Provident Financial Services, Inc · NYSE:PFS
Provident Financial Services — Investor Presentation (September 2014)
21 slides from Provident Financial Services's investor presentation, Sep 3, 2014
Slide 1: Provident Financial Services, Inc.
= Provident ~ Financial Services, Inc.
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements contained herein are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by reference to a future period or
Slide 3: Company overview (NYSE:PFS) at 6/30/14
(NYSE:PFS) At 6/30/14 Total Assets $8.4 B Total Loans $5.9 B Total Investments $1.7 B Total Deposits $5.8 B Tangible Common Equity $716 M 87 branch offices and 4 LPOs in NJ and Eastern PA Market Capitalization (8/25/14) $1.0 B 3 Mo. Average Daily Shares Traded (8/25/14) 192,000
Slide 4: EPS Growth Opportunities
EPS Growth Opportunities Recent expansion in Eastern PA and Western NJ Growth of Wealth Management Business Entry into Asset Based Lending Capital strength to fund accretive acquisitions and stock buybacks Expense management remains a priority
Slide 5: Team Capital Acquisition
Team Capital Acquisition Announced 12/19/13 Closed 5/30/14 Systems Converted 8/30/14 12 branches: Lehigh Valley (3), Bucks (2), NJ (7) $964M FV of Assets Acquired $634M FV of Loans Acquired $770M FV of Deposits Acquired $40M of Goodwill Created Provident Bank Team Capital Bank
Slide 6: Pennsylvania Market Entry and PFS Legacy Markets
Pennsylvania Market Entry PFS Legacy Markets 2 Team’s Pennsylvania markets have an attractive business climate due to proximity to large markets such as Philadelphia and New York, lower tax rates and affordable real estate A large number of Fortune 500 companies have established warehouses and distr
Slide 7: Financial Impact of Team Acquisition
Financial Impact of Team Acquisition 5% EPS accretion projected in 2015 TBV per share dilution of 3.5% with projected earn-back < 4 years IRR > 15% On track to meet or exceed 25% annualized cost saves
Slide 8: Growing Wealth Management Business
Growing Wealth Management Business Acquired Beacon Trust in August 2011 wholly owned subsidiary of Provident Bank AUM at 6/30/14 $1.0 billion AUA at 6/30/14 including managed ETF indices $2.0 billion Average revenue per managed dollar 74 bps, compared with 57 bps median for similarly sized firms Net
Slide 9: Asset Based Lending
Asset Based Lending Acquired a team of 3 experienced individuals in August 2014 Acquired a loan book of $47 million in commitments with outstandings of $25 million Growth expectations of approximately $20 million in 2015 Generates increased fee income Enhances credit controls over existing monitored
Slide 10: Strong Capital Position / Capital Formation
Strong Capital Position / Capital Formation 6/30/2014 Tangible Common Equity 8.90% Tier 1 Leverage 9.60% Total Risk-based 12.95% Dividend payout ratio (last twelve months) 51.72% Provides ability to pursue accretive acquisitions and/or repurchase common stock
Slide 11: Expense Management
Expense Management An historical strength of the current management team: Efficiency Ratio 6 months Years 2014* 59.84% 57.18% 57.03% 57.31% 57.69% * Excludes Team Capital acquisition related items and lump sum pension distribution costs.
Slide 12: Enhancing Shareholder Value: EPS and TBV per Share
12/13/10 12/31/11 12/31/12 12/31/13 $0.88 $1.01 $1.18 $1.23 Earnings per Share 12% CAGR $9.47 $9.87 $10.40 $10.92 TBV per Share 5% CAGR Enhancing Shareholder Value
Slide 13: Enhancing Shareholder Value: Dividends and Repurchases
Return of Capital $13.19 Average Cost per Share $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 2011 2012 2013 Stock Repurchases $4.1 M Stock Repurchases $9.4M Stock Repurchases $5.9 M $30.9 M $50.1 M $38.2 M 10% CAGR $13.19 Average Cost per Share Enhancing Shareholder Value Regular Dividends $26.8 M Regular
Slide 14: Increasing Profitability: Net Income and ROAA
(*in millions) $49.7 $57.3 $67.3 $70.5 0.73% 0.83% 0.94% 0.97% $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% 1.10% 12/31/10 12/31/11 12/31/12 12/31/13 Net Income* ROAA Increasing Profitability
Slide 15: Increasing Profitability: ROATE and ROAE
8.97% 9.81% 10.88% 11.04% 5.46% 6.09% 6.88% 7.08% 12/31/10 12/31/11 12/31/12 12/31/13 ROATE ROAE Increasing Profitability
Slide 16: Capable Risk Management
Capable Risk Management ERM Process Diversified Loan Portfolio Disciplined Loan Growth Solid Credit Quality Well-managed Interest Rate Risk Plain Vanilla Investment Portfolio $10 billion Threshold Readiness
Slide 17: Diversified Loan Portfolio
Total Loans: $5.9 billion Average Loan Yield: 4.25% Duration: 2.5 years Commercial Mortgage 28% 16% Commercial 20% Construction 4% Multi-family Diversified Loan Portfolio - 6/30/14 Residential 21% Consumer 11%
Slide 18: Commercial Real Estate Portfolio
Multi - family 36% Industrial 11% 3% Residential 3% Hotel 3% Land 1% Other Special Use Mixed Used 6% 1% Commercial Real Estate - 6/30/14 Retail 20% Office 16%
Slide 19: Asset Quality Trend
$135.4 M $ 82.2 M 2011 2012 2013 6/30/2014 NPAs NPAs/Assets Annualized NCOs $111.5 M $72.3 M Asset Quality Trend 1.91% 1.53% 1.10% 0.86% 0.52% 0.43% 0.22% 0.10%
Slide 20: Investment Portfolio
Agency Notes- Fixed 6% Corporate Notes - Fixed 1% Agency MBS - ARM 5% Agency CMBS - Fixed 1% Agency CMO - Fixed 23% Weighted Average Life: AFS 3.7 yrs HTM 5.0 yrs Combined Duration: 4.1 yrs Investment Portfolio – 6/30/14 Agency MBS - Fixed 36% Municipal 28%
Slide 21: Notable Items
Notable Items IPO 2003 Acquired First Sentinel Bancorp – Acquired First Morris Bank and Trust – Acquired Beacon Trust Company – Acquired Team Capital Bank – Shifted to a community bank balance sheet 69% commercial loans 85% core deposits 17% CAGR NIB deposits – No TARP No dilutive stock offerings No
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