Contact Information: CONTACT: Robert F. Mangano President & Chief Executive Officer (609) 655-4500 Joseph M. Reardon Sr. Vice President and Treasurer (609) 655-4500
1ST Constitution Bancorp Completes Sale of $12 Million in Fixed Rate Cumulative Perpetual Preferred Stock and Common Stock Warrant to the U.S. Treasury
| Source: 1ST Constitution Bancorp
CRANBURY, NJ--(Marketwire - December 23, 2008) - 1ST Constitution Bancorp (NASDAQ : FCCY ), the
holding company for 1ST Constitution Bank, is pleased to announce that it
closed a sale to the U.S. Treasury of 12,000 shares of Fixed Rate
Cumulative Perpetual Preferred Stock, Series B, of 1ST Constitution Bancorp
for $12 million in cash and issued a warrant to the Treasury to purchase
200,222 shares of 1ST Constitution Bancorp common stock. 1ST Constitution
was chosen as one of the stronger community banks to participate in the
U.S. Treasury Department's TARP Capital Purchase Program. On December 11,
2008, 1ST Constitution was advised by the Treasury that 1ST Constitution's
application under the program was preliminarily approved by the U.S.
Treasury on December 8, 2008. 1ST Constitution intends to use the proceeds
from this sale for general corporate purposes which include utilizing the
additional capital to grow the lending operations of 1ST Constitution Bank.
At this juncture, 1ST Constitution does not have any plans to participate
in the Treasury's TARP program related to the sale of troubled assets to
the Treasury. However, as an added benefit to 1ST Constitution Bank's
clients, 1ST Constitution Bank has agreed to voluntarily participate in the
Federal Deposit Insurance Corporation's fee-based expanded insurance
program which provides, without limitation, a guarantee on all of 1ST
Constitution Bank's non-interest bearing transaction accounts through
December 31, 2009.
President and Chief Executive Officer, Robert F. Mangano, stated, "Although
1ST Constitution is a well-capitalized organization, we believe the TARP
capital purchase program provides an excellent opportunity for strong banks
like 1ST Constitution to participate in and support the recovery of the
U.S. economy. 1ST Constitution chose to voluntarily enter the program in
order to support the Treasury's efforts to provide additional long-term
funds which should facilitate additional lending opportunities.
Furthermore, the enhancement to our already solid capital position will
provide strategic flexibility to our management team, while promoting
continued confidence in 1ST Constitution."
At September 30, 2008, 1ST Constitution Bank's capital ratios were all
above the level as required to be categorized as "well capitalized." 1ST
Constitution Bank's total risk-based capital, Tier I capital, and leverage
capital were 15.58 percent, 13.79 percent, and 11.35 percent, respectively,
at September 30, 2008. The regulatory requirement to be considered "well
capitalized" for total risk-based capital, Tier I capital, and leverage
capital are 10 percent, 6 percent, and 5 percent, respectively.
1ST Constitution's Fixed Rate Cumulative Perpetual Preferred Stock, Series
B, will have a stated value and liquidation preference of $12 million and
pay a cumulative dividend at the rate of five percent per annum for the
first five years which will reset to a rate of nine percent per annum after
year five. The shares are callable by 1ST Constitution at par after three
years and may be fully redeemed earlier if 1ST Constitution raises new
equity capital of at least $12 million.
In conjunction with the purchase of 1ST Constitution's preferred shares,
the Treasury will receive a warrant to purchase 200,222 shares in 1ST
Constitution common shares with an aggregate exercise price equal to $1.8
million or 15 percent of the stated value of the preferred stock. 1ST
Constitution's common stock underlying these warrants represents less than
6 percent of 1ST Constitution's outstanding common shares at September 30,
2008. The warrant exercise price of $8.99 per share of common stock was
based on the average of the closing prices of 1ST Constitution Bancorp's
common stock for the 20 trading days (in which shares were traded) ending
on the last trading day (in which shares were traded) prior to the date of
preliminary approval by the Treasury of 1ST Constitution's participation in
the TARP capital purchase program.
1ST Constitution Bancorp, through its primary subsidiary 1ST Constitution
Bank, operates 11 branch banking offices in Cranbury (2), Jamesburg, Fort
Lee, Hamilton, Hightstown, Montgomery, Perth Amboy, Plainsboro, Princeton,
and West Windsor. 1ST Constitution also operates
1stconstitutiondirect.com, which is an internet bank available for its
clients who prefer to bank from their computer rather than traveling to a
branch office.
1ST Constitution Bancorp common stock is traded on the Nasdaq Global Market
under the trading symbol "FCCY." Information about 1ST Constitution
Bancorp can be accessed via the Internet at www.1STCONSTITUTION.com.
The foregoing contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements are not
historical facts and include expressions about management's confidence and
strategies and management's expectations about new and existing programs
and products, relationships, opportunities, taxation, technology and market
conditions. These statements may be identified by such forward-looking
terminology as "expect," "look," "believe," "anticipate," "may," "will," or
similar statements or variations of such terms. Actual results may differ
materially from such forward-looking statements. Factors that may cause
results to differ materially from such forward-looking statements include,
but are not limited to, changes in the direction of the economy in New
Jersey, the direction of interest rates, effective income tax rates, loan
prepayment assumptions, continued levels of loan quality and origination
volume, continued relationships with major customers including sources for
loans, as well as the effects of general economic conditions and legal and
regulatory barriers and structure. 1ST Constitution Bancorp assumes no
obligation for updating any such forward-looking statements at any time.