On this page of StockholderLetter.com we present the latest annual shareholder letter from PROVIDENT FINANCIAL SERVICES INC — ticker symbol PFS. Reading current and past PFS letters to shareholders can bring important insights into the investment thesis.
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3/12/2025 Letter Continued (Full PDF)
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3/17/2023 PFS Stockholder Letter
• 3/15/2024 PFS Stockholder Letter
• More "Banking & Savings" Category Stockholder Letters
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PFS Benford's Law Stock Score = 90
3/12/2025 Letter Continued (Full PDF)
•
3/17/2023 PFS Stockholder Letter•
3/15/2024 PFS Stockholder Letter•
More "Banking & Savings" Category Stockholder Letters•
PFS Benford's Law Stock Score = 90PFS Shareholder/Stockholder Letter Transcript:
2024 ANNUAL REPORT BUILDING FOR THE FUTURE Provident Financial Services, Inc. is the holding company for Provident Bank. Established in 1839, Provident Bank emphasizes Commitment You Can Count On in attending to the financial needs of businesses, individuals, and families throughout New Jersey, eastern Pennsylvania, and Nassau, Orange and Queens Counties in New York. The Bank offers a broad array of deposit, loan, and investment products, as well as wealth management, trust, and fiduciary services through its wholly owned subsidiary, Beacon Trust Company, and insurance services through its wholly owned subsidiary, Provident Protection Plus, Inc. Financial Highlights (In thousands, except branch data, per share data, and percent data) As of December 31, 2024 2023 2022 $24,051,825 $14,210,810 $13,783,436 18,628,391 10,766,501 10,160,860 327,623 363,080 387,923 2,768,915 1,690,112 1,803,548 18,623,813 10,292,514 10,563,024 Borrowed funds 2,020,435 1,970,033 1,337,370 Stockholders equity 2,601,207 1,690,596 1,597,703 2024 2023 2022 $115,525 $128,398 $175,648 $1.05 $1.71 $2.35 Net interest margin 3.26% 3.16% 3.37% Average net interest rate spread 2.63% 2.63% 3.22% Non-performing loans to total loans 0.39% 0.46% 0.57% Allowance for loan losses to total loans 1.04% 0.99% 0.86% 140 94 95 Total assets Net loans outstanding Held to maturity debt securities Available for sale debt securities Deposits As of or for the year ended December 31, Net income Diluted earnings per share Number of branches A Message from Christopher Martin and Anthony Labozzetta Dear Fellow Shareholders, Reflecting on 2024, we recognize the challenges that have defined the year from persistent inflation and fluctuating interest rates to natural disasters and an evolving geopolitical landscape. Despite these external factors, we made significant strides, achieving key milestones that have strengthened our position as the premier super community banking franchise in the region. We are proud to share our accomplishments and the strategic initiatives that have positioned us for long-term success. Our signature achievement of the year was the successful completion of our merger with Lakeland Bancorp. This transformative merger was made possible by our teams resilience and commitment to flawless execution. In addition, the attainment of an investment-grade debt rating from KBRA, followed by the issuance of $225 million in subordinated debt, bolstered our capital position and enabled us to complete the final steps of the regulatory approval process. We extend a warm welcome to our new team members, customers, shareholders and board members from Lakeland. The integration of our two institutions has been guided by a shared commitment to excellence, innovation, and community service. The combination of our banks has allowed us to enhance our market reach, improve operating scale and efficiency, and reinforce our competitive position in the region. FINANCIAL HIGHLIGHTS Provident Financial Services delivered strong financial performance in 2024. Our stable core deposit funding contributed to a 3.26% net interest margin that, aided by solid performance from our wealth management and insurance operations, helped drive a pre-tax, pre-provision return on average assets adjusted for merger-related expenses of 1.46% and an adjusted pre-tax pre-provision return on average tangible equity of 18.77% for the year. Our key performance metrics reflect the success of our strategic initiatives, operational efficiencies, and disciplined risk management. The successful merger with Lakeland has created a more robust financial institution with greater earnings potential and enhanced capabilities, setting the stage for further growth in the years ahead. STRATEGIC INTEGRATION AND EXPANSION The seamless integration of operating systems, alignment of corporate cultures, and dedication to the customer experience have been hallmarks of a year defined by our merger. Through detailed planning and execution, we ensured that the transition for both customers and employees was smooth, with minimal disruption to service. We could not have accomplished this without the commitment and tireless efforts of our team members. The new organization now benefits from a stronger foundation to drive revenue growth, deepen customer relationships, and enhance business operations. Our larger footprint and expanded team allows us to provide a comprehensive offering of products and services, blending the personalized customer experience of a community bank with the expansive capabilities of a larger financial institution. The integration of our business lines leverages the best of both organizations to better serve our customers. For instance, one of the key enhancements resulting from the merger is the expansion of our specialty lending capabilities, which now include Asset Based, Mortgage Warehouse, and Healthcare Lending for businesses to obtain much needed financing from Provident Bank. In 2024, we launched our small business lending platform, addressing a significant opportunity in our product offerings and meeting the growing needs of small businesses the backbone of our communities. This initiative is expected to drive deposit and treasury management growth while opening doors for expansion in our wealth management and insurance business lines. iii A MESSAGE FROM CHRISTOPHER MARTIN AND ANTHONY LABOZZETTA As part of our strategic expansion in Eastern Pennsylvania, we added six experienced lenders to our commercial lending team, strengthening our presence in this critical market. In addition, we were pleased to welcome a highly accomplished Chief Lending Officer to lead our commercial banking efforts. Their expertise and vision will support our business strategy to grow our lending portfolios, intensify customer relationships, and broaden our horizons in the markets we serve. STRENGTHENING COLLABORATION AND COMMUNITY COMMITMENT A culture of collaboration remains at the core of Provident Bank. In 2024, we boosted cross-business referrals, fostering enhanced customer relationships and broadening service offerings. One example involved a referral from Beacon Trust to their partners in Commercial Real Estate and Provident Protection Plus, resulting in lending, deposit, treasury management, and insurance relationships a true testament to the synergies within our organization. Our commitment to corporate social responsibility remains unwavering. In 2024, Provident Bank and The Provident Bank Foundation contributed more than $2.8 million to non-profit organizations that provide essential services to the communities we serve. Additionally, we take pride in the many team members who dedicate their time to volunteer efforts. A notable highlight was our annual Bob Price Memorial Turkey Drive held at the home of the Lehigh Valley Iron Pigs in Allentown, PA. In partnership with the IronPigs and New Bethany, this grass-roots initiative resulted in the collection of more than 2,000 frozen turkeys, which were distributed to area non-profit agencies and schools to support families in need during Thanksgiving a shining example of the power of community partnerships. iv LOOKING AHEAD As we move forward, we remain committed to executing our strategic vision, fostering growth, and delivering value to our shareholders. Our expanded footprint, enhanced capabilities, and talented team provide us with the agility and strength to navigate the evolving banking landscape. We are confident that our focus on innovation, employee and customer experience, and community impact will continue to differentiate us as the premier super community banking franchise in the region. On behalf of the entire company, we thank you, our shareholders, for your continued trust and support. Sincerely, Chris Martin Anthony Labozzetta Executive Chairman President & CEO A MESSAGE FROM CHRISTOPHER MARTIN AND ANTHONY LABOZZETTA Board of Directors and Executive Management DIRECTORS Christopher Martin Ursuline F. Foley Anthony J. Labozzetta Robert E. McCracken Executive Chairman Former Chief Corporate Operations Officer, XL Group President and Chief Executive Officer Sole Managing Member and Owner, REM LLC President, Smith-McCracken and Wood Funeral Homes James P. Dunigan Brian A. Gragnolati Edward J. Leppert John Pugliese Former Executive Officer, PNC Asset Management Group President and Chief Executive Officer, Atlantic Heath System Founder, Leppert Group LLC, CPA s (Lead Director) Former Chief Executive Officer, Motors Management Corporation Frank L. Fekete James E. Hanson, II Nadine Leslie Thomas J. Shara Managing Partner, Mandel, Fekete & Bloom, CPAs President and Chief Executive Officer, The Hampshire Companies President and Chief Executive Officer, Middlesex Water Company Executive Vice Chairman Brian M. Flynn Matthew K. Harding Managing Partner, PKF O Connor Davies, LLP Chief Executive Officer, Levin Management Corporation Management PROVIDENT FINANCIAL SERVICES, INC. Christopher Martin Thomas J. Shara Adriano M. Duarte Bennett MacDougall Executive Chairman Executive Vice Chairman Anthony J. Labozzetta Thomas M. Lyons Executive Vice President and Investor Relations Officer Executive Vice President, General Counsel and Corporate Secretary President and Chief Executive Officer Senior Executive Vice President and Chief Financial Officer PROVIDENT BANK Christopher Martin Adriano M. Duarte Thomas M. Lyons James M. Nigro Executive Chairman Executive Vice President and Chief Accounting Officer Senior Executive Vice President and Chief Financial Officer Executive Vice President and Chief Credit Officer Anthony J. Labozzetta William J. Fink Bennett MacDougall Carolyn Powell President and Chief Executive Officer Executive Vice President and Chief Lending Officer Executive Vice President and General Counsel Executive Vice President and Chief Human Resources Officer Thomas J. Shara Vito Giannola Timothy J. Matteson Walter Sierotko Executive Vice Chairman Executive Vice President and Chief Banking Officer Executive Vice President and Chief Administrative Officer Executive Vice President and Head of CRE Lending James A. Christy George Lista Valerie O. Murray Ravi Vakacherla Executive Vice President and Chief Risk Officer President and Executive Vice President and Chief Executive Officer, Chief Wealth Management Provident Protection Plus, Inc. Officer Executive Vice President and Chief Digital and Innovation Officer Joseph T. Covell Senior Vice President and General Auditor v