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 13, 1999
VALLEY NATIONAL BANCORP
(Exact name of registrant as specified in 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)
(973) 305-8800
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other events
October l3, 1999, Valley National Bancorp (NYSE:VLY) reported
earnings of $27.3 million, or diluted share earnings of $0.45 for the quarter
ended September 30, 1999 compared with net income of $25.9 million, or
diluted share earnings of $0.42 for the quarter ended September 30, 1998.
These represent increases of 5.3 and 7.1 percent in net income and diluted
share earnings, respectively. All data for 1998 has been restated to
reflect the merger with Ramapo Financial Corp.("Ramapo") on June 11, 1999,
accounted for as a pooling of interests, and to reflect the 5% stock dividend
issued in May 1999.
Net income for the nine months ended September 30, 1999, excluding merger
related charges, was $81.4 million, or $1.33 per diluted share, compared
with $76.2 million, or $1.23 per diluted share, for the 1998 period. The
results for 1999 exclude the net, after tax, of $2.2 million or $0.04 a
diluted share from the Ramapo merger. Net income after the charge was $79.2
million, or $1.29 per diluted share.
The quarter ended September 30, 1999 produced an annualized return on
average assets ("ROA") of 1.80 percent and a 19.25 percent annualized return
on average equity ("ROE"). The efficiency ratio for the quarter ended
September 30, 1999 was 43.5 percent, one of the best in the banking industry.
Gerald H. Lipkin, Valley's Chairman, President and CEO stated, "Valley
continues to strive to deliver superior banking services to all of its customers
as it broadens its service offerings to meet their needs for on line delivery
systems and asset management
<PAGE>
alternatives. We continue to focus on close personal service to further
enhance our position as a "Super Community Bank" serving northern New
Jersey. Our earnings for the third quarter and nine months of 1999 reflect
the results of our strong performance, as income before taxes and merger
charges increased 21 and 20 percent, respectively over the prior year
periods. This increase is noteworthy because it offsets a higher effective
tax rate during 1999 compared with 1998."
Valley's focus on building its title insurance business was initiated with
the closing of the purchase of the Commonwealth Title Agency in mid July.
Since then, there has been a increase in business due to our successful
marketing efforts, placing us ahead of gross revenue targets for the agency's
first year of operations.*
Valley's realignment of its asset management and trust departments is
proceeding as planned with the location of Valley's new Financial Services
Division in an existing 16,000 square foot facility at 1195 Hamburg
Turnpike in Wayne. Valley's wholly owned subsidiary, New Century Asset
Management, now part of the Financial Services Division, will be operating at
this location along with trust and brokerage services. Valley anticipates
that cost savings will be realized from operating in this single modern
location. The Financial Services Division of Valley will also include estate
planning, custodial and other trust services, brokerage services
and financial planning.
Valley's suite of on line products now allows customers to apply for a
residential mortgage over the internet. This new capability supplements
Valley's on line services that allow customers to conveniently pay bills,
transfer funds, send e-mail and obtain account information via the internet.
Commenting further, Mr. Lipkin said, "Valley's increased earnings during
the third quarter of 1999 was mainly the result of strong loan production in
all loan categories, higher net interest income, lower non-interest
expenses, offset by higher income taxes. Valley's solid earnings, coupled
with its strong capital base and credit quality, allow us to add new
products and services and expand the franchise through de novo branching and
the acquisition of other financial institutions."
<PAGE>
Net interest income, on a fully-taxable equivalent basis, for the third
quarter of 1999 increased $4.0 million, or 6.4 percent, compared with the
third quarter of 1998, and produced a net interest margin of 4.58 percent.
Compared with the second quarter of 1999, net interest income increased $1.3
million, or 2.0 percent, and the net interest margin increased 7 basis points.
The increase in net interest income and the net interest margin between the
second and third quarter of 1999 was mainly the result of higher loan
and investment rates.
Non-interest income for the third quarter of 1999 was $11.3 million, unchanged
from the third quarter of 1998. Non-interest expense for the third quarter
of 1999 was $33.9 million, a decrease from $36.2 million during the same
period of 1998. The decrease was mainly the result of increased salary
expense; offset by a reduction of credit card and other expenses,
which are mostly attributable, to cost savings from mergers during 1998 and
1999.
Asset Quality and Reserve for Loan Losses
At September 30, 1999, among total loans of $4.4 billion, nonaccrual loans,
representing 0.1 percent of loans, were $6.2 million, down from $7.9 million
at September 30, 1998. Total nonperforming assets, which include
nonaccrual loans and OREO, totaled $7.0 million, or 0.2 percent of loans
and OREO, at September 30, 1999 down from $13.3 million at September 30,
1998. Loans past due 90 days or more and still accruing at September 30, 1999
increased to $11.7 million(a) compared to $10.5 million at September 30, 1998.
Capital Adequacy
Shareholders' equity was $568.3 million on September 30, 1999. Valley's
risk-based capital ratios were 12.05 percent for Tier 1 capital and 13.20
percent for Total capital. The Tier 1 leverage ratio was 9.48 percent.
(a) Corrected amount, originally reported in Valley's press release as
a decrease to $9.2 million.
<PAGE>
Valley National Bancorp is a regional bank holding company headquartered
in Wayne, NJ. Its principal subsidiary, Valley National Bank, operates 117
offices located in 75 communities serving 10 counties throughout
northern New Jersey. Valley's web site can be found at valleynationalbank.com.
* * * * * * * * *
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 an "asterisk" (*) or 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.
(FIVE TABLES TO FOLLOW)
<PAGE>
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands,
except per share data) 1999 1998 1999 1998
<S> <C> <C> <C> <C>
NET INCOME $ 27,279 $ 25,895 $ 79,165 $ 76,246
Net interest income 65,472 61,452 193,313 182,457
Net interest income (FTE) 66,646 62,654 196,638 186,325
Per share data:*
Basic earnings 0.45 0.42 1.30 1.24
Diluted earnings 0.45 0.42 1.29 1.23
Cash dividends declared 0.26 0.24 0.76 0.69
Book value 9.40 9.35 9.40 9.35
Closing stock price - high 29.25 33.81 29.31 33.81
Closing stock price - low 24.69 24.88 23.58 24.88
FINANCIAL RATIOS:
Net interest margin - FTE 4.58 % 4.62 % 4.56 % 4.63 %
Return on average assets 1.80 1.82 1.76 1.80
Return on average shareholders' equity 19.25 18.33 18.14 18.19
Efficiency ratio 43.49 47.85 42.88 45.73
</TABLE>
For the nine months ended September 30, 1999, net income, per share data and
the financial ratios include the merger-related charges, net of tax, recorded
during the second quarter of 1999 in connection with the Ramapo Financial
Corporation merger on June 11, 1999 of $2.2 million or $0.04 per diluted share.
*Per share figures have been adjusted for a 5 percent stock dividend issued May
18, 1999.
SELECTED BALANCE SHEET ITEMS AND RATIOS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 1999 1998 1999 1998
<S> <C> <C> <C> <C>
AVERAGE BALANCE SHEET ITEMS:
Assets $ 6,072,900 $ 5,682,268 $ 6,009,784 $ 5,640,265
Earning Assets 5,824,412 5,419,785 5,746,677 5,369,653
Loans 4,307,991 4,028,204 4,224,703 3,985,923
Interest Bearing Liabilities 4,587,076 4,253,019 4,514,682 4,228,291
Deposits 5,012,406 4,882,468 4,977,729 4,841,242
Shareholders' equity 566,882 565,162 581,902 558,847
ALLOWANCE FOR POSSIBLE LOAN LOSSES
Beginning of period $ 54,894 $ 53,008 $ 54,640 $ 53,170
Provision for possible loan losses 2,320 3,145 6,095 9,250
Charge-offs 3,383 2,923 8,789 11,185
Recoveries 915 750 2,800 2,745
End of period 54,746 53,980 54,746 53,980
As of September 30,
(Dollars in thousands) 1999 1998
BALANCE SHEET ITEMS:
Assets $ 6,109,798 $ 5,643,948
Loans 4,396,408 4,087,402
Deposits 4,961,607 4,834,950
Shareholders' equity 568,283 573,774
CAPITAL RATIOS:
Tier 1 leverage ratio 9.48 % 9.82%
Risk-based capital - Tier 1 12.05 13.54
Risk-based capital - Total Capital 13.20 14.79
</TABLE>
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
As of September 30,
(Dollars in thousands) 1999 1998
<S> <C> <C>
ASSET QUALITY:
Non-accrual loans $ 6,199 $ 7,934
Other real estate owned (OREO) 795 5,379
Total non-performing assets 6,994 13,313
Loans past due 90 days or more and
still accruing 11,653(b) 10,475
ASSET QUALITY RATIOS:
Non-performing assets to total loans plus
other real estate owned (OREO) 0.16 % 0.33%
Allowance for loan losses to loans 1.25 1.32
Net charge-offs to average loans 0.19 0.28
</TABLE>
(b) Corrected amount, originally reported in Valley's press release as $9,245.
<PAGE>
VALLEY NATIONAL BANCORP
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
($ in thousands) September 30,
1999 1998 (1)
<S> <C> <C>
Cash and due from banks $ 161,686 $ 141,888
Federal funds sold 0 64,000
Investment securities 1,405,159 1,221,701
Loans 4,387,267 4,066,496
Loans held for sale 9,141 20,906
Less: Allowance for possible loan losses (54,746) (53,980)
Loans, net 4,341,662 4,033,422
Premises and equipment 82,381 82,101
Accrued interest receivable 36,829 31,967
Other assets 82,081 68,869
Total assets $ 6,109,798 $5,643,948
Liabilities
Deposits:
Non-interest bearing $ 921,497 $ 806,153
Interest bearing:
Savings 1,977,994 1,968,825
Time 2,062,116 2,059,972
Total deposits 4,961,607 4,834,950
Other borrowings 530,557 183,733
Accrued expenses and other liabilities 49,351 51,491
Total liabilities 5,541,515 5,070,174
Shareholders' Equity
Common stock, no par value, authorized 103,359,375
shares; issued 60,624,940 shares in 1999 and
58,948,784 shares in 1998 25,959 26,003
Surplus 326,061 330,772
Retained earnings 233,478 225,350
Unallocated common stock held by Employee
Benefit Plan (1,097) (1,443)
Accumulated other comprehensive (loss) income (10,475) 4,717
573,926 585,399
Cost of shares in treasury (200,700 common shares
in 1999 and 474,017 in 1998) (5,643) (11,625)
Total shareholders' equity 568,283 573,774
Total liabilities and
shareholders' equity $ 6,109,798 $ 5,643,948
</TABLE>
Note: (1) 1998 data has been restated to reflect the merger with
Ramapo Financial Corporation, effective June 11, 1999.
VALLEY NATIONAL BANCORP
Consolidated Statements of Income Three Months Ended
($ in thousands, except per share data) September 30,
1999 1998 (1)
<TABLE>
<CAPTION>
<S> <C> <C>
Interest Income
Interest and fees on loans $ 85,839 $ 83,561
Interest and dividends on investment securities 21,431 17,787
Interest on federal funds sold and other
short term investments 636 2,323
Total interest income 107,906 103,671
Interest Expense
Interest on deposits:
Savings deposits 10,298 11,842
Time deposits 25,410 27,438
Interest on other borrowings 6,726 2,939
Total interest expense 42,434 42,219
Net interest income 65,472 61,452
Provision for possible loan losses 2,320 3,145
Net interest income after provision for possible
loan losses 63,152 58,307
Non-Interest Income
Trust income 535 424
Service charges on deposit accounts 3,599 3,608
Gains on securities transactions, net 140 114
Fees from loan servicing 2,137 1,964
Credit card income 2,299 2,564
Gain on sale of loans, net 442 1,293
Other 2,179 1,398
Total non-interest income 11,331 11,365
Non-Interest Expense
Salary expense 14,721 14,256
Employee benefit expense 3,667 3,349
FDIC insurance premiums 303 309
Occupancy and equipment expense 5,141 5,928
Credit card expense 1,286 1,804
Amortization of intangible assets 1,505 2,193
Other 7,300 8,360
Total non-interest expense 33,923 36,199
Income before income taxes 40,560 33,473
Income tax expense 13,281 7,578
Net income $ 27,279 $ 25,895
Earnings per share: (2)
Basic $ 0.45 $ 0.42
Diluted $ 0.45 $ 0.42
Weighted Average Number of Shares Outstanding: (2)
Basic 60,229,700 61,353,791
Diluted 60,864,460 62,179,568
</TABLE>
Note: (1) All data has been restated to reflect the merger with Ramapo
Financial Corporation, effective June 11, 1999.
(2) 1998 earnings per share and average shares outstanding have been
restated to reflect the 5% stock dividend issued on May 18, 1999.
<PAGE>
VALLEY NATIONAL BANCORP
Consolidated Statements of Income Nine Months Ended
($ in thousands, except per share data) September 30,
1999 1998 (1)
<TABLE>
<CAPTION>
<S> <C> <C>
Interest Income
Interest and fees on loans $ 250,977 $ 248,143
Interest and dividends on investment securities 62,914 55,886
Interest on federal funds sold and other
short term investments 2,954 4,883
Total interest income 316,845 308,912
Interest Expense
Interest on deposits:
Savings deposits 30,401 35,252
Time deposits 75,864 82,473
Interest on other borrowings 17,267 8,730
Total interest expense 123,532 126,455
Net interest income 193,313 182,457
Provision for possible loan losses 6,095 9,250
Net interest income after provision for possible
loan losses 187,218 173,207
Non-Interest Income
Trust income 1,632 1,364
Service charges on deposit accounts 10,691 10,330
Gains on securities transactions, net 2,570 1,154
Fees from loan servicing 5,990 5,540
Credit card income 6,497 7,762
Gain on sale of loans, net 1,890 3,935
Other 6,583 3,873
Total non-interest income 35,853 33,958
Non-Interest Expense
Salary expense 43,186 41,825
Employee benefit expense 9,978 9,433
FDIC insurance premiums 927 950
Occupancy and equipment expense 14,937 16,617
Credit card expense 3,932 7,317
Amortization of intangible assets 3,647 4,443
Merger - related charges 3,005 0
Other 21,812 23,085
Total non-interest expense 101,424 103,670
Income before income taxes 121,647 103,495
Income tax expense 42,482 27,249
Net income $ 79,165 $ 76,246
Earnings per share: (2)
Basic $ 1.30 $ 1.24
Diluted $ 1.29 $ 1.23
Weighted Average Number of Shares Outstanding: (2)
Basic 60,862,712 61,365,056
Diluted 61,480,737 62,212,398
</TABLE>
Note: (1) All data has been restated to reflect the merger with Ramapo
Financial Corporation, effective June 11, 1999.
(2) 1998 earnings per share and average shares outstanding have been
restated to reflect the 5% stock dividend issued on May 18, 1999.
<PAGE>
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
By: /s/ Alan D. Eskow
Alan D. Eskow
Principal Accounting Officer
and Corporate Secretary
Dated: October 20, 1999
