![]() 1 Sandler O’Neill & Partners, L.P. Sandler Sandler O’Neill & Partners, L.P. O’Neill & Partners, L.P. November 17, 2005 November 17, 2005 November 17, 2005 2005 Financial Services Conference 2005 Financial Services Conference Exhibit 99.1 |
![]() 2 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 Provident Financial Services, Inc. (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. Forward Looking Statement Forward Looking Statement Forward Looking Statement |
![]() 3 Company Profile at 9/30/05 Company Profile at 9/30/05 Company Profile at 9/30/05 • • NYSE Symbol: PFS NYSE Symbol: PFS • • Market Capitalization: $1.26 billion Market Capitalization: $1.26 billion • • Assets: $6.18 billion Assets: $6.18 billion • • Headquarters: Jersey City, New Jersey Headquarters: Jersey City, New Jersey – – a burgeoning economy contiguous to a burgeoning economy contiguous to New York City New York City • • Number of Branches: 76 Number of Branches: 76 – – throughout 10 counties in northern and throughout 10 counties in northern and central New Jersey central New Jersey |
![]() 4 Company History Company History Company History • • Founded: February, 1839 Founded: February, 1839 – oldest bank chartered in New Jersey • • IPO (Full Conversion): January, 2003 IPO (Full Conversion): January, 2003 – raised $587 million in net new capital • • Acquired First Sentinel Bancorp, Inc. Acquired First Sentinel Bancorp, Inc. (Assets: $2.2 billion): Closed July, 2004 (Assets: $2.2 billion): Closed July, 2004 – cash and stock transaction valued at $642 million |
![]() 5 Company Strengths Company Strengths Company Strengths • • Solid Franchise in Strong Markets Solid Franchise in Strong Markets • • Sufficient Capital for Strategic Deployment Sufficient Capital for Strategic Deployment • • Disciplined Approach to Expansion Disciplined Approach to Expansion • • Focus on Core Competencies Focus on Core Competencies • • Commitment to Risk Management Commitment to Risk Management – Interest Rate – Asset Quality – Compliance |
![]() 6 Significant Presence in Strong Markets Significant Presence in Strong Markets Significant Presence in Strong Markets • • 8th largest share of New Jersey deposit market* 8th largest share of New Jersey deposit market* • • 4th largest of any bank headquartered in-state* 4th largest of any bank headquartered in-state* – *(excludes institutional/brokerage deposits) Source: FDIC Summary of Deposits as of 6/30/05 • • 2005 Median Household Income 2005 Median Household Income – Provident’s 10-County Market Area = $62,512 – National Aggregate = $49,747 Source: SNL Financial |
![]() 7 76 Branches as of 9/30/05 76 Branches as of 9/30/05 76 Branches as of 9/30/05 Source: SNL Financial |
![]() ![]() ![]() 8 Financial Highlights Financial Highlights Financial Highlights (Dollars in thousands) INCOME STATEMENT: 9/30/05 9/30/04 Change Net income $43,728 $32,218 35.73% Diluted earnings per share $0.65 $0.54 20.37% Return on equity 5.28% 4.84% 9.09% Return on assets 0.93% 0.88% 5.68% Net interest margin 3.35% 3.41% -1.76% Efficiency ratio 59.34% 63.84% -7.05% Nine Months Ended |
![]() ![]() ![]() ![]() 9 (Dollars in millions) BALANCE SHEET: 9/30/05 12/31/04 Change Total assets $6,176 $6,433 -4.00% Total loans $3,682 $3,707 -0.67% Total deposits $3,964 $4,050 -2.12% Total investments $1,635 $1,900 -13.95% Total borrowings $1,048 $1,193 -12.15% Financial Highlights Financial Highlights Financial Highlights |
![]() ![]() ![]() ![]() 10 ASSET QUALITY: 9/30/05 9/30/04 Non-performing loans to total loans 0.18% 0.13% Non-performing assets to total assets 0.11% 0.08% Allowance for loan losses to total loans 0.89% 0.90% Financial Highlights Financial Highlights Financial Highlights |
![]() 11 Strategic Objectives Strategic Objectives Strategic Objectives • • Optimize Net Interest Margin Optimize Net Interest Margin – Maintain Low-Cost Funding Base – Optimize % of Core Deposits – Optimize Loans as % of Assets • • Improve Operating Efficiency Improve Operating Efficiency • • Disciplined Deployment of Capital Disciplined Deployment of Capital – Stock Repurchase – Dividends – Explore M & A Opportunities |
![]() 12 12/31/04 CD's> $100K 6% Other Time Deposits 28% Interest DDA 12% Non-Interest DDA 12% Savings / MMA 42% Striving to Maintain Low Cost Funding Base Striving to Maintain Low Cost Funding Base Striving to Maintain Low Cost Funding Base Cost of Interest-Bearing Liabilities (Trailing 5 Quarters) 2.13% 1.97% 1.88% 1.79% 1.70% 0.00% 1.00% 2.00% 3.00% 3Q04 4Q04 1Q05 2Q05 3Q05 9/30/05 CD's>$100K 7% Other Time Deposits 28% Interest DDA 14% Non-Interest DDA 12% Savings/MMA 39% |
![]() 13 12/31/04 Residential Mortgage 50% Consumer 14% Construction 6% Commercial R.E. 21% C & I 9% 9/30/05 Commercial R.E. 20% Construction 6% C & I 10% Consumer 15% Residential Mortgage 49% Striving to Optimize Loan Portfolio Striving to Optimize Loan Portfolio (Trailing 5 Quarters) 67.74% 66.68% 65.80% 65.06% 62.58% 60.00% 62.00% 64.00% 66.00% 68.00% 70.00% 3Q04 4Q04 1Q05 2Q05 3Q05 Average Loans as a percentage of Average Earning Assets |
![]() 14 Optimizing Net Interest Margin Optimizing Net Interest Margin Optimizing Net Interest Margin 3.40% 3.35% 3.24% 3.31% 3.34% 3.38% 3.38% 3.43% 3.15% 3.14% 3.10% 3.15% 3.20% 3.25% 3.30% 3.35% 3.40% 3.45% 3Q04 4Q04 1Q05 2Q05 3Q05 PFS SNL Bank & Thrift Index Minimizing Compression Above Industry Trends Minimizing Compression Above Industry Trends * * *Source: SNL Financial *Source: SNL Financial |
![]() 15 Efficiency Ratio (Trailing 5 Quarters) 62.08% 57.06% 58.52% 62.29% 58.83% 55.00% 57.00% 59.00% 61.00% 63.00% 65.00% 3Q04 4Q04 1Q05 2Q05 3Q05 Non-Interest Expense / Average Assets (Trailing 5 Quarters) 2.12% 1.93% 1.99% 2.21% 1.98% 1.85% 1.92% 1.99% 2.06% 2.13% 2.20% 2.27% * includes $1.4 million (pre-tax) Voluntary Retirement Initiative Positive Trend in Cost Management Contributes to Positive Trend in Operating Efficiency Positive Trend in Cost Management Contributes Positive Trend in Cost Management Contributes to Positive Trend in Operating Efficiency to Positive Trend in Operating Efficiency * * |
![]() 16 Earnings Performance (Trailing 5 Quarters) $0.23 $0.21 $0.22 $0.24 $0.19 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 3Q04 4Q04 1Q05 2Q05 3Q05 $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 Earnings EPS (diluted) and Plays an Increasing Role in Earnings Momentum and Plays an Increasing Role in and Plays an Increasing Role in Earnings Momentum Earnings Momentum |
![]() 17 Disciplined Capital Management to Build Stockholder Value Disciplined Capital Management Disciplined Capital Management to Build Stockholder Value to Build Stockholder Value • • Stock Repurchase Stock Repurchase – Completed first program 4th Quarter 2004; • approximately 4.0 million shares repurchased – Completed second program 3rd Quarter 2005; • approximately 3.7 million shares purchased – Third program authorized July, 2005; • approximately 3.6 million shares authorized for repurchase • approximately 2.7 million shares left for repurchase as of September 30, 2005 – 10.8% of issued and outstanding shares repurchased January, 2004 through September, 2005 |
![]() 18 Disciplined Capital Management Disciplined Capital Management - - Dividends Dividends $0.04 $0.05 $0.06 $0.07 $0.08 $0.09 $0.00 $0.02 $0.04 $0.06 $0.08 $0.10 Apr-03 July-03 Jan-04 Jan-05 Apr-05 Oct-05 Cash Dividend Declared Current Dividend Yield = 2.05% (based on 10/31/05 share price of $17.60) • • Stockholder Value returned via steady Stockholder Value returned via steady Cash Dividend Increases Cash Dividend Increases |
![]() 19 Disciplined Capital Management - Expansion Disciplined Capital Management Disciplined Capital Management - - Expansion Expansion • • Continue to seek out acquisition opportunities Continue to seek out acquisition opportunities – Must add long-term stockholder value – Focus on existing footprint and contiguous markets – Remain rational in evaluating opportunities • • Cautious approach to De Novo branching Cautious approach to De Novo branching – Not paying up for overpriced real estate – New locations must meet minimum growth and profit standards within 3 years |
![]() 20 Investors Financial Performance Which will be Driven by Customers seek Customer-Centricity Employees seek Which will be Driven by Focused & Rewarded Workforce Our Business Philosophy Our Business Philosophy Our Business Philosophy seek |