Provident Financial Services, Inc · NYSE:PFS
Provident Financial Services — Q2 2024 Earnings Presentation
29 slides from Provident Financial Services's earnings presentation, Jul 26, 2024
Slide 1: Q2 2024 Results Presentation
Q2 2024 RESULTS 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 06/30/24) 3 1839Bank founded: PFS (NYSE)Stock symbol: 162 serving New Jersey, eastern Pennsylvania, and Orange, Queens, and Nassau Counties, New York Branches: $1.35 Billion as of 7/22/2024Market capitalization: $24.1 Billion in Total Assets $
Slide 4: Q2 2024 Financial Highlights
NYSE: PFS 4 Q2 2024 Financial Highlights $70.1 M PTPP Income $0.68 PTPP Diluted EPS 1.47% PTPP ROAA 13.26% PTPP ROAE 19.21% PTPP ROATE Key Metrics Highlights • The Company's annualized adjusted pre-tax, pre-provision returns on average assets, average equity and average tangible equity(1) were 1.47%
Slide 5: Stable Core Funding Base
NYSE: PFS Savings deposits 11.4% Money market accounts 22.5% NOW accounts 35.3% Non-interest bearing deposits 20.3% Certificates of deposit 10.4% Stable Core Funding Base Cost of Interest-Bearing Deposits: 2.60% Total Cost of Deposits: 2.07% AVERAGE DEPOSIT COMPOSITION 5 Savings deposits 10.1% Money
Slide 6: Diversified Loan Portfolio
NYSE: PFS Diversified Loan Portfolio As of 6/30/24 6 $18.77BTotal Gross Loans 6.05%Q2 2024 Avg Net Loan Yield Residential Mortgage Loans 11% Commercial Mortgage 39% Multi-family Loans 17% Commercial Construction Loans 5% Commercial Loans 25% Consumer Loans 3% Residential Mortgage Loans 11% Commercia
Slide 7: CRE Investment Portfolio by Property Type
NYSE: PFS CRE Investment Portfolio by Property type 7 As of 6/30/24 MULTI- FAMILY 30.4% RETAIL 23.8% INDUSTRIAL 19.0% OFFICE 10.0% MIXED USE 8.3% SPECIAL USE 3.2% RESIDENTIAL 3.1% HOTEL 1.8% LAND 0.4% Portfolio Characteristics 3.65% of CRE Investment Portfolio10 Largest CRE Loans 2.04% of Total Loan
Slide 8: Multi-family Composition
NYSE: PFS Multi-family Composition (NY and Rent Stabilized sectors) 8 OTHER NY BOROUGHS 63% OTHER NY 25% MANHATTAN 12% Total NY Multi-family Loans = $282.3 Million Total multi-family loan portfolio: $3.26Billion • Of the total, 74 Loans on multi-family properties in the five boroughs of NYC, aggrega
Slide 9: CRE Office Composition
NYSE: PFS CRE Office Composition 9 • Medical Office: approx. 37% of total office portfolio. Maturity or Reprice by Year $257.7 M2024 102.2 M2025 186.5 M2026 193.0 M2027 166.4 M2028 160.8 M2029 & BEYOND $1,067.3 MTotal OFFICE - OUT OF MARKET 3% PENNSYLVANIA 13% OTHER NY 3% OTHER NY BOROUGHS 11% MANHA
Slide 10: C&I Loans by NAICS Sector
NYSE: PFS C & I – (Includes owner occupied) Loans by NAICS Sector – 6/30/24 10 Real Estate and Rental and Leasing 21% Health Care and Social Assistance 16% Construction 11% Manufacturing 9% Finance and Insurance 7% Wholesale Trade 7% Retail Trade 5% 13 Diversified Sectors 24% 1. Other Services (exce
Slide 11: Strong Credit Metrics
Strong Credit Metrics 11 0.97% 1.01% 0.99% 0.98% 1.00%Total allowance to total loans 0.57% 0.52% 0.56% 0.54% 0.42% Non performing assets to Loans +REO 0.44% 0.37% 0.46% 0.44% 0.36%Total non-performing loans to total loans 0.42% 0.40% 0.43% 0.42% 0.33% Total non-performing assets as a percentage of t
Slide 12: Investment Portfolio
NYSE: PFS Agency Notes - Fixed 3.96% U.S. Treasury Notes 11.43% Corporate Notes 3.38% Agency MBS - Fixed 40.81%Agency MBS - ARMs 0.29% Agency CMO 16.58% Corporate CMO - Fixed 0.03% Non Agency CMBS 1.47% Municipal Bonds 14.81% Student Loan Pools 1.67% Agency CMBS 5.57% Investment Portfolio 12 Total I
Slide 13: Net Interest Margin Analysis
NYSE: PFS (1) See Appendix for a reconciliation of GAAP and non-GAAP financial measures. Net Interest Margin Analysis 13 2.53% 2.67% 2.79% 2.87% 3.40% 5.24% 5.37% 5.50% 5.51% 6.05% 4.73% 4.89% 5.04% 5.06% 5.67% Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Asset Yields Securities Net Loan Total interest-e
Slide 14: Emphasis on Fee Income
NYSE: PFS $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Emphasis on Fee Income Non-Interest Income $ in thousands 14 (1) Durbin Act negative impact starting July 1, 2021 of approximately $1.2 million per quarter and includes incremental revenue as a result of acquis
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 8% Tax 3% Private Banking 3% Focus on Wealth Management Business 15 $4.2 Billion AUM For 1,032 family relationships 2024 YTD Revenue $ 13,593,512 Adv
Slide 16: Focus on Wealth Management Business
NYSE: PFS AVERAGE CLIENT SIZE $4,000,000 As of June 30, 2024, based on AUM of $4.2B for 1,032 family relationships AVERAGE FEE 73 bps EBITDA & NET INCOME EBITDA (YTD June 30, 2024) $ 7,244,714 Net Income (YTD June 30, 2024) $ 5,095,704 CROSSOVER PROVIDENT/BEACON (HOW MANY PROVIDENT CUSTOMERS ARE BEA
Slide 17: Provident Protection Plus, Inc.
NYSE: PFS • Provident Protection Plus, Inc. provides insurance agency services including business, personal and employee benefits insurance products. • The insurance agency’s primary source of revenue is commission income earned from the sale of business and personal property and casualty insurance
Slide 18: Strong Core Performance
NYSE: PFS 1.60% 1.48% 1.25% 1.28% 1.47% Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Core PTPP ROAA (Annualized Core PTPP earnings/average assets) CORE PTPP ROAA(1) (1) See Appendix for a reconciliation of GAAP and non-GAAP financial measures. Strong Core Performance 18 18.59% 15.09% 14.87% 14.54% 19.21%
Slide 19: Performance Ratios – Bank Capital
NYSE: PFS Performance Ratios – Bank Capital 19 9. 84 9. 84 9. 84 9. 91 9. 36 11 .2 0 11 .1 3 11 .1 2 11 .5 10 .7 6 11 .2 0 11 .1 3 11 .1 2 11 .5 10 .7 612 .0 0 11 .9 8 11 .9 5 12 .3 6 11 .6 6 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Tier 1 leverage capital Common equity Tier 1 risk-based capital Tier
Slide 20: CRE to Total Risk-Based Capital
NYSE: PFS Guideline is 300% of Regulatory Capital CRE to Total Risk-Based Capital 20 477.8% 484.8% 485.9% 472.1% 476.6% 0.00% 100.00% 200.00% 300.00% 400.00% 500.00% 600.00% 06/30/23 09/30/23 12/31/23 3/31/2024 6/30/2024
Slide 21: 2024 Forward Guidance
NYSE: PFS 2024 Forward Guidance 21 • 2024 rest of the year: 4 to 5% annualized percentage increase expectedLoans • 2024 rest of the year: low single digit percentage increase expectedDeposits • Balances expected to fluctuate based on loan, deposit and securities cash flowsBorrowings • 2024 rest of t
Slide 22: Appendix
APPENDIX
Slide 23: CRE Investment Portfolio Loans by NAICS Sector
NYSE: PFS CRE Investment Portfolio Loans by NAICS Sector – 6/30/24 23 Exposure ($)Loan CountNAIC Sector2 10,141,657,7574,445Real Estate and Rental and Leasing 205,947,16695Accommodation and Food Services 125,764,867101Construction 93,171,76584Other Services (except Public Administration) 69,640,9792
Slide 24: CRE Investment Portfolio by Property Type
NYSE: PFS As of 6/30/24 ($ in thousands) CRE Investment Portfolio by Property Type 24 WARR % OUTSTANDING $ OUTSTANDINGCOUNT PROPERTY TYPE 3.4130.44%3,260,805 1,068Multi-Family 3.3723.78%2,547,069 899Retail 3.4019.04%2,039,912 565Industrial 3.679.96%1,067,398 517Office 3.688.32%891,728 747Mixed 3.343
Slide 25: C&I Loans by NAICS Sector
NYSE: PFS C & I – (Includes owner occupied) Loans by NAICS Sector – 6/30/24 25 Balance ($)Exposure ($)Loan CountNAIC Sector2 1,037,098,2891,302,679,8711,288Real Estate and Rental and Leasing 836,378,751965,136,134678Health Care and Social Assistance 344,638,036688,286,6311,252Construction 395,322,46
Slide 26: Construction Loans by NAICS Sector
NYSE: PFS Construction Loans by NAICS Sector – 6/30/24 26 Balance ($)Exposure ($)Loan CountNAIC Sector2 763,730,8511,208,124,760120Real Estate and Rental and Leasing 95,724,823195,084,92456Construction 68,676,414111,803,99712Health Care and Social Assistance 12,450,19627,024,3233Accommodation and Fo
Slide 27: 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 28: 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 29: Q2 2024 Results Presentation
Q2 2024 RESULTS PRESENTATION
Provident Financial Services — Q2 2024 Earnings Presentation on 6ix