Provident Financial Services, Inc · NYSE:PFS
Provident Financial Services — Investor Presentation (November 2023)
28 slides from Provident Financial Services's investor presentation, Nov 1, 2023
Slide 1: Q3 2023 Investor Presentation
Q3 2023 INVESTOR PRESENTATION
Slide 2: Forward Looking Statements
NYSE: PFS Forward Looking Statements Certain statements contained herein are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amen
Slide 3: Corporate Profile
NYSE: PFS Corporate Profile (At or for the Quarter Ended 9/30/23) 3 Bank founded: 1839 Stock symbol: PFS (NYSE) Branches: 95 serving northern and central New Jersey, eastern Pennsylvania, Nassau and Queens County, NY Market capitalization: $1.08 Billion as of 10/27/23 Balance sheet: $14 Billion in T
Slide 4: Successful & Disciplined Acquirer
NYSE: PFS Acquired Tirschwell & Loewy, Inc. AUM: $822M Acquired The MDE Group AUM: $1.3B Acquired Team Capital Bank Assets: $964M Acquired First Sentinel Bancorp Assets: $2.6B Acquired First Morris Bank & Trust Assets: $554M Acquired Beacon Trust Company AUM: $1.5B IPO NYSE PFS 1839 Founded 2003 200
Slide 5: Strong Presence in Attractive Markets
NYSE: PFS POPULATION (as of February 2023 Estimates) NJ – 9,317,771 NY – 19,879,255 Queens – 2,340,201 Nassau – 1,393,596 PA – 12,979,881 Bucks – 647,873 Lehigh – 378,463 Northampton – 315,255 MEDIAN INCOME AND NATIONAL RANK NJ - $95,596 – 4th nationwide PA - $70,856 – 27th nationwide NY
Slide 6: Strong Presence in Attractive Markets: Household Profile
NYSE: PFS Average client tenure Business < 1 year 26% 1 – 2 years 7% 3 – 5 years 18% 6 – 9 years 18% 10+ years 31% Consumer < 1 year 14% 1 – 2 years 4% 3 – 5 years 14% 6 – 9 years 14% 10+ years 55% Provident’s NJ deposit share ranks 2nd amongst NJ-based financial institutions* Bu
Slide 7: Proven Consistent Performance: ROAA
NYSE: PFS ROAA CORE PTPP ROAA(1) (1) See Appendix for a reconciliation of GAAP and non-GAAP financial measures. Proven Consistent Performance 7 1.15% 0.86% 1.26% 1.29% 1.26% 1.42% 1.20% 0.93% 0.81% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 20 19 20 20 20 21 20 22 Q 3 20 22 Q 4 20 22 Q 1
Slide 8: Proven Consistent Performance: ROAE and ROATE
NYSE: PFS ROAE ROATE(1) (1) See Appendix for a reconciliation of GAAP and non-GAAP financial measures. Proven Consistent Performance 8 8.07% 6.49% 10.03% 10.86% 10.68% 12.37% 10.11% 7.76% 6.84% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 20 19 20 20 20 21 20 22 Q 3 20 22 Q 4 20 22 Q 1 20 23 Q
Slide 9: Historically Strong Track Record of Returns
3.0% 3.5% 3.7% 5.1% 4.0% 4.5% Dividend yield $0.21 $0.23 $0.23 $0.24 $0.24 Regular quarterly cash dividend per share (1) 10.05% CAGR 2.76% CAGR +20% 5-year TSR 15.96% (As of 2/10/23) 9 Historically Strong Track Record of Returns Note: See Appendix for a reconciliation of GAAP and non-GAAP financial
Slide 10: Stable Core Funding Base
NYSE: PFS Stable Core Funding Base $ in thousands ($) Balance Total Average Deposits 10,264,994 Average Branch Size 109,202 Cost of Interest Bearing Deposits: 0.90% Total Cost of Deposits: 0.67% AVERAGE DEPOSIT COMPOSITION AVERAGE DEPOSIT COMPOSITION 10 Savings deposits 13.6% Money market accounts 2
Slide 11: Diversified Loan Portfolio
NYSE: PFS Diversified Loan Portfolio As of 12/31/22 11 Residential Mortgage Loans 11% Commercial Mortgage 42% Multi-family Loans 15% Commercial Construction Loans 7% Commercial Loans 22% Consumer Loans 3% As of 9/30/23 Residential Mortgage Loans 11% Commercial Mortgage 41%Multi-family Loans 17% Comm
Slide 12: Strong Credit Metrics
Strong Credit Metrics 12 0.76% 1.03% 0.84% 0.86% 0.88% 0.86% 0.91% 0.97% 1.01% Total allowance to total loans 0.58% 0.93% 0.59% 0.59% 0.61% 0.59% 0.48% 0.57% 0.52% Non performing assets to Loans +REO 0.55% 0.89% 0.50% 0.57% 0.59% 0.57% 0.35% 0.44% 0.37% Total non-performing loans to total loans 0.44
Slide 13: Non-Performing Assets
NYSE: PFS Non-Performing Assets $ in thousands Strong Credit Metrics 13 At December 12/31/2019 12/31/2020 12/31/2021 12/31/2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Mortgage loans: Residential $8,543 $9,315 $6,072 $1,928 $3,120 $1,928 $1,744 $1,698 $1,329 Commercial 5,270 31,982 16,887 28,212 35,
Slide 14: Emphasis on Fee Income
NYSE: PFS $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 2019 2020 2021 2022 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Other income Net gain on securities transactions Bank-owned life insurance Insurance agency income Wealth management income Fees 2019 2020 2021 2022 Q3 22 Q4 22 Q1 2
Slide 15: Focus on Wealth Management Business
NYSE: PFS * Represents interest on lines of credit to Beacon clients, whose investment accounts are pledged as collateral. Advisory 86% Trust & Estate 7% Tax 3% Private Banking 4% Focus on Wealth Management Business 2023 YTD Revenue Advisory $18,667,288 Trust & Estate 1,467,989 Tax 691,039 Private B
Slide 16: Focus on Wealth Management Business: Client Size and EBITDA
NYSE: PFS AVERAGE CLIENT SIZE $3,471,000 As of September 30, 2023, based on AUM of $3.5B for 1,023family relationships AVERAGE FEE 73 bps EBITDA & NET INCOME EBITDA (YTD September 30, 2023) $ 8,977,445 Net Income (YTD September 30, 2023) $ 6,230,551 CROSSOVER PROVIDENT/BEACON (HOW MANY PROVIDENT CUS
Slide 17: Provident Protection Plus, Inc.
NYSE: PFS • Provident acquired SB One Insurance Agency as part of the July 31, 2020 merger with SB One Bancorp. • In July of 2022 SB One Insurance Agency was rebranded as Provident Protection Plus, Inc. • Provident Protection Plus, Inc. provides insurance agency services including business, personal
Slide 18: Appendix
APPENDIX
Slide 19: Non-GAAP Financial Measures
NYSE: PFS Note: The Company has presented the following non-GAAP (Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Company’s results of operations and financial condition. Presentat
Slide 20: Non-GAAP Financial Measures (continued)
NYSE: PFS Note: The Company has presented the following non-GAAP (Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Company’s results of operations and financial condition. Presentat
Slide 21: C&I Loans by NAICS Sector
NYSE: PFS C & I – (Includes owner occupied) Loans by NAICS Sector – 9/30/23 21 NAIC Sector2 Loan Count Exposure ($) Balance ($) Real Estate and Rental and Leasing 701 697,907,263 493,421,385 Health Care and Social Assistance 394 375,798,087 299,304,659 Manufacturing 213 376,313,807 275,471,099 Whole
Slide 22: Commercial Real Estate Loans by NAICS Sector
NYSE: PFS Commercial Real Estate Loans by NAICS Sector – 9/30/23 22 NAIC Sector2 Loan Count Exposure ($) Balance ($) Real Estate and Rental and Leasing 2,210 5,926,678,170 5,820,848,783 Accommodation and Food Services 42 159,778,065 159,593,393 Other Services (except Public Administration) 37 28,795
Slide 23: Construction Loans by NAICS Sector
NYSE: PFS Construction Loans by NAICS Sector – 9/30/23 23 NAIC Sector2 Loan Count Exposure ($) Balance ($) Real Estate and Rental and Leasing 76 991,757,655 605,801,931 Construction 9 53,834,206 27,434,557 Accommodation and Food Services 1 3,567,500 3,567,500 Arts, Entertainment, and Recreation 1 6,
Slide 24: CRE Investment By Property Type
NYSE: PFS As of 9/30/23 ($ in thousands) CRE Investment By Property Type 24 PROPERTY TYPE COUNT $ OUTSTANDING % OUTSTANDING WARR Multi-Family 531 1,795,218 28.92% 3.24 Retail 525 1,724,042 27.77% 3.32 Industiral 304 1,218,051 19.62% 3.36 Office 268 483,259 7.78% 3.52 Mixed 358 432,452 6.97% 3.34 Spe
Slide 25: CRE to Total Risk-Based Capital
NYSE: PFS Guideline is 300% of Regulatory Capital CRE to Total Risk-Based Capital 25 422.0% 440.8% 457.3% 473.2% 456.4% 468.0% 471.6% 485.3% 499.6% 491.3% 490.9% 473.3% 477.8% 481.1% 0.00% 100.00% 200.00% 300.00% 400.00% 500.00% 600.00% 12/31/18 12/31/19 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21
Slide 26: Performance Ratios – Holdco Capital
NYSE: PFS Performance Ratios – Holdco Capital 26 10 .3 4 9. 30 9. 45 10 .0 0 9. 55 9. 45 9. 43 9. 62 9. 78 10 .0 0 10 .1 7 10 .2 2 10 .2 2 12 .7 4 10 .4 6 11 .4 7 11 .3 6 11 .4 3 11 .4 7 11 .5 6 11 .0 5 10 .9 1 11 .3 6 11 .6 6 11 .5 3 11 .4 412 .7 4 10 .5 8 11 .5 9 11 .4 7 11 .5 5 11 .5 9 11 .6 8 11
Slide 27: Performance Ratios – Bank Capital
NYSE: PFS Performance Ratios – Bank Capital 27 9. 81 8. 75 8. 86 9. 51 8. 99 8. 86 8. 86 9. 13 9. 28 9. 51 9. 76 9. 84 9. 84 11 .9 5 9. 96 10 .8 7 10 .9 1 10 .8 9 10 .8 7 10 .9 8 10 .6 0 10 .4 6 10 .9 1 11 .3 0 11 .2 0 11 .1 3 11 .9 5 9. 96 10 .8 7 10 .9 1 10 .8 9 10 .8 7 10 .9 8 10 .6 0 10 .4 6 10
Slide 28: Q3 2023
Q3 2023 INVESTOR PRESENTATION
Provident Financial Services — Investor Presentation (November 2023) on 6ix