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1. Company Snapshot

1.a. Company Description

Provident Financial Services, Inc.operates as the bank holding company for Provident Bank that provides various banking products and services to individuals, families, and businesses in the United States.The company's deposit products include savings, checking, interest-bearing checking, money market deposit, and certificate of deposit accounts, as well as IRA products.


Its loan portfolio comprises commercial real estate loans that are secured by properties, such as multi-family apartment buildings, office buildings, and retail and industrial properties; commercial business loans; fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate properties; commercial construction loans; and consumer loans consisting of home equity loans, home equity lines of credit, marine loans, personal loans and unsecured lines of credit, and auto and recreational vehicle loans.The company also offers cash management, remote deposit capture, payroll origination, escrow account management, and online and mobile banking services; and business credit cards.In addition, it provides wealth management services comprising investment management, trust and estate administration, financial planning, tax compliance and planning, and private banking.


Further, the company sells insurance and investment products, including annuities; operates as a real estate investment trust for acquiring mortgage loans and other real estate related assets; and manages and sells real estate properties acquired through foreclosure.As of December 31, 2021, it operated 96 full-service branch offices in northern and central New Jersey, as well as in Pennsylvania and New York counties.The company was founded in 1839 and is headquartered in Jersey City, New Jersey.

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1.b. Last Insights on PFS

Provident Financial Services' recent performance was driven by a strong Q4 earnings beat, with net income increasing to $83.4 million, or $0.64 per share, surpassing the Zacks Consensus Estimate of $0.56 per share. The company's expanding profitability and continued operating momentum were highlighted in a recent update from Stonegate Capital Partners, which noted Provident Financial Services' ability to deliver another strong quarter. The upgrade to a Zacks Rank #2 (Buy) also reflects growing optimism about the company's earnings prospects. Additionally, the recent stake purchase by Citizens Financial Group Inc. RI in the third quarter, valued at approximately $1,182,000, indicates increasing institutional interest in the company.

1.c. Company Highlights

2. Provident Financial Services Delivers Strong Q4 2025 Results

Provident Financial Services reported net earnings of $83 million or $0.64 per share for the fourth quarter of 2025, exceeding analyst estimates of $0.56 per share. The company's pre-provision net revenue was a record $111 million, driven by record revenues, favorable credit metrics, and expanding core profitability. The annualized return on average assets was 1.34%, and the adjusted return on average tangible common equity was 17.6%. Commercial loan growth was 5.5% for the year, with total new loan production of $3.2 billion. The company's loan pipeline remained solid at $2.7 billion with a weighted average rate of 6.22%. Core deposits grew $260 million or 6.6% annualized compared to the linked quarter, and the company generated record fee revenue of $28.3 million in the quarter.

Publication Date: Feb -16

📋 Highlights
  • Profitability & Efficiency:: Quarterly net earnings of $83M ($0.64/share) with 1.34% ROAA and 17.6% ROATCE, driven by $111M pre-provision net revenue.
  • Loan Growth & Pipeline:: 5.5% annual commercial loan growth ($3.2B new loans) and a $2.7B loan pipeline at 6.22% weighted average rate.
  • Deposit & Fee Growth:: Core deposits up $260M (6.6% annualized) and record fee revenue of $28.3M, with noninterest income at $28.3M.
  • 2026 Guidance:: 4-6% loan/deposit growth, $28.5M/quarter noninterest income, and 3-5 bps NIM expansion (3.4%–3.5% NIM), offset by $5M system upgrade costs.

Revenue Growth and Margin Expansion

The company's noninterest income increased to $28.3 million, with gains realized on calls of corporate securities and solid performance from wealth management and insurance divisions. The company's net interest margin (NIM) is expected to expand by 3 to 5 basis points for the next two quarters, with a reported NIM estimated in the 3.4% to 3.5% range for 2026. The company's guidance for 2026 includes loans and deposits growing in the 4% to 6% range, noninterest income averaging $28.5 million per quarter, and a core return on average assets in the 120% to 130% range with a mid-teens return on average tangible common equity.

Valuation and Dividend Yield

With a Price-to-Tangible Book Value (P/TBV) ratio of 1.06 and a Dividend Yield of 4.18%, Provident Financial Services appears to be reasonably valued. The company's strong credit quality and stable deposit base support its dividend payout. The company's guidance for 2026 suggests continued growth and expansion, which could lead to further increases in its dividend payout.

Growth Prospects and Risk Management

The company is open to expanding its footprint in adjacent geographies, such as Long Island and the Philadelphia suburbs, and plans to hire in areas such as insurance, wealth management, and middle market lending, with a focus on adding 3-5 new teams. The company's credit quality remains strong, with low net charge-offs and NPAs. The allowance coverage ratio has decreased, but the company feels it is at a base level. The company's relationship banking approach makes book acquisitions non-essential, and its commercial real estate (CRE) book is holding up well.

2026 Outlook

For 2026, the company expects $60 million in purchase accounting accretion on its loan book. Back book repricing is expected to benefit the margin by 3-4 basis points. Analysts estimate next year's revenue growth at 5.6%, driven by the company's continued expansion and growth initiatives. The company's core systems conversion, scheduled for Labor Day weekend 2026, is a major tech initiative that is expected to drive further efficiency and growth.

3. NewsRoom

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PDS Biotech Announces Adoption of Amended Protocol for Phase 3 VERSATILE-003 Trial Incorporating Progression Free Survival (PFS) as Primary Endpoint for Interim Analysis and Potential Accelerated Approval

Feb -20

Source: globenewswire.com

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Provident Financial Services: Past Monumental Upside Justifies A Bit More From Here

Feb -19

Source: seekingalpha.com

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XXIX Updates on Fully Funded 2026 Exploration Plan

Feb -18

Source: newsfilecorp.com

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Provident Bank Strengthens Middle Market Lending Business with the Appointment of Industry Veteran Joseph A. Tammaro, Jr.

Feb -17

Source: globenewswire.com

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Aftermath Silver kicks off PFS at Berenguela project - ICYMI

Feb -14

Source: proactiveinvestors.com

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Scandium Canada Mandates Engineering Firm Norda Stelo to Lead the Pre-Feasibility Study for the Crater Lake Project

Feb -06

Source: thenewswire.com

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Analyzing Landmark Bancorp (NASDAQ:LARK) & Provident Financial Services (NYSE:PFS)

Feb -06

Source: defenseworld.net

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Provident Financial Services: Valuation Reflects Strengths

Feb -05

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.77%)

6. Segments

Banking and Related Activities

Expected Growth: 4.77%

Strong loan growth, driven by commercial and industrial lending, and a robust mortgage banking business, contributed to Provident Financial Services, Inc.'s 4.77% growth in Banking and Related Activities. Additionally, the company's focus on digital transformation, cost savings initiatives, and strategic acquisitions also supported this growth.

7. Detailed Products

Commercial Loans

Provident Financial Services, Inc. offers commercial loans to businesses, providing financing for various purposes such as expansion, equipment purchases, and working capital.

Commercial Real Estate Loans

The company offers commercial real estate loans for property acquisition, construction, and refinancing, helping businesses to own or invest in commercial properties.

Residential Mortgage Loans

Provident Financial Services, Inc. offers residential mortgage loans to individuals and families, helping them to purchase or refinance their homes.

Consumer Loans

The company offers consumer loans for various personal financing needs, such as debt consolidation, home improvements, and unexpected expenses.

Deposit Services

Provident Financial Services, Inc. offers a range of deposit services, including checking and savings accounts, certificates of deposit, and individual retirement accounts.

Treasury Management Services

The company offers treasury management services to help businesses manage their cash flow, optimize liquidity, and reduce financial risk.

8. Provident Financial Services, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Provident Financial Services, Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's strong brand recognition and customer loyalty.

Bargaining Power Of Customers

Customers have a high bargaining power due to the availability of alternative financial services providers, which puts pressure on Provident Financial Services, Inc. to maintain competitive pricing and services.

Bargaining Power Of Suppliers

Provident Financial Services, Inc. has a diversified supplier base, which reduces the bargaining power of individual suppliers, giving the company more negotiating power.

Threat Of New Entrants

The threat of new entrants is moderate due to the regulatory barriers and capital requirements in the financial services industry, but Provident Financial Services, Inc. still needs to innovate and adapt to changing market conditions.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players, which leads to a high intensity of rivalry, and Provident Financial Services, Inc. needs to differentiate itself through its products and services.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 64.90%
Debt Cost 3.95%
Equity Weight 35.10%
Equity Cost 9.11%
WACC 5.76%
Leverage 184.90%

11. Quality Control: Provident Financial Services, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Provident Financial Services

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Growth: 5.6

Quality: 4.9

Yield: 9.0

Momentum: 4.0

Volatility: 7.3

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Quality: 4.7

Yield: 8.0

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ConnectOne

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Yield: 6.0

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A-Score: 4.9/10

Value: 9.1

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Quality: 4.2

Yield: 7.0

Momentum: 1.0

Volatility: 3.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

23.08$

Current Price

23.08$

Potential

-0.00%

Expected Cash-Flows