Providence Financial Services Upsizes Subordinated Notes Offering

Providence Financial Services, Inc. has announced the pricing and upsizing of its subordinated notes offering. The company will be offering $225 million of its 9.00% fixed-to-floating rate subordinated notes due 2034, up from the previously announced amount of $200 million. The notes will initially bear interest at 9.00% per annum, with interest payable semiannually in arrears, commencing on the issue date, to, but excluding, May 15, 2029.

It's worth noting that commencing May 15, 2029, the interest rate on the notes will reset quarterly to a floating rate per annum equal to a benchmark rate that is expected to be three-month term sofr plus 476.5 basis points, with interest payable quarterly in arrears. The company may redeem the notes, in whole or in part, on and after May 15, 2029, at a price equal to 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest thereon. The notes will mature on May 15, 2034 if they are not earlier redeemed.

The purpose of the offering is to satisfy certain previously announced regulatory conditions that were agreed to in connection with the merger between the company and Lakeland Bancorp, Inc. The company intends to invest all of the net proceeds from the offering in the bank. The bank expects that the net proceeds will be initially invested in securities and used for other general corporate purposes, which may include the repayment of federal home loan bank advances and other indebtedness. The notes are intended to qualify as tier 2 capital for regulatory purposes.

Piper Sandler & Co. and Keefe, Bruyette & Woods, a Stifel company, are acting as joint book-running managers for the offering. The company expects to close the offering, subject to the satisfaction of customary closing conditions, on or about May 13, 2024.

This press release is neither an offer to sell nor a solicitation of an offer to purchase any securities of the company. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any offer to sell or solicitation of an offer to purchase securities of the company will be made only pursuant to a prospectus supplement and prospectus filed with the Securities and Exchange Commission (the "SEC"). The company has filed a registration statement (including a prospectus) (file no. 333-275213) and a preliminary prospectus supplement with the SEC for the offering to which this press release relates. Before making an investment decision, you should read the prospectus and preliminary prospectus supplement and other documents that the company has filed with the SEC for additional information about the company and the offering. As a result of these announcements, the company's shares have moved -0.8% on the market, and are now trading at a price of $15.86. For the full picture, make sure to review Provident Financial Services's 8-K report.

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