Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - PROVIDENT FINANCIAL SERVICES INC | d8k.htm |
 Sandler O’Neill & Partners East Coast Financial Services Conference November 12, 2009 Exhibit 99.1 |
 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 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.
|
 Christopher Martin Christopher Martin President & Chief Executive Officer |
 • NYSE Symbol - PFS • $6.8 billion in assets • Headquartered in Jersey City, NJ • Holding company for The Provident Bank • 170 years young – Oldest NJ chartered bank • Converted from mutual form in 2003 • 84 branch locations throughout northern and central NJ • 2 Loan Production Offices (soon to be 3) in NJ Corporate Profile |
 • CEO & CFO – Newly appointed from within in September 2009 • Senior management team has over 25 years on average of banking experience with large commercial banks & thrifts in our primary markets • Extremely knowledgeable and results-oriented • Creating culture of accountability and efficiency • Majority of officers have been with publicly traded organizations Executive Leadership Team |
 Current Retail Franchise 84 Branches in 11 New Jersey Counties |
  Market
Demographics (as of 6/30/09) County Market Rank Number of Branches Company Deposits in Market ($000) Deposit Market Share (%) Total Population 2009 (Actual) Median HH Income 2009 ($) Middlesex 5 24 1,516,296 7.18 795,633 79,468 Hudson 3 16 977,600 4.41 614,738 52,390 Morris 9 11 666,472 4.20 497,099 104,797 Essex 13 6 440,120 2.21 792,345 56,140 Monmouth 9 10 429,914 2.54 646,088 83,164 Bergen 26 3 202,340 0.55 910,698 84,586 Somerset 9 5 184,260 2.29 330,637 102,357 Ocean 12 4 168,594 1.33 575,822 60,787 Union 24 3 96,876 0.61 532,432 73,694 Mercer 20 1 47,160 0.19 370,793 75,668 NJ Totals 83 4,729,632 6,566,381 Source: FDIC -Summary of Deposit & SNL
|
 • Challenge - Increase revenue in difficult environment • Created two new lending teams - Middle Market & Business Banking • SBA Initiative • Reduce marginally accretive asset classes • Expand non-interest income with concentration on Wealth Management • Aggressively manage credit quality • Branch rationalization Focused on Effective Strategic Plan |
 Asset
Composition 25.0% 3.0% 5.3% 0.1% 1.1% 2.9% 62.6% Total cash & cash equivalents Total investments Net loans Foreclosed assets Premises & equipment Intangible assets Other assets 18.5% 68.4% 7.9% 1.0% 0.1% 1.1% 3.0% 9/30/09 9/30/09 12/31/08 12/31/08 |
 Loan
Composition (as of 9/30/09) 35% 11% 3% 18% 28% 5% Net total of $7.5MM representing premiums, discounts & deferred fees, has not been included in the outstanding loan totals LOAN CATEGORY RESIDENTIAL (1ST LIENS) 1,523,916 HE/HELOC 486,301 OTHER CONSUMER 107,431 COMMERCIAL LOANS 770,878 COMMERCIAL RE 1,207,994 CONSTRUCTION 217,275 $ OUTSTANDING (In Thousands) Total Loans = $4,314 MM Total Loans = $4,314 MM |
 CRE
Portfolio Composition (as of 9/30/09) 6% 15% 4% 10% 17% 18% 1% 26% 3% PROPERTY TYPE HOTEL 72,728 INDUSTRY 183,361 LAND 52,131 MIXED 126,613 MULTI FAMILY 205,503 OFFICE 216,944 RESIDENTIAL 10,999 RETAIL 309,122 SPECIAL USE PROPERTY 31,531 $ OUTSTANDING (In Thousands) Total CRE Loans = $1,209 MM Total CRE Loans = $1,209 MM |
 Construction Loan Composition (as of 9/30/09) Total Construction Loans = $217 MM Total Construction Loans = $217 MM Construction loan balance does not reflect unfunded commitments of $87MM.
No loans located outside of NJ/NY/PA 25.3% 48.8% 0.5% 14.7% 4.6% 3.7% 2.3% Primary Property Type Residential "For Sale" 54,476 MultiFamily "For Rent" 106,438 Retail 1,328 Office 32,021 Industrial 10,004 Specialty 7,942 Residential "Owner Occupied" 5,066 $ OUTSTANDING (In Thousands) |
 Asset
Quality (as of 9/30/09) PFS PEER Non-performing Loans/Loans (%) 1.81 1.95 Loan Loss Reserves/ Loans (%) 1.29 1.42 Loan Loss Reserves/ Non-performing Loans (%) 71.24 97.80 Net Charge-offs / Avg Loans (%) 0.25 0.77 Non-Performing Assets / Assets (%) 1.25 1.53 Source: SNL Peer Group: Valley National Bancorp, National Penn Bancshares, Inc., First Niagara Financial Group,
Inc., F.N.B. Corporation, NewAlliance Bancshares, Inc., United Bankshares, Inc., Signature
Bank, Investors Bancorp, Inc. (MHC),Northwest Bancorp, Inc. (MHC), First Commonwealth Financial Corporation, Harleysville National Corporation, NBT Bancorp Inc., WesBanco, Inc., Community Bank System, Inc., S&T Bancorp, Inc., Dime Community Bancshares, Inc., Beneficial
Mutual Bancorp, Inc. (MHC), Flushing Financial Corporation, Sun Bancorp, Inc. |
 NPAs & 90> day Delinquencies / Loans & REO (%) Source: SNL 0.83 0.90 1.10 1.34 1.62 2.00 2.35 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 0.00 0.50 1.00 1.50 2.00 2.50 OTHER ASSETS OWNED CONSUMER LOANS COMMERCIAL LOANS CONSTRUCTION LOANS COMMERCIAL REAL ESTATE LOANS 1-4 FAMILY FIRST MORTGAGES PEER Peer Group: Valley National Bancorp, National Penn Bancshares, Inc., First Niagara Financial Group,
Inc., F.N.B. Corporation, NewAlliance Bancshares, Inc., United Bankshares, Inc., Signature
Bank, Investors Bancorp, Inc. (MHC),Northwest Bancorp, Inc. (MHC), First Commonwealth Financial Corporation, Harleysville National Corporation, NBT Bancorp Inc., WesBanco, Inc., Community Bank System, Inc., S&T Bancorp, Inc., Dime Community Bancshares, Inc., Beneficial
Mutual Bancorp, Inc. (MHC), Flushing Financial Corporation, Sun Bancorp, Inc. |
 Investment Securities (as of 9/30/09) Investment Portfolio Summary 27% 1% 14% 31% 1% 9% 17% Aaa Aa1 Aa3 Baa1 Ba2 B1 Caa1 65% 8% 6% 3% 5% 4% 9% Aa1 Aa2 A1 A2 A3 Baa1 Baa3 8% 25% 8% 48% 5% 3 3 Aaa Aa1 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 NR 3% 3% 32% 27% 9% 9% 9% 5% 2% 2% Municipal Corporate Notes Private Label CMO US Agencies 224,618 $
Agency MBS 458,677 $
Agency CMO 522,432 $
Private Label CMO 144,213 $
Corporate Notes 19,032 $
Municipal 276,854 $
Equity 9,144 $
Amortized Cost (In Thousands) |
 Deposit Composition CDs 32% MMA 17% Muni 10% NOW 14% NIB 9% Savings 18% 9/30/09 9/30/09 12/31/08 12/31/08 Total Cost of Deposits: 1.91% Total Cost of Deposits: 1.91% Total Cost of Deposits: 1.51% Total Cost of Deposits: 1.51% MMA 18% Savings 21% CDs 35% NOW 13% NIB 9% Muni 4% |
 Deposit Growth Average Deposit Balances (In Thousands) Checking $427,545 $440,011 $459,330 $537,471 $625,318 Savings $916,391 $877,186 $867,822 $881,064 $878,129 MMDA $686,975 $709,853 $717,283 $749,998 $782,856 Municipal $158,026 $185,483 $226,145 $261,484 $406,658 NIB $459,734 $454,421 $455,524 $471,408 $474,436 Time $1,473,159 $1,492,289 $1,579,931 $1,678,449 $1,612,891 9/30/08 12/31/08 3/31/09 6/30/09 9/30/09 $4,121,831 $4,159,243 $4,306,036 $4,579,874 $4,780,288 |
 Time
Deposit Maturities (as of 9/30/09) (In Thousands) Time Deposit Maturities $497,006 $856,411 $72,316 $47,040 $146,254 2009 2010 2011 2012 Thereafter 2.57%* 2.29%* 3.46%* 3.88%* 3.64%* *Weighted Average Cost |
 Borrowings (as of 9/30/09) (In Thousands) FHLB $47,400 $219,827 $213,511 $9,100 $79,324 Others $- $103,239 $67,000 $45,000 $125,000 2009 2010 2011 2012 Thereafter 4.23%* 4.07%* 3.81%* 3.76%* 3.22%* *Weighted Average Cost |
 Capital (as of 9/30/09) The Company continues to exceed all regulatory requirements and The Company continues to exceed all regulatory requirements and is “well capitalized.” is “well capitalized.” Amount Ratio Amount Ratio 254,812 $ 4.00% 515,898 $ 8.10% 167,565 $ 4.00% 515,898 $ 12.32% Regulatory Tier 1 leverage capital Tier 1 risk-based capital Total risk-based capital 335,131 $ 8.00% 568,304 $ 13.57% REQUIRED ACTUAL (Dollars in thousands) |
 Thomas M. Lyons Thomas M. Lyons Senior Vice President & Chief Financial Officer |
 Financial Highlights (Dollars in thousands) BALANCE SHEET: 9/30/09 12/31/08 Total assets $6,816,309 $6,548,748 Total loans 4,321,364 4,526,748 Total deposits 4,875,211 4,226,336 Total investments 1,706,657 1,210,646 Total borrowed funds 1,004,623 1,247,681 Total stockholders' equity 882,620 1,018,590 |
 Financial Highlights (Dollars in thousands except Earnings per Share) INCOME STATEMENT: 9/30/09* 9/30/08 Operating Income * $23,904 $34,209 Operating Diluted Earnings per Share $0.43 $0.61 Operating ROAE 3.46% 4.53% Operating ROAA 0.48% 0.72% Net Interest Margin 3.02% 3.08% Operating Efficiency Ratio 68.50% 64.66% Nine Months Ended *Excludes impact of goodwill impairment charge |
 Return on Average Assets (8.79) 0.86 0.89 0.56 0.65 0.68 0.82 0.46 0.52 0.39 0.73 0.18 0.35 (0.61) 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 PFS Peer Source: SNL Peer Group: Valley National Bancorp, National Penn Bancshares, Inc., First Niagara Financial Group,
Inc., F.N.B. Corporation, NewAlliance Bancshares, Inc., United Bankshares, Inc., Signature
Bank, Investors Bancorp, Inc. (MHC),Northwest Bancorp, Inc. (MHC), First Commonwealth Financial Corporation, Harleysville National Corporation, NBT Bancorp Inc., WesBanco, Inc., Community Bank System, Inc., S&T Bancorp, Inc., Dime Community Bancshares, Inc., Beneficial
Mutual Bancorp, Inc. (MHC), Flushing Financial Corporation, Sun Bancorp, Inc. |
 Net
Interest Rate Margin 2.87% 3.10% 3.20% 3.10% 2.96% 3.01% 3.27% 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 |
 Cost
of Funds 3.14 2.74 2.55 2.47 2.39 2.27 2.07 3.02 2.60 2.52 2.42 2.16 1.98 1.83 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 PFS Peer Source: SNL Peer Group: Valley National Bancorp, National Penn Bancshares, Inc., First Niagara Financial Group,
Inc., F.N.B. Corporation, NewAlliance Bancshares, Inc., United Bankshares, Inc., Signature
Bank, Investors Bancorp, Inc. (MHC),Northwest Bancorp, Inc. (MHC), First Commonwealth Financial Corporation, Harleysville National Corporation, NBT Bancorp Inc., WesBanco, Inc., Community Bank System, Inc., S&T Bancorp, Inc., Dime Community Bancshares, Inc., Beneficial
Mutual Bancorp, Inc. (MHC), Flushing Financial Corporation, Sun Bancorp, Inc. |
 Pre-Provision Net Interest Income $39,189 $42,569 $45,351 $44,960 $43,931 $43,165 $45,310 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 |
 Net
Operating Exp / Avg Assets (%) 1.60 1.54 1.53 1.55 1.36 1.60 1.48 1.46 1.48 1.46 1.35 1.37 1.40 1.42 3Q09 2Q09 1Q09 4Q08 3Q08 2Q08 1Q08 PFS Peer Source: SNL (Total noninterest expense - (foreclosed property expense + amortization of intangibles expense + total noninterest income)) as a percentage of average assets. (Annualized) Peer Group: Valley National Bancorp, National Penn Bancshares, Inc., First Niagara Financial Group,
Inc., F.N.B. Corporation, NewAlliance Bancshares, Inc., United Bankshares, Inc., Signature
Bank, Investors Bancorp, Inc. (MHC),Northwest Bancorp, Inc. (MHC), First Commonwealth Financial Corporation, Harleysville National Corporation, NBT Bancorp Inc., WesBanco, Inc., Community Bank System, Inc., S&T Bancorp, Inc., Dime Community Bancshares, Inc., Beneficial
Mutual Bancorp, Inc. (MHC), Flushing Financial Corporation, Sun Bancorp, Inc. |
 NPAs / Assets (%) 1.25 1.04 0.60 0.42 1.53 1.26 0.68 0.54 0.48 1.05 0.96 0.47 1.04 0.83 3Q09 2Q09 1Q09 4Q08 3Q08 2Q08 1Q08 PFS Peer Source: SNL Peer Group: Valley National Bancorp, National Penn Bancshares, Inc., First Niagara Financial Group,
Inc., F.N.B. Corporation, NewAlliance Bancshares, Inc., United Bankshares, Inc., Signature
Bank, Investors Bancorp, Inc. (MHC),Northwest Bancorp, Inc. (MHC), First Commonwealth Financial Corporation, Harleysville National Corporation, NBT Bancorp Inc., WesBanco, Inc., Community Bank System, Inc., S&T Bancorp, Inc., Dime Community Bancshares, Inc., Beneficial
Mutual Bancorp, Inc. (MHC), Flushing Financial Corporation, Sun Bancorp, Inc. |
 Funding and Liquidity • Core deposits represented 66.8% of total deposits at 9/30/09 • Loan to deposit ratio was 88.6% at 9/30/09 • Virtual branch as a viable liquidity channel • FHLB borrowing capacity • Securitization of residential portfolio |
 Quarterly Cash Dividend since IPO 0.00 0.02 0.04 0.06 0.08 0.10 0.12 Current Dividend Yield = 4.21% |
 • Expanding relationships while regional and national banks remain dislocated • Process improvements to achieve efficiency target and achieve Line of Business profitability targets • Continue to rationalize branch locations • Improve net interest income in conjunction with minimizing risk • Safeguard capital when assessing opportunities • Business Case Justification for all future initiatives Looking Forward Clear Strategy and Effective Execution |
 Objectives Increase awareness of wealth management services offered • Asset Allocation • Trust and Fiduciary services • Estate services • Financial Planning • Family Office services Increase acquisition speed of new clients • Investment management accounts are easier and faster to move as compared to trust accounts Increase number of potential clients • More people have investment management accounts than trusts Improve mix of types of clients and services offered • Individuals with investable assets of $1 to $5 million • Municipalities with short-term fixed income management needs • Corporate entities with small-to-medium- sized 401k plans 33 Transition to Wealth Management |
 Transition to Wealth Management Initiatives Systems • Upgraded trading platform • Added financial planning platform Staff • Restructured into functional teams designed to meet clients needs • Added dedicated investment management team • Added sales staff • Added dedicated compliance staff Marketing • Launching media campaign • Re-design of web pages • Re-branded division Sales • Re-engineering sales process • Enriched sales incentive program • Increased emphasis on cross-selling among other divisions within Provident Investment Management • Built asset-allocation models that are focused on risk adjusted returns 34 |
 Sandler O’Neill & Partners East Coast Financial Services Conference November 12, 2009 |