Second Quarter 2026
Filed Jul 30, 2026Provident Financial Services, Inc. Reports Second Quarter Earnings
Second-quarter net income was $78.1 million and core PPNR was a record $117.8 million, supported by higher net interest income, higher non-interest income, commercial loan growth and margin expansion. Asset-quality indicators remained low in absolute terms but non-performing loans were higher than at December 31, 2025, while funding included increased brokered time deposits and borrowed funds.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net incomeGAAP | $78.1 million | – | – |
| Basic and diluted earnings per shareGAAP | $0.60 per basic and diluted share | – | – |
| Net incomeGAAP | $157.6 million | – | – |
| Basic and diluted earnings per shareGAAP | $1.21 per basic and diluted share | – | – |
| Core net incomenon-GAAP | $79.9 million | – | – |
| Core net income per basic and diluted sharenon-GAAP | $0.61 per basic and diluted share | – | – |
| Core net incomenon-GAAP | $159.3 million | – | – |
| Core net income per basic and diluted sharenon-GAAP | $1.22 per basic and diluted share | – | – |
| Core pre-provision, net revenue (PPNR)non-GAAP | $117.8 million | – | – |
| Core PPNR per basic and diluted sharenon-GAAP | $0.90 per basic and diluted share | – | – |
| Net interest incomeGAAP | $202.7 million | – | increased $15.6 million |
| Non-interest incomeGAAP | $32.0 million | – | increased $4.9 million |
| Annualized return on average assetsGAAP | 1.24 % | – | – |
| Annualized core return on average assetsnon-GAAP | 1.27 % | – | – |
| Annualized return on average equityGAAP | 10.82 % | – | – |
| Annualized core return on average equitynon-GAAP | 11.05 % | – | – |
| Annualized return on average tangible equityother | 15.90 % | – | – |
| Annualized core return on average tangible equitynon-GAAP | 16.22 % | – | – |
| Annualized core non-interest expense to average assetsnon-GAAP | 1.85 % | – | – |
| Core efficiency rationon-GAAP | 49.75 % | – | – |
| Net interest marginGAAP | 3.48% | – | – |
| Core net interest marginnon-GAAP | 3.09% | increased 5 basis points | increased 16 basis points |
| Average yield on interest-earning assetsother | 5.61 % | – | – |
| Average cost of interest-bearing liabilitiesother | 2.71 % | – | – |
| Annualized core PPNR return on average assetsnon-GAAP | 1.87 % | – | 23 basis point expansion |
| Annualized core PPNR return on average equitynon-GAAP | 16.30 % | – | – |
| Annualized core PPNR return on average tangible equitynon-GAAP | 22.21 % | – | – |
| Annualized net loan charge-offs to average total loansGAAP | 0.04 % | – | – |
| Net charge-offsGAAP | $1.9 million | – | – |
| Net charge-offsGAAP | $5.0 million | – | – |
Capital returns
- For the three months ended June 30, 2026, common stock repurchases totaled 25,799 shares at an average cost of $22.15 per share.
- For the six months ended June 30, 2026, common stock repurchases totaled 614,722 shares at an average cost of $21.09 per share.
- As of June 30, 2026, approximately 2,199,471 shares remained eligible for repurchase under the current stock repurchase authorization.
- Stockholders’ equity totaled $2.91 billion compared to $2.83 billion as of December 31, 2025.
- Book value per share and TBV per share as of June 30, 2026 were $22.29 and $16.42, respectively, compared with $21.69 and $15.70, respectively, as of December 31, 2025.
What drove it
- Record net-interest income increased $15.6 million to $202.7 million when compared to the prior year quarter, driven primarily by growth in earning assets and an expanded net interest margin.
- Record non-interest income increased $4.9 million to $32.0 million when compared to the prior year quarter, driven primarily by growth in loan related fee income, swap fee income, wealth management and insurance agency income.
- Total commercial loans, including mortgage warehouse lines, commercial mortgage, multi-family and construction loans, increased 9.9% annualized for the quarter.
- The record pipeline totaled $3.17 billion as of June 30, 2026, with a weighted average interest rate of 6.33%.
- Commercial loans, multi-family loans and commercial mortgage loans had net increases of $407.6 million, $139.5 million and $103.8 million, respectively, from December 31, 2025.
- Total commercial loans represented 87.3% of the loan portfolio as of June 30, 2026, compared to 86.7% as of December 31, 2025.
Concerns
- Non-performing loans were $136.9 million, or 0.68% of total loans held for investment, compared to $78.4 million, or 0.40% of total loans, as of December 31, 2025.
- Allowance for credit losses on loans represented 134.87% of non-performing loans, compared to 235.61% at December 31, 2025.
- The adjusted CRE concentration ratio, excluding purchase accounting adjustments, was 399.7% as of June 30, 2026, compared to 399.5% as of December 31, 2025.
- Brokered time deposits increased by $149.3 million to assist in funding seasonal outflows in municipal deposits.
- Borrowed funds increased to fund asset growth and seasonal outflows in municipal deposits.
What to watch
- Commercial loan pipeline conversion from the $3.17 billion record pipeline.
- Net interest margin and core net interest margin following second-quarter expansion.
- Non-performing loans, which declined $6.0 million compared to the trailing quarter but were above December 31, 2025.
- Funding mix, including municipal deposit seasonal outflows, brokered time deposits and borrowed funds.
- Non-interest income contribution, which represented nearly 14% of total revenues.
Balance sheet and cash flow
- Total assets as of June 30, 2026 were $25.66 billion, compared to $24.98 billion as of December 31, 2025.
- Total investment securities were $3.57 billion as of June 30, 2026, compared to $3.47 billion as of December 31, 2025.
- Loans held for investment totaled $20.05 billion as of June 30, 2026, and $19.50 billion as of December 31, 2025.
- Total gross loans were $20,059,442 at June 30, 2026, $19,658,807 at March 31, 2026, and $19,515,513 at December 31, 2025.
- Total loans were $20,045,752 at June 30, 2026, $19,647,702 at March 31, 2026, and $19,504,061 at December 31, 2025.
- Loan funding, including advances on lines of credit, totaled $5.28 billion as of June 30, 2026, compared with $4.30 billion for the same period in 2025.
- The Company's unfunded loan commitments totaled $4.07 billion, including commitments of $2.37 billion in commercial loans, $717.0 million in construction loans and $283.5 million in commercial mortgage loans.
- Unfunded loan commitments as of December 31, 2025 and June 30, 2025 were $3.71 billion and $3.74 billion, respectively.
- Total deposits were $19.55 billion as of June 30, 2026, compared to $19.28 billion as of December 31, 2025.
- Borrowed funds totaled $2.41 billion as of June 30, 2026, compared to $2.11 billion as of December 31, 2025.
- Borrowed funds represented 9.4% of total assets as of June 30, 2026, an increase from 8.5% as of December 31, 2025.
- Tangible common equity ratio increased from 8.03% as of June 30, 2025 to 8.60% as of June 30, 2026.
- Common Equity Tier One and Total Risk Based Capital ratios for Provident Bank were 12.1% and 13.0% as of June 30, 2026, respectively.
Analysis
Provident reported second-quarter GAAP net income of $78.1 million, or $0.60 per basic and diluted share, compared with $79.4 million, or $0.61 per basic and diluted share, in the preceding quarter and $72.0 million, or $0.55 per basic and diluted share, in the prior-year quarter. For the six months ended June 30, 2026, net income was $157.6 million, or $1.21 per basic and diluted share, compared with $136.0 million, or $1.04 per basic and diluted share, in the prior-year period. Core net income was $79.9 million, or $0.61 per basic and diluted share, in the second quarter after adjustments for one-time core system conversion and executive severance expenses.
The period was led by record core PPNR of $117.8 million and record net interest income of $202.7 million. Net interest income increased $15.6 million compared with the prior-year quarter, while non-interest income increased $4.9 million to $32.0 million. The company attributed these gains to earning-asset growth, an expanded net interest margin, loan related fee income, swap fee income, wealth management income and insurance agency income. GAAP net interest margin was 3.48%, versus 3.40% in the trailing quarter and 3.36% in the prior-year quarter. Core net interest margin was 3.09%, up 5 basis points from the trailing quarter and 16 basis points from the prior-year quarter.
Commercial banking activity expanded. Total commercial loans increased 9.9% annualized for the quarter, and the pipeline was $3.17 billion as of June 30, 2026, at a weighted average interest rate of 6.33%. Loans held for investment totaled $20.05 billion, compared with $19.50 billion as of December 31, 2025. Commercial loans, multi-family loans and commercial mortgage loans increased from December 31, 2025, while mortgage warehouse lines, residential mortgage loans, construction loans and consumer loans declined. Commercial loans represented 87.3% of the loan portfolio, compared with 86.7% as of December 31, 2025.
Profitability indicators were mixed sequentially but ahead of the prior-year quarter in several areas. Annualized return on average assets was 1.24%, versus 1.29% in the first quarter and 1.19% a year earlier. Annualized core PPNR return on average assets was 1.87%, compared with 1.75% in the prior quarter and 1.64% a year earlier. The core efficiency ratio improved to 49.75% from 52.02% in the preceding quarter and 53.52% in the prior-year quarter. Annualized net loan charge-offs to average total loans were 0.04%.
Asset quality improved sequentially but remained weaker than at year-end. Non-performing loans declined to $136.9 million from $142.9 million at March 31, 2026, but exceeded $78.4 million at December 31, 2025. The allowance for credit losses on loans was 134.87% of non-performing loans, compared with 235.61% at December 31, 2025. Deposits were $19.55 billion and borrowed funds were $2.41 billion as of June 30, 2026. Capital measures strengthened, with the tangible common equity ratio at 8.60%, tangible book value per share at $16.42, and Common Equity Tier One and Total Risk Based Capital ratios at 12.1% and 13.0%, respectively. The filing provided no forward guidance.
Management, verbatim
Through the first half of 2026, Provident has grown earnings per share 17% year-over-year while also significantly improving our profitability and building capital.
Anthony J. Labozzetta, President and Chief Executive Officer
We achieved record pre-provision net revenue during the second quarter, driven by strong commercial loan production, expanding core margin and increasing contribution from non-interest income, which represented nearly 14% of total revenues.
Anthony J. Labozzetta, President and Chief Executive Officer
We are proud of the noticeable momentum of our organization, and I’m optimistic that we will continue to drive organic growth with an unchanged commitment to achieving top quartile risk-adjusted returns.
Anthony J. Labozzetta, President and Chief Executive Officer
Not in the filing
stated, not guessed- Forward guidance for revenue, margin, operating expenses, tax rate, earnings, loans, deposits or other metrics was not provided.
- Previous-release outlook was not provided.
- Total revenue was not printed as a numeric line item.
- Gross margin was not applicable or not reported.
- Operating income was not reported in the provided filing text.
- Non-GAAP EPS comparisons for prior year and prior quarter were not reported.
- Operating cash flow was not reported in the provided filing text.
- Free cash flow was not reported in the provided filing text.
- Cash balance was not reported in the provided filing text.
- Total debt was not reported as a total debt line item in the provided filing text.
- Full financial statements and the remainder of the asset-quality disclosure were not included in the provided filing text.
- Prior-year and prior-quarter values for core net interest margin were not printed on the core net interest margin line item.
- Segment revenue disclosures were not reported.
AlphaAI 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.