−Removed: The risk factors that were previously disclosed in the Company’s Annual Report on Form 10K for the year ended December 31, 2021, have been supplemented by the Company for the quarter ended September 30, 2022 as follows:
−Removed: Regulatory approvals may not be received, may take longer than expected, or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company that results from the merger of the Company and Lakeland.
−Removed: Before the merger of the Company and Lakeland (the “merger”) and the subsequent merger of Lakeland Bank with and into Provident Bank (the “bank merger”) may be completed, various approvals, consents and non-objections must be obtained from the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), the FDIC, the New Jersey Department of Banking and Insurance (the “NJDOBI”) and other regulatory authorities in the United States.
−Removed: In determining whether to grant these approvals, such regulatory authorities consider a variety of factors, including the regulatory standing of each company.
−Removed: These approvals could be delayed or not obtained at all, including due to an adverse development in either company’s regulatory standing or in any other factors considered by regulators when granting such approvals;
−Removed: governmental, political or community group inquiries, investigations or opposition;
−Removed: or changes in legislation or the political environment generally.
−Removed: The approvals that are granted may impose terms and conditions, limitations, obligations or costs, or place restrictions on the conduct of the combined company’s business or require changes to the terms of the transactions contemplated by the merger agreement between the Company and Lakeland.
−Removed: There can be no assurance that regulators will not impose any such conditions, limitations, obligations or restrictions and that such conditions, limitations, obligations or restrictions will not have the effect of delaying the completion of any of the transactions contemplated by the merger agreement, imposing additional material costs on or materially limiting the revenues of the combined company following the merger or otherwise reducing the anticipated benefits of the merger if the merger were consummated successfully within the expected timeframe.
−Removed: In addition, there can be no assurance that any such conditions, terms, obligations or restrictions will not result in the delay or abandonment of the merger.
−Removed: Additionally, the completion of the merger is conditioned on the absence of certain orders, injunctions or decrees by any court or regulatory agency of competent jurisdiction that would prohibit or make illegal the completion of any of the transactions contemplated by the merger agreement.
−Removed: In addition, despite the companies’ commitments to using their reasonable best efforts to comply with conditions imposed by regulators, under the terms of the merger agreement, neither the Company nor Lakeland, nor any of their respective subsidiaries, is permitted (without the written consent of the other party), to take any action, or commit to take any action, or agree to any condition or restriction, in connection with obtaining the required permits, consents, approvals and authorizations of governmental entities that would reasonably be expected to have a material adverse effect on the combined company and its subsidiaries, taken as a whole, after giving effect to the merger and the bank merger.
−Removed: Failure to complete the merger could negatively impact the Company.
−Removed: If the merger is not completed for any reason, including as a result of the Company’s stockholders or Lakeland’s shareholders failing to approve certain matters in connection with the merger at each company’s respective special meeting, there may be various adverse consequences and the Company may experience negative reactions from the financial markets and from its customers and employees.
−Removed: For example, the Company’s business may have been impacted adversely by the failure to pursue
−Removed: other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger.
−Removed: Additionally, if the merger agreement is terminated, the market price of the Company’s common stock could decline to the extent that current market prices reflect a market assumption that the merger will be beneficial and will be completed.
−Removed: The Company also could be subject to litigation related to any failure to complete the merger or to proceedings commenced against the Company to perform its obligations under the merger agreement.
−Removed: If the merger agreement is terminated under certain circumstances, the Company may be required to pay a termination fee of $50 million to Lakeland.
−Removed: Additionally, the Company has incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement, as well as the costs and expenses of preparing, filing, printing and mailing of a joint proxy statement/prospectus in connection with the merger, and all filing and other fees paid in connection with the merger.
−Removed: If the merger is not completed, the Company would have to pay these expenses without realizing the expected benefits of the merger.
−Removed: The current volatile interest rate environment may adversely impact the fair value adjustments of investments and loans acquired in the merger.
−Removed: Upon the closing of the merger, we will need to adjust the fair value of Lakeland’s investment and loan portfolios.
−Removed: The rising interest rate environment could have the effect of increasing the magnitude of the purchase accounting marks relating to such fair value adjustments, thereby increasing initial tangible book value dilution, extending the tangible book value earn back period, and negatively impacting the Company’s capital ratios, which may result in the Company taking steps to strengthen its capital position.
−Removed: Combining the Company and Lakeland may be more difficult, costly or time-consuming than expected, and the Company may fail to realize the anticipated benefits of the merger.
−Removed: The success of the merger will depend, in part, on the ability to realize the anticipated cost savings from combining the businesses of the Company and Lakeland.
−Removed: To realize the anticipated benefits and cost savings from the merger, the Company and Lakeland must successfully integrate and combine their businesses in a manner that permits those cost savings to be realized without adversely affecting current revenues and future growth.
−Removed: If the Company and Lakeland are not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected.
−Removed: In addition, the actual cost savings of the merger could be less than anticipated, and integration may result in additional and unforeseen expenses.
−Removed: An inability to realize the full extent of the anticipated benefits of the merger and the other transactions contemplated by the merger agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, levels of expenses and operating results of the combined company following the completion of the merger, which may adversely affect the value of the common stock of the combined company following the completion of the merger.
−Removed: The Company and Lakeland have operated and, until the completion of the merger, must continue to operate, independently.
−Removed: It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the companies’ ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the merger.
−Removed: Integration efforts between the companies may also divert management attention and resources.
−Removed: These integration matters could have an adverse effect on the Company during this transition period and for an undetermined period after completion of the merger on the combined company.
−Removed: Furthermore, the board of directors and executive leadership of the combined company will consist of former directors and executive officers from each of the Company and Lakeland.
−Removed: Combining the boards of directors and management teams of each company into a single board and a single management team could require the reconciliation of differing priorities and philosophies.
−Removed: The combined company may be unable to retain personnel of the Company and/or Lakeland successfully after the merger is completed.
−Removed: The success of the merger will depend in part on the combined company’s ability to retain the talent and dedication of key employees currently employed by the Company and Lakeland.
−Removed: It is possible that these employees may decide not to remain with the Company or Lakeland, as applicable, while the merger is pending or with the combined company after the merger is consummated.
−Removed: If the Company and Lakeland are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, the Company and Lakeland could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs.
−Removed: In addition, following the merger, if key employees terminate their employment, the combined company’s business
−Removed: activities may be adversely affected, and management’s attention may be diverted from successfully hiring suitable replacements, all of which may cause the combined company’s business to suffer.
−Removed: The Company and Lakeland also may not be able to locate or retain suitable replacements for any key employees who leave either company.
−Removed: The Company will be subject to business uncertainties and contractual restrictions while the merger is pending.
−Removed: Uncertainty about the effect of the merger on employees and customers may have an adverse effect on the Company.
−Removed: These uncertainties may impair the Company’s ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that deal with the Company to seek to change existing business relationships with the Company.
−Removed: In addition, subject to certain exceptions, the Company has agreed to operate its business in the ordinary course in all material respects and to refrain from taking certain actions that may adversely affect its ability to consummate the transactions contemplated by the merger agreement on a timely basis without the consent of Lakeland.
−Removed: These restrictions may prevent the Company from pursuing attractive business opportunities that may arise prior to the completion of the merger.
−Removed: The Company has incurred and is expected to incur substantial costs related to the merger and integration.
−Removed: The Company has incurred and expects to incur a number of non-recurring costs associated with the merger.
−Removed: These costs include legal, financial advisory, accounting, consulting and other advisory fees, retention, severance and employee benefit-related costs, public company filing fees and other regulatory fees, financial printing and other printing costs, closing, integration and other related costs.
−Removed: Some of these costs are payable by the Company regardless of whether or not the merger is completed.
−Removed: Stockholder litigation related to the merger could prevent or delay the completion of the merger, result in the payment of damages or otherwise negatively impact the business and operations of the Company.
−Removed: Stockholders may bring claims in connection with the proposed merger and, among other remedies, may seek damages or an injunction preventing the merger from closing.
−Removed: If any plaintiff were successful in obtaining an injunction prohibiting the Company or Lakeland from completing the merger or any other transactions contemplated by the merger agreement, then such injunction may delay or prevent the effectiveness of the merger and could result in costs to the Company, including costs in connection with the defense or settlement of any stockholder lawsuits filed in connection with the merger.
−Removed: Further, such lawsuits and the defense or settlement of any such lawsuits may have an adverse effect on the financial condition and results of operations of the Company.
−Removed: The COVID-19 pandemic may delay and adversely affect the completion of the merger.
−Removed: The COVID-19 pandemic has created economic and financial disruptions that have adversely affected, and are likely to continue to adversely affect, the business, financial condition, liquidity, capital and results of operations of the Company.
−Removed: If the effects of the COVID-19 pandemic cause a continued or extended decline in the economic environment and the financial results of the Company, or the business operations of the Company are further disrupted as a result of the COVID-19 pandemic, efforts to complete the merger and integrate the businesses of the Company and Lakeland may also be delayed and adversely affected.
−Removed: Additional time may be required to obtain the requisite regulatory approvals, and regulators may impose additional requirements on the Company or Lakeland that must be satisfied prior to completion of the merger, which could delay and adversely affect the completion of the merger.
−Removed: The merger agreement may be terminated in accordance with its terms and the merger may not be completed.
−Removed: The merger agreement is subject to a number of conditions which must be fulfilled in order to complete the merger.
−Removed: Those conditions include, among other things:
−Removed: (i) approval by each of the Company’s stockholders and Lakeland’s shareholders of certain matters relating to the merger at each company’s respective special meeting;
−Removed: (ii) authorization for listing on the New York Stock Exchange of the shares of the Company’s common stock to be issued in the merger, subject to official notice of issuance, (iii) the receipt of required regulatory approvals, including the approval of the Federal Reserve Board, the FDIC and the NJDOBI;
−Removed: and (iv) the absence of any order, injunction, decree or other legal restraint preventing the completion of the merger, the bank merger or any of the other transactions contemplated by the merger agreement or making the completion of the merger, the bank merger or any of the other transactions contemplated by the merger agreement illegal.
−Removed: Each party’s obligation to complete the merger is also subject to certain additional customary conditions, including (a) subject to applicable materiality standards, the accuracy of the representations and warranties of the other party, (b) the performance in all material respects by the other party of its obligations under the merger agreement, (c) the receipt by each party of an opinion from its counsel to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986 and (d) the execution and delivery of the bank merger agreement in respect of the bank merger.
−Removed: These conditions to the closing may not be fulfilled in a timely manner or at all, and, accordingly, the merger may not be completed.
−Removed: In addition, the parties can mutually decide to terminate the merger agreement at any time, before or after the requisite stockholder and shareholder approvals, or the Company or Lakeland may elect to terminate the merger agreement in certain other circumstances.
+Added: The risk factors that were previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, have been supplemented by the Company for the quarter ended March 31, 2023, as follows:
+Added: Our stock price may be negatively impacted by unrelated bank failures and negative depositor confidence in depository institutions.
+Added: Further, if the public loses confidence in how we manage our liquidity, deposits, capital levels and interest rate risk, which have come under greater scrutiny in light of recent bank failures, it may have a material adverse effect on our financial condition and results of operations.
+Added: On March 9, 2023, Silvergate Bank, La Jolla, California, announced its decision to voluntarily liquidate its assets and wind down operations.
+Added: On March 10, 2023, Silicon Valley Bank, Santa Clara, California, was closed by the California
+Added: Department of Financial Protection and Innovation, on March 12, 2023, Signature Bank, New York, New York, was closed by the New York State Department of Financial Services, and on May 1, 2023 First Republic Bank, San Francisco, California, was closed by the FDIC and sold to JPMorgan Chase & Co.
+Added: In each case, the FDIC was named receiver after each of these banks lost credibility with its depositors and experienced massive deposit outflows.
+Added: These banks also had elevated levels of uninsured deposits, which may be less likely to remain at the bank over time and less stable as a source of funding than insured deposits.
+Added: These failures led to volatility and declines in the market for bank stocks and questions about depositor confidence in depository institutions.
+Added: These events have led to a greater focus by institutions, investors, regulators and depositors on the on-balance sheet liquidity of and funding sources for financial institutions, the composition of deposits, including the amount of uninsured deposits, the amount of accumulated other comprehensive loss, capital levels and interest rate risk management.
+Added: If we are unable to adequately manage our liquidity, deposits, capital levels and interest rate risk, it may have a material adverse effect on our financial condition and results of operations.
+Added: Our funding sources may prove insufficient or costly to support our future growth.
+Added: A lack of liquidity could adversely affect our financial condition and results of operations and result in regulatory limits being placed on the Company.
+Added: We must maintain sufficient funds to respond to the needs of depositors and borrowers.
+Added: Deposits have traditionally been our primary source of funding for our lending and investment activities.
+Added: We also receive funds from loan repayments, investment maturities and income on other interest-earning assets.
+Added: While we emphasize the generation of low-cost core deposits as a source of funding, there is strong competition for such deposits in our market area.
+Added: Additionally, deposit balances can decrease if customers perceive alternative investments as providing a better risk/return tradeoff.
+Added: Accordingly, as a part of our liquidity management, we must use several funding sources in addition to deposits and repayments and maturities of loans and investments.
+Added: As we continue to grow, we may become more dependent on these sources, which may include Federal Home Loan Bank of New York advances, federal funds purchased and brokered certificates of deposit.
+Added: Adverse operating results or changes in industry conditions could lead to difficulty or an inability to access these additional funding sources.
+Added: Our financial flexibility will be severely constrained if we are unable to maintain our access to funding or if adequate financing is not available to accommodate future growth at acceptable interest rates.
+Added: Further, if we are required to rely more heavily on more expensive funding sources to support liquidity and future growth, our revenues may not increase proportionately to cover our increased costs.
+Added: Our net interest margin a nd profitability would also be adversely affected.
+Added: Alternatively, we may need to sell a portion of our investment and/or loan portfolio to raise funds, which, depending upon market conditions, could result in us realizing a loss on the sale of such assets.
+Added: Any decline in available funding could adversely impact our ability to originate loans, invest in securities, pay our expenses, or fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, financial condition and results of operations.
+Added: A lack of liquidity could also attract increased regulatory scrutiny and potential restrictions imposed on us by regulators.
+Added: The premiums of the FDIC’s deposit insurance program are expected to increase, and banking regulators have signaled further review of regulatory requirements and the potential for changes to laws or regulations governing banks and bank holding companies.
+Added: Changes resulting from these events could include increased regulatory oversight, higher capital requirements or changes in the way regulatory capital is calculated, and the impositions of additional restrictions through regulatory changes or supervisory or enforcement activities, each of which could have a material impact on our business.
+Added: The Failure to Address the Federal Debt Ceiling in a Timely Manner, Downgrades of the U.S.
+Added: Credit Rating and Uncertain Credit and Financial Market Conditions May Affect the Stability of Securities Issued or Guaranteed by the Federal Government, which May Affect the Valuation or Liquidity of our Investment Securities Portfolio and Increase Future Borrowing Costs.
+Added: As a result of uncertain political, credit and financial market conditions, including the potential consequences of the federal government defaulting on its obligations for a period of time due to federal debt ceiling limitations or other unresolved political issues, investments in financial instruments issued or guaranteed by the federal government pose credit default and liquidity risks.
+Added: Given that future deterioration in the U.S.
+Added: credit and financial markets is a possibility, no assurance can be made that losses or significant deterioration in the fair value of our U.S.
+Added: government issued or guaranteed investments will not occur.
+Added: At March 31, 2023, we had approximately $250.8 million, $81.5 million and $1.22 billion invested in U.S.
+Added: Treasury securities, U.S.
+Added: government agency securities, and residential mortgage-backed securities issued or guaranteed by government-sponsored enterprises and programs, respectively.
+Added: Downgrades to the U.S.
+Added: credit rating could affect the stability of securities issued or guaranteed by the federal government and the valuation or liquidity of our portfolio of such investment securities, and could result in our counterparties requiring additional collateral for our borrowings.
+Added: Further, unless and until U.S.
+Added: political, credit and financial market conditions have been sufficiently resolved or stabilized, it may increase our future borrowing costs.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.