Good day and welcome to the Provident Financial's Second Quarter Conference Call. All participants will be in listen-only mode. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Mr. Leonard Gleason. Please go ahead Mr. Gleason.

Thank you, Carrie. Good morning ladies and gentlemen. Thank you for joining us on this beautiful summer morning. The presenters for our second quarter earnings call are Chris Martin, Chairman, President and CEO; and Tom Lyons, Executive Vice President and CFO. Before beginning their 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 can be found in the text of this morning's earnings release, which may be accessed on the Investor Relations page of our website, www.providentnj.com. Now I'm pleased to introduce Chris Martin, who will offer his perspective on our second quarter’s financial results. Chris?

Thanks, Len and good morning everyone. Provident achieved several highway marks during the second quarter with record revenues, pretax pre-provision earnings, net income of $21.8 million, and earnings per share of $0.35. Our return on average assets was 1.01% and return on average tangible equity was 11.78%. The increase in total revenue was due to strong growth in wealth management income, loan swap fees, deposit service fees, gains on sales of investments, and stable net interest income. Net interest margin pressure from the prolonged low interest rate environment continued with greater originations of variable and floating rate assets contributing to a decrease in our NIM to 3.17%. As labor market and general economic conditions continued to improve, we think it is prudent to forego some current income in order to best position ourselves for an eventual increase in rates. Tom will discuss this in more detail but we anticipate a relatively stable NIM for the remainder of 2015. Year-to-date loan originations have been approximately 75% variable rate and our portfolio was 55% adjustable with 27% of loans having floating rate June 30th. The impact of lower asset yields on net interest income has been largely offset by consistent loan portfolio growth and further mitigated by impressive growth in non-interest bearing deposits. Our loan pipeline stands at 1.1 billion, another record level for us with pipeline rates somewhat higher than they were at the end of Q1. Total loans increased $223 million or 7% annualized for the first half of 2015 and the commercial component of the loan portfolio now represents 71% of outstandings. Our Pennsylvania lending teams in Lehigh Valley and Bucks regions have increasing pipelines and we have added new relationship managers to support this growth as well increased volume we are seeing within our loan production areas. C&I…

Thank you Chris and good morning everyone. As Chris noted our net income for the second quarter was a record $21.8 million, a 10% increase from $19.8 million for the trailing quarter. Earnings per share improved to $0.35 compared with $0.32 for the trailing quarter. The increase in earnings was driven by increased non-interest income which grew to 22% of revenues. Wealth management fees doubled to 5 million with the closing of the MDE acquisition on April 1st. Swap income increased by 2 million versus the trailing quarter as we originated more synthetically floating rate assets in anticipation of future interest rate increases. And fee income increased by 1 million as a result of increased deposit, debit card, and annuity sales income. Loans grew by 121 million on average during the quarter or 8% annualized with multifamily and construction and commercial real estate loans leading the way. Despite the $90 million increase in average earning assets, net interest income decreased by $300,000 versus the trailing quarter to 61.7 million as the origination and purchase of floating rate and short duration assets in anticipation of a rising rate environment reduced yields. Funding cost remained stable and average non-interest bearing deposits increased 16% annualized. However, the net interest margin decreased 7 basis points to 3.17%. We provided $1.1 million from loan losses this quarter compared with 600,000 in the prior quarter as allowance requirements from loan growth exceeded the benefit of continued improvement in asset quality. Non-performing loans decreased 5 million from the trailing quarter to 46 million or 0.73% of total loans. Total delinquencies fell to just over 1% of loans and weighted average risk rating of the portfolio improved. Net charges for the quarter increased to a still low 2.6 million on annualized 17 basis points of average loans. The amounts from loan losses to total loans decreased to 95 basis points at June 30th from 1% at March 31st. However, the allowance coverage of non-performing loans increased to 129%. Excluding acquired loans reported at fair value, the allowance is 1.03% of loans. Non-interest expense increased $2.7 million versus the trailing quarter to 46.1 million including non-recurring expense of 413,000 related to the MDE acquisition. The balance of the increase was primarily attributable to of course the continuing MDE operations, the stock based portion of annual directives fees, and increased advertising. Income tax expense was $10 million compared with $8 million for the trailing quarter and our effective tax rate increased slightly to 30.6% from 29.8%. We are currently projecting effective tax rate of approximately 30% for the remainder of 2015. That concludes our prepared remarks. We would be happy to respond to your questions.

[Operator Instructions]. Our first question comes from Mark Fitzgibbon of Sandler O'Neill. Please go ahead.

Good morning gentlemen.

Good morning.

First question I had Tom on expenses, do you feel like that sort of 47.5, I am sorry $45.5 million of operating expenses for the quarter is a decent run rate going forward with MDE and any synergies that you might extract there?

There is a couple of non-recurring type items in the quarter Mark. We have annual directors comp in one of the stock based compensation that gets recognized all in a lump in the second quarter each year. And then there is some transaction related charges so if you back those, those were about 1.2 million combined, I would figure about 45 million for a run rate.

Okay, great. And then secondly could you talk a little bit about your plan for growing deposits and perhaps share with us your deposit campaigns, any deposits campaigns that you have ongoing?

Well Mark, this is Chris. We certainly look at business advantage check in part which is something we are really promoting. It is probably -- we think it’s the best in class out there and we’ve had very good success with that of late even in the Pennsylvania market and even our mature markets in New Jersey. So that’s something we are leading with and doing very well with promotion and certainly are calling lists are going out there to people that we banked for years and never really connected on an operating basis. We aren’t really in the CD or high rate money market Mark, things that is going on is advertising and certainly some of our competitors are using that to get some core deposits. Certainly our C&I business that we have been doing has made those relationships a lot more sticky and more manageable for us.

I’d echo Chris’s comments on the pseudo additional C&I and non-interest bearing deposit. You saw we had some significant growth in non-interest bearing for the quarter. Cash package has performed for us as well and you see that reflected in some of the additional fee income for the quarter. Deposit fees and ATM and debit card fees were up combined about $850,000 in Q2 versus the trailing quarter. So we are seeing some nice traction there.

Okay and then lastly loan level swap income was elevated for you guys this quarter and for a lot of banks, where do you think that might settle out based on what you are seeing in the third quarter sort of a normalized more normal level for that?

At this point I think it’s kind of tough to call a normalized level. As you noted it is a volatile item. It was 121,000 in the first quarter for us and all the way up to 2.1 million in the second quarter. That really depends on borrowed demand and suitability for the product. It is a business we see GAAP, we like floating rate asset at this point in the cycle. We’ll continue to do that but that was very good performance for the quarter.

But thus far in the third quarter you have seen pretty good activity?

Little bit lighter so far.

Okay, thank you.

Our next question comes from David Bishop of Drexel Hamilton. Please go ahead.

Yes, good morning gentlemen.

Good morning.

Hey, just wondering if you can comment -- you spoke a little bit about adding the additional floating rate low and just curious what you are seeing in terms of new production that yields versus what might be rolling off?

Pipeline yield is about 360 -- I guess the portfolio is around 408, if I remember correctly.

I am sorry is that 360?

360, yes.

Got you. And then in terms of the impact related to the investments in terms of back office as you approach the $10 million mark, do you think most of that is in the run rate or do you see additional need for incremental expense adds as you approach that threshold?

We build this, it’s not LEGO necessarily but I think we are spending little time in systems to do certainly some more credit risk type events. And we are certainly looking at stress testing as we move forward. I think it’s something that we will be building up over a period. We certainly don’t see organically that 10 billion is there within two quarters or even a year as we estimate it. So, after an acquisition material nature we still have a little bit of time. On the other hand we are already building, we are also planning, we are adding a maybe staff to or reassigning staff to that area. So I think it something it’s going to be a little bit more whether that’s why we have to look at our operations to make sure we can maybe reduce some cost or utilize technologies a little bit better on the back end.

Got it and one final one, I think you mentioned the elevated charge offs, maybe some detail about the one sub standard loan that was charged now?

Yes, I guess that was just to note that the reason for the bump was really related to one specific credit. There was a charge about 1.1 million and 1.2 million on a loan and that has been resolved at this point.

Great, thank you.

Thank you.

Our next question comes from Matthew Kelley of Piper Jaffray. Please go ahead.

Hi, guys. First question, I was wondering just to get an update what were the AUM balances at the end of the quarter and where was that in the first quarter and what's the outlook for assets under management and the wealth kind of advisory business going forward?

As of June 30th Beacon has 2.4 billion under our management. When we did MDE with an additional 2.5, so not really terrible in the way of runoff. We had another small piece we had did with the Suffolk National Bank out of Long Island that’s been holding up very well considering it is a new market for us. So we are pretty pleased with that. Organic growth in that space is always challenging, its more referral then it is just go out there and sell well. Getting loans is a lot of different business then that and I think we have a good strategy going forward to make sure the business and what we offer our clients has multi pronged approaches to investment management but also hand holding and being able to pick up a phone and talk to somebody versus some of the large firms.

Okay, got it. And in the securities book it’s been trickling down in terms of total balances, is that going to continue in the back half of the year, is it going to stabilize or run a 1.5 billion?

I would expect it to stabilize. It’s really been a question of suitability of investment options and opportunities on the loan portfolio side instead.

Okay, got you. And then when you are thinking about the provision and reserve coverage, remind us what you are looking at for incremental provisioning on new C&I and new CRE growth into the portfolio, what type of provisions are allocated to new balance growth?

I think we are at about 90 basis points blended all in on card production.

Okay, got it. So there is probably some additional room there to bring down the overall coverage ratio on originated loans?

It’s probably work down if credit quality continues along the same path, we are down to middle to high 80s ultimately which would translate if you exclude to the acquired book to low 90s.

Okay, got it. And then I think it was 1.1 billion pipeline you had mentioned, how does that breakdown between Pennsylvania versus New Jersey and maybe just talk about what you’ve been experiencing in terms of yields and growth rates for commercial loans in your two kinds of markets?

I will give you some pipeline information first, Pennsylvania is about 53 million of the 1.1 billion. But grown from 35 million in Q1 so we are starting to pick up a little bit more in the Pennsylvania market. That’s just Pennsylvania, we also had some activity in West New Jersey as a result of Team acquisition which is built in there as well. The rate as I said overall is about 360. I expect it to run at 1.1 billion, it is probably about close to 60% so maybe roughly $580 million is what we expect to close out of that 1.1 billion.

Okay, got it. Then last question just give a little more detail on the competitive environment that you are seeing for deposit rates. You guys have really solid core deposit balance growth, the cash back checking had some success this quarter but talk a little bit more about just what you are seeing for promotional offerings in the money market and CDs and how that’s changed over the last three to six months in your markets.

Well certainly some smaller institutions that are suffering with deposit growth, we did see a small competitor had a 10 month CD at 1.40%. Some of our other competitors of similar size have money market rates of the same level that is if they bring it one year relationship and do some other behaviors and they are advertising them pretty heavily. So I think those are the two areas, the CD play is going on a little bit more as people are just trying to get some deposit balances as the loan volumes have started to pick up. Again we’ve been playing defense, we actually will deal with it on a one to one basis if there is a need to be aggressive. We’ve been pretty successful in the municipal market and we also think that borrowing for four years it makes a lot more sense than putting on a CD for 10 months at a higher rate.

Got it, okay, thank you.

Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Martin for any closing remarks.