WAYNE, N.J., Oct. 24 /PRNewswire-FirstCall/ -- Valley National Bancorp
(NYSE: VLY) ("Valley"), the holding company for Valley National Bank, is
pleased to announce that it has been chosen as one of the nation's stronger
regional banks to participate in the U.S. Treasury Department's TARP
Capital Purchase Program. On October 24, 2008, Valley was advised by the
Treasury that Valley's application under the program was approved. Valley
filed an application with the Treasury under such program for the sale of
$330 million in Valley nonvoting senior preferred stock to the Treasury.
Valley intends to use the proceeds from this sale for general corporate
purposes which include additional capital to grow lending operations and
support acquisitions of other financial institutions which may become
available in the current economic downturn.
Valley has no plan or current need to participate in other aspects of
the Treasury's overall TARP program, specifically the sale of troubled
assets to the Treasury. However, as an added benefit to Valley customers,
Valley does plan to voluntarily participate in the FDIC's fee-based
expanded insurance program which provides, without limitation, a guarantee
on all of Valley's non-interest bearing accounts through December 31, 2009.
"We view the terms of the Capital Purchase Program to be favorable and
a very attractive low-cost alternative to other capital sources in today's
market," noted Gerald H. Lipkin, Chairman, President and CEO. Mr. Lipkin
added, "Although Valley is a well-capitalized organization, we believe such
a program provides an excellent opportunity for healthy strong banks like
Valley to participate in and support the recovery of the U.S. economy.
Valley chose to voluntarily enter the program in order to shore up the
Treasury's efforts to provide additional long-term funds which should
facilitate additional lending. Furthermore, the enhancement to our already
solid capital position will provide strategic flexibility to our management
team while promoting continued confidence in the Valley brand."
Valley's senior preferred shares will pay a cumulative dividend rate of
five percent per annum for the first five years and will reset to a rate of
nine percent per annum after year five. The shares are callable by Valley
at par after three years and may be replaced if Valley were to choose to
repurchase them with newly raised equity capital at any time.
In conjunction with the purchase of Valley's senior preferred shares,
the Treasury will receive warrants to purchase approximately 2.5 million in
Valley common shares with an aggregate market price equal to $49.5 million
or 15 percent of the senior preferred investment. The Valley common stock
underlying these warrants represents less than two percent of Valley's
outstanding common shares at September 30, 2008. The exercise price will be
the market price of Valley's common stock at the time of issuance,
calculated on a 20-trading day trailing average.
Valley, like other institutions, has not yet been provided with the
final documentation and the closing on this purchase is subject to the
execution of satisfactory definitive documentation. The purchase, according
to the Treasury, will occur within 30 days of the approval and before
year-end.
At September 30, 2008, Valley National Bank's capital ratios were all
above the level required to be categorized as "well capitalized." Valley
National Bank's total risk-based capital, Tier I capital, and leverage
capital were 10.12 percent, 8.41 percent, and 6.83 percent, respectively,
at September 30, 2008.
About Valley
Valley is a regional bank holding company, headquartered in Wayne, New
Jersey, with $14.3 billion in assets. Its principal subsidiary, Valley
National Bank, currently operates 195 branches in 132 communities serving
14 counties throughout northern and central New Jersey and Manhattan,
Brooklyn and Queens. Valley is the largest commercial bank headquartered in
New Jersey and is committed to providing the most convenient service, the
latest in product innovations and an experienced and knowledgeable staff
with a high priority on friendly customer service 24 hours a day, 7 days a
week. Valley offers a wide range of deposit products, mortgage loans and
cash management services to consumers and businesses including products
tailored for the medical, insurance and leasing business. Valley's
comprehensive delivery channels enable customers to bank in person, by
telephone or online.
For more information about Valley National Bank and its products and
services, please visit http://www.valleynationalbank.com or call Customer Service
24/7 at 1-800-522-4100.
Forward Looking Statements
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, taxation, technology
and market conditions. These statements may be identified by such
forward-looking terminology as "expect," "believe," "view," "opportunity,"
"allow," "continues," "reflects," "typically," "usually," "anticipate," or
similar statements or variations of such terms. Such forward-looking
statements involve certain risks and uncertainties. Actual results may
differ materially from such forward-looking statements. Factors that may
cause actual results to differ from those contemplated by such
forward-looking statements include, among others, the following: the
Treasury providing satisfactory definitive documentation, unanticipated
changes in the financial markets and the resulting unanticipated effects on
financial instruments in Valley's investment portfolio; unanticipated
changes in the direction of interest rates; volatility in earnings due to
certain financial assets and liabilities held at fair value; the occurrence
of an other-than-temporary impairment to investment securities classified
as available for sale or held to maturity; stronger competition from banks,
other financial institutions and other companies; changes in loan,
investment and mortgage prepayment assumptions; insufficient allowance for
credit losses; a higher level of net loan charge-offs and delinquencies
than anticipated; the inability to realize expected cost savings and
synergies from the Greater Community merger in the amounts or in the
timeframe anticipated; material adverse changes in Valley's operations or
earnings; the inability to retain Greater Community's customers and
employees; a decline in the economy in Valley's primary market areas,
mainly in New Jersey and New York; changes in relationships with major
customers; changes in effective income tax rates; higher or lower cash flow
levels than anticipated; inability to hire or retain qualified employees; a
decline in the levels of deposits or loss of alternate funding sources; a
decrease in loan origination volume; a change in legal and regulatory
barriers including issues related to compliance with anti-money laundering
("AML") and bank secrecy act ("BSA") laws; adoption, interpretation and
implementation of new or pre-existing accounting pronouncements; the
development of new tax strategies or the disallowance of prior tax
strategies; operational risks, including the risk of fraud by employees or
outsiders and unanticipated litigation pertaining to Valley's fiduciary
responsibility; and the inability to successfully implement new lines of
business or new products and services.
SOURCE Valley National Bancorp
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Related links:
http://www.valleynationalbank.com
CONTACT:
Alan D. Eskow, Executive Vice President and
Chief Financial Officer, Valley National Bancorp, +1-973-305-4003
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