プロビデント・ファイナンシャル・サービシズ（PFS）2026年第3四半期決算説明会：過去最高の売上高と利益率拡大

プロビデント・ファイナンシャル・サービシズ（NYSE: PFS）が発表した2026年度第3四半期決算は、純受取利息の増加、利ざやの拡大、ウェルスマネジメントおよび保険事業の堅調維持に支えられ、売上高が過去最高を記録し、調整後利益も増加した。

要点

• 調整後純利益は前年同期比17.5%増の8,400万ドル（希薄化後1株当たり0.65ドル）となった。非コア費用を複数計上した後の報告ベースの純利益は6,900万ドル（1株当たり0.53ドル）だった。
• 総営業収益は過去最高の2億3,800万ドルに達した。純受取利息は前年同期比7%増となる過去最高の2億800万ドルを記録し、非金利収入は3,050万ドルとなった。
• コア純金利利ざやは前四半期比で7ベーシスポイント拡大し3.16%となった。経営陣は2026年度第4四半期にコア純金利利ざやがさらに1〜2ベーシスポイント拡大すると予想している。
• 期末預金残高は2億6,200万ドル増加（年率5.4%増）し、投資目的の保有貸出金は1億2,400万ドル増加（年率2.5%増）した。
• 経営陣は通期の貸出金および預金の成長率目標（5%〜6%）を維持した。また、市場動向や与信基準に左右されるものの、2027年の貸出金成長率についても5%〜6%と予想した。
• 資産の質は安定した推移を見せた。総資産に対する不調和資産の割合は55ベーシスポイントで、純貸倒償還率は当四半期および年初来の双方で5ベーシスポイントとなった。

主要財務データ

報告ベースの損益には、買収会計における償却促進に関連する債務消滅損1,750万ドル、コアシステム移行費用370万ドル、およびリース早期解約費用46万5,000ドルが含まれていた。

事業・営業業績

法人および地方自治体口座が当四半期の預金増加を牽引した。無利息当座預金は5%増加し、経営陣は今後の継続的な拡大を見込んでいるが、市場金利の上昇により一部の残高が有利息商品へシフトする可能性もある。

総追加預金コストは前四半期の2.85%〜2.95%に対し、約3.25%となった。預金全体コストは前四半期比で10ベーシスポイント上昇して2.02%となり、有利息預金コストは13ベーシスポイント上昇の2.50%となった。

プロビデントは当四半期中に約5億5,000万ドルの商業ローンを実行した。商業ローンの案件パイプライン総額は30億ドル超を維持し、実行確率を考慮した調整後パイプラインは17億ドルとなった。C&I（商業・産業）融資、中堅企業向け融資、および専門融資がパイプラインの半数以上を占めた。パイプラインの適用金利は6.5%に近づいており、既存ポートフォリオの利回り5.94%を上回っている。

ウェルスマネジメント収益と保険収益は、前年同期比でそれぞれ6%増、20%増となった。ウェルスマネジメントの運用資産残高は44億ドルと比較的安定していた。また、第3四半期の非金利収入は、銀行保有生命保険（BOLI）収入の増加分（350万ドル）によっても押し上げられた。

当行はレイバー・デーの週末にコアシステムの移行を完了した。経営陣によると、新プラットフォームによりデータ活用能力、営業効率、意思決定が向上することが期待されるという。また、プロビデントは「B」と呼ばれる社内AIエージェントを開発し、移行期間中の従業員への情報提供に活用した。

経営陣の見通し

• 2026年度通期の貸出金および預金の成長率目標は、引き続き5%〜6%としている。
• 経営陣は2026年度第4四半期の非金利収入を約2,900万ドルと予想している。
• 第4四半期のコア営業費用は1億1,800万ドル〜1億2,000万ドルと見込まれており、これにコアシステム移行の最終費用約100万ドルが加算される。
• 通期の実行税率は約28%となる見込みである。
• 経営陣は、コアROA（総資産利益率）1.2%〜1.3%、コアROTCE（平均有形株主資本利益率）10%台半ばを目標として維持している。
• 米連邦準備理事会（FRB）が2026年12月に利上げを行うと仮定した場合、経営陣は第4四半期にコア純金利利ざやが1〜2ベーシスポイント拡大すると予想している。
• コア費用は2026年通期で約4億7,400万ドルに達する見込みである。経営陣は、その水準をベースとして2027年の費用伸び率を3.5%〜3.75%と見込んでいる。
• 経営陣は2027年の貸出金成長率を5%〜6%と予測する一方、量を追求するために与信基準を緩和することはないと強調した。

今後12か月間で約33億ドルの貸出金がリプライスされ、金利が約5.75%から約6.5%以上に上昇する見込みである。また、同期間中に約3億5,000万ドルの有価証券もリプライスされる予定である。経営陣は、これら両カテゴリー全体で100ベーシスポイント以上の利回り向上が見込まれると試算している。

リスクおよび注視事項

金利上昇により預金獲得コストが増加しており、無利息口座からコストのより高い商品へと残高がシフトする可能性がある。経営陣は、イールドカーブの長期ゾーンが変動しない場合、25ベーシスポイントの利上げによって当初利ざやが1〜2ベーシスポイント縮小する可能性があると試算したが、貸借対照表は全体として広範に金利中立的であると説明した。

第4四半期の貸出金の伸びは、予想を上回る繰上返済の影響を受ける可能性がある。また、金利上昇はモーゲージ・ウェアハウス残高の重荷となっており、金利が大幅に上昇した場合には融資活動が低下する可能性がある。

不調和資産は総資産の55ベーシスポイントであった。経営陣は、シニア向け住宅関連の大口1件を含む4件の与信について年末までに解決できると見込んでいる。これらの与信を除外した場合、不調和資産は総資産の23ベーシスポイントになると試算した。

貸倒引当金カバー率は前四半期比で2ベーシスポイント上昇し94ベーシスポイントとなった。経営陣は、足元の引当金増加は広範な悪化ではなく主に個別引当によるものだと説明し、現時点でポートフォリオ全体に及ぶ信用上の懸念は見られないと述べた。

アナリスト質疑応答の要点

預金の見通し：経営陣は、法人向け銀行業務、トレジャリー・マネジメント、小規模事業者向け施策、およびターゲットを絞った専門分野を通じて、預金および無利息残高が引き続き増加すると見込んでいる。ただし、そのペースと構成比は市場金利に依存する。

貸出金の伸び：経営陣は、商業ローン・パイプラインの多様性と実行への移行について自信を示した。2026年の貸出金成長率を6%近く、2027年を5%〜6%と予想する一方で、繰上返済が純増ペースに影響を与える可能性があると指摘した。

株主還元：プロビデントは約37万株の自社株買いを実施した。経営陣は、自社株買いは機動的に検討されており、3年間の回収期間フレームワークに基づくと現在の買付上限価格は約22ドルであると述べた。

M&A：経営陣は、買収は必須事項ではなく選択肢の一つであると説明した。いかなる取引も企業文化の適合性と戦略的価値を提供する必要があり、オーガニック成長が引き続き最優先事項であるとしている。

貸借対照表の管理：当行は引き続き97%〜103%の預貸比率を目標としている。経営陣は、目標範囲の下限に達することが必ずしも最も収益性の高い結果とは限らないとし、コア預金カテゴリーの組み合わせを通じて貸出金の伸びを賄う意向を示した。

決算説明会（電話会議）文字起こし全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Hello, everyone. Thank you for joining us, and welcome to the Provident Financial Services Third Quarter 2026 Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Michael Perito, Head of Investor Relations. Michael, please go ahead.

Michael Perito

Thank you. Good morning, everyone, and thanks for joining us for our third quarter 2026 earnings call. Today's presenters are President and CEO, Tony Labozzetta; and Executive Vice President and Chief Financial Officer, Adriano Duarte. 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 is contained in last evening's earnings release, which has been posted to the Investor Relations page on our website, provident.

bank.

Now I'd like to hand it off to Tony Labozzetta, who will offer his perspective on our third quarter. Tony?

Anthony Labozzetta

Thank you, Michael, and good morning, everyone. I appreciate you joining us today to discuss our third quarter results. Provident continued its strong performance, delivering another quarter of solid financial results with core net income of $84 million or $0.65 per diluted share. Our annualized adjusted return on average assets was 1.3%, and our adjusted return on average tangible common equity was over 16% for the sixth consecutive quarter. Total operating revenues of $238 million marked another record quarter and continue to be driven by good growth in both our spread and fee-based businesses. Year-over-year, net interest income grew 7% and our wealth and insurance revenues grew 6% and 20%, respectively.

Our adjusted pre-provision net revenue reached a record $120 million, representing $0.92 per share and an annualized core PPNR return on average assets of 1.85%. Over Labor Day weekend, the bank completed its core conversion as planned. This was a significant project that touched virtually every aspect of our bank. I'm extremely proud of our team for executing with excellence on this critical initiative. Their planning, collaboration, effort and focus on the customer experience resulted in a very successful conversion. Our strong core profitability and ability to drive positive operating leverage while making significant investments such as our core conversion represents one of the key elements of our strategy.

Balance sheet trends during the quarter showed continued positive momentum, keeping us on track to achieve the growth we guided to for the year. We saw solid expansion during the quarter in noninterest-bearing deposits and more broadly, our core business deposits, which drove deposit growth over 5% annualized. The bank remains focused on growing our deposits to fund our strong lending activity. We have several impactful deposit initiatives in flight, particularly in our small business group and within certain targeted specialty deposit verticals. Commercial loan balances grew 3% annualized in the third quarter, which, as a reminder, is typically a seasonally slower quarter for our business.

In addition to normal seasonality, the recent rise in interest rates also weighed slightly on our mortgage warehouse balances. Overall, activity and loan growth remained positive. We funded approximately $550 million of commercial loans during the quarter, and our pipeline remains over $3 billion. For the third consecutive quarter, our pipeline remains well diversified with C&I, middle market and specialty representing over 50% of the total. We are pacing to achieve approximately 6% loan growth for the year, although we remain mindful that payoffs in the fourth quarter could have an impact on net growth. Asset quality metrics were stable when compared to the prior quarter and remain at low levels. We continue to make good progress on the senior housing relationship that migrated to nonperforming status earlier this year and anticipate a satisfactory resolution by year-end. Adjusting our nonperforming assets for the resolution of these 4 credits, our NPAs would be only 23 basis points of total assets.

Overall, asset quality trends remain favorable. Commercial delinquencies have improved and net charge-offs were only 5 basis points for both this quarter and year-to-date. The bank has strong balance sheet, and we continue to actively manage our interest rate risk profile. During the quarter, we saw improvement in both our loan-to-deposit and CET concentration ratios. Our CET1 ratio grew to 10.9%. And during the past few weeks, the bank has been buying back stock due to increased market volatility. Overall, I'm incredibly proud of the hard work of our employees. Our strong performance is a direct result of the culture we have at Provident.

Now I would like to turn the call over to Adriano for his comments on our financial performance. Adriano?

Adriano Duarte

Thank you, Tony, and good morning, everyone. As Tony noted, our adjusted net income for the third quarter was $84 million or $0.65 per share, which increased 17.5% versus the third quarter of 2025. This produced an adjusted return on average assets of 1.3% and a core return on average tangible equity of 16.6%, adjusting for the amortization of intangibles. During the quarter, we had several noncore expense items that impacted our reported net income of $69 million or $0.53 per share. These items included a $17.5 million loss on extinguishment of debt due to accelerated amortization of purchase accounting, $3.7 million of core conversion costs and $465,000 of early lease termination costs.

Adjusted pre-provision net revenue was nearly $120 million or an annualized 1.85% of average assets, a 10% increase from the $109 million or 1.76% of average assets reported for the third quarter of 2025. Our record revenue of $238 million was driven by record net interest income of $208 million and noninterest income of $30.5 million. Average earning assets increased $341 million or an annualized 5.8% versus the trailing quarter, with average yield on assets increasing 7 basis points to 5.68%. Interest-bearing deposit costs were 2.5%, an increase of 13 basis points versus the trailing quarter, while total deposit costs were 2.02%, an increase of 10 basis points.

Our core net interest margin expanded 7 basis points to 3.16%, while our reported net interest margin expanded 2 basis points to 3.5%. We are currently modeling rate increase by the Federal Reserve in December of 2026 and expect core margin to expand 1 to 2 basis points in the fourth quarter. Period-end loans held for investment increased $124 million or an annualized 2.5% for the quarter. Our pull-through adjusted loan pipeline at quarter end was $1.7 billion. The pipeline rate is approaching 6.5% and remains accretive relative to our current portfolio yield of 5.94%. Period-end deposits increased $262 million for the quarter or an annualized 5.4%. The increase was driven by commercial and municipal deposit growth. Our loan-to-deposit ratio improved quarter-over-quarter to 101.8%, and we continue to target a 97% to 103% range on this ratio.

Asset quality remains strong with nonperforming assets representing 55 basis points of total assets. We recorded a provision for credit losses of $5.2 million for the quarter, driven mainly by loan growth, changes in portfolio mix and required specific reserves. This brought our allowance coverage ratio up 2 basis points from the trailing quarter to 94 basis points. Noninterest income of $30.5 million was slightly ahead of expectations, partly due to elevated BOLI income of $3.5 million. In addition, we continue to see solid performance from both our Insurance and Wealth Management divisions. Wealth Management AUM was relatively stable during the quarter at $4.4 billion. Total noninterest expense increased $140.7 million in the third quarter, reflecting nonoperating expenses I previously noted. After adjusting for these items, core noninterest expense was approximately $119 million for the quarter. Adjusted expenses to average assets and the efficiency ratio were stable from the trailing quarter at 1.84% and 49.9%, respectively.

We project quarterly core operating expenses of approximately $118 million to $120 million in the fourth quarter, with the increased range most notably driven by higher incentive accruals due to our stronger financial performance. In addition to normal expenses, we will be incurring final costs associated with the successful core conversion of approximately $1 million in the fourth quarter. Our continued sound financial performance supported earning asset growth and again drove strong capital formation, excluding changes in AOCI. Tangible book value per share decreased $0.26 this quarter to $16.15, and our tangible common equity ratio decreased slightly to 8.4% quarter-over-quarter.

Lastly, I'd like to share a couple of additional updates with our guidance. We continue to expect full year loan and deposit growth of 5% to 6% with noninterest income of approximately $29 million in the fourth quarter. We expect a full year effective tax rate of approximately 28%, and we continue to target a core ROA of 1.2% to 1.3% with a mid-teens return on average tangible common equity.

That concludes our prepared remarks, and we'd be happy to respond to any questions.

Operator

[Operator Instructions] Your first question comes from the line of Feddie Strickland with Hovde.

質疑応答

Feddie Strickland

Just wanted to start on deposits, if we could. You guys have been able to consistently grow DDAs for 2 quarters in a row at this point. Can we see that start to flatten out with higher rates and maybe some mix shift? Or can you continue growing that given the momentum you talked about last quarter in treasury and some other areas?

Anthony Labozzetta

Well, our expectation that deposits will continue to grow. Obviously, market dynamics like changing rates may make the cost of acquisition a little higher than they presently are. But the strategies that we have both in production now and in flight, we expect that the focus -- the laser focus that we have on deposits to continue to show growth in the upcoming quarters.

Feddie Strickland

Understood, can the noninterest-bearing balances grow from here, you think? Or are they relatively flat?

Anthony Labozzetta

Well, we had a 5% growth this quarter in noninterest-bearing demand. The focus that we have in our commercial lending side and our treasury management side, we think we can continue to grow. Now can I promise that it's going to be 5%. I think changing rates will also impact that as well. But we still expect to have some expansion in that, obviously, depending on what happens to market rates and the delta between 0 and the offering rate.

Adriano Duarte

Exactly. It may create a little bit of a transition from NIB to other deposit lines. But as Tony said, I think the production will definitely be there.

Feddie Strickland

And then just switching gears to loans. It just seems like a relatively stable pipeline linked quarter. You reiterated the guide here. Is it fair to assume we see loan growth maybe pick back up in the fourth quarter? And I also just want to ask if you're starting to see paydowns slow at all with higher rates.

Anthony Labozzetta

Yes. I mean we're pretty -- when it comes to the commercial loan pipeline overall, I think we're very confident in not only its pull-through, but -- and its diversity and mix that's in that pipeline. I think rates would have to move -- I would say, more than 50 basis points and depending on which part of the curve moves. Obviously, if the short part of the Fed moves, we might see some reduction in activity beyond the 50 basis point move in more of the C&I type loans. Obviously, the treasury curve moves, we can see that on the term loans like, et cetera. But right now, we feel pretty strong about our pipeline, the pull-through, the level that it's at, the activity that we're seeing flow in to replace the closed and funded business. And I think, as I mentioned in my opening remarks, I think we're seeing a 6% growth level. Obviously, I have to put a caveat that if we see prepayments beyond what we're anticipating, that could impact that number. But right now, it's looking good. But I will stress one more thing.

Volume by itself is not important. I think we haven't spent one bit on credit structure. We continue to deal with some of the most notable sponsors. So we're feeling pretty good, not only about the level of production, but the quality of that production. I just wanted to reiterate.

Feddie Strickland

Just one more quick one, if I could, on accretion. Is there any significant change to that number? I think you had about $20 million, if my math is right this quarter.

Adriano Duarte

Should tick down a little bit, Feddie, as prepayments have slowed down on some of the CRE loans. We're projecting for the next 12 months around 60% to 62%.

Operator

Your next question comes from the line of Tim Switzer with KBW.

Timothy Switzer

Real quick, sorry, Adriano. Can you repeat what the expected purchase accounting is going forward?

Adriano Duarte

So for securities and loans, we anticipate somewhere between $50 million and $52 million for the next 12 months. So about $15 million a quarter.

Timothy Switzer

I was $50 million or $60 million. Got it. 5-0. And then my other question -- Sorry, 6-0, my apologies. You guys have talked a good amount about the benefits to core conversion, particularly in the commercial part of the business. Now that it's completed, could you maybe discuss what some of the immediate benefits are already have been and what the near-term opportunities going forward will be? And how much of this is efficiency focused versus revenue opportunities?

Anthony Labozzetta

That's great. That's a good question. I think the first thing I will draw back on in my comments, I couldn't do enough justice to how well that conversion took place. I think our team did an outstanding job. I would call it brilliant execution all the way across on how collaborative that was. Now that that's behind us, it's going to allow us to continue our focus on the projects that we have in flight. Some of the things I'll point to is our data capabilities. We have a big project to enhance our data capabilities, which is going to obviously increase efficiencies. It's going to increase decision-making power within our organization. When it comes -- we had probably over a year now, we've had a governance council around AI.

That particularly is to ensure that the -- any initiatives that we have are aligned with the business use cases. It's worked well. We've put -- we've developed our own AI agent that we call B as part of our conversion, which I think it was very instrumental to the success in terms of empowering our organization with knowledge and answers so that we could have a great customer experience in the conversion. And so moving forward, we expect to use our platform with enhanced data, enhanced -- to continue to do these in-play projects that we have and build along our loan capabilities and et cetera. So I can keep going, but I think I gave you the gist of what we're trying to accomplish.

Timothy Switzer

Yes. That was great color. I appreciate it. And then one last one, another follow-up on the NIM. Given the impact of rate hikes near term, you guys are a little liability sensitive, I feel like. But longer term, does that change over time? Is there like a catch-up on loan repricing or anything? And how should we think about the trajectory of the margin if we get, say, like 2 or 3 hikes and then the Fed just kind of settles down for a little bit?

Adriano Duarte

Yes. So I mean, our balance sheet position is mostly neutral across the board, both rates down, rates up. Typically, we may see 1 to 2 basis point rate compression with a 25 basis point rate hike, but that takes into account no movement on the longer end of the curve. And I think we have enough management strategies to sustain a pretty stable margin across all. Basis points expansion in the margin with the rates.

Operator

Your next question comes from the line of Steve Moss with Raymond James.

Stephen Moss

Maybe just following up on expenses and the investments going forward. Just kind of curious like I know you guys are getting into planning season for '27, but just how you guys are thinking about the cadence of expense growth in '27.

Adriano Duarte

So on a core basis, Steve, I mean, we expect to finish out the year right around $474 million in total and probably a growth between 3.5% and 3.75% off of that into 2027.

Anthony Labozzetta

And what I would add to that is some of the projects that I talked about that are in flight are all within that paradigm that AD just discussed. So -- and again, positive operating leverage is a big focus for us. So as we invest, we expect that revenue has to mass the revenue that we're producing right now.

Stephen Moss

Right. No, you guys there. That's helpful. And then in terms of just thinking about the back book repricing here, just kind of curious, is there any step-up in cash flows in '27 that maybe helps the margin?

Adriano Duarte

In '27, it's kind of hard to say, right? When rates up, we actually see a little bit of a slowdown, but we still have about just on natural maturities and a pretty conservative prepayment assumption, about $3.3 billion in loans repricing over the next 12 months, we're going from about 5.75% to, let's say, 6.5% or north of that. On the securities side, about 350 -- sorry, about $350 million for the year that we anticipate repricing in the next 12 months.

Anthony Labozzetta

Yes. And the only thing I'd add, Steve, is we're still seeing a good pickup on rate on the investment side as well. So really both parts of the earning asset leverage are still in place as we move into 2027 in terms of seeing pickup on yields to help offset some of the funding cost rise that we've seen in the last 90 to 100 days.

Adriano Duarte

Exactly. On a core basis, we're looking at north of 100 basis points pickup on each one of those line items.

Stephen Moss

Appreciate that color there. And then just in terms of thinking about credit. I mean, hear you guys in terms of the credit resolution. The reserve has kind of started to drift up a little bit over the last couple of quarters from the lows. Just thinking about modeling this going forward, obviously, a more greater C&I mix, kind of do we think that cadence of reserve ratio is steadily higher over the next 4 to 5 quarters?

Anthony Labozzetta

We've been pretty stable on a pool basis, right around 90 basis points. Some of that increase has actually been on some one-off specific reserves that we needed to put up. But on a C&I basis, obviously, something could pop in, but we don't see any broad possible issues.

Adriano Duarte

Yes. I mean I would add, Steve, that when it comes to that, it's not -- there's a lot of looksee's in the organization. On a quarterly basis, we stress different sectors of our loan portfolio from CRE or now into the C&I space. So -- and we do something we call Kramer, which is loan reviews within the teams. So we got a pretty good eye into what is coming down the pipe. And there's nothing that we see today that is in any way, shape or form rising to a level of concern. And in fact, as we solve for the 4 credits that I mentioned, which is working -- is going according to plan, and we expect it to move out by the end of the fourth quarter, our total NPA will be down to 23 basis points. And so it's looking pretty positive.

Operator

Your next question comes from Manuel Navas with Piper Sandler.

Manuel Navas

So the pipeline is pretty steady, pretty strong, and you're going to close the year out with solid loan growth. With rates not really impacting demand yet. Is this a good run rate into next year kind of thoughts on the opportunities for loan growth next year?

Anthony Labozzetta

Yes. I mean I think, yes, the answer -- the short answer is yes, but I want to frame it in the context that it's not a guess. I mean it's looking at what's happening in the market and looking at our capacity within our organization and the number of producers and teams that we have. So when you do the simple math of it, again, we could outpace that guidance depending on certain dynamics. But one thing we won't do is spend on our credit culture. So we do project in that 5% to 6% range for next year as well.

Manuel Navas

I appreciate that. The guide for fees in the fourth quarter, can you kind of walk through some of the line items there and how you get that $29 million?

Adriano Duarte

So both wealth management and our insurance lines, we expect it to grow versus the prior year, right? On the bank fee income, we should see a little bit of a pickup in the fourth quarter versus the third quarter. We had some statement overlaps during the conversion process where we passed on some fees just to make sure the customer experience was what we needed to be. We have pretty strong SBA loan sales coming down the pipeline in the fourth quarter as well. BOLI is probably the one piece that was a little bit of an uptick in the third quarter, as we mentioned, about $3.5 million higher than the typical run rate.

Manuel Navas

And you talked about buyback being a little bit opportunistic here in October. Kind of -- can you update that? And what would be the right pace there? And how long can this extend that kind of opportunistic repurchase trend?

Adriano Duarte

Typically, we have a threshold that if we were acquiring ourselves. So the earn-back is typically 3 years. Right now, the threshold is about that $22 mark. So we're active when the opportunity arises and our stock price dips below that. Currently, we purchased back about 370,000 shares.

Manuel Navas

And so the price sensitivity is what would drive it?

Adriano Duarte

Yes, currently, that's how we approach it, Manuel.

Operator

Your next question comes from the line of Matthew Breese with Stephens.

Matthew Breese

I wanted to talk a little bit about the loan-to-deposit ratio. You provided some guidance there. And I guess within that, maybe help me out on a couple of areas. What were municipal deposits at period end? I think the release noted they were down. I was just curious what the absolute level was. And what is the all-in incremental cost of deposits today? And how does that compare to a quarter ago?

Adriano Duarte

So the all-in is about 3.25%, Matt, where probably a quarter ago, we were around 285, 295. And the municipal deposits are right around $3.6 billion at this point. But typically, at quarter end, it's usually on the low side of those balances.

Matthew Breese

And just thinking about your loan-to-deposit ratio guide, I think it was what, 97% at the low end. Yes, if you were to hit that perfect, does that include growth in some of the higher cost areas like CDs and money market? Is that necessary to get there? Or is it more a function of loan growth?

Unknow Executive

Matt, I don't think that's how we think about it. That range is how we want to operate the business and manage our balance sheet to maximize our liquidity and our profitability. And so where we fall in that range and the reason the range is wide is because of some of that seasonality in the municipal business. But I think our intention just purely stated is to grow loans and fund them with core deposit initiatives that we have that's Tony and AD mentioned. And I think that's kind of how we think about growing the business.

Anthony Labozzetta

I would add one thing that our expectation is that we're growing deposits in every one of our verticals. And that includes noninterest-bearing and interest-bearing. We want to outperform in the areas of the key core deposits. But in order for us to maintain that -- to get to that 97% or sub 1, you're going to have to grow all of your deposit verticals. You can't do it with just one.

Adriano Duarte

And sometimes even being at that 97% may not be the most profitable approach to getting there.

Matthew Breese

I just wanted to get some sense for how to get there. And then stepping back, just on M&A, I'd be curious how active are conversations these days and maybe remind us in terms of size, geography and type of banks you'd be interested in partnering with.

Anthony Labozzetta

Great question. I mean I always have to start this question by putting -- as you've seen by our comments and our answers and our hyper focus as an organization is to make sure that organically, we're growing every business line within this bank. And I think we're doing so, and we're off to some good results. That being said, M&A is something that it is part of the job, right? You always have to have conversations. You have to know the markets around you. The way I would express it is we're fortunate enough to put ourselves in a position where we have optionality. The optionality would be that we don't -- we're not forced to do anything. If something were to take place in the conversation that's culturally compatible, gives us a strategic purpose, then we would entertain it. But again, I want to make sure that everyone understands that the lion's share of our focus is on organic growth.

Matthew Breese

Tony, I'd just be curious, are conversations starting to pick up a little bit? And yes, just in terms of size and geography, I'd be curious where you're interested.

Anthony Labozzetta

Yes. Matt, I would say the conversations are always happening. I don't know if there's been a pickup. I think, I would say, since the regulatory changes when you had kind of a hyper pickup, I think then it just got steady. So now it's just business as usual when it comes to M&A discussions.

Operator

This concludes today's question-and-answer session. I will now turn the call back to Tony Labozzetta for closing remarks.

Anthony Labozzetta

Well, thank you, everyone. I'd like to mention again that we are very excited about Provident's future. We appreciate you joining us on the call today, and we look forward to speaking with you again after the holidays.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.