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, 2005
---------------------------------------------------
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
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
The Provident Bank 401(k) Plan
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
THE PROVIDENT BANK
401(k) PLAN
Financial Statements
December 31, 2005 and 2004
(With Report of Independent Registered Public Accountant Thereon)
THE PROVIDENT BANK
401(k) PLAN
Financial Statements
Index
Page
Report of Independent Registered Public Accounting Firm 1
Statements of Net Assets Available for Plan Benefits -
December 31, 2005 and 2004 2
Statements of Changes in Net Assets Available for Plan Benefits
- Years ended December 31, 2005 and 2004 3
Notes to Financial Statements 4
Schedule of Assets Held for Investment Purposes at End of Year Schedule 1
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 Provident Bank 401(k) Plan (the "Plan") (formerly known as The
Incentive Savings Plan for the Employees of First Savings Bank) as of December
31, 2005 and 2004, 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
Provident Bank 401(k) Plan as of December 31, 2005 and 2004, 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
for investment purposes at end of year is presented for purposes of additional
analysis and is not a required part of the 2005 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 2005 basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the 2005
basic financial statements taken as a whole.
/s/ KPMG LLP
Short Hills, New Jersey
June 27, 2006
THE PROVIDENT BANK 401(k) PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 2005 and 2004
2005 2004
------------------- ----------------
Assets:
Investments, at fair value $ 32,630,638 11,947,484
Participant loans receivable 617,080 207,680
Contributions receivable 48,369 -
Accrued income and other assets - 2,050
------------------- ----------------
Net assets available for plan benefits $ 33,296,087 12,157,214
=================== ================
See accompanying notes to financial statements.
2
THE PROVIDENT BANK 401(k) PLAN
Statements of Changes in Net Assets
Available for Plan Benefits
Years ended December 31, 2005 and 2004
2005 2004
--------------------- -----------------
Additions:
Interest income $ 14,735 $ 11,177
Dividend income 264,570 369,201
Realized and unrealized (depreciation) appreciation of investments (18,311) 351,604
Employee contributions 608,748 345,217
Employer contributions 69,688 62,253
Transfers from predecessor plan 23,566,066 -
--------------------- -----------------
Total additions 24,505,496 1,139,452
Deductions:
Distributions 3,365,265 8,480,644
Administrative expenses 1,358 13,068
--------------------- -----------------
Total deductions 3,366,623 8,493,712
--------------------- -----------------
Increase (decrease) in net assets available for plan benefits 21,138,873 (7,354,260)
Net assets available for plan benefits
at beginning of year 12,157,214 19,511,474
--------------------- -----------------
Net assets available for plan benefits
at end of year $ 33,296,087 $ 12,157,214
===================== =================
See accompanying notes to financial statements.
3
THE PROVIDENT BANK 401(k) PLAN
Notes to the Financial Statements
December 31, 2005 and 2004
(1) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements have been prepared on an accrual
basis of accounting. The Provident Bank 401(k) Plan (the "Plan"),
formerly known as The Incentive Savings Plan for the Employees of
First Savings Bank, is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
(b) Plan Changes
Effective September 30, 2005, the Provident Bank Employee Savings
Incentive Plan merged into the Incentive Savings Plan for the
Employees of First Savings Bank. The merged plan was re-named The
Provident Bank 401(k) Plan.
(c) Funds and Accounts Managed by Principal Trust Company
In 2005, the Plan changed trustees from Merrill Lynch to the Principal
Trust Company. Under the terms of a trust agreement between the
Principal Trust Company (the "Custodian") and The Provident Bank (the
"Bank"), the Custodian managed funds on behalf of the Plan. The
Custodian held the Plan's investment assets and executed transactions
therein. The investments in the funds were reported to the Bank by the
Custodian as having been determined through the use of current values
for all assets.
(d) Use of Estimates
The Plan administrator has made estimates and assumptions relating to
the preparation of the financial statements in conformity with
accounting principles generally accepted in the United States of
America. Actual results could differ from those estimates.
(e) Concentration of Risk
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 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 in
investment funds are subject to risk conditions of the individual fund
objectives, stock market fluctuations, interest rates, economic
conditions and world affairs.
(2) Plan Description
The Plan is a voluntary, participant-directed defined contribution plan
sponsored by the Bank and covers all employees who complete one year of
continuous service, as defined, with the Bank and who worked at least 1,000
hours during such year. The following description of the Plan provides only
general information. Eligible employees who participated in the Plan should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
(a) Employee Contributions
Participants may elect to make tax-deferred contributions up to the
maximum amount allowed by the Internal Revenue Service.
4
THE PROVIDENT BANK 401(k) PLAN
Notes to the Financial Statements
December 31, 2005 and 2004
(b) Employer Contributions
In 2005 and 2004, contributions were made by the Bank in an amount
equal to 25% and 50%, respectively, of the first 6% of a participant's
eligible contributions. The Board of Directors sets the Bank's
matching contribution rate in its sole discretion.
(c) Vesting
Participants are always fully vested in their contributions and income
or losses thereon. Prior to October 1, 2005, employer contributions
and income or losses thereon were also fully vested. Commencing
October 1, 2005, employer contributions and income or losses thereon
were vested as follows: 33% vested at the end of the first year of
service, 67% vested at the end of the second year of service, and 100%
vested at the end of the third year of service. Additionally, a
participant shall become 100% vested if he terminates employment on or
after he attains age 65, or as a result of his death or disability.
(d) Forfeitures
Forfeitures of non-vested contributions used to reduce subsequent
employer contributions for the year ended December 31, 2005 amounted
to $15,506. There were no forfeitures in 2004.
(e) Participant Loans
Upon written application by a participant, the Administrator may have
directed that a loan be made from the participant's account. The
maximum permissible loan available was limited to the lesser of (i)
$50,000 with certain restrictions or (ii) 50% of his account. Any loan
made must generally be repaid within a period not to exceed the
earlier of termination of employment or five years. Loans bear a
reasonable rate of interest and, once fixed, remain in effect for the
duration of the loan.
Principal and interest were paid ratably through bi-weekly payroll
deductions or directly by the participants to the trustee.
(f) Benefit Payments/Withdrawals
Upon retirement or termination of employment, participants may, under
certain conditions, elect to receive vested amounts in (i) a cash lump
sum, or (ii) equal monthly, quarterly, semi-annual or annual
installments over a period not to exceed the life expectancy of the
participant or the combined life expectancy of the participant and his
designated beneficiary. During employment, participants may make cash
withdrawals of post-tax participant contributions and related vested
employer matching contributions and earnings thereon once per year
without penalty. Hardship withdrawals of pre-tax participant
contributions are also permitted once per year, but with a penalty.
(g) Participants' Accounts
Separate accounts for each participant were maintained and credited
with the participant's contributions, the Bank's contributions made on
behalf of that participant and the participant's proportionate share,
as defined, of plan earnings or losses. The benefit to which a
participant is entitled is the benefit that can be provided from his
account.
5
THE PROVIDENT BANK 401(k) PLAN
Notes to the Financial Statements
December 31, 2005 and 2004
(h) Investment Valuation
Investments were valued at fair market value. Investment transactions
were recorded on a trade date basis.
(3) Plan Expenses
Certain costs of administrative services rendered on behalf of the Plan
were borne by the Bank.
(4) Plan Termination
The Plan has no termination date, and it is the Bank's intention to
continue the Plan indefinitely. Upon termination of the Plan, the amounts
credited to participant accounts would become fully vested.
(5) Federal Income Taxes
The Internal Revenue Service issued its latest determination letter on
February 25, 2005, which stated that the Plan and its underlying trust
qualify under the applicable provisions of the Internal Revenue Code and
therefore are exempt from federal income taxes. In the opinion of the Plan
administrator, the Plan and its underlying trust have operated within the
terms of the Plan and remain qualified under the applicable provisions of
the Internal Revenue Code.
(6) Investments
Investments at December 31, 2005 and 2004 consisted of mutual funds, loans
to participants and common stock issued by Provident Financial Services,
Inc. At December 31, 2005 and 2004, individual investments in excess of 5%
of net assets available for plan benefits were as follows:
December 31, 2005 December 31, 2004
------------------ -------------------
Principal Trust Company:
Provident Financial Services, Inc.,
investment in common stock $ 11,093,771 4,238,913
Investors Large Company Growth 3,531,200 --
Principal Investors Lifetime Str Inc Separate Account 2,691,318 --
Principal Diversified International Separate Account 2,218,024 --
Principal Fixed Income 401(a)/(k) 6,780,390 --
Principal Large Cap Value II Separate Account 2,800,621 --
Aim Blue Chip Fund Class A -- 810,623
Merrill Lynch Retirement Preservation Trust -- 5,085,602
6
Schedule 1
THE PROVIDENT BANK
401(k) PLAN
Schedule of Assets Held for
Investment Purposes at End of Year
December 31, 2005
Market
Cost value
-----------------------------
Principal Trust Company
High Yield Opp A Fund $ 11,239 11,244
Columbia Acorn A Fund 252,122 252,346
AM FDS GRTH FD of AM R4 Fund 137,827 141,030
Bond and Mtg Separate Account 1,058,993 1,066,114
Principal Lifetime 2010 Separate Account 54,034 54,805
Principal Lifetime 2020 Separate Account 114,286 117,315
Principal Lifetime 2030 Separate Account 34,141 35,073
Principal Lifetime 2040 Separate Account 15,091 15,486
Principal Lifetime 2050 Separate Account 5,893 5,916
Principal Lifetime Str Inc Separate Account 2,658,173 2,691,318
Value I Separate Account 109,734 112,232
Medium Company Blend 141,880 143,964
MDCP GR II Separate Account 1,270,917 1,306,817
Large Company Growth Separate Account 3,486,878 3,531,200
Large Cap Blend Separate Account 21,775 22,468
Small Cap Value I Separate Account 11,516 11,750
Large Cap Stk Idx Separate Account 115,845 116,860
Diversified International Separate Account 2,099,306 2,218,024
U.S. Property Separate Account 19,958 20,481
Principal Fixed Income 401(a)/(k) 6,724,784 6,780,390
LGCAP Value II Separate Account 2,758,707 2,800,621
SMCAP STK IDX Separate Account 78,791 81,413
Provident Financial Services, Inc., investment in common stock 10,374,488 11,093,771
==============================
See accompanying report of independent registered public accounting firm.
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 27, 2006, relating to the statements of net assets available for plan
benefits of The Provident Bank 401(k) Plan (formerly known as The Incentive
Savings Plan for the Employees of First Savings Bank) as of December 31, 2005
and 2004, and the related statements of changes in net assets available for plan
benefits for the years then ended, and the supplemental schedule of assets held
for investment purposes at end of year as of December 31, 2005, which report
appears in the December 31, 2005 Annual Report on Form 11-K of The Provident
Bank 401(k) Plan.
/s/ KPMG LLP
Short Hills, New Jersey
June 28, 2006
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 PROVIDENT BANK 401(k) PLAN
Date: June 20, 2006 By: /s/ Joanne Hynes
-------------------
Name: Joanne Hynes
Title: Plan Administrator