Greater Community Bancorp Delivers Proposal to Acquire 1st Constitution Bancorp.

Business Editors

TOTOWA, N.J.--(BUSINESS WIRE)--Feb. 6, 2003

Greater Community Bancorp (Nasdaq: GFLS) announced today that it sent a letter to the board of directors of 1st Constitution Bancorp (Nasdaq: FCCY), expressing a strong interest in pursuing a strategic combination with 1st Constitution and requesting a meeting with 1st Constitution's board of directors to further discuss Greater Community's proposal.

Under the proposal, 1st Constitution's shareholders would receive approximately $32.40 per share, an 18.8% premium over 1st Constitution's closing stock price yesterday, in exchange for their shares of 1st Constitution common stock. The form of consideration would be a combination of 35% in cash and 65% in Greater Community common stock.

Greater Community previously delivered a written proposal to 1st Constitution on September 9, 2002, which was rejected by 1st Constitution's board of directors. Greater Community has submitted this second letter to 1st Constitution in order to update its proposal and outline steps it is prepared to take if 1st Constitution does not accept the proposal. A copy of this second letter is attached to this press release.

Greater Community Bancorp is a financial holding company headquartered in Totowa, New Jersey. The Company operates 15 branches in the northern New Jersey counties of Bergen, Passaic and Morris through its three state-chartered commercial bank subsidiaries: Greater Community Bank, Bergen Commercial Bank and Rock Community Bank. They provide traditional commercial and retail banking services to small businesses and consumers in New Jersey. The Company also owns two non-bank subsidiaries: Greater Community Financial, L.L.C., a full service securities broker-dealer, and Highland Capital Corp., an equipment leasing and financing subsidiary.

VIA FEDEX 

Board of Directors 1st Constitution Bancorp 2650 Route 130 P.O. Box 634 Cranbury, New Jersey 08512

Dear Gentlemen:

For several months now, Greater Community Bancorp ("Greater Community") has expressed a strong interest in pursuing a strategic combination with 1st Constitution Bancorp ("1st Constitution"). By letter dated September 9, 2002, we proposed a business combination with 1st Constitution under which 1st Constitution's shareholders would have received $34 in cash and Greater Community stock for each share of their 1st Constitution common stock, at a time when those shares were trading for only about $22 per share. That nearly 55% premium to 1st Constitution shareholders was rejected by 1st Constitution's board without even meeting with us to discuss the proposal.

Since then, we have contacted Robert F. Mangano, President and Chief Executive Officer of 1st Constitution, several times to discuss how we can offer substantial value to 1st Constitution shareholders. The one time Mr. Mangano and Edward D. Knapp, the Chairman of the Board of 1st Constitution, met with us, they made it clear to us that they would give serious consideration to our proposal only if Mr. Mangano would be made Chief Executive Officer of the resulting institution. Such a condition suggests a motivation that may be inconsistent with what is in the best interests of 1st Constitution's shareholders. We believe that 1st Constitution's directors and executive officers should put aside personal self-interest and start focusing on how to maximize value to 1st Constitution's shareholders.

1. Updated Proposal. As of today, we are prepared to offer 1st Constitution's shareholders $32.40 per share in cash and Greater Community stock. This price is equivalent to our previous proposal of $34 per share after adjustment for the 5% stock dividend declared by 1st Constitution on December 19, 2002 and represents a 18.8% premium over 1st Constitution's closing price on February 5, 2003 of $27.27 per share. This price is also equal to 18.7 times 1st Constitution's last twelve months earnings per share and 227% of 1st Constitution's book value. We believe that such a price would be considered fair to 1st Constitution's shareholders by any reasonable standard and would represent a value that we do not believe 1st Constitution could reasonably achieve and sustain by executing its business plan without the benefit of our position and our acquisition proposal. If you disagree, we would be very interested in reviewing 1st Constitution's business plan for enhancing shareholder value. While the trading price of 1st Constitution stock has recently increased, we believe such increase is largely attributable to our previous proposal and not 1st Constitution's business fundamentals. The day our proposal was disclosed, 1st Constitution's stock closed nearly 18% higher than its closing price on the day before and recently was trading at a price over 40% higher than before we disclosed our proposal.

The increase in value to 1st Constitution's shareholders could be even more if our proposal is accepted. However, if we were to withdraw our proposal, we believe that the price of 1st Constitution shares would decline substantially to the detriment of 1st Constitution's shareholders. Mr. Mangano and Mr. Knapp themselves appear to believe that 1st Constitution shares are worth only about $25 a share (or $23.75 a share after adjustment for the stock dividend), since they indicated a willingness to arrange for 1st Constitution to purchase 50% of our shares at that price and to arrange for certain other investors who are close to 1st Constitution to purchase the remaining 50% of our shares, also at such price per share. We are prepared to offer much more than that to all of 1st Constitution's shareholders. Furthermore, based on reasonable assumptions, we and our advisors believe that a combination between Greater Community and 1st Constitution would be accretive to the resulting institution's earnings per share in the first year following the combination, thereby possibly further increasing the value to shareholders.

2. Fiduciary Responsibility. As a director of 1st Constitution, you have a fiduciary responsibility to its shareholders, and you have an obligation to exercise due care in determining whether our proposal is in the best interests of 1st Constitution and its shareholders. That duty of care is especially important in this instance, given the danger that, if you fail to give our proposal due consideration, you may be perceived as acting to entrench yourself or management to the detriment of shareholders, rather than acting to enhance shareholder value. If you refuse to give our proposal due consideration unless your CEO is assured that he will remain CEO of the resulting institution, it is hard to believe that the requisite duty of care is being exercised by you and your fellow board members. If the board's and management's self-interest and entrenchment is more important to 1st Constitution's board of directors than the interests of 1st Constitution's shareholders, we will have no choice but to consider going directly to 1st Constitution's shareholders.

3. Going Directly to Shareholders. We are prepared to commence a proxy contest for representation on 1st Constitution's board of directors or a tender offer for all or part of the outstanding shares of 1st Constitution, or both, subject to any necessary regulatory approvals. Alternatively, we may exercise our right to insist that 1st Constitution act to enhance shareholder value and demonstrate a business plan realistic enough to attain such value. We will be in attendance at 1st Constitution's 2003 annual meeting of shareholders, and, if your full board will not agree to meet with us privately before the annual meeting, we will at that time request a public explanation of why you continue to refuse to seriously consider our proposal.

We feel strongly that this is an opportunity we must pursue. We are 1st Constitution's largest shareholder, and we are not going away. While our preference is to negotiate a mutually acceptable business combination, we are prepared to proceed without your cooperation if necessary. Continued delay and resistance on 1st Constitution's part will only serve to increase our costs, thereby potentially reducing the price we are able to offer 1st Constitution shareholders. If your objective is to maximize shareholder value, you can meet this objective by meeting with us without delay to negotiate a mutually acceptable transaction.

4. Strategic Combination. We note that there are compelling business reasons for a strategic combination between Greater Community and 1st Constitution. Among other things, a combination between Greater Community and 1st Constitution would:

- provide the customers served by both banks with a wider range of product and service offerings and a larger number of financial specialists to serve their banking and investment needs.

- provide the shareholders of both companies with a better return on their investment and a higher trading multiple associated with a billion dollar financial institution.

- provide the shareholders of 1st Constitution with a cash return on their investment, because Greater Community currently pays cash dividends at an annual rate of $.40 per share while 1st Constitution currently pays no cash dividend whatsoever.

- attract institutional investors that will increase liquidity and attract additional research coverage.

- improve the overall performance of the combined institution by eliminating certain duplicative expenses that will have a direct positive impact on earnings.

- provide officers and employees with an opportunity to advance their careers with a larger institution.

- increase access to equity markets for future expansion.

- allow customers to continue to experience at least the same level of service that they now enjoy.

5. Conditions and Timing. Our current proposal is summarized below. Any final offer we make will be subject to the performance of customary due diligence, execution of a definitive merger agreement, receipt of the required regulatory approvals and the approval of 1st Constitution's and our shareholders. We would not be required to raise capital or obtain any other type of financing in connection with our proposal. With cooperation from 1st Constitution, we believe that we could complete our due diligence within a week or two and execute a fully negotiated definitive merger agreement promptly thereafter. The closing for such a transaction could take place as early as the second quarter of 2003.

6. Substantive Terms. The substantive terms of our proposal are as follows:

Price and Form of Consideration. We are prepared to offer a combination of cash and Greater Community's common stock for all of the outstanding common stock of 1st Constitution, at a price of $32.40 per share. If the results of our due diligence and proposed structure are favorable, we could consider higher consideration. The stock portion of the consideration would not be taxable to 1st Constitution's shareholders. The treatment of outstanding stock options is open to discussion and negotiation.

Structure. 1st Constitution's shareholders will receive a combination of 35% in cash and 65% in Greater Community common stock for each share of 1st Constitution's common stock. We are willing to negotiate caps/floors or collars to protect both sides from a significant change in value.

Resulting Corporate Structure and Personnel. The corporate structure of the entity resulting from a combination between Greater Community and 1st Constitution is open to discussion and negotiation. We are also willing to consider keeping 1st Constitution as a separate bank within our holding company structure. We emphasize that we intend to retain as many employees as possible where there is no duplication. In addition, we do not intend to close any of 1st Constitution's branch offices. If reassignment is impractical for any of your employees, we intend to honor your current termination or severance plans.

Board of Directors. In order to enhance the transition period and provide assurance to 1st Constitution's shareholders, communities and constituents, we are willing to discuss the possibility of adding one or more of 1st Constitution's current directors to our board of directors or some other similar arrangement.

Transition Period. The customary acquisition teams will be organized to make the transition as seamless as possible. We envision working together with 1st Constitution's management and employees to coordinate systems, human resources, operations, products and all other aspects of integrating our two companies.

While these are the basic terms of our proposal, we believe that you and every other member of the board of directors cannot adequately evaluate the merits of our proposal in an informed manner, as you are required to do, without first meeting with us so that we can further explain our proposal and discuss it fully with you and all of your fellow board members. We have expressed a willingness to work with you and negotiate a mutually acceptable deal. Now it is up to you to carry out your fiduciary obligations to 1st Constitution's shareholders.

As we feel that both our own shareholders and yours should be fully informed as to the merits of our proposal and the increased value that it would bring to their shares, we are publicly releasing the text of this letter. We are also encouraging your shareholders to communicate directly with you as to their view of the proposed combination.

On behalf of Greater Community, I appreciate your consideration and immediate attention to this matter, and I request that you respond by February 12, 2003. We look forward to a thorough discussion of this proposal with you, the other members of 1st Constitution's board of directors and your advisors.

Very truly yours,

George E. Irwin

President & Chief Executive Officer

cc: Charles S. Crow III

Edward D. Knapp

Robert F. Mangano

William M. Rue 

Frank E. Walsh III