First Bank (OTC BB:FRBA) announced today that it has entered into a definitive merger agreement with Heritage Community Bank (HCB) headquartered in Randolph, New Jersey. The combined entity will have over $500 million in assets with 7 branches in three counties in New Jersey. According to terms of the Agreement, HCB shareholders will receive 0.4534 shares of FRBA stock in an all-stock exchange, subject to adjustment based on HCB’s shareholders equity as of the month-end prior to closing. Assuming Heritage satisfies the minimum shareholders equity requirement outlined in the agreement, First Bank expects to issue 875,251 new shares to consummate this transaction. HCB will be merged into First Bank, and the transaction is expected to be a tax-free exchange with respect to the stock consideration received by the shareholders of HCB. The merger has been unanimously approved by the boards of directors of both companies. The transaction is subject to closing conditions typical of merger transactions, including approval by the respective shareholders and bank regulatory authorities. “We are extremely excited about this combination with Heritage Community Bank,” stated First Bank President and CEO Patrick L. Ryan. “HCB’s focus on relationship lending to quality commercial borrowers, with a particular emphasis on commercial and industrial (C&I) lending, fits perfectly with the First Bank model. Furthermore, we love the demographics of HCB’s markets. Morris County, with strong income, growth, and density characteristics, presents an attractive opportunity for us. Heritage has created a platform that can become a real engine for growth and profitability as we leverage the improved infrastructure and administration capabilities of the combined franchise. Together with our currently pending new Somerset branch, we believe Morris County is a natural extension of our market.” Peter Kenny, President and CEO of Heritage, will be joining First Bank as an employee and a Board member. At least one additional director from Heritage will be added to the First Bank Board of Directors. “First Bank is an ideal partner for us,” Kenny said. “We have similar business models, similar relationship-lending philosophies, and a similar emphasis on community relations in our markets. Plus, the enhanced risk diversification and larger lending limit will allow us to expand our coverage area and attract new customers.”
Hovde Group acted as financial advisor to First Bank and Keefe, Bruyette & Woods, a Stifel Company, acted as financial advisor to Heritage. Windels Marx provided legal counsel to First Bank and McCarter & English, LLP provided legal counsel to Heritage.First Bank ( www.firstbanknj.com) is a New Jersey, state-chartered bank, with four full-service locations in Ewing, Hamilton, Lawrence, and Williamstown, NJ. First Bank has assets of $373 million, loans of $280 million and deposits of $331 million as of March 31, 2013. Heritage Community Bank ( www.heritagecbnj.com) is a New Jersey, state-chartered bank, with three full-service locations in Morris County, New Jersey (two in Randolph and one in Denville). Heritage has assets of approximately $146 million, loans of $125 million and deposits of $136 million as of March 31, 2013. This news release contains certain forward-looking statements, either expressed or implied, which are provided to assist the reader in understanding anticipated future financial performance. These statements involve certain risks, uncertainties, estimates and assumptions made by management, which are subject to factors beyond the Bank's control and could impede its ability to achieve these goals. These factors include general economic conditions, trends in interest rates, the ability of our borrowers to repay their loans, and results of regulatory exams, among other factors.