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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) April 7, 1999
VALLEY NATIONAL BANCORP
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(Exact name of registrant as specified in its charter)
New Jersey
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(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
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(Address of principal executive offices)
(973) 305-8800
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(Registrant's telephone number, including area code)
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<PAGE>
Item 5. Other Events
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On April 7, 1999, Valley National Bancorp ("Valley" or the Company") issued a
press release reporting earnings for the quarter ended March 31, 1999. A copy of
the press release is attached to this Form 8-K as an exhibit and is incorporated
by reference herein.
First quarter fully diluted earnings per share increased to $0.46 per share from
$0.43 in 1998, an increase of 7 percent. Net income for the first quarter ended
March 31, 1999 was $25.3 million, compared to $23.7 million for the same period
in 1998. All data for 1998 has been restated to reflect the merger with Wayne
Bancorp, Inc. on October 16, 1998, accounted for as a pooling of interests, and
the 5 for 4 stock split issued during May 1998.
The quarter ended March 31, 1999 produced an annualized return on average assets
of 1.82 percent and an 18.09 percent annualized return on average equity. The
efficiency ratio for the quarter ended March 31, 1999 was 41.8 percent.
On April 7, 1999, the Company also issued a press release announcing the
declaration of the Company's 5% stock dividend on the Company's common stock
outstanding. The stock dividend is payable May 18, 1999 to shareholders of
record May 7, 1999. Additionally, the Company announced the declaration of an
increase in the Company's regular annual dividend rate from $0.95 per share on
an after split basis to $1.04 per share of common stock. A copy of the press
release is attached to this Form 8-K as an Exhibit.
On December 17, 1998, the Company reached an agreement to acquire Ramapo
Financial Corporation ("Ramapo") in a merger. The acquisition will be completed
by the issuance of the Company's Common Stock totaling approximately 3.4 million
shares. Under the terms of the merger agreement between Ramapo and the Company,
each share of Ramapo common stock was to be converted into 0.425 shares of
Valley common stock. However, as a result of the Company's 5% stock dividend
referred to above, the 0.425 exchange ratio will be adjusted to 0.44625,
assuming that the Ramapo merger is consummated after the May 7, 1999 record date
for the Valley stock dividend, as is currently expected. The merger agreement
provides Ramapo with the right to terminate the agreement if the average
closing price of Valley common stock during a ten trading day period ending five
days before the merger is less than $23.50. However, as a result of the
Company's 5% stock dividend, and assuming the merger is completed in June 1999,
as is currently contemplated, Ramapo's right to terminate the merger agreement
will be adjusted and will be triggered if the (post-stock dividend) average
closing price of Valley common stock during a ten trading day period ending five
days before the merger is less than $22.38.
Item 7. Exhibits
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Exhibit 99.1 Press Release - First Quarter Earnings
Exhibit 99.2 Press Release - Stock Dividend
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: April 8, 1999 By:
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Alan D. Eskow
Corporate Secretary
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
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99.1 Press Release - First Quarter Earnings
99.2 Press Release - Stock Dividend
VALLEY NATIONAL BANCORP
EARNINGS PER SHARE REACH RECORD HIGH
Wayne, NJ, April 7, 1999 - Valley National Bancorp (NYSE:VLY) reported
record earnings per share on a diluted basis of $0.46 for the quarter ended
March 31, 1999, an increase of 7 percent over the $0.43 for the quarter ended
March 31, 1998. Net income for the quarter ended March 31, 1999 was $25.3
million, compared to $23.7 million for the same period in 1998. All data for
1998 has been restated to reflect the merger with Wayne Bancorp, Inc. on October
16, 1998, accounted for as a pooling of interests, and the 5 for 4 stock split
issued during May 1998.
The quarter ended March 31, 1999 produced an annualized return on
average assets of 1.82 percent and an 18.09 percent annualized return on average
equity. The efficiency ratio for the quarter ended March 31, 1999 was 41.8
percent, one of the best in the banking industry.
Gerald H. Lipkin, Valley's Chairman, President and CEO stated, "We
continue to focus on further enhancing our position as a "Super Community Bank"
serving northern New Jersey. On December 17, 1998 we announced a merger with
Ramapo Financial Corporation, the parent company of the $338 million,
eight-branch Ramapo Bank headquartered in Wayne, New Jersey. Subject to
receiving final regulatory and shareholder approval, the transaction will close
mid June 1999."
"We continue to develop our internet banking capabilities and currently
are accepting applications for automobile loans on the web through Autoweb.com
through our participation with a major nationwide insurance carrier. During the
second quarter of 1999 Valley will begin accepting residential mortgage loan
applications at VNBmortgage.com. Our /-BankWorks PC banking and bill
payment product is in the process of being installed on our website and we
expect this to be available over the internet within the next 90 days. Each of
these products will allow customers access to Valley National Bank through an
additional distribution channel and provide increased revenue opportunities for
Valley."
"Our branch expansion plans continued on target as we have plans for
six additional de novo branches during 1999, one of which opened on March 31,
1999. These new locations, in conjunction with the Wayne and Ramapo mergers
continue to fill in our franchise throughout northern New Jersey. At the
quarter-end we operated 105 branches serving 71 communities, all within one hour
from our headquarters in Wayne."
Mr. Lipkin continued, "Valley's increased earnings during the first
quarter of 1999 were mainly the result of strong loan production in all lending
areas, higher net interest income and increased securities gains, offset by a
higher effective tax rate. Valley's solid earnings, coupled with its strong
capital base, allows us to add new products and services and expand the
franchise through de novo branching and the acquisition of other financial
institutions."
Net interest income, on a fully-taxable equivalent basis, for the first
quarter of 1999 increased to $61.2 million with a net interest margin of 4.62
percent compared with $58.2 million and 4.60 percent, for the first quarter of
1998. The increase was due mainly to a higher average balance of loans and
investments and a lower cost of deposits and borrowings.
Non-interest income for the first quarter of 1999 was $11.8 million,
approximately $1.4 million higher than the first quarter of 1998. Non-interest
expense for the first quarter of 1999 was $29.7 million, a decrease from $31.1
million during the same period of 1998. This was mainly the result of decreased
credit card expense offset by increases in salaries and employee benefit expense
and amortization of intangible assets.
Income before income taxes increased by $6.8 million or 20.3 percent
for the quarter ended March 31, 1999 mainly as a result of increased net
interest income. Income tax expense for the first quarter of 1999 returned to
more normal levels with an effective tax rate of 37.2 percent compared to 29.4
percent for the same quarter in 1998.
Asset Quality and Reserve for Loan Losses
At March 31, 1999, among total loans of $4.1 billion, nonaccrual loans,
representing 0.2 percent of loans, were $6.6 million, down from $7.9 million at
March 31, 1998. Total nonperforming assets, which include nonaccrual loans and
OREO, totaled $8.6 million, or 0.2 percent of loans and OREO, at March 31, 1999
down from $10.5 million at March 31, 1998. Loans past due 90 days or more and
still accruing at March 31, 1999 decreased to $13.1 million compared to $15.5
million at March 31, 1998.
Capital Adequacy
Shareholders' equity was $565.7 million on March 31, 1999. Valley's
risk-based capital ratios were 12.93 percent for Tier 1 capital and 14.09
percent for Total capital. The Tier 1 leverage ratio was 10.05 percent.
Valley National Bancorp is a regional bank holding company
headquartered in Wayne, NJ. Its principal subsidiary, Valley National Bank,
operates 105 offices located in 71 communities serving 10 counties throughout
northern New Jersey.
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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.
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<TABLE>
<CAPTION>
VALLEY NATIONAL BANCORP
Consolidated Financial Highlights
SELECTED CONSOLIDATED FINANCIAL DATA
Three Months Ended March 31,
1999 1998
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(Dollars in thousands except per share data)
<S> <C> <C>
NET INCOME $ 25,348 $ 23,679
Per share data:
Basic earnings 0.46 0.43
Diluted earnings 0.46 0.43
Cash dividends declared 0.25 0.22
Book value 10.23 9.40
Closing stock price - high 29.13 33.70
Closing stock price - low 25.00 28.20
FINANCIAL RATIOS:
Net interest margin - FTE 4.62 % 4.60 %
Return on average assets 1.82 1.79
Return on average shareholders' equity 18.09 18.51
Efficiency ratio 41.77 45.12
<CAPTION>
SELECTED BALANCE SHEET ITEMS AND RATIOS
As of March 31,
1999 1998
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(Dollars in thousands)
<S> <C> <C>
BALANCE SHEET ITEMS:
Assets $ 5,706,352 $ 5,357,686
Loans 4,050,573 3,848,923
Deposits 4,681,694 4,595,881
Shareholders' equity 565,735 516,528
CAPITAL RATIOS:
Tier 1 leverage ratio 10.05 % 9.56 %
Risk-based capital
Tier I 12.93 13.22
Total Capital 14.09 14.42
ASSET QUALITY:
Non-accrual loans $ 6,641 $ 7,867
Other real estate owned 1,947 2,621
Total non-performing assets 8,588 10,488
Loans past due 90 days or more and still accruing 13,079 15,519
Allowance for loan losses 50,075 48,248
ASSET QUALITY RATIOS:
Non-performing assets to total loans plus
Other Real Estate Owned (OREO) 0.21 % 0.27 %
Allowance for loan losses to loans 1.24 1.25
Net charge-offs to average loans 0.18 0.30
</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.
<PAGE>
<TABLE>
<CAPTION>
VALLEY NATIONAL BANCORP
Consolidated Statements of Income
Three Months Ended March 31,
(Dollars in thousands, except per share data) 1999 1998(1)
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<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 78,409 $ 78,264
Interest and dividends on investment securities 18,532 17,982
Interest on federal funds sold and other
short term investments 981 1,088
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Total interest income 97,922 97,334
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INTEREST EXPENSE
Interest on deposits:
Savings deposits 9,125 10,836
Time deposits 23,974 26,896
Interest on other borrowings 4,611 2,767
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Total interest expense 37,710 40,499
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NET INTEREST INCOME 60,212 56,835
Provision for possible loan losses 2,000 2,570
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Net interest income after
provision for possible loan losses 58,212 54,265
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NON-INTEREST INCOME
Trust income 412 340
Service charges on deposit accounts 3,225 2,885
Gains on securities transactions, net 1,974 917
Fees from loan servicing 1,932 1,575
Credit card income 1,990 2,523
Gain on sale of loans, net 664 1,064
Other 1,590 1,096
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Total non-interest income 11,787 10,400
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NON-INTEREST EXPENSE
Salary expense 13,079 12,551
Employee benefit expense 2,915 2,824
FDIC insurance premiums 305 320
Occupancy and equipment expense 4,337 4,727
Credit card expense 1,314 3,145
Amortization of intangible assets 1,308 950
Other 6,397 6,610
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Total non-interest expense 29,655 31,127
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Income before income taxes 40,344 33,538
Income tax expense 14,996 9,859
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NET INCOME $ 25,348 $ 23,679
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EARNINGS PER SHARE: (2)
Basic $ 0.46 $ 0.43
Diluted $ 0.46 $ 0.43
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: (2)
Basic 55,097,997 55,024,368
Basic 55,621,964 55,641,013
</TABLE>
Note: (1) All data has been restated to reflect the merger with Wayne
Bancorp, effective October 16, 1998.
(2) 1998 earnings 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
March 31,
(Dollars in thousands) 1999 1998(1)
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<S> <C> <C>
ASSETS
Cash and due from banks $ 154,338 $ 149,842
Federal funds sold 85,000 64,000
Investment securities 1,291,705 1,171,478
Loans 4,026,793 3,825,839
Loans held for sale 23,780 23,084
Less: Allowance for possible loan losses (50,075) (48,248)
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Loans, net 4,000,498 3,800,675
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Premises and equipment 79,771 79,174
Accrued interest receivable 31,964 30,370
Other assets 63,076 62,147
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Total assets $ 5,706,352 $ 5,357,686
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LIABILITIES
Deposits:
Non-interest bearing $ 803,424 $ 759,661
Interest bearing:
Savings 1,934,315 1,957,509
Time 1,943,955 1,878,711
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Total deposits 4,681,694 4,595,881
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Other borrowings 400,450 193,302
Accrued expenses and other liabilities 58,473 51,975
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Total liabilities 5,140,617 4,841,158
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SHAREHOLDERS' EQUITY (2)
Common stock, no par value, authorized 98,437,500
shares; issued 55,486,522 shares in 1999 and
55,514,406 shares in 1998 24,432 24,344
Surplus 312,018 310,831
Retained earnings 234,104 190,462
Unallocated common stock held by the ESOP (1,332) (1,560)
Accumulated other comprehensive income 1,737 4,921
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570,959 528,998
Cost of shares in treasury (191,988 common shares
in 1999 and 535,998 in 1998) (5,224) (12,470)
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Total shareholders' equity 565,735 516,528
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Total liabilities and shareholders' equity $ 5,706,352 $ 5,357,686
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</TABLE>
Note: (1) 1998 data has been restated to reflect the merger with Wayne
Bancorp, effective October 16, 1998.
(2) 1998 shares outstanding have been restated to reflect the 5 for 4
stock split issued on May 18, 1998.
VALLEY NATIONAL BANCORP BOARD OF DIRECTORS DECLARES
A 5 PERCENT STOCK DIVIDEND AND INCREASES CASH DIVIDEND
WAYNE, NJ, April 7, 1999 -- Valley National Bancorp (NYSE:VLY) today reported
that the Board of Directors approved a 5 percent stock dividend payable May 18,
1999, to the shareholders of record on May 7, 1999.
Mr. Gerald H. Lipkin, Chairman, President and Chief Executive Officer of Valley
National Bancorp said, "In conjunction with the stock dividend, Valley is also
increasing its regular annual dividend rate from $0.95 per share on an after
split basis to $1.04 per share. This represents an increase of 9.5 percent after
adjusting for the effect of the stock dividend and increased cash dividend." The
next regular quarterly cash dividend is due to be paid on July 1, 1999.
Valley's annual dividend rate has increased on a restated basis 1,200 percent
from $0.08 per share in 1978. Mr. Lipkin noted, "We have never reduced the
regular cash dividend in the 72 year history of the bank. In fact, during the
last three decades, Valley's dividend has increased 30 times."
The first quarter of 1999, produced record results for Valley. The reported net
income was $25.3 million, or $0.46 a diluted share, an increase in per share
earnings of 7.0 percent over 1998 first quarter diluted share earnings of $0.43.
After the stock dividend, diluted earnings per share are adjusted to $0.43 and
$0.41 for 1999 and 1998, respectively.
Valley National Bancorp is a regional bank holding company headquartered in
Wayne, NJ. Its principal subsidiary, Valley National Bank, has $5.7 billion in
assets and operates 105 branch offices in 10 counties serving 71 communities
throughout New Jersey.
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