Center Bancorp and ConnectOne Bancorp announced a definitive agreement to merge, in a transaction valued at $243 million, based on the closing price of Center common stock on January 17, 2014.

Based on financial results as of December 31, 2013, the combined company will have approximately $3 billion in total assets, $2.3 billion in total deposits and $2.1 billion in total loans with 24 branch locations across northern New Jersey. On a pro forma basis, the combined bank will be the fourth largest New Jersey-headquartered banking institution in the markets it serves and will be focused on serving middle-market commercial businesses in some of the most affluent counties in the state.

Under the terms of the merger agreement, which has been approved by both companies’ boards of directors, ConnectOne shareholders will receive a fixed exchange ratio of 2.6 shares of Center common stock for each share of ConnectOne common stock. Upon closing, Center shareholders will own approximately 54% of the combined company’s stock, while ConnectOne shareholders will own approximately 46%. The merger is expected to generate fully phased-in annual cost savings of approximately $7 million or approximately 14% of the expected combined expense. The merger is expected to be accretive to both Center’s and ConnectOne’s earnings per share in 2015, excluding the impact of potential revenue enhancement opportunities. Additionally, it is anticipated that the combined company’s capital ratios will remain well in excess of regulatory minimums and that the combined company will have sufficient capital to continue its growth strategy.

“We are excited to announce the combination of two high-performing New Jersey community banks,” said Frank Sorrentino, ConnectOne’s chairman andCEO. “Both banks have a demonstrated track record of strong financial performance, exceptional customer services and commitment to the communities that we serve. We believe together, with our increased scale, expanded geographic footprint and investments in technology, we are well- positioned to serve the marketplace and continue to be the bank of choice for middle-market commercial businesses.”

Anthony Weagley, Center’s CEO said, “This merger creates value for the shareholders, customers and employees of both companies, while continuing to be an important contributor to the communities in which we operate. The compatible cultures of our two organizations make this partnership a natural fit. We are excited about our combined growth prospects and believe we are well positioned in the marketplace to continue our industry leading growth.”

The combined company’s leadership team will be assembled from both organizations with ConnectOne’s Frank Sorrentino serving as chairman, CEO and President and William S. Burns serving as CFO. Center Bancorp’s Anthony Weagley will serve as COO of the combined organization. Other key executive positions will be drawn from the senior management of both organizations. Additionally, the board of directors of the combined company is expected to have 12 members, comprised of an equal number of current directors of Center and ConnectOne, respectively.

Upon closing, Union Center National Bank, the bank subsidiary of Center, will merge with and into ConnectOne Bank, the bank subsidiary of ConnectOne. ConnectOne Bank will continue to use the ConnectOne name and the holding company will change its name to ConnectOne Bancorp. Trading on the NASDAQ Global Select Market will be under the symbol “CNOB.”

The transaction is expected to close either late in the second calendar quarter or early in the third calendar quarter of 2014. The transaction, which is intended to be structured as a tax-free exchange of shares, is subject to approval by the shareholders of both companies, regulatory approval and certain other customary closing conditions.

Keefe, Bruyette & Woods, a Stifel Company, served as financial advisor to Center Bancorp and rendered a fairness opinion in connection with the transaction to Center. Lowenstein Sandler is acting as Center’s legal counsel. FinPro Capital Advisors served as financial advisor to ConnectOne. Raymond James & Associates rendered a fairness opinion in connection with the transaction to ConnectOne. Windels, Marx, Lane & Mittendorf and Sullivan & Cromwell LLP are serving as ConnectOne’s legal counsel.