Provident-Lakeland bank merger gets final approval

Federal Reserve approves deal, which is expected to be completed in Q2 and will create super community bank under Provident name

The long-awaited merger of Provident and Lakeland banks received its final approval, from the Federal Reserve, the last step before the two banks are able to create a super community bank in the tri-state area with more than $25 billion in assets and $20 billion in deposits.

The combined bank, which will run under the Provident Bank name, will be headquartered in Iselin and led by CEO Anthony Labozzetta, the current CEO of Provident Bank.

The merger, which was first announced in September 2022, is expected to be completed in the second quarter, subject to the completion of the subordinated debt issuance and satisfaction of customary closing conditions, officials at the banks said in a release.

The combined company will be created by an all-stock merger, valued at approximately $1.3 billion. It will operate under the “Provident Financial Services Inc.” name and will trade under the Provident ticker symbol “PFS” on the New York Stock Exchange.

Chris Martin, Provident’s current executive chairman, will continue to serve as executive chairman of a new 16-member board of directors, consisting of nine directors from Provident and seven directors from Lakeland.

Thomas Shara Jr., Lakeland’s current CEO and director, will serve as executive vice chairman.

Consistent with the approval of the Federal Deposit Insurance Corp. for the merger, the Federal Reserve approval is subject to a commitment by Provident to issue $200 million of Tier 2 qualifying subordinated debt prior to or concurrently with the completion of the merger.

In addition, Provident has committed to submitting, within 60 days following the completion of the merger, a capital plan to the Federal Reserve Bank of New York to maintain satisfactory capital at the bank holding company, and for two years following completion of the merger to provide the Federal Reserve Bank of New York 30 days’ prior written notice of any capital distribution, which capital distribution shall be consistent with the capital plan.

Provident Financial Services Inc. is the holding company for Provident Bank, a community-oriented bank since 1839.

Provident Bank provides a comprehensive array of financial products and services through its network of branches throughout northern and central New Jersey — as well as Bucks, Lehigh and Northampton counties in Pennsylvania, and Queens and Nassau counties in New York.

The bank also provides fiduciary and wealth management services through its wholly owned subsidiary, Beacon Trust Co., and insurance services through its wholly owned subsidiary, Provident Protection Plus Inc.

Lakeland Bank is the wholly owned subsidiary of Lakeland Bancorp Inc., which had $11.14 billion in total assets as of Dec. 31, 2023. With an extensive branch network and commercial lending centers throughout New Jersey and Highland Mills, New York, the bank offers business and retail banking products and services.