Providence Financial Services, Inc. (NYSE:PFS) has reported its first-quarter earnings for 2024, showing a net income of $32.1 million, or $0.43 per basic and diluted share. This is a significant increase from the previous quarter, which recorded a net income of $27.3 million, or $0.36 per basic and diluted share. However, it is a decrease from the same period in 2023, during which the company reported a net income of $40.5 million, or $0.54 per basic and diluted share.
The company's total commercial and industrial ("C&I") loan portfolio saw an increase of $72.1 million, or 11.5% annualized, to $2.51 billion as of March 31, 2024, from $2.44 billion as of December 31, 2023. However, net interest income decreased by $2.1 million to $93.7 million for the three months ended March 31, 2024, from $95.8 million for the trailing quarter due to one fewer day in the current quarter and higher funding costs.
The net interest margin also decreased by five basis points to 2.87% for the quarter ended March 31, 2024, from 2.92% for the trailing quarter. The weighted average yield on interest-earning assets increased by two basis points to 5.06%, while the weighted average cost of interest-bearing liabilities increased by nine basis points to 2.80% compared to the trailing quarter.
The company's loan pipeline, consisting of work-in-process and loans approved pending closing, totaled $1.08 billion as of March 31, 2024, with a weighted average interest rate of 7.42%, compared to $1.09 billion with a weighted average interest rate of 7.08% as of December 31, 2023.
Asset quality improved in the quarter, with non-performing loans declining to $47.6 million, or 0.44% of total loans, compared to $49.6 million, or 0.46% of total loans as of December 31, 2023. Additionally, criticized and classified loans fell to $226.3 million, or 2.09% of loans as of March 31, 2024, from $241.3 million, or 2.22% of loans as of December 31, 2023.
The company recorded a $200,000 provision for credit losses on loans for the quarter ended March 31, 2024, compared to a $500,000 provision for the trailing quarter. The decrease in the provision for credit losses was primarily due to an improved economic forecast for the current quarter within the company's current expected credit loss ("CECL") model.
Wealth management and insurance agency income increased by 8.3% and 16.9%, respectively, versus the same period in 2023. Total non-interest income was 18.2% of net revenue for the quarter ended March 31, 2024.
The Company's annualized adjusted pre-tax, pre-provision ("PTPP") return on average assets was 1.28% for the quarter ended March 31, 2024, compared to 1.25% for the quarter ended December 31, 2023. Annualized returns on average assets, average equity, and average tangible equity were 0.92%, 7.60%, and 10.40%, respectively for the three months ended March 31, 2024, compared with 0.77%, 6.60%, and 9.15%, respectively for the trailing quarter.
Anthony J. Labozzetta, President, and Chief Executive Officer, commented on the results, stating that "our first-quarter results reflect strong operating performance and returns despite continuing pressure on funding costs and the net interest margin."
The company's board of directors declared a quarterly cash dividend of $0.24 per common share payable on May 31, 2024, to stockholders of record as of the close of business on April 29, 2024.
Following these announcements, the company's shares moved 4.0%, and are now trading at a price of $14.3. For the full picture, make sure to review Provident Financial Services's 8-K report.
