Provident Financial Services in Iselin, N.J., has agreed to buy Lakeland Bancorp in Oak Ridge, N.J.
The $13.7 billion-asset Provident said in a press release Tuesday that it will pay $1.3 billion in stock for the $10.4 billion-asset Lakeland. The deal, which is expected to close in the second quarter, priced Lakeland at 154% of its tangible book value.
“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,” Anthony Labozzetta, Provident’s president and CEO, said in the release.
“We bring together a diverse group of employees who are committed to delivering exceptional service to our customers and the communities we serve,” Labozzetta added.
Thomas Shara Jr., Lakeland’s president and CEO, will become Provident’s executive vice chairman. Lakeland will have seven directors on Provident’s 16-member board.
Provident said the deal should allow it to scale its own insurance and wealth management businesses and Lakeland’s asset-based lending and equipment lease financing offerings.
The deal is expected to be 24% accretive to Provident’s 2024 earnings per share, inclusive of interest rate marks. It should take Provident less than four years to earn back any dilution to its tangible book value.
Provident plans to cut about 35% of Lakeland’s annual noninterest expense, or roughly $65 million. The company expects to incur $95 million of one-time merger-related charges.
Piper Sandler and Sullivan & Cromwell advised Provident. Keefe, Bruyette & Woods and Luse Gorman advised Lakeland.