UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 22, 2004
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PROVIDENT FINANCIAL SERVICES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-31566 42-1547151
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
830 Bergen Avenue, Jersey City, New Jersey 07306-4599
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 333-1000
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Not Applicable
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(Former name or former address, if changed since last report)
Item 7. Financial Statements and Exhibits.
(a) Not Applicable.
(b) Not Applicable.
(c) Exhibits.
Exhibit No. Description
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99 Press release dated April 22, 2004
Item 12. Results of Operations and Financial Condition.
On April 22, 2004, Provident Financial Services, Inc. announced its
earnings for the quarter ended March 31, 2004. A copy of the press release dated
April 22, 2004, detailing earnings for this period is attached as Exhibit 99 to
this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
PROVIDENT FINANCIAL SERVICES, INC.
DATE: April 23, 2004 By: /s/ Paul M. Pantozzi
------------------------------------
Paul M. Pantozzi
Chairman, Chief Executive Officer
and President
EXHIBIT 99
PRESS RELEASE OF PROVIDENT FINANCIAL SERVICES, INC.
NEWS RELEASE
Provident Financial Services (NYSE: PFS)
----------------------------------------
Contact:
Kenneth J. Wagner
Investor Relations
Provident Financial Services, Inc.
830 Bergen Avenue
Jersey City, NJ 07306
201-915-5344
FOR IMMEDIATE RELEASE: April 22, 2004
Provident Financial Services, Inc. Announces Quarterly Earnings and Declares
Quarterly Dividend
JERSEY CITY, NJ, April 22, 2004 - Provident Financial Services, Inc. (NYSE:PFS)
reported net income of $10.3 million for the quarter ended March 31, 2004,
compared to a net loss of ($6.4) million for the quarter ended March 31, 2003.
The net loss for the quarter ended March 31, 2003 was due primarily to the
one-time expense associated with the $15.6 million contribution net of tax to
The Provident Bank Foundation. The Company reported basic and diluted earnings
per share of $0.19 for the quarter ended March 31, 2004, compared to a basic and
diluted loss per share of ($0.12) for the quarter ended March 31, 2003.
"Our fundamental earnings measurements continued to show improvement in this
year's first quarter," said Paul M. Pantozzi, the Company's Chairman of the
Board, CEO and President. "The reported net interest margin of 3.50% climbed 9
basis points above the level of the trailing quarter, and our non-interest
income categories, particularly fee income, continued their positive trend. Net
income was augmented by gains on earning-asset sales that resulted from our
ongoing management of interest rate risk."
Mr. Pantozzi added, "Our ability to generate commercial real estate loans,
including construction loans, as well as commercial & industrial loans was amply
demonstrated in the first quarter of 2004. The balances outstanding in these
combined categories grew $61.3 million or 6.89% compared to the balances
reported at year-end 2003. This has contributed incrementally toward our
strategic goal of maintaining an even mix of commercial and consumer loan assets
in the overall loan portfolio."
"Meanwhile, our integration plans for the pending acquisition of First Sentinel
Bancorp, Inc. have been proceeding on schedule. We continue to look forward to
the successful completion of this transaction at the end of the second quarter,
as planned, subject to regulatory and stockholder approvals. The stockholders of
both companies will vote on the transaction at annual meetings scheduled for
June 23, 2004." .
COMPARISON OF OPERATING RESULTS
Total net interest income increased $2.1 million or 6.64% to $34.4 million for
the quarter ended March 31, 2004 compared to $32.3 million for the quarter ended
March 31, 2003. Interest income for the first quarter of 2004 decreased $191,000
or 0.40% to $47.0 million compared to $47.2 million for the comparable quarter
in 2003. Income on all loans secured by real estate increased $1.8 million or
8.42% to $23.2 million for the three months ended March 31, 2004 compared to
$21.4 million for the three months ended March 31, 2003. Income on commercial
loans decreased $1.7 million or 30.0% to $3.9 million for the three months ended
March 31, 2004 compared to $5.6 million for the three months ended March 31,
2003, which amount included $2.3 million in mortgage warehouse interest income.
The Company sold substantially all of its mortgage warehouse loans in the fourth
quarter of 2003. Interest expense decreased $2.3 million or 15.64 % to $12.6
million for the quarter ended March 31, 2004 compared to $14.9 million for the
quarter ended March 31, 2003. Due to the continued decline in interest rates on
deposits, interest expense on deposits decreased $4.3 million. Interest expense
on borrowings increased $2.0 million due to an increase in outstanding
borrowings used to fund commercial real estate loan commitments and leverage
transactions.
The average balance of investment securities held to maturity and securities
available for sale increased $28.5 million to $1.63 billion for the quarter
ended March 31, 2004 from $1.60 billion for the quarter ended March 31, 2003.
The average balance of net loans increased $241.7 million or 12.31% to $2.20
billion for the quarter ended March 31, 2004 compared to $1.96 billion for the
comparable quarter in 2003. The average yield on interest earning assets
decreased 37 basis points to 4.79% for the quarter ended March 31, 2004 compared
to 5.16% for the comparable quarter in 2003, primarily due to the reinvestment
of cash from loan and mortgage-backed securities prepayments in lower yielding
loans and investments. Compared to the trailing quarter the yield on interest
earning assets improved 12 basis points to 4.79% from 4.67%.
Average core deposit account balances increased $159.0 million or 10.04% to
$1.74 billion for the first quarter ended March 31, 2004 compared to $1.58
billion at March 31, 2003. Core deposit accounts consist of all demand deposit
and savings accounts. Average time deposit balances decreased $95.5 million or
9.21% to $941.5 million for the quarter ended March 31, 2004 compared to $1.04
billion for the comparable quarter in 2003. Average borrowings increased $272.4
million or 65.48% to $688.5 million for the quarter ended March 31, 2004
compared to $416.0 million for the quarter ended March 31, 2003. The average
cost of interest bearing liabilities decreased 50 basis points to 1.67% for the
quarter ended March 31, 2004 compared to 2.17% for the quarter ended March 31,
2003, and compared to the trailing quarter, the average cost of interest bearing
liabilities increased 3 basis points.
Net interest margin decreased 3 basis points to 3.50% for the quarter ended
March 31, 2004 compared to 3.53% for the quarter ended March 31, 2003, and
compared to the trailing quarter, the net interest margin increased 9 basis
points. The interest rate spread increased 13 basis points to 3.12% for the
quarter ended March 31, 2004 compared to 2.99% for the comparable quarter in
2003, and compared to the trailing quarter, the interest rate spread increased 9
basis points.
Non-interest income increased $2.2 million or 39.78% to $7.7 million for the
quarter ended March 31, 2004 compared to $5.5 million for the comparable period
in 2003. Fees on retail accounts increased $572,000 or 14.11% to $4.63 million
at March 31, 2004 compared to $4.05 million for the quarter ended March 31,
2003. This increase is primarily attributable to fee income associated with the
introduction of overdraft privilege on retail checking accounts during the
fourth quarter of 2003. Income associated with the cash surrender value of bank
owned life insurance increased $185,000 or 23.07% to $907,000 for the quarter
ended March 31, 2003 compared to $802,000 for the quarter ended March 31, 2003.
This increase was due to an additional purchase of $20.0 million of bank owned
life insurance late in the first quarter of 2003. During the quarter ended March
31, 2004 the Company recorded net gains of $431,000 on securities sales compared
to a net loss of $4,000 in the same prior period. Net gains on the sale of
mortgage-backed securities were $174,000 and gains on the sale of equity
securities were $257,000. Other income increased $952,000 or 171.53% to $1.5
2
million in the first quarter of 2004 compared to $555,000 in the comparable
quarter of 2003. During the first quarter the Company sold $72.0 million of
fixed rate 30- and 20-year residential mortgages as part of an ongoing strategy
to reduce interest rate risk. During the quarter ended March 31, 2004, the
Company recorded gains of $1.3 million on the sale of residential mortgage loans
compared to gains of $288,000 in the same prior period. Proceeds from the sale
of loans and mortgage-backed securities were used to reduce short-term
borrowings and reposition the balance sheet.
Non-interest expense decreased $20.9 million or 43.90% to $26.7 million for the
quarter ended March 31, 2004 compared to $47.5 million for the quarter ended
March 31, 2003. The decrease in non-interest expense for the quarter ended March
31, 2004 is primarily due to the one-time expense associated with the $24
million contribution to The Provident Bank Foundation that was recorded in the
first quarter of 2003. Salary and benefit expense increased $2.4 million or
19.8% to $14.4 million for the three months ended March 31, 2004 compared to
$12.0 million for the three months ended March 31, 2003. This increase is
primarily attributable to expenses related to stock based benefit plans.
Expenses associated with the employee stock ownership plan amounted to $747,000
at March 31, 2004 compared to $516,000 at March 31, 2003. Stock award plan
expense in the amount of $1.3 million and stock option plan expense in the
amount of $910,000 were recorded in the first quarter of 2004, while there were
no expenses associated with these plans in the comparable period in 2003. The
Company has adopted the fair value based method, SFAS No. 123 "Accounting for
Stock Based Compensation" to recognize compensation expense on all outstanding
stock option awards from the time of grant.
The provision for loan losses for both the quarter ended March 31, 2004 and the
quarter ended March 31, 2003 was $600,000. The allowance for loan losses was
$20.6 million or 0.91% of total loans at March 31, 2004 compared to $21.0
million or 1.05% of total loans at March 31, 2003 and $20.6 million or 0.92% of
total loans at December 31, 2003. At March 31, 2004, the allowance for loan
losses as a percentage of non-performing loans increased to 470.56% from 323.27%
at March 31, 2003.
COMPARISON OF FINANCIAL CONDITION
Total assets at March 31, 2004 decreased $26.6 million or 0.62% to $4.258
billion compared to $4.285 billion at December 31, 2003.
Total loans at March 31, 2004 increased $38.7 million or 1.73% to $2.28 billion
compared to $2.24 billion at December 31, 2003. Residential mortgage loans
decreased $46.2 million or 4.43% to $998.6 million at March 31, 2004 compared to
$1.04 billion at December 31, 2003. Residential mortgage loan originations
totaled $18.4 million and purchases of one-to-four family loans totaled $49.3
million at March 31, 2004. Residential loan payoffs totaled $25.3 million,
excluding scheduled amortization, and loans sold totaled $73.0 million for the
quarter ended March 31, 2004. Commercial real estate loans, including multi
family and construction loans, increased $13.6 million or 2.12% to $652.3
million at March 31, 2004 compared to $638.7 million at December 31, 2003.
Commercial loans increased $47.7 million or 19.03% to $298.5 million at March
31, 2004 compared to $250.8 million at December 31, 2003. Consumer loans
increased $20.5 million or 6.85% to $319.8 million at March 31, 2004 compared to
$299.3 million at December 31, 2003. In the third quarter of 2003 the Company
began purchasing auto loans for the consumer loan portfolio. For the quarter
ended March 31, 2004 auto loans totaled $33.0 million or 10.31% of the total
consumer loan portfolio. Retail loans, which consist of one- to- four family
residential mortgages and consumer loans, such as fixed-rate home equity loans
and lines of credit, totaled $1.32 billion and accounted for 58.23% of the loan
portfolio at March 31, 2004 compared to $1.34 billion or 60.24% of the portfolio
at December 31, 2003. Commercial loans, consisting of commercial real estate,
multi-family, construction and commercial loans, totaled $950.8 million,
accounting for 41.77% of the loan portfolio at March 31, 2004 compared to $889.5
million or 39.76% at December 31, 2003. In the fourth quarter of 2003, the
Company sold substantially all of its mortgage warehouse loans, resulting in a
temporary increase in retail loans as a percentage of the portfolio. During the
first quarter of 2004, the mix of commercial loans as a percentage of total
loans improved due to the increase in commercial and construction loans and the
decrease in residential mortgage loans.
Investment securities held to maturity decreased $10.0 million or 1.93% to
$507.8 million at March 31, 2004, compared to $517.8 million at December 31,
2003. Securities available for sale decreased $148.5 or 12.90% to $1.0 billion
3
at March 31, 2004 compared to $1.15 billion at December 31, 2003. During the
first quarter of 2004, $81.5 million in mortgage-backed securities were sold as
part of the Company's ongoing strategy to reduce interest rate risk.
Total non-performing loans were $4.4 million at March 31, 2004 compared to $6.1
million at December 31, 2003. Total non-performing loans as a percentage of
total loans were 0.19% at March 31, 2004 and 0.27% at December 31, 2003. The
allowance for loan losses as a percentage of non-performing loans was 470.56% at
March 31, 2004 and 336.67% at December 31, 2003.
Total deposits decreased $4.1 million or 0.15% to $2.692 billion at March 31,
2004 from $2.696 billion at December 31, 2003. Savings deposits decreased $5.1
million or 0.52% to $982.8 million at March 31, 2004 compared to $987.9 million
at December 31, 2003. Core deposits, consisting of all demand and savings
accounts, decreased $10.9 million or 0.62% to $1.75 billion at March 31, 2004
from $1.76 billion at December 31, 2003. At March 31, 2004, core deposits were
65.1% of total deposits compared to 65.4% at December 31, 2003. Time deposits
increased $6.8 million or 0.73% to $939.9 million at March 31, 2004 from $933.1
million at December 31, 2003 primarily due to certain large commercial
relationships shifting from core to time deposit products.
Total borrowed funds decreased $35.0 million or 4.76% to $701.3 million at March
31, 2004 from $736.3 million at December 31, 2003. Federal Home Loan Bank
borrowings decreased $47.4 million or 6.85% to $644.3 million at March 31, 2004
compared to $691.7 million at December 31, 2003.
On January 22, 2004, the Company's Board of Directors authorized the repurchase
of up to 3,039,630 shares, or approximately 5%, of the Company's then
outstanding shares of common stock. Under the general repurchase program, the
Company purchased 263,968 shares of its common stock at an average price of
$19.53 per share. The Company also purchased 186,532 shares of its common stock
at an average price of $19.06 per share for the stock award plan.
DECLARATION OF QUARTERLY DIVIDEND
On April 22, 2004, the Company's Board of Directors declared a quarterly cash
dividend of $0.06 per common share, consistent with the prior quarterly
dividend. The dividend is payable on May 28, 2004 to stockholders of record as
of the close of business on May 14, 2004.
PENDING MERGER TRANSACTION
The Company and First Sentinel Bancorp, Inc. have filed a registration statement
with the Securities and Exchange Commission (SEC). INVESTORS ARE ENCOURAGED TO
READ THE REGISTRATION STATEMENT AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC,
AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, INCLUDING THE JOINT
PROXY STATEMENT/PROSPECTUS THAT IS PART OF THE REGISTRATION STATEMENT, BECAUSE
THEY CONTAIN IMPORTANT INFORMATION. The final joint proxy statement/prospectus
will be mailed to stockholders of record as of April 30, 2004 of both the
Company and First Sentinel Bancorp, Inc. Investors will be able to obtain the
documents free of charge at the SEC's web site, www.sec.gov. Documents filed
-------------
with the SEC by the Company may also be obtained by writing John F. Kuntz, Esq.,
Corporate Secretary, Provident Financial Services, Inc., 830 Bergen Avenue,
Jersey City, New Jersey 07306. Documents filed with the SEC by First Sentinel
Bancorp, Inc. may also be obtained by writing Ann C. Clancy, Esq., Corporate
Secretary, First Sentinel Bancorp, Inc., 1000 Woodbridge Center Drive,
Woodbridge, New Jersey 07095.
4
The Company and its executive officers may be deemed to be participants in the
solicitation of proxies from the Company's stockholders in connection with the
merger. Information about the Company's directors and executive officers and
their ownership of common stock is set forth in the joint proxy
statement/prospectus. Additional information regarding the interests of such
participants may be obtained by reading the joint proxy statement/prospectus
when it becomes available.
Provident Financial Services, Inc. is the holding company for The Provident
Bank. Founded in 1839, the Bank currently operates 54 full service branches
throughout northern and central New Jersey.
POST EARNINGS CONFERENCE CALL
Representatives of the Company will hold a conference call for investors at
10:00 a.m. Eastern Time on Friday, April 23, 2004 regarding highlights of the
Company's first quarter 2004 financial results. The call can be accessed by
dialing 1-800-299-8538 (Domestic) or 1-617-786-2902 (International) and stating
the pass code number: 93708434. Internet access to the call is also available
(listen only) at www.providentnj.com by going to Investor Relations and clicking
on Webcast. -------------------
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 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 wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. The Company
wishes to advise 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.
5
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Statements of Condition
March 31, 2004 (Unaudited) and December 31, 2003
(Dollars in Thousands, except per share data)
Assets March 31, 2004 December 31, 2003
---------------------------------------------
Cash and due from banks $ 87,780 106,228
Federal funds sold 118,000 --
Short-term investments 65,739 69,624
---------------------------------------------
Total cash and cash equivalents 271,519 175,852
---------------------------------------------
Investment securities (market value of $517,288 and $524,429 507,792 517,789
at March 31, 2004 and December 31, 2003, respectively)
Securities available for sale, at fair value 1,003,289 1,151,829
Federal Home Loan Bank stock 32,214 34,585
Loans 2,276,029 2,237,367
Less: allowance for loan losses 20,620 20,631
---------------------------------------------
Net loans 2,255,409 2,216,736
Other real estate owned, net 32 41
Banking premises and equipment, net 46,701 46,741
Accrued interest receivable 16,039 16,842
Intangible assets 24,142 23,938
Bank owned life insurance 72,493 71,506
Other assets 28,643 29,019
---------------------------------------------
Total assets $ 4,258,273 4,284,878
=============================================
Liabilities and Equity
Deposits:
Demand deposits $ 769,208 774,988
Savings deposits 982,775 987,877
Certificates of deposit of $100,000 or more 161,547 148,306
Other time deposits 778,394 784,805
---------------------------------------------
Total deposits 2,691,924 2,695,976
Mortgage escrow deposits 10,628 11,061
Borrowed funds 701,285 736,328
Other liabilities 31,234 24,394
---------------------------------------------
Total liabilities 3,435,071 3,467,759
---------------------------------------------
Stockholders' Equity:
Preferred stock, $0.01 par value,
50,000,000 shares authorized, none issued -- --
Common stock, $0.01 par value, 200,000,000 shares authorized,
61,538,300 shares issued and 60,149,600 outstanding at March 31, 2004
and 61,538,300 shares issued and 60,600,100 outstanding at
December 31, 2003, respectively. 615 615
Additional paid-in capital 607,441 606,541
Retained earnings 331,419 324,250
Accumulated other comprehensive income 11,129 6,416
Less: Treasury Stock, at cost, 263,968 shares at March 31, 2004 (5,168) --
Less: Unallocated common stock held by
Employee Stock Ownership Plan (78,036) (78,816)
Less: Common Stock acquired by the Stock Award Plan (44,198) (41,887)
--------------------------------------------
Total stockholders' equity 823,202 817,119
--------------------------------------------
--------------------------------------------
Total liabilities and stockholders' equity $ 4,258,273 4,284,878
============================================
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Statements of Income
Three Months ended March 31, 2004 (Unaudited) and 2003 (Unaudited)
(Dollars in Thousands, except per share data)
Three Months Ended
March 31
----------------------
2004 2003
----------------------
Interest income:
Real estate secured loans $ 23,177 21,377
Commercial loans 3,887 5,554
Consumer loans 4,635 4,812
Investment securities 5,142 3,668
Securities available for sale 9,836 11,385
Other short-term investments 170 68
Federal funds 140 314
----------------------
Total interest income 46,987 47,178
----------------------
Interest expense:
Deposits 7,866 12,151
Borrowed funds 4,719 2,768
----------------------
Total interest expense 12,585 14,919
----------------------
Net interest income 34,402 32,259
Provision for loan losses 600 600
----------------------
Net interest income after provision for loan
losses 33,802 31,659
----------------------
Non-interest income:
Fees 4,625 4,053
Net gain (loss) on securities transactions 427 (4)
Commissions 110 71
Bank owned life insurance 987 802
Other income 1,507 555
----------------------
Total non-interest income 7,656 5,477
----------------------
Non-interest expense:
Salaries and employee benefits 14,408 12,025
Net occupancy expense 3,798 3,410
Federal deposit insurance 103 108
Data processing expense 1,840 1,618
Advertising and promotion expense 1,403 657
Amortization of intangibles 522 1,195
Other operating expenses 4,592 4,516
Contribution to The Provident Bank Foundation
-- 24,000
----------------------
Total non-interest expenses 26,666 47,529
----------------------
Income(loss) before income tax expense
(benefit) 14,792 (10,393)
Income tax expense (benefit) 4,498 (3,950)
----------------------
Net income (loss) $ 10,294 (6,443)
======================
Basic Earnings (loss) Per Share (1) $0.19 ($0.12)
Average basic shares outstanding 54,849,271 60,130,912
Diluted Earnings (loss) Per Share (1) $0.19 ($0.12)
Average diluted shares outstanding 54,895,895 60,130,912
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL HIGHLIGHTS
(dollars in thousands, except share data)
(unaudited)
For the
Three Months
Ended
March 31,
2004 2003
-------------------
INCOME STATEMENT:
Net Interest Income 34,402 32,259
Provision for Loan Losses 600 600
Non-interest Income 7,656 5,477
Non-interest Expense 26,666 47,529
Income before income tax expense (benefit) 14,792 (10,393)
Net Income (loss) 10,294 (6,443)
Basic Earnings (loss) Per Share (1) $0.19 ($0.12)
Diluted Earnings (loss) Per Share (1) $0.19 ($0.12)
Interest Rate Spread 3.12% 2.99%
Net Interest Margin 3.50% 3.53%
PROFITABILITY:
Return on average assets 0.98% -0.66%
Return on average equity 5.06% -3.26%
Operating expense to average assets 2.54% 4.81%
Efficiency ratio (net of foundation expense) (2) 63.40% 62.35%
ASSET QUALITY:
Non-performing loans 4,382 6,499
Other Real Estate Owned 32 0
Non-performing loans to total loans 0.19% 0.33%
Non-performing assets to total assets 0.10% 0.16%
Allowance for loan losses 20,620 21,016
Allowance for loan losses to non performing loans 470.56% 323.27%
Allowance for loan losses to total loans 0.91% 1.05%
AVERAGE BALANCE SHEET DATA:
Assets 4,230,184 3,953,982
Loans, net 2,204,793 1,963,121
Earnings Assets 3,948,659 3,711,012
Core Deposits 1,742,035 1,583,038
Borrowings 688,484 416,042
Interest Bearing Liabilities 3,034,511 2,749,812
Stockholders Equity 818,040 801,368
Average yield on interest earning assets 4.79% 5.16%
Average cost of interest bearing liabilities 1.67% 2.17%
CAPITAL:
Leverage Capital 18.76% 22.14%
Total risk based capital 30.85% 37.67%
Average equity to average assets 19.34% 20.27%
Notes:
------
(1) Basic and Diluted (loss) Per Share for the three months ended March 31,
2003 includes the results of operations from January 15, 2003, the date we
completed our Plan of Conversion in the amount of ($7,423,000).
(2) Efficiency Ratio Calculation
03/31/2004 03/31/2003
---------- ----------
Net Interest Income 34,402 32,259
Non Interest Income 7,656 5,477
------- ------
Total Income: 42,058 37,736
Non Interest Expense: 26,666 47,529
LESS: Provident Bank Charitable Foundation Donation - 24,000
------- ------
Adjusted Non Interest Expense 26,666 23,529
Expense/Income: 63.40% 62.35%
====== ======
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
(unaudited)
Average Quarterly Balance
NET INTEREST MARGIN ANALYSIS
(Unaudited) March 31, 2004 December 31, 2003
-------------- -----------------
(Dollars in Thousands) Average Average Average Average
Balance Interest Yield Balance Interest Yield
------------------------------------------ ---------------------------------------
Interest Earning Assets:
Fed Funds Sold and
Other Short Term Investments $ 115,370 $ 310 1.08% $ 120,156 $ 299 0.99%
Investment Securities (1) 515,636 5,142 4.01% 509,207 4,984 3.88%
Securities Available for Sale 1,079,578 9,723 3.62% 1,170,446 10,771 3.65%
Federal Home Loan bank Stock 33,282 113 1.37% 30,655 14 0.18%
Net Loans (2) 2,204,793 31,699 5.78% 2,114,565 30,362 5.70%
---------------- ------------ ------------- ------------
Total Interest Earning Assets: $ 3,948,659 $ 46,987 4.79% $ 3,945,029 $ 46,430 4.67%
---------------- ------------ ------------- ------------
Non-Interest Earning Assets:
Cash and Due from Banks 83,845 79,207
Other Assets 197,680 185,575
---------------- -------------
TOTAL ASSETS $ 4,230,184 $ 4,209,811
================ =============
Interest Bearing Liabilities:
Demand Deposits $ 426,495 $ 767 0.72% $ 446,084 $ 849 0.76%
Savings Deposits 978,051 2,162 0.89% 988,870 2,398 0.96%
Time Deposits 941,481 4,937 2.11% 937,748 4,962 2.10%
---------------- ------------ ------------- ------------
TOTAL DEPOSITS 2,346,027 7,866 1.35% 2,372,702 8,209 1.37%
---------------- ------------ ------------- ------------
Borrowed Funds 688,484 4,719 2.76% 658,533 4,325 2.61%
---------------- ------------ ------------- ------------
TOTAL BORROWINGS 688,484 4,719 2.76% 658,533 4,325 2.61%
---------------- ------------ ------------- ------------
Total Interest Bearing Liabilities: $ 3,034,511 $ 12,585 1.67% $ 3,031,235 $ 12,534 1.64%
---------------- ------------ ------------- ------------
Non-Interest Bearing Liabilities 377,633 357,430
---------------- -------------
TOTAL LIABILITIES 3,412,144 3,388,665
Equity 818,040 821,146
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TOTAL LIAB & CAPITAL $ 4,230,184 $ 4,209,811
================ =============
Net Interest Income $ 34,402 $ 33,896
============ ============
Net interest rate spread 3.12% 3.03%
Net interest earning assets $ 914,148 $ 913,794
================ =============
Net Interest Margin (3) 3.50% 3.41%
Ratio of interest-earning assets to
total interest-bearing liabilities 1.30x 1.30x
================ =============
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(1) Average outstanding balance amounts shown are amortized cost.
(2) Average outstanding balances shown net of the allowance for loan losses,
deferred loan fees and expenses, loan premiums and discounts and include
non-accrual loans.
(3) Net interest income divided by average interest-earning assets.
The following table summarizes the net interest margin for the previous
year, inclusive.
03/31/04 12/31/03 09/30/03 06/30/03 03/31/03
1st. Qtr. 4th. Qtr. 3rd. Qtr. 2nd. Qtr. 1st. Qtr.
--------- --------- --------- --------- ---------
Interest Earning Assets:
Securities 3.53% 3.49% 2.84% 3.38% 3.58%
Net Loans 5.78% 5.70% 5.99% 6.31% 6.56%
Total Interest Earning Assets: 4.79% 4.67% 4.49% 4.86% 5.16%
Interest Bearing Liabilities:
Total Deposits 1.35% 1.37% 1.47% 1.71% 2.11%
Total Borrowings 2.76% 2.61% 2.80% 2.79% 2.70%
Total Interest Bearing Liabilities: 1.67% 1.64% 1.76% 1.92% 2.17%
Interest Rate Spread 3.12% 3.03% 2.73% 2.94% 2.99%
Net Interest Margin 3.50% 3.41% 3.14% 3.41% 3.53%
Ratio of interest-earning assets to
total interest-bearing liabilities 1.30x 1.30x 1.31x 1.33x 1.35x