Provident to Buy First Sentinel for $646M

Monday, December 22nd 2003, 12:00 am
By: News On 6

NEWARK, N.J. (AP) _ Provident Financial Services Inc. said Monday it is acquiring First Sentinel Bancorp Inc., operator of First Savings Bank, in a $642 million deal. The news sent First Sentinel shares up by more than 14 percent.

Under the terms of the signed agreement, 60 percent of First Sentinel common shares will be converted into Provident stock and the remaining 40 percent will be converted into cash.

First Sentinel shareholders will have the option to receive either 1.092 shares of Provident Financial common stock, $22.25 of cash, or some combination.

In morning trading, Provident shares dropped $1.01 to $19.36 on the New York Stock Exchange. First Sentinel shares, which are traded on the Nasdaq Stock Exchange, surged $2.67, or 14.2 percent, to $21.45.

The merger will leave Jersey City-based Provident Financial with about $6.4 billion in assets and retail and commercial banking services through 76 branches in 10 of the state's 21 counties.

It will make The Provident Bank the state's eighth-largest bank, with deposits of about $4.1 billion, the banks said.

The merger is to close at the end of the second quarter of 2004, subject to stockholder and regulatory approval. The boards of both companies have approved the deal.

Provident Financial's chairman, CEO and president, Paul M. Pantozzi, will continue as chairman and CEO of the holding company and bank.

The CEO and president of Woodbridge-based First Sentinel, Christopher Martin, will be named president of Provident Financial and The Provident Bank.

The Provident Bank, originally established in 1839, operates 54 branches in New Jersey. First Savings Bank has 22 branches in the state.