SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 2004
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED].
For the transition period from _______________ to ______________________
Commission File Number 001-31566
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A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
The Incentive Savings Plan for the Employees of First Savings Bank
B: Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Provident Financial Services, Inc.
830 Bergen Avenue
Jersey City, New Jersey 07306-4599
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Provident Financial Services, Inc.:
We consent to the incorporation by reference in registration statement no.
333-103041 on Form S-8 of Provident Financial Services, Inc. of our report dated
June 10, 2005, relating to the financial statements of The Incentive Savings
Plan for the Employees of First Savings Bank as of December 31, 2004 and 2003,
and for the years then ended, and supplemental schedule of assets held for
investment purposes at end of year as of December 31, 2004, which report appears
in the Annual Report on Form 11-K of The Incentive Savings Plan for the
Employees of First Savings Bank.
/S/ KPMG LLP
Short Hills, New Jersey
June 28, 2005
THE INCENTIVE SAVINGS PLAN FOR THE EMPLOYEES OF FIRST SAVINGS BANK
Financial Statements and Schedule
December 31, 2004 and 2003
(WITH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANT THEREON)
THE INCENTIVE SAVINGS PLAN FOR THE
EMPLOYEES OF FIRST SAVINGS BANK
Financial Statements and Schedules
Index
Page
Report of Independent Registered Public Accounting Firm 1
Statements of Net Assets Available for Benefits - December 31, 2004
and 2003 2
Statements of Changes in Net Assets Available for Benefits - Years ended
December 31, 2004 and 2003 3
Notes to Financial Statements 4
Schedules
1 Schedule H, Item 4(i) - Schedule of Assets (Held at End of Year)
December 31, 2004 8
Report of Independent Registered Public Accounting Firm
Benefits Committee
The Provident Bank:
We have audited the accompanying statements of net assets available for plan
benefits of The Incentive Savings Plan for the Employees of First Savings Bank
(the "Plan") as of December 31, 2004 and 2003, and the related statements of
changes in net assets available for plan benefits for the years then ended.
These financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of The
Incentive Savings Plan for the Employees of First Savings Bank as of December
31, 2004 and 2003, and the changes in net assets available for plan benefits for
the years then ended in conformity with U.S. generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary schedule of assets
(held at end of year) is presented for purposes of additional analysis and is
not a required part of the 2004 basic financial statements, but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audit of the 2004 basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the 2004 basic financial
statements taken as a whole.
/S/ KPMG LLP
June 10, 2005
THE INCENTIVE SAVINGS PLAN FOR THE
EMPLOYEES OF FIRST SAVINGS BANK
Statements of Net Assets Available for Benefits
December 31, 2004 and 2003
2004 2003
-------------------------------------
Assets - investments, at market value (note 3): Mutual funds:
Alger Mid Cap Growth Ret Port Fund Class A $ 243,548 256,851
Van Kampen American Value Fund Class A 113,320 123,131
Merrill Lynch Small Cap Value Fund Class A 26,843 14,671
Merrill Lynch Equity Income Fund Class D 317,044 310,853
Dreyfus Premier Balance Fund Class A 419,067 498,978
Aim Blue Chip Fund Class A 810,624 984,821
Mercury HW International Value Fund Class I 107,908 108,412
Blackrock Government Income Portfolio Class A 3,575 1,902
Pimco Total Return Fund Class A 187,365 224,480
AllianceBernstein Americas Government Income Fund Class A 17,014 11,571
Massachusetts Investors Growth Stock Fund Class A 376,661 467,212
----------------- ---------------
2,622,969 3,002,882
----------------- ---------------
Merrill Lynch Retirement Preservation Trust 5,085,602 2,059,680
----------------- ---------------
Employer stock fund:
Common stock 4,238,913 14,205,003
----------------- ---------------
Participant loans receivable 207,680 242,604
Accrued Income and Other Assets 2,050 1,305
----------------- ---------------
Net assets available for benefits $ 12,157,214 19,511,474
================= ================
See accompanying notes to financial statements.
2
THE INCENTIVE SAVINGS PLAN FOR THE
EMPLOYEES OF FIRST SAVINGS BANK
Statements of Changes in Net Assets
Available for Benefits
Years ended December 31, 2004 and 2003
2004 2003
----------------------------------
Additions:
Employee contributions $ 343,269 $ 586,574
Employer contributions 62,253 106,688
Employee rollovers 1,949 49,057
Interest income 11,177 16,042
Net investment income 720,805 5,507,065
---------- --------------
Total additions 1,139,453 6,265,426
Deductions from net assets attributed to
benefits to participants 8,480,645 261,257
Other 13,068 950
----------- --------------
Net (decrease) increase in net assets available for benefits (7,354,260) 6,003,219
Net assets available for benefits
at beginning of year 19,511,474 13,508,255
----------- --------------
Net assets available for benefits
at end of year $12,157,214 $19,511,474
=========== ===============
See accompanying notes to financial statements.
3
THE INCENTIVE SAVINGS PLAN FOR THE
EMPLOYEES OF FIRST SAVINGS BANK
Notes to Financial Statements
December 31, 2004 and 2003
(1) General
The Incentive Savings Plan for the Employees of First Savings Bank (the
"Plan"), a participant-directed, defined contribution plan, is a voluntary
savings plan available to all eligible employees of First Savings Bank (the
"Bank"). The Bank was a wholly-owned subsidiary of First Sentinel Bancorp,
Inc, which was acquired by Provident Financial Services, Inc. on July 14,
2004. Upon completion of the acquisition, the Bank was merged with and into
The Provident Bank.
The accompanying financial statements have been prepared on an accrual
basis. Purchases and sales of investments are recorded on a trade-date
basis.
A number of estimates and assumptions have been made relating to the
reporting of assets and liabilities, related increases and decreases in
such amounts, and the disclosure of contingent assets and liabilities in
order to prepare these financial statements in conformity with accounting
principles generally accepted in the United States of America. Actual
results could differ from those estimates.
The assets of the Plan are primarily financial instruments which are
monetary in nature. As a result, interest rates have a more significant
impact on the Plan's performance than do the effects of general levels of
inflation. Interest rates do not necessarily move in the same direction or
in the same magnitude as the prices of goods and services as measured by
the consumer price index. Investments are subject to risk conditions of the
individual fund objectives, the stock market, interest rates, economic
conditions and world affairs. Due to the level of risk associated with
certain investment securities, it is at least reasonably possible that
changes in the values of investment securities will occur in the near term
and that such changes could materially affect member's account balances and
the amounts reported in the statement of net assets available for benefits.
All contributions are invested in a trust fund managed by Merrill Lynch,
with oversight from a committee consisting of at least three members of the
Board of Directors of the Bank. Contributions to the Plan were suspended
upon the July 14, 2004 merger of the Bank with and into The Provident Bank.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
(2) Plan Description
The following description of the Plan provides only general information.
Eligible employees who participate ("members") should refer to the plan
agreement for a more complete description of the Plan's provisions.
Eligibility
Employees over age 21 and working at least 1,000 hours are eligible to
participate in the Plan on the first day of each calendar quarter following
the completion of one year of service, as defined.
Employee Contributions
A member may make basic contributions to the Plan, through payroll
deductions, of any whole percentage from 2% to 15% of the member's
compensation, as defined, up to certain limitations.
4 (Continued)
THE INCENTIVE SAVINGS PLAN FOR THE
EMPLOYEES OF FIRST SAVINGS BANK
Notes to Financial Statements
December 31, 2004 and 2003
Bank Contributions
In 2004 and 2003, the Bank matched 25% of a member's basic contribution, up
to 6% of that member's compensation, as defined. Bank contributions are
funded biweekly. At its discretion, the Bank may make an additional
contribution to the Plan as of the end of a plan year in an amount
determined by the Bank. For the years ended December 31, 2004 and 2003, the
Bank elected not to make an additional discretionary match.
Vesting
All member contributions, employer contributions and income or loss thereon
are fully vested at all times.
Withdrawals
Money can be withdrawn from the Plan when a member reaches age 59-1/2,
terminates employment, dies, becomes disabled or experiences financial
hardship, as defined.
Benefit Payments
Upon termination of employment, a member's vested amount under the Plan is
generally paid in a lump-sum distribution. The benefit to which a member is
entitled is the benefit that can be provided from a member's account.
Members' Accounts
Each member's account is credited with the member's contribution, the
appropriate amount of the Bank's contribution and an allocation of the
Plan's earnings or losses. Allocations are based on the member's relative
contribution to the individual funds.
Loans to Members
Members are permitted to borrow from the Plan as defined in the plan
document. In no event shall the loan exceed the lesser of: (a) $50,000,
reduced by the highest loan balance outstanding during the one-year period
ending on the day before the date on which the new loan is granted; or (b)
50% of the member's vested amount under the Plan on the date the loan is
granted. Interest shall be charged thereon at a rate for similar loans in
the Bank's portfolio and the loan shall be repaid by payroll deduction or
in a manner determined by the plan sponsor, but not less frequently than
quarterly.
Investments
Contributions to the Plan by a member and by the Bank will be invested at
the member's direction in various types of investments, as determined by
the trust fund committee, such as mutual funds and First Sentinel Bancorp,
Inc.'s common stock. Loans to members are carried at cost plus accrued
interest. Mutual funds and common stock are carried at fair value. Fair
value is determined by quoted market prices.
5 (Continued)
THE INCENTIVE SAVINGS PLAN FOR THE
EMPLOYEES OF FIRST SAVINGS BANK
Notes to Financial Statements
December 31, 2004 and 2003
(3) Investments
Investments at December 31, 2004 and 2003 consisted of mutual funds, loans
to members and common stock issued by Provident Financial Services, Inc.
and First Sentinel Bancorp, Inc. The following table represents the fair
value of individual investments which exceed 5% of the Plan's net assets as
of December 31, 2004 and 2003:
2004 2003
---------------- ------------------
Aim Blue Chip Fund Class A 810,624 984,821
Merrill Lynch Retirement Preservation Trust 5,085,602 2,059,680
Common stock - First Sentinel Bancorp, Inc.
(related party) -- 14,205,003
Common stock - Provident Financial
Services, Inc. (related party) 4,238,913 --
A summary of net investment income by investment type for the years ended
December 31, 2004 and 2003 follows:
2004 2003
------------------- -------------------
Mutual funds $ 364,109 620,682
Employer stock fund (related party) 356,696 4,886,383
------------------- -------------------
Net investment income $ 720,805 5,507,065
=================== ===================
(4) Plan Expenses
Administrative expenses of the Plan may be paid in whole or in part by the
Bank at its discretion, and any expenses not paid by the Bank shall be paid
by the Plan out of the principal or income of the trust fund. All
administrative expenses for the years ended December 31, 2004 and 2003 were
paid by the Bank.
(5) Plan Termination
The Plan has no termination date, however, the Bank may terminate, amend or
modify the Plan at any time that it may deem advisable. In the event of the
termination of the Plan, an appraisal of the trust fund shall be made and,
after deducting termination expenses, the members will be paid their vested
amounts.
On July 14, 2004, First Sentinel Bancorp, Inc. was acquired by Provident
Financial Services, Inc. In connection with the merger, the Plan is
expected to be merged into The Provident Bank's Employee Savings Incentive
Plan prior to December 31, 2005.
6 (Continued)
THE INCENTIVE SAVINGS PLAN FOR THE
EMPLOYEES OF FIRST SAVINGS BANK
Notes to Financial Statements
December 31, 2004 and 2003
(6) Income Taxes
The Plan obtained its latest determination letter dated February 25, 2005,
in which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code ("IRC"). Plan management believes that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the IRC. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
(7) Related Party Transactions
Certain Plan investments are managed by Merrill Lynch. Merrill Lynch is the
trustee as defined by the Plan. In addition, the Plan invests in the stock
of First Sentinel Bancorp, Inc. and provides loans to its members. These
transactions qualify as party-in-interest transactions.
7
Schedule 1
THE INCENTIVE SAVINGS PLAN FOR THE
EMPLOYEES OF FIRST SAVINGS BANK
Schedule H, Item 4(i) - Schedule of Assets
(Held at End of Year)
December 31, 2004
Description Fair Value
------------------
Common stock --Provident Financial Services, Inc.*
(the plan sponsor) $ 4,238,913
==================
Merrill Lynch Retirement Preservation Trust* $ 5,085,602
==================
Mutual Funds:
Alger Mid Cap Growth Ret Port Fund Class A $ 243,548
Van Kampen American Value Fund Class A 113,320
Merrill Lynch Small Cap Value Fund Class A* 26,843
Merrill Lynch Equity Income Fund Class D* 317,044
Dreyfus Premier Balance Fund Class A 419,067
Aim Blue Chip Fund Class A 810,624
Mercury HW International Value Fund Class I 107,908
Blackrock Government Income Portfolio Class A 3,575
Pimco Total Return Fund Class A 187,365
AllianceBernstein Americas Government Income Fund Class A 17,014
Massachusetts Investors Growth Stock Fund Class A 376,661
------------------
$ 2,622,969
==================
*Participant loans (interest rates ranging from 5.00% to 10.50%
charged during 2004) $ 207,680
==================
* A party-in-interest as defined by ERISA.
See accompanying report of independent registered public accounting firm.
8
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE INCENTIVE SAVINGS PLAN FOR THE
EMPLOYEES OF FIRST SAVINGS BANK
Date: June 28, 2005 By: /s/ Joanne Hynes
---------------------
Name: Joanne Hynes
Title: Plan Administrator