Sandler O’Neill & Partners East Coast Financial Services Conference November 11, 2010 Exhibit 99.1 |
Forward Looking Statements 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 cautions readers not to place undue reliance on any such forward-looking statements which speak only as of the date made. The Company also advises 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. |
3 Christopher Martin Christopher Martin Chairman, President & Chief Executive Officer |
NYSE Symbol - PFS $6.8 billion in assets Headquartered in Jersey City, NJ Holding company for The Provident Bank Oldest NJ bank chartered in 1839 Converted from mutual form in 2003 81 branch locations throughout northern and central NJ 3 Loan Production Offices in NJ Moving / Consolidating administrative operations to Metro Park (Iselin) in March 2011 from 3 locations to 1 No TARP, No TRUPS, No dilution with a secondary offering CORPORATE PROFILE 4 |
Senior management team has, on average, over 25 years of banking experience with large commercial banks & thrifts in our primary markets Extremely knowledgeable and results-oriented Culture of accountability, efficiency and integrity Majority of officers have been with publicly-traded organizations 360° leadership development program to assure management succession Executive Leadership Team 5 |
Current Retail Franchise 6 |
Market Demographics (as of 6/30/10) Source: FDIC-Summary of Deposit & SNL County Market Rank Number of Branches Company Deposits in Market ($000) Deposit Market Share (%) Total Population 2010 (Actual) Median HH Income 2010 ($) Middlesex 5 24 1,596,006 7.46 794,605 78,561 Hudson 4 15 915,698 3.81 607,650 52,525 Morris 10 10 712,897 3.80 496,157 104,165 Essex 13 7 479,095 2.28 783,531 55,914 Monmouth 9 10 459,179 2.63 649,429 82,974 Bergen 26 3 223,296 0.58 910,386 84,344 Somerset 9 4 178,191 2.11 333,075 101,044 Ocean 13 4 163,070 1.27 578,728 60,936 Union 20 3 139,796 0.80 531,112 73,602 Mercer 20 1 53,031 0.47 371,697 75,009 Passaic 25 1 7,990 0.08 500,140 62,332 NJ Totals 82 4,928,249 6,556,510 7 |
Challenge: Increase revenue in difficult environment Community Bank with commercial emphasis SBA Initiative Reduce marginally accretive asset classes Expand non-interest income with concentration on Wealth Management Aggressively manage credit quality Branch rationalization Healthcare Lending Group established in 2010 Acquisitions where accretive & improve franchise value Seeking Out Strategic Growth & Opportunities 8 |
Market Capitalization: $740.6 million 59,922,431 Shares Outstanding 5,879 Registered Stockholders 15.90% Insider Ownership (includes 7.76% held by ESOP) 61.34% Institutional Ownership 3.56% Current Dividend Yield 130.8% Price/TBV 80.4% Price/BV 14.0x P/E (as of 10/26/10) 12.1x Price/2011 Est. Earnings (as of 10/26/10) Market Data as 9/30/10 9 |
Asset Composition 9/30/10 9/30/10 12/31/08 12/31/08 10 |
Loan Originations 11 |
Loan Portfolio Net total of $6.8MM representing premiums, discounts & deferred fees, has not been included in the outstanding loan totals Total Loans = $4,337 MM Total Loans = $4,337 MM 12 (as of 9/30/10) (in thousands) |
CRE Portfolio by Industry Total CRE Loans = $1,480 MM Total CRE Loans = $1,480 MM 13 (as of 9/30/10) (in thousands) |
Construction Loan Portfolio Total Construction Loans = $134 MM Total Construction Loans = $134 MM Construction loan balance does not reflect unfunded commitments of $75MM. No loans are located outside of NJ/NY/PA 14 (as of 9/30/10) (in thousands) |
Portfolio Performance (in thousands) CRE/CONST C & I CONSUMER 1-4 FAMILY TOTAL LOAN PORTFOLIO BALANCE 1,614,071 $ 741,367 $ 568,533 $ 1,413,877 $ 4,337,848 $ NON-PERFORMING LOANS 29,575 $ 28,515 $ 7,123 $ 38,297 $ 103,510 $ % OF PORTFOLIO 1.83% 3.85% 1.25% 2.71% 2.39% % OF TOTAL LOANS 0.68% 0.66% 0.16% 0.88% 2.39% NET CHARGE-OFFS 7,134 $ 6,824 $ 3,131 $ 1,491 $ 18,580 $ ANNUALIZED NET CHARGE- OFFS AS % OF AVG. O/S 0.61% 1.24% 0.73% 0.14% 0.57% 15 (as of 9/30/10) Net total of $6.8MM representing premiums, discounts & deferred fees, has not been included in the outstanding loan totals |
Asset Quality PFS PEER* Non-performing Loans/Loans (%) 2.39 2.41 Loan Loss Reserves/ Loans (%) 1.58 1.67 Loan Loss Reserves/ Non-performing Loans (%) 66.4 89.0 Net Charge-offs / Avg Loans (%) 0.57 1.22 Non-Performing Assets / Assets (%) 1.61 1.87 Source: SNL 16 (as of 9/30/10) *Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NAL, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS |
NPAs & 90+ day Delinquencies / Loans & REO (%) 17 *Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NAL, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL |
Aaa Aa1 Baa2 Baa3 B1 B3 Caa1 55% 9% 4% 6% 3% 4% 19% Aa1 Aa2 Aa3 A1 A2 A3 Baa1 B1 5% 22% 3% 19% 41% 4% 3% 3% Aaa Aa1 Aa2 Aa3 A1 A2 Baa1 NR 5% 9% 47% 23% 10% 2% 2% 2% Municipal Corporate Notes Private Label CMO 18 Note: 80% are Available for Sale. (as of 9/30/10) Investment Securities (in thousands) |
Deposit Composition At 9/30/10 At 9/30/10 At 12/31/08 At 12/31/08 Total Cost of Deposits: 1.91% Total Cost of Deposits: 1.91% Total Cost of Deposits: 1.15% Total Cost of Deposits: 1.15% 19 |
Average Deposits 20 |
Time Deposit Maturities 1.00%* 1.17%* 2.13%* 3.58%* 2.96%* *Weighted Average Cost 21 (as of 9/30/10) |
Borrowings 4.26%* 3.81%* 3.76%* 2.99%* 3.00%* *Weighted Average Cost 22 (as of 9/30/10) |
Thomas M. Lyons Thomas M. Lyons Senior Vice President & Chief Financial Officer 23 |
Financial Highlights 24 (Dollars in thousands) BALANCE SHEET: 9/30/10 12/31/09 Total assets $6,782,295 $6,836,172 Total loans 4,344,657 4,384,194 Total deposits 4,904,556 4,899,177 Total investments 1,744,815 1,702,513 Total borrowed funds 903,610 999,233 Total stockholders' equity 921,048 884,555 |
Financial Highlights (Dollars in thousands except Earnings per Share) INCOME STATEMENT: 9/30/10 9/30/09* Operating Income * $37,590 $23,904 Operating Diluted Earnings per Share $0.66 $0.43 Operating ROAE 5.55% 3.46% Operating ROAA 0.74% 0.48% Net Interest Margin 3.45% 3.02% Operating Efficiency Ratio 57.18% 68.50% Nine Months Ended *Excludes impact of goodwill impairment charge in 2009 25 |
Return on Average Assets Source: SNL 26 *Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NAL, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS |
Net Interest Rate Margin 27 Source: SNL *Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NAL, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS |
Interest Cost: Total Deposits Source: SNL 28 *Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NAL, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS |
Cost of Funds Source: SNL 29 *Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NAL, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS [Total Interest Expense / (Average Interest Bearing Liabilities + Average Noninterest Bearing Deposits)]. |
Pre-Provision Net Interest Income 30 |
(Total noninterest expense - (foreclosed property expense + amortization of intangibles expense + total noninterest income)) as a percentage of average assets. (Annualized) Net Operating Exp / Avg Assets (%) Source: SNL 31 *Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NAL, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS |
Quarterly Cash Dividend since IPO Current Dividend Yield = 3.56% 32 |
Capital The Company continues to exceed all current regulatory The Company continues to exceed all current regulatory requirements and is “well capitalized.” requirements and is “well capitalized.” 33 (as of 9/30/10) Amount Ratio Amount Ratio Regulatory Tier 1 leverage capital 256,613 $ 4.00% 545,017 $ 8.50% Tier 1 risk-based capital 168,832 $ 4.00% 545,017 $ 12.91% Total risk-based capital 337,664 $ 8.00% 597,975 $ 14.17% REQUIRED ACTUAL (Dollars in thousands) |
Looking Forward Clear Strategy and Effective Execution Expand relationships while regional and national banks remain dislocated Cultivate and reward existing relationships to defend from competition Implement process improvements to achieve efficiency target and achieve Line of Business profitability targets Continue to enhance branch franchise Adapt to new regulations from Dodd-Frank and SEC Improve net interest income while managing risk Maintain appropriate capital levels while assessing opportunities Provide tax-efficient return to stockholders 34 |