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FALSE000117897000011789702023-10-262023-10-26

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 26, 2023
PROVIDENT FINANCIAL SERVICES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware
001-31566
42-1547151
(State or Other Jurisdiction of Incorporation)
(Commission File No.)
(I.R.S. Employer Identification No.)
239 Washington Street, Jersey City, New Jersey
07302
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code 732-590-9200

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Symbol(s)
Name of each exchange on which registered
Common
PFS
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02    Results of Operation and Financial Condition.

On October 26, 2023, Provident Financial Services, Inc. (the “Company”) issued a press release reporting its financial results for the three and nine months ended September 30, 2023. A copy of the press release is attached as Exhibit 99.1 to this report and is being furnished to the SEC and shall not be deemed “filed” for any purpose.


Item 7.01    Regulation FD Disclosure.

On October 26, 2023, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.24 per common share, payable on November 24, 2023, to stockholders of record as of the close of business on November 10, 2023.

This announcement was included as part of the press release announcing financial results for the three and nine months ended September 30, 2023 and attached as Exhibit 99.1 to this report. A copy of the press release is being furnished to the SEC and shall not be deemed “filed” for any purpose.


Item 9.01.    Financial Statements and Exhibits

(a)     Financial Statements of Businesses Acquired. Not applicable.

(b)    Pro Forma Financial Information. Not applicable.

(c)     Shell Company Transactions. Not applicable.

(d)    Exhibits.

Exhibit No.        Description

99.1    Press release issued by the Company on October 26, 2023 announcing its financial results for the three and nine months ended September 30, 2023 and the declaration of a quarterly cash dividend.

104    Cover Page Interactive Data File (embedded within the Inline XBRL document)




















SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.



PROVIDENT FINANCIAL SERVICES, INC.
DATE:
 October 27, 2023 By: /s/ Anthony J. Labozzetta
Anthony J. Labozzetta
President and Chief Executive Officer









EX-99.1 2 a093023earningsrelease.htm EX-99.1 Document

Provident Financial Services, Inc. Announces Third Quarter Earnings
and Declares Quarterly Cash Dividend

ISELIN, NJ, October 26, 2023 - Provident Financial Services, Inc. (NYSE:PFS) (the “Company”) reported net income of $28.5 million, or $0.38 per basic and diluted share for the three months ended September 30, 2023, compared to $32.0 million, or $0.43 per basic and diluted share, for the three months ended June 30, 2023 and $43.4 million, or $0.58 per basic and diluted share, for the three months ended September 30, 2022. For the nine months ended September 30, 2023, net income totaled $101.1 million, or $1.35 per basic and diluted share, compared to $126.6 million, or $1.69 per basic and diluted share, for the nine months ended September 30, 2022. Compared with the prior year period, net income for the three months ended September 30, 2023 was negatively impacted by a decrease in net interest income attributable to a decrease in lower-costing deposits, as well as increased funding costs and resulting net interest spread compression. Net income for the three and nine months ended September 30, 2023 was further impacted by increased provisions for credit losses due to a worsened economic forecast. Transaction costs related to our pending merger with Lakeland Bancorp, Inc. (“Lakeland”) totaled $2.3 million and $5.3 million for the three and nine months ended September 30, 2023, respectively, compared with transaction costs totaling $2.9 million for the respective 2022 periods. In addition, prior year earnings for the three and nine months ended September 30, 2022, included an $8.6 million gain on the sale of a foreclosed property.
Performance Highlights for the Third Quarter of 2023
•The Company’s total loan portfolio increased $137.1 million, or 5.2% annualized, to $10.67 billion at September 30, 2023, from $10.53 billion at June 30, 2023.
•At September 30, 2023, the Company's loan pipeline, consisting of work-in-process and loans approved pending closing, totaled $1.70 billion, with a weighted average interest rate of 7.62%, compared to $1.74 billion, with a weighted average interest rate of 7.23% at June 30, 2023.
•The average yield on total loans increased 13 basis points compared to the trailing quarter, to 5.37% for the quarter ended September 30, 2023, while the average cost of deposits, including non-interest bearing deposits, increased 32 basis points from the trailing quarter, to 1.74% for the quarter ended September 30, 2023.
•Net interest income decreased $2.9 million to $96.2 million for the three months ended September 30, 2023, from $99.1 million for the trailing quarter as a result of higher funding costs, which more than offset the benefits of favorable loan repricing and loan growth.
•The net interest margin decreased 15 basis points to 2.96% for the quarter ended September 30, 2023, from 3.11% for the trailing quarter. The weighted average yield on interest-earning assets for the quarter ended September 30, 2023 increased 16 basis points to 4.89%, compared to the trailing quarter, while the weighted average cost of interest-bearing liabilities for the quarter ended September 30, 2023 increased 37 basis points to 2.50%, compared to the trailing quarter. The increase in funding costs reflected a decrease in lower-costing deposits, an increase in borrowings and unfavorable repricing in both deposits and borrowings.
•During the three months ended September 30, 2023, additional balances from traditional non-interest and interest bearing demand deposits transitioned into our insured cash sweep ("ICS") product, as a method to increase the level of customers' deposit insurance in light of recent banking turmoil. As of September 30, 2023 our ICS deposits totaled $500.7 million, compared to $382.9 million at June 30, 2023. Our estimated uninsured and uncollateralized deposits at September 30, 2023 totaled $2.49 billion, or 25% of deposits. At September 30, 2023, our total on-balance sheet liquidity and borrowing capacity was $3.59 billion, representing 144% of estimated uninsured and uncollateralized deposits. All borrowing capacity is immediately available.
•At September 30, 2023, CRE loans related to office properties totaled $483.3 million, compared to $487.9 million at June 30, 2023. This portfolio constitutes 4.5% of total loans. Approximately 35% of our office loans are to medical offices and we do not have significant central business district exposure. Delinquencies in the office portfolio at September 30, 2023 were limited to one loan totaling $250,000. The portfolio is granular, with an average size of $1.8 million and just three relationships greater than $10.0 million.
1

•Asset quality improved in the quarter, as non-performing loans at September 30, 2023 declined to $39.5 million, or 0.37% of total loans, compared to $45.9 million, or 0.44% of total loans at June 30, 2023.
•The Company recorded an $11.0 million provision for credit losses for the quarter ended September 30, 2023, compared to a $10.4 million provision for the trailing quarter. The provision for credit losses in the quarter was primarily attributable to a weakened economic forecast within our CECL model. The allowance for credit losses as a percentage of loans increased to 1.01% at September 30, 2023, from 0.97% at June 30, 2023.
•Tangible book value per share(1) decreased $0.25 to $15.41 at September 30, 2023, compared to the trailing quarter, as unrealized losses on available for sale debt securities increased $31.2 million for the quarter.
•Annualized returns on average assets, average equity and average tangible equity were 0.81%, 6.84% and 9.47%, respectively for the three months ended September 30, 2023, compared with 0.93%, 7.76% and 10.75%, respectively for the trailing quarter.
•The Company's annualized adjusted pre-tax, pre-provision ("PTPP") return on average assets(1) was 1.48% for the quarter ended September 30, 2023, compared to 1.60% for the quarter ended June 30, 2023.
Anthony J. Labozzetta, President and Chief Executive Officer commented, “Provident produced good financial results this quarter, despite challenging market conditions. We had another strong quarter of growth in our loan portfolio, our loan pipeline remains robust and we saw solid performance from our fee businesses. Expenses were well managed and, while increases in interest rates and a shift in the funding mix continued to impact our net interest margin, our interest rate risk management remains sound. While our asset quality remained strong and stable, we built loan loss reserves largely due to changes in our CECL forecast.”
Regarding the Company's pending merger with Lakeland, Mr. Labozzetta added, “Provident continues to engage in productive discussions with our regulators and we look forward to closing our transaction as soon as we receive the required regulatory approvals.”
Declaration of Quarterly Dividend
The Company’s Board of Directors declared a quarterly cash dividend of $0.24 per common share payable on November 24, 2023 to stockholders of record as of the close of business on November 10, 2023.
Results of Operations
Three months ended September 30, 2023 compared to the three months ended June 30, 2023
For the three months ended September 30, 2023, net income was $28.5 million, or $0.38 per basic and diluted share, compared to net income of $32.0 million, or $0.43 per basic and diluted share, for the three months ended June 30, 2023. Transaction costs related to our pending merger with Lakeland totaled $2.3 million and $2.0 million for the three months ended September 30, 2023 and June 30, 2023, respectively.
Net Interest Income and Net Interest Margin
Net interest income decreased $2.9 million to $96.2 million for the three months ended September 30, 2023, from $99.1 million for the trailing quarter. The decrease in net interest income was primarily due to a decrease in lower-costing deposits and an increase in borrowings, combined with unfavorable repricing of both deposits and borrowings, partially offset by originations of new loans at current market rates and the favorable repricing of adjustable-rate loans.
The Company’s net interest margin decreased 15 basis points to 2.96% for the quarter ended September 30, 2023, from 3.11% for the trailing quarter. The weighted average yield on interest-earning assets for the quarter ended September 30, 2023 increased 16 basis points to 4.89%, compared to the trailing quarter. The weighted average cost of interest-bearing liabilities for the quarter ended September 30, 2023 increased 37 basis points from the trailing quarter, to 2.50%. The average cost of interest-bearing deposits for the quarter ended September 30, 2023 increased 37 basis points to 2.22%, compared to 1.85% for the trailing quarter.
2

The average cost of total deposits, including non-interest-bearing deposits, was 1.74% for the quarter ended September 30, 2023, compared to 1.42% for the trailing quarter. The average cost of borrowed funds for the quarter ended September 30, 2023 was 3.74%, compared to 3.41% for the quarter ended June 30, 2023.
Provision for Credit Losses
For the quarter ended September 30, 2023, the Company recorded an $11.0 million provision for credit losses, compared with a provision for credit losses of $10.4 million for the quarter ended June 30, 2023. The provision for credit losses in the quarter was primarily attributable to a worsened economic forecast and related deterioration in the projected commercial property price indices used in our CECL model. For the three months ended September 30, 2023, net charge-offs totaled $5.5 million, or an annualized 21 basis points of average loans, which was primarily attributable to one commercial loan.
Non-Interest Income and Expense
For the three months ended September 30, 2023, non-interest income totaled $19.3 million, a decrease of $67,000, compared to the trailing quarter. Insurance agency income decreased $623,000 to $3.2 million for the three months ended September 30, 2023, compared to the trailing quarter, mainly due to additional new business activity in the prior quarter. Other income decreased $144,000 to $1.1 million for the three months ended September 30, 2023, compared to the trailing quarter, primarily due to a reduction in gains on the sale of SBA loans. Partially offsetting these decreases to non-interest income, fee income increased $357,000 to $6.1 million for the three months ended September 30, 2023, compared to the trailing quarter, primarily due to increases in commercial loan prepayment fees and deposit fee income, partially offset by a decrease in non-deposit investment fee income. Additionally, BOLI income increased $286,000 for the three months ended September 30, 2023, compared to the trailing quarter, primarily due to an increase in benefit claims recognized, partially offset by lower equity valuations.
Non-interest expense totaled $67.2 million for the three months ended September 30, 2023, an increase of $2.7 million, compared to $64.5 million for the trailing quarter. For the three months ended September 30, 2023, the Company recorded a $1.5 million provision for credit losses for off-balance sheet credit exposures, compared to a $647,000 provision benefit for the trailing quarter. The $2.2 million increase in the provision for credit losses for off-balance sheet exposures for the quarter was primarily due to an increase in loans approved and awaiting closing, combined with a decrease in line of credit utilization. Compensation and benefits expense increased $419,000 to $35.7 million for the three months ended September 30, 2023, compared to $35.3 million for the trailing quarter. The increase in compensation and benefit expense was primarily attributable to increases in the accrual for incentive compensation and salary expense, partially offset by a decrease in stock-based compensation. Additionally, merger expenses related to our pending combination with Lakeland increased $329,000 to $2.3 million for the three months ended September 30, 2023, compared to the trailing quarter. Partially offsetting these increases in non-interest expense, FDIC insurance decreased $497,000 to $1.6 million for the three months ended September 30, 2023, compared to the trailing quarter, primarily due to a quarterly adjustment related to a decrease in the assessment rate.
The Company’s annualized adjusted non-interest expense as a percentage of average assets(1) was 1.80% for the quarter ended September 30, 2023, compared to 1.83% for the trailing quarter. The efficiency ratio (adjusted non-interest expense divided by the sum of net interest income and non-interest income)(1) was 54.81% for the three months ended September 30, 2023, compared to 53.29% for the trailing quarter.
Income Tax Expense
For the three months ended September 30, 2023, the Company's income tax expense was $8.8 million with an effective tax rate of 23.7%, compared with income tax expense of $11.6 million with an effective tax rate of 26.7% for the trailing quarter. The decrease in tax expense for the three months ended September 30, 2023, compared with the trailing quarter was largely due to a decrease in taxable income, while the decrease in the effective tax rate was due to a decrease in the proportion of income derived from taxable sources.
Three months ended September 30, 2023 compared to the three months ended September 30, 2022
For the three months ended September 30, 2023, net income was $28.5 million, or $0.38 per basic and diluted share, compared to net income of $43.4 million, or $0.58 per basic and diluted share, for the three months ended September 30, 2022.
3

Transaction costs related to our pending merger with Lakeland totaled $2.3 million and $2.9 million for the three months ended September 30, 2023 and September 30, 2022, respectively.
Net Interest Income and Net Interest Margin
Net interest income decreased $13.3 million to $96.2 million for the three months ended September 30, 2023, from $109.5 million for same period in 2022. The decrease in net interest income was primarily due to a decrease in lower-costing deposits and an increase in borrowings, combined with unfavorable repricing of both deposits and borrowings, partially offset by originations of new loans and the favorable repricing of adjustable-rate loans.
The Company’s net interest margin decreased 55 basis points to 2.96% for the quarter ended September 30, 2023, from 3.51% for the same period last year. The weighted average yield on interest-earning assets for the quarter ended September 30, 2023 increased 99 basis points to 4.89%, compared to 3.90% for the quarter ended September 30, 2022. The weighted average cost of interest-bearing liabilities increased 196 basis points for the quarter ended September 30, 2023 to 2.50%, compared to 0.54% for the third quarter of 2022. The average cost of interest-bearing deposits for the quarter ended September 30, 2023 was 2.22%, compared to 0.47% for the same period last year. Average non-interest-bearing demand deposits decreased $520.5 million to $2.23 billion for the quarter ended September 30, 2023, compared to $2.75 billion for the quarter ended September 30, 2022. The average cost of total deposits, including non-interest-bearing deposits, was 1.74% for the quarter ended September 30, 2023, compared with 0.35% for the quarter ended September 30, 2022. The average cost of borrowed funds for the quarter ended September 30, 2023 was 3.74%, compared to 1.11% for the same period last year.
Provision for Credit Losses
For the quarter ended September 30, 2023, the Company recorded an $11.0 million provision for credit losses, compared with an $8.4 million provision for credit losses for the quarter ended September 30, 2022. The increase in the allowance for credit losses on loans was primarily attributable to a worsened economic forecast and related deterioration in the projected commercial property price indices used in our CECL model. For the three months ended September 30, 2023, net charge-offs totaled $5.5 million, or an annualized 21 basis points of average loans, which was primarily attributable to one commercial loan.
Non-Interest Income and Expense
Non-interest income totaled $19.3 million for the quarter ended September 30, 2023, a decrease of $9.1 million, compared to the same period in 2022. Other income decreased $9.2 million to $1.1 million for the three months ended September 30, 2023, compared to the quarter ended September 30, 2022, primarily due to an $8.6 million gain realized in the prior year on the sale of a foreclosed commercial office property, combined with a decrease in the gains on sales of SBA loans. Fee income decreased $1.1 million to $6.1 million for the three months ended September 30, 2023, compared to the prior year quarter, primarily due to decreases in commercial loan prepayment fees and deposit fee income. Partially offsetting these decreases in non-interest income, BOLI income increased $583,000 to $1.8 million three months ended September 30, 2023, compared to the prior year quarter, primarily due to an increase in benefit claims recognized. Additionally, insurance agency income increased $359,000 to $3.2 million for the three months ended September 30, 2023, compared to the quarter ended September 30, 2022, largely due to strong retention revenue and new business activity.
For the three months ended September 30, 2023, non-interest expense totaled $67.2 million, a decrease of $2.3 million, compared to the three months ended September 30, 2022. Compensation and benefits expense decreased $2.4 million to $35.7 million for three months ended September 30, 2023, compared to $38.1 million for the same period in 2022. The decrease was principally due to decreases in the accrual for incentive compensation, employee medical expense and stock-based compensation, partially offset by an increase in salary expense. Additionally, merger-related expenses related to our pending combination with Lakeland decreased $597,000 to $2.3 million for the three months ended September 30, 2023, compared to the same period in 2022. Partially offsetting these decreases in non-interest expense, FDIC insurance expense increased $228,000 to $1.6 million for the three months ended September 30, 2023, compared to the same period in 2022, primarily due to an increase in the assessment rate.
The Company’s annualized adjusted non-interest expense as a percentage of average assets(1) was 1.80% for the quarter ended September 30, 2023, compared to 1.89% for the same period in 2022. The efficiency ratio (adjusted non-interest expense divided by the sum of net interest income and non-interest income)(1) was 54.81% for the three months ended September 30, 2023 compared to 47.11% for the same respective period in 2022.
4

Income Tax Expense
For the three months ended September 30, 2023, the Company's income tax expense was $8.8 million with an effective tax rate of 23.7%, compared with $16.7 million with an effective tax rate of 27.7% for the three months ended September 30, 2022. The decrease in tax expense for the three months ended September 30, 2023, compared with the same period last year was largely the result of a decrease in taxable income, while the decrease in the effective tax rate for the three months ended September 30, 2023, compared with the three months ended September 30, 2022, was largely due to a decrease in the proportion of income derived from taxable sources.
Nine Months Ended September 30, 2023 compared to the nine months ended September 30, 2022
For the nine months ended September 30, 2023, net income totaled $101.1 million, or $1.35 per basic and diluted share, compared to net income of $126.6 million, or $1.69 per basic and diluted share, for the nine months ended September 30, 2022. Transaction costs related to our pending merger with Lakeland totaled $5.3 million and $2.9 million for the nine months ended September 30, 2023 and 2022, respectively.
Net Interest Income and Net Interest Margin
Net interest income increased $175,000 to $303.7 million for the nine months ended September 30, 2023, from $303.5 million for same period in 2022. The increase in net interest income for the nine months ended September 30, 2023 was primarily driven by the favorable repricing of adjustable rate loans, higher market rates on new loan originations and the originations of higher-yielding loans, partially offset by the unfavorable repricing of both deposits and borrowings, a decrease in lower-costing deposits and an increase in borrowings. Additionally, fees related to the forgiveness of PPP loans, which are recognized in interest income, were approximately $77,000 for the nine months ended September 30, 2023, compared to $1.4 million for the nine months ended September 30, 2022.
For the nine months ended September 30, 2023, the net interest margin decreased five basis points to 3.19%, compared to 3.24% for the nine months ended September 30, 2022. The weighted average yield on interest earning assets increased 125 basis points to 4.76% for the nine months ended September 30, 2023, compared to 3.51% for the nine months ended September 30, 2022, while the weighted average cost of interest-bearing liabilities increased 169 basis points to 2.07% for the nine months ended September 30, 2023, compared to 0.38% for the same period last year. The average cost of interest-bearing deposits increased 149 basis points to 1.82% for the nine months ended September 30, 2023, compared to 0.33% for the same period last year. Average non-interest-bearing demand deposits decreased $388.8 million to $2.38 billion for the nine months ended September 30, 2023, compared with $2.77 billion for the nine months ended September 30, 2022. The average cost of total deposits, including non-interest-bearing deposits, was 1.40% for the nine months ended September 30, 2023, compared with 0.25% for the nine months ended September 30, 2022. The average cost of borrowings for the nine months ended September 30, 2023 was 3.29%, compared to 0.97% for the same period last year.
Provision for Credit Losses
For the nine months ended September 30, 2023, the Company recorded a $27.4 million provision for credit losses related to loans, compared with a provision for credit losses of $5.0 million for the nine months ended September 30, 2022. The increase in the allowance for credit losses on loans was primarily attributable to a worsened economic forecast and related deterioration in the projected commercial property price indices used in our CECL model. For the nine months ended September 30, 2023, net charge-offs totaled $7.3 million, or an annualized 9 basis points of average loans, which was primarily attributable to two commercial loans.
Non-Interest Income and Expense
For the nine months ended September 30, 2023, non-interest income totaled $60.9 million, a decrease of $8.7 million, compared to the same period in 2022. Other income decreased $7.8 million to $5.7 million for the nine months ended September 30, 2023, compared to $13.5 million for the same period in 2022, primarily due to an $8.6 million gain realized in the prior year on the sale of a foreclosed commercial office property, a decrease in net fees on loan-level interest rate swap transactions and a decrease in the gains on sales of SBA loans, partially offset by a $2.0 million gain related to the resolution of certain post-closing conditions following the September 2022 sale of a foreclosed commercial property.
5

Fee income decreased $3.2 million to $18.3 million for the nine months ended September 30, 2023, compared to the same period in 2022, primarily due to a decrease in commercial loan prepayment fees, while wealth management income decreased $448,000 to $20.8 million for the nine months ended September 30, 2023, compared to the same period in 2022, primarily due to a decrease in the market value of assets under management. Partially offsetting these decreases to non-interest income, insurance agency income increased $2.0 million to $11.2 million for the nine months ended September 30, 2023, compared to $9.1 million for the same period in 2022, largely due to increases in contingent commissions, retention revenue and new business activity. Additionally, BOLI income increased $860,000 to $4.8 million for the nine months ended September 30, 2023, compared to the same period in 2022, primarily due to greater equity valuations.
Non-interest expense totaled $201.1 million for the nine months ended September 30, 2023, an increase of $5.9 million, compared to $195.2 million for the nine months ended September 30, 2022. The Company recorded a $1.6 million provision for credit losses for off-balance sheet credit exposures for the nine months ended September 30, 2023, compared to a $1.8 million provision benefit for the same period in 2022. The $3.4 million increase in the provision for credit losses for off-balance sheet credit exposures was primarily the result of the period-over-period relative change in line of credit utilization and an increase in projected loss factors as a result of a worsened economic forecast. Other operating expense increased $3.2 million to $31.8 million for the nine months ended September 30, 2023, compared to $28.5 million for the nine months ended September 30, 2022, largely due to increases in professional fees, combined with an increase in debit card expense. Merger-related expenses increased $2.4 million to $5.3 million for the nine months ended September 30, 2023, compared to $2.9 million for the nine months ended September 30, 2022. FDIC insurance expense increased $1.7 million to $5.7 million for the nine months ended September 30, 2023, compared to the same period in 2022, primarily due to an increase in the assessment rate. Partially offsetting these increases, compensation and benefits expense decreased $2.9 million to $109.7 million for the nine months ended September 30, 2023, compared to $112.6 million for the nine months ended September 30, 2022, primarily due to decreases in the accrual for incentive compensation, employee medical expenses and stock-based compensation, partially offset by an increase in salary expense. Additionally, net occupancy expense decreased $1.8 million to $24.5 million for the nine months ended September 30, 2023, compared to the same period in 2022, mainly due to decreases in maintenance and depreciation expenses.
Income Tax Expense
For the nine months ended September 30, 2023, the Company's income tax expense was $34.9 million with an effective tax rate of 25.7%, compared with $46.2 million with an effective tax rate of 26.7% for the nine months ended September 30, 2022. The decrease in tax expense for the nine months ended September 30, 2023, compared with the same period last year was largely the result of a decrease in taxable income, while the decrease in the effective tax rate for the nine months ended September 30, 2023, compared with the prior year period was largely due to a decrease in the proportion of income derived from taxable sources.
Asset Quality
The Company’s total non-performing loans at September 30, 2023 were $39.5 million, or 0.37% of total loans, compared to $45.9 million, or 0.44% of total loans at June 30, 2023 and $58.5 million, or 0.57% of total loans at December 31, 2022. The $6.4 million decrease in non-performing loans at September 30, 2023, compared to the trailing quarter, consisted of a $10.0 million decrease in non-performing commercial loans, a $383,000 decrease in non-performing consumer loans, a $369,000 decrease in non-performing residential mortgage loans and a $56,000 decrease in non-performing multi-family loans, partially offset by a $4.4 million increase in non-performing commercial mortgage loans. At September 30, 2023, impaired loans totaled $30.4 million with related specific reserves of $3.4 million, compared with impaired loans totaling $37.1 million with related specific reserves of $4.5 million at June 30, 2023. At December 31, 2022, impaired loans totaled $42.8 million with related specific reserves of $2.4 million.
At September 30, 2023, the Company’s allowance for credit losses related to the loan portfolio was 1.01% of total loans, compared to 0.97% and 0.86% at June 30, 2023 and December 31, 2022, respectively. The allowance for credit losses increased $19.5 million to $107.6 million at September 30, 2023, from $88.0 million at December 31, 2022. The increase in the allowance for credit losses on loans at September 30, 2023 compared to December 31, 2022 was due to a $27.4 million provision for credit losses, partially offset by net charge-offs of $7.3 million and a gross reduction of the allowance for credit losses of $594,000 which was recorded against equity upon the January 1, 2023 adoption of ASU 2022-02, related to troubled debt restructurings.
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The increase in the allowance for credit losses on loans was primarily attributable to a worsened economic forecast and related deterioration in the projected commercial property price indices used in our CECL model, combined with an increase in total loans outstanding.
The following table sets forth accruing past due loans and non-accrual loans on the dates indicated, as well as certain asset quality ratios.
  September 30, 2023 June 30, 2023 December 31, 2022
 
Number
of
Loans
 Principal
Balance
of Loans
Number
of
Loans
 Principal
Balance
of Loans
Number
of
Loans
 Principal
Balance
of Loans
(Dollars in thousands)
Accruing past due loans:
30 to 59 days past due:
Commercial mortgage loans —  $ —  2  $ 1,445  2  $ 2,300 
Multi-family mortgage loans 2  5,473  1  3,853  1  790 
Construction loans —  —  —  —  1  905 
Residential mortgage loans 9  1,588  11  1,427  10  1,411 
Total mortgage loans 11  7,061  14  6,725  14  5,406 
Commercial loans 6  1,959  10  3,021  5  964 
Consumer loans 27  1,207  15  957  18  885 
Total 30 to 59 days past due 44  $ 10,227  39  $ 10,703  37  $ 7,255 
60 to 89 days past due:
Commercial mortgage loans 2  $ 587  2  $ 1,137  2  $ 412 
Multi-family mortgage loans —  —  —  —  —  — 
Construction loans —  —  —  —  1  1,097 
Residential mortgage loans 7  936  6  1,171  9  1,114 
Total mortgage loans 9  1,523  8  2,308  12  2,623 
Commercial loans 4  228  2  90  5  1,014 
Consumer loans 4  168  3  147  4  147 
Total 60 to 89 days past due 17  1,919  13  2,545  21  3,784 
Total accruing past due loans 61  $ 12,146  52  $ 13,248  58  $ 11,039 
Non-accrual:
Commercial mortgage loans 9  $ 11,667  7  $ 7,279  10  $ 28,212 
Multi-family mortgage loans 2  2,258  2  2,314  1  1,565 
Construction loans 2  1,868  2  1,874  2  1,878 
Residential mortgage loans 11  1,329  12  1,698  14  1,928 
Total mortgage loans 24  17,122  23  13,165  27  33,583 
Commercial loans 27  21,912  30  31,885  34  24,188 
Consumer loans 7  495  8  878  10  738 
Total non-accrual loans 58  $ 39,529  61  $ 45,928  71  $ 58,509 
Non-performing loans to total loans 0.37  % 0.44  % 0.57  %
Allowance for loan losses to total non-performing loans 272.11  % 222.25  % 150.44  %
Allowance for loan losses to total loans 1.01  % 0.97  % 0.86  %
At September 30, 2023 and December 31, 2022, the Company held foreclosed assets of $16.5 million and $2.1 million, respectively. During the nine months ended September 30, 2023, there were four additions to foreclosed assets with an aggregate carrying value of $15.1 million, and three properties sold with an aggregate carrying value of $768,000. Foreclosed assets at September 30, 2023 consisted primarily of commercial real estate. Total non-performing assets at September 30, 2023 decreased $4.6 million to $56.0 million, or 0.40% of total assets, from $60.6 million, or 0.44% of total assets at December 31, 2022.
7

Balance Sheet Summary
Total assets at September 30, 2023 were $14.09 billion, a $303.4 million increase from December 31, 2022. The increase in total assets was primarily due to a $418.7 million increase in total loans, partially offset by a $132.0 million decrease in total investments.
The Company’s loan portfolio totaled $10.67 billion at September 30, 2023 and $10.25 billion at December 31, 2022. The loan portfolio consisted of the following:
September 30, 2023 June 30, 2023 December 31, 2022
(Dollars in thousands)
Mortgage loans:
Commercial $ 4,411,099  $ 4,373,436  $ 4,316,185 
Multi-family 1,790,039  1,645,770  1,513,818 
Construction 667,462  707,234  715,494 
Residential 1,167,570  1,166,159  1,177,698 
Total mortgage loans 8,036,170  7,892,599  7,723,195 
Commercial loans 2,340,080  2,348,447  2,233,670 
Consumer loans 302,769  301,306  304,780 
Total gross loans 10,679,019  10,542,352  10,261,645 
Premiums on purchased loans 1,413  1,374  1,380 
Net deferred fees and unearned discounts (12,820) (13,195) (14,142)
Total loans $ 10,667,612  $ 10,530,531  $ 10,248,883 
During the nine months ended September 30, 2023, the loan portfolio had net increases of $276.2 million in multi-family loans, $106.4 million in commercial loans and $94.9 million in commercial mortgage loans, partially offset by net decreases in construction, residential mortgage and consumer loans of $48.0 million, $10.1 million and $2.0 million, respectively. Commercial loans, consisting of commercial real estate, multi-family, commercial and construction loans, represented 86.2% of the loan portfolio at September 30, 2023, compared to 85.6% at December 31, 2022.
For the nine months ended September 30, 2023, loan funding, including advances on lines of credit, totaled $2.53 billion, compared with $3.05 billion for the same period in 2022.
At September 30, 2023, the Company’s unfunded loan commitments totaled $2.18 billion, including commitments of $1.21 billion in commercial loans, $533.9 million in construction loans and $105.7 million in commercial mortgage loans. Unfunded loan commitments at December 31, 2022 and September 30, 2022 were $2.06 billion and $2.17 billion, respectively.
The loan pipeline, consisting of work-in-process and loans approved pending closing, totaled $1.70 billion at September 30, 2023, compared to $1.29 billion and $1.46 billion at December 31, 2022 and September 30, 2022, respectively.
Total investment securities were $2.13 billion at September 30, 2023, a $132.0 million decrease from December 31, 2022. This decrease was primarily due to repayments of mortgage-backed securities, an increase in unrealized losses on available for sale debt securities and maturities and calls of certain municipal and agency bonds, partially offset by purchases of mortgage-backed and municipal securities.
Total deposits decreased $421.6 million during the nine months ended September 30, 2023, to $10.14 billion. Total savings and demand deposit accounts decreased $738.3 million to $9.07 billion at September 30, 2023, while total time deposits increased $316.7 million to $1.07 billion at September 30, 2023. The decrease in savings and demand deposits was largely attributable to a $456.2 million decrease in non-interest bearing demand deposits, a $324.7 million decrease in money market deposits and a $238.2 million decrease in savings deposits, partially offset by a $280.8 million increase in interest bearing demand deposits.
8

During the nine months ended September 30, 2023, deposit balances from traditional non-interest and interest bearing demand deposits transitioned into our ICS product, as a method to increase the level of customers' deposit insurance in light of recent bank deposit turmoil. The Bank's ICS deposits increased $441.8 million to $500.7 million at September 30, 2023, from $58.9 million at December 31, 2022. The increase in time deposits consisted of a $322.4 million increase in retail time deposits, partially offset by a $5.7 million decrease in brokered time deposits.
Borrowed funds increased $684.9 million during the nine months ended September 30, 2023, to $2.02 billion. The increase in borrowings was largely due to asset funding requirements. Borrowed funds represented 14.4% of total assets at September 30, 2023, an increase from 9.7% at December 31, 2022.
Stockholders’ equity increased $25.3 million during the nine months ended September 30, 2023, to $1.62 billion, primarily due to net income earned for the period, partially offset by an increase in unrealized losses on available for sale debt securities and cash dividends paid to stockholders. For the three months ended September 30, 2023, the Company did not repurchase shares under its stock repurchase program. For the nine months ended September 30, 2023, common stock repurchases totaled 71,357 shares at an average cost of $23.32 per share, all of which were made in connection with withholding to cover income taxes on the vesting of stock-based compensation. At September 30, 2023, approximately 1.1 million shares remained eligible for repurchase under the current stock repurchase authorization. Book value per share and tangible book value per share(1) at September 30, 2023 were $21.49 and $15.41, respectively, compared with $21.25 and $15.12, respectively, at December 31, 2022. The Company completed its most recent annual goodwill impairment test as of July 1, 2023. At September 30, 2023, the Company performed an interim goodwill impairment analysis and concluded that no triggering considerations were met and therefore a test for impairment between annual tests was not required.
About the Company
Provident Financial Services, Inc. is the holding company for Provident Bank, a community-oriented bank offering "commitment you can count on" since 1839. Provident Bank provides a comprehensive array of financial products and services through its network of branches throughout northern and central New Jersey, Bucks, Lehigh and Northampton counties in Pennsylvania, as well as Queens and Nassau Counties in New York. The Bank also provides fiduciary and wealth management services through its wholly owned subsidiary, Beacon Trust Company and insurance services through its wholly owned subsidiary, Provident Protection Plus, Inc.
Post Earnings Conference Call
Representatives of the Company will hold a conference call for investors on Friday, October 27, 2023 at 10:00 a.m. Eastern Time to discuss the Company’s financial results for the quarter ended September 30, 2023. The call may be accessed by dialing 1-888-412-4131 (United States Toll Free) and 1-646-960-0134 (United States Local). Speakers will need to enter conference ID code (3610756) before being met by a live operator. Internet access to the call is also available (listen only) at provident.bank by going to Investor Relations and clicking on "Webcast."
Forward Looking Statements
Certain statements contained herein are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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,” "project," "intend," “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 set forth in Item 1A of the Company's Annual Report on Form 10-K, as supplemented by its Quarterly Reports on Form 10-Q, and 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.
9

Government, the effects of the recent turmoil in the banking industry (including the closing of three financial institutions), changes in accounting policies and practices that may be adopted by the regulatory agencies and the accounting standards setters, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, potential goodwill impairment, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets, the availability of and costs associated with sources of liquidity, the ability to complete, or any delays in completing, the pending merger between the Company and Lakeland; any failure to realize the anticipated benefits of the transaction when expected or at all; certain restrictions during the pendency of the transaction that may impact the Company’s ability to pursue certain business opportunities or strategic transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events, diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the merger and integration of the companies; and the impact of a potential shutdown of the federal government.
The Company cautions readers not to place undue reliance on any such forward-looking statements which speak only as of the date they are made. The Company advises 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 assume any duty, and does not undertake, to update any forward-looking statements to reflect events or circumstances after the date of this statement.
Footnotes
(1) Annualized adjusted pre-tax, pre-provision return on average assets, annualized return on average tangible equity, tangible book value per share, annualized adjusted non-interest expense as a percentage of average assets and the efficiency ratio are non-GAAP financial measures. Please refer to the Notes following the Consolidated Financial Highlights which contain the reconciliation of GAAP to non-GAAP financial measures and the associated calculations.












10

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Financial Highlights
(Dollars in Thousands, except share data) (Unaudited)
At or for the
Three months ended 		At or for the
Nine Months Ended
September 30, June 30, September 30, September 30, September 30,
2023 2023 2022 2023 2022
Statement of Income
Net interest income $ 96,236  $ 99,106  $ 109,489  $ 303,666  $ 303,491 
Provision for credit losses 11,009  10,397  8,413  27,407  5,004 
Non-interest income 19,320  19,387  28,445  60,861  69,523 
Non-interest expense 67,157  64,463  69,443  201,109  195,173 
Income before income tax expense 37,390  43,633  60,078  136,011  172,837 
Net income 28,547  32,003  43,421  101,086  126,613 
Diluted earnings per share $ 0.38  $ 0.43  $ 0.58  $ 1.35  $ 1.69 
Interest rate spread 2.39  % 2.60  % 3.36  % 2.69  % 3.13  %
Net interest margin 2.96  % 3.11  % 3.51  % 3.19  % 3.24  %
Profitability
Annualized return on average assets 0.81  % 0.93  % 1.26  % 0.98  % 1.24  %
Annualized return on average equity 6.84  % 7.76  % 10.68  % 8.22  % 10.36  %
Annualized return on average tangible equity (1)
 9.47  % 10.75  % 14.96  % 11.40  % 14.46  %
Annualized adjusted non-interest expense to average assets (3)
 1.80  % 1.83  % 1.89  % 1.87  % 1.91  %
Efficiency ratio (4)
 54.81  % 53.29  % 47.11  % 53.26  % 52.03  %
Asset Quality
Non-accrual loans $ 45,928  $ 39,529  $ 59,501 
90+ and still accruing —  —  — 
Non-performing loans 45,928  39,529  59,501 
Foreclosed assets 13,697  16,487  2,053 
Non-performing assets 59,625  56,016  61,554 
Non-performing loans to total loans 0.44  % 0.37  % 0.59  %
Non-performing assets to total assets 0.42  % 0.40  % 0.45  %
Allowance for loan losses $ 102,073  $ 107,563  $ 88,633 
Allowance for loan losses to total non-performing loans 222.25  % 272.11  % 148.96  %
Allowance for loan losses to total loans 0.97  % 1.01  % 0.88  %
Net loan charge-offs (recoveries) $ 5,510  $ 1,085  $ (1,216) $ 7,266  $ (2,893)
Annualized net loan charge-offs (recoveries) to average total loans 0.21  % 0.04  % (0.05) % 0.09  % (0.04) %
Average Balance Sheet Data
Assets $ 13,976,610  $ 13,833,055  $ 13,622,554  $ 13,848,351  $ 13,618,804 
Loans, net 10,470,843  10,238,224  9,914,831  10,269,022  9,694,816 
Earning assets 12,735,938  12,575,967  12,390,107  12,574,437  12,414,917 
Core deposits 9,212,202  9,297,058  10,173,351  9,408,156  10,394,240 
Borrowings 1,780,655  1,658,809  908,841  1,556,619  663,366 
Interest-bearing liabilities 9,826,064  9,565,814  9,011,492  9,554,204  8,978,775 
Stockholders' equity 1,654,920  1,653,677  1,613,522  1,645,093  1,633,430 
Average yield on interest-earning assets 4.89  % 4.73  % 3.90  % 4.76  % 3.51  %
Average cost of interest-bearing liabilities 2.50  % 2.13  % 0.54  % 2.07  % 0.38  %


11

Notes and Reconciliation of GAAP and Non-GAAP Financial Measures
(Dollars in Thousands, except share data)
The Company has presented the following non-GAAP (U.S. Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Company’s results of operations and financial condition. Presentation of these non-GAAP financial measures is consistent with how the Company evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Company’s industry. Investors should recognize that the Company’s presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and the Company strongly encourages a review of its condensed consolidated financial statements in their entirety.
(1) Book and Tangible Book Value per Share
September 30, At December 31,
2023 2022
Total stockholders' equity $ 1,622,970  $ 1,597,703 
Less: total intangible assets 458,663  460,892 
Total tangible stockholders' equity $ 1,164,307  $ 1,136,811 
Shares outstanding 75,531,884  75,169,196 
Book value per share (total stockholders' equity/shares outstanding) $21.49  $21.25 
Tangible book value per share (total tangible stockholders' equity/shares outstanding) $15.41  $15.12 
(2) Annualized Return on Average Tangible Equity
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30, September 30,
2023 2023 2022 2023 2022
Total average stockholders' equity $ 1,654,920  $ 1,653,677  $ 1,613,522  $ 1,645,093  $ 1,633,430 
Less: total average intangible assets 459,133  459,865  462,180  459,871  463,030 
Total average tangible stockholders' equity $ 1,195,787  $ 1,193,812  $ 1,151,342  $ 1,185,222  $ 1,170,400 
Net income $ 28,547  $ 32,003  $ 43,421  $ 101,086  $ 126,613 
Annualized return on average tangible equity (net income/total average tangible stockholders' equity) 9.47  % 10.75  % 14.96  % 11.40  % 14.46  %
(3) Annualized Pre-Tax, Pre-Provision ("PTPP") Return on Average Assets
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30, September 30,
2023 2023 2022 2023 2022
Net income $ 28,547  $ 32,003  $ 43,421  $ 101,086  $ 126,613 
Adjustments to net income:
Provision for credit losses 11,009  10,397  8,413  27,407  5,004 
Credit loss (benefit) expense for off-balance sheet credit exposure 1,532  (647) 1,575  1,624  (1,788)
Merger-related transaction costs 2,289  1,961  2,886  5,349  2,886 
Income tax expense 8,843  11,630  16,657  34,925  46,224 
PTPP income $ 52,220  $ 55,344  $ 72,952  $ 170,391  $ 178,939 
Annualized PTPP income $ 207,177  $ 221,984  $ 289,429  $ 227,812  $ 239,241 
Average assets $ 13,976,610  $ 13,833,055  $ 13,622,554  $ 13,848,351  $ 13,618,804 
Annualized PTPP return on average assets 1.48  % 1.60  % 2.12  % 1.65  % 1.76  %
12

(4) Annualized Adjusted Non-Interest Expense to Average Assets
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30, September 30,
2023 2023 2022 2023 2022
Reported non-interest expense $ 67,157  $ 64,463  $ 69,443  $ 201,109  $ 195,173 
Adjustments to non-interest expense:
Credit loss (benefit) expense for off-balance sheet credit exposures 1,532  (647) 1,575  1,624  (1,788)
Merger-related transaction costs 2,289  1,961  2,886  5,349  2,886 
Adjusted non-interest expense $ 63,336  $ 63,149  $ 64,982  $ 194,136  $ 194,075 
Annualized adjusted non-interest expense $ 251,279  $ 253,290  $ 257,809  $ 259,559  $ 259,478 
Average assets $ 13,976,610  $ 13,833,055  $ 13,622,554  $ 13,848,351  $ 13,618,804 
Annualized adjusted non-interest expense/average assets 1.80  % 1.83  % 1.89  % 1.87  % 1.91  %
(5) Efficiency Ratio Calculation
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30, September 30,
2023 2023 2022 2023 2022
Net interest income $ 96,236  $ 99,106  $ 109,489  $ 303,666  $ 303,491 
Non-interest income 19,320  19,387  28,445  60,861  69,523 
Total income $ 115,556  $ 118,493  $ 137,934  $ 364,527  $ 373,014 
Adjusted non-interest expense $ 63,336  $ 63,149  $ 64,982  $ 194,136  $ 194,075 
Efficiency ratio (adjusted non-interest expense/income) 54.81  % 53.29  % 47.11  % 53.26  % 52.03  %

13

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Statements of Financial Condition
September 30, 2023 (Unaudited) and December 31, 2022
(Dollars in Thousands)
Assets September 30, 2023 December 31, 2022
Cash and due from banks $ 188,573  $ 186,490 
Short-term investments 696  18 
Total cash and cash equivalents 189,269  186,508 
Available for sale debt securities, at fair value 1,656,305  1,803,548 
Held to maturity debt securities, net (fair value of $343,082 at September 30, 2023 (unaudited) and $373,468 at December 31, 2022) 370,416  387,923 
Equity securities, at fair value 1,210  1,147 
Federal Home Loan Bank stock 101,250  68,554 
Loans 10,667,612  10,248,883 
Less allowance for credit losses 107,563  88,023 
Net loans 10,560,049  10,160,860 
Foreclosed assets, net 16,487  2,124 
Banking premises and equipment, net 71,453  79,794 
Accrued interest receivable 55,741  51,903 
Intangible assets 458,663  460,892 
Bank-owned life insurance 241,406  239,040 
Other assets 364,576  341,143 
Total assets $ 14,086,825  $ 13,783,436 
Liabilities and Stockholders' Equity
Deposits:
Demand deposits $ 7,872,901  $ 8,373,005 
Savings deposits 1,200,377  1,438,583 
Certificates of deposit of $100,000 or more 699,880  504,627 
Other time deposits 368,241  246,809 
Total deposits 10,141,399  10,563,024 
Mortgage escrow deposits 41,319  35,705 
Borrowed funds 2,022,249  1,337,370 
Subordinated debentures 10,646  10,493 
Other liabilities 248,242  239,141 
Total liabilities 12,463,855  12,185,733 
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, 83,209,012 shares issued and 75,531,884 shares outstanding at September 30, 2023 and 76,169,196 outstanding at December 31, 2022. 832  832 
Additional paid-in capital 988,001  981,138 
Retained earnings 964,802  918,158 
Accumulated other comprehensive loss (195,056) (165,045)
Treasury stock (127,818) (127,154)
Unallocated common stock held by the Employee Stock Ownership Plan (7,791) (10,226)
Common Stock acquired by the Directors' Deferred Fee Plan (3,013) (3,427)
Deferred Compensation - Directors' Deferred Fee Plan 3,013  3,427 
Total stockholders' equity 1,622,970  1,597,703 
Total liabilities and stockholders' equity $ 14,086,825  $ 13,783,436 
14

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Statements of Income
Three months ended September 30, 2023, June 30, 2023 and September 30, 2022, and nine months ended September 30, 2023 and 2022 (Unaudited)
(Dollars in Thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30, September 30,
2023 2023 2022 2023 2022
Interest income:
Real estate secured loans $ 104,540  $ 99,302  $ 80,273  $ 299,830  $ 213,181 
Commercial loans 33,806  31,426  25,201  93,915  70,385 
Consumer loans 4,746  4,431  3,785  13,419  10,268 
Available for sale debt securities, equity securities and Federal Home Loan Bank stock 11,886  11,432  9,560  34,748  25,966 
Held to maturity debt securities 2,334  2,357  2,416  7,059  7,501 
Deposits, federal funds sold and other short-term investments 885  948  496  2,678  1,705 
Total interest income 158,197  149,896  121,731  451,649  329,006 
Interest expense:
Deposits 44,923  36,447  9,560  108,880  20,322 
Borrowed funds 16,765  14,088  2,518  38,329  4,790 
Subordinated debt 273  255  164  774  403 
Total interest expense 61,961  50,790  12,242  147,983  25,515 
Net interest income 96,236  99,106  109,489  303,666  303,491 
Provision charge for credit losses 11,009  10,397  8,413  27,407  5,004 
Net interest income after provision for credit losses 85,227  88,709  101,076  276,259  298,487 
Non-interest income:
Fees 6,132  5,775  7,203  18,294  21,516 
Wealth management income 6,992  6,919  6,785  20,826  21,274 
Insurance agency income 3,224  3,847  2,865  11,175  9,135 
Bank-owned life insurance 1,820  1,534  1,237  4,838  3,978 
Net gain on securities transactions 13  29  (3) 37  154 
Other income 1,139  1,283  10,358  5,691  13,466 
Total non-interest income 19,320  19,387  28,445  60,861  69,523 
Non-interest expense:
Compensation and employee benefits 35,702  35,283  38,079  109,724  112,582 
Net occupancy expense 8,113  7,949  8,452  24,474  26,262 
Data processing expense 5,312  5,716  5,575  16,536  16,551 
FDIC Insurance 1,628  2,125  1,400  5,688  3,955 
Amortization of intangibles 720  749  779  2,231  2,511 
Advertising and promotion expense 1,133  1,379  1,366  3,722  3,692 
Credit loss expense (benefit) for off-balance sheet exposures 1,532  (647) 1,575  1,624  (1,788)
Merger-related expenses 2,289  1,960  2,886  5,349  2,886 
Other operating expenses 10,728  9,949  9,331  31,761  28,522 
Total non-interest expense 67,157  64,463  69,443  201,109  195,173 
Income before income tax expense 37,390  43,633  60,078  136,011  172,837 
Income tax expense 8,843  11,630  16,657  34,925  46,224 
Net income $ 28,547  $ 32,003  $ 43,421  $ 101,086  $ 126,613 
Basic earnings per share $ 0.38  $ 0.43  $ 0.58  $ 1.35  $ 1.69 
Average basic shares outstanding 74,909,083 74,823,272 74,297,237 74,793,530 74,808,358
Diluted earnings per share $ 0.38  $ 0.43  $ 0.58  $ 1.35  $ 1.69 
Average diluted shares outstanding 74,914,205 74,830,187 74,393,380 74,816,606 74,896,493
15

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Net Interest Margin Analysis
Quarterly Average Balances
 (Dollars in Thousands) (Unaudited)
September 30, 2023 June 30, 2023 September 30, 2022
Average Balance Interest Average
Yield/Cost		 Average Balance Interest Average
Yield/Cost		 Average Balance Interest Average
Yield/Cost
Interest-Earning Assets:
Deposits $ 74,183  $ 884  4.73  % $ 73,470  $ 947  5.17  % $ 30,231  $ 201  2.67  %
Federal funds sold and other short-term investments 57 1  4.00  % 88 1  6.75  % 46,707 295  2.54  %
Available for sale debt securities 1,724,833 10,127 2.35  % 1,801,050 10,290  2.29  % 1,948,721 9,115 2.42  %
Held to maturity debt securities, net (1)
 373,681 2,334 2.50  % 379,958 2,357  2.48  % 399,370 2,416 1.87  %
Equity securities, at fair value 1,068  —  —  % 1,006  —  —  % 949  —  —  %
Federal Home Loan Bank stock 91,273 1,759 7.71  % 82,171 1,142 5.56  % 49,298 445 3.61  %
Net loans: (2)
Total mortgage loans 7,881,193 104,540 5.21  % 7,701,072 99,302 5.11  % 7,443,268 80,273 4.28  %
Total commercial loans 2,289,267 33,806 5.81  % 2,234,043 31,426 5.59  % 2,151,512 25,201 4.66  %
Total consumer loans 300,383 4,746 6.27  % 303,109 4,431 5.86  % 320,051 3,785 4.74  %
Total net loans 10,470,843 143,092 5.37  % 10,238,224 135,159 5.24  % 9,914,831 109,259 4.38  %
Total interest-earning assets $ 12,735,938  $ 158,197  4.89  % $ 12,575,967  $ 149,896  4.73  % $ 12,390,107  $ 121,731  3.90  %
Non-Interest Earning Assets:
Cash and due from banks 82,522 129,979 126,330
Other assets 1,158,150  1,127,109  1,106,117
Total assets $ 13,976,610  $ 13,833,055  $ 13,622,554 
Interest-Bearing Liabilities:
Demand deposits $ 5,741,052  $ 35,290  2.44  % $ 5,620,268  $ 28,613  2.04  % $ 5,906,679  $ 7,990  0.54  %
Savings deposits 1,240,951 592 0.19  % 1,307,830 537 0.16  % 1,515,926 296 0.08  %
Time deposits 1,052,793 9,041 3.41  % 968,344 7,297 3.02  % 669,639 1,274 0.76  %
Total Deposits 8,034,796 44,923 2.22  % 7,896,442 36,447 1.85  % 8,092,244 9,560 0.47  %
Borrowed funds 1,780,655 16,765 3.74  % 1,658,809 14,088 3.41  % 908,841 2,518 1.11  %
Subordinated debentures 10,613  273  10.24  % 10,563  255  9.66  % 10,407  164  6.35  %
Total interest-bearing liabilities 9,826,064 61,961 2.50  % 9,565,814 50,790 2.13  % 9,011,492 12,242 0.54  %
Non-Interest Bearing Liabilities:
Non-interest bearing deposits 2,230,199 2,368,960 2,750,746
Other non-interest bearing liabilities 265,427 244,604 246,794
Total non-interest bearing liabilities 2,495,626 2,613,564 2,997,540
Total liabilities 12,321,690 12,179,378 12,009,032
Stockholders' equity 1,654,920 1,653,677 1,613,522
Total liabilities and stockholders' equity $ 13,976,610  $ 13,833,055  $ 13,622,554 
Net interest income $ 96,236  $ 99,106  $ 109,489 
Net interest rate spread 2.39  % 2.60  % 3.36  %
Net interest-earning assets $ 2,909,874  $ 3,010,153  $ 3,378,615 
Net interest margin (3)
2.96  % 3.11  % 3.51  %
Ratio of interest-earning assets to total interest-bearing liabilities 1.30x 1.31x 1.37x
(1) Average outstanding balance amounts shown are amortized cost, net of allowance for credit losses.
(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.
16

The following table summarizes the quarterly net interest margin for the previous five quarters.
9/30/23 6/30/23 3/31/23 12/31/22 9/30/22
3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr.
Interest-Earning Assets:
Securities 2.67  % 2.53  % 2.52  % 2.32  % 2.36  %
Net loans 5.37  % 5.24  % 5.12  % 4.82  % 4.38  %
Total interest-earning assets 4.89  % 4.73  % 4.63  % 4.36  % 3.90  %
Interest-Bearing Liabilities:
Total deposits 2.22  % 1.85  % 1.39  % 0.90  % 0.47  %
Total borrowings 3.74  % 3.41  % 2.48  % 1.74  % 1.11  %
Total interest-bearing liabilities 2.50  % 2.13  % 1.54  % 1.00  % 0.54  %
Interest rate spread 2.39  % 2.60  % 3.09  % 3.36  % 3.36  %
Net interest margin 2.96  % 3.11  % 3.48  % 3.62  % 3.51  %
Ratio of interest-earning assets to interest-bearing liabilities 1.30x 1.31x 1.34x 1.35x 1.37x


















17

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Net Interest Margin Analysis
Average Year to Date Balances
(Dollars in Thousands) (Unaudited)
September 30, 2023 September 30, 2022
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
Interest-Earning Assets:
Deposits $ 69,696  $ 2,676  5.13  % $ 126,439  $ 499  0.53  %
Federal funds sold and other short term investments 58  2  5.34  % 113,498  1,206  1.42  %
Available for sale debt securities 1,777,861  30,819  2.31  % 2,028,645  24,786  1.63  %
Held to maturity debt securities, net (1)
 379,144  7,059  2.48  % 413,136  7,501  2.42  %
Equity securities, at fair value 1,022  —  —  % 1,020  —  —  %
Federal Home Loan Bank stock 77,634  3,929  6.75  % 37,363  1,180  4.21  %
Net loans: (2)
Total mortgage loans 7,740,591  299,830  5.12  % 7,253,822  213,181  3.89  %
Total commercial loans 2,225,725  93,915  5.60  % 2,119,637  70,385  4.40  %
Total consumer loans 302,706  13,419  5.93  % 321,357  10,268  4.27  %
Total net loans 10,269,022  407,164  5.25  % 9,694,816  293,834  4.01  %
Total interest-earning assets $ 12,574,437  $ 451,649  4.76  % $ 12,414,917  $ 329,006  3.51  %
Non-Interest Earning Assets:
Cash and due from banks 121,801  126,392 
Other assets 1,152,113  1,077,495 
Total assets $ 13,848,351  $ 13,618,804 
Interest-Bearing Liabilities:
Demand deposits $ 5,710,855  $ 85,822  2.01  % $ 6,126,916  $ 16,643  0.36  %
Savings deposits 1,315,157  1,582  0.16  % 1,496,355  871  0.08  %
Time deposits 961,010  21,476  2.99  % 681,783  2,808  0.55  %
Total deposits 7,987,022  108,880  1.82  % 8,305,054  20,322  0.33  %
Borrowed funds 1,556,619  38,329  3.29  % 663,366  4,790  0.97  %
Subordinated debentures 10,563  774  9.80  % 10,355  403  5.21  %
Total interest-bearing liabilities $ 9,554,204  $ 147,983  2.07  % $ 8,978,775  $ 25,515  0.38  %
Non-Interest Bearing Liabilities:
Non-interest bearing deposits 2,382,144  2,770,969 
Other non-interest bearing liabilities 266,910  235,630 
Total non-interest bearing liabilities 2,649,054  3,006,599 
Total liabilities 12,203,258  11,985,374 
Stockholders' equity 1,645,093  1,633,430 
Total liabilities and stockholders' equity $ 13,848,351  $ 13,618,804 
Net interest income $ 303,666  $ 303,491 
Net interest rate spread 2.69  % 3.13  %
Net interest-earning assets $ 3,020,233  $ 3,436,142 
Net interest margin (3)
3.19  % 3.24  %
Ratio of interest-earning assets to total interest-bearing liabilities 1.32x 1.38x
(1) Average outstanding balance amounts shown are amortized cost, net of allowance for credit losses.
(2) Average outstanding balance are net of the allowance for loan losses, deferred loan fees and expenses, loan premium and discounts and include non-accrual loans.
(3) Annualized net interest income divided by average interest-earning assets.
18

The following table summarizes the year-to-date net interest margin for the previous three years.
Nine Months Ended
September 30, 2023 September 30, 2022 September 30, 2021
Interest-Earning Assets:
Securities 2.57  % 1.72  % 1.47  %
Net loans 5.25  % 4.01  % 3.78  %
Total interest-earning assets 4.76  % 3.51  % 3.31  %
Interest-Bearing Liabilities:
Total deposits 1.82  % 0.33  % 0.34  %
Total borrowings 3.29  % 0.97  % 1.13  %
Total interest-bearing liabilities 2.07  % 0.38  % 0.43  %
Interest rate spread 2.69  % 3.13  % 2.88  %
Net interest margin 3.19  % 3.24  % 2.99  %
Ratio of interest-earning assets to interest-bearing liabilities 1.32x 1.38x 1.36x




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