Provident Financial Services Reports $64M Net Income and Significant Growth in Latest Quarter

Provident Financial Services, Inc. reported significant financial growth in its latest quarterly results, with net income reaching $64.0 million, or $0.49 per share, for the three months ending March 31, 2025. This marks a substantial increase from the $32.1 million, or $0.43 per share, reported in the same period last year. The company's total interest income surged to $305.3 million, up from $163.9 million in the prior year, driven by a notable rise in interest income from real estate secured loans and commercial loans, which increased by $79.6 million and $39.7 million, respectively.

The company's total assets grew to $24.22 billion, reflecting a $172.9 million increase from December 31, 2024. This growth was primarily attributed to a $132.0 million rise in loans held for investment, which reached $18.79 billion, and a $110.5 million increase in total investments. The loan portfolio's composition remained stable, with commercial loans representing 86.1% of the total, slightly up from 85.9% in the previous quarter. The company also reported a decrease in total deposits, which fell by $175.0 million to $18.45 billion, largely due to declines in savings and demand deposit accounts.

Strategically, Provident Financial completed its merger with Lakeland Bancorp, which was finalized on May 16, 2024. This merger added approximately $10.59 billion in total assets and $7.91 billion in total loans to Provident's balance sheet. The integration of Lakeland has contributed to increased operational scale, although it also resulted in some branch consolidations. The company has not incurred any merger-related expenses in the current quarter, contrasting with $2.2 million in costs recorded in the same period last year.

Operationally, the company reported a provision for credit losses of $325,000 for the quarter, compared to $200,000 in the previous year. The allowance for credit losses decreased slightly to $191.8 million, representing 1.02% of total loans. Non-performing loans increased to $99.3 million, or 0.54% of total loans, primarily due to two significant commercial real estate loans. The company continues to monitor its loan portfolio closely, particularly in light of economic conditions that could impact borrower repayment capabilities.

Looking ahead, Provident Financial remains focused on maintaining its capital ratios above regulatory requirements, with a total risk-based capital ratio of 13.29% as of March 31, 2025. The company is also committed to managing its interest rate risk and liquidity effectively, with plans to leverage its strong capital position to support future growth initiatives. The outlook remains cautiously optimistic, with management emphasizing the importance of adapting to changing economic conditions and market dynamics.