Attached files
| file | filename |
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| 8-K - FORM 8-K - VALLEY NATIONAL BANCORP | d8k.htm |
 Investor
Presentation EXHIBIT 99.1 |
 2
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, acquisitions, relationships, opportunities, taxation,
technology, market conditions and economic expectations.
These
statements
may
be
identified
by
such
forward-looking
terminology
as
“should,”
“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 materially from those contemplated by
such forward-looking statements include, but are not limited to, the following:
failure to obtain shareholder approval for the merger of State Bancorp with Valley or
to satisfy other conditions to the merger on the proposed terms and within the proposed
timeframe including, without limitation, the purchase from the United States Department of the
Treasury of each share of State Bancorp’s Series A Preferred Stock issued under
the Treasury’s Capital Purchase Program; the inability to realize expected cost
savings and synergies from the merger of State Bancorp with Valley in the amounts
or in
the
timeframe
anticipated;
changes
in
the
estimate
of
non-recurring
charges;
costs
or
difficulties
relating to integration matters might be greater than expected; material adverse changes in
Valley’s or State Bancorp’s operations or earnings; the inability to retain
State Bancorp’s customers and employees; or a decline in the economy in
Valley’s primary market areas, mainly in New Jersey and New York, as well as those factors
set forth in Valley’s Current Report on Form 8-K filed on July 28, 2011, Quarterly
Report on Form 10-Q for the quarter ended March 31, 2011 and our Annual Report on
Form 10-K for the year ended December 31, 2010. Valley assumes no obligation
for updating any such forward-looking statement at any time. |
 3
Additional Information and Where to Find it
This communication does not constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation
of
any
vote
or
approval.
In
connection
with
the
proposed
merger,
Valley
intends
to
file
a
proxy
statement/prospectus with
the
Securities
and
Exchange
Commission.
INVESTORS
AND
SECURITY
HOLDERS
ARE
ADVISED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION.
Investors and security holders may obtain a free copy of the registration statement
(when available) and other documents filed by Valley with the Commission at the
Commission’s web site at www.sec.gov. These documents may
be accessed and downloaded for free at Valley’s web site at
http://www.valleynationalbank.com/filings.html
or by directing a request to Dianne M. Grenz, First Senior Vice
President, Valley National Bancorp, at 1455 Valley Road, Wayne, New Jersey 07470, telephone
(973) 305-3380. Participants in the Solicitation
This
communication
is
not
a
solicitation
of
a
proxy
from
any
security
holder
of
State
Bancorp.
However,
Valley,
State
Bancorp, their respective directors and executive officers and other persons may be deemed to
be participants in the solicitation
of
proxies
from
State
Bancorp’s
shareholders
in
respect
of
the
proposed
transaction.
Information
regarding the directors and executive officers of Valley may be found in its definitive proxy
statement relating to its 2011 Annual Meeting of Shareholders, which was filed with the
Commission on March 11, 2011 and can be obtained free of charge from Valley’s
website. Information regarding the directors and executive officers of State Bancorp
may be found in its definitive proxy statement relating to its 2011 Annual Meeting of
Shareholders, which was filed with the
Commission
on
March
25,
2011
and
can
be
obtained
free
of
charge
from
State
Bancorp’s
website.
Other
information
regarding
the
participants
in
the
proxy
solicitation
and
a
description
of
their
direct
and
indirect
interests,
by security holdings or otherwise, will be contained in the proxy statement/prospectus and
other relevant materials to be filed with the SEC when they become available.
|
 Historical
Financial Data (1) (Dollars in millions, except for share data)
6/30/2011
14,470
$
73.5
$
$0.43
1.03
%
11.24
%
$0.34
5/11 -
5%
Stock Dividend
2010
14,144
131.2
0.78
0.93
10.32
0.69
5/10 -
5%
Stock Dividend
2009
14,284
116.1
0.61
0.81
8.64
0.69
5/09 -
5%
Stock Dividend
2008
14,718
93.6
0.61
0.69
8.74
0.69
5/08 -
5%
Stock Dividend
2007
12,749
153.2
1.05
1.25
16.43
0.69
5/07 -
5%
Stock Dividend
2006
12,395
163.7
1.10
1.33
17.24
0.67
5/06 -
5%
Stock Dividend
2005
12,436
163.4
1.12
1.39
19.17
0.65
5/05 -
5%
Stock Dividend
2004
10,763
154.4
1.11
1.51
22.77
0.63
5/04 -
5%
Stock Dividend
2003
9,873
153.4
1.10
1.63
24.21
0.60
5/03 -
5%
Stock Dividend
2002
9,148
154.6
1.06
1.78
23.59
0.57
5/02 -
5:4
Stock Split
2001
8,590
135.2
0.89
1.68
19.70
0.54
5/01 -
5%
Stock Dividend
2000
6,426
106.8
0.86
1.72
20.28
0.50
5/00 -
5%
Stock Dividend
1999
6,360
106.3
0.81
1.75
18.35
0.48
5/99 -
5%
Stock Dividend
1998
5,541
97.3
0.78
1.82
18.47
0.43
5/98 -
5:4
Stock Split
1997
5,091
85.0
0.71
1.67
18.88
0.38
5/97 -
5%
Stock Dividend
1996
4,687
67.5
0.62
1.47
17.23
0.34
5/96 -
5%
Stock Dividend
1995
4,586
62.6
0.57
1.40
16.60
0.32
5/95 -
5%
Stock Dividend
1994
3,744
59.0
0.63
1.60
20.03
0.30
5/94 -
10%
Stock Dividend
1993
3,605
56.4
0.61
1.62
21.42
0.24
4/93 -
5:4
Stock Split
1992
3,357
43.4
0.48
1.36
19.17
0.21
4/92 -
3:2
Stock Split
1991
3,055
31.7
0.35
1.29
15.40
0.20
Period End
Total Assets
Net Income
(2)
Common Stock Splits and Dividends
Diluted
Earnings Per
Common
Share
Return on
Average
Assets
Return on
Average
Equity
Cash Dividends
Declared Per
Common Share
4
Shareholder Returns
(1) All per share amounts have been adjusted retroactively for stock
splits and stock dividends during the periods presented. (2) Net income
includes other-than-temporary impairment charges on investment securities totaling $517 thousand, $2.9 million, $4.0 million,
$49.9 million, and $10.4 million, net of tax benefit, for the period ended June 30,
2011, December 31, 2010, 2009, 2008, and 2007, respectively. |
 Valley
National Bank Today About Valley
Regional Bank Holding Company
Approximately $14.5 Billion in
Assets
Headquartered in Wayne, New
Jersey
40
th
Largest United States
Chartered
Commercial Bank
One of the Largest Chartered
Commercial Banks
Headquartered in
New Jersey
Operates 198 Branches in 134
Communities Serving 14 counties
throughout Northern and Central
New Jersey, Manhattan, Brooklyn
and Queens
Traded on the NYSE (VLY)
Significant Attributes
Consistent Shareholder Returns
Focus on Credit Quality
Conservative Strategies
Affluent and Heavily Populated
Footprint
Strong Customer Service
Experienced Senior and Executive
Management
5 |
 6
Management Approach
Large percentage of retail ownership
Long-term investment approach
Focus on cash and stock dividends
Large insider ownership, family members, retired
employees and retired directors
Market Cap of approximately $2.3 Billion
Over 200 institutional holders
40% of total outstanding shares
Source: Bloomberg as of 7/27/2011
Large Bank that Operates and Feels Like a Small Closely Held Company
|
 7
Valley’s 2Q 2011 Highlights
Announced Merger Agreement with State Bancorp, Inc.
Received regulatory approval from the OCC and FRB NY
Closing anticipated for 4Q 2011 subject to shareholder approval and other conditions
Loan Growth
Total non-covered
loans
increased
by
$73.0
million
linked
quarter,
or
3.7%
on
an
annualized
basis,
to
$9.3
billion
Residential Mortgage: 19.4% annualized growth linked quarter
Commercial Real Estate: 3.3% annualized growth linked quarter
Commercial & Industrial: (7.3%) annualized decline linked quarter
Consumer Loans: (4.8%) annualized decline linked quarter
Credit Quality
Total 30+ day delinquencies were 1.66% of entire loan portfolio
Total non-accrual loans were 1.19% of total loans
Out of approximately 22,500 residential mortgages and home equity loans, only 248 loans were
past due 30 days
or more at June 30, 2011.
Net charge-offs were $6.2 million or 0.27% of average total non-covered loans on an
annualized basis Allowance for non-covered loan losses as a percentage of
non-covered loans decreased to 1.29% from 1.30% at March 31, 2011.
Net Income
2Q net
income
available
to
common
shareholders
was
$36.9
million
($0.22
Diluted
EPS)
Capital
Strong capital ratios |
 8
Equity Composition / Ratios*
Total Tier II Equity = $1.4 Billion
As of 06/30/11
Significant unrealized gain on facilities, referenced in slide 9,
not incorporated in capital ratios reflected above.
*Non-GAAP reconciliations shown on slide 29-30.
Capital Ratios
As of
06/30/2011
“Well
Capitalized”
Tangible Common Equity /
Tangible Assets
6.86%
N/A
Tangible Common Equity /
Risk-Weighted Assets
9.20%
N/A
Tier I Common Ratio
9.40%
N/A
Tier I
11.07%
6.00%
Tier II
13.09%
10.00%
Leverage
8.37%
5.00%
Book Value
$7.72
N/A
Tangible Book Value
$5.71
N/A
Tangible
Common
Equity 70%
Trust
Preferred
13%
Sub
debt
6%
LL Reserve
9%
Other
Equity 2% |
 9
Asset and Loan Composition
Total Assets = $14.5 Billion
As of 06/30/2011
*Other Assets includes bank owned branch locations carried at a
cost estimated by management to be significantly less than the
current market value.
Non-Covered Loans (Gross) = $9.3 Billion
Non
Covered
Loans 64%
Securities 20%
Cash 4%
Intangible
Assets 2%
Total Other
Assets* 8%
Commercial
Real Estate
37%
Residential
Mortgages
23%
Commercial
Loans
20%
Auto Loans
9%
Other
Consumer
7%
Construction
Loans
4%
Covered Loans
2%
- |
 10
Total Commercial Real Estate -
$3.4 Billion
(Non-Covered Loans)
As of 05/31/11
Primary Property
Type
$ Amount
(Millions)
% of
Total
Average
LTV
Retail
895
27%
49%
Industrial
656
19%
52%
Apartments
422
13%
45%
Office
415
12%
53%
Mixed Use
374
11%
45%
Healthcare
233
7%
62%
Specialty
216
6%
50%
Residential
76
2%
49%
Land Loans
65
2%
67%
Other
26
1%
48%
Diversified Commercial Real Estate Portfolio
-Average LTV based on current balances and most recent appraised value
-The total CRE loan balance is based on Valley’s internal loan hierarchy
structure and does not reflect loan classifications reported in Valley’s SEC
and bank regulatory reports.
-The chart above does not include $373 million in construction loans.
27%
19%
13%
12%
11%
7%
6%
2%
2%
1% |
 11
Total Retail Property Types -
$895 Million
(Non-Covered Loans)
Retail Property Type
% of
Total
Average
LTV
Multi-Tenanted -
Anchor
26%
49%
Single Tenant
22%
50%
Multi-Tenanted -
No Anchor
20%
53%
Auto Dealership
12%
50%
Private & Public Clubs
6%
33%
Food Establishments
5%
54%
Entertainment Facilities
4%
45%
Private Education Facilities
3%
51%
Auto Servicing
2%
51%
Retail Composition of Commercial Real Estate
-Average LTV based on current balances and most recent appraised value
-The chart above does not include construction loans.
As of 05/31/11 |
 12
Construction Loan Composition
Total
(Non-Covered)
Construction
Loans
-
$389
Million
Primary Property Type
$ Amount
(Millions)
% of
Total
Residential
149
38%
Retail
52
13%
Land Loans
52
13%
Apartments
42
11%
Mixed Use
37
10%
Other
18
5%
Industrial
13
3%
Office
8
3%
Healthcare
8
2%
Specialty
7
2%
-Construction loan balance is based on Valley’s internal loan hierarchy
structure and does not reflect loan classifications reported in Valley’s SEC
and bank regulatory reports.
As of 05/31/11 |
 13
Net Charge-offs to Average Loans
Source -
SNL Financial As of 7/2711
Peer group consists of banks with total assets between $3 billion and $50 billion.
2003 -
2010
2011 YTD |
 14
Investment Portfolio
2011
Investment Types
2007
35%
GSE MBS (GNMA)
3%
20%
GSE MBS (FNMA/FHLMC)
49%
13%
Trust Preferred
12%
10%
State, County & Municipals
7%
8%
Other
7%
7%
US Treasury
0%
4%
Corporate Debt
17%
3%
Private Label MBS
5%
$2.9 Billion
Investment Portfolio
$3.1 Billion
As of 06/30/11 and 12/31/07
Duration of MBS Securities
2.22 Years
2.64 Years |
 15
Securities by Investment Grade
AAA Rated 70%
AA Rated 5%
A Rated 4%
BBB Rated 7%
Non Investment Grade 4%
Not Rated 10%
As of 06/30/2011 |
 16
Deposits and Borrowings Composition
Total Liabilities = $13.2 Billion
As of 06/30/2011
Total Deposits = $9.7 Billion |
 Merger
Overview 17 |
 Strategic
Rationale for Transaction •
Powerful Super Community Bank Franchise
–
Strategic eastward geographic extension into a contiguous market
for Valley
–
Strong middle market commercial lender which matches up with
Valley’s historic strengths
–
Significant core deposit funding franchise
–
Utilizes strong management team with extensive Long Island expertise
–
Clean balance sheet
•
Shared Vision of Banking
–
Relationship bank
–
Conservative management culture
•
Financially Advantageous
–
Commitment to strong capital
–
Accretive to income within one year
18 |
 Summary of Key
Terms at Acquisition *Adjusted
to
reflect
the
5%
stock
dividend
declared
by
Valley
on
4/13/11
**Calculations
based
on
Valley’s
10
day
average
closing
share
price
(4/14/11
–
4/28/11)
19
•100% common stock consideration;
fixed 1 for 1 exchange ratio* •~$222 million •Non-taxable merger transaction
•Preferred to be repaid &
warrants retired or converted to Valley instruments
•1.85x
•17.9x (Does not include projected
cost saves, estimated to be 25%)
•16.6%
•8.6%
•~2.30% (in addition to ALLL balance as
of 3/31/11 of $27.6 million)
•~25% of 2010 of non-interest expense
•~$14 million after
tax •81% of loan
portfolio reviewed by Valley’s experienced staff
•Subject to customary
regulatory and State shareholder approval •VLY inherits strong seasoned management team
•4Q 2011
Structure
Transaction Value
TARP
Taxable / Non Taxable
Price / Tangible Book
Price / 2012 Estimated EPS
Price / Deposits
Core Deposit Premium
Loan Mark
Cost Saves
Merger –Related Charges
Due Diligence
Approvals
Management Transitions
Expected Closing
Price & Structure
Pricing Multiples**
Assumptions
Closing & Other |
 Valley’s
Eastward Expansion •
New York City
–
Acquired Merchants Bank in 2001 (7 branches)
–
Opened 7 De Novo locations
–
Acquired 2 locations with LibertyPointe and Park Avenue acquisitions
•
Brooklyn and Queens
–
Opened 13 De Novo locations since 2007
–
Acquired deposits and lending relationships from LibertyPointe and Park Avenue
acquisitions
•
Long Island
–
Due diligence on Valley’s expansion into Long Island commenced in 2008
•
Continuation of Valley’s eastward franchise expansion, Long Island phase restrained
between 2008 and 2010 due to economic uncertainty and lack of strong acquisition
candidate(s) –
Significant opportunities to fill in franchise
•
Opportunity to grow via De Novo branching
•
Still receptive to grow via acquisition
20 |
 Strategic
Fit Valley’s New York Expansion Continues
2011 Total NY Relationships
•$2.9 billion in NY
deposits •$2.1 billion in
NY loans** * *Pro-forma deposits include State Bancorp;
pro-forma loans are inclusive of VLY C&I and State Bancorp 2001+ De
Novo Branches Manhattan -
9
2007+ Brooklyn/Queens
Brooklyn –
8
Queens -
5
State Bank Branches
Queens –
3
Nassau –
8
Suffolk –
5
Manhattan -
1
VLY NJ Branches -
169
2001 Merchant’s Branches
Manhattan -
7
2001 Total NY Relationships
•$950 million in NY deposits
•$473 million in NY
loans* * NY loans include C&I loans only
21 |
 Demographic
Overview •
Familiar & Strong Demographics
–
High net worth marketplace
–
Population density
–
Large average deposits per branch
–
Significant number of businesses within marketplace
* Core
Market
Includes
Passaic,
Morris,
Hudson,
Essex
and
Bergen
Counties
22
Region
Households
(HH) (2010)
HH per Sq
Mile
Avg. Income
per HH
Avg. Deposits
per Branch
Total
Businesses
NJ Core Market*
Brooklyn/Queens/NYC
Long Island
1,171,909
2,474,719
956,874
1,104
12,203
798
$96,097
$79,390
$113,739
$58.4 million
$239.6 million
$71.8 million
156,071
291,176
127,289 |
 Future
Opportunities •
Ability to lever Valley’s capital to grow Long Island Franchise
–
Opportunity to fill in Nassau and Suffolk county geography
•
Consumer Lending
–
Opportunity to introduce new products (State Bancorp does
not actively pursue consumer lending relationships)
•
Valley’s residential mortgage products
•
Valley’s consumer lending (auto & home equity) products
•
Commercial Lending
–
Opportunity to expand relationships
•
Larger lending limit
23 |
 Pro-Forma
Impact * Pro-Forma assets, loans and deposits have not been adjusted to
reflect purchase accounting adjustments. (1) Adjusted to reflect
Valley’s 5% stock dividend declared on April 13, 2011 24
Financial Highlight
Assets ($ Billion)
Loans ($ Billion)
Deposits ($ Billion)
Branches
Tangible Common Equity /
Tangible Assets
Tangible Book Value /
Share
(1)
Valley
03/31/2011
State Bank
03/31/2011
Pro-Forma*
$14.4
$9.4
$9.7
198
6.88%
$5.68
$1.6
$1.1
$1.3
17
7.60%
$7.12
$16.0
$10.5
$11.0
215
6.68%
$5.57 |
 3/31/2011
Loan Mix Pro-Forma Impact
25
1
Family
22%
Auto
9%
Valley
Commercial
20%
Consumer
Construction
5%
-
4
6%
1
Family
7%
State Bank
Commercial
47%
Consumer
1
%
Construction
5%
Commercial
Real Estate
40%
-4
1-4
Family
20%
Auto
8%
Pro-Forma
Commercial
23%
Consumer
6%
Construction
5%
Commercial
Real Estate
38%
Commercial
Real Estate
38% |
 3/31/2011
Deposit Mix Pro-Forma Impact
26
Valley
Noninterest
-
Bearing
26%
Interest
-
Bearing
44%
Time
30%
State Bank
Interest
-
Bearing
45%
Noninterest
-
Bearing
28%
Time
27%
Pro-Forma
Time
30%
Noninterest
-
Bearing
26%
Interest
-
Bearing
44% |
 Acquisition
History •
Customer Friendly
•
Employee Friendly
•
Seamless Transitions
•
Quick Conversions
27
2011
2010
2010
2008
2005
2005
2001
State Bank of Long Island (Jericho, NY)
The Park Avenue Bank (Manhattan, NY)
LibertyPointe Bank (Manhattan, NY)
Greater Community Bank (Totowa, NJ)
NorCrown Bank (Livingston, NJ)
Shrewsbury State Bank (Shrewsbury, NJ)
Merchants Bank of New York (Manhattan, NY)
$1,580 million
$480 million
$200 million
$976 million
$622 million
$425 million
$1,369 million
17
5
3
16
15
12
7
91
86
40
50
51
103
Year
Recent Bank Acquisitions
Total Assets
Branches
Data Processing
Conversion
Period (Days) |
 28
For More Information
Log onto our web site: www.valleynationalbank.com
E-mail requests to: dgrenz@valleynationalbank.com
Call Shareholder Relations at: (973) 305-3380
Write to: Valley National Bank
1455 Valley Road
Wayne, New Jersey 07470
Attn: Dianne M. Grenz, First Senior Vice President
Director of Marketing, Shareholder & Public Relations
Log onto our website above or www.sec.gov to obtain free copies of
documents filed by Valley with the SEC |
 29
06/30/2011
Non-GAAP Disclosure Reconciliations
($ in Thousands)
Total Assets
$14,469,776
Less: Goodwill & Other Intangible Assets
(341,893)
Total Tangible Assets (TA)
$14,127,883
Total Equity
$1,311,218
Less: Goodwill & Other Intangible Assets
(341,893)
Total Tangible Common Equity (TCE)
$969,325
Risk Weighted Assets (RWA)
$10,535,713
Ratios
TCE / TA
6.86%
TCE / RWA
9.20%
Tier I Common Capital Ratio
(Tier 1 common /RWA)
9.40%
Tier I
(Total Tier I / RWA)
11.07%
Tier II
(Total Tier II / RWA)
13.09%
Total Equity
$1,311,218
Less: Net unrealized gains on securities available
for sale
(10,505)
Plus: Accumulated net gains (losses) on cash
flow hedges, net of tax
2,978
Plus: Pension liability adjustment, net of tax
17,815
Less: Goodwill
(317,891)
Less: Other disallowed intangible assets
(13,505)
Tier I Common Capital
$990,110
Plus: Trust preferred securities
$176,313
Total Tier I Capital
$1,166,423
Plus: Allowance for credit losses
$131,588
Plus: Unrealized Gains on AFS equity securities
1,435
Plus: Qualifying sub debt
80,000
Total Tier II Capital
$1,379,446 |
 30
Common Shares Outstanding
169,851,372
Shareholders’
Equity
$1,311,218
Less: Goodwill and Other Intangible
Assets
(341,893)
Tangible Shareholders’
Equity
$969,325
Tangible Book Value
$5.71
06/30/2011
Non-GAAP Disclosure Reconciliations
($ in Thousands) |