Provident Financial Services, Inc · NYSE:PFS
Provident Financial Services — Investor Presentation (February 2024)
31 slides from Provident Financial Services's investor presentation, Feb 14, 2024
Slide 1: Q1 2024 Investor Presentation
Q1 2024 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 12/31/23) 3 Bank founded: 1839 Stock symbol: PFS (NYSE) Branches: 94 serving northern and central New Jersey, eastern Pennsylvania, Nassau and Queens Counties, NY Market capitalization: $1.14 Billion as of 2/12/24 Balance sheet: $14.21 Billion
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: Strong Performance Despite Market Challenges (ROAA)
NYSE: PFS 1.15% 0.86% 1.26% 1.29% 0.92% 1.42% 1.20% 0.93% 0.81% 0.77% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 2019 2020 2021 2022 2023 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 ROAA ROAA CORE PTPP ROAA(1) (1) See Appendix for a reconciliation of GAAP and non-GAAP financial measures. Stro
Slide 8: Strong Performance Despite Market Challenges (ROAE/ROATE)
NYSE: PFS 11.71% 9.28% 13.89% 15.20% 10.84% 17.51% 14.10% 10.75% 9.47% 9.15% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% 2019 2020 2021 2022 2023 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 ROATE (Annualized net income/average tangible stockholders' equity) ROAE ROATE(1) (1)
Slide 9: Historically Strong Track Record of Returns
3.5% 3.7% 5.1% 4.0% 4.5% 5.3% Dividend yield $0.23 $0.23 $0.23 $0.24 $0.24 $0.24 Regular quarterly cash dividend per share (1) 2.19% CAGR 2.84% CAGR +0.85% 5-year TSR 6.02% (As of 2/12/24) 9 Historically Strong Track Record of Returns Note: See Appendix for a reconciliation of GAAP and non-GAAP fina
Slide 10: Stable Core Funding Base
NYSE: PFS Stable Core Funding Base $ in thousands ($) Balance Total Quarterly Average Deposits as of 12/31/2023 10,305,783 Average Branch Size 109,636 Cost of Interest Bearing Deposits: 0.90% Total Cost of Deposits: 0.67% AVERAGE DEPOSIT COMPOSITION AVERAGE DEPOSIT COMPOSITION 10 Savings deposits 13
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 12/31/23 Residential Mortgage Loans 11% Commercial Mortgage 41%Multi-family Loans 17% Com
Slide 12: CRE Investment Portfolio by Property Type
NYSE: PFS CRE Investment Portfolio by Property type 12 As of 12/31/23 RETAIL 29% MULTI- FAMILY 27% INDUSTRIAL 20% OFFICE 8% MIXED USE 7% SPECIAL USE 4% RESIDENTIAL 3% HOTEL 2% LAND 1% Portfolio Characteristics 10 Largest CRE Loans 15% of CRE Investment Portfolio 10 Largest CRE Loans 8% of Total Loan
Slide 13: Multi-family Composition
NYSE: PFS Multi-family Composition (NY and Rent Stabilized sectors) 13 Total multi-family loan portfolio: $1.81 Billion • Of the total, 69 Loans on multi-family properties in the five boroughs of NYC, aggregate outstanding $186.8M Rent stabilized loan portfolio: $117.4 Million, (6.49% of multi-famil
Slide 14: CRE Office Composition
NYSE: PFS CRE Office Composition 14 • Medical Office: approx. 39%, with LTV of 58% and DSCR 1.61x • Single Tenant: approx. 27%,with LTV of 59% and DSCR of 1.62x • LTVs> 60%: approx. 41% and weighted avg DSCR of 1.26x • Occupancy less than 80%: approx. 19%, with DSCR of 1.63x Maturity or Reprice by Y
Slide 15: Strong Credit Metrics
Strong Credit Metrics 15 1.03% 0.84% 0.86% 0.99% 0.86% 0.91% 0.97% 1.01% 0.99% Total allowance to total loans 0.93% 0.59% 0.59% 0.56% 0.59% 0.48% 0.57% 0.52% 0.56% Non performing assets to Loans +REO 0.89% 0.50% 0.57% 0.46% 0.57% 0.35% 0.44% 0.37% 0.46%Total non-performing loans to total loans 0.71%
Slide 16: Non-Performing Assets
NYSE: PFS Non-Performing Assets $ in thousands Strong Credit Metrics 16 At December 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Mortgage loans: Residential $9,315 $6,072 $1,928 $853 $1,928 $1,744 $1,698 $1,329 $853 Commercial 31,982 16,887 28,212 5,151 28,212
Slide 17: 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 2020 2021 2022 2023 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Other income Net gain on securities transactions Bank-owned life insurance Insurance agency income Wealth management income Fees Emphasis on Fee Income Non-Interest
Slide 18: Focus on Wealth Management Business
NYSE: PFS * Represents interest on lines of credit to Beacon clients, whose investment accounts are pledged as collateral. ** Does not include miscellaneous recovery of $303,291. Advisory 86% Trust & Estate 7% Tax 3% Private Banking 4% Focus on Wealth Management Business 2023 YTD Revenue Advisory $
Slide 19: Focus on Wealth Management Business
NYSE: PFS AVERAGE CLIENT SIZE $3,789,000 As of December 31, 2023, based on AUM of $3.86B for 1,019 family relationships AVERAGE FEE 74 bps EBITDA & NET INCOME EBITDA (YTD December 31, 2023) $ 12,269,418 Net Income (YTD December 31, 2023) $ 8,513,750 CROSSOVER PROVIDENT/BEACON (HOW MANY PROVIDENT CUS
Slide 20: 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 21: Appendix
APPENDIX
Slide 22: 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 23: 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 24: C&I Loans by NAICS Sector
NYSE: PFS C & I – (Includes owner occupied) Loans by NAICS Sector – 12/31/23 24 NAIC Sector2 Loan Count Exposure ($) Balances ($) Real Estate and Rental and Leasing 720 720,117,509 503,275,119 Construction 451 516,129,329 227,035,253 Manufacturing 212 397,294,939 284,843,618 Health Care and Social A
Slide 25: CRE Investment Portfolio Loans by NAICS Sector
NYSE: PFS CRE Investment Portfolio Loans by NAICS Sector – 12/31/23 25 NAIC Sector2 Loan Count Exposure ($) Balances ($) Real Estate and Rental and Leasing 2,234 6,055,442,691 5,949,801,232 Accommodation and Food Services 42 160,497,786 160,313,114 Construction 32 55,691,367 53,294,320 Health Care a
Slide 26: Construction Loans by NAICS Sector
NYSE: PFS Construction Loans by NAICS Sector – 12/31/23 26 NAIC Sector2 Loan Count Exposure ($) Balances ($) Real Estate and Rental and Leasing 74 949,451,110 587,534,554 Construction 8 81,640,000 25,396,334 Health Care and Social Assistance 2 21,359,500 21,359,500 Manufacturing 1 11,250,000 7,972,5
Slide 27: CRE Investment Portfolio by Property Type
NYSE: PFS As of 12/31/23 ($ in thousands) CRE Investment Portfolio by Property Type 27 PROPERTY TYPE COUNT $ OUTSTANDING % OUTSTANDING WARR Multi-Family 542 1,817,510 28.71% 3.25 Retail 521 1,736,435 27.43% 3.36 Industrial 311 1,269,999 20.06% 3.35 Office 264 483,084 7.63% 3.56 Mixed 362 456,160 7.2
Slide 28: CRE to Total Risk-Based Capital
NYSE: PFS Guideline is 300% of Regulatory Capital CRE to Total Risk-Based Capital 28 422.0% 440.8% 457.3% 471.6% 485.3% 499.6% 491.3% 490.9% 473.3% 477.8% 484.8% 485.9% 0.00% 100.00% 200.00% 300.00% 400.00% 500.00% 600.00% 12/31/18 12/31/19 12/31/20 12/31/21 03/31/22 06/30/22 09/30/22 12/31/22 03/31
Slide 29: Performance Ratios – PFS (HoldCo.) Capital
NYSE: PFS Performance Ratios – PFS (HoldCo.) Capital 29 9. 30 9. 45 10 .0 0 10 .2 2 9. 41 9. 43 9. 62 9. 78 10 .0 0 10 .1 7 10 .2 2 10 .2 2 10 .2 2 10 .4 6 11 .4 7 11 .3 6 11 .4 5 10 .9 2 11 .5 6 11 .0 5 10 .9 1 11 .3 6 11 .6 6 11 .5 3 11 .4 4 11 .4 5 10 .5 8 11 .5 9 11 .4 7 11 .5 6 11 .0 4 11 .6 8
Slide 30: Performance Ratios – Bank Capital
NYSE: PFS Performance Ratios – Bank Capital 30 8. 75 8. 86 9. 51 9. 84 8. 86 8. 86 9. 13 9. 28 9. 51 9. 76 9. 84 9. 84 9. 849. 96 10 .8 7 10 .9 1 11 .1 2 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 .1 2 9. 96 10 .8 7 10 .9 1 11 .1 2 10 .8 7 10 .9 8 10 .6 0 10 .4 6 10 .9 1 11 .
Slide 31: Q1 2024
Q1 2024 INVESTOR PRESENTATION
Provident Financial Services — Investor Presentation (February 2024) on 6ix