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Benefit Plans
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Benefit Plans Benefit Plans
Pension and Post-retirement Benefits
The Bank has a noncontributory defined benefit pension plan covering its full-time employees who had attained age 21 with at least one year of service as of April 1, 2003. The pension plan was frozen on April 1, 2003. All participants in the pension plan are 100% vested. The pension plan’s assets are invested in investment funds and group annuity contracts currently managed by the Principal Financial Group and Allmerica Financial. Based on the measurement date of December 31, 2024, no contributions will be made to the pension plan in 2025.
In addition to pension benefits, certain health care and life insurance benefits are currently made available to certain of the Bank’s retired employees. The costs of such benefits are accrued based on actuarial assumptions from the date of hire to the date the employee is fully eligible to receive the benefits. Effective January 1, 2003, eligibility for retiree health care benefits was frozen as to new entrants and benefits were eliminated for employees with less than ten years of service as of December 31, 2002. Effective January 1, 2007, eligibility for retiree life insurance benefits was frozen as to new entrants and retiree life insurance benefits were eliminated for employees with less than ten years of service as of December 31, 2006.
The following table sets forth information regarding the pension plan and post-retirement healthcare and life insurance plans (in thousands):
 PensionPost-retirement
 202420232022202420232022
Change in benefit obligation:
Benefit obligation at beginning of year$24,423 24,550 32,517 11,344 12,095 16,748 
Service cost— — — 11 13 28 
Interest cost1,154 1,208 855 540 600 443 
Actuarial (gain) loss (65)(149)(48)(10)(357)140 
Benefits paid(1,639)(1,648)(1,658)(681)(658)(933)
Change in actuarial assumptions(1,275)462 (7,116)(111)(349)(4,331)
Benefit obligation at end of year$22,598 24,423 24,550 11,093 11,344 12,095 
Change in plan assets:
Fair value of plan assets at beginning of year$52,734 47,930 58,451 — — — 
Actual (loss) return on plan assets4,775 6,452 (8,863)— — — 
Employer contributions— — — 681 658 933 
Benefits paid(1,639)(1,648)(1,658)(681)(658)(933)
Fair value of plan assets at end of year55,870 52,734 47,930 — — — 
Funded status at end of year$33,272 28,311 23,380 (11,093)(11,344)(12,095)
For the years ended December 31, 2024 and 2023, the Company, in the measurement of its pension plan and post-retirement obligations updated its mortality assumptions to the PRI 2012 mortality table with the fully generational projection scale MP 2021 issued by The Society of Actuaries ("SOA") in October 2021. The prepaid pension benefits of $33.3 million and the unfunded post-retirement healthcare and life insurance benefits of $11.1 million as of December 31, 2024 are included in Other assets and Other liabilities, respectively, in the Consolidated Statements of Financial Condition.
The components of accumulated other comprehensive loss (income) related to the pension plan and other post-retirement benefits, on a pre-tax basis, as of December 31, 2024 and 2023 are summarized in the following table (in thousands):
 PensionPost-retirement
 2024202320242023
Unrecognized prior service cost$— — — — 
Unrecognized net actuarial loss (income)2,573 5,633 (8,381)(10,378)
Total accumulated other comprehensive loss (income)$2,573 5,633 (8,381)(10,378)
Net periodic (benefit) increase cost for the years ending December 31, 2024, 2023 and 2022, included the following components (in thousands):
 PensionPost-retirement
 202420232022202420232022
Service cost$— — — 11 13 28 
Interest cost1,154 1,208 855 540 600 443 
Return on plan assets(3,112)(2,824)(3,456)— — — 
Amortization of:
Net loss (gain) 57 709 — (2,118)(2,130)(1,304)
Unrecognized prior service cost— — — — — — 
Net periodic (benefit) increase cost$(1,901)(907)(2,601)(1,567)(1,517)(833)
The weighted average actuarial assumptions used in the plan determinations as of December 31, 2024, 2023 and 2022 were as follows:
 PensionPost-retirement
 202420232022202420232022
Discount rate5.50 %4.90 %5.10 %5.50 %4.90 %5.10 %
Rate of compensation increase— — — — — — 
Expected return on plan assets6.00 6.00 6.00 — — — 
Medical and life insurance benefits cost rate of increase— — — 5.00 5.50 6.00 
The Company provides its actuary with certain rate assumptions used in measuring the benefit obligation. The most significant of these is the discount rate used to calculate the period-end present value of the benefit obligations, and the expense to be included in the following year’s financial statements. A lower discount rate will result in a higher benefit obligation and expense, while a higher discount rate will result in a lower benefit obligation and expense. The discount rate assumption was determined based on a cash flow-yield curve model specific to the Company’s pension and post-retirement plans. The Company compares this rate to certain market indices, such as long-term treasury bonds, or the Citigroup pension liability indices, for reasonableness. A discount rate of 5.50% was selected for the December 31, 2024 measurement date.
Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A 1% change in the assumed health care cost trend rate would have had the following effects on post-retirement benefits as of December 31, 2024 (in thousands):
1% increase1% decrease
Effect on total service cost and interest cost$60 (55)
Effect on post-retirement benefits obligation$1,100 (950)
Estimated future benefit payments, which reflect expected future service, as appropriate for the next five years, are as follows (in thousands):
PensionPost-retirement
2025$1,759 751 
20261,769 756 
20271,786 777 
20281,791 785 
20291,803 800 
The weighted-average asset allocation of pension plan assets as of December 31, 2024 and 2023 were as follows:
Asset Category20242023
Domestic equities37 %38 %
Foreign equities11 %11 %
Fixed income50 %49 %
Real estate2 %2 %
Cash— %— %
Total100 %100 %
The Company’s expected return on pension plan assets assumption is based on historical investment return experience and evaluation of input from the Plan's Investment Consultant and the Company's Benefits Committee which manages the pension plan’s assets. The expected return on pension plan assets is also impacted by the target allocation of assets, which is based on the Company’s goal of earning the highest rate of return while maintaining risk at acceptable levels.
Management strives to have pension plan assets sufficiently diversified so that adverse or unexpected results from one security class will not have a significant detrimental impact on the entire portfolio. The target allocation of assets and acceptable ranges around the targets are as follows:
Asset CategoryTargetAllowable Range
Domestic equities37 %
30-41%
Foreign equities11 %
5-13%
Fixed income50 %
40-65%
Real estate2 %
0-4%
Cash— %
0%
Total100 %
The Company anticipates that the long-term asset allocation on average will approximate the targeted allocation. Actual asset allocations are the result of investment decisions by a third-party investment manager.
The following tables present the assets that are measured at fair value on a recurring basis by level within the GAAP fair value hierarchy as reported on the statements of net assets available for Plan benefits as of December 31, 2024 and 2023, respectively (in thousands):
Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
 Fair value measurements as of December 31, 2024
Total(Level 1)(Level 2)(Level 3)
Group annuity contracts$73 — 73 — 
Mutual funds:
Fixed income27,740 27,740 — — 
International equity6,042 6,042 — — 
Large U.S. equity1,654 1,654 — — 
Small/Mid U.S. equity1,127 1,127 — — 
Total mutual funds36,563 36,563 — — 
Pooled separate accounts19,234 — 19,234 — 
Total Plan assets$55,870 36,563 19,307 — 
 Fair value measurements as of December 31, 2023
Total(Level 1)(Level 2)(Level 3)
Group annuity contracts$76 — 76 — 
Mutual funds:
Fixed income25,728 25,728 — — 
International equity5,713 5,713 — — 
Large U.S. equity1,577 1,577 — — 
Small/Mid U.S. equity1,114 1,114 — — 
Total mutual funds34,132 34,132 — — 
Pooled separate accounts18,526 — 18,526 — 
Total Plan assets$52,734 34,132 18,602 — 
401(k) Plan
The Bank has a 401(k) plan, and in connection with the merger with Lakeland assumed the Lakeland Bancorp, Inc. Salary Savings 401(k) and Trust Plan, both of which cover substantially all employees of the Bank. For 2024, 2023 and 2022, the Bank matched 25% of the first 6% contributed by the participants. The contribution percentage is determined by the board of directors in its sole discretion. The Bank’s aggregate contributions to the 401(k) Plan for 2024, 2023 and 2022 were $2.5 million, $1.3 million and $1.2 million, respectively.
Supplemental Executive Retirement Plan
The Bank maintains a non-qualified supplemental retirement plan for certain senior officers of the Bank. This unfunded plan, which was frozen as of April 1, 2003, provides benefits in excess of the benefits permitted to be paid by the pension plan under provisions of the tax law. Amounts expensed under this supplemental retirement plan amounted to $76,000, $73,000 and $73,000 for the years 2024, 2023 and 2022, respectively. As of December 31, 2024 and 2023, $1.6 million and $1.6 million, respectively, were recorded in Other liabilities on the Consolidated Statements of Financial Condition for this supplemental retirement plan. In connection with this supplemental retirement plan, an increase of $57,000, net of tax, was recorded in other comprehensive income (loss) for 2024, while there was no change recorded in other comprehensive income (loss) for 2023, while an increase of $283,000, net of tax, was recorded for 2022.
Retirement Plan for the Board of Directors of Provident Bank
The Bank maintains a Retirement Plan for the board of directors of the Bank, a non-qualified plan that provides cash payments for up to 10 years to eligible retired board members based on age and length of service requirements. The maximum payment under this plan to a board member, who terminates service on or after the age of 72 with at least ten years of service on the board, is forty quarterly payments of $2,500. The Bank may suspend payments under this plan if it does not meet Federal Deposit Insurance Corporation or New Jersey Department of Banking and Insurance minimum capital requirements. The Bank may terminate this plan at any time although such termination may not reduce or eliminate any benefit previously accrued to a board member without his or her consent. The plan was amended in December 2005 to terminate benefits under this plan for any directors who had less than ten years of service on the board of directors of the Bank as of December 31, 2006.
The plan further provides that, in the event of a change in control (as defined in the plan), the undistributed balance of a director’s accrued benefit will be distributed to him or her within 60 days of the change in control. The Bank paid $10,000, $5,000, and $5,000 to former board members under this plan for each of the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024 and 2023, $776,000 and $128,000, respectively, were recorded in other liabilities on the Consolidated Statements of Financial Condition for this retirement plan. A minimal increase of $500, net of tax, was recorded in other comprehensive income for 2024, while there was a decrease of $7,000, net of tax, recorded in other comprehensive income for 2023 and an increase of $11,000 recorded in 2022, respectively, in connection with this plan.
Employee Stock Ownership Plan
The ESOP is a tax-qualified plan designed to invest primarily in the Company’s common stock that provides employees with the opportunity to receive a funded retirement benefit from the Bank, based primarily on the value of the Company’s common stock. The ESOP purchased 4,769,464 shares of the Company’s common stock at an average price of $17.09 per share with the proceeds of a loan from the Company to the ESOP. As of December 31, 2024, there was no outstanding loan principal, as the Bank made the final repayment on borrowed funds in December 2024. A final allocation of shares will be made to participants in May.
For the years ending December 31, 2024 and 2023, 286,564 shares and 311,946 shares from the ESOP were released, respectively. As of December 31, 2024, there were no remaining unallocated ESOP shares held in suspense, as final repayment was made in December. ESOP compensation expense for the years ended December 31, 2024, 2023 and 2022 was $2.6 million, $3.1 million and $4.1 million, respectively.
Non-Qualified Supplemental Defined Contribution Plan (“the Supplemental Employee Stock Ownership Plan”)
Effective January 1, 2004, the Bank established a deferred compensation plan for executive management and key employees of the Bank, known as Provident Bank Non-Qualified Supplemental Employee Stock Ownership Plan (the “Supplemental ESOP”). The Supplemental ESOP was amended and restated as the Non-Qualified Supplemental Defined Contribution Plan (the “Supplemental DC Plan”), effective January 1, 2010. The Supplemental DC Plan is a non-qualified plan that provides additional benefits to certain executives whose benefits under the 401(k) Plan and ESOP are limited by tax law limitations applicable to tax-qualified plans. The Supplemental DC Plan requires a contribution by the Bank for each participant who also participates in the 401(k) Plan and ESOP equal to the amount that would have been contributed under the terms of the 401(k) Plan and ESOP but for the tax law limitations, less the amount actually contributed under the 401(k) Plan and ESOP.
The Supplemental DC Plan provides for a phantom stock allocation for qualified contributions that may not be accrued in the qualified ESOP and for matching contributions that may not be accrued in the qualified 401(k) Plan due to tax law limitations. Under the Supplemental 401(k) provision, the estimated expense (benefit) for the years ending December 31, 2024, 2023 and 2022 was $37,000, $262,000 and $312,000, respectively, and included the matching contributions plus interest credited at an annual rate equal to the ten-year bond-equivalent yield on U.S. Treasury securities. Under the Supplemental ESOP provision, the estimated expense for the years ending December 31, 2024, 2023 and 2022 was $23,000, $432,000 and $144,000, respectively. The phantom equity is treated as equity awards (expensed at the time of allocation) and not liability awards which would require periodic adjustment to market, as participants do not have an option to take their distribution in cash.
2024 Equity Plan
Upon stockholders’ approval of the 2024 Equity Plan on April 25, 2024, shares available for stock awards and stock options under the Amended and Restated Long-Term Incentive Plan were reserved for issuance under the new 2024 Equity Plan. No additional grants of stock awards and stock options will be made under the Amended and Restated Long-Term Incentive Plan. The new plan authorized the issuance of up to 2,100,000 shares of Company common stock to be issued as stock awards. As of December 31, 2024, 2,271,833 shares remain available for grant under the plan. Shares previously awarded under prior equity incentive plans that are subsequently forfeited or expire may also be issued under this new plan.
Stock Awards
As a general rule, restricted stock grants are held in escrow for the benefit of the award recipient until vested. Awards outstanding generally vest in three annual installments, commencing one year from the date of the award. Additionally, certain
awards are three-year performance-vesting awards, which may or may not vest depending upon the attainment of certain corporate financial targets. Expense attributable to stock awards amounted to $8.4 million, $7.6 million and $9.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.
A summary status of the granted but unvested stock awards as of December 31, and changes during the year, is presented below:
 Restricted Stock Awards
 202420232022
Outstanding at beginning of year1,053,092 1,023,130 900,483 
Granted901,360 427,053 447,526 
Forfeited(428,307)(328,761)(105,556)
Vested(63,307)(68,330)(219,323)
Outstanding at the end of year1,462,838 1,053,092 1,023,130 
As of December 31, 2024, unrecognized compensation cost relating to unvested restricted stock totaled $8.8 million. This amount will be recognized over a remaining weighted average period of 1.6 years.
Restricted Stock Units ("RSUs")
RSUs earn dividend equivalents (equal to cash dividends paid on the Company's common share) over the applicable performance or service period. Dividend equivalents, per the terms of the agreements, are accumulated and paid to the grantee on the quarterly dividend date, or forfeited if the applicable performance or service conditions are not met.
As part of the Lakeland acquisition, 302,805 shares were acquired on May 16, 2024. During the year, 3,414 shares vested and 2,843 shares were forfeited. Outstanding shares at the end of the year totaled 296,548, with unrecognized compensation cost relating to unvested RSUs totaling $3.2 million. This amount will be recognized over a remaining weighted average period of 1.9 years.
Stock Options
Each stock option granted entitles the holder to purchase one share of the Company’s common stock at an exercise price not less than the fair value of a share of the Company’s common stock at the date of grant. Options generally vest over a five-year period from the date of grant and expire no later than 10 years following the grant date. Additionally, certain options are three-year performance-vesting options, which may or may not vest depending upon the attainment of certain corporate financial targets.
A summary of the status of the granted but unexercised stock options as of December 31, 2024, 2023 and 2022, and changes during the year is presented below:
 202420232022
 
Number
of
stock
options
Weighted
average
exercise
price
Number
of
stock
options
Weighted
average
exercise
price
Number
of
stock
options
Weighted
average
exercise
price
Outstanding at beginning of year548,925 $19.37 600,806 $19.01 566,453 $18.73 
Granted— — — — 34,353 23.70 
Exercised— — (51,881)15.23 — — 
Forfeited— — — — — — 
Expired(80,762)16.38 — — — — 
Outstanding at the end of year468,163 $19.89 548,925 $19.37 600,806 $19.01 

The total fair value of options vesting during 2024, 2023 and 2022 was $133,000, $198,000 and $195,000, respectively.
Compensation expense of approximately $11,000 and $77,000 is projected for 2025 and 2026 respectively, on stock options outstanding as of December 31, 2024. After March 2025, there are no unvested stock options expensed.
The following table summarizes information about stock options outstanding as of December 31, 2024:
 Options OutstandingOptions Exercisable
Range of exercise prices
Number
of
options
outstanding
Average
remaining
contractual
life
Weighted
average
exercise
price
Number
of
options
exercisable
Weighted
average
exercise
price
$18.34-18.70
142,299 1.1$18.53 142,299 $18.53 
$20.62-27.25
325,864 4.8$23.20 314,413 $23.19 

The stock options outstanding and stock options exercisable as of December 31, 2024, both had an aggregate intrinsic value of $48,000.
The expense related to stock options is based on the fair value of the options at the date of the grant and is recognized ratably over the vesting period of the options.
Compensation expense related to the Company’s stock option plan totaled $77,000, $144,000 and $198,000 for 2024, 2023 and 2022, respectively.
The estimated fair values were determined on the dates of grant using the Black-Scholes Option pricing model. The fair value of the Company’s stock option awards are expensed on a straight-line basis over the vesting period of the stock option. The risk-free rate is based on the implied yield on a U.S. Treasury bond with a term approximating the expected term of the option. The expected volatility computation is based on historical volatility over a period approximating the expected term of the option. The dividend yield is based on the annual dividend payment per share, divided by the grant date stock price. The expected option term is a function of the option life and the vesting period.
There were no options granted during 2024 or 2023.