Board of Directors
The Provident Bank
830 Bergen Avenue
Jersey City, New Jersey 07306-4599

The notice of intent to convert from mutual to stock form filed on behalf of The Provident Bank, Jersey City, New Jersey (Bank) has been reviewed by the Federal Deposit Insurance Corporation (FDIC) pursuant to the FDIC regulations at 12 C.F.R. Sections 303.160 and 333.4.

This notice was filed in connection with the Bank's "Plan of Conversion" (Plan). Pursuant to the Plan, the Bank will convert to a New Jersey-chartered stock savings bank and become a wholly-owned subsidiary of the newly formed Provident Financial Services, Inc. (Bancorp), a Delaware corporation. Concurrently, with the reorganization, Bancorp intends to offer for sale its common stock on a priority basis to qualifying depositors and an employee stock ownership plan. In addition, Bancorp will fund a charitable foundation (Foundation) in an amount equal to 6% of the offering up to a maximum contribution of $24,000,000, funded 80% by the contribution of shares of common stock and 20% by cash.

The FDIC has relied on information provided in the Bank's notice of conversion and the accompanying business plan in reaching its decision regarding the notice. Management of the Bank has represented that, for three years after the closing of the conversion, the FDIC will be given at least 30 days prior written notice before any material deviation from the business plan, such as a return of capital, is implemented. Management has further represented that, for twelve months following the conversion, the Bancorp will not make any distribution to stockholders that represents a return of capital without the FDIC's prior written consent.

Based on the information provided and representations made, the FDIC plans to issue a letter of non-objection to the proposed conversion transaction provided that the Bank satisfies the following conditions:

1. The Bank must execute the enclosed Tolling Agreement and deliver it to this office on or before December 10, 2002.

2. The Foundation's board of directors shall commit to the following oversight provisions:

a. Common stock of Bancorp held by the Foundation shall be voted by the Foundation at the same ratio as the shares voted on each and every proposal considered by the shareholders of Bancorp;

b. The Foundation shall be subject to examination by the FDIC;

c. The Foundation shall comply with all supervisory directives imposed by the FDIC;

d. The Foundation shall operate in accordance with written policies adopted by the Foundation's board of directors, including adopting a conflict of interest policy acceptable to the FDIC;

e. The Foundation shall not engage in self-dealing and will comply with all laws necessary to maintain its tax-exempt status under the Internal Revenue Code; and

f. The Foundation shall provide a proposed operating plan prior to conversion and annual reports to the FDIC describing the grants made and the grant recipients.

3. The Bank must submit final disclosure materials acceptable to the FDIC Division of Supervision and Consumer Protection, Accounting & Securities Disclosure Section.

4. The Bank must provide written evidence that its Plan has been approved by the affirmative vote of a majority of the votes eligible to be cast at a special meeting of the Bank's voting participants;

5. The Bank must advise this office of the results of the subscription offering and deliver an updated appraisal that:

a. Takes the results of the subscription offering into account;

b. Discusses any material occurrences during the subscription period; and

c. Explains any orders that may have been rejected; and

6. The Bank must receive the necessary approvals from the New Jersey Department of Banking and Insurance for its establishment as a stock savings bank and from the Federal Reserve for the establishment of Bancorp.

Provided the Bank meets the foregoing conditions and that the FDIC is satisfied with the appraiser's determination in the updated appraisal that the results of the subscription offering represent the fair value for Bancorp, the FDIC will issue a letter of non-objection to the proposed conversion transaction.

Sincerely,

John M. Lane
Deputy Director