Lakeland Bancorp, Inc. (NasdaqGS:LBAI) entered into a definitive agreement to acquire Highlands Bancorp, Inc. (OTCPK:HSBK) for $55.2 million on August 23, 2018. Under the agreement and plan of merger, shareholders of Highlands Bancorp will receive, for each outstanding share of Highlands Bancorp common stock that they own at the effective time of the merger, 1.015 shares of Lakeland Bancorp common stock. Lakeland Bancorp expects to issue an aggregate of approximately 2.8 million shares of its common stock in the merger, and will cash out outstanding Highlands Bancorp options. Additionally, each outstanding restricted share shall be treated in the same manner as all other shares of Highlands common stock are treated. Pursuant to the transaction, Highlands Bancorp will be merged with and into Lakeland Bancorp, with Lakeland Bancorp as the surviving bank holding company, and Highlands State Bank will merge with and into Lakeland Bank, with Lakeland Bank as the surviving bank. In case of termination, Highlands Bancorp will pay $2.25 million to Lakeland. Additionally, the Directors and Officers of Lakeland Bancorp shall be the Directors and Officers of the surviving corporation. The transaction is subject to regulatory approval including without limitation approvals or waivers of the Federal Deposit Insurance Corporation, the New Jersey Department of Banking and Insurance and the Federal Reserve Board, effectiveness of the registration statement, approval of the listing on the NASDAQ of the Lakeland Bancorp common stock, third party approval, the receipt by each of Lakeland Bancorp and Highlands Bancorp of an opinion to the effect that the merger will be treated as a reorganization qualifying under Section 368(a) of the Internal Revenue Code of 1986, the issuance of Lakeland Bancorp common stock shall have been qualified in every state where such qualification is required under the applicable state securities Laws, all statutory waiting periods in respect thereof (including the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, if applicable) shall have expired, approval of the holding company merger by Highlands Bancorp’s shareholders and other customary conditions. No approval is required from Lakeland Bancorp’s shareholders. The Boards of Directors of both companies have unanimously approved the transaction. Highlands Bancorp’s Directors and certain of its Executive Officers, owning in the aggregate approximately 12.65% of Highlands Bancorp’s outstanding shares, have signed voting agreements pursuant to which they have agreed to vote their shares in favor of the holding company merger. As on November 26, 2018, the transaction has been approved by FDIC. As on December 13, 2018, the transaction was approved by the shareholders of Highlands Bancorp. The transaction is expected to close early in 2019. As on December 13, 2018, the transaction is expected to close on or about January 4, 2019. The transaction is expected to be approximately 4% accretive to Lakeland Bancorp’s earnings per share in 2019 and approximately 1.5% dilutive to tangible book value with an estimated earnback less than 2 years using the crossover method. Peter H. Ehrenberg and Laura R. Kuntz of Lowenstein Sandler LLP acted as legal advisors and Bill Hickey, John Beckelman, Justin Kessler and Eleanor Miller of Sandler O’Neill + Partners, L.P. acted as financial advisors and rendered a fairness opinion to Lakeland Bancorp. Dan Flaherty and Matthew Veneri of FIG Partners, L.P. acted as financial advisors and Robert Schwartz of Windels Marx Lane & Mittendorf, LLP acted as legal advisor to Highlands Bancorp. American Stock Transfer and Trust Company acted as exchange agent to Lakeland and Highlands in the transaction. Laurel Hill Advisory Group, LLC acted as the proxy solicitor for Highlands and will be paid fees of $6,000 for its services. Highlands agreed to pay FIG a fee of $50,000 upon rendering its fairness opinion to the Highlands Board of Directors. In addition to the fairness opinion fee, upon the successful completion of the merger FIG will be paid a success fee equal to 1% of the merger consideration. Lakeland Bancorp, Inc. (NasdaqGS:LBAI) completed the acquisition of Highlands Bancorp, Inc. (OTCPK:HSBK) on January 4, 2019.