Bill Young • RBC Capital Markets

Question 1

Bill Young's questions to Provident Financial Services Inc (PFS) leadership • Q4 2024

Jan 29, 2025

Question

Bill Young asked how the company's 2025 return targets compare to longer-term goals and whether there is room for optimization. He also questioned what provides confidence in achieving the 5% loan growth target for 2025, given recent elevated payoff activity.

Answer

CFO Tom Lyons stated there is a continued ability to gain efficiencies and scale to improve returns. CEO Tony Labozzetta added that the company has built a foundation for growth that can scale without proportional expense increases. Regarding loan growth, Labozzetta expressed confidence due to strategic changes in the commercial bank, a strong leadership team, and significant growth in C&I and specialty lending. He noted that amping up CRE lending to traditional levels would help achieve or exceed targets. Lyons also highlighted a strong market position and the end of merger-related distractions as positive factors.

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Question 2

Bill Young's questions to Provident Financial Services Inc (PFS) leadership • Q3 2024

Oct 30, 2024

Question

Bill Young of RBC Capital Markets asked about the drivers for the 2025 net interest margin guidance, the reasons for a higher expense guide, and whether the growing loan pipeline signals an inflection point in client demand.

Answer

CFO Tom Lyons explained that NIM expansion is driven more by organic loan repricing than Fed actions, projecting 3-5 bps of core margin expansion quarterly. He attributed the higher Q4 expense guide of ~$110M to the timing of merger cost saves and forecasted a $112M-$115M run rate for early 2025. CEO Anthony Labozzetta noted that loan pipeline momentum is strong due to post-merger focus, client optimism from rate cuts, and capturing business from larger banks, expecting good growth into 2025.