VALLEY NATIONAL BANCORP
424B3, 1995-05-09
NATIONAL COMMERCIAL BANKS
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                    LAKELAND FIRST FINANCIAL GROUP, INC.
                                250 ROUTE 10
                        SUCCASUNNA, NEW JERSEY 07876
                               (201) 584-6666

   
                                                              May 5, 1995
    

Dear Stockholder:

     On behalf of the Board of Directors, I want to extend to you a cordial
invitation to attend a Special Meeting of Stockholders of Lakeland First
Financial Group, Inc. ("Lakeland").  The meeting will be held at 10:00 
a.m., Eastern time, on Tuesday, June 6, 1995, at Days Inn, Route 46,
Ledgewood, New Jersey.

   
     The purpose of the meeting is to vote on a proposal to approve the
Amended and Restated Agreement and Plan of Merger, dated as of April 21,
1995 (the "Merger Agreement"), among Lakeland, Lakeland Savings Bank (the
"Bank"), Valley National Bancorp ("Valley") and Valley National Bank
("VNB"), pursuant to which Lakeland will merge with and into Valley (the
"Merger"), and the Bank will merge with and into VNB (the "Bank Merger"
and together with the Merger, the "Mergers").

     Upon consummation of the Merger, each outstanding share of Lakeland
common stock will be converted into and represent the right to receive
1.286 shares (the "Exchange Ratio") of Valley's common stock, no par value
("Valley Common Stock"), subject to certain adjustments.  The closing
price of Valley Common Stock on May 1, 1995, the latest practicable
trading day before the printing of the enclosed Proxy Statement/Prospectus
was $25.38 per share.  Consummation of the Mergers is subject to certain
conditions, including approval of the Merger Agreement by Lakeland
stockholders and approval of the Mergers by various regulatory agencies. 
Approval of the Merger Agreement requires the affirmative vote of a
majority of the votes cast by the holders of Lakeland common stock
represented at a meeting at which a quorum is present.
    

     The accompanying Notice of Special Meeting and Proxy
Statement/Prospectus contain information about the Mergers as well as other
information relating to Lakeland and Valley.  We urge you to review
carefully such information and the information in Lakeland's 1994 Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q for the periods ended
September 30, 1994 and December 31, 1994, and the 1995 Annual Meeting Proxy
Statement, copies of which are available as indicated in the accompanying
Proxy Statement/Prospectus under "AVAILABLE INFORMATION."

     The Board of Directors of Lakeland has unanimously adopted the Merger
Agreement and recommends that the stockholders of Lakeland vote FOR
approval of the Merger Agreement.  Even if you plan to attend the meeting
in person, please complete the enclosed proxy, sign and date it and mail it
promptly in the enclosed postage-paid, return addressed envelope.  You may
revoke your proxy by attending the special meeting and voting in person.

                                   Yours very truly,


                                   Michael Halpin
                                   President and Chief Executive Officer

     Please do not send your common stock certificates at this time.  If
the Merger is consummated, you will be sent instructions regarding the
surrender of your stock certificates.

                    LAKELAND FIRST FINANCIAL GROUP, INC.
   
                                250 Route 10
                        Succasunna, New Jersey 07876
                               (201) 584-6666
    
                 NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
                          TO BE HELD ON JUNE 6, 1995

     NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of
Lakeland First Financial Group, Inc. ("Lakeland") will be held at 10:00
a.m., Eastern time, on Tuesday, June 6, 1995, at Days Inn, Route 46,
Ledgewood, New Jersey for the following purposes:

   
     1.   To consider and vote upon a proposal to approve the Amended
          and Restated Agreement and Plan of Merger, dated as of April 21,
          1995 (the "Merger Agreement"), among Lakeland, Lakeland Savings
          Bank (the "Bank"), Valley National Bancorp ("Valley") and Valley
          National Bank ("VNB"), pursuant to which Lakeland will
          merge with and into Valley and the Bank will
          merge with and into VNB , and each outstanding share of Lakeland
          common stock will be converted into and represent the right to
          receive 1.286 shares (the "Exchange Ratio") of Valley's common
          stock, no par value, subject to certain
          adjustments.
    

     2.   To transact such other business as may properly come before the
          meeting or any adjournment or adjournments thereof.

     A copy of the Merger Agreement is set forth as ANNEX A to the
accompanying Proxy Statement/Prospectus.

     The Board of Directors of Lakeland has fixed April 26, 1995, as
the record date for the determination of stockholders entitled to notice of
and to vote at the Special Meeting, and accordingly, only holders of record
of Lakeland common stock at the close of business on that date will be
entitled to notice of and to vote at the Special Meeting.  In the event
there are not sufficient shares represented for a quorum or votes to
approve the Merger Agreement at the Special Meeting, the Special Meeting
may be adjourned to permit further solicitation.

     Approval of the Merger Agreement requires the affirmative vote of a
majority of the votes cast by the holders of Lakeland common stock
represented at a meeting at which a quorum is present.

     The Board of Directors of Lakeland unanimously recommends that
stockholders vote "For" approval of the Merger Agreement.

                              By Order of the Board of Directors of
                              LAKELAND FIRST FINANCIAL GROUP, INC.
                              WILLIAM H. McNEAR
                              CHAIRMAN OF THE BOARD

Stockholders are urged to complete, date, sign and return promptly the
enclosed Proxy in the accompanying envelope, which requires no postage if
mailed in the United States.  If a Stockholder receives more than one Proxy
for any reason, each Proxy should be completed and returned.  Your
cooperation will be appreciated.  Your Proxy will be voted with respect to
the matters identified thereon in accordance with any specifications on the
Proxy.
   
                             PROXY STATEMENT
                                    for
                     Special Meeting of Stockholders for
                     Lakeland First Financial Group, Inc.
                          to be held on June 6, 1995
                              Days Inn, Route 46
                          Ledgewood, New Jersey 07876

                                PROSPECTUS OF
                           VALLEY NATIONAL BANCORP
                                    for
                   Common Stock of Valley National Bancorp
                       to be issued in connection with
              the Merger of Lakeland First Financial Group, Inc.
                    with and into Valley National Bancorp

      This Proxy Statement/Prospectus is being furnished by Lakeland First
 Financial Group, Inc., a New Jersey corporation ("Lakeland"), to the
 holders of Lakeland common stock, par value $0.10 per share ("Lakeland
 Common Stock"), as a Proxy Statement in connection with the
 solicitation of proxies by Lakeland's Board of Directors for use at a
 special meeting of stockholders of Lakeland to be held at 10:00 a.m.,
 Eastern time, on Tuesday, June 6, 1995, at Days Inn, Route 46, 
 Ledgewood, New Jersey (the "Special Meeting"), and at any adjournment or
 adjournments thereof.  In the event there are not sufficient shares
 represented for a quorum or votes to approve the Merger Agreement at the
 Special Meeting, the Special Meeting may be adjourned to permit further
 solicitation.

      This Proxy Statement/Prospectus, the accompanying Notice of Special
 Meeting and form of Proxy are first being mailed to the stockholders of
 record of Lakeland on or about May 5, 1995.
    

      The purpose of the Special Meeting is to consider and vote upon a
 proposal to approve the Amended and Restated Agreement and Plan of Merger,
 dated as of April 21, 1995 (the "Merger Agreement"), among Lakeland,
 Lakeland Savings Bank ("the Bank"), Valley National Bancorp ("Valley"),
 and Valley National Bank ("VNB"), pursuant to which Lakeland will merge
 with and into Valley (the "Merger") and the Bank will merge with and into
 VNB (the "Bank Merger" and together with the Merger, the "Mergers"), all
 on and subject to the terms and conditions contained therein.  See
 "SUMMARY," "THE MERGER AGREEMENT," and a copy of the Merger Agreement
 which is attached as ANNEX A to this Proxy Statement/Prospectus.
   

      Upon consummation of the Merger each outstanding share of Lakeland
 Common Stock will be converted into and represent the right to receive
 1.286 shares (the "Exchange Ratio") of Valley's common stock, no par value
 ("Valley Common Stock"), subject to certain adjustments.  The Exchange
 Ratio of 1.286 shares, and all share and per share data (including
 reported stock prices) for Valley and Lakeland on a pro forma basis
 included in this Proxy Statement/Prospectus, have been adjusted for the 5%
 stock dividend declared March 23, 1995 and payable May 2, 1995 to Valley
 stockholders of record on April 14, 1995.  The Merger Agreement, a copy of
 which is attached as ANNEX A to this Proxy Statement/Prospectus, has been
 amended and restated to reflect the adjusted Exchange Ratio.  Valley's
 Annual Report on Form 10-K, which is incorporated by reference into this
 Proxy Statement/Prospectus, has not been amended or restated to
 retroactively reflect the stock dividend.  Pursuant to the terms of the
 Merger Agreement, cash will be paid in lieu of fractional shares of Valley
 Common Stock.  For a more complete description of the Merger Agreement and
 the terms of the Merger, see "THE MERGERS" and "THE MERGER AGREEMENT."

      Valley Common Stock is traded on the New York Stock Exchange under the
 symbol "VLY."  On January 25, 1995, the last business day prior to public
 announcement of the execution of the letter of intent with respect to the
 Mergers (the "Letter of Intent"), the closing price of Valley Common Stock
 was $25.48 per share.  On May 1, 1995, the latest practicable date before
 the printing of this Proxy Statement/Prospectus, such price was $25.38.
 Lakeland's Common Stock is listed on the NASDAQ National Market System
 under the symbol "LLSL."  On January 25, 1995, the last business day prior
 to public announcement of the execution of the Letter of Intent, the last
 reported sale price per share of Lakeland Common Stock on the NASDAQ
 National Market System was $21.50.  On May 1, 1995, such price was $30.75.
 See "SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA -- Comparative Per
 Share Data."  Lakeland stockholders are urged to obtain current market
 quotations for the Valley and Lakeland Common Stock.  Because the Exchange
 Ratio is fixed, Lakeland stockholders are not assured of receiving any
 specific market value of Valley Common Stock.  The price of Valley Common
 Stock at the Effective Time may be higher or lower than the market price
 at the time of entering into the Letter of Intent, at the time of mailing
 this Proxy Statement/Prospectus or at the time of the Special Meeting. 

      Valley has filed a Registration Statement pursuant to the Securities
 Act of 1933, as amended (the "Securities Act"), covering the shares of
 Valley Common Stock which will be issued in connection with the Merger.
 In addition to constituting the Lakeland Proxy Statement for the Special
 Meeting, this document constitutes a Prospectus of Valley with respect to
 the Valley Common Stock to be issued if the Merger is consummated.

        THESE SECURITIES ARE NOT A SAVINGS OR DEPOSIT ACCOUNT AND ARE 
         NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR 
                        ANY OTHER GOVERNMENTAL AGENCY.

            THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
            BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
          SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
          COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
            THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT.  ANY
            REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

        The date of this Proxy Statement/Prospectus is May 5, 1995
    

                            AVAILABLE INFORMATION

      Lakeland and Valley are subject to the informational requirements of
 the Securities Exchange Act of 1934, as amended, and the rules and
 regulations thereunder (the "Exchange Act"), and, in accordance therewith,
 file reports, proxy statements and other information with the Securities
 and Exchange Commission (the "Commission").  Reports, proxy statements, and
 other information filed by Lakeland and Valley can be inspected and copied
 at the public reference facilities maintained by the Commission at 450
 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's Regional
 Offices in New York (7 World Trade Center, 13th Floor, New York, New York
 10048) and Chicago (Citicorp Center, 500 West Madison Street, Suite 1400,
 Chicago, Illinois 60661) and copies of such materials can be obtained from
 the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
 Washington, D.C. 20549, at prescribed rates.  Lakeland's Common Stock is
 listed on the NASDAQ National Market System and reports, proxy statements,
 and other information relating to Lakeland can also be inspected at the
 offices of the NASDAQ Stock Market Reports Section, 1735 K Street, N.W.,
 Washington, D.C.  20006.  The outstanding shares of Valley Common Stock are
 traded on the New York Stock Exchange ("NYSE") and reports, proxy
 statements, and other information relating to Valley may be inspected at
 the offices of the NYSE, 20 Broad Street, New York, New York 10005.

   
      Valley has filed with the Commission a Registration Statement on Form
 S-4 (together with any amendments thereto, the "Registration Statement")
 under the Securities Act, with respect to the shares of Valley Common Stock
 to be issued upon consummation of the Merger.  This Proxy
 Statement/Prospectus does not contain all the information set forth in the
 Registration Statement and the exhibits thereto, certain portions of which
 have been omitted as permitted by the rules and regulations of the SEC.
 Copies of the Registration Statement are available for inspection and
 copying as set forth above. Statements contained in this Proxy
 Statement/Prospectus or in any document incorporated by reference in this
 Proxy Statement/Prospectus relating to the contents of any contract or
 other document referred to herein or therein are not necessarily complete,
 and in each instance reference is made to the copy of such contract or
 other document filed as an exhibit to the Registration Statement or such
 other document, each such statement being qualified in all respects by
 such reference.

      THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
 WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH.  A COPY OF DOCUMENTS
 RELATING TO LAKELAND (OTHER THAN CERTAIN EXHIBITS TO SUCH DOCUMENTS) IS
 AVAILABLE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER,
 TO WHOM A PROXY STATEMENT/PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL
 REQUEST TO:  LAKELAND FIRST FINANCIAL GROUP, INC., ATTENTION: FRANCES A.
 STACEY, CORPORATE SECRETARY, 250 ROUTE 10, SUCCASUNNA, NEW JERSEY 07876;
 TELEPHONE NUMBER (201) 584-6666.  THOSE DOCUMENTS PERTAINING TO VALLEY ARE
 AVAILABLE UPON WRITTEN OR ORAL REQUEST FROM ALAN ESKOW, CORPORATE
 SECRETARY, VALLEY NATIONAL BANCORP, 1455 VALLEY ROAD, WAYNE, NEW JERSEY
 07470; TELEPHONE NUMBER (201) 305-8800.  IN ORDER TO ENSURE TIMELY DELIVERY
 OF SUCH DOCUMENTS, ANY SUCH REQUEST SHOULD BE MADE BY MAY 26, 1995.

      ALL INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY
 STATEMENT/PROSPECTUS WITH RESPECT TO VALLEY WAS SUPPLIED BY VALLEY, AND ALL
 INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY
 STATEMENT/PROSPECTUS WITH RESPECT TO LAKELAND WAS SUPPLIED BY LAKELAND.
    

      NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
 REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROXY
 STATEMENT/PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
 REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY VALLEY
 OR LAKELAND.  NEITHER THE DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS AT
 ANY TIME, NOR ANY DISTRIBUTION OF SHARES OF VALLEY COMMON STOCK SHALL,
 UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
 CHANGE IN THE AFFAIRS OF VALLEY OR LAKELAND SINCE THE DATE HEREOF OR THAT
 THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
 ITS DATE.  THIS PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
 SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OR AN OFFER TO
 SELL OR SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
 CIRCUMSTANCES IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT LAWFUL.

               INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

      The following documents filed by Lakeland with the Commission (Company
 File No. 0-17992) under Section 13(a) or 15(d) of the Exchange Act are
 hereby incorporated by reference in this Proxy Statement/Prospectus:

      1.   Annual Report on Form 10-K for the year ended June 30, 1994;

      2.   Quarterly Reports on Form 10-Q for the periods ended September
           30, 1994 and December 31, 1994; 
   
      3.   Current Reports on Form 8-K, filed February 1, 1995, March 3, 
           1995 and April 25, 1995;
    
      4.   The description of Lakeland Common Stock set forth in Lakeland's
           Registration Statement filed on Form 8-A filed pursuant to
           Section 12 of the Exchange Act, and any amendment or report filed
           for the purpose of updating such description; and

      5.   The portions of Lakeland's Proxy Statement for the Annual Meeting
           of Stockholders held on October 18, 1994, that have been
           incorporated by reference in the 1994 Lakeland Form 10-K.

      The following documents filed by Valley with the Commission (Company
 File No. 0-11179) are incorporated herein by reference.

      1.   Annual Report on Form 10-K for the year ended December 31, 1994,
           as amended by Form 10-K/A filed April 4, 1995;
   
      2.   Current Reports on Form 8-K filed February 2, 1995, March 2, 
           1995, March 30, 1995, April 25, 1995 and April 26, 1995;
    
      3.   The description of Valley Common Stock set forth in Valley's
           Registration Statement on Form 8-A filed by Valley pursuant to
           Section 12 of the Exchange Act, and any amendment or report filed
           for the purpose of updating such description; and

      4.   The portions of Valley's Proxy Statement for the Annual Meeting
           of Stockholders held on March 23, 1995 that have been
           incorporated by reference in the 1994 Valley Form 10-K.

      All documents filed by Lakeland or Valley pursuant to Sections 13(a),
 13(c), 14, or 15(d) of the Exchange Act subsequent to the date hereof and
 prior to the earlier of the Effective Time or the termination of the Merger
 Agreement are hereby incorporated by reference into this Proxy
 Statement/Prospectus and shall be deemed a part hereof from the date of
 filing of such documents.

      Any statement contained herein, in any supplement hereto or in a
 document incorporated or deemed to be incorporated by reference herein
 shall be deemed to be modified or superseded for purposes of this Proxy
 Statement/Prospectus to the extent that a statement contained herein, in
 any supplement hereto or in any subsequently filed document which also is
 or is deemed to be incorporated by reference herein modifies or supersedes
 such statement.  Any such statement so modified or superseded shall not be
 deemed, except as so modified or superseded, to constitute a part of this
 Proxy Statement/Prospectus or any supplement hereto.
   

                            TABLE OF CONTENTS
                                                                      
                                                                PAGE
                                                                ----
AVAILABLE INFORMATION . . . . . . . . . . . .  . . . . . . . .     2  
                                                                  
INCORPORATION OF CERTAIN DOCUMENTS  BY REFERENCE . . . . . . ..    3

SUMMARY . . . . . . . . . .  . . . . . . . . . . . . . . . . ..    5

RECENT DEVELOPMENTS .  . . . . . . . . . .  . . . . . . . . .  .  11 

   Valley .  . . . . . . . . . . .  . . . . . . . . . . .  . . .  11

   Lakeland . . . . . . .  . . . . . . . . . . .  . . . . . .  .  12 

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA   . . . . . .  .   13

   Lakeland  First Financial Group, Inc. . . .  . . . . . . .  .  13 

   Valley National Bancorp  . .  . . . . . . . . .  . . . . .  .  14 

   Comparative Per Share Data . . .  . . . . . . . . .  . . . .   15 

UNAUDITED PRO FORMA  COMBINED FINANCIAL INFORMATION. . . .  . .   16 

CERTAIN INFORMATION REGARDING VALLEY   . . . . . . . .  . . . .   19 

CERTAIN INFORMATION REGARDING LAKELAND  .  . . . . . . . .  . .   19 

THE SPECIAL MEETING .  . . . . . . . . . .  . . . . . . . . .  .  19 

   General  . . . . . . .  . . . . . . . . . . .  . . . . . . .   19 

   Record Date; Vote Required . .  . . . . . . . . .  . . . . .   20 

THE MERGERS . . . .  . . . . . . . . . . .  . . . . . . . . .  .  20 

   General  . . . . . . . .  . . . . . . . . . . .  . . . . . .   20 

   Background  and Reasons . . . . . . .  . . . . . . . . .  . .  20 

   Opinion of Financial Advisor .  . . . . . . . .  . . . . .  .  22 

   Certain Federal Income Tax Consequences   . . . . . . .  . .   25 

THE MERGER AGREEMENT  .  . . . . . . . . . .  . . . . . . . .  .  26 

   The Mergers   . . . . . . . . . .  . . . . . . . . . . .  . .  26 

   Effective Time . .  . . . . . . . . . .  . . . . . . . . .  .  27 

   Exchange of Lakeland Certificates  . .  . . . . . . . .  . .   27 

   Conversion of  Stock Options  . . . . . .  . . . . . . . .  .  27 

   No Dissenters' Rights. . . .  . . . . . . . . .  . . . . .  .  27 

   Interests of Certain Persons  in the Merger . . . .  . . .  .  28 

   Employment Matters . . . .  . . . . . . . . .  . . . . . .  .  28 

   Business  Pending Consummation  . . . . .  . . . . . . . .  .  28 

   Regulatory  Approvals . . . . . . . .  . . . . . . . . .  . .  29 

   Conditions to Consummation; Termination  .  . . . . . . .  .   30 

   Amendment  .  . . . . . . . . . .  . . . . . . . . . . .  . .  31 

   Extension; Waiver   . . . . . . . . . .  . . . . . . . . .  .  31 

   Accounting Treatment . . . . . .  . . . . . . . . .  . . . .   31 

   Expenses . . . . . . .  . . . . . . . . . . .  . . . . . .  .  31 

   Resale of Valley Common Stock by  Affiliates. . . . . . .  .   31 

THE STOCK OPTION  AGREEMENT  . . . . . . . .  . . . . . . . .  .  32 

DESCRIPTION  OF VALLEY CAPITAL STOCK . . . .  . . . . . . . .  .  33 

COMPARISON OF RIGHTS OF VALLEY  AND LAKELAND STOCKHOLDERS  .  .   33 

STOCKHOLDER PROPOSALS FOR 1995 ANNUAL MEETING  . . . . . . .  .   35 

LEGAL OPINIONS  . . . . .  . . . . . . . . . . .  . . . . . .  .  35 

EXPERTS . . . . . . . . . . .  . . . . . . . . . . .  . . . . .   35 

OTHER MATTERS . . . . . .  . . . . . . . . . . .  . . . . . .  .  35 

SUBSEQUENT FILINGS INCORPORATED  BY REFERENCE. . . . . .  . .  .  35 


ANNEXES: 
   ANNEX A - AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER  .    A-1
   ANNEX B - OPINION OF HOPPER SOLIDAY & CO., INC . . . . . . . .    B-1
   ANNEX C - STOCK OPTION AGREEMENT . . . . . . . . . . . . . . .    C-1
   ANNEX D - LETTER REGARDING EMPLOYEE AND 
             DIRECTOR BENEFITS  . . . . . . . . . . . . . . . . .    D-1

                                   SUMMARY

      THE FOLLOWING IS A BRIEF SUMMARY OF CERTAIN INFORMATION RELATING TO
 THE MERGERS CONTAINED ELSEWHERE IN THIS PROXY STATEMENT/PROSPECTUS.  THIS
 SUMMARY IS NOT INTENDED TO BE A SUMMARY OF ALL MATERIAL INFORMATION
 RELATING TO THE MERGERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
 MORE DETAILED INFORMATION CONTAINED ELSEWHERE IN THIS PROXY
 STATEMENT/PROSPECTUS, INCLUDING THE ANNEXES HERETO AND IN THE DOCUMENTS
 INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS.  A COPY OF
 THE MERGER AGREEMENT IS SET FORTH AS ANNEX A TO THIS PROXY
 STATEMENT/PROSPECTUS.  STOCKHOLDERS ARE URGED TO READ CAREFULLY THE ENTIRE
 PROXY STATEMENT/PROSPECTUS, INCLUDING THE ANNEXES.

 Valley National Bancorp and Valley National Bank

      Valley National Bancorp ("Valley") is the parent corporation and bank
 holding company of Valley National Bank ("VNB"), a national banking
 association that provides a wide range of commercial and retail banking
 services and trust services in New Jersey.  As of December 31, 1994, and
 for the year then ended, Valley reported assets of $3.7 billion, net loans
 of $2.2 billion, deposits of $3.3 billion, stockholder's equity of $300.2
 million and net income of $59.0 million, and as of such date Valley
 operated through 62 branches in New Jersey. The principal executive offices
 of Valley and VNB are located at 1455 Valley Road, Wayne, New Jersey 07470,
 and their telephone number is (201) 305-8800. 
    

 Lakeland First Financial Group, Inc. and Lakeland Savings Bank

      Lakeland First Financial Group, Inc. ("Lakeland") is a bank holding
 company registered under the Bank Holding Company Act of 1956, as amended
 ("BHCA").  Lakeland's principal asset is the stock of Lakeland Savings Bank
 (the "Bank") which is a community-oriented institution offering a variety
 of financial services in New Jersey.  As of December 31, 1994, Lakeland
 reported total assets of $673.9 million, net loans of $393.0 million,
 deposits of $531.1 million and stockholders' equity of $53.1 million.  As
 of December 31, 1994 Lakeland operated its business through its main office
 and 16 branch offices located in Morris, Warren, and Sussex Counties, New
 Jersey.  For the fiscal year ended June 30, 1994 and for the six months
 ended December 31, 1994, Lakeland reported net income of $8.5 million and
 $4.8 million, respectively.  The principal executive offices of Lakeland
 and the Bank are located at 250 Route 10, Succasunna, New Jersey 07876, and
 their telephone number is (201) 584-6666.

 The Mergers
   

      Under the terms of the Amended and Restated Agreement and Plan of
 Merger dated as of April 21, 1995 (the "Merger Agreement"), Lakeland will
 merge with and into Valley (the "Merger").  Upon consummation of the
 Merger, each outstanding share of Lakeland common stock, $0.10 par value
 ("Lakeland Common Stock") will be converted into and represent the right
 to receive 1.286 shares (the "Exchange Ratio") of Valley common stock, no
 par value ("Valley Common Stock"), subject to certain adjustments.  The
 Exchange Ratio of 1.286 shares, and all share and per share data
 (including reported stock prices) for Valley and Lakeland on a pro forma
 basis included in this Proxy Statement/Prospectus, have been adjusted for
 the 5% stock dividend declared March 23, 1995 and payable May 2, 1995 to
 Valley stockholders of record on April 14, 1995.  The Merger Agreement, a
 copy of which is attached as ANNEX A to this Proxy Statement/Prospectus,
 has been amended and restated to reflect the adjusted Exchange Ratio.
 Valley's Annual Report on Form 10-K, which is incorporated by reference
 into this Proxy Statement/Prospectus, has not been amended or restated to
 retroactively reflect the stock dividend.  Pursuant to the terms of the
 Merger Agreement, cash will be paid in lieu of fractional shares of
 Valley Common Stock.  For a more complete description of the Merger
 Agreement and the terms of the Merger, see "THE MERGERS."

      Pursuant to a separate merger agreement between VNB and the Bank
 ("Bank Merger Agreement"), the Bank will be merged with and into VNB
 (the"Bank Merger" and together with the Merger, the "Mergers").
 Immediately following consummation of the Merger (the "Effective Time")
 or as soon thereafter as VNB may deem appropriate, the Bank Merger will
 be consummated.
    

 Background and Reasons for the Mergers

      For a discussion of the background and factors considered by Lakeland
 and Valley in reaching their respective decisions to approve the Merger
 Agreement, see "THE MERGERS -- Background and Reasons."

      The Board of Directors of Lakeland has adopted the Merger Agreement by
 unanimous vote, believes it is in the best interests of Lakeland and its
 stockholders and recommends its approval by Lakeland stockholders.  

 Special Meeting; Record Date
   

      The Special Meeting will be held on Tuesday, June 6, 1995, at 10:00 
 a.m., Eastern time, at Days Inn, Route 46, Ledgewood, New Jersey, for the
 purpose of considering and voting upon a proposal to approve the Merger
 Agreement.

      The Board of Directors of Lakeland has fixed April 26, 1995, as the
 record date for determining stockholders entitled to notice of and to vote
 at the Special Meeting (the "Record Date").  As of such date, there were
 3,922,166 shares of Lakeland Common Stock outstanding and entitled to
 be voted at the Special Meeting.  See "THE SPECIAL MEETING."

 Vote Required; Board Recommendation

      Approval of the Merger Agreement requires the affirmative vote of a
 majority of the votes cast at the Special Meeting at which a quorum is
 present by the holders of Lakeland Common Stock.  The directors and
 executive officers of Lakeland (including certain of their related
 interests) beneficially owned, as of the Record Date, and are entitled to
 vote at the Special Meeting, 330,057 shares of Lakeland Common Stock,
 which represents 8.4 percent of the shares outstanding.  The executive
 officers and directors of Lakeland have indicated that they intend to vote
 all of their shares in favor of approval of the Merger Agreement.  The
 Board of Directors of Lakeland has unanimously approved the Merger
 Agreement and recommends that Lakeland stockholders vote "FOR" approval
 of the Merger Agreement.  See "THE SPECIAL MEETING -- Record Date; Vote
 Required."

 Opinion of Financial Advisor  

      Hopper Soliday & Co., Inc. ("Hopper Soliday") has advised Lakeland's
 Board of Directors that, in its opinion, the consideration to be received
 for each share of Lakeland Common Stock set forth in the Merger Agreement
 is fair, from a financial point of view, to Lakeland and its stockholders. 
 The full text of the Hopper Soliday opinion, dated as of May 5, 1995,
 which describes the procedures followed, assumptions made, limitations on
 the review undertaken and other matters in connection with rendering such
 opinion, is set forth in ANNEX B to this Proxy Statement/Prospectus and
 should be read in its entirety by Lakeland stockholders.  For further
 information regarding the opinion of Hopper Soliday, see "THE MERGERS
 -- Opinion of Financial Advisor." 

 Consideration

      At the Effective Time of the Merger, each share of Lakeland Common
 Stock outstanding will automatically be converted into 1.286 shares of
 Valley Common Stock (adjusted for Valley's 5% stock dividend declared
 March 23, 1995 and payable May 2, 1995 to Valley stockholders of record
 of April 14, 1995), subject to certain adjustments.
    

      The Exchange Ratio is subject to adjustment to take into account any
 stock split, stock dividend, stock combination, reclassification, or
 similar transaction by Valley with respect to the Valley Common Stock.  No
 adjustments to the Exchange Ratio will be made as of the Effective Time to
 compensate Lakeland stockholders for any change in the market value of
 Valley Common Stock between January 26, 1995 (the date of the Letter of
 Intent) and the Effective Time.

      No holder of Lakeland Common Stock will be entitled to receive
 fractional shares of Valley Common Stock, but instead will be entitled to
 receive a cash payment in the amount of the value of such fractional share
 interest, determined by multiplying such stockholders' fractional interest
 by the Average Closing Price (as defined below) of Valley Common Stock.
 All shares of Valley Common Stock that individual Lakeland stockholders are
 entitled to receive in exchange for each share of Lakeland Common Stock
 held will be aggregated to constitute as many whole shares of Valley Common
 Stock as possible before determining the amount of a cash payment for
 fractional shares.
   

      The "Average Closing Price" is defined in the Merger Agreement as the
 average of the closing prices of Valley Common Stock as reported on the
 NYSE and published in the WALL STREET JOURNAL during the first 10 of the 15
 consecutive trading days immediately preceding the Effective Time.  The
 Average Closing Price is subject to adjustment to take into account any
 stock split, stock dividend, stock combination, reclassification, or
 similar transaction by Valley with respect to the Valley Common Stock.
 See "THE MERGER AGREEMENT -- The Mergers."

 Conversion of Stock Options

      At the Effective Time, each outstanding option to purchase Lakeland
 Common Stock (a "Lakeland Option") granted under the 1986 Stock Option and
 Incentive Plan of Lakeland (the "Lakeland Option Plan") will be converted
 into either Valley Common Stock or an option to purchase Valley Common
 Stock, at the election of the holder of such Lakeland Option (an
 "Optionee"), subject to certain conditions.  See "THE MERGER AGREEMENT --
 Conversion of Stock Options."

      From and after the Effective Time, each Lakeland Option which is
 converted into an option to purchase Valley Common Stock will be
 administered, operated, and interpreted by a committee comprised of members
 of the Board of Directors of Valley appointed by such board.  Valley has
 agreed to reserve for issuance the number of shares of Valley Common Stock
 necessary to satisfy Valley's obligations under such options, and to
 register such shares, if they are not previously registered under the
 Securities Act.
    

      Holders of Lakeland Options will receive an option preference form
 after the mailing of this Proxy Statement/Prospectus but prior to the
 Effective Time and may exercise the election by submitting the option
 preference form as specified in such form.

 Certain Federal Income Tax Consequences

      Stockholders are urged to consult their own tax advisors as to the
 specific consequences to them of the Mergers under applicable tax laws.
   

      Consummation of the Mergers is conditioned upon the receipt of an
 opinion of counsel to Valley to the effect that the Merger will constitute
 a tax-free reorganization as defined in Section 368(a)(1) of the Internal
 Revenue Code of 1986, as amended (the "Code").  Assuming the applicability
 of Section 368(a)(1) of the Code, the receipt of Valley Common Stock in
 exchange for Lakeland Common Stock will be a nontaxable event to Valley,
 Lakeland, and the Lakeland stockholders.  The receipt of cash by a
 stockholder of Lakeland in lieu of fractional shares of Valley Common
 Stock pursuant to the Merger will be a taxable transaction to such
 stockholder for federal income tax purposes.  In general, a stockholder
 will recognize gain or loss upon the surrender of the stockholder's
 Lakeland Common Stock equal to the difference, if any, between (i) the
 amount of the cash payment expected to be received from Valley in lieu
 of fractional shares of Valley Common Stock and (ii) the stockholder's
 tax basis in such Common Stock.  See "THE MERGERS -- Certain Federal
 Income Tax Consequences."

 No Dissenters' Rights

      Consistent with the provisions of the New Jersey Business Corporation
 Act, no stockholder of Lakeland will have the right to dissent from the
 Merger.  See "THE MERGER AGREEMENT -- No Dissenters' Rights."

 Business Pending Consummation

      Lakeland has agreed in the Merger Agreement not to take certain
 actions relating to the operation of Lakeland pending consummation of the
 Mergers, without the prior written consent of Valley or VNB, except as
 otherwise permitted by the Merger Agreement.  These actions include, among
 other things: (i) changing any provision of its Certificate of
 Incorporation or Bylaws or similar governing document; (ii) paying any
 dividends (other than regular quarterly dividends of $0.15 per share and
 one special dividend which may be declared in an amount such that between
 January 26, 1995 and the Effective Time, Lakeland's stockholders will
 receive dividends equal to those they would have received had the Merger
 been consummated on January 26, 1995) or redeeming or otherwise acquiring
 any shares of its capital stock, or issuing any additional shares of its
 capital stock (other than upon exercise of an outstanding Lakeland Option)
 or giving any person the right to acquire any such shares; (iii) granting
 any severance or termination pay other than the settlement of the retainer
 agreement of Mr. William H. McNear, Chairman of the Board of Lakeland, or
 pursuant to policies of Lakeland in effect as of the date of the Merger
 Agreement (see "THE MERGER AGREEMENT -- Interests of Certain Persons in the
 Merger") or entering into or amending any employment agreement with any
 directors, officers or employees except as authorized in the Merger
 Agreement, or adopting any new employee benefit plan or arrangement or
 amending any existing benefit plan; (iv) awarding any increase in
 compensation or benefits to its directors, officers or employees except
 in the ordinary course of business and consistent with past practices and
 policies; (v) selling or disposing of any substantial amount of assets or
 incurring any significant liability other than in the ordinary course of
 business; or (vi) taking any other action not in the ordinary course of
 business consistent with prudent banking practices. 

 Regulatory Approvals

      Consummation of the Merger requires the approval of the Office of the
 Comptroller of the Currency (the "OCC"). OCC approval does not constitute
 an endorsement of the Merger or a determination by the OCC that the terms of
 the Merger are fair to the stockholders of Lakeland.  An application for
 such approval was filed on March 22, 1995.  On March 22, 1995, Valley
 submitted a draft application to the Federal Reserve Board seeking a waiver
 of the requirement for approval of the Merger under Regulation Y
 promulgated under the Bank Holding Company Act of 1956, as amended (the
 "BHCA").  There can be no assurance that the necessary regulatory approvals
 will be obtained or as to the timing or conditions of such approvals.  See
 "THE MERGER AGREEMENT -- Regulatory Approvals."

 Management and Operations After the Mergers

      At the Effective Time, as a result of the Merger, Lakeland will be
 merged into Valley, which will be the surviving entity in the Merger.  In
 addition, the Bank will be merged into VNB, with VNB as the surviving
 entity in the Bank Merger.  VNB will continue to operate as a subsidiary of
 Valley.  Valley has agreed to appoint Michael Halpin, President of Lakeland
 and the Bank, as a First Senior Vice President of VNB following the
 Mergers.  See "THE MERGER AGREEMENT -- Employment Matters."

      The location of the principal office of Valley will remain unchanged
 -- 1455 Valley Road, Wayne, New Jersey.  Initially, the branch offices of
 the Bank will serve as branch offices of VNB; however, there is no
 assurance that one or more of these branch offices will not be closed in
 the future.

 Effect of the Merger on Rights of Stockholders

      At the Effective Time, the holders of Lakeland Common Stock will
 become holders of Valley Common Stock.  Valley and Lakeland are both New
 Jersey general business corporations governed by the New Jersey Business
 Corporation Act and registered bank holding companies under the BHCA. 
 Therefore, there are no material differences in the legal rights of holders
 of shares of Lakeland Common Stock and Valley Common Stock under the New
 Jersey Business Corporation Act.  For a description of Valley Common Stock,
 see "DESCRIPTION OF VALLEY CAPITAL STOCK".  For a comparison of the
 Certificates of Incorporation and the Bylaws of Valley and Lakeland, see
 "COMPARISON OF RIGHTS OF VALLEY AND LAKELAND STOCKHOLDERS."
    

 Exchange of Certificates

      At the Effective Time, holders of certificates formerly representing
 shares of Lakeland Common Stock will cease to have any rights as Lakeland
 stockholders and their certificates automatically will represent the shares
 of Valley Common Stock into which their shares of Lakeland Common Stock
 will have been converted by the Merger.  As soon as practicable after the
 Effective Time, Valley will send written notice to each holder of Lakeland
 Common Stock indicating the number of shares of Valley Common Stock for
 which such holder's shares of Lakeland Common Stock have been exchanged.

      Holders of outstanding certificates for Lakeland Common Stock, upon
 proper surrender of such certificates to Valley, will receive, promptly
 after the Effective Time, a certificate representing the full number of
 shares of Valley Common Stock into which the shares of Lakeland Common
 Stock previously represented by the surrendered certificates have been
 converted.  At the time of issuance of the new stock certificate each
 stockholder so entitled will receive a check for the amount of the
 fractional share interest, if any, to which he may be entitled.

      Each share of Valley Common Stock for which shares of Lakeland Common
 Stock are exchanged will be deemed to have been issued at the Effective
 Time.  Accordingly, Lakeland stockholders who receive Valley Common Stock
 in the Merger will be entitled to receive any dividend or other
 distribution which may be payable to holders of record of Valley Common
 Stock as of dates on or after the Effective Time.  However, no dividend or
 other distribution will actually be paid with respect to any shares of
 Valley Common Stock until the certificate or certificates formerly
 representing shares of Lakeland Common Stock have been surrendered, at
 which time any accrued dividends and other distributions on such shares of
 Valley Common Stock will be paid without interest.  See "THE MERGER
 AGREEMENT -- Exchange of Lakeland Certificates."

      Lakeland stock certificates should not be returned to Lakeland with
 the enclosed proxy and should not be forwarded until after receipt of a
 letter of transmittal which will be provided to Lakeland stockholders upon
 consummation of the Merger.

 Effective Time; Conditions to Consummation; Amendments; Termination

      A closing under the Merger Agreement (the "Closing") will occur on the
 first business day of the month following receipt of all necessary
 regulatory approvals and the satisfaction or waiver of all conditions
 precedent to the Merger, or at such other time as is agreed to by Valley
 and Lakeland.  A Certificate of Merger will be filed with the New Jersey
 Secretary of State immediately following the Closing.  The time of such
 filing will be the "Effective Time."  The actual Effective Time is
 dependent upon satisfaction of all conditions precedent, some of which are
 not under the control of Valley and/or Lakeland, and may be changed by
 agreement of the parties.

      Consummation of the Mergers is contingent upon a number of conditions,
 including receiving all necessary regulatory approvals; the approval of the
 Merger by the requisite vote of the Lakeland stockholders; an opinion of
 Pitney, Hardin, Kipp & Szuch, counsel to Valley, to the effect that the
 Merger will result in a tax free reorganization; and an opinion of Hopper
 Soliday & Co., Inc. ("Hopper Soliday"), advisors to Lakeland, that the
 Merger is fair to the stockholders of Lakeland from a financial point of
 view.  Hopper Soliday's opinion is included as ANNEX B.  See "THE MERGERS -
 - Opinion of Financial Advisor;" and "THE MERGER AGREEMENT -- Conditions to
 Consummation; Termination."
   

      Consummation of the Merger requires the approval of the OCC. OCC
 approval does not constitute an endorsement of the Merger or a
 determination by the OCC that the terms of the Merger are fair to the
 stockholders of Lakeland.  An application for such approval was filed
 on March 22, 1995.  On March 22, 1995, Valley submitted a draft
 application to the Federal Reserve Board seeking a waiver of the
 requirement for approval of the Merger under Regulation Y promulgated
 under the BHCA.  While Valley and Lakeland anticipate receiving
 such approvals, there can be no assurance that they will be granted, or
 that they will be granted on a timely basis without conditions unacceptable
 to Valley or Lakeland.  See "THE MERGER AGREEMENT -- Regulatory Approvals".
    

      The Merger Agreement may be amended, modified or supplemented with
 respect to any of its terms by the written consent of Valley and Lakeland
 at any time prior to the Effective Time.

      The Merger Agreement may be terminated by either Lakeland or Valley if
 the Effective Time has not occurred by October 31, 1995.  The Merger
 Agreement may be terminated by Valley if Lakeland's net operating income
 (subject to certain adjustments) for any full fiscal quarter after December
 31, 1994 is materially less than Lakeland's net income for each of the last
 two fiscal quarters of calendar year 1994.  The Merger Agreement may be
 terminated by Lakeland if Valley's net operating income (subject to certain
 adjustments) for any full fiscal quarter after December 31, 1994 is
 materially less than Valley's net income for each of the last two fiscal
 quarters of calendar year 1994, or if the fiduciary responsibilities of the
 Board of Directors of Lakeland require Lakeland to participate or authorize
 participation in a merger with a third party or some other form of
 Acquisition Transaction (as such term is defined in the Merger Agreement). 
 For a more complete description of the foregoing termination rights, and
 for a description of other termination rights available to Lakeland and
 Valley, see "THE MERGER AGREEMENT -- Conditions to Consummation;
 Termination".
   

      Upon a termination of the Merger Agreement, the transactions
 contemplated thereby will be abandoned without further action by any party
 and each party will bear its own expenses, except that printing and mailing
 costs will be borne equally by the parties.  In the event of a termination,
 each party will retain all rights and remedies it may have at law or equity
 under the Merger Agreement.

 Accounting Treatment of the Merger

      The Merger is expected to be accounted for by Valley under the
 pooling-of-interests method of accounting in accordance with generally
 accepted accounting principles.  Under the pooling-of-interests method of
 accounting, Lakeland's historical basis of assets, liabilities and
 shareholders' equity will be retained by Valley as the surviving entity. 
 For a discussion of the effects of pooling-of-interests accounting, see
 "UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION."

 Stock Option for Shares of Lakeland Common Stock

      On January 26, 1995, Valley and Lakeland entered into a stock option
 agreement (the "Stock Option Agreement"), in connection with the execution
 of the Letter of Intent.  Pursuant to the terms of the Stock Option
 Agreement, Lakeland has granted to Valley an option (the "Option") to
 purchase up to 1,250,000 authorized but unissued shares of Lakeland Common
 Stock, representing approximately 24.9% of the outstanding shares of
 Lakeland Common Stock, assuming full exercise of the Option, at a price of
 $21.00 per share.  Valley does not have any voting rights with respect to
 shares of Lakeland Common Stock subject to the Option prior to exercise of
 the Option.  The Stock Option Agreement is set forth as ANNEX C hereto. 
 See "THE STOCK OPTION AGREEMENT."

      In the event that certain specifically enumerated "Triggering Events"
 occur and the Mergers are not consummated, Valley would recognize a gain on
 the sale of the shares of Lakeland Common Stock received pursuant to the
 exercise of the Option if such shares of Lakeland Common Stock were sold at
 prices exceeding $21.00 per share.  The ability of Valley to exercise the
 Option and to cause up to an additional 1,250,000 shares of Lakeland Common
 Stock to be issued may be considered a deterrent to other potential
 acquisitions of control of Lakeland, as it is likely to increase the cost
 of an acquisition of all of the shares of Lakeland Common Stock which would
 then be outstanding.  The exercise of the Option by Valley may also make
 "pooling-of-interests" accounting treatment unavailable to a subsequent
 acquiror.

 Interests of Certain Persons in the Merger

      The Merger Agreement provides that for the six-year period following
 the Effective Time, Valley will indemnify the directors and officers 
 of Lakeland against certain liabilities to the extent such persons
 were indemnified under Lakeland's Certificate of Incorporation and Bylaws.
 See "THE MERGER AGREEMENT -- Interests of Certain Persons in the Merger."

      As of the Effective Time, Valley will cause its Board of Directors to
 take action to appoint as a member of its Board Mr. William H. McNear, who
 is Chairman of Lakeland's Board of Directors, and one other Lakeland
 director to be selected by Valley from two nominees submitted by the Board
 of Directors of Lakeland.  In addition, John Grabovetz will be designated
 as a Director Emeritus of Valley at the Effective Time.  As of the
 Effective Time, Valley will appoint Michael Halpin as a First Senior Vice
 President of VNB, and Valley will assume Mr. Halpin's employment contract.
 It is anticipated that Mr. McNear will receive a lump sum payment of
 $150,000 from Lakeland upon the Effective Time as settlement of his
 retainer agreement with Lakeland.  In a letter to Lakeland dated February
 27, 1995, Valley expressed its intention to provide Lakeland directors and
 employees with certain benefits.  See "THE MERGER AGREEMENT -- Interests of
 Certain Persons in the Merger" and "-- Employment Matters" and ANNEX D.
    

 Employment Matters

      Valley intends to continue the employment of as many officers and
 employees of the Bank as possible, and to the extent practical, at the same
 location, with the same or equivalent salary and benefits.  Valley intends
 to have all Lakeland employees participate in the benefits and
 opportunities available to all Valley employees.  See "THE MERGER AGREEMENT
 -- Employment Matters."

 Resale of Valley Common Stock by Affiliates
   
      For a discussion on the ability of affiliates of Lakeland and Valley
 to resell Valley Common Stock, see "THE MERGER AGREEMENT -- Resale of
 Valley Common Stock by Affiliates."  This Proxy Statement/Prospectus
 cannot be used for resales of Valley Common Stock received by any person
 who may be deemed an affiliate of Valley or Lakeland. 


                             RECENT DEVELOPMENTS

 Valley
    

      On February 28, 1995, American Union Bank was merged with and into
 VNB, resulting in the issuance of 288,734 shares of Valley Common Stock.
 The historical per share data for Valley contained in this Proxy
 Statement/Prospectus and incorporated by reference herein does not include
 the combined results of American Union Bank, as the combined results would
 not be materially different from those presented.

      On March 23, 1995, Valley announced that its Board of Directors had
 approved a 5% stock dividend payable May 2, 1995 to record holders of
 Valley Common Stock as of April 14, 1995. Valley also announced its intention
 to maintain its $.25 per share regular quarterly dividend following the
 stock dividend.  The Exchange Ratio of 1.286 shares, and all share and
 per share data (including reported stock prices) for Valley and for Valley
 and   Lakeland   on   a   pro   forma  basis   included   in   this   Proxy
 Statement/Prospectus, have been  adjusted for this 5% stock  dividend.  The
 Merger Agreement, a  copy of  which is attached  as ANNEX  A to this  Proxy
 Statement/Prospectus, has been amended and restated to reflect the adjusted
 Exchange Ratio.  Valley's Annual Report on Form 10-K, which is incorporated
 by reference into this Proxy  Statement/Prospectus, has not been amended or
 restated to retroactively reflect the stock dividend.
   

      On April 13, 1995, Valley and VNB announced that VNB had filed an
 application with the Federal Reserve Bank of New York to establish an Edge
 Corporation to undertake certain international activities.  The purpose of
 the application is to establish a finance company in Toronto, Canada.  The
 proposed Canadian finance company will make consumer loans, primarily auto
 and mortgage loans in Canada, utilizing Valley's expertise in the area and
 extending to Canada the existing referral program Valley has with a major
 insurance company.  An application has also been filed with the Office of
 Supervision of Financial Institutions, the Canadian banking and financial
 institution regulator, to establish the finance company in Canada, with
 capitalization of Canadian $10.0 million.  While Valley anticipates the
 applications will be approved, there can be no assurance concerning
 regulatory approval or the timing of such approvals.

      On April 19, 1995, Valley reported net income before securities
 gains of $14.4 million for the first quarter of 1995 as compared to
 $14.0 million for the first quarter of 1994, a 2.4% increase.  After
 securities gains, net income was $14.7 million for the quarter ended
 March 31, 1995, compared with net income of $16.0 million recorded for
 the first quarter of 1994 and $14.3 million for the fourth quarter of
 1994.  Per share earnings were $0.48 for the first quarter of 1995,
 compared with per share earnings of $0.53 and $0.47 for the first
 quarter and fourth quarter of 1994, respectively.  The first quarter
 of 1994 was positively impacted by securities gains of $3.3 million,
 compared to only $537 thousand of securities gains in the first
 quarter of 1995.  For the first quarter of 1995, Valley had an
 annualized return on average assets of 1.55%, an annualized return
 on average equity of 19.04%, and an efficiency ratio of 44.9%.
    

      On March 31, 1995, Valley's assets totalled $3.82 billion,
 representing a 2.1% increase over the $3.74 billion in assets at
 December 31, 1994.  Additionally, loans net of unearned income
 increased 2.8% to $2.25 billion, compared to December 31, 1994.
 Total deposits increased 2.7% to $3.42 billion at March 31, 1995,
 compared with deposits of $3.33 billion on December 31, 1994.
 Valley's shareholders' equity was $322.1 million at March 31, 1995,
 an 11.3% increase over Valley's capital position at March 31, 1994.
 Valley had a book value per share of $10.52, a tier one leverage ratio
 of 8.52% and a risk based capital ratio of 15.16% at March 31, 1995. 
   

      Valley's net interest income before the provision for possible
 loan losses was $37.6 million for the first quarter of 1995,
 representing a 1.1% increase above the $37.1 million recorded in the
 same period in 1994.  Interest on loans was up 22.2% during the quarter
 and reached $46.0 million, compared with $37.9 million recorded during
 the first quarter of 1994.  This helped to limit the decline in
 Valley's net interest margin to 4.46% at the end of the first quarter
 of 1995 from 4.63% and 4.56% at March 31, 1994 and December 31, 1994,
 respectively.

      Valley's non-interest income for the first quarter of 1995 was
 $4.7 million, compared with $7.5 million reported in the same period
 a year ago.  Gains on the sale of securities for the first quarter
 decreased from $3.3 million to $537 thousand.  Total non-interest
 expense, including costs connected with recent acquisitions, increased
 slightly during the quarter to $19.7 million, compared with
 $19.4 million recorded for the first quarter of 1994.
    

      Valley's non-performing assets, including non-accrual loans, and
 other real estate owned ("OREO"), were $24.2 million, or 1.07% of loans
 and OREO at March 31, 1995, versus $25.7 million, or 1.17% of loans and
 OREO at December 31, 1994.  This compares with $23.4 million, or 1.20%
 of loans and OREO at March 31, 1994.  Loans past due in excess of 90
 days and still accruing interest, were $5.7 million at March 31, 1995,
 as compared with $15.2 million at March 31, 1994 and $5.4 million at
 December 31, 1994.
   

      On April 25, 1995, Valley announced that it has authorized the
 purchase of up to 500,000 shares of outstanding Valley Common Stock.
 Purchases may be made from time to time through 1995 in the open market
 or in privately negotiated transactions, at prices not exceeding
 prevailing market prices.  The acquired shares are to be held in
 treasury to be used for the exercise of employee stock options and the
 exercise of outstanding warrants that expire December 31, 1995.

 Lakeland

      On April 11, 1995, Lakeland announced that its Board of Directors had
 declared its regular cash dividend of 15 cents per share of Lakeland Common
 Stock, payable on or about May 19, 1995 to stockholders of record as May 5,
 1995.

      On April 12, 1995, Lakeland announced that its net income for the 
 quarter ended March 31, 1995 was $2.6 million, or $.66 per share, a 23.7% 
 increase over net income of $2.1 million, or $.54 per share, for the same
 quarter last year.  Net income for the nine months ending March 31, 1995
 totalled $7.4 million, or $1.87 per share, compared to $6.3 million, or
 $1.61 per share, for the same period last year.  At March 31, 1995 there
 were 3,913,315 shares of Lakeland Common Stock outstanding, compared to
 3,506,358 shares on March 31, 1994.  The book value of Lakeland Common
 Stock at March 31, 1995 was $14.14 per share.

      As of March 31, 1995, Lakeland's assets totalled $676.7 million,
 compared to $641.5 million at March 31, 1994, and stockholders' equity
 totalled $55.3 million, or 8.18% of assets, compared to $49.0 million,
 or 7.64% of assets at March 31, 1994.  Lakeland's provision for losses on
 loans totalled $307,000 for the quarter ended March 31, 1995, and
 $1,652,000 for the nine months ended March 31, 1995, compared to $300,000
 and $900,000 for the same periods last year.  Lakeland's allowance for
 loan losses totalled $5.7 million on March 31, 1995, as compared to
 $4.4 million at March 31, 1994.  Non-performing loans, ninety days or
 more in arrears, totalled $4.5 million, or 0.66% of Lakeland's total
 assets at March 31, 1995, compared to $5.4 million, or 0.84% of total
 assets a year earlier.  Lakeland's other non-performing assets, which
 include foreclosed properties, in-substance foreclosures, and
 investments in real estate, totalled $1.2 million at March 31, 1995,
 compared to $3.5 million at March 31, 1994.

                SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

 Lakeland First Financial Group, Inc.

      The following selected consolidated financial and other data are
 presented on a December 31 year-end basis, in order to make such data
 comparable to the Valley data contained elsewhere herein and incorporated
 herein by reference.  However, Lakeland has historically used a June 30
 fiscal year end.  Thus, the data set forth below are derived from the
 unaudited consolidated quarterly financial data of Lakeland necessary to
 present December 31 year-end data for Lakeland.  The data below should
 be read in conjunction with the audited consolidated financial statements,
 related notes and other financial information incorporated by reference
 herein.  See "AVAILABLE INFORMATION" and "INCORPORATION OF CERTAIN
 DOCUMENTS BY REFERENCE." 

<TABLE>

                                            At or For the Year Ended December 31,
                                     1994        1993         1992         1991        1990
                                 --------     -------      -------     --------     ------- 
                                          (In thousands, except for per share data)
<CAPTION>
 <S>                             <C>         <C>          <C>         <C>           <C>
 INCOME STATEMENT DATA:
 Interest income . . . . . . .   $ 46,543    $ 41,123     $ 33,358    $  31,478     $30,007
 Interest expense  . . . . . .     21,424      19,952       18,584       20,648      21,052
                                  -------     -------      -------      -------     -------
 Net interest income . . . . .     25,119      21,171       14,774       10,830       8,955
                                  -------     -------      -------      -------     -------
 Provision for possible loan      
  losses . . . . . . . . . . .      2,350       2,209        1,656          769       1,301
                                  -------     -------      -------      -------     -------
 Net interest income after
  provision for possible loan      
  losses . . . . . . . . . . .     22,769      18,962       13,118       10,061       7,654
 Non-interest income . . . . .      1,243       1,214        1,764          558          61
 Non-interest expense  . . . .      9,770       9,278        7,953        6,430       5,631
                                  -------     -------      -------      -------     -------
 Income before income taxes                                       
  and cumulative effect of         
  accounting change  . . . . .     14,242      10,898        6,929        4,189       2,084
 Income taxes  . . . . . . . .      5,095       3,488        3,196        1,740       1,189
                                  -------     -------      -------      -------     -------
 Income before cumulative
  effect of accounting change.      9,147       7,410        3,733        2,449         895
 Cumulative effect of
  accounting change. . . . . .         --          --          473           --          --

                                  -------     -------      -------      -------     -------
 Net income  . . . . . . . . .   $  9,147    $  7,410      $ 4,206     $  2,449    $    895
                                  =======     =======       ======      =======     =======

 PER COMMON SHARE DATA(1): 
 Income before cumulative
  effect of accounting change.   $   2.31    $   1.89     $   0.98     $   0.65    $   0.24  
 Cumulative effect of                   
  accounting change  . . . . .         --          --         0.12           --          --
 Net income  . . . . . . . . .       2.31        1.89         1.10         0.65        0.24  
 Book Value  . . . . . . . . .      13.65       13.54        12.86        12.95       13.57  
 Dividends . . . . . . . . . .       0.92        0.74         0.50         0.48        0.75  

 RATIOS:
 Return on Average Assets  . .       1.42%       1.32%        0.94%        0.70%       0.28%
 Return on Average Equity  . .      18.23       16.63        10.32         6.23        2.25 


 FINANCIAL CONDITION DATA:
 Total assets  . . . . . . . .  $ 673,877   $ 613,171    $ 508,625    $ 381,561   $ 320,708
 Investment securities held to    
  maturity . . . . . . . . . .    250,059     236,766      191,366       97,060      46,137
 Investment securities                
  available for sale . . . . .        640       2,777        3,891           --          --
 Loans (net of unearned           
  income). . . . . . . . . . .    398,345     355,669      294,526      266,328     249,679
 Allowance for possible loan        
  losses . . . . . . . . . . .      5,351       5,426        3,430        1,819       1,665
 Deposits  . . . . . . . . . .    531,057     501,029      373,231      323,626     279,018
 Shareholders' equity  . . . .     53,070      47,298       41,833       39,665      38,953
                                                            
 -----------------------
 (1)  The per share data has been restated to give retroactive effect to stock splits and dividends.
    
</TABLE>

 Valley National Bancorp

      The following selected consolidated financial and other data for the last
 five fiscal years are derived in part from audited consolidated financial
 statements of Valley.  The data should be read in conjunction with the audited
 consolidated financial statements, related notes and other financial
 information incorporated by reference herein.  See "AVAILABLE INFORMATION" and
 "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
   

<TABLE>
                                                     At or For the Year Ended December 31,
                                      1994          1993         1992        1991        1990
                                      ----          ----         ----        ----        ----
                                                 (In thousands, except per share data)

  <S>                              <C>          <C>          <C>        <C>          <C>
  INCOME STATEMENT DATA:                        
  Interest income . . . . . . . .  $  242,945   $  237,461   $  236,600  $  212,894  $ 188,620

  Interest expense  . . . . . . .      93,839       93,426      114,947     115,695    104,336       
                                       -------      -------      -------    --------   -------- 
  Net interest income . . . . . .     149,106      144,035      121,653      97,199     84,284
  Provision for possible loan            
   losses . . . . . . . . . . . .       3,545        6,360       16,320      12,268     12,795
  Net interest income after            -------      -------     --------    --------   -------
   provision for possible loan
   losses . . . . . . . . . . . .     145,561      137,675      105,333      84,931     71,489

  Non-interest income . . . . . .      22,479       26,514       30,967      14,717     11,289  
  Non-interest expense  . . . . .      79,018       76,640       70,826      54,381     43,362 
                                      -------      -------      -------     -------    -------
  Income before income taxes and
   cumulative effect of accounting         
   change  . . . . . . . . . . . .     89,022       87,549       65,474      45,267     39,416
  Income taxes  . . . . . . . . .      29,978       30,703       22,095      13,547     10,784       
                                       -------      -------      -------     -------    -------  
  Income before cumulative effect          
   of accounting change . . . . .      59,044       56,846       43,379      31,720     28,632
  Cumulative effect of accounting        
   change . . . . . . . . . . . .         --         (402)          --          --         --
                                      -------      -------      -------     -------    -------
  Net income  . . . . . . . . . .  $   59,044   $   56,444   $   43,379  $   31,720  $  28,632
                                    =========    =========    =========   =========  ========= 

  PER COMMON SHARE DATA<F1>:
  Income before cumulative effect
   of accounting change . . . . .  $    1.96    $    1.91    $    1.49   $   1.09   $    0.98 
 
  Cumulative effect of accounting
   change . . . . . . . . . . . .         --        (0.01)          --          --         -- 
  Net income  . . . . . . . . . .       1.96         1.90         1.49        1.09        0.98
  Book Value  . . . . . . . . . .       9.91         9.41         8.03        7.22        6.69 
  Dividends . . . . . . . . . . .       0.93         0.74         0.67        0.63        0.63  

  RATIOS:
  Return on Average Assets  . . .       1.60%        1.62%        1.36%       1.29%      1.44%
  Return on Average Equity  . . .      20.03        21.42        19.17       15.40      14.54 

  FINANCIAL CONDITION DATA:
  Total assets  . . . . . . . . .  $3,743,943   $3,604,868   $3,357,405  $3,055,062 $2,149,062 
  Investment securities held to           
   maturity . . . . . . . . . . .     846,151      991,573    1,160,019   1,272,487    408,173
  Investment securities available        
   for sale . . . . . . . . . . .     458,223      461,080      331,916       9,239        -- 
  Loans (net of unearned income)    2,187,808    1,898,941    1,614,064   1,556,555  1,557,344 
  Allowance for possible loan
   losses . . . . . . . . . . . .      36,434       36,568       29,990      23,366     17,262  
  Deposits  . . . . . . . . . . .   3,334,021    3,250,656    3,052,256   2,726,669  1,875,926 
  Shareholders' equity  . . . . .     300,191      282,451      235,550     211,398    196,184  
 --------------------
<FN>
<F1>The per share data has been restated to  give retroactive effect to stock
 splits and dividends,including the 5% stock dividend declared March 23, 1995,
 payable May 2, 1995 to shareholders of record April 14, 1995.
</FN>
</TABLE>

 Comparative Per Share Data

      The following table shows comparative per share data for Valley Common
 Stock and Lakeland Common Stock on an historical basis, for Valley Common
 Stock on a pro forma basis after giving effect to the Merger and for
 Lakeland on a pro forma equivalent basis.  The Merger is expected to be
 accounted for under the pooling-of-interests method of accounting.  The
 amount of future dividends payable by Valley, if any, is subject to the
 discretion of Valley's Board of Directors.  The Directors normally consider
 Valley's and VNB's cash needs, general business conditions, dividends from
 subsidiaries and applicable governmental regulations and policies.  Pro
 forma amounts assume that Valley would have declared cash dividends per
 share of Valley Common Stock equal to its historical cash dividends per
 share of Valley Common Stock declared.  The pro forma combined amounts
 below have been calculated on a basis consistent with the assumptions
 utilized in the preparation of the unaudited pro forma combined financial
 information appearing elsewhere in this Proxy Statement/Prospectus.
<TABLE>

                                                                        Pro Forma
                                                                   Equivalent Per

                                Historical Historical   Pro Forma        Lakeland
                                    Valley   Lakeland    Combined       Share(1)
                                ---------- ----------   ---------  --------------

  <S>                               
  Year Ended December 31, 1994       <C>        <C>         <C>             <C>
    Net Income Per Share             $1.96      $2.31       $1.93           $2.48
    Book Value Per Share              9.91      13.65       10.02           12.89
    Cash Dividends Per Share          0.93       0.92        0.93            1.20

  Year Ended December 31, 1993
    Net Income Per Share             $1.90      $1.89       $1.84           $2.37
    Book Value Per Share              9.41      13.54        9.46           12.17
    Cash Dividends Per Share          0.74       0.74        0.74            0.95

  Year Ended December 31, 1992
    Net Income Per Share             $1.49      $1.10       $1.39           $1.79
    Book Value Per Share              8.03      12.37        8.12           10.44
    Cash Dividends Per Share          0.67       0.50        0.67            0.86


 ----------------------
 (1)  Lakeland pro forma equivalent per share data is computed by
      multiplying the pro forma combined per share data (giving effect to
      the Merger) by the Exchange Ratio of 1.286 (which is adjusted for the
      5% stock dividend declared by Valley on March 23, 1995, payable on May
      2, 1995 to stockholders of record on April 14, 1995).

</TABLE>

      The following table presents information concerning the market price
 of Valley Common Stock and Lakeland Common Stock for the dates indicated:
 January 25, 1995, the last business day prior to public announcement of the
 execution of the Letter of Intent, and May 1, 1995, the latest
 practicable date before the printing of this Proxy Statement/Prospectus.
 The table also presents the equivalent value of Valley Common Stock per
 Lakeland share which has been calculated by multiplying the market price of
 Valley Common Stock on the dates indicated by the Exchange Ratio of 1.286.
 Lakeland Common Stock is listed on the Nasdaq National Market System under
 the symbol "LLSL."  Valley Common Stock is traded on the New York Stock
 Exchange under the symbol "VLY."  Lakeland stockholders are urged to obtain
 current market quotations for the Valley Common Stock.  Because the
 Exchange Ratio is fixed, Lakeland stockholders are not assured of receiving
 any specific market value of Valley Common Stock.  The price of Valley
 Common Stock at the Effective Time may be higher or lower than the market
 price at the time of entering into the Letter of Intent, the time of
 mailing this Proxy Statement/Prospectus or the time of the Meeting.

                                                             Equivalent 
                                                               Value
                                                             of Valley 
                                                             Stock Per
                                 Market Price                 Share of 
                                  Per Share                   Lakeland
                       ----------------------------------    ----------
                            Valley
                           Closing          Lakeland
                           -------          --------
 January 25, 1995           $25.48           $21.50            $32.77
 May 1, 1995                $25.38           $30.75            $32.63

               UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

      The following unaudited pro forma combined financial information
 presents the Pro Forma Combined Condensed Statement of Condition of Valley
 and Lakeland at December 31, 1994 giving effect to the Mergers as if they
 had been consummated at such date.  Also presented are the Pro Forma
 Combined Condensed Statements of Income for the years ended December 31,
 1994, 1993, and 1992 giving effect to the Mergers as if they were
 consummated on January 1 of each year.  The unaudited pro forma information
 is based on the historical financial statements of Valley and Lakeland
 after giving effect to the Mergers under the pooling-of-interests method of
 accounting and based upon the assumptions and adjustments contained in the
 footnotes to the Unaudited Pro Forma Combined Condensed Financial
 Statements.

      The unaudited pro forma combined financial information has been
 prepared by Valley's management based upon the historical financial
 statements and related notes thereto of Valley and Lakeland incorporated
 herein by reference.  The unaudited pro forma information should be read in
 conjunction with such historical financial statements and notes.  The
 historical data for Valley include the combined results of Rock Financial
 Corporation, which was merged into Valley at the close of business on
 November 30, 1994.  The Rock acquisition was accounted for using the
 pooling-of-interests method of accounting.  The historical data for Valley
 do not include the results of American Union Bank, which was merged into
 VNB at the close of business on February 28, 1995, as the combined results
 would not be materially different from those presented.  The Pro Forma
 Combined Statements of Income are not necessarily indicative of
 operating results which would have been achieved had the Mergers been
 consummated as of the beginning of the periods for which such data are
 presented and should not be construed as being representative of future
 periods.

      The historical per share data for Valley and Lakeland have been
 restated to give retroactive effect to stock dividends and stock splits,
 including Valley's 5% stock dividend declared March 23, 1995, payable on
 May 2, 1995 to Valley shareholders of record on April 14, 1995.

                     PRO FORMA COMBINED CONDENSED STATEMENT OF CONDITION
                                         (Unaudited)
<TABLE>
                                                       At December 31, 1994
                                                             PRO FORMA(1)    PRO FORMA
                                     VALLEY      LAKELAND     ADJUSTMENTS     COMBINED
                                     ------      --------     -----------     --------

                                                      (In Thousands)
  <S>                             <C>           <C>         <C>              <C>
  ASSETS:

  Cash and due from banks . .     $  154,647    $   14,957  $       ---      $  169,604 
  Investment securities held
   to maturity  . . . . . . .        846,151       250,059          ---       1,096,210 
  Investment securities
   available for sale . . . .        458,223           640          ---         458,863 
  Loans . . . . . . . . . . .      2,187,808       398,345          ---       2,586,153 
  Allowance for possible loan
   losses . . . . . . . . . .        (36,434)       (5,351)         ---         (41,785)
  Other assets  . . . . . . .        133,548        15,227          ---         148,775 
                                   ---------     ---------    ---------       --------- 
  Total assets  . . . . . . .     $3,743,943    $  673,877   $      ---      $4,417,820 
                                   =========     =========    =========      ========== 

  LIABILITIES:

  Deposits  . . . . . . . . .     $3,334,021    $  531,057          ---      $3,865,078 
  Borrowings  . . . . . . . .         81,684        83,321          ---         165,005 
  Other liabilities . . . . .         28,047         6,429          ---          34,476 
                                   ---------     ---------     --------       --------- 
  Total liabilities . . . . .      3,443,752       620,807          ---       4,064,559 
                                   ---------     ---------     --------       --------- 

  SHAREHOLDERS' EQUITY

  Common Stock  . . . . . . .         16,276           389        2,277          18,942 
  Surplus . . . . . . . . . .        133,190        40,628       (2,277)        171,541 
  Retained earnings, net  . .        152,889        12,053           --         164,942 
  Treasury stock  . . . . . .        (2,164)           ---          ---          (2,164) 
                                   ---------   -----------    ---------       --------- 
  Total shareholders' equity         300,191        53,070          ---         353,261 
                                   ---------    ---------     ---------       --------- 
  Total liabilities and
   shareholders' equity . . .     $3,743,943    $  673,877   $      ---      $4,417,820 
                                  ==========     =========    =========       ========= 
 --------------------
 (1)    To record the exchange of  3,886,845 shares of Lakeland Common  Stock outstanding at December
 31, 1994 into 4,998,483 shares of Valley Common Stock.

</TABLE>

                      PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
                                                           (Unaudited)
                                                 For the year ended December 31,
<TABLE>
                                          1994                  1993                  1992
                                      ------------           ------------         ------------
    <S>                                <C>                   <C>                  <C>
                                               (In thousands, except per share data)
    Interest income . . . . . .        $   289,488           $   278,584          $   269,958 
    Interest expense  . . . . .            115,263               113,378              133,531 
                                        ----------            ----------           ---------- 
    Net interest income . . . .            174,225               165,206              136,427 
    Provision for possible loan
     losses . . . . . . . . . .              5,895                 8,569               17,976 
                                        ----------            ----------          ----------- 
    Net interest income after
     provision for possible
     loan losses  . . . . . . .            168,330               156,637              118,451 
    Non-interest income . . . .             23,722                27,728               32,731 
    Non-interest expense  . . .             88,788                85,918               78,779 
                                        ----------            ----------           ---------- 
    Income before income taxes
     and cumulative effect of
     accounting change  . . . .            103,264                98,447               72,403 
    Income taxes(1)   . . . . .             35,073                34,191               25,291 
                                        ----------            ----------           ---------- 
    Net income before
     cumulative effect of
     accounting change  . . . .             68,191                64,256               47,112 
    Cumulative effect of
     accounting change  . . . .                 --                  (402)                 473
                                        ----------            ----------           ----------
    Net income  . . . . . . . .      $      68,191         $      63,854        $      47,585 
                                      ============          ============         ============ 
    Net income per share before
     cumulative effect of
     accounting change  . . . .      $        1.93         $        1.85        $        1.38 
                                     =============          ============         ============ 
    Net income per share  . . .      $        1.93         $        1.84        $        1.39 
                                      ============          ============         ============ 
    Weighted average number of
     shares outstanding . . . .         35,254,099            34,703,608           34,196,309
                                        ==========            ==========           ==========
 --------------------
 (1)   Income Taxes shown do not reflect a one-time adjustment of approximately
       $3.2 million which will be required in connection with the Mergers
       to recapture tax bad debt deductions previously taken by Lakeland in
       the aggregate amount of $8.6 million.  Tax bad debt deductions taken 
       by a savings bank must be reversed if the savings bank is merged into
       a commercial bank, as will be the case in the Bank Merger.  The 
       required adjustment has no effect on the Pro Forma Combined Condensed
       Statements of Income shown above, but Valley will record income tax
       expense of approximately $3.2 million, which will reduce its net income
       for the year ended December 31, 1995 by the same amount.

</TABLE>

                                     COMBINED PRO FORMA
                                   SELECTED FINANCIAL DATA
                                        (Unaudited)
<TABLE>
                                   At or for the Year Ended December 31,
                               1994          1993         1992          1991       1990
                           ------------  -----------  -----------   ----------  ----------

  INCOME STATEMENT DATA        (In thousands, except for per share data)     
                
  <S>                      <C>          <C>           <C>          <C>        <C>
  Interest income . .      $  289,488   $  278,584    $  269,958   $ 244,372  $  218,627 
  Interest expense  .         115,263      113,378       133,531     136,343     125,388 
                              -------      -------       -------     -------     ------- 
  Net interest income         174,225      165,206       136,427     108,029      93,239  
  Provision for                
   possible loan               
   losses . . . . . .           5,895        8,569        17,976       13,037     14,096
  Net interest income         -------      -------       -------      -------    -------
   after provision               
   for possible loan          
   losses . . . . . .         168,330      156,637       118,451       94,992     79,143
  Non-interest income          23,722       27,728        32,731       15,275     11,350
  Non-interest                                                                   
   expense. . . . . .          88,788       85,918        78,779       60,811     48,993
  Income before               -------      -------       -------      -------    ------- 
   income taxes and     
   cumulative effect               
   of accounting
   change . . . . . .         103,264       98,447        72,403       49,456     41,500
  Income taxes  . . .          35,073       34,191        25,291       15,287     11,973 
                              -------      -------       -------      -------    ------- 
  Income before
   cumulative effect                  
   of accounting change        68,191       64,256        47,112       34,169     29,527
  Cumulative effect                 
   of accounting change            --         (402)          473           --         --
                              -------      -------       -------      -------    ------- 
  Net income  . . . .      $   68,191   $   63,854    $   47,585   $   34,169  $  29,527
                            =========    =========     =========    =========   ======== 


  PER COMMON SHARE DATA (1):
  Income before
   cumulative effect          
   of accounting change     $    1.93    $    1.85     $    1.38    $   0.99   $    0.87
  Cumulative effect                
   of accounting change            --        (0.01)         0.01          --          -- 
  Net income  . . . .            1.93         1.84          1.39        0.99        0.87  
  Book value  . . . .           10.02         9.46          8.12        7.37        7.14  
  Dividends . . . . .            0.93         0.74          0.67        0.63        0.63  

  RATIOS:
  Return on Average Assets       1.57%        1.58%         1.31%       1.22%       1.28%
  Return on Average Equity      19.77        20.73         17.82       14.10       12.47 

  FINANCIAL CONDITION DATA:
  Total Assets  . . .      $4,417,820   $4,218,039    $3,866,030  $3,436,623  $2,469,770 
  Investment                  
   securities held to   
   maturity . . . . .       1,096,210    1,228,339     1,351,385   1,369,547     454,310
  Investment                  
   securities
   available for sale         458,863      463,857       335,807       9,239          --
  Loans (net of              
   unearned income) .       2,586,153    2,254,610     1,908,590   1,822,883   1,807,023
  Allowance for                  
   possible loan      
   losses . . . . . .          41,785       41,994        33,420      25,185      18,927
  Deposits  . . . . .       3,865,078    3,751,685     3,425,487   3,050,295   2,154,944 
  Shareholders'                 
   equity . . . . . .         353,261      329,749       277,383     251,063     235,137

 --------------------
 (1)  The per share data has been restated to  give retroactive effect to stock splits and dividends,
 including Valley's 5% stock dividend declared March 23, 1995, payable May 2,
 1995 to shareholders of record April 14, 1995.
    

                     CERTAIN INFORMATION REGARDING VALLEY

 Valley National Bancorp

      Valley is a bank holding company registered with the Board of
 Governors of the Federal Reserve System (the "Board of Governors") under
 the BHCA.  Valley was organized under the laws of New Jersey in 1983 by VNB
 for the purpose of creating a bank holding company for VNB.  In addition to
 VNB, Valley indirectly owns additional subsidiaries through VNB, including
 two investment subsidiaries and a mortgage servicing subsidiary.  The
 corporate headquarters of Valley is located in Wayne, New Jersey.

      As of December 31, 1994, Valley had consolidated assets of
 approximately $3.7 billion, deposits of $3.3 billion and stockholders'
 equity of $300.2 million.

 Valley National Bank
   

      VNB, a wholly owned subsidiary of Valley, is a commercial bank
 established in 1927 under the laws of the United States of America.  It
 maintains its main office in Passaic, New Jersey and operates 64
 branches in northern New Jersey.

      VNB provides a full range of commercial and retail bank services,
 including the acceptance of demand, savings and time deposits.  Retail
 lending, primarily residential mortgages and automobile loans constitutes a
 substantial part of VNB's business.  VNB also provides commercial loans and
 mortgages to a variety of businesses and offers full personal, corporate
 and pension trust and other fiduciary services.

      Additional information about Valley and VNB is included above under
 the caption "Recent Developments" and in documents incorporated by
 reference in this Proxy Statement/Prospectus.  See "RECENT DEVELOPMENTS"
 and "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."

                    CERTAIN INFORMATION REGARDING LAKELAND

      Lakeland is a bank holding company registered under the BHCA and
 subject to examination by the Board of Governors.  Lakeland is
 headquartered in Succasunna, New Jersey.  Lakeland was incorporated in
 1988 for the purpose of acting as a holding company for the Bank which
 is Lakeland's sole operating subsidiary.
    

      The Bank, a wholly owned subsidiary of Lakeland, was chartered by the
 State of New Jersey in 1887.  The Bank received the necessary approvals
 from the Office of Thrift Supervision and the New Jersey Department of
 Banking to convert its charter to a New Jersey chartered capital stock
 savings bank effective June 1, 1992 and to change the name of the Bank from
 Lakeland Savings Bank, SLA to Lakeland Savings Bank.  The Bank has been a
 member of the Federal Home Loan Bank ("FHLB") System since 1954.  Its
 savings deposits are insured by the Savings Association Insurance Fund
 ("SAIF") which is administered by the Federal Deposit Insurance Corporation
 ("FDIC").

   
      Additional information about Lakeland and the Bank is included above
 under the caption "Recent Developments" and in documents incorporated by
 reference in this Proxy Statement/Prospectus.  See "RECENT DEVELOPMENTS"
 and "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."

                             THE SPECIAL MEETING

 General

      This Proxy Statement/Prospectus is being furnished by Lakeland to its
 stockholders in connection with the solicitation of proxies by the Board of
 Directors of Lakeland for use at the Special Meeting to be held on June 6,
 1995, and any adjournment or adjournments thereof, to consider and vote
 upon: (i) a proposal to approve the Merger Agreement and the transactions
 contemplated thereby; and (ii) such other business as may properly came
 before the Special Meeting or any adjournment thereof.
    

      After having been submitted, the enclosed Proxy may be revoked by the
 person giving it, at any time before it is exercised, by: (i) submitting
 written notice of revocation of such Proxy to the Secretary of Lakeland;
 (ii) submitting a Proxy having a later date; or (iii) such person appearing
 at the Special Meeting and requesting a return of the Proxy.  All shares
 represented by valid proxies will be exercised in the manner specified
 thereon.  If no specification is made, such shares will be voted in favor
 of approval of the Merger Agreement.

      Directors, officers, and employees of Lakeland may solicit proxies
 from Lakeland stockholders, either personally or by telephone, telegraph or
 other form of communication.  Such persons will receive no additional
 compensation for such services.  All expenses associated with the
 solicitation of proxies will be paid by Lakeland, except that Lakeland and
 VNB will share printing and mailing expenses of the Proxy materials.
   

      THE BOARD OF DIRECTORS OF LAKELAND HAS UNANIMOUSLY ADOPTED THE MERGER
 AGREEMENT, BELIEVES IT IS IN THE BEST INTERESTS OF LAKELAND AND ITS
 STOCKHOLDERS AND RECOMMENDS ITS APPROVAL BY LAKELAND STOCKHOLDERS.  SEE
 "THE MERGERS -- Background and Reasons."

 Record Date; Vote Required

      The Board of Directors of Lakeland has fixed April 26, 1995, as the
 Record Date for determining stockholders entitled to notice of and to vote
 at the Special Meeting, and accordingly, only holders of Lakeland Common
 Stock of record at the close of business on that day will be entitled to
 notice of and to vote at the Special Meeting.  The number of shares of
 Lakeland Common Stock outstanding on the Record Date was 3,922,166, each
 share being entitled to one vote.  
    

      Approval of the Merger Agreement requires the affirmative vote of a
 majority of the votes cast by the holders of Lakeland Common Stock
 represented at a meeting at which a quorum is present.  By checking the
 appropriate box, a stockholder may: (i) vote "FOR" approval of the Merger
 Agreement, (ii) vote "AGAINST" approval of the Merger Agreement, or (iii)
 "ABSTAIN."  The Merger Agreement must be approved by a vote of a majority
 of the shares of the Common Stock votes cast, without regard to (a) Broker
 Non-votes, or (b) proxies marked "ABSTAIN" as to that matter.
   

      The directors and executive officers of Lakeland (including certain of
 their related interests) beneficially owned, as of the Record Date, and are
 entitled to vote at the Special Meeting 330,057 shares of Lakeland Common
 Stock, which represent 8.4 percent of the shares of Lakeland Common Stock
 outstanding.  The executive officers and directors of Lakeland have
 indicated that they intend to vote all of their shares in favor of approval
 of the Merger Agreement.  The Board of Directors of Lakeland has
 unanimously approved the Merger Agreement and recommends that Lakeland
 stockholders vote "FOR" approval of the Merger Agreement.

                                 THE MERGERS

      THE FOLLOWING INFORMATION RELATING TO THE MERGERS IS NOT INTENDED TO
 BE A COMPLETE DESCRIPTION OF ALL MATERIAL INFORMATION RELATING TO THE
 MERGERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO MORE DETAILED
 INFORMATION CONTAINED ELSEWHERE IN THIS PROXY STATEMENT/PROSPECTUS,
 INCLUDING THE ANNEXES HERETO AND THE DOCUMENTS INCORPORATED HEREIN BY
 REFERENCE.  A COPY OF THE MERGER AGREEMENT IS SET FORTH AS ANNEX A TO THIS
 PROXY STATEMENT/PROSPECTUS AND IS INCORPORATED HEREIN BY REFERENCE AND
 REFERENCE IS MADE THERETO FOR A COMPLETE DESCRIPTION OF THE TERMS OF THE
 MERGERS.  STOCKHOLDERS OF LAKELAND ARE URGED TO READ THE MERGER AGREEMENT
 CAREFULLY.

 General

      Under the terms of the Merger Agreement, Lakeland will merge with and
 into Valley and the Bank will subsequently merge with and into VNB.  Upon
 consummation of the Merger, each outstanding share of Lakeland Common Stock
 will be converted, by virtue of the Merger, automatically and without any
 action on the part of the holder thereof, into the right to receive 1.286
 shares of Valley Common Stock, subject to certain adjustments.  See "THE
 MERGER AGREEMENT -- The Mergers."
    

      Pursuant to a separate merger agreement between VNB and the Bank (the
 "Bank Merger Agreement"), the Bank will be merged with and into VNB (the
 "Bank Merger").  Immediately following consummation of the Merger at the
 Effective Time or as soon thereafter as VNB may deem appropriate, the Bank
 Merger will be consummated.

 Background and Reasons
   

      Background of the Merger.  In late 1994, in recognition of the trend
 towards consolidation and increasing competition in the financial
 institution industry, Lakeland began to evaluate its strategic alternatives
 given these circumstances and inquiries by third parties as to possible
 affiliations or other business combinations.  After holding discussions
 with Valley, Lakeland hired Hopper Soliday in January 1995 to assist it in
 evaluating a possible business combination with Valley.  Thereafter, Valley
 orally conveyed a non-binding preliminary indication of interest. Following
 a review of the non-binding preliminary indication of interest and extensive
 discussion, the Board voted to authorize management to execute a letter of
 intent and a stock option agreement and to negotiate the terms of a
 proposed definitive merger agreement with Valley for its consideration. 
 The Letter of Intent and the Stock Option Agreement were executed by
 Lakeland and Valley on January 26, 1995.
    

      During the following weeks, the management of Lakeland and Valley,
 along with their financial and legal advisors, negotiated the terms and
 conditions of a transaction as contained in the Merger Agreement.

      On February 24 and 26, 1995, the Lakeland Board met to consider the
 proposed Merger Agreement with Valley.  At those meetings, Hopper Soliday
 provided the Board with a preliminary indication that the value of the
 consideration to be received by the Lakeland stockholders was fair from a
 financial point of view.  After extensive discussions, the Lakeland Board
 voted to approve and adopt the Merger Agreement as of February 27, 1995.
   

      Lakeland's Reasons for the Merger.  Lakeland believes that the Merger
 is fair to, and in the best interests of Lakeland and its stockholders. 
 Accordingly, the Lakeland Board of Directors has unanimously approved and
 adopted the Merger Agreement.  The Board therefore unanimously recommends
 that Lakeland's stockholders vote FOR the approval and adoption of the
 Merger Agreement.
    

      In reaching its determination that the Merger is fair to, and in the
 best interests of Lakeland and its stockholders, the Lakeland Board
 considered a number of factors both from a short-term and long-term
 perspective, including, without limitation, the following:

      (i)  Lakeland Board's familiarity with and review of Lakeland's
      business, operations, financial conditions, earnings and prospects;

      (ii) the current and prospective economic environment and competitive
      and regulatory constraints facing financial institutions and
      particularly Lakeland;

      (iii) the Lakeland Board's review, based in part on presentations
      by Hopper Soliday and the due diligence reviews by Lakeland's
      financial and legal advisers and management, of the business,
      operations, financial condition, earnings and prospects of Valley;

      (iv) the advice of Hopper Soliday that the acquisition proposal by
      Valley was fair to Lakeland stockholders from a financial point of
      view;

      (v)  the Lakeland Board's review of the alternative of continuing to
      remain independent.  In this regard, the Lakeland Board considered an
      analysis of Hopper Soliday regarding the range of possible values to
      Lakeland stockholders that could potentially be obtained in a sale of
      Lakeland to other potential acquirors;

      (vi)  the Lakeland Board's evaluation of the risks to consummation of
      the Mergers, including, among others, the risks associated with
      obtaining all necessary regulatory approvals without the imposition of
      any condition which differs from conditions customarily imposed in
      approving acquisitions of the type contemplated by the Merger
      Agreement and compliance with which would materially adversely affect
      the reasonably anticipated benefits of the transactions to Valley;

      (vii)  the expectation that the Merger will be a tax-free transaction
      to Lakeland and its stockholders and that the Merger will be accounted
      for as a pooling of interests; and

      (viii) the terms of the Merger Agreement and the other documents
      executed in connection with the Mergers.

      In view of the variety of factors considered in connection with its
 evaluation of the Mergers, the  Lakeland Board did not find it practicable
 to, and did not, quantify or otherwise attempt to assign relative weights
 to the specific factors considered in reaching its determination.

      LAKELAND'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT LAKELAND
 STOCKHOLDERS VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT.
   

      Valley's Reasons for the Merger.  Valley entered into the Merger
 Agreement with Lakeland as part of Valley's ongoing strategy of growth
 through acquisitions.

 Opinion of Financial Advisor

      Lakeland has retained Hopper Soliday to act as Lakeland's financial
 advisor and render a fairness opinion in connection with the Merger.
 Hopper Soliday has provided and continues to provide, certain other
 financial advisory services to Lakeland.  Hopper Soliday was selected to
 act as Lakeland's financial advisor on a transaction specific basis based
 upon its qualifications, expertise and reputation.

      In such capacity, Hopper Soliday participated in the negotiations with
 respect to the pricing and other terms and conditions of the Merger, but
 the decision as to whether to accept the price offered was ultimately made
 by the Board of Directors of Lakeland.  Hopper Soliday rendered a
 preliminary indication of fairness to the Lakeland Board of Directors on
 January 26, 1995 and rendered its written opinion on May 5, 1995 that, in
 its opinion, as of such date the financial terms of Valley's offer were
 "fair" to Lakeland and to its stockholders from a financial point of view.
 No limitations were imposed by Lakeland's Board of Directors upon Hopper
 Soliday with respect to its investigations or procedures followed by it in
 arriving at its opinion.

      The full text of the written opinion of Hopper Soliday dated
 May 5, 1995, which sets forth the assumptions made and the matters
 considered, is attached as ANNEX B to this Proxy Statement/Prospectus.
 Lakeland stockholders are urged to read this opinion in its entirety.
 Hopper Soliday's opinion is directed only to the consideration to be
 received by Lakeland stockholders in the Merger and does not constitute a
 recommendation to any Lakeland stockholder as to how such stockholder
 should vote at the Special Meeting.  The summary of Hopper Soliday's
 opinion set forth in this Proxy Statement/Prospectus is qualified in its
 entirety by reference to the full text of the opinion.  Hopper Soliday's
 preliminary indication of fairness as of January 26, 1995 was to the same
 effect as its opinion attached hereto.
    

      In arriving at its written opinion, Hopper Soliday reviewed and
 analyzed among other things: (i) the Merger Agreement; (ii) the Agreement
 and Plan of Merger by and between American Union Bank ("American Union")
 and Valley; (iii) the American Union Proxy Statement/Prospectus; (iv)
 Valley Annual Reports for the years ended December 31, 1992 through
 December 31, 1994 and Annual Reports on Form 10-K for the years ended
 December 31, 1992 and 1993; (v) Lakeland Annual Reports for the years ended
 June 30, 1992 through June 30, 1994, Annual Reports on Form 10-K for the
 same period and Quarterly Reports on Form 10-Q for the quarters ended
 September 30, 1994 and December 31, 1994; (vi) financial forecasts of
 Valley reviewed with the management of Valley; (vii) financial forecasts of
 Lakeland reviewed with the management of Lakeland; (viii) the views of
 senior management of Lakeland and Valley of their respective past and
 current business operations, results thereof, financial condition and
 future prospects; (ix) historical and currently publicly available market
 information concerning the trading of and the trading markets for Lakeland
 Common Stock and Valley Common Stock; (x) the financial terms of recent
 mergers and acquisitions in the savings industry; (xi) the current banking
 environment; and (xii) such other information, financial studies, analyses
 and investigations and financial, economic and market criteria as Hopper
 Soliday considered relevant.

      In connection with its review, Hopper Soliday relied upon and assumed
 without independent verification the accuracy and completeness of the
 financial and other information regarding Valley and Lakeland provided to
 Hopper Soliday by the companies and their representatives.  Hopper Soliday
 was not retained to nor did it conduct a physical inspection of any of the
 properties or facilities of Valley or Lakeland, nor did Hopper Soliday make
 any independent evaluation or appraisal of Valley's or Lakeland's assets or
 liabilities, nor was it furnished with any such appraisal.  Hopper Soliday
 also assumed that the Mergers in all respects are, and will be, undertaken
 and consummated in compliance with all laws and regulations that are
 applicable to Valley and Lakeland.

      In rendering its opinion, Hopper Soliday assumed that in the course of
 obtaining the necessary approvals for the Merger and in the preparation of
 this Proxy Statement/Prospectus, no conditions will be imposed that will
 have a material adverse effect on the amount or form of the consideration
 or on the results of operations, or the financial condition or prospects of
 Lakeland or, on a pro forma basis, Valley.
   

      In arriving at its opinion, Hopper Soliday performed a variety of
 financial analyses.  The preparation of a fairness opinion, however,
 involves various determinations as to the most appropriate and relevant
 methods of financial analysis and the application of those methods to the
 particular circumstances and therefore, such opinion is not readily
 susceptible to summary description.  Accordingly, Hopper Soliday believes
 that its analyses must be considered as a whole and that considering any
 portions of such analysis and the factors considered, without considering
 all the analyses and factors could create a misleading view of the process
 underlying Hopper Soliday's opinion.  No one analysis was assigned a
 greater significance than any other.  As a result of its consideration of
 the aggregate of all factors present and analyses performed, Hopper Soliday
 has reached the conclusion, and opines, that the terms of the Merger, as
 set forth in the Merger Agreement, are fair from a financial point of view
 to Lakeland and its stockholders.
    
      In its analyses, Hopper Soliday made numerous assumptions with respect
 to industry performance, business and economic conditions, and other
 matters, many of which are beyond the control of Valley or Lakeland.  Any
 estimates contained in Hopper Soliday's analyses are not necessarily
 indicative of future results or values, which may be significantly more or
 less favorable than suggested by such analyses.  Estimates of values of
 companies do not purport to be appraisals or necessarily reflect the prices
 at which companies or their securities may actually be sold.
   

      The following is a brief summary of the analyses and procedures
 performed by Hopper Soliday in the course of arriving at its written
 opinion dated May 5, 1995 and presented to the Lakeland Board of
 Directors.  See ANNEX B.

      Impact Analysis.  Hopper Soliday analyzed the changes in the amount of
 earnings, book value and indicated dividends represented by the issuance of
 1.286 shares of Valley Common Stock and the number of outstanding shares of
 Lakeland Common Stock.  The analysis evaluated, among other things,
 possible dilution in earnings and book value per share for Valley and the
 dividends to be received by Lakeland stockholders.  This analysis was based
 upon December 31, 1993 data for Valley and Lakeland.
    

      At the time performed, this analysis indicated that the Merger would
 be approximately 1.03% dilutive to Valley's earnings per share (after giving
 pro forma effect to the American Union Merger), assuming no merger economies,
 other expense reductions or revenue enhancements.  Hopper Soliday's analysis
 also evaluated, among other things, the Merger's accretive effect on Valley's
 tangible book value per share of approximately 0.31%, the percentage of
 reserves to non-performing loans and the capitalization of Valley after the
 Merger.  In addition, Hopper Soliday's analysis considered dividends paid
 by Lakeland to date and future dividend prospects for fiscal 1995 and
 Valley's annualized dividend of $1.00 per share.  This impact analysis was
 based upon the data available at the time performed and should not be
 construed as indicative of the actual impact of the Merger when
 consummated.
   

      Impact per Share Analysis.  Hopper Soliday also analyzed the impact of
 the Merger on certain Valley values (giving pro forma effect to the
 American Union Merger) per Lakeland share based on the Exchange Ratio of
 1.286 shares of Valley Common Stock for one share of Lakeland Common Stock.
 That analysis, which was based on certain assumptions made by Hopper
 Soliday, found that, based on the Exchange Ratio, Valley's equivalent
 earnings per share would be $2.48, or 7.36% greater than existing Lakeland
 earnings per share; that Valley's equivalent tangible book value would be
 $12.36, or 6.51% less than the existing Lakeland tangible book value; and
 that Valley's equivalent dividend income would be $1.286, or 28.60% greater
 than Lakeland's current dividend income per share, including the special
 dividend paid in August 1994.
    

      Stock Performance Analysis.  Hopper Soliday reviewed the trading
 prices of Lakeland and Valley over the period from December 31, 1990 to
 January 31, 1995, relative to each other, the Standard & Poor's 500 Stock
 Index and SNL Securities' All Bank and All Thrift indices.  Over the
 various periods analyzed, the performance of Lakeland Common Stock and
 Valley Common Stock exceeded the performance of the Standard & Poor's 500
 Stock Index and SNL Securities' All Bank and All Thrift indices.
   

      Comparable Companies Analysis.  Hopper Soliday performed an analysis
 of Lakeland's operating performance (including return on average assets,
 return on average common equity, total and tangible equity/assets and
 certain asset quality measures) and stock price to book and tangible book
 value and earnings multiples relative to the following three subsets: (i)
 fifteen thrift institutions located in New Jersey (Bankers Corp., Central
 Jersey Financial Corporation, Covenant Bank for Savings, Collective
 Bancorp, Inc., FMS Financial Corp., First State Financial Services, Inc.,
 First Savings Bank, SLA, MHC, First Savings Bank of NJ, MHC, First Home
 Savings Bank, FSB, IBS Financial Corp., Lakeview Financial Corp., Pamrapo
 Bancorp, Inc., PennFed Financial Services, Inc., Pulse Bancorp, Inc. and
 Raritan Bancorp, Inc.); (ii) sixteen institutions located in the Mid-
 Atlantic states with total assets of $500 million to $1.5 billion and an
 equity/assets ratio greater than 7.00% (Bay Ridge Bancorp, Inc., BSB
 Bancorp, Inc., Commonwealth Savings Bank, MHC, First Savings Bank, MHC,
 Harris Savings Bank, MHC, IBS Financial Corp., Maryland Federal Bancorp,
 Inc., MLF Bancorp, Inc., PennFed Financial Services, Inc., Prime Bancorp,
 Inc., Progressive Bank, Inc., PennFirst Bancorp, Inc., Queens County
 Bancorp, Inc., Reliance Bancorp, Inc., Sunrise Bancorp, Inc. and York
 Financial Corp.) and (iii) twenty-four institutions nationwide with total
 assets of $500 million to $1.5 billion, an equity to assets ratio greater
 than 7.00%, non-performing assets to total assets ratio of 2.00% or less
 and a year to date return on average assets ratio of 1.00% or greater
 (Advantage Bancorp, Inc., Anchor BanCorp Wisconsin, Inc., American Federal
 Bank, FSB, AMFED Financial, Inc., Bankers First Corporation, BSB Bancorp,
 Inc., Calumet Bancorp, Inc., Eagle Financial Services Corp., First Federal
 Financial Services, FFY Financial Corp., First Savings Bank, MHC, Harbor
 Federal Savings Bank, MHC, Home Financial Corp., Home Federal Bancorp, IBS
 Financial Corp., Indiana Federal Corporation, InterWest Savings Bank,
 Maryland Federal Bancorp, Inc., N.S. Bancorp, Inc., Prime Bancorp, Inc.,
 Progressive Bank, Inc., Queens County Bancorp, Inc., Reliance Bancorp,
 Inc., and Sunrise Bancorp, Inc.).
    

      Hopper Soliday calculated the high, low, mean and median values for
 price to book value, price to tangible book value, price to latest twelve
 months earnings, non-performing assets to total assets, latest twelve
 months return on average assets (before extraordinary items) and latest
 twelve months return on average equity (before extraordinary items) for
 each of the respective groups of comparable companies.  At December 31,
 1995, Lakeland's price to book value of 142.86%, price to tangible book
 value of 147.50%, price to latest twelve months earnings of 8.4x, non-
 performing assets to total assets of 1.06%, latest twelve months return on
 average assets of 1.41% and latest twelve months return on average equity
 of 18.19% was compared to the medians of each of the respective groups of
 comparable companies.  The medians for the New Jersey peer group were
 98.98%, 105.12%, 8.6x, 1.67%, 1.08% and 11.98%, respectively.  The medians
 for the Mid-Atlantic peer group were 91.35%, 92.75%, 9.2x, 0.73%, 1.06%,
 and 10.13%, respectively.  The medians for the nationwide peer group were
 98.88%, 110.15%, 8.9x, 0.69%, 1.15% and 11.63%, respectively.
   

      Comparable Transactions Analysis.  Hopper Soliday compared the
 multiples of book value, tangible book value, the latest twelve months'
 earnings and the premium paid in excess of tangible book value as a
 percentage of core deposits with the multiples paid in recent acquisitions
 of savings institutions that Hopper Soliday deemed comparable.  The
 transactions deemed comparable by Hopper Soliday included both intrastate
 and interstate acquisitions announced since January 1, 1993 with total
 assets between $375.0 million and $1.6 billion and an announced transaction
 value in excess of $50.0 million.  The transactions compared included
 (buyer/seller): NBD Bancorp, Inc./DeerBank Corp; BayBanks, Inc./NFS
 Financial Corporation; First Bancorporation of Ohio/CIVISTA Corporation;
 First Interstate Bancorp/University Savings Bank; New York Bancorp,
 Inc./Hamilton Bancorp, Inc.; Sovereign Bancorp/Charter FSB Bancorp, Inc.;
 NBD Bancorp, Inc./AmeriFed Financial Corporation; Core States Financial
 Corp/Germantown Savings Bank; Fifth Third Bancorp/Cumberland Federal
 Bancorporation; UJB Financial Corp/VSB Bancorp, Inc.; Citizens Financial
 Group/Neworld Bancorp; Roosevelt Financial Group/Home Federal Bancorp of
 Missouri; SunTrust Banks, Inc./Regional Investment Corporation; Shawmut
 National Corporation/Peoples Bancorp of Worcester; Mercantile
 Bancorporation, Inc./United Postal Bancorp; Fifth Third Bancorp/TriState
 Bancorp; CB Bancshares, Inc./International Holding Capital Corp.; and
 Huntington Bancshares, Inc./Railroadmen's FS&LA of Indianapolis.
    

      No company or transaction used in this analysis is identical to
 Lakeland, Valley or the Merger and Hopper Soliday did not assign greater
 weight to any specific company or transaction.  Accordingly, the results
 of the foregoing is not mathematical; rather, it involves complex
 considerations and judgments concerning the differences in financial and
 operating characteristics of the companies involved and other factors that
 could affect the public trading values of the securities of the company or
 companies to which they are being compared.

      Discounted Cash Flow Analysis.  Hopper Soliday estimated the future
 earnings, tangible book value and a dividend stream that Lakeland could
 produce over a four and a half year period (ending June 30, 1999), assuming
 annual growth rates of 10%, 15% and 20% in earnings.  Hopper Soliday also
 estimated the terminal value of the Lakeland Common Stock at the end of
 such period by: (i) a range of 10 to 15 times Lakeland's terminal year
 earnings and (ii) a range of 125% to 225% of Lakeland's tangible book value
 at the end of the period analyzed.  Using a discounted cash flow analysis,
 the dividend streams and terminal values were then discounted to present
 values using discount rates ranging from 10% to 20%, which reflects
 different assumptions regarding the required rates of return of holders and
 prospective buyers of Lakeland Common Stock.  The range of present values
 per fully diluted share of Lakeland Common Stock resulting from these
 assumptions was from $13.87 to $52.25, using a terminal value based on
 earnings, and from$15.07 to $39.87 using a terminal value based on tangible
 book value. The low end of the range utilizing earnings as a terminal value
 was based upon a 10% earnings growth rate, a terminal earnings multiple of
 10 and a 20% discount rate, while the high end of this range was based upon
 a 20% earnings growth rate, a terminal earnings multiple of 15 and a 10%
 discount rate.  The low end of the range utilizing tangible book value
 as a terminal value was based upon a 10% earnings growth rate, a tangible
 book value multiple of 125% and a 20% discount rate, while the high end of
 this range was based upon a 20% earnings growth rate, a tangible book value
 multiple of 225% and a 10% discount rate.
   

      Hopper Soliday's written opinion dated May 5, 1995 is based
 solely upon the information available to it and the economic, market and
 other circumstances as they existed as of the date of such opinion,
 including the market price of Valley Common Stock.  Events occurring after
 that date, including a material change in the market price of Valley Common
 Stock, could materially affect the assumptions and conclusions contained in
 this opinion.  Hopper Soliday has not undertaken to reaffirm or revise its
 opinion or otherwise comment upon any events occurring after the date
 thereof.
    

      Compensation of Hopper Soliday.  Pursuant to an engagement letter
 dated January 10, 1995 between Lakeland and Hopper Soliday, Lakeland agreed
 to pay Hopper Soliday an initial non-refundable retainer of $35,000.  In
 addition, upon the execution of a definitive merger agreement with Valley,
 Lakeland became obligated to pay Hopper Soliday a contingent advisory fee
 ("Advisory Fee") equal to one half of one percent (0.50%) of the total
 merger consideration and such Advisory Fee would not exceed $650,000.  The
 Advisory Fee is due and payable in cash upon the Effective Time of the
 Merger and the non-refundable retainer will be credited toward the Advisory
 Fee.

      As part of its investment banking business, Hopper Soliday is
 regularly engaged in the valuation of securities and companies, and in
 particular the valuation of bank holding companies, banks, savings and loan
 companies and savings institutions and their securities, in connection with
 mergers, acquisitions, private placements, secondary distributions of listed
 and unlisted securities and other corporate transactions.  The Board of
 Directors of Lakeland decided to retain Hopper Soliday based on its
 experience as a financial advisor in mergers and acquisitions, particularly
 financial institutions in the Mid-Atlantic region of the United States,
 and its knowledge of financial institutions and Lakeland in particular.

 Certain Federal Income Tax Consequences

      THE FEDERAL INCOME TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR
 GENERAL INFORMATION ONLY.  IT MAY NOT BE APPLICABLE TO CERTAIN CLASSES OF
 TAXPAYERS, INCLUDING INSURANCE COMPANIES, SECURITIES DEALERS, FINANCIAL
 INSTITUTIONS, FOREIGN PERSONS AND PERSONS WHO ACQUIRED SHARES OF LAKELAND
 COMMON STOCK PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR RIGHTS
 OR OTHERWISE AS COMPENSATION.  LAKELAND SHAREHOLDERS ARE URGED TO CONSULT
 THEIR OWN TAX ADVISERS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE
 MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL AND
 OTHER TAX LAWS.
   

      General.  It is intended that the Merger will be treated as a tax-free
 reorganization as defined in Section 368(a)(1)(A) of the Internal Revenue
 Code of 1986, as amended (the "Code"), and that, accordingly, no gain or
 loss will be recognized by Valley, Lakeland, VNB, the Bank or to the
 stockholders of Lakeland upon the exchange of their shares of Lakeland
 Common Stock solely for shares of Valley Common Stock pursuant to the
 Merger.  Counsel to Valley is required, as a condition of closing, to
 provide an opinion to Valley and to Lakeland, with respect to the matter
 covered by the foregoing sentence.  With respect to this Proxy
 Statement/Prospectus, counsel has provided an opinion that, based upon
 the circumstances as they presently exist, it expects to be able to render
 the required opinion.
    

      Consequences of Receipt of Cash in Lieu of Fractional Shares.  In
 general, cash paid in lieu of fractional share interests in corporate
 reorganizations is treated as having been received in part or full payment
 in exchange for the fractional share interest (and therefore subject to
 capital gains treatment if the related shares are held as capital assets)
 if the cash distribution is undertaken solely for purposes of saving the
 corporation the expense and inconvenience of issuing and transferring
 fractional shares and is not separately bargained for consideration.
   

      Basis of Valley Common Stock.  The basis of Valley Common Stock
 received by a Lakeland stockholder who receives solely Valley Common Stock
 will be the same immediately after the exchange, as the basis of such
 stockholder's Lakeland Common Stock exchanged therefor.  Where a Lakeland
 stockholder receives both Valley Common Stock and cash, the basis of the
 Valley Common Stock received will equal (a) the basis of the Lakeland
 Common Stock exchanged therefor, (b) decreased by the amount of cash
 received and (c) increased by the amount of gain recognized, if any, on the
 exchange.

      Holding Period.  The holding period of Valley Common Stock received by
 a Lakeland stockholder will include the holding period for the Lakeland
 Common Stock exchanged therefor.

      Consequences to Holders of Unexercised Lakeland Options.  Holders of
 options to purchase Lakeland Common Stock which have been issued
 pursuant to the stock option plan maintained by Lakeland may elect to
 convert their unexercised options to purchase shares of Lakeland Common
 Stock ("Lakeland Options") either into (i) an option to purchase Valley
 Common Stock on the same terms and conditions existing for the current
 stock option, except that the number of shares of Valley Common Stock
 purchasable under the option and the option price will both be adjusted to
 reflect the Exchange Ratio, or (ii) the right to receive a number of whole
 shares of Valley Common Stock with a value equal to the difference between
 the exercise price of the option and the value of the shares of Valley
 Common Stock received in exchange for each share of Lakeland Common Stock.
 See "THE MERGER AGREEMENT -- Conversion of Stock Options" for information
 concerning limitations on the right to convert Lakeland Options into
 options to purchase Valley Common Stock.
    

      In the case of holders of the Lakeland Options which qualify as
 "incentive stock options" pursuant to Section 422 of the Code, no gain or
 loss will be recognized on a substitution of Valley Common Stock options
 for Lakeland Options, provided the excess of the aggregate fair market
 value of the Valley Common Stock subject to the options over the aggregate
 option price for such shares is not greater than the excess of the
 aggregate fair market value of the Lakeland Common Stock subject to the
 aggregate options over the option price for such shares immediately prior
 to the substitution, and further provided that no additional benefits are
 conferred upon the holders of the new options.  The substituted Valley
 Common Stock options also should qualify as incentive stock options under
 Section 422 of the Code, provided the terms of the new options are in full
 compliance with such statutory provision.  Those holders of incentive stock
 options who receive cash or Valley Common Stock in cancellation of their
 Lakeland Options will be treated as having received compensation taxable as
 ordinary income equal to the amount by which the amount of cash or the
 value of the Valley Common Stock received exceeds their adjusted basis in
 their incentive stock options, if any.
   

      No ruling has been or will be requested from the Internal Revenue
 Service as to any of the tax effects of any of the transactions discussed
 in this Proxy Statement/Prospectus to stockholders of Lakeland, and no
 opinion of counsel has been or will be rendered to Lakeland's stockholders
 with respect to any of the tax effects of the Mergers to Lakeland's
 stockholders.  There is no assurance that applicable tax laws will not
 change prior to the Effective Time.


                             THE MERGER AGREEMENT

      THE FOLLOWING IS A BRIEF SUMMARY OF CERTAIN PROVISIONS OF THE MERGER
 AGREEMENT.  THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
 FULL TEXT OF THE MERGER AGREEMENT, WHICH IS ATTACHED AS ANNEX A TO THIS
 PROXY STATEMENT/PROSPECTUS.

 The Mergers

      Under the terms of the Merger Agreement, Lakeland will merge with and
 into Valley in accordance with the New Jersey Business Corporation Act and
 Valley will be the Surviving Corporation.  Immediately following the
 Effective Time, the Bank will be merged with and into VNB.  Upon
 consummation of the Merger, each outstanding share of Lakeland Common Stock
 will be converted, by virtue of the Merger, automatically and without any
 action on the part of the holder thereof, into and represent the right to
 receive 1.286 shares of Valley Common Stock.  The Exchange Ratio of 1.286
 shares, and all share and per share data (including reported stock prices)
 for Valley and for Valley and Lakeland on a pro forma basis included in
 this Proxy Statement/Prospectus, have been adjusted for the 5% stock
 dividend declared March 23, 1995 and payable May 2, 1995 to Valley
 stockholders of record of April 14, 1995.  The Merger Agreement, a copy of
 which is attached as ANNEX A to this Proxy Statement/Prospectus, has been
 amended and restated to reflect the adjusted Exchange Ratio.  Valley's
 Annual Report on Form 10-K, which is incorporated by reference into this
 Proxy Statement/Prospectus, has not been amended or restated to
 retroactively reflect the stock dividend.  

      The Exchange Ratio is subject to adjustment to take into account any
 stock split, stock dividend, stock combination, reclassification or similar
 transaction by Valley with respect to the Valley Common Stock.  No
 adjustments to the Exchange Ratio will be made as of the Effective Time to
 compensate Lakeland stockholders for any change in the market value of
 Valley Common Stock between January 26, 1995 (the date of the Letter of
 Intent) and the Effective Time.

      No holder of Lakeland Common Stock will be entitled to receive any
 fractional share of Valley Common Stock, but instead will be entitled to
 receive (without interest) a cash payment in the amount of the value of
 such fractional share interest, determined by multiplying such holder's
 fractional interest by the Average Closing Price ( as defined below) of
 Valley Common Stock.  All shares of Valley Common Stock that individual
 Lakeland stockholders are entitled to receive in exchange for each share of
 Lakeland Common Stock held will be aggregated to constitute as many whole
 share of Valley Common Stock as possible before determining the amount of a
 cash payment for fractional shares.

      The "Average Closing Price" is defined in the Merger Agreement as the
 average of the closing prices of Valley Common Stock as reported on the 
 NYSE and published in the WALL STREET JOURNAL during the
 first 10 of the 15 consecutive trading days immediately preceding the
 Closing.  The Average Closing Price is subject to adjustment to take into
 account any stock split, stock dividend, stock combination,
 reclassification, or similar transaction by Valley with respect to the
 Valley Common Stock.  The closing price of Valley Common Stock on May 1,
 1995, the latest practicable trading day before the printing of this Proxy
 Statement/Prospectus was $25.38.  For a more complete description of the
 Merger Agreement and the terms of the Merger, see ANNEX A.
    

 Effective Time

      The Effective Time of the Merger will be the time and date on which a
 Certificate of Merger is filed with the Secretary of State of the State of
 New Jersey.  A closing (the "Closing") will occur on the first day of the
 month next following receipt of all necessary regulatory approvals and the
 satisfaction and waiver of all conditions precedent to the Merger, or at
 such other time agreed to by Valley and Lakeland.  Immediately following
 the Closing, the Certificate of Merger will be filed with the Secretary of
 State of the State of New Jersey.  At the Closing, documents required to
 satisfy the conditions to the Merger of the respective parties will be
 exchanged.  The actual Effective Time is dependent upon satisfaction of all
 conditions precedent, some of which are not under control of Valley and/or
 Lakeland, and may be changed by agreement of the parties.   The Board of

      Directors  of  either  Valley or  Lakeland  may  terminate  the Merger
 Agreement if the Effective Date does not occur on or before October 31,
 1995.  See  "-- Exchange of  Lakeland Certificates" and  "-- Conditions  to
 Consummation; Termination."

 Exchange of Lakeland Certificates

      As promptly as practicable after the Effective Date, Valley will send
 or cause to be sent to each stockholder of record of Lakeland Common Stock,
 transmittal materials for use in exchanging all of such stockholder's
 certificates or certificates representing shares of Lakeland Common Stock
 for certificates representing Valley Common Stock, as appropriate.  The
 transmittal materials will contain information and instructions with
 respect to the surrender and exchange of such certificates.

      LAKELAND STOCKHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THEY
 RECEIVE THE LETTER OF TRANSMITTAL FORM AND INSTRUCTIONS.
   

      Holders of outstanding certificates for Lakeland Common Stock, upon
 proper surrender of such certificates to Valley, will receive, promptly
 after the Effective Time, a certificate representing the full number of
 shares of Valley Common Stock into which the shares of Lakeland Common
 Stock previously represented by the surrendered certificates have been
 converted.  At the time of issuance of the new stock certificate each
 stockholder so entitled will receive a check for the amount of the
 fractional share interest, if any, to which he may be entitled.

      Each share of Valley Common Stock for which shares of Lakeland Common
 Stock are exchanged will be deemed to have been issued at the Effective
 Time.  Accordingly, Lakeland stockholders who receive Valley Common Stock
 in the Merger will be entitled to receive any dividend or other
 distribution which may be payable to holders of record of Valley Common
 Stock as of the dates on or after the Effective Time.  However, no dividend
 or other distribution will actually be paid with respect to any shares of
 Valley Common Stock until the certificate or certificates formerly
 representing shares of Lakeland Common Stock have been surrendered, at
 which time any accrued dividends and other distributions on such shares of
 Valley Common stock will be paid without interest.
    

      After the Effective Date, the stock transfer books of Lakeland will be
 closed and there will be no transfers on the transfer books of Lakeland of
 the shares of Lakeland Common Stock that were outstanding immediately prior
 to the Effective Time.

 Conversion of Stock Options

   
      The Merger Agreement provides that each outstanding option to purchase
 Lakeland Common Stock (a "Lakeland Option") granted under Lakeland's
 existing stock option plan (the "Lakeland Option Plan") will be converted
 at the Effective Time into either an option to purchase Valley Common Stock
 or the right to receive shares of Valley Common Stock, as more fully
 described below.  At the Effective Time, each outstanding Lakeland Option
 will be converted, at the election of the holder of the Lakeland Option
 (the "Optionee"), into either (i) an option to purchase Valley Common
 Stock on the same terms and conditions existing for the current Lakeland
 Option, except that the number of shares of Valley Common Stock
 purchasable under the new option and the new option exercise price will
 both be adjusted to reflect the Exchange Ratio, or (ii) if the Lakeland
 Option is fully vested at the Closing, into the right to receive a number
 of whole shares of Valley Common Stock equal to (x) the excess of the sum
 determined by multiplying (A) the number of shares of Lakeland Common
 Stock covered by the Lakeland Option, times (B) the Exchange Ratio, times
 (C) the Average Closing Price, less (y) the aggregate exercise price for
 the Lakeland Option (z) divided by the Average Closing Price; PROVIDED,
 that only an Optionee who is an employee or director of Lakeland or the
 Bank at the Effective Time and who will become an employee or director of
 Valley or VNB immediately after the Effective Time will be entitled to
 select alternative (i).  Any Optionee whose options are fully vested and
 who either chooses alternative (ii) or is limited to alternative (ii)
 because the Optionee will not be an employee or director of Valley or VNB
 immediately after the Effective Time will receive an aggregate whole
 number of shares of Valley Common Stock for all Lakeland Options so
 converted and if applicable, an amount in cash equal to the fractional
 interest in Valley Common Stock such Optionee would otherwise be entitled
 to receive, multiplied by the Average Closing Price of Valley Common
 Stock.  Any Optionee choosing or limited to alternative (ii) should
 carefully consider the possibility of exercising his or her Lakeland
 Options prior to the Effective Time, rather than having such Lakeland
 Options converted into Valley Common Stock at the Effective Time, which
 would cause an immediate recognition of taxable income to the Optionee.
 See "THE MERGERS -- Certain Federal Income Tax Consequences" for a
 discussion of the federal income tax consequences of these alternatives.

      From and after the Effective Time, each Lakeland Option which is
 converted into an option to purchase Valley Common Stock will be
 administered, operated, and interpreted by a committee comprised of members
 of the Board of Directors of Valley appointed by such board.  Valley has
 agreed to reserve for issuance the number of shares of Valley Common Stock
 necessary to satisfy Valley's obligations under such options, and to
 register such shares pursuant to the Securities Act, if they are not
 previously so registered.

      Holders of Lakeland Options will receive an Option Preference Form
 after the mailing of this Proxy Statement/Prospectus but prior to the
 Effective Time and may exercise the election by submitting the Option
 Preference Form as specified in such form.  As of March 31, 1995, there
 were 95,092 Lakeland Options outstanding.

 No Dissenters' Rights

      Consistent with the provisions of the New Jersey Business Corporation
 Act, no stockholder of Lakeland will have the right to dissent from the
 Merger.

 Interests of Certain Persons in the Merger

      The Merger Agreement provides that for the six-year period following
 the Effective Time, Valley will indemnify the directors and officers 
 of Lakeland against certain liabilities to the extent such persons
 were indemnified under Lakeland's Certificate of Incorporation and Bylaws.

      As of the Effective Time, Valley will cause its Board of Directors to
 take action to appoint to the Board of Directors of Valley Mr. William H.
 McNear and one other director to be selected by Valley from two nominees
 submitted by the Board of Directors of Lakeland.  In addition, John
 Grabovetz will be designated as a Director Emeritus of Valley at the
 Effective Time.  As of the Effective Time, Valley will appoint Michael
 Halpin as a First Senior Vice President of VNB, and Valley will assume in
 writing Mr. Halpin's employment contract.  Mr. McNear will receive a lump
 sum payment of $150,000 from Lakeland upon the Effective Time in settlement
 of his Retainer Agreement with Lakeland.  In a letter dated February 27,
 1995, from VNB to Lakeland, VNB agreed to provide Lakeland employees and
 Directors with certain benefits.  See "-- Employment Matters" and ANNEX D.

 Employment Matters

      In a letter to Lakeland dated February 27, 1995, Valley expressed its
 intention to provide certain benefits to Lakeland and Bank employees who
 become employees of Valley or VNB.  See ANNEX D.  Valley and VNB intend to
 provide eligible, actively employed Lakeland and Bank employees who join
 Valley or VNB with the same Valley or VNB benefits plans coverage under
 which Valley and VNB employees participate under the terms and conditions
 as required by Valley and VNB plan contracts.  VNB benefit plans include
 but are not limited to, medical, dental and disability plans, pension and
 401(k) plans, vacation and paid personal days and sick days.  It is
 anticipated that employees of the Bank will retain their date of
 employment with the Bank for purposes of calculating VNB employee
 seniority and eligibility for VNB benefit plans. 

      It is Valley's intention that employees will be eligible to
 participate in the VNB 401(k) and retirement plans as soon as feasible
 after the Effective Time assuming all legal and financial requirements
 of the VNB and Lakeland retirement plans are satisfactory and complete,
 and that employees of the Bank will receive full eligible credit, sick
 leave accrual and vesting for prior pension services under the Lakeland
 Retirement Plan when merged into the VNB retirement plan.  VNB maintains
 the sole right to determine the terms and conditions of VNB benefit plans
 for service after the Effective Time, but it is Valley's intent that
 such benefits, in the aggregate, will not be less than those applicable
 to Lakeland or the Bank prior to the Merger.

      If any Lakeland or Bank employee is relocated as a result of
 departmental consolidations following the Effective Time to a location,
 other than that of an acquired Lakeland office or facility, Valley intends
 to give such employee, on a priority basis, the opportunity to accept a job
 posting to relocate to a Lakeland office or facility at the salary and
 position so posted.  VNB intends to offer severance arrangements to
 employees of the Bank consistent with prior Valley mergers.
    

      Consistent with Lakeland's past practice, Valley intends to provide
 Directors of Lakeland who continue as or become retired Directors of
 Lakeland, with supplemental medical insurance which supplements their
 coverage under Medicare, and to provide any Director or retired Director
 who is not 65 years of age with a supplementary medical insurance policy or
 a primary medical insurance policy until such person reaches age 65 at
 which time the supplementary policy will apply.  Valley also intends to
 continue the Lakeland Directors Post-Retirement Plan.

 Business Pending Consummation

   
      Lakeland has agreed in the Merger Agreement not to take certain
 actions relating to the operation of Lakeland pending consummation of the
 Mergers, without the prior written consent of Valley or VNB, except as
 otherwise permitted by the Merger Agreement.  These actions include, among
 other things: (i) changing any provision of its Certificate of
 Incorporation or Bylaws or similar governing document; (ii) paying any
 dividends (other than regular quarterly dividends of $0.15 per share and
 one special dividend which may be declared in an amount such that between
 January 26, 1995 and the Effective Time, Lakeland's stockholders will
 receive dividends equal to those they would have received had the Merger
 been consummated on January 26, 1995) or redeeming or otherwise acquiring
 any shares of its capital stock, or issuing any additional shares of its
 capital stock (other than upon exercise of an outstanding Lakeland Option)
 or giving any person the right to acquire any such shares; (iii) granting
 any severance or termination pay other than the settlement of the retainer
 agreement of Mr. William H. McNear, Chairman of the Board of Lakeland, or
 pursuant to policies of Lakeland in effect as of the date of the Merger
 Agreement (see "-- Interests of Certain Persons in the Merger") or
 entering into or amending any employment agreement with any directors,
 officers, or employees except as authorized in the Merger Agreement, or
 adopting any new employee benefit plan or arrangement or amending any
 existing benefit plan; (iv) awarding any increase in compensation or
 benefits to its directors, officers, or employees except in the ordinary
 course of business and consistent with past practices and policies;
 (v) selling or disposing of any substantial amount of assets or incurring
 any significant liability other than in the ordinary course of business; or
 (vi) taking any other action not in the ordinary course of business
 consistent with prudent banking practices. 

 Regulatory Approvals

      Consummation of the Merger requires the approval of the OCC.  OCC
 approval does not constitute an endorsement of the Merger or a
 determination by the OCC that the terms of the Merger are fair to the
 stockholders of Lakeland.  An application for such approval was filed on
 March 22, 1995.  On March 22, 1995, Valley submitted a draft application
 to the Federal Reserve Board seeking a waiver of the requirement for
 approval of the Merger under Regulation Y promulgated under the BHCA.  The
 Merger and the Bank Merger cannot proceed in the absence of the requisite
 regulatory approvals.  While Valley and Lakeland anticipate receiving such
 approvals, there can be no assurance that they will be granted, or that
 they will be granted on a timely basis.  There can also be no assurance
 that any such approvals will not contain a condition or requirement which
 causes such approvals to fail to satisfy the conditions set forth in the
 Merger Agreement and described below under "-- Conditions to
 Consummation; Termination".  There can likewise be no assurance that the
 U.S. Department of Justice or a state Attorney General will not challenge
 the Merger or the Bank Merger or, if such a challenge is made, as to the
 result thereof.

 Conditions to Consummation; Termination

      Consummation of the Mergers is subject, among other things, to:
 (i) approval of the Merger Agreement by the requisite vote of the
 stockholders of Lakeland; (ii) the receipt of all consents, approvals and
 authorizations of all necessary federal government authorities and
 expiration of all required waiting periods, necessary for the consummation
 of the Merger (see "--Regulatory Approvals"); (iii) the effectiveness of
 the registration statement covering the shares of Valley Common Stock to be
 issued to Lakeland stockholders; (iv) qualification of the Merger to be
 treated by Valley as a pooling-of-interests for accounting purposes; and
 (v) receipt by the parties of an opinion of Pitney, Hardin, Kipp & Szuch to
 the effect that the exchange of Lakeland Common Stock for Valley Common
 Stock is a tax-free reorganization with the meaning of Section 368(a)(1)(A)
 of the Code.  See "THE MERGERS -- Certain Federal Income Tax Consequences".
 Consummation of the Merger is also conditioned on, among other things,
 (i) the continued accuracy in all material respects of the representations
 and warranties of Lakeland and Valley, respectively, contained in the
 Merger Agreement; (ii) the performance by Lakeland or Valley, as the case
 may be, in all material respects, of all obligations under the Merger
 Agreement; (iii) the absence of any litigation that would restrain or
 prohibit the consummation of the Merger; and (iv) receipt by the Board of
 Directors of Lakeland of a fairness opinion by Hopper Soliday.  See
 "THE MERGERS -- Opinion of Financial Advisor" and ANNEX B.

      Consummation of the Mergers is also subject to the satisfaction or
 waiver of various other conditions specified in the Merger Agreement,
 including, among others: (i) the delivery by Lakeland and Valley, each to
 the other, of (a) opinions of their respective counsel, and (b)
 certificates executed by certain of their respective executive officers as
 to compliance with the Merger Agreement; and (ii) the accuracy of the
 representations and warranties, and compliance in all material respects
 with the agreements and covenants, of the parties to the Merger Agreement.
    

      The Merger Agreement provides that, whether before or after the
 Special Meeting and notwithstanding the approval of the Merger Agreement by
 the stockholders of Lakeland, the Merger Agreement may be terminated and
 the Mergers abandoned at any time prior to the Effective Date: (i) by
 mutual consent of Valley and Lakeland; or (ii) by either Valley or
 Lakeland, (a) if the stockholders of Lakeland fail to approve the Merger
 Agreement, (b) if the Merger is not consummated on or before October 31,
 1995, or (c) if any necessary regulatory approval has been denied or
 withdrawn at the request or recommendation of the applicable regulatory
 agency or governmental authority or by Valley upon written notice to
 Lakeland if any such application is approved with conditions which
 materially impair the value of Lakeland and the Bank, taken as a whole, to
 Valley.

      The Merger Agreement also provides that the Merger Agreement may be
 terminated: (a) by Valley if (i) there shall have occurred a material
 adverse change in the business, operations, assets, or financial condition
 of Lakeland or the Bank, taken as a whole, from that disclosed by Lakeland
 on February 27, 1995; or (ii) if the net operating income excluding
 security gains and losses (after tax but excluding expenses related to the
 Mergers) of Lakeland for any full fiscal quarter after December 31, 1994,
 is materially less than the net income of Lakeland for each of the last two
 fiscal quarters of calendar year 1994; or (iii) there was a material breach
 in any representation, warranty, covenant, agreement or obligation of
 Lakeland; (b) by Lakeland, if (i) there shall have occurred a material
 adverse change in the business, operations, assets or financial condition
 of Valley or VNB from that disclosed by Valley on February 27, 1995; or
 (ii) if the net operating income excluding security gains and losses (after
 tax but excluding expenses related to the Mergers) of Valley for any full
 fiscal quarter after December 31, 1994, is materially less than the net
 income of Valley for each of the last two fiscal quarters of calendar year
 1994; or (iii) there was a material breach in any representation, warranty,
 covenant, agreement or obligation of Valley; (c) by Valley or Lakeland if
 any condition to Closing specified in the Merger Agreement applicable to
 such party cannot reasonably be met after giving the other party a
 reasonable opportunity to cure any such condition; or (d) by Lakeland in
 the event that the fiduciary responsibilities of the Board of Directors of
 Lakeland established under applicable law require Lakeland to participate
 or authorize participation in any "Acquisition Transaction," as defined in
 the Merger Agreement.  See ANNEX A.
   

      Upon termination of the Merger Agreement, the transactions
 contemplated thereby will be abandoned without further action by any party
 and each party will bear its own expenses, except that the cost of printing
 and mailing this Proxy Statement/Prospectus will be borne equally by Valley
 and Lakeland.  In the event of a termination, each party will retain all
 rights and  remedies  it  may  have  at law  or  equity  under  the  Merger
 Agreement.
    

 Amendment

      The Merger Agreement may be amended by mutual action taken by Valley
 and Lakeland at any time before or after the adoption of the Merger
 Agreement by the stockholders of Lakeland but, after any such adoption, no
 amendment can be made which reduces or changes the amount or form of the
 consideration to be delivered to the stockholders of Lakeland without the
 approval of such stockholders.  The Merger Agreement may not be amended,
 except by an instrument in writing signed on behalf of Valley, VNB,
 Lakeland, and the Bank.

 Extension; Waiver
   

      Lakeland, the Bank, Valley or VNB may, at any time prior to the
 Effective Time of the Merger: (i) extend the time for the performance of
 any of the obligations or other acts of the other; (ii) waive any
 inaccuracies in the representations and warranties contained in the Merger
 Agreement or in any document delivered pursuant to the Merger Agreement; or
 (iii) waive compliance with any of the agreements or conditions contained
 in the Merger Agreement.  Any agreement on the part of any party to any
 such extension or waiver shall be valid only if set forth in an instrument
 in writing signed on behalf of such party against which the waiver is
 sought to be enforced.

 Accounting Treatment

      The Merger is expected to be accounted for by Valley under the
 pooling-of-interests method of accounting.  As required by generally
 accepted accounting principles, under a pooling-of-interests, the assets
 and liabilities of Lakeland as of the Effective Time will be recorded at
 their respective historical cost net of depreciation and added to those of
 Valley.  Financial statements of Valley issued after consummation of the
 Merger would reflect such values.  Financial statements of Valley issued
 before consummation of the Merger will be restated retroactively to
 reflect Lakeland's historical financial position or results of operations. 
 See "UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION."
    

 Expenses

      All expenses incurred by or on behalf of the parties in connection
 with the Merger Agreement and the transactions contemplated thereby shall
 be borne by the party incurring the same, except that printing and mailing
 expenses will be shared equally by Valley and Lakeland if the Merger
 Agreement is terminated.

 Resale of Valley Common Stock by Affiliates
   

      The shares of Valley Common Stock that will be issued if the Merger is
 consummated have been registered under the Securities Act and will be
 freely transferable, except for shares received by persons, including
 directors and executive officers of Lakeland, who may be deemed to be
 "affiliates" of Lakeland under Rule 145 promulgated under the Securities
 Act.  An "affiliate" of an issuer is defined generally as a person who
 "controls" the issuer.  Directors, executive officers and 10% stockholders
 are presumed by the Commission to control the issuer.  Affiliates may not
 sell their shares of Valley Common Stock acquired pursuant to the Merger,
 except pursuant to an effective registration statement under the Securities
 Act covering the Valley Common Stock or in compliance with Rule 145
 requirements of the Securities Act.

      Persons who may be deemed to be "affiliates" of Lakeland have
 delivered letters to Valley in which they have agreed to certain
 restrictions on their ability to sell, transfer or otherwise dispose of
 ("transfer") any Lakeland Common Stock owned by them and any Valley Common
 Stock acquired by them in the Merger.  Pursuant to the accounting rules
 governing a pooling-of-interests, the affiliates of Lakeland have agreed
 not to transfer the shares during a period commencing with the period
 beginning 30 days prior to the Effective Time and ending on the date on
 which financial results covering at least 30 days of post-merger combined
 operations of Valley and Lakeland have been published by Valley or filed by
 Valley on a Form 8-K, 10-Q or 10-K.  Also, in connection with the pooling-
 of-interests rules, the affiliates have agreed not to transfer their
 Lakeland Common Stock in the period prior to 30 days before the Effective
 Time without giving Valley advance notice and an opportunity to object if
 the transfer would interfere with pooling-of-interests accounting for the
 Merger.  Pursuant to Rule 145, the affiliates have also agreed to refrain
 from transferring Valley Common Stock acquired by them in the Merger,
 except in compliance with certain restrictions imposed by Rule 145. 
 Certificates representing the shares of Valley Common Stock acquired by
 each such person pursuant to the Merger will bear a legend reflecting that
 the shares are restricted in accordance with the letter signed by such
 person and may not be transferred except in compliance with such
 restrictions.
    

      Persons who may be deemed "affiliates" of Valley have also delivered
 letters in which they have agreed not to transfer Valley Common Stock
 beneficially owned by them in violation of the pooling-of -interests
 restrictions set forth above with respect to Lakeland.


                          THE STOCK OPTION AGREEMENT

   
      Valley and Lakeland entered into the Stock Option Agreement in
 connection with the execution of the Letter of Intent.  Pursuant to the
 terms of the Stock Option Agreement, Lakeland has granted to Valley an
 Option to purchase up to 1,250,000 authorized but unissued shares of
 Lakeland Common Stock, or approximately 24.9% of the outstanding shares of
 Lakeland Common Stock.  The exercise price under the Stock Option Agreement
 is $21.00 per share.  Valley does not have any voting rights with respect
 to shares of Lakeland Common Stock subject to the Option prior to exercise
 of the Option.  The Stock Option Agreement is set forth as ANNEX C hereto.
    

      In the event that certain specifically enumerated "Triggering Events"
 occur, as defined below, including but not limited to the acquisition of
 beneficial ownership of at least 20% of the outstanding shares of Lakeland
 Common Stock by a person or group other than Valley or an affiliate of
 Valley, Valley may exercise the Option in whole or in part.  The ability of
 Valley to exercise the Option and to cause up to an additional 1,250,000
 shares of Lakeland Common Stock to be issued may be considered a deterrent
 to other potential acquisitions of control of Lakeland because it is likely
 to increase the cost of an acquisition of all of the shares of Lakeland
 Common Stock that would be outstanding.  In the event that a Triggering
 Event occurs and the Merger is not consummated, Valley would recognize a
 gain on the sale of the shares of Lakeland Common Stock received pursuant
 to the exercise of the Option if such shares of Lakeland Common Stock were
 sold at prices exceeding $21.00 per share.
   

      Upon or after the occurrence of certain "Triggering Events" 
 the Option may be exercised by Valley in whole or in part. 
 The term "Triggering Event" is defined to mean the occurrence of any of the
 following events: a person or group, as such terms are defined in the
 Exchange Act and the rules and regulations thereunder, other than Valley or
 an affiliate of Valley, (a) acquires beneficial ownership (as such term is
 defined in Rule 13d-3 promulgated under the Exchange Act) of at least 20%
 of the then outstanding shares of Lakeland Common Stock; (b) enters into a
 written letter of intent or an agreement with Lakeland pursuant to which
 such person would: (i) merge or consolidate, or enter into any similar
 transaction, with Lakeland; (ii) acquire all or a significant portion of
 the assets or liabilities of Lakeland; or (iii) acquire beneficial
 ownership of securities representing, or the right to acquire the
 beneficial ownership or to vote securities representing, 10% or more of the
 then outstanding shares of Lakeland Common Stock; or (c) makes a filing
 with any bank or thrift regulatory authorities or publicly announces a bona
 fide proposal (a "Proposal"), for (i) any merger, consolidation or
 acquisition of all or a significant portion of all the assets or
 liabilities of Lakeland or any other business combination involving
 Lakeland or (ii) a transaction involving the transfer of beneficial
 ownership of securities representing, or the right to acquire beneficial
 ownership or to vote securities representing, 20% or more of the
 outstanding shares of Lakeland Common Stock, and thereafter, if such
 Proposal has not been publicly withdrawn (as defined in the Stock Option
 Agreement) at least fifteen (15) days prior to the Lakeland Special Meeting
 called to vote on the Merger and Lakeland's stockholders fail to approve
 the Merger by the vote required by applicable law at the Lakeland Special
 Meeting; or (d) makes a bona fide Proposal and thereafter, but before such
 Proposal has been publicly withdrawn, Lakeland willfully takes any action
 in any manner that would materially interfere with its desire or ability to
 enter into a definitive Merger Agreement or its ability to consummate the
 Merger or materially reduce the value of the transaction to Valley.  The
 term "Triggering Event" is further defined as the taking of any direct or
 indirect action by Lakeland or any of its directors, officers or agents to
 invite, encourage or solicit any Proposal which has as its purpose a tender
 offer for the shares of Lakeland Common Stock, a merger, consolidation,
 plan of exchange, plan of acquisition or reorganization of Lakeland, or a
 sale of shares of Lakeland Common Stock or any significant portion of its
 assets or liabilities.  Under the Stock Option Agreement, a significant
 portion means 25% of the assets or liabilities of Lakeland.  "Publicly
 withdrawn" for purposes of the Stock Option Agreement means an
 unconditional bona fide withdrawal of the Proposal coupled with a public
 announcement of no further interest in pursuing such Proposal or acquiring
 any controlling influence over Lakeland or in soliciting or inducing any
 other person (other than Valley or any affiliate) to do so.

      Valley may not sell, assign or otherwise transfer its rights and
 obligations under the Stock Option Agreement in whole or in part to any
 person or any group of persons other than to an affiliate of Valley.
 Lakeland is not obligated to issue shares of Lakeland Common Stock upon
 exercise of the Option (i) in the absence of any required governmental
 or regulatory approval or consent necessary for Lakeland to issue the
 Lakeland Common Stock subject to such Option or Valley to exercise the
 Option or prior to the expiration or termination of any waiting period
 required by law; or (ii) so long as any injunction or other order,
 decree or ruling issued by any federal or state court of competent
 jurisdiction is in effect which prohibits the sale or delivery of the
 Lakeland Common Stock subject to the Option.
    

      The Stock Option Agreement further provides that after the occurrence
 of a Triggering Event and upon receipt of a written request from Valley,
 Lakeland shall prepare and file a registration statement with the
 Commission, covering the Option and such number of shares subject thereto
 as Valley shall specify in order to permit the sale or other disposition of
 the Option and the shares subject thereto; provided, however, that in no
 event will Valley have the right to have more than one such registration
 statement become effective, and provided further, that Lakeland shall not
 be required to prepare and file any such registration statement in
 connection with any proposed sale to which Lakeland's counsel delivers to
 Lakeland and to Valley an opinion to the effect that no filing is required
 under applicable laws and regulations.
   

      The exercise of the Option by Valley may also make pooling-of-
 interests accounting treatment unavailable to a subsequent acquiror.
    

                     DESCRIPTION OF VALLEY CAPITAL STOCK

      The authorized capital stock of Valley consists of 39,414,375 shares
 of Common Stock.  As of December 31, 1994, 30,269,824 shares of Common
 Stock were issued and outstanding, excluding treasury shares.
   

      Dividend  Rights.   Holders of  Valley  Common Stock  are entitled  to
 dividends when and if declared by  the Board of Directors of Valley  out of
 funds legally available for the payment of dividends. The only statutory
 limitation is that such dividends may not be paid when Valley is insolvent.
 Because funds for the payment of dividends by Valley must come primarily
 from the earnings of Valley's bank subsidiary, as a practical matter, any
 restrictions on the ability of VNB to pay dividends will act as
 restrictions on the amount of funds available for payment of dividends by
 Valley.

      As a national banking association, VNB is subject to limitation on the
 amount of dividends it may pay to Valley, VNB's only stockholder.  Prior
 approval by the OCC is required to the extent the total of all dividends to
 be declared by VNB in any calendar year exceeds net profits, as defined,
 for that year combined with VNB's retained net profits from the preceding
 two calendar years, less any transfers to capital surplus.  Under this
 limitation, VNB could declare dividends in 1995 without prior approval of
 the OCC of up to $65 million plus an amount equal to VNB's net profits for
 1995 to the date of such dividend declaration.
    

      Valley is also subject to the certain Federal Reserve Board policies
 which may, in certain circumstances, limit its ability to pay dividends. 
 These policies require, among other things, that a bank holding company
 maintain a minimum capital base.  The Federal Reserve Board would most
 likely seek to prohibit any dividend payment which would reduce a holding
 company's capital below these minimum amounts.
   

      Voting Rights.  At meetings of stockholders, holders of Valley Common
 Stock are entitled to one vote per share.  The quorum for stockholders'
 meeting is a majority of the outstanding shares.  Generally, actions and
 authorizations to be taken or given by stockholders require the approval of
 a majority of the votes cast by holders of Valley Common Stock at a meeting
 at which a quorum is present.

      Liquidation Rights. In the event of liquidation, dissolution or winding
 up of Valley, holders of Valley Common Stock are entitled to share
 equally and ratably in assets available for distribution after payment of
 debts and liabilities.

      Assessment and  Redemption.  All  outstanding shares of  Valley Common
 Stock are fully paid and nonassessable.  The Common Stock is not
 redeemable at the option of the issuer or the holders thereof.

      Other Matters.  The transfer agent and registrar for Valley Common Stock
 is presently American Stock Transfer and Trust Company.  Valley Common
 Stock is traded on the NYSE, and is registered with the Commission
 under Section 12(b) of the Exchange Act.  Valley also has outstanding
 stock purchase warrants issued in connection with a prior acquisition.
 As of December 31, 1994, warrants to purchase 593,318 shares
 of Common Stock were outstanding.


           COMPARISON OF RIGHTS OF VALLEY AND LAKELAND STOCKHOLDERS

      General.  Valley and Lakeland are both New Jersey general business
 corporations governed by the New Jersey Business Corporation Act and
 registered bank holding companies under the BHCA.  Therefore, there are no
 material differences in the legal rights of holders of shares of Lakeland
 Common Stock and Valley Common Stock under the New Jersey Business
 Corporation Act.  The following description of the Valley Common Stock sets
 forth certain general terms of the Valley Common Stock.
    

      The following is a comparison of certain provisions of the respective
 certificates of incorporation and bylaws of each of Lakeland and Valley. 
 This summary does not purport to be complete and is qualified in its
 entirety by reference to the certificates of incorporation and bylaws of
 each of Lakeland and Valley, which may be changed from time to time.
   

      Voting Requirements.  Under the New Jersey Business Corporation Act,
 unless a greater vote is specified in the certificate of incorporation,
 any amendment to a New Jersey corporation's certificate of incorporation,
 the voluntary dissolution of the corporation, or the sale or other
 disposition of all or substantially all of its assets otherwise than in
 the ordinary course of business or the merger or consolidation of the
 corporation with another corporation, requires in each case the
 affirmative vote of a majority of the votes cast by shareholders of the
 corporation entitled to vote thereon.  Lakeland's Certificate of
 Incorporation contains certain restrictions on "Business Combinations"
 with "Related Persons" which may be avoided by means of a super-majority
 vote of shareholders other than Related Persons.  No "Business
 Combination" (as defined in the Certificate of Incorporation) between
 Lakeland and a "Related Person" (defined in the Certificate of
 Incorporation to include persons who, together with their affiliates,
 own 10% or more of the voting power of Lakeland's capital stock)
 is valid or can be consummated unless (i) the proposed Business
 Combination is first approved by a majority of "Continuing Directors"
 (defined in the Certificate of Incorporation as directors (unaffiliated
 with the Related Person) who became directors prior to the time the Related
 Person became a Related Person, or who were subsequently nominated for
 director by a majority of other Continuing Directors) or (ii) the proposed
 Business Combination is first approved by the affirmative vote of 80% of
 the outstanding shares entitled to vote thereon and at least a majority of
 the outstanding shares not beneficially owned by the Related Person. 
 Valley's Certificate of Incorporation does not contain greater vote
 provisions than those required by the New Jersey Business Corporation Act.

      Classified Board of Directors. The New Jersey Business Corporation Act
 permits a New Jersey corporation to provide for a classified board in
 its certificate of incorporation.  The Certificate of Incorporation of
 Lakeland currently provides for a classified Board of Directors; the Board
 is divided into three classes, with one class of directors generally
 elected for three-year terms at each annual meeting.  Valley's Certificate
 of Incorporation does not presently contain any provision for a classified
 Board of Directors.

      Preferred Stock.  The authorized capital stock of Lakeland consists of
 15,000,000 shares of Lakeland Common Stock and 5,000,000 shares of serial
 preferred stock.  As of May 1, 1995, no preferred stock was issued
 or outstanding.  Under the terms of Lakeland's Certificate of
 Incorporation, the Board of Directors of Lakeland (provided two-thirds of a
 quorum approves) has authority at any time to divide any or all of the
 authorized but unissued shares of preferred stock into series, determine
 the designations, number of shares, relative rights, preferences, and
 limitations of any such series and authorize the issuance of such series. 
 Valley's Certificate of Incorporation does not presently contain any
 provision for authorization of preferred stock.

      Shareholder Consent to Corporate Action.  Except as otherwise provided
 by the certificate of incorporation, the New Jersey Business Corporation
 Act permits any action required or permitted to be taken at any meeting of
 a corporation's shareholders, other than the annual election of directors,
 to be taken without a meeting upon the written consent of shareholders who
 would have been entitled to cast the minimum number of votes necessary to
 authorize such action at a meeting of shareholders at which all
 shareholders entitled to vote were present and voting.  The annual election
 of directors, if not conducted at a shareholders' meeting, may only be
 effected by unanimous written consent.  Under the New Jersey Business
 Corporation Act, a shareholder vote on a plan of merger or consolidation,
 if not conducted at a shareholders' meeting, may only be effected by
 either: (i) unanimous written consent of all shareholders entitled to vote
 on the issue with advance notice to any other shareholders or (ii) written
 consent of shareholders who would have been entitled to cast the minimum
 number of votes necessary to authorize such action at a meeting, together
 with advance notice to all other shareholders.  Lakeland's Certificate of
 Incorporation specifically prohibits the taking of any stockholder action
 by written consent without a meeting, while Valley's Certificate of
 Incorporation presently is silent on this issue, thus permitting
 stockholder action by written consent to the fullest extent allowed under
 the New Jersey Business Corporation Act.

      Liquidation Rights.    In the  event of  liquidation, dissolution,  or
 winding up of Valley, holders of Valley Common Stock are entitled to share
 equally and ratably in assets available for distribution after payment of
 debts and liabilities.  In the event of liquidation, dissolution, or
 winding up of Lakeland, holders of Lakeland Common Stock are entitled to
 share equally and ratably in assets available for distribution after
 payment of debts and liabilities, except that if shares of preferred stock
 of Lakeland are outstanding at the time of liquidation, such shares of
 preferred stock may have prior rights upon liquidation.
    

                STOCKHOLDER PROPOSALS FOR 1995 ANNUAL MEETING

      If the Merger is not completed, the next annual meeting of
 stockholders of Lakeland is expected to be held in October 1995.  Any
 proposal that a stockholder wishes to have included in Lakeland's Proxy
 Statement/Prospectus for the 1995 Annual Meeting must be received by the
 Secretary of Lakeland at Lakeland's executive offices, 250 Route 10,
 Succasunna, New Jersey 07876, not later than May 23, 1995.  If such
 proposal is in compliance with the requirements of Rule 14a-8 under the
 Exchange Act and Article XI of Lakeland's by-laws, the proposal will be
 included in the Proxy Statement/Prospectus and set forth on the form of
 proxy issued for the 1995 Annual Meeting.  It is urged that any such
 proposals be sent by certified mail, return receipt requested.

                                LEGAL OPINIONS
   

      Certain legal matters associated with the Mergers will be passed for
 Lakeland upon by Malizia, Spidi, Sloane & Fisch, P.C., Washington, D.C.,
 special counsel for Lakeland.  Certain legal matters relating to the
 issuance of the shares of Valley Common Stock offered hereby will be passed
 upon by Pitney, Hardin, Kipp & Szuch, counsel to Valley.  Attorneys in the
 law firm of Pitney, Hardin, Kipp & Szuch, beneficially own 5,001 shares of
 Valley Common Stock as of April 25, 1995.
    

                                   EXPERTS

      The consolidated balance sheets of Lakeland as of June 30, 1994 and
 1993, and the related consolidated statements of operations, stockholders'
 equity and cash flows for each of the years in the three-year period ended
 June 30, 1994, included in Lakeland's 1994 Annual Report to Stockholders
 which is incorporated by reference in Lakeland's Annual Report on Form 10-K
 for the fiscal year ended June 30, 1994, have been incorporated herein in
 reliance on the report of Stephen P. Radics & Co., independent certified
 public accountants, and upon the authority of said firm as experts in
 accounting and auditing.

      The consolidated financial statements of Valley as of December 31,
 1994 and 1993 and for each of the years in the three-year period ended
 December 31, 1994 have been incorporated by reference herein and in the
 Registration Statement in reliance upon the report of KPMG Peat Marwick
 LLP, independent certified public accountants, incorporated by reference
 herein upon the authority of said firm as experts in accounting and
 auditing.  The report of KPMG Peat Marwick LLP covering the December 31,
 1994 consolidated financial statements refers to a change in accounting
 for certain investments in debt and equity securities in 1994 and accounting
 for income taxes in 1993.

      Representatives of Stephen P. Radics & Co., will be present at the
 Special Meeting, will be given an opportunity to make a statement, if they
 so desire, and will be available to respond to any appropriate questions.

                                OTHER MATTERS

      As of the date of this Proxy Statement/Prospectus, the Board of
 Directors of Lakeland knows of no matters which will be presented for
 consideration at the Special Meeting other than as set forth in the Notice
 of Special Meeting accompanying this Proxy Statement/Prospectus.  However,
 if any other matters shall come before the meeting or any adjournments
 thereof and be voted upon, the enclosed Proxy shall be deemed to confer
 discretionary authority to the individuals named as proxies therein to vote
 the shares represented by such Proxy as to any such matters.

                       SUBSEQUENT FILINGS INCORPORATED
                                 BY REFERENCE

      All documents filed by Lakeland or Valley pursuant to Sections 13(a),
 13(c), 14, or 15(d) of the Exchange Act subsequent to the date hereof and
 prior to the earlier of the Effective Time or the termination of the Merger
 Agreement are hereby incorporated by reference into this Proxy
 Statement/Prospectus and shall be deemed a part hereof from the date of
 filing of such documents.

 <PAGE>
                                                                   ANNEX A


                       AMENDED AND RESTATED
                   AGREEMENT AND PLAN OF MERGER

           THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER,
 dated as of April 21, 1995 ("Agreement"), is among Valley National
 Bancorp, a New Jersey corporation and registered bank holding
 company ("Valley"), Valley National Bank, a national banking
 association ("VNB"), Lakeland First Financial Group, Inc., a New
 Jersey corporation and registered bank holding company
 ("Lakeland") and Lakeland Savings Bank, a savings bank chartered
 under the laws of New Jersey (the "Bank").

           Valley desires to acquire Lakeland and Lakeland's Board
 of Directors has determined, based upon the terms and conditions
 hereinafter set forth, that the acquisition is in the best
 interests of Lakeland and its stockholders.  The acquisition will
 be accomplished by merging Lakeland into Valley with Valley as the
 surviving corporation and, at the same time, merging the Bank into
 VNB with VNB as the surviving bank, and Lakeland shareholders
 receiving the consideration hereinafter set forth.  The Boards of
 Directors of Lakeland, Valley, the Bank and VNB have duly adopted
 and approved this Agreement and the Board of Directors of Lakeland
 has directed that it be submitted to its shareholders for approval.

           Lakeland and Valley entered into a letter of intent,
 dated January 26, 1995 (the "Letter of Intent"), and a Stock Option
 Agreement, dated January 26, 1995 (the "Valley Stock Option"), in
 contemplation of entering into this Agreement.

           This Agreement was originally entered into on February 27,
 1995, and the parties desire to amend and restate this Agreement to
 take into account the 5% common stock dividend declared by Valley's
 Board of Directors and payable on May 2, 1995 to shareholders of
 record on April 14, 1995 (the "Second Quarter Stock Dividend") and
 the exchange ratio adjustment necessitated thereby, and also to
 reflect their mutual understanding that Valley stock options will
 be issued in exchange for Lakeland stock options in the Merger only
 to employees and directors of Lakeland who will become employees or
 directors of Valley at the Effective Time of the Merger.

           Accordingly, the parties hereto agree as follows:

                             ARTICLE I

                            THE MERGER

           1.1.  THE MERGER.  Subject to the terms and conditions of
 this Agreement, at the Effective Time (as hereafter defined),
 Lakeland shall be merged with and into Valley (the "Merger") in
 accordance with the New Jersey Business Corporation Act and Valley
 shall be the surviving corporation (the "Surviving Corporation"). 
 Immediately following the Effective Time, the Bank shall be merged
 with and into VNB as provided in Section 1.7 hereof.

           1.2.  EFFECT OF THE MERGER.  At the Effective Time (as
 hereafter defined), the Surviving Corporation shall be considered
 the same business and corporate entity as each of Lakeland and
 Valley and thereupon and thereafter, all the property, rights,
 powers and franchises of each of Lakeland and Valley shall vest in
 the Surviving Corporation and the Surviving Corporation shall be
 subject to and be deemed to have assumed all of the debts,
 liabilities, obligations and duties of each of Lakeland and Valley
 and shall have succeeded to all of each of their relationships,
 fiduciary or otherwise, as fully and to the same extent as if such
 property rights, privileges, powers, franchises, debts,
 obligations, duties and relationships had been originally acquired,
 incurred or entered into by the Surviving Corporation.

           1.3.  CERTIFICATE OF INCORPORATION.  The certificate of
 incorporation of Valley as it exists immediately prior to the
 Effective Time shall not be amended by the Merger, but shall
 continue as the certificate of incorporation of the Surviving
 Corporation until otherwise amended as provided by law.

           1.4.  BYLAWS.  The bylaws of Valley as they exist
 immediately prior to the Effective Date shall continue as the by-
 laws of the Surviving Corporation until otherwise amended as
 provided by law.

           1.5.  DIRECTORS AND OFFICERS.  The directors and officers
 of Valley as of the Effective Time shall continue as the directors
 and officers of the Surviving Corporation with the additions
 provided for in Section 5.15 hereof.

           1.6.  EFFECTIVE TIME AND CLOSING.  The Merger shall
 become effective (and be consummated) upon the filing of the 
 certificate of merger (the "Certificate of Merger") with the New
 Jersey Secretary of State.  The term "Effective Time" shall mean
 the date and time when the Certificate of Merger is so filed.  A
 closing (the "Closing") shall take place prior to the Effective
 Time at 10:00 a.m., on the first day of the month next following
 the receipt of all necessary regulatory and governmental approvals
 and consents and the expiration of all statutory waiting periods in
 respect thereof and the satisfaction or waiver of the conditions to
 the consummation of the Merger specified in Article VI hereof
 (other than the delivery of certificates, opinions and other
 instruments and documents to be delivered at the Closing), at
 Valley's main office or at such other place, time or date as Valley
 and Lakeland may mutually agree upon.  When all necessary
 regulatory and governmental approvals and consents have been
 received and all statutory waiting periods in respect thereto are
 scheduled to expire on a date certain (or have already expired) and
 all other conditions to the consummation of the Merger specified in
 Article VI hereof (other than the delivery of certificates,
 opinions and other instruments and documents to be delivered at the
 Closing) have been met, then the parties shall schedule a date for
 the Closing (the "Scheduled Closing Date").  Immediately following
 the Closing, the Certificate of Merger shall be filed with the New
 Jersey Secretary of State.

           1.7.  THE BANK MERGER.  Immediately following the
 Effective Time, the Bank shall be merged with and into VNB (the
 "Bank Merger") in accordance with the provisions of the National
 Bank Act and the New Jersey Banking Act of 1948, as amended, and
 VNB shall be the surviving bank (the "Surviving Bank").  Upon the
 consummation of the Bank Merger, the separate existence of the Bank
 shall cease and the Surviving Bank shall be considered the same
 business and corporate entity as each of the Bank and VNB and all
 of the property, rights, powers and franchises of each of the Bank
 and VNB shall vest in the Surviving Bank and the Surviving Bank
 shall be deemed to have assumed all of the debts, liabilities,
 obligations and duties of each of the Bank and VNB and shall have
 succeeded to all of each of their relationships, fiduciary or
 otherwise, as fully and to the same extent as if such property
 rights, privileges, powers, franchises, debts, obligations, duties
 and relationships had been originally acquired, incurred or entered
 into by the Surviving Bank.  Upon the consummation of the Bank
 Merger, the articles of association and bylaws of VNB shall become
 the articles of association and bylaws of the Surviving Bank and
 the officers, employees and directors of VNB and the officers and
 employees of the Bank shall be the officers, employees and
 directors of the Surviving Bank with such additions from the
 directors of Lakeland as specified herein.  In connection with the
 execution of this Agreement, the Bank and VNB shall execute and
 deliver a separate merger agreement (the "Bank Merger Agreement")
 in the form of Appendix A, annexed hereto, for delivery to the OCC
 (as hereafter defined) and the Commissioner (as hereafter defined)
 for approval of the Bank Merger.

                            ARTICLE II

                   CONVERSION OF LAKELAND SHARES

           2.1.  CONVERSION OF LAKELAND SHARES AND OPTIONS.  Each
 share of common stock, $0.10 par value, of Lakeland ("Lakeland
 Common Stock"), issued and outstanding immediately prior to the
 Effective Time, and each validly outstanding option to purchase
 Lakeland Common Stock, shall, by virtue of the Merger and without
 any action on the part of the holder thereof, be converted, paid or
 cancelled as follows:

           (a)  LAKELAND COMMON STOCK.  Each share of Lakeland
 Common Stock shall be converted into and represent the right to
 receive 1.286 (the "Exchange Ratio") shares of Valley's common
 stock, no par value ("Valley Common Stock"), subject to adjustments
 as set forth in this subsection 2.1(a).

                (i)  This Agreement has been amended and restated to
      reflect adjustment of the Exchange Ratio to account for the
      Second Quarter Stock Dividend.  The Exchange Ratio and the
      Average Closing Price (as hereafter defined) shall be
      appropriately adjusted for any stock split, stock dividend,
      stock combination, reclassification or similar transaction
      ("Capital Change") effected by Valley with respect to Valley
      Common Stock between April 21, 1995 and the Effective Date.
      The parties shall mutually agree upon such adjustment in
      writing or, if unable to agree, shall arbitrate the dispute,
      using a mutually agreed upon arbitrator whose decision shall
      be final and non-appealable.

                (ii)  No fractional shares of Valley Common Stock
      will be issued, and in lieu thereof, each holder of Lakeland
      Common Stock who would otherwise be entitled to a fractional
      interest will receive an amount in cash determined by
      multiplying such fractional interest by the Average Closing
      Price (as hereafter defined).

                (iii)     The "Average Closing Price" shall mean the
      average price of Valley Common Stock calculated based upon the
      closing price during the first 10 of the 15 consecutive
      trading days immediately preceding the Closing.  The Average
      Closing Price shall be determined by (x) first, recording the
      closing price (the "Daily Price") of Valley Common Stock
      reported on the New York Stock Exchange and published in THE
      WALL STREET JOURNAL during the first 10 of the 15 consecutive
      trading days immediately preceding the Closing; and
      (y) second, computing the average of the Daily Prices in the
      10 day period.

           (b)  LAKELAND STOCK OPTIONS.  At the Effective Time, each
 outstanding option to purchase Lakeland Common Stock (a "Lakeland
 Option") granted under the Stock Option Plans of Lakeland (the
 "Lakeland Option Plans") shall be converted, at the election of the
 holder of such Lakeland Option (an "optionee"), provided that only
 an optionee who is an employee or director of Lakeland or the Bank
 at the Effective Time and who will become an employee or director
 of Valley or VNB immediately after the Effective Time shall be
 entitled to receive an option to purchase Valley Common Stock as
 set forth in paragraph (i) below:

                (i)  into an option to purchase Valley Common Stock,
      wherein (x) the right to purchase shares of Lakeland Common
      Stock pursuant to the Lakeland Option shall be converted into
      the right to purchase that same number of shares of Valley
      Common Stock multiplied by the Exchange Ratio, (y) the option
      exercise price per share of Valley Common Stock shall be the
      previous option exercise price per share of the Lakeland
      Common Stock divided by the Exchange Ratio and (z) in all
      other material respects the option shall be subject to the
      same terms and conditions as governed the Lakeland Option on
      which it was based, including the length of time within which
      the option may be exercised and for any options which are
      "incentive stock options" (as defined in Section 422 of the
      Internal Revenue Code of 1986, as amended (the "Code"), the
      adjustments shall be and are intended to be effected in a
      manner which is consistent with Section 424(a) of the Code; or

                (ii) if the Lakeland Option is fully vested at the
      Closing, into the right to receive immediately after the
      Effective Time a number of whole shares of Valley Common Stock
      equal to (x) the excess of the sum determined by multiplying
      (A) the number of shares of Lakeland Common Stock covered by
      the Lakeland Option, times (B) the Exchange Ratio, times (C)
      the Average Closing Price, less (y) the aggregate exercise
      price for the Lakeland Option (z) divided by the Average
      Closing Price.  No fractional shares of Valley Common Stock
      shall be issued pursuant to this Section 2.1(b)(ii), and in
      lieu thereof, each optionee who would otherwise be entitled to
      a fractional interest will receive an amount in cash
      determined by multiplying such fractional interest by the
      Average Closing Price.

           2.2.  EXCHANGE OF SHARES.

           (a)  Lakeland and Valley hereby appoint Valley National
 Bank, Trust Department (the "Exchange Agent") as the Exchange Agent
 for purposes of effecting the conversion of Lakeland Common Stock
 and Lakeland Options.  As soon as practicable after the Effective
 Time, the Exchange Agent shall mail to each holder of record (a
 "Record Holder") of a certificate or certificates which,
 immediately prior to the Effective Time represented outstanding
 shares of Lakeland Common Stock (the "Certificates"), a mutually
 agreed upon letter of transmittal (which shall specify that
 delivery shall be effected, and risk of loss and title to the
 Certificates shall pass, only upon delivery of the Certificates to
 the Exchange Agent), and instructions for use in effecting the
 surrender of the Certificates in exchange for Valley Common Stock
 (and cash in lieu of fractional shares) as provided in Section 2.1. 
 Upon surrender of a Certificate for exchange and cancellation to
 the Exchange Agent, together with such letter of transmittal, duly
 executed, the Record Holder shall be entitled to promptly receive
 in exchange for such Certificate the consideration as provided in
 Section 2.1 hereof and the Certificates so surrendered shall be
 cancelled.  The Exchange Agent shall not be obligated to deliver or
 cause to be delivered to any Record Holder the consideration to
 which such Record Holder would otherwise be entitled until such
 Record Holder surrenders the Certificate for exchange or, in
 default thereof, an appropriate Affidavit of Loss and Indemnity
 Agreement and/or a bond as may be reasonably required in each case
 by Valley.  Notwithstanding the time of surrender of the
 Certificates, Record Holders shall be deemed shareholders of Valley
 for all purposes from the Effective Time, except that Valley shall
 withhold the payment of dividends from any Record Holder until such
 Record Holder effects the exchange of Certificates for Valley
 Common Stock.  (Such Record Holder shall receive such withheld
 dividends, without interest, upon effecting the share exchange.) 
 With respect to each outstanding Lakeland Option the Exchange Agent
 shall, 10 days prior to Closing, distribute option election forms
 to each optionee and, upon receipt from the optionee of a properly
 completed option election, shall after the Effective Time
 distribute to the optionee Valley Common Stock or an amendment to
 the option grant evidencing the conversion of the grant to an
 option to purchase Valley Common Stock in accordance with Section
 2.1 hereof.

           (b)  After the Effective Time, there shall be no
 transfers on the stock transfer books of Lakeland of the shares of
 Lakeland Common Stock which were outstanding immediately prior to
 the Effective Time and, if any Certificates representing such
 shares are presented for transfer, they shall be cancelled and
 exchanged for the consideration as provided in Section 2.1 hereof.

           (c)  If payment of the consideration pursuant to Section
 2.1 hereof is to be made in a name other than that in which the
 Certificate surrendered in exchange therefor is registered, it
 shall be a condition of such payment that the Certificate so
 surrendered shall be properly endorsed (or accompanied by an
 appropriate instrument of transfer) and otherwise in proper form
 for transfer, and that the person requesting such payment shall pay
 to the Exchange Agent in advance any transfer or other taxes
 required by reason of the payment to a person other than that of
 the registered holder of the Certificate surrendered, or required
 for any other reason, or shall establish to the satisfaction of the
 Exchange Agent that such tax has been paid or is not payable.

           2.3.  NO DISSENTERS' RIGHTS.  Consistent with the
 provisions of the New Jersey Business Corporation Act, no
 shareholder of Lakeland shall have the right to dissent.

           2.4.  VALLEY SHARES.  The shares of Valley Common Stock
 outstanding at the Effective Time shall not be affected by the
 Merger, but along with the additional shares of Valley Common Stock
 to be issued as provided in Section 2.1 hereof, shall become the
 outstanding common stock of the Surviving Corporation.

                            ARTICLE III

            REPRESENTATIONS AND WARRANTIES OF LAKELAND

           References herein to "Lakeland Disclosure Schedule" shall
 mean all of the disclosure schedules required by this Article III,
 dated as of the date hereof and referenced to the specific sections
 and subsections of Article III of this Agreement, which have been
 delivered on the date hereof by Lakeland to Valley.  Lakeland
 hereby represents and warrants to Valley as follows:

           3.1.  CORPORATE ORGANIZATION.

           (a)  Lakeland is a corporation duly organized, validly
 existing and in good standing under the laws of the State of New
 Jersey.  Lakeland has the corporate power and authority to own or
 lease all of its properties and assets and to carry on its business
 as it is now being conducted and is duly licensed or qualified to
 do business in each jurisdiction in which the nature of the
 business conducted by it or the character or location of the
 properties and assets owned or leased by it makes such licensing or
 qualification necessary, except where the failure to be so licensed
 or qualified would not have a material adverse effect on the
 business, operations, assets or financial condition of Lakeland on
 a consolidated basis.  Lakeland is registered as a bank holding
 company under the Bank Holding Company Act of 1956, as amended
 ("BHCA").

           (b)  Each of the Subsidiaries of Lakeland are listed in
 the Lakeland Disclosure Schedule.  The term "Subsidiary", when used
 in this Agreement with respect to Lakeland, means any corporation,
 joint venture, association, partnership, trust or other entity in
 which Lakeland has, directly or indirectly at least a 50% interest
 or acts as a general partner.  Each Subsidiary of Lakeland is duly
 organized, validly existing and in good standing under the laws of
 its state of incorporation.  The Bank is a New Jersey savings bank
 whose deposits are insured by the Savings Association Insurance
 Fund of the Federal Deposit Insurance Corporation ("FDIC") to the
 fullest extent permitted by law.  Each Subsidiary of Lakeland has
 the corporate power and authority to own or lease all of its
 properties and assets and to carry on its business as it is now
 being conducted and is duly licensed or qualified to do business in
 each jurisdiction in which the nature of the business conducted by
 it or the character or location of the properties and assets owned
 or leased by it makes such licensing or qualification necessary,
 except where the failure to be so licensed or qualified would not
 have a material adverse effect on the business, operations, assets
 or financial condition of Lakeland and its Subsidiaries.  The
 Lakeland Disclosure Schedule sets forth true and complete copies of
 the Certificate of Incorporation and Bylaws of Lakeland and each
 Lakeland Subsidiary as in effect on the date hereof.  Except as set
 forth in the Lakeland Disclosure Schedule, Lakeland does not own or
 control, directly or indirectly, any equity interest in any
 corporation, company, association, partnership, joint venture or
 other entity and owns no real estate, except (i) residential real
 estate acquired through foreclosure or deed in lieu of foreclosure
 in each individual instance with a fair market value less than
 $500,000 and (ii) real estate used for its banking premises.

           3.2.  CAPITALIZATION.  The authorized capital stock of
 Lakeland consists of 15,000,000 shares of Lakeland Common Stock and
 5,000,000 shares of preferred stock ("Lakeland Preferred Stock"). 
 As of February 3, 1995, there were 3,901,770 shares of Lakeland
 Common Stock issued and outstanding and no shares issued and held
 in the treasury.  There are no shares of Lakeland Preferred Stock
 issued or outstanding.  As of February 3, 1995, there were 110,157
 shares of Lakeland Common Stock issuable upon exercise of
 outstanding Lakeland Options granted to directors, officers and
 employees of the Bank pursuant to the Lakeland Option Plan.  The
 Lakeland Disclosure Schedule sets forth true and complete copies of
 the Lakeland Option Plans and of each outstanding Lakeland Option. 
 All issued and outstanding shares of Lakeland Common Stock, and all
 issued and outstanding shares of capital stock of each Lakeland
 Subsidiary, have been duly authorized and validly issued, are fully
 paid, and nonassessable.  The authorized capital stock of the Bank
 consists of 10,000,000 shares of common stock, $2.00 par value. 
 All of the outstanding shares of capital stock of each Lakeland
 Subsidiary are owned by Lakeland and are free and clear of any
 liens, encumbrances, charges, restrictions or rights of third
 parties.  Except for the Lakeland Options and the Valley Stock
 Option, neither Lakeland nor any Lakeland Subsidiary has or is
 bound by any outstanding subscriptions, options, warrants, calls,
 commitments or agreements of any character calling for the
 transfer, purchase or issuance of any shares of capital stock of
 Lakeland or any Lakeland Subsidiary or any securities representing
 the right to purchase or otherwise receive any shares of such
 capital stock or any securities convertible into or representing
 the right to purchase or subscribe for any such shares, and there
 are no agreements or understandings with respect to voting of any
 such shares.

           3.3.  AUTHORITY; NO VIOLATION.

           (a)  Subject to the approval of this Agreement and the
 transactions contemplated hereby by the shareholders of Lakeland,
 and subject to the parties obtaining all necessary regulatory
 approvals, Lakeland and the Bank have full corporate power and
 authority to execute and deliver this Agreement and to consummate
 the transactions contemplated hereby in accordance with the terms
 hereof.  The execution and delivery of this Agreement and the
 consummation of the transactions contemplated hereby have been duly
 and validly approved by the Board of Directors of each of Lakeland
 and the Bank.  The execution and delivery of the Bank Merger
 Agreement has been duly and validly approved by the Board of
 Directors of the Bank.  Except for the approvals described in
 paragraph (b) below, no other corporate proceedings on the part of
 Lakeland or the Bank are necessary to consummate the transactions
 contemplated hereby (except for the approval by Lakeland of the
 Bank Merger Agreement).  This Agreement has been duly and validly
 executed and delivered by Lakeland and the Bank, and constitutes
 valid and binding obligations of Lakeland and the Bank, enforceable
 against Lakeland and the Bank in accordance with its terms.  

           (b)  Neither the execution and delivery of this Agreement
 by Lakeland and the Bank, nor the consummation by Lakeland and the
 Bank of the transactions contemplated hereby in accordance with the
 terms hereof, or compliance by Lakeland and the Bank with any of
 the terms or provisions hereof, will (i) violate any provision of
 Lakeland's or the Bank's Certificate of Incorporation or other
 governing instrument or Bylaws, (ii) assuming that the consents and
 approvals set forth below are duly obtained, violate any statute,
 code, ordinance, rule, regulation, judgment, order, writ, decree or
 injunction applicable to Lakeland or the Bank or any of their
 respective properties or assets, or (iii) except as set forth in
 the Lakeland Disclosure Schedule, violate, conflict with, result in
 a breach of any provisions of, constitute a default (or an event
 which, with notice or lapse of time, or both, would constitute a
 default) under, result in the termination of, accelerate the
 performance required by, or result in the creation of any lien,
 security interest, charge or other encumbrance upon any of the
 respective properties or assets of Lakeland or the Bank under, any
 of the terms, conditions or provisions of any note, bond, mortgage,
 indenture, deed of trust, license, lease, agreement or other
 instrument or obligation to which Lakeland or the Bank is a party,
 or by which either or both of them or any of their respective
 properties or assets may be bound or affected except, with respect
 to (ii) and (iii) above, such as individually and in the aggregate
 will not have a material adverse effect on the business,
 operations, assets or financial condition of Lakeland and its
 Subsidiaries on a consolidated basis, and which will not prevent or
 delay the consummation of the transactions contemplated hereby. 
 Except for consents and approvals of or filings or registrations
 with or notices to the Comptroller of the Currency ("OCC"), the
 Commissioner of Banking of the State of New Jersey (the
 "Commissioner"), the Board of Governors of the Federal Reserve
 System ("FRB"), the Securities and Exchange Commission ("SEC"), the
 New Jersey Secretary of State, and the shareholders of Lakeland, no
 consents or approvals of or filings or registrations with or
 notices to any third party or any public body or authority are
 necessary on behalf of Lakeland or the Bank in connection with (x)
 the execution and delivery by Lakeland and the Bank of this
 Agreement and (y) the consummation by Lakeland and the Bank of
 transactions contemplated hereby and (z) the execution and delivery
 by the Bank of the Bank Merger Agreement and the consummation by
 the Bank of the transactions contemplated thereby.

           3.4.  FINANCIAL STATEMENTS.

           (a)  The Lakeland Disclosure Schedule sets forth copies
 of the consolidated statements of condition of Lakeland as of June
 30, 1992, 1993 and 1994, and the related consolidated statements of
 income, stockholders' equity and cash flows for the periods ended
 June 30 in each of the three years 1992 through 1994, in each case
 accompanied by the audit report of Stephen P. Radics, independent
 public accountants with respect to Lakeland, and the unaudited
 consolidated statements of condition and related consolidated
 statements of income, stockholders' equity and cash flows of
 Lakeland for the periods ended September 30, 1994 and December 31,
 1994, as filed with the SEC on Form 10-Q  under the Securities
 Exchange Act of 1934, as amended (the "1934 Act") (collectively,
 the "Lakeland Financial Statements").  The Lakeland Financial
 Statements (including the related notes) have been prepared in
 accordance with generally accepted accounting principles ("GAAP")
 consistently applied during the periods involved, and fairly
 present the consolidated financial condition of Lakeland as of the
 respective dates set forth therein, and the related consolidated
 statements of income, stockholders' equity and cash flows fairly
 present the results of the consolidated operations, stockholders'
 equity and cash flows of Lakeland for the respective periods set
 forth therein.

           (b)  The books and records of Lakeland and its
 Subsidiaries have been and are being maintained in material
 compliance with applicable legal and accounting requirements, and
 reflect only actual transactions.

           (c)  Except as and to the extent reflected, disclosed or
 reserved against in the Lakeland Financial Statements (including
 the notes thereto), as of December 31, 1994 neither Lakeland nor
 any of its Subsidiaries had any material liabilities, whether
 absolute, accrued, contingent or otherwise material to the
 business, operations, assets or financial condition of Lakeland or
 any of its Subsidiaries.  Since December 31, 1994 and to the date
 hereof, neither Lakeland nor any of its Subsidiaries have incurred
 any material liabilities except in the ordinary course of business
 and consistent with prudent banking practice, except as
 specifically contemplated by this Agreement.

           3.5.  BROKERAGE FEES.  Neither Lakeland nor any of its
 Subsidiaries nor any of their respective directors or officers has
 employed any broker or finder or incurred any liability for any
 broker's or finder's fees or commissions in connection with any of
 the transactions contemplated by this Agreement, except for Hopper
 Soliday & Co., Inc. ("Hopper Soliday").  Copies of the agreements
 with Hopper Soliday are set forth in the Lakeland Disclosure
 Schedule.

           3.6.  ABSENCE OF CERTAIN CHANGES OR EVENTS.

           (a)  There has not been any material adverse change in
 the business, operations, assets or financial condition of Lakeland
 and its Subsidiaries on a consolidated basis since December 31,
 1994 and to Lakeland's knowledge, no facts or conditions exist
 which Lakeland believes will cause or is likely to cause such a
 material adverse change in the future.

           (b)  Except as set forth in the Lakeland Disclosure
 Schedule, neither Lakeland nor any of its Subsidiaries has taken or
 permitted any of the actions set forth in Section 5.2 hereof
 between December 31, 1994 and the date hereof and Lakeland and the
 Lakeland Subsidiaries have conducted their business only in the
 ordinary course, consistent with past practice.

           3.7.  LEGAL PROCEEDINGS.  Except as disclosed in the
 Lakeland Disclosure Schedule, neither Lakeland nor any of its
 Subsidiaries is a party to any, and there are no pending or, to
 Lakeland's knowledge, threatened, legal, administrative, arbitral
 or other proceedings, claims, actions or governmental
 investigations of any nature against Lakeland or any of its
 Subsidiaries.  Except as disclosed in the Lakeland Disclosure
 Schedule, neither Lakeland nor any of its Subsidiaries is a party
 to any order, judgment or decree entered against Lakeland or any
 Lakeland Subsidiary in any lawsuit or proceeding.

           3.8.  TAXES AND TAX RETURNS.

           (a)  To its knowledge, Lakeland and each Lakeland
 Subsidiary have duly filed (and until the Effective Time will so
 file) all returns, declarations, reports, information returns and
 statements ("Returns") required to be filed by them in respect of
 any federal, state and local taxes (including withholding taxes,
 penalties or other payments required) and each has duly paid (and
 until the Effective Time will so pay) all such taxes due and
 payable, other than taxes or other charges which are being
 contested in good faith (and disclosed to Valley in writing). 
 Lakeland and each Lakeland Subsidiary have established (and until
 the Effective Time will establish) on their books and records
 reserves for the payment of all federal, state and local taxes not
 yet due and payable, but incurred in respect of Lakeland or any
 Lakeland Subsidiary through such date, which reserves are, to the
 knowledge of Lakeland, adequate for such purposes.  Except as set
 forth in the Lakeland Disclosure Schedule, the federal income tax
 returns of Lakeland and its Subsidiaries have been examined by the
 Internal Revenue Service (the "IRS") (or are closed to examination
 due to the expiration of the applicable statute of limitations) and
 no deficiencies were asserted as a result of such examinations
 which have not been resolved and paid in full.  Except as set forth
 in the Lakeland Disclosure Schedule, the applicable state income
 tax returns of Lakeland and its Subsidiaries have been examined by
 the applicable authorities (or are closed to examination due to the
 expiration of the statute of limitations) and no deficiencies were
 asserted as a result of such examinations which have not been
 resolved and paid in full.  To the knowledge of Lakeland, there are
 no audits or other administrative or court proceedings presently
 pending nor any other disputes pending, or claims asserted for,
 taxes or assessments upon Lakeland or any of its Subsidiaries, nor
 has Lakeland or any of its Subsidiaries given any currently
 outstanding waivers or comparable consents regarding the
 application of the statute of limitations with respect to any taxes
 or tax Returns.

           (b)  Except as set forth in the Lakeland Disclosure
 Schedule, neither Lakeland nor any of its Subsidiaries (i) has
 requested any extension of time within which to file any tax Return
 which Return has not since been filed, (ii) is a party to any
 agreement providing for the allocation or sharing of taxes, (iii)
 is required to include in income any adjustment pursuant to Section
 481(a) of the Code, by reason of a voluntary change in accounting
 method initiated by Lakeland or any Lakeland Subsidiary (nor does
 Lakeland have any knowledge that the IRS has proposed any such
 adjustment or change of accounting method) or (iv) has filed a
 consent pursuant to Section 341(f) of the Code or agreed to have
 Section 341(f)(2) of the Code apply.

           3.9.  EMPLOYEE BENEFIT PLANS.  Except as disclosed in the
 Lakeland Disclosure Schedule: 

           (a)  Neither Lakeland nor any of its Subsidiaries
 maintains or contributes to any "employee pension benefit plan",
 within the meaning of Section 3(2)(A) of the Employee Retirement
 Income Security Act of 1974, as amended ("ERISA") (the "Lakeland
 Pension Plans"), "employee welfare benefit plan", within the
 meaning of Section 3(1) of ERISA (the "Lakeland Welfare Plans"),
 stock option plan, stock purchase plan, deferred compensation plan,
 severance plan, bonus plan, employment agreement or other similar
 plan, program or arrangement.  Neither Lakeland nor any of its
 Subsidiaries has, since September 2, 1974, contributed to any
 "Multiemployer Plan", within the meaning of Sections 3(37) and
 4001(a)(3) of ERISA.

           (b)  Lakeland has delivered to Valley a complete and
 accurate  copy of each of the following with respect to each of the
 Lakeland Pension Plans and Lakeland Welfare Plans: (i) plan
 document, summary plan description, and summary of material
 modifications (if not available, a detailed description of the
 foregoing); (ii) trust agreement or insurance contract, if any;
 (iii) most recent IRS determination letter, if any; (iv) most
 recent actuarial report, if any; and (v) most recent annual report
 on Form 5500.

           (c)  The present value of all accrued benefits under each
 of the Lakeland Pension Plans subject to Title IV of ERISA, based
 upon the actuarial assumptions used for purposes of the most recent
 actuarial valuation prepared by such Pension Plan's actuary, did
 not exceed the then current value of the assets of such plans
 allocable to such accrued benefits.

           (d)  During the last five years, the Pension Benefit
 Guaranty Corporation (the "PBGC") has not asserted any claim for
 liability against Lakeland or any of its Subsidiaries which has not
 been paid in full.

           (e)  All premiums (and interest charges and penalties for
 late payment, if applicable) due to the PBGC with respect to each
 Lakeland Pension Plan have been paid.  All contributions required
 to be made to each Lakeland Pension Plan under the terms thereof,
 ERISA or other applicable law have been timely made, and all
 amounts properly accrued to date as liabilities of Lakeland and its
 Subsidiaries which have not been paid have been properly recorded
 on the books of Lakeland and its Subsidiaries.

           (f)  To the knowledge of Lakeland, each of the Lakeland
 Pension Plans, the Lakeland Welfare Plans and each other plan and
 arrangement identified on the Lakeland Disclosure Schedule has been
 operated in compliance in all material respects with the provisions
 of ERISA, the Code, all regulations, rulings and announcements
 promulgated or issued thereunder, and all other applicable
 governmental laws and regulations.  Furthermore, the IRS has issued
 a favorable determination letter with respect to each of the
 Lakeland Pension Plans and Lakeland is not aware of any fact or
 circumstance which would disqualify either plan, that could not be
 retroactively corrected (in accordance with the procedures of the
 IRS).

           (g)  To the knowledge of Lakeland, within the past two
 plan years no non-exempt prohibited transaction, within the meaning
 of Section 4975 of the Code or Section 406 of ERISA, has occurred
 with respect to any of the Lakeland Welfare Plans or Lakeland
 Pension Plans.

           (h)  No Lakeland Pension Plan or any trust created
 thereunder has been terminated, nor have there been any "reportable
 events", within the meaning of Section 4034(b) of ERISA, with
 respect to any of the Lakeland Pension Plans.

           (i)  To the knowledge of Lakeland, no "accumulated
 funding deficiency", within the meaning of Section 412 of the Code,
 has been incurred with respect to any of the Lakeland Pension
 Plans.

           (j)  There are no pending, or, to the knowledge of
 Lakeland, threatened or anticipated claims (other than routine
 claims for benefits) by, on behalf of or against any of the
 Lakeland Pension Plans or the Lakeland Welfare Plans, any trusts
 related thereto or any other plan or arrangement identified in the
 Lakeland Disclosure Schedule.

           (k)  No Lakeland Pension or Welfare Plan provides medical
 or death benefits (whether or not insured) beyond an employee's
 retirement or other termination of service, other than (i) coverage
 mandated by law, or (ii) death benefits under any Lakeland Pension
 Plan.

           (l)  Except with respect to customary health, life and
 disability benefits or as disclosed in the Lakeland Disclosure
 Schedule, there are no unfunded benefits obligations which are not
 accounted for by reserves shown on the financial statements and
 established under GAAP, or otherwise noted on such financial
 statements.

           (m)  With respect to each Lakeland Pension and Welfare
 Plan that is funded wholly or partially through an insurance
 policy, there will be no liability of Lakeland or any Lakeland
 Subsidiary as of the Effective Time under any such insurance policy
 or ancillary agreement with respect to such insurance policy in the
 nature of a retroactive rate adjustment, loss sharing arrangement
 or other actual or contingent liability arising wholly or partially
 out of events occurring prior to the Effective Time.

           (n)  Except as hereafter agreed to by Valley in writing,
 the consummation of the transactions contemplated by this Agreement
 will not (i) entitle any current or former employee of Lakeland or
 any Lakeland Subsidiary to severance pay or any similar payment, or
 (ii) accelerate the time of payment, vesting, or increase the
 amount, of any compensation due to any current employee or former
 employee under any Lakeland Pension or Welfare Plan.

           3.10.  REPORTS.

           (a)  Each communication mailed by Lakeland to its
 stockholders since January 1, 1992, and each annual, quarterly or
 special report, proxy statement or communication, as of its date,
 complied in all material respects with all applicable statutes,
 rules and regulations enforced or promulgated by the applicable
 regulatory agency and did not contain any untrue statement of a
 material fact or omit to state any material fact required to be
 stated therein or necessary in order to make the statements made
 therein, in light of the circumstances under which they were made,
 not misleading; provided that disclosures as of a later date shall
 be deemed to modify disclosures as of an earlier date.

          (b)  Lakeland and the Bank have, since January 1, 1992,
 duly filed with the FDIC and the FRB in correct form in all
 material respects the monthly, quarterly and annual reports
 required to be filed under applicable laws and regulations, and
 Lakeland promptly will deliver or make available to Valley accurate
 and complete copies of such reports.  The Lakeland Disclosure
 Schedule lists all examinations of Lakeland or the Bank conducted
 by either the New Jersey Department of Banking, FDIC or the FRB
 since January 1, 1992 and the dates of any responses thereto
 submitted by Lakeland or the Bank.

           3.11.  LAKELAND AND BANK INFORMATION.  The information
 relating to Lakeland and the Bank to be contained in the Proxy
 Statement/Prospectus (as defined in Section 5.6(a) hereof) to be
 delivered to stockholders of Lakeland in connection with the
 solicitation of their approval of this Agreement and the
 transactions contemplated hereby, as of the date the Proxy
 Statement/Prospectus is mailed to stockholders of Lakeland, and up
 to and including the date of the meeting of stockholders to which
 such Proxy Statement/Prospectus relates, will not contain any
 untrue statement of a material fact or omit to state a material
 fact necessary to make the statements therein, in light of the
 circumstances under which they were made, not misleading.

           3.12.  COMPLIANCE WITH APPLICABLE LAW.  

           (a) GENERAL.  Except as set forth in the Lakeland
 Disclosure Schedule, each of Lakeland and the Lakeland Subsidiaries
 hold all material licenses, franchises, permits and authorizations
 necessary for the lawful conduct of its business under and pursuant
 to each, and has complied with and is not in default in any respect
 under any, applicable law, statute, order, rule, regulation, policy
 and/or guideline of any federal, state or local governmental
 authority relating to Lakeland or the Bank (other than where such
 defaults or non-compliances will not, alone or in the aggregate,
 result in a material adverse effect on the business, operations,
 assets or financial condition of Lakeland and its Subsidiaries on
 a consolidated basis) and Lakeland has not received notice of
 violation of, and does not know of any violations of, any of the
 above.

           (b) CRA.  Without limiting the foregoing, to its
 knowledge the Bank has complied in all material respects with the
 Community Reinvestment Act ("CRA") and Lakeland has no reason to
 believe that any person or group would object to the consummation
 of this Merger due to the CRA performance of or rating of the Bank. 
 Except as listed on the Lakeland Disclosure Schedule, no person or
 group has adversely commented upon the Bank's CRA performance.

           3.13.  CERTAIN CONTRACTS.

           (a)  Except as disclosed in the Lakeland Disclosure
 Schedule under this Section or Section 3.5, (i) neither Lakeland
 nor any Lakeland Subsidiary is a party to or bound by any contract
 or understanding (whether written or oral) with respect to the
 employment or termination of any present or former officers,
 employees, directors or consultants.  The Lakeland Disclosure
 Schedule sets forth true and correct copies of all employment
 agreements or termination agreements with officers, employees,
 directors, or consultants to which Lakeland or any Lakeland
 Subsidiary is a party.

           (b)  Except as disclosed in the Lakeland Disclosure
 Schedule, (i) as of the date of this Agreement, neither Lakeland
 nor any Lakeland Subsidiary is a party to or bound by any
 commitment, agreement or other instrument which contemplates the
 payment by Lakeland or any Lakeland Subsidiary of amounts in excess
 of $100,000, or which has a term extending beyond December 31, 1995
 and cannot be terminated by Lakeland or its subsidiary without
 consent of the other party thereto, (ii) no commitment, agreement
 or other instrument to which Lakeland or any Lakeland Subsidiary is
 a party or by which any of them is bound limits the freedom of
 Lakeland or any Lakeland Subsidiary to compete in any line of
 business or with any person, and (iii) neither Lakeland nor any
 Lakeland Subsidiary is a party to any collective bargaining
 agreement.

           (c)  Except as disclosed in the Lakeland Disclosure
 Schedule, neither Lakeland nor any Lakeland Subsidiary nor, to the
 knowledge of Lakeland, any other party thereto, is in default in
 any material respect under any material lease, contract, mortgage,
 promissory note, deed of trust, loan or other commitment or
 arrangement.

           3.14.  PROPERTIES AND INSURANCE.

           (a)  Lakeland and its Subsidiaries have good and, as to
 owned real property, marketable title to all material assets and
 properties, whether real or personal, tangible or intangible,
 reflected in Lakeland's consolidated balance sheet as of December
 31, 1994, or owned and acquired subsequent thereto (except to the
 extent that such assets and properties have been disposed of for
 fair value in the ordinary course of business since December 31,
 1994), subject to no encumbrances, liens, mortgages, security
 interests or pledges, except (i) those items that secure
 liabilities that are reflected in such balance sheet or the notes
 thereto or incurred in the ordinary course of business after the
 date of such balance sheet, (ii) statutory liens for amounts not
 yet delinquent or which are being contested in good faith, (iii)
 such encumbrances, liens, mortgages, security interests, pledges
 and title imperfections that are not in the aggregate material to
 the business, operations, assets, and financial condition of
 Lakeland and its Subsidiaries taken as a whole and (iv) with
 respect to owned real property, title imperfections noted in title
 reports delivered to Valley prior to the date hereof.  Lakeland and
 its Subsidiaries as lessees have the right under valid and
 subsisting leases to occupy, use, possess and control all property
 leased by them in all material respects as presently occupied,
 used, possessed and controlled by them.

           (b)  The Lakeland Disclosure Schedule lists all policies
 of insurance covering business operations and all insurable
 properties and assets of Lakeland and its Subsidiaries showing all
 risks insured against, in each case under valid, binding and
 enforceable policies or bonds, with such amounts and such
 deductibles as are specified.  As of the date hereof, neither
 Lakeland nor any of its Subsidiaries has received any notice of
 cancellation or notice of a material amendment of any such
 insurance policy or bond or is in default under such policy or
 bond, no coverage thereunder is being disputed and all material
 claims thereunder have been filed in a timely fashion.

           3.15.  MINUTE BOOKS.  The minute books of Lakeland and
 its Subsidiaries contain records that are accurate in all material
 respects of all meetings and other corporate action held of their
 respective stockholders and Boards of Directors (including
 committees of their respective Boards of Directors).

           3.16.  ENVIRONMENTAL MATTERS.  Except as disclosed in the
 Lakeland Disclosure Schedule, neither Lakeland nor any of its
 Subsidiaries has received any written notice, citation, claim,
 assessment, proposed assessment or demand for abatement alleging
 that Lakeland or any of its Subsidiaries (either directly or as a
 successor-in-interest in connection with the enforcement of
 remedies to realize the value of properties serving as collateral
 for outstanding loans) is responsible for the correction or
 clean-up of any condition material to the business, operations,
 assets or financial condition of Lakeland or its Subsidiaries. 
 Except as disclosed in the Lakeland Disclosure Schedule, Lakeland
 has no knowledge that any toxic or hazardous substances or
 materials have been emitted, generated, disposed of or stored on
 any property owned or leased by Lakeland or any of its Subsidiaries
 in any manner that violates or, after the lapse of time may
 violate, any presently existing federal, state or local law or
 regulation governing or pertaining to such substances and
 materials.

           3.17.  RESERVES.  As of the date hereof, the reserve for
 loan and lease losses in the Lakeland Financial Statements is , to
 Lakeland's knowledge, adequate based upon past loan loss
 experiences and potential losses in the current portfolio to cover
 all known or anticipated loan losses.

           3.18.  NO PARACHUTE PAYMENTS.  No officer, director,
 employee or agent (or former officer, director, employee or agent)
 of Lakeland or any Lakeland Subsidiary is entitled now, or will or
 may be entitled to as a consequence of this Agreement or the
 Merger, to any payment or benefit from Lakeland, a Lakeland
 Subsidiary, Valley or VNB which if paid or provided would
 constitute an "excess parachute payment", as defined in Section
 280G of the Code or regulations promulgated thereunder.

           3.19  DISCLOSURE.  There are no material facts concerning
 the business, operations, assets or financial condition of Lakeland
 or its Subsidiaries which could have a material adverse effect on
 the business, operations or financial condition of Lakeland or its
 Subsidiaries on a consolidated basis which have not been disclosed
 to Valley directly or indirectly by access to any filing by
 Lakeland under the 1934 Act.  The representations and warranties
 contained in Article III of this Agreement are accurate in all
 material respects.

                            ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES
                             OF VALLEY

           References herein to the "Valley Disclosure Schedule"
 shall mean all of the disclosure schedules required by this Article
 IV, dated as of the date hereof and referenced to the specific
 sections and subsections of Article IV of this Agreement, which
 have been delivered on the date hereof by Valley to Lakeland. 
 Valley hereby represents and warrants to Lakeland as follows:

           4.1.  CORPORATE ORGANIZATION.

           (a)  Valley is a corporation duly organized and validly
 existing and in good standing under the laws of the State of New
 Jersey.  Valley has the corporate power and authority to own or
 lease all of its properties and assets and to carry on its business
 as it is now being conducted, and is duly licensed or qualified to
 do business in each jurisdiction in which the nature of the
 business conducted by it or the character or location of the
 properties and assets owned or leased by it makes such licensing or
 qualification necessary, except where the failure to be so licensed
 or qualified would not have a material adverse effect on the
 business, operations, assets or financial condition of Valley or
 its Subsidiaries (defined below). Valley is registered as a bank
 holding company under the BHCA.

           (b)  Each of the Subsidiaries of Valley are listed in the
 Valley Disclosure Schedule.  The term "Subsidiary" when used in
 this Agreement with reference to Valley, means any corporation,
 joint venture, association, partnership, trust or other entity in
 which Valley has, directly or indirectly, at least a 50% interest
 or acts as a general partner.  Each Subsidiary of Valley is duly
 organized and validly existing and in good standing under the laws
 of the jurisdiction of its incorporation.  VNB is a national bank
 whose deposits are insured by the Bank Insurance Fund of the FDIC
 to the fullest extent permitted by law.  Each Subsidiary of Valley
 has the corporate power and authority to own or lease all of its
 properties and assets and to carry on its business as it is now
 being conducted and is duly licensed or qualified to do business in
 each jurisdiction in which the nature of the business conducted by
 it or the character or location of the properties and assets owned
 or leased by it makes such licensing or qualification necessary,
 except where the failure to be so licensed or qualified would not
 have a material adverse effect on the business, operations, assets
 or financial condition of Valley and its Subsidiaries.  

           4.2.  CAPITALIZATION.  All figures in this Section 4.2
 are adjusted to take into account the Second Quarter Stock
 Dividend as though it had occurred prior to the date as to
 which the figures relate.  The authorized capital stock of
 Valley consists solely of 39,414,375 shares of Valley Common Stock. 
 As of December 31, 1994, there were 30,269,824 shares of Valley
 Common Stock issued and outstanding net of treasury stock, and
 121,696 treasury shares.  Since such date, and from time to time
 hereafter, Valley may repurchase shares of its Common Stock.  Since
 December 31, 1994, to and including the date of this Agreement, no
 additional shares of Valley Common Stock have been issued except in
 connection with exercises of options granted under the Long-Term
 Stock Incentive Plan of Valley (the "Valley Option Plan") or grants
 of restricted stock under the Valley Option Plan or upon exercise
 of outstanding Warrants (as hereafter defined).  As of December 31,
 1994, except for: (a) 509,905 shares of Valley Common Stock
 issuable upon exercise of outstanding stock options and stock
 appreciation rights granted pursuant to the Valley Option Plan, (b)
 up to 593,318 shares issuable upon exercise of the outstanding
 warrants issued by Valley in connection with the acquisition of
 Mayflower Financial Corporation (the "Warrants"), and (c) 10,827
 shares of Valley Common Stock issuable upon exercise of outstanding
 stock options granted to a consultant for Valley, there were no
 shares of Valley Common Stock issuable upon the exercise of
 outstanding stock options or otherwise.  All issued and outstanding
 shares of Valley Common Stock, and all issued and outstanding
 shares of capital stock of Valley's Subsidiaries, have been duly
 authorized and validly issued, are fully paid, nonassessable and
 free of preemptive rights, and are free and clear of all liens,
 encumbrances, charges, restrictions or rights of third parties. 
 All of the outstanding shares of capital stock of Valley's
 Subsidiaries are owned by Valley free and clear of any liens,
 encumbrances, charges, restrictions or rights of third parties. 
 Except for the options and stock appreciation rights referred to
 above under the Valley Option Plan and the Warrants, and 288,734
 shares of Valley Common Stock to be issued in connection with the
 Agreement and Plan of Merger, dated as of November 9, 1994, among
 Valley, VNB, American Union Bank (the "American Union Agreement"),
 neither Valley nor any of Valley's Subsidiaries has or is bound by
 any outstanding subscriptions, options, warrants, calls,
 commitments or agreements of any character calling for the
 transfer, purchase or issuance of any shares of capital stock of
 Valley or Valley's Subsidiaries or any securities representing the
 right to otherwise receive any shares of such capital stock or any
 securities convertible into or representing the right to purchase
 or subscribe for any such shares, and there are no agreements or
 understandings with respect to voting of any such shares.

           4.3.  AUTHORITY; NO VIOLATION.

           (a)  Valley and VNB have full corporate power and
 authority to execute and deliver this Agreement and to consummate
 the transactions contemplated hereby in accordance with the terms
 hereof.  Valley has a sufficient number of authorized but unissued
 shares of Valley Common Stock to pay the consideration for the
 Merger set forth in Section 2.1 of this Agreement.  The execution
 and delivery of this Agreement and the consummation of the
 transactions contemplated hereby have been duly and validly
 approved by the Board of Directors of each of Valley and VNB.  No
 other corporate proceedings on the part of Valley and VNB are
 necessary to consummate the transactions contemplated hereby
 (except for the approval by Valley of the Bank Merger Agreement). 
 This Agreement has been duly and validly executed and delivered by
 Valley and VNB and constitutes a valid and binding obligation of
 Valley and VNB, enforceable against Valley and VNB in accordance
 with its terms.

           (b)  Neither the execution or delivery of this Agreement
 nor the consummation by Valley and VNB of the transactions
 contemplated hereby in accordance with the terms hereof, will (i)
 violate any provision of the Certificate of Incorporation or Bylaws
 of Valley or the Articles of Association or Bylaws of VNB, (ii)
 assuming that the consents and approvals set forth below are duly
 obtained, violate any statute, code, ordinance, rule, regulation,
 judgment, order, writ, decree or injunction applicable to Valley or
 VNB or any of their respective properties or assets, or (iii)
 violate, conflict with, result in a breach of any provision of,
 constitute a default (or an event which, with notice or lapse of
 time, or both, would constitute a default) under, result in the
 termination of, accelerate the performance required by, or result
 in the creation of any lien, security interest, charge or other
 encumbrance upon any of the properties or assets of Valley or VNB
 under, any of the terms, conditions or provisions of any note,
 bond, mortgage, indenture, deed of trust, license, lease, agreement
 or other instrument or obligation to which Valley or VNB is a
 party, or by which Valley or VNB or any of their properties or
 assets may be bound or affected, except, with respect to (ii) and
 (iii) above, such as in the aggregate will not have a material
 adverse effect on the business, operations, assets or financial
 condition of Valley and Valley's Subsidiaries on a consolidated
 basis, or the ability of Valley and VNB to consummate the
 transactions contemplated hereby.  Except for consents and
 approvals of or filings or registrations with or notices to the
 OCC, the Commissioner, the FRB, the New Jersey Secretary of State,
 the SEC, or applicable state securities bureaus or commissions, no
 consents or approvals of or filings or registrations with or
 notices to any third party or any public body or authority are
 necessary on behalf of Valley or VNB in connection with (a) the
 execution and delivery by Valley or VNB of this Agreement, (b) the
 consummation by Valley of the Merger and the other transactions
 contemplated hereby and (c) the execution and delivery by VNB of
 the Bank Merger Agreement and the consummation by VNB of the Bank
 Merger and other transactions contemplated thereby.  To Valley's
 knowledge, no fact or condition exists which Valley has reason to
 believe will prevent it or VNB from obtaining the aforementioned
 consents and approvals.

           4.4.  FINANCIAL STATEMENTS.

           (a)  Valley has previously delivered to Lakeland copies
 of the consolidated statements of financial condition of Valley as
 of December 31, 1991, 1992 and 1993, the related consolidated
 statements of income, changes in stockholders' equity and of cash
 flows for the periods ended December 31 in each of the three fiscal
 years 1991 through 1993, in each case accompanied by the audit
 report of KPMG Peat Marwick LLP, independent public accountants
 with respect to Valley, and the unaudited consolidated statements
 of condition of Valley as of March 30, 1994, June 30, 1994 and
 September 30, 1994, and the related unaudited consolidated
 statements of income, changes in stockholders' equity and cash
 flows for the three months then ended as reported in Valley's
 Quarterly Reports on Form 10-Q, filed with the SEC under the 1934 
 Act (collectively, the "Valley Financial Statements").  The Valley
 Financial Statements (including the related notes), have been
 prepared in accordance with generally accepted accounting
 principles consistently applied during the periods involved, and
 fairly present the consolidated financial position of Valley as of
 the respective dates set forth therein, and the related
 consolidated statements of income, changes in stockholders' equity
 and of cash flows (including the related notes, where applicable)
 fairly present the results of the consolidated operations and
 changes in stockholders' equity and of cash flows of Valley for the
 respective fiscal periods set forth therein.

           (b)  The books and records of Valley and its subsidiaries
 have been and are being maintained in material compliance with
 applicable legal and accounting requirements, and reflect only
 actual transactions.

           (c)  Except as and to the extent reflected, disclosed or
 reserved against in the Valley Financial Statements (including the
 notes thereto), as of September 30, 1994 neither Valley nor any of
 its Subsidiaries had or has, as the case may be, any material
 obligation or liability, whether absolute, accrued, contingent or
 otherwise, material to the business, operations, assets or
 financial condition of Valley or any of its Subsidiaries.  Since
 September 30, 1994, neither Valley nor any of its Subsidiaries have
 incurred any material liabilities, except in the ordinary course of
 business and consistent with prudent banking practice. 

           4.5.  BROKERAGE FEES.  Except for fees to be paid to MG
 Advisors, Inc., neither Valley nor VNB nor any of their respective
 directors or officers has employed any broker or finder or incurred
 any liability for any broker's or finder's fees or commissions in
 connection with any of the transactions contemplated by this
 Agreement.

           4.6.  ABSENCE OF CERTAIN CHANGES OR EVENTS.  There has
 not been any material adverse change in the business, operations,
 assets or financial condition of Valley and Valley's Subsidiaries
 on a consolidated basis since September 30, 1994 and to Valley's
 knowledge, no fact or condition exists which Valley believes will
 cause or is likely to cause such a material adverse change in the
 future.

           4.7.  VALLEY INFORMATION.  The information relating to
 Valley and its subsidiaries, this Agreement and the transactions
 contemplated hereby in the Registration Statement and Proxy
 Statement/Prospectus (as defined in Section 5.6(a) hereof), as of
 the date of the mailing of the Proxy Statement/Prospectus, and up
 to and including the date of the meeting of stockholders of
 Lakeland to which such Proxy Statement/Prospectus relates, will not
 contain any untrue statement of a material fact or omit to state a
 material fact necessary to make the statements therein, in light of
 the circumstances under which they were made, not misleading.

           4.8.  CAPITAL ADEQUACY.  At the Effective Time, after
 taking into effect the Merger and the transactions contemplated
 hereunder, Valley will have sufficient capital to satisfy all
 applicable regulatory capital requirements.

           4.9.  VALLEY COMMON STOCK.  At the Effective Time, the
 Valley Common Stock to be issued pursuant to the terms of Section
 2.1, when so issued, shall be duly authorized, validly issued,
 fully paid, and non-assessable, free of preemptive rights and free
 and clear of all liens, encumbrances or restrictions created by or
 through Valley, with no personal liability attaching to the
 ownership thereof.

           4.10.  LEGAL PROCEEDINGS.  Except as disclosed in the
 Valley Disclosure Schedule, neither Valley nor its Subsidiaries is
 a party to any, and there are no pending or, to Valley's knowledge,
 threatened, legal, administrative, arbitral or other proceedings,
 claims, actions or governmental investigations of any nature
 against Valley or any of its Subsidiaries which, if decided
 adversely to Valley, or any of its Subsidiaries, would have a
 material adverse effect on the business, operations, assets or
 financial condition of Valley and its Subsidiaries on a
 consolidated basis.  Except as disclosed in the Valley Disclosure
 Schedule, neither Valley nor any of Valley's Subsidiaries is a
 party to any order, judgment or decree entered against Valley or
 any such Subsidiary in any lawsuit or proceeding which would have
 a material adverse effect on the business, operations, assets or
 financial condition of Valley and its Subsidiaries on a
 consolidated basis.

           4.11.  TAXES AND TAX RETURNS.  To the knowledge of
 Valley, Valley and its Subsidiaries have duly filed (and until the
 Effective Time will so file) all Returns required to be filed by
 them in respect of any federal, state and local taxes (including
 withholding taxes, penalties or other payments required) and have
 duly paid (and until the Effective Time will so pay) all such taxes
 due and payable, other than taxes or other charges which are being
 contested in good faith.  Valley and its Subsidiaries have
 established (and until the Effective Time will establish) on their
 books and records reserves for the payment of all federal, state
 and local taxes not yet due and payable, but incurred in respect of
 Valley and its Subsidiaries through such date, which reserves are,
 to the knowledge of Valley, adequate for such purposes.  No
 deficiencies exist or have been asserted based upon the federal
 income tax returns of Valley and VNB.

           4.12.  EMPLOYEE BENEFIT PLANS.

           (a)  Valley and its Subsidiaries maintain or contribute
 to certain "employee pension benefit plans" (the "Valley Pension
 Plans"), as such term is defined in Section 3 of ERISA, and
 "employee welfare benefit plans" (the "Valley Welfare Plans"), as
 such term is defined in Section 3 of ERISA.  Since September 2,
 1974, neither Valley nor its Subsidiaries have contributed to any
 "Multiemployer Plan", as such term is defined in Section 3(37) of
 ERISA.

           (b)  To the knowledge of Valley, each of the Valley
 Pension Plans and each of the Valley Welfare Plans has been
 operated in compliance in all material respects with the provisions
 of ERISA, the Code, all regulations, rulings and announcements
 promulgated or issued thereunder, and all other applicable
 governmental laws and regulations.

           (c)  To the knowledge of Valley, no "accumulated funding
 deficiency" within the meaning of Section 412 of the Code has been
 incurred with respect to any of the Valley Pension Plans.

           (d)  Except with respect to customary health, life and
 disability benefits or as disclosed on the Valley Disclosure
 Schedule, there are no unfunded benefit obligations which are not
 accounted for by reserves shown on the financial statements of
 Valley and established under GAAP or otherwise noted on such
 financial statements.

           4.13.  REPORTS.

           (a)  Each communication mailed by Valley to its
 stockholders since January 1, 1992, and each annual, quarterly or
 special report, proxy statement or communication, as of its date,
 complied in all material respects with all applicable statutes,
 rules and regulations enforced or promulgated by the applicable
 regulatory agency and did not contain any untrue statement of a
 material fact or omit to state any material fact required to be
 stated therein or necessary in order to make the statements made
 therein, in light of the circumstances under which they were made,
 not misleading; provided that disclosures as of a later date shall
 be deemed to modify disclosures as of an earlier date.

           (b)  Valley and VNB have, since January 1, 1992, duly
 filed with the OCC and the FRB in correct form in all material
 respects the monthly, quarterly and annual reports required to be
 filed under applicable laws and regulations, and Valley, upon
 written request from Lakeland, promptly will deliver or make
 available to Lakeland accurate and complete copies of such reports. 
 The Valley Disclosure Schedule lists the dates of all examinations
 of Valley or VNB conducted by either the OCC, the FRB or the FDIC
 since January 1, 1992, and the dates of any responses thereto
 submitted by Valley or VNB.

           4.14.  COMPLIANCE WITH APPLICABLE LAW.   Valley and its
 Subsidiaries hold all material licenses, franchises, permits and
 authorizations necessary for the lawful conduct of their respective
 businesses under and pursuant to each, and has complied with and is
 not in default in any respect under any, applicable law, statute,
 order, rule, regulation, policy and/or guideline of any federal,
 state or local governmental authority relating to Valley and its
 Subsidiaries (other than where such default or non-compliance will
 not result in a material adverse effect on the business,
 operations, assets or financial condition of Valley and its
 Subsidiaries on a consolidated basis) and Valley has not received
 notice of violations of, and does not know of any violations of,
 any of the above.  Without limiting the foregoing, to its knowledge
 VNB has complied in all material respects with the CRA and Valley
 has no reason to believe that any person or group would object to
 the consummation of the Merger due to the CRA performance or rating
 of VNB.  To the knowledge of Valley, except as listed on the Valley
 Disclosure Schedule, no person or group has adversely commented
 upon VNB's CRA performance.

           4.15.  PROPERTIES AND INSURANCE.

           (a)  Valley and its Subsidiaries have good and, as to
 owned real property, marketable title to all material assets and
 properties, whether real or personal, tangible or intangible,
 reflected in Valley's consolidated balance sheet as of December 31,
 1993, or owned and acquired subsequent thereto (except to the
 extent that such assets and properties have been disposed of for
 fair value in the ordinary course of business since December 31,
 1993), subject to no encumbrances, liens, mortgages, security
 interests or pledges, except (i) those items that secure
 liabilities that are reflected in such balance sheet or the notes
 thereto or incurred in the ordinary course of business after the
 date of such balance sheet, (ii) statutory liens for amounts not
 yet delinquent or which are being contested in good faith, (iii)
 such encumbrances, liens, mortgages, security interests, pledges
 and title imperfections that are not in the aggregate material to
 the business, operations, assets, and financial condition of Valley
 and its subsidiaries taken as a whole and (iv) with respect to
 owned real property, title imperfections noted in title reports
 delivered to Lakeland prior to the date hereof.  Valley and its
 Subsidiaries as lessees have the right under valid and subsisting
 leases to occupy, use, possess and control all property leased by
 them in all material respects as presently occupied, used,
 possessed and controlled by them.

           (b)  The business operations and all insurable properties
 and assets of Valley and its Subsidiaries are insured for their
 benefit against all risks which, in the reasonable judgment of the
 management of Valley should be insured against, in each case under
 valid, binding and enforceable policies or bonds, with such 
 deductibles and against such risks and losses as are in the opinion
 of the management of Valley adequate for the business engaged in by
 Valley and its Subsidiaries.  As of the date hereof, neither Valley
 nor any of its Subsidiaries has received any notice of cancellation
 or notice of a material amendment of any such insurance policy or
 bond or is in default under such policy or bond, no coverage
 thereunder is being disputed and all material claims thereunder
 have been filed in a timely fashion.

           4.16.  MINUTE BOOKS.  The minute books of Valley and its
 Subsidiaries contain records that are accurate in all material
 respects of all meetings and other corporate action held of their
 respective stockholders and Boards of Directors (including
 committees of their respective Boards of Directors).

           4.17.  ENVIRONMENTAL MATTERS.  Except as disclosed in the
 Valley Disclosure Schedule, neither Valley nor any of its
 Subsidiaries has received any written notice, citation, claim,
 assessment, proposed assessment or demand for abatement alleging
 that Valley or any of its Subsidiaries (either directly or as a
 successor-in-interest in connection with the enforcement of
 remedies to realize the value of properties serving as collateral
 for outstanding loans) is responsible for the correction or
 clean-up of any condition material to the business, operations,
 assets or financial condition of Valley or its Subsidiaries. 
 Except as disclosed in the Valley Disclosure Schedule, Valley has
 no knowledge that any toxic or hazardous substances or materials
 have been emitted, generated, disposed of or stored on any property
 owned or leased by Valley or any of its Subsidiaries in any manner
 that violates or, after the lapse of time may violate, any
 presently existing federal, state or local law or regulation
 governing or pertaining to such substances and materials, the
 violation of which would have a material adverse effect on the
 business, operations, assets or financial condition of Valley and
 its Subsidiaries on a consolidated basis.

           4.18.  RESERVES.  As of the date hereof, the reserve for
 loan and lease losses in the Valley Financial Statements is, to
 Valley's knowledge, adequate based upon past loan loss experiences
 and potential losses in the current portfolio to cover all known or
 anticipated loan losses.

           4.19.  DISCLOSURES.  Except for other acquisition
 transactions which Valley may not yet have publicly disclosed,
 there are no material facts concerning the business, operations,
 assets or financial condition of Valley which could have a material
 adverse effect on the business, operations or financial condition
 of Valley which have not been disclosed to Lakeland directly or
 indirectly by access to any filing by Valley under the 1934 Act. 
 The representations and warranties contained in Article IV of this
 Agreement are accurate in all material respects.

                             ARTICLE V
 
                     COVENANTS OF THE PARTIES

           5.1.  CONDUCT OF THE BUSINESS OF LAKELAND.  During the
 period from the date of this Agreement to the Effective Time,
 Lakeland shall, and shall cause each of its Subsidiaries to,
 conduct its respective business and engage in transactions
 permitted hereunder only in the ordinary course and consistent with
 prudent banking practice, except with the prior written consent of
 Valley, which consent will not be unreasonably withheld.  Lakeland
 also shall use its best efforts to (i) preserve its business
 organization and that of each Lakeland Subsidiary intact, (ii) keep
 available to itself the present services of its employees and those
 of its Subsidiaries, provided that neither Lakeland nor any of its
 Subsidiaries shall be required to take any unreasonable or
 extraordinary act or any action which would conflict with any other
 term of this Agreement, and (iii) preserve for itself and Valley
 the goodwill of its customers and those of its Subsidiaries and
 others with whom business relationships exist.  

           5.2.  NEGATIVE COVENANTS AND DIVIDEND COVENANTS.

           (a)  Lakeland agrees that from the date hereof to the
 Effective Time, except as otherwise approved by Valley in writing
 or as permitted or required by this Agreement, it will not, nor
 will it permit any of its Subsidiaries to:

           (i)  change any provision of its Certificate of
      Incorporation or Bylaws or any similar governing documents; 

           (ii)  except for the issuance of Lakeland Common Stock
      pursuant to the present terms of the outstanding Lakeland
      Options, change the number of shares of its authorized or
      issued common or preferred stock or issue or grant any option,
      warrant, call, commitment, subscription, right to purchase or
      agreement of any character relating to the authorized or
      issued capital stock of Lakeland or any Lakeland Subsidiary or
      any securities convertible into shares of such stock, or
      split, combine or reclassify any shares of its capital stock,
      or redeem or otherwise acquire any shares of such capital
      stock, or declare, set aside or pay any dividend, or other
      distribution (whether in cash, stock or property or any
      combination thereof) in respect of its capital stock, other
      than Lakeland's regular quarterly dividends of $.15 per share
      and one special dividend, to be declared after the Scheduled
      Closing Date has been set, in an amount such that between
      January 26, 1995 and the Closing Date, Lakeland shareholders
      will receive dividends equivalent to those they would have
      received as Valley shareholders during the same time period if
      the Merger had closed on January 26, 1995;

           (iii)  grant any severance or termination pay (other than
      pursuant to policies of Lakeland in effect on the date hereof
      and disclosed to Valley in the Lakeland Disclosure Schedule or
      as agreed to by Valley in writing) to, or enter into or amend
      any employment agreement with, any of its directors, officers
      or employees, other than the severance payment to William H.
      McNear, Chairman of Lakeland's Board of Directors, in the
      amount of $150,000 in settlement of his Retainer Agreement
      with Lakeland upon the Effective Time (which payment shall be
      reduced in such manner and to such extent so that, when
      aggregated with all other payments to be made to such person
      by Lakeland, such payment shall not be deemed an "excess
      parachute payment" in accordance with Section 280G of the Code
      or be subject to the excise tax provided in Section 4999(a) of
      the Code); adopt any new employee benefit plan or arrangement
      of any type or amend any such existing benefit plan or
      arrangement; or award any increase in compensation or benefits
      to its directors, officers or employees except with respect to
      salary increases in the ordinary course of business and
      consistent with past practices and policies;

           (iv)  sell or dispose of any substantial amount of assets
      or incur any significant liabilities other than in the
      ordinary course of business consistent with past practices and
      policies;

           (v)  make any capital expenditures in excess of $100,000
      other than pursuant to binding commitments existing on the
      date hereof and other than expenditures necessary to maintain
      existing assets in good repair;

           (vi)  file any applications or make any contract with
      respect to branching or site location or relocation, other
      than branching initiatives already underway as disclosed to
      Valley on the Lakeland Disclosure Schedule.  Any such
      initiative requiring a competitive bid to an independent third
      party or requiring a competitive bid to an instrumentality of
      a government or quasi-governmental body will be disclosed only
      on a direct confidential basis;

           (vii)  agree to acquire in any manner whatsoever (other
      than to foreclose on collateral for a defaulted loan) any
      business or entity;

           (viii)  make any material change in its accounting
      methods or practices, other than changes required in
      accordance with generally accepted accounting principles;

           (ix)  take any action that would result in any of the
      representations and warranties contained in Article III of
      this Agreement not being true and correct in any material
      respect at the Effective Time; or

           (x)  agree to do any of the foregoing.

           (b)  Valley agrees that from the date hereof to the
 Effective Time, except as otherwise approved by Lakeland in writing
 or as permitted or required by this Agreement, it will not, nor
 will it permit any of it Subsidiaries to:

           (i)     take any action that is intended or may
 reasonably be expected to result in any of its representations and
 warranties set forth in this Agreement being or becoming untrue in
 any material respect, or that may result in any condition,
 agreement or covenant set forth in this Agreement not being
 satisfied;

           (ii)    take or cause to be taken any action which would
 disqualify the Merger as a tax free reorganization under Section
 368 of the Code;

           (iii)   consolidate with or merge with any other person
 or entity in which Valley is not the surviving entity, or convey,
 transfer or lease its properties and assets substantially as an
 entirety to any person or entity unless such person or entity shall
 expressly assume the obligations of Valley under this Agreement; or

           (iv)    authorize or enter into any agreement or
 commitment to do any of the foregoing.

           5.3.  NO SOLICITATION.  Lakeland and the Bank shall not,
 directly or indirectly, encourage or solicit or hold discussions or
 negotiations with, or provide any information to, any person,
 entity or group (other than Valley) concerning any merger or sale
 of shares of capital stock or sale of substantial assets or
 liabilities not in the ordinary course of business, or similar
 transactions involving Lakeland or the Bank (an "Acquisition
 Transaction").  Notwithstanding the foregoing, Lakeland may enter
 into discussions or negotiations or provide information in
 connection with an unsolicited possible Acquisition Transaction if
 the Board of Directors of Lakeland, after consulting with counsel,
 determines that such discussions or negotiations should be
 commenced in the exercise of its fiduciary responsibilities or such
 information should be furnished in the exercise of its fiduciary
 responsibilities.  Lakeland will promptly communicate to Valley the
 terms of any proposal, whether written or oral, which it may
 receive in respect of any Acquisition Transaction and the fact that
 it is having discussions or negotiations with, or supplying
 information to, a third party in connection with a possible
 Acquisition Transaction.

           5.4.  CURRENT INFORMATION.  During the period from the
 date of this Agreement to the Effective Time, Lakeland will cause
 one or more of its designated representatives to confer on a
 monthly or more frequent basis with representatives of Valley
 regarding Lakeland's business, operations, properties, assets and
 financial condition and matters relating to the completion of the
 transactions contemplated herein.  Without limiting the foregoing,
 Lakeland will send to Valley a monthly list of each new loan or
 extension of credit, and each renewal of an existing loan or
 extension of credit, in excess of $500,000, made during such month,
 and provide Valley with a copy of the loan offering for any such
 loan, extension of credit, or renewal upon request.  As soon as
 reasonably available, but in no event more than 45 days after the
 end of each fiscal quarter (other than the last fiscal quarter of
 each fiscal year) ending after the date of this Agreement, Lakeland
 will deliver to Valley the Bank's call reports filed with the
 Commissioner and FDIC and Lakeland's quarterly reports on Form 10-Q
 as filed with the SEC under the 1934 Act, and Valley will deliver
 to Lakeland Valley's quarterly reports on Form 10-Q, as filed with
 the SEC under the 1934 Act, and VNB's call reports filed with the
 OCC and the FDIC.  As soon as reasonably available, but in no event
 more than 90 days after the end of each fiscal year, Lakeland will
 deliver to Valley and Valley will deliver to Lakeland their
 respective audited Annual Reports, in each case as filed on Form
 10-K with the SEC under the 1934 Act.

           5.5.  ACCESS TO PROPERTIES AND RECORDS; CONFIDENTIALITY.

           (a)  Lakeland and the Bank shall permit Valley and its
 representatives, and Valley and VNB shall permit Lakeland and its
 representatives, accompanied by an officer of the respective party,
 reasonable access to their respective properties, and shall
 disclose and make available to Valley and its representatives or
 Lakeland and its representatives as the case may be, all books,
 papers and records relating to their respective assets, stock
 ownership, properties, operations, obligations and liabilities,
 including, but not limited to, all books of account (including the
 general ledger), tax records, minute books of directors' and
 stockholders' meetings, organizational documents, bylaws, material
 contracts and agreements, filings with any regulatory authority,
 independent auditors' work papers (subject to the receipt by such
 auditors of a standard access representation letter), litigation
 files, plans affecting employees, and any other business activities
 or prospects in which Valley and its representatives or Lakeland
 and its representatives may have a reasonable interest.  Neither
 party shall be required to provide access to or to disclose
 information where such access or disclosure would violate or
 prejudice the rights of any customer or would contravene any law,
 rule, regulation, order or judgment.  The parties will use their
 best efforts to obtain waivers of any such restriction and in any
 event make appropriate substitute disclosure arrangements under
 circumstances in which the restrictions of the preceding sentence
 apply.  Lakeland acknowledges that Valley may be involved in
 discussions concerning other potential acquisitions and Valley
 shall not be obligated to disclose such information to Lakeland
 except as such information is publicly disclosed by Valley.

           (b)  All information furnished by the parties hereto
 previously in connection with transactions contemplated by this
 Agreement or pursuant hereto shall be used solely for the purpose
 of evaluating the Merger contemplated hereby and shall be treated
 as the sole property of the party delivering the information until
 consummation of the Merger contemplated hereby and, if such Merger
 shall not occur, each party and each party's advisors shall return
 to the other party all documents or other materials containing,
 reflecting or referring to such information, will not retain any
 copies of such information, shall use its best efforts to keep
 confidential all such information, and shall not directly or
 indirectly use such information for any competitive or other
 commercial purposes.  In the event that the Merger contemplated
 hereby does not occur, all documents, notes and other writings
 prepared by a party hereto or its advisors based on information
 furnished by the other party shall be promptly destroyed.  The
 obligation to keep such information confidential shall continue for
 five years from the date the proposed Merger is abandoned but shall
 not apply to (i) any information which (A) the party receiving the
 information can establish by convincing evidence was already in its
 possession prior to the disclosure thereof to it by the other
 party; (B) was then generally known to the public; (C) became known
 to the public through no fault of the party receiving such
 information; or (D) was disclosed to the party receiving such
 information by a third party not bound by an obligation of
 confidentiality; or (ii) disclosures pursuant to a legal
 requirement or in accordance with an order of a court of competent
 jurisdiction.

           5.6.  REGULATORY MATTERS.

           (a)  For the purposes of holding the meeting of Lakeland
 shareholders referred to in Section 5.7 hereof and registering or
 otherwise qualifying under applicable federal and state securities
 laws Valley Common Stock to be issued to Record Holders and
 optionees in connection with the Merger, the parties hereto shall
 cooperate in the preparation and filing by Valley of a Registration
 Statement with the SEC which shall include an appropriate proxy
 statement and prospectus satisfying all applicable requirements of
 applicable state and federal laws, including the Securities Act of
 1933, as amended (the "1933 Act"), the 1934 Act and applicable
 state securities laws and the rules and regulations thereunder. 
 (Such proxy statement and prospectus in the form mailed by Lakeland
 to the Lakeland shareholders and optionees together with any and
 all amendments or supplements thereto, is herein referred to as the
 "Proxy Statement/Prospectus" and the various documents to be filed
 by Valley under the 1933 Act with the SEC to register for sale the
 Valley Common Stock to be issued to Record Holders and optionees,
 including the Proxy Statement/Prospectus, are referred to herein as
 the "Registration Statement").

           (b)  Valley shall furnish information concerning Valley
 as is necessary in order to cause the Proxy Statement/Prospectus,
 insofar as it relates to Valley, to comply with Section 5.6(a)
 hereof.  Valley agrees promptly to advise Lakeland if at any time
 prior to the Lakeland shareholder meeting referred to in Section
 5.7 hereof, any information provided by Valley in the Proxy
 Statement/Prospectus becomes incorrect or incomplete in any
 material respect and to provide Lakeland with the information
 needed to correct such inaccuracy or omission.  Valley shall
 furnish Lakeland with such supplemental information as may be
 necessary in order to cause the Proxy Statement/Prospectus, insofar
 as it relates to Valley, to comply with Section 5.6(a) after the
 mailing thereof to Lakeland shareholders.

           (c)  Lakeland shall furnish Valley with such information
 concerning Lakeland and the Bank as is necessary in order to cause
 the Proxy Statement/Prospectus, insofar as it relates to such
 corporations, to comply with Section 5.6(a) hereof.  Lakeland
 agrees promptly to advise Valley if, at any time prior to the
 Lakeland shareholder's meeting referred to in Section 5.6(a)
 hereof, information provided by Lakeland in the Proxy
 Statement/Prospectus becomes incorrect or incomplete in any
 material respect and to provide Valley with the information needed
 to correct such inaccuracy or omission.  Lakeland shall furnish
 Valley with such supplemental information as may be necessary in
 order to cause the Proxy Statement/Prospectus, insofar as it
 relates to Lakeland and the Bank, to comply with Section 5.6(a)
 after the mailing thereof to Lakeland shareholders.

           (d)  Valley shall as promptly as practicable, at its sole
 expense, make such filings as are necessary in connection with the
 offering of the Valley Common Stock with applicable state
 securities agencies and shall use all reasonable efforts to qualify
 the offering of the Valley Common Stock under applicable state
 securities laws at the earliest practicable date.  Lakeland shall
 promptly furnish Valley with such information regarding the
 Lakeland shareholders as Valley requires to enable it to determine
 what filings are required hereunder.  Lakeland authorizes Valley to
 utilize in such filings the information concerning Lakeland and the
 Bank provided to Valley in connection with, or contained in, the
 Proxy Statement/ Prospectus.  Valley shall furnish Lakeland with
 copies of all such filings and keep Lakeland advised of the status
 thereof.  Valley and Lakeland shall as promptly as practicable file
 the Registration Statement containing the Proxy
 Statement/Prospectus with the SEC, and each of Valley and Lakeland
 shall promptly notify the other of all communications, oral or
 written, with the SEC concerning the Registration Statement and the
 Proxy Statement/Prospectus.

           (e)  Valley shall cause the Valley Common Stock to be
 issued in connection with the Merger to be listed on the New York
 Stock Exchange.

           (f)  The parties hereto will cooperate with each other
 and use their best efforts to prepare all necessary documentation,
 to effect all necessary filings and to obtain all necessary
 permits, consents, waivers, approvals and authorizations of all
 third parties and governmental bodies necessary to consummate the
 transactions contemplated by this Agreement as soon as possible,
 including, without limitation, those required by the OCC and the
 FRB.  The parties shall each have the right to review in advance
 all information relating to the other, as the case may be, and any
 of their respective subsidiaries, which appears in any filing made
 with, or written material submitted to, any third party or
 governmental body in connection with the transactions contemplated
 by this Agreement.  Valley and VNB shall cause at least a draft of
 their respective applications to the FRB and an actual application
 to the OCC to be filed within 45 days of the date hereof, so long
 as Lakeland and the Bank provide all information necessary to
 complete the application within 30 days of the date hereof.

           (g)  Each of the parties will promptly furnish each other
 with copies of written communications received by them or any of
 their respective subsidiaries from, or delivered by any of the
 foregoing to, any governmental body in respect of the transactions
 contemplated hereby.

           5.7.  APPROVAL OF SHAREHOLDERS.  Lakeland will (a) take
 all steps necessary duly to call, give notice of, convene and hold
 a meeting of the shareholders of Lakeland as soon as reasonably
 practicable for the purpose of securing the approval by such
 shareholders of this Agreement, (b) subject to the qualification
 set forth in Section 5.3 hereof, recommend to the shareholders of
 Lakeland the approval of this Agreement and the transactions
 contemplated hereby and use its best efforts to obtain, as promptly
 as practicable, such approvals, and (c) cooperate and consult with
 Valley with respect to each of the foregoing matters.  In
 connection therewith, each director of Lakeland agrees (i) to vote
 in favor of the Merger, and (ii) take such action as is necessary
 or is reasonably required by Valley to consummate the Merger.

           5.8.  FURTHER ASSURANCES.  Subject to the terms and
 conditions herein provided, each of the parties hereto agrees to
 use its best efforts to take, or cause to be taken, all actions and
 to do, or cause to be done, all things necessary, proper or
 advisable under applicable laws and regulations to satisfy the
 conditions to Closing and to consummate and make effective the
 transactions contemplated by this Agreement, including, without
 limitation, using reasonable efforts to lift or rescind any
 injunction or restraining order or other order adversely affecting
 the ability of the parties to consummate the transactions
 contemplated by this Agreement and using its best efforts to
 prevent the breach of any representation, warranty, covenant or
 agreement of such party contained or referred to in this Agreement
 and to promptly remedy the same.  Nothing in this section shall be
 construed to require any party to participate in any threatened or
 actual legal, administrative or other proceedings (other than
 proceedings, actions or investigations to which it is otherwise a
 party or subject or threatened to be made a party or subject) in
 connection with consummation of the transactions contemplated by
 this Agreement unless such party shall consent in advance and in
 writing to such participation and the other party agrees to
 reimburse and indemnify such party for and against any and all
 costs and damages related thereto.

           5.9.  PUBLIC ANNOUNCEMENTS.  The parties hereto shall
 cooperate with each other in the development and distribution of
 all news releases and other public disclosures with respect to this
 Agreement or any of the transactions contemplated hereby, except as
 may be otherwise required by law or regulation or as to which the
 party releasing such information has used its best efforts to
 discuss with the other party in advance.

           5.10.  FAILURE TO FULFILL CONDITIONS.  In the event that
 Valley or Lakeland determines that a material condition to its
 obligation to consummate the transactions contemplated hereby
 cannot be fulfilled on or prior to October 31, 1995 and that it
 will not waive that condition, it will promptly notify the other
 party.  Except for any acquisition or merger discussions Valley may
 enter into with other parties, Lakeland and Valley will promptly
 inform the other of any facts applicable to Lakeland or Valley,
 respectively, or their respective directors or officers, that would
 be likely to prevent or materially delay approval of the Merger by
 any governmental authority or which would otherwise prevent or
 materially delay completion of the Merger.

           5.11.  DISCLOSURE SUPPLEMENTS.  From time to time prior
 to the Effective Time, each party hereto will promptly supplement
 or amend (by written notice to the other) its respective Disclosure
 Schedules delivered pursuant hereto with respect to any matter
 hereafter arising which, if existing, occurring or known at the
 date of this Agreement, would have been required to be set forth or
 described in such Schedules or which is necessary to correct any
 information in such Schedules which has been rendered materially
 inaccurate thereby.  For the purpose of determining satisfaction of
 the conditions set forth in Article VI, no supplement or amendment
 to such Schedules shall correct or cure any warranty which was
 untrue when made, but supplements or amendments may be used to
 disclose subsequent facts or events to maintain the truthfulness of
 any warranty.

           5.12.  TRANSACTION EXPENSES OF LAKELAND.  Lakeland shall
 mutually agree with Valley about printing arrangements for the
 Proxy Statement/Prospectus before entering into any binding
 contract for such expenses.

           5.13.  CLOSING.  The parties hereto shall cooperate and
 use reasonable efforts to try to cause the Effective Time to occur
 on July 1 or October 1, 1995.

           5.14.  INDEMNIFICATION.  After the Effective Time, to the
 extent permitted by applicable law, and the Certificate of
 Incorporation or Articles of Association, Valley agrees that it
 will, or will cause VNB to, provide to the directors and officers
 of Lakeland and the Bank indemnification equivalent to that
 provided by the Certificate of Incorporation and Bylaws of each of
 Lakeland and the Bank with respect to acts or omissions occurring
 prior to the Effective Time, including without limitation, the
 authorization of this Agreement and the transactions contemplated
 hereby, for a period of six years from the Effective Time, or in
 the case of matters occurring prior to the Effective Time which
 have not been resolved prior to the sixth anniversary of the
 Effective Time, until such matters are finally resolved.  To the
 extent permitted by applicable law, and the Certificate of
 Incorporation or Articles of Association, Valley or VNB (as
 applicable) shall advance expenses in connection with the foregoing
 indemnification.

           5.15.  NEW VALLEY DIRECTORS; OFFICERS.

           (a)  DIRECTORS.  As of the Effective Time, Valley shall
 cause its Board of Directors to take action to appoint at the
 Effective Time two directors of Lakeland to the Board of Directors
 of Valley.  One of the Lakeland directors to be so elected shall be
 William H. McNear and the other director shall be selected by the
 nominating committee of the Board of Directors of Valley from two
 nominees submitted by the Board of Directors of Lakeland.  In
 addition, John Grabovetz shall be designated as a Director Emeritus
 of Valley at the Effective Time.

           (b)  OFFICERS.  As of the Effective Time, Valley shall
 appoint Michael Halpin a First Senior Vice President of VNB and
 Valley shall assume in writing Mr. Halpin's employment contract, a
 copy of which is included in the Lakeland Disclosure Schedule.

           5.16.  EMPLOYMENT MATTERS.  Valley intends to continue
 the employment of all officers and employees of the Bank, and to
 the extent practical, at the same location, with the same or
 equivalent salary and benefits.  Valley intends to have all
 Lakeland employees participate in the benefits and opportunities
 available to all Valley employees.

           5.17.  POOLING AND TAX-FREE REORGANIZATION TREATMENT. 
 Neither Valley nor Lakeland shall intentionally take, fail to take
 or cause to be taken or not be taken, any action within its
 control, whether before or after the Effective Time, which would
 disqualify the Merger as a "pooling of interests" for accounting
 purposes or as a "reorganization" within the meaning of Section
 368(a) of the Code.

           5.18  LAKELAND OPTION PLAN.  From and after the Effective
 Time, each Lakeland Option which is converted to an option to
 purchase Valley Common Stock under Section 2.1(b)(i) shall be
 administered, operated and interpreted by a committee comprised of
 members of the Board of Directors of Valley appointed by the Board
 of Directors of Valley.  Valley shall reserve for issuance the
 number of shares of Valley Common Stock necessary to satisfy
 Valley's obligations.  Valley shall also register, if not
 previously registered pursuant to the 1933 Act, the shares
 authorized for issuance under the Lakeland Options so converted.

           5.19.  AFFILIATES.

          (a)  Promptly, but in any event within 30 days, after the
 execution and delivery of this Agreement, (i) Lakeland shall
 deliver to Valley (x) a letter identifying all persons who, to the
 knowledge of Lakeland, may be deemed to be affiliates of Lakeland
 under Rule 145 of the 1933 Act, including without limitation all
 directors and executive officers of Lakeland and (y) a letter
 identifying all persons who, to the knowledge of Lakeland, may be
 deemed to be affiliates of Lakeland as that term (affiliate) is
 used for purposes of qualifying for pooling-of-interests accounting
 treatment; and (ii) Valley shall identify to Lakeland all persons
 who, to the knowledge of Valley, may be deemed affiliates of Valley
 as that term (affiliates) is used for purposes of qualifying for
 pooling-of-interests accounting treatment.

           (b)  Lakeland shall cause each director of Lakeland to,
 and Lakeland shall use its best efforts to cause each executive
 officer of Lakeland and each other person who may be deemed an
 affiliate of Lakeland (under either Rule 415 of the 1933 Act or the
 accounting treatment rules) to, execute and deliver to Valley
 within 30 days after the execution and delivery of this Agreement,
 a letter substantially in the form of Exhibit 5.19 hereto agreeing
 to be bound by the restrictions of Rule 145, as set forth in
 Exhibit 5.19 and agreeing to be bound by the rules which permit the
 Merger to be treated as a pooling of interests for accounting
 purposes.  In addition, Valley shall cause each director and
 executive officer of Valley to, and Valley shall use its best
 efforts to cause each other person who may be deemed an affiliate
 of Valley (as that term is used for purposes of qualifying for
 pooling of interests) to, execute and deliver to Valley within 30
 days after the execution and delivery of this Agreement, a letter
 in which such persons agree to be bound by the rules which permit
 the Merger to be treated as a pooling of interests for accounting
 treatment.

           (c)  Valley agrees to publish financial results covering
 at least 30 days of combined operations of Valley and Lakeland as
 soon as practicable after consummation of the Merger.

           5.20.  COMPLIANCE WITH THE INDUSTRIAL SITE RECOVERY ACT. 
 Lakeland, at its sole cost and expense, shall use its best efforts
 to obtain prior to the Effective Time, with respect to each
 facility located in New Jersey owned or operated by Lakeland or any
 Lakeland Subsidiary (each, a "Facility"), either: (a) a Letter of
 Non-Applicability ("LNA") from the New Jersey Department of
 Environmental Protection ("NJDEP") stating that the Facility is not
 an "industrial establishment," as such term is defined under the
 Industrial Site Recovery Act ("ISRA"); (b) a Remediation Agreement
 issued by the NJDEP pursuant to ISRA authorizing the consummation
 of the transactions contemplated by this Agreement; (c) a Negative
 Declaration approval, Remedial Action Workplan approval, No Further
 Action letter or other document or documents issued by the NJDEP
 advising that the requirements of ISRA have been satisfied with
 respect to the Facility; or (d) an opinion addressed to Valley from
 New Jersey legal counsel reasonably acceptable to Valley to the
 effect that ISRA has been complied with, or is inapplicable, with
 respect to the Facility.  In the event Lakeland obtains a
 Remediation Agreement, Lakeland will post or have posted an
 appropriate Remediation Funding Source or will have obtained the
 NJDEP's approval to self-guaranty any Remediation Funding Source
 required under any such Remediation Agreement.

                            ARTICLE VI

                        CLOSING CONDITIONS

           6.1.  CONDITIONS OF EACH PARTY'S OBLIGATIONS UNDER THIS
 AGREEMENT.  The respective obligations of each party under this
 Agreement to consummate the Merger shall be subject to the
 satisfaction, or, where permissible under applicable law, waiver at
 or prior to the Effective Time of the following conditions:

           (a)  APPROVAL OF LAKELAND SHAREHOLDERS; SEC REGISTRATION. 
 This Agreement and the transactions contemplated hereby shall have
 been approved by the requisite vote of the shareholders of
 Lakeland.  The Registration Statement shall have been declared
 effective by the SEC and shall not be subject to a stop order or
 any threatened stop order, and the issuance of the Valley Common
 Stock shall have been qualified in every state where such
 qualification is required under the applicable state securities
 laws.  The Valley Common Stock to be issued in connection with the
 Merger, including Valley Common Stock to be issued for the Lakeland
 Options, shall have been approved for listing on the New York Stock
 Exchange.

           (b)  REGULATORY FILINGS.  All necessary regulatory or
 governmental approvals and consents (including without limitation
 any required approval of the OCC and any approval or waiver
 required by the FRB) required to consummate the transactions
 contemplated hereby shall have been obtained without any term or
 condition which would materially impair the value of Lakeland and
 the Bank, taken as a whole, to Valley or which would materially
 impair the value of Valley and VNB, taken as a whole, to Lakeland. 
 All conditions required to be satisfied prior to the Effective Time
 by the terms of such approvals and consents shall have been
 satisfied; and all statutory waiting periods in respect thereof
 shall have expired.

           (c)  SUITS AND PROCEEDINGS.  No order, judgment or decree
 shall be outstanding against a party hereto or a third party that
 would have the effect of preventing completion of the Merger; no
 suit, action or other proceeding shall be pending or threatened by
 any governmental body in which it is sought to restrain or prohibit
 the Merger or the Bank Merger; and no suit, action or other
 proceeding shall be pending before any court or governmental agency
 in which it is sought to restrain or prohibit the Merger or the
 Bank Merger or obtain other substantial monetary or other relief
 against one or more parties hereto in connection with this
 Agreement and which Valley or Lakeland determines in good faith,
 based upon the advice of their respective counsel, makes it
 inadvisable to proceed with the Merger because any such suit,
 action or proceeding has a significant potential to be resolved in
 such a way as to deprive the party electing not to proceed of any
 of the material benefits to it of the Merger or the Bank Merger.

           (d)  TAX FREE EXCHANGE.  Valley and Lakeland shall have
 received an opinion, satisfactory to Valley and Lakeland, of
 Pitney, Hardin, Kipp & Szuch, counsel for Valley, to the effect
 that the transactions contemplated hereby will result in a
 reorganization (as defined in Section 368(a) of the Code), and
 accordingly no gain or loss will be recognized for federal income
 tax purposes to Valley, Lakeland, VNB or the Bank or to the
 shareholders of Lakeland who exchange their shares of Lakeland for
 Valley Common Stock (except to the extent that cash is received in
 lieu of fractional shares of Valley Common Stock).

           (e)  POOLING OF INTERESTS. The Merger shall be qualified
 to be treated by Valley as a pooling-of-interests for accounting
 purposes and Valley shall have received a letter from KPMG Peat
 Marwick LLP (and a concurring or back-up letter from Stephen P.
 Radics, as necessary or appropriate to enable KPMG Peat Marwick to
 issue its letter) to the effect that the Merger will qualify for
 pooling-of-interests accounting treatment if closed and consummated
 in accordance with the Agreement.

           6.2.  CONDITIONS TO THE OBLIGATIONS OF VALLEY UNDER THIS
 AGREEMENT.  The obligations of Valley under this Agreement shall be
 further subject to the satisfaction or waiver, at or prior to the
 Effective Time, of the following conditions:

           (a)  REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
 OBLIGATIONS OF LAKELAND AND BANK.  The representations and
 warranties of Lakeland contained in this Agreement shall be true
 and correct in all material respects on the Closing Date as though
 made on and as of the Closing Date.  Lakeland shall have performed
 in all material respects the agreements, covenants and obligations
 necessary to be performed by it prior to the Closing Date.  With
 respect to any representation or warranty which as of the Closing
 Date has required a supplement or amendment to the Lakeland
 Disclosure Schedule to render such representation or warranty true
 and correct as of the Closing Date, the representation and warranty
 shall be deemed true and correct as of the Closing Date only if (i)
 the information contained in the supplement or amendment to the
 Disclosure Schedule related to events occurring following the
 execution of this Agreement and (ii) the facts disclosed in such
 supplement or amendment would not either alone, or together with
 any other supplements or amendments to the Lakeland Disclosure
 Schedule, materially adversely effect the representation as to
 which the supplement or amendment relates.

           (b)  CONSENTS.  Valley shall have received the written
 consents of any person whose consent to the transactions
 contemplated hereby is required under the applicable instrument.

           (c)  OPINION OF COUNSEL.  Valley shall have received an
 opinion of counsel to Lakeland, dated the date of the Closing, in
 form and substance reasonably satisfactory to Valley, covering the
 matters set forth on Schedule 6.2 hereto and any other matters
 reasonably requested by Valley.

           (d)  BANK ACTION.  The Bank shall have taken all
 necessary corporate action to effectuate the Bank Merger
 immediately following the Effective Time.

           (e)  CERTIFICATES.  Lakeland shall have furnished Valley
 with such certificates of its officers or other documents to
 evidence fulfillment of the conditions set forth in this Section
 6.2 as Valley may reasonably request.

           (f)  ENVIRONMENTAL LAW COMPLIANCE.  Lakeland shall have
 obtained, with respect to each Facility, an LNA, a Remediation
 Agreement, a Negative Declaration approval, a Remedial Action
 Workplan approval (in which event Lakeland will post or have posted
 an appropriate Remediation Funding Source or will have obtained the
 NJDEP's approval to self-guaranty any Remediation Funding Source
 required under any such Remediation Agreement), a No Further Action
 letter or other document or documents issued by the NJDEP advising
 that the requirements of ISRA have been satisfied with respect to
 the Facility or an opinion of the type referred to in Section
 5.20(d) hereof.

           6.3.  CONDITIONS TO THE OBLIGATIONS OF LAKELAND UNDER
 THIS AGREEMENT.  The obligations of Lakeland under this Agreement
 shall be further subject to the satisfaction or waiver, at or prior
 to the Effective Time, of the following conditions:

           (a)  REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
 OBLIGATIONS OF VALLEY.  The representations and warranties of
 Valley contained in this Agreement shall be true and correct in all
 material respects on the Closing Date as though made on and as of
 the Closing Date.  Valley shall have performed in all material
 respects, the agreements, covenants and obligations to be performed
 by it prior to the Closing Date.  With respect to any
 representation or warranty which as of the Closing Date has
 required a supplement or amendment to the Valley Disclosure
 Schedule to render such representation or warranty true and correct
 as of the Closing Date, the representation and warranty shall be
 deemed true and correct as of the Closing Date only if (i) the
 information contained in the supplement or amendment to the
 Disclosure Schedule related to events occurring following the
 execution of this Agreement and (ii) the facts disclosed in such
 supplement or amendment would not either alone, or together with
 any other supplements or amendments to the Valley Disclosure
 Schedule, materially adversely effect the representation as to
 which the supplement or amendment relates.

           (b)  OPINION OF COUNSEL TO VALLEY.  Lakeland shall have
 received an opinion of counsel to Valley, dated the date of the
 Closing, in form and substance reasonably satisfactory to Lakeland,
 covering the matters set forth on Schedule 6.3 hereto.

           (c)  FAIRNESS OPINION.  Lakeland shall have received an
 opinion from Hopper Soliday as of the date of this Agreement and
 the date the Proxy Statement/Prospectus is mailed to Lakeland's
 stockholders, to the effect that, in its opinion, the consideration
 to be paid to stockholders of Lakeland hereunder is fair to such
 stockholders from a financial point of view.

           (d)  LAKELAND DIRECTORS AND OFFICERS.  Valley shall have
 taken all action necessary to appoint two directors of Lakeland to
 the Board of Directors of Valley, shall have appointed Michael
 Halpin a First Senior Vice President of Valley and shall have
 assumed in writing the contract of Michael Halpin, all as provided
 in Section 5.15 and shall appoint John Grabovetz as Director
 Emeritus.

           (e)  CERTIFICATES.  Valley shall have furnished Lakeland
 with such certificates of its officers or others and such other
 documents to evidence fulfillment of the conditions set forth in
 this Section 6.3 as Lakeland may reasonably request.

           (f)  VNB ACTION.  VNB shall have taken all necessary
 corporate action to effectuate the Bank Merger immediately
 following the Effective Time.

                            ARTICLE VII

                 TERMINATION, AMENDMENT AND WAIVER

           7.1.  TERMINATION.  This Agreement may be terminated
 prior to the Effective Time, whether before or after approval of
 this Agreement by the stockholders of Lakeland:

           (a)  By mutual written consent of the parties hereto.

           (b)  By Valley or Lakeland (i) if the Effective Time
 shall not have occurred on or prior to October 31, 1995 or (ii) if
 a vote of the stockholders of Lakeland is taken and such
 stockholders fail to approve this Agreement at the meeting (or any
 adjournment thereof) held for such purpose, unless in each case the
 failure of such occurrence shall be due to the failure of the party
 seeking to terminate this Agreement to perform or observe its
 agreement set forth herein to be performed or observed by such
 party (or the directors of Lakeland) at or before the Effective
 Time. 

           (c)  By Valley or Lakeland upon written notice to the
 other if any application for regulatory or governmental approval
 necessary to consummate the Merger and the other transactions
 contemplated hereby shall have been denied or withdrawn at the
 request or recommendation of the applicable regulatory agency or
 governmental authority or by Valley upon written notice to Lakeland
 if any such application is approved with conditions which
 materially impair the value of Lakeland and the Bank, taken as a
 whole, to Valley.

           (d)  By Valley if (i) there shall have occurred a
 material adverse change in the business, operations, assets, or
 financial condition of Lakeland or the Bank, taken as a whole, from
 that disclosed by Lakeland on the date of this Agreement; or (ii)
 if the net operating income excluding security gains and losses
 (after tax but excluding expenses related to this Agreement) of
 Lakeland for any full fiscal quarter after December 31, 1994, is
 materially less than the net income of Lakeland for each of the
 last two fiscal quarters of calendar year 1994; or (iii) there was
 a material breach in any representation, warranty, covenant,
 agreement or obligation of Lakeland hereunder. 

           (e)  By Lakeland, if (i) there shall have occurred a
 material adverse change in the business, operations, assets or
 financial condition of Valley or VNB from that disclosed by Valley
 on the date of this Agreement; or (ii) if the net operating income
 excluding security gains and losses (after tax but excluding
 expenses related to this Agreement) of Valley for any full fiscal
 quarter after December 31, 1994, is materially less than the net
 income of Valley for each of the last two fiscal quarters of
 calendar year 1994; or (iii) there was a material breach in any
 representation, warranty, covenant, agreement or obligation of
 Valley hereunder.

           (f)  By Valley or Lakeland if any condition to Closing
 specified under Article VI hereof applicable to such party cannot
 reasonably be met after giving the other party a reasonable
 opportunity to cure any such condition.

           (g)  By Lakeland in the event that, as provided in
 Section 5.3 hereof, the fiduciary responsibilities of the Board of
 Directors of Lakeland established under applicable law require
 Lakeland to participate or authorize participation in any
 Acquisition Transaction.

           7.2.  EFFECT OF TERMINATION.  In the event of the
 termination and abandonment of this Agreement by either Valley or
 Lakeland pursuant to Section 7.1, this Agreement shall forthwith
 become void and have no effect, without any liability on the part
 of any party or its officers, directors or stockholders.  Nothing
 contained herein, however, shall relieve any party from any
 liability for any breach of this Agreement.

           7.3.  AMENDMENT.  This Agreement may be amended by mutual
 action taken by the parties hereto at any time before or after
 adoption of this Agreement by the stockholders of Lakeland but,
 after any such adoption, no amendment shall be made which reduces
 or changes the amount or form of the consideration to be delivered
 to the shareholders of Lakeland without the approval of such
 stockholders.  This Agreement may not be amended except by an
 instrument in writing signed on behalf of Valley and Lakeland.

           7.4.  EXTENSION; WAIVER.  The parties may, at any time
 prior to the Effective Time of the Merger, (i) extend the time for
 the performance of any of the obligations or other acts of the
 other parties hereto; (ii) waive any inaccuracies in the
 representations and warranties contained herein or in any document
 delivered pursuant thereto; or (iii) waive compliance with any of
 the agreements or conditions contained herein.  Any agreement on
 the part of any party to any such extension or waiver shall be
 valid only if set forth in an instrument in writing signed on
 behalf of such party against which the waiver is sought to be
 enforced.

                           ARTICLE VIII

                           MISCELLANEOUS

           8.1.  EXPENSES.  All costs and expenses incurred in
 connection with this Agreement and the transactions contemplated
 hereby (including legal, accounting and investment banking fees and
 expenses) shall be borne by the party incurring such costs and
 expenses, except that the cost of printing and mailing the Proxy
 Statement/Prospectus shall be borne equally by the parties hereto
 if the transaction is terminated.

           8.2.  NOTICES.  All notices or other communications which
 are required or permitted hereunder shall be in writing and
 sufficient if delivered personally or sent by telecopier with
 confirming copy sent the same day by registered or certified mail,
 postage prepaid, as follows:

           (a)  If to Valley, to:

                Valley National Bancorp
                1445 Valley Road
                Wayne, New Jersey  07474-0558
                Attn.:  Gerald H. Lipkin
                        Chairman and Chief Executive Officer
                Telecopier No. (201) 305-0024

                Copy to:

                Pitney, Hardin, Kipp & Szuch
                Delivery: 
                200 Campus Drive
                Florham Park, New Jersey  07932

                Mail:
                P.O. Box 1945
                Morristown, New Jersey  07962-1945
                Attn.:  Ronald H. Janis, Esq.
                Telecopier No. (201) 966-1550

           (b)  If to Lakeland, to:

                Lakeland First Financial Group, Inc.
                250 Route 10
                Succasunna, New Jersey  07876
                Attn:  Michael Halpin,
                  President and Chief Executive Officer
                Telecopier No. (201) 584-2234

                Copy to:

                Malizia, Spidi, Sloane and Fisch, P.C.
                1301 K Street, N.W., Suite 700 East
                Washington, D.C.  20005
                Attn:  John J. Spidi, Esq.
                Telecopier No. (202) 434-4661

 or such other addresses as shall be furnished in writing by any
 party, and any such notice or communications shall be deemed to
 have been given as of the date so delivered or telecopied and
 mailed.

           8.3.  PARTIES IN INTEREST.  This Agreement shall be
 binding upon and shall inure to the benefit of the parties hereto
 and their respective successors and permitted assigns.  Nothing in
 this Agreement is intended to confer, expressly or by implication,
 upon any other person any rights or remedies under or by reason of
 this Agreement, except for the indemnitees covered by Section 5.14
 hereof, the persons referred to in Section 5.15 and the persons
 signing letter agreements pursuant to Section 5.19 hereof who shall
 be entitled to the benefits of such Section 5.19.  No assignment of
 this Agreement may be made except upon the written consent of the
 other parties hereto.

           8.4.  ENTIRE AGREEMENT.  This Agreement, which includes
 the Disclosure Schedules hereto and the other documents, agreements
 and instruments executed and delivered pursuant to or in connection
 with this Agreement, contains the entire Agreement between the
 parties hereto with respect to the transactions contemplated by
 this Agreement and supersedes all prior negotiations, arrangements
 or understandings, written or oral, with respect thereto, including
 the Letter of Intent.  If any provision of this Agreement is found
 invalid, it shall be considered deleted and shall not invalidate
 the remaining provisions.

           8.5.  COUNTERPARTS.  This Agreement may be executed in
 one or more counterparts, all of which shall be considered one and
 the same agreement and each of which shall be deemed an original.

           8.6.  GOVERNING LAW.  This Agreement shall be governed by
 the laws of the State of New Jersey, without giving effect to the
 principles of conflicts of laws thereof.

           8.7.  DESCRIPTIVE HEADINGS.  The descriptive headings of
 this Agreement are for convenience only and shall not control or
 affect the meaning or construction of any provision of this
 Agreement.

           8.8  SURVIVAL.  All representations, warranties and,
 except to the extent specifically provided otherwise herein,
 agreements and covenants, other than those agreements and covenants
 set forth in Sections 5.14, 5.15 and 5.18 which shall survive the
 Merger, shall terminate as of the Effective Time.

           IN WITNESS WHEREOF, Valley, VNB, the Bank and Lakeland
 have caused this Agreement to be executed by their duly authorized
 officers as of the day and year first above written.

 ATTEST:                       VALLEY NATIONAL BANCORP

 By: PETER SOUTHWAY            By: GERALD H. LIPKIN
     -------------------------     -------------------------
     Peter Southway, President     Gerald H. Lipkin
                                   Chairman and Chief
                                   Executive Officer

 ATTEST:                       LAKELAND FIRST FINANCIAL GROUP, INC.

 By: WILLIAM H. McNEAR         By: MICHAEL HALPIN
     -------------------------     -------------------------
     William H. McNear,            Michael Halpin, President
     Chairman                      and Chief Executive Officer

 ATTEST:                       VALLEY NATIONAL BANK

 By: PETER SOUTHWAY            By: GERALD H. LIPKIN
     -------------------------     -------------------------
     Peter Southway, President     Gerald H. Lipkin
                                   Chairman and Chief
                                   Executive Officer

 ATTEST:                       LAKELAND SAVINGS BANK

 By: WILLIAM H. McNEAR         By: MICHAEL HALPIN
     -------------------------     -------------------------
     William H. McNear,            Michael Halpin, President
     Chairman                      and Chief Executive Officer
   

 <PAGE>
                                                                   ANNEX B

                      HOPPER SOLIDAY & CO., INC.


                                          May 5, 1995         


  The Board of Directors
  Lakeland First Financial Group, Inc.
  250 Route 10
  Succasunna, New Jersey  07876

  Members of the Board:

            You have requested our opinion as to the fairness, from
  a  financial point of  view, to  Lakeland First  Financial Group,
  Inc. ("Lakeland") and its shareholders of the financial terms  of
  the  proposed  merger ("Proposed  Merger")  between Lakeland  and
  Valley National Bancorp ("Valley").

            The terms  of the  Amended  and Restated  Agreement and
  Plan  of Merger  dated as of April 21, 1995 (the "Agreement"), by
  and between Lakeland  and Valley  indicate that the  consummation
  of the  Proposed Merger is subject  to receipt of  approvals from
  the   shareholders  of  Lakeland  and  from  various   regulatory
  agencies,  and is further subject  to the satisfaction of certain
  other conditions. As provided for in the Agreement, Lakeland will
  merge  with  and into  Valley.  Under the terms of the Agreement,
  each outstanding share of Lakeland common stock will be converted
  into 1.286 shares (the "Exchange Ratio") of Valley  common stock.
  The  Exchange Ratio has been adjusted to reflect the five percent
  stock dividend  declared by Valley on March 23, 1995 and  payable
  May 2, 1995 to shareholders of record as  of April 14, 1995.   No
  adjustment in  the Exchange Ratio will  be made as of the Closing
  Date to  compensate for any  change in the  market  value of  the
  common stock of Valley between January 26, 1995 (the date  of the
  Letter  of Intent  between  Lakeland and  Valley) and the Closing
  Date.
    

            Hopper  Soliday &  Co., Inc.  ("Hopper  Soliday") as  a
  customary  part of its investment banking business, is engaged in
  the  valuation of  securities and  companies  in connection  with
  mergers,  acquisitions, private  placements  and other  corporate
  transactions.

            In arriving at our opinion we have reviewed among other
  things: (i) the Agreement; (ii)  the Agreement and Plan of Merger
  dated  November  9, 1994  by  and  between  American  Union  Bank
  ("American Union") and  Valley concerning the proposed  merger of
  American Union with and into Valley (the "American Union Merger")
  as well as the American Union Proxy Statement/Prospectus for this
  transaction; (iii)  the  Proxy Statement/Prospectus  on Form  S-4
  concerning  the Proposed Merger;  (iv) Valley Annual  Reports for
  the years ended  December 31, 1992 through December  31, 1994 and
  annual Reports on Form 10-K for the years ended December 31, 1992
  and 1993;  (v) Lakeland Annual  Reports for the years  ended June
  30, 1992 through  June 30, 1994, Annual Reports on  Form 10-K for
  the  same periods;  and Quarterly  Reports on  Form 10-Q  for the
  quarters  ending September 30,  1994 and December  31, 1994; (vi)
  financial forecasts  of Valley  reviewed with  the management  of
  Valley; (vii) financial  forecasts of Lakeland reviewed  with the
  management of Lakeland; (viii) the  views of senior management of
  Lakeland and Valley of their respective past and current business
  operations,  results  thereof,  financial  condition  and  future
  prospects; (ix)  historical and current publicly available market
  information concerning the trading of and the trading markets for
  Lakeland common stock and Valley  common stock; (x) the financial
  terms of recent mergers and  acquisitions in the savings industry
  which we deem to be  comparable to the Proposed Merger; (xi)  the
  current  banking environment;  and (xii) such  other information,
  financial  studies,  analyses  and investigations  and  financial
  economic and market criteria as we consider relevant.

            In reaching  our opinion,  we have  assumed and  relied
  upon,  without   independent  verification,   the  accuracy   and
  completeness of all the financial information, analyses and other
  information reviewed  by and  discussed with us,  and we  did not
  make or  obtain from any other source, any independent evaluation
  or  appraisal of  the specific  assets,  the collateral  securing
  assets or the liabilities of  Valley or Lakeland or any of  their
  subsidiaries, or the  collectability of  any such  assets.   With
  respect to the financial projections reviewed with management, we
  have assumed that they have  been reasonably prepared on the best
  currently available  estimates and  judgments  of the  respective
  managements of the  respective future  financial performances  of
  Lakeland and Valley and that such performances  will be achieved.
  We have also assumed  that there has  been no material change  in
  Lakeland's  or  Valley's  assets,  financial condition, results of
  operations,  business or  future prospects  since the  date of the
  last  financial  statements noted  above.  We have further assumed
  that in the course of obtaining the necessary regulatory approvals
  for the  Proposed Merger, no conditions  will be imposed that will
  have  a  material  adverse  effect  on  the  amount  or  form   of
  consideration  or  on  the  results  of  operations, the financial
  condition  or the prospects of Lakeland or, on  a pro forma basis,
  Valley.

            Our opinion is based upon information provided to us by
  the  managements  of  Lakeland and  Valley,  as  well  as market,
  economic, financial and other conditions as they exist and can be
  evaluated only as of the date hereof.  Events occurring after the
  date  hereof  could  materially effect  the  assumptions  used in
  preparing this  opinion.  We  have not undertaken to  reaffirm or
  revise   this  opinion  or  otherwise  comment  upon  any  events
  occurring after  the date hereof.   Our opinion pertains  only to
  the  financial consideration offered  in the Proposed  Merger and
  does not constitute a recommendation to the Board of Lakeland.

            We  have  acted  as  Lakeland's  financial  advisor  in
  connection with  the Proposed Merger  and will receive a  fee for
  our  services, a significant portion  of which is contingent upon
  the consummation of the Proposed  Merger.  We received an initial
  retainer  for our engagement  as financial advisor,  but have not
  received an additional fee for rendering this opinion.

            It is understood that this  opinion is not to be quoted
  or referred to, in whole or in part, in a registration statement,
  prospectus, or proxy statement, or  in any other document used in
  connection with  the offering  or sale of  securities, nor  shall
  this  letter  be used  for  any  other  purpose,  without  Hopper
  Soliday's  prior  written  consent; provided,  however,  that  we
  hereby  consent  to  the  inclusion   of  this  opinion  in   any
  registration statement or proxy statement used in connection with
  the Proposed Merger so long as  the opinion is quoted in full  in
  such registration statement or proxy statement.

            Based  upon and  subject  to the  foregoing, it  is our
  opinion that, as  of the date hereof,  the terms of the  Proposed
  Merger as provided and described  in the Agreement are fair, from
  a financial point of view, to Lakeland and its shareholders.


  Very truly yours,
   

  HOPPER SOLIDAY & CO., INC.

    
 <PAGE> 
   
                                                        ANNEX C

    
                      STOCK OPTION AGREEMENT

           THIS STOCK OPTION AGREEMENT ("Agreement") dated January
 26, 1995, is by and between Valley National Bancorp, a New Jersey
 corporation and registered bank holding company ("Valley"), and
 Lakeland First Financial Group, Inc. a New Jersey corporation
 ("Lakeland") and registered bank holding company for Lakeland
 Savings Bank ("Bank").

                            BACKGROUND

      1.   Valley, Lakeland, the Bank and Valley National Bank
 ("VNB"), a wholly-owned subsidiary of Valley, as of the date
 hereof, have executed a letter of intent (the "Letter Agreement")
 pursuant to which the parties will negotiate a definitive
 agreement and plan of merger (the "Merger Agreement") pursuant to
 which Valley will acquire Lakeland through a merger of Lakeland
 with and into Valley (the "Merger").

      2.   As an inducement to Valley to enter into the letter of
 intent and negotiate the Merger Agreement and in consideration
 for such entry and negotiation, Lakeland desires to grant to
 Valley an option to purchase authorized but unissued shares of
 common stock of Lakeland in an amount and on the terms and
 conditions hereinafter set forth.

                             AGREEMENT

      In consideration of the foregoing and the mutual covenants
 and agreements set forth herein and in letter of intent and in
 any definitive Merger Agreement, Valley and Lakeland, intending
 to be legally bound hereby, agree:

      1.   GRANT OF OPTION.  Lakeland hereby grants to Valley the
 option to purchase 1,250,000 shares of common stock, $0.10 par
 value (the "Common Stock") of Lakeland at an exercise price of
 $21.00 per share (the "Option Price"), on the terms and
 conditions set forth herein (the "Option").

      2.   EXERCISE OF OPTION.  This Option shall not be
 exercisable until the occurrence of a Triggering Event (as such
 term is hereinafter defined).  Upon or after the occurrence of a
 Triggering Event (as such term is hereinafter defined), Valley
 may exercise the Option, in whole or in part, at any time or from
 time to time in accordance with the terms and conditions hereof.

      The term "Triggering Event" means the occurrence of any of
 the following events:

      A person or group (as such terms are defined in the
 Securities Exchange Act of 1934, as amended (the "Exchange Act"),
 and the rules and regulations thereunder) other than Valley or an
 affiliate of Valley:

           a.   acquires beneficial ownership (as such term is
 defined in Rule 13d-3 as promulgated under the Exchange Act) of
 at least 20% of the then outstanding shares of Common Stock;

           b.   enters into a written letter of intent or an
 agreement with Lakeland pursuant to which such person or any
 affiliate of such person would (i) merge or consolidate, or enter
 into any similar transaction with Lakeland, (ii) acquire all or a
 significant portion of the assets or liabilities of Lakeland, or
 (iii) acquire beneficial ownership of securities representing, or
 the right to acquire beneficial ownership or to vote securities
 representing 10% or more of the then outstanding shares of Common
 Stock;

           c.   makes a filing with any bank or thrift regulatory
 authorities or publicly announces a bona fide proposal (a
 "Proposal") for (i) any merger, consolidation or acquisition of
 all or a significant portion of all the assets or liabilities of 
 Lakeland or any other business combination involving Lakeland, or
 (ii) a transaction involving the transfer of beneficial ownership
 of securities representing, or the right to acquire beneficial
 ownership or to vote securities representing, 20% or more of the
 outstanding shares of Common Stock, and thereafter, if such
 Proposal has not been Publicly Withdrawn (as such term is
 hereinafter defined) at least 15 days prior to the meeting of
 stockholders of Lakeland called to vote on the Merger and
 Lakeland stockholders fail to approve the Merger by the vote
 required by applicable law at the meeting of stockholders called
 for such purpose; or

           d.   makes a bona fide Proposal and thereafter, but
 before such Proposal has been Publicly Withdrawn, Lakeland
 willfully takes any action in any manner which would materially
 interfere with its desire or ability to enter into a definitive
 Merger Agreement or its ability to consummate the Merger or
 materially reduce the value of the transaction to Valley.

      The term "Triggering Event" also means the taking of any
 direct or indirect action by Lakeland or any of its directors,
 officers or agents to invite, encourage or solicit any proposal
 which has as its purpose a tender offer for the shares of
 Lakeland Common Stock, a merger, consolidation,  plan of
 exchange, plan of acquisition or reorganization of Lakeland, or a
 sale of shares of Lakeland Common Stock or any significant
 portion of its assets or liabilities.

      The term "significant portion" means 25% of the assets or
 liabilities of Lakeland.

      "Publicly Withdrawn", for purposes of clauses (c) and (d)
 above, shall mean an unconditional bona fide withdrawal of the
 Proposal coupled with a public announcement of no further
 interest in pursuing such Proposal or in acquiring any
 controlling influence over Lakeland or in soliciting or inducing
 any other person (other than Valley or any affiliate) to do so.

      Notwithstanding the foregoing, the Option may not be
 exercised at any time (i) in the absence of any required
 governmental or regulatory approval or consent necessary for
 Lakeland to issue the Option Shares or Valley to exercise the
 Option or prior to the expiration or termination of any waiting
 period required by law, or (ii) so long as any injunction or
 other order, decree or ruling issued by any federal or state
 court of competent jurisdiction is in effect which prohibits the
 sale or delivery of the Option Shares.

      Lakeland shall notify Valley promptly in writing of the
 occurrence of any Triggering Event known to it, it being
 understood that the giving of such notice by Lakeland shall not
 be a condition to the right of Valley to exercise the Option. 
 Lakeland will not take any action which would have the effect of
 preventing or disabling Lakeland from delivering the Option
 Shares to Valley upon exercise of the Option or otherwise
 performing its obligations under this Agreement.

      In the event Valley wishes to exercise the Option, Valley
 shall send a written notice to Lakeland (the date of which is
 hereinafter referred to as the "Notice Date") specifying the
 total number of Option Shares it wishes to purchase and a place
 and date for the closing of such a purchase (a "Closing");
 provided, however, that a Closing shall not occur prior to two
 days after the later of receipt of any necessary regulatory
 approvals and the expiration of any legally required notice or
 waiting period, if any.

      3.   PAYMENT AND DELIVERY OF CERTIFICATES.  At any Closing
 hereunder (a) Valley will make payment to Lakeland of the
 aggregate price for the Option Shares so purchased by wire
 transfer of immediately available funds to an account designated
 by Lakeland, (b) Lakeland will deliver to Valley a stock
 certificate or certificates representing the number of Option
 Shares so purchased, free and clear of all liens, claims, charges
 and encumbrances of any kind or nature whatsoever created by or
 through Lakeland, registered in the name of Valley or its
 designee, in such denominations as were specified by Valley in
 its notice of exercise and bearing a legend as set forth below
 and (c) Valley shall pay any transfer or other taxes required by
 reason of the issuance of the Option Shares so purchased.

      Unless a registration statement is filed and declared
 effective under Section 4 hereof, a legend will be placed on each
 stock certificate evidencing Option Shares issued pursuant to
 this Agreement, which legend will read substantially as follows:

           The shares of stock evidenced by this certificate have
      not been registered for sale under the Securities Act of
      1933 (the "1933 Act").  These shares may not be sold,
      transferred or otherwise disposed of unless a registration
      statement with respect to the sale of such shares has been
      filed under the 1933 Act and declared effective or, in the
      opinion of counsel reasonably acceptable to Lakeland
      Financial Corporation, said transfer would be exempt from
      registration under the provisions of the 1933 Act and the
      regulations promulgated thereunder.

      4.   REGISTRATION RIGHTS.  Upon or after the occurrence of a
 Triggering Event and upon receipt of a written request from
 Valley, Lakeland shall prepare and file a registration statement
 with the Securities and Exchange Commission, covering the Option
 and such number of Option Shares as Valley shall specify in its
 request, and Lakeland shall use its best efforts to cause such
 registration statement to be declared effective in order to
 permit the sale or other disposition of the Option and the Option
 Shares, provided that Valley shall in no event have the right to
 have more than one such registration statement become effective. 

      In connection with such filing, Lakeland shall use its best
 efforts to cause to be delivered to Valley such certificates,
 opinions, accountant's letters and other documents as Valley
 shall reasonably request and as are customarily provided in
 connection with registrations of securities under the Securities
 Act of 1933, as amended.  All expenses incurred by Lakeland in
 complying with the provisions of this Section 4, including
 without limitation, all registration and filing fees, printing
 expenses, fees and disbursements of counsel for Lakeland and blue
 sky fees and expenses shall be paid by Valley.  Underwriting
 discounts and commissions to brokers and dealers relating to the
 Option Shares, fees and disbursements of counsel to Valley and
 any other expenses incurred by Valley in connection with such
 registration shall be borne by Valley.  In connection with such
 filing, Lakeland shall indemnify and hold harmless Valley against
 any losses, claims, damages or liabilities, joint or several, to
 which Valley may become subject, insofar as such losses, claims,
 damages or liabilities (or actions in respect thereof) arise out
 of or are based upon any untrue statement with respect to
 Lakeland or alleged untrue statement with respect to Lakeland of
 any material fact with respect to Lakeland contained in any
 preliminary or final registration statement or any amendment or
 supplement thereto, or arise out of a material fact with respect
 to Lakeland required to be stated therein or necessary to make
 the statements therein with respect to Lakeland not misleading;
 and Lakeland will reimburse Valley for any legal or other expense
 reasonably incurred by Valley in connection with investigating or
 defending any such loss, claim, damage, liability or action;
 provided, however, that Lakeland will not be liable in any case
 to the extent that any such loss, claim, damage or liability
 arises out of or is based upon an untrue statement or alleged
 untrue statement of omission or alleged omission made in such
 preliminary or final registration statement or such amendment or
 supplement thereto in reliance upon and in conformity with
 written information furnished by or on behalf of Valley
 specifically for use in the preparation thereof.  Valley will
 indemnify and hold harmless Lakeland to the same extent as set
 forth in the immediately preceding sentence but only with
 reference to written information specifically furnished by or on
 behalf of Valley for use in the preparation of such preliminary
 or final registration statement or such amendment or supplement
 thereto; and Valley will reimburse Lakeland for any legal or
 other expense reasonably incurred by Lakeland in connection with
 investigating or defending any such loss, claim, damage,
 liability or action.

      5.   ADJUSTMENT UPON CHANGES IN CAPITALIZATION.  In the
 event of any change in the Common Stock by reason of stock
 dividends, split-ups, mergers, recapitalizations, combinations,
 conversions, exchanges of shares or the like, then the number and
 kind of Option Shares and the Option Price shall be appropriately
 adjusted.

      In the event any capital reorganization or reclassification
 of the Common Stock, or any consolidation, merger or similar
 transaction of Lakeland with another entity, or in the event any
 sale of all or substantially all of the assets of Lakeland shall
 be effected in such a way that the holders of Common Stock shall
 be entitled to receive stock, securities or assets with respect
 to or in exchange for Common Stock, then, as a condition of such
 reorganization, reclassification, consolidation, merger or sale,
 lawful and adequate provisions (in form reasonably satisfactory
 to the holder hereof) shall be made whereby the holder hereof
 shall thereafter have the right to purchase and receive upon the
 basis and upon the terms and conditions specified herein and in
 lieu of the Common Stock immediately theretofore purchasable and
 receivable upon exercise of the rights represented by this
 Option, such shares of stock, securities or assets as may be
 issued or payable with respect to or in exchange for the number
 of shares of Common Stock immediately theretofore purchasable and
 receivable upon exercise of the rights represented by this Option
 had such reorganization, reclassification, consolidation, merger
 or sale not taken place; provided, however, that if such
 transaction results in the holders of Common Stock receiving only
 cash, the holder hereof shall be paid the difference between the
 Option Price and such cash consideration without the need to
 exercise the Option.

      6.   FILINGS AND CONSENTS.  Each of Valley and Lakeland will
 use its best efforts to make all filings with, and to obtain
 consents of, all third parties and governmental authorities
 necessary to the consummation of the transactions contemplated by
 this Agreement.

      Exercise of the Option herein provided shall be subject to
 compliance with all applicable laws including, in the event
 Valley is the holder hereof, approval of the Board of Governors
 of the Federal Reserve System and Lakeland agrees to cooperate
 with and furnish to the holder hereof such information and
 documents as may be reasonably required to secure such approvals.

      7.   REPRESENTATIONS AND WARRANTIES OF LAKELAND.  Lakeland
 hereby represents and warrants to Valley as follows:

           a.   DUE AUTHORIZATION.  Lakeland has full corporate
 power and authority to execute, deliver and perform this
 Agreement and all corporate action necessary for execution,
 delivery and performance of this Agreement has been duly taken by
 Lakeland.

           b.   AUTHORIZED SHARES.  Lakeland has taken and, as
 long as the Option is outstanding, will take all necessary
 corporate action to authorize and reserve for issuance all shares
 of Common Stock that may be issued pursuant to any exercise of
 the Option.

           c.   NO CONFLICTS.  Neither the execution and delivery
 of this Agreement nor consummation of the transactions
 contemplated hereby (assuming all appropriate regulatory
 approvals) will violate or result in any violation or default of
 or be in conflict with or constitute a default under any term of
 the certificate of incorporation or by-laws of Lakeland or, to
 its knowledge, any agreement, instrument, judgment, decree,
 statute, rule or order applicable to Lakeland.

      8.   SPECIFIC PERFORMANCE.  The parties hereto acknowledge
 that damages would be an inadequate remedy for a breach of this
 Agreement and that the obligations of the parties hereto shall be
 specifically enforceable.  Notwithstanding the foregoing, Valley
 shall have the right to seek money damages against Lakeland for a
 breach of this Agreement.

      9.   ENTIRE AGREEMENT.  This Agreement constitutes the
 entire agreement between the parties with respect to the subject
 matter hereof and supersedes all other prior agreements and
 understandings, both written and oral, among the parties or any
 of them with respect to the subject matter hereof.

      10.  ASSIGNMENT OR TRANSFER.  Valley may not sell, assign or
 otherwise transfer its rights and obligations hereunder, in whole
 or in part, to any person or group of persons other than to an
 affiliate of Valley.  Valley represents that it is acquiring the
 Option for Valley's own account and not with a view to or for
 sale in connection with any distribution of the Option.  Valley
 is aware that presently neither the Option nor the Option Shares
 are being offered by a registration statement filed with, and
 declared effective by, the Securities and Exchange Commission,
 but instead are being offered in reliance upon the exemption from
 the registration requirements pursuant to Section 4(2) of the
 Securities Act of 1933, as amended.

      11.  AMENDMENT OF AGREEMENT.  By mutual consent of the
 parties hereto, this Agreement may be amended in writing at any
 time, for the purpose of facilitating performance hereunder or to
 comply with any applicable regulation of any governmental
 authority or any applicable order of any court or for any other
 purpose.

      12.  VALIDITY.  The invalidity or unenforceability of any
 provision of this Agreement shall not affect the validity or
 enforceability of any other provisions of this Agreement, which
 shall remain in full force and effect.

      13.  NOTICES.  All notices, requests, consents and other
 communications required or permitted hereunder shall be in
 writing and shall be deemed to have been duly given when
 delivered personally, by express service, cable, telegram or
 telex, or by registered or certified mail (postage prepaid,
 return receipt requested) to the respective parties as follows:

      If to Valley:  

           Valley National Bancorp
           1445 Valley Road
           Wayne, New Jersey  07470
           Attn.:  Gerald H. Lipkin
                   Chairman and Chief Executive Officer

      With a copy to:

           Pitney, Hardin, Kipp & Szuch
           200 Campus Drive
           Florham Park, New Jersey  07932-0950

           P.O. Box 1945
           Morristown, New Jersey  07962-1945
           Attn.:  Ronald H. Janis, Esq.

      If to Lakeland:

           Lakeland First Financial Group, Inc.
           250 Route 10
           Succasunna, NJ  07876
           Attn.: Michael Halpin
                  President and Chief Executive Officer
      
      With a copy to:

           Malizia, Spidi, Sloane and Fisch, P.C.
           1301 K Street, N.W.
           Suite 700 East
           Washington, D.C.  20005
           Attn.:  John J. Spidi, Esq.

 or to such other address as the person to whom notice is to be
 given may have previously furnished to the others in writing in
 the manner set forth above (provided that notice of any change of
 address shall be effective only upon receipt thereof).

      14.  GOVERNING LAW.  This Agreement shall be governed by and
 construed in accordance with the laws of the State of New Jersey.

      15.  CAPTIONS.  The captions in the Agreement are inserted
 for convenience and reference purposes, and shall not limit or
 otherwise affect any of the terms or provisions hereof.

      16.  WAIVERS AND EXTENSIONS.  The parties hereto may, by
 mutual consent, extend the time for performance of any of the
 obligations or acts of either party  hereto.  Each party may
 waive (i) compliance with any of the covenants of the other party
 contained in this Agreement and/or (ii) the other party's
 performance of any of its obligations set forth in this
 Agreement.

      17.  PARTIES IN INTEREST.  This Agreement shall be binding
 upon and inure solely to the benefit of each party hereto, and
 nothing in this Agreement, express or implied, is intended to
 confer upon any other person any rights or remedies of any nature
 whatsoever under or by reason of this Agreement, except as
 provided in Section 10 permitting Valley to assign its rights and
 obligations hereunder only to an affiliate of Valley.

      18.  COUNTERPARTS.  This Agreement may be executed in two or
 more counterparts, each of which shall be deemed to be an
 original, but all of which shall constitute one and the same
 agreement.

      19.  TERMINATION.  In the event no definitive Merger
 Agreement is entered into, then this Agreement shall expire upon
 termination of the Letter Agreement unless a Triggering Event has
 occurred prior to such termination date, in which case this
 Agreement shall not terminate until 12 months following such
 termination.  In the event a definitive Merger Agreement is
 entered into by the parties hereto, this Agreement shall
 terminate upon either the termination of the Merger Agreement as
 provided therein or the consummation of the transactions
 contemplated by the Merger Agreement; provided, however, that if
 termination of the Merger Agreement occurs after the occurrence
 of a Triggering Event, this Agreement shall not terminate until
 12 months following the date of the termination of the Merger
 Agreement.

      IN WITNESS WHEREOF, each of the parties hereto, pursuant to
 resolutions adopted by its Board of Directors, has caused this
 Agreement to be executed by its duly authorized officer, all as
 of the day and year first above written.

                               LAKELAND FIRST FINANCIAL GROUP,
                               INC.

                               By: MICHAEL HALPIN
                                   -------------------------
                                   Michael Halpin
                                   President and
                                   Chief Executive Officer

                               VALLEY NATIONAL BANCORP

                               By: GERALD H. LIPKIN
                                   -------------------------
                                   Gerald H. Lipkin
                                   Chairman and
                                   Chief Executive Officer


 <PAGE>
                                                                  ANNEX D

                       VALLEY NATIONAL BANCORP
                          1445 VALLEY ROAD
                     WAYNE, NEW JERSEY  07474-0558


                                       As of February 27, 1995


 Mr. Michael Halpin
 President and CEO
 Lakeland First Financial

 Dear Mike:

           This letter will acknowledge the intentions of Valley
 National Bank regarding Lakeland employees and benefits.  This
 letter replaces and supersedes my letter to you dated February
 23, 1995.  This letter does not supersede or overrule any
 provision of the Agreement and Plan of Merger, dated as of
 February 27, 1995, among Valley National Bancorp, Valley National
 Bank, Lakeland First Financial Group, Inc. and Lakeland Savings
 Bank.

           Valley National Bank will provide eligible, actively
 employed Lakeland employees who join Valley National Bank with
 the same Valley National Bank benefits plans coverage under which
 VNB employees participate under the terms and conditions as
 required by VNB plan contracts.  Specific Valley benefit plans,
 as described in the attached Valley employees handbooks, include
 but are not limited to, medical, dental and disability plans,
 pension and 401(K) plans, vacation and paid personal days and
 sick days.  Lakeland employees will retain their date of
 employment with Lakeland for purposes of calculating Valley
 National Bank employee seniority and eligibility for VNB benefit
 plans.

           Lakeland employees will be eligible to participate in
 the VNB 401(K) and Retirement plans as soon as feasible after the
 date of merger assuming all legal and financial requirements of
 the Valley National and Lakeland Retirement plans are
 satisfactory and complete.  Lakeland employees will receive full
 eligible credit, sick leave accrual and vesting for prior pension
 services under the Lakeland Retirement plan when merged into the
 Valley Retirement Plan.  Valley National Bank maintains the sole
 right to determine the terms and conditions of VNB benefit plans
 for service after the Effective Time of the Merger, but in no
 event shall such benefits, in the aggregate, be less than those
 applicable to Lakeland prior to the Merger.

           Any Lakeland or Bank employee relocated as a result of
 departmental consolidations following the Effective Time into a
 location, other than that of an acquired Lakeland office or
 facility, shall be given, on a priority basis, the opportunity to
 accept a job posting position to relocate to a Lakeland office or
 facility at the salary and position so posted.  Valley National
 Bank will offer the same severance arrangements to Lakeland
 employees as prior Valley mergers, a copy of which is attached.

           Valley, consistent with Lakeland's past practice, shall
 provide each Director of Lakeland who continues as or becomes a
 retired Director of Lakeland, with supplemental medical insurance
 which supplements their coverage under Medicare.  Any Director or
 retired Director who is not 65 years of age shall be provided a
 supplementary medical insurance policy or a primary medical
 insurance policy until age 65 at which time the supplementary
 policy will apply.  Valley will also continue the Lakeland
 Directors Post Retirement Plan as outlined in Lakeland's 1994
 Proxy.

           This letter is a statement of Valley's intentions. 
 This letter does not grant, and shall not be construed as
 granting, rights of enforcement to any current or prior director,
 officer or employee of Lakeland.  Without limiting the foregoing,
 Valley does not hereby make any promise of future employment to
 any person. 
           

                                       GERALD H. LIPKIN
                                       ---------------------------
                                       Gerald H. Lipkin
                                       Chairman of the Board & 
                                       Chief Executive Officer

   
    

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