Valley National Bancorp Reports Continued Earnings Growth

Apr 18, 2001, 01:00 ET from Valley National Bancorp

    WAYNE, N.J., April 18 /PRNewswire/ -- Valley National Bancorp
 (NYSE:   VLY) has announced the following today:
 
     Valley National Bancorp (NYSE:   VLY) reported net income, before merger
 related charges, of $35.6 million, or $0.45 per diluted share for the quarter
 ended March 31, 2001, compared to net income of $32.0 million, or $0.40 per
 diluted share, for the quarter ended March 31, 2000, an increase in diluted
 earnings per share of 12.5 percent. Net income excludes a net, after tax
 merger related charge of $7.0 million, or $0.09 per diluted share, recorded in
 conjunction with the recently completed Merchants New York Bancorp, Inc.
 ("Merchants") merger. Net income including the charge was $28.6 million, or
 $0.36 per diluted share. All data has been restated to reflect the merger with
 Merchants on January 19, 2001, accounted for as a pooling of interests and the
 recently announced 5 percent stock dividend payable May 18, 2001 to
 shareholders of record May 4, 2001.
     (Logo:  http://www.newscom.com/cgi-bin/prnh/19990930/VLYLOGO )
     In addition, the Board of Directors of Valley on April 4, 2001 announced
 its intention to increase the annual cash dividend by 7.0 percent to $1.06 per
 share after adjusting for the 5 percent stock dividend. This marks the 32nd
 time in the last 33 years that Valley has increased its cash dividend.
     The quarter ended March 31, 2001, excluding the merger related charges,
 produced an annualized return on average assets ("ROA") of 1.82 percent and a
 21.43 percent annualized return on average equity ("ROE"). The efficiency
 ratio for the quarter ended March 31, 2001 was 44.64 percent, one of the best
 in the banking industry.
     Gerald H. Lipkin, Valley's Chairman, President and CEO stated, "We are
 very pleased with the addition of the seven branches, staff, shareholders and
 approximately $1.5 billion of assets of the Merchants Bank of New York
 recently added to Valley. The integration of Merchants is underway and we
 expect to convert their data processing system to Valley's system the weekend
 of May 5th. This will allow all customers to immediately access their accounts
 on Valley's real time on-line systems, including ATM machines at any of
 Valley's locations.
     Since the merger was announced we have received over $100 million in
 commercial mortgage applications from Merchants' customers, most of which have
 been approved and many have already closed. In addition, we have also seen
 activity in residential, home equity, automobile and other consumer loans.
 Additional deposit products and other services will become available as
 Merchants computer systems are converted to Valley's."
     Commenting further, Mr. Lipkin continued, "We are satisfied with the
 results for the quarter, particularly considering the softening of the
 economy. While there has been a general decline in business activity, Valley
 continues to post increased loans and earnings. We continue to maintain our
 lending standards and our asset quality remains strong. Due to the
 economically diversified and densely populated nature of our primary trade
 area, we remain cautiously optimistic about the economy of our service area
 and the quality of our loan portfolio."
     While residential refinancings have increased during the quarter, our
 origination of new loans has increased dramatically and we anticipate
 applications rising to approximately 500 this month, thereby replacing most of
 the runoff from our portfolio.
     Net interest income, on a fully-taxable equivalent basis, for the first
 quarter of 2001 increased to $82.6 million, or 2.9 percent over the prior year
 first quarter, with a net interest margin of 4.40 percent. This compares with
 $80.2 million and a net interest margin of 4.41 percent for the first quarter
 of 2000 and $81.4 million and a net interest margin of 4.43 percent for the
 fourth quarter of 2000.
     Non-interest income for the first quarter of 2001 was $18.7 million, an
 increase of $5.3 million from the first quarter of 2000. Excluding gains on
 the sale of loans and security gains, non-interest income increased
 $242 thousand, or 1.9 percent over the first quarter of 2000. Loan sale
 transactions in 2001 include an after tax gain of $2.9 million from the sale
 of the Shop Rite co-branded credit card portfolio.
     Non-interest expense for the first quarter of 2001 was $42.9 million,
 excluding the gross merger related charge of $9.0 million, an increase of
 $2.1 million from $40.8 million during the same period of 2000.
 
     Assset Quality and Allowance for Loan Losses
     Total loans grew 3.0 percent to $5.1 billion at March 31, 2001 from the
 prior year, after the sale of approximately $65 million of credit card loans.
 Nonaccrual loans, representing .08 percent of loans, were $3.9 million. Total
 nonperforming assets, which include nonaccrual loans and other real estate
 owned ("OREO"), totaled $4.0 million, or .08 percent of loans and OREO, at
 March 31, 2001, down from $9.1 million at March 31, 2000 and unchanged from
 December 31, 2000.
     Loans past due 90 days or more and still accruing at March 31, 2001
 increased to $19.6 million, or 0.38 percent of $5.1 billion of total loans,
 compared to $17.0 million at March 31, 2000 and $15.0 at December 31, 2000.
 Total loans past due in excess of 30 days were 1.27 percent of all loans at
 March 31, 2001 compared to 1.30 percent at March 31, 2000 and 1.58 percent at
 December 31, 2000.
 
      Capital Adequacy
     Valley's risk-based capital ratios were 11.8 percent for Tier 1 capital
 and 12.9 percent for Total capital. The Tier 1 leverage ratio was 8.5 percent.
 Shareholders' equity increased to $681.3 million from $625.1 million a year
 ago.
 
      Earnings Guidance
     In view of Valley's historical high performance levels and depending upon
 the economic outlook for our trade area, coupled with our loan demand, Valley
 targets an annual growth rate in earnings per share of 6- 12 percent,
 excluding merger related charges. For 2001 we anticipate that our earnings
 will fall within our targeted range.
 
     Valley National Bancorp is a regional bank holding company headquartered
 in Wayne, New Jersey. Its principal subsidiary, Valley National Bank including
 its Merchants Bank of New York Division, currently operates 125 offices
 located in 78 communities serving 10 counties throughout northern New Jersey
 and Manhattan.
 
     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", "view", "opportunity", "allow", "continues",
 "reflects", 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 of loans, as well as the effects of economic
 conditions and legal and regulatory barriers and structure. Actual results may
 differ materially form such forward-looking statements. Valley assumes no
 obligation for updating any such forward-looking statement at any time.
 
               Valley National Bancorp
          Consolidated Financial Highlights
 
 
     SELECTED FINANCIAL DATA
                                                     Three Months Ended
                                                         March  31,
     (Dollars in thousands, except per
      share data)                              2001                    2000
     SELECTED FINANCIAL DATA BEFORE
      MERGER CHARGES:
     Net income before merger charges       $35,606                 $31,994
     Earnings per diluted share*               0.45                    0.40
     Return on average assets                  1.82 %                  1.69 %
     Return on average equity                 21.43                   20.08
 
     SELECTED FINANCIAL DATA INCLUDING
      MERGER CHARGES:
     NET INCOME                             $28,563                 $31,994
     Net interest income                     81,025                  78,493
     Net interest income (FTE)               82,566                  80,233
 
     Weighted Average Number of Shares
      Outstanding:
          Diluted                        78,643,691              80,782,279
 
     Per share data:*
       Basic earnings                         $0.37                   $0.40
       Diluted earnings                        0.36                    0.40
       Cash dividends declared                 0.25                    0.24
       Book value                              8.73                    7.80
       Closing stock price - high             30.95                   24.43
       Closing stock price - low              24.42                   19.62
 
     FINANCIAL RATIOS:
     Net interest margin - FTE                 4.40 %                  4.41 %
     Return on average assets                  1.46                    1.69
     Return on average shareholders'
      equity                                  17.19                   20.08
     Efficiency ratio                         44.64                   43.59
 
     For the three months ended March 31, 2001, net income, per share data and
     the financial ratios include the merger-related charges, net of tax,
     recorded in connection with the Merchants New York Bancorp, Inc. merger on
     January 19, 2001 of $7.0 million or $0.09 per diluted share.
     *Per share figures have been adjusted for a 5 percent stock dividend
      declared April 4, 2001 to shareholders of record May 4, 2001 to be issued
      May 18, 2001.
 
 
     SELECTED BALANCE SHEET ITEMS AND RATIOS
                                                     Three Months Ended
                                                         March 31,
     (Dollars in thousands)                       2001              2000
     AVERAGE BALANCE SHEET ITEMS:
     Assets                                    $7,829,234        $7,580,139
     Earning assets                             7,500,302         7,282,511
     Loans                                      5,116,640         4,969,582
     Interest bearing liabilities               5,885,414         5,660,483
     Deposits                                   6,048,211         5,954,692
     Shareholders' equity                         664,751           637,421
 
     ALLOWANCE FOR LOAN LOSSES:
     Beginning of period                          $61,995           $64,228
     Provision for loan losses                      2,100             2,450
     Charge-offs                                    2,532             2,692
     Recoveries                                       984               989
     End of period                                 62,547            64,975
 
                Valley National Bancorp
           Consolidated Financial Highlights
 
     SELECTED FINANCIAL DATA
                                                        As of March 31,
     (Dollars in thousands)                          2001              2000
     BALANCE SHEET ITEMS:
     Assets                                    $8,017,193        $7,657,466
     Loans                                      5,114,406         5,027,394
     Deposits                                   6,112,550         5,966,410
     Shareholders' equity                         681,302           625,086
     CAPITAL RATIOS:
     Tier 1 leverage ratio                           8.47 %            8.51 %
     Risk-based capital - Tier 1                    11.75             11.57
     Risk-based capital - Total Capital             12.85             12.72
     ASSET QUALITY:
     Non-accrual loans                             $3,897            $7,352
     Other real estate owned (OREO)                    88             1,791
     Total non-performing assets                    3,985             9,143
     Loans past due 90 days or more and
      still accruing                               19,627            16,963
     ASSET QUALITY RATIOS:
     Non-performing assets to total loans
      plus
       other real estate owned (OREO)                0.08 %            0.18 %
     Allowance for loan losses to loans              1.22              1.29
     Net charge-offs to average loans                0.12              0.14
 
     SHAREHOLDER RELATIONS
     Requests for copies of reports providing more detailed financial
     statements and analysis, as well as all other inquiries regarding
     Shareholder Relations should be directed to Dianne Grenz at Valley
     National Bancorp, 1455 Valley Road, Wayne, New Jersey, 07470 or by
     telephone at (973) 305-3380, by fax at 973-696-2044 or by e-mail at
     dgrenz@valleynationalbank.com.
 
 
     VALLEY NATIONAL BANCORP
     Consolidated Statements of Financial Condition
     ($ in thousands)
                                                        March 31,
 
     Assets                                      2001               2000  (1)
 
     Cash and due from banks                 $191,481                 $207,384
     Federal funds sold                       142,000                   72,000
     Securities:
        Securities available for sale       1,955,623                1,542,647
        Securities held to maturity           447,501                  617,461
              Total securities              2,403,124                2,160,108
     Loans                                  5,114,406                5,027,394
     Less: Allowance for loan losses          (62,547)                 (64,975)
     Loans, net                             5,051,859                4,962,419
 
     Premises and equipment, net               90,571                   91,650
     Due from customers on acceptances
      outstanding                              18,339                   17,970
     Accrued interest receivable               48,423                   46,400
     Intangible assets                         40,116                   41,145
     Other assets                              31,280                   58,390
               Total assets                $8,017,193               $7,657,466
 
     Liabilities
 
     Deposits:
          Non-interest bearing             $1,257,068               $1,264,656
          Interest bearing:
             Savings                        2,359,155                2,310,140
             Time                           2,496,327                2,391,614
               Total deposits               6,112,550                5,966,410
     Federal funds purchased and
      securities sold under agreements
      to repurchase                           226,404                  239,909
     Treasury tax and loan account and
      other short term borrowings              76,066                  146,209
     Long-term debt                           819,788                  591,863
     Bank acceptances outstanding              18,339                   17,970
     Accrued expenses and other
      liabilities                              82,744                   70,019
               Total liabilities            7,335,891                7,032,380
 
     Shareholders' Equity
     Preferred stock, no par value
           30,000,000 shares authorized;
            none issued
     Common stock, no par value,
      authorized 108,527,344
           shares; issued 74,791,831
            shares in 2001 and
           75,020,980 shares in 2000           31,994                   32,140
     Surplus                                  320,849                  326,231
     Retained earnings                        326,287                  353,008
     Unallocated Common Stock Held by the
      employee benefit plan                      (729)                    (917)
     Accumulated other comprehensive gain
      (loss)                                   12,450                  (26,984)
                                              690,851                  683,478
     Treasury stock, at cost
       (375,561 common shares
        in 2001 and 2,300,858 in 2000)         (9,549)                 (58,392)
               Total shareholders' equity     681,302                  625,086
 
               Total liabilities and
                shareholders' equity       $8,017,193               $7,657,466
 
     Note:  (1) 2000 data has been restated to reflect the merger with
                Merchants New York Bancorp Inc., effective January 19, 2001.
 
 
     VALLEY NATIONAL BANCORP
     Consolidated Statements of Income             Three Months Ended
     ($ in thousands, except per share data)            March 31,
                                                2001                2000  (1)
 
     Interest Income
     Interest and fees on loans                $104,333               $100,429
     Interest and dividends on investment
      securities                                 38,230                 36,126
     Interest on federal funds sold and
      other short term investments                1,639                  1,133
                   Total interest income        144,202                137,688
     Interest Expense
     Interest on deposits:
          Savings deposits                       13,805                 14,340
          Time deposits                          33,849                 30,935
     Interest on other borrowings                15,523                 13,920
                    Total interest expense       63,177                 59,195
     Net Interest Income                         81,025                 78,493
     Provision for loan losses                    2,100                  2,450
     Net interest income after provision for
          loan losses                            78,925                 76,043
     Non-Interest Income
     Trust and investment services                1,211                    720
     Service charges on deposit accounts          4,548                  3,998
     Gains on securities transactions, net          163                      0
     Fees from loan servicing                     2,685                  2,730
     Credit card fee income                         997                  1,949
     Gain on sale of loans, net                   5,638                    765
     Other                                        3,442                  3,244
                    Total non-interest
                     income                      18,684                 13,406
 
     Non-Interest Expense
     Salary expense                              19,448                 18,424
     Employee benefit expense                     4,859                  4,090
     FDIC insurance premiums                        291                    313
     Occupancy and equipment expense              7,838                  6,070
     Credit card expense                            626                  1,231
     Amortization of intangible assets            1,818                  1,688
     Merger - related charges                     9,017                      0
     Other                                        8,059                  9,032
                    Total non-interest
                     expense                     51,956                 40,848
     Income before income taxes                  45,653                 48,601
     Income tax expense                          17,090                 16,607
     Net Income                                 $28,563                $31,994
 
     Earnings Per Share:  (2)
                   Basic                          $0.37                  $0.40
                   Diluted                        $0.36                  $0.40
     Weighted Average Number of Shares
      Outstanding:  (2)
                   Basic                     77,935,200             80,159,333
                   Diluted                   78,643,691             80,782,279
 
     Note:  (1) 2000 data has been restated to reflect the merger with
                Merchants New York Bancorp Inc., effective January 19, 2001.
            (2) Earnings per share and average shares outstanding have
                been restated to reflect the 5% stock dividend declared on
                April 4, 2001 and payable on May 18, 2001.
 
 
      VALLEY NATIONAL BANCORP
 
      Consolidated Statements of Income (1)
      ($ in thousands, except per share data)
 
                     Quarter      Quarter      Quarter      Quarter      Year
                      Ended        Ended        Ended        Ended       Ended
                      Mar,         June,        Sept,        Dec,        Dec
                      2000         2000         2000         2000        2000
 
     Interest Income
     Interest and
      fees on loans  $100,429    $103,731     $107,119     $108,673    $419,952
     Interest and
      dividends
      on investment    36,126      36,145       35,664       36,067     144,002
      securities
     Interest on
      federal funds
      sold and
      other
      short term
      investments       1,133       1,008        1,333          778       4,252
     Total interest
      income          137,688     140,884      144,116      145,518     568,206
 
     Interest Expense
     Interest on deposits:
      Savings deposits   14,340     14,417       14,514       14,199     57,470
      Time deposits      30,935     32,431       34,283       35,507    133,156
     Interest on other
      borrowings
                         13,920     15,632       16,359       16,111     62,022
      Total interest
       expense           59,195     62,480       65,156      65,817     252,648
 
     Net Interest
      Income             78,493     78,404       78,960      79,701     315,558
     Provision for
      loan losses         2,450      2,875        2,580      2,850       10,755
     Net interest income
      after provision for
      loan losses        76,043     75,529       76,380      76,851     304,803
 
     Non-Interest Income
     Trust and
      investment services   720        783          940       1,120       3,563
     Service charges
      on deposit
      accounts            3,998      4,754       4,712        4,716      18,180
     Gains on securities
      transactions, net       0          0         117          238         355
     Fees from loan
      servicing           2,730      2,782       2,769        2,621      10,902
     Credit card fee
      income              1,949      2,103       2,110        2,241       8,403
     Gain on sale of
      loans, net            765        584         437          441       2,227
     Other                3,244      3,453       3,352        4,746      14,795
      Total non-interest
       income            13,406     14,459      14,437       16,123      58,425
 
     Non-Interest Expense
     Salary expense (4)  18,424     18,070      18,678       20,944      76,116
     Employee benefit
      expense             4,090      4,465       4,406        5,076      18,037
     FDIC insurance
      premiums              313        313         309          304       1,239
     Occupancy and
      equipment expense   6,070      5,690       6,813        6,952      25,525
     Credit card
      expense             1,231      1,343       1,233        1,225       5,032
     Amortization of
      intangible assets   1,688      1,948       2,029       2,060        7,725
     Other (3)            9,032      9,194       7,980      10,584       36,790
      Total non-interest
       expense           40,848     41,023      41,448      47,145      170,464
     Income before
      income taxes       48,601     48,965      49,369      45,829      192,764
     Income tax
      expense            16,607     16,348      16,601      16,471       66,027
     Net Income         $31,994    $32,617     $32,768     $29,358     $126,737
 
     Earnings Per
      Share:(2)
       Basic              $0.40      $0.42       $0.42       $0.38        $1.61
       Diluted            $0.40      $0.41       $0.42       $0.37        $1.60
     Weighted Average
      Number of Shares
      Outstanding: (2)
       Basic          80,159,333  78,535,472  77,950,692  77,788,652  8,612,928
       Diluted        80,782,279  79,233,181  78,617,065  78,533,942  9,235,570
 
     Notes:  (1) Data has been restated to reflect the merger with Merchants
                 New York Bancorp, Inc. effective January 19, 2001.
             (2) Earnings per share and average shares outstanding have been
                 restated to reflect the 5% stock dividend declared on April 4,
                 2001 and payable on May 18, 2001.
             (3) Other non-interest expense recorded in the quarter ended
                 December 31, 2000 includes a $1.3 million fraud loss incurred
                 by Merchants Bank.
             (4) Included in salary expense for the quarter ended December 31,
                 2000 is extra compensation recorded by Merchants Bank.
 
 

SOURCE Valley National Bancorp
    WAYNE, N.J., April 18 /PRNewswire/ -- Valley National Bancorp
 (NYSE:   VLY) has announced the following today:
 
     Valley National Bancorp (NYSE:   VLY) reported net income, before merger
 related charges, of $35.6 million, or $0.45 per diluted share for the quarter
 ended March 31, 2001, compared to net income of $32.0 million, or $0.40 per
 diluted share, for the quarter ended March 31, 2000, an increase in diluted
 earnings per share of 12.5 percent. Net income excludes a net, after tax
 merger related charge of $7.0 million, or $0.09 per diluted share, recorded in
 conjunction with the recently completed Merchants New York Bancorp, Inc.
 ("Merchants") merger. Net income including the charge was $28.6 million, or
 $0.36 per diluted share. All data has been restated to reflect the merger with
 Merchants on January 19, 2001, accounted for as a pooling of interests and the
 recently announced 5 percent stock dividend payable May 18, 2001 to
 shareholders of record May 4, 2001.
     (Logo:  http://www.newscom.com/cgi-bin/prnh/19990930/VLYLOGO )
     In addition, the Board of Directors of Valley on April 4, 2001 announced
 its intention to increase the annual cash dividend by 7.0 percent to $1.06 per
 share after adjusting for the 5 percent stock dividend. This marks the 32nd
 time in the last 33 years that Valley has increased its cash dividend.
     The quarter ended March 31, 2001, excluding the merger related charges,
 produced an annualized return on average assets ("ROA") of 1.82 percent and a
 21.43 percent annualized return on average equity ("ROE"). The efficiency
 ratio for the quarter ended March 31, 2001 was 44.64 percent, one of the best
 in the banking industry.
     Gerald H. Lipkin, Valley's Chairman, President and CEO stated, "We are
 very pleased with the addition of the seven branches, staff, shareholders and
 approximately $1.5 billion of assets of the Merchants Bank of New York
 recently added to Valley. The integration of Merchants is underway and we
 expect to convert their data processing system to Valley's system the weekend
 of May 5th. This will allow all customers to immediately access their accounts
 on Valley's real time on-line systems, including ATM machines at any of
 Valley's locations.
     Since the merger was announced we have received over $100 million in
 commercial mortgage applications from Merchants' customers, most of which have
 been approved and many have already closed. In addition, we have also seen
 activity in residential, home equity, automobile and other consumer loans.
 Additional deposit products and other services will become available as
 Merchants computer systems are converted to Valley's."
     Commenting further, Mr. Lipkin continued, "We are satisfied with the
 results for the quarter, particularly considering the softening of the
 economy. While there has been a general decline in business activity, Valley
 continues to post increased loans and earnings. We continue to maintain our
 lending standards and our asset quality remains strong. Due to the
 economically diversified and densely populated nature of our primary trade
 area, we remain cautiously optimistic about the economy of our service area
 and the quality of our loan portfolio."
     While residential refinancings have increased during the quarter, our
 origination of new loans has increased dramatically and we anticipate
 applications rising to approximately 500 this month, thereby replacing most of
 the runoff from our portfolio.
     Net interest income, on a fully-taxable equivalent basis, for the first
 quarter of 2001 increased to $82.6 million, or 2.9 percent over the prior year
 first quarter, with a net interest margin of 4.40 percent. This compares with
 $80.2 million and a net interest margin of 4.41 percent for the first quarter
 of 2000 and $81.4 million and a net interest margin of 4.43 percent for the
 fourth quarter of 2000.
     Non-interest income for the first quarter of 2001 was $18.7 million, an
 increase of $5.3 million from the first quarter of 2000. Excluding gains on
 the sale of loans and security gains, non-interest income increased
 $242 thousand, or 1.9 percent over the first quarter of 2000. Loan sale
 transactions in 2001 include an after tax gain of $2.9 million from the sale
 of the Shop Rite co-branded credit card portfolio.
     Non-interest expense for the first quarter of 2001 was $42.9 million,
 excluding the gross merger related charge of $9.0 million, an increase of
 $2.1 million from $40.8 million during the same period of 2000.
 
     Assset Quality and Allowance for Loan Losses
     Total loans grew 3.0 percent to $5.1 billion at March 31, 2001 from the
 prior year, after the sale of approximately $65 million of credit card loans.
 Nonaccrual loans, representing .08 percent of loans, were $3.9 million. Total
 nonperforming assets, which include nonaccrual loans and other real estate
 owned ("OREO"), totaled $4.0 million, or .08 percent of loans and OREO, at
 March 31, 2001, down from $9.1 million at March 31, 2000 and unchanged from
 December 31, 2000.
     Loans past due 90 days or more and still accruing at March 31, 2001
 increased to $19.6 million, or 0.38 percent of $5.1 billion of total loans,
 compared to $17.0 million at March 31, 2000 and $15.0 at December 31, 2000.
 Total loans past due in excess of 30 days were 1.27 percent of all loans at
 March 31, 2001 compared to 1.30 percent at March 31, 2000 and 1.58 percent at
 December 31, 2000.
 
      Capital Adequacy
     Valley's risk-based capital ratios were 11.8 percent for Tier 1 capital
 and 12.9 percent for Total capital. The Tier 1 leverage ratio was 8.5 percent.
 Shareholders' equity increased to $681.3 million from $625.1 million a year
 ago.
 
      Earnings Guidance
     In view of Valley's historical high performance levels and depending upon
 the economic outlook for our trade area, coupled with our loan demand, Valley
 targets an annual growth rate in earnings per share of 6- 12 percent,
 excluding merger related charges. For 2001 we anticipate that our earnings
 will fall within our targeted range.
 
     Valley National Bancorp is a regional bank holding company headquartered
 in Wayne, New Jersey. Its principal subsidiary, Valley National Bank including
 its Merchants Bank of New York Division, currently operates 125 offices
 located in 78 communities serving 10 counties throughout northern New Jersey
 and Manhattan.
 
     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", "view", "opportunity", "allow", "continues",
 "reflects", 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 of loans, as well as the effects of economic
 conditions and legal and regulatory barriers and structure. Actual results may
 differ materially form such forward-looking statements. Valley assumes no
 obligation for updating any such forward-looking statement at any time.
 
               Valley National Bancorp
          Consolidated Financial Highlights
 
 
     SELECTED FINANCIAL DATA
                                                     Three Months Ended
                                                         March  31,
     (Dollars in thousands, except per
      share data)                              2001                    2000
     SELECTED FINANCIAL DATA BEFORE
      MERGER CHARGES:
     Net income before merger charges       $35,606                 $31,994
     Earnings per diluted share*               0.45                    0.40
     Return on average assets                  1.82 %                  1.69 %
     Return on average equity                 21.43                   20.08
 
     SELECTED FINANCIAL DATA INCLUDING
      MERGER CHARGES:
     NET INCOME                             $28,563                 $31,994
     Net interest income                     81,025                  78,493
     Net interest income (FTE)               82,566                  80,233
 
     Weighted Average Number of Shares
      Outstanding:
          Diluted                        78,643,691              80,782,279
 
     Per share data:*
       Basic earnings                         $0.37                   $0.40
       Diluted earnings                        0.36                    0.40
       Cash dividends declared                 0.25                    0.24
       Book value                              8.73                    7.80
       Closing stock price - high             30.95                   24.43
       Closing stock price - low              24.42                   19.62
 
     FINANCIAL RATIOS:
     Net interest margin - FTE                 4.40 %                  4.41 %
     Return on average assets                  1.46                    1.69
     Return on average shareholders'
      equity                                  17.19                   20.08
     Efficiency ratio                         44.64                   43.59
 
     For the three months ended March 31, 2001, net income, per share data and
     the financial ratios include the merger-related charges, net of tax,
     recorded in connection with the Merchants New York Bancorp, Inc. merger on
     January 19, 2001 of $7.0 million or $0.09 per diluted share.
     *Per share figures have been adjusted for a 5 percent stock dividend
      declared April 4, 2001 to shareholders of record May 4, 2001 to be issued
      May 18, 2001.
 
 
     SELECTED BALANCE SHEET ITEMS AND RATIOS
                                                     Three Months Ended
                                                         March 31,
     (Dollars in thousands)                       2001              2000
     AVERAGE BALANCE SHEET ITEMS:
     Assets                                    $7,829,234        $7,580,139
     Earning assets                             7,500,302         7,282,511
     Loans                                      5,116,640         4,969,582
     Interest bearing liabilities               5,885,414         5,660,483
     Deposits                                   6,048,211         5,954,692
     Shareholders' equity                         664,751           637,421
 
     ALLOWANCE FOR LOAN LOSSES:
     Beginning of period                          $61,995           $64,228
     Provision for loan losses                      2,100             2,450
     Charge-offs                                    2,532             2,692
     Recoveries                                       984               989
     End of period                                 62,547            64,975
 
                Valley National Bancorp
           Consolidated Financial Highlights
 
     SELECTED FINANCIAL DATA
                                                        As of March 31,
     (Dollars in thousands)                          2001              2000
     BALANCE SHEET ITEMS:
     Assets                                    $8,017,193        $7,657,466
     Loans                                      5,114,406         5,027,394
     Deposits                                   6,112,550         5,966,410
     Shareholders' equity                         681,302           625,086
     CAPITAL RATIOS:
     Tier 1 leverage ratio                           8.47 %            8.51 %
     Risk-based capital - Tier 1                    11.75             11.57
     Risk-based capital - Total Capital             12.85             12.72
     ASSET QUALITY:
     Non-accrual loans                             $3,897            $7,352
     Other real estate owned (OREO)                    88             1,791
     Total non-performing assets                    3,985             9,143
     Loans past due 90 days or more and
      still accruing                               19,627            16,963
     ASSET QUALITY RATIOS:
     Non-performing assets to total loans
      plus
       other real estate owned (OREO)                0.08 %            0.18 %
     Allowance for loan losses to loans              1.22              1.29
     Net charge-offs to average loans                0.12              0.14
 
     SHAREHOLDER RELATIONS
     Requests for copies of reports providing more detailed financial
     statements and analysis, as well as all other inquiries regarding
     Shareholder Relations should be directed to Dianne Grenz at Valley
     National Bancorp, 1455 Valley Road, Wayne, New Jersey, 07470 or by
     telephone at (973) 305-3380, by fax at 973-696-2044 or by e-mail at
     dgrenz@valleynationalbank.com.
 
 
     VALLEY NATIONAL BANCORP
     Consolidated Statements of Financial Condition
     ($ in thousands)
                                                        March 31,
 
     Assets                                      2001               2000  (1)
 
     Cash and due from banks                 $191,481                 $207,384
     Federal funds sold                       142,000                   72,000
     Securities:
        Securities available for sale       1,955,623                1,542,647
        Securities held to maturity           447,501                  617,461
              Total securities              2,403,124                2,160,108
     Loans                                  5,114,406                5,027,394
     Less: Allowance for loan losses          (62,547)                 (64,975)
     Loans, net                             5,051,859                4,962,419
 
     Premises and equipment, net               90,571                   91,650
     Due from customers on acceptances
      outstanding                              18,339                   17,970
     Accrued interest receivable               48,423                   46,400
     Intangible assets                         40,116                   41,145
     Other assets                              31,280                   58,390
               Total assets                $8,017,193               $7,657,466
 
     Liabilities
 
     Deposits:
          Non-interest bearing             $1,257,068               $1,264,656
          Interest bearing:
             Savings                        2,359,155                2,310,140
             Time                           2,496,327                2,391,614
               Total deposits               6,112,550                5,966,410
     Federal funds purchased and
      securities sold under agreements
      to repurchase                           226,404                  239,909
     Treasury tax and loan account and
      other short term borrowings              76,066                  146,209
     Long-term debt                           819,788                  591,863
     Bank acceptances outstanding              18,339                   17,970
     Accrued expenses and other
      liabilities                              82,744                   70,019
               Total liabilities            7,335,891                7,032,380
 
     Shareholders' Equity
     Preferred stock, no par value
           30,000,000 shares authorized;
            none issued
     Common stock, no par value,
      authorized 108,527,344
           shares; issued 74,791,831
            shares in 2001 and
           75,020,980 shares in 2000           31,994                   32,140
     Surplus                                  320,849                  326,231
     Retained earnings                        326,287                  353,008
     Unallocated Common Stock Held by the
      employee benefit plan                      (729)                    (917)
     Accumulated other comprehensive gain
      (loss)                                   12,450                  (26,984)
                                              690,851                  683,478
     Treasury stock, at cost
       (375,561 common shares
        in 2001 and 2,300,858 in 2000)         (9,549)                 (58,392)
               Total shareholders' equity     681,302                  625,086
 
               Total liabilities and
                shareholders' equity       $8,017,193               $7,657,466
 
     Note:  (1) 2000 data has been restated to reflect the merger with
                Merchants New York Bancorp Inc., effective January 19, 2001.
 
 
     VALLEY NATIONAL BANCORP
     Consolidated Statements of Income             Three Months Ended
     ($ in thousands, except per share data)            March 31,
                                                2001                2000  (1)
 
     Interest Income
     Interest and fees on loans                $104,333               $100,429
     Interest and dividends on investment
      securities                                 38,230                 36,126
     Interest on federal funds sold and
      other short term investments                1,639                  1,133
                   Total interest income        144,202                137,688
     Interest Expense
     Interest on deposits:
          Savings deposits                       13,805                 14,340
          Time deposits                          33,849                 30,935
     Interest on other borrowings                15,523                 13,920
                    Total interest expense       63,177                 59,195
     Net Interest Income                         81,025                 78,493
     Provision for loan losses                    2,100                  2,450
     Net interest income after provision for
          loan losses                            78,925                 76,043
     Non-Interest Income
     Trust and investment services                1,211                    720
     Service charges on deposit accounts          4,548                  3,998
     Gains on securities transactions, net          163                      0
     Fees from loan servicing                     2,685                  2,730
     Credit card fee income                         997                  1,949
     Gain on sale of loans, net                   5,638                    765
     Other                                        3,442                  3,244
                    Total non-interest
                     income                      18,684                 13,406
 
     Non-Interest Expense
     Salary expense                              19,448                 18,424
     Employee benefit expense                     4,859                  4,090
     FDIC insurance premiums                        291                    313
     Occupancy and equipment expense              7,838                  6,070
     Credit card expense                            626                  1,231
     Amortization of intangible assets            1,818                  1,688
     Merger - related charges                     9,017                      0
     Other                                        8,059                  9,032
                    Total non-interest
                     expense                     51,956                 40,848
     Income before income taxes                  45,653                 48,601
     Income tax expense                          17,090                 16,607
     Net Income                                 $28,563                $31,994
 
     Earnings Per Share:  (2)
                   Basic                          $0.37                  $0.40
                   Diluted                        $0.36                  $0.40
     Weighted Average Number of Shares
      Outstanding:  (2)
                   Basic                     77,935,200             80,159,333
                   Diluted                   78,643,691             80,782,279
 
     Note:  (1) 2000 data has been restated to reflect the merger with
                Merchants New York Bancorp Inc., effective January 19, 2001.
            (2) Earnings per share and average shares outstanding have
                been restated to reflect the 5% stock dividend declared on
                April 4, 2001 and payable on May 18, 2001.
 
 
      VALLEY NATIONAL BANCORP
 
      Consolidated Statements of Income (1)
      ($ in thousands, except per share data)
 
                     Quarter      Quarter      Quarter      Quarter      Year
                      Ended        Ended        Ended        Ended       Ended
                      Mar,         June,        Sept,        Dec,        Dec
                      2000         2000         2000         2000        2000
 
     Interest Income
     Interest and
      fees on loans  $100,429    $103,731     $107,119     $108,673    $419,952
     Interest and
      dividends
      on investment    36,126      36,145       35,664       36,067     144,002
      securities
     Interest on
      federal funds
      sold and
      other
      short term
      investments       1,133       1,008        1,333          778       4,252
     Total interest
      income          137,688     140,884      144,116      145,518     568,206
 
     Interest Expense
     Interest on deposits:
      Savings deposits   14,340     14,417       14,514       14,199     57,470
      Time deposits      30,935     32,431       34,283       35,507    133,156
     Interest on other
      borrowings
                         13,920     15,632       16,359       16,111     62,022
      Total interest
       expense           59,195     62,480       65,156      65,817     252,648
 
     Net Interest
      Income             78,493     78,404       78,960      79,701     315,558
     Provision for
      loan losses         2,450      2,875        2,580      2,850       10,755
     Net interest income
      after provision for
      loan losses        76,043     75,529       76,380      76,851     304,803
 
     Non-Interest Income
     Trust and
      investment services   720        783          940       1,120       3,563
     Service charges
      on deposit
      accounts            3,998      4,754       4,712        4,716      18,180
     Gains on securities
      transactions, net       0          0         117          238         355
     Fees from loan
      servicing           2,730      2,782       2,769        2,621      10,902
     Credit card fee
      income              1,949      2,103       2,110        2,241       8,403
     Gain on sale of
      loans, net            765        584         437          441       2,227
     Other                3,244      3,453       3,352        4,746      14,795
      Total non-interest
       income            13,406     14,459      14,437       16,123      58,425
 
     Non-Interest Expense
     Salary expense (4)  18,424     18,070      18,678       20,944      76,116
     Employee benefit
      expense             4,090      4,465       4,406        5,076      18,037
     FDIC insurance
      premiums              313        313         309          304       1,239
     Occupancy and
      equipment expense   6,070      5,690       6,813        6,952      25,525
     Credit card
      expense             1,231      1,343       1,233        1,225       5,032
     Amortization of
      intangible assets   1,688      1,948       2,029       2,060        7,725
     Other (3)            9,032      9,194       7,980      10,584       36,790
      Total non-interest
       expense           40,848     41,023      41,448      47,145      170,464
     Income before
      income taxes       48,601     48,965      49,369      45,829      192,764
     Income tax
      expense            16,607     16,348      16,601      16,471       66,027
     Net Income         $31,994    $32,617     $32,768     $29,358     $126,737
 
     Earnings Per
      Share:(2)
       Basic              $0.40      $0.42       $0.42       $0.38        $1.61
       Diluted            $0.40      $0.41       $0.42       $0.37        $1.60
     Weighted Average
      Number of Shares
      Outstanding: (2)
       Basic          80,159,333  78,535,472  77,950,692  77,788,652  8,612,928
       Diluted        80,782,279  79,233,181  78,617,065  78,533,942  9,235,570
 
     Notes:  (1) Data has been restated to reflect the merger with Merchants
                 New York Bancorp, Inc. effective January 19, 2001.
             (2) Earnings per share and average shares outstanding have been
                 restated to reflect the 5% stock dividend declared on April 4,
                 2001 and payable on May 18, 2001.
             (3) Other non-interest expense recorded in the quarter ended
                 December 31, 2000 includes a $1.3 million fraud loss incurred
                 by Merchants Bank.
             (4) Included in salary expense for the quarter ended December 31,
                 2000 is extra compensation recorded by Merchants Bank.
 
 SOURCE  Valley National Bancorp