Provident Financial Services, Inc.

Provident reported second-quarter net earnings of $78 million, or $0.60 per diluted share, and core net earnings of $80 million, or $0.61 per share. Annualized adjusted ROA was 1.27%, adjusted ROTCE was over 16%, and core PPNR reached a record $118 million. Revenue was a record $235 million, including record net interest income of $203 million and record noninterest income of $32 million. On a year-over-year basis, adjusted net income increased 11%, core PPNR increased 18%, and core earnings per share grew 17% in the first half of 2026 versus the same period last year. Net interest margin was 3.48% reported and 3.09% core, while core expenses were $116.9 million and the efficiency ratio improved to 49.8%. For guidance, management now expects loan and deposit growth to land at the high end of the initial range, or 5% to 6% full-year growth. They also raised Q3 and Q4 noninterest income guidance to $29 million per quarter from $28.5 million previously, expect full-year effective tax rate of about 28% to 28.25%, and continue to target core ROA of 1.2% to 1.3% with a mid-teens ROTCE.

Tony Labozzetta framed the quarter as evidence that Provident’s growth strategy is working, highlighting record revenues, improved profitability, and strong operating leverage. He emphasized commercial lending momentum, especially the $3.2 billion pipeline and the second straight quarter with both CRE and C&I pipelines above $1 billion, and said the company is focused on organic growth first, with M&A remaining selective and driven by cultural and strategic fit. He also stressed continued investments in deposits, digital, and AI, and said the core conversion remains on track for the Labor Day target.

Adriano Duarte highlighted record revenue of $235 million, core PPNR of $118 million, and a reported net interest margin of 3.48%, with core NIM at 3.09%. He said deposit costs declined 2 basis points sequentially to 1.92% overall, while interest-bearing deposit costs fell to 2.37%, but he expects deposit costs to rise 1 to 2 basis points over the next couple of quarters because of CD competition. He also said the company expects core NIM expansion of 1 to 2 basis points in the third and fourth quarters, reported NIM of roughly 3.45% to 3.50% for the rest of 2026, quarterly operating expenses of about $117 million to $119 million, and about $4.5 million of additional nonrecurring core-system upgrade charges over the rest of 2026. Tangible book value per share rose $0.39 to $16.42, the tangible common equity ratio increased to 8.6%, and there were over 2 million shares remaining on the buyback authorization, though no shares were repurchased in Q2.

Analysts focused on deposits, NIM, loan pricing, accretion, and M&A. Management said competition is much more intense on funding than on lending, with deposit costs likely rising modestly while back-book repricing and securities cash flows support margin expansion; on loans, management said it is not seeing irrational pricing yet. On accretion, Adriano clarified that the apparent quarter-to-quarter noise reflected balance-sheet adjustments and said the underlying loan book accretion should be about $36 million in 2027, while the reported adjustment to NIM is about 35 basis points. On M&A, Tony said it remains part of strategy but only selectively, with organic growth still the top priority.