![]() Sandler O’Neill & Partners East Coast Financial Services Conference November 10, 2011 Exhibit 99.1 |
![]() 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. Forward Looking Statements |
![]() Christopher Martin Christopher Martin Chairman, President & Chief Executive Officer |
![]() NYSE Symbol - PFS $7.0 billion in assets Headquartered in Jersey City, NJ Holding company for The Provident Bank, the oldest NJ bank (chartered in 1839) Converted to stock form in 2003 82 branch locations throughout northern and central NJ Two Loan Production Offices in NJ Consolidated administrative operations to Metro Park (Iselin) in March 2011 – Sale of two buildings to close Q4 Did not participate in TARP, No TRUPS CORPORATE PROFILE |
![]() Market Capitalization: $806 million 60.0 million Shares Outstanding 11.04% Insider Ownership (includes 7.67% held by ESOP) including 22,060 shares purchased by CEO/CFO & Directors in 2011 64.71% Institutional Ownership 3.60% Dividend Yield 137% Price/TBV 84.9% Price/BV 13.5x P/E 13.0x Price/2012 Est. Earnings Market Data – 10/28/11 |
![]() Senior management team has, on average, over 25 years of relationship banking experience with large commercial banks & thrifts in our primary markets Extremely knowledgeable and results-oriented Conservative business practices Culture of accountability, efficiency and integrity Majority of officers have been with publicly-traded organizations Ongoing leadership development throughout organization to ensure management succession and performance Executive Leadership Team |
![]() New Strategic Plan in place September 2011 Challenge: Increase revenue in difficult environment Focus on Relationships by defined target customer segments Community Bank with commercial emphasis Ongoing SBA Initiative Reduce marginally accretive asset classes Expand non-interest income with concentration on Wealth Management Aggressively manage credit quality Continue Branch rationalization/relocations Continue to evaluate acquisition opportunities Seeking Out Strategic Organic Growth & Opportunities |
![]() Current Retail Franchise 82 Branches in 11 New Jersey Counties |
![]() ![]() ![]() Market Demographics (as of 6/30/11) Source: FDIC-Summary of Deposit & SNL Provident Financial Services, Inc. (NYSE: PFS) New Jersey (NJ) Middlesex 5 25 1,595,709 7.16 794,605 78,561 Hudson 4 14 933,095 3.48 607,650 52,525 Morris 9 10 777,042 3.83 496,157 104,165 Essex 12 7 479,377 2.21 783,531 55,914 Monmouth 10 11 462,256 2.60 649,429 82,974 Bergen 28 3 197,111 0.51 910,386 84,344 Somerset 9 4 193,594 2.26 333,075 101,044 Ocean 13 4 159,815 1.22 578,728 60,936 Union 20 2 131,607 0.76 531,112 73,602 Mercer 20 1 59,980 0.53 371,697 75,009 Passaic 21 1 25,979 0.26 500,140 62,332 NJ Totals 82 5,015,565 6,556,510 Weighted Average: New Jersey Franchise 76,203 Aggregate: Entire State of New Jersey 8,822,373 72,519 Aggregate: National 311,212,863 54,442 County Market Rank Number of Branches Company Deposits in Market ($000) Deposit Market Share (%) Total Population 2010 (Actual) Median HH Income 2010 ($) |
![]() Asset Composition – At 9/30/11 Total cash & cash equivalents 1.8% Total investments 24.2% Net loans 64.2% Foreclosed assets 0.1% Premises & equipment 1.1% Accrued interest receivable 0.3% Intangible assets 5.2% Bank -owned life insurance 2.0% Other assets 1.1% |
![]() Loan Portfolio – At 9/30/11 ($ in thousands) Owner Occupied loans totaled $453,738M at 9/30/11 and are included under the Commercial loan portfolio total of $814,112M. Net total of $3,819M representing premiums, discounts & deferred fees, has not been included in the outstanding loan totals. |
![]() CRE Portfolio by Industry – At 9/30/11 Total CRE Loans = $1,733 MM |
![]() C & I Loan Portfolio – At 9/30/11 C&I Loans= $814 MM Primary Property Type ($ in thousands) |
![]() Construction Loan Portfolio – At 9/30/11 Total Construction Loans = $117 MM Construction loan balance does not reflect unfunded commitments of $60MM. No loans are located outside of NJ/NY/PA. Primary Property Type ($ in thousands) |
![]() Loan Originations Note: Does not include loan purchases or renewals. |
![]() Loan Quality by Portfolio As of 9/30/11 Net total of $3.8 MM representing premiums, discounts & deferred fees, has not been included in the outstanding loan totals. ($ in thousands) TOTAL LOAN PORTFOLIO BALANCE 1,848,645 $ 814,112 $ 553,670 $ 1,347,973 $ 4,564,400 $ NON-PERFORMING LOANS 47,115 $ 29,732 $ 8,438 $ 40,048 $ 125,333 $ % OF PORTFOLIO 2.55% 3.65% 1.52% 2.97% 2.75% % OF TOTAL LOANS 1.03% 0.65% 0.18% 0.88% 2.75% NET CHARGE-OFFS (YTD) 1,678 $ 6,429 $ 5,935 $ 3,925 $ 17,967 $ 0.13% 1.09% 1.41% 0.38% 0.53% CRE/CONST C & I CONSUMER 1-4 FAMILY ANNUALIZED NET CHARGE- OFFS AS % OF AVG. O/S |
![]() NPAs & 90+ day Delinquencies / Loans & REO Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 2.83% 2.78% 2.99% 2.94% 3.35% 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 Other Assets Owned Consumer Commercial Loans Construction Loans Commercial Real Estate 1-4 Family 1st Mortgages Peer Mean |
![]() Investment Securities – At 9/30/11 Note: 78% are Available for Sale. Weighted Avg. Life AFS 2.6 yrs. HTM 3.8 yrs. Total 2.9 yrs. |
![]() Deposit Composition – At 9/30/11 Total Deposits= $5,074 MM 77% Core Total Cost of Deposits: 0.81% Savings 18% MMA 21% NOW 15% NIB 13% CDs 23% Muni 10% |
![]() ($ in thousands) $218,023 $614,181 $130,628 $98,157 $117,835 0.84% 1.01% 2.76% 3.05% 2.39% Time Deposit Maturities Time Deposit Maturities – At 9/30/11 Note: % = Weighted Avg. Cost |
![]() Borrowings – At 9/30/11 Note: % = Weighted Avg. Cost ($ in thousands) $27,400 $54,100 $77,587 $132,793 $514,338 2011 2012 2013 2014 Thereafter Borrowings 4.05% 3.76% 2.72% 2.37% 2.51% |
![]() Thomas M. Lyons Thomas M. Lyons Executive Vice President & Chief Financial Officer |
![]() Financial Highlights ($ in thousands) BALANCE SHEET: 9/30/11 12/31/10 Total assets $6,997,359 $6,824,528 Total loans 4,568,220 4,409,813 Total deposits 5,074,293 4,877,734 Total investments 1,695,372 1,763,232 Total borrowed funds 912,567 969,683 Total stockholders' equity 949,397 921,687 |
![]() Financial Highlights ($ in thousands except Earnings per Share) INCOME STATEMENT: 9/30/11 9/30/10 Net Income $42,474 $37,590 Diluted Earnings per Share $0.75 $0.66 ROATE 9.76% 9.16% ROAA 0.83% 0.74% Net Interest Margin 3.51% 3.45% Efficiency Ratio 57.13% 57.18% Nine Months Ended |
![]() Return on Average Assets (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 0.80 0.71 0.76 0.82 0.90 0.71 0.76 0.73 0.84 0.91 |
![]() Pre-Provision Net Interest Income |
![]() Net Interest Margin (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL |
![]() Cost of Deposits (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 PFS Peer 0.95 0.85 0.81 0.78 0.72 0.97 0.90 0.82 0.79 0.79 |
![]() Cost of Funds (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 1.30 1.17 1.10 1.07 1.00 1.36 1.25 1.17 1.13 1.08 PFS Peer |
![]() Interest Rate Sensitivity Net Interest Income Change in Interest Rates in Basis Points (Rate Ramp) Dollar Amount (in thousands) Dollar Change Percent Change % -100 206,213 (5,845) (2.8) Static 212,058 — — +100 212,468 410 0.2 +200 208,989 (3,069) (1.4) +300 206,284 (5,774) (2.7) |
![]() Asset Quality (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 1.58 1.56 1.63 1.62 1.61 1.76 1.71 1.73 1.71 1.65 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 Loan Loss Reserve / Loans |
![]() Asset Quality (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 2.45 2.38 2.83 3.06 2.74 2.37 2.34 2.55 2.54 2.38 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 Non Performing Loans/Loans PFS Peer |
![]() Asset Quality (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL Cumulative for the period PFS 0.51 Peer 0.84 Net Charge-offs/Avg. Loans |
![]() Net Operating Exp / Avg Assets (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 1.51 1.52 1.57 1.57 1.56 1.56 1.56 1.61 1.61 1.59 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 |
![]() Efficiency Ratio (%) Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL 54.77 55.44 55.73 56.33 55.97 58.23 58.85 59.69 59.31 58.67 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 |
![]() Diluted EPS / Annualized ROATE $0.24 $0.21 $0.23 $0.25 $0.27 9.48% 8.41% 9.13% 9.63% 10.48% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 Diluted EPS Annl. ROATE |
![]() Capital – At 9/30/11 Amount Ratio Amount Ratio Regulatory Tier 1 leverage capital 261,461 $ 4.00% 571,567 $ 8.74% Tier 1 risk-based capital 177,900 $ 4.00% 571,567 $ 12.85% Total risk-based capital 355,800 $ 8.00% 627,384 $ 14.11% REQUIRED ACTUAL (Dollars in thousands) The Company continues to exceed all current regulatory requirements and is “well capitalized.” |
![]() Capital Flexibility Tangible Common Equity/ Tangible Assets = 8.86% Never a reduction in the quarterly dividend rate Increased dividend 9% in 2011, to $0.12 per quarter Targeted payout ratio 45-55% 1.9 million shares eligible for repurchase under current authorization Ability to grow through acquisition |
![]() Looking Forward Expand relationships while money center banks remain dislocated Cultivate and reward existing relationships to defend from competition Assess acquisition opportunities in our contiguous markets where accretive Implement process improvements to achieve efficiency target and achieve Line of Business profitability targets Challenge our strategic assumptions, stress test our business lines and accurately assess risks Continue to enhance branch franchise Adapt to new regulations from Dodd-Frank and SEC Improve net interest income while managing risk Provide tax-efficient return to stockholders Clear Strategy and Effective Execution with an Economic Backdrop of Uncertainty |