Center Bancorp, Inc. Reports First Quarter 2014 Earnings

Center Bancorp, Inc. Reports First Quarter 2014 Earnings  UNION, N.J., April 24, 2014 (GLOBE NEWSWIRE) -- Center Bancorp, Inc. (Nasdaq:CNBC) (the "Corporation" or "Center"), parent company of Union Center National Bank ("UCNB" or the "Bank"), today reported operating results for the first quarter ended March 31, 2014. Net income available to common stockholders amounted to $4.4 million, or $0.27 per fully diluted common share, for the quarter ended March 31, 2014, compared with net income available to common stockholders of $4.9 million, or $0.30 per fully diluted common share, for the quarter ended March 31, 2013.  Net income available to common stockholders, excluding merger-related expenses for the pending merger with ConnectOne Bancorp, announced January 21, 2014, of approximately $1.1 million pre-tax or $703,000 post-tax, was $5.1 million or $0.31 per fully diluted common share for the quarter ended March 31, 2014.                                                 For the Three Months Ended (dollar in thousands, except share data,        3/31/2014 12/31/2013 3/31/2013 unaudited) Net income available to common stockholders     $4,370   $4,955    $4,868 Net income available to common stockholders,    5,073     4,955      4,868 excluding merger-related expenses (1) Earnings per common share - diluted             $0.27    $0.30    $0.30 Earnings per common share,excluding            $0.31    $0.30     $0.30 merger-related expenses – diluted (1) (1) Adjusted for the merger-related expenses in the period of $1.1 million (pre-tax) or $703,000 (post-tax).   "Overall 2014 has unfolded with a strong first quarter, net of the reported acquisition costs for the pending merger with ConnectOne Bank. The Corporation reported 18.8 percent commercial loan growth, 4.5 percent deposit growth, flat operating expense (excluding merger-related expenses) and continued strong asset quality compared to March 31, 2013. The continued momentum in expanding our franchise and client base with continued emphasis on the loan segments positions the balance sheet for further earnings momentum in 2014. Our actions, supported by our earnings performance and strategic growth, create incremental shareholder value," said Anthony C. Weagley, President & Chief Executive Officer of Union Center National Bank.                       Highlights for the quarter include:    oStrong balance sheet with strong credit quality compared to prior year.        o3.28 percent tax equivalent annualized net interest margin, compared to     3.28 percent in the linked sequential quarter.        o3.8 percent average earning asset growth in 2014.        o12.3 percent total loan growth in 2014 compared to March 31, 2013.        o4.5 percent deposit growth in 2014 compared to March 31, 2013.        o4.5 percent non-interest bearing deposit growth in 2014 compared to March     31, 2013.        oNon-performing assets (NPA's) of $3.9 million were 0.23 percent of total     assets at March 31, 2014, compared to $4.2 million or 0.26 percent at     March 31, 2013 and $3.4 million or 0.20 percent at December 31, 2013. The     allowance for loan losses as a percentage of total non-performing loans     was 291.6 percent at March 31, 2014 compared to 390.7 percent at March 31,     2013 and 329.4 percent at December 31, 2013.        oThe Tier 1 leverage capital ratio was 9.79 percent at March 31, 2014,     compared to 9.31 percent at March 31, 2013, and 9.69 percent at December     31, 2013, exceeding regulatory guidelines in all periods.        oTangible book value per common share rose to $8.90 at March 31, 2014,     compared to $8.36 at March 31, 2013 and $8.58 at December 31, 2013.        oThe efficiency ratio for the first quarter of 2014 on an annualized basis     was 48.1 percent as compared to 48.5 percent in the first quarter of 2013     and 46.6 percent in the fourth quarter of 2013.        oDeposits increased $57.7 million to $1.34 billion at March 31, 2014 from     $1.28 billion at March 31, 2013.                                                                   Selected Financial Ratios (unaudited;                                                       annualized where applicable)                     Adjusted                    for Merger                        Related                     Expenses As of or for the    3/31/14      3/31/14  12/31/13  9/30/13  6/30/13  3/31/13 quarter ended: Return on average   1.22%        1.05%    1.20%     1.23%    1.22%    1.23% assets (a) Return on average   11.78%       10.16%   11.85%    12.53%   11.84%   12.09% equity (a) Net interest margin (tax equivalent     3.28%        3.28%    3.29%     3.31%    3.28%    3.31% basis) Loans / deposits    73.70%       73.70%   71.61%    72.85%   70.48%   68.60% ratio Stockholders' equity / total      10.41%       10.37%   10.08%    10.04%   10.04%   10.23% assets (a) Efficiency ratio    48.1%        48.1%    46.6%     45.8%    47.0%    48.5% (1) Book value per      $9.97        $ 9.93  $ 9.61   $9.40  $9.17   $ 9.39 common share(a) Return on average tangible equity (1) 13.05%       11.25%   13.16%    13.98%   13.17%   13.49% (a) Tangible common stockholders'       8.83%        8.78%    8.48%     8.42%    8.38%    8.58% equity / tangible assets (1) (a) Tangible book value per common share    $8.95        $ 8.90  $ 8.58   $8.37   $ 8.14   $ 8.36 (1) (a)                                                                  (1) Information reconciling non-GAAP measures to GAAP measures is presented elsewhere in this press release, and calculations for the "Adjusted for Merger Related Expenses" for the 3/31/14 period should also be adjusted for (a) below.                                                                  (a) "Adjusted for Merger Related Expenses" for the 3/31/14 period reflect the exclusion of merger-related expenses of approximately $1.1 million (pre-tax) or $703,000 (post-tax) which would result in net income available to common stockholders of approximately $5.1 million, and stockholder's equity of approximately $174.5 million . There are no significant merger-related expenses incurred for other historical periods presented.   Net Interest Income  For the three months ended March 31, 2014, total interest income on a taxable equivalent basis increased $325,000 or 2.2 percent, to $15.0 million, compared to the three months ended March 31, 2013. Total interest expense decreased by $7,000, or 0.3 percent, to $2.7 million, for the three months ended March 31, 2014, compared to the same period last year. Net interest income on a taxable equivalent basis was $12.3 million for the three months ended March 31, 2014, increasing $332,000, or 2.8 percent, from $12.0 million for the comparable period in 2013. Compared to 2013, for the three months ended March 31, 2014, average interest earning assets increased $54.7 million while net interest spread was at 3.15 percent and 3.17 percent for the three months ended March 31, 2014 and March 31, 2013, respectively. For the quarter ended March 31, 2014, the Corporation's net interest margin on a taxable equivalent annualized basis decreased to 3.28 percent as compared to 3.31 percent for the same three month period in 2013.  The 2.2 percent increase in total interest income on a taxable equivalent basis reflected an increase of $54.7 million in interest earning assets. The average volume contributed $543,000 of interest income offset in part by lower rates which reduced interest income by $218,000.  The 0.3 percent decrease in interest expense reflects a favorable shift in the deposit mix and the impact of the sustained low levels in short-term interest rates, offsetting higher volumes of interest bearing deposits.The average cost of funds declined 4 basis points to 0.86 percent from 0.90 percent for the quarter ended March 31, 2014 as compared to the quarter ended March 31, 2013 and on a linked sequential quarter decreased 5 basis points compared to the fourth quarter of 2013.  Commenting on the Corporation's net interest margin, Mr. Weagley remarked: "We maintained our margins during the period, despite the high liquidity pool carried during the period, which has not been entirely offset by the projected investing activity.We continue to see opportunities to fund loans and position our cash accordingly. We expect an improvement in margin, principally given the continued volume of asset deployment into loans from cash and elimination of temporary factors holding the margin down as we move through the second quarter of 2014."  Earnings Summary for the Period Ended March 31, 2014  The following table presents condensed consolidated statement of income data for the periods indicated.  Condensed Consolidated Statements of Income (unaudited)                                                                 (dollars in thousands,                                           except per share data) For the quarter ended:  3/31/2014  12/31/13   9/30/13    6/30/13    3/31/13 Net interest income     $11,610   $11,866   $11,722   $11,228   $11,370 Provision for loan      625        350        —          —          — losses Net interest income afterprovision for     10,985     11,516     11,722     11,228     11,370 loan losses Other income            2,521      1,756      1,543      1,707      1,845 Other expense           7,496      6,459      6,205      6,076      6,538 Income before income    6,010      6,813      7,060      6,859      6,677 tax expense Income tax expense      1,612      1,829      1,966      1,936      1,753 Net income              $4,398    $4,984    $5,094    $4,923    $4,924 Net income available to $4,370    $4,955    $ 5,066   $4,895    $4,868 common stockholders Earnings per common                                              share: Basic                   $0.27     $0.30     $0.31     $0.30     $0.30 Diluted                 $0.27     $0.30     $0.31     $0.30     $0.30 Weighted average common                                            shares outstanding: Basic                   16,350,183 16,350,183 16,349,480 16,348,915 16,348,215 Diluted                 16,405,540 16,396,931 16,385,155 16,375,774 16,373,588                                                                  Other Income  The following table presents the components of other income for the periods indicated.  (in thousands, unaudited)                                           For the quarter ended:                3/31/14 12/31/13 9/30/13 6/30/13 3/31/13 Service charges on deposit accounts   $393  $409   $356   $318   $289 Loan related fees                     181    289      297     114     227 Net gains on sales of loans held for  36     39       26      91      138 sale Annuities and insurance commissions   100    151      92      146     100 Debit card and ATM fees               104    124      127     133     117 Bank-owned life insurance             255    260      265     274     565 Net investment securities gains       1,415  449      343     600     319 Other fees                            37     35       37      31      90 Total other income                    $2,521 $1,756  $1,543 $1,707 $1,845  Total other income increased $676,000 for the first quarter of 2014 compared with the same period in 2013.During the first quarter of 2014, the Corporation recorded net investment securities gains of $1,415,000 compared to net investment securities gains of $319,000 for the same period last year. Excluding net securities gains, the Corporation recorded other income of $1.1 million for the three months ended March 31, 2014 compared to other income of $1.5 million for the first quarter of 2013 and $1.3 million for the three months ended December 31, 2013. Increases in other income in the first quarter of 2014 when compared to the first quarter of 2013 (excluding securities gains) were primarily from an increase of $104,000 in service charges on deposit accounts, offset by a decline of $102,000 in net gains on sales of loans held for sale, a decrease of $46,000 in loan related fees, a decrease in bank owned life insurance income of $310,000, a $13,000 decline in debit card and ATM fees and a $53,000 decline in other fees.  Other Expense  The following table presents the components of other expense for the periods indicated.  (in thousands, unaudited)                                           For the quarter ended:                3/31/14 12/31/13 9/30/13 6/30/13 3/31/13 Salaries                              $2,569 $2,659  $2,532 $2,652 $2,653 Employee benefits                     763     734      715     683     837 Occupancy and equipment               1,080   962      839     811     906 Professional and consulting           255     310      352     230     219 Stationery and printing               84      108      62      78      85 FDIC Insurance                        300     294      283     208     313 Marketing and advertising             40      47       94      62      101 Computer expense                      345     364      362     343     353 Bank regulatory related expenses      93      84       86      82      90 Postage and delivery                  61      63       71      70      56 ATM related expenses                  66      64       66      65      71 Other real estate owned, net          2       4        7       107     19 Amortization of core deposit          6       7        6       8       10 intangible Merger-related expenses               1,060   —        —       —       — All other expenses                    772     759      730     677     825 Total other expense                   $7,496 $6,459  $6,205 $6,076 $6,538                                                                     Total other expense for the first quarter of 2014 amounted to $7.5 million, which was approximately $1,037,000 or 16.1 percent higher than other expense for the three months ended December 31, 2013. Excluding the merger-related expenses of $1.1 million, other expense decreased $23,000 or 0.4 percent, primarily resulting from a decrease in salaries and benefit expense, which decreased $61,000. Other decreases contributing to the decrease in non-merger related operating overhead included professional and consulting of $55,000, stationery and printing of $24,000, marketing and advertising of $7,000 and computer expense of $19,000. These decreases were partially offset by increases in occupancy and equipment expense of $118,000, primarily due to the cost of snow removal and related expense, FDIC insurance expense of $6,000, bank regulatory expense of $9,000 and all other expense of $13,000.  The increase in other expense for the three months ended March 31, 2014, when compared to the quarter ended March 31, 2013, was approximately $958,000. Excluding the merger-related expenses of $1.1 million, other expense decreased $102,000 or 1.6 percent. Increases primarily included occupancy and equipment expense of $174,000 primarily due to the cost of snow removal and related expense, professional and consulting expense of $36,000, and postage and delivery expense of $5,000. These increases were partially offset by decreases of $158,000 in salary and benefit expense, FDIC insurance expense of $13,000, marketing and advertising expense of $61,000, computer expense of $8,000, ATM related expense of 5,000, other real estate owned expense of $17,000, ATM related expenses of $5,000, and all other expense of $53,000.  Statement of Condition Highlights at March 31, 2014  Condensed Statements of Condition  The following table presents condensed statements of condition data as of the dates indicated.  Condensed Consolidated Statements of Condition (unaudited)                                                                (in thousands)                                                  At quarter ended:  3/31/14     12/31/13    9/30/13     6/30/13     3/31/13 Cash and due from  $106,282  $82,692   $33,557    $61,959    $116,755 banks Investment                                                      securities: Available for sale 287,471     323,070     413,147     419,773     458,004 Held to maturity   214,191     215,286     153,486     136,786     78,212 Loans held for sale, at fair      —           —           101         585         774 value Loans              987,529     960,943     957,492     902,822     879,387 Allowance for loan (10,633)    (10,333)    (10,194)    (10,202)    (10,232) losses Restricted investment in bank 8,986       8,986       8,986       8,986       8,966 stocks, at cost Premises and       13,833      13,681      13,472      13,456      13,544 equipment, net Goodwill           16,804      16,804      16,804      16,804      16,804 Core deposit       17          24          29          36          45 intangible Bank-owned life    35,989      35,734      35,474      35,209      34,935 insurance Other real estate  220         220         220         220         1,536 owned Other assets       15,471      25,975      21,842      19,264      11,065 Total assets       $1,676,160 $1,673,082 $1,644,416 $1,605,698 $1,609,795 Deposits           $1,339,885 $1,342,005 $1,314,317 $1,280,894 $1,282,223 Borrowings         151,155     151,155     151,155     151,155     151,155 Other liabilities  11,307      11,338      13,806      12,364      11,664 Stockholders'      173,813     168,584     165,138     161,285     164,753 equity Total liabilities and stockholders'  $1,676,160 $1,673,082 $1,644,416 $1,605,698 $1,609,795 equity                                                                 Highlights as of March 31, 2014 included:    oContinued balance sheet strength, with total assets amounting to $1.7     billion at March 31, 2014.        oTotal loans were $987.5 million at March 31, 2014, increasing $108.1     million, or 12.3 percent, from March 31, 2013.Total real estate loans     increased $57.6 million, or 9.4 percent, from March 31, 2013. Commercial     loans increased $50.2 million, or 18.8 percent, year over year.        oDeposits totaled $1.34 billion at March 31, 2014, increasing $57.7     million, or 4.5 percent, since March 31, 2013.Total Demand, Savings,     Money Market, and certificates of deposit less than $100,000 increased     $47.0 million or 4.0 percent from March 31, 2013. The increases reflect     continued core deposit growth.        oBorrowings totaled $151.2 million at March 31, 2014 and March 31, 2013.  Commenting on the balance sheet, Mr. Weagley indicated: "We strengthened our balance sheet during the first quarter of 2014, with a strong Tier 1 ratio of 9.79 percent, up from 9.31 percent in the first quarter of 2013, and 9.69 percent at December 31, 2013. We also continue to see positive signs for growth coupled with sustained asset quality."  The following table reflects the composition of the Corporation's deposits as of the dates indicated.  Deposits                                                        (unaudited) (in thousands)                                                  At quarter ended:  3/31/14     12/31/13    9/30/13     6/30/13     3/31/13 Demand:                                                         Non-interest       $223,332   $227,370   $238,214   $219,669   $213,794 bearing Interest-bearing   260,064     266,613     231,390     195,954     207,427 Savings            180,032     178,889     186,194     221,271     221,274 Money market       520,022     522,578     505,490     493,155     488,124 Time               156,435     146,555     153,029     150,845     151,604 Total deposits     $1,339,885 $1,342,005 $1,314,317 $1,280,894 $1,282,223                                                                 Loans  The Corporation's total loans increased $26.6 million to $987.5 million or at an annualized rate of 11.1% at March 31, 2014, from $960.9 million at December 31, 2013.The allowance for loan losses amounted to $10.6 million and $10.3 million at March 31, 2014 and December 31, 2013, respectively."We continue to see strong growth in demand and momentum in generating new prospects into our pipelines consistent with prior periods.The success that we have achieved continued to aid in growing the portfolio in 2014, as cited by our committed loan volume. During the first quarter we had a number of loans that delayed closing until late in the quarter and in certain cases into the second quarter of 2014. This, coupled with the prepayment volume, dampened the overall average growth; however, we expect the volume to continue to fuel overall net growth in future periods, "commented Mr. Weagley.At March 31, 2014, the Corporation had $184.5 million in overall undisbursed loan commitments, which consisted primarily of unused commercial lines of credit, home equity lines of credit and available usage from active construction facilities. Included in the overall undisbursed commitments are the Corporation's "Approved, Accepted but Unfunded" pipeline, which includes approximately $29.8 million in commercial and commercial real estate loans and $3.4 million in residential mortgages expected to fund over the next 90 days.  The loan growth during the period resulted from approximately $81.5 million in new loans and advances during the first quarter.This growth was offset in part by prepayments of $33.9 million coupled with scheduled payments, maturities and payoffs of $20.7 million. Average loans during the first quarter of 2014 totaled $963.1 million as compared to $873.9 million during the first quarter of 2013, representing a 10.1 percent increase.  At the end of the first quarter of 2014, the loan portfolio remained well diversified with commercial and industrial (C&I) loans, including owner-occupied commercial real estate loans, accounting for 32.1 percent of the loan portfolio, commercial real estate loans representing 49.7 percent of the loan portfolio, and residential real estate and consumer and other loans representing 14.2 percent of the loan portfolio. Construction and development loans accounted for only 4.0 percent of the loan portfolio.The loan volume increase within the portfolio compared to March 31, 2013, amounted to $108.8 million in commercial and commercial real estate loans and $4.1 million in construction loans, offset by a decrease of $5.2 million in residential mortgage loans. At March 31, 2014, net loans totaled $976.6 million compared to $869.2 million at March 31, 2013.  The following reflects the composition of the Corporation's loan portfolio as of the dates indicated.  Loans (unaudited)                                                 (in thousands)                                                    At quarter ended:            3/31/14   12/31/13  9/30/13   6/30/13   3/31/13 Real estate loans:                                                Residential                  $ 140,012 $ 140,477 $ 142,744 $ 142,772 $ 145,228 Commercial                   490,413   479,083   464,374   443,441   431,771 Construction                 39,308    42,722    42,727    38,565    35,166 Total real estate loans      669,733   662,282   649,845   624,778   612,165 Commercial loans             316,974   297,762   306,974   277,734   266,762 Consumer and other loans     438       561       517       147       326 Total loans before deferred  987,145   960,605   957,336   902,659   879,253 fees and costs Deferred costs, net          384       338       156       163       134 Total loans                  $ 987,529 $ 960,943 $ 957,492 $ 902,822 $ 879,387                                                                   Asset Quality  Non-accrual loans increased from $3.1 million at December 31, 2013 to $3.4 million at March 31, 2014. Other real estate owned was $220,000 at March 31, 2014 and at December 31, 2013.   At March 31, 2014, non-performing assets totaled $3.87 million, or 0.23 percent of total assets, as compared with $4.2 million, or 0.26 percent, at March 31, 2013 and $3.36 million, or 0.20 percent, at December 31, 2013. The increase in non-performing assets from December 31, 2013 to March 31, 2014 reflected the addition of a commercial loan in the amount of $676,000 to non-accrual status, and subsequently reduced by a partial charge-off of $333,000. The decrease from March 31, 2013 to March 31, 2014 reflects the Corporation's ability to satisfactorily work out certain problem loans. As of March 31, 2014, the major components of non-accrual loans were comprised of three relationships which equates to 56.8% of total non-performing assets. The largest component, totaling $723,000 of the total, is secured by a senior lien on a mixed use commercial property, located in Bergen County, New Jersey. The Corporation is adequately secured with sufficient cash flows to service the loan. The loan, while not reinstated into accruing status in the first quarter, is receiving monthly payments and is expected to be restored to accruing status in 2014. An additional $676,000 of the total is a commercial note secured by a mixed use property, located in Ocean County, New Jersey, with a low loan to value with no loss expected. Increased collection efforts have been implemented on these two notes. An additional $537,000 of the total is secured by a senior lien on a residential property located in Morris County, New Jersey. This loan has been restructured, and is being monitored for performance under the terms and conditions of the restructured agreement. The remaining non-accrual loans are primarily residential properties and are in the process of being worked out. Seven loans totaling $2.0 million or 60 percent of the total non-accrual loan balances were making payments at March 31, 2014.  The following table presents the components of non-performing assets and other asset quality data for the periods indicated.  (dollars in thousands, unaudited)                                             As of or for the quarter ended:      3/31/14    12/31/13   9/30/13    6/30/13    3/31/13 Non-accrual loans (1)                $3,409    $3,137    $2,032    $2,508    $2,565 Loans 90 days or more past due and   237        —          —          53         55 still accruing Total non-performing loans           3,646      3,137      2,032      2,561      2,620 Other real estate owned              220        220        220        220        1,536 Total non-performing assets          $3,866    $3,357    $2,252    $2,781    $4,156                                                                              Non-performing assets / total assets 0.23%      0.20%      0.14%      0.17%      0.26% Non-performing loans / total loans   0.37%      0.33%      0.21%      0.28%      0.30% Net charge-offs                      $325      $211      $8        $30       $5 Net charge-offs / average loans (2)  0.13%      0.09%      N/M        0.01%      N/M Allowance for loan losses / total    1.08%      1.08%      1.06%      1.13%      1.16% loans Allowance for loan losses /          291.6%     329.4%     501.7%     398.4%     390.7% non-performing loans                                                                              Total assets                         $1,676,160 $1,673,082 $1,644,416 $1,605,698 $1,609,795 Total loans                          987,529    960,943    957,492    902,822    879,387 Average loans                        963,098    950,541    921,523    888,175    873,916 Allowance for loan losses            10,633     10,333     10,194     10,202     10,232                                           (1) Seven loans totaling $2.0 million or (60%) of the total non-accrual loan balance were making payments at March 31, 2014. (2) Annualized.                                                                              N/M – not meaningful  The allowance for loan losses at March 31, 2014 amounted to approximately $10.6 million, or 1.08 percent of total loans, compared to 1.16 percent of total loans at March 31, 2013. The allowance for loan losses as a percentage of total non-performing loans was 291.6 percent at March 31, 2014 compared to 390.7 percent at March 31, 2013.  Capital  At March 31, 2014, total stockholders' equity amounted to $173.8 million, or 10.37 percent of total assets. Tangible common stockholders' equity was $145.7 million, or 8.78 percent of tangible assets, compared to 8.58 percent at March 31, 2013. Book value per common share was $9.93 at March 31, 2014, compared to $9.39 at March 31, 2013. Tangible book value per common share was $8.90 at March 31, 2014 compared to $8.36 at March 31, 2013.  At March 31, 2014, the Corporation's Tier 1 leverage capital ratio was 9.79 percent, the Tier 1 risk-based capital ratio was 12.39 percent and the total risk-based capital ratio was 13.21 percent. Tier 1 capital increased $14.7 million to approximately $162.5 million at March 31, 2014 from $147.8 million at March 31, 2013, reflecting an increase in retained earnings.  At March 31, 2014, the Corporation's capital ratios continued to exceed the minimum Federal requirements for a bank holding company, and Union Center National Bank's capital ratios continued to exceed each of the minimum levels required for classification as a "well capitalized institution" under the Federal Deposit Insurance Corporation Improvement Act.  Non-GAAP Financial Measures  Reported amounts are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Corporation's management believes that the supplemental non-GAAP information provided in this press release is utilized by market analysts and others to evaluate a company's financial condition and, therefore, that such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures presented by other companies.  "Return on average tangible stockholders' equity" is a non-GAAP financial measure and is defined as net income as a percentage of tangible stockholders' equity. Tangible stockholders' equity is defined as common stockholders' equity less goodwill and other intangible assets. The return on average tangible stockholders' equity measure may be important to investors that are interested in analyzing the Corporation's return on equity excluding the effect of changes in intangible assets on equity.  The following table presents a reconciliation of average tangible stockholders' equity and a reconciliation of the annualized return on average tangible stockholders' equity for the periods presented.  (dollars in thousands)                                            For the quarter ended:       3/31/14   12/31/13  9/30/13   6/30/13   3/31/13 Net income                   $4,398   $4,984   $5,094   $4,923   $4,924 Average stockholders' equity $ 173,184 $ 168,273 $ 162,557 $ 166,385 $ 162,853 Less: Average goodwill and other   16,825    16,831    16,838    16,845    16,855 intangible assets Average tangible             $156,359 $151,442 $145,719 $149,540 $145,998 stockholders' equity                                                                  Return on average            10.16%    11.85%    12.53%    11.84%    12.09% stockholders' equity (1) Add: Average goodwill and other   1.09%     1.31%     1.45%     1.33%     1.40% intangible assets (1) Return on average tangible   11.25%    13.16%    13.98%    13.17%    13.49% stockholders' equity (1) (1) Annualized.                                                   "Tangible book value per common share" is a non-GAAP financial measure and represents tangible stockholders' equity (or tangible book value) calculated on a per common share basis. The disclosure of tangible book value per common share may be helpful to those investors who seek to evaluate the Corporation's book value per common share without giving effect to goodwill and other intangible assets.  The following table presents a reconciliation of stockholders' equity to tangible common stockholders' equity and book value per common share to tangible book value per common share as of the dates presented.  (dollars in thousands, except per share data) At quarter ended:       3/31/14    12/31/13   9/30/13    6/30/13    3/31/13 Common shares           16,369,012 16,369,012 16,369,012 16,367,744 16,348,915 outstanding Stockholders' equity    $173,813  $168,584  $165,138  $161,285  $164,753 Less: Preferred stock   11,250     11,250     11,250     11,250     11,250 Less: Goodwill and      16,821     16,827     16,834     16,840     16,849 other intangible assets Tangible common         $145,742  $140,507  $137,054  $133,195  $136,654 stockholders' equity                                                                 Book value per common   $9.93     $9.61     $9.40     $9.17     $9.39 share Less: Goodwill and      1.03       1.03       1.03       1.03       1.03 other intangible assets Tangible book value per $8.90     $8.58     $8.37     $8.14     $8.36 common share  "Tangible common stockholders' equity/tangible assets" is a non-GAAP financial measure and is defined as tangible common stockholders' equity as a percentage of total assets minus goodwill and other intangible assets. This measure may be important to investors that are interested in analyzing the financial condition of the Corporation without consideration of intangible assets, inasmuch as tangible common stockholders' equity and tangible assets both exclude goodwill and other intangible assets.  The following table presents a reconciliation of total assets to tangible assets and a comparison of total stockholders' equity/total assets to tangible common stockholders' equity/tangible assets as of the dates presented.  (dollars in thousands)                                           At quarter ended:       3/31/14    12/31/13   9/30/13    6/30/13    3/31/13 Total assets            $1,676,160 $1,673,082 $1,644,416 $1,605,698 $1,609,795 Less: Goodwill and      16,821     16,827     16,834     16,840     16,849 other intangible assets Tangible assets         $1,659,339 $1,656,255 $1,627,582 $1,588,858 $1,592,946                                                                 Total stockholders'     10.37%     10.08%     10.04%     10.04%     10.23% equity / total assets Tangible common stockholders' equity /  8.78%      8.48%      8.42%      8.38%      8.58% tangible assets  Other income is presented in the table below including and excluding net gains. We believe that many investors desire to evaluate other income without regard for such gains.  (in thousands)                                                      For the quarter ended:                3/31/14 12/31/13 9/30/13 6/30/13 3/31/13 Other income                          $2,521 $1,756  $1,543 $1,707 $1,845 Less: Net investment securities gains 1,415   449      343     600     319 Other income, excluding net           $1,106 $1,307  $1,200 $1,107 $1,526 investment securities gains  "Efficiency ratio" is a non-GAAP financial measure and is defined as other expense as a percentage of net interest income on a tax equivalent basis plus other income, excluding net investment securities gains, calculated as follows:  (dollars in thousands)                                             For the quarter ended:            3/31/14  12/31/13 9/30/13  6/30/13  3/31/13 Other expense                     $7,496  $6,459  $6,205  $6,076  $6,538 Less: merger-related expenses     1,060    —        —        —        — Other expense, excluding special  $6,436  $6,459  $6,205  $6,076  $6,538 items                                                                   Net interest income (tax          $12,282 $12,561 $12,342 $11,810 $11,950 equivalent basis) Other income, excluding net       1,106    1,307    1,200    1,107    1,526 investment securities gains Total                             $13,388 $13,868 $13,542 $12,917 $13,476                                                                   Efficiency ratio                  48.1%    46.6%    45.8%    47.0%    48.5%  The following table sets forth the Corporation's consolidated average statements of condition for the periods presented.  Condensed Consolidated Average Statements of Condition (unaudited) (in thousands)                                                  For the quarter    3/31/14     12/31/13    9/30/13     6/30/13     3/31/13 ended: Investment                                                      securities Available for sale $320,833   $384,554   $426,870   $457,484  $503,223 Held to maturity   214,680     190,817     150,087     95,163      65,378 Loans              963,098     950,541     921,523     888,175     873,916 Allowance for loan (10,358)    (10,296)    (10,200)    (10,214)    (10,229) losses All other assets   188,683     146,119     163,732     183,894     171,703 Total assets       $1,676,936 $1,661,735 $1,652,012 $1,614,502 $1,603,991 Non-interest       $225,407   $263,715   $238,194   $219,965   $212,860 bearing deposits Interest-bearing   1,113,213   1,064,096   1,086,757   1,059,552   1,061,261 deposits Borrowings         151,655     151,155     151,753     151,924     151,488 Other liabilities  13,477      14,496      12,751      16,676      15,529 Stockholders'      173,184     168,273     162,557     166,385     162,853 equity Total liabilities and stockholders'  $1,676,936 $1,661,735 $1,652,012 $1,614,502 $1,603,991 equity  About Center Bancorp  Center Bancorp, Inc. is a bank holding company, which operates Union Center National Bank, its main subsidiary. Chartered in 1923, Union Center National Bank is one of the oldest national banks headquartered in the state of New Jersey and now ranks as the third largest national bank headquartered in the state.Union Center National Bank is currently the largest commercial bank headquartered in Union County. Its primary market niche is its commercial banking business. The Bank focuses its lending activities on commercial lending to small and medium-sized businesses, real estate developers and high net worth individuals.  The Bank, through its Private Banking and Wealth Management Division, which includes its wholly-owned subsidiary, Center Financial Group LLC, provides personalized wealth management and advisory services to high net worth individuals and families. Our services include banking, liquidity management, investment services, custody, tailored lending, wealth planning, trust and fiduciary services, insurance, family wealth advisory services and philanthropic advisory services.The Bank, through a strategic partnership between the Bank's Private Banking Division and Alexander, Troy & Company, Family Office Services, of Katonah, New York, provides customized financial and administrative services to high-net worth individuals.  Center, through a strategic partnership with Compass Financial Management, LLC and ING, offers pension/401(k) planning services.Compass is an Investment Advisory Company with five decades of cumulative experience providing investment services in a personal, professional and attentive manner.They provide discretionary private investment management for individuals and corporate accounts as well as 401(k) advisory services.  The Bank currently operates 16 banking locations in Bergen, Mercer, Morris and Union Counties in New Jersey. Banking centers are located in Union Township (5 locations), Berkeley Heights, Boonton/Mountain Lakes,Englewood, Madison, Millburn/Vauxhall, Morristown, Oakland, Saddle River, Springfield, Princeton and Summit, New Jersey. The Bank's primary market area is comprised of central and northern New Jersey.  For further information regarding Center Bancorp, Inc., please visit our web site at http://www.centerbancorp.com or call (800) 862-3683. For information regarding Union Center National Bank, please visit our web site at www.ucnb.com.  Forward-Looking Statements  All non-historical statements in this press release (including statements regarding earnings momentum, margin improvement, positive signs for growth coupled with sustained asset quality, loan volume growth, mortgages expected to fund over the next 90 days and restoration of non-accrual loans to accruing status in future periods,) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may use forward-looking terminology such 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 direction of interest rates, continued levels of loan quality and origination volume, the ability to consummate the pending merger and then integrate the businesses of Center and ConnectOne, continued relationships with major customers, including sources for loans, as well as the effects of international, national, regional and local economic conditions and legal and regulatory barriers and structure, including those relating to economic recovery and the deregulation of the financial services industry, and other risks cited in the Corporation's most recent Annual Report on Form 10-K and other 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.  Registration Statement  In connection with the proposed merger of Center Bancorp, Inc. ("Center") and ConnectOne Bancorp, Inc. ("ConnectOne"), Center, Center has filed with the Securities and Exchange Commission ("SEC") a Registration Statement on Form S-4 that includes a joint proxy statement of Center and ConnectOne and a prospectus of Center, as well as other relevant documents concerning the proposed transaction.Center and ConnectOne will each mail the joint proxy statement and prospectus to its shareholders subsequent to the Registration Statement on Form S-4 being declared effective. SHAREHOLDERS OF CENTER AND CONNECTONE ARE URGED TO READ CAREFULLY THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT AND PROSPECTUS REGARDING THE PROPOSED MERGER IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of the joint proxy statement and prospectus (when available) and other filings containing information about Center and ConnectOne at the SEC's website at www.sec.gov. The joint proxy statement and prospectus (when available) and the other filings may also be obtained free of charge at Center's website at www.centerbancorp.com under the tab "Investor Relations," and then under the heading "SEC Filings" or at ConnectOne's website at www.connectonebank.com under the tab "Investor Relations," and then under the heading "SEC Filings."  Center, ConnectOne and certain of their respective directors and executive officers, under the SEC's rules, may be deemed to be participants in the solicitation of proxies of Center's and ConnectOne's shareholders in connection with the proposed merger. Information regarding the directors and executive officers of Center and their ownership of Center common stock is set forth in the proxy statement for Center's 2013 annual meeting of shareholders, as filed with the SEC on Schedule 14A on April 15, 2013. Information regarding the directors and executive officers of ConnectOne and their ownership of ConnectOne common stock is set forth in the proxy statement for ConnectOne's 2013 annual meeting of shareholders, as filed with the SEC on Schedule 14A on April 8, 2013. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the joint proxy statement and prospectus regarding the proposed merger when they become available. Free copies of these documents may be obtained as described in the preceding paragraph.  This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.     CENTER BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CONDITION                                                                  (in thousands, except for share and per share data)   March 31,   December 31,                                                       2014        2013                                                      (Unaudited)                                                                   ASSETS                                                            Cash and due from banks                               $ 106,282   $ 82,692 Investment securities:                                            Available for sale                                    287,471     323,070 Held to maturity (fair value of $214,952 at March 31, 214,191     215,286 2014 and $210,958 atDecember 31, 2013) Loans held for sale                                   —           — Loans                                                 987,529     960,943 Less: Allowance for loan losses                       10,633      10,333 Net loans                                             976,896     950,610 Restricted investment in bank stocks, at cost         8,986       8,986 Premises and equipment, net                           13,833      13,681 Accrued interest receivable                           6,341       6,802 Bank-owned life insurance                             35,989      35,734 Goodwill                                              16,804      16,804 Other real estate owned                               220         220 Due from brokers for investment securities            —           8,759 Other assets                                          9,147       10,438 Total assets                                          $ 1,676,160 $ 1,673,082                                                                  LIABILITIES                                                       Deposits:                                                         Non-interest bearing                                  $ 223,332   $ 227,370 Interest-bearing:                                                 Time deposits $100 and over                           110,353     99,444 Interest-bearing transaction, savings and time        1,006,200   1,015,191 deposits less than $100 Total deposits                                        1,339,885   1,342,005 Long-term borrowings                                  146,000     146,000 Subordinated debentures                               5,155       5,155 Accounts payable and accrued liabilities              11,307      11,338 Total liabilities                                     1,502,347   1,504,498                                                                  STOCKHOLDERS' EQUITY                                              Preferred stock, $1,000 liquidation value per share, authorized 5,000,000 shares; issued and outstanding               11,250 shares of Series B preferred stock at March    11,250      11,250 31, 2014 and December 31, 2013; total liquidation value of $11,250,000 Common stock, no par value, authorized 25,000,000 shares; issued 18,477,412 shares at March 31, 2014               andDecember 31, 2013; outstanding 16,369,012 shares  110,056     110,056 at March 31, 2014 and December 31, 2013 Additional paid in capital                            5,002       4,986 Retained earnings                                     65,053      61,914 Treasury stock, at cost (2,108,400 common shares at   (17,078)    (17,078) March 31, 2014 and December 31, 2013) Accumulated other comprehensive loss                  (470)       (2,544) Total stockholders' equity                            173,813     168,584 Total liabilities and stockholders' equity            $ 1,676,160 $ 1,673,082                                            CENTER BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited)                                                                                                                            Three Months Ended                                                          March 31, (in thousands, except for share and per share data)      2014       2013                                                                    Interest income                                                     Interest and fees on loans                               $ 10,111  $ 9,923 Interest and dividends on investment securities:                    Taxable                                                  3,016      2,972 Tax-exempt                                               1,056      1,076 Dividends                                                154        131 Interest on federal funds sold and other                 —          2 short-terminvestment Total interest income                                    14,337     14,104 Interest expense                                                    Interest on certificates of deposit $100 or more         207        239 Interest on other deposits                               1,109      1,045 Interest on borrowings                                   1,411      1,450 Total interest expense                                   2,727      2,734 Net interest income                                      11,610     11,370 Provision for loan losses                                625        — Net interest income after provision for loan losses      10,985     11,370 Other income                                                        Service charges, commissions and fees                    497        406 Annuities and insurance commissions                      100        100 Bank-owned life insurance                                255        565 Loan related fees                                        181        227 Net gains on sale of loans held for sale                 36         138 Other                                                    37         90 Other-than-temporary impairment losses on investment     —          (24) securities Net gains on sale of investment securities               1,415      343 Net investment securities gains                          1,415      319 Total other income                                       2,521      1,845 Other expense                                                       Salaries and employee benefits                           3,332      3,490 Occupancy and equipment                                  1,080      906 FDIC insurance                                           300        313 Professional and consulting                              255        219 Stationery and printing                                  84         85 Marketing and advertising                                40         101 Computer expense                                         345        353 Other real estate owned, net                             2          19 Merger-related expenses                                  1,060      — Other                                                    998        1,052 Total other expense                                      7,496      6,538 Income before income tax expense                         6,010      6,677 Income tax expense                                       1,612      1,753 Net Income                                               4,398      4,924 Preferred stock dividends and accretion                  28         56 Net income available to common stockholders             $ 4,370    $ 4,868 Earnings per common share                                           Basic                                                    $ 0.27     $ 0.30 Diluted                                                  $ 0.27     $ 0.30 Weighted Average Common Shares Outstanding                          Basic                                                    16,350,183 16,348,215 Diluted                                                  16,405,540 16,373,588                                            CENTER BANCORP, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA (Unaudited)                                                                                    Three Months Ended (in thousands, except for share and per share data) (annualized where             3/31/2014  12/31/2013 3/31/2013 applicable) Statements of Income Data                                                                                                                 Interest income                           $14,337   $14,644   $14,104 Interest expense                          2,727      2,778      2,734 Net interest income                       11,610     11,866     11,370 Provision for loan losses                 625        350        — Net interest income after provision for   10,985     11,516     11,370 loan losses Other income                              2,521      1,756      1,845 Other expense                             7,496      6,459      6,538 Income before income tax expense          6,010      6,813      6,677 Income tax expense                        1,612      1,829      1,753 Net income                                $4,398    $4,984    $4,924 Net income available to common            $4,370    $4,955    $4,868 stockholders Earnings per Common Share                                      Basic                                     $0.27     $0.30     $0.30 Diluted                                   $0.27     $0.30     $0.30 Statements of Condition Data (Period-End)                      Investment securities:                                         Available for sale                        $287,471 $323,070  $458,004 Held for maturity( fair value $214,952,   214,191    215,286    78,212 $210,958 and $81,921) Loans held for sale                       —          —          774 Loans                                     987,529    960,943    879,387 Total assets                              1,676,160  1,673,082  1,609,795 Deposits                                  1,339,885  1,342,005  1,282,223 Borrowings                                151,155    151,155    151,155 Stockholders' equity                      173,813    168,584    164,753 Common Shares Dividend Data                                    Cash dividends                            $1,228    $1,226    $899 Cash dividends per share                  $0.075    $0.075    $0.055 Dividend payout ratio                     28.10%     24.74%     18.47% Weighted Average Common Shares                                 Outstanding Basic                                     16,350,183 16,350,183 16,348,215 Diluted                                   16,405,540 16,396,931 16,373,588 Operating Ratios                                               Return on average assets (annualized)     1.05%      1.20%      1.23% Return on average equity (annualized)     10.16%     11.85%     12.09% Return on average tangible equity         11.25%     13.16%     13.49% (annualized) Average equity / average assets           10.33%     10.13%     10.15% Book value per common share (period-end)  $9.93     $9.61     $9.39 Tangible book value per common share      $8.90     $8.58     $8.36 (period-end) Non-Financial Information (Period-End)                         Common shareholders of record             501        514        536 Full-time equivalent staff                166        166        173  CONTACT: Investor Inquiries:          Anthony C. Weagley          President &          Chief Executive Officer          (908) 206-2886  Center Bancorp, Inc. Logo