The Boards of Directors of Lakeland Bancorp, Inc. (“Lakeland”)
(NASDAQ: LBAI), the parent company of Lakeland Bank, and 1st
Constitution Bancorp (“1st Constitution”) (NASDAQ: FCCY), the
parent company of 1st Constitution Bank, announced today that they
have entered into a definitive Agreement and Plan of Merger (the
“Merger Agreement”), under which Lakeland will acquire 1st
Constitution.
The combined organization will have approximately
$9.6 billion in assets and will rank as the 5th largest
bank headquartered in New Jersey. The merger brings together two
high-performing companies with complementary geographies and
business lines.
Lakeland will acquire all of the outstanding shares of 1st
Constitution in exchange for common shares of Lakeland and will
cash out outstanding 1st Constitution options. The exchange ratio
will be fixed at 1.3577 Lakeland shares for each 1st Constitution
share, resulting in an aggregate transaction value of approximately
$244.4 million, or $23.53 per share, which represents a 14%
premium over the closing sale price per share of 1st Constitution
common stock on July 9, 2021.
Thomas J. Shara, President and Chief Executive Officer of
Lakeland and Lakeland Bank, remarked: “We are delighted to be
combining with 1st Constitution and expanding Lakeland’s presence
into central New Jersey. This business combination provides
attractive financial attributes to shareholders of both Lakeland
and 1st Constitution. This merger is consistent with our recent
initiatives to expand into desirable markets. We look forward to
working with 1st Constitution in delivering a broad array of
business and consumer products into our expanded marketplace.”
Robert F. Mangano, President and Chief Executive Officer of 1st
Constitution, stated: “We are excited to be partnering with such a
respected and well-managed institution. This merger will bring
together two outstanding organizations with similar cultures as
well as strong relationships in New Jersey.” In connection with the
merger, it is anticipated that Mr. Mangano will be appointed to the
Boards of Directors of Lakeland and Lakeland Bank.
The Merger Agreement has been unanimously approved by the Boards
of Directors of both companies. The merger is expected to close in
the fourth quarter of 2021 or early first quarter 2022, subject to
satisfaction of customary closing conditions, including receipt of
required regulatory approvals and approval by the shareholders of
Lakeland and 1st Constitution. In the transaction, 1st Constitution
will merge into Lakeland, and 1st Constitution Bank will merge into
Lakeland Bank, with Lakeland and Lakeland Bank being the surviving
entities.
Key Transaction Highlights:
- Continues Lakeland’s
opportunistic acquisition growth and positions the Company to
efficiently cross the $10 billion asset threshold in the
future
- Provides Lakeland
with entry into attractive new markets in Mercer, Middlesex and
Monmouth counties and enhances our presence in Ocean and Bergen
counties in New Jersey
- 1st Constitution
residential mortgage business enhances non-interest income
- Strong cultural fit
that combines two organizations with like-minded commitments to
customers, communities and stockholders
Key Financial Highlights:
- Strong earnings
accretion: Approximately 10% accretive to Lakeland’s earnings per
share
- Achievable cost
savings assumption of 44% or approximately $18 million in 2022
- Reasonable tangible
book value dilution: Approximately 3.9% dilutive to tangible book
value per share at closing
- Tangible book value
earnback period projected to be approximately 3.3 years using the
crossover method
- Compelling economics
with anticipated internal rate of return over 20%
- Pro forma combined
company with total assets of $9.6 billion, total loans of $7.4
billion, and deposits of $8.2 billion
1st Constitution’s directors and executive officers, who
beneficially own in the aggregate approximately 13.2% of 1st
Constitution’s outstanding shares, have signed voting agreements
pursuant to which they have agreed to vote their shares in favor of
the holding company merger.
Keefe, Bruyette & Woods, A Stifel Company, served
as financial advisor and Luse Gorman, PC served as legal counsel to
Lakeland.
Raymond James served as financial advisor and Day Pitney LLP
served as legal counsel to 1st Constitution.
Conference Call, Webcast and Investor Presentation
Lakeland and 1st Constitution will host a conference call and
audio webcast at 10:00 a.m. ET on July 12, 2021 to review the
proposed transaction. Lakeland President and Chief Executive
Officer Thomas Shara and Chief Financial Officer Thomas Splaine
will host the call with 1st Constitution President and Chief
Executive Officer Robert Mangano. The conference
call dial-in number is (866) 982-4138 and the
international dial-in number is (873) 415-0277. Participants should
ask to be joined into Conference ID 1564578 for the Lakeland
Bancorp, Inc. (LBAI) call. Please dial in at least five minutes
before the start of the call to register.
An investor presentation discussing the proposed transaction
will be available for download on the “Investor Relations” link on
Lakeland’s website https://www.lakelandbank.com
About Lakeland Bancorp, Inc.
Lakeland Bancorp, Inc, has an extensive branch network and
commercial lending centers throughout New Jersey and in Highland
Mills, New York, and offers business and retail banking products
and services. Business services include commercial loans and lines
of credit, commercial real estate loans, loans for healthcare
services, asset-based lending, equipment financing, small business
loans and lines and cash management services. Consumer services
include online and mobile banking, home equity loans and lines,
mortgage options and wealth management solutions. Lakeland is proud
to be recognized as one of New Jersey's Best-In State Banks by
Forbes and Statista, rated a 5-Star Bank by Bauer Financial and
named one of New Jersey's 50 Fastest Growing Companies by NJBIZ. As
of March 31st, 2021, Lakeland Bancorp had consolidated total
assets, total loans, total deposits and total stockholders’ equity
of $7.8 billion, $6.1 billion, $6.6 billion and $768.1 million,
respectively.
About 1st Constitution Bancorp
1st Constitution Bancorp is a bank holding company headquartered
and maintaining its main office in Cranbury, New Jersey with
additional offices in Asbury Park, Fair Haven, Fort Lee, Freehold,
Hamilton, Hightstown, Hillsborough, Hopewell, Jackson, Jamesburg,
Lawrenceville, Little Silver, Long Branch, Manahawkin, Neptune
City, Perth Amboy, Plainsboro, Princeton, Rocky Hill, Rumson,
Shrewsbury and Toms River, New Jersey. Founded in 1989, 1st
Constitution provides deposit and loan banking services to
corporations, individuals, partnerships and other community
organizations throughout the central, coastal, and northeastern
areas of New Jersey. As of March 31, 2021, 1st Constitution had
consolidated total assets, total loans, total deposits and total
stockholders’ equity of $1.8 billion, $1.3 billion, $1.6 billion
and $191.3 million, respectively. 1st Constitution is proud to be
recognized by Newsweek Magazine as the “Best Small Bank in New
Jersey!”
Additional Information and Where to Find It
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. In connection with the proposed Merger,
Lakeland Bancorp intends to file with the Commission a registration
statement that will include a joint proxy statement of Lakeland
Bancorp and 1st Constitution Bancorp that also constitutes a
prospectus of Lakeland Bancorp. INVESTORS AND SECURITY HOLDERS ARE
ADVISED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT
BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION.
Investors and security holders may obtain a free copy of the
registration statement (when available) and other documents filed
by Lakeland Bancorp and 1st Constitution Bancorp with the
Commission at the Commission’s web site at www.sec.gov. These
documents may be accessed and downloaded for free at Lakeland
Bancorp’s website at www.lakelandbank.com or by directing a request
to Investor Relations, Lakeland Bancorp, Inc., 250 Oak Ridge Road,
Oak Ridge, New Jersey 07438 (973-697-2000). 1st Constitution
Bancorp’s documents may be accessed and downloaded for free at 1st
Constitution Bancorp’s website at www.1stconstitution.com or by
directing a request to Investor Relations, 1st Constitution
Bancorp, 2650 Route 130 P.O. Box 634 Cranbury New Jersey 08512
(609-655-4500).
Participants in the Solicitation
Lakeland Bancorp, 1st Constitution Bancorp and their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies from 1st Constitution Bancorp’s and
Lakeland Bancorp’s shareholders in respect of the proposed
transaction. Information regarding the directors and executive
officers of Lakeland Bancorp may be found in its definitive proxy
statement relating to its 2021 Annual Meeting of Shareholders,
which was filed with the Commission on April 9, 2021 and can be
obtained free of charge from Lakeland Bancorp’s website.
Information regarding the directors and executive officers of 1st
Constitution Bancorp may be found in its definitive proxy statement
relating to its 2021 Annual Meeting of Shareholders, which was
filed with the Commission on April 22, 2021 and can be obtained
free of charge from 1st Constitution Bancorp’s website. Other
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interest, by
security holdings or otherwise, will be contained in the joint
proxy statement/prospectus and other relevant materials to be filed
with the Commission when they become available.
Cautionary Statements Regarding Forward-Looking
Information
This press release contains forward-looking statements with
respect to the proposed mergers and the timing of consummation of
the mergers that are made in reliance upon the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
The words “anticipates”, “projects”, “intends”, “estimates”,
“expects”, “believes”, “plans”, “may”, “will”, “should”, “could”
and other similar expressions are intended to identify such forward
looking statements. These forward-looking statements are
necessarily speculative and speak only as of the date made, and are
subject to numerous assumptions, risks and uncertainties, all of
which may change over time. Actual results could differ materially
from such forward-looking statements. The following factors, among
others, could cause actual results to differ materially and
adversely from such forward-looking statements: failure to obtain
necessary regulatory approvals (and the risk that such approvals
may result in the imposition of conditions that could adversely
affect the combined company); failure to obtain shareholder
approvals or to satisfy any of the other conditions to the
transaction on a timely basis or at all or other delays in
completing the transaction; the magnitude and duration of
the COVID-19 pandemic and its impact on the global
economy and financial market conditions and the business, results
of operations, and financial condition of Lakeland Bancorp or 1st
Constitution Bancorp; the occurrence of any event, change or other
circumstances that could give rise to the right of one or both of
the parties to terminate the Merger Agreement; the outcome of any
legal proceedings that may be instituted against Lakeland Bancorp
or 1st Constitution Bancorp; failure to realize anticipated
efficiencies and synergies if the Mergers are consummated; material
adverse changes in Lakeland Bancorp’s or 1st Constitution Bancorp’s
operations or earnings; decline in the economy in Lakeland
Bancorp’s and 1st Constitution Bancorp’s primary market areas;
potential adverse reactions or changes to business or employee
relationships, including those resulting from the announcement or
completion of the transaction; the dilution caused by Lakeland
Bancorp’s issuance of additional shares of its capital stock in
connection with the transaction; and other factors that may affect
the future results of Lakeland Bancorp or 1st Constitution Bancorp.
Additional factors that could cause results to differ materially
from those described above can be found in Lakeland Bancorp’s
Annual Report on Form 10-K for the year ended
December 31, 2020 and in its subsequent Quarterly Reports on
Form 10-Q, including in the respective Risk Factors
sections of such reports, as well as in subsequent Commission
filings, each of which is on file with the Commission and available
in the “Investors Relations” section of Lakeland Bancorp’s website,
www.lakelandbank.com, under the heading “Documents” and in other
documents Lakeland Bancorp files with the Commission, and in 1st
Constitution Bancorp’s Annual Report on Form 10-K for the
year ended December 31, 2020 and in its subsequent Quarterly
Reports on Form 10-Q, including in the respective Risk
Factors sections of such reports, as well as in subsequent
Commission filings, each of which is on file with and available in
the “Investor Relations” section of 1st Constitution Bancorp’s
website, www.1stconstitution.com, under the heading “SEC Filings”
and in other documents 1st Constitution Bancorp files with the
Commission.
Neither Lakeland Bancorp nor 1st Constitution Bancorp assumes
any obligation for updating any such forward-looking statements at
any time.
Contact:
Lakeland Bancorp, Inc.:Thomas J. Shara
President and CEO
Thomas F. Splaine EVP & CFO973-697-2000
1st Constitution
Bancorp:Robert F. ManganoPresident and CEO609-655-4500
1st Constitution Bancorp (NASDAQ:FCCY)
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