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Edited Transcript of PFS earnings conference call or presentation 31-Jan-20 3:00pm GMT

Q4 2019 Provident Financial Services Inc Earnings Call

Jersey City Feb 8, 2020 (Thomson StreetEvents) -- Edited Transcript of Provident Financial Services Inc earnings conference call or presentation Friday, January 31, 2020 at 3:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Christopher P. Martin

Provident Financial Services, Inc. - Chairman, President & CEO

* Leonard G. Gleason

Provident Financial Services, Inc. - Senior VP & IR Officer, and General Counsel of The Provident Bank

* Thomas M. Lyons

Provident Financial Services, Inc. - Senior EVP & CFO

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Conference Call Participants

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* Collyn Bement Gilbert

Keefe, Bruyette, & Woods, Inc., Research Division - MD and Analyst

* Erik Edward Zwick

Boenning and Scattergood, Inc., Research Division - Director and Analyst of Northeast Banks

* Mark Thomas Fitzgibbon

Piper Sandler & Co., Research Division - MD & Head of FSG Research

* Russell Elliott Teasdale Gunther

D.A. Davidson & Co., Research Division - VP & Senior Research Analyst

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Presentation

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Operator [1]

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Good day, and welcome to Provident Financial Services, Inc. fourth quarter conference call. (Operator Instructions) Please note the event is being recorded.

I'd now like to turn the conference over to Mr. Len Gleason, Investor Relations Officer. Please go ahead.

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Leonard G. Gleason, Provident Financial Services, Inc. - Senior VP & IR Officer, and General Counsel of The Provident Bank [2]

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Thank you, Nick. Good morning, ladies and gentlemen, and thank you for joining us for our fourth quarter earnings call. Today's presenters are Chris Martin, Chairman, President and CEO; and Tom Lyons, Senior Executive Vice President and Chief Financial Officer.

Before beginning their review of our financial results, we ask that you please take note of our standard caution as to any forward-looking statements that may be made during the course of today's call. Our full disclaimer is contained in this morning's earnings release, which has been posted to the Investor Relations page on our website, provident.bank.

Now I'm pleased to introduce Chris Martin, who will offer his perspective on the fourth quarter. Chris?

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Christopher P. Martin, Provident Financial Services, Inc. - Chairman, President & CEO [3]

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Thank you, Len, and good morning, everybody. Provident's core earnings of $0.43 per share were impacted by continued margin compression, albeit slight, and increased expenses primarily from consulting fees related to CECL modeling and implementation. Our core return on average assets was 1.13% and core return on average tangible equity was 11.36% for the quarter.

We experienced only 2 basis points of margin compression in Q4 and forecasted being relatively neutral in 2020. The repricing of deposit relationships that had discretionary rates positively impacted overall deposits for us. Competitive deposit pricing has become more rational in our markets, which is a welcome respite for our funding costs. This affords us an opportunity to reduce the rates on our CD book, although not a large portion of our overall deposits.

Key to our success will be our ability to continue to grow our noninterest-bearing and core deposits. We believe we have reached an inflection point in loan pricing and predict lower single-digit growth in the loan portfolio, which continues to be bombarded by payoffs and refinances away from us.

Our loan portfolio is skewed to variable rate products, and we continue to swap out longer-term fixed rate loans. C&I lending has become more competitive of late, but we are winning our share of quality loans and relationships. The middle market space has faced headwinds relating to the origination of loans at levels that meet our ROE hurdles. We've taken all commercial lending expectations to the level of GDP growth, so low single-digit growth is what we expect to see in 2020.

Our residential lending has picked up of late, and we continue to be selective in our credit decisioning and leave the aggressive lending to competition that need these out-sized growth targets to bolster their margins. Further, we are seeing more and more interest-only periods extended and longer fixed rate terms than we have in a long while, emanating from the agencies and life companies.

On the matter of CECL implementation, we expect incremental volatility since reserve levels will be very dependent on macroeconomic forecasting. This could affect loan pricing in the future also.

Our credit costs were elevated this quarter versus the same quarter in last year as we continue to conservatively evaluate our classified credits. We have deemphasized our exposure and concentration in certain industries, while also staying away from leveraged lending. We believe the current economic backdrop supports a relatively stable credit outlook. And our net charge-offs for the year were slightly higher, but still in line with peers.

Speculation about a potential recession has been on our and other bankers' minds over the last couple of years, but it is not evident yet and we try to spot the potholes beforehand.

Fee income continued its improving trend with wealth management leading the way along with loan level swap income and loan prepayment fees. The additional valuation adjustment to the T&L transaction is proof positive that this acquisition is exceeding our initial estimates.

Expenses were higher in the quarter, with the majority being in compensation and the noncash contingent liability for the T&L acquisition. Consultant and technology expenses continued to increase as we prepared for CECL, regulatory costs for being $10 billion and technology investments to remain relevant in the new digital banking paradigm.

We continue to balance expenses with investments in the customer platform and product set. Our tech spend is embodied in more consumer-centric, efficient and agile decisioning for our clients to enhance their relationship with us. Information compiled in our data warehouse and our use of data analytics will be key to understanding our clients' needs.

Reliance on AI will likely expand in the years ahead, especially in the payment channels. And we're also investing in the universal banker model, better recruiting processes and onboarding orientation and constantly evaluating our branch network.

As for M&A, we expended a fair amount of time and energy in 2019 assessing potential acquisitions, and continue to have more than enough capital to achieve better returns for our stockholders through whole bank transactions and RIA purchases. We can fund our organic growth and support a solid and consistently above-average cash dividend with only a 54% payout ratio and supportive buybacks when they meet our total return criteria.

The consumer segment appears to be in good shape from both the credit and spending perspectives, and the labor market may be the best that we have seen in a generation. Fed interest rate policy is expected to be on hold for a while with geopolitical issues, endemic risk and the presidential election grabbing the headlines, we believe the economy will continue to grow in spite of these distractions.

With that, I'll turn it over to Tom for his comments. Tom?

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Thomas M. Lyons, Provident Financial Services, Inc. - Senior EVP & CFO [4]

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Thank you, Chris, and good morning, everyone. Our net income was $26 million or $0.40 per diluted share compared with $35.8 million or $0.55 per diluted share for the fourth quarter of 2018 and $31.4 million or $0.49 per diluted share in the trailing quarter. Current quarter earnings were adversely impacted by a $2 million or $0.03 per basic and diluted share net of tax expense increase in the estimated fair value of the contingent consideration liability related to the April 1, 2019, acquisition of New York City-based RIA Tirschwell & Loewy. As previously disclosed, the earn-out of the contingent consideration is based upon T&L achieving certain revenue growth and retention targets over a 3-year period from the date of acquisition.

Based upon T&L's recent positive operating performance and improved projections for the remaining measurement period, an increase to the estimated fair value of contingent consideration was warranted. At December 31, 2019, the contingent liability was $9.4 million, with maximum potential future payments totaling $11 million. Excluding this charge, the company would have reported net income of $27.9 million or $0.43 per basic and diluted share and net income of $114.6 million or $1.77 per basic and diluted share for the quarter and year ended December 31, 2019, respectively.

Our net interest margin contracted 2 basis points versus the trailing quarter and 23 basis points versus the same period last year. To combat margin compression, we continue to price downward deposit accounts with negotiated exception rates. This deposit rate management, coupled with an $80 million or 21% annualized increase in average noninterest-bearing deposits, resulted in a 3 basis point decrease in the total cost of deposits this quarter to 65 basis points.

Noninterest-bearing deposits averaged $1.6 billion or 23% of average total deposits for the quarter. We will continue to thoughtfully manage liability costs as the rate environment evolves.

Quarter end loan totals increased $66 million or 3.6% annualized from September 30, as growth in CRE, construction and residential mortgage loans was partially offset by net reductions in C&I, multifamily and consumer loans. Loan originations, excluding line of credit advances reached their best levels of the year, up $106 million or 30% versus the trailing quarter to $461 million, but payoffs remained elevated, up $46 million or 18% versus the trailing quarter to $298 million.

The pipeline at December 31 decreased to $905 million from $1.1 billion at the trailing quarter end, reflecting strong year-end closing activity. The pipeline rate has decreased 14 basis points since last quarter to 3.97% at December 31. The lower pipeline rate reflects current market conditions and a decline in interest rates.

Our provision for loan losses was $2.9 million for the current quarter compared with $0.5 million in the trailing quarter. Our annualized net charge-offs as a percentage of average loans were 26 basis points for the quarter and 18 basis points for the full year.

Overall, credit metrics remained stable this quarter with nonperforming assets totaling 55 basis points of total assets at quarter end. The allowance for loan losses to total loans decreased to 76 basis points from 79 basis points in the trailing quarter, largely as a result of improvements in qualitative allowance factors.

Noninterest income decreased slightly versus the trailing quarter to $17.7 million as lower swap fee income offset increased bank loan life insurance benefits and loan prepayment fees. Excluding the increase in the fair value of the contingent consideration liability related to the T&L acquisition, noninterest expenses were an annualized 2.05% of average assets for the quarter.

Core expenses increased $1.2 million versus the trialing quarter with consultancy and audit costs related to CECL implementation, additional examination and consulting fees that totaled $1.4 million driving the increase.

We did once again benefit this quarter from an FDIC insurance small bank assessment credit of $758,000, and our total remaining FDIC credit potentially realizable in future quarters is $1 million.

Our effective tax rate decreased to 23.6% from 24% for the trailing quarter, and we are currently projecting an effective tax rate of approximately 24% for 2020.

That concludes our prepared remarks. We'd be happy to respond to questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) First question comes from Mark Fitzgibbon, Piper Sandler.

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Mark Thomas Fitzgibbon, Piper Sandler & Co., Research Division - MD & Head of FSG Research [2]

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Just curious: you guys have been holding the balance sheet under $10 billion for a while here. Should we assume that absent any acquisitions, you'll grow through that $10 billion organically sometime with the next couple of quarters?

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Christopher P. Martin, Provident Financial Services, Inc. - Chairman, President & CEO [3]

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Yes, this is Chris. Absolutely, Mark. It was just the last quarter, there was no real reason an initiative for us to go through absent an acquisition. So we anticipate probably, again, subject to payoffs and other things that may happen, that it would be happening in the middle of the year.

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Mark Thomas Fitzgibbon, Piper Sandler & Co., Research Division - MD & Head of FSG Research [4]

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Okay. And then I wondered if you could share with us what total assets under management are today and specifically, at Tirschwell & Loewy.

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Thomas M. Lyons, Provident Financial Services, Inc. - Senior EVP & CFO [5]

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Total assets under management are $3.4 billion, T&L is about $922 million.

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Mark Thomas Fitzgibbon, Piper Sandler & Co., Research Division - MD & Head of FSG Research [6]

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Okay. And then I'm curious: of the $4.7 million in net charge-offs that you had this quarter. Where did those come from? What was kind of the breakdown?

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Thomas M. Lyons, Provident Financial Services, Inc. - Senior EVP & CFO [7]

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Primarily in the C&I category, it's about 4 borrowers that make up the bulk of that. Diverse industries, no pattern to it, really nothing notable in terms of an indicator or any future deterioration.

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Mark Thomas Fitzgibbon, Piper Sandler & Co., Research Division - MD & Head of FSG Research [8]

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Okay. And then Tom, I wondered if you could just share with us any guidance on the margin and expenses for 2020.

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Thomas M. Lyons, Provident Financial Services, Inc. - Senior EVP & CFO [9]

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Sure. The margin looks pretty stable for us, give us a plus or minus 2 basis points, let's say, but we expect to hold around these levels. We continue to see downward pressure on the asset yield side of things, but we think we're able to manage the liability costs effectively (inaudible).

In terms of expense, probably in the $51.5 million kind of range a quarter. We had about $207 million roughly for the full year, expected noninterest expenses.

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Mark Thomas Fitzgibbon, Piper Sandler & Co., Research Division - MD & Head of FSG Research [10]

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Okay. And then lastly, CECL implications, any updates there?

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Thomas M. Lyons, Provident Financial Services, Inc. - Senior EVP & CFO [11]

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No, we're not really providing guidance on the impact of CECL yet. We're on target with our planning, cross-functional planning, the governance control frameworks in place. We're fine-tuning completing validation of the model. So we expect we'll be in a position to disclose those results in the 10-K filing. Difficult to predict future provisioning though given that the volatility associated with the economic forecast and other model variables. We'll have more to come.

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Mark Thomas Fitzgibbon, Piper Sandler & Co., Research Division - MD & Head of FSG Research [12]

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And just one final question for you, Chris. I'm curious as to your thoughts on the M&A environment, and if there's a -- if bank deals are a higher priority or asset manager deals are a higher priority for you all?

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Christopher P. Martin, Provident Financial Services, Inc. - Chairman, President & CEO [13]

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Well, with our capital levels we consider those opportunities for us to grow. There are obviously less and less available as the market's been pretty hot in the New Jersey and in Pennsylvania. So we continue to see that as an opportunity for us to grow and leverage. So we'll continue to do that. And we will do it in the same disciplined manner that we do with every investment and utilizing our capital. So I would think, yes, it's always been on the forefront. I think it's just even more so now as we go through $10 billion.

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Mark Thomas Fitzgibbon, Piper Sandler & Co., Research Division - MD & Head of FSG Research [14]

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And which is the priority would you say, bank or asset manager deals?

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Christopher P. Martin, Provident Financial Services, Inc. - Chairman, President & CEO [15]

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The answer would be yes, the most accretive, definitely. If we can expand our deposit base, an opportunity in lowering cost, I think, a whole bank acquisition would be preferable. But in the interim, we think that the wealth management space probably is going to have a lot more opportunities being it's just the numbers game.

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Operator [16]

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(technical difficulty)

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Christopher P. Martin, Provident Financial Services, Inc. - Chairman, President & CEO [17]

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Hello?

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Operator [18]

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Mr. Zwick, are you there?

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Erik Edward Zwick, Boenning and Scattergood, Inc., Research Division - Director and Analyst of Northeast Banks [19]

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Yes. Can you guys hear me?

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Christopher P. Martin, Provident Financial Services, Inc. - Chairman, President & CEO [20]

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Yes, we can hear.

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Thomas M. Lyons, Provident Financial Services, Inc. - Senior EVP & CFO [21]

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Yes.

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Erik Edward Zwick, Boenning and Scattergood, Inc., Research Division - Director and Analyst of Northeast Banks [22]

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Okay. Great. I guess first starting with the loans. You noted the pipeline is down. Looks like it's down year-over-year and quarter-over-quarter. I'm curious what's driving that and whether it's a function of market demand or your appetite for loans given the interest rate environment or potentially some other factor.

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Thomas M. Lyons, Provident Financial Services, Inc. - Senior EVP & CFO [23]

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I think the seasonality in terms of the quarter over trailing quarter, a lot of strong closing activity period-end, still pretty stable levels close to $1 billion, $906 million -- $905 million, $906 million at the end of the period. I think demand remains pretty consistent. We're not really seeing a big trail off here.

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Christopher P. Martin, Provident Financial Services, Inc. - Chairman, President & CEO [24]

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Yes. I think -- this is Chris. In the first quarter, we're seeing definitely some C&I coming in at a decent level of product we like. I think the pull-through is only about 55% of deal sheets versus getting to finalized. Certainly, the commercial real estate also has been pretty healthy. So we're looking forward to the first quarter being a little bit better than last year.

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Erik Edward Zwick, Boenning and Scattergood, Inc., Research Division - Director and Analyst of Northeast Banks [25]

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Got it. And then just looking at the balances in multifamily loans, they declined throughout the year, about $200 million year-over-year. Was that decline conscious on your part? I'm wondering if it's related to pricing or structure you're seeing in the market, concentration perhaps or maybe some other -- something else.

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Christopher P. Martin, Provident Financial Services, Inc. - Chairman, President & CEO [26]

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Well, it certainly has been a lot of people again taking permanent loans out. The agencies are offering a lot of interest-only periods longer than we would ever anticipate for very stabilized properties. So that has definitely hurt the multifamily space, and there's some aggressive lending at some high leverage levels that we just would not do. And so when people want to take out proceeds and take it back up to 80%, we don't think that's a prudent process for us. So they do move on.

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Erik Edward Zwick, Boenning and Scattergood, Inc., Research Division - Director and Analyst of Northeast Banks [27]

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Appreciate the color there. And one last one for me. You bought that stock, I think, in the first 3 quarters of the year. It doesn't look like you bought any in the fourth quarter. Curious kind of what drove that decision to step back. And how are you thinking about the opportunity to repurchase in 2020 versus the other uses of capital? And I know you kind of talked about M&A already a little bit.

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Thomas M. Lyons, Provident Financial Services, Inc. - Senior EVP & CFO [28]

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Yes. Well, again, as always, profitable growth would be #1 for us and that includes M&A as well as organic growth. We would like to relever the balance sheet. And Mark asked earlier about the drop. We're trying to ensure we stay below $10 billion and how quickly we think we can get up ahead of that. We see steepness in the curve, we'll put some securities on and lever that portfolio up a little bit and hopefully, then remix it to more profitable loans over time. But after growth and certainly buybacks and dividends, the regular dividend will probably remain fairly consistent given the economic outlook, but we have plenty of capital available to do buybacks [as] the pricing in the marketplace makes sense.

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Operator [29]

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Next question comes from Russell Gunther with D.A. Davidson.

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Russell Elliott Teasdale Gunther, D.A. Davidson & Co., Research Division - VP & Senior Research Analyst [30]

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I wanted to follow up on your comments about the loan growth outlook, appreciate the low single-digit guide. I'm curious for your thoughts on kind of what the loan mix drivers of that would be. And then Chris, just any further color you could provide on what you think is driving the increased competition in C&I, in particular.

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Christopher P. Martin, Provident Financial Services, Inc. - Chairman, President & CEO [31]

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Taking the first one, we see, again, the commercial real estate having a lot of opportunities. Obviously, you get size and scale in our market and contiguous. We're definitely -- we're still involved in some of the construction with very well-known principles that we've been dealing with for a lot of years, so there's opportunities in that space.

In the C&I side, I think a lot of people are trying to diversify their balance sheet. So the competition is definitely there. And it's across the industry sectors, we do like to do owner-occupied properties for the most part. Obviously, we like a little bit of collateral that goes along with the C&I credit and the relationships that come with that. So there's no real industry code, right, that we look at. I know that we've, in the past, deemphasized a couple of industry sectors. And we just -- you've just to be cognizant of what's going on in the business market, to say, what do you think is going to be the area that will continue to have a positive growth and the good financial results.

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Russell Elliott Teasdale Gunther, D.A. Davidson & Co., Research Division - VP & Senior Research Analyst [32]

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Okay. Very good. And then last question would be on the expense side of things, understand the guide of around $51.5 million a quarter and what the franchise investment is and pressures there. Just curious if you think there's an opportunity, whether it's branch rationalization or some other levers to pull to kind of help mitigate that? And maybe that's not a full year '20 impact, but just curious as to any offsets to continued franchise investment.

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Christopher P. Martin, Provident Financial Services, Inc. - Chairman, President & CEO [33]

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Well, we certainly have always been evaluating the franchise with -- we did a sale leaseback of a lot of branches a couple of years ago. We always evaluate the profitability of that network and the costs attached to it. So that's not something that's new to us. Obviously, operating costs as we've gone to over $10 billion have the regulators in here on a full-time basis. The risk characteristics of the enhanced regulation have caused us to have to invest a little bit more in that space. Obviously, CECL and all of that -- with all the consultants to make sure in the documentation that, it just adds to the cost structure.

On the other hand, we're always looking at nickels and dimes add up to dollars. And so we're always looking around at the edges of how can we be more efficient use technology. And at the end of the day, we should be able to achieve our operating efficiencies through some people counts. So we're really always trying to do that. I think just in this interim period, with all the things going on between regulatory and CECL, that just added to the consultants expense that hopefully will go down a little bit over time.

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Operator [34]

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Our next question comes from Steve

(technical difficulty)

(Operator Instructions) Our next question is from Collyn Gilbert, KBW.

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Collyn Bement Gilbert, Keefe, Bruyette, & Woods, Inc., Research Division - MD and Analyst [35]

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So let me start -- let me -- I think -- I don't remember. I guess the last question was on expenses. But I just wanted -- I'm just curious to dig into that a little bit more. So with the increased costs that you guys have had to carry with CECL and crossing $10 billion, is the expectation then that those costs will not be able to reverse going forward, that some of these new investments are just going to hold? Or is the thought that those -- you will reverse some of those, but they'll be offset by other areas within the business?

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Christopher P. Martin, Provident Financial Services, Inc. - Chairman, President & CEO [36]

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It's more part 2, I think. Certain things are changing, but then other things are growing as we continue to expand and build infrastructure. So the numbers I kind of threw out of about $51.5 million a quarter, about $207 million for the year is what we're expecting for noninterest expense.

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Collyn Bement Gilbert, Keefe, Bruyette, & Woods, Inc., Research Division - MD and Analyst [37]

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Okay. And have you quantified -- I know going into crossing $10 billion, I think if I recall that your expense outlay seems fairly minimal. I don't remember the exact number, but have you quantified all-in now what the cost has been for you guys to cross $10 billion, putting Durbin aside, just on the expense side?

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Thomas M. Lyons, Provident Financial Services, Inc. - Senior EVP & CFO [38]

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We got away from trying to even measure it because there was less specific to stress testing around Dodd-Frank Act Stress Testing and rather just increases. So we kind of viewed it as more as growing capabilities and commensurate with the sophistication and size of the organization. So we don't really isolate it so much anymore.

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Collyn Bement Gilbert, Keefe, Bruyette, & Woods, Inc., Research Division - MD and Analyst [39]

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Okay. Okay. And then Tom, I just wanted to make sure, did I hear you correctly that the pipeline yield, did you say 3.70%?

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Thomas M. Lyons, Provident Financial Services, Inc. - Senior EVP & CFO [40]

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3.97%.

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Collyn Bement Gilbert, Keefe, Bruyette, & Woods, Inc., Research Division - MD and Analyst [41]

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3.97%. Okay. Okay. I mean that's still quite a bit lower I guess than your portfolio yield. But given the NIM guide, do you still feel comfortable that even with the downward pressure there, you can offset it on the funding side despite the fact that I feel like your funding costs are just so low already?

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Thomas M. Lyons, Provident Financial Services, Inc. - Senior EVP & CFO [42]

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Yes, we think there's still some room. Certainly, when we look at what's coming off in terms of maturities, both on borrowings and some of the time deposits, there's opportunity there, and we still have some exceptional pricing deposits that we can move down further. So we think we can match it.

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Christopher P. Martin, Provident Financial Services, Inc. - Chairman, President & CEO [43]

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Collyn, this is Chris. And obviously, we're seeing a bit of fixed rate, longer-term lending in the C&I space with competition, and we tend to not win that business. So we don't think that that's the right place to be. So -- and we have obviously focused on variable rate, just sometimes taking our expense, but certainly always being prepared and trying to match on an asset-liability basis to be pretty much match funded, not being one way or the other, whether it'd be liability or asset sensitive.

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Collyn Bement Gilbert, Keefe, Bruyette, & Woods, Inc., Research Division - MD and Analyst [44]

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Okay, that's helpful. And then just on the fee side just, Tom, can you kind of give your outlook there for fees, obviously, elevated this quarter for prepaid swaps? Maybe if you could break out what those specific numbers were in the quarter and then just -- yes, your outlook overall for fees?

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Thomas M. Lyons, Provident Financial Services, Inc. - Senior EVP & CFO [45]

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Sure. Prepayment income was $1.7 million, that was up from $1.5 million last quarter. With the other large-vol item of swaps, that was $1.5 million versus $2.7 million last quarter. So we did have a reduction here. So it kind of gives me a range of like 16%, I know it's pretty wide, but 16% to 18%, given the volatility in those 2 categories, sort of where we land in most quarters.

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Collyn Bement Gilbert, Keefe, Bruyette, & Woods, Inc., Research Division - MD and Analyst [46]

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Okay. And then can you remind us that there's seasonality, right, in the first quarter on service charges? It's jumped around a bit, but I just want to make sure that we're modeling that correctly.

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Christopher P. Martin, Provident Financial Services, Inc. - Chairman, President & CEO [47]

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Gee, I don't recall seasonality in service charges. On the expense side of things, we always have a little bit of seasonality around payroll taxes and typically utilities and snow removals, that kind of stuff, although it's been a pretty mild year so far.

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Collyn Bement Gilbert, Keefe, Bruyette, & Woods, Inc., Research Division - MD and Analyst [48]

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Okay. But nothing on the service charge. Okay. So maybe there's just been some other items. Okay, that was all I had.

No, I actually did have one more, sorry. Dividend. I know you had indicated kind of you prioritized capital and how you want to spend, which is very clear. Just curious about a special dividend.

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Thomas M. Lyons, Provident Financial Services, Inc. - Senior EVP & CFO [49]

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Yes, we've done, I think, 3 or 4 specials in history. I think maybe 3, certainly something that would remain under consideration given the high levels of capital that we hold. And again, as to whether we prefer special dividend versus buyback really depends on the pricing that the buybacks are available at.

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Collyn Bement Gilbert, Keefe, Bruyette, & Woods, Inc., Research Division - MD and Analyst [50]

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Okay.

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Christopher P. Martin, Provident Financial Services, Inc. - Chairman, President & CEO [51]

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Collyn, this is Chris. Obviously, the term special is what has to be considered at the same time. If it was routine then that would be part of our business model. That's not necessarily the case.

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Operator [52]

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The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.