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 30, 2004
---------------------------------------------------
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 Employee Savings Incentive 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
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 17, 2005, relating to the financial statements of The Provident Bank
Employee Savings Incentive Plan as of December 30, 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 30, 2004, which report appears in the
Annual Report on Form 11-K of The Provident Bank Employee Savings Incentive
Plan.
/S/ KPMG LLP
Short Hills, New Jersey
June 28, 2005
THE PROVIDENT BANK
EMPLOYEE SAVINGS INCENTIVE PLAN
Financial Statements and Schedule
December 30, 2004 and 2003
(With Report of Independent Registered Public Accountant Thereon)
THE PROVIDENT BANK
EMPLOYEE SAVINGS INCENTIVE PLAN
Notes to the Financial Statements
December 30, 2004 and 2003
Index
Page
Report of Independent Registered Public Accounting Firm 1
Statements of Net Assets Available for Benefits - December 30, 2004
and 2003 2
Statements of Changes in Net Assets Available for Benefits - Years ended
December 30, 2004 and 2003 3
Notes to the Financial Statements 4
Schedule
1 Schedule H, Item 4(i) - Schedule of Assets (Held at End of Year)
December 30, 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 Provident Bank Employee Savings Incentive Plan (the "Plan") as
of December 30, 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
Provident Bank Employee Savings Incentive Plan as of December 30, 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 17, 2005
THE PROVIDENT BANK
EMPLOYEE SAVINGS INCENTIVE PLAN
Statements of Net Assets Available
For Benefits
December 30, 2004 and 2003
2004 2003
------------------ -------------------
Assets:
Investments, at fair value $ 23,287,083 20,902,945
Participant loans receivable 478,639 216,957
Contributions receivable 24,480 97,535
Fee sharing receivable 47,260 47,260
------------------ -------------------
Liabilities:
Participant loans payable -- 4,500
Other payables 5,297 29,299
------------------ -------------------
Net assets available for benefits $ 23,832,165 21,230,898
================== ===================
See accompanying notes to financial statements.
2
THE PROVIDENT BANK
EMPLOYEE SAVINGS INCENTIVE PLAN
Statements of Changes in Net Assets
Available for Benefits
Years ended December 30, 2004 and 2003
2004 2003
-------------------------------------
Additions:
Interest income $ 14,456 14,907
Dividend income 103,639 60,656
Realized and unrealized appreciation of investments 1,078,883 6,017,984
Employee contributions 1,989,883 1,642,385
Employer contributions 721,953 1,024,598
----------------- -----------------
Total additions 3,908,814 8,760,530
----------------- -----------------
Deductions:
Distributions 1,169,568 1,559,776
Administrative expenses 137,979 124,062
----------------- -----------------
Total deductions 1,307,547 1,683,838
----------------- -----------------
Increase in net assets 2,601,267 7,076,692
Net assets available for benefits
at beginning of year 21,230,898 14,154,206
----------------- -----------------
Net assets available for benefits
at end of year $ 23,832,165 21,230,898
================= =================
See accompanying notes to financial statements.
3
THE PROVIDENT BANK
EMPLOYEE SAVINGS INCENTIVE PLAN
Notes to the Financial Statements
December 30, 2004 and 2003
(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 Employee
Savings Incentive Plan (the "Plan") is subject to the
provisions of the Employee Retirement Income Security Act of
1974 ("ERISA").
(b) Funds and Accounts Managed by UBS Fiduciary Trust Company
Under the terms of a trust agreement between the UBS
Fiduciary Trust Company (the "custodian") and The Provident
Bank (the "Bank"), the custodian manages nine funds on
behalf of the Plan. The custodian holds the Plan's
investment assets and executes transactions therein. The
investments in the funds have been reported to the Bank by
the custodian as having been determined through the use of
current values for all assets.
(c) 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.
(d) 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 are at least 18 years old and
who have completed one year of continuous service, as defined, with the Bank and
who have worked at least 1,000 hours during such year. The following description
of the Plan provides only general information. Eligible employees who
participate should refer to the Plan Agreement for a more complete description
of the Plan's provisions.
4
THE PROVIDENT BANK
EMPLOYEE SAVINGS INCENTIVE PLAN
Notes to the Financial Statements
December 30, 2004 and 2003
(a) Employee Contributions
Until March 31, 2003, participants could elect to make
voluntary contributions of 1% to 5% of their compensation, as
defined. Beginning April 1, 2003, the Plan was amended to
allow participants to elect to make tax-deferred contributions
up to the maximum amount allowed by the Internal Revenue
Service.
(b) Employer Contributions
In 2004, contributions were made by the Bank in an amount
equal to 50% of the first 6% of a participant's eligible
contributions. Until March 31, 2003, contributions were made
by the Bank in an amount equal to 100% of the employee's
contributions. Effective April 1, 2003, contributions were
made by the Bank in an amount equal to 75% of the first 6% of
a participant's eligible contributions. The Board of Directors
sets the Bank's matching contribution rate annually, and has
the power, in its sole discretion, to set the amount, and it
may suspend or alter Bank contributions.
(c) Vesting
Participants are always fully vested in their contributions
and income or losses thereon. Employer contributions and
income or losses thereon are 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 years
ended December 30, 2004 and 2003 amounted to $15,642 and
$14,008 respectively.
(e) Participant Loans
Upon written application by a participant, the administrator
may direct that a loan be made from his account. The maximum
permissible loan available shall not exceed 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 are paid ratably through bi-weekly
payroll deductions.
(f) Withdrawals/Benefit Payments
During employment, participants may make withdrawals in cash
of vested amounts contributed prior to April 1, 2003. Vested
amounts contributed by the participants on or after April 1,
2003 are eligible for hardship withdrawals, which may be
subject to a withdrawal penalty. Upon retirement or
termination of employment, participants may, under certain
conditions, elect to receive vested amounts in (i) a cash lump
5
THE PROVIDENT BANK
EMPLOYEE SAVINGS INCENTIVE PLAN
Notes to the Financial Statements
December 30, 2004 and 2003
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.
(g) Participants' Accounts
Separate accounts for each participant are 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.
(h) Investment Valuation
Investments are valued at fair market value. Investment
transactions are recorded on a trade date basis.
(3) Plan Expenses
Certain costs of administrative services rendered on behalf of the Plan are
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. However, the Bank may discontinue contributions or terminate
the Plan by action of its Board of Directors. 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 January
6, 2004 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
THE PROVIDENT BANK
EMPLOYEE SAVINGS INCENTIVE PLAN
Notes to the Financial Statements
December 30, 2004 and 2003
(6) Investments
Investments at December 30, 2004 and 2003 consisted of mutual funds, loans to
participants and common stock issued by Provident Financial Services, Inc. At
December 30, 2004 and 2003, individual investments in excess of 5% of net assets
available for plan benefits are as follows:
2004 2003
------------------- --------------------
UBS Fiduciary Trust Company:
Provident Financial Services, Inc., investment
in common stock $ 8,400,150 8,475,089
Capital growth portfolio 2,695,094 2,427,841
Guaranteed investment contracts portfolio 2,291,763 2,257,296
Conservative equity portfolio 2,619,514 2,046,583
Balanced value portfolio 2,008,463 1,747,143
Overseas equity portfolio 1,802,196 1,223,935
Money market portfolio 1,462,066 1,050,540
The increase (decrease) in realized and unrealized appreciation of investments
for the years ended December 30, 2004 and 2003 is as follows:
2004 2003
Provident Financial Services, Inc., investment
in common stock $ (15,629) 4,190,968
Capital growth portfolio 119,309 346,628
Guaranteed investment contracts portfolio 76,691 82,195
Conservative equity portfolio 326,344 486,483
Balanced value portfolio 105,223 256,107
Overseas equity portfolio 374,928 421,524
Mid-cap growth portfolio 35,705 169,673
Strategic bond portfolio 56,312 64,406
------------------ -------------------
$ 1,078,883 6,017,984
(7) Other Contributions
During 2004, several errors were discovered with respect to the calculation of
benefits under the Plan during the 2001 through 2003 Plan Years. The errors
resulted from the misapplication of the Plan's definition of compensation and/or
coding errors in the computerized payroll program. To the extent the errors
could be corrected by plan amendment, such plan amendments were adopted and
included in the determination letter request (Form 1023) filed with the Internal
Revenue Service on March 31, 2005. The remaining errors were self-corrected
without having to notify the Internal Revenue Service, through the Bank making
corrective contributions to restore the affected participants' account balances
to what they would have been had the failures not occurred. These corrective
contributions totaled $26,905, in the aggregate, and were recorded in 2004.
7
Schedule 1
THE PROVIDENT BANK
EMPLOYEE SAVINGS INCENTIVE PLAN
Schedule H, Item 4(i) - Schedule of Assets (Held at End of Year)
December 30, 2004
Market
Cost value
------------------------------------
UBS Fiduciary Trust Company
General account $ 135,979 135,979
Money market portfolio 1,462,066 1,462,066
Guaranteed investment contracts portfolio 1,899,599 2,291,763
Balanced value portfolio 1,546,186 2,008,463
Conservative equity portfolio 1,882,150 2,619,514
Capital growth portfolio 2,348,057 2,695,094
Mid-cap growth portfolio 965,847 963,740
Overseas equity portfolio 1,196,401 1,802,196
Strategic bond portfolio 772,536 908,118
-----------------------------------
12,208,821 14,886,933
===============================
Provident Financial Services, Inc., investment in common stock $ 5,009,275 8,400,150
===============================
See accompanying report of independent registered public accountant.
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 PROVIDENT BANK
EMPLOYEE SAVINGS INCENTIVE PLAN
By: UBS FIDUCIARY TRUST COMPANY,
TRUSTEE
AS DIRECTED TRUSTEE
Date: June 28, 2005 By: /s/ Georgette Thomas
------------------
Name: Georgette Thomas
Title: Vice President