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Lakeland Bancorp Letter to Shareholders




September 10, 2012


Dear Shareholder:

We recently completed a transaction that we believe is a positive development for our

Company. On September 4, 2012, we closed on a $25 million capital raise. This was

done by issuing, through two separate offerings, a total of 2.7 million shares of common

stock at a price of $9.65, which exceeds our current book value, and is 1.6 times our

tangible book value as of June 30, 2012. The net proceeds from these offerings will be

used to repay $25 million of trust preferred debt with a coupon rate of 7.535% and

currently is included in our capital calculations. Obviously, in the present interest rate

environment, this rate greatly exceeds current funding alternatives.


The key benefit of these transactions is the reduced interest expense of approximately

$1.9 million annually. Furthermore, the $25 million increase in common equity, which is

the first of its kind in the history of Lakeland Bancorp, helps better position our Company

to meet our long-term growth and strategic goals.


Your Board of Directors believes that these benefits demonstrate our ongoing

commitment to you, our shareholders, to sustain and increase your investment. On behalf

of our management team and Board of Directors, we thank you for your continued



Thomas J. Shara

President and Chief Executive Officer