Provident Financial Services (PFS) investor relations material

Executive summary

• Net income for Q2 2025 was $72M ($0.55/share), reversing a prior-year loss and reflecting strong operational performance, earning asset growth, improved margins, and asset quality.

• Six-month net income reached $136M ($1.04/share), a significant increase from $20.6M in the same period last year.

• The Lakeland Bancorp merger, completed May 2024, added $10.59B in assets, $7.91B in loans, and $8.62B in deposits, with integration completed and no merger-related expenses in 2025.

• Tangible book value per share increased to $14.60; tangible common equity ratio rose to 8.03%.

• Board approved a $0.24/share quarterly cash dividend, payable August 29.

Financial highlights

• Record revenue of $214M in Q2 2025, driven by net interest income of $187M and noninterest income of $27M.

• Net interest margin increased to 3.36% from 3.21% year-over-year; efficiency ratio improved to 53.5%.

• Noninterest expenses were $114.6M, down year-over-year as merger-related costs fell.

• Average earning assets grew $383M (annualized 7%) versus the trailing quarter; average yield on assets rose to 5.68%.

• Provision for credit losses was a benefit of $2.7M, reflecting improved asset quality.

Outlook and guidance

• Projected net interest margin for 2025 is 3.35%–3.45%, assuming two 25bp rate cuts in September and November.

• Quarterly core operating expenses expected to remain in the $112M–$115M range for 2025.

• Effective tax rate anticipated at 29.5% for the remainder of 2025.

• Management expects to sustain positive momentum, focusing on growth in earning assets, margin expansion, and operational efficiency.

• Interest rate risk is managed to a neutral position; a 200bp rate increase projected to reduce net interest income by 0.7%.