FOR IMMEDIATE RELEASE Contact: Alan D. Eskow
Senior Vice President & Controller
Valley National Bancorp
(973) 305-4003
Eric Gould
Executive Vice President
Merchants New York Bancorp, Inc.
(212) 973-6637
Valley National Bancorp to acquire Merchants New York Bancorp for $375 million
WAYNE, NJ - September 6, 2000 -Valley National Bancorp (NYSE:VLY) and Merchants
New York Bancorp, Inc. (NASDAQ NMS:MBNY) jointly announced today that they have
entered into a definitive merger agreement by which Valley National Bancorp
will acquire Merchants for common stock valued at $375 million, based on
Valley's current market value. Merchants New York Bancorp is the holding
company for The Merchants Bank of New York, a commercial bank with $1.4 billion
in assets operating seven offices all located in Manhattan.
Pursuant to the agreement, Merchants New York Bancorp, Inc. will be merged into
Valley National Bancorp and The Merchants Bank of New York will be merged into
Valley National Bank. The Merchants Bank will continue to operate in
Manhattan, under its existing name, as a division of Valley National Bank. The
acquisition of Merchants is structured as a tax-free merger to be accounted for
as a pooling of interests. Each of the 18,645,488 outstanding shares
of Merchants common stock will be exchanged for .7634 shares of Valley common
stock. Valley will issue 14,233,965 shares of its common stock in exchange for
the outstanding shares of Merchants. At June 30, 2000, Merchants had $96.7
million of shareholders equity. In connection with the execution of the merger
agreement, Merchants also granted Valley an option to acquire 19.9%, or
approximately 4.7 million shares from Merchants' authorized, but unissued
common stock.
Valley National Bank with $6.2 billion in assets, is a highly efficient,
top-performing super community bank that emphasizes middle market commercial
and consumer lending. The Bank has a record of 72 consecutive years of
profitable operation and a long history of increased dividends. The Bank has a
successful record of leveraging its proven super community bank strategy in its
17 previous acquisitions during the past 23 years. Mr. Gerald H. Lipkin,
Chairman, President and CEO of Valley, noted, "The merger with Merchants is
consistent with our company's strategy of highly focused growth within Northern
New Jersey and the contiguous local market through new branches and
acquisitions of other strong financial institutions. The Merchants Bank of New
York is a traditional commercial bank with a low risk, superb middle market
lending expertise and a credit culture very similar to Valley's business
model. All seven of Merchants' offices are located in midtown Manhattan, a
distance of approximately 15 miles from Wayne and most of its customers are
within 45 minutes of Valley's headquarters. This proximity will allow Valley
to continue to operate as a super community bank. Over the years, Merchants
has developed a strong following among small- to medium-sized companies that
want to maintain their banking relationship with senior management and
the decision makers in the bank. This closely follows Valley's approach to
lending and highlights the attractiveness of the merger."
Mr. Lipkin added, "The Merchants Bank of New York has a relatively large
commercial loan base, and has shown improved earnings and earnings per share
performance in each of the last seven years."
"We expect this acquisition to generate sufficient cost savings to make it
accretive to earnings during the first year. Additionally, since Merchants
does not focus on consumer banking, a major strength at Valley, we view this as
an opportunity to enhance Merchants revenue stream and a significant growth
opportunity. Valley's goal in acquisitions is to price transactions so that
they are accretive to Valley's per share earnings during the first year of
combined operations."
Mr. Spencer B. Witty, who is Chairman of Merchants New York Bancorp, Inc. and
who will become a Vice Chairman of Valley, indicated that "the proposed
affiliation with Valley will bring together two great banking institutions,
creating a much stronger franchise and market presence. We believe that this
transaction will position Merchants for the future." Merchants will be able to
provide larger loans to customers as a result of Valley's greater lending
limit. Customers will easily be able to obtain residential mortgages, auto
and consumer loans, and take advantage of Valley's trust, asset management and
insurance services. Valley also provides an extended-hour customer service
department, substantial ATM locations, debit cards, on-line real-time banking
and a broad base of branch locations, all of which will be available at The
Merchants Bank of New York.
Mr. James G. Lawrence, President and Chief Executive Officer, and Mr. William
J. Cardew, Vice Chairman and Chief Operating Officer and Mr.Eric Gould, EVP,
will also join Valley's senior management team following the merger. In
addition, Messrs. Spencer Witty, Robinson Markel, and Charles Baum, Directors
of Merchants, will join Valley's Board of Directors following the merger.
The acquisition is conditioned upon necessary regulatory approvals, the
approval of Valley and Merchants shareholders and other customary conditions.
The parties anticipate that the merger will be consummated in the first quarter
of 2001.
Valley National Bank, the principal subsidiary of Valley National Bancorp,
currently operates 117 branches in 76 communities in Bergen, Essex, Hudson,
Middlesex, Morris, Passaic, Somerset, Sussex, Union and Warren counties in
New Jersey.
Investor Conference Call: To participate in an analyst presentation at
11:00 a.m., EDT, Wednesday, September 6, 2000, dial toll-free 1-800-450-0818,
access code Valley. The presentation can be played back beginning 1:00 p.m.
EDT on September 6, 2000 and running through 11:59 p.m. on September 7, 2000 by
calling 1-800-475-6701, access code 537260. The analyst presentation can also
be viewed on Valley's website @ www.valleynationalbank.com.
This document contains forward-looking statements concerning the financial
condition, results of operations and business of Valley following the
consummation of its proposed acquisition of
Merchants, the anticipated financial and other benefits of the proposed
acquisition and the plans and objectives of Valley's management following the
proposed acquisition, including, without limitation, statements relating to
the cost savings expected to result from the proposed acquisition, and
anticipated results of operations of the combined company following the
proposed acquisition. Generally, the words "will," "may," "should,"
"continue," "believes," "expects," "anticipates" or similar expressions
identify forward-looking statements. These forward-looking statements involve
certain risks and uncertainties. Factors that could cause
actual results to differ materially from those contemplated by the
forward-looking statements include, among others, the following factors:
(1) cost savings expected to result from the proposed acquisition may not be
fully realized or realized within the expected time frame; (2)operating results
following the proposed acquisition may be lower than expected; (3) competitive
pressure among financial services companies may increase significantly;
(4) costs or difficulties related to the integration of the businesses of
Valley and Merchants may be greater than expected; (5) adverse changes in the
interest rate environment may reduce interest margins of the combined company;
(6) general economic conditions, whether nationally or in the market areas in
which Valley and Merchants conduct business, may be less favorable than
expected; (7) legislation or regulatory changes may adversely affect the
businesses in which Valley and Merchants are engaged; or (8) adverse changes
may occur in the securities markets. Readers are cautioned not to place undue
reliance on forward looking statements which are subject to influence by the
named risk factors and unanticipated future events. Actual results may differ
materially from management expectations. Both Valley and Merchants disclaim
any obligation to update or revise any forward looking statements based
on the occurrence of future events, the receipt of new information, or
otherwise.
Valley and Merchants will be filing with the SEC a joint proxy statement-
prospectus with respect to solicitation of proxies of their stockholders to
approve the proposed merger and Valley will be filing a registration statement
with respect to the common stock to be issued in the merger. Investors and
security holders are advised to read the joint proxy statement-prospectus and
the registration statement, when each of these documents becomes available,
because each of them will contain important information about Valley,
Merchants, the merger, the persons who, under SEC rules, may be deemed to be
participants in the solicitation of shareholders of Valley and Merchants in
connection with the merger, and the interests of those persons in the
solicitation. Investors and security holders may obtain a free copy of the
joint proxy statement-prospectus and the registration statement (when
available) and other documents filed by Valley or Merchants with the SEC at the
SEC's Internet web site at www.sec.gov. The joint proxy statement-prospectus
and the registration statement (when available) and such other documents filed
by Valley with the SEC will be available free of charge by contacting Valley
National Bancorp, 1455 Valley Road, Wayne, NJ 07474, Attention: Dianne Grenz,
telephone: (973) 305-3380. Documents filed with the SEC by Merchants will be
available free of charge by contacting Merchants New York Bancorp, Inc., 275
Madison Avenue, New York, NY 10016, Attention: Corporate Secretary, telephone
(212) 973-6600. Shareholders and investors should read the joint proxy
statement-prospectus carefully when it becomes available before making any
voting or investment decisions.