Provident Financial Services, Inc · NYSE:PFS
Provident Financial Services — Investor Presentation (January 2022)
23 slides from Provident Financial Services's investor presentation, Jan 7, 2022
Slide 1: Governance Presentation January 10, 2022
GOVERNANCE PRESENTATION JANUARY 10, 2022
Slide 2: Topics for Discussion
Our Business and Strategy………………………………………………………………….........2 Corporate Governance and Oversight of Risk…………………………………….........10 Executive Compensation…………………………………………………………………………..14 ESG and Corporate Social Responsibility…………………………………………………...16 Appendix: Non GAAP Disclosure Reconciliation……………………
Slide 3: Our Business and Strategy
a = == = ww OUR BUSINESS AND STRATEGY = Providentesi:
Slide 4: Company Overview, Highlights and Key Figures
COMPANY OVERVIEW COMPANY HIGHLIGHTS INVESTMENT HIGHLIGHTS KEY FIGURES* Effective execution of relationship banking strategy, delivering high quality banking services across its customer base Well positioned in highly attractive markets Diversified loan portfolio Emphasis on acquisition and retention
Slide 5: Well Positioned in Highly Attractive Markets
($in millions; except HHI) Metropolitan Market 2021 2021 - 2026 HHI 2021 Statistical Area Rank Branches Deposits Median HHI Projected Growth Population New York-Newark-Jersey City 22 90 $10,094 $86,466 11.67% 19,200,306 Allentown-Bethlehem-Easton 18 4 $309 $70,959 9.11% 847,822 Philadelphia-Camden-W
Slide 6: Track Record of Strong Performance
0.50% 0.75% 1.00% 1.25% 1.50% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YTD 2021PFS Peer Median TRACK RECORD OF STRONG PERFORMANCE RETURN ON AVERAGE ASSETS RETURN ON AVERAGE TANGIBLE COMMON EQUITY 5.0% 7.5% 10.0% 12.5% 15.0% 17.5% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Y
Slide 7: Diversified Loan Portfolio Funded by Attractive Deposit Base
80% 13% 3% 4% Demand deposits Savings deposits Certificates of deposit Time deposits DIVERSIFIED LOAN PORTFOLIO FUNDED BY ATTRACTIVE DEPOSIT BASE CURRENT LOAN MIX 13% 39% 14% 7% 23% 3% Residential Mortgage Commercial Mortgage Multi-family Mortgage Construction Mortgage Commercial Consumer 3Q21 Loan
Slide 8: Strong and Growing Fee Income Businesses
STRONG AND GROWING FEE INCOME BUSINESSES REVENUE COMPOSITION (2010) REVENUE COMPOSITION (2021 YTD) WEALTH MANAGEMENT FEE INCOME ($MM) WEALTH MANAGEMENT AUM ($MM) $0 $1,000 $2,000 $3,000 $4,000 $5,000 2015 2016 2017 2018 2019 2020 Q321 Tirschwell & Loewy (acquired in 2019) Beacon Investment Advisory
Slide 9: Continued Delivery of Attractive Shareholder Returns
$0 $7 $14 $21 $28 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 CONTINUED DELIVERY OF ATTRACTIVE SHAREHOLDER RETURNS $0 $5 $10 $15 $20 $25 $30 Note: Stock price as of 11/5/21 close. STRONG PRICE PERFORMANCE THROUGH-THE-CYCLE CONSISTENT RETURN OF CAPITAL $0.20 $0.60 $1.00 $1.40 2010 2011 201
Slide 10: Organic Strategy Augmented by Disciplined M&A
ORGANIC STRATEGY AUGMENTED BY DISCIPLINED M&A $6.8 $7.1 $7.3 $7.5 $8.5 $8.9 $9.5 $9.8 $9.7 $9.8 $12.9 $13.4 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q3 2021 WHOLE BANK ACQUISITIONS ADDING SCALE… …SUPPLEMENTED BY FEE INCOME DEALS July 2020: SB One Bancorp ($186M value, $2.1B assets)May
Slide 11: Corporate Governance and Oversight of Risk
CORPORATE GOVERNANCE AND OVERSIGHT OF RISK 10
Slide 12: Independent, Diverse Board Committed to Refreshment
WE HAVE AN INDEPENDENT, DIVERSE BOARD COMMITTED TO REFRESHMENT Christopher Martin (Executive Chairman) Age: 65 Director Since: 2005 Committees: N/A E 2 12 86% Independent Average Tenure~9 yr 5 Directors added in the last 3 years 21% Gender or Ethnically Diverse Anthony J. Labozzetta (President & CEO
Slide 13: Skills Attributable to Individual Directors
SKILLS ATTRIBUTABLE TO INDIVIDUAL DIRECTORS Audit/Financial Experience in finance, accounting and/or auditing Commercial/ Knowledge of real estate markets and financing Real Estate Knowledge Environmental, Social & Experience with ESG practices Governance Executive Experience Experience managing a s
Slide 14: Board's Robust Approach to Overseeing Risk Management
OUR BOARD HAS A ROBUST APPROACH TO OVERSEEING RISK MANAGEMENT BOARD’S ROLE IN OVERSIGHT OF RISK Audit Committee Compensation and Human Capital Committee Governance & Nominating Committee Risk Committee Technology Committee Oversee the financial reporting process, including the integrity of financial
Slide 15: Executive Compensation
= Providentesi: a =a a ey wy EXECUTIVE COMPENSATION 14
Slide 16: Overview of 2020 Executive Compensation
OVERVIEW OF 2020 EXECUTIVE COMPENSATION Sh or t- Te rm Lo ng -T er m Base Salary Annual Cash Incentive Incentive Awards Description / Purpose Link to PerformanceCompensation Element Fixed / Performance-Based PROVIDENT’S EXECUTIVE COMPENSATION ALIGNS OUR EXECUTIVE TEAM BEHIND LONG-TERM SHAREHOLDER VA
Slide 17: ESG and Corporate Social Responsibility
ESG AND CORPORATE SOCIAL RESPONSIBILITY 16
Slide 18: ESG: Diversity, Equity and Inclusion
ESG AND CORPORATE SOCIAL RESPONSIBILITY Diversity, Equity and Inclusion Provident is committed to fostering a safe working environment, which promotes diversity and is free from harassment or discrimination of any kind. We are proud of our diverse workforce, including women holding 64% of all manage
Slide 19: ESG: Internal ESG Efforts
ESG AND CORPORATE SOCIAL RESPONSIBILITY Internal ESG Efforts We have established a standing group of senior representatives tasked with building the Bank’s ESG program. The group reports on its progress to the Board’s Governance & Nominating Committee. The following areas, among others, are under re
Slide 20: ESG: Community Building
ESG AND CORPORATE SOCIAL RESPONSIBILITY Community Building The Bank established the Provident Bank Foundation in 2003 with the intent of supporting not-for-profit groups, institutions, schools and other 501(c)(3) organizations that provide valuable services to the communities served by Provident Ban
Slide 21: Appendix: Non-GAAP Disclosure Reconciliation
APPENDIX: NON-GAAP DISCLOSURE RECONCILIATION 20
Slide 22: Notes and Reconciliation of GAAP and Non-GAAP Financial Measures
NOTES AND RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) 2019Y 2020Y 2021 YTD Efficiency ratio calculation: Net Interest income 297,973$ 312,570$ 272,132$ Non-interest income 63,794 72,431 66,156 Total income 361,767$ 385,001$ 338,288$ Reported non-i
Slide 23: 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
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