Attached files
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8-K - FORM 8-K - LAKELAND BANCORP INC | d31490d8k.htm |
EX-2.1 - EX-2.1 - LAKELAND BANCORP INC | d31490dex21.htm |
EX-99.2 - EX-99.2 - LAKELAND BANCORP INC | d31490dex992.htm |
Exhibit 99.1
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Acquisition of Pascack Bancorp (OTCQX: PSBR) August 4, 2015
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Safe Harbor Statement Safe Harbor Statement This communication 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. Statements regarding (i) the anticipated effect of the transaction on earnings per share and book value per share, (ii) other pro forma effects of the transaction, including statements regarding potential cost savings, (iii) the growth opportunities applicable to the combined institution, (iv) the timing of the closing and execution risks associated with the transaction and (v) consensus 2016 EPS estimates are also 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 Pascack Bancorp shareholder or regulatory approval for the merger of Pascack Bancorp into Lakeland Bancorp, and the merger of Pascack Community Bank into Lakeland Bank; failure to realize anticipated efficiencies and synergies if the mergers are consummated; material adverse changes in Lakeland Bancorps or Pascack Bancorps operations or earnings; decline in the economy in Lakeland Bancorps and Pascack Bancorps primary market areas; as well as the risk factors set forth in the periodic reports filed by Lakeland Bancorp with the Commission. Neither Lakeland Bancorp nor Pascack Bancorp assumes any obligation for updating any such forward-looking statements at any time.
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Overview of Pascack Bancorp Branch Footprint Waldwick Hillsdale Westwood Rochelle Park Hackensack Lodi Nutley Existing LBAI in area PSBR (8) Overview Headquarters: Waldwick, NJ Established: 2002 Assets: $403 mm Loans: $334 mm Deposits: $305 mm Tangible Common Equity (1): $33 mm Net Interest Margin: 3.71% Efficiency Ratio: 73.8% 2014 Net Income: $2.4 mm NPAs / Loans + OREO 0.94% Source: SNL Financial (1) Assumes conversion of $1.7 million of convertible preferred equity
Transaction Rationale Improves Lakelands position in economically attractive Bergen and Essex Counties in northern New Jersey Pascack is a solid community bank franchise that Lakeland can leverage for future growth Lending and noninterest income opportunities Immediately accretive to Lakeland shareholders financially Low execution risk, achievable cost savings, familiar markets Consistent with recent growth initiatives at Lakeland Somerset Hills Bancorp acquisition in 2013 Two new Commercial Loan Production Offices (LPO) covering Middlesex/Monmouth counties in NJ and the Hudson Valley region of New York state
Transaction Overview Per Share Consideration: Transaction Value (1): Consideration Mix: Exchange: Board Representation: Required Approvals: Due Diligence: Expected Closing: Deal Value / TBVPS: Deal Value / Adjusted TBVPS (3): Deal Value / LTM EPS: Core Deposit Premium: One-Time Expenses: Anticipated Cost Savings: Pro Forma TCE / TA: EPS Impact (4): Tangible Book Value Per Share Impact (4): $11.35 per share $43.8 million 90% stock / 10% cash Exchange ratio fixed at 0.9576 :1 Commitment to one Board member with option for two (2) Customary regulatory approvals and approval of PSBR shareholders Comprehensive due diligence completed Q4 2015 1.31x 1.65x 19.9x 4.3% $7.7 million estimated, pre-tax; $5.1 million, after-tax $3.8 million estimated, pre-tax or 35% of non-interest expense ~7.5% ~4.5% accretive to 2016E EPS ~2.7% dilutive (estimated earnback of approximately 3.5 years) (1) Transaction value includes cash out of options totaling $0.1m (2) At the discretion of LBAI Board (3) Adjusted tangible book value reflects mark to market on real estate of -$6.8 million after-tax (4) Based upon current estimates
Pascack Loan and Deposit Composition PSBR Loan Composition Residential R.E. Construction 7% 0% Consumer & Other 4% Commercial Commercial R.E. & Industrial 81% 8% Loan Portfolio ($000) Amount % of Total Construction $1,099 0% Residential R.E. 22,181 7% Commercial R.E. 270,684 81% Commercial & Industrial 26,486 8% Consumer & Other 13,513 4% Gross Loans & Leases $333,963 100% PSBR Deposit Composition Jumbo Time Deposits 7% Demand Retail Time Deposits Deposits 21% 19% NOW & Other Trans. MMDA & Accts Other 11% Savings 42% Deposit Portfolio ($000) Amount % of Total Demand Deposits $65,534 21% NOW & Other Trans. Accts 32,798 11% MMDA & Other Savings 127,992 42% Retail Time Deposits 56,526 19% Jumbo Time Deposits 21,965 7% Total Deposits $304,815 100% Source: SNL Financial Note: Financials per bank level regulatory filings as of 6/30/2015
Deposit Market Share Positioning Lakeland is the 4th largest public independent NJ based community bank Pro Forma DMS Bergen County, NJ Number Deposits in Market of Market Share Rank Institution (ST) Branches ($mm) (%) 1 Bank of America Corp. (NC) 43 6,642 15.4 2 Toronto-Dominion Bank 46 6,197 14.4 3 M&T Bank Corp. (NY) 27 4,969 11.5 4 JPMorgan Chase & Co. (NY) 53 4,265 9.9 5 Wells Fargo & Co. (CA) 32 2,570 6.0 6 Valley National Bancorp (NJ) 37 2,253 5.2 7 PNC Financial Services Group (PA) 33 1,964 4.6 8 Oritani Financial Corp. (NJ) 18 1,375 3.2 9 Columbia Bank MHC (NJ) 14 1,358 3.2 10 ConnectOne Bancorp, Inc. (NJ) 8 1,102 2.6 11 Capital One Financial Corp. (VA) 14 922 2.1 12 Citigroup Inc. (NY) 7 915 2.1 13 Boiling Springs MHC (NJ) 11 903 2.1 14 Spencer Savings Bank SLA (NJ) 11 895 2.1 15 Kearny Financial Corp. (NJ) 9 767 1.8 16 Pro Forma 14 608 1.4 20 Lakeland Bancorp (NJ) 7 354 0.8 23 Pascack Bancorp Inc. (NJ) 7 254 0.6 Totals (1-15) 363 37,095 86.0 Totals (1-50) 474 43,155 100.0 Deposit Market Share New Jersey Number Deposits in Market of Market Share Rank Institution (ST) Branches ($mm) (%) 1 Bank of America Corp. (NC) 285 44,819 15.8 2 Wells Fargo & Co. (CA) 304 34,727 12.2 3 Toronto-Dominion Bank 273 33,784 11.9 4 PNC Financial Services Group (PA) 324 24,363 8.6 5 M&T Bank Corp. (NY) 101 16,625 5.8 6 JPMorgan Chase & Co. (NY) 223 15,825 5.6 7 Investors Bancorp Inc (NJ) 111 10,903 3.8 8 Valley National Bancorp (NJ) 164 8,764 3.1 9 Banco Santander 138 8,524 3.0 10 New York Community Bancorp (NY) 47 7,996 2.8 11 Capital One Financial Corp. (VA) 56 5,756 2.0 12 Provident Financial Services (NJ) 85 5,517 1.9 13 Citigroup Inc. (NY) 11 3,960 1.4 14 Columbia Bank MHC (NJ) 44 3,357 1.2 Pro Forma 56 3,049 1.1 15 Fulton Financial Corp. (PA) 68 2,784 1.0 16 Lakeland Bancorp (NJ) 48 2,736 1.0 67 Pascack Bancorp Inc. (NJ) 8 313 0.1 Totals (1-15) 2,234 227,705 80.0 Totals (1-134) 3,127 284,648 100.0 Source: SNL Financial
Pro Forma Branch Network Legacy LBAI (43) Legacy SOMH (5) PSBR (8) LBAI LPO (2) Summary Pro Forma Information(1) Assets: $4.2 bn Loans: $3.2 bn Deposits: $3.2 bn Market Cap.: ~$465 mm Price / Tangible Book Value: 1.5x Price / 2016 EPS (2): 11x Branches: 56 Loan Production Offices: 2 Counties Served: 10 NJ Deposit Market Share Rank (3): 4 Source: SNL Financial (1) Includes purchase accounting adjustments (2) Per First Call consensus estimates (3) Includes public independent New Jersey community banks
Contiguous Market Transformation Deposit Distribution of Franchise2010 $ in millions, Warren Essex Branches $18 $91 Bergen 1 $274 7 13% Passaic $505 10 23% Depos $ in millions, Somerset Union Branches $107 $33 Warren 1 $18 Essex 1 1% 1 $117 3% 1% Sussex 3 4% $799 15 Bergen 26% 11% $608 122% growth 14 20% growth 16% 37% Passaic growth growth Morris $587 $780 9 12 19% 26% Source: SNL Financial; Deposit data prior to SOMH and PSBR as of 6/30/2010 Aggregate f Deposits Median Number of by Top 5 HHI Small titutions ($) Businesses 75.8% $87,442 3,002 57.4% 94,383 13,934 62.6% 61,310 10,373 57.1% 83,133 27,378 68.1% 97,056 8,051 58.6% 52,497 16,315 63.7% 69,222 11,765 71.6% 70,245 2,140
Transaction Summary Consistent with recent initiatives to expand in desirable markets and position Lakeland for future growth opportunities Pascack represents an attractive addition to Lakelands branches and provides opportunities to build upon its current presence Attractive financial returns Low execution risk Strengthens Lakelands strategic position in New Jersey as one of the states largest independent community banks