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) - July 17, 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. Today, Valley National Bancorp ("Valley") issued a press release reporting
2003 second 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 July 17, 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: July 17, 2003
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FOR IMMEDIATE RELEASE Contact: Alan Eskow
Executive Vice President and
Chief Financial Officer
973-305-4003
Valley National Bancorp Reports Net Income and EPS for Second Quarter
WAYNE, NJ - July 17, 2003 -- Valley National Bancorp (NYSE:VLY) today
reported net income of $0.40 per diluted share or $37.7 million for the second
quarter ended June 30, 2003, compared with $0.40 per diluted share or $39.9
million for the second quarter of 2002. All data reflects the 5 percent stock
dividend that was issued May 16, 2003.
Net income for the six months ended June 30, 2003 was $0.80 per diluted
share or $75.7 million compared to $0.79 per diluted share or $78.5 million for
the first half of 2002. The effective tax rate for the second quarter and first
half of 2003 was 34.2 percent and 34.1 percent, respectively, compared to 30.4
percent and 28.7 percent for the same periods in 2002 when Valley had recorded a
$1.75 million and $5.25 million tax benefit associated with the restructuring of
a subsidiary into a REIT.
Under Valley's share repurchase program approved by the Board of Directors
in August 2001, a total of 10.2 million of the 10.5 million common shares
authorized for repurchase had been acquired through the close of the 2003 second
quarter at a total cost of $250 million, funds that would otherwise have been
invested and contributed to a higher net interest income and net income. During
the first six months of 2003, Valley repurchased 1.4 million common shares at a
total cost of $35.2 million.
Net interest income, on a tax equivalent basis, for the second quarter of
2003 was $94.3 million, with a net interest margin of 4.34 percent. That
compares with net interest income of $94.7 million for the 1st quarter of 2003
with a net interest margin of 4.46 percent. Net interest income declined
slightly during the second quarter of 2003 mainly as a result of declining
interest rates on loans and investments due to refinancing activity. Deposit and
borrowing rates also declined, but by less than the rates on loans and
investments.
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 half 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 second quarter of 2003, Valley achieved an annualized return on
average shareholders' equity (ROE) of 24.27 percent, an annualized return on
average assets (ROA) of 1.62 percent and an efficiency ratio of 50.3 percent.
The efficiency ratio is calculated by dividing total non-interest expense by the
sum of net interest income and non-interest income. These ratios place Valley
among the nation's best performing banks.
Total loans increased to $6.1 billion at June 30, 2003 from $5.5 billion at
June 30, 2002 or 11.7 percent and were up from $6.0 billion at March 31, 2003.
In the first half of 2003, Valley achieved strong increases in residential and
commercial mortgages and commercial loans. During the first half of 2003, Valley
also sold approximately $156 million of residential and SBA loans while selling
approximately $246 million of loans for the full year 2002.
Total deposits increased by 6.6 percent to $7.0 billion at June 30, 2003
from $6.6 billion at June 30, 2002. Non-interest bearing deposits increased by
9.1 percent over the June 30, 2002 balances to $1.6 billion, and savings
deposits increased by 17.2 percent to $3.2 billion. These are Valley's lowest
cost core deposits and the most desirable type of deposits Valley attempts to
attract. Valley's cost of average total deposits for the first half of 2003 was
1.11 percent, down from 1.66 percent for the first six months of 2002,
reflecting the lower interest rate environment.
Net chargeoffs were $1.6 million for the first half of 2003. Total
non-performing assets, which include non-accrual loans and other real estate
owned ("OREO"), totaled $24.1 million, or 0.39 percent of loans and OREO, at
June 30, 2003, down from $27.2 million at March 31, 2003.
Loans past due 90 days or more and still accruing at June 30, 2003
decreased to $3.0 million, or 0.05 percent of $6.1 billion of total loans,
compared to $4.7 million at March 31, 2003 and $4.9 million at December 31,
2002. Total loans past due in excess of 30 days were 0.75 percent of all loans
at June 30, 2003 compared with 0.87 percent at March 31, 2003 and 1.20 percent
at December 31, 2002.
Non-interest income for the second quarter of 2003 was $26.2 million, up
28.4 percent from $20.4 million for the second quarter of 2002, amounting to
22.0 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. In addition, service charges on deposit accounts increased by $855
thousand or 17.7 percent while gains from the sale of loans increased by $1.2
million or 74.6 percent.
Non-interest expense for the second quarter of 2003 rose by 18.4 percent to
$59.9 million from the 2002 second 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. In addition,
amortization of intangibles increased by $895 thousand or 33.0 percent mainly
due to heavy refinancing resulting in a decline in Valley's portfolio of
serviced residential mortgage loans. On a linked quarter basis, salary expense
was $24.4 million for the first quarter of 2003 compared to $24.6 million for
the second quarter of 2003.
Valley's risk-based capital ratios were 10.86 percent for Tier 1 capital
and 11.71 percent for total capital. The Tier 1 leverage ratio was 8.20 percent.
Shareholders' equity decreased to $629.1 million from $673.1 million a year ago.
This decrease resulted from shares acquired under Valley's share repurchase
program used primarily for the payment of the 5% stock dividend issued in 2003.
During the quarter Valley acquired approximately 670 thousand shares under this
program at a cost of $16.6 million, for an average price of $24.82.
Valley has begun to reposition some of its borrowings to take advantage of
the low long-term interest rate environment that presently exists. It is
anticipated that this strategy will enable Valley to better match its lower
yielding fixed rate loans when interest rates begin to rise.*
Valley National Bancorp is a regional bank holding company headquartered in
Wayne, New Jersey. Its principal subsidiary, Valley National Bank, currently
operates 128 offices located in 83 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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<caption>
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
Three Months Ended Six Months Ended
June 30, June 30,
(Dollars in thousands, except per share 2003 2002 2003 2002
data)
SELECTED FINANCIAL DATA:
Net income $37,729 $39,896 $75,711 $78,496
Net interest income 92,755 91,447 185,911 179,227
Net interest income (FTE) 94,303 92,907 188,964 182,110
Weighted Average Number of Shares Outstanding:*
Diluted 94,313,570 99,344,567 94,685,855 99,778,533
Per share data:*
Basic earnings $0.40 $0.40 $0.80 $0.79
Diluted earnings 0.40 0.40 0.80 0.79
Cash dividends declared 0.225 0.21 0.44 0.42
Book value 6.71 6.86 6.71 6.86
Closing stock price - high 27.13 27.57 27.13 27.57
Closing stock price - low 24.01 25.05 22.86 25.03
FINANCIAL RATIOS:
Net interest margin - FTE 4.34% 4.62 4.40 % 4.55
Annualized return on average assets 1.62 1.87 1.65 1.85
Annualized return on average equity 24.27 24.16 24.16 23.67
Efficiency ratio 50.32 45.20 49.60 45.88
SELECTED BALANCE SHEET ITEMS AND RATIOS
Three Months Ended Six Months Ended
June 30, June 30,
(Dollars in thousands) 2003 2002 2003 2002
AVERAGE BALANCE SHEET ITEMS:
Assets $9,308,327 $8,542,747 $9,194,695 $8,475,427
Interest earning assets 8,692,965 8,039,643 8,588,703 7,996,965
Loans 6,050,578 5,389,510 5,954,306 5,355,424
Interest bearing liabilities 6,878,608 6,196,573 6,777,443 6,144,150
Deposits 6,863,701 6,530,711 6,749,512 6,440,820
Shareholders' equity 621,874 660,546 626,652 663,219
ALLOWANCE FOR LOAN LOSSES:
Beginning of period $66,791 $64,223 $64,087 $63,803
Provision for loan losses 1,755 3,974 5,010 7,679
Charge-offs 2,143 5,265 4,310 9,980
Recoveries 1,074 1,367 2,690 2,797
End of period 67,477 64,299 67,477 64,299
</table>
*Weighted average number of shares outstanding and per share data reflect
the 5 percent stock dividend issued on May 16, 2003.
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<table>
<caption>
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
As of June 30,
(Dollars in thousands) 2003 2002
BALANCE SHEET ITEMS:
Assets $9,506,570 $8,782,717
Loans 6,133,388 5,489,863
Deposits 7,026,076 6,591,437
Shareholders' equity 629,134 673,120
CAPITAL RATIOS:
Tier 1 leverage ratio 8.20% 9.65
Risk-based capital - Tier 1 10.86 13.01
Risk-based capital - Total Ca 11.71 14.02
ASSET QUALITY:
Non-accrual loans $23,894 $19,553
Other real estate owned (OREO) 172 0
Total non-performing assets 24,066 19,553
Loans past due 90 days or more and
still accruing 3,023 10,216
ASSET QUALITY RATIOS:
Non-performing assets to total loans plus
other real estate owned (OREO) 0.39% 0.36
Allowance for loan losses to loans 1.10 1.17
Net charge-offs to average loans 0.05 0.27
</table>
SHAREHOLDER RELATIONS
Requests for copies of reports providing more detailed financial statements
and analysis, as well as all other inquiries regarding Shareholder Relations
should be directed to Dianne Grenz at Valley National Bancorp, 1455 Valley Road,
Wayne, New Jersey, 07470, by telephone at (973) 305-3380, by fax at (973)
696-2044 or by e-mail at dgrenz@valleynationalbank.com.
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VALLEY NATIONAL BANCORP
Consolidated Statements of Financial Condition
($ in thousands)
<table>
<caption>
June 30,
Assets 2003 2002
-------------- ---------------
Cash and due from banks $ 241,325 $ 195,697
Securities:
Available for sale 2,126,734 2,258,258
Held to maturity 605,695 511,237
Trading account 3,524 0
-------------- ---------------
Total securities 2,735,953 2,769,495
-------------- ---------------
Loans 6,034,860 5,461,605
Loans held for sale 98,528 28,258
Less: Allowance for loan losses (67,477) (64,299)
-------------- ---------------
Loans, net 6,065,911 5,425,564
-------------- ---------------
Premises and equipment, net 116,549 105,381
Due from customers on acceptances outstanding 10,667 18,283
Accrued interest receivable 41,219 45,110
Intangible assets 53,004 32,625
Bank owned life insurance 161,910 155,342
Other assets 80,032 35,220
-------------- ---------------
Total assets $ 9,506,570 $ 8,782,717
============== ===============
Liabilities
Deposits:
Non-interest bearing $ 1,598,087 $ 1,464,336
Interest bearing:
Savings 3,159,926 2,697,104
Time 2,268,063 2,429,997
-------------- ---------------
Total deposits 7,026,076 6,591,437
-------------- ---------------
Federal funds purchased and securities
sold under agreements to repurchase 449,116 244,008
Treasury tax and loan account and other
short-term borrowings 17,268 38,575
Long-term debt 1,072,599 923,686
Bank acceptances outstanding 10,667 18,283
Accrued expenses and other liabilities 101,710 93,608
-------------- ---------------
Total liabilities 8,677,436 7,909,597
-------------- ---------------
Company - obligated mandatorily redeemable preferred 200,000 200,000
capital securities of a subsidiary trust holding solely junior
subordinated debentures of the Company
Shareholders' Equity (1)
Preferred stock, no par value
30,000,000 shares authorized; none issued 0 0
Common stock, no par value, authorized 149,564,244
shares; issued 94,249,841 shares in 2003 and
99,022,370 shares in 2002 33,332 33,347
Surplus 319,140 318,851
Retained earnings 254,078 304,919
Unallocated common stock held by the employee benefit plan (352) (519)
Accumulated other comprehensive gain 36,123 38,206
-------------- ---------------
642,321 694,804
Treasury stock, at cost (500,326 common shares
in 2003 and 832,027 in 2002) (13,187) (21,684)
-------------- ---------------
Total shareholders' equity 629,134 673,120
-------------- ---------------
Total liabilities and shareholders' equity $ 9,506,570 $ 8,782,717
============== ===============
Note: (1) Share data reflects the 5% stock dividend paid on May 16, 2003.
</table>
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<caption>
VALLEY NATIONAL BANCORP
Consolidated Statements of Income Three Months Ended
($ in thousands, except per share data) June 30, 2003
2003 2002
--- ----------------- -----------------
Interest Income
Interest and fees on loans $ 92,225 $ 91,902
Interest and dividends on investment securities 33,729 39,128
Interest on federal funds sold and other
short-term investments 86 327
----------------- -----------------
Total interest income 126,040 131,357
----------------- -----------------
Interest Expense
Interest on deposits:
Savings deposits 6,427 8,632
Time deposits 12,218 18,019
Interest on other borrowings 14,640 13,259
----------------- -----------------
Total interest expense 33,285 39,910
----------------- -----------------
Net Interest Income 92,755 91,447
Provision for loan losses 1,755 3,974
----------------- -----------------
Net interest income after provision for
loan losses 91,000 87,473
----------------- -----------------
Non-Interest Income
Trust and investment services 2,156 1,192
Insurance fees, commissions and premiums 4,202 735
Service charges on deposit accounts 5,682 4,827
Gains on securities transactions, net 2,968 2,609
Fees from loan servicing 2,459 2,415
Gain on sale of loans, net 2,727 1,562
Bank owned life insurance 1,564 1,806
Other 4,464 5,275
----------------- -----------------
Total non-interest income 26,222 20,421
----------------- -----------------
Non-Interest Expense
Salary expense 24,647 20,882
Employee benefit expense 5,892 4,701
Net occupancy expense 8,767 7,118
Amortization of intangible assets 3,609 2,714
Distributions on capital securities 3,932 3,932
Other 13,028 11,214
----------------- -----------------
Total non-interest expense 59,875 50,561
----------------- -----------------
Income before income taxes 57,347 57,333
Income tax expense 19,618 17,437
----------------- -----------------
Net Income $ 37,729 $ 39,896
================= =================
Earnings Per Share: (1)
Basic $ 0.40 $ 0.40
Diluted $ 0.40 $ 0.40
Weighted Average Number of Shares Outstanding: (1)
Basic 93,798,729 98,709,539
Diluted 94,313,570 99,344,567
Note: (1) Share data reflects the 5% stock dividend paid on May 16, 2003.
</table>
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<table>
<caption>
VALLEY NATIONAL BANCORP
Consolidated Statements of Income Six Months Ended
($ in thousands, except per share data) June 30, 2003
2003 2002
--- ---------------- ----------------
Interest Income
Interest and fees on loans $ 184,052 $ 182,788
Interest and dividends on investment securities 68,246 75,762
Interest on federal funds sold and other
short-term investments 173 964
---------------- ----------------
Total interest income 252,471 259,514
---------------- ----------------
Interest Expense
Interest on deposits:
Savings deposits 13,137 16,720
Time deposits 24,171 36,585
Interest on other borrowings 29,252 26,982
---------------- ----------------
Total interest expense 66,560 80,287
---------------- ----------------
Net Interest Income 185,911 179,227
Provision for loan losses 5,010 7,679
---------------- ----------------
Net interest income after provision for
loan losses 180,901 171,548
---------------- ----------------
Non-Interest Income
Trust and investment services 4,230 2,370
Insurance fees, commissions and premiums 9,004 1,521
Service charges on deposit accounts 10,959 9,712
Gains on securities transactions, net 6,179 2,964
Fees from loan servicing 4,451 4,913
Gain on sale of loans, net 5,315 3,342
Bank owned life insurance 3,078 3,222
Other 8,646 10,421
---------------- ----------------
Total non-interest income 51,862 38,465
---------------- ----------------
Non-Interest Expense
Salary expense 49,067 41,963
Employee benefit expense 12,198 9,547
Net occupancy expense 17,182 13,995
Amortization of intangible assets 6,375 4,903
Distributions on capital securities 7,864 7,865
Other 25,259 21,594
---------------- ----------------
Total non-interest expense 117,945 99,867
---------------- ----------------
Income before income taxes 114,818 110,146
Income tax expense 39,107 31,650
---------------- ----------------
Net Income $ 75,711 $ 78,496
---------------- ----------------
Earnings Per Share: (1)
Basic $ 0.80 $ 0.79
Diluted $ 0.80 $ 0.79
Weighted Average Number of Shares Outstanding: (1)
Basic 94,226,287 99,159,149
Diluted 94,685,855 99,778,533
Note: (1) Share data reflects the 5% stock dividend paid on May 16, 2003.
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