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Provident Financial Services Inc. Reports Operating Results (10-Q)

May 11, 2009 | About:
10qk

Provident Financial Services Inc. (PFS) filed Quarterly Report for the period ended 2009-03-31.

Provident Financial Services Inc. is the holding company of The Provident Bank a community- and customer-oriented banking company. The Provident Bank emphasizes personal service and customer convenience in attending to the financial needs of individuals families and businesses in northern and central New Jersey. The bank offers a broad array of deposit loan trust and investment products. In keeping with its Customer-Centric Strategy. Provident Financial Services Inc. has a market cap of $681.67 million; its shares were traded at around $11.31 with a P/E ratio of 16.16 and P/S ratio of 2.04. The dividend yield of Provident Financial Services Inc. stocks is 3.89%.

Highlight of Business Operations:

Total net loans at March 31, 2009, decreased $156.0 million, or 3.5%, to $4.32 billion, compared to $4.48 billion at December 31, 2008, largely as a result of the securitization of $84.9 million of conforming one- to four-family residential mortgage loans. Loan originations totaled $268.9 million and loan purchases totaled $12.9 million for the quarter ended March 31, 2009. Net increases of $34.9 million in commercial and multi-family mortgage loans were more than offset by decreases of $135.0 million in residential mortgage loans, $22.8 million in commercial loans, $14.2 million in consumer loans, and $13.1 million in construction loans during the first quarter of 2009. Commercial loans, consisting of commercial real estate, construction and commercial loans, totaled $2.10 billion at March 31, 2009 and December 31, 2008, representing 48.1% of the loan portfolio at March 31, 2009, and 46.5% of the loan portfolio at December 31, 2008. The Company intends to continue to focus on the origination of commercial loans. Retail loans, which consist of

Total deposits increased $290.5 million, or 6.9%, to $4.52 billion at March 31, 2009, from $4.23 billion at December 31, 2008, with core deposits increasing $134.1 million and time deposits increasing $156.4 million. Core deposits, consisting of all demand and savings deposits, represented 62.6% of total deposits at March 31, 2009, compared to 63.7% of total deposits at December 31, 2008. Within core deposits, money market account balances increased $63.5 million, to $820.3 million at March 31, 2009, NOW checking account balances increased $44.0 million, to $646.3 million at March 31, 2009, savings account balances increased $18.1 million, to $890.4 million at March 31, 2009 and non-interest bearing demand deposit accounts increased $8.6 million, to $470.9 million at March 31, 2009. These increases are primarily due to increases in municipal money market and checking account balances, Smart checking and Platinum relationship checking and money market account balances, and business checking account balances. Time deposit increases were primarily in the 18-month and shorter maturity categories.

Total stockholders equity decreased $146.6 million, or 14.4%, to $872.0 million at March 31, 2009. This decrease was due to a net loss of $143.6 million, $6.6 million in cash dividends, and common stock purchases of $60,000, partially offset by $2.6 million in other comprehensive income and the allocation of shares to stock-based compensation plans of $1.1 million. At March 31, 2009, book value per share and tangible book value per share were $14.57 and $8.54, respectively, compared with $17.09 and $8.45, respectively, at December 31, 2008. Common stock repurchases during the quarter ended March 31, 2009, totaled 5,000 shares at an average cost of $11.36 per share. At March 31, 2009, 2.1 million shares remained eligible for repurchase under the current stock repurchase program authorized by the Companys Board of Directors.

The average balance of net loans increased $125.3 million, or 3.0%, to $4.36 billion for the quarter ended March 31, 2009, compared to $4.24 billion for the same period in 2008. Income on all loans secured by real estate decreased $782,000, or 1.9%, to $40.6 million for the three months ended March 31, 2009, compared to $41.4 million for the three months ended March 31, 2008. Interest income on commercial loans decreased $784,000, or 6.9%, to $10.5 million for the quarter ended March 31, 2009, compared to $11.3 million for the quarter ended March 31, 2008. Consumer loan interest income decreased $1.5 million, or 15.5%, to $8.2 million for the quarter ended March 31, 2009, compared to $9.7 million for the quarter ended March 31, 2008. The average loan yield for the three months ended March 31, 2009, was 5.48%, compared with 5.90% for the same period in 2008, reflecting declines in short-term interest rates and the composition of the commercial loan portfolio, which is 48% floating or adjustable rate.

Non-Interest Income. Non-interest income totaled $7.0 million for the quarter ended March 31, 2009, a decrease of $1.8 million, or 20.7%, compared to the same period in 2008. Other income decreased $886,000 to $381,000 for the three months ended March 31, 2009, from $1.3 million for the three months ended March 31, 2008, due to the realization of non-recurring earnings in the first quarter of 2008, including $660,000 in pre-tax gains associated with the ownership and mandatory redemption of a portion of the Companys Class B Visa, Inc. shares as part of Visas initial public offering, and $400,000 in pre-tax gains on the sale of deposits associated with the sale of an under-performing branch. Fee income decreased $885,000 to $5.2 million for the three months ended March 31, 2009, from $6.1 million for the three months ended March 31, 2008, due primarily to lower deposit and loan prepayment fees and reductions in income on funds underlying outstanding official checks as a result of lower short-term interest rates. Income from the appreciation of the cash surrender value of Bank-owned life insurance decreased $139,000 to $1.2 million for the quarter ended March 31, 2009, compared with the same period in 2008, primarily as a result of lower carrier crediting rates due to the lower interest rate environment.

Non-Interest Expense. For the three months ended March 31, 2009, non-interest expense increased $153.8 million, to $185.8 million, compared to $32.0 million for the three months ended March 31, 2008. The increase in non-interest expense was primarily due to the goodwill impairment charge of $152.5 million recorded in the first quarter of 2009. Compensation and benefits expense increased $764,000 to $17.5 million for the three months ended March 31, 2009, from $16.7 million for the three months ended March 31, 2008, due primarily to pre-tax severance costs of $541,000 recognized in the first quarter of 2009, and increases in pension and healthcare benefits expense. Other operating expenses increased $476,000 to $5.8 million for the quarter ended March 31, 2009, from $5.3 for the same period last year, primarily due to increases in deposit insurance costs and expenses related to foreclosed assets.

Read the The complete ReportPFS is in the portfolios of John Keeley of Keeley Fund Management.

Rating: 5.0/5 (1 vote)

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