Provident Financial Services, Inc. (NYSE:PFS) and Lakeland Bancorp, Inc. (NASDAQ:LBAI) have received regulatory approvals from the Federal Deposit Insurance Corporation and the New Jersey Department of Banking and Insurance for their merger. The only pending regulatory approval required to complete the merger is the approval of the Board of Governors of the Federal Reserve System.
Upon completion of the merger, the combined company will operate under the Provident name and will benefit from enhanced scale and opportunities for growth and profitability. The combined company will have a board of directors consisting of nine directors from Provident and five directors from Lakeland.
The two companies expect to extend their merger agreement to June 30, 2024, to provide time to receive the remaining regulatory approval and to complete the subordinated debt issuance. The merger is expected to be completed in the second calendar quarter, subject to the receipt of approval for the merger from the Board of Governors of the Federal Reserve System, completion of the debt issuance, and satisfaction of customary closing conditions.
Providence intends to raise $200 million of tier 2 qualifying subordinated debt prior to completing the merger to satisfy a regulatory condition. Additionally, for a period of three years following completion of the merger, Provident Bank will be required to maintain a tier 1 capital to total assets leverage ratio of at least 8.5% and a total capital to risk-based assets ratio of at least 11.25%.
Lakeland Bancorp, Inc. had $11.14 billion in total assets at December 31, 2023, and was recognized as New Jersey’s best-in-state bank by Forbes and Statista for the fifth consecutive year. Lakeland was also rated a 5-star bank by Bauer Financial and named one of New Jersey’s 50 fastest-growing companies by NJBiz.
The market has reacted to these announcements by moving the company's shares 1.8% to a price of $12.34. For more information, read the company's full 8-K submission here.
