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Provident Financial Services (PFS)
NYSE:PFS
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Provident Financial Services
(NYSE:PFS)
72Outperform
Provident Financial Services (PFS) vs. S&P 500 (SPY)
Market Cap
$2.15B
Dividend Yield5.83%
Average Volume (3M)634.38K
Price to Earnings (P/E)16.3
Beta (1Y)1.27
Revenue Growth63.85%
EPS Growth-39.11%
CountryUS
Employees1,142
SectorFinancial
Sector Strength77
IndustryBanking
Share Statistics
EPS (TTM)1.04
Shares Outstanding130,489,490
10 Day Avg. Volume563,752
30 Day Avg. Volume634,382
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.65
Price to Cash Flow (P/CF)2.30
P/FCF Ratio1.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$23.50Price Target Upside43.73% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Provident Financial Services Business Overview & Revenue Model
Company DescriptionProvident Financial Services, Inc. is a holding company that operates through its subsidiary, Provident Bank, which is one of the oldest and largest independent banks in New Jersey. The company provides a comprehensive range of banking and financial services to individuals, families, and businesses primarily in northern and central New Jersey, as well as in certain parts of Pennsylvania. Provident Financial Services emphasizes personalized customer service and offers traditional retail and commercial banking services, including deposit products, loans, and wealth management solutions.
How the Company Makes MoneyProvident Financial Services makes money primarily through interest income generated from its lending activities, which include residential, commercial, and consumer loans. The company also earns revenue from fees associated with deposit accounts, loan servicing, and other banking services. Additionally, Provident Financial Services benefits from investment income through its securities portfolio. The company's earnings are also supported by non-interest income, which includes fees from wealth management services and various banking fees. Key factors contributing to its revenue include maintaining a strong net interest margin, effective risk management practices, and strategic growth initiatives within its market areas.
Provident Financial Services Financial Statement Overview
Summary
Provident Financial Services demonstrates sound financial health with strong profitability and a robust balance sheet. Revenue growth is positive, although net margins have faced some pressure. Cash flow generation is strong, but volatility in free cash flow and large financing activities need monitoring. The company is well-positioned, but maintaining profitability amidst competitive pressures is crucial.Income Statement
The company shows strong gross profit margins consistently above 80%, indicating efficient cost management. Revenue growth is solid, particularly noticeable in 2024, but net profit margins have declined slightly, suggesting rising costs or competitive pressures. EBIT margins remain robust, reflecting operational efficiency.75
Positive
Balance Sheet
The balance sheet is strong with no debt in 2024, significantly improving the debt-to-equity ratio to 0. Stockholders' equity has increased, enhancing the equity ratio, while Return on Equity remains stable, indicating consistent profitability. These factors contribute to a solid financial foundation.82
Very Positive
Cash Flow
Operating cash flow is positive and growing, indicating good cash generation from core activities. However, free cash flow growth has been volatile, and the high financing outflow in 2024 could be a concern. The operating cash flow to net income ratio suggests efficient cash conversion, but the free cash flow to net income ratio highlights potential cash flow management issues.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 960.30M | 1.05B | 451.38M | 505.34M | 452.83M | 385.00M | Gross Profit |
| 908.39M | 1.05B | 403.98M | 462.31M | 414.22M | 348.81M | EBIT |
| 214.18M | 1.04B | 242.80M | 288.74M | 227.12M | 127.55M | EBITDA |
| 171.12M | 0.00 | 0.00 | 417.96M | 359.78M | 322.71M | Net Income Common Stockholders |
| 94.31M | 115.53M | 128.40M | 175.65M | 167.92M | 96.95M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.21B | 205.94M | 180.19M | 1.99B | 2.77B | 1.64B | Total Assets |
| 9.73B | 24.05B | 14.21B | 13.78B | 13.78B | 12.92B | Total Debt |
| 1.44B | 2.31B | 1.46B | 1.35B | 637.06M | 1.20B | Net Debt |
| 1.30B | 2.10B | 1.28B | 1.16B | -75.41M | 668.75M | Total Liabilities |
| 8.37B | 21.45B | 12.52B | 12.19B | 637.06M | 1.20B | Stockholders Equity |
| 1.36B | 2.60B | 1.69B | 1.60B | 1.70B | 1.62B |
| Cash Flow | Free Cash Flow | ||||
| 229.12M | 426.38M | 165.91M | 190.90M | 144.38M | 94.09M | Operating Cash Flow |
| 230.72M | 426.38M | 173.40M | 200.31M | 158.18M | 106.91M | Investing Cash Flow |
| 671.02M | 507.67M | -469.60M | -647.56M | -717.94M | -507.98M | Financing Cash Flow |
| 76.84M | -908.37M | 289.95M | -78.70M | 739.86M | 746.68M |
Provident Financial Services Technical Analysis
Negative
16.35
Price Trends
18.38
Negative
19.10
Negative
17.66
Negative
Market Momentum
-0.49
Positive
25.47
Positive
7.13
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PFS, the sentiment is Negative. The current price of 16.35 is below the 20-day moving average (MA) of 17.97, below the 50-day MA of 18.38, and below the 200-day MA of 17.66, indicating a bearish trend. The MACD of -0.49 indicates Positive momentum. The RSI at 25.47 is Positive, neither overbought nor oversold. The STOCH value of 7.13 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PFS.
Provident Financial Services Risk Analysis
Provident Financial Services disclosed 31 risk factors in its most recent earnings report. Provident Financial Services reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Provident Financial Services Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $570.88M | 12.10 | 7.39% | 4.64% | 6.97% | -16.70% | |
73 Outperform | $973.22M | 10.44 | 5.95% | 4.65% | 7.54% | -2.82% | |
72 Outperform | $2.15B | 16.33 | 5.38% | 5.83% | 63.85% | -39.11% | |
69 Neutral | $865.34M | 13.08 | 5.99% | 3.13% | 6.06% | -15.21% | |
64 Neutral | $13.80B | 10.64 | 9.23% | 4.22% | 17.66% | -7.66% | |
46 Neutral | $438.58M | 16.43 | -4.49% | 6.75% | -3.66% | -196.64% |
* Financial Sector Average
Performance Comparison
PFS
Provident Financial Services
16.35
2.13
14.98%
FFIC
Flushing Financial
12.86
0.81
6.72%
OCFC
Oceanfirst Financial
16.44
1.81
12.37%
TRST
TrustCo Bank
29.86
3.92
15.11%
CNOB
ConnectOne Bancorp
22.55
3.32
17.26%
Provident Financial Services Earnings Call Summary
Earnings Call Date: Jan 28, 2025 | % Change Since: -13.72% | Next Earnings Date: Apr 25, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive outlook with strong deposit growth and improved asset quality. The completion of merger-related activities was also a significant highlight. However, challenges remain in achieving robust loan growth and maintaining noninterest income levels.Highlights
Strong Deposit Growth
Deposits grew by $248 million or 5.4% annualized. The average cost of total deposits decreased 11 basis points to 2.25%.
Improved Asset Quality
Nonperforming loan ratio decreased 8 basis points to 39 basis points. Net charge-offs decreased to $5.5 million from $6.8 million in the trailing quarter.
Fee-Based Business Success
Provident Protection Plus had 19% organic growth in the fourth quarter. Beacon Trust assets under management grew to $4.2 billion, a 7.5% growth relative to last year.
Merger Completion
All merger-related charges have been recognized, with no further expenses expected in 2025, setting a foundation for growth.
Lowlights
Modest Loan Growth
Although $713 million in new commercial loans were closed, $328 million were paid off, resulting in modest portfolio growth.
Noninterest Income Decrease
Noninterest income decreased to $24 million, mainly due to fewer BOLI benefit claims and a seasonal reduction in insurance agency income.
Company Guidance
During the fourth quarter earnings call for Provident Financial Services, the company reported net earnings of $48.5 million, or $0.37 per share, with an annualized adjusted return on average assets of 1.05% and an adjusted return on average tangible equity of 15.39%. The company's core net interest margin expanded by 4 basis points, while the reported margin compressed to 3.28%. Provident saw a $248 million increase in deposits, with an average cost of 2.25%, and commercial loans closed at approximately $713 million. Nonperforming loan ratios improved, decreasing by 8 basis points to 39 basis points. The fee-based business, Provident Protection Plus, experienced 19% organic growth, and Beacon Trust's assets under management grew by 7.5%, reaching $4.2 billion. As the company moves into 2025, they project return on average assets of approximately 1.15% and return on tangible equity of about 16%, with plans to maintain operating expenses around $112 million to $115 million quarterly.Provident Financial Services Corporate Events
M&A TransactionsShareholder MeetingsDividendsFinancial Disclosures
Provident Financial Reports Improved Income and Dividend
Positive
Jan 29, 2025
On January 28, 2025, Provident Financial Services announced a quarterly cash dividend of $0.24 per share, payable on February 28, 2025, and scheduled its Annual Meeting of Stockholders for April 24, 2025. The company’s financial results for the quarter ending December 31, 2024, showed improved net income, influenced by the merger with Lakeland Bancorp, which significantly increased assets and deposits. The merger also impacted provisions for credit losses and transaction costs. Provident reported improvements in asset quality and wealth management income, while managing a decrease in net interest margin. The company reclassified a portion of its loan portfolio as held for sale, reflecting strategic business shifts.
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Provident Financial Highlights Q4 2024 Results and Merger
Neutral
Jan 28, 2025
The company reported its fourth quarter 2024 financial results, highlighting a slight decrease in net interest margin and improvements in asset quality as non-performing loans decreased. Additionally, Provident Financial Services announced a reclassification of $151.3 million in its commercial loan portfolio for sale, exiting the non-relationship equipment lease financing business, and increased total deposits by $247.6 million. The company also noted a pending merger with Lakeland, with potential impacts on business and customer relationships.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.