Provident Financial Services Q4 2024 Earnings Call Transcript

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Provided by Quartr
January 29, 2025

There are 8 speakers on the call.

Operator

Good morning, and welcome everyone to the Provident Financial Services Inc. Fourth Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you.

Operator

I would now like to turn the call over to Adriano Duarte, Head in Investor Relations Officer. Please go ahead, sir.

Speaker 1

Thank you, Christophe. Good morning, everyone, and thank you for joining us for our fourth quarter earnings call. Today's presenters are President and CEO, Tony LaVazetta and Senior Executive Vice President and Chief Financial Officer, Tom Lyons. Before beginning the review of our financial results, we ask that you please take note of our standard caution as to any forward looking statements that may be made during the course of today's call. Our full disclaimer is contained in last evening's earnings release, which has been posted to the Investor Relations page of our website, provident.bank.

Speaker 1

Now it's my pleasure to introduce Tony LaVazetta, who will offer his perspective on our

Speaker 2

Thank you, Adriano. Happy New Year, everyone, and welcome to the Provident Financial Services earnings call. The was characterized by a more favorable macroeconomic environment with continued growth, additional interest rate cuts, improved performance in the banking sector and an optimistic outlook. The Provident team maintained solid core performance and profitability, thanks to the excellent asset quality, good deposit growth and the increasing contributions of our fee based businesses. During the quarter, we reported net earnings of $4,850,000,0.0 or $0,.37 per share.

Speaker 2

Our annualized adjusted return on average assets was 1.05% and our adjusted return on average tangible equity was 15,.39 percent. Our adjusted pretax pre provision return on average assets was 1.53% for the We are pleased with our core financial results and are confident in our ability to build on this momentum going into 2025. At the 04/00, our capital levels remained healthy and comfortably exceeded levels deemed to be well capitalized. Normalizing for changes in AOCI, our tangible book value per share grew $0,.34 to $14,.71 and our tangible common equity ratio was consistent with the trailing quarter at 7.67%. As such, our Board of Directors approved a quarterly cash dividend $0,.24 per share payable on February '28.

Speaker 2

During the quarter, our deposits grew $2.48,000,000 dollars or 5.4% annualized. The average cost of total deposits decreased 11 basis points to 2.25% and the average cost of interest bearing deposits decreased 15 basis points. Our total cost of funds decreased 14 basis points to 2.48%, which remains favorable relative to our peer group. As a result, our core net interest margin expanded 4 basis points. However, our reported margin compressed 3 basis points to 3.28% due to a decrease in purchase accounting accretion.

Speaker 2

During the our commercial lending team closed approximately $7.13,000,000 dollars of new commercial loans. However, we experienced approximately $3.28,000,000 dollars in loan payoffs, resulting in a modest growth in our portfolio. This quarter's production consisted of 53% commercial real estate, 47% commercial and industrial loans, roughly 1 half of the C and I production was in our specialty lending group. While on the topic of lending, we are excited to announce that as of Monday, Bill Fink has joined us as our new Chief Lending Officer, following the retirement of John Rath. Bill is responsible for leading our commercial lending growth strategy and brings with him over 30 of experience in commercial banking, credit administration and an impressive track record in credit risk management and operational strategy.

Speaker 2

In the past twenty years, Bill worked at TD in numerous leadership positions and most recently spearheaded its middle market and asset based lending businesses with responsibility for a 24000000000 portfolio. I'm very confident that he will succeed in driving responsible growth in our commercial lending group. In addition to hiring Bill, we have added more resources to our lending teams and have expanded our lending presence in Pennsylvania and Westchester. Our credit quality is strong and for the quarter continued to improve as our non performing loan ratio decreased 8 basis points to 39 basis points. This ratio compares favorably relative to our peer group.

Speaker 2

Our net charge offs also decreased to $550,000,0.0 from $680,000,0.0 in the trailing quarter, which is also low relative to our peer group. We are confident in our underwriting and portfolio management standards as well as the quality of our portfolio. We have seen a modest decrease in our total loan pipeline to approximately $180,000,000,0.0 in the from approximately $2,000,000,000 in the preceding quarter. The weighted average interest rate is 6.91% compared to 7.18% in the trailing quarter. The pull through adjusted pipeline, including loans pending closing, is approximately $1,000,000,000 This quarter, Provident's fee based businesses continue to excel.

Speaker 2

Provident Protection Plus had 19% organic growth in the as compared to the same period last year. In addition, it had over 16% organic growth over the last twelve months and its retention rate was 100%. Beacon Trust assets under management grew to $420,000,000,0.0 which represents a 7.5% growth relative to last year. Income improved 12% relative to the and was driven by good investment performance. As we enter 2025, we are pleased that the merger is now behind us.

Speaker 2

The fundamentals of our company are strong and we have built a solid foundation for growth. We are optimistic about the operating environment and our ability to build our business, which will help us produce even more value for our customers, employees and stockholders. Now, I'll turn the call over to Tom for his comments on our financial performance. Tom? Thank you, Tony, and

Speaker 3

good morning, everyone. As Tony noted, we reported net income of $4,850,000,0.0 or $0,.37 per share for the quarter. Excluding charges related to our merger with Lakeland Bancorp, core earnings were $6,290,000,0.0 in the current quarter or $0,.48 per share with a core ROA of 1.05%. Further adjusting for the amortization of intangibles, our core return on average tangible equity was 15.39% for the quarter. Note that all merger related charges have now been recognized with no further merger expense to be recorded in 2025.

Speaker 3

Excluding merger related charges, pre tax pre provision earnings for the current quarter were $9,180,000,0.0 or an annualized 1.53% of average assets. Revenue totaled $20,590,000,0.0 for the quarter and our core net interest margin increased 4 basis points from the trailing quarter to 2.85%. Including 43 basis points of purchase accounting accretion, our net interest margin was 3.28% for the We currently project a NIM in the 3.35% to 3.45% range for 2025. Our projections include 2 additional 25 basis point rate reductions in Sept. 0 and December 2025.

Speaker 3

During the quarter, we reclassified $15,130,000,0.0 of non relationship equipment lease loans to held for sale. Excluding this transfer, period end total loans were essentially flat for the quarter as growth in multifamily and commercial loans was largely offset by reductions in CRE, construction, residential and consumer loans. Dec. 0 closings were strong, however, and our pull through adjusted loan pipeline at quarter end was $1,000,000,000 with a weighted average rate of 6.98% versus our current portfolio yield of 5.99%. Deposits increased to $148,000,000 or an annualized 5.4% from the trailing quarter to $1,860,000,000,0.0 at December '31, with growth driven by municipal and consumer non interest bearing and money market balances.

Speaker 3

As a result, our loans to deposit ratio decreased slightly to 101%. The average cost of total deposits decreased 11 basis points to 2.25% this quarter. Asset quality remained strong with non performing loans representing just 39 basis points of total loans, NPAs to assets declining to 34 basis points, total delinquencies at 57 basis points of loans and criticized and classified loans totaling 2.67% of loans. Net charge offs were $550,000,0.0 or an annualized 12 basis points of average loans this quarter. The provision for loan losses decreased to $780,000,0.0 this quarter, reflecting specific reserve requirements and some deterioration in the macroeconomic variables that drive our CECL estimate.

Speaker 3

This increased our coverage ratio to 1.04% of loans at December '31. Non interest income decreased to $24,000,000 this quarter, mainly due to fewer BOLI benefit claims and a seasonal reduction in insurance agency income. Non interest expenses improving to 55.4% for the quarter. Non interest expenses for the quarter included certain items that are not expected to recur in the 2025 run rate, including a $140,000,0.0 litigation reserve charge and approximately $160,000,0.0 of year end adjustments to incentive accruals. We currently project quarterly core operating expenses of approximately 112000000 to $115,000,000 for 2025.

Speaker 3

Our effective tax rate for the quarter fell to 22.6% due to a $420,000,0.0 benefit reported on the revaluation of certain deferred tax assets. We currently expect our 2025 effective tax rate to approximate 29.5%. Regarding projected 2025 financial performance, we currently estimate return on average assets of approximately 1.15% and return on tangible equity of approximately 16% with an operating expense ratio of approximately 1.8% and an efficiency ratio of approximately 52%. That concludes our prepared remarks. We'd be happy to respond to questions.

Operator

And your first question comes from the line of Mark Fitzgibbon with Piper Sandler. Mark, please go ahead.

Speaker 4

Hey, guys. Good morning.

Speaker 3

Good morning. Good morning, Mark.

Speaker 4

First question I had, Tom, I guess I'm curious how you hit that $26,000,000 fee projection in like the when insurance revenues declined seasonally. What's kind of the offset? I mean, what are some of the other items that you anticipate being higher to mitigate that seasonal decline in insurance?

Speaker 3

Yes. That's an average over the course of the year, Mark. So we're going to see seasonal improvement in the In addition, there's some volatile items in there, as you know, regarding gains on loan sales, swap fee income, SBA loan sales. Insurance contingency in

Speaker 1

the which makes it higher than $26,000,000 Right.

Speaker 3

And also BOLI death benefit claims, we don't model those, but there's a actuarial component to that where we see some recognition of income there. So overall, we expect the $26,000,000 in the quarter as a reasonable number.

Speaker 4

So for the BOLI number, is a normal run rate excluding debt benefits sort of $230,000,000,0.0 Is that a right number?

Speaker 3

Is that on top of what we were quoting this quarter, Mark? I think so.

Speaker 1

That's correct. This quarter had none, so that's a typical run rate, Mark. Yes.

Speaker 2

Okay, great.

Speaker 4

And then I guess your expense guide looks like it assumes some pretty heavy lifting. I guess what are some of the bigger pieces of that? Where do we have cost synergies coming? Is it residual stuff from the Lakeland deal? Or is there other things where you think you can sort of reduce expenses on?

Speaker 3

Yes. I mean, we kind of worked off of the beginning reported expense for this quarter, Mark, back half of the non recurring items, and I mentioned a few of them in the comments, took into account the additional payroll employer payroll taxes in the worked through the full cost savings, which were realized at the end of So we took full benefit for that in We get to I'm getting about $113,000,000 or $114,000,000 for the So the $112,000,000

Speaker 1

to $115,000,000

Speaker 3

guide seems reasonable. We'd expect to see that stabilize, maybe even trail off a little bit in the back half of the year.

Speaker 4

Okay. And I think you said you're assuming two twenty five basis point cuts in rates. What is each 25 basis point cut mean for NII or the margin?

Speaker 2

To be honest, not a

Speaker 3

whole lot. The balance sheet is so neutral that we ran a number of scenarios both with growth and different rate cut environments and very tightly clustered in terms of NIM. And the difference in net interest income is at most a couple of million dollars up or down, a couple of hundred basis points even.

Speaker 4

Okay. And lastly, Tony, I guess I'm curious from your perspective, what are sort of the top 2 or 3 priorities for the company right now?

Speaker 2

So, these of you no problem, we're pretty good at the risk management and our balance sheet is pretty strong. So as we move into 2025 and beyond this year, in no particular order, I would probably say the continuing to build on our culture and nurture the team dynamics of bringing 2 companies together, our growth, growth and growth are still going to be our biggest focus for this year in all sectors. I think some of the things that we're excited about is the changes that are happening in our commercial bank and treasury management and seeing some good dynamic growth there in deposits. Our fee based businesses will still drive. And lastly, I would say huge focus about deepening share across the channels.

Speaker 2

That's big. And I think with the Lakeland merger being able to deploy some of that is also going to be very accretive for us. And we want to do this while and I know you mentioned it, while we're maintaining operational efficiency. So that's really the focus for me and the team as we move into 2025. Thank you.

Speaker 3

Welcome. Thanks, Glenn.

Operator

And your next question comes from the line of Billy Yong with RBC Capital Markets. Billy, please go ahead.

Speaker 1

Hey, guys. How are you? Good morning, Billy.

Speaker 5

Good. Just I guess first, just kind of like a bigger picture question. Kind of looking at your adjusted returns for the quarter and your 2025 return targets, just kind of how do you think those returns kind of stack against your longer term franchise goals? Do you see room to kind of optimize and do better than that longer term?

Speaker 3

I think there's the continued ability to gain efficiencies and scale, which should continue to improve the returns metrics overall. Yes. I would add

Speaker 2

to that, that we've done Yeoman's job a lot of effort this year in building the foundation for an organization that could meet some good strong growth. We've done much and I think we're prepared. And I think as we continue to build, we won't have to scale up at the same level, so we can take advantage of that. We put some good dynamics for loan growth in this coming year, and we'll continue to look at areas to become even more efficient. So I think it's really growing our businesses and being able to handle the scale without adding to the operating expenses.

Speaker 5

Got it. Thank you for that. And then just switching to loan growth a little bit. I think we've spent the last couple of quarters talking about kind of improving activity and better customer sentiment. Hasn't really shown up in the bottom line numbers yet, but I kind of understand there's some moving parts this quarter.

Speaker 5

It feels like payoff activity was a little bit elevated this quarter, it's been a little bit of a headwind. Kind of do you need to see that moderate a little bit to kind of get to your 5% growth target for 2025? Or what is it that gives you confidence that you'll get there?

Speaker 2

Well, I think if you remember last quarter, we gave a little bit of caution that we might see some creep repayments and we saw some of that. This quarter, we also had about 50% of the $3.28,000,000 dollars that I mentioned was just maturities or and loans and sale of the underlying property. So that's just something that you can't really gauge and about half was refinancing away from us. So the way I feel comfortable about it is, we've made some good dynamic changes in our commercial bank. We have good leadership team there that across all our segments that can really build our business.

Speaker 2

We're seeing activity. If the operating environment cooperates and the rate cycle, I think that we're going to really jump ahead, right? So there's those small headwinds that I mentioned, but we have the appropriate complement to be able to produce growth in excess of the numbers that we're guiding you guys on. And if just to give you a sense, the $7.12,000,000 dollars that we closed this quarter, we really need to be somewhere at the size of the bank that we are now between $24,000,000,000 and $25,000,000,000 we need to be closer to about $800,000,000 to $900,000,000 of production and then you take about 40% of that and that's what really affects goes to your outstanding. That's sort of the algorithm or calculus that we do.

Speaker 2

And so we're able to see that, that seven twelve in this environment. So again, the only thing I would caution is the operating environment. In terms of providence product capacity and having the right complement, the right leadership, the right go to market strategy, enhancing our treasury management. I'm pretty excited about that and I think '25 is going to demonstrate that. But we've had some headwinds of change.

Speaker 2

Obviously, John retired, our CLO, we've got new changes there. We see opportunities coming from even the legacy organizations that some of those change agents have come to us from. So long winded answer to say, I know it hasn't showed up in our results in the last couple of 3, But we're feeling pretty good about the foundation to build as we move forward.

Speaker 3

Yes. If I could just add a couple of thoughts, Tony. I think our market position currently is very strong. I know some of our competitors have some other internal issues that they're dealing with. And so I think we have the ability to be a real dominant player over the next year.

Speaker 3

I think Tony referenced a little bit some of the distractions we saw with integration and core systems conversion, all that's behind us now. So I think there's a full focus on moving forward. And then in Tony's prepared comments, he did reference Bill Fink joining us as Chief Lending Officer and some other ads in the revenue producing side that we expect to see really generate some growth. So pretty optimistic. Yes.

Speaker 2

So I would say 1 last thing if you on that, we've been historically very strong on growing the Cree side of the business. If you look at the real underlying sort of silver lining in our commercial growth in our production is that most of the growth we've seen has come in the C and I space and our specialty lending businesses, which have done really well. If our CRE, which I think we could amp up, we had some noise around CRE this year. If we could amp up our CRE to this traditional levels, which I think that's probably easier for us to do than the other size, then we should achieve the numbers that we're guiding to and maybe overachieve.

Speaker 5

Appreciate it. Thank you for taking my questions.

Operator

And your next question comes from the line of Tim Switzer with KBW. Tim, please go ahead.

Speaker 6

Hey, good morning. Thank you for taking my questions. Good morning. My first one is on kind of looking for a little bit more clarity on the expense outlook. It's kind of a wide range there and you're talking about $113,000,000 to $114,000,000 for the but then maybe trails down a little bit in the back half of the year.

Speaker 6

What would be driving that improvement later in Is that like seasonality or some initiatives you have that would maybe coming offline?

Speaker 3

Yes. Typical seasonality, Tim, with the employer payroll tax thresholds being achieved and some of the utility maintenance kind of costs that you see in the colder months of the year being a little bit more elevated in the

Speaker 6

Okay. And what would maybe drive you, I guess, to the higher end of your range if you're thinking 01/13, 01/00 '14 and then down from there?

Speaker 3

Only additional investments in terms of core operating expense. I mean, things that come that I consider to be outside of operations would be decisions made around resolutions of non performing assets as an example where you might take a loss that's not reflected in these core projections.

Operator

Okay.

Speaker 6

And sorry if I missed this earlier, but is this quarter a good level for purchase accounting accretion going forward?

Speaker 3

The base? Yes, I think it's a good base, Tim. It's a little bit unpredictable because of the volatilities in the cash flows. I mean, what happened to us this quarter is we saw fewer prepayments of loans that had acquisition discounts and we actually saw some prepayments of loans that had acquisition premiums in the SBA book that was acquired. There's not a lot of premium loans left in there.

Speaker 3

It's about total of about $240,000,0.0 but that was about $800,000 with the reduction in the current quarter.

Speaker 6

Oh, wow. Okay. And I think we've asked this before, but are you guys considering a securities restructuring just given the change in the yield curve and with some of your lower yielding assets, it seems like it could give you a nice earn back relative the quick.

Speaker 3

No, Tim. I think we continue to feel that it's appropriate to hold the assets. We don't see that again in an efficient market, we don't see the earn back in a short enough timeframe to warrant that. We did do the restructuring in connection with the acquisition of about $6.50,000,000 dollars 5 50 million dollars at the Lakeland acquisition because there it made sense. The hit equity was already baked in through the purchase accounting.

Speaker 2

You might want to add that we're thinking about this thoroughly since we made the announcement on the lease and You might want to expand on that.

Speaker 3

That's true. I mean, we did decide, as you saw in the earnings release, to exit the non relationship portion of the equipment lease financing business. So I consider that a restructure. It's not a big spread business, and we think there's it's just not attractive from a building the franchise point of view and better use of capital. Yes.

Speaker 6

Okay. That makes sense. Thank you, guys.

Speaker 3

Thank you.

Operator

And your next question comes from the line of Paddy Strickland with The Hovde Group. Paddy, please go ahead.

Speaker 1

Hey, good morning. I was wondering if you can update us on the opportunity with upcoming CD maturities and what you're seeing on repricing CDs today?

Speaker 3

Yes. CDs repricing over the next twelve months total about $3,000,000,000 1 point 2 billion dollars in the about 57 basis points of pickup in the When I talked about how neutral our balance sheet is, it's funny if you look at floating rate loans, they're about $480,000,000,0.0 and the maturing CDs and borrowings about $430,000,000,0.0 over the next twelve months. And then the flexibility on the rest of the other liability side,

Speaker 2

I think so. We also have a slight repricing downward on some of the specialty pricing deposits for the non CDs coming sugar.

Speaker 3

Yes, that makes up the rest of the difference. And why I say that regardless of the rate environment, really the impact on the NIM is fairly minimal.

Speaker 1

Got it. And then 1 of the dig into fees, really wealth in particular, 2 questions on that. Number 1, is there an opportunity to move that average fee higher from that 73 basis points or so? And then the second portion of that is VC. What are the opportunities for the non advisory portions of the wealth business?

Speaker 3

I don't think that there's a lot of ability to up the fee rate. The 73% is pretty strong relative to the industry and the peer group.

Speaker 2

Exactly. I think the game for us is to up the AUM And if we can keep the fee at that relative level, I think that will be the success in that space. The second part of that question was with is that the I didn't get the second part.

Speaker 3

Could you repeat it, Feddy? The non advisory portions?

Speaker 2

What do you

Speaker 1

mean like Just growth in non advisory portions of the business?

Speaker 2

Yes. I think that's been growing. For us, I think we this year, I think we did, I think, dollars 300 and something million of new mostly outside bank growth in that business. It's not a, what I would call, a material segment of our space, but it's a good contributor. And ultimately, I think I would love to see more graduation from that space and into as assets build and into more of our Beacon wealth business, so having more of a synergy there.

Speaker 2

But ideally, I think from my perspective, I see the greatest promise for us is to continue to synergize across the channels and have our AUM growth on the Beacon side is going to be the greatest path for improved profitability.

Speaker 3

Yes. I'm not sure if we understood. But, Faye, let me just check the question. I think Tony was referring to the non deposit investment products outside of Beacon, but I think you might have been asking about non advisory services provided by Beacon. Is that correct?

Speaker 3

Things like the tax estate, that kind of?

Speaker 1

That's correct. I was just wondering whether that, I guess, the pie grows a little bit for those sections relative to the non advisory or relative to the advisory part of the business?

Speaker 3

It does, but it's a relatively small portion really. The money at Beacon is made through the advisory services.

Speaker 1

Got it. And just last question, wanted to touch on credit. I know there's not a pun in terms of NPAs, but could you talk about potential opportunities to resolve some of the non performing loans over the course of 2025?

Speaker 3

We continue to work with the customers. We look at note sales to see where they make sense. On the REO side, we're trying to work through a couple of resolutions on the remaining. I think it's about $960,000,0.0 left in real estate owned. We expect to see some of that continue to move.

Speaker 3

We do a pretty good job of retaining those non performing assets for a relatively short period of time. I think we have

Speaker 2

a good group in the resolution area and they have good active strategies on the best path out for all the things that are moving into it. So we're pretty comfortable, but things don't stay in there forever and there was a good exit strategy.

Speaker 1

All right, great. Thanks for taking my questions.

Speaker 3

Thank you.

Operator

And our final question comes from the line of Manuel Nieves with D. A. Davidson. Manuel, please go ahead.

Speaker 7

Hey, good morning. Could you speak a little bit more to the good morning. Could you speak a little bit more to the kind of the wildcards around the NIM range? What could get you to the top and what could get you to the bottom?

Speaker 3

Really the biggest driver is the shape of the curve. So long as the longer end stays somewhat anchored on the ten year side of things, especially that's where we see a little bit of a pickup rates down versus rates up is that we see more benefit to the wholesale funding cost and a little bit on deposits, but that deposits you get to a level where I think the beta starts to drop more. But that's really the primary challenge there

Operator

is just that the shape of

Speaker 3

the chart, the curve changes materially. The other thing would be the accretion which has volatility and growth overall, right? We talked about last quarter, I believe, and we're going to continue to execute on that added some for the securities portfolio. I'd like to see that get up to about 15% of assets. The spread on that is a little lower, so it could drive the NIM down a bit, but still give us greater net interest income.

Speaker 7

That's great. You've been able to lower deposit costs pretty well. Is there any difference in the first seventy five basis points versus the Dec. 0 cut? And is that is there still going to be some deposit costs dealt into the beyond CD repricing?

Speaker 3

Yes. You'll see cuts that were effective January '1.

Speaker 7

Okay. Any difference in the difficulty of those cuts or pushback?

Speaker 3

No. When the initial cuts came through, the communication was pretty clear that there were going to be continued movements in line with the Fed for the most part. So I would expect A lot

Speaker 2

of those communications happened between the relationship managers and a lot of our customers. So not only did they inform about the rate cut, but they informed about prospective rate cuts and what the impacts would be. So it should since the stability is there, we haven't we're pretty comfortable that the clients are well informed in their behaviors. 1 of the things we saw this quarter, which wasn't clearly pointed out, we also saw some good consumer deposits flowing. Most of that growth happened in the consumer side, both non interest bearing and interest bearing and also some municipal.

Speaker 2

So our business deposits were actually cycling down through the payments of bonuses, taxes, etcetera, which we didn't see any account closures. So most of that will we expect to kind of recycle back in. So with the consumer activity coming back, which has been the outflows over the last since COVID, I think that, that is probably a good indication that, that flows in and if our commercial deposits come back in, it should bode well for our growth as we move forward.

Speaker 7

I appreciate that. Can you expand a little bit more on the just kind of shifting gears to the opportunity geographically? You brought up Pennsylvania and Westchester. Just could you add some more color maybe sizing or timing of that opportunity? Sure.

Speaker 2

In my spoken comments earlier, I mentioned that we added more complements to our current lending teams in our present markets. In addition to that, we've also expanded by having, I think, a 4 person team into Pennsylvania and I think 2 more individuals into the Cree space in Pennsylvania. And so that will help us to grow the we have a sort of a more focused strategy in building out our Eastern Pennsylvania marketplace, which we have a good presence in. And I think those folks will help us build that in tandem working with our other our retail side. We're looking at both building not only the commercial, but the treasury management and deposits as well in that market.

Speaker 2

Then we've added some complements in the Westchester in New York, Westchester, not Westchester, Pennsylvania to be able to build out some of the lending in that space. So we're pretty comfortable and I think Bill Fink coming on board. Perhaps he'll build out his team from folks that follow him. And it's pretty exciting time. I know it's not showing up in the balance sheet just yet, But I'm pretty comfortable that we've set the foundation for good growth as we move forward.

Speaker 7

Thank you. I appreciate the commentary.

Speaker 2

Thank you.

Operator

That concludes our Q and A session. Will now turn the call back over to Antonio Labosseta for closing remarks. Tony?

Speaker 3

Sure.

Speaker 2

I just wanted to say thank you to everyone and appreciate the good questions this quarter. I'm pretty comfortable and optimistic for Providence future. I wish you all a good 2025 and look forward to having conversations with you in the near future. Thank you.

Speaker 3

This concludes the meeting. Thank you

Operator

all for joining. You may now disconnect.

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