PROVIDENT FINANCIAL SERVICES, INC. Item 8.01 Other Events.
As previously disclosed, onSeptember 26, 2022 ,Provident Financial Services, Inc. , aDelaware corporation ("Provident"),NL 239 Corp., aDelaware corporation and a direct, wholly owned subsidiary of Provident ("Merger Sub"), and Lakeland Bancorp, Inc., aNew Jersey corporation ("Lakeland"), entered into an Agreement and Plan of Merger (the "Merger Agreement"). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Lakeland, with Lakeland as the surviving entity (the "Merger"), and as soon as reasonably practicable following the Merger, Lakeland will merge with and into Provident, with Provident as the surviving entity. In connection with the proposed Merger, Provident filed with theSecurities and Exchange Commission (the "SEC") a registration statement on Form S-4 containing a joint proxy statement/prospectus, as amended, and Provident filed a definitive proxy statement/prospectus and Lakeland filed a definitive proxy statement with theSEC , each datedDecember 21, 2022 (collectively, the "joint proxy statement/prospectus"), which Provident first mailed to its stockholders and Lakeland first mailed to its shareholders on or aboutDecember 22, 2022 . Following the announcement of the Merger Agreement, as of the date of this Current Report on Form 8-K, seven lawsuits and six demand letters challenging the disclosures contained in the joint proxy statement/prospectus or other aspects of the Merger have been filed. The first lawsuit, captionedShiva Stein v. Lakeland Bancorp, Inc. et al., Case No. 1:22-cv-09946, was filed in theU.S. District Court for the Southern District of New York onNovember 22, 2022 . The second lawsuit, captionedRyan O'Dell v. Lakeland Bancorp, Inc. et al., Case No. 1:22-cv-09980, was filed in theU.S. District Court for the Southern District of New York onNovember 23, 2022 . The third lawsuit, captionedStephen Bushansky v. Lakeland Bancorp, Inc. et al., Case No. 2:22-cv-07131, was filed in theU.S. District Court for the District of New Jersey onDecember 7, 2022 . The fourth lawsuit, captionedMolly Kaplan v. Lakeland Bancorp, Inc. et al., Case No. 2:22-cv- 07193, was filed in theU.S. District Court for the District of New Jersey onDecember 8, 2022 . The fifth lawsuit, captionedMichael Rubin v.Provident Financial Services, Inc. et al., Case No. 1:22-cv-10485, was filed in theU.S. District Court for the Southern District of New York onDecember 12, 2022 . The sixth lawsuit, captionedPaul Berger Revocable Trust v.Provident Financial Services, Inc. et al., Docket No. HUD-C-000005-23, was filed in theSuperior Court of New Jersey onJanuary 4, 2023 . The seventh lawsuit, captionedCharles Reinhardt v. Lakeland Bancorp, Inc. et al., Case No. 1:23-cv-00113, was filed in theU.S. District Court for the Southern District of New York onJanuary 6, 2023 . The complaints in the Stein, O'Dell, Bushansky, Kaplan and Reinhardt actions are brought by alleged Lakeland shareholders and assert claims against Lakeland and the members of its board of directors. The complaints in the Rubin and Berger actions are brought by alleged Provident stockholders and assert claims against Provident and the members of its board of directors. The complaints filed in the actions, other than the Berger action, allege, among other things, that the defendants caused a materially incomplete and misleading registration statement relating to the proposed Merger to be filed with theSEC in violation of Section 14(a) and Section 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 14a-9 promulgated thereunder. In addition, the complaint in the Berger action alleges that certain directors of Provident breached fiduciary duties of good faith, loyalty, fair dealing, due care and disclosure underDelaware law. OnJanuary 17, 2023 , the plaintiff in the Berger action filed a motion seeking an interlocutory injunction that would, among other things, enjoin the closing of the vote at the special meeting of Provident's stockholders, to be held virtually via the internet onFebruary 1, 2023 , in connection with the Merger. The court has not ruled on this motion. We refer to the foregoing lawsuits and demand letters collectively as the "Merger Actions." Provident and Lakeland believe that the claims asserted in the Merger Actions referred to above are without merit and supplemental disclosures are not required or necessary under applicable laws. However, in order to diminish the risk that these Merger Actions delay or otherwise adversely affect the Merger, and to minimize the costs, risks and uncertainties inherent in defending the Merger Actions, and without admitting any liability or wrongdoing, Provident and Lakeland have determined to supplement the joint proxy statement/prospectus as described in this Current Report on Form 8-K. Provident , Lakeland and the other named defendants deny that they have violated any laws or breached any duties to Provident's stockholders or Lakeland's shareholders, as applicable. Nothing in this Current Report on Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein. To the contrary, Provident and Lakeland specifically deny all allegations in the Merger Actions that any additional disclosure was or is required.
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Supplemental Disclosures to Joint Proxy Statement/Prospectus
The following information supplements the joint proxy statement/prospectus and should be read in conjunction with the disclosures contained in the joint proxy statement/prospectus, which should be read in its entirety. To the extent that information set forth herein differs from or updates information contained in the joint proxy statement/prospectus, the information contained herein supersedes the information contained in the joint proxy statement/prospectus. All page references in the information below are to pages in the joint proxy statement/prospectus datedDecember 21, 2022 , and any defined terms used but not defined herein shall have the meanings set forth in the joint proxy statement/prospectus. Without admitting in any way that the disclosures below are material or otherwise required by law, rule or regulation, Provident and Lakeland make the following amended and supplemental disclosures to the joint proxy statement/prospectus:
The Merger-Opinion of Provident's Financial Advisor
The disclosure under the heading "The Merger-Opinion of Provident's Financial Advisor-Comparable Company Analyses" is hereby amended by deleting the table of company names in the middle of page 76 (theProvident Peer Group ) of the joint proxy statement/prospectus and replacing it with the following: Financials as ofJune 30, 2022 Balance Sheet Capital Position LTM Profitability Valuation as ofSeptember 23, 2022 Total CRE/ Price/ Loans/ NPAs/ TCE/ Lev. RBC Total Effic. LTM 2022E 2023E Div Market Assets Deposits Assets TA Ratio Ratio RBC ROAA ROAE NIM Ratio TBV EPS EPS EPS Yield Cap Company State Ticker ($M) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (x) (x) (x)
(%) ($M) Fulton Financial Corporation PA FULT 25,253 89.5 0.77 7.04 9.06 13.70 182.5 1.05
10.2 2.85 63.9 150 10.0 9.2 8.7 3.7 2,708 WSFS Financial Corporation
DE WSFS 20,550 66.5 0.16 6.66 9.20 14.62 214.4 0.97
7.9 3.14 58.8 236 14.6 11.0 9.4 1.2 3,072 Customers Bancorp, Inc.
PA CUBI 20,252 92.4 0.20 5.99 7.52 12.61 203.0 1.80
26.3 3.93 36.8 82 3.1 4.1 4.7 0.0 990 Community Bank System, Inc. NY CBU 15,488 61.0 0.23 5.11 8.65 16.58 118.9 1.14
8.8 2.77 60.4 462 19.9 18.0 16.4 2.7 3,435 Sandy Spring Bancorp, Inc.
MD SASR 13,303 98.3 0.32 8.45 9.53 16.07 345.1 1.57
13.3 3.50 49.0 155 8.7 9.7 9.1 3.5 1,688 OceanFirst Financial Corp.
NJ OCFC 12,439 95.9 0.22 7.91 9.28 12.80 391.6 0.85
6.7 3.08 57.6 122 11.8 8.4 6.8 4.0 1,146 Dime Community Bancshares, Inc. NY DCOM 12,347 91.4 0.30 7.07 8.71 13.26 534.9 1.19
12.3 3.20 47.9 139 8.9 8.5 7.9 3.1 1,193 NBT Bancorp Inc.
NY NBTB 11,720 77.6 0.32 7.87 9.77 15.50 151.6 1.27
12.4 3.03 58.6 186 11.2 11.0 11.0 3.1 1,676 Eagle Bancorp, Inc.
MD EGBN 10,942 78.0 0.22 10.60 10.68 15.70 337.7 1.20
11.1 2.73 41.5 126 9.9 9.5 9.1 3.9 1,451 Lakeland Bancorp, Inc.
NJ LBAI 10,374 87.1 0.24 8.01 9.05 13.74 385.2 0.97
9.4 3.13 54.0 131 10.6 9.7 8.2 3.5 1,074
Note: Includes banks headquartered in the
between $10B and $30B ; excludes publicly announced merger targets and
mutuals; Price / Estimated EPS multiples based on median consensus
estimates.
Source: S&P Capital IQ Pro.
The disclosure under the heading "The Merger-Opinion of Provident's Financial
Advisor-Comparable Company Analyses" is hereby amended by deleting the table of
company names at the bottom of page 77 (the Lakeland Peer Group ) of the joint
proxy statement/prospectus and replacing it with the following:
Financials as of June 30, 2022 Balance Sheet Capital Position LTM Profitability Valuation as of September 23, 2022
Total CRE/ Price/
Loans/ NPAs/ TCE/ Lev. RBC Total Effic. LTM 2022E 2023E Div Market
Assets Deposits Assets TA Ratio Ratio RBC ROAA ROAE NIM Ratio TBV EPS EPS EPS Yield Cap
Company State Ticker ($M) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (x) (x) (x) (%) ($M)
Fulton Financial Corporation PA FULT 25,253 89.5 0.77 7.04 9.06 13.70 182.5 1.05
10.2 2.85 63.9 150 10.0 9.2 8.7 3.7 2,708 WSFS Financial Corporation
DE WSFS 20,550 66.5 0.16 6.66 9.20 14.62 214.4 0.97
7.9 3.14 58.8 236 14.6 11.0 9.4 1.2 3,072 Customers Bancorp, Inc.
PA CUBI 20,252 92.4 0.20 5.99 7.52 12.61 203.0 1.80
26.3 3.93 36.8 82 3.1 4.1 4.7 0.0 990 Community Bank System, Inc.
NY CBU 15,488 61.0 0.23 5.11 8.65 16.58 118.9 1.14
8.8 2.77 60.4 462 19.9 18.0 16.4 2.7 3,435
9.5 3.03 54.1 156 11.1 10.2 9.3 4.1 1,753 Sandy Spring Bancorp, Inc.
MD SASR 13,303 98.3 0.32 8.45 9.53 16.07 345.1 1.57
13.3 3.50 49.0 155 8.7 9.7 9.1 3.5 1,688 OceanFirst Financial Corp.
NJ OCFC 12,439 95.9 0.22 7.91 9.28 12.80 391.6 0.85
6.7 3.08 57.6 122 11.8 8.4 6.8 4.0 1,146 Dime Community Bancshares, Inc. NY DCOM 12,347 91.4 0.30 7.07 8.71 13.26 534.9 1.19
12.3 3.20 47.9 139 8.9 8.5 7.9 3.1 1,193 NBT Bancorp Inc.
NY NBTB 11,720 77.6 0.32 7.87 9.77 15.50 151.6 1.27
12.4 3.03 58.6 186 11.2 11.0 11.0 3.1 1,676 Eagle Bancorp, Inc.
MD EGBN 10,942 78.0 0.22 10.60 10.68 15.70 337.7 1.20
11.1 2.73 41.5 126 9.9 9.5 9.1 3.9 1,451
Note: Includes banks headquartered in the
between $10B and $30B ; excludes publicly announced merger targets and
mutuals; Price / Estimated EPS multiples based on median consensus
estimates.
Source: S&P Capital IQ Pro.
The disclosure under the heading "The Merger-Opinion of Provident's Financial
Advisor-Analysis of Precedent Transactions" is hereby amended by deleting the
table of Acquiror and Target names at the bottom of page 78 (the Nationwide
Precedent Transactions group) of the joint proxy statement/prospectus and
replacing it with the following:
Transaction Information Seller Information
Price/
Core 1-Day
Acquiror Target Deal LTM Deposit Market Total TCE/ LTM LTM Efficiency NPAs/
Annc. Value Earnings TBV Prem Prem Assets TA ROAA ROAE Ratio Assets
Company St. Company St. Date ($M) (x) (%) (%) (%) ($M) (%) (%) (%) (%) (%)
Raymond James Financial Inc. FL TriState Capital Holdings Inc. PA 10/20/21 1,155.3 22.4 188 5.8 42.7 12,158.9 4.7 0.64 9.0 61.7 0.09
Valley National Bancorp NY Bank Leumi Le-Israel Corp. NY 9/23/21 1,180.9 19.3 135 4.5 - 8,350.8 10.5 0.79 7.1 61.7 0.61
First Interstate BancSystem MT Great Western Bancorp SD 9/16/21 1,968.1 12.1 170 - 24.7 13,070.2 8.8 1.27 14.7 54.2 2.01
Home Bancshares, Inc. AR Happy Bancshares Inc. TX 9/15/21 887.7 12.2 159 7.3 - 6,262.4 9.1 1.28 11.2 64.3 0.39
Old National Bancorp IN First Midwest Bancorp Inc. IL 6/1/21 2,468.6 20.4 165 6.3 3.2 21,208.6 7.4 0.63 5.1 59.7 0.81
Independent Bank Corp. MA Meridian Bancorp Inc. MA 4/22/21 1,150.6 14.5 150 8.7 22.1 6,503.9 11.8 1.17 10.1 45.1 0.07
BancorpSouth Bank MS Cadence Bancorp . TX 4/12/21 2,874.2 9.6 155 7.1 5.1 18,800.4 10.5 1.62 14.4 48.2 0.78
Eastern Bankshares Inc. MA Century Bancorp Inc. MA 4/7/21 641.9 14.8 170 - 20.8 7,289.3 5.2 0.68 12.0 56.1 0.04
WSFS Financial Corp. DE Bryn Mawr Bank Corp. PA 3/10/21 989.9 29.8 229 13.6 14.2 5,432.0 8.1 0.64 5.3 61.2 0.23
SVB Financial Group CA Boston Private Financial MA 1/4/21 942.6 19.9 112 1.7 29.5 10,048.7 8.0 0.49 5.3 71.8 0.31
Pacific Premier Bancorp CA Opus Bank CA 2/3/20 1,031.4 16.6 141 5.1 0.7 7,992.4 9.2 0.80 5.8 63.6 0.07
South State Corporation SC CenterState Bank Corp. FL 1/27/20 3,212.0 13.7 201 13.6 10.0 17,142.0 10.1 1.42 8.5 51.3 0.29
Note: Includes nationwide bank and thrift transactions announced between
January 1, 2020 andSeptember 23, 2022 where the targets assets at announcement were between$5B and$25B ; excludes reverse merger transactions. Source: S&P Capital IQ Pro.
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The disclosure under the heading "The Merger-Opinion of Provident's Financial
Advisor-Net Present Value Analysis" is hereby supplemented by adding the
following table after the Earnings Per Share Multiples chart (that includes
Annual Estimate Variance in the left-most column) in the middle of page 81 of
the joint proxy statement/prospectus:
The following table describes the discount rate calculation which was prepared
by Piper Sandler and used for both Provident common stock as well as Lakeland
common stock. In its normal course of business, Piper Sandler employs the Kroll
Cost of Capital Navigator in determining an appropriate discount rate. The
discount rate equals the risk-free rate, plus the equity risk premium, plus the
size premium, plus the industry premium.
Calculation of Discount Rate
Risk-free rate 3.50 %
Equity risk premium 5.50 %
Size premium 1.22 %
Industry premium (0.16 %)
Calculated discount rate 10.06 %
The disclosure under the heading "The Merger-Opinion of Provident's Financial
Advisor-Pro Forma Transaction Analysis" is hereby supplemented by adding the
following table after the second to last full paragraph on page 81 of the joint
proxy statement/prospectus:
The following table describes estimated earnings per share and tangible book
value accretion and dilution metrics for Provident as indicated in the analysis:
2023E 2024E 2025E
EPS Accretion1 17.0 % 24.1 % 23.9 %
TBV Accretion / (Dilution)2 (13.2 %) (7.8 %) (3.2 %)
(1) Excluding onetime transaction expenses
(2) Estimated TBV dilution at Closing of the merger: (17.3%)
The Merger-Opinion of Lakeland's Financial Advisor
The disclosure on page 92 of the joint proxy statement/prospectus under the section "The Merger- Opinion of Lakeland's Financial Advisor", which section begins on page 86, is hereby supplemented by adding the following paragraph below the table that appears at the top of page 92:
The low and high stock price-to-tangible book value per share multiples of the selected companies in the "Lakeland Selected Companies Analysis" were 0.94x (the multiple for Flushing Financial Corporation) and 2.06x (the multiple for Tompkins Financial Corporation), respectively, the low and high stock price-to-2022 estimated EPS multiples of the selected companies were 7.7x (the multiple for ConnectOne Bancorp, Inc., Metropolitan Bank Holding Corp., and Peapack-Gladstone Financial Corporation) and 12.6x (the multiple for Kearny Financial Corp.), respectively, and the low and high stock price-to-2023 estimated EPS multiples of the selected companies were 6.4x (the multiple for Metropolitan Bank Holding Corp.) and 12.4x (the multiple for Tompkins Financial Corporation), respectively.
The disclosure on page 93 of the joint proxy statement/prospectus under the section "The Merger- Opinion of Lakeland's Financial Advisor" is hereby supplemented by adding the following paragraph below the table that appears at the bottom of page 93:
The low and high stock price-to-tangible book value per share multiples of the selected companies in the "Provident Selected Companies Analysis" were 0.94x (the multiple for Flushing Financial Corporation) and 2.06x (the multiple for Tompkins Financial Corporation), respectively, the low and high stock price-to-2022 estimated EPS multiples of the selected companies were 7.7x (the multiple for ConnectOne Bancorp, Inc., Metropolitan Bank Holding Corp., and Peapack-Gladstone Financial Corporation) and 12.6x (the multiple for Kearny Financial Corp.), respectively, and the low and high stock price-to-2023 estimated EPS multiples of the selected companies were 6.4x (the multiple forMetropolitan Bank ) and 12.4 x (the multiple for Tompkins Financial Corporation), respectively.
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The disclosure on page 95 of the joint proxy statement/prospectus under the section "The Merger- Opinion of Lakeland's Financial Advisor" is hereby supplemented by adding the following paragraph below the table that appears at the top of page 95:
The low and high transaction price-to-tangible book value multiples of the selected transactions in the "Selected Transactions Analysis" were 1.15x (the multiple for the New York Community Bancorp, Inc./Flagstar Bancorp, Inc. transaction) and 1.88x (the multiple for the Raymond James Financial, Inc./TriState Capital Holdings, Inc. transaction), respectively, the low and high pay-to-trade ratios of the selected transactions were 0.66x (the multiple for the Raymond James Financial, Inc./TriState Capital Holdings, Inc. transaction) and 0.99x (the multiple for theOld National Bancorp/First Midwest Bancorp, Inc. transaction), respectively, and the low and high core deposit premiums of the selected transactions were 2.2% (the core deposit premium for the New York Community Bancorp, Inc./Flagstar Bancorp, Inc. transaction) and 8.7% (the core deposit premium for theIndependent Bank Corp. /Meridian Bancorp, Inc. transaction), respectively. For the six selected transactions in which LTM core EPS for the acquired company was available, the low and high transaction price-to-LTM core EPS multiples of the selected transactions were 3.8x (the multiple for the New York Community Bancorp, Inc./Flagstar Bancorp, Inc. transaction) and 23.4x (the multiple for the Raymond James Financial, Inc./TriState Capital Holdings, Inc. transaction), respectively. For the six selected transactions in which FWD EPS estimates for the acquired company was available at announcement, the low and high transaction price-to-FWD estimated EPS multiples of the selected transactions were 8.9x (the multiple for the New York Community Bancorp, Inc./Flagstar Bancorp, Inc. transaction) and 15.6x (the multiple for the Raymond James Financial, Inc./TriState Capital Holdings, Inc. transaction), respectively. For the six selected transactions in which the acquired company was publicly traded, the low and high one-day market premiums of the selected transactions were 3.2% (the one-day market premium for theOld National Bancorp/First Midwest Bancorp, Inc. transaction) and 42.7% (the one-day market premium for the Raymond James Financial, Inc./TriState Capital Holdings, Inc. transaction), respectively.
The disclosure on page 96 of the joint proxy statement/prospectus under the section "The Merger- Opinion of Lakeland's Financial Advisor" is hereby supplemented by amending and restating the third to last sentence of the first paragraph on page 96 as follows:
This analysis indicated the Merger could be accretive to Provident's estimated 2023 and 2024 EPS by 20.4% and 24.5%, respectively, and could be dilutive to Provident's estimated tangible book value per share at closing assumed as ofMarch 31, 2023 by 17.3%. The disclosure on pages 96 and 97 of the joint proxy statement/prospectus under the section "The Merger- Opinion of Lakeland's Financial Advisor" is hereby supplemented by adding the following paragraph beneath the second full paragraph on page 97 as follows: The ranges of discount rates assumed in the Lakeland Dividend Discount Model Analysis, Provident Dividend Discount Model Analysis, and Illustrative Pro Forma Combined Dividend Discount Model Analysis were selected taking into account capital asset pricing model implied cost of capital calculations.
Forward-Looking Statements
This Current Report on Form 8-K 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.
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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. . . .
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