Provident Financial Services — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income for the three months ended September 30, 2026, was $69.2 million ($0.53 per share), compared to $78.1 million ($0.60 per share) in the prior quarter and $71.7 million ($0.55 per share) in the same period last year.
• Net income for the nine months ended September 30, 2026, totaled $226.7 million ($1.74 per share), compared to $207.7 million ($1.59 per share) for the same period in 2025.
• Core net income (excluding one-time debt extinguishment loss, core conversion costs, and branch restructuring expenses) was $84.3 million ($0.65 per share) for the quarter and $243.5 million ($1.87 per share) for the nine months.
• Core pre-provision net revenue (PPNR) for the quarter was $119.5 million ($0.92 per share), representing a 10% year-over-year increase.
• Net interest income increased to $208.0 million for the quarter, up $13.7 million year-over-year, driven by earning asset growth and an expanded net interest margin.
• Net interest margin was 3.50% for the quarter, up from 3.43% in the prior year quarter and 3.48% in the prior quarter.
• Core net interest margin increased 22 basis points year-over-year to 3.16%.
• Total non-interest income was $30.5 million for the quarter, down $1.4 million from the prior quarter but up $3.1 million year-over-year.
• Total non-interest expense was $140.7 million for the quarter, an increase of $21.4 million from the prior quarter and $27.6 million year-over-year, primarily due to a $17.5 million loss on debt extinguishment and $3.7 million in core conversion costs.
• The core efficiency ratio was 49.93% for the quarter, compared to 49.75% in the prior quarter and 51.01% in the prior year quarter.
• Annualized return on average assets was 1.07% for the quarter; core return on average assets was 1.30%.
• Annualized return on average tangible equity was 13.80% for the quarter; core return on average tangible equity was 16.57%.
• Net charge-offs were $2.4 million for the quarter (0.05% annualized) and $7.4 million for the nine months (0.05% annualized).
• Provision for credit losses was $5.2 million for the quarter, down from $9.3 million in the prior quarter and $7.0 million in the prior year quarter.
• Allowance for credit losses increased to $189.5 million as of September 30, 2026, from $184.8 million as of December 31, 2025.
• Allowance for loan losses to total loans was 0.94% as of September 30, 2026.
• Income tax expense was $23.5 million for the quarter with an effective tax rate of 25.3%.

Guidance and Future Outlook:

• Management expressed optimism regarding future profitable organic growth, citing a robust loan pipeline and strong asset quality.
• The company noted momentum in both spread and fee-based businesses.
• No specific numerical forward guidance was provided in the release.

Business Segments and Product Lines:

• Total commercial loans (including mortgage warehouse lines, commercial mortgage, multi-family, and construction) increased 3.4% annualized for the quarter.
• The loan pipeline totaled $3.03 billion as of September 30, 2026, with a weighted average interest rate approaching 6.50%.
• Both CRE and C&I pipelines exceeded $1.0 billion for the third consecutive quarter.
• Total deposits increased $261.7 million (5.31% annualized) to $19.81 billion; core deposits increased $233.7 million (5.76% annualized) to $15.42 billion.
• Savings and demand deposit accounts increased $590.5 million to $16.58 billion, while time deposits decreased $62.4 million to $3.22 billion.
• The company successfully completed its previously announced core system conversion during the quarter.
• Loan-to-deposit ratio decreased to 101.8% as of September 30, 2026, from 102.6% as of June 30, 2026.

Market and Competitive Landscape:

• No specific market share data or direct competitor comparisons were provided in the release.
• The company operates in New Jersey, Pennsylvania, and New York counties.

Risks and Challenges:

• Results were impacted by a $17.5 million one-time loss on the extinguishment of debt due to accelerated amortization of purchase accounting adjustments.
• Core conversion related costs of $3.7 million and $465,000 in branch restructuring expenses affected results.
• Tangible book value per share declined slightly to $16.16, and tangible common equity ratio declined 20 basis points to 8.40%, impacted by an $83.0 million reduction in Accumulated Other Comprehensive Income.
• Adjusted CRE concentration ratio was 399.4% as of September 30, 2026.
• Total non-performing loans increased to $140.1 million (0.69% of total loans) from $136.9 million in the prior quarter and $78.4 million in the prior year.
• Total non-performing assets increased to $141.1 million (0.55% of total assets) from $80.4 million at December 31, 2025.

Management Commentary and Tone:

• Anthony J. Labozzetta, President and CEO, stated the company delivered "another quarter of solid financial results including record revenues."
• Management highlighted "strong performance" and "building momentum" in spread and fee-based businesses.
• The tone was optimistic, with management noting the company is "optimistic that we will keep driving profitable organic growth going forward."
• Management confirmed the company maintained an adjusted efficiency ratio below 50%.

Other Key Points:

• The company completed a core system conversion during the quarter.
• Common stock repurchases totaled 1,464 shares in the quarter (for tax withholding on stock compensation) and 616,186 shares for the nine months ended September 30, 2026.
• Approximately 2,198,007 shares remained eligible for repurchase under the current authorization as of September 30, 2026.
• Stockholders' equity totaled $2.86 billion as of September 30, 2026.
• Common Equity Tier One ratio was 12.5% and Total Risk Based Capital ratio was 13.4% for Provident Bank.
• Foreclosed assets were $1.0 million as of September 30, 2026, comprised of one commercial real estate property.
• Borrowed funds totaled $2.39 billion as of September 30, 2026, an increase from $2.11 billion at December 31, 2025, used to fund asset growth and replace seasonal municipal deposit outflows.