Provident Financial Services, Inc. Announces Increased Fourth Quarter and Full Year Earnings for 2012 and Declares Quarterly Cash Dividend

Fri Feb 1, 2013 8:00am EST

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JERSEY CITY, N.J.,  Feb. 1, 2013  /PRNewswire/ -- Provident Financial Services,
Inc. (NYSE:PFS) (the "Company") reported net income of  $16.7 million, or  $0.29
 per basic and diluted share for the quarter ended  December 31, 2012, compared
to net income of  $14.9 million, or  $0.26  per basic and diluted share for the
quarter ended  December 31, 2011.   

For the year ended  December 31, 2012, the Company reported net income of  $67.3
million, or  $1.18  per basic and diluted share, compared to net income of 
$57.3 million, or  $1.01  per basic and diluted share for the same period last
year.   

The increase in earnings for the fourth quarter and year ended  December 31,
2012, was largely attributable to continued improvements in asset quality and
related reductions in the provision for loan losses, inclusive of consideration
for possible loan losses related to Superstorm Sandy, while growth in both
average loans outstanding and average lower-costing core deposits more than
offset the impact of compression in asset yields.   

Christopher Martin, Chairman, President and Chief Executive Officer, commented,
"Our quarterly results were strong as loan growth eclipsed 7% annualized, while
earnings per share of  29 cents  continued our consistent trend of producing
solid results.  We achieved record earnings in 2012, despite the challenging
rate environment and a struggling, but improving regional economy.  The growth
in our commercial lending and wealth management divisions produced excellent
results, augmented by quality client relationships."  Martin continued: "We
conservatively provided for the potential financial impact of Superstorm Sandy
on customers with businesses and residences in parts of our market.  To help
those communities that were the hardest hit, The Provident Bank Foundation has
earmarked  $250,000  to assist in their rebuilding efforts."

Declaration of Quarterly Dividend

The Company's Board of Directors declared a quarterly cash dividend of  $0.13 
per common share payable on  February 28, 2013, to stockholders of record as of
the close of business on  February 15, 2013.

Balance Sheet Summary

Total assets increased  $186.3 million  to  $7.28 billion  at  December 31,
2012, from  $7.10 billion  at  December 31, 2011.  The increase was primarily
due to increases in net loans and cash and cash equivalents, partially offset by
a decline in total securities.   

Cash and cash equivalents increased  $34.2 million  to  $103.8 million  at 
December 31, 2012, from  $69.6 million  at  December 31, 2011.  These cash
balances are expected to be deployed to fund loan originations, the repayment of
borrowings and investment purchases.

The Company's loans increased  $251.2 million, or 5.4%, at  December 31, 2012 
to  $4.90 billion  from  $4.65 billion  at  December 31, 2011.  Loan
originations totaled  $1.7 billion  and loan purchases totaled  $73.7 million 
for the year ended  December 31, 2012.  The loan portfolio had net increases of 
$256.2 million  in commercial and multi-family mortgage loans,  $18.2 million 
in consumer loans,  $17.4 million  in commercial loans and  $5.3 million  in
construction loans, which were partially offset by a decrease in residential
mortgage loans of  $43.6 million.  Commercial real estate, commercial and
construction loans represented 62.4% of the loan portfolio at  December 31,
2012, compared to 59.8% at  December 31, 2011.

At  December 31, 2012, the Company's unfunded loan commitments totaled  $869.0
million, including  $334.9 million  in commercial loan commitments,  $149.8
million  in construction loan commitments and  $97.2 million  in commercial
mortgage commitments.  Unfunded loan commitments at  December 31, 2011  were 
$770.4 million.

Total investments decreased  $102.4 million, or 5.8%, to  $1.66 billion  at 
December 31, 2012, from  $1.76 billion  at  December 31, 2011.  The decrease was
primarily due to principal repayments on mortgage-backed securities, maturities
of municipal and agency bonds, and the sale of certain mortgage-backed
securities which had a high risk of prepayment, partially offset by purchases of
mortgage-backed and municipal securities.

Total deposits increased  $271.7 million, or 5.3%, during the year ended 
December 31, 2012  to  $5.43 billion  from  $5.16 billion  at  December 31,
2011.  Core deposits, consisting of savings and demand deposit accounts,
increased  $442.9 million, or 11.0%, to  $4.47 billion  at  December 31, 2012. 
Partially offsetting this increase, time deposits decreased  $171.3 million, or
15.2%, to  $957.5 million  at  December 31, 2012, with the majority of the
decrease occurring in the 24-month and shorter maturity categories.  The Company
continued to develop core deposit relationships, while strategically permitting
the run-off of higher-costing time deposits.  Core deposits represented 82.4% of
total deposits at  December 31, 2012, compared to 78.1% at  December 31, 2011.  

Borrowed funds were reduced  $116.9 million, or 12.7% during the year ended 
December 31, 2012, to  $803.3 million, as core deposit growth continued to
replace wholesale funding.  Borrowed funds represented 11.0% of total assets at 
December 31, 2012, a reduction from 13.0% at  December 31, 2011.

Stockholders' equity increased  $28.8 million, or 3.0% during the year ended 
December 31, 2012, to  $981.2 million, primarily due to net income earned for
the period, partially offset by dividends paid to stockholders and common stock
repurchases.  Common stock repurchases for the three months and year ended 
December 31, 2012, totaled 271,045 shares at an average cost of  $14.00  per
share and 678,750 shares at an average cost of  $13.89  per share, respectively.
 As of  December 31, 2012, 4.1 million shares remained eligible for repurchase. 
At  December 31, 2012, book value per share and tangible book value per share
were  $16.37  and  $10.40, respectively, compared with  $15.88  and  $9.87,
respectively, at  December 31, 2011.   

Results of Operations

Net Interest Income and Net Interest Margin

For the three months ended  December 31, 2012, net interest income increased 
$296,000  from the same period in 2011, to  $54.2 million.  Net interest income
for the year ended  December 31, 2012, increased  $1.3 million  compared to
2011, to  $217.3 million.  The improvements in net interest income for the three
months and year ended  December 31, 2012, resulted from an increase in average
interest-earning assets, primarily average loans outstanding, funded with growth
in lower-costing core deposits.  This improvement in earning asset volume and
funding mix was partially offset by compression in the net interest margin.  

The Company's net interest margin for the quarter ended  December 31, 2012  was
3.29%, a decrease of 2 basis points from 3.31% for the quarter ended  September
30, 2012, and 10 basis points from 3.39% for the quarter ended  December 31,
2011.  The decrease in the net interest margin was primarily attributable to the
decline in yields on interest-earning assets, which outpaced the downward
re-pricing of the Company's interest-bearing liabilities as longer-term market
interest rates have declined and the yield curve has flattened.  The weighted
average yield on interest-earning assets was 3.92% for the three months ended 
December 31, 2012, compared with 3.99% for the trailing quarter, and 4.24% for
the three months ended  December 31, 2011.  The weighted average cost of
interest-bearing liabilities was 0.77% for the quarter ended  December 31, 2012,
compared with 0.82% for the trailing quarter, and 0.99% for the fourth quarter
of 2011.  The average cost of interest bearing deposits for the three months
ended  December 31, 2012  was 0.50%, compared with 0.54% for the trailing
quarter, and 0.72% for the same period last year.  Partially offsetting the
effects of interest rate spread compression on the margin, average non-interest
bearing demand deposits totaled  $840.1 million  for the quarter ended  December
31, 2012, compared with  $771.4 million  for the trailing quarter, and  $680.1
million  for the quarter ended  December 31, 2011.  The average cost of
borrowings for the three months ended  December 31, 2012  was 2.29%, compared
with 2.32% for the trailing quarter, and 2.34% for the same period last year.  

For the year ended  December 31, 2012, the net interest margin decreased 11
basis points to 3.38%, compared with 3.49% for the year ended  December 31,
2011.  The weighted average yield on interest-earning assets declined 38 basis
points to 4.08% for the year ended  December 31, 2012, compared with 4.46% for
the year ended  December 31, 2011, while the weighted average cost of
interest-bearing liabilities declined 30 basis points to 0.83% for the year
ended  December 31, 2012, compared with 1.13% for the same period in 2011.  The
average cost of interest bearing deposits for the year ended  December 31, 2012 
was 0.56%, compared with 0.83% for the same period last year.  Average
non-interest bearing demand deposits totaled  $743.1 million  for the year ended
 December 31, 2012, compared with  $605.8 million  for the year ended  December
31, 2011.  The average cost of borrowings for the year ended  December 31, 2012 
was 2.26%, compared with 2.55% for the same period last year.  

Non-Interest Income

Non-interest income totaled  $11.8 million  for the quarter ended  December 31,
2012, an increase of  $3.1 million, or 35.4%, compared to the same period in
2011.  The improvement in non-interest income was largely due to increases in
both net gains from securities transactions and other income.   Net gains on
securities transactions for the quarter ended  December 31, 2012, increased 
$2.0 million.  During the period, the Company identified and sold certain
mortgage-backed securities which had a high risk of accelerated prepayment.  The
proceeds from the sales were reinvested in similar securities with more stable
projected cash flows.  Other income increased  $993,000  for the quarter 
December 31, 2012, compared to the same period in 2011, due to a  $525,000  net
gain recognized on the sale of a vacant parcel of land in the current period and
losses previously recorded in 2011 related to the sale of the Company's former
administrative facilities.  Also contributing to the improvement in other income
was an increase in net gains on the sale of foreclosed real estate and an
increase in gains related to loan sales.   

For the year ended  December 31, 2012, non-interest income totaled  $43.6
million, an increase of  $11.1 million, or 34.0%, compared to the same period in
2011.  Fee income totaled  $30.3 million  for the year ended  December 31, 2012,
an increase of  $4.9 million  compared with the same period in 2011, largely due
to an increase in wealth management fees attributable to the  August 2011 
acquisition of Beacon Trust Company ("Beacon") and increased prepayment fees on
commercial loans, which were partially offset by lower overdraft fee income. 
Net gains on securities transactions totaled  $4.5 million  for the year ended 
December 31, 2012, compared to  $708,000  for the same period in 2011.  During
the year, the Company identified and sold certain mortgage-backed securities
which had a high risk of accelerated prepayment.  The proceeds from the sales
were reinvested in similar securities with more stable projected cash flows. 
Also contributing to the increase in non-interest income, other income increased
 $2.0 million  for the year ended  December 31, 2012, compared with the same
period in 2011, primarily due to a  $525,000  net gain recognized on the sale of
a vacant parcel of land,  $568,000  in income associated with the termination of
the Company's debit card rewards program, losses previously recorded in 2011
related to the sale of the Company's former administrative facilities, and an
increase in gains resulting from a larger number of loan sales. 
Other-than-temporary impairment charges on investment securities declined 
$302,000  for the year ended  December 31, 2012, compared to last year, as the
Company did not experience any other-than-temporary impairment on its securities
portfolio in 2012.

Non-Interest Expense

For the three months ended  December 31, 2012, non-interest expense increased 
$1.2 million, or 3.2%, to  $37.4 million, compared to the three months ended 
December 31, 2011.  Compensation and benefits increased  $1.4 million  for the
quarter ended  December 31, 2012, to  $19.8 million, compared to the quarter
ended  December 31, 2011.  This increase was due to higher salary expense
associated with annual merit increases, increased severance costs and increased
employee medical and retirement benefit costs, partially offset by a reduction
in the incentive compensation accrual.  Other operating expenses increased 
$403,000, to  $6.9 million  for the quarter ended  December 31, 2012, from the
same period in 2011, mainly due to  $545,000  of net expenses related to damages
sustained at one of the Company's branches in Superstorm Sandy, partially offset
by a reduction in other operating expenses attributable to prior year costs of 
$227,000  associated with Hurricane Irene incurred in the quarter ended 
December 31, 2011.  Partially offsetting these increases, amortization of
intangibles decreased  $218,000  for the three months ended  December 31, 2012,
compared with the same period in 2011, as a result of scheduled reductions in
core deposit intangible amortization.  FDIC insurance expense decreased 
$202,000  to  $1.2 million  for the three months ended  December 31, 2012,
compared with the same period in 2011, primarily due to a lower assessment rate.
 Net occupancy expense decreased  $163,000, to  $5.2 million  for the three
months ended  December 31, 2012, compared to the same period in 2011, primarily
due to reduced property taxes and lower utilities and maintenance expense.

The Company's annualized non-interest expense as a percentage of average assets
was 2.05% for the quarter ended  December 31, 2012, compared to 2.04% for the
same period in 2011.  The efficiency ratio (non-interest expense divided by the
sum of net interest income and non-interest income) was 56.68% for the quarter
ended  December 31, 2012, compared with 57.85% for the same period in 2011.   

Non-interest expense for the year ended  December 31, 2012  was  $148.8 million,
an increase of  $6.4 million, or 4.5%, from the year ended  December 31, 2011. 
Compensation and benefits expense increased  $6.0 million, to  $80.9 million 
for the year ended  December 31, 2012  compared to the year ended  December 31,
2011, due to higher salary expense associated with annual merit increases,
personnel added as a result of the Beacon acquisition, an increased incentive
compensation accrual and increased employee medical and retirement benefit
costs.  In addition, other operating expense increased  $2.2 million  for the
year ended  December 31, 2012, compared to the same period in 2011, due
primarily to increased non-performing asset related expenses, net expenses
incurred due to damages sustained in Super- storm Sandy, a  $213,000  charge
related to the termination of a software contract in connection with the Beacon
integration and  $222,000  in charges related to the consolidation of
underperforming branches.  Data processing expense increased  $818,000  for the
year ended  December 31, 2012, compared to the same period in 2011, due to an
increase in software maintenance expense, primarily associated with technology
enhancements at Beacon, and increased core processing fees.  Partially
offsetting these increases, impairment of premises and equipment declined 
$807,000  for the year ended  December 31, 2012, compared to last year, due to
an impairment charge incurred in the first quarter of 2011 related to the then
planned sale and relocation of the Company's former loan center.  FDIC insurance
expense decreased  $788,000  to  $5.1 million  for the year ended  December 31,
2012, compared with the same period in 2011.  The decrease was primarily due to
a lower assessment rate and a change in assessment methodology from a
deposit-based to an asset-based assessment, effective in the second quarter of
2011.  Net occupancy expense decreased  $644,000  to  $20.5 million, compared to
the same period last year, due to the consolidation and relocation of the
Company's administrative offices in  April 2011  and the elimination of prior
year carrying costs on previously occupied facilities owned by the Company that
were sold in November 2011. Additionally, amortization of intangibles decreased 
$564,000  for the year ended  December 31, 2012, compared with the same period
of 2011, as a result of scheduled reductions in core deposit intangible
amortization, partially offset by the amortization of the customer relationship
intangible arising from the Beacon acquisition.

Asset Quality

The Company's total non-performing loans at  December 31, 2012, improved
to$99.0million, or 2.02% of total loans, compared with  $105.7 million, or 2.19%
of total loans at  September 30, 2012, and  $122.5 million, or 2.63% of total
loans at  December 31, 2011.  The  $6.7 million  decrease in non-performing
loans at  December 31, 2012, compared with the trailing quarter, was largely due
to a  $2.4 million  decrease in non-performing residential loans, a  $1.8
million  decrease in non-performing commercial mortgage loans, a  $1.7 million 
decrease in non-performing construction loans and a  $1.2 million  decrease in
non-performing commercial loans.  At  December 31, 2012, impaired loans totaled 
$109.6 million  with related specific reserves of  $7.2 million, compared with
impaired loans totaling  $114.4 million  with related specific reserves of  $8.4
million  at  September 30, 2012.  At  December 31, 2011, impaired loans totaled 
$103.2 million  with related specific reserves of  $9.3 million.

At  December 31, 2012, the Company's allowance for loan losses was 1.43% of
total loans, compared with 1.46% of total loans at  September 30, 2012, and
1.60% of total loans at  December 31, 2011.  The Company recorded provisions for
loan losses of  $4.0 million  and  $16.0 million  for the three months and year
ended  December 31, 2012, respectively, compared with provisions of  $6.0
million  and  $28.9 million  for the three months and year ended  December 31,
2011, respectively.  The provision for loan losses for the three months and year
ended  December 31, 2012, included  $1.5 million  for possible loan losses
related to Superstorm Sandy.  The Company had net charge-offs of  $3.9 million 
and  $20.0 million  for the three months and year ended  December 31, 2012,
respectively, compared with net charge-offs of  $5.3 million  and  $23.3
million, respectively, for the same periods in 2011.  The allowance for loan
losses decreased  $4.0 million  to  $70.3 million  at  December 31, 2012, from 
$74.4 million  at  December 31, 2011, as the weighted average risk rating of the
loan portfolio improved and net non-performing asset disposition increased.   

At  December 31, 2012, the Company held  $12.5 million  of foreclosed assets,
compared with  $12.8 million  at  December 31, 2011.  Foreclosed assets at 
December 31, 2012  consisted primarily of  $6.5 million  of commercial real
estate,  $5.0 million  of residential real estate and  $583,000  of marine
vessels.  

Income Tax Expense

For the three months ended  December 31, 2012, the Company's income tax expense
was  $7.9 million, compared with  $5.5 million  for the same period in 2011. 
For the year ended  December 31, 2012, the Company's income tax expense was 
$28.9 million, compared with  $19.8 million  for the same period in 2011.  The
Company's effective tax rates were 32.1% and 30.0%, respectively, for the three
months and year ended  December 31, 2012, compared with 27.0% and 25.7% for the
three months and year ended  December 31, 2011, respectively.  The increase in
effective tax rates and income tax expense was primarily a function of growth in
pre-tax income from taxable sources.  

About the Company

Provident Financial Services, Inc. is the holding company for The Provident
Bank, a community-oriented bank offering a full range of retail and commercial
loan and deposit products.  The Bank currently operates a network of full
service branches throughout 11 counties in northern and central  New Jersey.

Post Earnings Conference Call

Representatives of the Company will hold a conference call for investors at 
10:00 a.m. Eastern Time  on  Friday, February 1, 2013  regarding highlights of
the Company's quarter and year ended  December 31, 2012  financial results.  The
call may be accessed by dialing 1-877-317-6789 (Domestic) or 1-412-317-6789
(International).  Internet access to the call is also available (listen only) at
 www.providentnj.com  by going to Investor Relations and clicking on Webcast.

Forward Looking Statements  

Certain statements contained herein are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements may be
identified by reference to a future period or periods, or by the use of
forward-looking terminology, such as "may," "will," "believe," "expect,"
"estimate," "anticipate," "continue," or similar terms or variations on those
terms, or the negative of those terms. Forward-looking statements are subject to
numerous risks and uncertainties, including, but not limited to, those related
to the economic environment, particularly in the market areas in which the
Company operates, competitive products and pricing, fiscal and monetary policies
of the U.S. Government, changes in government regulations affecting financial
institutions, including regulatory fees and capital requirements, changes in
prevailing interest rates, acquisitions and the integration of acquired
businesses, credit risk management, asset-liability management, the financial
and securities markets and the availability of and costs associated with sources
of liquidity.  

The Company cautions readers not to place undue reliance on any such
forward-looking statements which speak only as of the date made. The Company
advises readers that the factors listed above could affect the Company's
financial performance and could cause the Company's actual results for future
periods to differ materially from any opinions or statements expressed with
respect to future periods in any current statements. The Company does not
undertake and specifically declines any obligation to publicly release the
result of any revisions which may be made to any forward-looking statements to
reflect events or circumstances after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events.

 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY                                                                                                             
 Consolidated Statements of Financial Condition                                                                                                                
 December 31, 2012 (Unaudited) and December 31, 2011                                                                                                           
 (Dollars in Thousands)                                                                                                                                        
                                                                                                                                                       
 Assets                                                                                                                December 31,          December 31,  
                                                                                                                       2012                  2011          
                                                                                                                                                       
 Cash and due from banks                                                                                            $  101,850    $         68,553        
 Short-term investments                                                                                                1,973                1,079         
                                                                   Total cash and cash equivalents                  103,823              69,632        
                                                                                                                                                       
 Securities available for sale, at fair value                                                                          1,264,002            1,376,119     
 Investment securities held to maturity (fair value of $374,916 at                                                                                        
 December 31, 2012 and $366,296 at December 31, 2011)                                                                  359,464              348,318       
 Federal Home Loan Bank of New York ("FHLB-NY") stock                                                                  37,543               38,927        
                                                                                                                                                       
 Loans                                                                                                               4,904,699            4,653,509     
                       Less allowance for loan losses                                                                 70,348               74,351        
                                                                   Net loans                                        4,834,351            4,579,158     
                                                                                                                                                       
 Foreclosed assets, net                                                                                                12,473               12,802        
 Banking premises and equipment, net                                                                                   66,120               66,260        
 Accrued interest receivable                                                                                           24,002               24,653        
 Intangible assets                                                                                                    357,907              360,714       
 Bank-owned life insurance                                                                                             147,286              142,010       
 Other assets                                                                                                        76,724               78,810        
                                                                   Total assets                                  $  7,283,695  $         7,097,403     
                                                                                                                                                       
 Liabilities and Stockholders' Equity                                                                                                                     
                                                                                                                                                       
 Deposits:                                                                                                                                              
                       Demand deposits                                                                             $  3,556,011  $         3,136,129     
                       Savings deposits                                                                               914,787              891,742       
                       Certificates of deposit of $100,000 or more                                                    324,901              383,174       
                       Other time deposits                                                                            632,572              745,552       
                                                                   Total deposits                                   5,428,271            5,156,597     
                                                                                                                                                       
 Mortgage escrow deposits                                                                                              21,238               20,955        
 Borrowed funds                                                                                                        803,264              920,180       
 Other liabilities                                                                                                     49,676               47,194        
                                                                   Total liabilities                                6,302,449            6,144,926     
                                                                                                                                                       
 Stockholders' Equity:                                                                                                                                    
 Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued                                           -                    -             
 Common stock, $0.01 par value, 200,000,000 shares authorized, 83,209,293 shares                                                                          
 issued and 59,937,955 outstanding at December 31, 2012, and 59,968,195                                                                                   
 outstanding at December 31, 2011                                                                                      832                  832           
 Additional paid-in capital                                                                                            1,021,507            1,019,253     
 Retained earnings                                                                                                     389,549              363,011       
 Accumulated other comprehensive income                                                                                7,716                9,571         
 Treasury stock                                                                                                      (386,270)            (384,725)     
 Unallocated common stock held by the Employee Stock Ownership Plan ("ESOP")                                           (52,088)             (55,465)      
 Common Stock acquired by the Directors' Deferred Fee Plan ("DDFP")                                                    (7,298)              (7,390)       
 Deferred Compensation - DDFP                                                                                          7,298                7,390         
                                                                   Total stockholders' equity                       981,246              952,477       
                                                                   Total liabilities and stockholders' equity    $  7,283,695  $         7,097,403     


 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY                                                                                                                          
 Consolidated Statements of Income                                                                                                                                          
 Three Months and Year Ended December 31, 2012 (Unaudited) and 2011                                                                                                         
 (Dollars in Thousands, except per share data)                                                                                                                              
                                                                                                                                                                 
                                                                                              Three Months Ended                    Year Ended                       
                                                                                              December 31,                          December 31,                     
                                                                                              2012                 2011           2012               2011        
 Interest income:                                                                                                                                                  
            Real estate secured loans                                                        $  38,903      $        39,306      $  155,078     $      158,731     
            Commercial loans                                                                    10,125               10,892         40,942             42,759      
            Consumer loans                                                                      6,241                6,348          25,208             25,793      
            Securities available for sale and FHLB-NY stock                                     6,398                7,689          29,141             36,157      
            Investment securities                                                               2,912                2,991          11,808             12,160      
            Deposits, Federal funds sold and other short-term investments                       24                   38             82                 119         
                                   Total interest income                                       64,603               67,264         262,259            275,719     
                                                                                                                                                                 
 Interest expense:                                                                                                                                                 
            Deposits                                                                          5,688                8,113          25,348             36,552      
            Borrowed funds                                                                      4,708                5,240          19,574             23,177      
                                   Total interest expense                                      10,396               13,353         44,922             59,729      
                                   Net interest income                                         54,207               53,911         217,337            215,990     
                                                                                                                                                                 
 Provision for loan losses                                                                       4,000                6,000          16,000             28,900      
                                   Net interest income after provision for loan losses         50,207               47,911         201,337            187,090     
                                                                                                                                                                 
 Non-interest income:                                                                                                                                               
            Fees                                                                              7,318                7,366          30,336             25,418      
            Bank owned life insurance                                                           1,381                1,244          5,276              5,242       
            Other-than-temporary impairment losses on securities                                -                    -              -                  (1,661)     
            Portion of loss recognized in OCI (before taxes)                                    -                    -              -                  1,359       
            Net impairment losses recognized in earnings                                        -                    -              -                  (302)       
            Net gain on securities transactions                                                 2,015                22             4,497              708         
            Other income                                                                        1,038                45             3,504              1,476       
                                   Total non-interest income                                   11,752               8,677          43,613             32,542      
                                                                                                                                                                 
 Non-interest expense:                                                                                                                                              
            Compensation and employee benefits                                                  19,790               18,428         80,874             74,904      
            Net occupancy expense                                                               5,157                5,320          20,487             21,131      
            Data processing expense                                                             2,556                2,506          10,318             9,500       
            FDIC Insurance                                                                      1,198                1,400          5,095              5,883       
            Amortization of intangibles                                                         498                  716            2,466              3,030       
            Impairment of premises and equipment                                                -                    -              -                  807         
            Advertising and promotion expense                                                   1,290                1,346          4,139              3,951       
            Other operating expenses                                                            6,896                6,493          25,449             23,240      
                                   Total non-interest expenses                                 37,385               36,209         148,828            142,446     
                                   Income before income tax expense                            24,574               20,379         96,122             77,186      
 Income tax expense                                                                              7,892                5,509          28,855             19,842      
                                   Net income                                               $  16,682      $        14,870      $  67,267      $      57,344      
                                                                                                                                                                 
 Basic earnings per share                                                                     $  0.29        $        0.26        $  1.18        $      1.01        
 Average basic shares outstanding                                                                57,183,704           56,898,336     57,145,868         56,856,083  
                                                                                                                                                                 
 Diluted earnings per share                                                                   $  0.29        $        0.26        $  1.18        $      1.01        
 Average diluted shares outstanding                                                              57,235,473           56,910,915     57,199,804         56,868,524  


 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY                                                                                                             
 Consolidated Financial Highlights                                                                                                                             
 (Dollars in Thousands, except share data) (Unaudited)                                                                                                         
                                                                                                                                                 
                                                                    At or for the                                 At or for the                        
                                                                    Three Months Ended                            Year Ended                           
                                                                    December 31,                                  December 31,                         
                                                                    2012                   2011                2012                   2011       
 STATEMENTS OF INCOME:                                                                                                                              
 Net interest income                                               $  54,207           $     53,911           $  217,337          $     215,990    
 Provision for loan losses                                            4,000                  6,000               16,000                 28,900     
 Non-interest income                                                  11,752                 8,677               43,613                 32,542     
 Non-interest expense                                                 37,385                 36,209              148,828                142,446    
 Income before income tax expense                                      24,574                 20,379              96,122                 77,186     
 Net income                                                          16,682                 14,870              67,267                 57,344     
 Diluted earnings per share                                           $0.29                  $0.26               $1.18                  $1.01      
 Interest rate spread                                                 3.15%                  3.25%               3.25%                  3.33%      
 Net interest margin                                                  3.29%                  3.39%               3.38%                  3.49%      
                                                                                                                                                 
 PROFITABILITY:                                                                                                                                    
 Annualized return on average assets                                   0.91%                  0.84%               0.94%                  0.83%      
 Annualized return on average equity                                   6.69%                  6.18%               6.88%                  6.09%      
 Annualized non-interest expense to average assets                     2.05%                  2.04%               2.08%                  2.07%      
 Efficiency ratio (1)                                                 56.68%                 57.85%              57.03%                 57.31%     
                                                                                                                                                 
 ASSET QUALITY:                                                                                                                                    
 Non-accrual loans                                                                                            $  98,990           $     122,549    
 90+ and still accruing                                                                                          -                      -          
 Non-performing loans                                                                                            98,990                 122,549    
 Foreclosed assets                                                                                               12,473                 12,802     
 Non-performing assets                                                                                           111,463                135,351    
 Non-performing loans to total loans                                                                              2.02%                  2.63%      
 Non-performing assets to total assets                                                                            1.53%                  1.91%      
 Allowance for loan losses                                                                                    $  70,348           $     74,351     
 Allowance for loan losses to total non-performing loans                                                          71.07%                 60.67%     
 Allowance for loan losses to total loans                                                                         1.43%                  1.60%      
                                                                                                                                                 
 AVERAGE BALANCE SHEET DATA:                                                                                                                        
 Assets                                                           $  7,269,482        $     7,041,992        $  7,170,941        $     6,893,107  
 Loans, net                                                          4,772,099              4,528,380           4,658,422              4,423,125  
 Earning assets                                                        6,525,784              6,289,331           6,431,555              6,158,329  
 Core deposits                                                         4,419,871              3,992,536           4,226,283              3,777,647  
 Borrowings                                                          818,122                888,027             864,728                909,531    
 Interest-bearing liabilities                                         5,378,558              5,352,132           5,389,461              5,294,623  
 Stockholders' equity                                                 992,375                954,563             977,758                941,428    
 Average yield on interest-earning assets                              3.92%                  4.24%               4.08%                  4.46%      
 Average cost of interest-bearing liabilities                          0.77%                  0.99%               0.83%                  1.13%      
                                                                                                                                                 
 LOAN DATA:                                                                                                                                         
 Mortgage loans:                                                                                                                                   
                 Residential                                                                                  $  1,265,015        $     1,308,635  
                 Commercial                                                                                      1,349,950              1,253,542  
                 Multi-family                                                                                   723,958                564,147    
                 Construction                                                                                   120,133                114,817    
 Total mortgage loans                                                                                            3,459,056              3,241,141  
                 Commercial loans                                                                               866,395                849,009    
                 Consumer loans                                                                                 579,166                560,970    
 Total gross loans                                                                                               4,904,617              4,651,120  
                 Premium on purchased loans                                                                      4,964                  5,823      
                 Unearned discounts                                                                             (78)                   (100)      
                 Net deferred                                                                                   (4,804)                (3,334)    
 Total loans                                                                                                 $  4,904,699        $     4,653,509  
                                                                                                                                                


 Notes                                                                                                                
                                                                                                                     
 (1)  Efficiency Ratio Calculation                                                                                      
                                                    Three Months Ended                    Year Ended                       
                                                    December 31,                          December 31,                     
                                                    2012                  2011         2012                 2011     
            Net interest income                   $  54,207         $      53,911    $  217,337        $     215,990  
            Non-interest income                      11,752                8,677        43,613               32,542   
            Total income:                         $  65,959         $      62,588    $  260,950        $     248,532  
                                                                                                                     
            Non-interest expense:                 $  37,385         $      36,209    $  148,828        $     142,446  
                                                                                                                     
            Expense/income:                          56.68%                57.85%       57.03%               57.31%   


 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY                                                                                                                                                                                                             
 Net Interest Margin Analysis                                                                                                                                                                                                                                  
 Quarterly Average Balances                                                                                                                                                                                                                                    
 (Unaudited) (Dollars in Thousands)                                                                                                                                                                                                                            
                                                                                                                                                                                                                              
                                                                                                                                                                                                                              
                                                                                         December 31, 2012                                                       September 30, 2012                                                   
                                                                                         Average                                 Average                     Average                                         Average          
                                                                                         Balance            Interest             Yield                       Balance                 Interest                Yield            
   Interest-Earning Assets:                                                                                                                                                                                                     
           Deposits                                            $                         37,442         $   24                   0.25%            $          66,040              $   42                      0.25%            
           Federal funds sold and                                                                                                                                                                                              
           other short-term investments                                          1,738                       -                    0.14%                       1,461                   -                       0.02%            
           Investment securities  (1)                                                     350,890            2,912                3.32%                       356,052                 2,987                   3.36%            
           Securities available for sale                                                  1,325,804          5,963                1.80%                       1,315,366               6,138                   1.87%            
           Federal Home Loan Bank stock                                                   37,811             435                  4.58%                       38,489                  461                     4.77%            
           Net loans:   (2)                                                                                                                                                                                                    
           Total mortgage loans                                                           3,380,309          38,903               4.55%                       3,260,435               38,544                  4.68%            
           Total commercial loans                                                         812,727            10,125               4.91%                       822,093                 10,242                  4.94%            
           Total consumer loans                                                           579,063            6,241                4.29%                       575,680                 6,343                   4.38%            
           Total net loans                                                                4,772,099          55,269               4.58%                       4,658,208               55,129                  4.68%            
           Total Interest-Earning Assets                        $                         6,525,784      $   64,603               3.92%            $          6,435,616           $   64,757                  3.99%            
                                                                                                                                                                                                                              
   Non-Interest Earning Assets:                                                                                                                                                                                                 
           Cash and due from banks                                                        80,974                                                              82,849                                                           
           Other assets                                                                   662,724                                                             660,647                                                          
           Total Assets                                         $                         7,269,482                                                $          7,179,112                                                        
                                                                                                                                                                                                                              
   Interest-Bearing Liabilities:                                                                                                                                                                                                
           Demand deposits                                      $                         2,675,980      $   2,293                0.34%            $          2,601,626           $   2,543                   0.39%            
           Savings deposits                                                               903,774            339                  0.15%                       902,458                 365                     0.16%            
           Time deposits                                                                  980,682            3,056                1.24%                       1,018,517               3,247                   1.27%            
           Total Deposits                                                                 4,560,436          5,688                0.50%                       4,522,601               6,155                   0.54%            
           Borrowed funds                                                                 818,122            4,708                2.29%                       837,728                 4,887                   2.32%            
           Total Interest-Bearing Liabilities                                             5,378,558          10,396               0.77%                       5,360,329               11,042                  0.82%            
                                                                                                                                                                                                                              
   Non-Interest Bearing Liabilities                                                        898,549                                                             835,051                                                          
           Total Liabilities                                                              6,277,107                                                           6,195,380                                                        
           Stockholders' equity                                                           992,375                                                             983,732                                                          
           Total Liabilities and Stockholders' Equity                                      7,269,482                                                $          7,179,112                                                        
                                                                                                                                                                                                                              
   Net interest income                                                                                    $   54,207                                                               $   53,715                                   
                                                                                                                                                                                                             3.17%            
   Net interest rate spread                                                                                                        3.15%                                                                                        
   Net interest-earning assets                                   $                         1,147,226                                                $          1,075,287                                                        
                                                                                                                                                                                                                              
   Net interest margin (3)                                                                                                         3.29%                                                                       3.31%            
   Ratio of interest-earning assets to                                                                                                                                                                                          
   total interest-bearing liabilities                                                      1.21           x                                                    1.20                x                                            
                                                                                                                                                                                                                                


                                                                                                         
 (1)     Average outstanding balance amounts shown are amortized cost.                                   
 (2)     Average outstanding balances are net of the allowance for loan losses, deferred loan fees and   
                  expenses, loan premiums and discounts and include non-accrual loans.                   
 (3)     Annualized net interest income divided by average interest-earning assets.                      


 The following table summarizes the quarterly net interest margin for the previous five quarters.                                               
                                                                                                                                     
                                                                       12/31/12     9/30/12      6/30/12      3/31/12      12/31/11  
                                                                       4th  Qtr.    3rd  Qtr.    2nd  Qtr.    1st  Qtr.    4th Qtr.  
 Interest-Earning Assets:                                                                                                            
 Securities                                                            2.13%        2.17%        2.42%        2.54%        2.44%     
 Net loans                                                             4.58%        4.68%        4.76%        4.83%        4.94%     
 Total interest-earning assets                                         3.92%        3.99%        4.11%        4.19%        4.24%     
                                                                                                                                     
 Interest-Bearing Liabilities:                                                                                                       
 Total deposits                                                        0.50%        0.54%        0.58%        0.62%        0.72%     
 Total borrowings                                                      2.29%        2.32%        2.20%        2.25%        2.34%     
 Total interest-bearing liabilities                                    0.77%        0.82%        0.85%        0.90%        0.99%     
                                                                                                                                     
 Interest rate spread                                                  3.15%        3.17%        3.26%        3.29%        3.25%     
 Net interest margin                                                   3.29%        3.31%        3.39%        3.42%        3.39%     
                                                                                                                                     
 Ratio of interest-earning assets to interest-bearing liabilities      1.21x        1.20x        1.18x        1.18x        1.18x     


 PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY                                                                                                                     
 Net Interest Margin Analysis                                                                                                                                          
 Average Year to Date Balances                                                                                                                                         
 (Unaudited) (Dollars in Thousands)                                                                                                                                    
                                                                                                                                                         
                                                                                                                                                         
                                                                        December 31, 2012                              December 31, 2011                       
                                                                        Average                     Average         Average                     Average  
                                                                        Balance           Interest  Yield           Balance           Interest  Yield    
 Interest-Earning Assets:                                                                                                                                  
               Deposits                                 $                32,200     $      81        0.25%        $  47,727     $      119       0.25%    
               Federal funds sold and                                                                                                                     
               other short-term investments                              1,439             1         0.09%           1,457             -         0.01%    
               Investment securities  (1)                                351,981           11,808    3.35%           345,528           12,160    3.52%    
               Securities available for sale                             1,348,376         27,327    2.03%           1,302,233         34,393    2.64%    
               Federal Home Loan Bank stock                              39,137            1,814     4.63%           38,259            1,764     4.61%    
               Net loans:  (2)                                                                                       .                                    
               Total mortgage loans                                      3,273,458         155,078   4.74%           3,102,662         158,731   5.08%    
               Total commercial loans                                    812,575           40,942    5.04%           765,228           42,759    5.56%    
               Total consumer loans                                      572,389           25,208    4.40%           555,235           25,793    4.64%    
               Total net loans                                           4,658,422         221,228   4.75%           4,423,125         227,283   5.11%    
               Total Interest-Earning Assets            $                6,431,555  $      262,259   4.08%        $  6,158,329  $      275,719   4.46%    
                                                                                                                                                         
 Non-Interest Earning Assets:                                                                                                                              
               Cash and due from banks                                   77,489                                      77,823                               
               Other assets                                              661,897                                     656,955                              
               Total Assets                             $                7,170,941                                $  6,893,107                            
                                                                                                                                                         
 Interest-Bearing Liabilities:                                                                                                                             
               Demand deposits                          $                2,581,802  $      10,292    0.40%        $  2,272,780  $      15,168    0.67%    
               Savings deposits                                          901,398           1,449     0.16%           899,020           2,971     0.33%    
               Time deposits                                             1,041,533         13,607    1.31%           1,213,292         18,413    1.52%    
               Total Deposits                                            4,524,733         25,348    0.56%           4,385,092         36,552    0.83%    
                                                                                                                                                         
               Borrowed funds                                            864,728           19,574    2.26%           909,531           23,177    2.55%    
               Total Interest-Bearing Liabilities                        5,389,461         44,922    0.83%           5,294,623         59,729    1.13%    
                                                                                                                                                         
 Non-Interest Bearing Liabilities                                         803,722                                     657,056                              
               Total Liabilities                                         6,193,183                                   5,951,679                            
               Stockholders' equity                                      977,758                                     941,428                              
               Total Liabilities and Stockholders' Equity                 7,170,941                                $  6,893,107                            
                                                                                                                                                         
 Net interest income                                                                 $      217,337                              $      215,990            
                                                                                                                                                         
 Net interest rate spread                                                                             3.25%                                       3.33%    
 Net interest-earning assets                             $                1,042,094                                $  863,706                              
                                                                                                                                                         
 Net interest margin    (3)                                                                           3.38%                                       3.49%    
 Ratio of interest-earning assets to                                                                                                                       
 total interest-bearing liabilities                                       1.19       x                                1.16       x                         


                                                                                                          
 (1)     Average outstanding balance amounts shown are amortized cost.                                    
 (2)     Average outstanding balances are net of the allowance for loan losses, deferred loan fees and    
                  expenses, loan premiums and discounts and include non-accrual loans.                    
 (3)     Annualized net interest income divided by average interest-earning assets.                       


   The following table summarizes the year-to-date net interest margin for the previous three years.                                                                                       
                                                                                                                                                                                 
                                                                                       Year Ended                                                                                    
                                                                                       12/31/12              12/31/11              12/31/10                                      
   Interest-Earning Assets:                                                                                                                                                      
   Securities                                                                          2.32%                 2.79%                 3.15%                                         
   Net loans                                                                           4.75%                 5.11%                 5.39%                                         
   Total interest-earning assets                                                       4.08%                 4.46%                 4.73%                                         
                                                                                                                                                                                 
   Interest-Bearing Liabilities:                                                                                                                                                 
   Total deposits                                                                      0.56%                 0.83%                 1.09%                                         
   Total borrowings                                                                    2.26%                 2.55%                 3.18%                                         
   Total interest-bearing liabilities                                                  0.83%                 1.13%                 1.46%                                         
                                                                                                                                                                                 
   Interest rate spread                                                                3.25%                 3.33%                 3.27%                                         
   Net interest margin                                                                 3.38%                 3.49%                 3.45%                                         
                                                                                                                                                                                 
   Ratio of interest-earning assets to interest-bearing liabilities                      1.19x                 1.16x                 1.14x                                         
                                                                                                                                                                                 


SOURCE  Provident Financial Services, Inc.


Investor Relations, Provident Financial Services, Inc., +1-732-590-9300

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