Provident Financial Services, Inc · NYSE:PFS
Provident Financial Services — Shareholder Meeting (April 2006)
27 slides from Provident Financial Services's shareholder meeting presentation, Apr 26, 2006
Slide 1: 2006 Annual Meeting of Stockholders
2006 Annual Meeting of Stockholders April 26, 2006 April 26, 2006 EXHIBIT 99.1
Slide 2: 2006 Annual Meeting of Stockholders
2006 Annual Meeting of Stockholders Paul M. Pantozzi Paul M. Pantozzi Chairman of the Board & Chairman of the Board & Chief Executive Officer Chief Executive Officer
Slide 3: 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 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by reference to a future period or peri
Slide 4: Corporate Profile
Corporate Profile • A $6 billion community bank • 76 retail offices serving 10 counties in northern and central New Jersey • Established: February, 1839 • Full conversion IPO: January, 2003 • Shares traded on NYSE: ticker symbol PFS • Market capitalization: $1.25 billion (at 3/31/06)
Slide 5: Ongoing Strategies for Earnings-per-Share Growth
Ongoing Strategies for Earnings-per-Share Growth • • Enterprise Management Enterprise Management – Disciplined Resource Management – Balance Sheet Management and Positioning – Preserving/Enhancing Franchise Value – Asset Quality Maintenance • • Capital Management Capital Management – Share Repurchas
Slide 6: Resource Management
Resource Management $43.4 $43.5 $44.8 $46.0 $47.2 $48.5 $46.9 3.34% 3.31% 3.31% 3.27% 3.43% 3.38% 3.38% 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 Net Interest Income (in millions) Net Interest Margin (%) Core Revenue Driver is Net Interest Income Core Revenue Driver is Net Interest Income – – Near term Str
Slide 7: Resource Management
Resource Management $30.2 $29.5 $30.0 $33.2 $31.4 $32.3 $34.3 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 Non-Interest Expense (in millions) # of FTEs Diligently Managing Overhead Costs Diligently Managing Overhead Costs – – Optimize Workforce Productivity Optimize Workforce Productivity Includes $1.4 millio
Slide 8: Balance Sheet Management
Balance Sheet Management Decreasing Dependence on Investment Decreasing Dependence on Investment Securities and Wholesale Borrowings* Securities and Wholesale Borrowings* * Excludes Subordinated Debentures ($ in millions) $1,997 $1,900 $1,782 $1,708 $1,635 $1,538 $1,451 $1,239 $1,166 $1,109 $1,100 $
Slide 9: Balance Sheet Management
Balance Sheet Management Maximizing Loans to Drive Revenue Maximizing Loans to Drive Revenue $3,406 $3,690 $3,661 $3,660 $3,660 $3,655 $3,712 62.6% 68.9% 67.7% 66.7% 65.8% 65.1% 70.9% 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 Aver. Net Loans (in millions) % of Aver. Earning Assets
Slide 10: Balance Sheet Management
Balance Sheet Management 3/31/06 Residential Mortgage 47% Consumer 15% Construction 8% Commercial R.E. 20% Commercial & Industrial 10% Loan Portfolio Mix: Continuing Emphasis on Loan Portfolio Mix: Continuing Emphasis on Commercial Loans Commercial Loans 12/31/04 Residential Mortgage 50% Consumer 14
Slide 11: Balance Sheet Management
Balance Sheet Management 12/31/04 Non-Interest DDA 12% Time Deposits 34% MMA 4% Savings 38% NOW 12% Deposit Mix: Safeguarding Core Customer Relationships Deposit Mix: Safeguarding Core Customer Relationships 3/31/06 Non-Interest DDA 12% Time Deposits 38% MMA 3% Savings 34% NOW 13%
Slide 12: Preserving Franchise Value Branch Offices
Preserving Franchise Value 76 Branch Offices Serving 10 Counties in Northern 76 Branch Offices Serving 10 Counties in Northern and Central New Jersey and Central New Jersey
Slide 13: Significant Presence in Great Markets
Significant Presence in Great Markets • • 81% of our deposits are in 4 counties with strong 81% of our deposits are in 4 counties with strong and growing demographics and growing demographics – Middlesex – Hudson – Essex – Monmouth • • Together they comprise one-third of all Together they comprise o
Slide 14: Deposit Market Share and Growth Potential
Deposit Market Share and Growth Potential * Source: SNL Financial/ESRI Source: SNL Financial as per FDIC/SOD at 6/30/05. Data is pro-forma for pending mergers and excludes brokerage/institutional deposits. 2005 Median Household Income ($)* Projected Growth 2005 - 2010 (%)* Middlesex 69,256 13.68 Hud
Slide 15: Asset Quality Maintenance
Asset Quality Maintenance Industry-leading Performance Industry-leading Performance Non-performing Assets as a % of Total Assets 0.26% 0.25% 0.23% 0.22% 0.21% 0.22% 0.10% 0.11% 0.11% 0.13% 0.09% 0.10% 0.08% 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 Mid-Atlantic Banks & Thrifts PFS
Slide 16: Capital Management --Share Repurchase
Capital Management --Share Repurchase • • Completed first program 4th Quarter 2004: Completed first program 4th Quarter 2004: – approximately 4.0 million shares repurchased • • Completed second program 3rd Quarter 2005: Completed second program 3rd Quarter 2005: – approximately 3.7 million shares re
Slide 17: Capital Management --Cash Dividends
Capital Management --Cash Dividends Stockholder Value via steady Cash Dividend Increases Stockholder Value via steady Cash Dividend Increases Cash Dividend Declared $0.04 $0.05 $0.06 $0.07 $0.08 $0.09 $0.10 Apr-03 July-03 Jan-04 Jan-05 Apr-05 Oct-05 Apr-06 Current Dividend Yield = 2.22% (based on 4/
Slide 18: Disciplined Approach to Market Expansion
Disciplined Approach to Market Expansion • • New branch openings curtailed during 2005 New branch openings curtailed during 2005 – few in-market opportunities with favorable pricing – First Sentinel acquisition, completed July, 2004, added 22 branches to our network – efforts concentrated on optimiz
Slide 19: Financial Highlights
Financial Highlights Financial Highlights st Quarter 2006 Quarter 2006 Linda A. Niro Linda A. Niro Senior Vice President & Senior Vice President & Chief Financial Officer Chief Financial Officer
Slide 20: Financial Highlights
Financial Highlights (Dollars in thousands) INCOME STATEMENT: 3/31/06 3/31/05 Net income $13,802 $15,022 Diluted earnings per share $0.22 $0.22 Return on equity 5.22% 5.41% Return on assets 0.94% 0.96% Net interest margin 3.31% 3.38% Efficiency ratio 59.56% 58.83%
Slide 21: Financial Highlights
Financial Highlights (Dollars in thousands) BALANCE SHEET: 3/31/06 12/31/05 Total assets $5,948,254 $6,052,374 Total loans $3,731,348 $3,739,122 Total deposits $3,924,735 $3,921,458 Total investments $1,450,687 $1,537,665 Total borrowings $901,560 $996,552 Total stockholders' equity $1,066,927 $1,07
Slide 22: Comparative Yield Curve
Comparative Yield Curve 4.89% 4.88% 4.90% 5.00% 5.08% 4.90% 4.74% 4.75% 1.00% 4.51% 3.62% 2.77% 2.32% 1.15% 0.96% 5.28% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% FF 3 mo 6 mo 2 yr. 3 yr. 5 yr. 10 yr. 30 yr. Current Yield Curve Yield Curve @ 4/30/04
Slide 23: Net Interest Rate Spread
Net Interest Rate Spread 4.60% 5.00% 5.40% Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 1.80% 2.20% 2.60% Yield on Earning Assets Rate Paid on Liabilities Spread 3.09% Spread 2.92% Spread 3.04% Spread 2.98% Spread 2.91%
Slide 24: Net Interest Rate Margin
Net Interest Rate Margin 3.31% 3.27% 3.31% 3.34% 3.38% 3.20% 3.25% 3.30% 3.35% 3.40% 3.45% 3.50% Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 $40 $41 $42 $43 $44 $45 $46 $47 $48 $49 $50 Net Interest Income Net Interest Rate Margin Net Int. Rate Margin Net Int. Income
Slide 25: Asset Quality
Asset Quality $5,790 $6,005 $7,345 $5,590 $6,465 0.16% 0.16% 0.18% 0.20% 0.15% Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Non-Performing Loans Non-Performing Loans/Total Loans
Slide 26: Looking Ahead
Looking Ahead • Positioned to take advantage of return to normalized yield curve • Anticipate increased new branch activity in conjunction with branch rationalization • Redoubling efforts to expand small-business customer relationships • Ongoing expense management • Ongoing asset quality maintenance
Slide 27: Our Mission
OUR MISSION Our mission is to consistently provide superior value to our stockholders by achieving strong financial performance to our customers by delivering high quality financial solutions that help improve and enrich their lives to our employees by maintaining a challenging and rewarding work en
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