UPDATE: Lakeland Bancorp to Buy Somerset Hills Bancorp for 1.1962 Shares of Lakeland or $12/Share in Cash
The Boards of Directors of Lakeland Bancorp, Inc. (Nasdaq: LBAI) ("Lakeland Bancorp"), the parent company of Lakeland Bank, and Somerset Hills Bancorp (Nasdaq: SOMH) ("Somerset Hills Bancorp"), the parent company of Somerset Hills Bank, announced today 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% of the aggregate merger consideration will be shares of Lakeland Bancorp common stock and 10% 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% 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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