Provident Financial Services, Inc. Reports Third Quarter Earnings
PROVIDENT FINANCIAL SERVICES INC (PFS) filed an SEC Form 8-K — Results of Operations and Financial Condition. Provident Financial Services, Inc. Reports Third Quarter Earnings ISELIN, NJ, October 28, 2026 - Provident Financial Services, Inc. (NYSE: PFS) (the “Company”) reported net income of $69.2 million, or $0.53 per basic and diluted share for the three months ended September 30, 2026
How this was made
The 30-second read
Why it matters
The earnings miss may trigger short‑term downside, but underlying credit quality and deposit trends could mitigate longer‑term risk.
Market read
First‑report earnings release for a U.S. regional bank; may influence after‑hours trading in the banking sector.
What to watch
Core net interest margin expansion and low charge‑offs may offset headline earnings weakness.
Provident Financial Services reported third-quarter net income of $69.2 million, or $0.53 per basic and diluted share, as record net interest income and higher net interest margin were offset by a $17.5 million loss on extinguishment of debt and core conversion costs.
Net interest income reached $208.0 million, net interest margin expanded to 3.50%, deposits and commercial lending grew, and core PPNR increased to $119.5 million. Reported earnings declined sequentially and year over year because of the $17.5 million debt-extinguishment loss, core conversion costs, and branch restructuring expenses, while non-performing loans increased from year-end.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net income, three months ended September 30, 2026GAAP | $69.2M | – | – |
| Basic earnings per share, three months ended September 30, 2026GAAP | $0.53 per basic share | – | – |
| Diluted earnings per share, three months ended September 30, 2026GAAP | $0.53 per diluted share | – | – |
| Core net income, three months ended September 30, 2026non-GAAP | $84.3M | – | – |
| Core diluted earnings per share, three months ended September 30, 2026non-GAAP | $0.65 per diluted share | – | – |
| Core PPNR, three months ended September 30, 2026non-GAAP | $119.5M | – | 10% year-over-year growth |
| Core PPNR diluted EPS, three months ended September 30, 2026non-GAAP | $0.92 | – | – |
| Net interest income, three months ended September 30, 2026GAAP | $208M | – | – |
| Net interest margin, three months ended September 30, 2026GAAP | 3.50% | – | – |
| Core net interest margin, three months ended September 30, 2026non-GAAP | 3.16% | increased 7 basis points | 22 basis points |
| Total interest income, three months ended September 30, 2026GAAP | $338.3M | – | – |
| Total interest expense, three months ended September 30, 2026GAAP | $130.3M | – | – |
| Provision for credit losses, three months ended September 30, 2026GAAP | $5.2M | – | – |
| Total non-interest income, three months ended September 30, 2026GAAP | $30.5M | – | – |
| Total non-interest expense, three months ended September 30, 2026GAAP | $140.7M | – | – |
| Core non-interest expense, three months ended September 30, 2026non-GAAP | $119.1M | – | – |
| Core efficiency ratio, three months ended September 30, 2026non-GAAP | 49.93% | – | – |
| Income tax expense, three months ended September 30, 2026GAAP | $23.5M | – | – |
| Effective tax rate, three months ended September 30, 2026GAAP | 25.3% | – | – |
| Annualized return on average assets, three months ended September 30, 2026GAAP | 1.07% | – | – |
| Annualized core return on average assets, three months ended September 30, 2026non-GAAP | 1.30% | – | – |
| Annualized return on average equity, three months ended September 30, 2026GAAP | 9.39% | – | – |
| Annualized return on average tangible equity, three months ended September 30, 2026non-GAAP | 13.80% | – | – |
| Net income, nine months ended September 30, 2026GAAP | $226.7M | – | – |
| Diluted earnings per share, nine months ended September 30, 2026GAAP | $1.74 per diluted share | – | – |
| Core net income, nine months ended September 30, 2026non-GAAP | $243.5M | – | – |
| Core diluted earnings per share, nine months ended September 30, 2026non-GAAP | $1.87 per diluted share | – | – |
| Net interest income, nine months ended September 30, 2026GAAP | $604.4M | – | – |
| Net interest margin, nine months ended September 30, 2026GAAP | 3.46% | – | – |
| Total assets as of September 30, 2026GAAP | $25.85B | – | – |
| Loans held for investment as of September 30, 2026GAAP | $20.17B | – | – |
| Total deposits as of September 30, 2026GAAP | $19.81B | increased $261.7 million or 5.31% annualized quarter over quarter | – |
| Total core deposits as of September 30, 2026other | $15.42B | increased $233.7 million, or 5.76% annualized | – |
| Borrowed funds as of September 30, 2026GAAP | $2.39B | – | – |
| Stockholders' equity as of September 30, 2026GAAP | $2.86B | – | – |
| Cash and cash equivalents as of September 30, 2026GAAP | $266M | – | – |
| Total non-performing loans as of September 30, 2026GAAP | $140.1M | – | – |
| Non-performing loans to total loans held for investment as of September 30, 2026GAAP | 0.69% | – | – |
| Allowance for credit losses on loans as of September 30, 2026GAAP | $189.5M | – | – |
| Allowance for credit losses to total loans as of September 30, 2026GAAP | 0.94% | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- For the three months ended September 30, 2026, common stock repurchases totaled 1,464 shares at an average cost of $24.44 per share, all of which were made in connection with withholding to cover income taxes on the vesting of stock-based compensation.
- For the nine months ended September 30, 2026, common stock repurchases totaled 616,186 shares at an average cost of $21.10 per share.
- As of September 30, 2026, approximately 2,198,007 shares remained eligible for repurchase under the current stock repurchase authorization.
- Cash dividends paid to stockholders partially offset net income in stockholders' equity.
What drove it
- Record net interest income increased $13.7 million to $208.0 million compared with the prior-year quarter, driven primarily by growth in earning assets and expanded net interest margin.
- Average loans totaled $19.88 billion, an increase of $311.9 million, or 6.37%, from the trailing quarter, primarily due to strong growth within the total commercial portfolio.
- Average total deposits totaled $20.03 billion, an increase of $1.61 billion, or 8.72%, from the prior-year quarter.
- Total non-interest income increased $3.1 million year over year, led by a $3.8 million increase in BOLI income and an $803,000 increase in insurance agency income.
- The loan pipeline totaled $3.03 billion as of September 30, 2026, with a weighted average interest rate approaching 6.50%.
Concerns
- Reported third-quarter earnings included a $17.5 million one-time loss on extinguishment of debt, $3.7 million of core conversion related costs, and $465,000 of branch restructuring expenses.
- Total non-interest expense increased $27.6 million from the prior-year quarter to $140.7 million.
- Non-performing loans were $140.1 million, or 0.69% of total loans held for investment, versus $78.4 million, or 0.40% of total loans, as of December 31, 2025.
- Impaired loans were $126.2 million with related specific reserves of $6.6 million as of September 30, 2026, compared with $63.3 million and $5.9 million, respectively, as of December 31, 2025.
- Tangible book value per share declined slightly sequentially to $16.16 and the tangible common equity ratio declined 20 basis points to 8.40%, both impacted by an $83.0 million reduction in AOCI.
- The cost of total deposits increased to 2.02% from 1.92% for the trailing quarter.
What to watch
- Execution on the $3.03 billion loan pipeline, including CRE and C&I pipelines that each exceeded $1.0 billion for the third consecutive quarter.
- Whether net interest margin sustains improvement as the yield on interest-earning assets and the cost of interest-bearing liabilities change.
- Commercial credit performance, specific reserves, non-performing loans, and net charge-offs.
- Deposit mix following municipal deposit seasonal outflows and the increase in brokered demand deposits.
- The effect of the completed core system conversion and debt extinguishment on future reported expenses and core efficiency.
Balance sheet and cash flow
- Total assets were $25.85 billion as of September 30, 2026, compared to $24.98 billion as of December 31, 2025.
- Total deposits were $19.81 billion as of September 30, 2026, compared to $19.28 billion as of December 31, 2025.
- Total savings and demand deposit accounts increased $590.5 million to $16.58 billion, while total time deposits decreased $62.4 million to $3.22 billion as of September 30, 2026.
- Borrowed funds totaled $2.39 billion as of September 30, 2026, compared to $2.11 billion as of December 31, 2025.
- Cash and cash equivalents were $266.0 million as of September 30, 2026, compared to $211.5 million as of December 31, 2025.
- No operating cash flow, investing cash flow, financing cash flow, or free cash flow was reported.
Analysis
Provident Financial Services produced a solid underlying third quarter, with net interest income reaching $208.0 million and net interest margin improving to 3.50% from 3.48% in the second quarter and 3.43% in the prior-year quarter. The company attributed the increase in net interest income to new loan originations at current market rates, favorable repricing of adjustable-rate loans, growth in earning assets, and favorable deposit repricing. Average loans increased $311.9 million from the trailing quarter, while average total deposits rose to $20.03 billion.
Reported profitability was affected by discrete expenses. Net income was $69.2 million, or $0.53 per basic and diluted share, compared with $78.1 million, or $0.60 per share, in the prior quarter and $71.7 million, or $0.55 per share, a year earlier. The period included a $17.5 million loss on extinguishment of debt, $3.7 million of core conversion related costs, and $465,000 of branch restructuring expenses. Excluding these expenses, core net income was $84.3 million, or $0.65 per diluted share. Core PPNR was $119.5 million, compared with $108.7 million in the prior-year quarter.
Expense and fee-income trends were mixed. Total non-interest expense increased to $140.7 million, driven primarily by the debt-extinguishment loss, conversion costs, and higher data processing expense. Core non-interest expense was $119.1 million, and the core efficiency ratio was 49.93%, compared with 51.01% a year earlier. Total non-interest income increased to $30.5 million from $27.4 million a year earlier, supported by BOLI income and insurance agency income, but declined from $32.0 million in the second quarter as fee income, other income, and insurance agency income declined.
Balance-sheet growth was led by deposits and commercial lending. Total deposits were $19.81 billion, including $15.42 billion of core deposits, and total commercial loans represented 87.5% of the loan portfolio. Borrowed funds increased to $2.39 billion from $2.11 billion at year-end and were used largely to fund asset growth and replace seasonal municipal deposit outflows. Capital remained above well-capitalized regulatory thresholds at Provident Bank, with Common Equity Tier One and Total Risk Based Capital ratios of 12.5% and 13.4%, respectively, although tangible book value per share and the tangible common equity ratio fell sequentially due to the $83.0 million AOCI reduction.
Credit costs declined from both comparison periods, with a $5.2 million provision for credit losses and $2.4 million of net charge-offs, or an annualized 5 basis points of average loans. Asset-quality metrics nonetheless warrant attention: non-performing loans rose to $140.1 million, or 0.69% of loans held for investment, from $78.4 million, or 0.40%, at December 31, 2025. The company reported a $3.03 billion pipeline and said both CRE and C&I pipelines exceeded $1.0 billion for the third consecutive quarter. No forward financial guidance was provided.
Management, verbatim
We continued our strong performance, delivering another quarter of solid financial results including record revenues. Building momentum in both our spread and fee-based businesses drove 10% year-over-year growth in our pre-provision net revenue, while core deposits grew nearly 6% annualized. During the quarter, we successfully completed our previously-announced core conversion, while also maintaining an adjusted efficiency ratio below 50%. Our robust loan pipeline and strong asset quality leave me optimistic that we will keep driving profitable organic growth going forward.
Anthony J. Labozzetta, President and Chief Executive Officer
Not in the filing
stated, not guessed- Forward revenue, earnings, margin, expense, tax-rate, credit, balance-sheet, or capital guidance was not provided.
- Prior outlook was not provided.
- Operating cash flow was not reported.
- Investing cash flow was not reported.
- Financing cash flow was not reported.
- Free cash flow was not reported.
- Cash dividend amount or dividend per share was not reported.
- GAAP revenue was not reported because the issuer is a bank and the release reports net interest income and non-interest income rather than revenue.
- Segment revenue was not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Provident Financial Services (NYSE:PFS) filed a Form 8‑K reporting its third‑quarter 2026 results, highlighting revenue records, deposit growth, and a one‑time debt extinguishment loss.
Ticker impact
Provident Financial Services reported Q3 2026 earnings with net income $69.2M, EPS $0.53, down from prior quarter, and disclosed a $17.5M one‑time loss.
likely pressure as the market prices in lower earnings and the one‑time loss
Net income fell 11% YoY and EPS declined; core revenue growth was modest and a $17.5M debt extinguishment loss was highlighted.
Market effects
Banking sector may see modest pressure as a regional lender reports earnings decline.
U.S. regional banks could face slight sell‑off in after‑hours trading.
Limited; impact confined to U.S. regional banking niche.
Counterpoint
Despite the earnings dip, record revenue and strong deposit growth could support a bounce.
Key entities
- companyProvident Financial Services, Inc.
U.S. regional bank reporting Q3 2026 earnings.
- executiveAnthony J. Labozzetta
President and CEO who commented on the results.
