Provident Financial Services, Inc

morning and welcome to today's Providence Financial Services Inc second quarter earnings release conference call. My name is Candice and I will be your moderator for today's call. All lines have been placed on mute during a presentation portion of a call with the opportunity for question and answer at the end. If you would like to ask a question please press start followed by one on your telephone keypad. I would now like to hand the conference call over to our host Adriano Duarte Head of Investor Relations. Please go ahead.

Thank you, Candace. Good morning, everyone, and thank you for joining us for our second quarter earnings call. Today's presenters are President and CEO Tony Lapazetta and Senior Executive Vice President and Chief Financial Officer Tom Lyons. Before beginning the 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, provident.bank. Now, it's my pleasure to introduce Tony Labazzetta, who will offer his perspective on our second quarter. Tony?

Thank you, Adriano, and good morning, everyone. Provident had strong financial performance for the second quarter. Record revenue produced earnings of 53 cents per share. Our performance was driven in large part by solid growth in commercial loans. The growth combined with an expanding net interest margin drove a 5.2% increase in net interest income over the trailing quarter. This resulted in an annualized rate of return on average assets of 1.16% and a return on average tangible equity of 13.82%. Our board approved a quarterly cash dividend of 24 cents per share. During the quarter, we also repurchased approximately 706,000 shares of our common stock at an average price of $23 per share. Capital position remains strong and comfortably exceeds well-capitalized levels. We've remained dedicated to fostering a best-in-class customer experience, which will help build all of our business lines. Commercial lending continues to be our primary focus, and in the second quarter, we closed approximately $821 million of new loans, a 103% increase from the same quarter last year. Our line of credit utilization percentage increased 5% in the second quarter to 36%, which is approaching our historical average of about 40%. prepayments declined approximately 23% as compared to the first quarter. As a result of our robust productivity and lower prepayments, we grew our commercial loan portfolio, excluding PPP, at an annualized rate of 17.3%. We had good pull-through in our commercial loan pipeline during the second quarter, yet we replenished our gross pipeline, which remained strong at approximately $1.4 billion. The pull-through adjusted pipeline, including loans pending closing, is approximately $825 million, and our projected pipeline rate increased 84 basis points from the last quarter to 4.99%. Despite a competitive market and rising interest rates, lending and business activity remains vibrant. We expect substantial pull-through in the pipeline, and as such, we expect to have strong loan growth for fiscal 2022. Our core deposits remained stable, and the total cost of deposits for the quarter increased one basis points to 20 basis points. While our cost of funds remained stable, we deployed more liquidity into higher yielding commercial loans, which helped drive a 19 basis points improvement in our net interest margin. Going forward, we expect more improvement in the net interest margin as we experience the full benefit of the prior interest rate hikes and the commercial loan growth, which should also have a positive impact on our net interest income for the remainder of the year. Our fee-based businesses are an important component of our community banking model. Provident Protection Plus, formerly SB1 Insurance, had a moderate increase in revenue of 2.9% as compared to the same quarter last year. However, on a year-to-date basis, they grew 21.6% as compared to the prior year. Given the unfavorable conditions in the financial markets, Beacon Trust experienced a decline in the market value of assets under management. And as a result, fee income decreased 442,000 or 5.9% for the quarter as compared to the trailing quarter. As we look forward, our goal is to build our business lines. In doing so, we remain mindful of the uncertainty in the marketplace and the potential risks that may arise. Once more, I want to thank the Provident team for their commitment and dedication. Their hard work and preparation was the catalyst that produced strong financial results for the second quarter. We look forward to growing our business and creating value for our employees, customers, communities, and shareholders. With that, I'll turn the call over to Tom for his comments on our financial performance. Tom?