Provident Financial Services (NYSE:PFS) Releases Earnings Results, Beats Estimates By $0.04 EPS

Provident Financial Services (NYSE:PFS) released its quarterly earnings results on Thursday, July 30th. The savings and loans company reported $0.60 earnings per share for the quarter, beating analysts’ consensus estimates of $0.56 by $0.04, Zacks reports. The business had revenue of $234.96 million during the quarter, compared to analyst estimates of $225.57 million. Provident Financial Services had a return on equity of 11.00% and a net margin of 22.15%.During the same quarter last year, the company posted $0.55 EPS.

Here are the key takeaways from Provident Financial Services’ conference call:

• Strong earnings and profitability: Second-quarter core net income rose 11% year over year to $80 million, or $0.61 per share, while adjusted ROA reached 1.27% and adjusted return on tangible common equity exceeded 16%. Record revenue and core pre-provision net revenue reflected improved operating leverage.
• Loan growth momentum remains robust: The bank funded $700 million of new commercial loans during the quarter and ended June with a record $3.2 billion commercial pipeline. Management expects full-year loan growth toward the high end of its range, now targeting 5%–6% growth.
• Fee income guidance was raised: Record second-quarter non-interest income of $32 million was supported by insurance, wealth management, banking fees and SBA loan sales. Management increased its third- and fourth-quarter non-interest income outlook to $29 million per quarter and cited continued momentum in insurance and Beacon Trust.
• Net interest margin is expected to expand modestly: Core NIM increased five basis points sequentially to 3.09%, with another one to two basis points of expansion modeled in each of the next two quarters. However, deposit costs are expected to rise one to two basis points amid intense competition, particularly for CDs and consumer deposits.
• Credit metrics improved: Net charge-offs were a low four basis points of average loans, and management expects the senior-housing relationship that entered non-accrual status to be resolved by year-end with no material loss. Excluding that $82 million relationship, non-performing loans were 27 basis points of total loans.

Provident Financial Services Price Performance

Shares of PFS stock traded down $0.12 during mid-day trading on Monday, reaching $23.59. The company’s stock had a trading volume of 887,387 shares, compared to its average volume of 976,981. Provident Financial Services has a 1-year low of $17.69 and a 1-year high of $25.49. The company has a market cap of $3.08 billion, a P/E ratio of 9.83 and a beta of 0.78. The company has a debt-to-equity ratio of 0.99, a quick ratio of 1.03 and a current ratio of 1.03. The firm’s 50-day moving average is $23.91 and its two-hundred day moving average is $22.69.

Provident Financial Services Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Friday, August 28th. Shareholders of record on Friday, August 14th will be issued a $0.24 dividend. This represents a $0.96 annualized dividend and a yield of 4.1%. The ex-dividend date of this dividend is Friday, August 14th. Provident Financial Services’s payout ratio is 40.00%.

Analyst Ratings Changes

PFS has been the topic of several analyst reports. DA Davidson set a $26.00 price target on shares of Provident Financial Services in a research note on Friday, July 31st. Piper Sandler reiterated an “overweight” rating and issued a $29.00 price objective (up from $26.00) on shares of Provident Financial Services in a report on Friday, July 31st. Keefe, Bruyette & Woods reissued an “outperform” rating and set a $28.00 target price (up from $26.00) on shares of Provident Financial Services in a research report on Monday, August 3rd. Weiss Ratings restated a “buy (b)” rating on shares of Provident Financial Services in a report on Wednesday, July 29th. Finally, Raymond James Financial boosted their price target on Provident Financial Services from $25.00 to $27.00 and gave the stock a “strong-buy” rating in a research report on Wednesday, July 1st. One equities research analyst has rated the stock with a Strong Buy rating, four have given a Buy rating and three have issued a Hold rating to the company’s stock. According to MarketBeat, Provident Financial Services presently has an average rating of “Moderate Buy” and an average target price of $26.79.

Insider Activity at Provident Financial Services

In other news, EVP Vito Giannola sold 20,000 shares of Provident Financial Services stock in a transaction dated Tuesday, August 18th. The shares were sold at an average price of $24.36, for a total transaction of $487,200.00. Following the sale, the executive vice president directly owned 56,424 shares in the company, valued at approximately $1,374,488.64. The trade was a 26.17% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Insiders own 3.02% of the company’s stock.

Hedge Funds Weigh In On Provident Financial Services

A number of hedge funds have recently modified their holdings of the stock. Mercer Global Advisors Inc. ADV acquired a new stake in shares of Provident Financial Services in the fourth quarter valued at approximately $216,000. EP Wealth Advisors LLC bought a new stake in Provident Financial Services during the 4th quarter worth about $452,000. Voloridge Investment Management LLC lifted its position in Provident Financial Services by 28.5% during the 4th quarter. Voloridge Investment Management LLC now owns 402,140 shares of the savings and loans company’s stock valued at $7,942,000 after purchasing an additional 89,197 shares during the period. Wellington Management Group LLP lifted its position in Provident Financial Services by 5.5% during the 4th quarter. Wellington Management Group LLP now owns 6,710,987 shares of the savings and loans company’s stock valued at $132,542,000 after purchasing an additional 351,889 shares during the period. Finally, Susquehanna Fundamental Investments LLC boosted its stake in shares of Provident Financial Services by 85.2% in the 4th quarter. Susquehanna Fundamental Investments LLC now owns 113,157 shares of the savings and loans company’s stock valued at $2,235,000 after purchasing an additional 52,070 shares during the last quarter. 71.97% of the stock is owned by institutional investors and hedge funds.

Provident Financial Services Company Profile

Provident Financial Services, Inc is the bank holding company for Provident Bank, a regional commercial bank headquartered in Jersey City, New Jersey. The company operates a network of full-service branches across New Jersey, the New York metropolitan area and eastern Pennsylvania, offering a range of personal and business banking solutions.

Its core products and services include checking and savings accounts, consumer and residential mortgage loans, commercial real estate financing and small-business lending.