Provident Financial Services, Inc

First quarter earnings call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Leonard Gleason, Senior Vice President of Investor Relations. Please go ahead, sir.

Thank you, Chuck. Good morning, ladies and gentlemen. Thank you for joining us for our first quarter earnings call. Today's presenters are Chairman and Chief Executive Officer Chris Martin, President and Chief Operating Officer Tony Lavazetta, and Senior Executive Vice President and Chief Financial Officer Tom Lyons. Before beginning our review of our financial results, we ask that you please take note of our standard caution as to any forward-looking statements that may be made during the course of today's call. Our full disclaimer is contained in this morning's earnings release, which has been posted to the investor relations page on our website, providence.bank. With that, it's my pleasure to introduce Chris Martin, who will offer his perspective on our first quarter. Chris.

Thanks, Glenn, and good morning, everyone. We appreciate your participation today. Our first quarter earnings were vastly improved from the same period last year when the pandemic's impact was first being felt. The economy is rebounding quickly via massive stimulus by the government, the success of the vaccine rollout, and the tenacity and perseverance of both consumers and business owners to weather this unprecedented event. Earnings per share were 63 cents for the quarter as compared to 23 cents for the same period in 2020. And the primary drivers of the improvement included a negative provision due to the prospects of a strong GDP growth combined with the full impact of improved revenue from the SB1 acquisition. Annualized return on average assets was 1.51% and annualized return on average tangible equity was 16.8%. Loan growth was constrained as PPP loan forgiveness and prepayments offset meaningful production. Originations were robust, and we continue to support the PPP program in its second phase. The loan pipeline is consistent with the trailing quarter and the previous year to date. Yields on new originations are approaching portfolio yields, so stabilization in asset yields is on the horizon. And like most financial institutions, we are awash with liquidity due to the proceeds from stimulus checks and PPP monies augmenting deposit growth. This added liquidity presents the accompanying challenge of where and how to invest the balances in an accretive manner while remaining sensitive to potential runoff. Our core deposits are now 91% of total deposits. The resultant increase in deposits alleviated the need for borrowing, which decreased during the quarter. Our margin improved six basis points during the quarter, and we envision core margin stability in the near term. Non-interest income improved with the new revenue sources from SB1 insurance, increased wealth management income from Beacon Trust, and sadly another bank-owned life insurance claim. Retail fees also added to these increases, along with loan prepayment fees and a net gain on the sale of residential mortgage loans. Operating expenses of $61.9 million increased from the prior year, largely due to the addition of compensation and occupancy expenses from SB1. Non-interest expense to average assets was 1.95% versus 2.13% for 2020. FDIC insurance costs increased due to an increase in the assessment rate, an increase in total assets, and the prior year's results having benefited from a small bank assessment credit. We exceeded the cost savings we projected when we announced the SB1 acquisition and are enthusiastic about the combined company's potential to extract more costs and increase revenue. Our efficiency ratio was 56.19%. As for asset quality, the numbers continue to improve from trailing quarter. Deferrals are down to $132 million, of which $123.5 million are commercial loans, and of that number, approximately 96% are paying interest. And Tom will go over this in more detail, but we are optimistic that as the economy opens up further and more people are vaccinated, results will continue to improve. At this time, I would like to ask Tony to add more color to the success of the combination, along with strategic plans for Provident. Tony?