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UPDATE: Stifel Nicolaus Downgrades Provident Financial Services to Hold


Stifel Nicolaus lowers its rating on Provident Financial Services (NYSE: PFS) as it believes the company's performance improvement evidenced by 4Q11 report is now priced into the shares.

Stifel Nicolaus says, "We are lowering our 2012 EPS estimates to $1.15 from $1.19, and we are lowering our 2013 EPS estimates to $1.31 from $1.36. The drop in our estimates, not surprisingly, is stemming from increased margin pressure as asset yields are expected to continue to fall, while funding cost reductions are somewhat more limited. Provident did however, indicate that loan momentum should pick up in 2012. However, even with our increased loan growth expectations (now 9% up from 6%), the growth isn't sufficient enough to offset margin pressure, leaving our net interest income projection to fall to $222 million in 2012 from $226 million previously."

PFS closed at $14.22 a share on Friday.


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