Provident Financial Services, Inc

Thank you for standing by. I would like to welcome everyone to the Provident Financial Services Inc. Third Quarter Earnings Conference Call. I would now like to turn the call over to Adrian Duarte, the Investor Relations Officer. Please go ahead, sir.

Thank you, Dustin. Good morning, everyone, and thank you for joining us for our Third Quarter Earnings Call. Today's presenters are President and CEO Tony Labazzetta 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 question as to any forward-looking statements that may be made during the course of today's call. Our full disclaimer is contained in yesterday evening's earnings release, which has been posted to the investor relations page on our website, providence.bank. Now, it's my pleasure to introduce Tony Labazzetta, who will offer his perspective on the third quarter. Tony?

Thank you, Adriano, and welcome, everyone, to the Providence Financial Services earnings call. Before we discuss our quarterly results, I am pleased to announce that as of September 3rd, the conversion of Lakeland Bank's core system was completed, and we are now operating as a fully united organization. Our cultures are combining well, and we have successfully retained virtually all legacy Lakeland customers. We are grateful. to all the team members whose hard work and diligent preparation allowed us to have a smooth systems integration. We are already seeing the benefits of the merger through cost savings, expansion in our margin, and more revenue enhancement opportunities. And we are excited to carry this momentum into 2025. Moving on to our quarterly results, the third quarter was characterized by stronger than expected economic growth. the first interest rate cut in more than four years, and an optimistic outlook for the banking sector despite weak loan demand and higher deposit costs. The Provident team achieved solid core profitability, highlighted by core margin expansion, growth in the loan pipeline, significant contributions from our fee-based businesses, and improved operating efficiency. During the quarter, we reported net earnings of $46.4 million, or $0.36 per share, on an annualized adjusted return on average assets of 0.95% and a return on average tangible equity of 14.53%. Our adjusted pre-tax, pre-provision return on average assets was 1.48% for the third quarter. As we move forward, we expect to continue to leverage synergies and further enhance earnings going into 2025. At quarter end, our capital was healthy and exceeded levels deemed to be well capitalized. Our tangible book value per share increased 4.5% to 13.66, and our tangible common equity ratio was 7.68% compared to 7.34 for the trailing quarter. As such, our Board of Directors approved a quarterly cash dividend of 24 cents per share, payable on November 29th. During the quarter, our average cost of total deposits increased nine basis points to 2.36%. Our deposits grew by 22 million this quarter, largely in short-term certificates of deposits. Our total cost of funds increased six basis points to 2.62%. and remains favorable relative to our peer group. Overall, our net interest margin increased 10 basis points to 3.31%, and we expect to see continued improvement over the next several quarters. During the third quarter, our commercial lending team closed approximately $489 million of new commercial loans. We experienced approximately $227 million in loan payoffs resulting in a net growth of about 39 million. This quarter's production consisted of 35% commercial real estate, 43% in commercial and industrial lending, and 22% in specialty lending. Despite a slight deterioration in non-performing loans, primarily due to one commercial real estate credit, for which we anticipate a near-term resolution with no expected loss, our credit quality remains strong for the third quarter, as evidenced by our non-performing loan ratio of 47 basis points. We do not see any systemic weakness in our loan portfolio and remain confident in our underwriting and portfolio management standards. This is further supported by lower levels of net charge-offs relative to our peer group. We have seen an increase in our total loan pipeline, which grew during the third quarter to approximately $2 billion The weighted average interest rate is 7.18% compared to 7.53% in the trailing quarter. The pull-through adjusted pipeline, including loans pending closing, is approximately $1.2 billion. We are optimistic regarding the strength and quality of our pipeline, and as such, we expect good growth over the next two quarters. This quarter, Providence fee-based businesses performed very well. Providence Protection Plus had 13% organic growth in the third quarter as compared to the same quarter last year, which was the highest third quarter growth rate in its history. In addition, it had 16% organic growth year-to-date, and its retention rate was 99%, even as insurance rates continued to rise. Beacon Trust assets under management grew by 4% for the quarter to a record high $4.2 billion, which represents a 10% year-to-date growth. This growth was driven largely by good investment performance, and as a result, fee income improved 9% as compared to the third quarter of 2023. As we move towards the end of the year, we are increasingly optimistic about the prospects for future performance as we anticipate a more favorable operating environment, growth in our business lines, continued revenue enhancement opportunities, Strong credit quality and improving operating efficiency, which will help us deliver even more value to our customers, employees, and stockholders. Now, I will turn the call over to Tom for his comments on our financial performance. Tom? Thank you, Tony, and good morning, everyone.