Valley National Bancorp
Annual Report 1998

Plain-text annual report

Valley National Bancorp 1998 Annual Report Valley National Bancorp is a regional bank holding company with over $5.5 billion in assets. Valley National Bank, its principal subsidiary, is a super community bank Sussex Passaic that operates 105 branch offices in 71 communities throughout 10 counties in northern New Jersey. Valley is the second-largest Warren Morris bank headquartered in New Jersey. Bergen Essex Hudson Union Hunterdon Somerset Middlesex Historical Financial Data 1977 - 1998 * (in millions, except for share data ) Year End 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 Total Assets Net Income Diluted Earnings Per Share Return on Average Assets Return on Average Equity Dividends Per Share Stock Splits & Dividends $ 5,541 $ 97.3(1) $ 1.75 1.82% 18.47% $ 0.97 5/98-5:4 Stock Split 5,091 4,687 4,586 3,744 3,605 3,357 3,055 2,149 1,975 1,835 1,663 1,615 1,471 1,355 933 733 600 520 498 466 409 85.0 67.5(2) 62.6(3) 59.0 56.4 43.4 31.7 28.6 36.0 34.2 32.1 29.6 24.2 17.5 14.8 9.8 6.8 5.9 5.1 5.0 4.3 1.60 1.40 1.27 1.42 1.38 1.08 0.79 0.71 0.89 0.85 0.80 0.74 0.61 0.50 0.45 0.30 0.23 0.20 0.17 0.17 0.14 1.67 1.47 1.40 1.60 1.62 1.36 1.29 1.44 1.92 2.00 2.02 1.99 1.73 1.64 1.82 1.53 1.32 1.15 1.05 1.14 1.19 18.88 17.23 16.60 20.03 21.42 19.17 15.40 14.54 19.93 20.96 22.95 24.90 23.76 24.84 27.49 23.83 17.60 16.31 15.43 16.57 15.42 5/97-5% Stock Dividend 5/96-5% Stock Dividend 5/95-5% Stock Dividend 5/94-10% Stock Dividend 4/93-5:4 Stock Split 4/92-3:2 Stock Split 7/88-3:2 Stock Split 5/86-3:2 Stock Split 2/85-2:1 Stock Split 5/83-2:1 Stock Split 4/82-5% Stock Dividend 4/80-5% Stock Dividend 4/78-5% Stock Dividend 0.85 0.76 0.72 0.69 0.54 0.49 0.46 0.46 0.44 0.40 0.38 0.30 0.25 0.18 0.14 0.10 0.09 0.09 0.08 0.08 0.07 All per share amounts have been adjusted retroactively for stock splits and stock dividends during the periods presented. (1) Includes the one-time charge, net of tax, of $3.2 million, or $0.06 per diluted share recorded in connection with the Wayne Bancorp merger. (2) Includes the one-time FDIC SAIF assessment, net of tax, of $3.8 million, or $0.07 per diluted share. (3) Includes the one-time Lakeland merger and acquisition expenses, net of tax, of $5.4 million, or $0.10 per diluted share. * Data for years prior to 1998 exclude Wayne Bancorp, Inc., for years prior to 1997 exclude Midland Bancorp, Inc., and for years prior to 1995 exclude Lakeland First Financial Group, Inc. 1 Letter to Shareholders We are pleased to report another consecutive year of record earnings. In 1998, Valley earned net income of $97.3 million, or $1.75 diluted earnings per share, compared to $86.9 million, or $1.57 diluted earnings per share for 1997. This was after recording a net after tax charge, in conjunction with the Wayne Bancorp merger, of $0.06 per diluted share or $3.2 million. The net income and per share data for 1997 have been restated to reflect the 5 for 4 stock split issued during May 1998 and the merger with Wayne Bancorp accounted for as a pooling of interest on October 16, 1998. Valley’s increased earnings were the result of a higher net interest margin, continued loan growth over the prior year, the movement of funds from the lower yielding investment portfolio into the higher yielding loan portfolio, less dependence on higher cost time deposits and a lower effective tax rate. In addition, we have continued to focus on obtaining funding sources from lower cost core deposits. We continued to solidify Valley’s market position by expanding the Company through the acquisition of the $272 million Wayne Bancorp, Inc. in October 1998. Wayne Bancorp, headquartered in Wayne, New Jersey, operated six branch offices in Bergen, Essex and Passaic counties. With this acquisition, Valley grew to over $5.5 billion in assets. Strategic Growth In December, we announced the signing of a definitive merger agreement by which Valley will acquire Ramapo Financial Corporation headquartered in Wayne, New Jersey. Ramapo Bank, its principal subsidiary, has $331 million in assets and operates eight branch offices in Essex, Morris and Passaic counties. This merger is consistent with Valley’s strategy of growth within northern New Jersey through acquisitions of other strong financial institutions. Ramapo’s lending is heavily concentrated towards commercial borrowers and their deposit base consists of substantial low cost core deposits. We believe the “in-market” nature of this acquisition, coupled with Ramapo’s high non-interest expenses will enable Valley to generate significant cost savings at the conclusion of a one year period. We anticipate that the merger will be consummated in the second quarter of 1999. To further enhance our position as a super community bank serving northern New Jersey consumers and businesses, we expect to open 25 to 30 de novo branch offices during the next five years. New branch locations will be in communities that strategically complement our existing retail branch network. Consistent with this approach, in the third and fourth quarters of 1998, we opened three new branch offices in Morristown, Secaucus and West New York. By year-end, we had a total of 105 branches located in 71 communities. Our franchise also grew with the continued expansion of our automobile lending program, through a major national insurance company, into Pennsylvania in January. This loan origination program now covers 11 states along the eastern seaboard plus Canada. Additionally, the U.S. Small Business Administration granted approval of our request to extend preferred SBA lender status beyond New Jersey, New York, Pennsylvania, Delaware and Maryland to the Greater Washington, D.C. area. One of the most exciting programs implemented at the bank this past year was our Retail Banking Sales Initiative. The program, which focuses on generating growth internally, was instituted to create an environment in which our branch managers and staff are encouraged to maximize every customer contact. We established quantifiable sales goals as well as customer courtesy and service standards for each branch. The branch performance compensation plan was realigned to coincide with the achievement of these goals and standards. The initial results of the program have been very promising. Financial Strength Consistent Profitability and Efficiency Our efficiency ratio of 46.7 percent continued to place Valley among the top-performing bank holding companies in the nation. Technology will continue to make us more efficient and effective in the delivery of value-added products and services. Our customers will continue to benefit from the increased convenience that the changes will produce. The implementation of proven technologies coupled with our attention to cost control and our deliberate approach should enhance our bank’s performance in the future. Return on average assets and return on average equity before the merger-related charge for Wayne Bancorp were 1.88 percent and 19.06 percent, respectively, for the fiscal year ended December 31, 1998. Both of these ratios are indicative of Valley’s performance and are among the highest in the industry for banks our size. Asset Quality Competition for new loans continued to be intense during 1998. Many bank and non-bank lenders lowered or liberalized their lending policies to increase their loan origination volume. Despite this circumstance, Valley maintained its “disciplined credit culture” and did not sacrifice its underwriting standards for the sake of developing new loan business. Solid Capital Position Valley, recognized throughout the banking industry for its strong capital base, is positioned to take advantage of growth opportunities and enhance shareholder value. Shareholders’ equity was $555.8 million at year-end. Valley’s risk-based capital ratios were 13.29 percent for Tier 1 capital and 14.51 percent for total capital. The Tier 1 leverage ratio was 10.12 percent. These ratios were all above the regulatory “well capitalized” requirements. Enhanced Shareholder Value At the 1998 Shareholders Meeting in April, your Board of Directors approved a 5 for 4 stock split, paid May 18, 1998, to the shareholders of record on May 1, 1998. In conjunc- tion with the stock split, Valley increased its regular cash dividend from $0.88 per share on an after split basis to $1.00 per share. This represents an increase of 13.6 percent after adjusting for the effect of the stock split and increased cash dividend. It should be noted that Valley’s annual dividend rate has increased on a restated basis 1,150 percent from $0.08 per share in 1978. We have never reduced the regular cash dividend in the bank’s 71 year history. In fact, Valley’s dividend has increased 29 times during the last three decades. The Valley Board of Directors has always believed that cash dividends are an important component of shareholder value. Exceeding Customer Expectations Valley is committed to exceeding the expectations of our customers every day by delivering the highest quality service and appropriate need-based products to satisfy our customers’ needs. In addition, we recognize the importance of convenience and continue to expand our branch network and alternative delivery systems to meet our customers’ preferences for ways to access their bank. Now customers can access their banking services whenever, wherever and however they want. A Vision For the Future Our employees continue to demonstrate unparalleled levels of enthusiasm and perseverance. It is this level of dedication to our customers and the bank that distinguishes Valley employees from all others. Through their superior performance, we will continue to build a strong platform for continued success. During 1999, we will enhance the convenience of V-BankWorks, our PC banking service, by making it accessible through our web site on the Internet. We also plan to re-design our web site, valleynationalbank.com, by adding more functions and content while maintaining a user-friendly approach. In addition, as technological advancements continue to reshape the banking frontier, we will carefully incorporate new technologies into our product mix, delivery systems and operations to help assure that our staff continues to build long-term relation- ships with our customers by providing complete solutions to their ever-changing financial needs. Gerald H. Lipkin Chairman, President and Chief Executive Officer 2 3 Introduction Valley’s mission is to offer traditional During 1998, Valley’s management team banking products and services in and staff enhanced shareholder value a personal, friendly and approachable by implementing the following strategic manner. “Closer to what matterssm”, business plan objectives: the bank’s value proposition, accurately portrays Valley’s profile as a bank committed to providing the value-added products, convenient delivery channels and quality service that matters most to each one of our customers. It conveys the actual • Delivering quality customer service and continuing to expand its sales culture. • Offering an array of core basic banking services and developing new, value- added products and services. Valley customer experience...the local • Solidifying its market position by provision of products and services in a expanding the Company through an responsive and understanding manner that acquisition and new branch construction. exceeds customer expectations every day. • Providing alternative delivery channels “Closer to what matters” is a customer- so customers can access financial centered approach and not a bank imposed services at their convenience. definition of what is really important to our customers. This “high touch, high service” approach gives Valley a • Focusing on quick turnaround for all loan requests. competitive edge over banks many times • Enforcing effective cost management. its size. • Serving as an involved partner with the communities we serve. To effectively manage the expansion of our franchise, all operations are consolidated into a three-building campus in Wayne, New Jersey. Left to Right Peter John Southway Executive Vice President Peter Crocitto Executive Vice President Robert M. Meyers Executive Vice President Peter Southway Vice Chairman 4 5 Our staff provides products and services in a responsive and understanding manner that exceeds customer expectations. Left to Right Carol B. Diesner Senior Vice President Alan D. Eskow Senior Vice President & Controller Susan S. Pinn Senior Vice President Exceeding Expectations Everyday For You One of the most distinguishing Early in 1998, we decentralized and characteristics of any business is the reorganized our branch system to be more human element. Its importance is proactive in meeting the full spectrum magnified even further in a sales- and of customers’ financial needs with the service-oriented super community bank appropriate mix of Valley products and such as ours. Within the current economic services. Under the leadership of three environment of steady growth and low retail banking senior managers with overall unemployment, every business has been regional branch responsibility, each branch faced with increased competition in hiring office and region was assigned specific and in retaining the most qualified team goals and performance standards. Branch members. These dynamics have not staffs are now being measured according caused us to compromise the high to how well they have achieved their goals standards expected of a Valley employee. and their compensation depends, to a large At Valley, we have been successful in extent, on their performance. strengthening and enhancing our work- force through increased incentives, training, and opportunities for personal growth. We continue to place strong emphasis on providing our customers with highly qualified individuals to help them identify and meet their financial needs, as well as consistently exceed their expectations. Our long-term commitment to training emphasizes product knowledge, need-based selling skills, sales manage- ment and customer service. Branch managers now have bottom line accountability for their offices, but also are empowered with decision-making to respond even more quickly to customer needs. This new entrepreneurial spirit has generated an excitement, enthusiasm and competition among branch staffs and has resulted in significant increases in quality business leads, responsiveness and closed loans. 6 7 Convenient and Responsive Delivery Systems For You Our goal is to provide convenient and To support this delivery system responsive access to Valley’s products and growth and resulting higher volume of services however our customers wish to transactions, we installed a new mainframe access them, whether in person, over the computer. After the installation, Valley telephone or via the computer. During continued to operate on a single platform 1998, Valley’s traditional branch network with all processing conducted on-line continued to expand through a merger and real-time. This means that every with Wayne Bancorp, headquartered transaction, whether at a teller’s station, in Wayne, New Jersey, as well as an ATM or from home or business utilizing construction and opening of three new a personal computer, is recognized branch offices in Morristown, Secaucus, immediately by our system to keep and West New York. The merger, which account balances current up-to-the-minute. was consummated in October, added six branch offices in Essex, Passaic, and Bergen counties. In anticipation of the millennium, Valley took proactive measures to ensure that all its customers’ records will be unaffected by Our extended-hour Telephone Banking the advent of the Year 2000. The bank Center continues to complement our completed its programming changes in traditional branch network. Customers September 1998, thereby allowing ample have the choice of speaking to a telephone time for continued system testing and a representative or using Banking-By-Phone, smooth transition. Additionally, the bank an automated 24-hour system. Throughout is working closely with its third-party 1998, the Telephone Banking Center, which vendors and service providers to make provides most of the services available sure they are Year 2000 compliant and through a traditional branch, handled three that the services they provide will million calls as compared to two million not be jeopardized. in 1997. 8 Valley continued to expand its branch network and alterative delivery channels to meet our customers’ changing preferences for ways to access their bank. Left to Right Barbara M. Mohrbutter Senior Vice President Robert J. Mulligan First Senior Vice President Peter T. Jackey Senior Vice President Lawrence E. Flack Senior Vice President Bernadette M. Mueller Senior Vice President 9 We help our customers realize their dreams of owning a new home, buying a new automobile, enhancing the value of their home, paying for a college education, and more. Left to Right John S. Harris Senior Vice President Robert J. Farnon First Senior Vice President Edward L. Lawrence Senior Vice President Richard M. Seguine Senior Vice President Albert L. Engel First Senior Vice President Value-Added Consumer Products and Services For You Even with an exceptional workforce, At the beginning of 1998, Valley expanded its effectiveness is diminished if it does its direct automobile loan program, with not have the products and services that a leading nationwide insurance company, meet customers’ needs. At Valley, we to Pennsylvania. This program now continually look for opportunities to extends to 11 states from Maine to Florida expand our services and product lines as well as Canada. With the dramatic to benefit our customers while providing increase in the number of insurance agents a reasonable return on investment participating in the program, automobile to benefit our shareholders. loan volume continued to increase compared to prior years. Valley attained record levels of home mortgage and home equity lending volume during 1998. By offering an innovative menu of products and rapid approvals, we continued to build market share. And as interest rates remained low and housing demand throughout the region maintained a strong pace, demand for new and refinanced loans helped us to meet our goals. We also achieved new heights for VNB Mortgage Services (“MSI”), Valley’s nine year old mortgage servicing subsidiary. MSI grew its servicing portfolio to over $2.6 billion during 1998. 10 11 Valley’s experienced commercial and commercial real estate lending officers make decisions locally to help small and middle-market companies expand their businesses. Left to Right John H. Prol First Senior Vice President Robert E. Farrell First Senior Vice President D. Franklin Larsen Senior Vice President Richard P. Garber First Senior Vice President Value-Added Business Products and Services For You Over the years, we have developed a deep because our business development strategy understanding of the businesses and to generate new business through referrals economic factors that shape the dynamic from attorneys, certified public accountants northern New Jersey marketplace. and commercial real estate brokers began Although competition from both bank and to materialize. As a result, Valley remained non-bank lenders was fierce during 1998, one of the leading producers of SBA Loans. our experienced teams of commercial and commercial real estate lending officers were successful in continuing to develop more extensive relationships with existing business customers while focusing on building new relationships with small businesses and middle-market companies. The bank’s community lending portfolio also grew during 1998. Demand remained strong for Business EZ Line, a revolving line of credit earmarked to meet seasonal working capital requirements or support business growth. Our success in such a challenging To help businesses manage their money environment can be attributed to our more effectively, we introduced two responsiveness and desire to concentrate new services: Business EZ-Fax and on long-term relationships instead of V-BankWorks this past year. Business single transactions. In addition, senior EZ-Fax provides customers with a faxed management meets regularly with our bank statement by the start of each customers and decision-making occurs business day. at the local level. V-BankWorks is an interactive service that Last year, we expanded our SBA Loan links our business customers’ personal preferred lender status beyond New Jersey computers directly to the bank. Business to include Delaware, Maryland, New York, customers can get account balances, review Pennsylvania and Greater Washington, their account histories, transfer funds D.C. During 1998, we continued to between accounts, and more. increase our SBA loan origination volume 12 13 Improving the Quality of Life For You At Valley, we believe that a strong bank Valley’s spirit of local support continues and community go hand in hand, and that to enable organizations to provide vital by working together we can make an community services. Our employees also important investment in everyone’s future. participated in record numbers during 1998 So during 1998, we continued to focus on to provide support and volunteer services building relationships of value which not where it was needed. This selfless service, only benefit individuals, communities and together with the significant financial organizations, but ultimately enable Valley support provided by the Bank to hundreds to succeed. We re-committed ourselves to of deserving organizations, create the finding even better solutions to expanding comprehensive approach to community community needs thereby helping to create development that we strive to accomplish. communities that not only survive, but even thrive. Part of the Bank’s expansion efforts continues to focus on our urban areas. To To help meet the credit needs of the diverse that end, we renovated and expanded our communities we serve, we committed to Passaic Park branch into a cornerstone a new, five year, $103 million community building within that community, as well agreement with New Jersey Citizen Action. as opened new branch offices in Secaucus In addition to establishing specific lending and West New York. and service goals designed for low and moderate income customers, the program also is geared toward non-profit developers whose importance to the revitalization of our communities cannot be underestimated. We recognize that community development requires the implementation of a sustained program to revitalize neighborhoods while empowering constituents of those neighborhoods with the resources and encouragement they Our support for the new Family Service need to continue. As a result, our of Morris County Family Loan Program, commitment continues without which provides special loans to families in interruption. financial crisis, underscores our goal of working collaboratively with community organizations to find local solutions. 14 Whether it’s financing the construction of low-income housing and senior citizen complexes or first-time home purchases, Valley is an involved corporate citizen with long-term ties to all the communities it serves. Left to Right John J. Murphy Senior Vice President Kenneth W. Nickel Senior Vice President Alan D. Lipsky First Senior Vice President Garret G. Nieuwenhuis Senior Vice President 15 Valley National Bancorp and Subsidiaries Valley National Bancorp and Subsidiaries CONSOLIDATED STATEMENTS OF INCOME CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION Interest Income Interest and fees on loans Interest and dividends on investment securities: Taxable Tax-exempt Dividends Interest on federal funds sold and other short-term investments Total interest income Interest Expense Interest on deposits: Savings deposits Time deposits Interest on federal funds purchased and securities sold under repurchase agreements Interest on other short-term borrowings Interest on other borrowings Total interest expense Net Interest Income Provision for possible loan losses Net Interest Income After Provision For Possible Loan Losses Non-Interest Income Trust income Service charges on deposit accounts Gains on securities transactions, net Fees from loan servicing Credit card fee income Gains on sales of loans, net Other Total non-interest income Non-Interest Expense Salary expense Employee benefit expense FDIC insurance premiums Net occupancy expense Furniture and equipment expense Credit card expense Amortization of intangible assets Merger-related charges Other Total non-interest expense Income Before Income Taxes Income tax expense Net Income Earnings Per Share: Basic Diluted Weighted Average Number Of Shares Outstanding: Basic Diluted See consolidated financial statements and accompanying notes presented in Item 8 of the Company’s SEC Form 10-K. Years ended December 31, 1998 1997 (in thousands, except for share data) 1996 $ 316,502 $ 303,181 $ 276,743 57,005 7,885 1,946 6,318 389,656 43,372 105,395 906 1,625 8,806 160,104 229,552 12,370 217,182 1,375 12,674 1,418 7,382 10,153 4,863 5,208 43,073 51,792 12,327 1,270 12,877 8,338 9,066 5,546 4,539 29,002 134,757 125,498 28,150 $ 97,348 67,944 10,346 1,689 3,924 387,084 44,529 113,582 1,171 1,132 5,471 165,885 221,199 12,650 208,549 1,162 12,063 2,150 5,576 12,643 3,634 5,784 43,012 46,738 11,596 1,205 11,653 8,036 17,520 3,441 – 29,029 129,218 122,343 35,397 $ 86,946 73,858 12,757 1,109 4,159 368,626 45,143 112,795 1,128 648 3,077 162,791 205,835 3,556 202,279 1,080 11,268 781 4,835 5,549 1,839 4,884 30,236 46,201 10,813 10,083 11,832 7,665 7,518 3,009 – 27,411 124,532 107,983 36,479 $ 71,504 $ 1.77 1.75 $ 1.58 1.57 $ 1.33 1.33 54,987,473 55,607,255 54,906,154 55,294,894 53,074,424 53,459,884 Assets Cash and due from banks Federal funds sold Investment securities held to maturity, fair value of $238,421 and $168,476 in 1998 and 1997, respectively Investment securities available for sale Trading account securities Loans Loans held for sale Less: Allowance for possible loans losses Net loans Premises and equipment Accrued interest receivable Other assets Total assets Liabilities Deposits: Non-interest bearing Interest bearing: Savings Time Total deposits Federal funds purchased and securities sold under repurchase agreements Treasury tax and loan account and other short-term borrowings Other borrowings Accrued expenses and other liabilities Total liabilities Commitments and Contingencies Shareholders’ Equity Common stock, no par value, authorized 98,437,500 shares; issued 55,503,060 shares in 1998 and 55,520,694 shares in 1997 Surplus Retained earnings Unallocated common stock held by the ESOP Accumulated other comprehensive income Treasury stock, at cost (236,735 shares in 1998 and 356,082 shares in 1997) Total shareholders’ equity Total liabilities and shareholders’ equity See the consolidated financial statements and accompanying notes presented in Item 8 of the Company’s SEC Form 10-K. December 31, 1998 1997 (in thousands, except for share data) $ 175,794 102,000 $ 151,620 33,400 237,410 927,481 1,592 3,954,395 23,455 (49,868) 3,927,982 79,774 29,711 59,463 $ 5,541,207 166,615 1,090,638 – 3,786,783 16,651 (48,542) 3,754,892 77,871 31,210 54,452 $ 5,360,698 $ 854,594 $ 781,239 1,982,973 1,837,122 4,674,689 30,414 22,667 212,949 44,701 4,985,420 1,918,762 1,902,320 4,602,321 32,882 24,056 146,012 46,124 4,851,395 24,424 311,611 223,185 (1,331) 4,084 561,973 (6,186) 555,787 $ 5,541,207 24,345 310,904 178,739 (1,604) 3,614 515,998 (6,695) 509,303 $ 5,360,698 16 17 Board of Directors Officers and Directors VALLEY NATIONAL BANCORP Gerald H. Lipkin Chairman, President and Chief Executive Officer Peter Southway Vice Chairman Peter Crocitto Executive Vice President Robert M. Meyer Executive Vice President Peter John Southway Executive Vice President VALLEY NATIONAL BANCORP/VALLEY NATIONAL BANK Alan D. Eskow Senior Vice President, Controller & Chief Accounting Officer, Secretary Jack M. Blackin Senior Vice President and Assistant Secretary Wilma Falduto Assistant Secretary Joleen J. Martin Robert E. McEntee William H. McNear Sam P. Pinyuh Robert Rachesky Barnett Rukin Peter Southway Richard F. Tice Leonard J. Vorcheimer Joseph L. Vozza Board of Directors Gerald H. Lipkin Andrew B. Abramson Pamela Bronander Joseph Coccia, Jr. Harold P. Cook, III VALLEY NATIONAL BANK Officers Gerald H. Lipkin Chairman, President and Chief Executive Officer Peter Southway Vice Chairman Executive Vice Presidents Peter Crocitto Robert M. Meyer Peter John Southway First Senior Vice Presidents Albert L. Engel Robert J. Farnon Robert E. Farrell Richard P. Garber Alan D. Lipsky Robert J. Mulligan John H. Prol Senior Vice President, Controller & Chief Accounting Officer Alan D. Eskow Austin C. Drukker Willard L. Hedden Graham O. Jones Walter H. Jones, III Gerald Korde Senior Vice Presidents Jack M. Blackin Laura Blackwell Franklin Bollhorst Carol B. Diesner Lawrence E. Flack John S. Harris Peter T. Jackey D. Franklin Larsen Edward L. Lawrence Barbara Mohrbutter Bernadette M. Mueller John J. Murphy Kenneth W. Nickel Garret G. Nieuwenhuis Susan S. Pinn Richard M. Seguine Thomas Sparkes Senior Vice President and General Counsel Lucinda P. Long Senior Vice President and Trust Officer Sephen P. Cosgrove 19 Front Row, Left to Right Joseph Coccia, Jr. Chairman of the Board Coccia Realty, Inc. Graham O. Jones Partner Jones & Jones, Esqs. Wilma Falduto Assistant Secretary Peter Southway Vice Chairman Gerald H. Lipkin Chairman, President and Chief Executive Officer Gerald Korde President Birch Lumber Company, Inc. Back Row, Left to Right Walter H. Jones, III Chairman Hoke, Inc. Sam P. Pinyuh Retired Harold P. Cook, III Cook & Rumana Attorneys-at-Law William H. McNear President McNear Excavating Company Robert Rachesky Chairman and Chief Executive Officer FujiColor Photo Service, Inc. Leonard J. Vorcheimer Principal LJV Enterprises Pamela Bronander Executive Vice President Scandia Packaging Machinery Company Austin C. Drukker President Press Publications, Inc. Joleen J. Martin President CP Test Services, Inc. Joseph L. Vozza President Joseph L. Vozza Administrative Services, Inc. Andrew B. Abramson President and Chief Executive Officer The Value Group, Inc. Barnett Rukin Chairman and Chief Executive Officer Shortline Bus System Robert E. McEntee Financial Consultant Willard L. Hedden Retired Richard F. Tice President Tice Farms 18 Walter H. Jones, III Chairman Hoke, Inc. Advisory Boards AUTO DEALER Advisory Board EASTERN Regional Advisory Board Jeffrey Barish President Newton Motorsport, Inc. P. Russell Bodrato President All Brands Auto Sales, Inc. Irwin Burack President Burack Chevrolet-Oldsmobile, Inc. Steven K. Cooper Vice President Jack Trebour Ford Suzuki Sanford Dorf President D & C Chevrolet Company Henry Fette President Fette Ford, Inc. Lawrence T. Fette President Fette Imports, Inc. Paul Franzetti President Lakeview Motors, Inc. Kenneth Gensinger President Gensinger Motors Nicholas Hagedoorn President Borough Jeep/Eagle Chrysler/Plymouth, Inc. Lee M. Horner President Wyman Ford, Inc. Sanford Kalb President City Motors, Inc. Allan Kaytes President Kaytes Ford, Inc. Gerald A. Lustig President Acura of Denville Samuel A. Magarino President S & M Pontiac Buick Oldsmobile GMC Truck, Inc. John S. Merriam President Gearhart Chevrolet, Inc. Eugene C. Meyers President Hawthorne Auto Sales Company Fred J. Meyers President Preakness Chevrolet, Inc. Frank Nappa President Wayne Auto Sales, Inc. Mark W. Porcaro President Pro-Chevrolet, Cadillac, Inc. David R. Porter Vice President Bell Imports Ltd. Robert X. Robertazzi President Liberty Lincoln-Mercury, Inc. James A. Salerno President Jim Salerno Pontiac Buick GMC Robert A. Senior President Three County Volkswagen Corporation Peter A. Spina President Wayne Motors, Inc. Stuart Lasser President Saturn of Denville NJ, LP Dennis C. Oberle Vice President Mahwah Sales & Service, Inc. CENTRAL Regional Advisory Board Steven Alexander, M.D. Medical Director Care-Advantage, Inc. George Bean President The George Bean Co. Grace Bielefeldt President Bee Paper Company, Inc. Milton Brown Accountant Melvin Cohen President Melrose Displays, Inc. Morris Diamond Chairman The Diamond Agency Dorothy Druian President Brookdale Shop-Rite, Inc. Arthur S. Gurtman Financial Consultant Joseph Guttila President Chopper Express, Inc. Mitchell Herman President Service Fabrics, Inc. Gordon M. Hahn President Charles F. Hahn, Inc. Lester F. Herrschaft Treasurer Albert A. Stier, Inc. Charles Infusino President Little Falls Shop-Rite, Inc. Edna Kanter President Passaic-Clifton Driv-Ur-Self System, Inc. Phil Forte President PRF Inc. T/A Sandy Hill Building Supply Co. Stanley Lee Gottlieb President The Diamond Agency Jack Kaplowitz Chairman Birch Lumber Company Carolyn Kessler President Kessler Industries, Inc. Marc J. Lenner Associate Lester M. Entin Associates Donald Lesser Vice President Pine Lesser & Sons Robert Lieberman President All-Ways Advertising Company Anthony J. Marino President Century 21 Construction Corporation Anthony J. Mazzone President Innovation Data Processing, Inc. John V. McGrane McGrane Mortgage Company Roy G. Meyer, Sr. President Elmwood Supply Company, Inc. Jeffrey Moll President & CEO Passaic Beth Israel Hospital Patrick Mucci, Jr. President Group Advisory, Inc. Gabriel L. Papera Treasurer Allstate Can Corporation George Poydinecz Developer Joshua Rabinowitz Consultant Vincent Riviello Vice President KTI New Jersey Fibers, Inc. Gerd Rohmert President Mayer Textiles Machine Corporation Neal Schuman President Arthur Schuman, Inc. Elliott Taradash Treasurer M. Grossman & Son, Inc. Joseph Waters Developer 20 Carmen B. Alecci CEO West Hudson Hospital Gary D. Bennett, Esq. Koch, Koch & Bennett Thomas Cifelli President Cifelli Associates Andrew Fiore, Jr. President Fiore & Sons, Inc. Arthur W. Goodman President Goodman Sales Co., Inc. Harvey Hankin President Ben Franklin Stores Charles B. Hummel President Hummel Machine & Tool Co. Thomas J. Lazur President National Siding Corporation John J. Martello President John J. Martello, Inc. Thomas J. Martin Chairman CP Test Services, Inc. NORTHERN Regional Advisory Board Donald Aronson President Donald Aronson Consulting Group Leon Finver President Continental/Marmorstein Agency Stanley Berenzweig Chairman Rag Shops, Inc. Peter Brown CEO Heather Hill Sportswear Anthony DíAgostino CEO Zuckerbergís Industrial Park Judith Greenberg President Heritage Management Co. Arthur Joseph Vice President Krass-Joseph, Inc. Burton Lerner President Tenavision, Inc. Donald N. Dinallo President Terminal Construction Corporation Robert W. Landzettel President Lazon Paint & Wallpaper Co. Bernard Dorfman, Esq. Harold Effron Effron Realty Associates Lawrence Levy, Esq. Marcus & Levy Stewart C. Libes President Accountants on Call Joseph Melone Vice President San Carlo Restaurant David Newton President Newrent, Inc. Robert A. Nicosia Chairman Universal Bonding Insurance Co. Peter Pfaff Chairman Pfaff Tool & Manufacturing, Inc. Nathan Rogoff President Roval Lumber & Millwork Co. Anthony F. Marangi Vice President Marangi Sanitation, Inc. Bruce M. Meisel, Esq. John Nakashian President H.H. Nakashian & Sons Kenneth Olsen President Glatt Air Techniques, Inc. Hal Parnes President The Parnes Company James R. Poole President Poole & Company Alfred Simon Certified Public Accountant Maria Silva President European Travel Agency Pasquale P. Tremonte President Fulton Building Co., Inc. Walter M. Van Wagner Vice President Saxon Construction & Management Corp. J. Scott Wright President Graphic Management, Inc. Alvin Singer President Singer Nelson Charlmers Albert Skoglund President Hiller & Skoglund, Inc. Samuel Toscano, Jr. Chairman & CEO Neuman Distributors, Inc. Marvin Van Dyk Chairman, Secretary & Treasurer Van Dyk Health Care, Inc. Arthur M. Weis President Capintec, Inc. Richard H. Weisinger, Esq. Fischer, Weisinger, Caliguire, Porter & Pierce SOUTHERN Regional Advisory Board Bernard Burkhoff Chairman The Real Estate Investment Group James Emiliani President Emiliani Enterprises,Inc. Kenneth Jayson President Jayson Fuel Oil William Cohen President Go Lightly Candy Company Joseph B. DeAndrea President Joseph B. DeAndrea, Inc. Morton Dear Consultant Steven A. Edwards Executive Vice President Business & Governmental Insurance Agency Arthur Ferdinand, CPA Ferdinand, Ganek & Company, PA Donald P. Kalis President Garwood Metal Company, Inc. Ernest J. Finizio, Jr. NJSIAA Project Manager Tournament Marketing Gerald B. Green Restaurateur Steven R. Gross President Tyser Metro & Company Joseph Hyman Management Consultant Seymour Litwin President Prudential Pioneer Real Estate Stanley Mitnick Vice President Medco, Inc. Vincent J. Morrocco, President Vincent J. Morrocco, Inc. James Papandrea President Watertrol, Inc. John J. Palitto Owner Palitto Agency Tino Rosa Owner Rosa Agency, Inc. Ervin Samuels CEO Buy Wise Auto Parts Marvin H. Strauss, CPA Fazio, Mannuzza, Roche, Tankel, DíAngerio, LLC Albert Urdang Owner Albert Urdang & Co. Sanford C. Vogel, Esq. Vogel & Gast 21 Kathleen Medore President National Fruit & Essences, Inc. Stanley Nice President CNS, Inc. Roy Solondz President Roxbury Mortgage Co., Inc. Robert Viersma President Bob Viersma & Sons, Inc. Henry M. Winstead President H & W Tool Company, Inc. Stacey Rudbart Assistant Vice President Gibraltar Securities Company Ben Sher President Sher Distributing Co., Inc. Robert J. Topchik Consultants Richard Ullman, President National Prescription Administrators, Inc. Edward F. Boscia President J.B. Ward & Sons, Inc. Richard J. Dalba, CPA Dalba, Goeller & Co. Robert Dickman President Dickman Business Brokers Paul Dunajchuk Vice President Roxbury Water Co. Thomas D. Farkas President Herbert L. Farkas Company Eugene Feyl President E-F Food Systems, Inc. Sanford D. Axelband The Hamilton Group David M. Collins Owner Carriage House Bed & Breakfast Thomas D. Collins Hardware Consultant Patrick DíAngola President ARCS Fabricators, Inc. Joseph J. DeLuccia, Esq. Attorney-at-Law Kenneth Elkin President KG Specialty Steel, Inc. WESTERN Regional Advisory Board Alan Goldstein, Esq. Nussbaum, Stein, Goldstein & Bronstein Dennis J. Kohl Scout Executive Morris-Sussex Area Council, Inc. William H. McNear President McNear Excavating, Inc. George Hagemiester Consultant Jackie Harrison Executive Director Center For Humanistic Change Robert A. Hopler President Stroud-Hopler, Inc. Gilbert R. Jacobs President JA-BAR Silicone Corporation Joel A. Kobert, Esq. Courter, Kobert, Laufer & Cohen Joseph Kubert President The Joe Kubert School of Cartoon & Graphic Art, Inc. Dennis C. Kwasnik President Tee Pee Packaging, Inc. Michael J. Luciano Vice President Morris County Sanitation Service, Inc. David Madden President Madden Insurance Agency, Inc. WEST ESSEX Regional Advisory Board Nicholas S. Gentile, Jr. President Pompton Lakes Building Supply Co. Richard Len Vice President, Investments GRL Advisors Jay Gerish President J. Gerish, Inc. Donald Gottheimer President D & B Whoesale Cosmetics, Inc. Ronald Higgins Vice President & Owner RLM Insurance Agency Frank Kobola Chairman Edenwood Corporation Gary Len President GRL Advisors Sanford Levine President Sanford Levine & Sons Packaging Corp. William J. Lloyd Retired Funeral Director Charles A. Lota Certified Public Accountant Saul Lupin, CPA Senior. Partner Smolin, Lupin & Company, PA Salvatore Valente President Bildisco Manufacturing Co., Inc. Edward Ringley President RAFCO Plastics, Inc. Victoria E. Taylor Executive Director Martin Luther King, Jr. Senior Center Ellen Ziff Director of Health First Passaic Beth Israel Hospital Community CRA Advisory Committee John Atlas, Esq. Passaic County Legal Aid Society John Griffith Regional Public Affairs Manager Public Service Electric & Gas Company Rev. Earl Modean Former Pastor, First Lutheran Church, Clifton Housing Advocate & Non-Profit Development/Organizer Barbara Dunn Executive Director Paterson Habitat For Humanity Joseph Masciandaro President/CEO Mid-Bergen Mental Health Center, Inc. William Matos President Matos Auto Care Center, Inc. Shareholder Information Corporate Address Valley National Bancorp 1455 Valley Road Wayne, New Jersey 07470 (973) 305-8800 Stock Lising Valley National Bancorp common stock is traded on the New York Stock Exchange under the symbol VLY. Form 10-K Persons may obtain a copy of Valley National Bancorp’s 1998 Annual Report or Form 10-K by submitting a request in writing to: Dianne M. Grenz Assistant Vice President Shareholder Relations Department Valley National Bancorp 1455 Valley Road Wayne, New Jersey 07470 Financial Information Investors, security analysts and others seeking financial information should submit a request in writing to: Alan D. Eskow Senior Vice President & Controller Valley National Bancorp 1455 Valley Road Wayne, New Jersey 07470 Shareholder Inquiries, Dividend Reinvestment Plan, and Registrar and Transfer Agent For information regarding share accounts of common stock or Valley’s Dividend Reinvestment Plan, please contact the Registrar and Transfer Agent or Valley National Bancorp: American Stock Transfer & Trust Company 40 Wall Street New York, New York 10005 Attn: Shareholder Relations Department (800) 937-5449 Dividend Reinvestment Plan (800) 278-4353 Valley National Bancorp Attn: Shareholders Relations Department (800) 526-7430, ext. 3380 (973) 305-3380 Dianne M. Grenz Assistant Vice President Shareholder Relations Department 22 23 Valley National Bank Branch Locations 105 Branches in 71 Communities Hillsdale 24 Broadway Northvale 151 Paris Avenue Ho-Ho-Kus 18 Sycamore Avenue Oakland 350 Ramapo Valley Road Ridgefield 868 Broad Street Ridgewood 44 Godwin Avenue Morris County Budd Lake 202 Route 46 & Mt. Olive Road 342 Route 46 Chester 151 Route 206 Dover 100 E. Blackwell Street Landing 101 Center Street Morristown 10 Madison Avenue East Hanover Route 10 West & Murray Road Mine Hill 271-273 Route 46 Parsippany Arlington Plaza, 800 Route 46 Lyndhurst 456 Valley Brook Avenue Oradell 350 Kinderkamack Road Rochelle Park 405 Rochelle Avenue Jefferson Township 715 Route 15 South Morris Plains 51 Gibraltar Drive Succasunna 250 Route 10 Bergen County Bogota 325 Palisade Avenue Elmwood Park 80 Broadway Englewood 80 West Street 41-43 Palisades Avenue Fair Lawn 31-00 Broadway 20-24 Fair Lawn Avenue 139 Lincoln Avenue Fort Lee 2180 Lemoine Avenue 2121 Lemoine Avenue 1372 Palisades Avenue Hackensack 3 University Plaza Essex County Belleville 22 Bloomfield Avenue 381 Franklin Avenue 237 Washington Avenue Bloomfield 548 Broad Street 1422 Broad Street Hudson County East Newark 710 North 4th Street Harrison 433 Harrison Avenue 24 Moonachie Moonachie Road & East Joseph Street New Milford 243 Main Street North Arlington 629 Ridge Road Fairfield 167 Fairfield Avenue One Passaic Avenue 363 Route 46 West Livingston 73 South Livingston Avenue 531 South Livingston Avenue Kearny 100 Central Avenue 256 Kearny Avenue 72-80 Midland Avenue Secaucus 40 Meadowlands Parkway West New York 5712 Bergenline Avenue Midland Park 207 Franklin Avenue Paramus Bergen Mall Tenafly 85 County Road Waldwick 67 Franklin Turnpike Wyckoff 356 Franklin Avenue Route 4 & Forest Avenue Fashion Center Route 17 & Ridgewood Avenue 80 East Ridgewood Avenue East 58 Midland Avenue Ramsey 10 South Franklin Turnpike Maplewood 142 Maplewood Avenue 740 Irvington Avenue Newark 167 Bloomfield Avenue Ferry Plaza Shopping Center, Ferry Street 784 Mount Prospect Avenue North Caldwell 9 Bloomfield Avenue Nutley 371 Franklin Avenue 171 River Road & Park Avenue West Caldwell 1059 Bloomfield Avenue 540 Passaic Avenue Middlesex County South Plainfield 100 Durham Avenue Somerset County Green Brook 302-306 Route 22 West North Plainfield 350 Rock Avenue Watchung 672-6 Somerset Street Pompton Lakes 516 Wanaque Avenue Wayne 200 Black Oak Ridge Road 1445 Valley Road 1345 Willowbrook Mall, Main Mall Entrance 1504 Route 23 North Valley Road at Peakness Avenue 1501 Hamburg Turnpike Warren County Belvidere Route 46 & Route 519 Blairstown 128 Route 94 Hackettstown 105 Mill Street Telephone Banking Center 1-800-522-4100 Website Address valleynationalbank.com Passaic 211 Main Avenue 615 Main Avenue 128 Market Street 545 Paulison Avenue 506 Van Houten Avenue Union County Clark 76 Central Avenue Roselle Park 1 West Westfield Avenue Union 2784 Morris Avenue Westfield 801 Central Avenue Passaic County Clifton 505 Allwood Road 925 Allwood Road 1006 Route 46 Little Falls 171 Browertown Road North Haledon 5 Sicomac Road Sussex County Branchville Branchville Square Franklin 288 Route 23 Fredon 410 Route 94 Sparta 7 Woodport Road Tranquility Route 517 & Kennedy Road Vernon 538 Route 515 1455 Valley Road Wayne, New Jersey 07470 (973) 305-8800 www.valleynationalbank.com 

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