January 29, 2013
Lakeland Bancorp to
Acquire Somerset Hills Bancorp
The Boards of
Directors of Lakeland Bancorp, Inc.
("Lakeland Bancorp"), the parent
company of Lakeland Bank, and
Somerset Hills Bancorp ("Somerset
Hills Bancorp"), the parent company
of Somerset Hills Bank, announce that the companies have
entered into a definitive Agreement
and Plan of Merger (the "Merger
Agreement"), pursuant to which
Somerset Hills Bancorp will be
merged with and into Lakeland
Bancorp, with Lakeland Bancorp as
the surviving bank holding company.
The Merger Agreement provides that
the shareholders of Somerset Hills
Bancorp will receive, at their
election, for each outstanding share
of Somerset Hills Bancorp common
stock that they own at the effective
time of the merger, either 1.1962
shares of Lakeland Bancorp common
stock or $12.00 in cash, subject to
proration as described in the Merger
Agreement, so that 90 percent of the
aggregate merger consideration will
be shares of Lakeland Bancorp common
stock and 10 percent will be cash.
Lakeland Bancorp
expects to issue an aggregate of
5,780,883 shares of its common stock
in the merger, and will also assume
outstanding Somerset Hills Bancorp
stock options (which will be
converted into options to purchase
Lakeland Bancorp common stock). The
transaction is valued at
approximately $64.4 million in the
aggregate (excluding the assumption
of stock options), or $12.00 per
share, which represents a 31 percent
premium over the closing sale price
per share of Somerset Hills Bancorp
common stock on January 28, 2013.
The transaction is expected to be
accretive to Lakeland Bancorp's
earnings per share in 2014 and
slightly dilutive to tangible book
value with an estimated earn back
prior to December 31, 2014. In
addition, the transaction is
expected to be immediately accretive
to the TCE Ratio (tangible common
equity as a percentage of tangible
assets) by approximately 25 basis
points.
The Merger
Agreement provides that immediately
after the merger of Somerset Hills
Bancorp into Lakeland Bancorp,
Somerset Hills Bank will merge with
and into Lakeland Bank, with
Lakeland Bank as the surviving bank.
Upon the closing
of the mergers, Messrs. Edward B.
Deutsch and Thomas J. Marino
(currently the Chairman of the Board
and a director of Somerset Hills
Bancorp, respectively) will be
appointed to the Boards of Directors
of Lakeland Bancorp and Lakeland
Bank.
In addition, upon
the closing of the mergers, Stewart
E. McClure, Jr., currently Vice
Chairman and member of the Board of
Directors of Somerset Hills Bancorp,
and the President, Chief Executive
Officer and Chief Operating Officer
of Somerset Hills Bancorp and
Somerset Hills Bank, will serve as
Co-President of Lakeland Bank, the
surviving bank.
Robert Vandenbergh,
Senior Executive Vice President and
Chief Operating Officer of Lakeland
Bancorp and Lakeland Bank, has been
appointed President of Lakeland Bank
in connection with the announcement
of the Merger Agreement, and will
serve as Co-President of Lakeland
Bank effective upon the mergers,
while retaining his current
positions at Lakeland Bancorp.
Thomas J. Shara, President and Chief
Executive Officer of Lakeland
Bancorp and Lakeland Bank, will
continue to serve as Chief Executive
Officer of Lakeland Bank and as
President and Chief Executive
Officer of Lakeland Bancorp.
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