Breaking News

Erdogan Selects Ahmet Davutoglu as Turkey's Next Prime Minister
Tweet TWEET

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
 
Press spacebar to pause and continue. Press esc to stop.