UNION, NJ -- (MARKET WIRE) -- 03/22/07 --
Center Bancorp Inc. (NASDAQ: CNBC), the parent
company of Union Center National Bank, today announced that it has sent a
letter to shareholders. In the letter, Center Bancorp President and Chief
Executive Officer, John J. Davis, makes several points, including:
-- Strong one-, five- and ten-year record of delivering long-term
shareholder value. During the past year, Center Bancorp's stock has
increased nearly 40%. Over the last five years, total return to
shareholders has averaged nearly 17% per year. A purchase of 1,000 shares
of Center Bancorp's stock in 1996, with dividends reinvested, would yield a
total return of 314%.
-- Good progress on strategic objectives of growing commercial loans,
reducing more costly borrowed funds and shrinking the size of the lower-
yielding investment portfolio.
-- New initiatives to increase non-interest income and to lower operating
expenses. Earlier this month, Center Bancorp announced the acquisition of
Beacon Trust Company, a limited purpose trust company with managed assets
of $1.3 billion. Center Bancorp believes that the transaction will add to
non-interest income, diversify the Company's earnings stream and is
expected to be accretive to the company's earnings per share in the first
12 months following closing. Center Bancorp also announced in March an
aggressive program to reduce salary and benefits expense by nine percent
annually.
The letter also discusses the Committee To Preserve Shareholder Value, a
group of dissident shareholders, led by Larry Seidman, who has proposed its
own slate of three dissident nominees to the Company's board of directors.
Citing Mr. Seidman's history of conflict with federal bank regulators and
other banks and the dissidents' apparent lack of a real strategic plan, Mr.
Davis said, "Ask yourself this question: Do you want your investment in
Center Bancorp managed by a Board that has a demonstrated track record of
creating superior long-term value for shareholders and that will focus on
your long-term best interests? Or do you want your Board influenced by the
addition of three dissidents whose contributions, we believe, will at best
be disruptive, and potentially cause you to fail to realize the superior
longer-term value that can result from the successful implementation of our
strategic plan?"
The full text of the letter follows:
March 22, 2007
Dear Fellow Shareholder:
You will shortly be receiving a detailed proxy statement and a BLUE proxy
card in connection with the Company's Annual Meeting of Shareholders
scheduled for May 15, 2007. Four of our highly qualified directors have
been nominated for re-election. These directors are Brenda Curtis, John J.
Davis, Donald G. Kein and Norman F. Schroeder.
In advance of the Annual Meeting and your receiving our proxy statement, I
wanted to tell you about some important initiatives we have undertaken to
enhance the long-term value of your investment in Center Bancorp, and to
provide some information to you about a hostile proxy contest about to be
launched by a group of dissident shareholders who, we believe, are
interested in their own short-term interests, not the long-term interests
of all shareholders.
Your participation in the Annual Meeting this year is particularly
important as the group of dissidents, led by Larry Seidman, has proposed
its own slate of three director nominees in opposition to the incumbent
directors nominated by your Board. After careful consideration, your Board
concluded that the dissidents lack a real strategic plan or new ideas for
your company.
Your Board also found it disturbing that Mr. Seidman has a
self-acknowledged history of conflict with federal bank regulators and
other banks. Mr. Seidman would have you believe that such conflict is not
significant, yet in a current proxy contest with another bank, Mr. Seidman
described that bank's own regulatory scrutiny as something, "you do not get
for good conduct(1)." We agree and believe that Mr. Seidman's history of
conduct would more likely threaten than advance the implementation of
Center Bancorp's strategic plan and its progress going forward.
UNDER YOUR BOARD'S LEADERSHIP, CENTER BANCORP HAS A DEMONSTRATED RECORD OF
CREATING SUPERIOR LONG-TERM VALUE FOR SHAREHOLDERS
-- Strong one-year record: During the past year, our stock price has
increased by nearly 40%.
-- Strong five-year record: Over the last five years, your Company has
provided a total return to shareholders (increase in stock price plus
reinvestment of dividends) averaging nearly 17% per year.
-- Strong ten-year record: If you had purchased 1,000 shares of Center
Bancorp stock at the end of 1996 and had reinvested your dividends, your
investment today would have yielded you a total return of 314%(2).
The following chart shows that, over the last five years, Center Bancorp
has produced for its shareholders a total return superior to that of both
the S&P 500 Index (a widely recognized indicator of stock market
performance) and an index comprised of 112 banks located in the
mid-Atlantic region.
Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06
------ ------ ------ ------ ------ ------
Center Bancorp Inc. $ 100 $ 135 $ 229 $ 164 $ 148 $ 220
S&P © 500 $ 100 $ 78 $ 100 $ 111 $ 117 $ 135
Hemscott Group Index $ 100 $ 96 $ 122 $ 139 $ 140 $ 158
CENTER BANCORP HAS IN PLACE A STRATEGIC PLAN TO IMPROVE PERFORMANCE AND TO
INCREASE THE VALUE OF THE COMPANY...
WE BELIEVE OUR PLAN IS WORKING
We believe our recent financial results and actions taken to enhance
long-term shareholder value demonstrate that we have made important
progress in implementing our plan.
Consider this:
-- We have grown our loan portfolio, particularly in commercial lending,
and have kept the quality of our loan portfolio very high. In 2006, total
loans grew by 8.8% and commercial real estate loans, a targeted growth
area, grew by 25%. Total non-performing assets at the end of 2006 were
only 0.07% of total assets. At the same time, core deposits have
increased. Strong growth of high-quality loans and core deposits is
important because it reduces our reliance on the lower-yielding investment
portfolio and decreases more costly borrowings. In 2006, we reduced our
investment portfolio by 44% and decreased borrowings by nearly 32%.
-- Increasing fee-based, non-interest income is a key strategic priority
in our goal to lower costs, increase efficiency, improve profitability and
increase returns for our shareholders. Just last week, we signed a
definitive merger agreement to acquire Beacon Trust Company, located in
Madison, New Jersey (the press release is enclosed for your review). We
believe that this transaction, once completed, will add to non-interest
income, diversify Center Bancorp's earnings stream and boost our bottom
line.
-- Cost control is another priority of the Company. Earlier this month,
we announced our plan to lower salary and benefits expense by $1.1 million
or 9 percent (the press release is also enclosed). This, too, will
increase our net income.
-- We have consistently returned capital to shareholders. During the 10
years that we have been listed on the Nasdaq stock exchange, the Company
has paid shareholders a cash dividend every quarter. In fact, since 1996,
we have increased cash dividends paid by an average rate of more than 6%
per year and have paid a total of $29 million in cash dividends to you, our
shareholders, during that period.
YOUR BOARD AND MANAGEMENT HAVE A PLAN TO CONTINUE SUCCESS
We believe that we have made good progress on the elements of our strategic
plan and that its successful execution will make Center Bancorp an even
more attractive institution with a strong position in one of the most
desirable banking markets in the United States, thereby increasing
shareholder value and the value of your investment.
Support your Board of Directors and the continued implementation of its
plan.
CERTAIN THINGS YOU SHOULD KNOW ABOUT THE DISSIDENTS
As discussed above, Larry Seidman and two other nominees, calling
themselves the Committee To Preserve Shareholder Value, have filed a
preliminary proxy statement with the intention of launching a hostile,
costly and disruptive proxy contest to replace some of your Company's
directors and to elect three dissident nominees to your Board. As a result,
you may also receive proxy solicitation materials and a WHITE proxy card
from the committee seeking your vote to elect its three hand-picked
nominees.
Your Board of Directors vigorously opposes the committee's proxy
solicitation and strongly urges you to discard the committee's materials
and to not sign or return any WHITE proxy cards sent to you by the
committee.
We believe that the following facts about the committee are telling:
-- In 1995, the Office of Thrift Supervision issued a Cease and Desist
Order and levied a Civil Money Penalty against Mr. Seidman, after finding
that he recklessly engaged in unsafe and unsound practices in the business
of an insured banking institution. Mr. Seidman does not challenge these
facts.
-- Each of the committee's three nominees, which include Mr. Seidman, was
nominated by a shareholder holding only 100 shares of the Company's common
stock.
-- The dissidents' own proxy statement reveals that their "strategic
plan" for your Company consists of little more than hiring an investment
banker and exploring the possible sale of the bank. In our opinion, a
"plan" focused principally on the sale of the Company ignores the
attractive, and we believe superior, long-term potential value of the
Center Bancorp franchise.
Ask yourself this question: Do you want your investment in Center Bancorp
managed by a Board that has a demonstrated track record of creating
superior long-term value for shareholders and that will focus on your
long-term best interests? Or do you want your Board influenced by the
addition of three dissidents whose contributions, we believe, will at best
be disruptive, and potentially cause you to fail to realize the superior
longer-term value that can result from the successful implementation of our
strategic plan?
SUPPORT CENTER BANCORP'S STRATEGIC PLAN
SUPPORT THE BOARD THAT HAS A DEMONSTRATED RECORD OF CREATING SUPERIOR
LONG-TERM VALUE FOR SHAREHOLDERS
Remember, do not retain any proxy materials which accompany the WHITE card.
If you have any questions or need assistance, please do not hesitate to
contact Georgeson Inc., who is assisting us in this matter, toll free at
888-897-6050.
Thank you for your support. We look forward to communicating with you in
the coming weeks.
On Behalf of the Board of Directors,
Sincerely,
John J. Davis
President and Chief Executive Officer
About Center Bancorp
Center Bancorp, Inc., through its wholly owned subsidiary, Union Center
National Bank, Union, New Jersey, currently operates fourteen banking
locations. Banking centers are located in Union Township (6 locations),
Berkeley Heights, Boonton/Mountain Lakes, Madison, Millburn/Vauxhall,
Morristown (3 locations), Springfield, and Summit, New Jersey. The Bank
also operates remote ATM locations in the Union and Chatham New Jersey
Transit train station, Union Hospital and the Boys and Girls Club of Union.
The Bank recently received approvals to install and operate one additional
off-premise ATM location in the Madison New Jersey Transit Station, which
is scheduled to be operational in 2007.
Union Center National Bank is the largest commercial bank headquartered in
Union County; it was chartered in 1923 and is a full-service banking
company.
For further information regarding Center Bancorp, Inc., call
1-(800)-862-3683. For information regarding Union Center National Bank,
visit our web site at http://www.centerbancorp.com.
Forward-Looking Statements
All non-historical statements in this press release (including statements
regarding the extent to which non-interest expense will be reduced, the
ultimate effect of the initiatives announced in this press release, the
amount of a one-time, pre-tax charge related to termination benefits, the
time when particular savings will be achieved and steps which may be taken
during the balance of 2007 to reduce the level of overhead and to increase
revenue) constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements may use such forward-looking terminology as "expect," "look,"
"believe," "plan," "anticipate," "may," "will" or similar statements or
variations of such terms or otherwise express views concerning trends and
the future. Such forward-looking statements involve certain risks and
uncertainties. These include, but are not limited to, the ultimate timing
for the implementation of the initiatives described herein, the responses
both by the employees directly involved in such initiatives and those not
directly involved, and other risks cited in reports filed by the
Corporation with the Securities and Exchange Commission. Actual results may
differ materially from such forward-looking statements. Center Bancorp,
Inc. assumes no obligation for updating any such forward-looking statement
at any time.
Additional Information
In connection with Center Bancorp, Inc.'s ("Center") 2007 Annual Meeting,
on February 27, 2007, Center filed a preliminary proxy statement with the
Securities and Exchange Commission (the "SEC") and on March 21, 2007 filed
a revised preliminary proxy statement with the SEC. Center will prepare and
file with the SEC a definitive proxy statement and may file other
solicitation materials. CENTER SHAREHOLDERS ARE URGED TO READ THE
PRELIMINARY PROXY STATEMENT AND THE DEFINITIVE PROXY STATEMENT AND OTHER
MATERIALS, WHEN THEY BECOME AVAILABLE, BECAUSE THEY DO OR WILL CONTAIN
IMPORTANT INFORMATION. Shareholders may obtain a free copy of the
preliminary proxy statement and the definitive proxy statement (when
available), and any other documents that may be filed by Center with the
SEC in connection with the 2007 Annual Meeting through the SEC's web site
at www.sec.gov. Shareholders may also obtain free copies of the
preliminary proxy statement, definitive proxy statement (when available)
and other documents filed by Center in connection with the 2007 Annual
Meeting by directing a request to: Center Bancorp, Inc. at 2455 Morris
Avenue, Union, New Jersey 07083, Attention: Anthony C. Weagley, Chief
Financial Officer.
Center Bancorp, Inc. Participant Information
IN ACCORDANCE WITH RULE 14A-12(A)(1)(I) OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, INFORMATION REGARDING THE IDENTITY OF THE PERSONS WHO
MAY, UNDER SEC RULES, BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF
SHAREHOLDERS AND THEIR INTERESTS ARE SET FORTH IN THE PRELIMINARY PROXY
STATEMENT THAT WAS FILED BY CENTER WITH THE SEC.
(1) Mooney, Bill. "Yardville Faces New Challenge; Critical Shareholders
Seek Election to Bank's Board." Trenton Times, 7 Feb 2007.
(2) Bloomberg Data, Reflects the total return on 1,000 shares purchased on
12/31/1996 and sold on 12/29/2006, assuming reinvestment of dividends.
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Investor Inquiries
Anthony C. Weagley
Vice President and Treasurer
Center Bancorp
(908) 206-2886
Media Inquiries:
Mike Pascale or Tom JohnsonAbernathy MacGregor
(212) 371-5999