Provident Financial Services, Inc · NYSE:PFS
Provident Financial Services — Q3 2024 Earnings Presentation
29 slides from Provident Financial Services's earnings presentation, Oct 29, 2024
Slide 1: Q3 2024 Results Presentation
Q3 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 09/30/24) 3 Bank founded: 1839 Stock symbol: PFS (NYSE) Branches: 140 serving New Jersey, eastern Pennsylvania, and Orange, Queens, and Nassau Counties, New York Market capitalization: $2.49 Billion as of 10/23/2024 Balance sheet: $24.0 Billio
Slide 4: Q3 2024 Financial Highlights
NYSE: PFS 4 Q3 2024 Financial Highlights $0.36 Diluted EPS 0.95% Adjusted ROAA 8.62% Adjusted ROAE 14.53% Adjusted ROATE Key Metrics Highlights • Adjusting for transaction costs related to the merger with Lakeland, net of tax, the Company's annualized adjusted returns on average assets, average equi
Slide 5: Stable Core Funding Base
NYSE: PFS Stable Core Funding Base DEPOSIT COMPOSITION 5 Non-interest bearing deposits 20.4% Interest bearing core deposits 42.2% Municipal deposits 20.4% Certificates of deposit 15.3% Wholesale deposits 1.8% September 30, 2024 Q3 Cost of Interest-Bearing Deposits 2.96% Q3 Total Cost of Deposits 2.3
Slide 6: Diversified Portfolio of Loans Held for Investment
NYSE: PFS Diversified Portfolio of Loans Held for Investment September 30, 2024 6 Residential Mortgage Loans 11% Commercial Mortgage 39% Multi-family Loans 17% Commercial Construction Loans 5% Commercial Loans 25% Consumer Loans 3% LOAN COMPOSITION Q3 2024 Avg Net Loan Yield 6.21% ($'s in thousands)
Slide 7: CRE Investment Portfolio by Property Type
NYSE: PFS CRE Investment Portfolio by Property type 7 As of 9/30/24 MULTI- FAMILY 31.1% RETAIL 23.6% INDUSTRIAL 18.8% OFFICE 8.6% MIXED USE 8.2% SPECIAL USE 4.9% RESIDENTIAL 3.0% HOTEL 1.2% LAND 0.6% Portfolio Characteristics 10 Largest CRE Loans 4.00% of CRE Investment Portfolio 10 Largest CRE Loan
Slide 8: Multi-family Composition (NY and Rent Stabilized sectors)
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 = $408.2 Million Total multi-family loan portfolio: $3.34 Billion • Of the total, 88 Loans on multi-family properties in the five boroughs of NYC, aggreg
Slide 9: CRE Office Composition
NYSE: PFS CRE Office Composition 9 • Medical Office: approx. 36% of total office portfolio. Maturity or Reprice by Year 2024 $153.6 M 2025 90.4 M 2026 155.2 M 2027 172.5 M 2028 157.9 M 2029 & BEYOND 191.5 M Total $921.1 M OFFICE - OUT OF MARKET 4% PENNSYLVANIA 11% OTHER NY 8% OTHER NY BOROUGHS 4% MA
Slide 10: C & I Loans by NAICS Sector
NYSE: PFS C & I – (Includes owner occupied) Loans by NAICS Sector – September 30, 2024 10 Real Estate and Rental and Leasing 22% Health Care and Social Assistance 18% Construction 7% Manufacturing 10% Finance and Insurance 5% Wholesale Trade 6% Retail Trade 5% 13 Diversified Sectors 27% 1. Other Ser
Slide 11: Strong Credit Metrics
Strong Credit Metrics 11 1.01% 0.99% 0.98% 1.00% 1.02%Total allowance to total loans 0.37% 0.46% 0.44% 0.36% 0.47% Total non-performing loans to total loans 0.40% 0.43% 0.42% 0.33% 0.41%Total non-performing assets as a percentage of total assets 0.21% 0.03% 0.04% 0.04% 0.14%Net charge-off ratio Q3 2
Slide 12: Investment Portfolio
NYSE: PFS Agency Notes - Fixed 3.34% U.S. Treasury Notes 10.94% Corporate Notes 4.17% Agency MBS - Fixed 40.11% Agency MBS - ARMs 0.29% Agency CMO 17.83% Corporate CMO - Fixed 0.03% Non Agency CMBS 1.19% Municipal Bonds 15.13% Student Loan Pools 1.46% Agency CMBS 5.51% Investment Portfolio 12 Total
Slide 13: Net Interest Margin Analysis
NYSE: PFS Net Interest Margin Analysis 13 2.67% 2.79% 2.87% 3.40% 3.69% 5.37% 5.50% 5.51% 6.05% 6.21% 4.89% 5.04% 5.06% 5.67% 5.84% Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Asset Yields Securities Net Loans Total interest-earning assets 2.22% 2.47% 2.60% 2.84% 2.96% 3.74% 3.71% 3.60% 3.83% 3.73% 2.50
Slide 14: Emphasis on Fee Income
NYSE: PFS $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Emphasis on Fee Income Non-Interest Income $ in thousands 14 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Fees $ 6,132 $ 6,102 $ 5,912 $ 8,699 $ 9,816 Wealth management income 6,992 6,843 7,488 7,769 7,620 Insurance agency in
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 87% Trust & Estate 8% Tax 2% Private Banking 3% Focus on Wealth Management Business 15 $4.2 Billion AUM For 1,032 family relationships 2024 YTD Revenue Advisory $ 20,57
Slide 16: Focus on Wealth Management Business
NYSE: PFS AVERAGE CLIENT SIZE $4,000,000 As of September 30, 2024, based on AUM of $4.2B for 1,032 family relationships AVERAGE FEE 73 bps EBITDA & NET INCOME EBITDA (YTD September 30, 2024) $ 11,155,389 Net Income (YTD September 30, 2024) $ 7,908,809 CROSSOVER PROVIDENT/BEACON (HOW MANY PROVIDENT C
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 1.48% 1.25% 1.28% 1.47% 1.48% Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 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 15.09% 14.87% 14.54% 19.21% 19.77%
Slide 19: Performance Ratios – Bank Capital
NYSE: PFS Performance Ratios – Bank Capital 19 9 .8 4 9 .8 4 9 .9 1 9 .3 6 9 .7 01 1 .1 3 1 1 .1 2 1 1 .5 0 1 0 .8 1 1 1 .5 1 1 1 .1 3 1 1 .1 2 1 1 .5 0 1 0 .8 1 1 1 .5 1 1 1 .9 8 1 1 .9 5 1 2 .3 6 1 1 .7 2 1 2 .4 6 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Tier 1 leverage capital Common equity Tier 1
Slide 20: CRE to Total Risk-Based Capital
NYSE: PFS Guideline is 300% of Regulatory Capital CRE to Total Risk-Based Capital 20 484.8% 485.9% 472.1% 468.4% 466.2% 0.00% 100.00% 200.00% 300.00% 400.00% 500.00% 600.00% 09/30/23 12/31/23 03/31/24 6/30/2024 9/30/2024
Slide 21: 2024 & 2025 Guidance
NYSE: PFS 2024 & 2025 Guidance 21 Loans • 2024 rest of the year: 3% annualized growth; 2025: 5% growth Deposits • 2024 rest of the year: low single digit annualized growth; 2025: 3% growth Borrowings • 2024 and 2025: Balances expected to fluctuate based on loan, deposit and securities cash flows Net
Slide 22: Appendix
APPENDIX
Slide 23: CRE Investment Portfolio by Property Type
NYSE: PFS As of 9/30/24 ($ in thousands) CRE Investment Portfolio by Property Type* 23 PROPERTY TYPE COUNT $ OUTSTANDING % OUTSTANDING WARR Multi-Family 1,066 3,338,031 31.08% 3.47 Retail 891 2,532,128 23.58% 3.37 Industrial 561 2,021,424 18.82% 3.47 Office 476 921,100 8.58% 3.71 Mixed 730 880,001 8
Slide 24: C & I Loans by NAICS Sector
NYSE: PFS C & I – (Includes owner occupied)* Loans by NAICS Sector – 9/30/24 24*Excludes Purchase Accounting Adjustments NAIC Industry Code Loans Count Exposure ($) Balance ($) Real Estate and Rental and Leasing 1,483 1,355,892,315 1,061,833,941 Health Care and Social Assistance 745 994,655,996 858,
Slide 25: Construction Loans by NAICS Sector
NYSE: PFS Construction Loans by NAICS Sector – 9/30/24 25 NAIC Industry Code Loan Count Exposure ($) Balance ($) Real Estate and Rental and Leasing 98 1,047,588,933 663,396,787 Construction 50 186,897,922 105,646,125 Health Care and Social Assistance 5 92,323,743 61,621,378 Accommodation and Food Se
Slide 26: 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 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: Q3 2024 Results Presentation
Q3 2024 RESULTS PRESENTATION
Provident Financial Services — Q3 2024 Earnings Presentation on 6ix