Provident Financial Services Inc. (PFS) filed Annual Report for the period ended 2011-12-31.

Providnt Fin Sv has a market cap of $850.6 million; its shares were traded at around $14.08 with a P/E ratio of 13.8 and P/S ratio of 2.8. The dividend yield of Providnt Fin Sv stocks is 3.4%. Providnt Fin Sv had an annual average earning growth of 5.9% over the past 10 years.

Highlight of Business Operations:

Total loans increased $238.1 million, or 5.5%, to $4.58 billion at December 31, 2011, from $4.41 billion at December 31, 2010. For the year ended December 31, 2011, loan originations totaling $1.51 billion and loan purchases of $79.5 million were partially offset by repayments of $1.30 billion and loan sales of $12.9 million. Multi-family loans increased $177.0 million to $564.1 million at December 31, 2011, compared to $387.2 million at December 31, 2010. Commercial loans increased $93.5 million to $849.0 million at December 31, 2011, compared to $755.5 million at December 31, 2010, and commercial real estate loans increased $73.4 million to $1.25 billion at December 31, 2011, compared to $1.18 billion at December 31, 2010. Residential mortgage loans decreased $77.7 million to $1.31 billion at December 31, 2011, compared to $1.39 billion at December 31, 2010, as loan repayments attributable to an active refinance market outpaced originations. One- to four-family residential mortgage loan originations totaled $146.7 million and one- to four-family residential mortgage loans purchased totaled $79.5 million for the year ended December 31, 2011. Principal repayments on residential mortgage loans totaled $285.8 million, and residential mortgage loans sold totaled $12.9 million for

Interest income decreased $10.8 million, or 3.8%, to $275.7 million for 2011, compared to $286.5 million for 2010. The decrease in interest income was attributable to a decrease in the yield on average earning assets, partially offset by an increase in average earning asset balances. The yield on interest-earning assets decreased 27 basis points to 4.46% for 2011, from 4.73% for 2010, with reductions in yields experienced in nearly all earning asset classes. Average interest-earning assets increased $101.0 million, or 16.7%, to $6.16 billion for 2011, compared to $6.06 billion for 2010. The average outstanding loan balances increased $148.6 million, or 3.5%, to $4.42 billion for 2011 from $4.27 billion for 2010, and the average balance of investment securities increased $10.4 million, or 3.1%, to $345.5 million for 2011, compared to $335.1 million for 2010. These increases were partially offset by a decrease in average interest-earning deposits, Federal funds sold and short-term investment balances of $51.7 million, or 51.3%, to $49.2 million for 2011, from $100.9 million for 2010. In addition, the average balance of securities available for sale decreased $9.6 million, or 0.7%, to $1.30 billion for 2011, compared to $1.31 billion for 2010.

Non-Interest Income. For the year ended December 31, 2011, non-interest income totaled $32.5 million, an increase of $990,000, or 3.1%, compared to the same period in 2010. Fee income totaled $25.4 million for the year ended December 31, 2011, an increase of $1.7 million compared with the same period in 2010, largely due to increased wealth management fees related to the Beacon acquisition, an increase in revenue from loan related activity and increased revenue associated with annuity sales. These increases were partially offset by a reduction in overdraft fees. Other income increased $266,000 for the year ended December 31, 2011, compared with the same period in 2010, primarily as a result of net gains recognized on the sale of foreclosed real estate and an increase in gains resulting from a larger number of loan sales, partially offset by the losses incurred on the sales of the Company’s previously occupied administrative facilities. Offsetting these increases, income related to Bank-owned life insurance decreased $706,000 for the year ended December 31, 2011, compared to the same period last year, primarily due to the receipt of policy claim proceeds in the second quarter of 2010. Additionally, net gains on securities transactions declined $177,000 for the year ended December 31, 2011, compared with the same period in 2010. These net gains on securities transactions totaled $708,000 for the year ended December 31, 2011, compared with net gains of $885,000 for the same period in 2010. The Company recognized net other-than-temporary impairment charges of $302,000 and $170,000 for the years ended December 31, 2011 and December 31, 2010, respectively, related to an investment in a non-Agency mortgage-backed security.

General. Net income for the year ended December 31, 2010 was $49.7 million, compared to a net loss of $121.8 million for the year ended December 31, 2009. Basic and diluted earnings per share were $0.88 for the year ended December 31, 2010, compared to a basic and diluted loss per share of $2.16 for 2009. For the year ended December 31, 2010, the Company recorded an impairment charge of $1.5 million, or $904,000 net of tax, arising from the anticipated sale and relocation of its administrative building in the first half of 2011. The carrying value of the existing premises and equipment was adjusted to reflect its current estimated realizable value, net of selling expenses. The Company expects to realize operational efficiencies and reduced occupancy expense as a result of the relocation. Compared with the year ended December 31, 2009, earnings for the year ended December 31, 2010 reflected a $27.9 million increase in net interest income and lower operating costs of $5.8 million, excluding a $152.5 million goodwill impairment charge incurred in 2009. These improvements were partially offset by an increase in income tax expense of $9.6 million resulting from increased taxable income and an increase in the provision for loan losses of $5.3 million attributable to increases in non-performing loans, downgrades in credit risk ratings, and an increase in commercial loans as a percentage of the total loan portfolio. Additionally, earnings for the year ended December 31, 2009 were impacted by an industry-wide special assessment imposed by the FDIC as part of its plan to restore the deposit insurance fund. The cost of this special assessment to the Company in the second quarter of 2009 was $3.1 million, or $1.9 million net of tax.

Interest income decreased $6.0 million, or 2.1%, to $286.5 million for 2010, compared to $292.6 million for 2009. The decrease in interest income was attributable to a decrease in the yield on average earning assets, partially offset by an increase in average earning asset balances. The yield on interest-earning assets decreased 22 basis points to 4.73% for 2010, from 4.95% for 2009, with reductions in yields experienced in nearly all earning asset classes. Average interest-earning assets increased $111.1 million, or 1.7%, to $6.06 billion for 2010, compared to $5.92 billion for 2009. The average balance of securities available for sale increased $222.8 million, or 20.5%, to $1.31 billion for 2010, compared to $1.09 billion for 2009. This increase was partially offset by a decrease in average interest-earning deposits, Federal funds sold and short-term investment balances of $46.5 million, or 31.5%, to $100.9 million for 2010, from $147.3 million for 2009. In addition, average outstanding loan balances decreased $29.3 million, or 0.7%, to $4.27 billion for 2010 from $4.30 billion for 2009, and the average balance of investment securities decreased $4.1 million, or 1.2%, to $335.1 million for 2010, compared to $339.2 million for 2009.

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