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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 14, 1998
VALLEY NATIONAL BANCORP
(Exact name of registrant as specified in its charter)
New Jersey
(State or other jurisdiction of incorporation)
0-11179 22-2477875
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(Commission File Number) (IRS Employer Identification No.)
1455 Valley Road
Wayne, New Jersey 07470
(Address of principal executive offices)
(973) 305-8800
(Registrant's telephone number, including area code)
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<PAGE>
Item 5. Other Events
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On October 15, 1998, Valley National Bancorp ("VALLEY") reported
earnings for the third quarter. Net income for the third quarter was $24.2
million compared to $21.9 million in the third quarter of 1997. Per share data
for 1997 has been restated to reflect the 5 for 4 stock split issued during May
1998. VALLEY reported third quarter diluted share earnings of $0.45, an increase
of 10% from $0.41 in the same quarter of 1997. Return on average equity and
return on average assets were 19.53% and 1.91%, respectively, for the third
quarter, compared to 19.21% and 1.72%, respectively, for the same period in
1997.
VALLEY's total assets as of September 30, 1998 were $5.042 billion.
Loans totaled $3.732 billion, deposits were $4.344 billion and shareholders'
equity was $504.403 million.
VALLEY is the bank holding company for Valley National Bank which
operates 98 offices located in 68 communities serving 10 counties throughout
northern New Jersey. VALLEY has pending the acquisition of Wayne Bancorp, Inc.
which is expected to close on or about October 16, 1998.
A copy of VALLEY's press release is attached to this Form 8-K as an
Exhibit and is incorporated herein by reference.
Item 7. Exhibits
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Exhibit 99 Press Release dated October 14, 1998
SIGNATURES
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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: October 15, 1998 By:ALAN D. ESKOW
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Alan D. Eskow
Corporate Secretary
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
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99 Press release dated October 14, 1998.
Contact:
Alan D.
Eskow
Senior Vice President
(973) 305-4003
VALLEY NATIONAL BANCORP REPORTS STRONG EARNINGS
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WAYNE, NJ, October 14, 1998-- Valley National Bancorp (NYSE:VLY) reported third
quarter diluted share earnings of $0.45, an increase of 10 percent over the
$0.41 in the same quarter of 1997. Net income was $24.2 million for the third
quarter of 1998, compared to $21.9 million for the third quarter of 1997,
representing a 11 percent increase. Per share data for 1997 has been restated to
reflect the 5 for 4 stock split issued during May 1998.
For the nine months ended September 30, 1998 Valley reported record diluted
share earnings of $1.35, an increase of 13 percent over the $1.19 in the same
nine months of 1997. Net income was $72.0 million for the nine months ended
September 30, 1998, compared to $63.2 million for the same period in 1997.
The third quarter of 1998 produced an annualized return on average assets of
1.91 percent and a 19.53 percent annualized return on average equity. The
efficiency ratio for the nine months ended September 30, 1998 was 45.4 percent,
one of the best in the banking industry.
Mr. Lipkin, Valley's Chairman and CEO stated, "We continue to focus on further
enhancing our position as a super community bank serving northern New Jersey.
The acquisition of the six branch, $272 million, Wayne Bancorp, Inc.,
headquartered in Wayne, New Jersey, has received all approvals and is expected
to close on Friday, October 16, 1998."
"Our previously announced branch expansion plans moved forward during the third
quarter as we opened a branch in Morristown and anticipate opening two
additional branches in Secaucus and West New York during the fourth quarter of
1998."
Commenting on the 1998 third quarter results, Mr. Lipkin continued, "Valley's
increased earnings during the third quarter of 1998 were the result of a higher
net interest margin, continued loan growth over the prior year, the movement of
funds from the lower yielding investment portfolio into the higher yielding loan
portfolio, less dependence on higher cost time deposits and a lower effective
tax rate. Valley has continued to focus on obtaining funding sources from lower
cost core deposits."
Net interest income, on a fully-taxable equivalent basis, for the third quarter
of 1998 increased to $56.7 million with a net interest margin of 4.68 percent
compared with $54.9 million and 4.57 percent, for the third quarter of 1997.
These increases were due mainly to a higher average balance of loans, a lower
cost on deposits, offset by a lower average balance of investments and interest
bearing liabilities.
While Valley continues to generate a record volume of residential mortgages, the
bank sold a large portion of its 1998 long-term fixed rate production into the
secondary market, to avoid future interest rate risk. Valley sold $108.4 million
during the first nine months of 1998 and continues to retain the servicing
rights on all of the loans sold.
Non-interest income for the third quarter of 1998 was $10.5 million, $1.2
million less than the third quarter of 1997 due largely to the sale of Valley's
merchant processing business during the third quarter of 1997 and lower gains on
the sale of SBA loans offset by higher mortgage servicing fees. Non-interest
expense for the third quarter of 1998 was $32.2 million an increase from $30.1
million during the same period of 1997. The increase was mainly the result of
increased salary, occupancy and amortization expense, offset by a reduction in
credit card expense.
Due to a realignment of corporate entities during the fourth quarter of 1997
there was a reduction in the effective tax rate for the third quarter of 1998
and nine months ended September 30, 1998 to 21.5 percent and 25.5 percent,
respectively. The reduction in the effective tax rate is limited in duration,
but may continue to have an impact on some future periods.
Asset Quality and Reserve for Loan Losses
At September 30, 1998, among total loans of $3.7 billion, nonaccrual loans,
representing 0.2 percent of loans, were $5.8 million, down from $7.3 million at
December 31, 1997. Total nonperforming assets, which include nonaccrual loans
and OREO, totaled $8.8 million, or 0.2 percent of loans and OREO, at September
30, 1998 an improvement over the $9.5 million at December 31, 1997. Loans past
due 90 days or more and still accruing at September 30, 1998 decreased to $10.0
million compared to $16.4 million at December 31, 1997.
The allowance for loan losses as a percentage of nonperforming assets continued
to be favorable at 536 percent at September 30, 1998, compared to 489 percent on
December 31, 1997.
Capital Adequacy
Shareholders' equity was $504.4 million on September 30, 1998. Valley's
risk-based capital ratios were 13.14 percent for Tier 1 capital and 14.39
percent for Total capital. The Tier 1 leverage ratio was 9.73 percent.
Valley National Bancorp is a regional bank holding company headquartered in
Wayne, NJ. Its principal subsidiary, Valley National Bank, operates 98 offices
located in 68 communities serving 10 counties throughout northern New Jersey.
* * *
The foregoing contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements are not
historical facts and include expressions about management's confidence and
strategies and management's expectations about new and existing programs and
products, relationships, opportunities, technology and market conditions. These
statements may be identified by such forward-looking terminology as "expect",
"look", "believe", "anticipate", "may", "will", or similar statements or
variations of such terms. Such forward-looking statements involve certain risks
and uncertainties. These include, but are not limited to, the direction of
interest rates, continued levels of loan quality and origination volume,
continued relationships with major customers including sources for loans,
successful completion of the implementation of Year 2000 technology changes, as
well as the effects of economic conditions and legal and regulatory barriers and
structure. Actual results may differ materially from such forward-looking
statements. Valley assumes no obligation for updating any such forward-looking
statement at any time.
(FOUR TABLES TO FOLLOW)
<PAGE>
<TABLE>
<CAPTION>
VALLEY NATIONAL BANCORP
Consolidated Statements of Income Three Months Ended
($ in thousands, except per share data) September 30,
1998 1997
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<S> <C> <C>
Interest Income
Interest and fees on loans $ 76,286 $ 72,904
Interest and dividends on investment securities 14,857 18,477
Interest on federal funds sold and other
short term investments 2,027 1,102
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Total interest income 93,170 92,483
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Interest Expense
Interest on deposits:
Savings deposits 10,385 10,692
Time deposits 24,878 27,211
Interest on other borrowings 2,322 1,202
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Total interest expense 37,585 39,105
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Net interest income 55,585 53,378
Provision for possible loan losses 3,000 2,150
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Net interest income after provision for possible
loan losses 52,585 51,228
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Non-Interest Income
Trust income 320 324
Service charges on deposit accounts 3,186 2,955
Gains on securities transactions, net 58 0
Fees from loan servicing 1,964 1,421
Credit card income 2,564 3,411
Gain on sale of loans, net 1,293 1,678
Other 1,143 1,927
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Total non-interest income 10,528 11,716
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Non-Interest Expense
Salary expense 12,630 11,202
Employee benefit expense 2,844 2,680
FDIC insurance premiums 271 291
Occupancy and equipment expense 5,330 4,610
Credit card expense 1,804 4,682
Amortization of intangible assets 2,154 856
Other 7,216 5,764
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Total non-interest expense 32,249 30,085
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Income before income taxes 30,864 32,859
Income tax expense 6,627 11,003
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Net income $ 24,237 $ 21,856
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Earnings per share: (1)
Basic $ 0.46 $ 0.41
Diluted $ 0.45 $ 0.41
Weighted Average Number of Shares Outstanding: (1)
Basic 52,790,058 52,859,731
Diluted 53,311,737 53,268,835
</TABLE>
Note: (1) 1997 net income per share and average shares outstanding have been
restated to reflect the 5 for 4 stock split issued on May 18, 1998.
<PAGE>
<TABLE>
<CAPTION>
VALLEY NATIONAL BANCORP
Consolidated Statements of Income Nine Months Ended
($ in thousands, except per share data) September 30,
1998 1997
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<S> <C> <C>
Interest Income
Interest and fees on loans $ 226,597 $ 216,414
Interest and dividends on investment securities 47,421 55,640
Interest on federal funds sold and other
short term investments 4,191 3,272
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Total interest income 278,209 275,326
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Interest Expense
Interest on deposits:
Savings deposits 31,153 32,197
Time deposits 74,960 80,941
Interest on other borrowings 6,937 3,368
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Total interest expense 113,050 116,506
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Net interest income 165,159 158,820
Provision for possible loan losses 8,825 5,250
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Net interest income after provision for possible
loan losses 156,334 153,570
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Non-Interest Income
Trust income 1,030 825
Service charges on deposit accounts 9,070 8,804
Gains on securities transactions, net 1,023 2,169
Fees from loan servicing 5,540 4,085
Credit card income 7,762 9,211
Gain on sale of loans, net 3,935 2,873
Other 3,145 4,375
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Total non-interest income 31,505 32,342
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Non-Interest Expense
Salary expense 36,690 33,580
Employee benefit expense 7,935 8,468
FDIC insurance premiums 836 799
Occupancy and equipment expense 14,899 13,559
Credit card expense 7,318 13,158
Amortization of intangible assets 4,339 2,556
Other 19,263 18,234
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Total non-interest expense 91,280 90,354
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Income before income taxes 96,559 95,558
Income tax expense 24,605 32,326
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Net income $ 71,954 $ 63,232
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Earnings per share: (1)
Basic $ 1.36 $ 1.20
Diluted $ 1.35 $ 1.19
Weighted Average Number of Shares Outstanding: (1)
Basic 52,804,692 52,828,790
Diluted 53,332,726 53,124,305
</TABLE>
Note: (1) 1997 net income per share and average shares outstanding have been
restated to reflect the 5 for 4 stock split issued on May 18, 1998.
<PAGE>
<TABLE>
<CAPTION>
VALLEY NATIONAL BANCORP
Consolidated Statements of Financial Condition
($ in thousands) September 30,
Assets 1998 1997
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<S> <C> <C>
Cash and due from banks $ 121,656 $ 153,226
Federal funds sold 40,000 102,000
Investment securities 1,031,611 1,252,721
Loans, net of unearned income 3,711,950 3,532,385
Loans held for sale 20,906 14,981
Less: Allowance for possible loan losses (47,308) (42,341)
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Loans, net 3,685,548 3,505,025
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Premises and equipment 75,292 72,939
Due from customers on acceptances outstanding 454 287
Accrued interest receivable 27,876 29,767
Other assets 60,543 59,560
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Total assets 5,042,980 5,175,525
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Liabilities
Deposits:
Non-interest bearing $ 729,464 $ 738,512
Interest bearing:
Savings 1,838,136 1,850,502
Time 1,777,121 1,922,586
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Total deposits 4,344,721 4,511,600
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Other borrowings 146,637 155,136
Bank acceptances outstanding 454 287
Accrued expenses and other liabilities 46,765 44,410
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Total liabilities 4,538,577 4,711,433
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Shareholders' Equity
Common stock, no par value, authorized 98,437,500
shares; issued 53,050,424 shares in 1998 and
53,081,058 shares in 1997 23,287 23,303
Surplus 291,657 293,578
Retained earnings 192,508 149,519
Accumulated other comprehensive income 4,148 2,476
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511,600 468,876
Cost of shares in treasury (257,928 common shares
in 1998 and 219,203 in 1997) (7,197) (4,784)
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Total shareholders' equity 504,403 464,092
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Total liabilities and shareholders' equity $ 5,042,980 $ 5,175,525
=============== ==============
</TABLE>
Note: (1) 1997 shares outstanding have been restated to reflect the 5 for 4
stock split issued on May 18, 1998.
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA
Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands except per share data) 1998 1997 1998 1997
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<S> <C> <C> <C> <C>
NET INCOME $ 24,237 $ 21,856 $ 71,954 $ 63,232
Per share data:*
Basic earnings 0.46 0.41 1.36 1.20
Diluted earnings 0.45 0.41 1.35 1.19
Cash dividends declared 0.25 0.22 0.72 0.63
Book value 9.55 8.78 9.55 8.78
Closing stock price - high 35.50 25.34 35.50 25.34
Closing stock price - low 26.13 21.91 26.13 19.33
FINANCIAL RATIOS:
Net interest margin - FTE 4.68% 4.57% 4.68% 4.54%
Return on average assets 1.91 1.72 1.90 1.66
Return on average shareholders' equity 19.53 19.21 19.52 18.79
Efficiency ratio 46.81 45.91 45.38 46.75
</TABLE>
<TABLE>
<CAPTION>
SELECTED BALANCE ITEMS AND RATIOS
As of September 30,
(Dollars in thousands) 1998 1997
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<S> <C> <C>
BALANCE SHEET ITEMS:
Assets $ 5,042,980 $ 5,175,525
Loans 3,732,856 3,547,366
Deposits 4,344,721 4,511,600
Shareholders' equity 504,403 464,092
CAPITAL RATIOS:
Tier 1 leverage ratio 9.73% 9.01%
Risk-based capital
Tier I 13.14 12.80
Total Capital 14.39 13.98
ASSET QUALITY:
Non-accrual loans $ 5,756 $ 7,806
Other real estate owned 3,070 2,822
Total non-performing assets 8,826 10,628
Loans past due 90 days or more and still accruing 9,997 16,901
Allowance for loan losses 47,308 42,341
ASSET QUALITY RATIOS:
Non-performing assets to total loans plus
Other Real Estate Owned (OREO) 0.24% 0.30%
Allowance for loan losses to loans 1.27 1.19
Allowance for loan losses to non-performing assets 536.01 398.39
Net charge-offs to average loans 0.29 0.34
</TABLE>
SHAREHOLDER RELATIONS
Requests for copies of reports providing more detailed financial statements and
analysis, as well as all other inquiries regarding Shareholder Relations should
be directed to Dianne Grenz at Valley National Bancorp, 1455 Valley Road, Wayne,
New Jersey, 07470 or by telephone at (973) 305-3380, or fax at (973) 696-2044.
*Per share figures have been adjusted for a 5 for 4 stock split issued May 18,
1998.
