Provident Financial Services, Inc. (NYSE:PFS) Q3 2022 Earnings Conference Call October 28, 2022 10:00 AM ET

Company Participants

Adriano Duarte - Head, IR

Tony Labozzetta - President and CEO

Tom Lyons - Senior EVP and CFO

Conference Call Participants

Billy Young - RBC

Mark Fitzgibbon - Piper Sandler

Michael Perito - KBW

Operator

Good morning. Thank you for attending today’s Provident Financial Services, Inc. Third Quarter Earnings Conference Call. My name is Alexis and I will be your operator for today’s call. All lines will be muted during the presentation portion of the call with an opportunity for questions-and-answers at the end. [Operator Instructions]

I would now like to pass the conference call over to Adriano Duarte, Investor Relations Officer of Provident Financial Services. You may proceed.

Adriano Duarte

Thank you, Alexis. Good morning and thank you for joining us for our third quarter earnings call. Today's presenters are President and CEO, Tony Labozzetta; and Senior Executive Vice President and Chief Financial Officer, Tom Lyons.

Before beginning their review of our financial results, we ask that you please take note of our standard caution as to any forward-looking statements that may be made during the course of today's call. Our full disclaimer is contained in this morning's earnings release, which has been posted to the Investor Relations page on our website www.provident.bank.

Now, it's my pleasure to introduce Tony Labozzetta, who will offer his perspective on our third quarter results. Tony?

Tony Labozzetta

Thank you, Adriano and good morning, everyone. In the third quarter, Provident delivered a strong financial performance, once again producing record revenues, resulting in earnings of $0.58 per share.

Our performance was driven in large part by the strength and stability of our funding base growth in loans and an expanding net interest margin. The expanding net interest margin drove a 10.1% increase in net interest income over the trailing quarter. This resulted in an annualized return on average assets of 1.26% return on average tangible equity of 14.96%.

Our solid earnings performance continues to positively impact our capital, which remains strong and comfortably exceeds well capitalized levels. Our board of directors approved a quarterly cash dividend of $0.24 per share.

We remain committed to furthering our goal of delivering a best-in-class customer experience, which creates advocates for life and will help build our business, all of our business lines.

Commercial lending continues to be our primary focus. And in the third quarter, we closed approximately $533 million of new loans. Our line of credit utilization percentage decreased 3% from the second quarter to 33%, which is trailing our historical average of about 40%. In addition, prepayment increased approximately 17% to $265 million as compared to the second quarter. Approximately two-thirds of the payoffs are due to the sale of the underlying collateral.