Provident Financial Services, Inc. and Lakeland Bancorp, Inc. Extend Merger Agreement

Rhea-AI Summary

Provident Financial Services, Inc. (NYSE:PFS) and Lakeland Bancorp, Inc. (Nasdaq: LBAI) have agreed to extend their merger agreement to March 31, 2024, to obtain the required regulatory approvals. The combined company will operate under the Provident name, providing enhanced scale, growth opportunities, and profitability, benefiting from complementary strengths of both companies.

Insights

Financial Analyst

The extension of the merger agreement between Provident Financial Services, Inc. and Lakeland Bancorp, Inc. is a strategic decision that reflects the complexities of obtaining regulatory approvals. This move suggests that while there are no immediate financial changes, the anticipation of a merger continues to be a significant factor in the valuation of both companies. Investors are likely to monitor this situation closely, as mergers can lead to cost synergies, expanded market reach and improved financial performance in the long run.

The market typically reacts to such news with a focus on the potential for revenue enhancement and cost reduction opportunities. The merger's success could result in a more robust financial institution capable of competing more effectively in the banking sector. However, delays can also signal potential issues that might affect investor confidence. Stakeholders should consider both the potential advantages of an expanded institution and the risks associated with the integration process and regulatory hurdles.

Economist

From an economic standpoint, the merger between Provident and Lakeland is indicative of consolidation trends within the banking industry. This trend can have several implications for the market, including reduced competition and the creation of larger entities that may benefit from economies of scale. The long-term impact on consumers and the business landscape could be significant, as larger financial institutions may have more resources to invest in technology and customer service, potentially leading to a more efficient banking sector.

However, the delay in obtaining regulatory approvals also reflects the stringent regulatory environment that governs financial mergers, designed to protect the financial system's stability and consumer interests. This necessary scrutiny ensures that such mergers do not create entities that are 'too big to fail' and that competitive dynamics are maintained to some extent.

Industry Analyst

The banking industry is highly sensitive to regulatory measures and the extension of the merger deadline underscores the importance of due diligence in this sector. Industry analysts will examine this development to assess the operational and cultural compatibility of Provident and Lakeland. The combined entity's ability to integrate smoothly, realize projected synergies and maintain customer satisfaction levels will be critical to its success.

Furthermore, the industry is moving towards digitalization and the merger could provide a platform for accelerated innovation and service improvement. Analysts will consider how the merger aligns with industry trends, such as digital banking services, customer experience enhancements and compliance with evolving regulatory requirements.

ISELIN, N.J. and OAK RIDGE, N.J., Dec. 20, 2023 (GLOBE NEWSWIRE) -- Provident Financial Services, Inc. (NYSE:PFS) (“Provident”), the parent company of Provident Bank, and Lakeland Bancorp, Inc. (Nasdaq: LBAI) (“Lakeland”), the parent company of Lakeland Bank, today announced that the two companies have agreed to extend their merger agreement to March 31, 2024, to provide additional time to obtain the required regulatory approvals.

Both parties remain committed to the merger and to obtaining regulatory approvals.

When completed, the combined company will operate under the Provident name and will benefit from enhanced scale, opportunities for growth and profitability, and Provident’s and Lakeland’s complementary strengths will provide exceptional service to customers and communities served.

About Provident

Provident Financial Services, Inc. is the holding company for Provident Bank, a community-oriented bank offering “commitment you can count on” since 1839. Provident Bank provides a comprehensive array of financial products and services through its network of branches throughout northern and central New Jersey, Bucks, Lehigh and Northampton counties in Pennsylvania, as well as Queens and Nassau Counties in New York. The Bank also provides fiduciary and wealth management services through its wholly owned subsidiary, Beacon Trust Company and insurance services through its wholly owned subsidiary, Provident Protection Plus, Inc.

About Lakeland

Lakeland Bank is the wholly-owned subsidiary of Lakeland Bancorp, Inc., which had $11.18 billion in total assets at September 30, 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. Business services include commercial loans and lines of credit, commercial real estate loans, loans for healthcare services, asset-based lending, equipment financing, small business loans and lines and cash management services. Consumer services include online and mobile banking, home equity loans and lines, mortgage options and wealth management solutions. Lakeland is proud to be recognized as New Jersey’s Best-In-State Bank by Forbes and Statista for the fifth consecutive year, Best Banks to Work For by American Banker, rated a 5-Star Bank by Bauer Financial and named one of New Jersey’s 50 Fastest Growing Companies by NJBIZ.

Forward Looking Statements

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to Provident’s and Lakeland’s beliefs, goals, intentions, and expectations regarding the proposed transaction, revenues, earnings, earnings per share, loan production, asset quality, and capital levels, among other matters; our estimates of future costs and benefits of the actions we may take; our assessments of probable losses on loans; our assessments of interest rate and other market risks; our ability to achieve our financial and other strategic goals; the expected timing of completion of the proposed transaction; the expected cost savings, synergies and other anticipated benefits from the proposed transaction; and other statements that are not historical facts.

Forward‐looking statements are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “should,” and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. These forward-looking statements include, without limitation, those relating to the terms, timing and closing of the proposed transaction.

Additionally, forward‐looking statements speak only as of the date they are made; Provident and Lakeland do not assume any duty, and do not undertake, to update such forward‐looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise. Furthermore, because forward‐looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those indicated in such forward-looking statements as a result of a variety of factors, many of which are beyond the control of Provident and Lakeland. Such statements are based upon the current beliefs and expectations of the management of Provident and Lakeland and are subject to significant risks and uncertainties outside of the control of the parties. Caution should be exercised against placing undue reliance on forward-looking statements. The factors that could cause actual results to differ materially include the following: the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the Merger Agreement; the outcome of any legal proceedings that may be instituted against Provident or Lakeland; the possibility that the proposed transaction will not close when expected or at all because required regulatory or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated (and the risk that required regulatory approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction); the ability of Provident and Lakeland to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the common stock of either or both parties to the proposed transaction; the possibility that the anticipated benefits of the proposed transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Provident and Lakeland do business; certain restrictions during the pendency of the proposed transaction that may impact the parties’ ability to pursue certain business opportunities or strategic transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management’s attention from ongoing business operations and opportunities; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes or at all and to successfully integrate Lakeland’s operations and those of Provident; such integration may be more difficult, time consuming or costly than expected; revenues following the proposed transaction may be lower than expected; Provident’s and Lakeland’s success in executing their respective business plans and strategies and managing the risks involved in the foregoing; the dilution caused by Provident’s issuance of additional shares of its capital stock in connection with the proposed transaction; effects of the announcement, pendency or completion of the proposed transaction on the ability of Provident and Lakeland to retain customers and retain and hire key personnel and maintain relationships with their suppliers, and on their operating results and businesses generally; and risks related to the potential impact of general economic, political and market factors on the companies or the proposed transaction and other factors that may affect future results of Provident and Lakeland; uncertainty as to the impacts of natural disasters or health epidemics, including the COVID-19 pandemic, on Provident, Lakeland and the proposed transaction; and the other factors discussed in the “Risk Factors” section of each of Provident’s and Lakeland’s Annual Report on Form 10‐K for the year ended December 31, 2022, in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of each of Provident’s and Lakeland’s Quarterly Report on Form 10‐Q for the quarter ended September 30, 2023, and other reports Provident and Lakeland file with the Securities and Exchange Commission.

Provident Financial Services, Inc.
Investor Relations Contact:
Thomas Lyons
SEVP & Chief Financial Officer
(732) 590-9348

Lakeland Bancorp, Inc.
Investor Relations Contacts:
Thomas J. Shara
President & Chief Executive Officer
(973) 697-2000

Thomas F. Splaine
EVP & Chief Financial Officer
(973) 697-2000

FAQ

What is the ticker symbol for Provident Financial Services, Inc.?

The ticker symbol for Provident Financial Services, Inc. is PFS on the NYSE.

What is the ticker symbol for Lakeland Bancorp, Inc.?

The ticker symbol for Lakeland Bancorp, Inc. is LBAI on the Nasdaq.

What is the merger agreement extension date for Provident Financial Services, Inc. and Lakeland Bancorp, Inc.?

The merger agreement has been extended to March 31, 2024.

What are the benefits of the merger for the combined company?

The combined company will benefit from enhanced scale, growth opportunities, and profitability, leveraging the complementary strengths of Provident and Lakeland.

What are the companies involved in the merger agreement extension?

Provident Financial Services, Inc. and Lakeland Bancorp, Inc. have extended their merger agreement.