October 30, 2000
Valley National Bancorp
1455 Valley Road
Wayne, New Jersey 07470
Merchants New York Bancorp, Inc.
275 Madison Avenue
New York, New York 10022
Re: Merger of Valley National Bancorp and
Merchants New York Bancorp, Inc.
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We have represented Valley National Bancorp ("Valley"), a New
Jersey corporation which is a registered bank holding company in connection with
the merger of Merchants New York Bancorp. Inc. ("Merchants"), a Delaware
corporation and registered bank holding company into Valley (the "Merger") and
the subsequent merger of The Merchants Bank of New York ("MBNY"), a New York
state-chartered commercial bank into Valley National Bank ("VNB"), a national
banking association. The Merger shall be effected pursuant to the provisions of
an Agreement and Plan of Merger dated as of September 5, 2000, by and among
Valley, VNB, Merchants and MBNY.
We have assumed, with your consent, that:
(a) the Merger will be effected in accordance with the Merger
Agreement, and
(b) the factual representations contained in the letters of
representation from Valley and Merchants dated October 30, 2000 will be true at
the Effective Time of the Merger (as defined in the Merger Agreement), provided,
however, that we did not rely on legal conclusions, if any, contained in such
representations.
On the basis of the foregoing, and our consideration of such
other matters of fact and law as we have deemed necessary or appropriate, it is
our opinion, under presently applicable federal income tax law, that:
1. The Merger will qualify as a "reorganization" under Section
368(a). (All "Section" references are to the Internal Revenue Code of 1986, as
amended, unless otherwise noted.)
2. No gain or loss will be recognized by Merchants in
connection with the Merger. Sections 361(a) and 1032.
3. Merchants shareholders will not recognize any gain or loss
for federal income tax purposes upon the exchange in the Merger of shares of
Merchants common stock solely for Valley common stock. Section 354(a).
4. The basis of Valley common stock received in the Merger by
Merchants shareholders will be the same as the basis of the shares of Merchants
common stock that they surrendered in exchange therefor. Section 358.
5. The holding period of Valley common stock will include the
holding period during which the shares of Merchants common stock surrendered in
exchange were held by the Merchants shareholder provided those shares of
Merchants common stock were held as capital assets. Section 1223.
6. Merchants shareholders receiving cash in lieu of fractional
shares of Valley common stock will be treated as if such fractional shares had
been received from Valley and then subsequently redeemed by Valley. The cash
received by the Merchants shareholders in lieu of fractional shares will be
treated as having been received as full payment in exchange for the fractional
shares deemed to have been redeemed. Section 302(a). Accordingly, if the
fractional shares interest in Valley common stock would have constituted a
capital asset in the hands of the shareholder, such shareholder should recognize
capital gain or loss in an amount equal to the difference between the amount of
such cash received and the portion of the adjusted tax basis in the Valley
common stock allocable to the fractional share interest.
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The tax consequences described above may not be applicable to
Merchants shareholders that acquired the common stock of Valley pursuant to the
exercise of an employee stock option or otherwise as compensation, that hold the
Valley common stock as part of a "straddle" or "conversion transaction" or that
are insurance companies, securities dealers, financial institutions or foreign
persons.
We hereby consent to the reference to us under the heading
"THE PROPOSED MERGER--Federal Income Tax Consequence" in the Joint Proxy
Statement-Prospectus pertaining to the Merger and to the filing of this opinion
as an exhibit to the related Amendment No. 1 to the Registration Statement on
Form S-4 filed with the Securities and Exchange Commission on the date hereof.
In giving this consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules of the Securities and Exchange Commission thereunder.
Very truly yours,
PITNEY, HARDIN, KIPP & SZUCH LLP
