UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrantþ Filed by a Party other than the Registrant¨

Check the appropriate box:

Provident Financial Services, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

830 Bergen Avenue

Jersey City, New Jersey 07306

March 23, 200714, 2008

Dear Fellow Stockholder:

You are cordially invited to attend the 20072008 Annual Meeting of Stockholders of Provident Financial Services, Inc., which will be held on April 25, 2007,23, 2008, at 10:00 a.m., local time, at the HiltonSheraton Newark Airport 1170 Spring Street, Elizabeth,Hotel, 128 Frontage Road, Newark, New Jersey.

The business to be conducted at the Annual Meeting consists of the election of five directors, the approval of the 2008 Long-Term Equity Incentive Plan and the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2007.2008. Your board of directors has determined that an affirmative vote on each of these matters to be considered at the Annual Meeting is in the best interests of Provident Financial Services, Inc. and its stockholders and unanimously recommends a vote“FOR” each of these matters.

Your vote is very important regardless of the number of shares you own. We urge you to complete, sign and return the enclosed Proxy Card as soon as possible, or to vote by Internet or telephone as described on your Proxy Card, even if you currently plan to attend the Annual Meeting. This will not prevent you from voting in person, but will assure that your vote is counted if you are unable to attend the Annual Meeting.

On behalf of the board of directors, officers and employees of Provident Financial Services, Inc., we thank you for your continued support.

Sincerely,

Paul M. Pantozzi

Chairman and

Chief Executive Officer

830 Bergen Avenue

Jersey City, New Jersey 07306

NOTICE OF THE 2007 ANNUAL MEETING OF STOCKHOLDERS

To Be Held on April 25, 2007

NOTICE IS HEREBY GIVEN THAT the 20072008 Annual Meeting of Stockholders of Provident Financial Services, Inc. will be held at the HiltonSheraton Newark Airport 1170 Spring Street, Elizabeth,Hotel, 128 Frontage Road, Newark, New Jersey on Wednesday, April 25, 2007,23, 2008, at 10:00 a.m., local time, to consider and vote upon the following matters:

The board of directors of Provident Financial Services, Inc. has fixed March 5, 20073, 2008 as the record date for determining the stockholders entitled to vote at the Annual Meeting and any adjournment or postponement of the Annual Meeting. Only stockholders of record at the close of business on that date are entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement of the Annual Meeting.

The board of directors of Provident Financial Services, Inc. unanimously recommends that you vote “FOR” each of the nominees for director listed in the Proxy Statement,“FOR”approval of the 2008 Long-Term Equity Incentive Plan and “FOR” ratification of the appointment of KPMG LLP as the independent registered public accounting firm for the year ending December 31, 2007.2008.

The board of directors of Provident Financial Services, Inc. requests that youPlease complete, sign and mail the enclosed Proxy Card promptly in the enclosed postage-paid envelope. You may also vote by Internet or telephone as described on your Proxy Card.Stockholders of record who attend the Annual Meeting may vote in person, even if they have previously delivered a signed proxy or voted by Internet or telephone.

By Order of the Board of Directors

Provident Financial Services, Inc.

John F. Kuntz, Esq.

Corporate Secretary

Jersey City, New Jersey

March 23, 200714, 2008

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER OF SHARES YOU OWN. THE BOARD OF DIRECTORS URGES YOU TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE OR TO VOTE BY INTERNET OR TELEPHONE AS DESCRIBED ON YOUR PROXY CARD.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 23, 2008—This Proxy Statement and Provident’s 2007 Annual Report to Stockholders are each available at http://www.cfpproxy.com/5429.

PROVIDENT FINANCIAL SERVICES, INC.

PROXY STATEMENT FOR THE

20072008 ANNUAL MEETING OF STOCKHOLDERS

To Be Held on April 25, 200723, 2008

GENERAL INFORMATION

This Proxy Statement and accompanying Proxy Card and the Annual Report to Stockholders are being furnished to the stockholders of Provident Financial Services, Inc. (“Provident”) in connection with the solicitation of proxies by the board of directors of Provident for use at the 20072008 Annual Meeting of Stockholders. The Annual Meeting will be held on April 25, 2007,23, 2008, at 10:00 a.m., local time, at the HiltonSheraton Newark Airport 1170 Spring Street, Elizabeth,Hotel, 128 Frontage Road, Newark, New Jersey. The term “Annual Meeting”, as used in this Proxy Statement, includes any adjournment or postponement of such meeting.

This Proxy Statement is dated March 16, 200714, 2008 and is first being mailed to stockholders of Provident on or about March 23, 2007.18, 2008.

The 20072008 Annual Meeting of Stockholders

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Who Can Vote

The Provident board of directors has fixed March 5, 20073, 2008 as the record date for determining the stockholders entitled to receive notice of and to vote at the Annual Meeting. Accordingly, only holders of record of shares of Provident common stock, par value $0.01 per share, at the close of business on such date will be entitled to vote at the Annual Meeting. On March 5, 2007, 63,360,2133, 2008, 60,118,789 shares of Provident common stock were outstanding and held by approximately 6,3406,300 holders of record. The presence, in person or by properly executed proxy, of the holders of a majority of the outstanding shares of Provident common stock is necessary to constitute a quorum at the Annual Meeting.

How Many Votes You Have

Each holder of shares of Provident common stock outstanding on March 5, 20073, 2008 will be entitled to one vote for each share held of record. However, Provident’s certificate of incorporation provides that stockholders of record who beneficially own in excess of 10% of the then outstanding shares of common stock of Provident are not entitled to vote any of the shares held in excess of that 10% limit. A person or entity is deemed to beneficially own shares that are owned by an affiliate of, as well as by any person acting in concert with, such person or entity.

Matters to Be Considered

The purpose of the Annual Meeting is to elect five directors, approve the 2008 Long-Term Equity Incentive Plan and ratify the appointment of KPMG LLP as Provident’s independent registered public accounting firm for the year ending December 31, 2007.2008.

You may be asked to vote upon other matters that may properly be submitted to a vote at the Annual Meeting. You also may be asked to vote on a proposal to adjourn or postpone the Annual Meeting. Provident could use any adjournment or postponement for the purpose, among others, of allowing additional time to solicit proxies.

How to Vote

You may vote your shares by completing and signing the enclosed Proxy Card and returning it in the enclosed postage-paid envelope or by attending the Annual Meeting. Alternatively, you may choose to vote your shares using the Internet or telephone voting options explained on your Proxy Card. You should complete and return the Proxy Card accompanying this document, or vote using the Internet or telephone voting options, to ensure that your vote is counted at the Annual Meeting, or at any adjournment or postponement of the Annual Meeting, regardless of whether you plan to attend.If you return an executed Proxy Card without marking your instructions, your executed Proxy Card will be voted “FOR” the election of the five nominees for director, “FOR” the approval of the 2008 Long-Term Equity Incentive Plan and “FOR” the ratification of the appointment of KPMG LLP as Provident’s independent registered public accounting firm for the year ending December 31, 20072008.

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Stockholders of record can vote in person at the Annual Meeting. If a broker holds your shares in street name, then you are not the stockholder of record and you must ask your broker how you can vote in person at the Annual Meeting.

The board of directors is currently unaware of any other matters that may be presented for consideration at the Annual Meeting. If other matters properly come before the Annual Meeting, or at any adjournment or postponement of the Annual Meeting, Provident intends that shares represented by properly submitted proxies will be voted, or not voted, by the persons named as proxies in the Proxy Card in their best judgment.

Participants in Provident Benefit Plans

If you are a participant in The Provident Bank Employee Stock Ownership Plan or The Provident Bank 401(k) Plan, or any other benefit plans through which you own shares of Provident common stock, you will have

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received with this Proxy Statement voting instruction forms that reflect all shares you may vote under the plans. Under the terms of these plans, the trustee or administrator votes all shares held by the plan, but each participant may direct the trustee or administrator how to vote the shares of Provident common stock allocated to his or her plan account. If you own shares through any of these plans and do not vote, the respective plan trustees or administrators will vote your shares in accordance with the terms of the respective plans. The deadline for returning your voting instructions is April 17, 2007.16, 2008.

Quorum and Vote Required

The presence, in person or by properly executed proxy, of the holders of a majority of the outstanding shares of Provident common stock is necessary to constitute a quorum at the Annual Meeting. Abstentions and broker non-votes will be counted solely for the purpose of determining whether a quorum is present. A proxy submitted by a broker that is not voted is sometimes referred to as a broker non-vote.

Directors are elected by a plurality of votes cast, without regard to either broker non-votes or proxies as to which authority to vote for the nominees being proposed is“Withheld.” The approval of the 2008 Long-Term Equity Incentive Plan and the ratification of the appointment of the independent registered public accounting firm isare each determined by a majority of the votes cast, without regard to broker non-votes or proxies marked“Abstain.”

Revocability of Proxies

You may revoke your proxy at any time before the vote is taken at the Annual Meeting. You may revoke your proxy by:

Written notices of revocation and other communications regarding the revocation of your proxy should be addressed to:

Provident Financial Services, Inc.

830 Bergen Avenue

Jersey City, New Jersey 07306

Attention: John F. Kuntz, Esq.

  Corporate Secretary

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If your shares are held in street name, you should follow your broker’s instructions regarding the revocation of proxies.

Solicitation of Proxies

Provident will bear the entire cost of soliciting proxies from you. In addition to solicitation of proxies by mail, Provident will request that banks, brokers and other holders of record send proxies and proxy material to the beneficial owners of Provident common stock and secure their voting instructions, if necessary. Provident will reimburse such holders of record for their reasonable expenses in taking those actions. Provident has also made arrangements with Georgeson, Inc. to assist Provident in soliciting proxies and has agreed to pay them a fee of $8,500$10,000 plus reasonable expenses for these services. If necessary, Provident may also use several of its regular employees, who will not be specially compensated, to solicit proxies from stockholders, personally or by telephone, facsimile or letter.

Householding

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Recommendation of the Board of Directors

Your board of directors unanimously recommends that you vote “FOR” each of the nominees for director listed in this Proxy Statement, “FOR” the approval of the 2008 Long-Term Equity Incentive Plan and “FOR” the ratification of KPMG LLP as Provident’s independent registered public accounting firm for the year ending December 31, 2007.2008.

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Security Ownership of Certain Beneficial Owners and Management

Persons and groups who beneficially own in excess of five percent of Provident’s common stock are required to file certain reports with the Securities and Exchange Commission regarding such beneficial ownership. The following table sets forth, as of March 5, 2007,3, 2008, certain information as to the shares of Provident common stock owned by persons who beneficially own more than five percent of Provident’s issued and outstanding shares of common stock. We know of no persons, except as listed below, who beneficially owned more than five percent of the outstanding shares of Provident common stock as of March 5, 2007.3, 2008. For purposes of the following table and the table included under the heading “Management,” in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, a person is deemed to be the beneficial owner of any shares of common stock (i) over which he or she has, or shares, directly or indirectly, voting or investment power or (ii) as to which he or she has the right to acquire beneficial ownership at any time within 60 days after March 5, 2007.3, 2008.

Principal Stockholders

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Management

The following table sets forth information about shares of Provident common stock owned by each nominee for election as director, each incumbent director, each named executive officer identified in the summary compensation table included elsewhere in this Proxy Statement, and all nominees, incumbent directors and executive officers as a group, as of March 5, 2007.3, 2008.

(footnotes on following page)

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Section 16(a) Beneficial Ownership Reporting Compliance

Provident’s common stock is registered with the Securities and Exchange Commission pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended. The executive officers and directors of Provident and The Provident Bank, and beneficial owners of greater than 10% of Provident’s common stock are required to file reports on Forms 3, 4 and 5 with the Securities and Exchange Commission disclosing beneficial ownership and changes in beneficial ownership of Provident’s common stock. The Securities and Exchange Commission rules require disclosure in Provident’s Proxy Statement or Annual Report on Form 10-K of the failure of an executive officer, director or 10% beneficial owner of Provident’s common stock to file a Form 3, 4, or 5 on a timely basis. Based on Provident’s review of ownership reports and confirmations by executive officers and directors only, no executive officer or director failed to file ownership reports on a timely basis for the year ended December 31, 2006.2007. Provident is not aware of any beneficial owners of more than 10% of its common stock.

PROPOSAL I—ELECTION OF PROVIDENT DIRECTORS

General

Provident’s board of directors currently consists of 14 members and is divided into three classes, with one class of directors elected each year. Each of the 14 members of the board of directors also serves as a director of The Provident Bank. Directors are elected to serve for a three-year term and until their respective successors shall have been elected and qualified. Five directors will be elected at the Annual Meeting to serve for a three-year term and until their respective successors shall have been elected and qualified. On the recommendation of the Governance/Nominating Committee, the board of directors nominated Thomas W. Berry, John G. Collins, FrankLaura L. Fekete, John P. MulkerinBrooks, Carlos Hernandez, William T. Jackson, Katharine Laud and Paul M. PantozziArthur McConnell for election as directors at the Annual Meeting.

Messrs. Berry, Collins, Fekete, Mulkerin and PantozziAll of the nominees for election at the Annual Meeting currently serve as directors of Provident and The Provident Bank. There are no arrangements or understandings between any nominee and any other person pursuant to which any such nominee was selected. Mr. BerryMs. Brooks was appointed to the boards of directors of Provident and The Provident Bank in 2005. He2006 and Ms. Laud was appointed to the boards of directors of Provident and The Provident Bank in 2007 in connection with the merger of First Morris Bank & Trust with and into The Provident Bank. Ms. Brooks and Ms. Laud were each recommended for consideration for appointment by the non-management directors.Unless authority to vote for the nominees is withheld, it is intended that the shares represented by the enclosed Proxy Card, if executed and returned, will be voted “FOR” the election of all nominees.

In the event that any nominee is unable or declines to serve, the persons named in the Proxy Card as proxies will vote with respect to a substitute nominee designated by Provident’s current board of directors. At this time, the board of directors knows of no reason why any of the nominees would be unable or would decline to serve, if elected.

The current Bylaws and Corporate Governance Principles of Provident provide that no director shall serve beyond the annual meeting of stockholders after attaining age 72. Thomas E. Sheenan, who has served as a director of Provident since 2003 and of The Provident Bank since 1990, will retire following the Annual Meeting in accordance with Provident’s Bylaws and Corporate Governance Principles. In accordance with the Agreement and Plan of Merger dated October 15, 2006 by and between Provident and First Morris Bank & Trust, a director of First Morris Bank & Trust will be appointed to the board of directors upon the recommendation of the Governance/Nominating Committee as of the effective date of the merger.

PROVIDENT’S BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF THE NOMINEES FOR DIRECTOR NAMED IN THIS PROXY STATEMENT.

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Directors and Executive Officers

The following table sets forth certain information, as of March 5, 2007,3, 2008, regarding the nominees for election as directors and the incumbent directors, including the terms of office of each director, as well as information regarding the executive officers of Provident and its wholly owned subsidiary, The Provident Bank.director.

The business experience for at least the past five years of each of Provident’s directors and the business experience and other information regarding the executive officers of Provident and its wholly owned subsidiary, The Provident Bank is as follows:

Directors

Thomas W. Berry.Mr. Berry is retired from investment banking. He previously served as a partner of Goldman Sachs & Co. until 1998. Mr. Berry was a founding director of Red Oak Bank, a New Jersey bank, which was acquired by another financial institution in 2005. He is a director of the Hyde and Watson Foundation and a trustee of the Community Foundation of New Jersey.Brown University. Mr. Berry is also a trustee of the North American Electric Reliability Corporation.

Laura L. Brooks. Ms. Brooks is Vice President-Risk Management and the Chief Risk Officer of PSEG in Newark, New Jersey since November 2002. Prior to November 2002, she was Vice President-Risk Management of PG&E in San Francisco, California. She is a member of the Committee of Chief Risk Officers and serves on the Advisory Board for the Quantitative Finance Program at Rutgers University.

John G. Collins.Mr. Collins is retired. He previously served as President of Fleet NJ from March 2001 until March 2003. Prior to 2001, Mr. Collins was Vice Chairman of Summit Bancorp and was a member of the board of directors of Summit Bancorp and its predecessor, UJB Financial Corp. Mr. Collins is a member of the board of trustees of CentraState Healthcare System.

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Geoffrey M. Connor.Mr. Connor is a practicing attorney and partnerCounsel in the Princeton, New Jersey office of the international law firm of Reed Smith LLP.

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Frank L. Fekete.Mr. Fekete is a certified public accountant and the Managing Partner of the accounting firm of Mandel, Fekete & Bloom, CPAs, located in Jersey City, New Jersey. Mr. Fekete is Chairman of the board of trustees of Christ Hospital, Jersey City, New Jersey.

Carlos Hernandez.Dr. Hernandez is President of New Jersey City University, located in Jersey City, New Jersey.

William T. Jackson. Mr. Jackson is retired. He previously served as Executive Director of Bayview/New York Cemetery located in Jersey City, New Jersey until January 2006.

Katharine Laud. Ms. Laud is a former member of the board of directors of First Morris Bank & Trust. She is Chief Financial Officer of Homeless Solutions, Inc., a provider of shelter and housing services to the homeless and working poor in Morris County, New Jersey and a developer of affordable housing.

Christopher Martin.Mr. Martin has served as President of Provident and President and Chief Operating Officer of The Provident Bank since January 2007. Prior to that time he was President of Provident and The Provident Bank since July 2004. He formerly served as President and Chief Executive Officer of both First Sentinel Bancorp, Inc. and First Savings Bank since January 2003, and as a member of both boards of directors.

Arthur McConnell. Mr. McConnell is the President of McConnell Realty, which owns and manages commercial and residential real estate, and is located in Atlantic Highlands, New Jersey.

John P. Mulkerin.Mr. Mulkerin is retired. He is a former member of the board of directors and former President and Chief Executive Officer of both First Sentinel Bancorp, Inc. and First Savings Bank. He is a member of the boardboards of directors of Middlesex Water Company and Raritan Bay Medical Center.

Edward O’Donnell.Mr. O’Donnell is President of Tradelinks Transport, Inc., a transportation consulting company located in Westfield, New Jersey. Mr. O’Donnell is a member of the management committee of North Bay Equity Partners, LLC.

Paul M. Pantozzi. Mr. Pantozzi has been the Chairman and Chief Executive Officer of Provident since January 2003. He has served as the Chief Executive Officer of The Provident Bank since 1993 and Chairman of The Provident Bank since 1998. Until July 2004, Mr. Pantozzi also served as President of Provident and The Provident Bank. Mr. Pantozzi is a member of the board of trustees of Christ Hospital, Jersey City, New Jersey.

Thomas E. Sheenan.Mr. Sheenan is the President of Sheenan Funeral Home located in Dunellen, New Jersey.

Jeffries Shein. Mr. Shein is a former member of the board of directors of First Sentinel Bancorp, Inc. and First Savings Bank. He is a principal with JGT Management Co., LLC, a real estate management and investment company. Mr. Shein is a member of the boardboards of directors of Middlesex Water Company and Raritan Bay Medical Center.

Executive Officers Who are Not Directors

Kevin J. Ward.Mr. Ward, age 58, has been Vice Chairman of Provident and The Provident Bank since June 2004. Prior to that time he was Vice Chairman and Chief Operating Officer of The Provident Bank since April 2004. He served as Executive Vice President and Chief Operating Officer of Provident since January 2003 and served as Executive Vice President and Chief Operating Officer of The Provident Bank since 2000.

Donald W. Blum. Mr. Blum, age 50,51, has been Executive Vice President and Chief Lending Officer of The Provident Bank since January 2005. He served as Senior Vice President and Chief Lending Officer of The Provident Bank since December 2001. Prior to that time, he was Senior Vice President, Real Estate Lending at Summit Bancorp.

Brian Giovinazzi.Mr. Giovinazzi, age 53, has been Executive Vice President-Corporate Administration of The Provident Bank since April 2007. Prior to that time he was President and Chief Executive Officer of First Morris Bank & Trust and a member of its board of directors.

9Janet D. Krasowski.Ms. Krasowski, age 55, has been Senior Vice President-Human Resources of The Provident Bank since May 2006. She was Chief Human Resources Officer of Atlantic Bank of New York from January 2001 to April 2006. Prior to that time she was with Dime Savings Bank (now Washington Mutual) as Senior Vice President and Benefits Director.

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John F. Kuntz.Mr. Kuntz, age 51,52, has been General Counsel and Corporate Secretary of Provident since January 2003, and has been Executive Vice President and General Counsel of The Provident Bank since May 2005. Prior to that time, he was Senior Vice President and General Counsel of The Provident Bank since November 2002 and Vice President and General Counsel of The Provident Bank since September 2001.

Janet D. Krasowski.Ms. Krasowski, age 54, has been Senior Vice President-Human Resources of The Provident Bank since May 2006. She was Chief Human Resources Officer of Atlantic Bank of New York from January 2001 to April 2006. Prior to that time she was with Dime Savings Bank (now Washington Mutual) as Senior Vice President and Benefits Director.

Linda A. Niro.Ms. Niro, age 52, has been Senior Vice President and Chief Financial Officer of Provident since January 2003 and has served as Senior Vice President and Chief Financial Officer of The Provident Bank since 2000.

Giacomo Novielli. Mr. Novielli, age 47, has been Senior Vice President and Chief Information Officer of The Provident Bank since January 2006. Prior to that time, he was First Vice President and Chief Information Officer of The Provident Bank since November 2003 and previously was First Vice President, Delivery and Distribution of The Provident Bank.

Kenneth J. Wagner.Mr. Wagner, age 56, has been Senior Vice President, Investor Relations of Provident since January 2003 and has been Senior Vice President of Strategic Business Development of The Provident Bank since 2001. Prior to that time he served as Senior Vice President of Customer Relationship Management of The Provident Bank.

Thomas M. Lyons.Mr. Lyons, age 42,43, has served as First Vice President and Chief Accounting Officer of The Provident Bank since February 2005. Prior to that time, he was First Vice President, Finance of The Provident Bank since July 2004. He was formerly Executive Vice President and Chief Financial Officer of First Sentinel Bancorp, Inc. and First Savings Bank since 2003. He was named Senior Vice President and Chief Financial Officer of First Savings Bank in April 2001, and appointed to the same position at First Sentinel Bancorp, Inc. in January 2002.

Linda A. Niro.Ms. Niro, age 53, has been Executive Vice President and Chief Financial Officer of Provident since December 2007 and Executive Vice President and Chief Financial Officer of The Provident Bank since November 2007. Prior to that time she served as Senior Vice President and Chief Financial Officer of Provident since January 2003 and as Senior Vice President and Chief Financial Officer of The Provident Bank since 2000.

Giacomo Novielli. Mr. Novielli, age 48, has been Senior Vice President and Chief Information Officer of The Provident Bank since January 2006. Prior to that time, he was First Vice President and Chief Information Officer of The Provident Bank since November 2003 and previously was First Vice President, Delivery and Distribution of The Provident Bank.

Michael A. Raimonde. Mr. Raimonde, age 55, has been Senior Vice President and Director of Retail Banking of The Provident Bank since April 2007. He was Executive Vice President of the Community Banking Division and Market President of the New York Retail System of Sovereign Bank since June 2006. Prior to that time, he was Senior Vice President, New York Retail Banking Division of Independence Community Bank.

Kenneth J. Wagner.Mr. Wagner, age 57, has been Senior Vice President, Investor Relations of Provident since January 2003 and has been Senior Vice President of Strategic Business Development of The Provident Bank since 2001.

Corporate Governance Matters

Provident is committed to maintaining sound corporate governance principles and the highest standards of ethical conduct and is in compliance with applicable corporate governance laws and regulations.

Board of Directors Meetings and Committees

The board of directors of Provident meets quarterly, or more often as may be necessary. The board of directors met 12nine times in 2006.2007. The board of directors currently maintains three standing committees: the Compensation Committee, the Audit Committee and the Governance/Nominating Committee. During 2006, the board of directors appointed an Executive Committee that met four times. The Executive Committee exercised the powers of the board of directors, except such powers expressly reserved for the full board of directors by Provident’s Bylaws and applicable corporate law, as was necessary between meetings of the board of directors. The members of the Executive Committee in 2006 were: Messrs. Pantozzi (Chair), Collins, Connor, Fekete, Jackson and Shein. The board of directors did not appoint an Executive Committee in 2007.of The Provident Bank meets monthly (except for the month of August), as required by New Jersey banking law.

All directors attended no fewer than 75% of the total number of meetings held by the Provident board of directors and all committees of the board on which they served (during the period they served) in 2006.2007. When the Provident and The Provident Bank board of directors and committee meetings are aggregated, all directors attended no fewer than 75% of the aggregated total number of meetings in 2006.2007. Provident has a policy requiring each director to attend each annual meeting of stockholders. All persons serving on the board of directors attendedat the time of the annual meeting of stockholders held on April 26, 2006.25, 2007 attended the meeting.

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Corporate Governance Principles

The board of directors has adopted Corporate Governance Principles, which are posted on the “Governance Documents” section of the “Investor Relations” page of The Provident Bank’s website atwww.providentnj.comwww.providentnj.com.. The Corporate Governance Principles cover the general operating policies and procedures followed by the board of directors including:

The Corporate Governance Principles provide for the board of directors to meet in regularly scheduled executive sessions without management at least two times a year. FourFive executive sessions were conducted in 2006.2007. Mr. Collins, who serves as Lead Director, presided over these executive sessions conducted by the non-employee directors, who are all independent. The Lead Director presides at meetings of the board of directors when the chairman of the board is not present, including the executive sessions of the non-employee directors, serves as a liaison between the chairman of the board and the independent directors, and has input with respect to board meeting agendas based on requests from the independent directors.

Director Independence

The New York Stock Exchange rules provide that a Provident director does not qualify as independent unless the board of directors affirmatively determines that the director has no direct or indirect material relationship with Provident. The New York Stock Exchange rules require the board of directors to consider all relevant facts and circumstances in determining the materiality of a director’s relationship with Provident and permit the board of directors to adopt and disclose standards to assist the board in making independence determinations. Accordingly, the board of directors has adopted Independence Standards to assist the board in determining whether a director has a material relationship with Provident. These Independence Standards, which should be read with the New York Stock Exchange rules, are available on the “Governance Documents” section of the “Investor Relations” page of The Provident Bank website atwww.providentnj.comwww.providentnj.com..

In February 2007,January 2008, the board of directors conducted an evaluation of director independence, based on the Independence Standards and the New York Stock Exchange rules. In connection with this review, the board of directors considered all relevant facts and circumstances relating to relationships that each director or his or her immediate family members and their related interests had with Provident.

After its evaluation, the board of directors affirmatively determined that each of Mr. Berry, Ms. Brooks, Mr. Collins, Mr. Connor, Mr. Fekete, Dr. Hernandez, Mr. Jackson, Ms. Laud, Mr. McConnell, Mr. Mulkerin, Mr. O’Donnell Mr. Sheenan and Mr. Shein is an independent director. The board of directors determined that Mr. Pantozzi and Mr. Martin are not independent because each of them is a Provident employee. The board of directors specifically considered the following business and other relationships in reaching its independence determinations:

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Governance/Nominating Committee

The current members of the Governance/Nominating Committee are: Messrs. Connor (Chair), Jackson, McConnell and O’Donnell. Each member of the Governance/Nominating Committee is considered “independent” as defined in the New York Stock Exchange corporate governance listing standards. The Governance/Nominating Committee’s charter is posted on the “Governance Documents” section of the “Investor Relations” page of The Provident Bank’s website atwww.providentnj.comwww.providentnj.com.. The Committee met five times during 2006.2007, including one conference call meeting for which no meeting fee was paid.

The functions of the Governance/Nominating Committee include, among other things:

The Governance/Nominating Committee identifies nominees for director by first assessing the performance of the current members of the board of directors willing to continue service. Current members of the board with skills and experience that are relevant to Provident’s business and who are willing to continue service are first considered for re-nomination, balancing the value of continuity of service by existing members of the board with that of obtaining a new perspective. If any member of the board does not wish to continue service, or if the Governance/Nominating Committee or the board decides not to re-nominate a member for re-election, or if the size of the board is increased, the Governance/Nominating Committee will solicit suggestions for director candidates from all board members. In addition, the Governance/Nominating Committee is authorized by its charter to engage a third party to assist in the identification of director nominees. Candidates must have the highest personal and professional ethics and integrity. Additional criteria weighed by the Governance/Nominating Committee in the director identification and selection process include the relevance of a candidate’s experience to the business of Provident, enhancement of the diversity of experience of the board, the needs of Provident and the board, the candidate’s independence from conflict or direct economic relationship with Provident, and the candidate’s ability and willingness to devote the proper time to prepare for and attend meetings. The Governance/Nominating Committee will also take into account whether a candidate satisfies the criteria for “independence” under the Independence Standards and the New York Stock Exchange rules, and if a nominee is sought for service on the Audit Committee, the financial and accounting expertise of a candidate, including whether an individual qualifies as an Audit Committee financial expert.

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Procedures for the Nomination of Directors by Stockholders

If a determination is made that an additional candidate is needed for the board, the Governance/Nominating Committee will consider candidates properly submitted by Provident’s stockholders. Stockholders can submit the

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names of qualified candidates for director by writing to the Corporate Secretary at Provident Financial Services, Inc., 830 Bergen Avenue, Jersey City, New Jersey 07306. The Corporate Secretary must receive a submission not less than 90120 days prior to the date of Provident’s proxy materials for the preceding year’s annual meeting. If the date of the annual meeting is advanced more than 30 days prior to, or delayed by more than 30 days after, the anniversary of the preceding year’s annual meeting, a stockholder’s submission must be so delivered not later than the close of business on the tenth day following the day on which public announcement of the date of such annual meeting is first made. A stockholder’s submission must be in writing and include the following information:

Stockholder submissions that are receivedtimely and that meet the criteria outlined above will be forwarded to the Chair of the Governance/Nominating Committee for further review and consideration. A nomination submitted by a stockholder for presentation at an annual meeting of Provident’s stockholders must comply with the procedural and informational requirements described later in this Proxy Statement under the heading “Advance Notice Of Business To Be Conducted at an Annual Meeting.”

Stockholder and Interested Party Communications with the Board

A stockholder of Provident and any other interested party may communicate with the board of directors, the non-employee directors, the Lead Director or with any individual director by writing to the Chair of the Governance/Nominating Committee, c/o Provident Financial Services, Inc., 830 Bergen Avenue, Jersey City, New Jersey 07306. A communication from a stockholder should indicate that the author is a stockholder and, if shares of Provident common stock are not held of record, the letter should include appropriate evidence of stock ownership.

Code of Business Conduct and Ethics

Provident has adopted a Code of Business Conduct and Ethics that is applicable to all directors, officers and employees of Provident and The Provident Bank, including the principal executive officer, principal financial officer, principal accounting officer, and all persons performing similar functions. The Code of Business Conduct and Ethics is posted on the “Governance Documents” section of the “Investor Relations” page onof The Provident Bank’s website atwww.providentnj.comwww.providentnj.com.. Amendments to and waivers from the Code of Business Conduct and Ethics will also be disclosed on The Provident Bank website.

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Transactions With Certain Related Persons

Federal laws and regulations generally require that all loans or extensions of credit to executive officers and directors must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with the general public and must not involve more than the normal risk of repayment or present other unfavorable features. However, regulations also permit executive officers and directors to receive the same terms through benefit or compensation plans that are widely available to other employees, as long as the director or executive officer or director is not given preferential treatment compared to the other participating employees. Pursuant to such a program, loans have been extended to executive officers, which loans are on substantially the same terms as those prevailing at the time for comparable transactions with the general public, except as to the interest rate charged, which rate is the same as available to all employees. These loans do not involve more than the normal risk of repayment or present other unfavorable features. As of December 31, 2006,2007, The Provident Bank had aggregate loans and loan commitments totaling $138,600$233,980 to onetwo executive officer.officers. The Provident Bank does not make loans to members of the board of directors or to their immediate family members and their related interests.

Section 402 of the Sarbanes-Oxley Act of 2002 generally prohibits an issuer from: (1) extending or maintaining credit; (2) arranging for the extension of credit; or (3) renewing an extension of credit in the form of a personal loan for an officer or director. There are several exceptions to this general prohibition, one of which is applicable to Provident. The provisions of the Sarbanes-Oxley Act of 2002 that prohibit loans do not apply to loans made by a depository institution, such as The Provident Bank, that is insured by the Federal Deposit Insurance Corporation and is subject to the insider lending restrictions of the Federal Reserve Act. All loans to Provident’s and The Provident Bank’s officers are made in conformity with the Federal Reserve Act and Regulation O.

Provident’s Code of Business Conduct and Ethics requires directors and executive officers to promptly disclose any interest they may have in any proposed transaction involving Provident and The Provident Bank, and any such director or executive officer shall abstain from any deliberation or voting on the transaction. Any such transaction would require approval of a majority of the directors who have no interest in the proposed transaction. In addition, directors and executive officers annually disclose any transactions, relationships or arrangements they or their related interests may have with Provident or The Provident Bank. Such disclosures, together with information obtained from director annual statement of interest forms, are used to monitor related party transactions and make independence determinations.

Audit Committee Matters

Audit Committee

The current members of the Audit Committee are: Messrs. Fekete (Chair), Berry, Collins and Mulkerin, Ms. Brooks and Ms. Brooks.Laud. Each member of the Audit Committee is considered “independent” as defined in the New York Stock Exchange corporate governance listing standards and under Securities and Exchange Commission Rule 10A-3. The duties and responsibilities of the Audit Committee include, among other things:

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The Audit Committee met ten12 times during 2006.2007, including one conference call meeting for which no meeting fee was paid. The Audit Committee reports to the board of directors on its activities and findings. The board of directors believes that Frank L. Fekete, the Chair of the Audit Committee, and John P. Mulkerin each qualify as an “Audit Committee financial expert” as that term is used in the rules and regulations of the Securities and Exchange Commission.

Audit Committee Report

Pursuant to rules and regulations of the Securities and Exchange Commission, this Audit Committee Report shall not be deemed incorporated by reference to any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that Provident specifically incorporates this information by reference, and otherwise shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission subject to Regulation 14A or 14C of the Securities and Exchange Commission or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended.

The Audit Committee operates under a written charter adoptedapproved by the board of directors. The Audit Committee’s charter is posted on the “Governance” section of the “Investor Relations” page of The Provident Bank’s website atwww.providentnj.comwww.providentnj.com. and a copy is included as Appendix A to this Proxy Statement.

Management has the primary responsibility for Provident’s internal control and financial reporting process, and for making an assessment of the effectiveness of Provident’s internal control over financial reporting. The independent registered public accounting firm is responsible for performing an independent audit of Provident’s consolidated financial statements in accordance with auditingthe standards generally accepted inof the United States of AmericaPublic Company Accounting Oversight Board (United States) and to issue an opinion on those financial statements, and for providing an attestation report on management’s assessment of internal control over financial reporting. The Audit Committee’s responsibility is to monitor and oversee these processes.

As part of its ongoing activities, the Audit Committee has:

Based on the review and discussions referred to above, the Audit Committee has recommended to Provident’s board of directors that the audited consolidated financial statements for the fiscal year ended December 31, 20062007 be included in Provident’s Annual Report on Form 10-K for filing with the Securities and Exchange Commission. In addition, the Audit Committee approved the re-appointment of KPMG LLP as the independent registered public accounting firm for the year ending December 31, 2007,2008, subject to the ratification of this appointment by the stockholders of Provident.

The Audit Committee of Provident Financial Services, Inc.

Frank L. Fekete (Chair)

Laura L. Brooks

Katharine Laud

John P. Mulkerin

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Compensation Committee Matters

Compensation Committee

The current members of the Compensation Committee are: Messrs. Shein (Chair), Berry, Fekete O’Donnell and Sheenan.O’Donnell. Each member of the Compensation Committee is considered “independent” as defined in the New York Stock Exchange corporate governance listing standards. The Compensation Committee is responsible for management succession planning and for reviewing and evaluating compensation programs and policies including setting performance measures and goals, approving awards under existing compensation plans and administering long-term incentive awards. On at least an annual basis, the Compensation Committee meets to review the performance of, and the compensation payable to, Provident’s and The Provident Bank’sthe executive officers, including the Chief Executive Officer. The basic elements of Provident’s executive compensation program include base salary, annual incentives, long-term incentive awards and certain other benefit arrangements, such as retirement programs. The Compensation Committee’s charter is posted on the “Governance Documents” section of the “Investor Relations” page of The Provident Bank’s website atwww.providentnj.comwww.providentnj.com.. The Compensation Committee met ten19 times during 2006.2007, including five conference call meetings for which no meeting fees were paid.

The Compensation Committee engagedhas retained the services of Amalfi Consulting (formerly Clark Consulting in 2005 and 2006,Consulting) as its independent compensation consultant, to assist it in evaluating executive compensation programs and in making determinations regarding executive officer compensation. The independent compensation consultant reports directly to the Compensation Committee and meets with the Committee in executive session, without the presence of management, and does not perform any services for Provident’s or The Provident Bank’s management.

The Compensation Committee determines the compensation payable to the Chief Executive Officer based on corporate financial performance against established goals and the Chief Executive Officer’s individual performance. The Compensation Committee establishes corporate performance goals and individual goals for the Chief Executive Officer at the beginning of the year, and members of the Compensation Committee meet with the Chief Executive Officer during the year to review progress against the goals. The Compensation Committee also sets performance goals for, and determines the compensation payable to, the executive officers, including the named executive officers. The Chief Executive Officer and the President provide the Compensation Committee with performance assessments and compensation recommendations for each of the other executive officers. The Compensation Committee considers those recommendations in arriving at its determinations. The independent compensation consultant is available to the Compensation Committee for assistance in these determinations.

Director compensation is established byThe Compensation Committee not only evaluates Provident’s overall financial performance in its review of executive management, it reviews how the board of directors uponexecutive officer performs his or her business responsibilities and performance with respect to several key management competencies and behaviors. Executive officers are expected to run their business lines and are held accountable for results. The key management competencies and behaviors are reviewed in the recommendationcontext of the Governance/Nominating Committee.executive’s effectiveness as a leader and his or her role in building a cohesive executive team. These competencies and behaviors include, but are not limited to, management skills, cooperation, teamwork, communication skills, leadership and vision. These performance characteristics, along with business accountabilities, form the basis of a performance review discussion with the executive that reinforces the executive’s role in achieving the business plan and Provident’s short-term and long-term strategies.

In 2007 the Compensation Committee retained Amalfi Consulting to evaluate Provident’s long-term equity incentive plans. The Committee determined that the terms of the existing plans (the Provident Financial Services, Inc. 2003 Stock Option Plan and the Provident Financial Services, Inc. 2003 Stock Award Plan), which were designed in 2003 following the conversion of The Provident Bank from a mutual savings bank to a stock savings bank, did not provide the flexibility needed to include performance measures in the vesting of long-term equity

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compensation awards. The proposed 2008 Long-Term Equity Incentive Plan, which is being presented for stockholder approval at the Annual Meeting, provides that flexibility and the opportunity to more effectively link pay with performance.

Management may provide information on relevant topics to the Compensation Committee regarding peer group and market data and may make recommendations regarding compensation actions, however,actions. However, the Compensation Committee retains responsibility for all compensation recommendations to the board of directors as to the executive officers. Director compensation is established by the board of directors upon the recommendation of the Governance/Nominating Committee and is discussed in this proxy statement under the heading “Director Compensation.”

Compensation Committee Interlocks and Insider Participation

Messrs. Berry, Fekete, O’Donnell Sheenan and Shein served as members of the Compensation Committee in 2006.2007. None of these directors has ever been an officer or employee of Provident,Provident. In addition, none of these directors is an executive officer of another entity, at which one of Provident’s executive officers serves on the board of directors, or had any transactions or relationships with Provident in 20062007 requiring specific disclosures under Securities and Exchange Commission rules.

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Executive Compensation

Compensation Discussion and Analysis

Executive Compensation Philosophy

The objective of Provident’s executive compensation program is to offer competitive cash and equity compensation and benefits that will attract, motivate and retain qualified and talented executives who will help maximize Provident’s financial performance and earnings growth. Provident’s executive compensation program is intended to align the interests of its executive officers with stockholders by rewarding performance against established corporate financial goals, and by rewarding strong executive leadership and superior individual performance. By offering competitive cash and equity compensation and benefits, Provident’s goal is to attract, motivate and retain a highly qualified and talented team of executives who will help maximize Provident’s long-term financial performance and earnings growth.

The compensation paid to each executive officer is based on the executive’s level of job responsibility, corporate financial performance measured against annual goals, and an assessment of the executive’s individual performance.performance and the competitive market. For higher-level executive officers, annual incentive compensation is linked more heavily to corporate financial performance, because these executives are in leadership roles that tend to influence corporate financial results.

The Compensation Committee regularly reviews the components of the executive compensation program with advice from Amalfi Consulting. In 2007 Amalfi Consulting was engaged Clark Consulting in 2005 and 2006 to benchmarkreview Provident’s executive compensation program toprogram. Part of that engagement included the review and recommendation of an appropriate peer group data. The independent compensation consultant provided the Compensation Committee with relevantto review competitive compensation program information using apractices, as well as for comparing financial targets. Financial targets for 2007 were established based upon an initial peer group of 18 banking institutions. TheseHowever, as a result of industry consolidation, the peer group used for relevant financial information was reduced to the 14 institutions listed below.

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The peer group used in 2007 included thrift and banking institutions with assets of $3 to $13 billion, having an asset mix similar to Provident. ThisProvident as follows:

Valley National Bancorp

Susquehanna Bancshares, Inc.

Sterling Financial Corporation

Provident Bankshares Corporation

New Alliance Bancshares, Inc.

First Commonwealth Financial Corp.

First Niagara Financial Group, Inc.

F.N.B. Corporation

First Fed Financial Corp.

National Penn Bancshares, Inc.

Community Bank System, Inc.

PFF Bancorp, Inc.

Bank Mutual Corporation

Harleysville National Corporation

The Compensation Committee will modify the peer group may be modified from year-to-year based on mergers and acquisitions within the industry or other relevant factors. The peer group currently consists of the 17 banking institutions identified below. Based on this peer group benchmarking, base salaries are targeted at the market median (50^th percentile) and annual incentive compensation is targeted at the top quartile (75^th percentile) when superior financial performance is achieved, and at the market (50^th percentile) when financial performance goals are met. While Provident’s executive compensation program targets base salary and annual incentive compensation at market levels, actual compensation paid to an executive officer may vary based on other factors, such as the individual’s performance, experience and tenure, and competitive market conditions.

The peer group companies are:

Valley National Bancorp—NJ

Susquehanna Bancshares, Inc.—PA

FirstFed Financial Corp.—CA

Sterling Financial Corporation—WA

Provident Bankshares Corporation—MD

New Alliance Bancshares, Inc.—CT

First Commonwealth Financial Corp.—PA

Chittenden Corporation—VT

First Niagara Financial Group, Inc.—NY

F.N.B. Corporation—PA

National Penn Bancshares, Inc.—PA

Community Bank System, Inc.—NY

PFF Bancorp, Inc.—CA

Partners Trust Financial Group, Inc.—NY

Bank Mutual Corporation—WI

TierOne Corporation—NE

Harleysville National Corporation—PA

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Elements of Executive Compensation for 20062007

Provident pays its executives in accordance with its philosophy to provide competitive compensation for demonstrated performance. The Compensation Committee usedevaluates Provident’s corporate financial performance and its performance against peers. The Committee also takes into consideration the performance of the individual executive, the competitive market, business challenges and opportunities and the performance assessment presented by management. The Compensation Committee employs a total compensation approach in establishing executive compensation opportunities, consisting of base salary, annual incentive compensation, long-term incentive awards (such as stock option and restricted stock awards), a competitive benefits package and perquisites.

Base Salary

ExecutiveA competitive base salary is necessary to attract and retain talented executives. The Compensation Committee evaluates executive officer base salary levels are evaluated by the Compensation Committee on an annual basis. In general, salary ranges are developed considering the competitive base salary information furnished to the Compensation Committee by the independent consultant. Each executive officer’s base salary level is targeted to these ranges consideringto remain competitive. The executive officer’s salary in relation to the salary range is dependent on the executive officer’s performance, and contribution, leadership, operational effectiveness and experience in the industry.

In establishing base salaries for 2006,all of 2007, the Compensation Committee considered Provident’s financial performance, which did not meet expectations, andas well as peer group and market-based industry salary data provided bydata. In consideration of the independent compensation consultant. Thedifficult external market conditions prevailing in 2006 resulting from an inverted yield curve, and to maintain a competitive base salary for Messrs. Pantozzi and Martin, the Committee determined that no increasesan increase in base salary would be warranted for Messrs. Pantozzi, Martin and Ward in 2006.2007 for both executives was appropriate. The Compensation Committee reviewed similar considerations for each of the other named executive officers and determined that increases were appropriate for Ms. Niro and Mr. Blum based upon their performance andeach of the named executives to maintainremain competitive base salary levels. Accordingly, Ms. Niro received an annual base salary increase of 3.8% or $7,500 and Mr. Blum received an annual base salary increase of 4.3% or $10,000.with the external market.

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Annual Incentive Payment/The 20062007 Incentive Plan

Annual incentive opportunities are provided to Provident’s executive officers in order to align the attainment of annual corporate financial performance objectives with executive compensation. At the beginning of each year, the Compensation Committee assigns corporate targets and a range of annual incentive award opportunities to each executive officer. The award opportunities are linked to a specific target and range of performance results for one or more corporate financial performance measures and attainment of individual goals.

The Compensation Committee established, and the board of directors approved, the 20062007 Incentive Plan. The 20062007 Incentive Plan had two components: a cash incentive payment and long-term incentive awards in the form of restricted stock awards and stock options. The Compensation Committee determined thatIn accordance with past practice, Messrs. Pantozzi and Ward and Ms. Niro would only be eligible for the cash incentive component and not the long-term incentive component due to the level of stock awards and stock options granted to them in 2003 in connection with the mutual to stock conversion of The Provident Bank. However, the Compensation Committee determined to award 50,000 stock options to Mr. Pantozzi, provided Provident’s financial performance in 2006 met or exceeded each of the Target levels established under the 2006 Incentive Plan. These Target levels were not achieved.

The cash incentive payments and long-term incentive awards under the 20062007 Incentive Plan were based primarily on the 20062007 financial performance compared with 20062007 targets relating to: (i) earnings per share (weighted 50%); (ii) efficiency ratio (weighted 25%); and (iii) total shareholderstockholder return relative to the performance of an identified peer group (weighted 25%) (collectively, the “Corporate Targets”). A portion of the payment of incentive compensation payable to each executive was also based on the executive’s performance against his or her 20062007 individual goals and objectives, and may be made whether or not the Corporate Targets were met. For the named executive officers, 75% of the incentive payment was based on Provident’s financial performance against the Corporate Targets and 25% was based on the executive’s performance against his or her individual goals and objectives. The Compensation Committee established the following Corporate Targets for 2007:

Incentive payments and awards based on the Company’s 2006Provident’s 2007 financial performance would be made if the Company’s 20062007 financial performance met or exceeded 95% of the Corporate Targets (“Threshold”). At Target, the performance hurdles were (i) $0.93 for earnings per share;

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(ii) 58.79% for the efficiency ratio; and (iii) at the 50^th percentile or better of the peer group for total shareholder return. For the Chief Executive Officer, incentive cash awards were a minimum of 6.25% of base salary upon the achievement of at least one metric at the Threshold levels,level, increasing to 100% of base salary for maximum achievement. For the other named executive officers, incentive cash awards ranged from 3.75% of base salary to 60% of base salary. For the named executive officers who were eligible to receive equity awards under the incentive plan, incentive awards rangeranged from 3.75% (5%(5.00% for the President) of base salary to 60% (80% for the President) of base salary, payable 50% in stock options and 50% in shares of restricted stock.

Based on Provident’s actual financial performance in 2006,2007, the earnings per share and efficiency ratio Corporate Targetstargets were not met. The total stockholder return target was achieved above Target with the achievement of total stockholder return results at the 64^th percentile of peers. The Compensation Committee determined that the expense associated with a voluntary resignation program and the expense associated with stock-based compensation acceleration due to the death of a former director were extraordinary one-time items that should be excluded from 2007 financial results in the Committee’s analysis of the calculation of the annual incentive payable to officers and managers of The Provident Bank. The voluntary resignation program expense was not contemplated when the 2007 Incentive Plan targets were set, and the board of directors authorized this one-time expense as part of Provident’s overall cost containment measures that will have a long-term benefit to Provident’s financial performance. The accelerated stock expense was caused by the death of a retired director. As a result of these considerations and the impact on 2007 financial performance, excluding these one-time expenses, Provident met the efficiency ratio performance standard at the Threshold level. The total shareholder return Corporate Target was not met. As a result ofBased on the Compensation Committee’s assessment of Provident’s 2006 financial performance againstforegoing, the Corporate Targets, and the assessment of each named executive officer’s individual performance, the following cash and equity awards were made in 2007Committee authorized payouts under the 2006 Incentive Plan:plan.

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20062007 Incentive Plan Payments

Long-Term Incentives (Stock Option and Stock Award Program)

Provident maintains the Provident Financial Services, Inc. 2003 Stock Award Plan and the Provident Financial Services, Inc. 2003 Stock Option Plan. Under these plans, individuals may receive awards of common stock and grants of options to purchase common stock. The Compensation Committee believes that stock ownership provides a significant incentive in building stockholder value by further aligning the interests of officers and employees with stockholders. The importance of this component of compensation increases as Provident’s common stock appreciates in value. In addition, stock option grants and stock awards vest over five years,time, thereby providing an additional retention incentive.

In addition to the stock awards and stock options granted under the 2006 Incentive Plan, the Compensation Committee granted additional long-term incentives to each of the named executive officers to reward superior individual performance in 2006, and to acknowledge that attainment of certain corporate financial goals was adversely impacted by the prevailing inverted yield curve and to maintain competitive compensation levels as follows:

Long-Term Incentive Awards

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It is the current policy of the Compensation Committee to make option grants when the window for trading by officers and directors in Provident common stock is open under the Provident’s stock trading policy. Generally stock options and stock awards are granted in January or February of each fiscal year in connection with the prior year’s financial results and the executive officer’s performance assessment. Throughout the year, stock options and stock awards may be granted to new hires and promoted employees, or to existing employees to recognize superior performance with a grant date effective as of the date of the next regularly scheduled Compensation Committee meeting that falls when the window for trading is open under Provident’s stock trading policy.

Benefits

Provident provides its executives with benefits that are generally available to all employees. These benefits include medical and dental, disability insurance and group life insurance coverage consistent with the same benefits provided to all of its full-time employees. Similarly, the named executivecoverage. Executive officers are participants in the Employee Stock Ownership Plan (“ESOP”) and 401(k) Plan offered to all full-time employees and certainemployees. When Provident adopted the ESOP, it froze future accruals under the pension plan. Certain of the executive officers have accrued benefits under athe pension plan that was frozen as of April 1, 2003. Messrs. Pantozzi, Martin and Ward and Ms. Niro are also eligible for post-retirement medical benefits, which benefits are available to all active employees with ten years of service as of December 31, 2002. Messrs. Pantozzi, Martin and Ward and Ms. Niro are also eligible for post-retirement life insurance benefits, which benefits are only available to active employees who had ten years of service as of December 31, 2006.

At the same time Provident provides a non-qualifiedfroze the pension plan, it froze future benefit accruals under the nonqualified retirement plan (“SERP”) for Messrs. Pantozzi and Ward.. The SERP pays to each participantprovides an amount equal to the amountbenefit which would have been payable under the terms of the pension plan but for the limitations under Sections 401(a)(17) and 415 of the Internal

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Revenue Code, less the amount payable under the terms of the pension plan. The Provident Bank froze the SERP as of April 1, 2003 as to the accrual of additional benefits under the SERP. Provident also established the Supplemental Executive Savings Plan, a non-qualifiednonqualified plan that provided additional benefits to certain participants whose benefits under The Provident Bankthe 401(k) Plan and Employee Stock Ownership Plan (“ESOP”)ESOP were limited by tax law limitations applicable to tax qualified plans. Messrs. Pantozzi and Ward are the participants in this plan. This plan was frozen effective December 31, 2003 with respect to all future contributions and remains open only to hold assets for distribution. Messrs. Pantozzi and Ward were the only participants in these nonqualified plans who have accumulated benefits under these plans.

Effective January 1, 2004, Provident established a new plan, known as The Provident Bank Non-QualifiedNonqualified Supplemental Employee Stock Ownership Plan (the “Supplemental ESOP”). The Supplemental ESOP provides additional benefits to participants whose benefits under the ESOP are limited by tax law limitations applicable to tax-qualified plans. Currently Messrs. Pantozzi and Ward are the only participants in this plan. The Supplemental ESOP requires a contribution by Provident for each participant who also participates in the ESOP equal to the amount, which would have been contributed under the terms of the ESOP, but for the tax law limitations, less the amount actually contributed under the ESOP. This benefit is payable in cash in a lump sum upon the death of a participant, a participant’s separation from service or disability (as those terms are defined in the Supplemental ESOP), or a change in control (as that term is defined in the Supplemental ESOP) of Provident or The Provident Bank.

Perquisites

The Compensation Committee believes that perquisites should be provided on a limited basis, and only to the most senior level of executive officers. The following perquisites are currently provided: club memberships for Messrs. Pantozzi Martin and Ward,Martin, and the use of a company-owned automobile for Messrs. Pantozzi, Martin, WardBlum and Blum.Giovinazzi. All of the named executive officers are eligible for an annual medical examination and Mr. Pantozzi has the use of a fitness trainer.examination.

Elements of Post-Termination Benefits

Employment Agreements.Agreements. Employment Agreements are generally limited to the most senior level of executive officer. The current employment agreements are three-year employment agreements, which is consistent with industry practice. Provident currently has entered into three-year employment agreements with Messrs. Pantozzi Martin and Ward.Martin. Mr. Ward, who resigned from his positions with Provident and The Provident Bank effective December 31, 2007, previously had an employment agreement with Provident. In connection with the settlement of that employment agreement and in exchange for a release of any claims against Provident, Mr. Ward will receive a lump-sum payment in the amount of $950,000, together with a payment of $52,000 in satisfaction of any obligation to provide Mr. Ward the use of a Provident-owned vehicle. The lump-sum payments will be made on or about July 2, 2008. In addition, Provident will continue to pay the employer’s portion of the cost of Mr. Ward’s coverage under Provident’s group plans for health, dental, vision and life insurance through September 1, 2008. The expense associated with these payments and benefits was recognized for financial reporting purposes in the fourth quarter of 2007.

The employment agreements provide that if employment is terminated for reasons other than for cause, or for retirement, disability or following a change in control, the executive would be entitled to:

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The executive may resign from employment and receive these benefits in the event of certain adverse changes in the executive’s employment conditions. Each employment agreement generally provides that following a change in control, the executive will receive the severance payments and insurance benefits described above if:

Change in Control Agreements.Agreements.Change in control agreements are also reserved for a limited number of executives. The current change in control agreements are two-year agreements which require a double trigger for benefits to be payable. Provident has entered into two-year change in control agreements with Mr. Blum and Ms. Niro.

Following a change in control, the executive is entitled to a severance payment ifif:

Good reason is generally defined to includeinclude:

The severance payment will equal two times the highest level of aggregate annualized base salary and other cash compensation paid to the officer during the calendar year in which he or she was terminated, or either of the immediately preceding two calendar years, whichever is greater. In addition, the executive is generally entitled to receive life, health, dental and disability coverage for the remaining term of the agreement. Payments under the change in control agreements are reduced to the extent necessary to prevent an excess parachute payment under Section 280G of the Internal Revenue Code.

Other Matters

Executive Stock Ownership Requirements

The Compensation Committee and the board of directors adopted the following minimum equity ownership requirements for top executives to further align their interests with stockholders:

Each of the named executives currently meets or exceeds these requirements. New executives will be given five years from their date of hire or promotion to achieve the minimum equity ownership levels, and vested and unvested restricted stock awards and shares held in the ESOP and 401(k) PlansPlan count toward the requirements.

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Tax Deductibility of Executive Compensation

Under Section 162(m) of the Internal Revenue Code, companies are subject to limits on the deductibility of executive compensation. Deductible compensation is limited to $1 million per year for each executive officer listed in the summary compensation table. Compensation that is “performance-based” under the Internal Revenue Code’s definition is exempt from this limit. Stock option grants are intended to qualify as performance-based compensation.

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The Compensation Committee does not have a formal policy with respect to the payment of compensation in excess of the deduction limit. The Compensation Committee’s practice is to structure compensation programs offered to the named executive officers with a view to maximizing the tax deductibility of amounts paid. However, in structuring compensation programs and making compensation decisions, the Committee considers a variety of factors, including the Company’sProvident’s tax position, the materiality of the payment and tax deductions involved and the need for flexibility to address unforeseen circumstances. After considering these factors, the Committee may decide to authorize payments, all or part of which would be nondeductible for federal tax purposes.

In 2006,2007 compensation paid to Mr. Pantozzi exceeded the deduction limit, primarily due to the vesting of restricted stock awards granted to him in 2003 in connection with the mutual to stock conversion of The Provident Bank. The Compensation Committee does not believe the provisions of Section 162(m) will materially affect the results of operations of Provident.

Compensation Committee Report

Pursuant to rules and regulations of the Securities and Exchange Commission, this Compensation Committee Report shall not be deemed incorporated by reference to any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that Provident specifically incorporates this information by reference, and otherwise shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission subject to Regulation 14A or 14C of the Securities and Exchange Commission or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended.

The Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

The Compensation Committee of Provident Financial Services, Inc.

Jeffries Shein, Chair

Thomas W. Berry

Frank L. Fekete

Edward O’Donnell

Thomas E. Sheenan

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Executive Compensation

The following table sets forth for the yearyears ended December 31, 2007 and 2006 certain information as to the total remuneration paid to Mr. Pantozzi, who serves as Chief Executive Officer, Ms. Niro, who serves as Chief Financial Officer, and the other most highly compensated executive officers of Provident Financial Services, Inc. or The Provident Bank, other than Mr. Pantozzi and Ms. Niro. The amounts reported under the stock awards and option awards columns include grants of stock awards and stock options made in 2003 in connection with the mutual to stock conversion of The Provident Bank.

SUMMARY COMPENSATION TABLE

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ALL OTHER COMPENSATION

PERQUISITES

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Plan-Based Awards.The following table sets forth certain information as to grants during 20062007 of plan-based awards to the named executive officers. The awards shown below that were granted on March 23, 2006 were pursuant toFebruary 22, 2007 represent awards that could be made based on performance under the 20062007 Incentive Plan. Additional grantsAwards shown below in the columns “All Other Stock Awards” and “All Other Option Awards” were made in 2007 as long-term incentive awards.awards to reward superior individual performance in 2006 and to maintain competitive compensation levels.

GRANTS OF PLAN-BASED AWARDS TABLE FOR THE YEAR ENDED DECEMBER 31, 20062007

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Outstanding Equity Awards at Year End.End.The following table sets forth information with respect to outstanding equity awards as of December 31, 20062007 for the named executive officers.

OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 20062007

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Option Exercises And Stock Vested

None of the Company’s named executive officers exercised any stock options during the fiscal year ended December 31, 2006, except Mr. French, whose employment terminated September 30, 2006.2007.