Provident Financial Services, Inc · NYSE:PFS
Provident Financial Services — Sandler O'Neill & Partners East Coast Financial Services Conference 2011
39 slides from Provident Financial Services's conference presentation, Nov 10, 2011
Slide 1: Sandler O'Neill & Partners East Coast Financial Services Conference
Sandler O’Neill & Partners East Coast Financial Services Conference November 10, 2011 Exhibit 99.1
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: Christopher Martin, Chairman, President & CEO
Christopher Martin Christopher Martin Chairman, President & Chief Executive Officer
Slide 4: Corporate Profile
CORPORATE PROFILE NYSE Symbol - PFS $7.0 billion in assets Headquartered in Jersey City, NJ Holding company for The Provident Bank, the oldest NJ bank (chartered in 1839) Converted to stock form in 2003 82 branch locations throughout northern and central NJ Two Loan Production Offices in NJ Consolid
Slide 5: Market Data – 10/28/11
Market Data – 10/28/11 Market Capitalization: $806 million 60.0 million Shares Outstanding 11.04% Insider Ownership (includes 7.67% held by ESOP) including 22,060 shares purchased by CEO/CFO & Directors in 2011 64.71% Institutional Ownership 3.60% Dividend Yield 137% Price/TBV 84.9% Price/BV 13.5x P
Slide 6: Executive Leadership Team
Executive Leadership Team Senior management team has, on average, over 25 years of relationship banking experience with large commercial banks & thrifts in our primary markets Extremely knowledgeable and results-oriented Conservative business practices Culture of accountability, efficiency and integ
Slide 7: Seeking Out Strategic Organic Growth & Opportunities
Seeking Out Strategic Organic Growth & Opportunities New Strategic Plan in place September 2011 Challenge: Increase revenue in difficult environment Focus on Relationships by defined target customer segments Community Bank with commercial emphasis Ongoing SBA Initiative Reduce marginally accretive a
Slide 8: Current Retail Franchise Branches in New Jersey Counties
Current Retail Franchise 82 Branches in 11 New Jersey Counties
Slide 9: Provident Financial Services, Inc.
‘PROVIDENT ‘SERVICES, INC.
Slide 10: Asset Composition – At 9/30/11
Asset Composition – At 9/30/11 Total investments 24.2% Net loans 64.2% Total cash & cash equivalents 1.8% Foreclosed assets 0.1% Premises & equipment 1.1% Accrued interest receivable 0.3% Intangible assets 5.2% Bank -owned life insurance 2.0% Other assets 1.1%
Slide 11: Loan Portfolio – At 9/30/11
Loan Portfolio – At 9/30/11 ($ in thousands) Owner Occupied loans totaled $453,738M at 9/30/11 and are included under the Commercial loan portfolio total of $814,112M. Net total of $3,819M representing premiums, discounts & deferred fees, has not been included in the outstanding loan totals .
Slide 12: CRE Portfolio by Industry – At 9/30/11
CRE Portfolio by Industry – At 9/30/11 Total CRE Loans = $1,733 MM
Slide 13: C & I Loan Portfolio – At 9/30/11
C & I Loan Portfolio – At 9/30/11 C&I Loans= $814 MM Primary Property Type ($ in thousands)
Slide 14: Construction Loan Portfolio – At 9/30/11
Construction Loan Portfolio – At 9/30/11 Total Construction Loans = $117 MM Construction loan balance does not reflect unfunded commitments of $60MM. No loans are located outside of NJ/NY/PA. Primary Property Type ($ in thousands)
Slide 15: Loan Originations
Loan Originations Note: Does not include loan purchases or renewals.
Slide 16: Loan Quality by Portfolio
Loan Quality by Portfolio As of 9/30/11 Net total of $3.8 MM representing premiums, discounts & deferred fees, has not been included in the outstanding loan totals. ($ in thousands) TOTAL LOAN PORTFOLIO BALANCE 1,848,645 $ 814,112 $ 553,670 $ 1,347,973 $ 4,564,400 $ NON-PERFORMING LOANS 47,115 $ 29,
Slide 17: NPAs & 90+ day Delinquencies / Loans & REO
NPAs & 90+ day Delinquencies / Loans & REO Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 2.83% 2.78% 2.99% 2.94% 3.35% 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 Other Assets Owned Consumer Commercial Loans Construction Loans Commer
Slide 18: Investment Securities – At 9/30/11
Investment Securities – At 9/30/11 Note: 78% are Available for Sale. Weighted Avg. Life AFS 2.6 yrs. HTM 3.8 yrs. Total 2.9 yrs.
Slide 19: Deposit Composition – At 9/30/11
Deposit Composition – At 9/30/11 Savings 18% NOW 15% Muni 10% Total Deposits= $5,074 MM 77% Core Total Cost of Deposits: 0.81% MMA 21% NIB 13% CDs 23%
Slide 20: Time Deposit Maturities – At 9/30/11
Time Deposit Maturities – At 9/30/11 ($ in thousands) $218,023 $614,181 $130,628 $98,157 $117,835 0.84% 1.01% 2.76% 3.05% 2.39% Time Deposit Maturities Note: % = Weighted Avg. Cost
Slide 21: Borrowings – At 9/30/11
Borrowings – At 9/30/11 Note: % = Weighted Avg. Cost ($ in thousands) $27,400 $54,100 $77,587 $132,793 $514,338 2011 2012 2013 2014 Thereafter Borrowings 4.05% 3.76% 2.72% 2.37% 2.51%
Slide 22: Thomas M. Lyons, EVP & Chief Financial Officer
Thomas M. Lyons Thomas M. Lyons Executive Vice President & Chief Financial Officer
Slide 23: Financial Highlights
Financial Highlights ($ in thousands) BALANCE SHEET: 9/30/11 12/31/10 Total assets $6,997,359 $6,824,528 Total loans 4,568,220 4,409,813 Total deposits 5,074,293 4,877,734 Total investments 1,695,372 1,763,232 Total borrowed funds 912,567 969,683 Total stockholders' equity 949,397 921,687
Slide 24: Financial Highlights
Financial Highlights ($ in thousands except Earnings per Share) INCOME STATEMENT: 9/30/11 9/30/10 Net Income $42,474 $37,590 Diluted Earnings per Share $0.75 $0.66 ROATE 9.76% 9.16% ROAA 0.83% 0.74% Net Interest Margin 3.51% 3.45% Efficiency Ratio 57.13% 57.18% Nine Months Ended
Slide 25: Return on Average Assets (%)
Return on Average Assets (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 0.80 0.71 0.76 0.82 0.90 0.71 0.76 0.73 0.84 0.91
Slide 26: Pre-Provision Net Interest Income
Pre-Provision Net Interest Income
Slide 27: Net Interest Margin (%)
Net Interest Margin (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL
Slide 28: Cost of Deposits (%)
Cost of Deposits (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 PFS Peer 0.95 0.85 0.81 0.78 0.72 0.97 0.90 0.82 0.79 0.79
Slide 29: Cost of Funds (%)
Cost of Funds (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 1.30 1.17 1.10 1.07 1.00 1.36 1.25 1.17 1.13 1.08 PFS Peer
Slide 30: Interest Rate Sensitivity Net Interest Income
Interest Rate Sensitivity Net Interest Income Change in Interest Rates in Basis Points (Rate Ramp) -100 Static +100 +200 +300 Dollar Amount (in thousands) Dollar Change Percent Change % 206,213 (5,845) (2.8) 212,058 — — 212,468 0.2 208,989 (3,069) (1.4) 206,284 (5,774) (2.7)
Slide 31: Asset Quality (%)
Asset Quality (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 1.58 1.56 1.63 1.62 1.61 1.76 1.71 1.73 1.71 1.65 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 Loan Loss Reserve / Loans
Slide 32: Asset Quality (%)
Asset Quality (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 2.45 2.38 2.83 3.06 2.74 2.37 2.34 2.55 2.54 2.38 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 Non Performing Loans/Loans PFS Peer
Slide 33: Asset Quality (%) Cumulative for the period
Asset Quality (%) Cumulative for the period Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL PFS 0.51 Peer 0.84 Net Charge-offs/Avg. Loans
Slide 34: Net Operating Exp / Avg Assets (%)
Net Operating Exp / Avg Assets (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 1.51 1.52 1.57 1.57 1.56 1.56 1.56 1.61 1.61 1.59 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3
Slide 35: Efficiency Ratio (%)
Efficiency Ratio (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 54.77 55.44 55.73 56.33 55.97 58.23 58.85 59.69 59.31 58.67 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3
Slide 36: Diluted EPS / Annualized ROATE
Diluted EPS / Annualized ROATE $0.24 $0.21 $0.23 $0.25 $0.27 9.48% 8.41% 9.13% 9.63% 10.48% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 Diluted EPS Annl. ROATE
Slide 37: Capital – At 9/30/11
Capital – At 9/30/11 REQUIRED ACTUAL Amount Ratio Amount Ratio Regulatory Tier 1 leverage capital 261,461 $ 4.00% 571,567 $ 8.74% Tier 1 risk-based capital 177,900 $ 4.00% 571,567 $ 12.85% Total risk-based capital 355,800 $ 8.00% 627,384 $ 14.11% (Dollars in thousands) The Company continues to excee
Slide 38: Capital Flexibility
Capital Flexibility Tangible Common Equity/ Tangible Assets = 8.86% Never a reduction in the quarterly dividend rate Increased dividend 9% in 2011, to $0.12 per quarter Targeted payout ratio 45-55% 1.9 million shares eligible for repurchase under current authorization Ability to grow through acquisi
Slide 39: Looking Forward
Looking Forward Expand relationships while money center banks remain dislocated Cultivate and reward existing relationships to defend from competition Assess acquisition opportunities in our contiguous markets where accretive Implement process improvements to achieve efficiency target and achieve Li