Provident Financial Services (PFS) risk factors, FY2025 10-K

Risks Related to the Recent Merger with Lakeland

1. 01The regulatory approvals received for the merger of the Company and Lakeland include conditions and commitments that could in the future have adverse effects on the Company
2. 02As a result of the merger, the Bank has become subject to additional requirements imposed by the DOJ

Risks Related to the Economy, Financial Markets, and Interest Rates

1. 03Changes to the underlying drivers of our net interest income could adversely affect our results of operations and financial condition34% rewritten
2. 04A general economic slowdown or uncertainty that produces either reduced returns or excessive market volatility could adversely impact our overall profitability, including our wealth management fee income and our access to capital and liquidity41% rewritten
3. 05Another shutdown of the federal government could adversely affect our results of operations and financial conditionNew
4. 06If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings could decrease
5. 07Commercial real estate, commercial and industrial and construction loans expose us to increased risk and earnings volatility33% rewritten

Risks Related to Regulatory, Compliance, Environmental and Legal Matters

1. 08We operate in a highly regulated environment and may be adversely affected by changes in laws and regulations
2. 09Financial institutions are facing increased scrutiny and potential enforcement actions from federal agencies, leading to the need to update internal risk-scoring and compliance proceduresNew
3. 10As a larger financial institution, we are subject to additional regulation and increased supervision
4. 11The fiscal, monetary and regulatory policies of the federal government and its agencies could have an adverse effect on our results of operations
5. 12We face regulatory scrutiny based on our commercial real estate lending
6. 13Future acquisitions may be delayed, impeded, or prohibited due to regulatory issues
7. 14We may experience impairments of goodwill or other intangible assets in the future
8. 15Climate change and related governmental action may materially affect the Company’s business and results of operations52% rewritten

Risks Related to Business Environment, Operations and Strategy

1. 16We have incurred, and may incur in the future, significant costs related to acquisitions by merger and subsequent integration activities
2. 17Our continuing concentration of business in a relatively confined region may increase our risk
3. 18Acts of terrorism, severe weather, natural disasters, public health issues, geopolitical and other external events could impact our ability to conduct business
4. 19We may not be able to detect money laundering and other illegal or improper activities fully or on a timely basis, which could expose us to additional liability and could have a material adverse effect on us
5. 20Our funding sources may prove insufficient or costly to support our future growth. A lack of liquidity could adversely affect our financial condition and results of operations and result in regulatory limits being placed on the Company
6. 21Strong competition within our market area may limit our growth and profitability87% rewritten
7. 22finance companies, investment advisers, wealth managers, mutual funds, insurance companies, online lenders, large non-bank participants, and brokerage and investment banking firms operating both locally and elsewhereNew
8. 23We use quantitative models to assist in measuring risks and estimating or predicting certain financial values, among other uses. These models are used throughout many of our business lines, and we rely on them, along with our business judgment, for many decision-making processes
9. 24We may need to raise additional capital in the future and such capital may not be available when needed or at all

Risks Related to Our Pending Core Conversion

1. 25We expect to incur significant costs related to our core system integrationNew

Risks Related to Technology and Security

1. 26Our business is highly dependent on the security and efficacy of our infrastructure, computer and data management systems to provide secure processing, transmission, storage and retrieval of confidential and proprietary information
2. 27We rely on third-party providers and other suppliers for a number of services that are important to our business. A breach, failure, interruption, cessation of an important service by any third-party could have a material adverse effect on our business, as well as cause reputational harm
3. 28Artificial Intelligence presents risks and challenges that may adversely affect our businessNew
4. 29Failure to keep pace with technological changes could adversely affect our business

Risks Related to Our Common Stock

1. 30Anti-takeover provisions could negatively impact our shareholders
2. 31There may be future sales or other dilution of the Company's equity, which may adversely affect the market price of our common stock
3. 32The Company relies on dividends from our subsidiaries for most of our revenue