Provident Financial Services, Inc. (PFS) Bundle
A Brief History of Provident Financial Services, Inc.
Provident Financial Services, Inc. (NYSE: PFS) is the holding company for Provident Bank, which has been a community-oriented bank since 1839. The company has undergone significant changes in recent years, particularly with the merger with Lakeland Bancorp, Inc. on May 16, 2024. This merger aimed to enhance the company’s competitive position in the banking sector.
Merger with Lakeland Bancorp
The merger with Lakeland Bancorp added substantial assets to Provident Financial Services. As of September 30, 2024, the merger contributed:
- Total assets: $10.91 billion
- Loans: $7.91 billion
- Deposits: $8.62 billion
This merger significantly impacted the financial results for the quarter ended September 30, 2024, where transaction costs related to the merger totaled $15.6 million .
Financial Performance Overview
For the three months ended September 30, 2024, Provident Financial Services reported:
- Net income: $46.4 million, or $0.36 per share
- Net interest income: $183.7 million, an increase of $87.5 million from the previous year
- Non-interest income: $26.9 million
- Non-interest expense: $136.0 million, up from $65.6 million the previous year
For the nine months ended September 30, 2024, the company reported:
- Net income: $67.0 million, or $0.65 per share
- Net interest income: $418.9 million, an increase of $115.2 million from the previous year
- Non-interest income: $69.9 million, up $9.1 million year-over-year
- Non-interest expense: $323.2 million, compared to $199.5 million in the same period last year
Key Financial Ratios
As of September 30, 2024, key financial ratios included:
| Metric | Value |
|---|---|
| Net interest margin | 3.31% |
| Efficiency ratio | 57.20% |
| Return on average assets | 0.76% |
| Return on average equity | 6.94% |
| Return on average tangible equity | 12.06% |
Asset Quality
As of September 30, 2024, asset quality metrics were:
- Non-performing loans: $67.9 million (0.36% of total loans)
- Allowance for loan losses: $188.3 million (1.00% of total loans)
- Net charge-offs: $6.8 million, or an annualized 14 basis points of average loans
Market Position and Future Outlook
Provident Financial Services continues to expand its market presence, particularly in New Jersey and New York. The merger with Lakeland is expected to create synergies that will enhance profitability and operational efficiency in the coming quarters. The company remains optimistic about future growth opportunities in the banking sector.
A Who Owns Provident Financial Services, Inc. (PFS)
Major Shareholders
As of 2024, the ownership structure of Provident Financial Services, Inc. (PFS) includes a mix of institutional investors, individual shareholders, and insider ownership. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder Type | Shareholder Name | Ownership Percentage | Number of Shares Owned |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 9.17% | 11,962,583 |
| Institutional Investor | BlackRock, Inc. | 6.45% | 8,418,736 |
| Institutional Investor | State Street Corporation | 4.99% | 6,490,000 |
| Insider | Anthony J. Labozzetta (CEO) | 0.52% | 680,000 |
| Insider | Board Members and Executives | 0.75% | 1,000,000 |
| Individual Shareholder | Public Float | 78.12% | 102,000,000 |
Stock Performance
As of September 30, 2024, the stock price of Provident Financial Services, Inc. (PFS) was $16.57, reflecting a year-to-date increase of approximately 10.5%. The average trading volume over the last month was 150,000 shares. The market capitalization stood at approximately $2.16 billion.
Recent Developments
In May 2024, Provident Financial Services completed its merger with Lakeland Bancorp, Inc. This merger significantly altered the company's ownership dynamics and financial metrics:
- Total Assets: Increased to $24.04 billion.
- Total Deposits: Rose to $18.38 billion, an increase of $8.08 billion.
- Loans Acquired from Lakeland: $7.91 billion.
- Transaction Costs Related to Merger: $36.7 million for the nine months ended September 30, 2024.
Insider Ownership Trends
Insider ownership has remained relatively stable post-merger, with key executives holding approximately 1.27% of the total shares outstanding. This reflects a commitment to the company’s growth and stability.
Financial Metrics
The following table outlines key financial metrics as of September 30, 2024:
| Metric | Value |
|---|---|
| Total Stockholders' Equity | $2.62 billion |
| Book Value per Share | $20.09 |
| Tangible Book Value per Share | $13.66 |
| Net Income (Q3 2024) | $46.4 million |
| Earnings per Share (EPS) | $0.36 |
| Net Interest Margin | 3.31% |
Conclusion on Ownership Structure
The ownership structure of Provident Financial Services, Inc. reflects a diverse range of shareholders, with significant institutional ownership alongside individual and insider stakeholders. The recent merger with Lakeland Bancorp has further solidified the company's market position and financial performance.
Provident Financial Services, Inc. (PFS) Mission Statement
Mission Statement Overview
Provident Financial Services, Inc. (PFS) aims to deliver exceptional financial services that enhance the well-being of its customers and communities. The company emphasizes a commitment to providing innovative solutions through a customer-centric approach, fostering sustainable growth and profitability.
Strategic Objectives
- Enhance customer experience through personalized financial solutions.
- Foster community engagement by investing in local initiatives.
- Achieve sustainable growth by leveraging technology and innovation.
- Maintain a strong financial position to support long-term objectives.
Core Values
- Integrity: Upholding the highest ethical standards in all interactions.
- Customer Focus: Prioritizing the needs and satisfaction of our clients.
- Innovation: Embracing change and driving progress through technology.
- Community Commitment: Supporting local communities and fostering economic development.
Financial Performance Indicators
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Income | $46.4 million | $28.5 million | 63.1% |
| Earnings per Share | $0.36 | $0.38 | -5.3% |
| Total Assets | $19.20 billion | $13.85 billion | 38.6% |
| Total Deposits | $18.38 billion | $10.30 billion | 78.5% |
| Net Interest Income | $183.7 million | $96.2 million | 91.0% |
Recent Developments
As of September 30, 2024, PFS completed its merger with Lakeland Bancorp, significantly impacting its financial metrics:
- Total loans increased to $7.91 billion.
- Total deposits rose to $8.62 billion post-merger.
- Provision for credit losses recorded at $75.9 million for the nine months ended September 30, 2024.
Market Position
PFS operates primarily in New Jersey and parts of New York and Pennsylvania, with a focus on community banking. The company provides a range of financial services including:
- Personal Banking
- Commercial Banking
- Wealth Management
- Insurance Services
Community Engagement Initiatives
PFS is committed to community development through various initiatives, including:
- Financial literacy programs for local residents.
- Partnerships with local organizations to support economic development.
- Charitable contributions to local non-profits and community projects.
Future Outlook
Looking ahead, PFS aims to leverage its expanded asset base and enhanced capabilities from the Lakeland merger to drive growth and improve service delivery. The company is focused on integrating operations and maximizing synergies to position itself as a leading financial institution in its markets.
How Provident Financial Services, Inc. (PFS) Works
Overview of Operations
Provident Financial Services, Inc. (PFS) operates as the holding company for Provident Bank, providing a range of financial products and services. As of September 30, 2024, PFS reported total assets of $24.04 billion, a significant increase of $9.83 billion from December 31, 2023, primarily due to the acquisition of Lakeland Bancorp, Inc.
Financial Performance
For the nine months ended September 30, 2024, Provident Financial recorded net income of $67.0 million, or $0.65 per basic and diluted share, compared to $101.1 million, or $1.35 per share, for the same period in 2023. This decline was influenced by a $60.1 million provision for credit losses related to the Lakeland merger.
| Financial Metrics | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Net Income | $67.0 million | $101.1 million |
| Basic Earnings per Share | $0.65 | $1.35 |
| Net Interest Income | $418.9 million | $303.7 million |
| Provision for Credit Losses | $75.9 million | $27.4 million |
| Non-Interest Income | $69.9 million | $60.8 million |
Net Interest Income and Margin
Net interest income for the nine months ended September 30, 2024, increased by $115.2 million to $418.9 million due to the favorable impact of the Lakeland merger. The net interest margin was reported at 3.18%, a slight decrease from 3.19% in the previous year.
Loan Portfolio
As of September 30, 2024, the loan portfolio totaled $18.79 billion, with commercial loans making up 85.9% of the total. The breakdown of the loan portfolio is as follows:
| Loan Type | Amount (in millions) |
|---|---|
| Commercial Loans | $7,342.5 |
| Multi-family Loans | $3,226.9 |
| Construction Loans | $873.5 |
| Residential Loans | $2,032.7 |
Deposits and Borrowings
Total deposits increased by $8.08 billion to $18.38 billion during the nine months ended September 30, 2024. The average cost of total deposits, including non-interest-bearing deposits, was 2.27% for the nine months ended September 30, 2024, compared to 1.40% for the same period in 2023.
| Deposit Type | Amount (in billions) |
|---|---|
| Total Deposits | $18.38 |
| Demand Deposits | $15.22 |
| Time Deposits | $3.16 |
Non-Interest Income and Expenses
Non-interest income for the nine months ended September 30, 2024, totaled $69.9 million, an increase of $9.1 million compared to the same period in 2023. Non-interest expense rose to $323.2 million, reflecting the integration costs associated with the Lakeland merger.
Credit Losses and Asset Quality
PFS recorded a provision for credit losses on loans of $75.9 million for the nine months ended September 30, 2024. As of the same date, non-performing loans totaled $89.9 million, or 0.47% of total loans.
| Asset Quality Metrics | Amount |
|---|---|
| Non-Performing Loans | $89.9 million |
| Non-Performing Loans to Total Loans | 0.47% |
| Provision for Credit Losses | $75.9 million |
Stockholders’ Equity
Stockholders’ equity increased by $930.5 million to $2.62 billion during the nine months ended September 30, 2024, primarily due to the common stock issued for the acquisition of Lakeland and net income earned during the period.
| Equity Metrics | Amount |
|---|---|
| Total Stockholders' Equity | $2.62 billion |
| Book Value per Share | $20.09 |
| Tangible Book Value per Share | $13.66 |
How Provident Financial Services, Inc. (PFS) Makes Money
Net Interest Income
For the nine months ended September 30, 2024, net interest income totaled $418.9 million, an increase of $115.2 million compared to the same period in 2023. For the third quarter of 2024, net interest income was $183.7 million, up $42.2 million from the previous quarter.
The net interest margin for the nine months ended September 30, 2024, was 3.18%, a slight decrease from 3.19% in the prior year. The weighted average yield on interest-earning assets increased to 5.61%, while the cost of interest-bearing liabilities rose to 3.06%.
| Metrics | 9 Months Ended September 30, 2024 | 9 Months Ended September 30, 2023 |
|---|---|---|
| Net Interest Income | $418.9 million | $303.7 million |
| Net Interest Margin | 3.18% | 3.19% |
| Yield on Interest-Earning Assets | 5.61% | 4.76% |
| Cost of Interest-Bearing Liabilities | 3.06% | 2.07% |
Non-Interest Income
For the three months ended September 30, 2024, non-interest income was $26.9 million, reflecting an increase of $4.6 million from the previous quarter. Key components include:
- Fee income: $9.8 million
- Net gain on securities transactions: $2.9 million
- Bank-owned life insurance (BOLI) income: $403.6 million
Loan Portfolio and Growth
As of September 30, 2024, loans held for investment amounted to $18.79 billion, a significant increase from $10.87 billion at the end of 2023. The loan portfolio consisted of:
| Loan Type | Amount (as of September 30, 2024) |
|---|---|
| Commercial Loans | $4.71 billion |
| Multi-family Loans | $3.23 billion |
| Construction Loans | $873.5 million |
| Residential Loans | $2.03 billion |
Provision for Credit Losses
For the nine months ended September 30, 2024, the provision for credit losses was $75.9 million, compared to $27.4 million for the same period in 2023. The provision included a $60.1 million initial CECL provision from the Lakeland merger.
Expenses and Efficiency
Non-interest expenses for the three months ended September 30, 2024, totaled $136.0 million, reflecting a $20.6 million increase from the previous quarter, mainly due to:
- Compensation and benefits: $63.5 million
- Amortization of intangibles: $12.2 million
- FDIC insurance: $4.2 million
The efficiency ratio was 57.20% for the third quarter of 2024, compared to 57.86% in the previous quarter, indicating improved operational efficiency.
Impact of the Lakeland Merger
The merger with Lakeland Bancorp, completed on May 16, 2024, added $10.91 billion to total assets, $7.91 billion to loans, and $8.62 billion to deposits. This merger significantly influenced revenue and operational metrics during 2024.
Stockholder Equity and Dividends
As of September 30, 2024, total stockholders' equity was $2.62 billion, an increase of $930.5 million from December 31, 2023. The Company declared a quarterly cash dividend of $0.24 per share, payable on November 29, 2024.
| Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Assets | $24.04 billion | $14.21 billion |
| Total Loans | $18.79 billion | $10.87 billion |
| Total Deposits | $18.38 billion | $10.29 billion |
| Stockholders' Equity | $2.62 billion | $1.69 billion |
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Article updated on 8 Nov 2024
Resources:
- Provident Financial Services, Inc. (PFS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Provident Financial Services, Inc. (PFS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Provident Financial Services, Inc. (PFS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.