Exhibit 99.1
Sandler O’Neill & Partners, L.P.
Financial Services Conference
November 11, 2004
1
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 periods, or by the use of forward-looking terminology, such as “may,” “will,” “believe,” “expect,” “estimate,” “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those related to the economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.
The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake and specifically declines any obligation to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
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Characteristics and Milestones
Rich heritage: Bank founded 1839
Completed full conversion and initial public offering January 15, 2003
Listed on NYSE (PFS)
Completed acquisition of First Sentinel Bancorp, Inc. July 14, 2004
Combination creates
New Jersey’s 8th largest bank in deposit market share*
3rd largest headquartered in-state*
*Source: FDIC—SOD as of 6/30/04
excludes brokerage/institutional deposits
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Key Business Drivers
Focused Operating Strategy
Range and depth of offerings for Retail and Commercial Clients
Effective Delivery with constant emphasis on Customer Service and Satisfaction
Strong franchise in a market with superior demographics
77 branches in 10 New Jersey counties
NJ median household income (HHI) exceeds US median by 31.3%*
7 of 10 counties in Provident market exceed state HHI median*
Sales Team Culture
Solid Reputation and Brand Recognition
Consistent Commitment to Asset Quality and Risk Management
*Source: U.S. Census Bureau data
4
Key Strategic Initiatives
Retention and expansion of customer relationships
Rational franchise expansion
In-market de-novo branching
Acquisitions considered if accretive to earnings
Achieve 50/50 mix of Commercial (C&I and C.R.E.) and Retail (1-4 Family and Consumer) loan portfolios
Optimize proportion of Core Deposits
Improve operating efficiency
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Financial Overview
($in millions) 9/30/2004 12/31/2003 12/31/2002
Assets $ 6,540 $ 4,285 $ 3,919
Loans (net) $ 3,710 $ 2,217 $ 2,032
Deposits $ 4,092 $ 2,696 $ 3,243 (1)
Equity $ 1,135 $ 817 $ 326
Market Cap $ 1,304 $ 1,145 N/A
Net Income ($in millions) $ 32.2 $ 18.7 (2) $ 26.6
(9 months actual)
EPS (9 months actual) $ 0.54 $ 0.31 (2) N/A
Net Interest Margin 3.41% 3.37% 3.96%
Return on Assets 0.88% 0.46% (2) 0.86%
(annualized)
Return on Equity 4.84% 2.31% (2) 8.71%
(annualized)
(1) includes $526 million conversion escrow account
(2) includes effect of $15.6 million net-of-tax contribution to The Provident Bank Foundation
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Geographic Market
Corporate HQ Jersey City, NJ
Loan Center Woodbridge, NJ
77 Branches in 10 Counties
First Sentinel acquisition has filled in geographic footprint and accommodates centralized lending operations
Middlesex
Somerset
Monmouth
Mercer
Burlington
Ocean
Fairfield
Bergen
Essex
Hudson
Morris
Passaic
Sussex
Union
Bronx
Kings
New York
Queens
Richmond
Rockland
Westchester
Bucks
Monroe
Montgomery
Philadelphia
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Key Factors for Competitive Success
Continuing evolution from traditional thrift to full-service community bank
Emphasis on core deposits (especially Business DDA) to build relationships and manage interest rate risk
Consistent expansion of commercial lending expertise
“Business Advantage” suite of products for commercial clients
Commitment to brand promise: “Hassle-free banking for busy people”®
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Deposit Mix
12/31/02
12/31/03
9/30/04
Savings, DDA, MMA 65%
Time 35%
Convr. Escr. 16%
Time 32%
Savings, DDA, MMA 52%
Time 35%
Savings, DDA, MMA 65%
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Building Commercial DDA
Number of accounts at period end
Outstanding Balance at period-end
($in millions)
Increasing Relationships
Growing Balances
7,305
8,470
11,284
2002
2003
Sept., 2004
Business Checking Relationships
(Non-Interest-Bearing accounts)
$129
$145
$218
2002
2003
Sept., 2004
Business Checking Deposits
(Non-Interest-Bearing)
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Loan Mix
12/31/02
12/31/03
9/30/04
CRE
C & I
Consumer
1-4 Family
13%
11%
29%
47%
14%
9%
13%
34%
30%
CRE
Mtg. Warehouse
C & I
Consumer
1-4 Family
14%
9%
26%
51%
CRE
C & I
Consumer
1-4 Family
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Portfolio Growth
Commercial & Industrial Loans
Outstanding Balance at period-end
($in millions)
At 9/30/04:
81% total portfolio growth above 12/31/02
77% organic growth
4% growth as result of First Sentinel acquisition
$190
$251
$343
Dec-02
Dec-03
Sept. 04
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Portfolio Growth
Construction Loans
Outstanding Balance at period-end
($in millions)
At 9/30/04:
142% total portfolio growth above 12/31/02
13% organic growth
129% growth as result of First Sentinel acquisition
$96
$99
$232
Dec-02
Dec-03
Sept. 04
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Portfolio Growth
Commercial Real Estate Loans
Outstanding Balance at period-end
($in millions)
At 9/30/04:
46% total portfolio growth above 12/31/02
1% organic growth
45% growth as result of First Sentinel acquisition
$515
$540
$751
Dec-02
Dec-03
Sept. 04
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Constant Focus on Asset Quality
Consistent commitment to credit quality, regardless of business cycles
Consistent underwriting standards & practices
Aggressive collection efforts
0.41%
0.27%
0.13%
2002
2003
Sept. 04
Non-performing Loans / Total Loans
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Improving Operating Efficiency
- managing overhead
- achieving economies of scale
2.00% 2.20% 2.40% 2.60% 2.80% 3.00% 3.20% 3.40%
2002 * 2003 9mos-9/04
Operating Expense/Total Avg. Assets
60.0% 61.0% 62.0% 63.0% 64.0% 65.0% 66.0% 67.0% 68.0% 69.0% 70.0%
2002 * 2003 9mos-9/04
Efficiency Ratio
* 2003 ratios exclude effect of one-time contribution to The Provident Bank Foundation.
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Capital Management
Stock repurchase
1st buyback program approved January, 2004
purchase activity constrained pending acquisition
program expanded post-acquisition to total of approx. 4 million (5%) of outstanding shares
at 9/30/04, 738 thousand shares left to repurchase
next program to be determined
Dividends
cash dividend declared after 1st quarter as public company
consistent payout ratio
dividend yield (9/30/04 closing price $17.25) 1.39%
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Our Vision
Investors seek
Financial Performance
Which will be Driven by
Customers seek
Customer-Centricity
Which will be Driven by
Employees seek
Focused & Rewarded Workforce
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