MORRIS COUNTY — Provident Financial Services, Inc. and Lakeland Bancorp, Inc. have entered into a definitive $1.3 billion all-stock merger agreement, creating a preeminent super-community bank in the state, according to the two financial institutions. The merger of Provident Bank and Lakeland Bank will create a financial institution that will have more than $25 billion in assets and $20 billion in total deposits. It will also have approximately 4% of all bank deposits in New Jersey, which represents the second largest share of New Jersey bank deposits for institutions with less than $100 billion in assets.
Under the terms of the merger agreement, which was unanimously approved by the boards of directors of both companies, Lakeland will merge with and into Provident, with Provident as the surviving corporation. The combined company will operate under the “Provident Financial Services, Inc.” name and the combined bank will operate under the “Provident Bank” name. The administrative headquarters of the combined company will be located in Iselin.
“We are excited to announce this transformational combination of two amazing organizations. The scale and profitability of the combined organization will enable us to invest in the future, better compete for market share, and better serve our customers and communities,” said Anthony Labozzetta, president and CEO of Provident. “It is particularly gratifying to embark on this journey with our colleagues on the Lakeland team and Tom Shara, whom we have held in high regard for many years.”
According to Thomas J. Shara, Lakeland’s president and CEO, “The combination of our companies will allow us to achieve substantially more for our clients, associates, communities, and shareholders than we could alone. I have tremendous respect for Tony Labozzetta, Chris Martin, Provident’s management team and associates. We will continue to build upon and leverage our combined strengths as we focus on the future together.”
Chris Martin, executive chairman of Provident added, “We are confident that this strategic combination and the resulting strong pro forma financial performance, synergies and experienced management team will deliver on our commitment to providing superior long-term shareholder returns.”
Strategic Benefits of the Merger
While the transaction fortifies Provident and Lakeland’s positions as leading players in the Tri-State commercial real estate market, Provident’s two ancillary fee-based business lines in insurance and wealth management and Lakeland’s growing asset-based lending and equipment lease financing provide opportunities for additional growth and relationship expansion. Both Provident and Lakeland have extensive experience successfully integrating with merger partners, and both are intensely focused on ensuring a smooth integration.
Governance and Leadership
The combined company’s board of directors will have sixteen directors, consisting of nine directors from Provident and seven directors from Lakeland.
- Christopher Martin, Provident’s current executive chairman, will continue to serve as executive chairman of the combined company board of directors
- Thomas Shara Jr., Lakeland’s current president, chief executive officer and director, will serve as executive vice chairman of the combined company board of directors
- Anthony Labozzetta, a current director of Provident, will continue to serve as a director of the combined company
- A Provident board representative will serve as the independent lead director of the combined company board of directors
The combined company will be led by a well-respected management team that is comprised of individuals with significant financial services and M&A integration experience.
- Anthony Labozzetta, Provident’s current president and CEO, will continue to serve in that role in the combined company
- Thomas Lyons, Provident’s current senior executive vice president and chief financial officer, will continue to serve in that role in the combined company
- The remainder of the executive team will draw from both Provident and Lakeland
The merger is expected to close in the second quarter of 2023, subject to satisfaction of customary closing conditions, including receipt of customary regulatory approvals and approval by the shareholders of each company.
Piper Sandler Companies is acting as financial advisor, and has rendered a fairness opinion to the board of directors of Provident. Sullivan & Cromwell LLP is serving as legal counsel to Provident. Keefe, Bruyette & Woods, A Stifel Company is acting as financial advisor, and has rendered a fairness opinion to the board of directors of Lakeland. Luse Gorman, PC is serving as legal counsel to Lakeland.