Lakeland Bank Bundle
Who Owns Lakeland Bank?
Understanding a company's ownership is key to its strategy and accountability. A major shift occurred when Lakeland Bank merged with Provident Financial Services, Inc. on May 16, 2024.
This significant all-stock merger, valued at around $1.3 billion, formed a larger community bank with a broader reach.
Lakeland Bank's ownership has evolved significantly since its founding in 1969. Previously a subsidiary of Lakeland Bancorp, Inc. (NASDAQ: LBAI), it held approximately $11.14 billion in assets as of December 31, 2023. The merger with Provident Financial Services, Inc. marks a new chapter in its ownership structure. Investors interested in its strategic positioning might find a Lakeland Bank BCG Matrix analysis insightful.
Who Founded Lakeland Bank?
Lakeland Bank, originally established as Lakeland State Bank in 1969, was founded by three businessmen: Bob Nicholson, John Fredericks, and Bruce Bohuny. Their aim was to address a local need for banking services in Oak Ridge, New Jersey.
Founding Visionaries
Bob Nicholson, John Fredericks, and Bruce Bohuny were the driving forces behind the bank's inception in 1969.
Initial Operations
The bank's first location was a trailer in Newfoundland, New Jersey, commencing operations on May 19, 1969.
Community-Centric Ownership
Early ownership was distributed among approximately 500 residents from West Milford and Jefferson.
Capital Raise Success
The initial capital raise of $1.2 million significantly exceeded the target of $1 million.
Early Leadership
Robert Nicholson served as chairman, and John Fredericks held the position of president among the initial seven directors and officers.
Core Values
The founders' vision prioritized personalized service, customer satisfaction, and community engagement.
The initial ownership structure of Lakeland State Bank was characterized by a broad community base, with around 500 residents from West Milford and Jefferson holding stakes. This widespread ownership was a direct result of a successful initial capital raise, which garnered $1.2 million against a requested $1 million, tripling the anticipated amount. Each investor was permitted to acquire up to 100 shares of stock. Robert Nicholson took on the role of chairman, while John Fredericks served as president within the group of seven original directors and officers. Their foundational principles emphasized delivering personalized banking experiences, ensuring high levels of customer satisfaction, and actively participating in community initiatives, all of which were reflected in the early distribution of control among local stakeholders. This approach laid the groundwork for the bank's future growth and its deep connection to the communities it serves, as detailed in the Brief History of Lakeland Bank.
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How Has Lakeland Bank’s Ownership Changed Over Time?
The ownership structure of Lakeland Bank has evolved significantly since its inception, transitioning from a state bank to a publicly traded entity and subsequently undergoing major mergers that reshaped its shareholder base.
| Event | Date | Impact on Ownership |
|---|---|---|
| Formation of Lakeland Bancorp, Inc. | May 19, 1989 | Became parent company of Lakeland State Bank, initiating a corporate structure for ownership. |
| Renaming to Lakeland Bank | 1997 | No direct ownership change, but a branding evolution. |
| Acquisition of 1st Constitution Bank | January 6, 2022 | Lakeland shareholders owned approximately 78%, 1st Constitution shareholders owned approximately 22% of the combined entity. |
| Merger with Provident Financial Services, Inc. | May 16, 2024 | Provident shareholders own 58%, former Lakeland shareholders own 42% of the combined company. |
Lakeland Bancorp, Inc., established in 1989 as the parent company for Lakeland State Bank, became a publicly traded entity on NASDAQ under the ticker LBAI. This transition opened its ownership to a broader range of investors, including institutional funds and individual shareholders, thereby diversifying who owns Lakeland Bank. The acquisition of 1st Constitution Bank on January 6, 2022, marked a significant step, increasing Lakeland's assets to over $10 billion and adjusting the shareholder percentages, with Lakeland shareholders retaining approximately 78% and 1st Constitution shareholders holding about 22%. The most transformative event in Lakeland Bank ownership occurred on May 16, 2024, with the all-stock merger with Provident Financial Services, Inc. This transaction, valued at approximately $1.3 billion, integrated Lakeland Bancorp into Provident Financial Services. Post-merger, Provident shareholders hold 58% of the combined entity, while former Lakeland shareholders now own 42%. The combined company, operating as Provident Financial Services, Inc., with banking operations under Provident Bank, reported substantial figures as of May 16, 2024, including approximately $24.5 billion in assets.
Key Stakeholders in Lakeland Bank's Evolution
Following its merger with Provident Financial Services, Inc., the ownership of the former Lakeland Bank is now distributed between the shareholders of both entities.
- Provident Financial Services, Inc. shareholders hold 58% of the combined company.
- Former Lakeland Bancorp, Inc. shareholders hold 42% of the combined company.
- Institutional investors and mutual funds are significant holders of Lakeland Bank stock.
- Individual shareholders also comprise a portion of the Lakeland Bank ownership.
- Understanding the Target Market of Lakeland Bank provides context for its strategic direction and stakeholder interests.
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Who Sits on Lakeland Bank’s Board?
Following the merger with Provident Financial Services, Inc., the combined entity now operates with a board of directors that includes key figures from the former Lakeland Bancorp. This integration signifies a shift in the corporate structure and leadership of the financial institution.
| Former Lakeland Director | New Role in Combined Entity |
|---|---|
| Thomas J. Shara | Executive Vice Chairman |
| Brian M. Flynn | Director |
| Brian A. Gragnolati | Director |
| James E. Hanson II | Director |
| Robert E. McCracken | Director |
| Mary Ann Deacon | Board Chair (Lakeland Bancorp, Inc. and Lakeland Bank) |
Prior to the merger, Lakeland Bancorp, Inc. had an eleven-member Board of Directors, structured into three classes with staggered three-year terms. This approach ensured continuity and a blend of expertise. As of March 15, 2024, Lakeland Bancorp's common stock had 65,153,661 shares outstanding, indicating the scale of its shareholder base before the integration. The company also had a mandatory retirement age of 72 for its directors, a common governance practice aimed at refreshing board perspectives.
Board Composition and Governance
The current board structure reflects the recent merger, incorporating experienced members from both previous organizations. This strategic alignment aims to leverage diverse insights for effective governance.
- The combined board now comprises 14 members for both Provident and Provident Bank.
- Five former Lakeland directors were appointed to the new board.
- Thomas J. Shara, formerly President and CEO of Lakeland, now holds the position of Executive Vice Chairman.
- Mary Ann Deacon, who previously chaired Lakeland Bancorp, Inc. and Lakeland Bank, continues to contribute her extensive experience.
- Non-employee directors receive an annual retainer and per-meeting fees for their service.
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What Recent Changes Have Shaped Lakeland Bank’s Ownership Landscape?
The ownership structure of Lakeland Bank has undergone a significant transformation following its merger with Provident Financial Services, Inc. This strategic union, finalized on May 16, 2024, has fundamentally altered the landscape of who owns Lakeland Bank, transitioning it from an independent entity to a part of a larger financial institution.
| Transaction Detail | Lakeland Bancorp, Inc. | Provident Financial Services, Inc. |
|---|---|---|
| Merger Completion Date | No longer independent | Acquiring entity |
| Shareholder Exchange Ratio | 0.8319 Provident shares per Lakeland share | Issued new shares to Lakeland shareholders |
| Trading Status | Ceased trading on NASDAQ | Continues trading under Provident's ticker |
This merger aligns with a broader trend in the regional banking sector, where consolidation is occurring to create more robust institutions. The combined entity, now operating as Provident Bank, boasts approximately $24.5 billion in assets and a network of 140 branches spanning New Jersey, New York, and Pennsylvania as of the merger date. The integration process is underway, with the system conversion anticipated in early September 2024, aiming to realize operational synergies and enhance market competitiveness.
Post-Merger Asset Size
The combined entity now manages approximately $24.5 billion in assets. This scale enhances its capacity for lending and investment.
Branch Network Expansion
The merger resulted in a network of 140 branches across key states. This expanded footprint improves customer accessibility and market reach.
Shareholder Value Creation
Lakeland shareholders received Provident common stock, reflecting an all-stock transaction. This aims to deliver enhanced value through the combined entity's growth potential.
Industry Consolidation Trend
The merger is indicative of a broader trend towards consolidation in the regional banking sector. This strategy seeks to build 'super community banks' with greater scale and efficiency.
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