Provident Financial Services (PFS) Q4 2024 Earnings Call January 29, 2025 10:00 AM ET Company Participants Adriano Duarte - Executive VP, Chief Accounting Officer & Investor Relations OfficerAnthony Labozzetta - President & CEOThomas M. Lyons - Senior EVP & CFOMark Fitzgibbon - Head of FSG ResearchTim Switzer - Vice PresidentFeddie Strickland - Director Conference Call Participants Billy Young - AnalystManuel Navas - MD & Senior Research Analyst Operator Good morning, and welcome everyone to the Provident F ...

Core Insights - Provident Financial reported revenue of $205.91 million for the quarter ended December 2024, marking a year-over-year increase of 79.4% [1] - The earnings per share (EPS) for the same period was $0.37, slightly up from $0.36 a year ago [1] - The reported revenue fell short of the Zacks Consensus Estimate of $209.6 million by 1.76% [1] - The EPS also missed the consensus estimate of $0.50 by 26.00% [1] Performance Metrics - Net Interest Margin was reported at 3.3%, compared to the average estimate of 3.4% from two analysts [4] - The Efficiency Ratio stood at 55.4%, slightly better than the estimated 55.6% [4] - Total Non-Interest Income was $24.18 million, below the average estimate of $25.83 million [4] - Net Interest Income was reported at $181.74 million, missing the estimated $183.77 million [4] Stock Performance - Shares of Provident Financial have returned +1.7% over the past month, outperforming the Zacks S&P 500 composite's +0.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - Provident Financial reported quarterly earnings of $0.37 per share, missing the Zacks Consensus Estimate of $0.50 per share, representing a -26% earnings surprise [1] - The company posted revenues of $205.91 million for the quarter, missing the Zacks Consensus Estimate by 1.76%, but showing a significant increase from $114.76 million year-over-year [2] Financial Performance - Earnings per share (EPS) for the current quarter was $0.37, compared to $0.36 a year ago, indicating slight year-over-year growth [1] - Over the last four quarters, the company has surpassed consensus EPS estimates only once [2] - The company has topped consensus revenue estimates two times over the last four quarters [2] Market Performance - Provident Financial shares have increased approximately 1.5% since the beginning of the year, while the S&P 500 has gained 2.2% [3] - The stock is currently rated Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - Current consensus EPS estimate for the upcoming quarter is $0.51 on revenues of $213.6 million, and for the current fiscal year, it is $2.13 on revenues of $876.75 million [7] - The outlook for the Financial - Savings and Loan industry is positive, ranking in the top 11% of over 250 Zacks industries, suggesting potential for outperformance [8]

Core Viewpoint - Provident Financial Services, Inc. reported solid financial performance for the year ended December 31, 2024, despite a decrease in net income compared to the previous year, largely influenced by the merger with Lakeland Bancorp, Inc. and associated costs [1][2][3] Financial Performance - For Q4 2024, net income was $48.5 million, or $0.37 per share, up from $46.4 million, or $0.36 per share in Q3 2024, and significantly higher than $27.3 million, or $0.36 per share in Q4 2023 [1][8][16] - For the year ended December 31, 2024, net income totaled $115.5 million, or $1.05 per share, compared to $128.4 million, or $1.71 per share in 2023 [25][30] Merger Impact - The merger with Lakeland added $10.91 billion to total assets, $7.91 billion to loans, and $8.62 billion to deposits, significantly impacting the financial results [2][3] - Transaction costs related to the merger were $20.2 million for Q4 2024 and $56.9 million for the year, compared to $2.5 million and $7.8 million for the respective periods in 2023 [2][16] Net Interest Income and Margin - Net interest income for Q4 2024 decreased by $2.0 million to $181.7 million, primarily due to reduced net accretion from purchase accounting adjustments related to the Lakeland merger [9][10] - The net interest margin decreased three basis points to 3.28% in Q4 2024, while the core net interest margin increased four basis points to 2.85% [10][18] Provision for Credit Losses - The provision for credit losses on loans was $7.8 million for Q4 2024, down from $9.6 million in Q3 2024, attributed to the reclassification of $151.3 million to the held for sale portfolio [11][19] - For the year, the provision for credit losses increased to $83.6 million from $28.2 million in 2023, largely due to the initial CECL provision from the Lakeland merger [28] Non-Interest Income and Expenses - Non-interest income for Q4 2024 totaled $24.2 million, a decrease of $2.7 million from the previous quarter, with notable declines in BOLI income and insurance agency income [12][20] - Non-interest expenses increased to $134.3 million in Q4 2024, up from $75.9 million in Q4 2023, primarily due to increased compensation and benefits expenses from the Lakeland acquisition [13][21] Asset Quality - Non-performing loans decreased to $72.1 million, or 0.39% of total loans, as of December 31, 2024, down from 0.47% in the previous quarter [33][37] - The allowance for credit losses increased to 1.04% of total loans, with total non-performing assets rising to $81.5 million, or 0.34% of total assets [34][37] Balance Sheet Summary - Total assets increased to $24.05 billion as of December 31, 2024, a $13.78 billion increase from the previous year, primarily due to the Lakeland merger [38] - Total deposits rose to $18.62 billion, with significant increases in savings and demand deposit accounts [42] Stockholder Information - The Board of Directors declared a quarterly cash dividend of $0.24 per common share, payable on February 28, 2025 [5] - The Annual Meeting of Stockholders is scheduled for April 24, 2025 [6]

Core Insights - The 2025 Economic Outlook survey by Provident Bank indicates widespread optimism among 1,000 business owners and leaders regarding the U.S. economy and their own companies [1][4] - Businesses are planning to increase capital spending, invest in technology (particularly AI), and anticipate modest hiring increases [1][6] Economic Optimism - 60% of respondents believe the U.S. economy will be in much better or somewhat better shape in one year [6] - 63% of respondents expect their own business to be in much better or somewhat better shape [6] - 68% anticipate a slight or significant increase in capital spending in 2025 [6] Hiring Trends - Over 50% of respondents expect a slight or significant increase in hiring for 2025, while 36% predict no changes in their hiring plans [6] - 69% of respondents plan to adopt AI tools in their business within the next year, with 29% ready to implement them and 40% interested but seeking more information [6] Challenges Facing Businesses - The top challenges identified by respondents include inflationary pressures (60%), trade tensions and tariffs (51%), and rising consumer and national debt (44%) [6] - For business owners, the primary challenges are employee benefits and costs (46%), inflation including rising costs of energy, fuel, goods, and services (46%), and rising wages (39%) [6] - Despite concerns about inflation, executives report minimal impact from the Federal Reserve's interest rate cuts, with 38% unsure and 30% stating no positive impact [6]

Yet Inflation, Rising Debt and Trade Tensions Remain Top Concerns for 2025ISELIN, N.J., Jan. 07, 2025 (GLOBE NEWSWIRE) -- Provident Bank, a leading New Jersey-based financial institution, released the results of its 2025 Economic Outlook survey showcasing widespread optimism and confidence from 1,000 business owners and leaders on both the U.S. economic landscape and within their own companies. Specifically, businesses are increasing capital spending, investing in technology (specifically AI), and pointing ...

Funding is provided through the FHBNY’s Small Business Recovery Grant ProgramISELIN, N.J., Dec. 17, 2024 (GLOBE NEWSWIRE) -- Provident Bank, a leading New Jersey-based financial institution, has announced the bank recently awarded a total of $50,000 in grants to 11 small businesses and 4 non-profit organizations as part of the Federal Home Loan Bank of New York (FHLBNY) Small Business Recovery Grant (SBRG) Program. The SBRG program provides funds to benefit FHLBNY members’ small businesses, including farms ...

Vabysmo PFS is the first and only prefilled syringe containing a bispecific antibody, offering a convenient alternative to currently available Vabysmo vialsVabysmo has demonstrated rapid and robust vision and anatomical improvements in neovascular age-related macular degeneration (nAMD), diabetic macular edema (DME) and retinal vein occlusion (RVO)The ready-to-use Vabysmo PFS is co-packaged with the only CE-marked needle specifically designed for intravitreal injection Basel, 13 December 2024– Roche (SIX: R ...

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- Inupadenant + carboplatin/pemetrexed in Phase 2 A2A-005 trial demonstrated a 63.9% overall response rate (ORR) and a median PFS of 7.7 months for all evaluable patients across the cohorts- Recommended Phase 2 dose (RP2D) of inupadenant 80mg + carboplatin/pemetrexed demonstrated 73.3% ORR, with 64.6% of patients achieving landmark 6-month PFS- Inupadenant + carboplatin/pemetrexed safety profile was manageable and tolerable, with no dose-dependent toxicity observed- Inupadenant deprioritized to focus resour ...