UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended December 31, 2023 OR☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File No. 1-31566 PROVIDENT FINANCIAL SERVICES, INC. (Exact Name of Registrant as Specified in its Charter) (State or Other Jurisdiction of Incorporation or Organ ...

Provident Financial Services, Inc. (NYSE:PFS) Q4 2023 Earnings Conference Call January 26, 2024 10:00 AM ET Company Participants Adriano Duarte - IR Officer Anthony Labozzetta - President & CEO Tom Lyons - SEVP & CFO Conference Call Participants Mark Fitzgibbon - Piper Sandler Bill Young - RBC Capital Markets Michael Perito - KBW Operator Thank you for standing by, and welcome to the Provident Financial Services, Inc. Fourth Quarter 2023 Earnings Conference Call. I would now like to welcome, Adriano Duarte, ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-31566 PROVIDENT FINANCIAL SERVICES, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 42-1547151 (State or Other Ju ...

Provident Financial Services, Inc. (NYSE:PFS) Q3 2023 Results Conference Call October 27, 2023 10:00 AM ET Company Participants Adriano Duarte - IR Officer Tony Labozzetta - President and CEO Tom Lyons - Sr. EVP and CFO Conference Call Participants Mark Fitzgibbon - Piper Sandler Bill Young - RBC Capital Markets Michael Perito - KBW Manuel Navas - D.A. Davidson Operator Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Provident ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-31566 PROVIDENT FINANCIAL SERVICES, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 42-1547151 (State or Other Jurisdicti ...

Provident Financial Services, Inc. (NYSE:PFS) Q2 2023 Earnings Call Transcript July 28, 2023 10:00 AM ET Company Participants Adriano Duarte - Investor Relations Officer Tony Labozzetta - President and Chief Executive Officer Tom Lyons - Senior Executive Vice President and Chief Financial Officer Conference Call Participants Mark Fitzgibbon - Piper Sandler Billy Young - RBC Capital Markets Michael Perito - KBW Manuel Navas - D.A. Davidson Operator Thank you for standing by. At this time, I would like to wel ...

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF ☒ 1934 For the quarterly period ended 3/31/2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q For the transition period from to Commission File Number: 001-31566 PROVIDENT FINANCIAL SERVICES, INC. (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation o ...

Provident Financial Services, Inc. (NYSE:PFS) Q1 2023 Earnings Conference Call April 28, 2023 10:00 AM ET Company Participants Adriano Duarte - Head of Investor Relations Tony Labozzetta - President & Chief Executive Officer Tom Lyons - Senior Executive Vice President & Chief Financial Officer Conference Call Participants Mark Fitzgibbon - Piper Sandler Billy Young - RBC Capital Markets Manuel Navas - D. A. Davidson Operator Good morning. Thank you for attending today's Provident Financial Services Inc. Fir ...

Part I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Provident Financial Services operates Provident Bank, focusing on deposit gathering and commercial lending, with a pending merger to create a $25 billion institution [Company Overview and Strategic Transactions](index=3&type=section&id=Company%20Overview%20and%20Strategic%20Transactions) The company is growing via acquisitions, highlighted by a pending merger with Lakeland Bancorp and significant 2022 capital returns to shareholders - On September 26, 2022, the Company entered into a merger agreement with Lakeland Bancorp, Inc The combined institution is expected to have approximately **$25 billion in total assets** and **$20 billion in total deposits**[17](index=17&type=chunk)[18](index=18&type=chunk) - In the pending merger, Lakeland shareholders will receive **0.8319 shares** of the Company's common stock for each share of Lakeland common stock, representing an aggregate merger consideration of approximately **$1.3 billion**[19](index=19&type=chunk) 2022 Capital Management Activities | Activity | Amount | Details | | :--- | :--- | :--- | | Cash Dividends Paid | $72.0 million | - | | Stock Repurchases | $47.5 million | 2,045,762 shares at an average cost of $23.23 per share | | Remaining Repurchase Authorization | 1.1 million shares | As of December 31, 2022 | [Provident Bank Operations](index=4&type=section&id=Provident%20Bank%20Operations) The bank focuses on relationship banking to attract core deposits, grow its commercial loan portfolio, and generate non-interest income amid a competitive market - The Bank emphasizes acquiring and retaining core deposits (savings and demand accounts), which totaled **$9.81 billion**, or **92.9% of total deposits**, at December 31, 2022[26](index=26&type=chunk) - Non-interest income was **$87.8 million in 2022**, slightly up from $86.8 million in 2021, driven by fee income, wealth management, and insurance services[27](index=27&type=chunk) - The Bank operates in a highly competitive market with a high concentration of financial institutions, including large money center banks, community banks, and credit unions[32](index=32&type=chunk)[33](index=33&type=chunk) [Lending Activities](index=6&type=section&id=Lending%20Activities) The bank's lending focuses on commercial real estate, growing its total loan portfolio to $10.26 billion while managing interest rate risk Loan Portfolio Composition (at December 31) | Loan Type | 2022 Amount ($ thousands) | 2022 Percent | 2021 Amount ($ thousands) | 2021 Percent | | :--- | :--- | :--- | :--- | :--- | | Residential mortgage | $1,177,698 | 11.59% | $1,202,638 | 12.66% | | Commercial mortgage | $4,316,185 | 42.48% | $3,827,370 | 40.28% | | Multi-family mortgage | $1,513,818 | 14.90% | $1,364,397 | 14.36% | | Construction loans | $715,494 | 7.04% | $683,166 | 7.19% | | Commercial loans | $2,233,670 | 21.98% | $2,188,866 | 23.04% | | Consumer loans | $304,780 | 3.00% | $327,442 | 3.45% | | **Total gross loans** | **$10,261,645** | **100.99%** | **$9,593,879** | **100.98%** | - At December 31, 2022, **59.37% of the Bank's loan portfolio** had a term to maturity of one year or less or had adjustable interest rates, reflecting a strategy to manage interest rate risk[28](index=28&type=chunk) Loan Originations and Purchases (Year Ended December 31) | Activity | 2022 ($ thousands) | 2021 ($ thousands) | 2020 ($ thousands) | | :--- | :--- | :--- | :--- | | Total loans originated and purchased | $3,951,055 | $3,524,498 | $3,495,530 | | Total repayments | $3,237,837 | $3,694,738 | $2,603,058 | | **Net increase (decrease)** | **$667,259** | **($241,266)** | **$2,490,005** | [Asset Quality](index=13&type=section&id=Asset%20Quality) Asset quality remains strong with minimal net charge-offs, though non-performing assets increased slightly to 0.44% of total assets in 2022 Non-Performing Assets (at December 31) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total non-performing loans ($ thousands) | $58,509 | $48,027 | $87,090 | | Total non-performing assets ($ thousands) | $60,633 | $56,758 | $91,565 | | Non-performing assets as a % of total assets | 0.44% | 0.41% | 0.71% | | Non-performing loans to total loans | 0.57% | 0.50% | 0.89% | Allowance for Credit Losses Analysis (Year Ended December 31) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Balance at end of period ($ thousands) | $88,023 | $80,740 | $101,466 | | Provision charge (benefit) to operations ($ thousands) | $8,400 | ($24,300) | $29,711 | | Net charge-offs (recoveries) to average loans | 0.01% | (0.04)% | 0.06% | | Allowance for credit losses to total loans | 0.86% | 0.84% | 1.03% | - The company adopted the **Current Expected Credit Loss (CECL) methodology** on January 1, 2020, which requires estimating credit losses over the life of financial instruments based on historical experience, current conditions, and reasonable forecasts[107](index=107&type=chunk) [Investment Activities and Sources of Funds](index=20&type=section&id=Investment%20Activities%20and%20Sources%20of%20Funds) The investment strategy focuses on managing liquidity and risk, with funds primarily sourced from core deposits, loan repayments, and FHLBNY advances Investment Securities Portfolio (at December 31, 2022) | Security Type | Amortized Cost ($ thousands) | Fair Value ($ thousands) | | :--- | :--- | :--- | | Held-to-maturity debt securities | $387,950 | $373,468 | | Available for sale debt securities | $2,058,487 | $1,803,548 | | Equity securities | $1,147 | $1,147 | | **Total** | **$2,447,584** | **$2,178,163** | - Primary sources of funds include deposits, principal and interest payments from loans and securities, FHLBNY advances, and proceeds from asset sales[140](index=140&type=chunk) - Total deposits were **$10.56 billion** at December 31, 2022 Core deposits (savings, interest and non-interest bearing checking, and money market accounts) represented **92.9% of total deposits**[141](index=141&type=chunk)[142](index=142&type=chunk) - Borrowed funds increased to **$1.34 billion** at year-end 2022 from $626.8 million in 2021, primarily consisting of FHLBNY advances and repurchase agreements[145](index=145&type=chunk)[150](index=150&type=chunk) [Other Business Activities and Human Capital](index=25&type=section&id=Other%20Business%20Activities%20and%20Human%20Capital) The company generates fee income through wealth management and insurance subsidiaries and emphasizes a diverse and supportive work environment for its employees - Wealth management services are provided through the wholly owned subsidiary, Beacon Trust Company, offering investment management, trust administration, and financial planning[152](index=152&type=chunk) - Insurance brokerage services are offered through Provident Protection Plus, Inc, providing commercial and personal lines of insurance[154](index=154&type=chunk) - As of December 31, 2022, the Company had **1,124 full-time and 29 part-time employees** The company highlights its diverse workforce, with **women holding 63% of managerial positions**[160](index=160&type=chunk)[164](index=164&type=chunk) [Regulation, Supervision, and Taxation](index=27&type=section&id=Regulation%2C%20Supervision%2C%20and%20Taxation) The company operates under extensive regulation from federal and state authorities and maintains a "well capitalized" status under all regulatory standards - The Company and the Bank are subject to extensive regulation by the New Jersey Department of Banking and Insurance, the FDIC, and the Federal Reserve Board Having exceeded **$10 billion in assets**, the company is also under the direct supervision of the Consumer Financial Protection Bureau (CFPB)[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) Provident Bank Capital Ratios (as of December 31, 2022) | Ratio | Actual | Minimum Requirement | Well-Capitalized Requirement | | :--- | :--- | :--- | :--- | | Tier 1 leverage capital | 9.51% | 4.00% | 5.00% | | Common equity Tier 1 risk-based capital | 10.91% | 4.50% | 6.50% | | Tier 1 risk-based capital | 10.91% | 6.00% | 8.00% | | Total risk-based capital | 11.58% | 8.00% | 10.00% | - The company is subject to federal income tax and state taxes in New Jersey, Pennsylvania, and New York New Jersey enacted legislation requiring combined tax returns starting in 2019 and imposed a temporary surtax effective for tax years 2018 through 2023[272](index=272&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) Key risks include merger integration with Lakeland, interest rate volatility, credit exposure in commercial real estate, and heightened regulatory scrutiny - **Merger Risks:** The pending merger with Lakeland faces risks such as failure to obtain regulatory approvals, integration difficulties, and the possibility of not realizing anticipated cost savings and benefits[282](index=282&type=chunk)[289](index=289&type=chunk) - **Economic and Interest Rate Risks:** Changes in market interest rates significantly affect net interest income A rising rate environment could compress margins if liability costs reprice faster than asset yields An economic slowdown could also increase credit losses[307](index=307&type=chunk)[308](index=308&type=chunk)[311](index=311&type=chunk) - **Credit Risks:** The company has significant exposure to **commercial real estate (57.4% of total loans)**, **commercial & industrial (22.0%)**, and **construction loans (7.0%)**, which are sensitive to economic conditions and carry higher risk than residential mortgages[315](index=315&type=chunk) - **Regulatory and Compliance Risks:** Operating in a highly regulated environment, the company is subject to extensive supervision Exceeding **$10 billion in assets** subjects it to stricter rules, including CFPB oversight and reduced debit card interchange fees[317](index=317&type=chunk)[319](index=319&type=chunk) - **Technology and Security Risks:** The business is highly dependent on technology and third-party providers, exposing it to risks of cyber-attacks, data breaches, and system failures which could result in financial loss and reputational harm[347](index=347&type=chunk)[355](index=355&type=chunk) [Item 1B. Unresolved Staff Comments](index=42&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved comments from the staff of the Securities and Exchange Commission (SEC) - There are no unresolved comments from the staff of the SEC to report[277](index=277&type=chunk) [Item 2. Properties](index=42&type=section&id=Item%202.%20Properties) The company operates 95 branch offices and leases its executive and administrative facilities, with a total net book value of $79.8 million for all properties - At December 31, 2022, the Bank operated **95 full-service branch offices** in New Jersey, Pennsylvania, and New York[278](index=278&type=chunk) - The aggregate net book value of premises and equipment was **$79.8 million** at December 31, 2022[278](index=278&type=chunk) [Item 3. Legal Proceedings](index=42&type=section&id=Item%203.%20Legal%20Proceedings) Ongoing legal actions from the normal course of business are not expected to have a material adverse impact on the company's financial condition - Management believes that ongoing legal actions and claims from the normal course of business are not expected to have a material adverse impact on the Company's financial condition and results of operations[280](index=280&type=chunk) [Item 4. Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[359](index=359&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=53&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on the NYSE, with active capital management through dividends and share repurchases, though its five-year return has underperformed peers - The Company's common stock trades on the New York Stock Exchange under the symbol "PFS"[362](index=362&type=chunk) - In 2022, the Company repurchased **2,054,762 shares** of its common stock at a cost of **$47.5 million** At year-end, **1.1 million shares** remained eligible for repurchase under the current program[368](index=368&type=chunk) - A quarterly cash dividend of **$0.24 per common share** was declared on January 27, 2023 The Board intends to maintain a regular quarterly dividend, subject to various factors[363](index=363&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net income rose to $175.6 million in 2022, driven by a 37 basis point expansion in net interest margin, partially offset by a higher provision for credit losses [Overview and Strategy](index=56&type=section&id=Overview%20and%20Strategy) The company's strategy centers on profitable growth through quality commercial lending, expanding market share, and growing stable, low-cost core deposits - The Bank's strategy is to grow profitably by expanding customer relationships, maintaining credit quality, and managing interest rate risk[372](index=372&type=chunk) - A key focus is on commercial lending, with commercial mortgage, multi-family, construction, and commercial loans accounting for **85.6% of the loan portfolio** at December 31, 2022[373](index=373&type=chunk) - The relationship banking strategy targets core accounts, with savings and demand deposits representing **92.9% of total deposits** at December 31, 2022[374](index=374&type=chunk)[375](index=375&type=chunk) [Critical Accounting Policies](index=58&type=section&id=Critical%20Accounting%20Policies) The allowance for credit losses is the most critical accounting policy, involving significant management judgment under the forward-looking CECL methodology - The allowance for credit losses on loans is identified as a critical accounting policy, requiring complex judgments and estimates[384](index=384&type=chunk)[387](index=387&type=chunk) - The Company adopted the **CECL methodology** on January 1, 2020, which requires estimating expected credit losses over the life of the loan portfolio based on past events, current conditions, and a reasonable and supportable forecast[385](index=385&type=chunk) - The CECL model uses an externally developed economic forecast over a six-quarter period, followed by a four-quarter reversion to historical averages, and is approved by the Asset-Liability Committee[388](index=388&type=chunk) [Analysis of Net Interest Income](index=60&type=section&id=Analysis%20of%20Net%20Interest%20Income) Net interest income grew by $51.5 million in 2022 as the net interest margin expanded by 37 basis points due to higher yields on assets Net Interest Income and Margin Analysis | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net Interest Income ($ thousands) | $417,552 | $366,023 | $312,570 | | Net Interest Rate Spread | 3.22% | 2.89% | 2.88% | | Net Interest Margin | 3.37% | 3.00% | 3.05% | - The increase in net interest income in 2022 was primarily driven by the favorable repricing of adjustable-rate loans and higher rates on new loan originations, which increased the yield on interest-earning assets by **46 basis points to 3.76%**[424](index=424&type=chunk)[425](index=425&type=chunk) - The average cost of interest-bearing liabilities increased by **13 basis points to 0.54%** in 2022, reflecting the rising interest rate environment[426](index=426&type=chunk) [Comparison of Financial Condition (2022 vs. 2021)](index=62&type=section&id=Comparison%20of%20Financial%20Condition) Total assets remained stable at $13.8 billion, with loan growth funded by a shift from cash and investments and an increase in borrowings - Total assets were stable at **$13.8 billion** at December 31, 2022[409](index=409&type=chunk) - The loan portfolio grew by **$667.3 million to $10.25 billion**, driven by growth in commercial mortgage, multi-family, and commercial loans[410](index=410&type=chunk) - Total deposits decreased by **$671.0 million**, while borrowed funds increased by **$710.6 million**, largely due to replacing $450.0 million of brokered demand deposits with FHLB borrowings[419](index=419&type=chunk)[420](index=420&type=chunk) - Stockholders' equity decreased by **$99.4 million**, primarily due to an increase in unrealized losses on available for sale debt securities, dividends paid, and common stock repurchases[421](index=421&type=chunk) [Comparison of Operating Results](index=64&type=section&id=Comparison%20of%20Operating%20Results) Net income rose in 2022 due to higher net interest income, which offset a significant swing in the provision for credit losses Key Operating Results (Years Ended December 31) | Metric ($ millions) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net Interest Income | $417.6 | $366.0 | $312.6 | | Provision for Credit Losses | $8.4 | ($24.3) | $29.7 | | Non-Interest Income | $87.8 | $86.8 | $72.4 | | Non-Interest Expense | $256.8 | $250.1 | $227.7 | | **Net Income** | **$175.6** | **$167.9** | **$97.0** | | **Diluted EPS** | **$2.35** | **$2.19** | **$1.39** | - **2022 vs 2021:** The increase in net income was primarily due to higher net interest income, partially offset by a significant increase in the provision for credit losses compared to the prior year's negative provision[422](index=422&type=chunk)[423](index=423&type=chunk)[424](index=424&type=chunk) - **2021 vs 2020:** The substantial increase in net income was driven by a large negative provision for credit losses due to an improved economic forecast and a significant increase in net interest income, benefiting from the SB One acquisition[433](index=433&type=chunk)[434](index=434&type=chunk)[435](index=435&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with simulation models showing the balance sheet is moderately asset-sensitive - The Company's primary market risk is interest rate risk, which it manages by focusing on adjustable-rate commercial loans and selling long-term fixed-rate residential mortgages[453](index=453&type=chunk) Net Interest Income Sensitivity Analysis (as of December 31, 2022) | Change in Interest Rates (bps) | Projected Change in NII ($ thousands) | Projected % Change in NII | | :--- | :--- | :--- | | +300 | $8,767 | 1.9% | | +200 | $6,033 | 1.3% | | +100 | $3,214 | 0.7% | | Static | $0 | 0.0% | | -100 | ($3,602) | (0.8)% | Economic Value of Equity (EVE) Sensitivity Analysis (as of December 31, 2022) | Change in Interest Rates (bps) | Projected Change in EVE ($ thousands) | Projected % Change in EVE | | :--- | :--- | :--- | | +300 | $83,858 | 3.7% | | +200 | $67,644 | 3.0% | | +100 | $49,154 | 2.2% | | Flat | $0 | 0.0% | | -100 | ($925) | 0.0% | [Item 8. Financial Statements and Supplementary Data](index=70&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the audited consolidated financial statements, which received an unqualified opinion from the independent auditor KPMG LLP [Report of Independent Registered Public Accounting Firm](index=71&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG LLP issued unqualified opinions on the financial statements and internal controls, identifying the allowance for credit losses as a critical audit matter - The independent auditor, KPMG LLP, issued an **unqualified opinion**, stating the financial statements are presented fairly in all material respects[465](index=465&type=chunk) - KPMG LLP also issued an **unqualified opinion** on the effectiveness of the Company's internal control over financial reporting as of December 31, 2022[466](index=466&type=chunk)[476](index=476&type=chunk) - The assessment of the **allowance for credit losses (ACL)** on loans was identified as a Critical Audit Matter due to the significant measurement uncertainty and the subjective, complex judgments required[470](index=470&type=chunk)[472](index=472&type=chunk) [Consolidated Financial Statements](index=74&type=section&id=Consolidated%20Financial%20Statements) The financial statements show total assets of $13.78 billion and net income of $175.6 million for the year ended December 31, 2022 Consolidated Statement of Financial Condition (at December 31) | ($ in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Total Assets | $13,783,436 | $13,781,202 | | Net Loans | $10,160,860 | $9,500,884 | | Total Deposits | $10,563,024 | $11,234,012 | | Total Liabilities | $12,185,733 | $12,084,106 | | Total Stockholders' Equity | $1,597,703 | $1,697,096 | Consolidated Statement of Income (Year Ended December 31) | ($ in thousands) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net Interest Income | $417,552 | $366,023 | $312,570 | | Provision for Credit Losses | $8,388 | ($24,339) | $29,719 | | Non-interest Income | $87,789 | $86,809 | $72,431 | | Non-interest Expense | $256,847 | $250,053 | $227,728 | | **Net Income** | **$175,648** | **$167,921** | **$96,951** | [Notes to Consolidated Financial Statements](index=82&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail key accounting policies, the pending Lakeland merger, loan portfolio analysis, and the company's well-capitalized regulatory status - **Note 1 (Accounting Policies):** The company adopted the **CECL methodology** for its allowance for credit losses on January 1, 2020, which requires a forward-looking estimate of expected losses[519](index=519&type=chunk) - **Note 3 (Business Combinations):** Details the pending merger with Lakeland Bancorp, where Lakeland shareholders will receive **0.8319 shares of PFS common stock** for each Lakeland share[561](index=561&type=chunk)[563](index=563&type=chunk) - **Note 7 (Loans and ACL):** The allowance for credit losses was **$88.0 million** at year-end 2022 Impaired loans totaled **$68.8 million**, of which $26.0 million were Troubled Debt Restructurings (TDRs)[591](index=591&type=chunk)[593](index=593&type=chunk) - **Note 16 (Regulatory Capital):** As of December 31, 2022, both the Company and the Bank were categorized as **well-capitalized** under all applicable regulatory guidelines[672](index=672&type=chunk)[673](index=673&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=138&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on any matter of accounting principles or financial disclosure - None reported[750](index=750&type=chunk) [Item 9A. Controls and Procedures](index=138&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls, procedures, and internal control over financial reporting were effective as of year-end 2022 - Management concluded that the Company's disclosure controls and procedures were **effective** as of December 31, 2022[751](index=751&type=chunk) - Management assessed the effectiveness of internal control over financial reporting and concluded it was **effective** as of December 31, 2022[755](index=755&type=chunk) Part III [Items 10-14](index=139&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) Information regarding directors, executive compensation, and corporate governance is incorporated by reference from the 2023 Proxy Statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the Proxy Statement for the Annual Meeting of Stockholders to be held on April 27, 2023[761](index=761&type=chunk)[762](index=762&type=chunk)[763](index=763&type=chunk)[768](index=768&type=chunk)[769](index=769&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=141&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Form 10-K report, including material contracts and certifications - This section lists all financial statements and exhibits filed with the Form 10-K, including merger agreements, corporate bylaws, and executive certifications[772](index=772&type=chunk)[775](index=775&type=chunk)

Financial Data and Key Metrics Changes - The company reported record interest income and non-net interest income, resulting in earnings of $0.66 per share, an increase from $0.58 per share in the previous quarter and $0.49 per share in Q4 2021 [3][16] - Net interest income increased by 4.2% over the trailing quarter, with a net interest margin expansion to 3.62% [4][17] - The annualized return on average assets was 1.42% and return on average tangible equity was 17.51% [4] Business Line Data and Key Metrics Changes - The company closed approximately $574 million in new commercial loans in Q4, leading to total commercial loan production of $2.4 billion for the year [4][6] - The commercial loan portfolio, excluding PPP loans, grew at an annualized rate of 9.7% for the quarter and 10.1% for the year [6][22] - Fee-based businesses showed mixed results, with the insurance agency revenue increasing by 4.5% and operating profit by 24%, while Beacon Trust experienced a decline in fee income [9][12] Market Data and Key Metrics Changes - The average balance of core deposits increased by $76 million, or 3.1% annualized, while spot core deposits decreased by $89 million, or 3.6% annualized [8] - The total cost of deposits increased by 32 basis points to 67 basis points, with a deposit beta of 26% for the quarter [8][18] Company Strategy and Development Direction - The company remains focused on delivering a best-in-class customer experience and emphasizes commercial lending as a key area of growth [4][14] - The ongoing merger with Lakeland Bancorp is expected to create a stronger community bank, with efforts focused on obtaining necessary approvals and integrating operations [14][15][68] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding potential economic challenges, including liquidity, funding costs, and credit quality [12][14] - The company anticipates stable net interest margins in the range of 3.50% to 3.60% for 2023, with expectations of continued loan growth despite rising interest rates [22][42] Other Important Information - The efficiency ratio improved to 46.88% from 47.11% in the previous quarter, indicating better cost management [25] - The allowance for credit losses on loans decreased by $600,000, reflecting stable asset quality [22][23] Q&A Session Summary Question: Can you explain the reversal of the provision for off-balance sheet credit exposure? - Management indicated that the reversal was due to strong closing activity and a decrease in the pipeline, leading to lesser commitments subject to reserve [19] Question: What is the outlook for expenses and effective tax rate? - Expenses are expected to be in the $66 million to $67 million range in the first part of the year, with an effective tax rate around 26% [30][32] Question: What are the assumptions for margin outlook and Fed actions? - The company expects the Fed funds rate to stabilize after potential hikes, with a margin outlook of 3.50% to 3.60% for the year [35][42] Question: Any trends in charge-offs this quarter? - Management noted no concerning trends in asset quality, with charge-offs related to specific credits previously reserved [43] Question: What is the expected cash flow from the securities portfolio? - Cash flows from the securities portfolio are currently around $12 million to $15 million per month, with expectations of fluctuations based on market conditions [57]