Provident Financial Services Inc. PFS, -0.56% and announced Tuesday and agreement to acquire Lakeland Bancorp Inc. LBAI, -0.55% in a stock deal valued at $1.3 billion. Provident’s stock was indicated down nearly 1% in premarket trading, while Lakeland shares were halted for news until 7: 45 a.m. Eastern. Under terms of the New Jersey-based community banks’ deal, Lakeland shareholders will received 0.8319 Provident shares for each Lakeland share they own. Based on Monday’s closing prices, that values Lakeland shares at $19.27 each, an 18.3% premium. The price implies a market capitalization for Lakeland of $1.25 billion, compared with Provident’s market cap of $1.74 billion as of Monday’s close. After the deal closes, which is expected to occur in the second quarter of 2023, Provident shareholders will own 58% of the combined company, which is expected to have more than $25 billion in assets and $20 billion in total deposits. Lakeland’s stock has gained 9.2% over the past three months and Provident shares have tacked on 3.7%, while the S&P 500 SPX, -1.03% has dropped 6.3%.
