Filed by Valley National Bancorp
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under the
Securities and Exchange Act of 1934
Subject Company: Merchants New York Bancorp, Inc.
Commission File No. 0-22058
FORWARD LOOKING STATEMENTS
This document contains forward-looking statements concerning the
financial condition, results of operations and business of Valley following the
consummation of its proposed acquisition of Merchants, the anticipated financial
and other benefits of the proposed acquisition and the plans and objectives of
Valley's management following the proposed acquisition, including, without
limitation, statements relating to the cost savings expected to result from the
proposed acquisition, and anticipated results of operations of the combined
company following the proposed acquisition. Generally, the words "will," "may,"
"should," "continue," "believes," "expects," "anticipates" or similar
expressions identify forward-looking statements. These forward-looking
statements involve certain risks and uncertainties. Factors that could cause
actual results to differ materially from those contemplated by the
forward-looking statements include, among others, the following factors: (1)
cost savings expected to result from the proposed acquisition may not be fully
realized or realized within the expected time frame; (2) operating results
following the proposed acquisition may be lower than expected; (3) competitive
pressure among financial services companies may increase significantly; (4)
costs or difficulties related to the integration of the businesses of Valley and
Merchants may be greater than expected; (5) adverse change in the interest rate
environment may reduce interest margins of the combined company; (6) general
economic conditions, whether nationally or in the market areas in which Valley
and Merchants conduct business, may be less favorable than expected; (7)
legislation or regulatory changes may adversely affect the businesses in which
Valley and Merchants are engaged; or (8) adverse changes may occur in the
securities markets. Readers are cautioned not to place undue reliance on forward
looking statements which are subject to influence by the named risk factors and
unanticipated future events. Actual results may differ materially from
management expectations. Both Valley and Merchants disclaim any obligation to
update or revise any forward looking statements based on the occurrence of
future events, the receipt of new information, or otherwise.
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September 14, 2000
Dear Shareholder:
We are very pleased to inform you that we have entered into a merger agreement
with The Merchants Bank of New York, a $1.4 billion commercial bank operating
seven offices in Manhattan. Merchants is a highly profitable, conservatively
managed bank with an operating philosophy very similar to Valley's.
Pursuant to the agreement, Merchants will be merged into Valley and will
continue to operate under the Merchants name in Manhattan. Each of Merchants'
18,645,488 outstanding shares will be exchanged for .7634 shares of Valley
common stock. At June 30, 2000, Merchants had $96.7 million of shareholders
equity. In connection with the execution of the acquisition agreement, Merchants
granted Valley an option to acquire 19.9% or 4.7 million shares from Merchants'
authorized, but unissued stock.
The transaction presents Valley with many exciting opportunities. Merchants has
operated successfully, but it does not offer its customers many retail banking
products. Merchants does not offer residential mortgages, home equity loans,
consumer overdraft checking privileges, debit cards, ATMs, asset management or
trust services - all products that Valley has marketed very successfully to its
customer base.
Although we are venturing outside of northern New Jersey, we expect to be able
to maintain our super community bank image. Merchants' offices are contiguous to
our service area, within 17 miles of our headquarters, and most of their
customers are less than one hour from Wayne. This will allow our senior
management to continue to offer our new customers close personal attention, the
hallmark of Valley service. Furthermore, in an effort to preserve their long
standing customer relationships, the senior management team of Merchants will be
joining Valley.
We anticipate sufficient cost savings to make the transaction accretive to our
2001 earnings, without giving any consideration for the additional new business
the merger is anticipated to generate. We are paying approximately 16 times
Merchants' estimated 2000 earnings and 14 times those earnings after anticipated
cost savings, making this a fairly priced acquisition.
On a combined basis, our goal will be to achieve a return on assets of about
1.75, a return on equity of about 20% and an efficiency ratio in the low 40
percent range, thereby maintaining Valley's record as one of the best performing
banking companies in America. The merger will require regulatory approval and
approval of both companies' shareholders. We expect to complete the transaction
in the first quarter of 2001. We will be providing you with additional
information about the merger transaction over the next few months and, as
always, we appreciate your continued support.
Sincerely,
Gerald H. Lipkin
Chairman, President & Chief Executive Officer
(OVER)
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MORE INFORMATION AND WHERE TO OBTAIN IT
We will be filing with the SEC a registration statement and a joint proxy
statement-prospectus with respect to the proposed merger. YOU SHOULD READ THESE
DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Information about Valley and certain other persons who may be
deemed to be participants in the solicitation of proxies from Valley
shareholders to approve the merger is set forth in a filing under Rule 14a-12
made by Valley with the SEC on September 7, 2000. You may obtain a free copy of
these documents and other documents filed by Valley or Merchants with the SEC at
the SEC's Internet web site at www.sec.gov. These documents will also be
available free of charge by contacting Valley National Bancorp, 1455 Valley
Road, Wayne, New Jersey 07474, Attention: Dianne Grenz, telephone (973)
305-3380.
