JERSEY CITY, N.J., July 24 NJ-Provident-earnings
JERSEY CITY, N.J., July 24 /PRNewswire-FirstCall/ -- Provident Financial
Services, Inc. (NYSE: PFS) (the "Company") reported basic and diluted earnings
per share of $0.18 for the quarter ended June 30, 2008, compared to basic and
diluted earnings per share of $0.22 for the quarter ended June 30, 2007.
Basic and diluted earnings per share were $0.38 for the six months ended June
30, 2008, compared to basic and diluted earnings per share of $0.41 for the
six months ended June 30, 2007. Net income for the three months ended June
30, 2008 totaled $10.4 million, compared to $13.6 million reported for the
same period in 2007. Net income was $21.0 million for the six months ended
June 30, 2008, compared to $24.4 million for the same period in 2007.
Earnings and per share data for the three and six months ended June 30,
2008, reflected severance costs totaling $503,000, net of tax, recognized
during the second quarter of 2008. Results for the six months ended June 30,
2008, were also impacted by a $180,000 net after-tax gain recorded in
connection with the ownership and mandatory redemption of a portion of the
Company's Class B Visa, Inc. shares as part of Visa's initial public offering
in the first quarter of 2008, and a $175,000 net after-tax gain resulting from
the sale of a branch office in the first quarter of 2008.
Earnings and per share data for the three and six months ended June 30,
2007, were impacted by the settlement of an insurance claim which resulted in
a recovery of $3.5 million, net of tax, related to a fraud loss that occurred
and was recognized in 2002, and one-time expenses of $246,000, net of tax,
related to the April 1, 2007 acquisition of First Morris Bank & Trust ("First
Morris").
Paul M. Pantozzi, Chairman and Chief Executive Officer, commented, "In the
second quarter, our net interest margin continued to expand, as it had in the
previous quarter, due to lower funding costs. We also maintained our
strategic focus on expense management and preservation of a solid capital
position. Our principal concern in the current economic environment has been
to maintain asset quality. While the past quarter witnessed an increase in
non-performing assets, we remained diligent in monitoring all of our loan
categories and making appropriate additions to our allowance for loan losses.
At the same time, credit demand from quality borrowers remained steady during
the quarter, and we continued our conservative underwriting standards as we
grew our loan portfolio on a linked quarter basis."
Declaration of Quarterly Dividend
The Company's Board of Directors declared a quarterly cash dividend of
$0.11 per common share payable on August 29, 2008, to stockholders of record
as of the close of business on August 15, 2008.
Balance Sheet Summary
Total assets increased to $6.38 billion at June 30, 2008, compared to
$6.36 billion at December 31, 2007, due primarily to an increase in securities
available for sale.
Total investments increased $91.9 million, or 7.9%, during the six months
ended June 30, 2008. The increase included $55.2 million of residential
mortgage loan pools that were securitized by the Company in the first quarter
of 2008 and are held as securities available for sale.
The Company's net loans decreased $19.4 million, or 0.5%, to $4.24 billion
at June 30, 2008, from $4.26 billion at December 31, 2007, largely as a result
of the securitization of $55.2 million of conforming one- to four-family 30-
year fixed-rate residential mortgage loans during the first quarter of 2008.
Loan originations totaled $649.8 million and loan purchases totaled $131.4
million for the six months ended June 30, 2008. Compared with December 31,
2007, construction loans decreased $86.1 million, commercial loans decreased
$26.9 million, and consumer loans decreased $22.8 million, while commercial
mortgage and multi-family loans increased $100.9 million, and residential
mortgage loans increased $15.7 million. Commercial real estate, construction
and commercial loans represented 45.1% of the loan portfolio at June 30, 2008,
compared to 45.2% at December 31, 2007.
At June 30, 2008, the Company's unfunded loan pipeline totaled $763.4
million, including $211.8 million in commercial loan commitments, $134.0
million in construction loan commitments and $105.3 million in commercial
mortgage commitments. The unfunded loan pipeline at March 31, 2008 was $671.9
million.
Total deposits decreased $50.3 million, or 1.2%, during the six months
ended June 30, 2008, however core deposits increased $56.8 million, or 2.2% to
$2.64 billion at June 30, 2008. Total deposits were $4.17 billion at June 30,
2008, with core deposits, consisting of savings and demand deposit accounts,
representing 63.3% of total deposits. Borrowed funds increased $65.9 million,
or 6.1%, during the six months ended June 30, 2008.
Common stock repurchases for the six months ended June 30, 2008 totaled
35,000 shares at an average cost of $13.82 per share. At June 30, 2008, book
value per share and tangible book value per share were $16.92 and $8.25,
respectively, compared with $16.78 and $8.05, respectively, at December 31,
2007.
Results of Operations
Net Interest Margin
The net interest margin increased 23 basis points to 3.10% for the quarter
ended June 30, 2008, from 2.87% for the quarter ended March 31, 2008. The net
interest margin for the quarter ended June 30, 2008 increased 8 basis points
compared with the net interest margin of 3.02% for the quarter ended June 30,
2007. The weighted average yield on interest-earning assets was 5.50% for the
three months ended June 30, 2008, compared with 5.63% for the trailing quarter
and 5.81% for the three months ended June 30, 2007. The weighted average cost
of interest-bearing liabilities was 2.74% for the quarter ended June 30, 2008,
compared with 3.14% for the trailing quarter and 3.23% for the second quarter
of 2007.
For the six months ended June 30, 2008, the net interest margin was 2.98%.
This was a decrease of 4 basis points compared with the net interest margin of
3.02% for the six months ended June 30, 2007. The weighted average yield on
interest-earning assets was 5.56% for the six months ended June 30, 2008,
compared with 5.76% for the six months ended June 30, 2007. The weighted
average cost of interest-bearing liabilities was 2.94% for the six months
ended June 30, 2008, compared with 3.21% for the same period in 2007.
The average cost of deposits for the three months ended June 30, 2008 was
2.41%, compared with 2.87% for the trailing quarter and 3.07% for the same
period last year. The average cost of borrowings for the three months ended
June 30, 2008 was 3.84%, compared with 4.06% for the trailing quarter and
4.09% for the same period last year.
The average cost of deposits for the six months ended June 30, 2008 was
2.64%, compared with 3.00% for the same period last year. The average cost of
borrowings for the six months ended June 30, 2008 was 3.95%, compared with
4.17% for the same period last year.
Non-Interest Income
Non-interest income totaled $6.7 million for the quarter ended June 30,
2008, a decrease of $7.5 million compared to the same period in 2007. In
2007, the Company recorded a one-time gain on an insurance settlement of $5.9
million, before taxes, related to the resolution of previously disclosed
litigation. Fee income for the quarter ended June 30, 2008 decreased $1.8
million, or 27.4%, compared to the same period in 2007, primarily as a result
of decreases in the value of equity fund holdings and lower loan prepayment
income. Partially offsetting these decreases, net gains on securities
transactions totaled $305,000 for the quarter ended June 30, 2008, compared
with losses of $63,000 for the same quarter in 2007.
For the six months ended June 30, 2008, non-interest income totaled $15.5
million, a decrease of $6.5 million, or 29.5%, compared to the same period in
2007. In 2007, the Company recorded a one-time gain on an insurance
settlement of $5.9 million, before taxes, related to the resolution of
previously disclosed litigation. Fee income decreased $1.2 million, or 9.5%,
for the six months ended June 30, 2008, compared to the same period in 2007,
primarily as a result of decreases in the value of equity fund holdings.
Partially offsetting these decreases, net gains on securities transactions
totaled $401,000 for the six months ended June 30, 2008, compared with losses
of $63,000 for the same period in 2007.
Non-Interest Expense
For the three months ended June 30, 2008, non-interest expense decreased
$844,000, or 2.5%, to $33.3 million, compared to $34.1 million for the three
months ended June 30, 2007. For the three months ended June 30, 2008,
compensation and benefits expense decreased $308,000, compared with the same
period in 2007. Compensation and benefits expense decreased despite the
recognition of $773,000 in pre-tax severance costs during the second quarter
of 2008, as a result of previous staff reductions and lower stock-based
compensation costs. Data processing and advertising costs decreased $366,000
and $153,000, respectively, for the quarter ended June 30, 2008, compared with
the same period in 2007, as prior year costs included charges related to the
First Morris acquisition. Amortization of intangibles decreased $312,000 for
the three months ended June 30, 2008, compared with the same period in 2007,
as a result of scheduled reductions in the amortization of core deposit
intangibles.
For the six months ended June 30, 2008, non-interest expense increased
$1.8 million, or 2.8%, to $65.2 million, compared to $63.5 million for the six
months ended June 30, 2007. Other operating expenses increased $1.0 million
for the six months ended June 30, 2008, compared with the same period in 2007,
due to increases in several categories, including $356,000 in expense
associated with the Company's proportionate share of a litigation reserve
established by Visa, as well as increases in attorney fees and costs
associated with foreclosed assets. Net occupancy expense increased $918,000
due primarily to the addition of nine branch locations in connection with the
acquisition of First Morris. Compensation and benefits expense increased
$235,000, primarily as a result of $773,000 in pre-tax severance costs
incurred during the second quarter of 2008. Partially offsetting these
increases, advertising and data processing costs decreased $423,000 and
$57,000, respectively, for the six months ended June 30, 2008, compared with
the same period in 2007, as prior year costs included charges related to the
First Morris acquisition.
Asset Quality
Total non-performing loans at June 30, 2008 were $36.7 million, or 0.86%
of total loans, compared with $34.6 million, or 0.81% of total loans at
December 31, 2007, and $11.1 million, or 0.27% of total loans at June 30,
2007. At June 30, 2008, non-performing loans included a $16.0 million loan
secured by a 64-unit condominium project which was greater than 90 days past
due and still accruing interest. Subsequent to June 30, 2008, the borrower
closed on the sale of the first unit, brought the loan current and reduced the
outstanding principal balance. The loan is now performing in accordance with
its original contractual terms. At June 30, 2008 the Company's allowance for
loan losses was 0.96% of total loans, compared with 0.95% of total loans at
December 31, 2007 and 0.89% of total loans at June 30, 2007. The Company
recorded provisions for loan losses of $1.5 million and $2.8 million for the
three and six months ended June 30, 2008, respectively, compared with
provisions of $1.2 million and $1.5 million for the three and six months ended
June 30, 2007, respectively. For the three and six months ended June 30,
2008, the Company had net charge-offs of $1.2 million and $2.5 million,
respectively, compared with net recoveries of $61,000 and net charge-offs of
$5,000 for the same periods in 2007. The allowance for loan losses increased
$336,000 to $41.1 million at June 30, 2008, from $40.8 million at December 31,
2007. The increase in the loan loss provision for the three and six months
ended June 30, 2008, compared with the same periods in 2007, was attributable
to an increase in non-performing loans, growth in the loan portfolio and an
increase in commercial loans as a percentage of the loan portfolio to 45.1% at
June 30, 2008, from 43.4% at June 30, 2007, as well as ongoing uncertainty
with respect to general economic conditions. At June 30, 2008, the Company
held $5.9 million of foreclosed assets, compared with $1.0 million at December
31, 2007. The increase in foreclosed assets is primarily attributable to one
commercial real estate line of credit secured by a number of properties that
was previously classified as impaired. During the six months ended June 30,
2008, the Company obtained title to five properties with a fair value of $4.8
million in connection with this line of credit.
Income Tax Expense
For the three months ended June 30, 2008, the Company's income tax expense
was $4.1 million, compared with $5.3 million for the same period in 2007. For
the six months ended June 30, 2008, the Company's income tax expense was $8.1
million, compared with $9.8 million for the same period in 2007. The decrease
in income tax expense was primarily attributable to reduced income before
income taxes. For the three and six months ended June 30, 2008, the Company's
effective tax rates were 28.3% and 27.8%, respectively, compared with 28.0%
and 28.7% for the three and six months ended June 30, 2007, respectively.
About the Company
Provident Financial Services, Inc. is the holding company for The
Provident Bank, a community-oriented bank offering a full range of retail and
commercial loan and deposit products. The Bank currently operates 83 full
service branches throughout northern and central New Jersey.
Post Earnings Conference Call
Representatives of the Company will hold a conference call for investors
at 10:00 a.m. Eastern Time on July 24, 2008 regarding highlights of the
Company's second quarter 2008 financial results. The call may be accessed by
dialing 1-800-860-2442 (Domestic) or 1-412-858-4600 (International). Internet
access to the call is also available (listen only) at www.providentnj.com by
going to Investor Relations and clicking on Webcast.
Forward Looking Statements
Certain statements contained herein are "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Such forward-looking statements
may be identified by reference to a future period or periods, or by the use of
forward-looking terminology, such as "may," "will," "believe," "expect,"
"estimate," "anticipate," "continue," or similar terms or variations on those
terms, or the negative of those terms. Forward-looking statements are subject
to numerous risks and uncertainties, including, but not limited to, those
related to the economic environment, particularly in the market areas in which
the Company operates, competitive products and pricing, fiscal and monetary
policies of the U.S. Government, changes in government regulations affecting
financial institutions, including regulatory fees and capital requirements,
changes in prevailing interest rates, acquisitions and the integration of
acquired businesses, credit risk management, asset-liability management, the
financial and securities markets and the availability of and costs associated
with sources of liquidity.
The Company wishes to caution readers not to place undue reliance on any
such forward-looking statements, which speak only as of the date made. The
Company wishes to advise readers that the factors listed above could affect
the Company's financial performance and could cause the Company's actual
results for future periods to differ materially from any opinions or
statements expressed with respect to future periods in any current statements.
The Company does not undertake and specifically declines any obligation to
publicly release the result of any revisions, which may be made to any
forward-looking statements to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or
unanticipated events.
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Statements of Condition
June 30, 2008 (Unaudited) and December 31, 2007
(Dollars in Thousands)
AssetsJune 30, 2008 December 31, 2007
Cash and due from banks $82,652$83,737
Federal funds sold - 18,000
Short-term investments 5,003 38,892
Total cash and cash equivalents87,655140,629
Investment securities held to maturity
(market value of $352,983 at June 30, 2008
(unaudited) and $359,699 at December 31, 2007) 355,020358,491
Securities available for sale, at fair value 868,067769,615
Federal Home Loan Bank stock 36,689 39,764
Loans 4,277,202 4,296,291
Less allowance for loan losses 41,118 40,782
Net loans4,236,084 4,255,509
Foreclosed assets, net 5,883 1,041
Banking premises and equipment, net 77,280 79,138
Accrued interest receivable 24,104 24,665
Intangible assets517,371520,722
Bank-owned life insurance124,334121,674
Other assets 52,457 48,143
Total assets$6,384,944 $6,359,391
Liabilities and Stockholders' Equity
Deposits:
Demand deposits$1,696,188 $1,553,625
Savings deposits 945,951 1,031,725
Certificates of deposit of $100,000 or more 455,633480,362
Other time deposits 1,076,738 1,159,108
Total deposits 4,174,510 4,224,820
Mortgage escrow deposits 20,761 18,075
Borrowed funds 1,141,023 1,075,104
Other liabilities 38,905 40,598
Total liabilities5,375,199 5,358,597
Stockholders' Equity:
Preferred stock, $0.01 par value,
50,000,000 shares authorized, none issued - -
Common stock, $0.01 par value, 200,000,000
shares authorized, 83,209,293 shares issued
and 59,674,626 shares outstanding at
June 30, 2008, and 59,646,936 shares
outstanding at December 31, 2007832832
Additional paid-in capital 1,012,265 1,009,120
Retained earnings445,305437,503
Accumulated other comprehensive income 1,453 4,335
Treasury stock at cost (383,891) (383,407)
Unallocated common stock held by Employee Stock
Ownership Plan (66,219) (67,589)
Common Stock acquired by the Directors'
Deferred Fee Plan(7,713)(7,759)
Deferred compensation -
Directors' Deferred Fee Plan 7,713 7,759
Total stockholders' equity 1,009,745 1,000,794
Total liabilities and stockholders' equity$6,384,944 $6,359,391
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Statements of Income
Three and Six Months Ended June 30, 2008 and 2007 (Unaudited)
(Dollars in Thousands, Except Per Share Data)
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
(Unaudited) (Unaudited)
Interest income:
Real estate secured loans $40,554 $42,322 $81,941 $82,524
Commercial loans 10,621 10,660 21,903 18,333
Consumer loans 9,147 9,922 18,826 18,834
Investment securities 3,601 3,877 7,254 7,862
Securities available for sale 11,315 9,988 21,602 19,196
Other short-term investments 77 35 303 78
Federal funds 16 101 164 105
Total interest income 75,331 76,905 151,993 146,932
Interest expense:
Deposits 22,222 29,229 48,812 53,356
Borrowed funds 10,540 7,638 21,423 16,264
Total interest expense32,762 36,867 70,235 69,620
Net interest income 42,569 40,038 81,758 77,312
Provision for loan losses1,500 1,200 2,800 1,500
Net interest income after
provision for loan
losses 41,069 38,838 78,958 75,812
Non-interest income:
Fees4,892 6,738 11,006 12,164
Gain on insurance settlement- 5,947 - 5,947
Bank-owned life insurance 1,352 1,355 2,660 2,687
Net gain (loss) on securities
transactions 305 (63)401(63)
Other income 118 225 1,385 1,193
Total non-interest income 6,667 14,202 15,452 21,928
Non-interest expense:
Compensation and employee
benefits 17,464 17,772 34,177 33,942
Net occupancy expense 5,174 4,970 10,431 9,513
Data processing expense 2,244 2,610 4,607 4,664
Amortization of intangibles 1,557 1,869 3,333 3,238
Advertising and promotion 1,312 1,465 1,829 2,252
Other operating expenses5,541 5,450 10,867 9,859
Total non-interest
expense 33,292 34,136 65,244 63,468
Income before income
tax expense 14,444 18,904 29,166 34,272
Income tax expense 4,091 5,287 8,120 9,847
Net income $10,353 $13,617 $21,046 $24,425
Basic earnings per share $0.18 $0.22 $0.38 $0.41
Average basic shares
outstanding56,014,455 61,339,380 55,969,517 60,202,164
Diluted earnings per share $0.18 $0.22 $0.38 $0.41
Average diluted shares
outstanding56,014,455 61,339,380 55,969,517 60,202,164
PROVIDENT FINANCIAL SERVICES, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except share data) (Unaudited)
At or for the Three At or for the Six
Months EndedMonths Ended
June 30, June 30,
2008200720082007
INCOME STATEMENT:
Net interest income$42,569 $40,038 $81,758 $77,312
Provision for loan losses1,500 1,200 2,800 1,500
Non-interest income 6,667 14,202 15,452 21,928
Non-interest expense33,292 34,136 65,244 63,468
Income before income tax
expense14,444 18,904 29,166 34,272
Net income 10,353 13,617 21,046 24,425
Basic earnings per share $0.18 $0.22 $0.38 $0.41
Diluted earnings per share $0.18 $0.22 $0.38 $0.41
Interest rate spread 2.76% 2.58% 2.62% 2.55%
Net interest margin 3.10% 3.02% 2.98% 3.02%
PROFITABILITY:
Annualized return on average
assets 0.66% 0.88% 0.67% 0.83%
Annualized return on average
equity 4.13% 5.14% 4.20% 4.74%
Annualized non-interest expense
to average assets 2.11% 2.21% 2.07% 2.16%
Efficiency ratio (1)67.62% 62.94% 67.12% 63.95%
ASSET QUALITY:
Non-accrual loans $20,726 $11,060
90+ and still accruing loans15,990 -
Non-performing loans36,716 11,060
Foreclosed assets5,883 562
Non-performing loans to
total loans 0.86% 0.27%
Non-performing assets to
total assets0.67% 0.19%
Allowance for loan losses $41,118 $36,764
Allowance for loan losses to
non-performing loans 111.99% 332.41%
Allowance for loan losses to
total loans 0.96% 0.89%
AVERAGE BALANCE SHEET DATA:
Assets $6,351,308 $6,181,643 $6,338,041 $5,931,470
Loans, net 4,203,838 4,065,358 4,220,519 3,903,432
Earning assets 5,492,015 5,305,200 5,477,877 5,119,020
Core deposits2,618,253 2,594,023 2,598,620 2,412,311
Borrowings 1,102,742 749,421 1,090,790 785,573
Interest-bearing liabilities 4,817,702 4,571,325 4,811,352 4,374,542
Stockholders' equity 1,009,273 1,063,526 1,007,553 1,039,485
Average yield on
interest-earning assets 5.50% 5.81% 5.56% 5.76%
Average cost of
interest-bearing liabilities2.74% 3.23% 2.94% 3.21%
Notes
(1) Efficiency Ratio Calculation
Three Months Ended Six Months Ended
June 30,June 30,
2008200720082007
Net interest income$42,569 $40,038 $81,758 $77,312
Non-interest income 6,667 14,202 15,452 21,928
Total income $49,236 $54,240 $97,210 $99,240
Non-interest expense $33,292 $34,136 $65,244 $63,468
Expense/Income: 67.62% 62.94% 67.12% 63.95%
Average Quarterly Balance
NET INTEREST MARGIN ANALYSIS
(Unaudited) (Dollars in thousands)
June 30, 2008 March 31, 2008
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
Interest-Earning Assets:
Federal Funds Sold and
Other Short-Term
Investments $12,227 $93 3.05% $43,839 $374 3.44%
Investment Securities
(1) 354,0123,601 4.07 355,3543,653 4.11
Securities Available
for Sale 887,401 10,557 4.76 788,2219,531 4.84
Federal Home Loan
Bank Stock34,537 758 8.83 39,125 756 7.78
Net Loans (2)
Total Mortgage
Loans 2,901,165 40,554 5.602,897,029 41,387 5.73
Total Commercial
Loans 679,636 10,621 6.29 701,802 11,282 6.47
Total Consumer Loans 623,0379,147 5.90 638,3699,679 6.08
Total Interest-
Earning Assets 5,492,015 75,331 5.505,463,739 76,662 5.63
Non-Interest Earning
Assets:
Cash and Due from
Banks74,823 81,323
Other Assets 784,470 779,712
Total Assets$6,351,308 $6,324,774
Interest-Bearing
Liabilities:
Demand Deposits $1,178,7005,110 1.74% $1,115,9206,480 2.34%
Savings Deposits 965,8772,446 1.02 997,6893,111 1.25
Time Deposits 1,570,383 14,666 3.761,612,555 16,999 4.24
Total Deposits 3,714,960 22,222 2.413,726,164 26,590 2.87
Total Borrowings 1,102,742 10,540 3.841,078,838 10,883 4.06
Total Interest-
Bearing
Liabilities 4,817,702 32,762 2.744,805,002 37,473 3.14
Non-Interest Bearing
Liabilities 524,333 513,939
Total Liabilities5,342,035 5,318,941
Stockholders'
Equity 1,009,273 1,005,833
Total Liabilities &
Stockholders'
Equity $6,351,308 $6,324,774
Net interest income $42,569 $39,189
Net interest rate
spread 2.76% 2.49%
Net interest-earning
assets $674,313$658,737
Net interest margin (3) 3.10% 2.87%
Ratio of
interest-earning
assets to
interest-bearing
liabilities 1.14 x 1.14 x
(1) Average outstanding balance amounts shown are amortized cost.
(2) Average outstanding balances are net of the allowance for loan losses,
deferred loan fees and expenses, loan premiums and discounts and include non-
accrual loans.
(3) Annualized net interest income divided by average interest-earning
assets.
The following table summarizes the net interest margin for the previous
year, inclusive.
6/30/08 3/31/08 12/31/07 9/30/07 6/30/07
2nd Qtr.1st Qtr. 4th Qtr.3rd Qtr.2nd Qtr.
Interest-Earning
Assets:
Securities 4.66% 4.67%4.55% 4.55% 4.52%
Net Loans 5.76% 5.90%6.09% 6.24% 6.20%
Total
Interest-Earning
Assets 5.50% 5.63%5.76% 5.87% 5.81%
Interest-Bearing
Liabilities
Total Deposits 2.41% 2.87%3.11% 3.17% 3.07%
Total Borrowings 3.84% 4.06%4.19% 4.16% 4.09%
Total
Interest-Bearing
Liabilities 2.74% 3.14%3.33% 3.34% 3.23%
Interest Rate
Spread2.76% 2.49%2.43% 2.53% 2.58%
Net Interest
Margin3.10% 2.87%2.84% 2.97% 3.02%
Ratio of
Interest-Earning
Assets to
Interest-Bearing
Liabilities 1.14x 1.14x1.14x 1.15x 1.16x
Average YTD Balance
NET INTEREST MARGIN ANALYSIS
(Unaudited) (Dollars in thousands)
June 30, 2008 June 30, 2007
Average AverageAverage Average
Balance Interest Yield Balance Interest Yield
Interest-Earning
Assets:
Federal Funds Sold and
Other Short-Term
Investments $28,033$467 3.35 % $6,712$183 5.50 %
Investment Securities
(1) 354,683 7,254 4.09 381,591 7,862 4.12
Securities Available
for Sale 837,811 20,088 4.80 796,377 17,980 4.52
Federal Home Loan
Bank Stock36,831 1,514 8.2730,908 1,216 7.94
Net Loans (2)
Total Mortgage Loans 2,899,097 81,941 5.67 2,770,745 82,524 5.98
Total Commercial
Loans 690,719 21,903 6.38 518,451 18,333 7.13
Total Consumer Loans 630,703 18,826 5.99 614,236 18,834 6.18
Total Interest-
Earning Assets 5,477,877 151,993 5.56 5,119,020 146,932 5.76
Non-Interest Earning
Assets:
Cash and Due from
Banks78,073 87,931
Other Assets 782,091 724,519
Total Assets$6,338,041 $5,931,470
Interest-Bearing
Liabilities:
Demand Deposits $1,147,310 11,590 2.03 %$697,190 7,473 2.16 %
Savings Deposits 981,783 5,557 1.14 1,249,665 10,233 1.65
Time Deposits 1,591,469 31,665 4.00 1,642,114 35,650 4.38
Total Deposits 3,720,562 48,812 2.64 3,588,969 53,356 3.00
Total Borrowings 1,090,790 21,423 3.95 785,573 16,264 4.17
Total Interest-
Bearing
Liabilities 4,811,352 70,235 2.94 4,374,542 69,620 3.21
Non-Interest Bearing
Liabilities 519,136 517,443
Total Liabilities5,330,488 4,891,985
Stockholders' Equity 1,007,553 1,039,485
Total Liabilities &
Stockholders'
Equity $6,338,041 $5,931,470
Net interest income$81,758 $77,312
Net interest rate
spread 2.62 % 2.55 %
Net interest-earning
assets $666,525$744,478
Net interest margin (3) 2.98 % 3.02 %
Ratio of
interest-earning
assets to
interest-bearing
liabilities 1.14 X 1.17 x
(1) Average outstanding balance amounts shown are amortized cost.
(2) Average outstanding balances are net of the allowance for loan losses,
deferred loan fees and expenses, loan premiums and discounts and include non-
accrual loans.
(3) Annualized net interest income divided by average interest-earning
assets.
The following table summarizes the YTD net interest margin for the
previous three years, inclusive.
Six Months Ended
6/30/086/30/07 6/30/06
Interest-Earning Assets:
Securities 4.67% 4.48% 4.22%
Net Loans 5.83% 6.16% 5.94%
Total Interest-Earning Assets 5.56% 5.76% 5.45%
Interest-Bearing Liabilities:
Total Deposits 2.64% 3.00% 2.20%
Total Borrowings 3.95% 4.17% 3.71%
Total Interest-Bearing Liabilities2.94% 3.21% 2.52%
Interest Rate Spread2.62% 2.55% 2.93%
Net Interest Margin 2.98% 3.02% 3.33%
Ratio of Interest-Earning Assets to
Total Interest-Bearing Liabilities1.14x 1.17x 1.19x
SOURCE Provident Financial Services, Inc.
