Provident Financial Services, Inc · NYSE:PFS
Provident Financial Services — Investor Presentation (February 2022)
28 slides from Provident Financial Services's investor presentation, Feb 17, 2022
Slide 1: Investor Presentation February 2022
INVESTOR PRESENTATION February 2022
Slide 2: Forward Looking Statements
NYSE: PFS 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
Slide 3: Corporate Profile
NYSE: PFS Corporate Profile (At or for the Quarter and Year Ended 12/31/21) 3 Bank founded: 1839 Stock symbol: PFS (NYSE) Branches: 96 serving northern and central New Jersey, eastern Pennsylvania & Queens County, NY Market capitalization: $1,865.0 Billion as of 2/7/22 Balance sheet: $13.8 Billion i
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: Successful & Disciplined Acquirer: Core PTPP ROAA and EPS
1.47% 1.38% 1.46% 1.54% 1.52% 1.56% 1.55% 1.50% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Core PTPP ROAA (Annualized Core PTPP earnings / average assets) $0.56 $0.56 $0.61 $0.65 $0.64 $0.67 $0.68 $0.68 Core PTPP Earnings per Share 5 Successful & Disciplined Acquirer (1) See App
Slide 6: Strong Presence in Attractive Markets
NYSE: PFS POPULATION (as of 12/2021) NJ – 9,301,389 PA – 13,015,961 Bucks – 639,897 Lehigh – 380,573 Northampton – 312,829 NY – 20,209,830 Queens – 2,317,350MEDIAN INCOME AND NATIONAL RANK NJ - $94,000 – 4th nationwide PA - $70,412 – 26th nationwide NY - $80,148 – 15th nationwide Sourc
Slide 7: Strong Presence in Attractive Markets: Household Profile
NYSE: PFS Average client tenure Business < 1 year 5% 1 – 2 years 18% 3 – 5 years 21% 6 – 9 years 19% 10+ years 35% Consumer < 1 year 2% 1 – 2 years 10% 3 – 5 years 14% 6 – 9 years 14% 10+ years 61% Provident’s NJ deposit share among NJ based institutions ranks 3rd* Businesses in
Slide 8: Proven Consistent Performance
NYSE: PFS (1) See Appendix for a reconciliation of GAAP and non-GAAP financial measures. Proven Consistent Performance 8 0.99% 1.22% 1.15% 0.86% 1.26% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 2017 2018 2019 2020 2021 ROAA (Annualized net Income/average assets) 1.53% 1.72% 1.63% 1.47% 1.53% 1.
Slide 9: Proven Consistent Performance
NYSE: PFS (1) See Appendix for a reconciliation of GAAP and non-GAAP financial measures. Proven Consistent Performance 9 7.28% 8.93% 8.07% 6.49% 10.03% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 2017 2018 2019 2020 2021 ROAE (Annualized net income/average stockholders' equity) 10.82% 13.07% 11.71%
Slide 10: Historically Strong Track Record of Returns
9.79% CAGR 5.01% CAGR +26.3% 10 Historically Strong Track Record of Returns (1) See Appendix for a reconciliation of GAAP and non-GAAP financial measures. (2) Does not include special cash dividends of $0.15 in 2017 and $0.20 in 2019. Increased regular quarterly cash dividend to $0.24 Q4 2021 $1.38
Slide 11: Stable & Growing Core Funding Base
NYSE: PFS Stable & Growing Core Funding Base – YTD 2021 Total Average Deposits $11.6 B Average Branch Size $116.1 M Cost of Interest Bearing Deposits: 0.28% Total Cost of Deposits: 0.21% AVERAGE DEPOSIT COMPOSITION 11 Muni 16% Commercial 39% Retail 45% Savings 13% Money Market 23% NOW 32% Non-intere
Slide 12: Diversified Loan Portfolio
NYSE: PFS Diversified Loan Portfolio – 12/31/21 12 Residential 13% Commercial Mortgage 40% Multi-family 14% Construction 7% Commercial 23% Consumer 3% Total Gross Loans $9.59B
Slide 13: Solid Credit Posture
Solid Credit Posture 13 0.82% 0.77% 0.76% 1.03% 0.84% 2017 2018 2019 2020 2021 Total Allowance to total Loans 0.57% 0.38% 0.58% 0.93% 0.59%Non performing assets to Loans +REO 0.48% 0.35% 0.55% 0.89% 0.50% Total non-performing loans to total loans 0.42% 0.28% 0.44% 0.71% 0.41% Total non-performing as
Slide 14: Emphasis on Fee Income
NYSE: PFS Emphasis on Fee Income Non-Interest Income $ in millions 14 31.61% 30.60% 35.27% 35.53% 35.43% 4.85% 11.77% $55.7 $58.7 $63.8 $72.4 $86.8 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 2017 2018 2019 2020 2021 Other income Net gain on securities transactions Bank-owned life ins
Slide 15: Focus on Wealth Management Business
NYSE: PFS Focus on Wealth Management Business 15 (actual YTD thru 12/31/21) Total Wealth Revenue $31.5M Profit Margin 28.9% Advisory 89% Trust & Estate 9% Tax 1% Private Banking 1%
Slide 16: Focus on Wealth Management Business
NYSE: PFS AVERAGE FEE 77 bps EBITDA & NET INCOME EBITDA (for the year-ended December 31, 2021) $19.9M* Net Income (for the year-ended December 31, 2021) $3.4M* CROSSOVER PROVIDENT/BEACON (HOW MANY PROVIDENT CUSTOMERS ARE BEACON CLIENTS) 97 Provident Bank households are also Beacon clients Focus on W
Slide 17: SB One Insurance Agency
NYSE: PFS • Agency revenue is generated from commissions related to the sale of insurance products in various lines of business including commercial, personal and employee benefits • The agency places property and casualty, life and health, and other coverage with about 25 different insurance carrie
Slide 18: Appendix
APPENDIX
Slide 19: Non-GAAP Financial Measures
NYSE: PFS Note: The Company has presented non-GAAP (Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Company’s results of operations and financial condition. Presentation of these n
Slide 20: Non-GAAP Financial Measures
NYSE: PFS Note: The Company has presented non-GAAP (Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Company’s results of operations and financial condition. Presentation of these n
Slide 21: C&I Loans by NAICS Sector
NYSE: PFS C & I - (Includes owner occupied) Loans by NAICS Sector – At 12/31/21 21 ($ in Thousands) NAIC Sector Loan Count Exposure ($) Balance ($) Real Estate and Rental and Leasing 717 673,129 468,598 Health Care and Social Assistance 430 427,103 347,440 Manufacturing 244 331,829 220,456 Wholesale
Slide 22: Commercial Real Estate Loans by NAICS Sector
NYSE: PFS Commercial Real Estate Loans by NAICS Sector – At 12/31/21 22 NAIC Sector Loan Count Exposure ($) Balance ($) Real Estate and Rental and Leasing 2,170 4,852,236 4,753,212 Accommodation and Food Services 51 219,023 218,498 Construction 36 102,008 96,196 Health Care and Social Assistance 23
Slide 23: Construction Loans by NAICS Sector
NYSE: PFS Construction Loans by NAICS Sector – At 12/31/21 23 NAIC Sector2 Loan Count Exposure ($) Balance ($) Real Estate and Rental and Leasing 106 927,487 542,759 Construction 33 131,328 81,287 Health Care and Social Assistance 2 38,362 18,794 Accommodation and Food Services 1 17,700 17,700 Retai
Slide 24: CRE Investment by Property Type
NYSE: PFS ($ In thousands) CRE Investment By Property Type – At 12/31/21 24 Prop Type Count $ Outstanding % Outstanding WARR Retail 510 1,425,369 27.39% 3.35 Multi-Family 477 1,371,381 26.35% 3.10 Industrial 243 826,713 15.88% 3.30 Office 301 622,201 11.96% 3.48 Mixed 314 350,141 6.73% 3.27 Hotel 37
Slide 25: CRE to Total Risk-Based Capital
NYSE: PFS Guideline is 300% of Regulatory Capital CRE To Total Risk-Based Capital 25 451.5% 452.4% 422.0% 440.8% 452.4% 448.8% 449.9% 457.3% 473.2% 456.4% 468.0% 471.6% 100.00% 150.00% 200.00% 250.00% 300.00% 350.00% 400.00% 450.00% 500.00% 12/31/16 12/31/17 12/31/18 12/31/19 03/31/20 06/30/20 09/30
Slide 26: Performance Capital Ratios
NYSE: PFS Performance Capital Ratios 26 9. 65 % 10 .2 4% 10 .3 4% 9. 30 % 9. 45 % 11 .8 7% 12 .5 4% 12 .7 4% 10 .4 6% 11 .4 7% 11 .8 7% 12 .5 4% 12 .7 4% 10 .5 8% 11 .5 9%12 .6 7% 13 .2 7% 13 .4 7% 11 .9 4% 12 .2 5% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 2017 2018 2019 2020 2021 T
Slide 27: Non-Performing Assets
NYSE: PFS $ in thousands Non-Performing Assets 27 *Includes $11,506 acquired from SB One. 2017 2018 2019 2020 2021 Residential $8,105 $5,853 $8,543 $9,315 $6,072 Commercial 7,090 3,180 5,270 31,982 16,887 Multi-family - - - - 439 Construction - - - 1,392 2,365 Commercial loans 17,243 15,391 25,160 4
Slide 28: INVESTOR PRESENTATION February 2022
INVESTOR PRESENTATION February 2022
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