<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999.
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________________
TO _________________.
Commission File Number 33-27312
----------
LAKELAND BANCORP, INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-2953275
------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
250 Oak Ridge Road, Oak Ridge, New Jersey 07438-8906
------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(973) 697-2000
-----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
-----
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of July 10, 1999, 8,500,788 common shares, $2.50 par value, were outstanding.
<PAGE>
LAKELAND BANCORP, INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
PART I. FINANCIAL INFORMATION 3
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF CONDITION AS OF
DECEMBER 31, 1998 AND JUNE 30, 1999 (UNAUDITED) 4
CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE
AND SIX MONTHS ENDED JUNE 30, 1998 AND 1999 (UNAUDITED) 5
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 1998 AND 1999 (UNAUDITED) 6
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE SIX MONTHS ENDED JUNE 30, 1998 AND 1999
(UNAUDITED) 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 13
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK 21
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 22
SIGNATURES 23
</TABLE>
<PAGE>
LAKELAND BANCORP, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
Certain information and footnote disclosures required under generally
accepted accounting principles have been condensed or omitted from the following
consolidated financial statements pursuant to the rules and regulations of the
Securities and Exchange Commission. Lakeland Bancorp, Inc. ( the registrant or
the Corporation) believes that the disclosures presented are adequate to assure
that the information presented is not misleading in any material respect. It is
suggested that the following consolidated financial statements be read in
conjunction with the year-end consolidated financial statements, and notes
thereto, included in the registrant's Annual Report on Form 10-K for the year
ended December 31, 1998.
The consolidated results of operations for the three and six months ended June
30, 1999, are not necessarily indicative of the results to be expected for the
entire fiscal year.
3
<PAGE>
LAKELAND BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
(Unaudited)
<TABLE>
<CAPTION>
December 31, June 30,
ASSETS 1998 1999
------------ ------------
<S> <C> <C>
Cash and due from banks $ 24,193,899 $ 26,072,903
Federal funds sold 10,875,000 10,825,000
------------ ------------
Cash and cash equivalents 35,068,899 36,897,903
Certificates of deposit 204,033 214,033
Securities available for
sale, at estimated fair
value 116,847,825 102,022,259
Securities held to
maturity; estimated fair
value of $68,271,000
in 1998 and $92,328,318
in 1999 67,302,146 93,241,990
Loans 307,596,324 322,784,188
Premises and equipment 14,260,225 14,081,176
Accrued interest receivable 4,414,733 4,453,068
Other assets 2,863,222 2,087,518
------------ ------------
Total assets $548,557,407 $575,782,135
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Non-interest-bearing
demand $107,097,017 $114,904,027
Savings and
interest-bearing demand 225,894,802 248,686,643
Club accounts 1,661,786 2,647,006
Time 125,144,292 121,931,479
Time of $100,000 and
over 29,082,870 24,978,235
------------ ------------
Total deposits 488,880,767 513,147,390
------------ ------------
Borrowed money 3,795,114 7,334,262
Other liabilities 2,567,989 1,620,443
------------ ------------
Total liabilities 495,243,870 522,102,095
------------ ------------
Commitments
Stockholders' equity
Common stock, no stated par value per
share; authorized shares ;
issued shares 8,511,588 in 1998
with par value of $2.50 and
8,511,588 in 1999; outstanding shares
8,502,988 in 1998 with a par value of
$2.50 and 8,500,788 in 1999 21,278,970 40,216,920
Surplus 29,557,747 --
(Accumulated deficit)undivided profits (491,609) 11,959,629
Accumulated other comprehensive
income, net 3,097,429 1,672,641
Treasury stock, at cost (8,600 and
10,800 shares in 1998 and 1999,
respectively) (129,000) (169,150)
------------ ------------
Total stockholders' equity 53,313,537 53,680,040
------------ ------------
Total liabilities and stockholders'
equity $548,557,407 $575,782,135
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
LAKELAND BANCORP, INC, AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------
1998 1999 1998 1999
------------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans and fees $6,186,828 $6,471,483 $12,401,125 $12,732,964
Federal funds sold 231,322 149,616 419,031 336,921
Securities
U.S. Treasury 1,017,925 906,836 2,011,283 1,831,491
U.S. Government agencies 682,813 898,822 1,450,413 1,694,442
States and political subdivisions 396,278 479,050 760,473 942,419
Other 83,216 305,340 163,841 601,213
---------- ---------- ----------- -----------
Total interest income 8,598,382 9,211,147 17,206,166 18,139,450
---------- ---------- ----------- -----------
INTEREST EXPENSE
Deposits 3,100,661 3,300,334 6,290,890 6,643,839
Borrowed money 42,418 72,948 79,385 117,710
---------- ---------- ----------- -----------
Total interest expense 3,143,079 3,373,282 6,370,275 6,761,549
---------- ---------- ----------- -----------
Net interest income 5,455,303 5,837,865 10,835,891 11,377,901
---------- ---------- ----------- -----------
PROVISION FOR LOAN LOSSES 52,928 160,000 101,810 265,000
---------- ---------- ----------- -----------
Net interest income after provision
for loan losses 5,402,375 5,677,865 10,734,081 11,112,901
---------- ---------- ----------- -----------
OTHER INCOME
Service charges on deposit accounts 596,035 690,409 1,183,899 1,290,471
Gain on sale of investment securities 12,960 5,585 66,502 19,176
Other income 108,083 157,564 241,560 275,985
---------- ---------- ----------- -----------
Total other income 717,078 853,558 1,491,961 1,585,632
---------- ---------- ----------- -----------
OTHER EXPENSES
Salaries and benefits 2,096,799 2,272,802 4,203,949 4,526,637
Occupancy expense, net 384,676 399,490 776,805 812,273
Furniture and equipment 375,243 414,064 753,820 839,919
Other 972,936 1,040,510 2,151,513 2,078,524
---------- ---------- ----------- -----------
Total other expenses 3,829,654 4,126,866 7,886,087 8,257,353
---------- ---------- ----------- -----------
INCOME BEFORE INCOME TAXES 2,289,799 2,404,557 4,339,955 4,441,180
INCOME TAXES 772,638 722,772 1,457,349 1,334,456
---------- ---------- ----------- -----------
NET INCOME $1,517,161 $1,681,785 $ 2,882,606 $ 3,106,724
========== ========== =========== ===========
Net income per common share
Basic and diluted 0.18 0.20 0.34 0.37
Weighted average number of shares outstanding
Basic and diluted 8,495,838 8,500,788 8,491,988 8,501,165
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
LAKELAND BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
----------------------------- --------------------------
1998 1999 1998 1999
------------- ------------- ------------- ----------
<S> <C> <C> <C> <C>
Net income $1,517,161 $ 1,681,785 $2,882,606 $ 3,106,724
Other comprehensive income (loss), net of
income taxes
Unrecognized holding gains (losses) on
securities available for sale, net of
income taxes (65,828) (1,267,580) 162,923 (1,424,788)
Less gains on dispositions of securities
available for sale, net of income taxes (8,553) (3,686) (43,891) (12,656)
------------- ------------ ------------ -----------
Total other comprehensive
income (loss), net of income
taxes (74,381) (1,271,266) 119,032 (1,437,444)
------------- ------------ ------------ -----------
Comprehensive income $1,442,780 $ 410,519 $3,001,638 $ 1,669,280
============= ============ ============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
LAKELAND BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
----------------------------
1998 1999
------------- -------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 2,882,606 $ 3,106,724
Adjustments to reconcile net income to net cash provided by operating activities
Net amortization and accretion 392,308 85,150
Depreciation and amortization of premises and equipment 530,865 625,997
Provision for loan losses 101,810 265,000
Gain on sales of investment securities (66,502) (19,176)
Decrease (increase) in accrued interest receivable 91,508 (38,335)
Decrease in other assets 38,639 775,704
Increase in other liabilities (250,645) (187,529)
------------ ------------
Net cash provided by operating activities 3,720,139 4,613,535
Cash flows from investing activities
Net change in certificates of deposit (2,364) (10,000)
Proceeds from maturities of and repayments on securities available for sale 21,454,566 10,748,696
Proceeds from sales of securities available for sale 10,636,000 4,840,471
Proceeds from calls of securities available for sale 2,000,000 500,000
Purchases of securities available for sale (32,085,716) (28,875,099)
Proceeds from maturities of and repayments on securities held to maturity 10,125,000 8,514,766
Purchases of securities held to maturity (9,826,234) (9,093,891)
Net increase in loans receivable (2,716,940) (15,452,864)
Net decrease in other real estate owned 59,669 -
Additions to premises and equipment (922,845) (446,948)
------------ ------------
Net cash used in investing activities (1,278,864) (29,274,869)
Cash flows from financing activities
Net (decrease) increase in deposits (984,374) 24,266,623
Net (decrease) increase in short-term borrowings 2,060,219 2,539,148
Proceeds from long-term debt - 1,000,000
Proceeds from sale of common stock 229,653 -
Cash dividends paid on common stock (1,172,687) (1,275,283)
Purchase of treasury stock - (40,150)
------------ ------------
Net cash provided by financing activities 132,811 26,490,338
Net increase in cash and cash equivalents 2,574,086 1,829,004
Cash and cash equivalents - beginning 41,168,103 35,068,899
------------ ------------
Cash and cash equivalents - ending $ 43,742,189 $ 36,897,903
============ ============
Supplemental disclosures of cash flow information
Cash paid during the six months for
Income taxes $ 1,429,883 $ 766,000
Interest $ 6,276,818 $ 6,788,984
Supplemental schedule of noncash investing and financing activities
Transfer of investment securities from available for sale
to held to maturity $ - $ 25,396,014
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE>
LAKELAND BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles. Certain
information and footnote disclosures normally included in financial statements
under generally accepted accounting principles have been condensed or omitted
pursuant to the Securities and Exchange Commission rules and regulations.
These financial statements should be read in conjunction with the annual
financial statements, and notes thereto, included in Form 10-K for the fiscal
year ended December 31,1998. In the opinion of management, all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of the consolidated financial statements have been included. The
consolidated results of operations for the three and six months ended June 30,
1999, are not necessarily indicative of the results which may be expected for
the entire fiscal year.
NOTE 2 - ACQUISITION
On July 15, 1999, the Corporation completed its merger with High Point
Financial Corp. (High Point). Under the terms of the merger, each share of
High Point common stock was converted into 1.2 shares of the Corporation's
common stock, resulting in an issuance of 4,160,674 shares of the
Corporation's common stock. The Corporation owned 344,252 shares of High Point
common stock prior to the merger and at the consummation of the merger, these
shares were canceled and retired upon conversion to the Corporation's common
stock. In addition, outstanding stock options to purchase High Point common
stock were converted into stock options to purchase 99,600 shares of the
Corporation's common stock with an exercise price of $5.80 per share. The
transaction will be accounted for under the pooling of interests method of
accounting.
The results of operations for the Corporation, High Point and the combined
entity are as follows (in thousands). These combined results of operations for
the six months ended June 30, 1999 and 1998 and the year ended December 31,
1998, are not necessarily indicative of prior or future operating results of
the combined enterprises.:
<TABLE>
<CAPTION>
Corporation High Point Combined
----------- ---------- --------
<S> <C> <C> <C>
Net interest income
Six months ended June 30, 1999 $ 11,113 $ 5,115 $ 16,228
Six months ended June 30, 1998 10,734 5,030 15,764
Year ended December 31, 1998 21,926 10,427 32,353
Net income
Six months ended June 30, 1999 $ 3,107 $ 1,020 $ 4,127
Six months ended June 30, 1998 2,883 964 3,847
Year ended December 31, 1998 5,725 2,246 7,971
Earnings per share - diluted
Six months ended June 30, 1999 $ 0.37 $ 0.26 $ 0.31
Six months ended June 30, 1998 0.34 0.25 0.29
Year ended December 31, 1998 0.67 0.58 0.63
</TABLE>
8
<PAGE>
LAKELAND BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOTE 3 - NET INCOME PER COMMON SHARE
Basic net income per common share is calculated by dividing net income by the
weighted average number of shares of common stock outstanding. Diluted net
income per share is calculated by adjusting the weighted average number of
shares of common stock outstanding to include the effect of stock options, if
dilutive, using the treasury stock method.
On August 26, 1998, the Corporation's Board of Directors authorized a 2- for-1
stock split in the form of a 100% stock dividend, which was distributed on
October 1, 1998. Per share amounts have been retroactively restated to give
effect to this stock dividend.
NOTE 4 - STOCKHOLDERS' EQUITY
On July 15, 1999, the Company amended its Articles of Incorporation whereby the
number of authorized common shares was increased from 14,806,718 shares with a
par value of $2.50 to 40,000,000 shares with no stated par value. The surplus
account has been combined with the common stock account as presented in the
consolidated balance sheet.
The $491,609 deficit in undivided profits contained in the December 31, 1998
consolidated financial statements is the result of a bookkeeping entry charging
undivided profits $10,617,797 in connection with Corporation's accounting for
its 2-for-1 stock split effected in the form of a 100% stock dividend
distributed on October 1, 1998. In accordance with New Jersey corporate law,
the Corporation's Board of Directors, on March 10, 1999, approved the reversing
of this accounting treatment of the stock dividend, thereby moving the
$10,617,797 from the capital stock account to the undivided profits account to
more accurately reflect the Corporation's consolidated financial condition.
This reclassification was made in the Corporation's unaudited consolidated
statement of financial condition as of June 30, 1999.
NOTE 5 - SECURITIES AVAILABLE FOR SALE
<TABLE>
<CAPTION>
June 30, 1999
------------------------------------------
Amortized Gross unrealized Fair market
------------------
cost Gains Losses value
--------- ------- --------- -----------
(in thousands)
<S> <C> <C> <C> <C>
U.S. Treasury $23,439 $ 143 $ (99) $ 23,483
U.S. Government agencies 30,905 7 (817) 30,095
Mortgage-backed securities 2,519 28 (29) 2,518
States and political subdivisions 31,329 42 (678) 30,693
Other debt securities 9,520 - (317) 9,203
Equity securities 1,512 4,518 - 6,030
------- ------ ------- --------
$99,224 $4,738 $(1,940) $102,022
======= ====== ======= ========
</TABLE>
(Continued)
9
<PAGE>
LAKELAND BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOTE 5 - SECURITIES AVAILABLE FOR SALE - Continued
<TABLE>
<CAPTION>
December 31, 1998
------------------------------------------------
Amortized Gross unrealized Fair market
-----------------------
cost Gains Losses value
--------- ----------- ---------- ------------
(in thousands)
<S> <C> <C> <C> <C>
U.S. Treasury $ 28,552 $ 587 $ (19) $ 29,120
U.S. Government agencies 25,719 62 (110) 25,671
Mortgage-backed securities 3,279 32 (14) 3,297
States and political subdivisions 38,456 384 (60) 38,780
Other debt securities 14,163 25 (100) 14,088
Equity securities 1,503 4,389 - 5,892
--------- -------- -------- --------
$ 111,672 $ 5,479 $ (303) $116,848
========= ======== ======== ========
</TABLE>
The following is a summary of securities available for sale by maturity:
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
----------------------- ------------------------
Amortized Fair market Amortized Fair market
cost value cost value
--------- ----------- --------- ------------
(in thousands)
<S> <C> <C> <C> <C>
Due in one year or less $ 11,960 $ 11,916 $ 21,669 $ 21,755
Due after one year through five years 66,750 65,966 60,842 61,384
Due after five years through ten years 13,972 13,219 15,293 15,441
Due after ten years 2,511 2,373 9,086 9,079
Mortgage-backed securities 2,519 2,518 3,279 3,297
Equity securities 1,512 6,030 1,503 5,892
-------- -------- -------- --------
$ 99,224 $102,022 $111,672 $116,848
======== ======== ======== ========
</TABLE>
10
<PAGE>
LAKELAND BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOTE 6 - INVESTMENT SECURITIES HELD TO MATURITY
<TABLE>
<CAPTION>
June 30, 1999
-----------------------------------------------
Amortized Gross unrealized Fair market
-----------------------
cost Gains Losses value
--------- ----------- ---------- ----------
(in thousands)
<S> <C> <C> <C> <C>
U.S. Treasury $ 35,018 $ 184 $ (247) $ 34,955
U.S. Government agencies 30,421 48 (366) 30,103
Mortgage-backed securities 2,122 20 (62) 2,080
States and political subdivisions 14,447 41 (138) 14,350
Other debt securities 11,234 1 (395) 10,840
-------- -------- --------- ----------
$ 93,242 $ 294 $ (1,208) $ 92,328
======== ======== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1998
------------------------------------------------
Amortized Gross unrealized Fair market
--------------------
cost Gains Losses value
--------- --------- --------- ------------
(in thousands)
<S> <C> <C> <C> <C>
U.S. Treasury $32,576 $ 630 $ - $33,206
U.S. Government agencies 21,910 317 (27) 22,200
Mortgage-backed securities 2,165 23 (5) 2,183
States and political subdivisions 4,513 78 - 4,591
Other debt securities 6,138 6 (53) 6,091
------- ------- ------- -------
$67,302 $ 1,054 $ (85) $68,271
======= ======= ======= =======
</TABLE>
The following is a summary of securities held to maturity by maturity:
<TABLE>
<CAPTION>
1999 1998
---------------------- ------------------------
Amortized Fair market Amortized Fair market
cost value cost value
--------- ----------- --------- ------------
(in thousands)
<S> <C> <C> <C> <C>
Due in one year or less $ 8,954 $ 8,428 $14,916 $15,007
Due after one year through five years 78,856 78,577 48,257 49,095
Due after five years through ten years 3,110 3,042 1,664 1,677
Due after ten years 200 201 300 309
Mortgage-backed securities 2,122 2,080 2,165 2,183
------- ------- ------- -------
$93,242 $92,328 $67,302 $68,271
======= ======= ======= =======
</TABLE>
11
<PAGE>
LAKELAND BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOTE 7 - LOANS
<TABLE>
<CAPTION>
December 31, June 30,
1998 1999
-------------- -------------
(in thousands)
<S> <C> <C>
Loans $ 311,671 $ 326,880
Less
Unearned income (178) (57)
Allowance for loan losses (3,897) (4,039)
---------- ----------
$ 307,596 $ 322,784
========== ==========
</TABLE>
A summary of the activity in the allowance for loan losses is as follows:
<TABLE>
<CAPTION>
Six months ended June 30,
------------------------------
1998 1999
---------- ----------
<S> <C> <C>
Balance - beginning $4,142,340 $3,897,024
Provisions charged to operations 101,810 265,000
Loans charged off (776,629) (166,067)
Recoveries of loans previously charged off 242,097 42,770
---------- ----------
Balance - end $3,709,618 $4,038,727
========== ==========
</TABLE>
Impaired loans and related amounts recorded in the allowance for loan losses are
summarized as follows:
<TABLE>
<CAPTION>
December 31, June 30,
1998 1999
----------- ----------
(in thousands)
<S> <C> <C>
Recorded investment in impaired loans
With recorded allowances $ 1,133 $ 792
Without recorded allowances 1,119 1,028
---------- ----------
Total impaired loans 2,252 1,820
---------- ----------
Related allowance for loan losses 381 319
---------- ----------
Net impaired loans $ 1,871 $ 1,501
========== ==========
</TABLE>
<TABLE>
<CAPTION>
Six months ended June 30,
------------------------------
1998 1999
---------- ----------
<S> <C> <C>
Average recorded investment $3,198,272 $ 339,975
Interest income recognized 51,535 33,556
</TABLE>
12
<PAGE>
PART I -- ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations
OVERVIEW
--------
During the first quarter of 1998, Lakeland Bancorp, Inc. (the "Company")
consummated its acquisition of Metropolitan State Bank ("MSB"). The transaction
was accounted for as a pooling of interests. As a result, the Company's
financial statements have been retroactively adjusted to combine the Company's
accounts and MSB's accounts for all prior periods. See Notes to Consolidated
Financial Statements.
Three Month Summary
The second quarter of 1999 resulted in increased earnings for Lakeland
Bancorp, Inc. (the "Company"), when compared to the same period in 1998. Net
income increased $164,624 or 10.85%, to $1,681,785 for the second three months
of 1999 from $1,517,161 for the same period in 1998. Net income per share
increased 11.11% to $.20. An increase of $382,562 in net interest income, an
increase of $136,480 in other income, and a decrease of $49,866 in income tax
expense more than offset increases of $297,212 in other expenses and $107,072 in
the provision for loan losses.
The Company's annualized return on average assets and average stockholders'
equity for the second three months of 1999 were 1.21% and 12.43%, respectively,
compared to 1.19% and 12.02%, respectively, for the same period in 1998.
Results Of Operations
Total interest income increased $612,765, or 7.13% to $9,211,147 for the
three months ended June 30, 1999, when compared to $8,598,382 for the same
period in 1998. The overall increase in this category was a result of an
increase of $284,655 or 4.60% in interest earned on the loan portfolio and
$409,816 or 18.80%, in interest earned on the securities portfolio which was
partially offset by a decrease of $81,706 or 35.32% in interest earned on
federal funds sold.
The increase in interest income on loans was primarily attributable to an
increase in average balances of $22.8 million, which was partially offset by a
25 basis point decrease in yield. The increase in interest income on investment
securities was attributable to an increase in average balances of $37.2 million,
which more than offset a 23 basis point decrease in yield.
13
<PAGE>
The $37.2 million increase reflected a $54.2 million increase in the average
volume of taxable securities, which more than offset a $17.0 million decrease in
the average volume of non-taxable securities. The decrease in interest income on
federal funds sold was attributable to a $2.7 million decrease in average
balances along with a 133 basis point decrease in yield.
Interest expense on deposits increased $199,673 or 6.44% to $3,300,334 for
the second quarter of 1999 compared to $3,100,661 for the same period in 1998.
This increase was primarily attributable to an increase of $39.8 million in
average balances of interest bearing deposits (which partially funded the
increases in loans and investment securities), which was partially offset by a
16 basis point decrease in yield. Total interest expense increased $230,203 or
7.32%, reflecting the aforementioned deposit factors along with a $30,530
increase in interest expense on borrowed money.
Net interest income increased $382,562 or 7.01% to $5,837,865 for the
second three months of 1999 from $5,455,303 for the same period in 1998,
primarily as the result of increased balances of net earning assets. The
annualized net interest margin (the average yield on interest earning assets,
less the average cost of interest-bearing liabilities) decreased from 3.87% to
3.65%. While the average yield on earning assets decreased 35 basis points from
7.39% to 7.04%, the average rate paid on interest-bearing liabilities decreased
12 basis points from 3.52% to 3.40%.
The provision for loan losses increased $107,072 or 202.30% to $160,000 for
the three months ended June 30, 1999, as compared with $52,928 for the same
prior year period. During the second quarter of 1999, the Company charged off
loans of $77,000 and recovered $12,000 in previously charged off loans compared
to $330,000 and $13,000, respectively, during the same period in 1998. The
$77,000 in charged-off loans in 1999 is primarily the result of the charging off
of ten commercial and consumer loans. The allowance for loan losses at June 30,
1999, was 1.24% of total loans, compared to 1.26% at December 31, 1998, and
1.42% at June 30, 1998. The Company believes, based on management's ongoing
review of loan quality, economic conditions, loss experience, and loan growth,
that the allowance for loan losses is adequate. This statement represents a
forward-looking statement. Actual results could differ materially from this
statement based upon a number of conditions, including the financial viability
of the Company's loan customers, the value of the Company's collateral, and
general economic conditions.
14
<PAGE>
The following table sets forth for the six months ending June 30, 1999 and
1998, and for each of the years in the five years ended December 31, 1998, the
historical relationships among the allowance for loan losses, the provision for
loan losses, the amount of loans charged-off and the amount of loan recoveries:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-------------------
JUNE 30, YEAR ENDED DECEMBER 31,
------------------- ---------------------------------------
1999 1998 1998 1997 1996 1995 1994
-------- -------- -------- ------- -------- -------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance of allowance at beginning
of period........................... $3,897 $4,142 $4,142 $3,585 $3,470 $3,547 $3,455
------ ------ ------ ------ ------ ------ ------
Charge-offs:
Commercial.......................... 32 489 834 466 554 119 339
Installment......................... 80 69 426 107 215 114 135
Mortgage............................ 54 219 -- 26 80 394 138
------ ------ ------ ------ ------ ------ ------
Total charge-offs................ 166 777 1,260 599 849 627 612
------ ------ ------ ------ ------ ------ ------
Recoveries:
Commercial.......................... 26 215 256 20 25 128 69
Installment......................... 17 28 61 77 31 65 66
Mortgage............................ -- -- -- 33 -- -- ---
------ ------ ------ ------ ------ ------ ------
Total recoveries................. 43 243 317 130 56 193 135
------ ------ ------ ------ ------ ------ ------
Net charge-offs........................ 123 534 943 469 793 434 477
------ ------ ------ ------ ------ ------ ------
Provision for loan losses.............. 265 102 698 1,026 908 357 569
------ ------ ------ ------ ------ ------ ------
Balance of allowance at end of period.. $4,039 $3,710 $3,897 $4,142 $3,585 $3,470 $3,547
====== ====== ====== ====== ====== ====== ======
Ratio of net charge-offs to average
loans outstanding (annualized)...... .08% .37% .32% .17% .32% .19% .23%
Balance of allowance at end of period
as a percent of total loans......... 1.24% 1.26% 1.25% 1.42% 1.33% 1.49% 1.68%
</TABLE>
The Company has established criteria to identify loans which may be
impaired. Large groups of smaller-balance homogeneous loans are collectively
evaluated for impairment, while other larger-balance loans are independently
evaluated.
A loan evaluated for impairment is deemed impaired when, based on current
information and events, it is probable that the Company will be unable to
collect all amounts due according to the contractual terms of the loan
agreement. An insignificant delay, which is defined as up to 90 days by the
Company, will not cause a loan to be classified as impaired. Loan impairment is
measured based on the present value of expected future cash flows discounted at
the loan's effective interest rate or, if the loan is collateral dependent, the
fair value of the related collateral. Loan allowances, based upon impaired loan
evaluations, are included in the allowance for loan loss.
The Company's policy concerning non-accrual loans states that loans,
without consideration as to loan balance, are placed on a non-accrual status
when payments are 90 days delinquent or more, unless the asset is both well
secured and in the process of collection. Due to the difference in measurement
criteria, the populations of non-accrual and impaired loans, while having many
common elements, will be different in the aggregate.
Loans, or portions thereof, are charged-off when it is determined that a
loss has occurred. Until such time, an allowance for loan loss is maintained for
estimated losses. With regard to interest income recognition for payments
received on impaired loans, as well as all non-accrual loans, the Company
applies any payments to principal as long as there is doubt as to the
collectibility of the loan balance.
15
<PAGE>
As of June 30, 1999, based on the above criteria, the Company classified
four loans, totaling $1,819,927 as impaired. The impairment of these loans is
based on the fair value of the underlying collateral for these loans. Based
upon such evaluation of these impaired loans, $318,701 has been allocated to the
allowance for loan losses.
The following schedule sets forth certain information regarding the
Company's non-accrual, past due and renegotiated loans and other real estate
owned (as such terms are defined in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998) as of June 30, 1999 and 1998, and as of
December 31 of each of the last five years:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
-------------------- ---------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
-------- ------- ------- ------- ------- ------- -------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Non-accrual loans............. $1,992 $2,677 $1,257 $2,007 $1,845 $2,366 $2,658
Past due loans................ 1,716 1,575 4,248 1,400 2,200 679 1,039
Renegotiated loans............ 2,115 1,488 1,468 1,529 2,567 2,325 1,740
------ ------ ------ ------ ------ ------ ------
Total non-accrual, past due
and renegotiated loans 5,823 5,740 6,973 4,936 6,612 5,370 5,437
Other real estate owned....... 384 589 648 648 177 951 1,302
------ ------ ------ ------ ------
Total........................ $6,217 $6,329 $6,476 $5,584 $6,789 $6,321 $6,739
====== ====== ====== ====== ====== ====== ======
</TABLE>
Included in the above schedule at June 30, 1999, are three non-accrual
loans, totaling $1,019,927, and one loan past due over 90 days, totaling
$800,000, which represents all loans categorized as impaired.
At June 30, 1999, non-accrual loans totaled $1,992,000, an increase of
$472,000 compared to March 31, 1999. This net change is primarily the result of
the addition of two commercial loans, totaling $705,000, and the removal of two
commercial loans, totaling $249,000 from this category. Of the total non-
accrual loans at June 30, 1999, all are either in foreclosure, in various stages
of litigation, or on a repayment schedule. At June 30, 1999, loans past due 90
days or more and still accruing totaled $1,716,000, a decrease of $867,000
compared to March 31, 1999. This net change is primarily the result of one
commercial loan, totaling $990,000, which was previously 90 days past due
brought current, two commercial loans, totaling $705,000, being moved to non-
accrual, and one commercial loan, totaling $800,000 being added to this
category. At June 30, 1999, renegotiated loans totaled $2,115,000, an increase
of $227,000 compared to March 31, 1999. This net change is primarily the result
of the addition of two commercial loans, to this category.
Other income increased $136,480 or 19.03% to $853,558 for the second three
months of 1999 from $717,078 for the same period in 1998. Of this increase,
service charges on deposits increased $94,374 or 15.83%, reflecting larger
account volume and stricter enforcement in the collection of fees.
16
<PAGE>
Other expenses increased by $297,212 or 7.76% to $4,126,866 for the second
three months of 1999 from $3,829,654 for the same period in 1998. Salaries and
benefits increased by $176,003 or 8.39%. This was due to increased staffing
levels, partially due to additional branch offices being opened, along with
normal salary increases. Furniture and fixtures expense increased $14,814 or
3.85%. Occupancy expense increased $38,821 or 10.35%. Increases in both of
these expense categories resulted from expansions in the Company's branch
network. Other expenses increased in the aggregate $67,575 or 6.95%. This
increase is due to the increased size of the branch network and the Company's
banking business.
Income tax expense decreased $49,866 or 6.45% to $722,772 for the second
three months of 1999 from $772,638 for the same period in 1998. The decrease in
income tax expense was due primarily to an increase in tax-exempt income.
17
<PAGE>
PART I -- ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Month Summary
The first six months of 1999 resulted in increased earnings for the
Company, when compared to the same period in 1998. Net income increased
$224,118 or 7.77%, to $3,106,724 for the first six months of 1999 from
$2,882,606 for the same period in 1998. Net income per share increased 8.82% to
$.37. Increases of $542,010 in net interest income and $93,671 in other income
and a decrease of $122,893 in income tax expense were partially offset by
increases of $371,266 in other expenses and $163,190 in the provision for loan
losses.
The Company's annualized return on average assets and average stockholders'
equity for the first six months of 1999 were 1.11% and 11.48%, respectively,
compared to 1.14% and 11.57%, respectively, for the same period in 1998.
RESULTS OF OPERATIONS
Total interest income increased $933,284 or 5.42% to $18,139,450 for the
six months ended June 30, 1999, when compared to $17,206,166 for the same period
in 1998. The overall increase in this category was a result of increases of
$331,839 or 2.68% in interest earned on the loan portfolio and $683,555 or
15.58% in interest earned on the securities portfolio, which offset a decrease
of $82,110 or 19.60% in interest earned on federal funds sold.
The increase in interest income on loans was attributable to an increase in
average balances of $23.7 million, which was partially offset by a 42 basis
point decrease in yield. The decrease in interest income on federal funds sold
was attributable to a decrease in average balances of $1.2 million, along with a
76 basis point decrease in yield. The increase in interest income on securities
was attributable to a $38.5 million increase in average balances which more than
offset a 43 basis points decrease in yield.
Interest expense on deposits increased $352,949 or 5.61% to $6,643,839 for
the first six months of 1999 compared to $6,290,890 for the same period in 1998.
This increase is attributable to a $39.8 million increase in average balances
offset partially by an 18 basis point decrease in yield. Total interest expense
increased $391,274 or 6.14%, reflecting the aforementioned deposit factors along
with a $38,325 increase in interest expense incurred in the first six months of
1999 on borrowed money.
18
<PAGE>
Net interest income increased $542,010 or 5.00% to $11,377,901 for the
first six months of 1999 from $10,835,891 for the same period in 1998, primarily
as the result of increased balances of average net earning assets, which more
than offset a 35 basis point decrease in net interest margin. The annualized
net interest margin decreased from 3.88% to 3.53%. While the average yield on
earning assets decreased 52 basis points from 7.45% to 6.93%, the average rate
paid on interest-bearing liabilities decreased 17 basis points from 3.57% to
3.40%.
Other income increased $93,671 or 6.28% to $1,585,632 for the first six
months of 1999 from $1,491,961 for the same period in 1998. This was primarily
the result of increased service charges on deposits of $106,572 and an increase
in other income of $34,425 which more than offset a $47,326 decrease in gain on
securities.
Other expenses increased by $371,266 or 4.71% to $8,257,353 for the first
six months of 1999 from $7,886,087 for the same period in 1998. Salaries and
benefits increased by $322,688 or 7.68%. This was due to increased staffing
levels, partially due to additional branch offices being opened, along with
normal salary increases. Furniture and fixtures expense increased $86,099 or
11.42%. Occupancy expense increased $35,468 or 4.57%. Increases in both of
these expense categories resulted from expansions in the Company's branch
network. Other expenses decreased in the aggregate of $72,989 or 3.39%. In
1998 $343,000 was expensed, which represented acquisition expenses incurred by
the Company with regard to the acquisition of MSB. Exclusive of this
acquisition expense, other expenses increased approximately $270,011 or 14.93%.
Approximately, $187,000 of this increase is due to higher expenses incurred due
to the increased number of branches and the Company's banking business. The
remaining $83,000 represents supplemental pension expense incurred in 1999,
relating to the funding of an annuity for the Chief Executive Officer of
Metropolitan State Bank.
Income tax expense decreased $122,893 or 8.43% to $1,334,456 for the first
six months of 1999 from $1,457,349 for the same period in 1998. The decrease in
income tax expense was due primarily to an increase in tax-exempt income.
19
<PAGE>
FINANCIAL CONDITION
The Company's total assets increased $27.2 million or .4.96% from $548.6
million at December 31, 1998, to $575.8 million at June 30, 1999. This increase
is due to a $1.8 million increase in cash and cash equivalents, a $15.2 million
increase in loans, and a $11.1 million increase in the Company's securities
portfolios, which was partially offset by a $900,000 decrease in other assets.
At June 30, 1999, the Company's securities portfolio of $195.3 million is
segregated into classifications of "available for sale" and "held to maturity".
As required, available for sale securities are carried at fair value. Unrealized
gains and losses of $4,738,000 and $1,940,000, respectively, contained in the
available for sale portfolio, have been recorded, net of deferred taxes, as a
separate component of stockholders' equity. The effect of such adjustment at
June 30, 1999, is to increase stockholders' equity by $1,673,000. Securities
held to maturity continue to be carried at historical cost and, at June 30,
1999, contain unrealized gains and losses of $294,000 and $1,208,000,
respectively. For the entire securities portfolio, net unrealized gains were
$1,884,000 at June 30, 1999, as compared with a $6,145,000 net unrealized gain
at December 31, 1998.
See notes 3 and 4 of the Notes to Consolidated Financial Statements. Total
deposits increased $24.3 million or 4.96% from December 31, 1998, to June 30,
1999. A $22.8 million increase in savings and interest-bearing demand deposits
and a $7.8 million increase in non-interest-bearing demand deposits were more
than offset by a $6.3 million decrease in time deposits. Time deposits at June
30, 1999, represented 29.14% of total deposits as compared to 31.55% at December
31, 1998.
Stockholders' equity increased $367,000 as net income of $3.1 million, was
offset by a $1.4 million decrease in the equity component related to available
for sale securities, $1.3 million in dividends paid to stockholders and $40,000
in the repurchase of treasury stock.
Cash and cash equivalents increased by $1.8 million during the six months
ended June 30, 1999. Operating activities, principally the result of the
Company's net income, provided $4.6 million in net cash. Investing activities
used $29.3 million in net cash, primarily reflecting use of funds for securities
of $13.4 million and use of funds for loans of $15.5 million. Financing
activities, on the other hand, provided $26.5 million in net cash, reflecting an
increase in deposits and short-term borrowings of $26.8 million and a $1.0
million increase in long-term debt, offset partially by a payment of cash
dividends of $1.3 million.
20
<PAGE>
CAPITAL RESOURCES
In March 1989, the FDIC adopted a risk-based capital policy statement,
which imposed a minimum capital standard on insured banks. The minimum ratio of
risk-based capital to risk-weighted assets (including certain off-balance sheet
items, such as standby letters of credit) is 8%. At least half of the total
capital is to be comprised of common stock equity and qualifying perpetual
preferred stock, less goodwill ("Tier I capital"). The remainder ("Tier II
capital") may consist of mandatory convertible debt securities, qualifying
subordinated debt, other preferred stock and a portion of the allowance for loan
losses. The Federal Reserve Board adopted a similar risk-based capital guideline
for the Company, which is computed on a consolidated basis.
In addition, the Federal Reserve Board has established leverage ratio
guidelines (Tier I capital to average quarterly assets, less goodwill) for bank
holding companies. These guidelines provide for a minimum leverage ratio of 3%
for bank holding companies that meet certain specified criteria, including that
they have the highest regulatory rating. All other holding companies will be
required to maintain a leverage ratio of 3% plus an additional cushion of at
least 100 to 200 basis points.
The following table reflects the Company's capital ratios as of June 30,
1999.
<TABLE>
<CAPTION>
AMOUNT RATIO
(In Thousands)
<S> <C> <C>
RISK-BASED CAPITAL RATIOS:
Actual Tier I Capital $52,007 15.51%
Tier I Capital minimum amount 13,412 4.00%
------- -----
Excess $38,595 11.51%
======= =====
Actual Combined Tier I and Tier II Capital $56,046 16.72%
Combined Tier I and Tier II Capital minimum
requirement 26,824 8.00%
------- -----
Excess $29,222 8.72%
======= =====
LEVERAGE RATIO:
Actual Tier I Capital to average second quarter
assets $52,007 9.32%
Minimum leverage target* * *
------- -----
Excess $ * *%
======= =====
</TABLE>
* No formal minimum leverage target (other than the three percent floor
described above) has been established for the Company as of June 30, 1999.
ITEM 3 Quantitative and Qualitative Disclosures about Market Risk-Not
applicable - no significant change from Annual Report on
Form 10-K.
21
<PAGE>
PART II OTHER INFORMATION
Item 1 Legal Proceedings Not Applicable
Item 2 Change in Securities Not Applicable
Item 3 Defaults Upon Senior Securities Not Applicable
Item 4 Submission of Matters to a Vote of Security Holders -
Not Applicable
Item 5 Other Information Not Applicable
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits:
3.1 Certificate of Amendment, as amended
27.1 Financial Data Schedule
(b) Current Reports on Form 8-K Filed
During the Quarter
Ended June 30, 1999:
1. Current Report on Form 8-K filed with the SEC on May 19, 1999,
Item 5 - Other Events
22
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Lakeland Bancorp, Inc.
----------------------------------
(Registrant)
/s/ Roger Bosma
----------------------------------
Roger Bosma
President and Chief Executive Officer
/s/ Arthur L. Zande
----------------------------------
Arthur L. Zande
Vice President and Treasurer
(Chief Financial Officer)
08/12/99
- -------------
Date
23
<PAGE>
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
LAKELAND BANCORP, INC.
The undersigned, being over the age of 18 years old, for the purpose
of forming a corporation under the New Jersey Business Corporation Act, does
hereby execute the following Certificate of Incorporation:
1. Name. The name of the corporation is Lakeland Bancorp, Inc.
----
2. Purpose. The principal purpose for which the corporation is
-------
organized is to exercise all powers of a banking holding company, which is
registered with the Board of Governors of the Federal Reserve System under the
Bank Holding Company Act of 1956, as amended, and to engage in banking and non-
banking activities allowed for such a bank holding company under New Jersey and
federal law.
3. Shares Authorized. The maximum number of shares which the
-----------------
corporation shall have the authority to issue is 3,000,000 shares of common
stock, which shall have a par value of $2.50 each.
4. Issuance of Stock. The capital stock of the corporation may be
-----------------
issued for valid corporate purposes upon authorization by the Board of Directors
of the corporation without prior stockholder approval. Such authorization by the
Board of Directors may be made by a majority or other vote of the Board as may
be provided in the Bylaws of the corporation. The provisions of this Article may
only be amended or repealed by the affirmative vote of the holders of not less
than eighty percent (80%) of the outstanding voting stock of the Corporation.
5. Office and Registered Agent. The address of the registered office
---------------------------
of the corporation in the State of New Jersey shall be One Lakeland Plaza,
Newfoundland, New Jersey 07534, and the name of its New Jersey registered agent
at such address shall be Arthur L. Zande.
6. Number and Terms of Directors. The corporation shall have not
-----------------------------
less than five (5) or more than twenty-five (25) Directors. The Board of
Directors of the corporation shall, at a regular meeting prior thereto, fix by
resolution the number of Directors for the succeeding year to be elected at the
next annual meeting of the shareholders. One-third of the Directors shall be
elected by a majority of the votes cast at each annual meeting of the
shareholders or by similar vote at any special meeting called for the purpose,
to serve three-year terms. Each Director shall hold office until the expiration
of the term for which he is elected, except as otherwise stated in the Bylaws,
and thereafter until his successor has been elected and qualified. Election of
Directors need not be by written ballot. The affirmative vote of the holders of
not less
<PAGE>
than eighty percent (80%) of the outstanding voting stock of the corporation is
required to amend or repeal the provisions of this Article.
7. First Board. The first Board of Directors shall be six (6) in
-----------
number, and the names and addresses are:
Name Address
- ---- -------
Bruce G. Bohuny 913 Cherokee Lane
Franklin Lakes, NJ 07417
John W. Fredericks 382 Osprey Lane
Mantoloking, NJ 08739
Robert B. Nicholson 309 East Mountain Road
Sparta, NJ 07871
John Pier, Jr. P. O. Box 38
Vernon, NJ 07462
Albert S. Riggs Milton Road
Oak Ridge, NJ 07438
Arthur L. Zande 55 Fox Trail Road
Sparta, NJ 07871
The terms of the first Board of Directors shall be set so as to
implement staggered terms of 3 years each. The initial terms of Messrs.
Nicholson and Zande shall expire in 1990, those of Messrs. Bohuny and Riggs in
1991 and those of Messrs. Fredericks and Pier in 1992.
8. Vacancies on Board of Directors. Any and all vacancies on the
-------------------------------
Board of Directors, including those resulting from an increase in the number of
Directors or the removal, resignation, or death of a Director, shall be filled
by the Board of Directors.
9. Removal of a Director. A Director of the corporation may only be
---------------------
removed during his or her term of office for cause, as defined as final
conviction of a felony, unsound mind, adjudication of bankruptcy, non-acceptance
of office or conduct prejudicial to the interests of the corporation, by the
affirmative vote of a majority of the entire Board of Directors of the
corporation or by the requisite shareholder vote. Shareholders shall not have
the right to remove Directors without such cause. Shareholders may only attempt
to remove a director for cause after service of specific charges, adequate
notice, and full opportunity to refute the charges.
10. Indemnification of Directors. Directors of the Corporation, to
----------------------------
the fullest extent permitted by the New Jersey Business Corporation Act, as now
or hereafter in effect, and any successor statute, shall not be personally
liable to the Corporation or its shareholders for
-2-
<PAGE>
damages for breach of any duty owed to the Corporation or its shareholders.
Also, any expenses incurred by a Director in connection with a proceeding
involving the Director may be paid by the Corporation in advance of final
disposition of the proceeding, provided the Director undertakes to repay such
amount unless it shall ultimately be determined that he or she is entitled to
indemnification.
11. By-Laws. The Board of Directors shall have the right to enact,
-------
alter, amend or repeal the Bylaws of the Corporation. Also, the By-Laws may be
amended, altered or repealed by the affirmative vote of the holders of not less
than eighty percent (80%) of the outstanding voting stock of the corporation.
12. Considerations in Evaluating Acquisition Offer. The Directors of
----------------------------------------------
the Corporation shall consider all factors they deem relevant in evaluating any
proposed tender offer or exchange offer for the corporation or any subsidiary's
stock, any proposed merger or consolidation of the corporation or subsidiary
with or into another entity and any proposal to purchase or otherwise acquire
all or substantially all the assets of the corporation or any subsidiary. The
Directors shall evaluate whether the proposal is in the best interests of the
corporation and its subsidiaries by considering the best interests of the
shareholders and other factors the Directors determine to be relevant, including
the social, legal and economic effects on employees, customers, depositors, and
communities served by the corporation and any subsidiary. The Directors shall
evaluate the consideration being offered to the shareholders in relating to the
then current market value of the corporation or any subsidiary, the then current
market value of the stock of the corporation or any subsidiary in a freely
negotiated transaction, and the Directors' estimate of the future value of stock
of the corporation or any subsidiary as an independent entity. The affirmative
vote of the holders of not less than eighty percent (80%) of the outstanding
voting stock of the corporation is required to amend or repeal the provisions of
this Article.
13. Votes Required to Approve Acquisition.
-------------------------------------
(a) Unapproved by Board. The affirmative vote of the holders of not
-------------------
less than eighty percent (80%) of the outstanding voting stock of the
corporation is required to approve of either (1) a merger or consolidation of
the corporation with, or (2) a sale, exchange or lease of all or substantially
all of the assets of the corporation to, any person or entity provided that the
Board of Directors of the corporation, by a majority vote of the entire Board,
does not recommend to the stockholders of the corporation a vote in favor of the
same. For purposes of this provision, substantially all of the assets shall mean
assets having a fair market value or book value, whichever is greater, of 25 per
cent or more of the total assets as reflected on a balance sheet of the
corporation as of a date no earlier than 45 days prior to any acquisition of
such assets.
(b) Acquisition by Controlling Party. The affirmative vote of the
--------------------------------
holders of not less than eighty percent (80%) of the outstanding shares of all
voting stock of the corporation and the affirmative vote of the holders of not
less than sixty-seven percent (67%) of the outstanding shares of voting stock
held by stockholders other than the Controlling Party (as defined below) shall
be required for the approval or authorization of any merger, consolidation,
-3-
<PAGE>
sale, exchange or lease of all of substantially all the assets of the
corporation (as defined above). Controlling Party is any stockholder owning or
controlling twenty per cent (20%) or more of the corporation's voting stock at
the time of the proposed transaction. However, these voting requirements shall
not be applicable in such transactions in which: (a) the cash or fair market
value of the property, securities or other consideration to be received (which
includes common stock of this corporation retained by its existing stockholders
in such a transaction in which the corporation is the surviving entity) per
share by holders of common stock of the corporation in such transaction is not
less than the highest per share price (with appropriate adjustments for
recapitalizations, stock splits, stock dividends and distributions), paid by the
Controlling Party in the acquisition of any of its holdings of the corporation's
common stock in the three years preceding the announcement of the proposed
transaction; or (b) the transaction is recommended by a majority of the entire
Board of Directors. The requirements of this paragraph are in addition to and
separate from any consent or approval that may be required by this Certificate
to authorize any merger, consolidation or sale, exchange or lease of all or
substantially all of the assets of the corporation as in paragraph (a) of this
Article.
(c) Meetings of Shareholders. Any meeting of shareholders, whether
------------------------
annual or special, called to consider a vote in favor of a merger or
consolidation of the corporation with, or a sale, exchange or lease of
substantially all of the assets of the corporation to, any person or entity, as
defined in paragraphs (a) and (b) of this Article, which is not recommended by
the Board of Directors of the corporation by the required vote, shall require
attendance in person or by proxy of eighty percent (80%) of the shareholders of
the corporation in order for a quorum for the conduct of business to exist. Such
a meeting may not be adjourned absent notice if a quorum is not present.
(d) Amendment or Repeal of this Article. The affirmative vote of not
-----------------------------------
less than eighty percent (80%) of the outstanding voting stock of the
corporation is required to amend or repeal any part of paragraphs (a) or (b) of
this Article.
14. Incorporator. The name of the sole incorporator is Walter J.
------------
Hunziker, Jr. and the address of the incorporator is 125 Ellison Street,
Paterson, New Jersey 07505.
Dated: February 3, 1989
/s/ Walter J. Hunziker, Jr.
--------------------------------
Walter J. Hunziker, Jr.,
Sole Incorporator
-4-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LAKELAND BANCORP, INC.
Pursuant to N.J.S. 14A:7-15.1(3)
DAted: As of January 10, 1990
The undersigned corporation, having adopted an amendment to its
certificate of incorporation in connection with a stock dividend, hereby
certifies as follows:
1. The name of the corporation is Lakeland Bancorp, Inc.
2. The date of adoption by the board of directors of the corporation
of the resolution approving the 3% stock dividend was January 10, 1990.
3. The amendment to the certificate of incorporation will not
adversely affect the rights or preferences of the holders of outstanding shares
of any class or series and will not result in the percentage of authorized
shares that remains unissued after the stock dividend exceeding the percentage
of authorized shares that was unissued before the stock dividend.
4. The only class of shares subject to the stock dividend was the
corporation's Common Stock. The number of shares of Common Stock subject to the
stock dividend was 1,017,855. The number of shares issued in connection the 3%
stock dividend was 30,535.
5. The certificate of incorporation is amended to increase the
corporation's number of authorized common shares from 3,000,000 to 3,030,535. In
connection therewith, Section 3 of the certificate of incorporation is deleted
in its entirety and new Section 3, annexed hereto as Exhibit A, is substituted
for it.
IN WITNESS WHEREOF, the undersigned corporation has caused this
certificate to be executed on its behalf by its duly authorized officer as of
the date first above written.
LAKELAND BANCORP, INC.
By:/s/ Arthur L. Zande
--------------------------
Arthur L. Zande
Executive Vice President
-5-
<PAGE>
Exhibit A
---------
3. Shares Authorized. The maximum number of shares which the
-----------------
corporation shall have the authority to issue is 3,030,535 shares of common
stock, which shall have a par value of $2.50 each.
-6-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LAKELAND BANCORP, INC.
Pursuant to N.J.S. 14A:7-15.1(3)
DAted: As of February 12, 1992
The undersigned corporation, having adopted an amendment to its
certificate of incorporation, as amended, in connection with a stock dividend,
hereby certifies as follows:
1. The name of the corporation is Lakeland Bancorp, Inc.
2. The date of adoption by the board of directors of the corporation
of the resolution approving the 3% stock dividend was February 12, 1992.
3. The amendment to the certificate of incorporation will not
adversely affect the rights or preferences of the holders of outstanding shares
of any class or series and will not result in the percentage of authorized
shares that remains unissued after the stock dividend exceeding the percentage
of authorized shares that was unissued before the stock dividend.
4. The only class of shares subject to the stock dividend was the
corporation's Common Stock. The number of shares of Common Stock subject to the
stock dividend was 1,048,390. The number of shares issued in connection the 3%
stock dividend was 31,452.
5. The certificate of incorporation is amended to increase the
corporation's number of authorized common shares from 3,030,535 to 3,061,987. In
connection therewith, Section 3 of the certificate of incorporation is deleted
in its entirety and new Section 3, annexed hereto as Exhibit A, is substituted
for it.
IN WITNESS WHEREOF, the undersigned corporation has caused this
certificate to be executed on its behalf by its duly authorized officer as of
the date first above written.
LAKELAND BANCORP, INC.
By:/s/ Arthur L. Zande
---------------------------
Arthur L. Zande
Executive Vice President
-7-
<PAGE>
Exhibit A
---------
3. Shares Authorized, The maximum number of shares which the
-----------------
corporation shall have the authority to issue is 3,061,987 shares of common
stock, which shall have a par value of $2.50 each.
-8-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LAKELAND BANCORP, INC.
Pursuant to N.J.S. 14A:7-15.1(3)
Dated: As of November 12, 1992
The undersigned corporation, having adopted an amendment to its
certificate of incorporation, as amended, in connection with a stock dividend,
hereby certifies as follows:
1. The name of the corporation is Lakeland Bancorp, Inc.
2. The date of adoption by the board of directors of the corporation
of the resolution approving the 10% stock dividend was November 12, 1992.
3. The amendment to the certificate of incorporation will not
adversely affect the rights or preferences of the holders of outstanding shares
of any class or series and will not result in the percentage of authorized
shares that remains unissued after the stock dividend exceeding the percentage
of authorized shares that was unissued before the stock dividend.
4. The only class of shares subject to the stock dividend was the
corporation's Common Stock. The number of shares of Common Stock subject to the
stock dividend was 1,079,842. The number of shares issued in connection the 10%
stock dividend was 107,984.
5. The certificate of incorporation is amended to increase the
corporation's number of authorized common shares from 3,061,987 to 3,169,971. In
connection therewith, Section 3 of the certificate of incorporation is deleted
in its entirety and new Section 3, annexed hereto as Exhibit A, is substituted
for it.
IN WITNESS WHEREOF, the undersigned corporation has caused this
certificate to be executed on its behalf by its duly authorized officer as of
the date first above written.
LAKELAND BANCORP, INC.
By:/s/ Arthur L. Zande
-------------------------
Arthur L. Zande
Executive Vice President
-9-
<PAGE>
Exhibit A
---------
3. Shares Authorized. The maximum number of shares which the
-----------------
corporation shall have the authority to issue is 3,169,971 shares of common
stock, which shall have a par value of $2.50 each.
-10-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LAKELAND BANCORP, INC.
Pursuant to N.J.S. 14A:7-15.1(3)
Dated: As of May 26, 1993
The undersigned corporation, having adopted an amendment to its
certificate of incorporation, as amended, in connection with a stock dividend,
hereby certifies as follows:
1. The name of the corporation is Lakeland Bancorp, Inc.
2. The date of adoption by the board of directors of the corporation
of the resolution approving the 6% stock dividend was May 26, 1993.
3. The amendment to the certificate of incorporation will not
adversely affect the rights or preferences of the holders of outstanding shares
of any class or series and will not result in the percentage of authorized
shares that remains unissued after the stock dividend exceeding the percentage
of authorized shares that was unissued before the stock dividend.
4. The only class of shares subject to the stock dividend was the
corporation's Common Stock. The number of shares of Common Stock subject to the
stock dividend was 1,187,826. The number of shares issued in connection the 6%
stock dividend was 71,269.
5. The certificate of incorporation is amended to increase the
corporation's number of authorized common shares from 3,169,971 to 3,241,240. In
connection therewith, Section 3 of the certificate of incorporation is deleted
in its entirety and new Section 3, annexed hereto as Exhibit A, is substituted
for it.
IN WITNESS WHEREOF, the undersigned corporation has caused this
certificate to be executed on its behalf by its duly authorized officer as of
the date first above written.
LAKELAND BANCORP, INC.
By:/s/ Arthur L. Zande
--------------------------
Arthur L. Zande
Executive Vice President
-11-
<PAGE>
Exhibit A
---------
3. Shares Authorized. The maximum number of shares which the
-----------------
corporation shall have the authority to issue is 3,241,240 shares of common
stock, which shall have a par value of $2.50 each.
-12-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LAKELAND BANCORP, INC.
Pursuant to N.J.S. 14A:7-15.1(3)
Dated: As of May 11, 1994
The undersigned corporation, having adopted an amendment to its
certificate of incorporation, as amended, in connection with a stock dividend,
hereby certifies as follows:
1. The name of the corporation is Lakeland Bancorp, Inc.
2. The date of adoption by the board of directors of the corporation
of the resolution approving the 10% stock dividend was May 11, 1994.
3. The amendment to the certificate of incorporation will not
adversely affect the rights or preferences of the holders of outstanding shares
of any class or series and will not result in the percentage of authorized
shares that remains unissued after the stock dividend exceeding the percentage
of authorized shares that was unissued before the stock dividend.
4. The only class of shares subject to the stock dividend was the
corporation's Common Stock. The number of shares of Common Stock subject to the
stock dividend was 1,382,483. The number of shares issued in connection with the
10% stock dividend was 138,248.
5. The certificate of incorporation is amended to increase the
corporation's number of authorized common shares from 3,241,240 to 3,379,488. In
connection therewith, Section 3 of the certificate of incorporation is deleted
in its entirety and new Section 3, annexed hereto as Exhibit A, is substituted
for it.
IN WITNESS WHEREOF, the undersigned corporation has caused this
certificate to be executed on its behalf by its duly authorized officer as of
the date first above written.
LAKELAND BANCORP, INC.
By:/s/ Arthur L. Zande
-------------------------
Arthur L. Zande
Executive Vice President
-13-
<PAGE>
Exhibit A
---------
3. Shares Authorized. The maximum number of shares which the
-----------------
corporation shall have the authority to issue is 3,379,488 shares of common
stock, which shall have a par value of $2.50 each.
-14-
<PAGE>
LAKELAND BANCORP, INC.
Certificate of Amendment
------------------------
to
--
Certificate of Incorporation
----------------------------
In accordance with the provisions of Section 14A:9-4(3) of the New
Jersey Statutes, LAKELAND BANCORP, INC., a corporation organized under the laws
of the State of New Jersey, does hereby certify the following facts in amendment
of its Certificate of Incorporation as filed on February 7, 1989:
FIRST: The name of the corporation is
LAKELAND BANCORP, INC.
SECOND: The Certificate of Incorporation is hereby amended by
inserting a revised Article 6 in place of the original text, to read as follows:
6. Number and Terms of Directors. The corporation shall have not
------------------------------
less than five (5) or more than twenty-five (25) Directors. The Board of
Directors of the corporation shall, at a regular meeting prior thereto, fix
by resolution the number of Directors for the succeeding year to be elected
at the annual meeting of the shareholders. The Board shall be divided into
three (3) classes of Directors, each of equal number, or in the event the
total number of Directors is not divisible by three (3) then of nearly
equal number as is possible. Unless they are elected to fill vacancies,
the Directors in each class shall be elected to hold office until the third
successive annual meeting of shareholders after their election and until
their successors shall have been elected and shall have qualified, such
that at each annual meeting of shareholders, only one class of Directors
shall be elected. In the event that a Director is elected to fill a
vacancy, the term of such Director shall expire at the next annual meeting
of shareholders. Any vacancy, however caused, occurring in the Board, and
newly created Directorships resulting from an increase in the authorized
number of Directors, may be filled by the affirmative vote of a majority of
the remaining Directors, even though less than a quorum of the Board, or by
a sole remaining Director. The Board of Directors shall specify the class
in which a Director so elected shall serve. Any Director so elected by the
Board of Directors shall hold office only until the next annual meeting of
the shareholders and until his successor shall have been elected and
qualified, notwithstanding that the term of office of the other Directors
in the class of which he is a member does not expire at the time of such
meeting. His successor shall be elected by the shareholders to a term of
office which shall expire at the same time as the term of office of the
other Directors in the class to which he is elected. Election of
-15-
<PAGE>
Directors need not be by written ballot. The affirmative vote of the
holders of not less than eighty per cent (80%) of the outstanding voting
stock of the corporation is required to amend or repeal the provisions of
this Article.
THIRD: The date of adoption of the foregoing amendment by the
Shareholders of this corporation was April 28, 1995, after its prior adoption by
the Board of Directors and due notice, on which date 1,277,175 shares were voted
in favor of the amendment, representing over 83% of the 1,531,531 total shares
outstanding and entitled to vote. Such vote complied with the minimum 80%
majority required for such amendment as contained in the original Article 6 of
the Certificate of Incorporation. No shares were voted against the amendment.
FOURTH: This amendment is to be effective immediately upon its filing
with the Secretary of State of New Jersey.
IN WITNESS WHEREOF, we have executed this Certificate on behalf of
LAKELAND BANCORP, INC. this 18th day of May, 1995.
By:/s/ Arthur L. Zande
-------------------------
Arthur L. Zande
Executive Vice President
-16-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LAKELAND BANCORP, INC.
Pursuant to N.J.S. 14A:7-15.1(3)
Dated: As of May 24, 1995
The undersigned corporation, having adopted an amendment to its
certificate of incorporation, as amended, in connection with a stock dividend,
hereby certifies as follows:
1. The name of the corporation is Lakeland Bancorp, Inc.
2. The date of adoption by the board of directors of the corporation
of the resolution approving the 5% stock dividend was May 24, 1995.
3. The amendment to the certificate of incorporation will not
adversely affect the rights or preferences of the holders of outstanding shares
of any class or series and will not result in the percentage of authorized
shares that remains unissued after the stock dividend exceeding the percentage
of authorized shares that was unissued before the stock dividend.
4. The only class of shares subject to the stock dividend was the
corporation's Common Stock. The number of shares of Common Stock subject to the
stock dividend was 1,535,931. The number of shares issued in connection with
the 5% stock dividend was 76,796.
5. The certificate of incorporation is amended to increase the
corporation's number of authorized common shares from 3,379,488 to 3,456,284.
In connection therewith, Section 3 of the certificate of incorporation is
deleted in its entirety and new Section 3, annexed hereto as Exhibit A, is
substituted for it.
IN WITNESS WHEREOF, the undersigned corporation has caused this
certificate to be executed on its behalf by its duly authorized officer as of
the date first above written.
LAKELAND BANCORP, INC.
By:/s/ Arthur L. Zande
------------------------
Arthur L. Zande
Executive Vice President
-17-
<PAGE>
Exhibit A
---------
3. Shares Authorized. The maximum number of shares which the
-----------------
corporation shall have the authority to issue is 3,456,284 shares of common
stock, which shall have a par value of $2.50 each.
-18-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LAKELAND BANCORP, INC.
Pursuant to N.J.S. 14A:7-15.1(3)
Dated: As of October 25, 1995
The undersigned corporation, having adopted an amendment to its
certificate of incorporation, as amended, in connection with a stock dividend,
hereby certifies as follows:
1. The name of the corporation is Lakeland Bancorp, Inc.
2. The date of adoption by the board of directors of the corporation
of the resolution approving the 100% stock dividend was September 13, 1995.
3. The amendment to the certificate of incorporation will not
adversely affect the rights or preferences of the holders of outstanding shares
of any class or series and will not result in the percentage of authorized
shares that remains unissued after the stock dividend exceeding the percentage
of authorized shares that was unissued before the stock dividend.
4. The only class of shares subject to the stock dividend was the
corporation's Common Stock. The number of shares of Common Stock subject to the
stock dividend was 1,619,727. The number of shares issued in connection with the
100% stock dividend was 1,619,727.
5. The certificate of incorporation is amended to increase the
corporation's number of authorized common shares from 3,456,284 to 6,912,568. In
connection therewith, Section 3 of the certificate of incorporation is deleted
in its entirety and new Section 3, annexed hereto as Exhibit A, is substituted
for it.
IN WITNESS WHEREOF, the undersigned corporation has caused this
certificate to be executed on its behalf by its duly authorized officer as of
the date first above written.
LAKELAND BANCORP, INC.
By:/s/ Arthur L. Zande
--------------------------
Arthur L. Zande
Executive Vice President
-19-
<PAGE>
Exhibit A
---------
3. Shares Authorized. The maximum number of shares which the
-----------------
corporation shall have the authority to issue is 6,912,568 shares of common
stock, which shall have a par value of $2.50 each.
-20-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LAKELAND BANCORP, INC.
Pursuant to N.J.S. 14A:7-15.1(3)
Dated: As of November 13, 1996
The undersigned corporation, having adopted an amendment to its
certificate of incorporation, as amended, in connection with a stock dividend,
hereby certifies as follows:
1. The name of the corporation is Lakeland Bancorp, Inc.
2. The date of adoption by the board of directors of the corporation
of the resolution approving the 2% stock dividend was November 13, 1996.
3. The amendment to the certificate of incorporation will not
adversely affect the rights or preferences of the holders of outstanding shares
of any class or series and will not result in the percentage of authorized
shares that remains unissued after the stock dividend exceeding the percentage
of authorized shares that was unissued before the stock dividend.
4. The only class of shares subject to the stock dividend was the
corporation's Common Stock. The number of shares of Common Stock subject to the
stock dividend was 3,309,259. The number of shares issued in connection with
the 2% stock dividend was 66,185.
5. The certificate of incorporation is amended to increase the
corporation's number of authorized common shares from 6,912,568 to 7,050,819. In
connection therewith, Section 3 of the certificate of incorporation is deleted
in its entirety and new Section 3, annexed hereto as Exhibit A, is substituted
for it.
IN WITNESS WHEREOF, the undersigned corporation has caused this
certificate to be executed on its behalf by its duly authorized officer as of
the date first above written.
LAKELAND BANCORP, INC.
By:/s/ Arthur L. Zande
------------------------------
Arthur L. Zande
Executive Vice President
-21-
<PAGE>
Exhibit A
---------
3. Shares Authorized. The maximum number of shares which the
-----------------
corporation shall have the authority to issue is 7,050,819 shares of common
stock, which shall have a par value of $2.50 each.
-22-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LAKELAND BANCORP, INC.
Pursuant to N.J.S. 14A:7-15.1(3)
Dated: As of August 27, 1997
The undersigned corporation, having adopted an amendment to its
certificate of incorporation, as amended, in connection with a stock dividend,
hereby certifies as follows:
1. The name of the corporation is Lakeland Bancorp, Inc.
2. The date of adoption by the board of directors of the corporation
of the resolution approving the 5% stock dividend was August 27, 1997.
3. The amendment to the certificate of incorporation will not
adversely affect the rights or preferences of the holders of outstanding shares
of any class or series and will not result in the percentage of authorized
shares that remain unissued after the stock dividend exceeding the percentage of
authorized shares that was unissued before the stock dividend.
4. The only class of shares subject to the stock dividend was the
corporation's Common Stock. The number of shares of Common Stock subject to the
stock dividend was 3,392,090. The number of shares issued in connection with
the 5% stock dividend was 169,604.
5. The certificate of incorporation is amended to increase the
corporation's number of authorized common shares from 7,050,819 to 7,403,359.
In connection therewith, Section 3 of the certificate of incorporation is
deleted in its entirety and new Section 3, annexed hereto as Exhibit A, in
substituted for it.
IN WITNESS WHEREOF, the undersigned corporation has caused this
certificate to be executed on its behalf by its duly authorized officer as of
the date first above written.
LAKELAND BANCORP, INC.
By:/s/ Arthur L. Zande
------------------------------
Arthur L. Zande
Executive Vice President
-23-
<PAGE>
EXHIBIT A
---------
3. Shares Authorized. The maximum number of shares which the
-----------------
corporation shall have the authority to issue is 7,403,359 shares of common
stock, which shall have a par value of $2.50 each.
-24-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LAKELAND BANCORP, INC.
Pursuant to N.J.S. 14A:7-15.1(3)
Dated: As of August 26, 1998
The undersigned corporation, having adopted an amendment to its
certificate of incorporation, as amended, in connection with a stock dividend,
hereby certifies as follows:
1. The name of the corporation is Lakeland Bancorp, Inc.
2. The date of adoption by the board of directors of the corporation
of the resolution approving the 100% stock dividend was August 26, 1998.
3. The amendment to the certificate of incorporation will not
adversely affect the rights or preferences of the holders of outstanding shares
of any class or series and will not result in the percentage of authorized
shares that remain unissued after the stock dividend exceeding the percentage of
authorized shares that was unissued before the stock dividend.
4. The only class of shares subject to the stock dividend was the
corporation's Common Stock. The number of shares of Common Stock subject to the
stock dividend was 4,245,719. The number of shares issued in connection with
the 100% stock dividend was 4,245,719.
5. The certificate of incorporation is amended to increase the
corporation's number of authorized common shares from 7,403,359 to 14,806,718.
In connection therewith, Section 3 of the certificate of incorporation is
deleted in its entirety and new Section 3, annexed hereto as Exhibit A, in
substituted for it.
IN WITNESS WHEREOF, the undersigned corporation has caused this
certificate to be executed on its behalf by its duly authorized officer as of
the date first above written.
LAKELAND BANCORP, INC.
By:/s/ Arthur L. Zande
----------------------------
Arthur L. Zande
Executive Vice President
-25-
<PAGE>
EXHIBIT A
---------
3. Shares Authorized. The maximum number of shares which the
-----------------
corporation shall have the authority to issue is 14,806,718 shares of common
stock, which shall have a par value of $2.50 each.
-26-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LAKELAND BANCORP, INC.
Pursuant to N.J.S. 14A:9-4(3)
Dated: July 16, 1999
Lakeland Bancorp, Inc., a corporation organized and existing under the
Business Corporation Act of the State of New Jersey (the "Corporation"), having
adopted an amendment to its Certificate of Incorporation, does hereby certify
that:
1. The name of the Corporation is Lakeland Bancorp, Inc.
2. The Corporation's Certificate of Incorporation, as amended, is
further amended by deleting Section 3, Shares Authorized, in its entirety and
substituting for it a new Section 3, Shares Authorized, the text of which is as
follows:
"3. Shares Authorized. The maximum number of shares which the
-----------------
corporation shall have the authority to issue is 40,000,000
shares of common stock, no par value."
3. The date of the adoption of the amendment by the Corporation's
shareholders was July 14, 1999.
4. The number of shares entitled to vote for the amendment was
8,500,788.
5. The number of shares voted for and against the amendment were as
follows:
For: 6,450,903
Against: 123,913
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
executed on its behalf by its duly authorized officer as of the date first above
written.
LAKELAND BANCORP, INC.
By:/s/ Arthur L. Zande
-----------------------------------
Arthur L. Zande, Vice President
-27-
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<PERIOD-START> JAN-01-1999
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<CASH> 26,073
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