SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported) - October 17, 2001
VALLEY NATIONAL BANCORP
(Exact Name of Registrant as Specified in Charter)
NEW JERSEY
(State or Other Jurisdiction of Incorporation)
1-11277 22-2477875
(Commission File Number) (IRS Employer Identification No.)
1455 Valley Road, Wayne, New Jersey 07470
(Address of Principal Executive Offices)
(973) 305-8800
(Registrant's Telephone Number)
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Item 5 - Other Events
On October 17, 2001, Valley National Bancorp ("Valley") issued a press
release reporting net income of $36.0 million for the third quarter of 2001
compared with $32.8 million for the third quarter of 2000, an increase of 10.0
percent. Diluted per share earnings increased to $0.46 for the third quarter
ended September 30, 2001 compared to $0.42 for the third quarter of 2000.
For the nine months ended September 30, 2001, diluted per share earnings,
before merger charges, were $1.35, an increase of 10.7 percent over the $1.22
reported for the nine months ended September 30, 2000. Net income, before
merger charges, was $106.2 million for the nine months ended September 30,
2001, compared with $97.4 million for the same period of 2000. Net income,
before merger charges, for the nine months ended September 30, 2001 excludes a
net, after tax merger related charge of $7.0 million, or $0.09 per diluted
share, recorded in conjunction with the first quarter acquisition of Merchants
New York Bancorp, Inc.
A copy of the press release is attached as Exhibit 99 to this Current
Report on Form 8-K and incorporated by reference herein.
Item 7 - Exhibits
Exhibit 99 Press Release dated October 17, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
VALLEY NATIONAL BANCORP
Dated: October 19, 2001 By: /s/ Alan D. Eskow__________
Alan D. Eskow
Executive Vice President & CFO
INDEX TO EXHIBITS
Exhibit No. Description
Exhibit 99 Press Release dated October 17, 2001.
Contact:Alan D. Eskow
Executive Vice President & CFO
(973) 305-4003
VALLEY NATIONAL BANCORP REPORTS 10 PERCENT INCREASE IN
THIRD QUARTER EARNINGS
WAYNE, N.J., October 17, 2001 - Valley National Bancorp (NYSE: VLY)
reported net income of $36.0 million for the third quarter of 2001 compared
with $32.8 million for the third quarter of 2000, an increase of 10.0 percent.
Diluted per share earnings increased to $0.46 for the third quarter ended
September 30, 2001 compared to $0.42 for the third quarter of 2000.
For the nine months ended September 30, 2001, diluted per share earnings,
before merger charges, were $1.35, an increase of 10.7 percent over the $1.22
reported for the nine months ended September 30, 2000. Net income, before
merger charges, was $106.2 million for the nine months ended September 30,
2001, compared with $97.4 million for the same period of 2000. Net income,
before merger charges, for the nine months ended September 30, 2001 excludes a
net, after tax merger related charge of $7.0 million, or $0.09 per diluted
share, recorded in conjunction with the first quarter acquisition of
Merchants New York Bancorp, Inc.
Net interest income, on a fully taxable equivalent basis, was $85.5 million for
the third quarter of 2001 with a net interest margin of 4.46 percent. This
compares with $84.2 million and a net interest margin of 4.37 percent for the
second quarter of 2001.
The quarter ended September 30, 2001 produced a return on average assets
("ROA") of 1.79 percent and a return on average equity ("ROE") of 20.67
percent. The efficiency ratio for the three months ended September 30, 2001
was 44.14 percent. According to recent FDIC statistics and other published
data for the banking industry, each of these performance measures is above
industry averages.
Mr. Lipkin, Chairman, President and CEO noted "Although interest rates
continued to decline during the third quarter, the bank's net interest income
increased, growing both net income and earnings per share, with loan volume
partially offsetting the decline in interest rates. Commercial loan and
commercial mortgage loan volume increased by approximately $75 million or 2.9
percent over the second quarter of 2001. Residential mortgage loans, net of
payments, increaed $84 million during the quarter, excluding loans sold during
the quarter, and application volume continued at high levels into October as
interest rates continued to decline."
Non-accrual loans were $14.4 million representing 0.27 percent of Valley's
$5.3 billion of total loans at September 30, 2001 an increase from $6.2 million
or 0.12 percent of Valley's loans at June 30, 2001. Loans past due 90 days or
more and still accruing were $14.7 million at September 30, 2001, a decrease
from $15.5 million at June 30, 2001. Loans past due in excess of 30 days as a
percentage of the loan portfolio were 1.25
percent for commercial loans, 1.55 percent for consumer loans and 1.09 percent
for residential loans at September 30, 2001.
Mr. Lipkin added "During 2001 we continued to expand the footprint of our
retail network with the opening of a new office in Chatham and the opening of
another office in Ridgewood. We plan to open a new office in Mountainside in
November."
During the quarter, Valley invested $100 million in Bank Owned Life Insurance
(BOLI) to help offset the rising cost of employee benefits. The investment
portfolio was reduced by a like amount and the income of $853 thousand from the
BOLI is included in non-interest income for the third quarter.
Valley's servicing portfolio of residential mortgages declined in value during
the quarter due to prepayments as a result of above normal refinancings
resulting from the recent declines in interest rates. Included in amortization
expense is an impairment reserve of $1.2 million recorded during the
quarter, in addition to the regular quarterly amortization, on mortgage
servicing rights to reflect the reduced values.
As of September 30, 2001, Valley's risk-based capital ratios were 11.2 percent
for Tier 1 Capital and 12.3 percent for Total Capital. The Tier l leverage
ratio was 8.3 percent. Shareholders' equity increased to $706.1 million from
$627.9 million a year ago.
In August, Valley's Board of Directors authorized the company to repurchase up
to 8,000,000 shares of Valley's outstanding common stock. Purchases may be made
from time to time in the open market or in privately negotiated transactions
generally not exceeding prevailing market prices. Valley currently has
77.3 million common shares outstanding and has purchased approximately 954
thousand shares through September 30, 2001. Reacquired shares are held in
treasury and may be used for general corporate purposes.
On October 12, 2001 Valley National Bancorp filed a registration statement with
the Securities and Exchange Commission relating to the public offering of
7,000,000 shares of trust preferred securities with a proposed aggregate
offering price of $175 million. Merrill Lynch, Pierce, Fenner & Smith,
Incorporated, Sandler O'Neill & Partners, L.P., Legg Mason Wood Walker,
Incorporated, Lehman Brothers, Inc., Ryan Beck & Co., Salomon Smith Barney and
UBS Warburg will be the underwriters of the offering. Valley intends to use
the proceeds from the offering for general corporate purposes.
Valley National Bancorp is a regional bank holding company headquartered
in Wayne, New Jersey. Its principal subsidiary, Valley National Bank,
including its Merchants Bank of New York Division, currently operates
126 offices located in 79 communities serving 10 counties throughout northern
New Jersey and Manhattan.
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The foregoing contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements are not
historical facts and include expressions about management's confidence and
strategies and management's expectations about new and existing programs and
products, relationships, opportunities, technology and market conditions.
These statements may be identified by or such forward-looking terminology as
"expect," "look," "believe," "anticipate," "may," "will," or similar statements
or variations of such terms. Such forward-looking statements involve certain
risks and uncertainties. These include, but are not limited to, the direction
of the economy in New Jersey and New York especially as it has been affected by
recent developments, the direction of interest rates, continued levels of loan
quality and origination volume, continued relationships with major customers
including sources for loans, as well as the effects of general economic
conditions and legal and regulatory barriers and structure. Actual results
may differ materially from such forward-looking statements. Valley assumes no
obligation for updating any such forward-looking statement at any time.
The registration statement relating to the securities discussed in this press
release is filed with the Securities and Exchange Commission but has not yet
become effective. These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes effective. This
press release shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of these securities in any state in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state.
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands except per share data) 2001 2000 2001 2000
SELECTED FINANCIAL DATA BEFORE MERGER CHARGES:
Net income before merger charges $36,005 $ 32,768 $ 106,170 $ 97,377
Earnings per diluted share (1) 0.46 0.42 1.35 1.22
Return on average assets 1.79 % 1.72 % 1.78 % 1.71 %
Return on average equity 20.67 21.18 20.70 20.85
SELECTED FINANCIAL DATA INCLUDING MERGER CHARGES (2):
NET INCOME $36,005 $ 32,768 $ 99,127 $ 97,377
Net interest income 83,959 78,960 247,614 235,857
Net interest income (FTE) 85,487 80,659 252,218 241,051
Weighted Average Number of Shares Outstanding:
Diluted 78,587,695 78,616,344 78,588,466 79,501,813
Per share data (1):
Basic earnings $ 0.46 $ 0.42 $ 1.27 $ 1.23
Diluted earnings 0.46 0.42 1.26 1.22
Cash dividends declared 0.265 0.25 0.78 0.73
Book value 9.13 8.06 9.13 8.06
Closing stock price - high 29.75 26.19 30.95 26.19
Closing stock price - low 26.60 22.62 24.42 19.61
FINANCIAL RATIOS:
Net interest margin - FTE 4.46 % 4.41 % 4.41 % 4.40 %
Return on average assets 1.79 1.72 1.66 1.71
Return on average shareholders' equity 20.67 21.18 19.33 20.85
Efficiency ratio 44.14 45.28 44.29 44.62
(1) Per share figures have been adjusted for a 5 percent stock dividend
declared April 4, 2001 to shareholders of record May 4, 2001 issued
May 18, 2001.
(2) For the nine months ended September 30, 2001, net income, per share data
and the financial ratios include the merger-related charges, net of tax,
recorded in connection with the Merchants New York Bancorp, Inc.
merger on January 19, 2001 of $7.0 million or $0.09 per diluted share.
The efficiency ratio excludes the merger-related charges.
SELECTED BALANCE SHEET ITEMS AND RATIOS
Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2001 2000 2001 2000
AVERAGE BALANCE SHEET ITEMS:
Assets $ 8,023,707 $ 7,615,665 $ 7,966,394 $ 7,602,983
Earning Assets 7,672,038 7,322,130 7,623,581 7,307,904
Loans 5,231,510 5,087,502 5,157,459 5,035,920
Interest Bearing Liabilities 6,008,998 5,717,838 5,973,366 5,695,584
Deposits 6,175,484 5,908,011 6,127,563 5,932,451
Shareholders' equity 696,776 618,750 683,915 622,702
ALLOWANCE FOR LOAN LOSSES:
Beginning of period $ 61,996 $ 65,432 $ 61,995 $ 64,228
Provision for loan losses 2,700 2,580 7,635 7,905
Charge-offs 1,390 3,226 8,232 9,261
Recoveries 1,366 877 3,274 2,791
End of period 64,672 65,663 64,672 65,663
Valley National Bancorp
Consolidated Financial Highlights
As of September 30,
(Dollars in thousands) 2001 2000
BALANCE SHEET ITEMS:
Assets $ 8,225,245 $ 7,706,247
Loans 5,299,951 5,150,026
Deposits 6,121,859 5,887,490
Shareholders' equity 706,124 627,864
CAPITAL RATIOS:
Tier 1 leverage ratio 8.32 % 8.37 %
Risk-based capital - Tier 1 11.17 11.22
Risk-based capital - Total Capital 12.25 12.36
SELECTED FINANCIAL DATA
ASSET QUALITY:
Non-accrual loans $ 14,411 $ 8,896
Other real estate owned (OREO) 393 591
Total non-performing assets 14,804 9,487
Loans past due 90 days or more and still accruing 14,718 15,276
ASSET QUALITY RATIOS:
Non-performing assets to total loans plus
other real estate owned (OREO) 0.28 % 0.18 %
Allowance for loan losses to loans 1.22 1.28
Net charge-offs to average loans 0.13 0.17
SHAREHOLDER RELATIONS
Requests for copies of reports providing more detailed financial statements and
analysis, as well as all other inquiries regarding Shareholder Relations should
be directed to Dianne Grenz at Valley National Bancorp, 1455 Valley Road,
Wayne, New Jersey 07470, by telephone at (973) 305-3380, fax at (973) 696-2044
or by e-mail at dgrenz@valleynationalbank.com.
<page>
VALLEY NATIONAL BANCORP
Consolidated Statements of Financial Condition
($ in thousands)
September 30,
Assets 2001 2000 (1)
Cash and due from banks $ 208,324 $ 216,011
Federal funds sold 0 8,000
Securities:
Available for sale 1,963,570 1,545,491
Held to maturity 485,655 595,369
----------------- ------------------
Total securities 2,449,225 2,140,860
----------------- ------------------
Loans 5,299,951 5,150,026
Less: Allowance for loan losses (64,672) (65,663)
----------------- ------------------
Loans, net 5,235,279 5,084,363
----------------- ------------------
Premises and equipment, net 92,597 92,252
Due from customers on acceptances outstanding 26,187 21,077
Accrued interest receivable 49,413 48,945
Intangible assets 37,442 39,573
Bank owned life insurance 100,853 0
Other assets 25,925 55,166
----------------- ------------------
Total assets $ 8,225,245 $ 7,706,247
================= ==================
Liabilities
Deposits:
Non-interest bearing $ 1,311,576 $ 1,234,732
Interest bearing:
Savings 2,385,079 2,211,470
Time 2,425,204 2,441,288
----------------- ------------------
Total deposits 6,121,859 5,887,490
----------------- ------------------
Federal funds purchased and securities
sold under agreements to repurchase 219,796 351,902
Treasury tax and loan account and other
short term borrowings 86,287 161,073
Long-term debt 959,746 591,828
Bank acceptances outstanding 26,186 21,077
Accrued expenses and other liabilities 105,247 65,013
----------------- ------------------
Total liabilities 7,519,121 7,078,383
----------------- ------------------
Shareholders' Equity
Preferred stock, no par value
30,000,000 shares authorized; none issued 0 0
Common stock, no par value, authorized 113,953,711
shares; issued 78,261,476 shares in 2001 and
74,846,218 shares in 2000 33,356 32,085
Surplus 406,631 323,199
Retained earnings 261,261 308,314
Unallocated common stock held by the employee benefit plan (643) (822)
Accumulated other comprehensive gain (loss) 31,167 (17,815)
----------------- ------------------
731,772 644,961
Treasury stock, at cost (921,527 common shares
in 2001 and 671,212 in 2000) (25,648) (17,097)
----------------- ------------------
Total shareholders' equity 706,124 627,864
----------------- ------------------
Total liabilities and shareholders' equity $ 8,225,245 $ 7,706,247
================= ==================
Note: (1) 2000 data has been restated to reflect the merger with Merchants
New York Bancorp Inc., effective January 19, 2001.
VALLEY NATIONAL BANCORP
Consolidated Statements of Income
($ in thousands, except per share data)
Three Months Ended
September 30,
2001 2000 (1)
---------------------- -------------------
Interest Income
Interest and fees on loans $ 99,695 $ 107,119
Interest and dividends on investment securities 36,385 35,664
Interest on federal funds sold and other
short term investments 809 1,333
------------------ -------------------
Total interest income 136,889 144,116
------------------ -------------------
Interest Expense
Interest on deposits: .
Savings deposits 11,539 14,515
Time deposits 26,291 34,283
Interest on other borrowings 15,100 16,358
------------------ -------------------
Total interest expense 52,930 65,156
------------------ -------------------
Net Interest Income 83,959 78,960
Provision for loan losses 2,700 2,580
------------------ -------------------
Net interest income after provision for
loan losses 81,259 76,380
------------------ -------------------
Non-Interest Income
Trust and investment services 1,065 940
Service charges on deposit accounts 4,524 4,712
Gains on securities transactions, net 932 117
Fees from loan servicing 2,736 2,769
Credit card fee income 865 2,110
Gain on sale of loans, net 1,419 437
Bank owned life insurance 853 0
Other 3,591 3,352
------------------ -------------------
Total non-interest income 15,985 14,437
------------------ -------------------
Non-Interest Expense
Salary expense 19,949 18,678
Employee benefit expense 4,035 4,406
FDIC insurance premiums 286 309
Occupancy and equipment expense 6,548 6,813
Credit card expense 318 1,233
Amortization of intangible assets 3,321 2,029
Other 9,922 7,980
------------------ -------------------
Total non-interest expense 44,379 41,448
------------------ -------------------
Income before income taxes 52,865 49,369
Income tax expense 16,860 16,601
------------------ -------------------
Net Income $ 36,005 $ 32,768
------------------ -------------------
Earnings Per Share: (2)
Basic $ 0.46 $ 0.42
Diluted $ 0.46 $ 0.42
Weighted Average Number of Shares Outstanding: (2)
Basic 77,933,392 77,950,692
Diluted 78,587,695 78,616,344
Note: (1) 2000 data has been restated to reflect the merger with Merchants
New York Bancorp Inc., effective January 19, 2001.
(2) Earnings per share and average shares outstanding have been
restated to reflect the 5% stock dividend dividend declared on
April 4, 2001 and issued on May 18, 2001.
VALLEY NATIONAL BANCORP
Consolidated Statements of Income
($ in thousands, except per share data)
Nine Months Ended
September 30,
2001 2000 (1)
---------------- ----------------
Interest Income
Interest and fees on loans $ 304,118 $ 311,278
Interest and dividends on investment securities 113,210 107,936
Interest on federal funds sold and other
short term investments 4,171 3,473
---------------- ----------------
---------------- ----------------
Total interest income 421,499 422,687
---------------- ----------------
---------------- ----------------
Interest Expense
Interest on deposits:
Savings deposits 38,032 43,271
Time deposits 90,298 97,650
Interest on other borrowings 45,555 45,909
---------------- ----------------
---------------- ----------------
Total interest expense 173,885 186,830
---------------- ----------------
---------------- ----------------
Net Interest Income 247,614 235,857
Provision for loan losses 7,635 7,905
---------------- ----------------
---------------- ----------------
Net interest income after provision for
loan losses 239,979 227,952
---------------- ----------------
---------------- ----------------
Non-Interest Income
Trust and investment services 3,472 2,443
Service charges on deposit accounts 13,774 13,464
Gains on securities transactions, net 1,911 117
Fees from loan servicing 8,242 8,281
Credit card fee income 2,794 6,162
Gain on sale of loans, net (Note 3) 8,942 1,787
Bank owned life insurance 853 0
Other 10,421 10,724
---------------- ----------------
---------------- ----------------
Total non-interest income 50,409 42,978
---------------- ----------------
---------------- ----------------
Non-Interest Expense
Salary expense 58,946 55,173
Employee benefit expense 13,579 12,962
FDIC insurance premiums 869 935
Occupancy and equipment expense 21,929 19,248
Credit card expense 1,223 3,808
Amortization of intangible assets 7,263 5,665
Merger - related charges 9,017 0
Other 27,206 26,205
---------------- ----------------
---------------- ----------------
Total non-interest expense 140,032 123,996
---------------- ----------------
---------------- ----------------
Income before income taxes 150,356 146,934
Income tax expense 51,229 49,557
---------------- ----------------
---------------- ----------------
Net Income $ 99,127 $ 97,377
---------------- ----------------
---------------- ----------------
Earnings Per Share: (2)
Basic $ 1.27 $ 1.23
Diluted $ 1.26 $ 1.22
Weighted Average Number of Shares Outstanding: (2)
Basic 77,968,912 78,865,104
Diluted 78,588,466 79,501,813
Note: (1) 2000 data has been restated to reflect the merger with Merchants
New York Bancorp Inc., effective January 19, 2001.
(2) Earnings per share and average shares outstanding have been
restated to reflect the 5% stock dividend dividend declared on
April 4, 2001 and issued on May 18, 2001.
(3) The 2001 gain on sale of loans includes the $4.9 million gain from
the sale of the Shoprite credit card portfolio to American Express.