Greater Community Bancorp (NASDAQ:GFLS)
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Valley National Bancorp (NYSE:VLY) (“Valley”),
the holding company for Valley National Bank, and Greater Community
Bancorp (NASDAQ: GFLS) (“Greater
Community”) jointly announced today that they
have entered into a merger agreement by which Greater Community will
merge with and into Valley. Greater Community is the holding company for
Greater Community Bank, a commercial bank with approximately $1.0
billion in assets and 16 full-service branches in the northern New
Jersey counties of Bergen, Passaic and Morris. Pursuant to the merger
agreement, Greater Community Bank will be merged with and into Valley
National Bank.
Gerald H. Lipkin, Valley’s Chairman, President
& CEO noted, “We are pleased to announce
the merger with Greater Community which is consistent with Valley’s
strategy of targeted growth, organically or through acquisition, within
its northern and central New Jersey footprint. Greater Community offers
Valley an opportunity to strengthen its position within a very
competitive market, while benefiting both companies’
current customers and shareholders. Furthermore, both institutions have
a longstanding commitment to credit quality, sound loan underwriting
standards and no exposure to subprime loans. With Valley’s
higher lending limits, this merger should allow us to expand upon a
number of Greater Community’s loan
relationships. We anticipate that the combination of our companies will
also strengthen Valley’s deposit market share
in Bergen, Passaic and Morris Counties.”
“We feel the merger with Valley represents an
excellent opportunity for our customers and shareholders, as well as a
cultural fit for our employees,” said Greater
Community’s Chairman, President and CEO,
Anthony M. Bruno, Jr. Mr. Bruno continued, “Within
a short time after close, our customers will have access to Valley’s
176 branch locations, in addition to our current branches, to conduct
their business and have immediate access to Valley’s
network of 221 ATMs, free of service charges. Valley’s
large presence in and outside of our markets will allow our employees to
leverage these resources with their talents to benefit our customer
needs, and ultimately our shareholders.”
John L. Soldoveri, a shareholder of Greater Community who owns
approximately 10% of Greater Community’s
outstanding common stock, has informed Greater Community that he will
support the transaction with Valley and has signed an agreement to vote
in favor of the merger.
Under the terms of the merger agreement, which has been unanimously
approved by the board of directors of both companies, Valley will issue
0.95 shares of its common stock for each outstanding common share of
Greater Community. In addition, for each ten shares of Greater Community
held, Valley will issue one warrant to buy one share of Valley common
stock at a price equal to $2.00 above Valley’s
average closing stock price for a period of time prior to closing, as
specified in the merger agreement. Cash will be paid in lieu of
fractional shares and warrants, and holders of Greater Community stock
options will be entitled to a cash payment, calculated in accordance
with the terms of the merger agreement. Based on Valley’s
March 19, 2008 closing price of $19.96, the total consideration is
estimated to be $167 million. As a result of the transaction, Valley
expects to record approximately $117 million, net of tax, of intangible
assets, comprised of $11 million of core deposit intangibles, $3.0 of
purchase accounting market value adjustments, $8.5 million of
non-recurring charges and $94.5 million of goodwill.
The pricing multiples are consistent with those of Valley’s
past transactions. The estimated price to earnings ratio is 18.0x
trailing 12-month earnings and the price to tangible book value multiple
is 265%. Valley anticipates that the transaction will be accretive to
earnings within the first full year of operations, as Valley intends to
realize 30% or more of non-interest expense cost savings on this “in
market” merger. The impact to Valley’s
capital ratios will be largely neutral, with Valley’s
book value per common share increasing approximately 10% from $7.92 to
$8.70, its tangible book value per common share remaining relatively
flat at $6.21 and the total capital ratio declining from 11.35% to
11.27%. Upon consummation of the merger, Valley will have a total of 192
branches, approximately $13.8 billion in total assets, $9.3 billion of
loans, $8.8 billion of deposits, goodwill and intangibles of $322
million and capital of $1.1 billion. See the table below for additional
pro forma data.
Valley anticipates the closing of the merger will occur late in the
third quarter of 2008, contingent upon receiving regulatory approvals,
approval by the Greater Community shareholders and other customary
closing conditions.
MG Advisors, Inc. and Stifel, Nicolaus & Company, Incorporated, served
as financial advisors to Valley in the transaction, and Day Pitney LLP
served as legal counsel. Sandler O’Neill +
Partners, L.P. and The Kafafian Group, Inc. acted as financial advisors
to Greater Community and Quarles & Brady LLP provided legal counsel.
Valley is a regional bank holding company with over $12.7 billion in
assets, headquartered in Wayne, New Jersey. Its principal subsidiary,
Valley National Bank, currently operates 176 branches in 114 communities
serving 13 counties throughout northern and central New Jersey and
Manhattan, Brooklyn and Queens. Valley is one of the largest commercial
banks headquartered in New Jersey and is committed to providing the most
convenient service, the latest in product innovations and an experienced
and knowledgeable staff with a high priority on friendly customer
service 24 hours a day, 7 days a week. Valley offers a wide range of
deposit products, mortgage loans and cash management services to
consumers and businesses including products tailored for the medical,
insurance and leasing business. Valley’s
comprehensive delivery channels enable customers to bank in person, by
telephone or online.
For more information about Valley National Bank and its products and
services, please visit www.valleynationalbank.com
or call Customer Service 24/7 at 1-800-522-4100.
Greater Community is a financial holding company headquartered in
Totowa, New Jersey. Greater Community operates 16 full-service branches
in the northern New Jersey counties of Bergen, Passaic and Morris
through its state-chartered commercial bank subsidiary Greater Community
Bank. Greater Community Bank provides traditional commercial and retail
banking services to businesses and consumers in New Jersey and, through
its subsidiary Highland Capital Corp., provides equipment leasing and
financing. Greater Community Bancorp also offers traditional insurance
products through its Greater Community Insurance Services, LLC
subsidiary, and title insurance and settlement services through its
Greater Community Title LLC subsidiary. In addition, Greater Community
Financial, a division of Greater Community Bank, provides a wide range
of investment products and services exclusively through Raymond James
Financial Services, Inc., member FINRA/SIPC. (Securities are not FDIC
insured or bank guaranteed, and are subject to risk and may lose value).
Insurance policies and tax services are not insured by the FDIC or any
federal government agency, may lose value, and are not a deposit of or
guaranteed by Greater Community Bank or any bank affiliate.
Selected Consolidated Unaudited Pro Forma Financial Data of Valley
and Greater Community
The following table shows selected consolidated pro forma financial data
reflecting the merger of Greater Community with Valley, assuming the
companies had been combined at December 31, 2007. The pro forma amounts
reflect certain purchase accounting adjustments, which are based on
estimates that are subject to change depending on fair values as of the
merger completion date. This information also does not necessarily
reflect what the historical financial condition or results of operations
of the combined company would have been had Valley and Greater Community
been combined as of December 31, 2007.
As of December 31, 2007
Greater
Combined
Valley
Community
Pro Forma
BALANCE SHEET ITEMS:
($ in thousands)
(Unaudited)
Assets
$12,748,959
$975,990
$13,830,555
Loans:
Commercial
1,563,150
126,252
1,689,402
Commercial Mortgage (includes Construction)
2,773,151
524,448
3,297,599
Residential Mortgage
2,063,242
144,164
2,207,406
Consumer
2,096,678
8,001
2,104,679
Total Loans
8,496,221
802,865
9,299,086
Intangible Assets
204,547
11,574
321,727
Deposits:
Non-interest bearing
1,929,555
166,550
2,096,105
Savings, NOW and money market
3,382,474
360,636
3,743,110
Time
2,778,975
222,286
3,001,261
Total Deposits
8,091,004
749,472
8,840,476
Shareholders' equity
949,060
72,389
1,115,776
CAPITAL RATIOS:
Book Value
$7.92
$8.31
$8.70
Tangible Book Value
6.21
6.98
6.19
Tier 1 leverage ratio
7.62
%
8.61
%
7.06
%
Risk-based capital - Tier 1
9.55
10.22
9.28
Risk-based capital - Total Capital
11.35
11.49
11.27
ASSET QUALITY:
Loans past due 90 days or more and still accruing
$8,462
$0
$0
Non-accrual loans
$30,623
$1,984
$0
Other real estate owned
609
0
0
Other repossessed assets
1,466
0
0
Total non-performing assets
$32,698
$1,984
$0
Troubled debt restructured loans
$8,363
$37
$0
ASSET QUALITY RATIOS:
Non-performing assets to total loans
0.38
%
0.25
%
0.37
%
Allowance for loan losses to total loans
0.86
1.39
0.90
Allowance for credit losses to total loans
0.88
1.39
0.93
Net charge-offs to average loans
0.14
0.05
0.13
Additional Information and Where to Find it
In connection with the proposed merger, Valley intends to file a proxy
statement/prospectus with the Securities and Exchange Commission.
INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE PROXY
STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders may obtain a free
copy of the registration statement (when available) and other documents
filed by Valley and Greater Community with the Commission at the
Commission’s web site at www.sec.gov.
Valley’s documents may be accessed and
downloaded for free at Valley’s web site at http://www.valleynationalbank.com/filings.html
or by directing a request to Dianne M. Grenz, First Senior Vice
President, Valley National Bancorp, at 1455 Valley Road, Wayne, New
Jersey 07470, telephone (973) 305-3380, and Greater Community’s
documents may be accessed and downloaded for free at http://www.greatercommunity.com/framecorp2.html
or by directing a request to Anthony M. Bruno, Jr., Chairman, President
and CEO, Greater Community Bancorp, at 55 Union Boulevard, Totowa, New
Jersey 07512, telephone (973) 942-1111.
Participants in the Solicitation
This communication is not a solicitation of a proxy from any security
holder of Greater Community Bancorp. However, Valley, Greater Community,
their respective directors and executive officers and other persons may
be deemed to be participants in the solicitation of proxies from Greater
Community’s shareholders in respect of the
proposed transaction. Information regarding the directors and executive
officers of Valley may be found in its definitive proxy statement
relating to its 2008 Annual Meeting of Shareholders, which was filed
with the Commission on March 6, 2008 and can be obtained free of charge
from Valley’s website. Information regarding
the directors and executive officers of Greater Community may be found
in its 2007 Annual Report on Form 10-K, which was filed with the
Commission on March 12, 2008 and can be obtained free of charge from
Greater Community’s website. Other
information regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security holdings
or otherwise, will be contained in the proxy statement/prospectus and
other relevant materials to be filed with the SEC when they become
available.
Forward Looking Statements
The foregoing contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements
are not historical facts and include expressions about management’s
confidence and strategies and management’s
expectations about new and existing programs and products,
relationships, opportunities, taxation, technology and market
conditions. These statements may be identified by such forward-looking
terminology as “expect,”
“believe,” “view,”
“opportunity,” “allow,”
“continues,” “reflects,”
“typically,” “usually,”
“anticipate,” or
similar statements or variations of such terms. Such forward-looking
statements involve certain risks and uncertainties. Actual results may
differ materially from such forward-looking statements. Factors that may
cause actual results to differ from those contemplated by such
forward-looking statements include, but are not limited to, the
following: failure to obtain shareholder or regulatory approval for the
merger of Greater Community with Valley or to satisfy other conditions
to the merger on the proposed terms and within the proposed timeframe;
the inability to realize expected cost savings and synergies from the
merger of Greater Community with Valley in the amounts or in the
timeframe anticipated; changes in the estimate of non-recurring charges;
costs or difficulties relating to integration matters might be greater
than expected; material adverse changes in Valley’s
or Greater Community’s operations or
earnings; the inability to retain Greater Community’s
customers and employees; or a decline in the economy in Valley’s
primary market areas, mainly in New Jersey and New York.
Valley and Greater Community assume no obligation for updating any such
forward-looking statement at any time.