Valley National Bancorp (“Valley”) (NASDAQ:VLY) and The Westchester
Bank Holding Corporation (“Westchester”) announced today that they
have entered into a definitive merger agreement whereby Valley will
acquire Westchester, parent company of The Westchester Bank. The
acquisition of this high-performing commercial bank will provide
Valley a physical footprint and additional commercial lending
expertise in the demographically attractive Westchester County (NY)
market.
Westchester is the largest independent
commercially focused bank headquartered in Westchester County with
total assets of $1.3 billion, total loans of over $0.9 billion, and
total deposits above $1.1 billion across its seven branch network
as of March 31, 2021. Westchester has consistently produced returns
on average assets above 1.25% supported by a robust net interest
margin, and an efficiency ratio below 50%. This acquisition will
supplement Valley’s existing Westchester County lending operations,
and add a strong low-cost core funding base in the market.
Under the terms of the merger agreement, the
stockholders of Westchester will receive 229.645 shares of Valley
common stock for each share of Westchester common stock they own.
Based on Valley’s closing stock price on June 28, 2021,
Westchester’s stockholders will receive approximately $210 million
in Valley common stock. Existing Westchester options will be cashed
out for approximately $10 million in cash.
This strategically compelling acquisition fills
in a geographic gap within Valley’s metro New York franchise, and
will meaningfully enhance Valley’s presence and growth
opportunities within the densely populated, affluent, and
commercially active Westchester County market. This acquisition is
also expected to be approximately 1% accretive to Valley’s
earnings, and neutral to Valley’s pro forma tangible book value and
capital ratios at close.
Ira Robbins, Valley's Chairman, President &
CEO commented that, “Under John Tolomer’s leadership, Westchester
has evolved into a high-performing and growth-oriented commercial
bank in a desirable market. Westchester’s conservative credit
culture and high-touch approach to commercial banking align
extremely well with Valley’s own value proposition.” He also
stated, “We look forward to having John and his team join Valley
where they will continue to drive growth in the Westchester County
market that they know so well. The ability to offer Valley’s
comprehensive suite of financial solutions to Westchester’s
commercial customers, along with the support of our larger balance
sheet and significant capital resources, should drive meaningful
growth for Valley in the Westchester County market. We are excited
to support John and his team in the next evolution of their company
as a part of the Valley family.”
John Tolomer, President & CEO of Westchester
said, “We are thrilled about our new partnership with Valley and
the opportunities for growth that it will provide for our employees
and customers. The infrastructure and culture that has been built
at Valley over the past few years will enable our customers to
access a robust product offering while still receiving access to
the local decision making and exceptional service they have become
accustomed to at The Westchester Bank.” Following the closing, Mr.
Tolomer will join Valley as Market President leading Valley’s
Westchester County efforts.
On a pro-forma basis as of March 31, 2021, the
combined company’s balance sheet would have $43 billion of assets,
and $34 billion of each loans and deposits. The addition of
Westchester’s seven branches will bring Valley’s branch count to
233 comprised of 131 in New Jersey, 45 in New York, 41 in Florida,
and 16 in Alabama. Valley has a track record of successfully
integrating acquisitions in a way that minimizes customer
disruption and delivers profitable growth while maintaining strong
credit metrics and a well-capitalized balance sheet. Integration
risk in the transaction is mitigated by Westchester’s relative size
and Valley’s familiarity with the Westchester market, where
pre-acquisition loan balances are already over $425 million. The
transaction should not disrupt Valley’s internal initiatives,
organic growth efforts across its footprint, or the consideration
of other strategic opportunities.
The acquisition is expected to close in the
fourth quarter of 2021, subject to standard regulatory approvals,
approval of Westchester stockholders, as well as other customary
conditions. An investor presentation with additional information
about the transaction can be found on Valley’s website at
www.valley.com.
Covington & Burling LLP acted as legal
counsel to Valley. Raymond James & Associates, Inc. served as
financial advisor to Westchester, and Goodwin Procter LLP served as
its legal counsel.
About ValleyAs the principal
subsidiary of Valley National Bancorp, Valley National Bank is a
regional bank with approximately $41 billion in assets as of March
31, 2021. Valley is committed to giving people and businesses the
power to succeed. Valley operates many convenient branch locations
across New Jersey, New York, Florida and Alabama, and is committed
to providing the most convenient service, the latest innovations
and an experienced and knowledgeable team dedicated to meeting
customer needs. Helping communities grow and prosper is the heart
of Valley’s corporate citizenship philosophy. To learn more about
Valley, go to www.valley.com or call our Customer Care Center at
800-522-4100.
About Westchester
The Westchester Bank Holding Corporation is the
holding company for The Westchester Bank, a New York state
chartered bank offering a full range of commercial loan and deposit
products. The Westchester Bank is dedicated to providing
exceptional personal service to its business customers aligning
with its core operating principle of “Banking Made Personal”.
Westchester currently operates its main office and seven
full-service branches in Westchester County, New York. For
additional information about Westchester, please visit
www.thewestchesterbank.com.
Important Information and Where to Find
ItThis presentation does not constitute an offer to sell
or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval with respect to the proposed
acquisition by Valley National Bancorp (“Valley”) of The
Westchester Bank Holding Corporation (“Westchester”). No offer of
securities shall be made except by means of a prospectus meeting
the requirements of the Securities Act of 1933, as amended, and no
offer to sell or solicitation of an offer to buy shall be made in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
In connection with the proposed transaction,
Valley will file with the U.S. Securities and Exchange Commission
(the “SEC”) a Registration Statement on Form S-4 that will include
a proxy statement of Westchester and a prospectus of Valley (the
“Proxy Statement/Prospectus”), and Valley may file with the SEC
other relevant documents concerning the proposed transaction. The
definitive Proxy Statement/Prospectus will be mailed to
stockholders of Westchester. STOCKHOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING
THE PROPOSED TRANSACTION CAREFULLY AND IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE
SEC BY VALLEY, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
VALLEY, WESTCHESTER AND THE PROPOSED TRANSACTION.
Free copies of the Proxy Statement/Prospectus,
as well as other filings containing information about Valley, may
be obtained at the SEC’s website (http://www.sec.gov) when they are
filed by Valley. You will also be able to obtain these documents,
when they are filed, free of charge, from Valley at www.valley.com
under the heading “Investor Relations.” Copies of the Proxy
Statement/Prospectus can also be obtained, when it becomes
available, free of charge, at Valley’s website at
http://ir.valleynationalbank.com or by directing a request to
Ronald H. Janis, Senior Executive Vice President & General
Counsel, Valley National Bancorp, at 1455 Valley Road, Wayne, New
Jersey 07470, telephone (973) 305-8800, or by directing a request
to The Westchester Bank Holding Corporation, 12 Water Street, White
Plains, New York 10601.
Participants in the
SolicitationThis communication is not a solicitation of a
proxy from any security holder of Valley or Westchester. However,
Valley, Westchester and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the stockholders of Westchester in
respect of the proposed transaction. Information about Valley’s
directors and executive officers is available in its proxy
statement for its 2021 annual meeting of shareholders, which was
filed with the SEC on March 8, 2021, and other documents filed by
Valley with the SEC. Information regarding the persons who may,
under the rules of the SEC, be deemed participants in the proxy
solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the Proxy Statement/Prospectus and other relevant materials to be
filed with the SEC when they become available. Free copies of this
document may be obtained as described in the preceding
paragraph.
Forward Looking StatementsThis
communication contains forward looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such statements are not historical facts and include expressions
about management’s confidence and strategies and management’s
expectations about new and existing programs and products,
acquisitions, relationships, opportunities, taxation, technology,
market conditions and economic expectations, including the
potential effects of the COVID-19 pandemic on Valley’s businesses
and financial results and conditions. Forward-looking statements
include, without limitation, statements relating to the impact
Valley and Westchester expect the proposed merger to have on the
combined entity's operations, financial condition, and financial
results, and Valley’s and Westchester's expectations about the
ability to successfully integrate their respective businesses and
the amount of cost savings and overall operational efficiencies
Valley and Westchester expect to realize as a result of the
proposed acquisition. These statements may be identified by such
forward looking terminology as “ should,”“ expect,”“ believe,”“
view,”“ opportunity,”“ allow,”“ continues,”“ reflects,”“
typically,”“ usually,”“ or similar statements or variations of such
terms Such forward looking statements involve certain risks and
uncertainties. Such forward-looking statements are based on various
assumptions (many of which are beyond the control of Valley and
Westchester) and are subject to risks and uncertainties (which
change over time) and other factors which could cause actual
results to differ materially from those currently anticipated.
Actual results may differ materially from such forward-looking
statements. Factors that may cause actual results to differ
materially from those contemplated by such forward looking
statements include, but are not limited to: the possibility that
the proposed acquisition does not close when expected or at all
because required regulatory, stockholder or other approvals and
other conditions to closing are not received or satisfied on a
timely basis or at all; the delay in or failure to close for any
other reason; the outcome of any legal proceedings that may be
instituted against Valley or Westchester; the occurrence of any
event, change or other circumstance that could give rise to the
right of one or both parties to terminate the merger agreement
providing for the merger; the risk that the businesses of Valley
and Westchester will not be integrated successfully; the
possibility that the cost savings and any synergies or other
anticipated benefits from the proposed acquisition may not be fully
realized or may take longer to realize than expected; changes in
the estimates of non-recurring charges; disruption from the
proposed acquisition making it more difficult to maintain
relationships with employees, customers or other parties with whom
Valley or Westchester have business relationships; the reaction to
the proposed transaction of the companies’ customers, employees and
counterparties; uncertainty as to the extent of the duration,
scope, and impacts of the COVID-19 pandemic on Valley, Westchester
and the proposed transaction; the continued impact of COVID-19 on
the U.S. and global economies, including business disruptions,
reductions in employment and an increase in business failures,
specifically among Valley’s clients; the continued impact of
COVID-19 on Valley’s employees and Valley’s ability to provide
services to Valley’s customers and respond to their needs as more
cases of COVID-19 may arise in Valley’s primary markets; potential
judgments, claims, damages, penalties, fines and reputational
damage resulting from pending or future litigation and regulatory
and government actions, including as a result of Valley’s
participation in and execution of government programs related to
the COVID-19 pandemic or as a result of Valley’s actions in
response to, or failure to implement or effectively implement,
federal, state and local laws, rules or executive orders requiring
that Valley grants forbearances or not act to collect Valley’s
loans; the impact of forbearances or deferrals Valley is required
or agree to as a result of customer requests and/or government
actions, including, but not limited to Valley’s potential inability
to recover fully deferred payments from the borrower or the
collateral; the risks related to the discontinuation of the London
Interbank Offered Rate and other reference rates, including
increased expenses and litigation and the effectiveness of hedging
strategies; damage verdicts or settlements or restrictions related
to existing or potential class action litigation or individual
litigation arising from claims of violations of laws or
regulations, contractual claims, breach of fiduciary
responsibility, negligence, fraud, environmental laws, patent or
trademark infringement, employment related claims, and other
matters; a prolonged downturn in the economy, mainly in New Jersey,
New York, Florida and Alabama, as well as an unexpected decline in
commercial real estate values within Valley’s market areas; higher
or lower than expected income tax expense or tax rates, including
increases or decreases resulting from changes in uncertain tax
position liabilities, tax laws, regulations and case law; the
inability to grow customer deposits to keep pace with loan growth;
a material change in Valley’s allowance for credit losses under
CECL due to forecasted economic conditions and/or unexpected credit
deterioration in Valley’s loan and investment portfolios; the need
to supplement debt or equity capital to maintain or exceed internal
capital thresholds; greater than expected technology related costs
due to, among other factors, prolonged or failed implementations,
additional project staffing and obsolescence caused by continuous
and rapid market innovations; the loss of or decrease in lower cost
funding sources within Valley’s deposit base, including Valley’s
inability to achieve deposit retention targets under Valley's
branch transformation strategy; cyber attacks, computer viruses or
other malware that may breach the security of Valley’s websites or
other systems to obtain unauthorized access to confidential
information, destroy data, disable or degrade service, or sabotage
Valley’s systems; results of examinations by the Office of the
Comptroller of the Currency (OCC), the Federal Reserve Bank (FRB),
the Consumer Financial Protection Bureau (CFPB), and other
regulatory authorities, including the possibility that any such
regulatory authority may, among other things, require us to
increase Valley’s allowance for credit losses, write down assets,
reimburse customers, change the way Valley does business, or limit
or eliminate certain other banking activities; our inability or
determination not to pay dividends at current levels, or at all,
because of inadequate earnings, regulatory restrictions or
limitations, changes in Valley’s capital requirements or a decision
to increase capital by retaining more earnings; unanticipated loan
delinquencies, loss of collateral, decreased service revenues, and
other potential negative effects on Valley’s business caused by
severe weather, the COVID-19 pandemic or other external events;
unexpected significant declines in the loan portfolio due to the
lack of economic expansion, increased competition, large
prepayments, changes in regulatory lending guidance or other
factors; and the failure of other financial institutions with whom
Valley has trading, clearing, counterparty and other financial
relationships; and other factors, many of which are beyond the
control of us and Westchester. A detailed discussion of factors
that could affect Valley’s results is included in Valley’s SEC
filings, including the “Risk Factors” section of Valley’s Annual
Report on Form 10-K for the year ended December 31, 2020 and any
updates to those risk factors set forth in Valley’s Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and other
filings, which have been filed by Valley with the SEC and are
available on the SEC’s website at www.sec.gov. Although we believe
that the expectations reflected in the forward-looking statements
are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. We caution readers not to
place undue reliance on any such forward-looking statements, which
speak only as of the date on which they are made. Valley and
Westchester undertake no duty to update any forward-looking
statement to conform the statement to actual results or changes in
our expectations, except as specifically required by law.
Contacts: |
Valley National
Bancorp |
|
The Westchester Bank
Holding Corporation |
Michael D.
Hagedorn |
|
John M.
Tolomer |
Senior Executive Vice
President and |
|
President
and |
Chief Financial
Officer |
|
Chief Executive
Officer |
(973)
872-4885 |
|
(914)
509-8584 |
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