Provident Financial Services Reports $115.5M Net Income and Significant Asset Growth Following Lakeland Bancorp Merger

Provident Financial Services, Inc. (PFS) reported net income of $115.5 million, or $1.05 per share, for the year ended December 31, 2024, compared to $128.4 million, or $1.72 per share, in 2023. Total assets increased significantly to $24.05 billion, a $9.84 billion increase primarily due to the May 16, 2024, merger with Lakeland Bancorp, Inc. This merger added $10.59 billion in assets, $7.91 billion in loans, and $8.62 billion in deposits. Following the merger, 22 banking offices were closed due to geographic overlap.

Net interest income rose to $600.6 million in 2024 from $399.5 million in 2023, driven by assets acquired from Lakeland, favorable adjustable-rate loan repricing, and higher rates on new loan originations. However, this was partially offset by increased costs for deposits and borrowings. Non-interest income increased by $14.3 million to $94.1 million, primarily due to higher fee income ($9.7 million increase), wealth management income ($2.9 million increase), and insurance agency income ($2.3 million increase). Non-interest expense rose by $182.2 million to $457.5 million, largely due to Lakeland's integration and merger-related expenses ($49 million increase).

The loan portfolio grew to $18.66 billion in 2024 from $10.87 billion in 2023, with significant increases in multi-family, commercial, and commercial mortgage loans, partially offset by decreases in construction, residential mortgage, and consumer loans. Commercial loans comprised 85.9% of the portfolio in 2024. The allowance for credit losses increased to 1.04% of total loans in 2024 from 0.99% in 2023, primarily due to a $60.1 million initial CECL provision related to the Lakeland acquisition and economic forecast adjustments. Non-performing assets decreased to 0.34% of total assets in 2024 from 0.43% in 2023. As of December 31, 2024, the company had 1,753 full-time and 48 part-time employees.

Provident Financial Services noted several risk factors, including the challenges of integrating Lakeland's operations, economic uncertainties impacting net interest income and asset values, regulatory changes, and cybersecurity threats. The company also highlighted its reliance on dividends from subsidiaries for revenue and the potential for future capital needs. The company's outlook includes a plan to review dividend payments quarterly and a continued focus on commercial lending and expanding customer relationships. The company's forward-looking statements are subject to various risks and uncertainties detailed in the filing.