![]() Acquisition of December 20, 2013 Investor Presentation Franchise Expansion to Eastern Pennsylvania Exhibit 99.2 |
![]() 1 Forward-Looking Statements Disclosure This presentation may contain forward-looking statements regarding Provident Financial Services, Inc. These statements constitute forward-looking information within the definition of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from any forward-looking statements expressed in this presentation, since forward-looking information involves significant known and unknown risks, uncertainties and other factors. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following: failure to satisfy the conditions to closing for the proposed merger in a timely manner or at all; failure of the Team Capital Bank stockholders to approve the proposed merger; failure to obtain the necessary governmental approvals for the proposed merger or adverse regulatory conditions in connection with such approvals; disruption to the parties’ businesses as a result of the announcement and pendency of the transaction; difficulties related to the integration of the businesses following the merger; competitive pressures among depository and other financial institutions; changes in the interest rate environment; and changes in general economic conditions, either nationally or regionally. For a discussion of additional factors that might cause such differences, please refer to Provident Financial Services, Inc.’s public filings with the Securities and Exchange Commission. These are available online at http://www.sec.gov. Provident Financial Services, Inc. does not undertake to update any forward-looking statements made in this presentation to reflect new information, future events or otherwise. Provident Financial Services, Inc. will be filing a registration statement on Form S-4 containing a proxy statement/prospectus and other documents regarding the proposed transaction with the SEC. Team Capital Bank stockholders and investors are urged to read the proxy statement/prospectus when it becomes available, because it will contain important information about Provident Financial Services, Inc. and Team Capital Bank and the proposed transaction. When available, copies of the proxy statement/prospectus will be mailed to Team Capital Bank stockholders. Copies of the proxy statement/prospectus also may be obtained free of charge at the SEC’s web site at http://www.sec.gov, or by directing a request to Provident Financial Services, Inc., Attention: Corporate Secretary, 100 South Wood Avenue, Iselin, New Jersey 08830, or on its website at www.providentnj.com, or to Team Capital Bank, Attention: Corporate Secretary, 3001 Emrick Boulevard, Bethlehem, Pennsylvania 18020, or on its website at www.teamcapitalbank.com. Copies of other documents filed by Provident Financial Services, Inc. with the SEC may also be obtained free of charge at the SEC’s website or by directing a request to Provident Financial Services, Inc. at the address provided above. This presentation does not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities. |
![]() 2 Transaction Rationale 1. Financial data for Team Capital Bank as of or for the quarter ending 9/30/13, NPAs exclude restructured loans. Enhances New Jersey Franchise with Expansion into Eastern Pennsylvania Provident currently lends in Team Capital’s Pennsylvania markets, and the acquisition will accelerate growth in those areas Large, attractive lending markets offering favorable loan spreads Talented lending team with strong commercial relationships in New Jersey, Lehigh Valley, and Bucks County Loans have grown in excess of 10% annually since 2010 Provident’s larger balance sheet and capital base will provide additional lending capacity Affluent demographics provide wealth management opportunities High Performing Commercially-Oriented Bank with Solid Asset Quality Strong profitability: ROAA 0.76%, ROACE 10.3%, NIM 3.65% Diverse commercial loan portfolio: 51% CRE, 12% C&I, 5% multifamily, 5% C&D; 4.97% yield on loans Solid asset quality: NPAs / Assets 0.5%, NPAs / Loans + OREO 0.8% Low cost deposit franchise: 25% noninterest-bearing deposits; 80% core deposits; 0.40% cost of deposits Financially Attractive 5% EPS accretion in 2015 (first full year); slightly accretive to 2014 EPS (excluding non-recurring deal related expenses) TBV dilution of 3.5% with earnback in 4 years IRR greater than 15% Leverages Provident’s excess capital 1 |
![]() 3 Deposit data as of 9/30/13. Provident Financial (78) Team Capital (12) Branch # Dep. ($mm) % of Total Branch # Dep. ($mm) % of Total NJ 7 $383 51% 85 $5,639 94% PA 5 $362 49% 5 $362 6% Total 12 $745 90 $6,001 Pro Forma Branch Map Pro Forma |
![]() 4 Transaction Overview Merger Consideration: $122 million Consideration Mix: 75% stock / 25% cash Represents approximately 4.9 million PFS shares and $31 million in cash Board Representation: One Provident board seat to Team Capital Required Approvals: Customary regulatory approvals Team Capital shareholder approval Due Diligence: Completed Preferred Equity (SBLF): Provident intends to repay Team Capital’s $22 million of SBLF preferred post closing Termination Fee: $5 million Expected Closing: Second quarter of 2014 1. Based on PFS closing stock price of $18.61 on December 19. 1 |
![]() 5 Overview of Team Capital Company Description Financial Summary ($ in millions) 1. Financial data for Team Capital Bank as of or for the quarter ending 9/30/13. 2. Excludes restructured loans. Team Capital Bank is a Pennsylvania state-chartered savings bank Organized by regional segments / lending teams, which include: Lehigh Valley, Bucks County and New Jersey 12 branches: Lehigh Valley (3), Bucks (2) and New Jersey (7) - Experienced commercial lending teams with approximately 15 loan officers Focus on small business and middle market accounts that are underserved by larger banks Assets $949 Net Loans $581 Deposits $745 Tangible Common Equity $65 ROAA 0.76% ROACE 10.3% NPAs / Assets 0.47% NPAs / Loans + OREO 0.76% Lehigh Valley New Jersey Bucks 2 2 1 |
![]() 6 Pro Forma Loans & Deposits Source: SNL Financial and company reports. Based on regulatory data as of or for the quarter ending 9/30/13. Loan Composition Deposit Composition Other 6% C&D 4% 1-4 Family 29% Multi- Family 17% C&I 8% Com'l RE 36% Provident Team Capital Pro Forma C&I 12% Other 9% Com'l RE 51% Multi- Family 5% 1-4 Family 18% C&D 5% 1-4 Family 28% Multi- Family 16% Com'l RE 37% C&I 8% C&D 4% Other 7% CDs 16% Other Trans, MM & Savings 67% Non- interest 17% CDs 17% Non- interest 18% Other Trans, MM & Savings 65% CDs 29% Other Trans, MM & Savings 46% Non- interest 25% $5,083 million $590 million $5,673 million Yield: 4.32 % Yield: 4.97% Yield: 4.39% Loans / Deposits: 96% $5,278 million $745 million $6,023 million Cost: 0.33% Cost: 0.40% Cost: 0.34% Provident Team Capital Pro Forma Loans / Deposits: 79% Loans / Deposits: 94% |
![]() 7 Lehigh Valley 1 Bucks County Pennsylvania PFS Current Markets 2 Population (2012): 651,240 629,397 12,807,296 577,234 Projected 5-Year Population Growth: 2.4% 0.7% 1.5% 1.3% # of Businesses: 23,592 27,664 496,809 22,873 Median Household Income: $55,180 $73,557 $49,167 $69,276 Projected 5-Year HHI Growth: 20.6 14.4 16.3 14.8 Deposits (PFS & Team) ($mm): $279 $84 $362 $5,639 Branches (PFS & Team): 3 2 5 85 Entry into Growing Markets Source: Pennsylvania State Data Center, 2010 U.S. Census, SNL Financial, Deposit data as of 9/30/13. 1. Lehigh Valley Pennsylvania region consists of Lehigh and Northampton counties. 2. Represents median of Provident’s current markets, branches and deposits include contribution from Team Capital’s New Jersey branches. Team’s Pennsylvania markets have an attractive business climate due to proximity to large markets such as Philadelphia and New York, lower tax rates and affordable real estate - A large number of Fortune 500 companies have established warehouses and distribution centers within the regions, including Amazon, Coca-Cola, WalMart, Nestle and Kraft Provident’s entry positions the company to take advantage of key demographic trends, including; - Lehigh County had the fastest population growth from 2010-2012 across the state of Pennsylvania - Lehigh Valley is the third most populous region in Pennsylvania, while Bucks County has the fourth largest county population in the state |
![]() 8 Financial Impact 1. Earnback represents years for pro forma projected TBV to equal PFS’ standalone projected TBV (“crossover” method). 2. Based on tangible common equity of approximately $66 million as of December 2013. 3. Represents median of Northeast U.S. acquisitions since 2011 with target assets between $500mm and $3.0bn and NPAs / Assets less than 3.5%. Financial Impact: 5% EPS accretion in 2015 (first full year); slightly accretive to EPS in 2014 (excluding non-recurring deal related expenses) TBV per share dilution of 3.5% at closing with earnback of 4 years IRR greater than 15% Pro forma TCE/TA at close: 8.7% Key Assumptions: Cost savings: Approximately 25% or $6 million based on Team Capital’s core noninterest expenses Gross credit mark of $9 million or 1.5% of loans After-tax restructuring charge of $11 million CDI of $9 million, representing 1.5% of core deposits amortized over 10 years (SOYD) Revenue synergies identified but excluded from financial analysis Pricing Metrics: Adjusted for 25% Precedent Cost Savings Transactions Price / Tangible Common Equity : 1.8x - 1.7x Price / LTM Net Income: 18.8x 12.1x 19.6x Price / 2014E Net Income: 16.9x 11.2x 22.1x Core Deposit Premium: 9.3% - 7.7% 1 2 3 |
![]() 9 Summary Enhances New Jersey franchise and accelerates growth in Eastern Pennsylvania Team Capital is a commercially-oriented bank with strong profitability, loan growth and asset quality Financially attractive transaction with 5% EPS accretion, 3.5% TBV dilution with reasonable earnback, IRR greater than 15% |
![]() Investor Presentation |