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

May 10, 2010 | About:
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10qk

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Provident Financial Services Inc. (PFS) filed Quarterly Report for the period ended 2010-03-31.

Provident Financial Services Inc. has a market cap of $729.66 million; its shares were traded at around $12.09 with a P/E ratio of 20.84 and P/S ratio of 2.25. The dividend yield of Provident Financial Services Inc. stocks is 3.64%.PFS is in the portfolios of John Keeley of Keeley Fund Management, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Total net loans at March 31, 2010, decreased $55.6 million, or 1.3%, to $4.27 billion, from $4.32 billion at December 31, 2009. Loan originations totaled $249.5 million and loan purchases totaled $23.3 million for the three months ended March 31, 2010. The loan portfolio had net increases of $44.9 million in commercial and multi-family mortgage loans, which were more than offset by decreases of $52.4 million in commercial loans, $25.0 million in residential mortgage loans, $15.6 million in construction loans, and $9.2 million in consumer loans. The decrease in commercial loans includes the repayment of a low-yielding $25.0 million LIBOR-based line of credit and reductions in Shared National Credits (SNC), consistent with the Companys strategy to decrease SNC balances. The decreases in residential mortgage and consumer loans reflect a lack of qualified loan demand, and the decrease in construction loans is representative of the slow real estate market. Commercial real estate, construction and commercial loans represented 52.7% of the loan portfolio at

The decrease in non-performing loans was largely attributable to a $5.2 million charge-off against a collateral-dependent impaired commercial mortgage loan that was fully covered by a specific valuation allowance at December 31, 2009. Non-performing consumer loans decreased $489,000 versus the trailing quarter, on net charge-offs of $624,000. Non-performing commercial loans decreased $397,000 as a result of charge-offs of $4.6 million, including $4.3 million charged against two loans which were identified as impaired and which carried aggregate specific reserve allocations of $2.3 million at December 31, 2009. Reductions in non-performing commercial loans were largely offset by the addition of a $2.9 million relationship secured by first mortgages on two commercial properties with an estimated loan-to-value ratio of 79%, and a $1.2 million unsecured loan with personal guarantees. Non-performing construction loans decreased $151,000 as a result of paydowns from a SNC which is current, but classified as non-performing consistent with regulatory guidance. Partially offsetting these decreases, non-performing residential mortgage loans increased $4.1 million during the quarter as borrowers continued to be adversely affected by an extended period of high levels of unemployment.

Total stockholders equity increased $9.7 million, or 1.1%, to $894.2 million at March 31, 2010. This increase was due to net income of $11.2 million, a net increase of $4.1 million in other comprehensive income and a net increase due to the allocation of shares to stock-based compensation plans of $1.2 million, partially offset by $6.6 million in cash dividends, and common stock purchases of $176,000. At March 31, 2010, book value per share and tangible book value per share were $14.92 and $8.97, respectively, compared with $14.79 and $8.80, respectively, at December 31, 2009. Common stock repurchases during the quarter ended March 31, 2010, totaled 16,000 shares at an average cost of $10.75 per share. At March 31, 2010, 2.1 million shares remained eligible for repurchase under the current stock repurchase program authorized by the Companys Board of Directors.

Net Interest Income. Total net interest income increased $6.8 million, or 15.6%, to $50.8 million for the quarter ended March 31, 2010, compared to $43.9 million for the quarter ended March 31, 2009. Interest income for the first quarter of 2010 decreased $1.1 million, or 1.4%, to $72.4 million, compared to $73.5 million for the same period in 2009. Interest expense decreased $7.9 million, or 26.7%, to $21.6 million for the quarter ended March 31, 2010, compared to $29.5 million for the quarter ended March 31, 2009.

The average balance of net loans decreased $76.4 million, or 1.8%, to $4.29 billion for the quarter ended March 31, 2010, compared to $4.36 billion for the same period in 2009. Income on all loans secured by real estate decreased $891,000, or 2.2%, to $39.7 million for the three months ended March 31, 2010, compared to $40.6 million for the three months ended March 31, 2009. Interest income on commercial loans decreased $161,000, or 1.5%, to $10.3 million for the quarter ended March 31, 2010, compared to $10.5 million for the quarter ended March 31, 2009. Consumer loan interest income decreased $898,000, or 11.0%, to $7.3 million for the quarter ended March 31, 2010, compared to $8.2 million for the quarter ended March 31, 2009. The average loan yield for the three months ended March 31, 2010, was 5.40%, compared with 5.48% for the same period in 2009, reflecting decreases in short-term interest rates and the composition of the loan portfolio, which is 42% floating or adjustable rate.

The average balance of interest-bearing core deposit accounts increased $646.1 million, or 28.6%, to $2.90 billion for the quarter ended March 31, 2010, compared to $2.26 billion for the quarter ended March 31, 2009. Average time deposit account balances decreased $132.3 million, or 8.3%, to $1.46 billion for the quarter ended March 31, 2010, compared to $1.60 billion for the same period in 2009. Interest paid on deposit accounts decreased $6.1 million, or 31.0%, to $13.5 million for the quarter ended March 31, 2010, compared to $19.6 million for the quarter ended March 31, 2009. The average cost of interest-bearing deposits was 1.26% for the three months ended March 31, 2010, compared with 2.06% for the three months ended March 31, 2009, reflecting market interest rate reductions and a shift in deposit composition to lower-costing core deposit accounts. The Company remains focused on cultivating core deposit relationships, while strategically permitting the run-off of certain higher-cost, single-service time deposits.

Read the The complete Report

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10qk
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