Provident Financial Services, Inc. (NYSE:PFS) Q1 2022 Earnings Conference Call April 29, 2022 10:00 AM ET

Company Participants

Adriano Duarte - IR

Tony Labozzetta - President & CEO

Thomas Lyons - Senior Executive Vice President & CFO

Conference Call Participants

Mark Fitzgibbon - Piper Sandler

Michael Perito - KBW

Billy Young - RBC

Erik Zwick - Boenning & Scattergood

Russell Gunther - D.A. Davidson

Operator

Hello and welcome to the Provident Financial Services, Inc First Quarter Earnings Release Call. My name is Alex, and I'll be coordinating the call today. [Operator Instructions]

I will now hand over to your host, Adriano Duarte, Investor Relations Officer for Provident. Over to you, Adriano.

Adriano Duarte

Thank you, Alex. Good morning, and thank you for joining us for our first 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 provident.bank.

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

Tony Labozzetta

Thank you, Adriano and good morning, everyone. We are very pleased with Provident's strong financial performance for the first quarter with earnings of $0.58 per share. Our performance was driven by growth in our key business lines, resulting in the deployment of some of our excess liquidity in more desirable asset classes. The growth and improved asset mix combined with an expanding net interest margin bolstered net interest income, which drove the increase in quarterly revenue.

In addition, improvements in credit metrics and the economic forecast supported a negative provision for the quarter. This produced an annualized rate of return on average assets of 1.3% and a return on average tangible equity of 14.58%. Our Board approved a quarterly cash dividend of $0.24 per share. During the quarter, we also repurchased approximately 1.3 million shares of common stock at an average price of $23.36 per share. Our capital position remains strong and comfortably exceeds well-capitalized levels.

Our focus is to continue to build our best-in-class customer experience and grow all of our business lines, especially commercial lending. Our commercial lending group continues to be very active and in the first quarter, we closed approximately $502 million of new loans, a 61% increase from the same quarter last year. Prepayments for the quarter adjusted for PPP included certain anticipated payoffs, which offset some of our strong production. Our line of credit utilization percentage increased 3% for the first quarter to 31%, but remains below our historical average of about 40%.