SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
May 28, 1996
VALLEY NATIONAL BANCORP
(Exact name of registrant as specified in its charter)
New Jersey
(State or other jurisdiction of incorporation)
0-11179 22-2477875
(Commission File Number) (IRS Employer Identification No.)
1455 Valley Road, Wayne, New Jersey 07470
(Address of principal executive offices)
(201) 305-8800
(Registrant's telephone number, including area code)
Item 5. Other Events.
On May 28, 1996, Valley National Bank ("VNB"), a commercial
bank subsidiary of Valley National Bancorp ("Valley"), issued a
joint press release with Wakefern Food Corporation to announce the
commencement of a co-branded credit card, the ShopRite MasterCard,
to be issued by VNB. A copy of the press release is an Exhibit to
this Form 8-K. VNB, which issues its own credit cards and affinity
cards, had disclosed in its recent 10-Qs and l0-K that it had
entered into a letter of intent for this co-branded program with a
then undisclosed party.
The ShopRite MasterCard will offer a 2% rebate on most
ShopRite supermarket purchases and a 1% rebate on purchases at all
other locations. Rebates are distributed in the form of ShopRite
Reward Certificates which may be used at ShopRite supermarkets and
pharmacies to purchase food and merchandise.
ShopRite operates 182 stores in New Jersey, New York,
Pennsylvania, Delaware, Connecticut and Massachusetts. VNB, as of
June l, 1996, had mailed first class, prior approval letters to
ShopRite customers.
The ShopRite Card has no annual fee, an interest-free payment
option on ShopRite purchases, a 9.9% APR on transfer balances
guaranteed for two years following the account opening, a 7.9% APR
on purchases for six months following the opening date and a $5
Bonus Reward Certificate for making the first purchase.
Valley anticipates that the ShopRite MasterCard, which is
VNB's first co-branded credit card, will significantly expand VNB's
outstanding cards and significantly increase its interest-bearing
outstanding credit card balances.*
Valley anticipates that the co-branded card program will have
a positive affect on earnings in 1997, but the introduction of the
co-branded program will have a slight adverse affect on earnings
over the remainder of 1996 since the start-up expenses and charges
will exceed the revenues from the program during 1996.* However,
there can be no assurance that the co-branded card will have in
1997 a positive impact on earnings or the extent of any positive
impact or that the adverse affect in 1996 will be slight. In
accordance with generally accepted accounting principles, Valley
intends to capitalize the substantial out-of-pocket costs
associated with generating the new cards and amortize such costs
over the anticipated average life of cards (approximately 4
years).*
Valley, commencing in 1995, began hiring employees for the
program. As of June l, 1996, VNB had hired an additional
approximately 40 persons for the program and VNB anticipates hiring
a total of approximately 80 persons by 1997.*
NOTE:
* The statements concerning the impact of VNB's co-branded
program on Valley's earnings for 1996 and 1997, the estimated
expenses and estimates of employees to be hired, as well as the
increase in VNB's outstanding credit cards and interest bearing
account balances, all are forward looking statements under the
Private Securities Litigation Reform Act of 1995. The correctness
of the estimates and forward looking statements depend upon a
number of factors and the actual results may differ materially from
Valley's estimates. While Valley has developed its estimates of the
impact of the co-branded card program after taking into account
what it considers to be relevant factors, the actual expenses and
results may vary, depending upon a number of factors, including but
not limited to the following: Valley assumes that it will, in
accordance with generally accepted accounting principles,
capitalize and amortize over a period of 4 years the substantial
out-of-pocket costs to it of generating the new cards, that a
significant percentage of the solicited customers will sign-up for
the ShopRite MasterCard, that Valley will generate an estimated $75
million of interest-bearing receivables outstanding at the end of
1996 and $270 million of interest-bearing receivables outstanding
at year-end 1997, that a significant portion of the new cardholders
will roll-over interest bearing balances from other credit cards,
that a majority of the cardholders will not pay their outstanding
balances in full each month, that the interest rate environment
during 1996 and 1997 generally will remain at present levels so
that the introductory rates will be profitable to VNB, that the co-
branded agreement with Wakefern will continue, that the cardholders
will generally maintain their cards with VNB for the anticipated
life of the cards, that credit card losses and theft losses
associated with these cards will not exceed the industry norms as
presently experienced by VNB and similar card issuers, and other
factors. Moreover, if VNB enters into other co-branded programs,
the affects associated with the ShopRite MasterCard may be impacted
by expenses and/or income from such other programs and VNB's
earnings and expenses from all its other non-card activities will
have more of an impact on Valley's total income and expenses than
the co-branded program.
Item 7. Exhibits.
Press Release, dated May 28, 1996
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
VALLEY NATIONAL BANCORP
Dated: June 12, 1996 By:/s/Alan D. Eskow
Alan D. Eskow
Principal Accounting Officer
and Corporate Secretary
INDEX TO EXHIBITS
99 Press Release dated May 28, 1996
ITEM 7 EXHIBIT 99
FROM: Valley National Bank CONTACT: John Harris
1455 Valley Road (201) 305-4014
Wayne, NJ 07474
Wakefern Food Corporation William Crombie
505 Division Street (908) 527-3901
Elizabeth, NJ 07207
FREE FOOD THROUGH VALLEY NATIONAL BANK/SHOPRITE
CO-BRANDED SUPERMARKET CREDIT CARD
May 28, 1996--Wayne, NJ--Gerald H. Lipkin, Chairman, President and
CEO of Valley National Bank and Dean Janeway, President of Wakefern
Food Corporation jointly announced the introduction of the ShopRite
MasterCard, the first co-branded supermarket credit card offered in
this area. The new ShopRite MasterCard, which will be issued by
Valley National Bank, is available to consumers that shop at
ShopRite supermarkets located in New Jersey, New York,
Pennsylvania, Delaware, and Connecticut.
"Unlike any other co-branded credit card programs offered to date,
the multi-purpose ShopRite MasterCard provides more than the
standard credit card features", stated Mr. Janeway. "The ShopRite
MasterCard incorporates the features of 3 cards in 1. Cardholders
can also use this card to get Price Plus instant discounts on
weekly ShopRite specials and for check cashing privileges,
regardless of how the consumer pays for their purchases," Mr.
Janeway continued.
The ShopRite MasterCard has universal appeal because cardholders
can use it to get FREE FOOD. When paying with the card,
cardholders earn a 2% rebate on most ShopRite supermarket
purchases, and a 1% rebate on purchases at all other locations.
Rebates are distributed in the form of ShopRite Reward
Certificates. These certificates are valid at ShopRite
supermarkets and pharmacies for free food and merchandise.
Standard and Gold MasterCard cards will be issued. Some of the
other key benefits of the ShopRite MasterCard account are a(n):
- No annual fee
- Interest-free payment option on ShopRite purchases
- 9.9% APR on transferred balances guaranteed for 2 years
following the account opening date
- 7.9% introductory APR on all purchases for 6 months
following the account opening date
- $5 Bonus Reward Certificate for making the first
purchase
"We are very excited about our new long-term partnership with
Wakefern, the largest supermarket cooperative in America and one of
the largest distributors in the northeast, and ShopRite, one of the
leading supermarkets in the region. Our co-branding credit card
strategy provides a method to significantly increase the bank's
credit card base and employment opportunities with our institution.
This is an investment in the type of venture which we feel will
enable Valley to continue to grow over the long-term as an
independent company," stated Mr. Lipkin.
Valley National Bank, principal subsidiary of Valley National
Bancorp (NYSE:VLY), has 80 offices serving 10 counties throughout
northern New Jersey.
