OAK RIDGE, N.J. and CRANBURY, N.J., July 12, 2021 (GLOBE NEWSWIRE) — The Boards of Directors of Lakeland Bancorp, Inc. (NASDAQ: LBAI), the parent company of Lakeland Bank, and 1st Constitution Bancorp (NASDAQ: FCCY), the parent company of 1st Constitution Bank, announced today that they have entered into a definitive Agreement and Plan of Merger, 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.
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!”
