PROVIDENT FINANCIAL SERVICES INC [PFS] Filings

10-Q 1 pfs-20230930.htm 10-Q pfs-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			For the quarterly period ended September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			For the transition period from to

Commission File Number: 001-31566

PROVIDENT FINANCIAL SERVICES, INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware			42-1547151
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

239 Washington Street	Jersey City	New Jersey	07302
(Address of Principal Executive Offices)	(City)	(State)	(Zip Code)

(732) 590-9200

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Symbol(s)

Name of each exchange on which registered

Common

PFS

New York Stock Exchange

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý NO ¨

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding twelve months (or for such shorter period that the Registrant was required to submit and post such files). Yes ý NO ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated Filer

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ý

As of November 1, 2023 there were 83,209,012 shares issued and 75,606,533 shares outstanding of the Registrant’s Common Stock, par value $0.01 per share, including 65,745 shares held by the First Savings Bank Directors’ Deferred Fee Plan not otherwise considered outstanding under U.S. generally accepted accounting principles.

PROVIDENT FINANCIAL SERVICES, INC.

INDEX TO FORM 10-Q


Item Number		Page Number

PART I—FINANCIAL INFORMATION

1	Financial Statements:

	Consolidated Statements of Financial Condition as of September 30, 2023 (unaudited) and December 31, 2022	3

	Consolidated Statements of Income for the three and nine months ended September 30, 2023 and 2022 (unaudited)	4

	Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2023 and 2022 (unaudited)	5

	Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022 (unaudited)	6

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (unaudited)	8

	Notes to Unaudited Consolidated Financial Statements	10

2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45

3	Quantitative and Qualitative Disclosures About Market Risk	57

4	Controls and Procedures	58

PART II—OTHER INFORMATION

1	Legal Proceedings	59

1A.	Risk Factors	59

2	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	59

3	Defaults Upon Senior Securities	59

4	Mine Safety Disclosures	59

5	Other Information	59

6	Exhibits	60

Signatures		61

PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS.

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statements of Financial Condition

September 30, 2023 (Unaudited) and December 31, 2022

(Dollars in Thousands)


	September 30, 2023		December 31, 2022
ASSETS
Cash and due from banks	$	188,573	$	186,490
Short-term investments	696		18
Total cash and cash equivalents	189,269		186,508
Available for sale debt securities, at fair value	1,656,305		1,803,548
Held to maturity debt securities, net (fair value of $343,082 at September 30, 2023 (unaudited) and $373,468 at December 31, 2022)	370,416		387,923
Equity securities, at fair value	1,210		1,147
Federal Home Loan Bank stock	101,250		68,554
Loans	10,667,612		10,248,883
Less allowance for credit losses	107,563		88,023
Net loans	10,560,049		10,160,860
Foreclosed assets, net	16,487		2,124
Banking premises and equipment, net	71,453		79,794
Accrued interest receivable	55,741		51,903
Intangible assets	458,663		460,892
Bank-owned life insurance	241,406		239,040
Other assets	364,576		341,143
Total assets	$	14,086,825	$	13,783,436

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand deposits	$	7,872,901	$	8,373,005
Savings deposits	1,200,377		1,438,583
Certificates of deposit of $100,000 or more	699,880		504,627
Other time deposits	368,241		246,809
Total deposits	10,141,399		10,563,024
Mortgage escrow deposits	41,319		35,705
Borrowed funds	2,022,249		1,337,370
Subordinated debentures	10,646		10,493
Other liabilities	248,242		239,141
Total liabilities	12,463,855		12,185,733
Stockholders’ Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued	—		—
Common stock, $0.01 par value, 200,000,000 shares authorized, 83,209,012 shares issued and 75,531,884 shares outstanding at September 30, 2023 and 76,169,196 outstanding at December 31, 2022	832		832
Additional paid-in capital	988,001		981,138
Retained earnings	964,802		918,158
Accumulated other comprehensive (loss) income	(195,056)		(165,045)
Treasury stock	(127,818)		(127,154)
Unallocated common stock held by the Employee Stock Ownership Plan	(7,791)		(10,226)
Common stock acquired by deferred compensation plans	(3,013)		(3,427)
Deferred compensation plans	3,013		3,427
Total stockholders’ equity	1,622,970		1,597,703
Total liabilities and stockholders’ equity	$	14,086,825	$	13,783,436

See accompanying notes to unaudited consolidated financial statements.

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statements of Income

Three and nine months ended September 30, 2023 and 2022 (Unaudited)

(Dollars in Thousands, except per share data)


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Interest income:
Real estate secured loans	$	104,540	$	80,273	$	299,830	$	213,181
Commercial loans	33,806		25,201		93,915		70,385
Consumer loans	4,746		3,785		13,419		10,268
Available for sale debt securities, equity securities and Federal Home Loan Bank stock	11,886		9,560		34,748		25,966
Held to maturity debt securities	2,334		2,416		7,059		7,501
Deposits, Federal funds sold and other short-term investments	885		496		2,678		1,705
Total interest income	158,197		121,731		451,649		329,006
Interest expense:
Deposits	44,923		9,560		108,880		20,322
Borrowed funds	16,765		2,518		38,329		4,790
Subordinated debt	273		164		774		403
Total interest expense	61,961		12,242		147,983		25,515
Net interest income	96,236		109,489		303,666		303,491
Provision charge for credit losses	11,009		8,413		27,407		5,004
Net interest income after provision charge for credit losses	85,227		101,076		276,259		298,487
Non-interest income:
Fees	6,132		7,203		18,294		21,516
Wealth management income	6,992		6,785		20,826		21,274
Insurance agency income	3,224		2,865		11,175		9,135
Bank-owned life insurance	1,820		1,237		4,838		3,978
Net gains on securities transactions	13		(3)		37		154
Other income	1,139		10,358		5,691		13,466
Total non-interest income	19,320		28,445		60,861		69,523
Non-interest expense:
Compensation and employee benefits	35,702		38,079		109,724		112,582
Net occupancy expense	8,113		8,452		24,474		26,262
Data processing expense	5,312		5,575		16,536		16,551
FDIC insurance	1,628		1,400		5,688		3,955
Amortization of intangibles	720		779		2,231		2,511
Advertising and promotion expense	1,133		1,366		3,722		3,692
Provision charge (benefit) for credit losses on off-balance sheet credit exposures	1,532		1,575		1,624		(1,788)
Merger-related expenses	2,289		2,886		5,349		2,886
Other operating expenses	10,728		9,331		31,761		28,522
Total non-interest expense	67,157		69,443		201,109		195,173
Income before income tax expense	37,390		60,078		136,011		172,837
Income tax expense	8,843		16,657		34,925		46,224
Net income	$	28,547	$	43,421	$	101,086	$	126,613
Basic earnings per share	$	0.38	$	0.58	$	1.35	$	1.69
Weighted average basic shares outstanding	74,909,083		74,297,237		74,793,530		74,808,358
Diluted earnings per share	$	0.38	$	0.58	$	1.35	$	1.69
Weighted average diluted shares outstanding	74,914,205		74,393,380		74,816,606		74,896,493

See accompanying notes to unaudited consolidated financial statements.

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statements of Comprehensive Income

Three and nine months ended September 30, 2023 and 2022 (Unaudited)

(Dollars in Thousands)


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Net income	$	28,547	$	43,421	$	101,086	$	126,613
Other comprehensive (loss) income, net of tax:
Unrealized gains and losses on available for sale debt securities:
Net unrealized (losses) arising during the period	(31,224)		(67,293)		(25,086)		(197,997)
Reclassification adjustment for gains included in net income	—		—		—		(42)
Total	(31,224)		(67,293)		(25,086)		(198,039)
Unrealized gains and losses on derivatives:
Net unrealized gains arising during the period	2,352		5,998		5,385		18,225
Reclassification adjustment for (gains) included in net income	(3,430)		(1,157)		(9,519)		(788)
Total	(1,078)		4,841		(4,134)		17,437
Amortization related to post-retirement obligations	(261)		(236)		(791)		(748)
Total other comprehensive (loss)	(32,563)		(62,688)		(30,011)		(181,350)
Total comprehensive (loss) income	$	(4,016)	$	(19,267)	$	71,075	$	(54,737)

See accompanying notes to unaudited consolidated financial statements.

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statements of Changes in Stockholders’ Equity

For the three and nine months ended September 30, 2022 (Unaudited)

(Dollars in Thousands)


For the three months ended September 30, 2022	COMMON STOCK		ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS		ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME		TREASURYSTOCK		UNALLOCATED ESOP SHARES		COMMON STOCK ACQUIRED BY DEFERRED COMP PLANS		DEFERRED COMPENSATION PLANS		TOTAL STOCKHOLDERS’ EQUITY
Balance at June 30, 2022	$	832	$	976,067	$	860,977	$	(111,799)	$	(127,091)	$	(13,721)	$	(3,705)	$	3,705	$	1,585,265
Net income	—		—		43,421		—		—		—		—		—		43,421
Other comprehensive loss, net of tax	—		—		—		(62,688)		—		—		—		—		(62,688)
Cash dividends paid	—		—		(18,066)		—		—		—		—		—		(18,066)


Distributions from deferred comp plans	—		47		—		—		—		—		168		(168)		47
Purchases of treasury stock	—		—		—		—		—		—		—		—		—
Purchase of employee restricted shares to fund statutory tax withholding	—		—		—		—		(54)		—		—		—		(54)


Allocation of ESOP shares	—		296		—		—		—		811		—		—		1,107
Allocation of Stock Award Plan ("SAP") shares	—		1,904		—		—		—		—		—		—		1,904

Allocation of stock options	—		49		—		—		—		—		—		—		49
Balance at September 30, 2022	$	832	$	978,363	$	886,332	$	(174,487)	$	(127,145)	$	(12,910)	$	(3,537)	$	3,537	$	1,550,985


For the nine months ended September 30, 2022	COMMONSTOCK		ADDITIONAL PAID-IN CAPITAL		RETAINEDEARNINGS		ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)		TREASURYSTOCK		UNALLOCATED ESOP SHARES		COMMON STOCK ACQUIRED BY DEFERRED COMP PLANS		DEFERRED COMPENSATION PLANS		TOTAL STOCKHOLDERS’ EQUITY
Balance at December 31, 2021	$	832	$	969,815	$	814,533	$	6,863	$	(79,603)	$	(15,344)	$	(3,984)	$	3,984	$	1,697,096
Net income	—		—		126,613		—		—		—		—		—		126,613
Other comprehensive loss, net of tax	—		—		—		(181,350)		—		—		—		—		(181,350)
Cash dividends paid	—		—		(54,814)		—		—		—		—		—		(54,814)


Distributions from deferred comp plans	—		133		—		—		—		—		447		(447)		133
Purchases of treasury stock	—		—		—		—		(46,529)		—		—		—		(46,529)
Purchase of employee restricted shares to fund statutory tax withholding	—		—		—		—		(1,013)		—		—		—		(1,013)

Stock option exercises	—		—		—		—		—		—		—		—		—
Allocation of ESOP shares	—		878		—		—		—		2,434		—		—		3,312
Allocation of SAP shares	—		7,389		—		—		—		—		—		—		7,389

Allocation of stock options	—		148		—		—		—		—		—		—		148
Balance at September 30, 2022	$	832	$	978,363	$	886,332	$	(174,487)	$	(127,145)	$	(12,910)	$	(3,537)	$	3,537	$	1,550,985

See accompanying notes to unaudited consolidated financial statements.

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statements of Changes in Stockholders’ Equity

For the three and nine months ended September 30, 2023 (Unaudited)

(Dollars in Thousands)


For the three months ended September 30, 2023	COMMON STOCK		ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS		ACCUMULATED OTHER COMPREHENSIVE LOSS		TREASURY STOCK		UNALLOCATED ESOP SHARES		COMMON STOCK ACQUIRED BY DEFERRED COMP PLANS		DEFERRED COMPENSATION PLANS		TOTAL STOCKHOLDERS’ EQUITY
Balance at June 30, 2023	832		986,150		954,403		(162,493)		(127,818)		(8,603)		(3,150)		3,150		1,642,471
Net income	—		—		28,547		—		—		—		—		—		28,547
Other comprehensive loss, net of tax	—		—		—		(32,563)		—		—		—		—		(32,563)
Cash dividends paid	—		—		(18,148)		—		—		—		—		—		(18,148)


Distributions from deferred comp plans	—		36		—		—		—		—		137		(137)		36
Purchases of treasury stock	—		—		—		—		—		—		—		—		—
Purchase of employee restricted shares to fund statutory tax withholding	—		—		—		—		—		—		—		—		—

Stock option exercises	—		—		—		—		—		—		—		—		—
Allocation of ESOP shares	—		(24)		—		—		—		812		—		—		788
Allocation of SAP shares	—		1,805		—		—		—		—		—		—		1,805

Allocation of stock options	—		34		—		—		—		—		—		—		34
Balance at September 30, 2023	$	832	$	988,001	$	964,802	$	(195,056)	$	(127,818)	$	(7,791)	$	(3,013)	$	3,013	$	1,622,970


For the nine months ended September 30, 2023	COMMONSTOCK		ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS		ACCUMULATED OTHER COMPREHENSIVE LOSS		TREASURY STOCK		UNALLOCATED ESOP SHARES		COMMON STOCK ACQUIRED BY DEFERRED COMP PLANS		DEFERRED COMPENSATION PLANS		TOTAL STOCKHOLDERS’ EQUITY
Balance at December 31, 2022	$	832	$	981,138	$	918,158	$	(165,045)	$	(127,154)	$	(10,226)	$	(3,427)	$	3,427	$	1,597,703
Net income	—		—		101,086		—		—		—		—		—		101,086
Other comprehensive loss, net of tax	—		—		—		(30,011)		—		—		—		—		(30,011)
Cash dividends paid	—		—		(54,875)		—		—		—		—		—		(54,875)
Cumulative effect of adopting Accounting Standards Update ("ASU") No. 2022-02, net of tax	—		—		433		—		—		—		—		—		433

Distributions from deferred comp plans	—		115		—		—		—		—		414		(414)		115

Purchase of employee restricted shares to fund statutory tax withholding	—		—		—		—		(1,671)		—		—		—		(1,671)

Stock option exercises	—		(217)		—		—		1,007		—		—		—		790
Allocation of ESOP shares	—		219		—		—		—		2,435		—		—		2,654
Allocation of SAP shares	—		6,635		—		—		—		—		—		—		6,635

Allocation of stock options	—		111		—		—		—		—		—		—		111
Balance at September 30, 2023	$	832	$	988,001	$	964,802	$	(195,056)	$	(127,818)	$	(7,791)	$	(3,013)	$	3,013	$	1,622,970

See accompanying notes to unaudited consolidated financial statements.

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

Nine months ended September 30, 2023 and 2022 (Unaudited)

(Dollars in Thousands)


	Nine months ended September 30,
	2023		2022
Cash flows from operating activities:
Net income	$	101,086	$	126,613
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangibles	8,835		9,845
Provision charge for credit losses on loans and securities	27,407		5,004
Provision charge (benefit) for credit losses on off-balance sheet credit exposures	1,624		(1,788)
Deferred tax benefit	(2,332)		(222)
Amortization of operating lease right-of-use assets	7,890		8,006

Income on Bank-owned life insurance	(4,838)		(3,978)
Net amortization of premiums and discounts on securities	6,088		10,465
Accretion of net deferred loan fees	(6,653)		(7,095)
Amortization of premiums on purchased loans, net	170		234
Originations of loans held for sale	(12,227)		(18,467)
Proceeds from sales of loans originated for sale	13,056		16,978
ESOP expense	2,654		3,312
Allocation of stock award expense	6,635		7,389
Allocation of stock option expense	111		148

Net gain on sale of loans	(1,071)		(1,306)
Net gain on securities transactions	(37)		(154)
Net gain on sale of premises and equipment	(197)		(22)
Net gain on sale of foreclosed assets	(2,789)		(8,590)
Increase in accrued interest receivable	(3,838)		(3,130)
Increase in other assets	(23,596)		(60,364)
Increase in other liabilities	9,101		74,992
Net cash provided by operating activities	127,079		157,870
Cash flows from investing activities:
Net increase in loans	(420,331)		(449,803)
Purchases of loans	(7,876)		(4,326)
Proceeds from sales of foreclosed assets	3,485		16,188
Proceeds from maturities, calls and paydowns of held to maturity debt securities	28,576		62,597
Purchases of investment securities held to maturity	(11,978)		(20,665)

Proceeds from maturities, calls and paydowns of available for sale debt securities	146,965		227,975
Purchases of available for sale debt securities	(40,089)		(279,395)
Proceeds from redemption of Federal Home Loan Bank stock	151,472		89,244
Purchases of Federal Home Loan Bank stock	(184,168)		(110,671)

BOLI claim benefits received	2,347		—


Proceeds from sales of premises and equipment	62		22
Purchases of premises and equipment	(5,895)		(7,879)
Net cash used in investing activities	(337,430)		(476,713)
Cash flows from financing activities:
Net decrease in deposits	(421,625)		(548,407)
Increase in mortgage escrow deposits	5,614		5,183
Cash dividends paid to stockholders	(54,875)		(54,814)


	Nine months ended September 30,
	2023		2022
Purchase of treasury stock	—		(46,529)
Purchase of employee restricted shares to fund statutory tax withholding	(1,671)		(1,013)
Stock options exercised	790		—
Proceeds from long-term borrowings	508,805		2,274,000
Payments on long-term borrowings	(58,443)		(1,826,556)
Net increase (decrease) in short-term borrowings	234,517		(10,616)
Net cash provided by (used in) financing activities	213,112		(208,752)
Net increase (decrease) in cash and cash equivalents	2,761		(527,595)
Cash and cash equivalents at beginning of period	186,438		685,163
Restricted cash at beginning of period	70		27,300
Total cash, cash equivalents and restricted cash at beginning of period	186,508		712,463
Cash and cash equivalents at end of period	189,199		183,068
Restricted cash at end of period	70		1,800
Total cash, cash equivalents and restricted cash at end of period	$	189,269	$	184,868

Cash paid during the period for:
Interest on deposits and borrowings	$	143,223	$	26,130
Income taxes	$	38,861	$	25,650
Non-cash investing activities:


Transfer of loans receivable to foreclosed assets	$	15,131	$	1,120

See accompanying notes to unaudited consolidated financial statements.

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies

A. Basis of Financial Statement Presentation

The accompanying unaudited consolidated financial statements include the accounts of Provident Financial Services, Inc. (the "Company") and its wholly owned subsidiary, Provident Bank (the “Bank") and its wholly owned subsidiaries.

In preparing the interim unaudited consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statements of financial condition and the consolidated statements of income for the periods presented. Actual results could differ from these estimates. The allowance for credit losses is a material estimate that is particularly susceptible to near-term change.

The interim unaudited consolidated financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, considered necessary for a fair presentation of the financial condition and results of operations for the periods presented. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results of operations that may be expected for all of 2023.

Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Additionally, certain comparative balances on the interim unaudited consolidated financial statements have been reclassified to conform to the current year’s presentation.

These unaudited consolidated financial statements should be read in conjunction with the December 31, 2022 Annual Report to Stockholders on Form 10-K.

B. Earnings Per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations for the three and nine months ended September 30, 2023 and 2022 (dollars in thousands, except per share amounts):


	Three months ended September 30,
	2023					2022
	Net Income		Weighted Average Common Shares Outstanding	Per Share Amount		Net Income		Weighted Average Common Shares Outstanding	Per Share Amount
Net income	$	28,547				$	43,421
Basic earnings per share:
Income available to common stockholders	$	28,547	74,909,083	$	0.38	$	43,421	74,297,237	$	0.58
Dilutive shares			5,122					96,143
Diluted earnings per share:
Income available to common stockholders	$	28,547	74,914,205	$	0.38	$	43,421	74,393,380	$	0.58


	Nine months ended September 30,
	2023					2022
	Net Income		Weighted Average Common Shares Outstanding	Per Share Amount		Net Income		Weighted Average Common Shares Outstanding	Per Share Amount
Net income	$	101,086				$	126,613
Basic earnings per share:
Income available to common stockholders	$	101,086	74,793,530	$	1.35	$	126,613	74,808,358	$	1.69
Dilutive shares			23,076					88,135
Diluted earnings per share:
Income available to common stockholders	$	101,086	74,816,606	$	1.35	$	126,613	74,896,493	$	1.69

Anti-dilutive stock options and awards at September 30, 2023 and 2022, totaling 1.2 million shares and 921,834 shares, respectively, were excluded from the earnings per share calculations.

C. Loans Receivable and Allowance for Credit Losses

The impact of utilizing the current expected credit loss ("CECL") methodology approach to calculate the allowance for credit losses on loans is significantly influenced by the composition, characteristics and quality of the Company’s loan portfolio, as well as the prevailing economic conditions and forecast utilized. Material changes to these and other relevant factors may result in greater volatility to the allowance for credit losses, and therefore, greater volatility to the Company’s reported earnings. For the three and nine months ended September 30, 2023, a worsened economic forecast and related deterioration in the projected commercial property price indices over the expected life of the loan portfolio within our CECL model led to increases to the provisions for credit losses and off-balance sheet credit exposures. See Notes 4 and 10 to the Consolidated Financial Statements for more information on the allowance for credit losses on loans and off-balance sheet credit exposures.

D. Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of identifiable net assets acquired through purchase acquisitions. In accordance with GAAP, goodwill with an indefinite useful life is not amortized, but is evaluated for impairment on an annual basis, or more frequently if events or changes in circumstances indicate potential impairment between annual measurement dates. Goodwill is analyzed for impairment at least once a year. As permitted by GAAP, the Company prepares a qualitative assessment in determining whether goodwill may be impaired. The factors considered in the assessment include macroeconomic conditions, industry and market conditions and overall financial performance of the Company, among others. The Company completed its most recent annual goodwill impairment test as of July 1, 2023. At September 30, 2023, the Company performed an analysis and concluded that no triggering events were identified and therefore a test for impairment between annual tests was not required.

Note 2. Business Combinations