New Jersey-based banks Provident Financial Services and Lakeland Bancorp have extended their merger agreement to March 31, 2024, to ensure time for required regulatory approvals.
The deal, announced in September 2022, will have Iselin-based Provident paying $1.3 billion in stock for $11.2-billion-asset Lakeland, which is headquartered roughly 34 miles away in Oak Ridge.
The combined bank, operating under the Provident name, will create what the firms dubbed last September a “super-community bank” with more than $25 billion in assets and $20 billion in deposits and locations throughout New Jersey, New York, and Pennsylvania.
The deal was originally expected to close in the second quarter of 2023.
“Both parties remain committed to the merger and to obtaining regulatory approvals,” the banks said in a joint statement Wednesday.
Upon completion, the bank will “benefit from enhanced scale, opportunities for growth and profitability, and Provident’s and Lakeland’s complementary strengths will provide exceptional service to customers and communities served.”
The merger will give Provident a 4% share of all bank deposits in New Jersey, making it second among banks with $100 billion or less in assets, the banks said in September.
A Provident spokesperson had no further comment beyond the announcement.
Janney Montgomery Scott analyst Jake Civiello, who covers Provident, wrote in a research note Thursday that he is “confident that the transaction will be completed as soon as regulatory approvals are granted.” American Banker reported that Civiello foresees the deal to close at the end of next year’s first quarter, and that given the delay, he decreased his 2024 earnings-to-share projection for Provident by 10 cents, to $1.90.
M&A activity has slowed this year, with much dealmaking news addressing those that have fallen through. Regulators have also increased scrutiny of bank deals, contributing to delays.
One of the executives close to the biggest merger termination of the year — the $13.4 billion deal-that-wasn’t between TD and First Horizon — said at a conference in January that “the latest deals seem to take longer than [they] used to,” according to The Globe and Mail.
