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) - April 16, 2003
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 9. The following information is being provided under Item 12 of Form 8-K.
On April 16, 2003, Valley National Bancorp ("Valley") issued a press release
reporting 2003 first quarter results of operations. A copy of the press release
is attached to this Current Report Form 8-K as Exhibit 99 and incorporated by
reference herein.
Item 7. Financial Statements and Exhibits
(c) Exhibit
99 Press Release dated April 16, 2003
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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
By: /s/ Alan D. Eskow
Alan D. Eskow
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
Dated: April 17, 2003
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Exhibit 99
FOR IMMEDIATE RELEASE Contact: Alan D. Eskow
Executive Vice President and
Chief Financial Officer
(973) 305-4003
Valley National Bancorp Again Reports Higher
First Quarter Earnings Per Share
All earnings data reflects the 5 percent stock dividend approved by Valley's
Board of Directors on April 9, 2003, payable on May 16, 2003 to shareholders of
record on May 2, 2003.
WAYNE, NJ, April 16, 2003 - Valley National Bancorp (NYSE:VLY) reported net
income per diluted share of $0.40 for the quarter ended March 31, 2003, an
increase of 5.3 percent over the $0.38 per diluted share reported for the
quarter ended March 31, 2002.
Net income for the first quarter of 2003 was $38.0 million, compared with $38.6
million for the first quarter of 2002. The effective tax rate for the first
quarter 2003 was 33.9 percent, compared to 26.9 percent for the first quarter of
2002, when Valley had recorded a $3.5 million benefit associated with the
restructuring of a subsidiary into a REIT. Valley more than offset the higher
tax rate in the 2003 first quarter by increasing pre-tax income by 8.8 percent
to $57.5 million. In addition, under Valley's share repurchase program approved
by the Board of Directors in August 2001, a total of 9.1 million of the 10
million common shares authorized for repurchase had been acquired through the
close of the 2003 first quarter at a total cost of $233 million, funds that
would otherwise have been invested to contribute to net income.
Net interest income, on a fully tax equivalent basis, for the first quarter of
2003 was $94.7 million, with a net interest margin of 4.46 percent. That
compares with net interest income of $90.8 million for the fourth quarter of
2002 with a net interest margin of 4.39 percent.
Gerald H. Lipkin, Valley's Chairman, President and CEO stated, "We are pleased
with the results we achieved under difficult economic conditions in the first
quarter of 2003.
Despite a soft economy, and an increased effective tax rate, we continued to
grow the company while maintaining Valley's strong asset quality".
For the first quarter of 2003, Valley achieved an annualized return on average
shareholders' equity (ROE) of 24.06 percent, an annualized return on average
assets (ROA) of 1.67 percent and an
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efficiency ratio of 49.6 percent. These ratios place Valley among the nation's
best performing banks.
Total loans increased to $6.0 billion at March 31, 2003 from $5.3 billion at
March 31, 2002 or 11.8 percent and from $5.8 billion at December 31, 2002. In
the first quarter of 2003, Valley achieved strong increases in residential and
commercial mortgages and commercial loans. During the quarter Valley also sold
approximately $75 million of residential and SBA loans while selling
approximately $246 million in 2002.
Total deposits increased by 5.2 percent to $6.7 billion at March 31, 2003 from
$6.4 billion at March 31, 2002. Non-interest bearing deposits increased by 11.0
percent over the 2002 first quarter to $1.5 billion, and savings deposits
increased by 16.1 percent to $3.1 billion. These are Valley's lowest cost core
deposits and the most desirable type of deposits Valley attempts to attract.
Valley's cost of total deposits for the first quarter of 2003 was 1.13 percent,
down from 1.68 percent in the 2002 first quarter, reflecting the lower interest
rate environment.
Net charge-offs were $551 thousand during the first quarter of 2003, a decrease
of $2.7 million or 83.2 percent, compared with $3.3 million for the quarter
ended March 31, 2002. Total non-performing assets, which include non-accrual
loans and other real estate owned ("OREO"), totaled $27.2 million, or 0.46
percent of loans and OREO, at March 31, 2003, up from $21.6 million at December
31, 2002.
Loans past due 90 days or more and still accruing at March 31, 2003 decreased to
$4.7 million, or 0.08 percent of $6.0 billion of total loans, compared to $9.0
million at March 31, 2002 and $4.9 million at December 31, 2002. Total loans
past due in excess of 30 days were 0.87 percent of all loans at March 31, 2003
compared with 1.20 percent at December 31, 2002.
Non-interest income for the first quarter of 2003 was $25.6 million, up 42.1
percent from $18.0 million for the first quarter of 2002, amounting to 21.6
percent of the total of net interest income and non-interest income. The
increase was heavily influenced by income from Masters Coverage Corp.(an
all-line insurance agency), NIA/Lawyers Title Agency, LLC, both acquired during
the second half of 2002 and Glen Rauch Securities, Inc., acquired January 1,
2003.
Non-interest expense for the first quarter of 2003 rose by 17.8 percent to $58.1
million from the 2002 first quarter, and by 4.8 percent from the 2002 fourth
quarter, due largely to increased salary expense for the recently acquired
subsidiaries, business expansion including new and refurbished branches, and
higher expenses and depreciation charges in connection with recent investments
in technology systems.
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Valley's risk-based capital ratios were 10.88 percent for Tier 1 capital and
11.98 percent for total capital. The Tier 1 leverage ratio was 8.38 percent.
Shareholders' equity at the close of the 2003 first quarter decreased to $626.5
million from $655.1 million a year ago. This decrease was a direct result of
shares acquired under Valley's share repurchase program. During the quarter
Valley acquired 731,800 shares under this program at a cost of $18.6 million,
for an average price of $25.44 (shares and average price have not been adjusted
for the 5 percent stock dividend approved by Valley's Board of Directors on
April 9, 2003).
The Board of Directors agreed to maintain the annual cash dividend at $0.90 per
share, on an after-stock-dividend basis, representing an increase of 5 percent
in the cash payout. Valley is scheduled to pay its next quarterly dividend on
July 1, 2003.
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 127 offices located in
82 communities serving 11 counties throughout northern New Jersey and Manhattan.
* * * * * * * * * * * * * * * *
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, taxation, technology and market
conditions. These statements may be identified by an "asterisk" (*) or such
forward-looking terminology as "expect," "view," "opportunity," "allow,"
"continues," "reflects," or similar statements or variations of such terms. Such
forward-looking statements involve certain risks and uncertainties. Actual
results may differ materially from such forward-looking statements. Factors that
may cause actual results to differ from those contemplated by such forward
looking statements include, among others, the following: unanticipated changes
in the direction of interest rates, effective income tax rates, loan prepayment
assumptions, levels of loan quality and origination volume, relationships with
major customers, as well as the effects of economic conditions and legal and
regulatory barriers and the development of new tax strategies or the
disallowance of prior tax strategies. Valley assumes no obligation for updating
any such forward-looking statement at any time.
# # #
-Tables to Follow-
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Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
Three Months Ended
March 31,
(Dollars in thousands, except per share data) 2003 2002
SELECTED FINANCIAL DATA:
Net income $ 37,982 38,600
Net interest income 93,156 87,779
Net interest income (FTE) 94,661 89,201
Weighted Average Number of Shares Outstanding:*
Diluted 95,098,987 100,318,558
Per share data:*
Basic earnings $ 0.40 0.39
Diluted earnings 0.40 0.38
Cash dividends declared 0.21 0.20
Book value 6.64 6.62
Closing stock price - high 26.20 26.93
Closing stock price - low 22.86 25.03
FINANCIAL RATIOS:
Net interest margin - FTE 4.46% 4.49%
Annualized return on average assets 1.67 1.84
Annualized return on average equity 24.06 23.19
Efficiency ratio 49.59 45.43
SELECTED BALANCE SHEET ITEMS AND RATIOS
Three Months Ended
March 31,
(Dollars in thousands) 2003 2002
AVERAGE BALANCE SHEET ITEMS:
Assets $ 9,079,800 8,407,360
Interest earning assets 8,483,283 7,953,813
Loans 5,856,965 5,320,959
Interest bearing liabilities 6,675,155 6,091,143
Deposits 6,634,054 6,349,930
Shareholders' equity 631,483 665,922
ALLOWANCE FOR LOAN LOSSES:
Beginning of period $ 64,087 63,803
Provision for loan losses 3,255 3,705
Charge-offs 2,167 4,715
Recoveries 1,616 1,430
End of period 66,791 64,223
*Weighted average number of shares outstanding and per share data reflect the 5
percent stock dividend declared on April 9, 2003, payable on May 16, 2003 to
shareholders of record on May 2, 2003.
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Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
March 31,
(Dollars in thousands) 2003 2002
BALANCE SHEET ITEMS:
<s> <c> <c>
Assets $ 9,456,663 $ 8,580,659
Loans 5,969,108 5,337,359
Deposits 6,739,714 6,409,555
Shareholders' equity 626,450 655,080
CAPITAL RATIOS:
Tier 1 leverage ratio 8.38% 9.84%
Risk-based capital - Tier 1 10.88 13.42
Risk-based capital - Total Capital 11.98 14.47
ASSET QUALITY:
Non-accrual loans $ 26,799 15,089
Other real estate owned (OREO) 448 0
Total non-performing assets 27,247 15,089
Loans past due 90 days or more and still accruing 4,698 8,992
ASSET QUALITY RATIOS:
Non-performing assets to total loans plus
other real estate owned (OREO) 0.46% 0.28%
Allowance for loan losses to loans 1.12 1.20
Net charge-offs to average loans 0.04 0.25
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, by fax at (973) 696-2044 or by
e-mail at dgrenz@valleynationalbank.com.
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VALLEY NATIONAL BANCORP
Consolidated Statements of Financial Condition
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($ in thousands) March 31,
Assets 2003 2002
<s> <c> <c>
Cash and due from banks $ 248,633 $ 168,309
Securities:
Available for sale 2,227,155 2,255,904
Held to maturity 611,778 504,317
Trading account 2,437 0
Total securities 2,841,370 2,760,221
Loans 5,969,108 5,337,359
Less: Allowance for loan losses (66,791) (64,223)
Loans, net 5,902,317 5,273,136
Premises and equipment, net 114,812 97,613
Due from customers on acceptances outstanding 13,744 18,218
Accrued interest receivable 44,196 44,788
Intangible assets 40,752 34,456
Bank owned life insurance 160,347 153,536
Other assets 90,492 30,382
Total assets $ 9,456,663 $ 8,580,659
Liabilities
Deposits:
Non-interest bearing $ 1,529,486 $ 1,378,315
Interest bearing:
Savings 3,059,526 2,635,143
Time 2,150,702 2,396,097
Total deposits 6,739,714 6,409,555
Federal funds purchased and securities
sold under agreements to repurchase 668,169 249,783
Treasury tax and loan account and other
short-term borrowings 7,405 30,072
Long-term debt 1,072,619 923,707
Bank acceptances outstanding 13,744 18,218
Accrued expenses and other liabilities 128,562 94,244
Total liabilities 8,630,213 7,725,579
Company - obligated mandatorily
redeemable preferred capital
securities of a subsidiary trust
holding solely junior
subordinated debentures of
the Company 200,000 200,000
Shareholders' Equity (1)
Preferred stock, no par value 0 0
30,000,000 shares authorized; none issued
Common stock, no par value, authorized 149,564,245
shares; issued 99,002,921 shares in 2003 and
102,619,697 shares in 2002 33,336 33,306
Surplus 319,482 406,408
Retained earnings 355,776 286,797
Unallocated common stock held by the employee
benefit plan (395) (561)
Accumulated other comprehensive gain 35,229 18,759
743,428 744,709
Treasury stock, at cost (4,652,725 common shares
in 2003 and 3,725,907 in 2002) (116,978) (89,629)
Total shareholders' equity 626,450 655,080
Total liabilities and
shareholders' equity $ 9,456,663 $ 8,580,659
Note: (1) Share data reflects the 5% stock dividend declared on April 9, 2003,
payable May 16, 2003 to shareholders of record on May 2, 2003.
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VALLEY NATIONAL BANCORP
Consolidated Statements of Income Three Months Ended
($ in thousands, except per share data) March 31, 2003
2003 2002
<s> <c> <c>
Interest Income
Interest and fees on loans $ 91,827 $ 90,886
Interest and dividends on investment securities 34,518 36,635
Interest on federal funds sold and other
short-term investments 86 637
Total interest income 126,431 128,158
Interest Expense
Interest on deposits:
Savings deposits 6,710 8,088
Time deposits 11,954 18,566
Interest on other borrowings 14,611 13,725
Total interest expense 33,275 40,379
Net Interest Income 93,156 87,779
Provision for loan losses 3,255 3,705
Net interest income after provision for
loan losses 89,901 84,074
Non-Iterest Income
Trust and investment services 2,074 1,178
Service charges on deposit accounts 5,277 4,885
Gains on securities transactions, net 3,211 355
Fees from loan servicing 1,993 2,498
Gain on sale of loans, net 2,588 1,780
Bank owned life insurance 1,515 1,416
Other 8,984 5,932
Total non-interest income 25,642 18,044
Non-Interest Expense
Salary expense 24,419 21,081
Employee benefit expense 6,307 4,845
Net occupancy expense 8,415 6,877
Amortization of intangible assets 2,766 2,189
Distribution on capital securities 3,932 3,932
Other 12,232 10,381
Total non-interest expense 58,071 49,305
Income before income taxes 57,472 52,813
Income tax expense 19,490 14,213
Net Income $ 37,982 $ 38,600
Earnings Per Share: (1)
Basic $ 0.40 $ 0.39
Diluted $ 0.40 $ 0.38
Weighted Average Number of Shares Outstanding: (1)
Basic 94,658,595 99,613,756
Diluted 95,098,987 100,318,558
Note: (1) Earnings per share and average shares outstanding reflect the 5% stock
dividend declared on April 9, 2003, payable on May 16, 2003 to shareholders of
record on May 2, 2003.
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