Provident Financial Services, Inc. Announces Increased Quarterly Earnings and Declares Quarterly Cash Dividend
Provident Financial Services, Inc. Announces Increased Quarterly Earnings and
Declares Quarterly Cash Dividend
PR Newswire
JERSEY CITY, N.J., Oct. 26, 2012
JERSEY CITY, N.J., Oct. 26, 2012 /PRNewswire/ -- Provident Financial Services,
Inc. (NYSE: PFS) (the "Company") reported net income of $16.2 million, or
$0.28 per basic and diluted share for the three months ended September 30,
2012, compared to net income of $15.6 million, or $0.27 per basic and diluted
share for the three months ended September 30, 2011.
For the nine months ended September 30, 2012, the Company reported net income
of $50.6 million, or $0.89 per basic share and $0.88 per diluted share,
compared to net income of $42.5 million, or $0.75 per basic and diluted share
for the same period last year.
The improvement in earnings for the third quarter and year-to-date period
ended September 30, 2012, was largely attributable to the continued
improvement in asset quality and related reductions in the provision for loan
losses, while growth in both average loans outstanding and average
lower-costing core deposits have mitigated compression in the net interest
margin.
Christopher Martin, Chairman, President and Chief Executive Officer,
commented, "The strong organic loan growth we experienced during the third
quarter helped offset the margin compression currently affecting much of our
industry. Our margin was impacted by accelerated repayments of
mortgage-backed securities, as well as rate modifications and refinancing by
existing customers who continued to take advantage of the prolonged low
interest rate environment." Martin continued: "Helping preserve the margin,
we achieved substantial core deposit growth during the quarter. Asset quality
continued to improve despite the lingering challenges within the New Jersey
economy. We look forward to 2013 and hopefully, a clearer economic outlook.
Our capital levels remain strong and our staff remains committed to building
and expanding client relationships through personal attention."
Declaration of Quarterly Dividend
The Company's Board of Directors declared a quarterly cash dividend of $0.13
per common share payable on November 30, 2012, to stockholders of record as of
the close of business on November 15, 2012.
Balance Sheet Summary
Total assets increased $167.6 million to $7.26 billion at September 30, 2012,
from $7.10 billion at December 31, 2011. The increase was primarily due to
increases in net loans and cash and cash equivalents, partially offset by a
decline in total securities.
Cash and cash equivalents increased $37.9 million to $107.6 million at
September 30, 2012, from $69.6 million at December 31, 2011. These cash
balances are expected to be deployed to fund loan originations, the repayment
of borrowings and investment purchases.
The Company's net loans increased $169.4 million, or 3.7%, during the nine
months ended September 30, 2012 to $4.75 billion. Loan originations totaled
$1.2 billion and loan purchases totaled $115.4 million for the nine months
ended September 30, 2012. The loan portfolio had net increases of $162.9
million in commercial and multi-family mortgage loans, $22.6 million in
consumer loans and $10.6 million in construction loans, which were partially
offset by decreases in residential mortgage loans and commercial loans of
$19.3 million and $9.8 million, respectively. Commercial real estate,
commercial and construction loans represented 61.1% of the loan portfolio at
September 30, 2012, compared to 59.8% at December 31, 2011.
At September 30, 2012, the Company's unfunded loan commitments totaled $850.9
million, including $345.4 million in commercial loan commitments, $138.7
million in construction loan commitments and $96.7 million in commercial
mortgage commitments. Unfunded loan commitments at December 31, 2011 were
$770.4 million.
Total investments decreased $35.9 million, or 2.0%, to $1.73 billion at
September 30, 2012, from $1.76 billion at December 31, 2011. The decrease was
primarily due to principal repayments on mortgage-backed securities,
maturities of municipal and agency bonds and the sale of certain
mortgage-backed securities which had a high risk of prepayment, partially
offset by purchases of mortgage-backed and municipal securities.
Total deposits increased $217.1 million, or 4.2%, during the nine months ended
September 30, 2012 to $5.37 billion. Core deposits, consisting of savings and
demand deposit accounts, increased $338.3 million, or 8.4%, to $4.37 billion
at September 30, 2012. Partially offsetting this increase, time deposits
decreased $121.2 million, or 10.7%, to $1.01 billion at September 30, 2012,
with the majority of the decrease occurring in the 24-month and shorter
maturity categories. The Company remains focused on developing core deposit
relationships, while strategically permitting the run-off of time deposits.
Core deposits represented 81.3% of total deposits at September 30, 2012,
compared to 78.1% at December 31, 2011.
Borrowed funds were reduced $85.8 million, or 9.3% during the nine months
ended September 30, 2012, to $834.4 million, as core deposit growth continued
to replace wholesale funding. Borrowed funds represented 11.5% of total
assets at September 30, 2012, a reduction from 13.0% at December 31, 2011.
Common stock repurchases for the nine months ended September 30, 2012, totaled
408,000 shares at an average cost of $13.81 per share. No shares were
repurchased during the quarter ended September 30, 2012. As of September 30,
2012, 1.4 million shares remained eligible for repurchase under the current
authorization. At September 30, 2012, book value per share and tangible book
value per share were $16.43 and $10.47, respectively, compared with $15.88 and
$9.87, respectively, at December 31, 2011.
Results of Operations
Net Interest Income and Net Interest Margin
For the three months ended September 30, 2012, net interest income decreased
$741,000 from the same period in 2011, to $53.7 million. The decline in net
interest income for the three months ended September 30, 2012, was primarily
due to compression in the net interest margin, partially mitigated by growth
in average interest-earning assets. Net interest income for the nine months
ended September 30, 2012, increased $1.1 million compared to the same period
in 2011, to $163.1 million. The improvement in net interest income for the
nine months ended September 30, 2012 resulted from an increase in average
interest-earning assets, primarily average loans outstanding, funded with
growth in lower-costing core deposits. This improvement in earning asset
volume and funding mix was partially offset by compression in the net interest
margin.
The Company's net interest margin for the quarter ended September 30, 2012 was
3.31%, a decrease of 8 basis points from 3.39% for the quarter ended June 30,
2012, and 19 basis points from 3.50% for the quarter ended September 30,
2011. The decrease in the net interest margin was primarily attributable to
the decline in yields on interest-earning assets, which outpaced the downward
re-pricing of the Company's interest-bearing liabilities as longer-term market
interest rates have declined and the yield curve has flattened. The weighted
average yield on interest-earning assets was 3.99% for the three months ended
September 30, 2012, compared with 4.11% for the trailing quarter, and 4.45%
for the three months ended September 30, 2011. The weighted average cost of
interest-bearing liabilities was 0.82% for the quarter ended September 30,
2012, compared with 0.85% for the trailing quarter and 1.10% for the third
quarter of 2011. The average cost of interest bearing deposits for the three
months ended September 30, 2012 was 0.54%, compared with 0.58% for the
trailing quarter and 0.81% for the same period last year. Partially
offsetting the effects of interest rate spread compression on the margin,
average non-interest bearing demand deposits totaled $771.4 million for the
quarter ended September 30, 2012, compared with $689.3 million for the
trailing quarter and $605.8 million for the quarter ended September 30, 2011.
The average cost of borrowings for the three months ended September 30, 2012
was 2.32%, compared with 2.20% for the trailing quarter, and 2.50% for the
same period last year. The increase in the cost of borrowing from the
trailing quarter was due to a reduction in lower-costing overnight funds.
For the nine months ended September 30, 2012, the net interest margin
decreased 13 basis points to 3.38%, compared with 3.51% for the nine months
ended September 30, 2011. The weighted average yield on interest-earning
assets declined 43 basis points to 4.10% for the nine months ended September
30, 2012, compared with 4.53% for the nine months ended September 30, 2011,
while the weighted average cost of interest-bearing liabilities declined 32
basis points to 0.86% for the nine months ended September 30, 2012, compared
with 1.18% for the same period in 2011. The average cost of interest bearing
deposits for the nine months ended September 30, 2012 was 0.58%, compared with
0.87% for the same period last year. Average non-interest bearing demand
deposits totaled $710.5 million for the nine months ended September 30, 2012,
compared with $580.8 million for the nine months ended September 30, 2011.
The average cost of borrowings for the nine months ended September 30, 2012
was 2.26%, compared with 2.62% for the same period last year.
Non-Interest Income
Non-interest income totaled $9.8 million for the quarter ended September 30,
2012, an increase of $1.1 million, or 13.2%, compared to the same period in
2011. Fee income increased $901,000 to $7.5 million for the three months
ended September 30, 2012, compared with the three months ended September 30,
2011, due primarily to an increase in commercial loan prepayment fees and
increased wealth management fees attributable to Beacon Trust Company
("Beacon"), acquired in August 2011. These increases were partially offset by
lower deposit-based fee revenue. Additionally, other income increased
$600,000 for the three months ended September 30, 2012, compared to the same
period in 2011, resulting from an increase in gains related to loan sales,
partially offset by increased net losses on the sale of foreclosed real
estate. Net gains on securities transactions for the quarter ended September
30, 2012 totaled $298,000, a decrease of $360,000 compared to the same period
in 2011.
For the nine months ended September 30, 2012, non-interest income totaled
$31.9 million, an increase of $8.0 million, or 33.5%, compared to the same
period in 2011. Fee income totaled $23.0 million for the nine months ended
September 30, 2012, an increase of $5.0 million compared with the same period
in 2011, largely due to an increase in wealth management fees related to the
Beacon acquisition and increased prepayment fees on commercial loans, which
were partially offset by lower deposit-based fee income, primarily consisting
of overdraft fees. Net gains on securities transactions totaled $2.5 million
for the nine months ended September 30, 2012, compared to $686,000 for the
same period in 2011. During the period, the Company identified and sold
certain mortgage-backed securities which had a high risk of accelerated
prepayment. The proceeds from the sales were reinvested in similar securities
with more stable projected cash flows. Also contributing to the increase in
non-interest income, other income increased $1.0 million for the nine months
ended September 30, 2012, compared with the same period in 2011, primarily due
to income associated with the termination of the Company's debit card rewards
program and an increase in gains related to loan sales, partially offset by
increased net losses on the sale of foreclosed real estate.
Other-than-temporary impairment charges on investment securities declined
$302,000 for the nine months ended September 30, 2012, compared to the same
period last year, as the Company did not experience any other-than-temporary
impairment on its securities portfolio in 2012.
Non-Interest Expense
For the three months ended September 30, 2012, non-interest expense increased
$1.9 million, or 5.6%, to $36.9 million, compared to the three months ended
September 30, 2011. Compensation and benefits increased $905,000 for the
quarter ended September 30, 2012, to $20.1 million, compared to the quarter
ended September 30, 2011. This increase was due to higher salary expense
associated with annual merit increases, personnel added as a result of the
Beacon acquisition, an increased incentive compensation accrual, and increased
employee health and medical costs and retirement benefit costs. Other
operating expenses increased $877,000, to $6.1 million for the quarter ended
September 30, 2012, from the same period in 2011, due mainly to an increase in
non-performing asset related expenses and costs associated with branch
consolidations. In addition, data processing expense increased $331,000 for
the three months ended September 30, 2012, compared to same period in 2011,
primarily due to increased software maintenance expense associated with
technology enhancements at Beacon. Partially offsetting these increases,
amortization of intangibles decreased $197,000 for the three months ended
September 30, 2012, compared with the same period in 2011, as a result of
scheduled reductions in core deposit intangible amortization. Net occupancy
expense decreased $144,000, to $5.1 million for the three months ended
September 30, 2012, compared to the same period in 2011, as the prior year
period included approximately $125,000 in expense due to property damage
sustained in Hurricane Irene.
The Company's annualized non-interest expense as a percentage of average
assets was 2.04% for the quarter ended September 30, 2012, compared to 2.01%
for the same period in 2011. The efficiency ratio (non-interest expense
divided by the sum of net interest income and non-interest income) was 58.10%
for the quarter ended September 30, 2012, compared with 55.39% for the same
period in 2011.
Non-interest expense for the nine months ended September 30, 2012 was $111.4
million, an increase of $5.2 million, or 4.9%, from the nine months ended
September 30, 2011. Compensation and benefits expense increased $4.6 million,
to $61.1 million for the nine months ended September 30, 2012 compared to the
nine months ended September 30, 2011, due to higher salary expense associated
with annual merit increases, personnel added as a result of the Beacon
acquisition, an increased incentive compensation accrual and increased
employee health and medical costs and retirement benefit costs. In addition,
other operating expense increased $1.8 million for the nine months ended
September 30, 2012, compared to the same period in 2011, due primarily to
increased non-performing asset related expenses, a $213,000 charge related to
the termination of a software contract in connection with the Beacon
integration, and $222,000 in charges related to the consolidation of
underperforming branches. Data processing expense increased $768,000 for the
nine months ended September 30, 2012, compared to the same period in 2011, due
to an increase in software maintenance expense, primarily associated with
technology enhancements at Beacon, and increased core processing fees.
Partially offsetting these increases, impairment of premises and equipment
declined $807,000 for the nine months ended September 30, 2012, compared to
the same period last year, due to an impairment charge incurred in the first
quarter of 2011 related to the then planned sale and relocation of the
Company's former loan center. FDIC insurance expense decreased $586,000 to
$3.9 million for the nine months ended September 30, 2012, compared with the
same period in 2011. The decrease was primarily due to a lower assessment
rate and a change in assessment methodology from a deposit-based to an
asset-based assessment, effective in the second quarter of 2011. Net
occupancy expense decreased $481,000 to $15.3 million, compared to the same
period last year, due to the consolidation and relocation of the Company's
administrative offices in April 2011 and the elimination of prior year
carrying costs on previously occupied facilities owned by the Company that
were sold in November 2011. Approximately $125,000 in expense due to property
damage sustained in Hurricane Irene were also included in occupancy expense
for the nine months ended September 30, 2011. Additionally, amortization of
intangibles decreased $346,000 for the nine months ended September 30, 2012,
compared with the same period of 2011, as a result of scheduled reductions in
core deposit intangible amortization, partially offset by the amortization of
the customer relationship intangible arising from the Beacon acquisition and
increased amortization of mortgage servicing rights.
Asset Quality
The Company's total non-performing loans at September 30, 2012 improved to
$105.7 million, or 2.19% of total loans, compared with $115.2 million, or
2.43% of total loans at June 30, 2012, $122.5 million, or 2.63% of total loans
at December 31, 2011, and $125.3 million, or 2.74% of total loans at September
30, 2011. The decrease in non-performing loans at September 30, 2012,
compared with the trailing quarter, was largely due to a $4.9 million decrease
in non-performing commercial loans, a $2.6 million decrease in non-performing
residential loans, a $1.3 million decrease in non-performing consumer loans
and a $1.0 million decrease in non-performing commercial mortgage loans. At
September 30, 2012, impaired loans totaled $114.4 million with related
specific reserves of $8.4 million, compared with impaired loans totaling
$115.5 million with related specific reserves of $8.6 million at June 30,
2012.
At September 30, 2012, the Company's allowance for loan losses was 1.46% of
total loans, compared with 1.53% of total loans at June 30, 2012, 1.60% of
total loans at December 31, 2011 and 1.61% of total loans at September 30,
2011. The Company recorded provisions for loan losses of $3.5 million and
$12.0 million for the three and nine months ended September 30, 2012,
respectively, compared with provisions of $7.5 million and $22.9 million for
the three and nine months ended September 30, 2011, respectively. For the
three and nine months ended September 30, 2012, the Company had net
charge-offs of $5.6 million and $16.1 million, respectively, compared with net
charge-offs of $6.1 million and $18.0 million, respectively, for the same
periods in 2011. The allowance for loan losses decreased $4.1 million to
$70.3 million at September 30, 2012, from $74.4 million at December 31, 2011
as the weighted average risk rating of the loan portfolio improved and
non-performing asset formation decreased.
At September 30, 2012, the Company held $13.9 million of foreclosed assets,
compared with $12.8 million at December 31, 2011. Foreclosed assets at
September 30, 2012 consisted of $6.5 million of commercial real estate, $5.9
million of residential real estate, $498,000 of marine vessels and $339,000 of
commercial loans.
Income Tax Expense
For the three and nine months ended September 30, 2012, the Company's income
tax expense was $7.0 million and $21.0 million, respectively, compared with
$5.1 million and $14.3 million, for the three and nine months ended September
30, 2011, respectively. The increase in income tax expense was primarily a
function of growth in pre-tax income from taxable sources. The Company's
effective tax rates were 30.1% and 29.3% for the three and nine months ended
September 30, 2012, respectively, compared with 24.6% and 25.2% for both the
three and nine months ended September 30, 2011, respectively.
About the Company
Provident Financial Services, Inc. is the holding company for The Provident
Bank, a community-oriented bank offering a full range of retail and commercial
loan and deposit products. The Bank currently operates a network of full
service branches throughout 11 counties in northern and central New Jersey.
Post Earnings Conference Call
Representatives of the Company will hold a conference call for investors at
10:00 a.m. Eastern Time on Friday, October 26, 2012 regarding highlights of
the Company's third quarter 2012 financial results. The call may be accessed
by dialing 1-877-317-6789 (Domestic), 1-412-317-6789 (International) or
1-866-605-3852 (Canada). Internet access to the call is also available
(listen only) at www.providentnj.com by going to Investor Relations and
clicking on Webcast.
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 cautions readers not to place undue reliance on any such
forward-looking statements which speak only as of the date made. The Company
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.
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Statements of Financial Condition
September 30, 2012 (Unaudited) and December 31, 2011
(Dollars in Thousands)
Assets September 30, December 31,
2012 2011
Cash and due from banks $ 105,601 $ 68,553
Short-term investments 1,952 1,079
Total cash and cash 107,553 69,632
equivalents
Securities available for sale, at fair value 1,337,212 1,376,119
Investment securities held to maturity (fair
value of $370,353 at
September 30, 2012 (unaudited) and 352,307 348,318
$366,296 at December 31, 2011)
Federal Home Loan Bank of New York ("FHLB-NY") 37,971 38,927
stock
Loans 4,818,857 4,653,509
Less allowance for loan losses 70,280 74,351
Net loans 4,748,577 4,579,158
Foreclosed assets, net 13,900 12,802
Banking premises and equipment, net 67,315 66,260
Accrued interest receivable 22,590 24,653
Intangible assets 358,365 360,714
Bank-owned life insurance 145,905 142,010
Other assets 73,285 78,810
Total assets $ 7,264,980 $ 7,097,403
Liabilities and Stockholders' Equity
Deposits:
Demand deposits $ 3,468,321 $ 3,136,129
Savings deposits 897,854 891,742
Certificates of deposit of $100,000 or 342,807 383,174
more
Other time deposits 664,695 745,552
Total deposits 5,373,677 5,156,597
Mortgage escrow deposits 21,340 20,955
Borrowed funds 834,421 920,180
Other liabilities 46,999 47,194
Total liabilities 6,276,437 6,144,926
Stockholders' Equity:
Preferred stock, $0.01 par value, 50,000,000 — —
shares authorized, none issued
Common stock, $0.01 par value, 200,000,000
shares authorized, 83,209,293 shares
issued and 60,156,795 outstanding at
September 30, 2012, and 59,968,195
outstanding at December 31, 2011 832 832
Additional paid-in capital 1,020,778 1,019,253
Retained earnings 390,515 363,011
Accumulated other comprehensive income 13,038 9,571
Treasury stock (383,256) (384,725)
Unallocated common stock held by the Employee (53,364) (55,465)
Stock Ownership Plan ("ESOP")
Common Stock acquired by the Directors' Deferred (7,321) (7,390)
Fee Plan ("DDFP")
Deferred Compensation - DDFP 7,321 7,390
Total stockholders' 988,543 952,477
equity
Total liabilities and $ 7,264,980 $ 7,097,403
stockholders' equity
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Statements of Income
Three and Nine Months Ended September 30, 2012 and 2011 (Unaudited)
(Dollars in Thousands, except per share data)
Three months ended Nine months ended
September 30, September 30,
2012 2011 2012 2011
Interest income:
Real estate secured loans $ 38,544 $ 39,466 $ 116,175 $ 119,425
Commercial loans 10,242 11,010 30,817 31,867
Consumer loans 6,343 6,436 18,967 19,445
Securities available for 6,599 9,174 22,743 28,468
sale and FHLB-NY stock
Investment securities 2,987 3,045 8,896 9,169
Deposits, Federal funds
sold and other short-term 42 26 58 81
investments
Total interest income 64,757 69,157 197,656 208,455
Interest expense:
Deposits 6,155 8,984 19,660 28,439
Borrowed funds 4,887 5,717 14,866 17,937
Total interest 11,042 14,701 34,526 46,376
expense
Net interest income 53,715 54,456 163,130 162,079
Provision for loan losses 3,500 7,500 12,000 22,900
Net interest income
after provision for 50,215 46,956 151,130 139,179
loan losses
Non-interest income:
Fees 7,532 6,631 23,018 18,052
Bank owned life insurance 1,273 1,274 3,895 3,998
Other-than-temporary
impairment losses on — — — (1,661)
securities
Portion of loss
recognized in OCI (before — — — 1,359
taxes)
Net impairment losses — — — (302)
recognized in earnings
Net gain on securities 298 658 2,482 686
transactions
Other income 687 87 2,466 1,431
Total non-interest 9,790 8,650 31,861 23,865
income
Non-interest expense:
Compensation and employee 20,131 19,226 61,084 56,476
benefits
Net occupancy expense 5,142 5,286 15,330 15,811
Data processing expense 2,712 2,381 7,762 6,994
FDIC Insurance 1,277 1,319 3,897 4,483
Amortization of 511 708 1,968 2,314
intangibles
Impairment of premises — — — 807
and equipment
Advertising and promotion 1,036 823 2,849 2,605
expense
Other operating expenses 6,087 5,210 18,553 16,747
Total non-interest 36,896 34,953 111,443 106,237
expenses
Income before income 23,109 20,653 71,548 56,807
tax expense
Income tax expense 6,955 5,087 20,963 14,333
Net income $ 16,154 $ 15,566 $ 50,585 $ 42,474
Basic earnings per share $ 0.28 $ 0.27 $ 0.89 $ 0.75
Average basic shares 57,194,046 56,926,131 57,133,164 56,847,975
outstanding
Diluted earnings per share $ 0.28 $ 0.27 $ 0.88 $ 0.75
Average diluted shares 57,238,819 56,941,715 57,169,844 56,860,371
outstanding
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Financial Highlights
(Dollars in Thousands, except share data) (Unaudited)
At or for the At or for the
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
STATEMENTS OF INCOME:
Net interest income $ 53,715 $ 54,456 $ 163,130 $ 162,079
Provision for loan losses 3,500 7,500 12,000 22,900
Non-interest income 9,790 8,650 31,861 23,865
Non-interest expense 36,896 34,953 111,443 106,237
Income before income tax 23,109 20,653 71,548 56,807
expense
Net income 16,154 15,566 50,585 42,474
Diluted earnings per share $0.28 $0.27 $0.88 $0.75
Interest rate spread 3.17% 3.35% 3.24% 3.35%
Net interest margin 3.31% 3.50% 3.38% 3.51%
PROFITABILITY:
Annualized return on 0.90% 0.90% 0.95% 0.83%
average assets
Annualized return on 6.53% 6.52% 6.95% 6.06%
average equity
Annualized non-interest 2.04% 2.01% 2.09% 2.08%
expense to average assets
Efficiency ratio (1) 58.10% 55.39% 57.15% 57.13%
ASSET QUALITY:
Non-accrual loans $ 105,686 $ 125,333
90+ and still accruing — —
Non-performing loans 105,686 125,333
Foreclosed assets 13,900 6,889
Non-performing assets 119,586 132,222
Non-performing loans to 2.19% 2.74%
total loans
Non-performing assets to 1.65% 1.89%
total assets
Allowance for loan losses $ 70,280 $ 73,655
Allowance for loan losses
to total non-performing 66.50% 58.77%
loans
Allowance for loan losses 1.46% 1.61%
to total loans
AVERAGE BALANCE SHEET DATA:
Assets $ 7,179,112 $ 6,896,530 $ 7,137,854 $ 6,842,934
Loans, net 4,658,208 4,414,332 4,620,253 4,387,655
Earning assets 6,435,616 6,151,259 6,399,917 6,114,182
Core deposits 4,275,493 3,789,544 4,161,283 3,705,231
Borrowings 837,728 907,055 880,376 916,777
Interest-bearing 5,360,329 5,289,910 5,393,121 5,275,243
liabilities
Stockholders' equity 983,732 947,394 972,850 937,002
Average yield on 3.99% 4.45% 4.10% 4.53%
interest-earning assets
Average cost of
interest-bearing 0.82% 1.10% 0.86% 1.18%
liabilities
LOAN DATA:
Mortgage loans:
Residential $ 1,289,316 $ 1,347,973
Commercial 1,293,143 1,236,370
Multi-family 687,485 497,025
Construction 125,408 115,251
Total mortgage loans 3,395,352 3,196,619
Commercial loans 839,253 814,112
Consumer loans 583,554 553,670
Total gross loans 4,818,159 4,564,401
Premium on 5,327 6,320
purchased loans
Unearned discounts (83) (107)
Net deferred (4,546) (2,394)
Total loans $ 4,818,857 $ 4,568,220
Notes
(1) Efficiency Ratio Calculation
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Net interest income $ 53,715 $ 54,456 $ 163,130 $ 162,079
Non-interest income 9,790 8,650 31,861 23,865
Total income: $ 63,505 $ 63,106 $ 194,991 $ 185,944
Non-interest expense: $ 36,896 $ 34,953 $ 111,443 $ 106,237
Expense/income: $ 58.10% $ 55.39% 57.15% 57.13%
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Net Interest Margin Analysis
Quarterly Average Balances
(Unaudited) (Dollars in Thousands)
September 30, 2012 June 30, 2012
Average Average Average Average
Balance Interest Yield Balance Interest Yield
Interest-Earning Assets:
Deposits $ 66,040 $ 42 0.25% $ 5,477 $ 3 0.25%
Federal funds sold and
other short-term
investments 1,461 — 0.02% 1,290 1 0.16%
Investment securities (1) 356,052 2,987 3.36% 357,248 2,991 3.35%
Securities available for 1,315,366 6,138 1.87% 1,381,968 7,376 2.13%
sale
Federal Home Loan Bank 38,489 461 4.77% 41,277 436 4.25%
stock
Net loans (2)
Total mortgage loans 3,260,435 38,544 4.68% 3,250,352 38,672 4.73%
Total commercial 822,093 10,242 4.94% 797,182 10,205 5.10%
loans
Total consumer loans 575,680 6,343 4.38% 570,088 6,335 4.47%
Total Net loans 4,658,208 55,129 4.68% 4,617,622 55,212 4.76%
Total Interest-Earning $ 6,435,616 $ 64,757 3.99% $ 6,404,882 $ 66,019 4.11%
Assets
Non-Interest Earning
Assets:
Cash and due from 82,849 66,450
banks
Other assets 660,647 660,810
Total Assets $ 7,179,112 $ 7,132,142
Interest-Bearing
Liabilities:
Demand deposits $ 2,601,626 $ 2,543 0.39% $ 2,540,421 $ 2,674 0.42%
Savings deposits 902,458 365 0.16% 909,157 372 0.16%
Time deposits 1,018,517 3,247 1.27% 1,057,748 3,457 1.31%
Total Deposits 4,522,601 6,155 0.54% 4,507,326 6,503 0.58%
Borrowed funds 837,728 4,887 2.32% 903,084 4,938 2.20%
Total Interest-Bearing $ 5,360,329 $ 11,042 0.82% $ 5,410,410 $ 11,441 0.85%
Liabilities
Non-Interest Bearing 835,051 748,172
Liabilities
Total Liabilities 6,195,380 6,158,582
Stockholders' equity 983,732 973,562
Total Liabilities and 7,179,112 $ 7,132,144
Stockholders' Equity
Net interest income $ 53,715 $ 54,578
Net interest rate spread 3.17% 3.26%
Net interest-earning assets $ 1,075,287 $ 994,472
Net interest margin (3) 3.31% 3.39%
Ratio of interest-earning
assets to
total
interest-bearing 1.20 x 1.18 x
liabilities
(1) Average outstanding balance amounts shown are amortized cost.
(2) Average outstanding balances are net of the allowance for loan losses,
deferred loan fees
and expenses, loan premiums and discounts and include
non-accrual loans.
(3) Annualized net interest income divided by average interest-earning
assets.
The following table summarizes the quarterly net interest margin for
the previous five quarters.
9/30/12 6/30/12 3/31/12 12/31/11 9/30/11
3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr.
Interest-Earning
Assets:
Securities 2.17% 2.42% 2.54% 2.44% 2.81%
Net loans 4.68% 4.76% 4.83% 4.94% 5.10%
Total
interest-earning 3.99% 4.11% 4.19% 4.24% 4.45%
assets
Interest-Bearing
Liabilities:
Total deposits 0.54% 0.58% 0.62% 0.72% 0.81%
Total borrowings 2.32% 2.20% 2.25% 2.34% 2.50%
Total
interest-bearing 0.82% 0.85% 0.90% 0.99% 1.10%
liabilities
Interest rate spread 3.17% 3.26% 3.29% 3.25% 3.35%
Net interest margin 3.31% 3.39% 3.42% 3.39% 3.50%
Ratio of interest-earning
assets to 1.20x 1.18x 1.18x 1.18x 1.16x
interest-bearing liabilities
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Net Interest Margin Analysis
Average Year to Date Balances
(Unaudited) (Dollars in Thousands)
September 30, 2012 September 30, 2011
Average Average Average Average
Balance Interest Yield Balance Interest Yield
Interest-Earning
Assets:
Deposits $ 30,440 $ 57 0.25% $ 43,573 $ 81 0.25%
Federal funds
sold and
other
short-term 1,339 1 0.07% 1,468 — 0.01%
investments
Investment 352,348 8,896 3.37% 344,651 9,169 3.55%
securities (1)
Securities
available for 1,355,955 21,365 2.10% 1,298,521 27,098 2.78%
sale
Federal Home 39,582 1,378 4.65% 38,314 1,370 4.78%
Loan Bank stock
Net loans (2) .
Total 3,237,581 116,175 4.75% 3,078,068 119,425 5.15%
mortgage loans
Total 812,524 30,817 5.02% 753,854 31,867 5.61%
commercial loans
Total 570,148 18,967 4.44% 555,733 19,445 4.68%
consumer loans
Total Net 4,620,253 165,959 4.76% 4,387,655 170,737 5.17%
loans
Total
Interest-Earning $ 6,399,917 $ 197,656 4.10% $ 6,114,182 $ 208,455 4.53%
Assets
Non-Interest
Earning Assets:
Cash and due 76,319 73,775
from banks
Other assets 661,618 654,977
Total Assets $ 7,137,854 $ 6,842,934
Interest-Bearing
Liabilities:
Demand deposits $ 2,550,181 $ 7,998 0.42% $ 2,219,689 $ 11,827 0.71%
Savings deposits 900,600 1,111 0.16% 904,731 2,423 0.36%
Time deposits 1,061,964 10,551 1.33% 1,234,046 14,189 1.54%
Total Deposits 4,512,745 19,660 0.58% 4,358,466 28,439 0.87%
Borrowed funds 880,376 14,866 2.26% 916,777 17,937 2.62%
Total
Interest-Bearing $ 5,393,121 $ 34,526 0.86% $ 5,275,243 $ 46,376 1.18%
Liabilities
Non-Interest
Bearing 771,883 630,689
Liabilities
Total 6,165,004 5,905,932
Liabilities
Stockholders' 972,850 937,002
equity
Total Liabilities
and Stockholders' 7,137,854 $ 6,842,934
Equity
Net interest $ 163,130 $ 162,079
income
Net interest rate 3.24% 3.35%
spread
Net
interest-earning $ 1,006,796 $ 838,939
assets
Net interest 3.38% 3.51%
margin (3)
Ratio of
interest-earning
assets to
total
interest-bearing 1.19 x 1.16 x
liabilities
(1) Average outstanding balance amounts shown are amortized cost.
(2) Average outstanding balances are net of the allowance for loan losses,
deferred loan fees
and expenses, loan premiums and discounts and include
non-accrual loans.
(3) Annualized net interest income divided by average interest-earning
assets.
The following table summarizes the year-to-date net interest margin for the
previous three years.
Nine Months Ended
9/30/12 9/30/11 9/30/10
Interest-Earning Assets:
Securities 2.37% 2.91% 3.27%
Net loans 4.76% 5.17% 5.41%
Total interest-earning assets 4.10% 4.53% 4.78%
Interest-Bearing Liabilities:
Total deposits 0.58% 0.87% 1.15%
Total borrowings 2.26% 2.62% 3.26%
Total interest-bearing 0.86% 1.18% 1.52%
liabilities
Interest rate spread 3.24% 3.35% 3.26%
Net interest margin 3.38% 3.51% 3.45%
Ratio of interest-earning assets to 1.19x 1.16x 1.14x
interest-bearing liabilities
Web Site: http://www.providentnj.com
SOURCE Provident Financial Services, Inc.
Website: http://www.providentnj.com
Contact: Investor Relations, Provident Financial Services, Inc.,
+1-732-590-9300
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement
Rate this Page