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As filed with the Securities and Exchange Commission on October 26, 2017

Registration No. 333-220743

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

AMENDMENT NO. 1

TO

FORM S-4

REGISTRATION STATEMENT

under

THE SECURITIES ACT OF 1933

 

 

VALLEY NATIONAL BANCORP

(Exact name of registrant as specified in its charter)

 

 

New Jersey

(State or other Jurisdiction of Incorporation of Organization)

6021

(Primary Standard Industrial Classification Code Number)

22-2477875

(I.R.S. Employer Identification No.)

1455 Valley Road

Wayne, New Jersey 07470

973-305-8800

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

 

 

Rudy E. Schupp, President

Valley National Bancorp

1455 Valley Road

Wayne, New Jersey 07470

(973) 305-8800

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Please send copies of all communications to:

 

RONALD H. JANIS		MICHAEL T. RAVE, ESQ.		JOSEPH V. CHILLURA		DENNIS R. WENDTE, ESQ.
Senior Executive Vice President and General Counsel		Day Pitney LLP One Jefferson Road		President and Chief Executive Officer		Barack Ferrazzano Kirschbaum & Nagelberg LLP
Valley National Bancorp		Parsippany, New Jersey 07054		USAmeriBancorp, Inc.		200 West Madison Street
1455 Valley Road		(973) 966-6300		4790 140th Avenue North		Suite 3900
Wayne, New Jersey 07470				Clearwater, Florida 33762		Chicago, Illinois 60606
(973) 305-8800				(727) 260-6420		(312) 984-3100

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective and upon completion of the merger described in the enclosed proxy statement/prospectus.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.   ☐

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering.   ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering.   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (check one):

 

Large Accelerated Filer		☒		Accelerated Filer		☐
Non-Accelerated Filer		☐   (Do not check if a smaller reporting company)		Smaller Reporting Company		☐
				Emerging Growth Company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.   ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-1(d) (Cross Border Third-Party Tender Offer)  ☐

 

 

CALCULATION OF REGISTRATION FEE

 

Title of each class of securities to be registered		Amount to be registered		Proposed maximum offering price per unit		Proposed maximum aggregate offering price				Amount of registration fee
Common Stock, no par value		76,334,259 Shares(1)		N/A		$	739,324,950	(2)		$	85,687.76
Noncumulative Perpetual Redeemable Preferred Stock, Series C, no par value		10,000 Shares(3)		N/A		$	10,000,000	(4)		$	1,159.00
Warrants to Purchase Shares of Common Stock, no par value		75,790 Warrants(5)		N/A		$	5,064,970	(6)		$	587.03
Common Stock, no par value, underlying Warrants		522,951 Shares(7)		N/A			—				—	(8)
Total										$	87,433.79	(9)

 

(1)

The maximum number of shares of Valley National Bancorp (“Valley”) common stock estimated to be issuable upon the completion of the merger of USAmeriBancorp, Inc. (“USAmeriBancorp”) with and into Valley, based on the number of shares of USAmeriBancorp common stock outstanding immediately prior to the merger, assuming that all stock options and warrants granted by USAmeriBancorp outstanding on the date hereof are exercised and all restricted stock units vest in accordance with their terms, and the exchange of each share of USAmeriBancorp common stock for shares of Valley common stock pursuant to the formula set forth in the Agreement and Plan of Merger, dated as of July 26, 2017, between Valley and USAmeriBancorp (the “merger agreement”) and assuming a volume-weighted average closing price of $10.00.

(2)

Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act and calculated in accordance with Rule 457(f)(1) and Rule 457(c) of the Securities Act as follows: the product of (1) $66.829, which is the average of the high and low prices per share of USAmeriBancorp common stock on September 26, 2017 as quoted on the OTC Pink marketplace, multiplied by (2) 11,062,936, which is the approximate sum of (i) the aggregate number of shares of USAmeriBancorp common stock outstanding as of September 26, 2017, (ii) the aggregate number of shares of USAmeriBancorp common stock issuable upon the exercise of USAmeriBancorp stock options, (iii) the aggregate number of shares of USAmeriBancorp common stock issuable upon the exercise of USAmeriBancorp warrants and (iv) the aggregate number of shares of USAmeriBancorp common stock issuable under USAmeriBancorp restricted stock units.

(3)

The maximum number of shares of Valley’s Noncumulative Perpetual Redeemable Preferred Stock, Series C (“Valley Series C Preferred Stock”), issuable upon the completion of the merger of USAmeriBancorp with and into Valley, based on the number of shares of USAmeriBancorp’s Noncumulative Perpetual Redeemable Preferred Stock, Series C (“USAmeriBancorp Series C Preferred Stock”), outstanding immediately prior to the merger and the exchange of each share of USAmeriBancorp Series C Preferred Stock for one share of Valley Series C Preferred Stock with substantially identical terms.

(4)

Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act and calculated in accordance with Rule 457(f) of the Securities Act as follows: the product of (1) $1,000 (the original issue price per share of USAmeriBancorp Series C Preferred Stock, which is also the liquidation price and redemption price of such preferred stock) multiplied by (2) 10,000 shares of USAmeriBancorp Series C Preferred Stock to be cancelled in the merger and exchanged for shares of Valley Series C Preferred Stock (also with a liquidation price and redemption price of $1,000 per share).

(5)

The maximum number of Valley warrants to purchase shares of Valley common stock, issuable upon the completion of the merger of USAmeriBancorp with and into Valley, based on the number of USAmeriBancorp warrants to purchase shares of USAmeriBancorp common stock that are outstanding immediately prior to the merger and the exchange of each such USAmeriBancorp warrant for one such Valley warrant.

(6)

Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act and calculated in accordance with Rule 457(g) of the Securities Act as follows: the product of (1) $66.829, which is the average of the high and low prices per share of USAmeriBancorp common stock on September 26, 2017 as quoted on the OTC Pink marketplace multiplied by (2) 75,790 shares issuable pursuant to the USAmeriBancorp warrants to be cancelled in the merger and exchanged for Valley warrants.

(7)	The maximum number of shares of Valley common stock underlying the Valley warrants registered on this Registration Statement assuming a volume-weighted average closing price of $10.00.

(8)	Pursuant to Rule 457(i) of the Securities Act, no separate registration fee is payable.

(9)	Previously paid in connection with the filing of the initial Registration Statement on Form S-4.

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

 

 

 

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Information in this joint proxy statement-prospectus is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This joint proxy statement-prospectus shall not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of these securities 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.

 

Proxy Statement of USAmeriBancorp, Inc.		Proxy Statement and Prospectus of Valley National Bancorp

Preliminary – Subject to Completion – Dated October 26, 2017

MERGER OF USAMERIBANCORP, INC. WITH AND INTO VALLEY NATIONAL BANCORP AND ISSUANCE OF VALLEY NATIONAL BANCORP COMMON STOCK IN CONNECTION WITH THE MERGER PROPOSED — YOUR VOTE IS VERY IMPORTANT

To the Shareholders of USAmeriBancorp, Inc. and Valley National Bancorp:

We are pleased to report that the Boards of Directors of Valley National Bancorp (“Valley”) and USAmeriBancorp, Inc. (“USAmeriBancorp”) have approved an Agreement and Plan of Merger (the “merger agreement”). Under the merger agreement, USAmeriBancorp will merge with and into Valley, with Valley as the surviving company in the merger (the “merger”). We cannot complete the merger transaction without your approval.

Each of USAmeriBancorp and Valley will be holding a special meeting of their respective common shareholders to vote on certain matters in connection with the merger. Holders of shares of USAmeriBancorp common stock will vote at a special meeting of USAmeriBancorp shareholders to be held on December 14, 2017 to approve the merger agreement and to vote on a related proposal. Holders of shares of Valley common stock will vote at a special meeting of Valley common shareholders to be held on December 14, 2017 to approve the issuance of up to 76,334,259 shares of Valley common stock in connection with the merger, which is necessary to allow the merger to close, and to vote on a related proposal. The 76,334,259 shares that Valley common shareholders are being asked to approve is the maximum number of shares that would be issuable in the transaction, including shares of Valley common stock underlying Valley warrants, Valley stock options and Valley restricted stock units to be issued in exchange for USAmeriBancorp warrants, USAmeriBancorp stock options and USAmeriBancorp restricted stock units, respectively, and assuming that Valley’s volume-weighted average share price during the 30 consecutive trading day period ending 5 trading days prior to closing (the “average closing price”) is $10.00. Valley expects substantially fewer shares of Valley common stock will be issued in the merger. Valley and USAmeriBancorp may each terminate the merger agreement if the average closing price is below $11.00.

Under the terms of the merger agreement, if the merger is completed, USAmeriBancorp common shareholders will be entitled to receive 6.100 shares of Valley common stock for each share of USAmeriBancorp common stock that they hold, subject to adjustment as described below and subject to the payment of cash in lieu of fractional shares. Subject to the termination rights set forth below, in the event the average closing price is less than $11.50, then Valley will adjust the 6.100 exchange ratio (or, in lieu of such adjustment, make an equivalent cash payment to USAmeriBancorp common shareholders) so that USAmeriBancorp common shareholders receive $69.00 in Valley common stock for each share of USAmeriBancorp common stock that they hold. The adjustment to the exchange ratio if the average closing price is less than $11.50 is not linear; therefore if the average closing price is between $11.32 and $11.49, the exchange ratio will decrease slightly and if the average closing price is less than $11.32, the exchange ratio will increase. Subject to the termination rights set forth below, in the event the average closing price is greater than $13.00, then Valley will decrease the 6.100 exchange ratio so that USAmeriBancorp common shareholders receive $79.30 in Valley common stock for each share of USAmeriBancorp common stock that they hold. In the event the average closing price is less than $11.00, either Valley or USAmeriBancorp may elect to terminate the merger agreement. In the event the average closing price is greater than $13.50, then USAmeriBancorp may elect to terminate the merger agreement. In addition, if Valley enters into a definitive acquisition agreement and the average closing price is greater than $13.50, the exchange ratio will be 5.874. In such event, USAmeriBancorp has the right to terminate the merger agreement. On October 25, 2017, a date immediately preceding the printing of this joint proxy statement-prospectus, the closing price of Valley common stock was $11.54 and the volume-weighted average share price for the 30 trading day period ended October 25, 2017 was $11.65.

Under the terms of the merger agreement, at the effective time of the merger, Valley will, at Valley’s option, either redeem USAmeriBancorp’s noncumulative perpetual redeemable preferred stock, Series C (the “USAmeriBancorp Series C preferred stock”), for cash in accordance with the terms of the USAmeriBancorp Series C preferred stock or issue shares of Valley’s noncumulative perpetual redeemable preferred stock, Series C (the “Valley Series C preferred stock”), which will have identical rights and preferences as the USAmeriBancorp Series C preferred stock, to USAmeriBancorp preferred shareholders in exchange for their shares of USAmeriBancorp Series C preferred stock.

Valley common stock is listed on the New York Stock Exchange under the symbol “VLY”. If issued, the Valley Series C preferred stock will not be listed or quoted on any marketplace. USAmeriBancorp common stock is quoted on the OTC Pink marketplace under the symbol “USAB”. The USAmeriBancorp Series C preferred stock is not quoted on any marketplace.

We generally expect the merger to be tax-free with respect to the Valley common stock that USAmeriBancorp common shareholders receive and the Valley Series C preferred stock, if any, that USAmeriBancorp preferred shareholders receive.

Assuming the exchange ratio is 6.100 and all of the outstanding USAmeriBancorp stock options and warrants are exercised and all of the outstanding USAmeriBancorp restricted stock units have vested prior to the closing of the merger, if the merger is completed, USAmeriBancorp common shareholders will own approximately 67.5 million shares, or approximately 20.3%, of Valley’s outstanding common stock.

The USAmeriBancorp Board of Directors unanimously recommends that USAmeriBancorp common shareholders vote to approve the merger agreement and the related proposal.

The Valley Board of Directors unanimously recommends that Valley common shareholders vote to approve the issuance of up to 76,334,259 shares of Valley common stock in connection with the merger and the related proposal.

Your vote is very important. Whether or not you plan to attend the USAmeriBancorp or Valley special meeting, as applicable, please take the time to vote by completing and mailing the enclosed proxy card to us.

 

 

This document, which serves as a joint proxy statement for the special meetings of USAmeriBancorp and Valley common shareholders and as a prospectus for the shares of Valley common stock to be issued in connection with the merger to USAmeriBancorp common shareholders, the shares of Valley Series C preferred stock that may be issued in connection with the merger to USAmeriBancorp preferred shareholders and the warrants to purchase shares of Valley common stock that may be issued in connection with the merger to USAmeriBancorp warrant holders, gives you detailed information about each respective company’s special meeting and the merger. Please carefully read this entire document, including the “Risk Factors” beginning on page 39 for a discussion of the risks related to the proposed merger. You can also obtain information about Valley from documents that it has filed with the Securities and Exchange Commission.

 

Joseph Chillura		Gerald H. Lipkin
President and Chief Executive Officer		Chairman of the Board and Chief Executive Officer
USAmeriBancorp, Inc.		Valley National Bancorp

Neither the Securities and Exchange Commission, nor any bank regulatory agency, nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The securities to be issued in connection with the merger are not savings accounts, deposits or other obligations of any bank or savings association and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

This joint proxy statement-prospectus is dated [●], 2017, and is first being mailed to USAmeriBancorp and Valley shareholders on [●], 2017.

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HOW TO GET COPIES OF RELATED DOCUMENTS

This document incorporates important business and financial information about Valley National Bancorp that is not included in or delivered with this document. Valley National Bancorp and USAmeriBancorp, Inc. shareholders may receive this information free of charge by writing or calling Investor Relations, Dianne Grenz, Valley National Bancorp, 1455 Valley Road, Wayne, New Jersey 07470; telephone number (973) 305-4005.

Valley will respond to your request as soon as practicable by sending the requested documents by first class mail or other equally prompt means. In order to ensure timely delivery of the documents in advance of the meeting, any request must be made by December 7, 2017.

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USAmeriBancorp, Inc.

4790 140th Avenue North

Clearwater, Florida 33762

NOTICE OF SPECIAL MEETING OF COMMON SHAREHOLDERS

TO BE HELD ON DECEMBER 14, 2017

At the direction of the Board of Directors of USAmeriBancorp, Inc., NOTICE IS HEREBY GIVEN that a special meeting of common shareholders of USAmeriBancorp, Inc. will be held at USAmeriBank, 4790 140^th Avenue North, Clearwater, FL 33762, on December 14, 2017, at 10:00 a.m. (local time) to consider and vote upon the following matters:

 

(1)

Approval of the Agreement and Plan of Merger, dated as of July 26, 2017, between Valley National Bancorp and USAmeriBancorp, Inc. pursuant to which USAmeriBancorp, Inc. will merge with and into Valley National Bancorp; and

 

(2)

Approval of a proposal to authorize the Board of Directors to adjourn or postpone the special meeting to a later date, if necessary or appropriate, to solicit additional proxies in favor of approval of the merger agreement or to vote on other matters properly before such special meeting.

The Board of Directors has fixed October 26, 2017, as the record date for the determination of the common shareholders entitled to notice of and to vote at the special meeting, and only common shareholders of record on said date will be entitled to receive notice of and to vote at said meeting.

Holders of USAmeriBancorp, Inc. common stock who comply with the provisions of Florida law relating to appraisal rights applicable to the merger are entitled to be paid, in cash, the fair value of their shares of USAmeriBancorp, Inc. common stock in accordance with certain appraisal rights under the Florida appraisal rights law, a copy of which is attached as Appendix D to this document.

The USAmeriBancorp, Inc. Board of Directors unanimously recommends that common shareholders vote:

 

(1)

“FOR” approval of the merger agreement; and

 

(2)

“FOR” approval of the authorization of the Board of Directors to adjourn or postpone the special meeting to a later date, if necessary or appropriate, to solicit additional proxies in favor of approval of the merger agreement or to vote on other matters properly before such special meeting.

By Order of the Board of Directors,

Jennifer W. Steans

Chairman of the Board

Clearwater, Florida

[●], 2017

IMPORTANT - WHETHER YOU PLAN TO ATTEND THE MEETING IN PERSON OR NOT, PLEASE VOTE PROMPTLY BY SUBMITTING YOUR PROXY BY INTERNET, PHONE OR BY COMPLETING, SIGNING, DATING AND RETURNING YOUR PROXY CARD IN THE ENCLOSED ENVELOPE. RETURNING THE PROXY CARD WILL NOT PREVENT YOU FROM VOTING IN PERSON IF YOU ATTEND THE MEETING.

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Valley National Bancorp

1455 Valley Road

Wayne, New Jersey 07470

NOTICE OF SPECIAL MEETING OF COMMON SHAREHOLDERS

TO BE HELD ON DECEMBER 14, 2017

At the direction of the Board of Directors of Valley National Bancorp, NOTICE IS HEREBY GIVEN that a special meeting of common shareholders of Valley National Bancorp will be held at Valley National Bank’s office located at 100 Furler Street, Totowa, New Jersey, on December 14, 2017, at 3:00 p.m. (local time) to consider and vote upon the following matters:

 

(1)

Approval of the issuance of up to 76,334,259 shares of Valley National Bancorp common stock in connection with the merger with USAmeriBancorp, Inc.; and

 

(2)

Approval of a proposal to authorize the Board of Directors to adjourn or postpone the special meeting to a later date, if necessary or appropriate, to solicit additional proxies in favor of approval of the issuance of up to 76,334,259 shares of Valley National Bancorp common stock in connection with the merger with USAmeriBancorp, Inc. or to vote on other matters properly before such special meeting.

The Board of Directors has fixed October 23, 2017, as the record date for the determination of the common shareholders entitled to notice of and to vote at the special meeting, and only common shareholders of record on said date will be entitled to receive notice of and to vote at said meeting.

The Valley National Bancorp Board of Directors unanimously recommends that common shareholders vote:

 

(1)

“FOR” approval of the issuance of up to 76,334,259 shares of Valley National Bancorp common stock in connection with the merger with USAmeriBancorp, Inc.; and

 

(2)

“FOR” approval of the authorization of the Board of Directors to adjourn or postpone the special meeting to a later date, if necessary or appropriate, to solicit additional proxies in favor of approval of the issuance of up to 76,334,259 shares of Valley National Bancorp common stock in connection with the merger with USAmeriBancorp, Inc. or to vote on other matters properly before such special meeting.

By Order of the Board of Directors,

Alan D. Eskow

Secretary

Wayne, New Jersey

[●], 2017

IMPORTANT - WHETHER YOU PLAN TO ATTEND THE MEETING IN PERSON OR NOT, PLEASE VOTE PROMPTLY BY SUBMITTING YOUR PROXY BY INTERNET, PHONE OR BY COMPLETING, SIGNING, DATING AND RETURNING YOUR PROXY CARD IN THE ENCLOSED ENVELOPE. RETURNING THE PROXY CARD WILL NOT PREVENT YOU FROM VOTING IN PERSON IF YOU ATTEND THE MEETING.

 

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TABLE OF CONTENTS

 

		Page
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETINGS			1
SUMMARY			9
What this Document is About			9
USAmeriBancorp Special Meeting			10
Valley Special Meeting			11
The Companies			11
The Merger			12
Other Proposals at USAmeriBancorp Special Meeting			21
Approval of the Issuance of up to 76,334,259 Shares of Valley Common Stock in Connection with the Merger			21
Other Proposal at Valley Special Meeting			22
SUMMARY FINANCIAL DATA OF VALLEY			23
SUMMARY FINANCIAL DATA OF USAMERIBANCORP			26
PRO FORMA FINANCIAL DATA			29
COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA AND COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION			35
RECENT DEVELOPMENTS FOR VALLEY			38
RISK FACTORS			39
FORWARD-LOOKING STATEMENTS			45
CERTAIN INFORMATION ABOUT VALLEY			47
General			47
Valley National Bank			47
CERTAIN INFORMATION ABOUT USAMERIBANCORP			49
Description of Business			49
Management Discussion and Analysis of Financial Condition and Results of Operations			49
INFORMATION ABOUT THE USAMERIBANCORP MEETING			54
Date, Time and Place			54
Purpose			54
Board Recommendations			54
Record Date; Quorum; Required Vote; Voting Agreements			54
Voting Rights; Proxies			55
Solicitation of Proxies			56
INFORMATION ABOUT THE VALLEY MEETING			57
Date, Time and Place			57
Purpose			57
Board Recommendations			57
Record Date; Quorum; Required Vote			57
Voting Rights; Proxies			58
Solicitation of Proxies			58
PROPOSAL 1 OF THE USAMERIBANCORP SPECIAL MEETING – THE MERGER			60
Background of the Merger			60
Recommendation of USAmeriBancorp’s Board of Directors and Reasons for the Merger			62
Valley’s Reasons for the Merger			65
Interests of Certain Persons in the Merger			66
Opinion of USAmeriBancorp’s Financial Advisor			72
Financial Forecasts and Projections Exchanged			85
Regulatory Approvals			86

 

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		Page
Resale Considerations Regarding Valley Common Stock and Preferred Stock			88
Accounting Treatment of the Merger			88
Material Federal Income Tax Consequences of the Merger			88
Appraisal Rights for USAmeriBancorp Common Shareholders			92
THE MERGER AGREEMENT			96
General Description			96
Consideration			96
Treatment of USAmeriBancorp Stock Options, Warrants and Restricted Stock Units			96
Bank Merger			97
Certificate of Incorporation and By-laws			97
Board of Directors			97
Exchange of Shares			98
Representations and Warranties			98
Covenants and Agreements			100
Employment and Director Matters			103
Agreement Not to Solicit Other Offers			103
Costs and Expenses			105
Indemnification and Insurance			105
Conditions to Complete the Merger			105
Termination			106
Termination Fees and Termination Expenses			107
Voting Agreements			108
DESCRIPTION OF VALLEY CAPITAL STOCK			110
General			110
Common Stock			110
Dividend Rights			110
Voting Rights			111
Liquidation Rights			111
Assessment and Redemption			111
Other Matters			111
Valley Series C Preferred Stock			111
Dividend & Repurchase Rights			111
Ranking			111
Liquidation Rights			112
Voting Rights			112
“Blank Check” Preferred Stock			112
COMPARISON OF THE RIGHTS OF SHAREHOLDERS OF VALLEY AND USAMERIBANCORP			114
Authorized Capital Stock			114
Size of Board of Directors			114
Classes and Election of Directors			114
Removal of Directors			115
Filling Vacancies on the Board of Directors			115
Nomination of Director Candidates by Shareholders			115
Proxy Access			116
Calling Special Meetings of Shareholders			116
Notice of Shareholder Proposals			116
Anti-Takeover Provisions; Dissenters’ Appraisal Rights			117
Indemnification of Directors and Officers; Limitation of Liability			119
Amendments to Certificates of Incorporation and By-laws			120

 

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		Page
PROPOSAL 2 OF THE USAMERIBANCORP SPECIAL MEETING – AUTHORIZATION TO VOTE ON ADJOURNMENT OR OTHER MATTERS			122
Vote Required for Approval			122
Recommendation of the USAmeriBancorp Board of Directors			122
PROPOSAL 1 OF THE VALLEY SPECIAL MEETING – APPROVAL OF THE ISSUANCE OF UP TO 76,334,259 SHARES OF VALLEY COMMON STOCK IN CONNECTION WITH THE MERGER			123
Reasons for the Valley Share Issuance Proposal			123
Interests of Valley Officers and Directors			123
Opinion of Valley’s Financial Advisor			123
Vote Required for Approval			135
Recommendation of the Valley Board of Directors			135
PROPOSAL 2 OF THE VALLEY SPECIAL MEETING - AUTHORIZATION TO VOTE ON ADJOURNMENT OR OTHER MATTERS			136
Vote Required for Approval			136
Recommendation of the Valley Board of Directors			136
VALLEY SHAREHOLDER PROPOSALS			137
INFORMATION INCORPORATED BY REFERENCE			138
OTHER MATTERS			139
LEGAL OPINION			139
EXPERTS			139
CONSOLIDATED FINANCIAL STATEMENTS OF USAMERIBANCORP, INC. INDEX TO FINANCIAL STATEMENTS			F-1
APPENDIX A     AGREEMENT AND PLAN OF MERGER			A-1
APPENDIX B     OPINION OF SANDLER O’NEILL  & PARTNERS, L.P.			B-1
APPENDIX C     OPINION OF KEEFE, BRUYETTE  & WOODS, INC.			C-1
APPENDIX D     FLORIDA APPRAISAL RIGHTS STATUTES			D-1

 

 

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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETINGS

Q: WHAT IS THE PURPOSE OF THIS DOCUMENT?

A: This document serves as both a joint proxy statement of USAmeriBancorp, Inc. (“USAmeriBancorp”) and Valley National Bancorp (“Valley”) and a prospectus of Valley. As a joint proxy statement, it is being provided to USAmeriBancorp common shareholders because the USAmeriBancorp Board of Directors is soliciting their proxy for use at the USAmeriBancorp special meeting of common shareholders at which the USAmeriBancorp common shareholders will consider and vote on (i) approval of the merger agreement between USAmeriBancorp and Valley and (ii) approval of the authorization of the USAmeriBancorp Board of Directors to adjourn or postpone the USAmeriBancorp special meeting to a later date, if necessary or appropriate, to solicit additional proxies in favor of approval of the merger agreement or to vote on other matters properly before such special meeting (the “USAmeriBancorp adjournment proposal”). As a joint proxy statement, it is also being provided to Valley common shareholders because the Valley Board of Directors is soliciting their proxy for use at the Valley special meeting of common shareholders at which the Valley common shareholders will consider and vote on (i) approval of the issuance of up to 76,334,259 shares of Valley common stock in connection with the merger (the “Valley share issuance proposal”) and (ii) approval of the authorization of the Valley Board of Directors to adjourn or postpone the Valley special meeting to a later date, if necessary or appropriate, to solicit additional proxies in favor of approval of the Valley share issuance proposal or to vote on other matters properly before such special meeting (the “Valley adjournment proposal”). The 76,334,259 shares that Valley common shareholders are being asked to approve is the maximum number of shares that would be issuable in the transaction, including shares of Valley common stock underlying Valley warrants, Valley stock options and Valley restricted stock units to be issued in exchange for USAmeriBancorp warrants, USAmeriBancorp stock options and USAmeriBancorp restricted stock units, respectively, and assuming that Valley’s volume-weighted average share price during the 30 consecutive trading day period ending 5 trading days prior to closing (the “average closing price”) is $10.00. Valley expects substantially fewer shares of Valley common stock will be issued in the merger. Valley and USAmeriBancorp may each terminate the merger agreement if the average closing price is below $11.00. As a prospectus, it is being provided to USAmeriBancorp common shareholders because Valley is offering to exchange shares of its common stock for their shares of USAmeriBancorp common stock upon completion of the merger, to holders of USAmeriBancorp’s noncumulative perpetual redeemable preferred stock, Series C (the “USAmeriBancorp Series C preferred stock”), because Valley may offer to exchange shares of its noncumulative perpetual redeemable preferred stock, Series C (the “Valley Series C preferred stock”), for their shares of USAmeriBancorp Series C preferred stock upon completion of the merger, and to holders of USAmeriBancorp warrants because Valley is offering to exchange warrants to purchase shares of its common stock for their USAmeriBancorp warrants upon completion of the merger.

Q: WHAT WILL USAMERIBANCORP COMMON SHAREHOLDERS RECEIVE IN THE MERGER?

A: Upon completion of the merger, USAmeriBancorp common shareholders will receive 6.100 shares of Valley common stock for each share of USAmeriBancorp common stock that they hold, subject to adjustment as described below and subject to the payment of cash in lieu of fractional shares. Subject to the termination rights set forth below, in the event the average closing price is less than $11.50, then Valley will adjust the 6.100 exchange ratio (or, in lieu of such adjustment, make an equivalent cash payment to USAmeriBancorp common shareholders) so that USAmeriBancorp common shareholders receive $69.00 in Valley common stock for each share of USAmeriBancorp common stock that they hold. The adjustment to the exchange ratio if the average closing price is less than $11.50 is not linear; therefore if the average closing price is between $11.32 and $11.49, the exchange ratio will decrease slightly and if the average closing price is less than $11.32, the exchange ratio will increase. Subject to the termination rights set forth below, in the event the average closing price is greater than $13.00, then Valley will decrease the 6.100 exchange ratio so that USAmeriBancorp common shareholders receive $79.30 in Valley common stock for each share of USAmeriBancorp common stock that they hold. In the event the average closing price is less than $11.00, either Valley or USAmeriBancorp may elect to terminate the merger agreement. In the event the average closing price is greater than $13.50, then USAmeriBancorp may elect

 

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to terminate the merger agreement. In addition, if Valley enters into a definitive acquisition agreement and the average closing price is greater than $13.50, the exchange ratio will be 5.874. In such event, USAmeriBancorp has the right to terminate the merger agreement. The foregoing is referred to in this document as the “merger consideration.” On October 25, 2017, a date immediately preceding the printing of this joint proxy statement-prospectus, the closing price of Valley common stock was $11.54 and the volume-weighted average share price for the 30 trading day period ended October 25, 2017 was $11.65.

Q: I HOLD SHARES OF USAMERIBANCORP SERIES C PREFERRED STOCK. HOW WILL THEY BE TREATED IN THE MERGER?

A: At the effective time of the merger, Valley will, at Valley’s option, either redeem the USAmeriBancorp Series C preferred stock for cash in accordance with the terms of the USAmeriBancorp Series C preferred stock or issue shares of Valley Series C preferred stock, which will have identical rights and preferences as the USAmeriBancorp Series C preferred stock, to USAmeriBancorp preferred shareholders in exchange for their shares of USAmeriBancorp Series C preferred stock.

Q: I HOLD A STOCK OPTION GRANTED BY USAMERIBANCORP. HOW WILL IT BE TREATED IN THE MERGER?

A. Under the merger agreement, each outstanding USAmeriBancorp stock option, whether unvested or vested, will vest only to the extent set forth in the USAmeriBancorp stock plans and option grant agreements. In addition, such USAmeriBancorp stock options will be converted, at the effective time of the merger, into Valley stock options to acquire Valley common stock where the number of shares of Valley common stock underlying such Valley stock options will be equal to the number of shares of USAmeriBancorp common stock underlying such USAmeriBancorp stock options multiplied by the exchange ratio and the exercise price per share of Valley common stock subject to such Valley stock options will be equal to the exercise price per share of USAmeriBancorp common stock subject to such USAmeriBancorp stock option divided by the exchange ratio. Notwithstanding the foregoing, if Valley elects to make a cash payment to USAmeriBancorp common shareholders as described in this document, the exchange ratio will be based on the total merger consideration so that the USAmeriBancorp stock options are converted on economically equivalent terms as outstanding shares of USAmeriBancorp common stock.

Q: I HOLD A WARRANT ISSUED BY USAMERIBANCORP. HOW WILL IT BE TREATED IN THE MERGER?

A. Under the merger agreement, each outstanding USAmeriBancorp warrant will be converted at the effective time of the merger into Valley warrants to acquire Valley common stock where the number of shares of Valley common stock underlying such Valley warrants will be equal to the number of shares of USAmeriBancorp common stock underlying such USAmeriBancorp warrants multiplied by the exchange ratio and the exercise price per share of Valley common stock subject to such Valley warrants will be equal to the exercise price per share of USAmeriBancorp common stock subject to such USAmeriBancorp warrants divided by the exchange ratio. Notwithstanding the foregoing, if Valley elects to make a cash payment to USAmeriBancorp common shareholders as described in this document, the exchange ratio will be based on the total merger consideration so that the USAmeriBancorp warrants are converted on economically equivalent terms.

Q: I HOLD A RESTRICTED STOCK UNIT GRANTED BY USAMERIBANCORP. HOW WILL IT BE TREATED IN THE MERGER?

A. Under the merger agreement, each outstanding USAmeriBancorp restricted stock unit representing the right to receive a share of USAmeriBancorp common stock will vest only to the extent set forth in the USAmeriBancorp stock plans and award agreements. All outstanding restricted stock units that have vested as of the effective time of the merger will be converted into the right to receive the same consideration as holders of USAmeriBancorp common stock are receiving in the merger, and all restricted stock units that are unvested as of the effective time

 

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of the merger will remain outstanding and be converted into the right to receive Valley common stock where the number of shares of Valley common stock underlying such restricted stock units will be equal to the number of shares of USAmeriBancorp common stock underlying such USAmeriBancorp restricted stock units multiplied by the exchange ratio. Notwithstanding the foregoing, if Valley elects to make a cash payment to USAmeriBancorp common shareholders as described in this document, the exchange ratio will be based on the total merger consideration so that the USAmeriBancorp restricted stock units are converted on economically equivalent terms as outstanding shares of USAmeriBancorp common stock.

Q: AS A USAMERIBANCORP COMMON SHAREHOLDER, HOW DO I VOTE?

A: Shares Held of Record. If you are a common shareholder of record of USAmeriBancorp as of the USAmeriBancorp record date, you may submit your proxy before the USAmeriBancorp special meeting in one of the following ways:

 

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Use the toll-free number shown on your proxy card,

 

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Visit the website shown on your proxy card to vote via the Internet,

 

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Complete, sign, date and return the enclosed USAmeriBancorp proxy card in the enclosed postage-paid envelope, or

 

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You may also cast your vote in person at the USAmeriBancorp special meeting.

Shares Held in Brokerage Accounts. If you hold your shares of common stock in street name (that is, you hold your shares of common stock through a broker, bank or other holder of record), your bank, broker or other holder of record will forward proxy materials and voting instructions that you must follow in order to vote your shares of common stock. You may receive more than one proxy card if your shares of common stock are registered in different names or are held in more than one account. If you hold your shares of common stock in street name and plan to attend the USAmeriBancorp special meeting, you should bring either a copy of the voting instruction card provided by your broker or nominee or a recent brokerage statement showing your ownership of USAmeriBancorp common stock as of the USAmeriBancorp record date.

The holders of the USAmeriBancorp Series C preferred stock are not entitled to vote on the approval of the merger agreement or the USAmeriBancorp adjournment proposal.

Q: AS A VALLEY COMMON SHAREHOLDER, HOW DO I VOTE?

A: Shares Held of Record. If you are a common shareholder of record of Valley as of the Valley record date, you may submit your proxy before the Valley special meeting in one of the following ways:

 

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Use the toll-free number shown on your proxy card,

 

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Visit the website shown on your proxy card to vote via the Internet,

 

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Complete, sign, date and return the enclosed Valley proxy card in the enclosed postage-paid envelope, or

 

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You may also cast your vote in person at the Valley special meeting.

Shares Held in Brokerage Accounts. If you hold your shares of common stock in street name (that is, you hold your shares of common stock through a broker, bank or other holder of record), your bank, broker or other holder of record will forward proxy materials and voting instructions that you must follow in order to vote your shares of common stock. You may receive more than one proxy card if your shares of common stock are registered in different names or are held in more than one account. If you hold your shares of common stock in street name and plan to attend the Valley special meeting, you should bring either a copy of the voting instruction card provided by your broker or nominee or a recent brokerage statement showing your ownership of Valley common stock as of the Valley record date.

 

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Shares Held in Valley’s 401(k) Plan. If you are a participant in the Valley National Bank Savings and Investment Plan (a 401(k) plan with an employee stock ownership feature (the “Valley 401(k) Plan”)), you may vote any shares of Valley common stock held in your Valley 401(k) Plan account as of the Valley record date ONLY by following the separate voting instructions provided by the Valley 401(k) Plan’s administrator. You may not vote the applicable shares by proxy or by ballot at the Valley special meeting.

Shares Held in Valley’s Dividend Reinvestment Plan. If you are a participant in Valley’s Dividend Reinvestment Plan, the shares of common stock that are held in your dividend reinvestment account will be voted in the same manner as your other shares of common stock, whether you vote by mail, by telephone or by internet. You may not vote the applicable shares by proxy or by ballot at the Valley special meeting.

Q: WHY IS THE VOTE OF HOLDERS OF USAMERIBANCORP COMMON STOCK IMPORTANT?

A: The approval of the merger agreement requires the affirmative vote of the holders of at least a majority of the USAmeriBancorp common stock outstanding. If you do not vote by proxy, telephone or internet or in person at the USAmeriBancorp special meeting, it will have the effect of a vote AGAINST approval of the merger agreement, but will have no effect on the vote to approve the USAmeriBancorp adjournment proposal. Failure to vote, however, may affect whether a quorum is present.

The USAmeriBancorp adjournment proposal will be approved if the affirmative votes cast by the holders of USAmeriBancorp common stock present in person or represented by proxy at the USAmeriBancorp special meeting and entitled to vote exceed the votes cast in opposition.

The holders of the USAmeriBancorp Series C preferred stock are not entitled to vote on the approval of the merger agreement or the USAmeriBancorp adjournment proposal.

Q: WHAT DOES THE USAMERIBANCORP BOARD OF DIRECTORS RECOMMEND?

A: The USAmeriBancorp Board of Directors has unanimously approved the merger agreement and believes that the proposed merger is advisable to USAmeriBancorp shareholders. Accordingly, the USAmeriBancorp Board of Directors unanimously recommends that USAmeriBancorp common shareholders vote “FOR” approval of the merger agreement.

The USAmeriBancorp Board of Directors also unanimously recommends a vote “FOR” approval of the USAmeriBancorp adjournment proposal.

Q: WHY IS THE VOTE OF HOLDERS OF VALLEY COMMON STOCK IMPORTANT?

A: The approval by Valley common shareholders is required for Valley to issue up to 76,334,259 shares of common stock in connection with the merger, which is a condition to closing of the merger. The 76,334,259 shares that Valley common shareholders are being asked to approve is the maximum number of shares that would be issuable in the transaction, including shares of Valley common stock underlying Valley warrants, Valley stock options and Valley restricted stock units to be issued in exchange for USAmeriBancorp warrants, USAmeriBancorp stock options and USAmeriBancorp restricted stock units, respectively, and assuming that the average closing price of Valley common stock is $10.00. Valley expects substantially fewer shares of Valley common stock will be issued in the merger. Valley and USAmeriBancorp may each terminate the merger agreement if the average closing price is below $11.00. Accordingly, if Valley common shareholders fail to approve the issuance of such shares of Valley common stock in connection with the merger, Valley cannot complete the merger. Approval of the Valley share issuance proposal requires the affirmative vote of a majority of the votes cast by the holders of Valley common stock at the Valley special meeting.

The Valley adjournment proposal requires the affirmative vote of a majority of the votes cast by the holders of Valley common stock at the Valley special meeting.

 

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If you do not vote by proxy, telephone or internet or in person at the Valley special meeting, it will have no effect on the vote to approve either of these proposals but may affect whether a quorum is present.

Q: WHAT DOES THE VALLEY BOARD OF DIRECTORS RECOMMEND?

A: The Valley Board of Directors has unanimously approved the merger and thereby the issuance of up to 76,334,259 shares of common stock in connection with the merger (subject to Valley’s right to terminate the merger if the average closing price is less than $11.00) and unanimously recommends that you vote “FOR” approval of the Valley share issuance proposal. Valley expects substantially fewer shares of Valley common stock will be issued in the merger.

The Valley Board of Directors also unanimously recommends a vote “FOR” approval of the Valley adjournment proposal.

Q: IF MY SHARES OF COMMON STOCK ARE HELD IN STREET NAME BY MY BROKER, WILL MY BROKER AUTOMATICALLY VOTE MY SHARES OF COMMON STOCK FOR ME?

A: No. Your broker cannot vote your shares of USAmeriBancorp or Valley common stock, as applicable, without instructions from you. You should instruct your broker as to how to vote your shares of common stock, following the directions your broker provides to you. Please check the voting form used by your broker. Without instructions, your shares of common stock will not be voted at your respective company’s special meeting, which will have the effects described above.

Q: WHAT IF I ABSTAIN FROM VOTING OR FAIL TO INSTRUCT MY BROKER?

A: Abstentions will count as shares of USAmeriBancorp or Valley common stock, as applicable, represented and entitled to vote at the respective company’s special meeting for purposes of determining a quorum but will not be counted as votes cast. Accordingly, abstentions will have no effect on any of the proposals at the USAmeriBancorp or Valley special meetings other than the proposal to approve the merger agreement at the USAmeriBancorp special meeting where abstentions are effectively a vote AGAINST the merger agreement. “Broker non-votes” are proxies received from brokers who, in the absence of specific voting instructions from beneficial owners of shares of USAmeriBancorp or Valley common stock, as applicable, held in brokerage name, are unable to vote such shares in those instances where discretionary voting by brokers is not permitted. Broker non-votes will be counted toward a quorum at the USAmeriBancorp special meeting and the Valley special meeting, as applicable, and will have the effect of a vote at the USAmeriBancorp special meeting AGAINST approval of the merger agreement, but will have no effect on any other proposals at the USAmeriBancorp or Valley special meetings.

Q: CAN I CHANGE MY VOTE AFTER I HAVE DELIVERED MY PROXY?

A: You may revoke your grant of a proxy at any time before it is voted by:

 

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filing a written revocation of the proxy with the Secretary of USAmeriBancorp or Valley, as the case may be;

 

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executing a later Internet or telephone vote;

 

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submitting a signed proxy card bearing a later date to the Secretary of USAmeriBancorp or Valley, as the case may be; or

 

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attending and voting in person at the respective company’s special meeting.

USAmeriBancorp common shareholders should send written revocations to Victoria Alderman, Secretary, USAmeriBancorp, Inc., 4790 140th Avenue North, Clearwater, Florida 33762. Attendance at the USAmeriBancorp special meeting will not in and of itself revoke a proxy, unless you choose to cast a ballot at such special meeting.

 

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Valley common shareholders should send written revocations to Alan D. Eskow, Secretary, Valley National Bancorp, 1455 Valley Road, Wayne, New Jersey 07470. Attendance at the Valley special meeting will not in and of itself revoke a proxy, unless you choose to cast a ballot at such special meeting.

If you use the Internet, you can change your vote at the Internet address shown on your USAmeriBancorp or Valley proxy card, as applicable. The Internet voting system for USAmeriBancorp shareholders is available 24 hours a day until 11:59 p.m., Eastern Time, on December 13, 2017. The Internet voting system for Valley shareholders is available 24 hours a day until 11:59 p.m., Eastern Time, on December 13, 2017.

If you vote by telephone, you can change your vote by using the toll free telephone number shown on your USAmeriBancorp or Valley proxy card, as applicable. The telephone voting system for USAmeriBancorp shareholders is available 24 hours a day in the United States until 11:59 p.m., Eastern Time, on December 13, 2017. The telephone voting system for Valley shareholders is available 24 hours a day in the United States until 11:59 p.m., Eastern Time, on December 13, 2017.

Valley common shareholders may revoke their instructions to the Valley 401(k) Plan’s administrator with respect to voting of the shares of common stock held in their Valley 401(k) Plan account by submitting to the Valley 401(k) Plan administrator a signed instruction card bearing a later date, provided that such new instruction card must be received by the Valley 401(k) Plan administrator on or prior to the last date for submission of such instructions with respect to the Valley special meeting designated in the separate voting instructions provided by the Valley 401(k) Plan’s administrator.

Q: IF I AM A HOLDER OF USAMERIBANCORP COMMON STOCK OR USAMERIBANCORP SERIES C PREFERRED STOCK WITH SHARES REPRESENTED BY STOCK CERTIFICATES, SHOULD I SEND IN MY USAMERIBANCORP STOCK CERTIFICATES NOW?

A: No. Following the merger, USAmeriBancorp common shareholders will receive a letter of transmittal from American Stock Transfer & Trust Company, who has been appointed as the exchange agent for the USAmeriBancorp common stock, which will provide them with instructions as to how they will exchange their USAmeriBancorp common stock for Valley common stock. The shares of Valley common stock that USAmeriBancorp common shareholders will receive in the merger will be issued in book-entry form. Please do not send in USAmeriBancorp stock certificates with the USAmeriBancorp proxy card.

Holders of USAmeriBancorp Series C preferred stock should also not send in their USAmeriBancorp stock certificates at this time. Following the merger, holders of USAmeriBancorp Series C preferred stock will receive a letter of transmittal from Valley National Bank, which is acting as the exchange agent for the USAmeriBancorp Series C preferred stock, which will provide them with instructions as to how they redeem their USAmeriBancorp Series C preferred stock for cash or exchange their USAmeriBancorp Series C preferred stock for Valley Series C preferred stock, depending on what action Valley decides to take, at its option, with respect to the USAmeriBancorp Series C preferred stock.

Q: WHAT SHOULD USAMERIBANCORP COMMON SHAREHOLDERS DO IF THEY HOLD THEIR SHARES OF USAMERIBANCORP COMMON STOCK IN BOOK-ENTRY FORM?

A: USAmeriBancorp common shareholders are not required to take any specific actions if their shares of USAmeriBancorp common stock are held in book-entry form. After the completion of the merger, shares of USAmeriBancorp common stock held in book-entry form will automatically be exchanged for shares of Valley common stock in book-entry form.

Q: WHO CAN USAMERIBANCORP SHAREHOLDERS CONTACT IF THEY CANNOT LOCATE THEIR USAMERIBANCORP STOCK CERTIFICATE(S)?

A: If USAmeriBancorp shareholders are unable to locate their original USAmeriBancorp stock certificate(s), they should contact Brenda Crum, Assistant Vice President, Senior Executive to the Board/Shareholder

 

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Relations, USAmeriBancorp, Inc., 4790 140th Avenue North, Clearwater, Florida 33762; telephone number (727) 260-6460.

Q: WHAT ARE THE TAX CONSEQUENCES OF THE MERGER TO USAMERIBANCORP SHAREHOLDERS?

A: We expect that for federal income tax purposes, the merger generally will not be a taxable event to USAmeriBancorp common shareholders. It is a condition to USAmeriBancorp’s obligation to complete the merger that USAmeriBancorp receive an opinion from its tax counsel substantially to the effect that the merger will qualify as a transaction that is generally tax-free to USAmeriBancorp common shareholders for federal income tax purposes. The federal income tax consequences to holders of USAmeriBancorp Series C preferred stock who receive shares of Valley Series C preferred stock in exchange for their shares of USAmeriBancorp Series C preferred stock will depend on the personal circumstances of the shareholder and the treatment of the applicable shares of USAmeriBancorp Series C preferred stock exchanged and the Valley Series C preferred stock received by such holders.

We urge USAmeriBancorp shareholders to consult with their tax advisors to gain a full understanding of the tax consequences of the merger to them. Tax matters are very complicated, and, in many cases, the tax consequences of the merger will depend on USAmeriBancorp shareholders’ particular facts and circumstances. See “Proposal 1 of the USAmeriBancorp Special Meeting – The Merger – Material Federal Income Tax Consequences of the Merger,” beginning at page 88.

Q: DO USAMERIBANCORP COMMON SHAREHOLDERS HAVE THE RIGHT TO DISSENT FROM THE MERGER?

A: Yes. If you are a USAmeriBancorp common shareholder and want to exercise appraisal rights and receive the fair value of your shares of USAmeriBancorp common stock in cash instead of the merger consideration, then you must file a written objection with USAmeriBancorp prior to the USAmeriBancorp special meeting stating, among other things, that you will exercise your right to dissent if the merger is completed. Also, you may not vote in favor of the merger agreement and must follow other procedures, both before and after the special meeting, as described in Appendix D to this joint proxy statement-prospectus. Note that if you return a signed proxy card without voting instructions or with instructions to vote “FOR” the merger agreement, then your shares will automatically be voted in favor of the merger agreement and unless you revoke your proxy before it is voted, you will lose all appraisal rights available under Florida law. A summary of these provisions can be found under “Proposal 1 of the USAmeriBancorp Special Meeting – The Merger – Appraisal Rights for USAmeriBancorp Shareholders,” beginning at page 92. Due to the complexity of the procedures for exercising the right to seek appraisal, USAmeriBancorp shareholders who are considering exercising such rights are encouraged to seek the advice of legal counsel. Failure to strictly comply with the applicable Florida law provisions will result in the loss of the right of appraisal.

Q: ARE THERE ANY REQUIRED REGULATORY OR OTHER CONDITIONS TO THE MERGER?

A: Yes. The merger must be approved by each of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) and the Office of the Comptroller of the Currency (the “OCC”). In addition, the merger agreement must be approved by the USAmeriBancorp common shareholders and the Valley share issuance proposal must be approved by Valley common shareholders. As of the date of this joint proxy statement-prospectus, Valley has received approval of the merger from each of the Federal Reserve Board and the OCC.

While Valley common shareholders are not voting on approval of the merger agreement, they effectively have a vote to approve the merger agreement because they have a vote to approve the Valley share issuance proposal, which is required to consummate the merger.

 

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Completion of the merger is also subject to certain other conditions, including there being no material adverse change in the financial condition of USAmeriBancorp. See “The Merger Agreement – Conditions to Complete the Merger,” beginning at page 105.

Q: IS THERE OTHER INFORMATION I SHOULD CONSIDER?

A: Yes. Much of the business and financial information about Valley that may be important to you is not included in this document. Instead, that information is incorporated by reference to documents separately filed by Valley with the Securities and Exchange Commission (the “SEC”). This means that Valley may satisfy its disclosure obligations to you by referring you to one or more documents separately filed by it with the SEC. See “Information Incorporated by Reference” beginning at page 138 for a list of documents that Valley has incorporated by reference into this joint proxy statement-prospectus and for instructions on how to obtain copies of those documents. The documents are available to you without charge.

Q: WHAT IF THERE IS A CONFLICT BETWEEN DOCUMENTS?

A: You should rely on the LATER FILED DOCUMENT. Information in this joint proxy statement-prospectus may update information contained in one or more of the Valley documents incorporated by reference. Similarly, information in documents that Valley may file after the date of this joint proxy statement-prospectus may update information contained in this joint proxy statement-prospectus or information contained in previously filed documents. Later dated documents filed with the SEC and incorporated by reference update and, in the event of a conflict, supersede earlier documents filed with the SEC.

Q: WHEN DO YOU EXPECT TO COMPLETE THE MERGER?

A: We are working toward completing the merger as quickly as possible and intend to close the merger in the first quarter of 2018. We cannot close the merger until after USAmeriBancorp common shareholders approve the merger agreement, the Valley common shareholders approve the Valley share issuance proposal and all regulatory approvals have been obtained.

Q: WHO SHOULD I CALL WITH QUESTIONS OR TO OBTAIN ADDITIONAL COPIES OF THIS JOINT PROXY STATEMENT-PROSPECTUS?

A: If you are a USAmeriBancorp shareholder and have questions about the USAmeriBancorp special meeting or if you need additional copies of this joint proxy statement-prospectus, you should contact:

Brenda Crum

Assistant Vice President, Senior Executive to the Board/Shareholder Relations

USAmeriBancorp, Inc.

4790 140th Avenue North

Clearwater, Florida 33762

Telephone number: (727) 260-6460

If you are a Valley shareholder and have questions about the Valley special meeting or if you need additional copies of this joint proxy statement-prospectus, you should contact:

Dianne Grenz

Executive Vice President

Valley National Bancorp

1455 Valley Road

Wayne, New Jersey 07470

Telephone number: (973) 305-4005

 

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RISK FACTORS

In addition to the other information included and incorporated by reference in this document, including the information addressed in “Forward-Looking Statements” beginning on page 45, USAmeriBancorp shareholders should consider the risks described below in determining whether to approve the merger agreement and Valley shareholders should consider the matters described below in determining whether to approve the Valley share issuance proposal.

USAmeriBancorp shareholders cannot be sure of the market value of the merger consideration they will receive because the market price of Valley common stock may fluctuate and the exchange ratio may be adjusted.

Upon completion of the merger, USAmeriBancorp common shareholders will be entitled to receive 6.100 shares of Valley common stock for each share of USAmeriBancorp common stock that they hold, subject to adjustment as described below and subject to the payment of cash in lieu of fractional shares. Subject to the termination rights set forth below, in the event the average closing price is less than $11.50, then Valley will adjust the 6.100 exchange ratio (or, in lieu of such adjustment, make an equivalent cash payment to USAmeriBancorp common shareholders) so that USAmeriBancorp common shareholders receive $69.00 in Valley common stock for each share of USAmeriBancorp common stock that they hold. The adjustment to the exchange ratio if the average closing price is less than $11.50 is not linear; therefore if the average closing price is between $11.32 and $11.49, the exchange ratio will decrease slightly and if the average closing price is less than $11.32, the exchange ratio will increase. Subject to the termination rights set forth below, in the event the average closing price is greater than $13.00, then Valley will decrease the 6.100 exchange ratio so that USAmeriBancorp common shareholders receive $79.30 in Valley common stock for each share of USAmeriBancorp common stock that they hold. In the event the average closing price is less than $11.00, either Valley or USAmeriBancorp may elect to terminate the merger agreement. In the event the average closing price is greater than $13.50, then USAmeriBancorp may elect to terminate the merger agreement. In addition, if Valley enters into a definitive acquisition agreement and the average closing price is greater than $13.50, the exchange ratio will be 5.874. In such event, USAmeriBancorp has the right to terminate the merger agreement. The intent of the foregoing is that USAmeriBancorp’s common shareholders will receive at the closing of the merger Valley common stock with a value (based on the average closing price) of between $69.00 and $79.30 for each share of USAmeriBancorp common stock they own.

At or prior to the consummation of the merger, Valley will determine, in its sole discretion, whether to issue shares of Valley Series C preferred stock to the holders of the outstanding USAmeriBancorp Series C preferred stock or to redeem the USAmeriBancorp Series C preferred stock for cash in accordance with its terms. If Valley determines to issue shares of Valley Series C preferred stock to the holders of the outstanding USAmeriBancorp Series C preferred stock, such shares of Valley Series C preferred stock will have identical rights and preferences as the USAmeriBancorp Series C preferred stock.

The market value of the merger consideration may vary from the closing price of Valley common stock on the date we announced the merger, on the date that this document is being mailed to USAmeriBancorp shareholders, on the date of the special meeting of USAmeriBancorp common shareholders and on the date we complete the merger and thereafter. Any change in the market price of Valley common stock prior to completion of the merger will affect the market value of the merger consideration that USAmeriBancorp common shareholders will receive upon completion of the merger. Accordingly, at the time of the USAmeriBancorp special meeting, USAmeriBancorp common shareholders will not know or be able to calculate the market value of the merger consideration they would receive upon completion of the merger except that they will receive between $69.00 and $79.30 for each share of USAmeriBancorp common stock they own if the merger is completed.

Other than the adjustment in the event the average closing price falls below $11.50 or rises above $13.00 prior to the closing of the merger, there will be no adjustment to the merger consideration for changes in the

 

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market price of either shares of Valley common stock or shares of USAmeriBancorp common stock. Stock price changes may result from a variety of factors, including general market and economic conditions, changes in Valley’s or USAmeriBancorp’s respective businesses, operations and prospects, and regulatory considerations. Many of these factors are beyond Valley’s or USAmeriBancorp’s control. USAmeriBancorp common shareholders should obtain current market quotations for shares of Valley common stock and for shares of USAmeriBancorp common stock before they vote on the merger.

We may fail to realize all of the anticipated benefits of the merger.

The success of the merger will depend, in part, on Valley’s ability to realize anticipated cost savings and to combine the businesses of Valley and USAmeriBancorp in a manner that permits growth opportunities to be realized and does not materially disrupt the existing customer relationships of USAmeriBancorp nor result in decreased revenues due to any loss of customers. However, to realize these anticipated benefits, the businesses of Valley and USAmeriBancorp must be successfully combined. If the combined company is not able to achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected.

Valley and USAmeriBancorp have operated and, until the completion of the merger, will continue to operate independently. The anticipated cost savings from the merger are largely expected to derive from the absorption by Valley of many of USAmeriBancorp’s back-office administrative functions and the conversion of USAmeriBancorp’s operating platform to Valley’s systems. It is possible that the integration process could result in the loss of key employees, as well as the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies, any or all of which could adversely affect Valley’s ability to maintain relationships with clients, customers, depositors and employees after the merger or to achieve the anticipated benefits of the merger. Integration efforts between the two companies will also divert management attention and resources. A failure to successfully navigate the complicated integration process could have an adverse effect on the combined company.

Another expected benefit from the merger is an expected increase in the revenues of the combined company from anticipated sales of Valley’s wide variety of financial products, and from increased lending out of Valley’s substantially larger capital base, to USAmeriBancorp’s existing customers and to new customers in USAmeriBancorp’s market area who may be attracted by the combined company’s enhanced offerings. An inability to successfully market Valley’s products to USAmeriBancorp’s customer base could cause the earnings of the combined company to be less than anticipated.

Valley may be unable to retain USAmeriBancorp’s employees.

The merger involves the integration of two companies that have previously operated independently. The difficulties of combining the operations of the two companies include integrating personnel with diverse business backgrounds, combining different corporate cultures and retaining key employees. The integration of the two companies will require the experience and expertise of certain executive officers of USAmeriBancorp who have agreed to work for Valley for periods of time following the completion of the merger and other key employees who Valley expects to retain. However, Valley may not be successful in retaining those employees who have not agreed to work for Valley for the time period necessary to successfully integrate USAmeriBancorp’s operations with those of Valley. In addition, Valley may not be successful in retaining employees such as loan officers and branch personnel who prefer to work at locally based financial institutions in Florida and Alabama. The loss of USAmeriBancorp employees could have an adverse effect on the business and results of operation of Valley in Florida and Alabama following the merger.

Valley may be unable to retain USAmeriBancorp’s customers or grow the USAmeriBancorp business.

USAmeriBancorp operates in geographic markets, and with customers primarily located, in and around the Tampa, Florida area and Alabama, while Valley’s markets and customers are located primarily in northern and

 

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central New Jersey, New York City and Long Island, New York and southeast and central Florida. Any time there is a change in products, services, ownership, or management of a bank, there is a risk that customers may choose to obtain some or all of their banking products and services from other banks. Valley believes that USAmeriBancorp’s customers will not seek products or services elsewhere as a result of the merger because Valley’s community banking model is similar to USAmeriBancorp’s community banking model. However, as the USAmeriBancorp operations and customers are in new geographic regions for Valley, there can be no assurances that Valley will be able to retain all of USAmeriBancorp’s customers or grow the customer base in the Tampa, Florida area and Alabama.

The market price of Valley common stock after the merger may be affected by factors different from those currently affecting the common stock of USAmeriBancorp or the common stock of Valley.

The businesses of Valley and USAmeriBancorp differ in important respects and, accordingly, the results of operations of the combined company and the market price of the combined company’s shares of common stock may be affected by factors different from those currently affecting the independent results of operations of Valley and USAmeriBancorp. For a discussion of the businesses of Valley and of certain factors to consider in connection with those businesses, see the documents incorporated by reference in this document and referred to under “Information Incorporated by Reference” beginning on page 138.

Valley may reduce or eliminate the cash dividend on its common stock.

Holders of Valley common stock are only entitled to receive such cash dividends as the Valley Board of Directors may declare out of funds legally available for such payments. Although Valley has historically declared cash dividends on its common stock, Valley is not required to do so and may reduce or eliminate its common stock cash dividend in the future depending upon Valley’s results of operations, financial condition or other metrics. This could adversely affect the market price of Valley common stock. Additionally, as a bank holding company, Valley’s ability to declare and pay dividends is dependent on federal regulatory policies and regulations, including the supervisory policies and guidelines of the Federal Reserve Board and the OCC regarding capital adequacy and dividends. Among other things, consultation of the Federal Reserve Board’s supervisory staff is required in advance of Valley’s declaration or payment of a dividend that exceeds its earnings for a period in which the dividend is being paid.

The merger agreement limits USAmeriBancorp’s ability to pursue an alternative acquisition proposal and requires USAmeriBancorp to pay a termination fee of $30 million, plus Valley’s reasonable out of pocket expenses up to $2,000,000, under certain circumstances relating to alternative acquisition proposals.

The merger agreement prohibits USAmeriBancorp from initiating, soliciting, knowingly encouraging or engaging in negotiations with, or providing any information to, any third party with respect to alternative acquisition proposals, subject to limited exceptions. Further, Valley generally has the opportunity to modify the terms of the merger in response to any competing acquisition proposals that may be made before the USAmeriBancorp Board of Directors’ withdrawal or modification of its recommendation to shareholders to approve the merger agreement. The merger agreement also provides for the payment by USAmeriBancorp of a termination fee in the amount of $30 million, plus Valley’s reasonable out of pocket expenses up to $2,000,000, in the event that Valley or USAmeriBancorp terminate the merger agreement for certain reasons. These provisions might discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of USAmeriBancorp. See “The Merger Agreement - Agreement Not to Solicit Other Offers” beginning on page 103.

These provisions could discourage a potential competing acquiror that might have an interest in acquiring USAmeriBancorp from considering or proposing that acquisition, even if it were prepared to pay higher per share consideration proposed to be received or realized in the merger, or might result in a potential competing acquiror to pay a lower price than it might otherwise be prepared to pay because of the added expense of the termination fee.

 

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If either Valley or USAmeriBancorp exercises its right to terminate the merger agreement if the average closing price is below $11.00, the merger would not be completed.

When the closing date of the merger is established, the parties will calculate Valley’s volume-weighted average share price during the 30 consecutive trading day period ending 5 trading days prior to closing, or average closing price. If the average closing price is below $11.00, either Valley or USAmeriBancorp may terminate the merger agreement, in which case the merger would not be completed and the anticipated benefits of completing the merger would not be realized. On October 25, 2017, a date immediately preceding the printing of this joint proxy statement-prospectus, the closing price of Valley common stock was $11.54 and the volume-weighted average share price for the 30 trading day period ended October 25, 2017 was $11.65.

If the merger is not completed, USAmeriBancorp and Valley will have incurred substantial expenses without realizing the expected benefits of the merger.

USAmeriBancorp and Valley have incurred substantial legal, accounting and investment banking expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement. If the merger is not completed, USAmeriBancorp and Valley would have to recognize these expenses without realizing the expected benefits of the merger.

USAmeriBancorp and Valley will be subject to business uncertainties and contractual restrictions while the merger is pending.

Uncertainties about the effect of the merger on their businesses may have an adverse effect on USAmeriBancorp and Valley. These uncertainties may also impair USAmeriBancorp’s ability to attract, retain and motivate strategic personnel until the merger is consummated, and could cause their customers and others that deal with USAmeriBancorp to seek to change their existing business relationship, which could negatively impact Valley upon consummation of the merger. In addition, the merger agreement restricts USAmeriBancorp from taking certain specified actions without Valley’s consent until the merger is consummated or the merger agreement is terminated. These restrictions may prevent USAmeriBancorp from pursuing or taking advantage of attractive business opportunities that may arise prior to the completion of the merger.

The merger is subject to certain closing conditions that, if not satisfied or waived, will result in the merger not being completed.

The merger is subject to customary conditions to closing, including the receipt of required regulatory approvals and approval of the USAmeriBancorp common shareholders. As of the date hereof, regulatory approvals have been received. The closing of the merger is also subject to approval of the Valley share issuance proposal by Valley common shareholders. If any condition to the merger is not satisfied or, where permitted, waived, the merger will not be completed. In addition, Valley and/or USAmeriBancorp may terminate the merger agreement under certain circumstances even if the merger is approved by USAmeriBancorp common shareholders.

If the merger is not completed, certain consequences could materialize, including any adverse effects from a failure to pursue other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger. For more information on closing conditions to the merger agreement, see the section entitled “The Merger Agreement - Conditions to Complete the Merger” beginning on page 105.

USAmeriBancorp’s directors and executive officers have interests in the merger that differ from the interests of USAmeriBancorp’s shareholders.

USAmeriBancorp’s executive officers and directors have interests in the merger that are in addition to, and may be different from, the interests of USAmeriBancorp shareholders generally. With respect to certain

 

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USAmeriBancorp executive officers, these interests include acceleration of vesting and payouts of certain USAmeriBancorp equity compensation awards, the right to receive change-in-control payments and accelerated payouts. In addition, certain USAmeriBancorp executive officers have entered into employment agreements with Valley that will become effective upon the closing of the merger. Furthermore, USAmeriBancorp’s Chairman of the Board will also be joining the Valley Board of Directors upon the closing of the merger. See “Proposal 1 of the USAmeriBancorp Special Meeting - The Merger - Interests of Certain of Persons in the Merger - Interests of USAmeriBancorp Executive Officers and Directors in the Merger” beginning on page 66 for a discussion of these interests.

The shares of Valley common stock to be received by USAmeriBancorp common shareholders as a result of the merger will have different rights from the shares of USAmeriBancorp common stock.

Upon completion of the merger, USAmeriBancorp common shareholders will become Valley common shareholders and their rights as shareholders will be governed by New Jersey law, the Valley Restated Certificate of Incorporation and the Valley By-laws. The rights associated with USAmeriBancorp common stock are different from the rights associated with Valley common stock. Please see “Comparison of the Rights of Shareholders of Valley and USAmeriBancorp” beginning on page 114 for a discussion of the different rights associated with Valley common stock.

USAmeriBancorp common shareholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management.

USAmeriBancorp’s common shareholders currently have the right to vote in the election of USAmeriBancorp’s Board of Directors and on other matters affecting USAmeriBancorp. When the merger occurs, each USAmeriBancorp common shareholder that receives shares of Valley common stock will become a common shareholder of Valley with a percentage ownership of the combined organization that is much smaller than the common shareholder’s percentage ownership of USAmeriBancorp. Because of this, USAmeriBancorp common shareholders will have less influence on the management and policies of Valley than they now have on the management and policies of USAmeriBancorp.

The opinions delivered by the respective financial advisors of USAmeriBancorp and Valley to the parties’ respective boards of directors prior to the signing of the merger agreement do not reflect any changes in circumstances that may have occurred since the date of the respective opinions.

Sandler, USAmeriBancorp’s financial advisor in connection with the proposed merger, has delivered to the Board of Directors of USAmeriBancorp its opinion, dated July 21, 2017, to the effect that, as of such date, the merger consideration was fair to holders of USAmeriBancorp common stock from a financial point of view. KBW, Valley’s financial advisor in connection with the proposed merger, delivered to the Board of Directors of Valley its opinion, dated July 25, 2017, regarding the fairness, from a financial point of view and as of the date of such opinion, to Valley of the exchange ratio in the merger. Neither USAmeriBancorp nor Valley have obtained an updated opinion as of the date of this document from Sandler or KBW, as the case may be.

Changes in the operations and prospects of Valley or USAmeriBancorp, general market and economic conditions and other factors which may be beyond the control of Valley and USAmeriBancorp may have altered the value of Valley or USAmeriBancorp or the prices of shares of Valley common stock and shares of USAmeriBancorp common stock as of the date of this document, or may alter such values and prices by the time the merger is completed. The financial advisors’ opinions do not speak as of any date other than the date of each such opinion. For a description of the opinion that the USAmeriBancorp Board of Directors received from Sandler, please refer to “Proposal 1 of the USAmeriBancorp Special Meeting - The Merger - Opinion of USAmeriBancorp’s Financial Advisor” beginning on page 72. For a description of the opinion that the Valley Board of Directors received from KBW, please refer to “Proposal 1 of the Valley Special Meeting - Issuance of up to 76,334,259 Shares of Valley Common in Connection with the Merger - Opinion of Valley’s Financial

 

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Advisor” beginning on page 123. For a description of the other factors considered by USAmeriBancorp’s Board of Directors in determining whether to approve the merger, please refer to “Proposal 1 of the USAmeriBancorp Special Meeting - The Merger - Recommendation of USAmeriBancorp’s Board of Directors and Reasons for the Merger” beginning on page 62. For a description of the other factors considered by Valley’s Board of Directors in determining whether to approve the merger, please refer to “Proposal 1 of the USAmeriBancorp Special Meeting - The Merger - Valley’s Reasons for the Merger” beginning on page 65.

Valley will be able to issue additional shares of its common stock in the future, which may adversely affect the market price of Valley common stock and dilute the holdings of existing shareholders.

In the future, Valley may issue additional shares of Valley common stock in connection with another acquisition or to increase its capital resources or, if Valley or Valley National Bank’s capital ratios fall below or near the Basel III regulatory required minimums, Valley could be required to raise additional capital by making additional offerings of common stock. Additional common stock offerings may dilute the holdings of Valley’s existing shareholders or reduce the market price of Valley common stock, or both. Valley may also issue additional shares of Valley preferred stock, which may have preferential voting, conversion, redemption or other rights to those of the Valley common stock. The issuance of additional preferred stock may be viewed as having adverse effects upon the holders of common stock and preferred stock. Holders of Valley common stock and preferred stock are not entitled to preemptive rights or other protections against dilution.

 

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FORWARD-LOOKING STATEMENTS

This joint proxy statement-prospectus, including information included or incorporated by reference in this joint proxy statement-prospectus, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about the benefits of the merger between Valley and USAmeriBancorp, including future financial and operating results and performance; statements about Valley’s and USAmeriBancorp’s plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “views,” “seeks,” “estimates,” “predicts,” “continues,” “allows,” “reflects,” “typically,” “usually,” “will,” “should,” “may” or the negative of these terms or words of similar meaning. These forward-looking statements are based upon the current beliefs and expectations of Valley’s and USAmeriBancorp’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond the control of Valley and USAmeriBancorp. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed in these forward-looking statements.

The following factors, among others, including the risks and uncertainties listed in “Risk Factors” beginning on page 39 of this joint proxy statement-prospectus, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

 

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the failure of the parties to satisfy the closing conditions in the merger agreement in a timely manner or at all;

 

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the failure of the common shareholders of USAmeriBancorp to approve the merger agreement;

 

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the failure of the common shareholders of Valley to approve the Valley share issuance proposal;

 

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the failure to satisfy conditions to the merger on the proposed terms and within the proposed timeframe;

 

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disruptions to the businesses of Valley and USAmeriBancorp as a result of the announcement and pendency of the merger;

 

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higher than expected increases in Valley’s or USAmeriBancorp’s loan losses or in the level of nonperforming loans;

 

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the risk that the businesses of Valley and USAmeriBancorp may not be combined successfully, or such combination may take longer or be more difficult, time-consuming or costly to accomplish than expected;

 

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weakness or unexpected decline in the U.S. economy, in particular in New Jersey, the New York Metropolitan area, including Long Island, Florida and Alabama;

 

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higher than expected costs and expenses incurred in connection with the merger, or in connection with potential litigation relating to the merger;

 

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higher than expected charges Valley incurs in connection with marking USAmeriBancorp’s assets to fair value;

 

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unexpected changes in interest rates;

 

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unexpected declines in real estate values within Valley’s and USAmeriBancorp’s market areas;

 

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other than temporary impairments or declines in value in Valley’s or USAmeriBancorp’s investment portfolio;

 

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higher than expected FDIC insurance assessments;

 

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•

the failure of other financial institutions with whom Valley and USAmeriBancorp have trading, clearing, counterparty and other financial relationships;

 

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lack of liquidity to fund Valley’s and USAmeriBancorp’s various cash obligations;

 

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unanticipated reduction in Valley’s and USAmeriBancorp’s deposit base;

 

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government intervention in the U.S. financial system and the effects of, and changes in, trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board;

 

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legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulations) which subject Valley and USAmeriBancorp to additional regulatory oversight and may result in increased compliance costs and/or require Valley and USAmeriBancorp to change their business models;

 

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changes in accounting policies or accounting standards;

 

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Valley’s and USAmeriBancorp’s inability to promptly adapt to technological changes;

 

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Valley’s and USAmeriBancorp’s internal controls and procedures may not be adequate to prevent losses;

 

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the possibility that litigation may be brought pertaining to fiduciary responsibility, environmental laws and other matters or that existing litigation may have unanticipated consequences;

 

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the possibility that the expected benefits of this acquisition will not be fully realized by Valley;

 

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the inability to realize expected cost savings and synergies from the merger of USAmeriBancorp with Valley in the amounts or in the timeframe anticipated;

 

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costs or difficulties relating to integration matters might be greater than expected;

 

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material adverse changes in Valley’s or USAmeriBancorp’s operations or earnings;

 

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the inability to retain USAmeriBancorp’s customers and employees;

 

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cyber-attacks on Valley or USAmeriBancorp causing disruptions or intrusions and leading to unexpected losses; and

 

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other unexpected material adverse changes in Valley’s or USAmeriBancorp’s operations or earnings.

Additional factors that could cause Valley’s and USAmeriBancorp’s results to differ materially from those described in the forward-looking statements can be found in Valley’s filings with the SEC, including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC.

You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this joint proxy statement-prospectus or the date of any document incorporated by reference in this joint proxy statement-prospectus. All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this joint proxy statement-prospectus and attributable to Valley or USAmeriBancorp or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Valley and USAmeriBancorp undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this joint proxy statement-prospectus or to reflect the occurrence of unanticipated events.

 

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CERTAIN INFORMATION ABOUT VALLEY

General

Valley National Bancorp, headquartered in Wayne, New Jersey, is a New Jersey corporation organized in 1983 and is registered as a bank holding company with the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended. In addition to its principal subsidiary, Valley National Bank, Valley owns all of the voting and common shares of GCB Capital Trust III and State Bancorp Capital Trusts I and II through which trust preferred securities were issued.

As of June 30, 2017, Valley had:

 

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consolidated total assets of $23.4 billion;

 

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total deposits of $17.3 billion;

 

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total loans of $17.6 billion; and

 

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total shareholders’ equity of $2.4 billion.

Valley’s principal executive offices and telephone number are:

1455 Valley Road

Wayne, New Jersey 07470

(973) 305-8800

Valley National Bank

Valley National Bank is a national banking association chartered in 1927 under the laws of the United States. Currently, Valley National Bank operates over 200 branch locations throughout northern and central New Jersey, the New York City boroughs of Manhattan, Brooklyn and Queens, Long Island, New York and Florida. Valley National Bank offers a full range of commercial, retail, insurance and wealth management financial services products. Valley National Bank also provides a variety of banking services including automated teller machines, telephone and internet banking, remote deposit capture, overdraft facilities, drive-in and night deposit services, and safe deposit facilities. Valley National Bank also provides certain international banking services to customers including standby letters of credit, documentary letters of credit and related products, and certain ancillary services such as foreign exchange, documentary collections, foreign wire transfers and the maintenance of foreign bank accounts, as well as transaction accounts for non-resident aliens.

Valley National Bank’s wholly-owned subsidiaries are all included in the consolidated financial statements of Valley. These subsidiaries include:

 

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an all-line insurance agency offering property and casualty, life and health insurance;

 

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an asset management adviser that is a registered investment adviser with the SEC;

 

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title insurance agencies in New Jersey, New York and Florida;

 

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subsidiaries which hold, maintain and manage investment assets for Valley National Bank;

 

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a subsidiary which owns and services auto loans;

 

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a subsidiary which specializes in health care equipment and other commercial equipment leases; and

 

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a subsidiary which owns and services New York commercial loans.

Valley National Bank’s subsidiaries also include real estate investment trust subsidiaries (the “REIT subsidiaries”) which own real estate related investments and some of the real estate utilized by Valley National

 

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Bank. Except for Valley National Bank’s REIT subsidiaries, all subsidiaries mentioned above are directly or indirectly wholly owned by Valley National Bank. Because each real estate investment trust must have 100 or more shareholders to qualify as a real estate investment trust, each of Valley National Bank’s REIT subsidiaries has issued less than 20% of its outstanding non-voting preferred stock to individuals, most of whom are current and former (non-executive officer) Valley National Bank employees. Valley National Bank owns the remaining preferred stock and all the common stock of the REIT subsidiaries.

 

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CERTAIN INFORMATION ABOUT USAMERIBANCORP

Description of Business

General

USAmeriBancorp, a Florida corporation, was organized in 2006. Its principal subsidiary is USAmeriBank, a Florida state-chartered commercial bank. USAmeriBancorp is registered as a bank holding company with the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended, and has elected financial holding company status under the Gramm-Leach-Bliley Act. USAmeriBancorp is privately held and its shares are not traded on any national or regional securities exchange. Its shares are quoted on the OTC Pink marketplace under the symbol “USAB”.

USAmeriBank is an independent, non-public bank based in Clearwater, Florida. USAmeriBank is a middle-market financial institution that provides a high-level of personalized service and attention to a targeted customer base. USAmeriBank maintains a branch network of 30 offices located throughout the Tampa Bay, Florida area and the Birmingham, Montgomery and Tallapoosa areas in Alabama.

USAmeriBank’s principal business embraces a traditional community bank philosophy, as it accepts and services deposit account holders from its markets and uses those deposits to make loans to customers within these same markets. USAmeriBank focused on growing long-term relationships with its customers and expanding its position in both the Tampa Bay, Florida and central Alabama markets. Through its experienced team of commercial relationship managers and customer centric approach to banking, USAmeriBank provides differentiated, customized services to a wide variety of clients and industries. USAmeriBank offers traditional deposit retail deposit products, including checking, savings, and term certificate accounts. USAmeriBank provides highly customized lending products including commercial and residential mortgage, commercial loans secured by real estate, commercial & industrial loans, small business loans, and installment loans. Additionally, USAmeriBank offers its commercial clients treasury and cash management services.

USAmeriBank’s deep personal relationships with its customers are built upon the ability to provide a differentiated customer experience that other financial services providers cannot offer. USAmeriBank’s foundation is to deliver a superior level of customer service, supported by quick local decision making and tailored banking solutions.

As of June 30, 2017, USAmeriBancorp had:

 

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consolidated assets of approximately $4.4 billion;

 

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total deposits of $3.5 billion;

 

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total loans of $3.5 billion; and

 

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total shareholders’ equity of $345 million.

USAmeriBancorp’s principal executive offices and telephone number are:

4790 140th Avenue North

Clearwater, Florida 33762

(727) 260-6420

Management Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations for Six Months ended June 30, 2017 and 2016

Total interest income was $83.2 million for the six months ended June 30, 2017, reflecting an increase of $10.9 million when compared to total interest income for the same period in 2016. Interest income earned on the

 

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loan portfolio increased $9.7 million, or 14.8%, to $75.4 million for the six months ended June 30, 2017 from $65.7 million for the six months ended June 30, 2016. The increase in interest income earned on the loan portfolio was mostly due to an increase of $1.1 million in interest income on consumer loans (including consumer real estate), an increase of $5.8 million in interest income on commercial real estate loans and an increase of $2.5 million in commercial and industrial loans. Interest income earned on investment securities increased by $1.0 million, or 17.3%, to $7.0 million for the six months ended June 30, 2017 from $6.0 million for the six months ended June 30, 2016. The increase in interest income earned on investment securities was mostly due to an increase in interest income on municipal and housing revenue bonds.

Interest expense totaled $14.3 million for the six months ended June 30, 2017, an increase of $3.5 million when compared to $10.8 million for the six months ended June 30, 2016. Interest expense on deposits increased by $2.3 million, and interest expense on the subordinated debt increased by $1.1 million, mostly related to $15.0 million of additional subordinated debt issued during March 2017.

Net interest margin was 3.55% for the six months ended June 30, 2017, a decrease of 3 basis points when compared to net interest margin of 3.58% for the same period in 2016. Net interest income totaled $68.9 million for the six months ended June 30, 2017, an increase of $7.4 million, or 12.10%, when compared to $61.5 million for the six months ended June 30, 2016.

The provision for loan losses totaled $1.1 million for the six months ended June 30, 2017, a decrease of $1.8 million when compared to the six months ended June 30, 2016. The decrease in the provision for loan losses was mostly the result of $1.0 million in loan recoveries during the first six months of 2017.

For the six months ended June 30, 2017, non-interest income totaled $10.3 million, an increase of $0.9 million, or 9.2%, when compared to $9.4 million for the first six months of 2016. The increase was mostly related to increases in: (i) trading income on interest swap agreements by $1.3 million; (ii) other income by $0.7 million; (iii) ATM fees by $0.2 million; and (iv) retail banking fees by $0.3 million. These increases were partially offset by a decrease in gain on sale of SBA loans of $0.7 million; a reduction of $0.2 million in income from investment advisory fees; and the recognition of operating losses in the renewable energy tax credit investment funds of $0.4 million.

Non-interest expense totaled $41.9 million for the six months ended June 30, 2017, an increase of $5.2 million, or 14.0%, when compared to the same period in 2016. The increase in non-interest expense was mostly related to increases in: (i) salaries and employee benefits of $3.5 million; (ii) occupancy and equipment of $0.2 million; (iii) regulatory fees of $0.4 million primarily related to asset growth; (iv) data processing of $0.2 million; and (v) other expenses of $0.9 million (mostly related to advertising and charitable contributions).

Financial Condition at June 30, 2017 and December 31, 2016

At June 30, 2017, the Company had assets totaling $4.4 billion, an increase of $229.6 million, or 5.5%, when compared to total assets of $4.2 billion as of December 31, 2016.

Investment securities available-for-sale increased by $33.9 million to $356.6 million at June 30, 2017 from $322.7 million at December 31, 2016. The increase was primarily due to a net increase of $25.5 million in municipal securities and a net increase of $11.2 million in government agency securities. These increases were partially offset by a decrease of $2.8 million in asset backed securities.

At June 30, 2017, the loan portfolio totaled $3.6 billion, an increase of $212.1 million, or 6.3%, when compared to the loan portfolio of $3.4 billion at December 31, 2016. The net increase in loans receivable was reflected in commercial real estate loans (which increased $119.6 million), construction and land development loans (which increased $66.7 million), commercial, financial and agricultural loans (which increased $13.9 million) and residential family loans (which increased $9.3 million).

 

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Other real estate owned totaled $6.2 million, at June 30, 2017, reflecting a decrease of $5.7 million, or 48.0%, when compared to $11.9 million at December 31, 2016. The decrease was mostly related to sales of properties totaling $5.3 million during the six months ended June 30, 2017.

At June 30, 2017, other assets totaled $19.5 million, a decrease of $12.9 million, or 39.7%, when compared to $32.4 million at December 31, 2016. The decrease in other assets was mostly related to a decrease of $1.8 million in the mark-to-market of swap agreements and to a decrease of $11.1 million in refundable income taxes.

Total deposits were $3.5 billion at June 30, 2017, an increase of $52.0 million, or 1.5%, when compared to total deposits of $3.5 billion at December 31, 2016. Advances from the FHLB totaled $377.3 million as of June 30, 2017, reflecting an increase of $152.2 million when compared to December 31, 2016. Subordinated debentures as of June 30, 2017 totaled $82.0 million, an increase of $15.3 million, mostly related to $15.0 million of additional subordinated debt issued during March 2017. Accrued expenses and other liabilities totaled $26.7 million as of June 30, 2017, reflecting a decrease of $11.1 million, or 29.3%, that was mostly related to a decrease of $14.3 million in commitments to invest in renewable energy tax credits and low income housing tax partnerships.

Results of Operations for Year ended December 31, 2016 and 2015

Total interest income was $149.3 million for the year ended December 31, 2016, reflecting an increase of $17.7 million, or 13.4%, when compared to total interest income of $131.6 million for the year ended December 31, 2015. The increase was mostly attributed to interest income earned on the loan portfolio increasing by $16.4 million, or 13.7%, to $135.7 million for the year ended December 31, 2016 from $119.3 million for the year ended December 31, 2015. The increase in interest income earned on the loan portfolio was mostly due to an increase of $0.4 million in interest income on consumer loans (including consumer real estate); an increase of $11.3 million in interest income on commercial real estate loans; and an increase of $4.7 million in commercial and industrial loans. Growth in volume of loans was the main contributor to increased interest income. Interest income on investment securities increased by $1.4 million, or 13.2%, to $12.3 million for the year ended December 31, 2016 from $10.9 million for the year ended December 31, 2015. The increase in interest income on investment securities was mostly due to an increase in interest income on municipal and housing revenue bonds.

Interest expense totaled $23.3 million for the year ended December 31, 2016, an increase of $5.7 million when compared to $17.7 million for the year ended December 31, 2015. Interest expense on deposits increased by $3.3 million, mostly due to an increase of $493.7 million in deposits. Interest expense on the subordinated debt increased by $2.4 million, mostly related to $45.0 million of additional subordinated debt issued during the first quarter of 2016.

Net interest margin was 3.53% for the year ended December 31, 2016, a decrease of 10 basis points when compared to net interest margin of 3.63% for the year ended December 31, 2015. Net interest income totaled $126.0 million for the year ended December 31, 2016, an increase of $12.0 million, or 10.6%, when compared to $114.0 million for the year ended December 31, 2015.

The provision for loan losses totaled $6.0 million for the year ended December 31, 2016, an increase of $0.5 million when compared to the year ended December 31, 2015. The slight increase in the provision for loan losses was mostly related to loan growth, partially offset by increased net recoveries. The loan portfolio increased by $428.3 million when comparing December 31, 2016 to December 31, 2015; however, credit quality in the loan portfolio remained strong, with manageable delinquencies, which resulted in a lower amount of additional provision for loan losses needed.

For the year ended December 31, 2016, non-interest income totaled $14.3 million, reflecting a decrease of $1.9 million when compared to $16.1 million for the year ended December 31, 2015. The decrease was mostly

 

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related to a decrease of $1.3 million in mortgage banking fees and a loss of $3.9 million related to operating losses from investments in renewable energy tax credits (which was offset by a $6.2 million income tax benefit). These decreases were partially offset by increases in: (i) trading income on interest swap agreements of $1.7 million; (ii) gain on sale of SBA loans of $1.6 million; and (iii) retail banking fees of $0.6 million.

Non-interest expense totaled $75.9 million for the year ended December 31, 2016, an increase of $5.6 million when compared to the year ended December 31, 2015. The increase in non-interest expense was mostly related to increases in: (i) salaries and employee benefits of $3.9 million; (ii) occupancy and equipment of $0.5 million; (iii) regulatory fees of $0.5 million primarily related to asset growth; (iv) data processing of $0.6 million with increased transaction volume and data security costs; and (v) professional fees of $0.7 million. These increases were partially offset by a decrease of $0.7 million in other expenses.

Income tax expense totaled $15.0 million for the year ended December 31, 2016, reflecting a decrease of $4.4 million when compared to the year ended December 31, 2015. The effective tax rate was 25.71% and 35.69% as of December 31, 2016 and 2015, respectively. The decrease in income tax expense was mostly related to a tax benefit of $6.2 million resulting from the investments in renewable energy tax credits, partially offset by increased pre-tax earnings.

Results of Operations for Year ended December 31, 2015 and 2014

Total interest income was $131.6 million for the year ended December 31, 2015, reflecting an increase of $13.9 million, or 11.9%, when compared to total interest income of $117.7 million for the year ended December 31, 2014. The increase was mostly attributed to interest income earned on the loan portfolio increasing by $11.8 million, or 11.0%, to $119.3 million for the year ended December 31, 2015 from $107.5 million for the year ended December 31, 2014. The increase in interest income earned on the loan portfolio was mostly due to an increase of $2.4 million in interest income on consumer loans (including consumer real estate), an increase of $7.1 million in interest income on commercial real estate loans and an increase of $2.3 million in commercial and industrial loans. Growth in the volume of loans was the main contributor to increased interest income. Interest income on investment securities increased by $1.7 million, or 18.7%, to $10.9 million for the year ended December 31, 2015 from $9.2 million for the year ended December 31, 2014. The increase in interest income on investment securities was mostly due to an increase in interest income on municipal and housing revenue bonds.

Interest expense totaled $17.7 million for the year ended December 31, 2015, a decrease of $2.5 million when compared to $20.1 million for the year ended December 31, 2014. Interest expense on deposits decreased by $0.2 million due to the capture of lower-rate deposits through wholesale funding strategies and the re-pricing of customer deposits to better align customer rates with market interest rates. Interest expense on advances from the FHLB decreased by $0.2 million, or 6.7%, to $2.2 million for the year ended December 31, 2015 from $2.4 million for the year ended December 31, 2014. Interest expense on subordinated debt decreased by $2.1 million, mostly due to the expenses related to the extinguishment of approximately $3.4 million of subordinated debt at an interest rate of 8% and $24.7 million of subordinated debt at an interest rate of 10% during the first quarter of 2014.

Net interest margin was 3.63% for the year ended December 31, 2015, an increase of 11 basis points when compared to net interest margin of 3.52% for the year ended December 31, 2014. Net interest income totaled $114.0 million for the year ended December 31, 2015, an increase of $16.4 million, or 16.8%, when compared to $97.6 million for the year ended December 31, 2014.

The provision for loan losses totaled $5.5 million for the year ended December 31, 2015, an increase of $2.7 million when compared to the year ended December 31, 2014. The increase in the provision for loan losses was mostly the result of growth of $425.1 million in the loan portfolio during 2015.

For the year ended December 31, 2015, non-interest income totaled $16.1 million, reflecting an increase of $2.5 million when compared to $13.7 million for the year ended December 31, 2014. The increase was mostly

 

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related to increases in: (i) trading income on interest rate contracts of $1.4 million; (ii) mortgage banking fees, net, of $0.9 million; (iii) retail banking fees of $0.4 million; and (iv) other non-interest income of $0.4 million (mostly in the loan fees category). These increases were partially offset by a decrease of $0.7 million in gain on sale of investment securities and a decrease of $0.3 million in fee income from investment advisory services.

Non-interest expense totaled $70.3 million for the year ended December 31, 2015, an increase of $5.6 million when compared to the year ended December 31, 2014. The increase in non-interest expense was mostly related to increases in: (i) salaries and employee benefits of $2.6 million related to normal salary increases; (ii) occupancy and equipment of $0.7 million; (iii) data processing of $0.7 million; and (iv) other expenses of $1.4 million (mostly related to the provision for off balance sheet exposure and an increase in advertising expenses).

Financial Condition at December 31, 2016 and December 31, 2015

At December 31, 2016, the Company had assets totaling $4.2 billion, an increase of $521.0 million, or 14.3%, when compared to $3.6 billion in total assets as of December 31, 2015.

Investment securities available-for-sale increased by $94.1 million, or 41.2%, to $322.7 million at December 31, 2016 from $228.6 million at December 31, 2015. Investment securities held-to-maturity decreased by $8.5 million, or 4.5%, to $182.1 million at December 31, 2016 from $190.6 million at December 31, 2015.

At December 31, 2016, the loan portfolio totaled $3.4 billion, an increase of $428.3 million, or 14.5%, when compared to the loan portfolio of $2.9 billion at December 31, 2015. The net increase in loans receivable was reflected in commercial real estate loans (which increased $231.5 million), construction and land development loans (which increased $47.2 million), commercial, financial and agricultural loans (which increased $94.3 million) and residential family loans (which increased $54.9 million). The allowance for loan losses increased to $39.6 million at December 31, 2016 from $32.7 million at December 31, 2015, mostly related to the growth in the loan portfolio as credit quality metrics improved.

Other investments totaled $24.7 million at December 31, 2016, reflecting an increase of $13.8 million, or 125.9%, when compared to $11.0 million at December 31, 2015. The increase was mostly related to two new investments in low income housing tax credits (totaling $10.5 million) and $8.2 million related to two new renewable energy tax credit investments, which were partially offset by distributions of $4.6 million in several fund investments.

At December 31, 2016, other assets totaled $32.4 million, an increase of $23.6 million when compared to $8.8 million at December 31, 2015. The increase in other assets was primarily related to an increase of $21.7 million in refundable income taxes resulting from two investments in renewable energy tax credit partnerships.

Total deposits were $3.5 billion at December 31, 2016, an increase of $493.7 million, or 16.5%, when compared to total deposits of $3.0 billion at December 31, 2015. Advances from the FHLB totaled $225.1 million as of December 30, 2016, reflecting a decrease of $54.6 million, or 19.5%, when compared to advances from the FHLB of $279.7 million at December 31, 2015. Subordinated debentures totaled $66.6 million as of December 31, 2016, reflecting an increase of $44.9 million, mostly related to $45.0 million of additional subordinated debt issued during March 2016. Accrued expenses and other liabilities totaled $37.8 million as of December 31, 2016, an increase of $18.7 million when compared to $19.1 million at December 31, 2015, mostly related to a net increase of $21.0 million in commitments to invest in tax credit partnerships.

 

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INFORMATION ABOUT THE USAMERIBANCORP MEETING

Date, Time and Place

This document solicits, on behalf of the USAmeriBancorp Board of Directors, proxies to be voted at a special meeting of USAmeriBancorp common shareholders and at any adjournments or postponements thereof. The USAmeriBancorp meeting is scheduled for:

December 14, 2017, at 10:00 a.m. (local time)

USAmeriBank

4790 140^th Avenue North

Clearwater, FL 33762

Purpose

At the meeting, USAmeriBancorp common shareholders will consider and vote on:

 

•

approval of the merger agreement; and

 

•

approval of the USAmeriBancorp adjournment proposal.

Board Recommendations

The USAmeriBancorp Board of Directors unanimously recommends that common shareholders vote FOR:

 

•

approval of the merger agreement; and

 

•

approval of the USAmeriBancorp adjournment proposal.

Record Date; Quorum; Required Vote; Voting Agreements

As of the record date, October 26, 2017, 10,625,534 shares of common stock of USAmeriBancorp were issued and outstanding. The common stock is USAmeriBancorp’s only class of securities entitled to vote, each share being entitled to one vote. The presence at the USAmeriBancorp special meeting, in person or by proxy, of holders of a majority of the issued and outstanding shares of USAmeriBancorp common stock as of the record date is considered a quorum for the transaction of business. If USAmeriBancorp common shareholders submit a properly completed proxy or if they appear at the USAmeriBancorp special meeting to vote in person, their shares of common stock will be considered part of the quorum. Abstentions and broker non-votes will be counted as present to determine if a quorum for the transaction of business is present. In the absence of a quorum, the USAmeriBancorp special meeting will be adjourned or postponed.

The merger cannot be completed without USAmeriBancorp common shareholders’ approval of the merger agreement. The affirmative vote of a majority of the shares of USAmeriBancorp common stock outstanding on the record date is required to approve the merger agreement.

On July 26, 2017, the directors and executive officers of USAmeriBancorp as a group beneficially owned a total of 2,972,236 shares of USAmeriBancorp common stock, representing 28.3% of the issued and outstanding common stock. In connection with the execution of the merger agreement, Valley entered into voting agreements with each USAmeriBancorp director. Pursuant to the voting agreements, the USAmeriBancorp directors have each agreed to vote the shares of common stock of USAmeriBancorp beneficially owned by them (whether solely or jointly with others) in favor of approval of the merger agreement. On the record date, a total of 2,661,243 shares of common stock representing approximately 25.0% of the outstanding USAmeriBancorp common stock are covered by the voting agreements.

 

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Approval of the USAmeriBancorp adjournment proposal requires that the affirmative votes cast by the holders of USAmeriBancorp common stock present in person or represented by proxy at the USAmeriBancorp special meeting and entitled to vote exceed the votes cast in opposition.

The matters to be considered at the USAmeriBancorp special meeting are of great importance to the common shareholders of USAmeriBancorp. Accordingly, you are urged to read and carefully consider the information presented in this joint proxy statement-prospectus, and to complete, date, sign and promptly return the enclosed proxy in the enclosed postage paid envelope as instructed on the proxy card or to vote by Internet or telephone.

Voting Rights; Proxies

If USAmeriBancorp common shareholders properly execute a proxy card and send it to USAmeriBancorp in the enclosed envelope in a timely manner, their proxy will be voted in accordance with the instructions they indicate, unless they revoke their proxy prior to the vote. If USAmeriBancorp common shareholders send USAmeriBancorp a proxy card that does not instruct USAmeriBancorp how to vote, their shares will be voted (1) “FOR” approval of the merger agreement and (2) “FOR” approval of the USAmeriBancorp adjournment proposal.

USAmeriBancorp common shareholders may revoke their grant of a proxy at any time before it is voted by:

 

(a)

filing a written revocation of the proxy with the Secretary of USAmeriBancorp;

 

(b)

executing a later Internet or telephone vote;

 

(c)

submitting a signed proxy card bearing a later date; or

 

(d)

attending and voting in person at the USAmeriBancorp special meeting.

Written revocations should be sent to Victoria Alderman, Secretary, USAmeriBancorp, Inc., 4790 140th Avenue North, Clearwater, Florida 33762. Attendance at the USAmeriBancorp special meeting will not in and of itself revoke a proxy, unless you choose to cast a ballot at such special meeting.

If USAmeriBancorp common shareholders use the Internet, they can change their vote at the Internet address shown on their proxy card. The Internet voting system is available 24 hours a day until 11:59 p.m., Eastern Time, on December 13, 2017.

If USAmeriBancorp common shareholders vote by telephone, they can change their vote by using the toll free telephone number shown on their proxy card. The telephone voting system is available 24 hours a day in the United States until 11:59 p.m., Eastern Time, on December 13, 2017.

The inspectors of election appointed for the USAmeriBancorp special meeting, who will determine whether or not a quorum is present, will tabulate votes cast by proxy or in person at such special meeting. Abstentions and “broker non-votes” will be treated as shares that are present and entitled to vote for purposes of determining the presence of a quorum. Abstentions occur when proxies are marked as abstentions, or when shareholders appear in person but abstain from voting. “Broker non-votes” occur when a broker indicates on a proxy that it does not have discretionary authority regarding certain shares. Abstentions are effectively a vote AGAINST the merger agreement but will have no effect on the USAmeriBancorp adjournment proposal at the USAmeriBancorp special meeting. Broker non-votes will have the effect of a vote AGAINST the merger agreement but will have no effect on USAmeriBancorp adjournment proposal at the USAmeriBancorp special meeting.

If USAmeriBancorp common shareholders do not vote by proxy, telephone or internet or in person at the USAmeriBancorp special meeting, it will have the effect of a vote AGAINST the merger agreement, but will have no effect on the vote to approve the USAmeriBancorp adjournment proposal. Failure to vote, however, may also affect whether a quorum is present.

 

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Solicitation of Proxies

USAmeriBancorp will bear all costs of soliciting proxies for the USAmeriBancorp special meeting. In addition to solicitations by mail, the directors, officers and employees of USAmeriBancorp may solicit proxies for the USAmeriBancorp special meeting from USAmeriBancorp common shareholders in person or by telephone. These directors, officers and employees will not be specifically compensated for their services. USAmeriBancorp will also make arrangements with brokerage firms and other custodians, nominees and fiduciaries to send proxy materials to their principals and will reimburse those parties for their expenses in doing so.

 

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INFORMATION ABOUT THE VALLEY MEETING

Date, Time and Place

This document solicits, on behalf of the Valley Board of Directors, proxies to be voted at a special meeting of Valley common shareholders and at any adjournments or postponements thereof. The Valley meeting is scheduled for:

December 14, 2017, at 3:00 p.m. (local time)

Valley National Bank’s Office

100 Furler Street

Totowa, New Jersey

Purpose

At the meeting, Valley common shareholders will consider and vote on:

 

•

approval of the issuance of up to 76,334,259 shares of Valley common stock in connection with the merger; and

 

•

approval of the Valley adjournment proposal.

Board Recommendations

The Valley Board of Directors unanimously recommends that shareholders vote FOR:

 

•

approval of the issuance of up to 76,334,259 shares of Valley common stock in connection with the merger; and

 

•

approval of the Valley adjournment proposal.

Record Date; Quorum; Required Vote

As of the record date, October 23, 2017, 264,313,414 shares of common stock of Valley were issued and outstanding. The common stock is Valley’s only class of securities entitled to vote, each share being entitled to one vote. The presence at the Valley special meeting, in person or by proxy, of holders of a majority of the issued and outstanding shares of Valley common stock as of the record date is considered a quorum for the transaction of business. If Valley common shareholders submit a properly completed proxy or if they appear at the Valley special meeting to vote in person, their shares of common stock will be considered part of the quorum. Abstentions and broker non-votes will be counted as present to determine if a quorum for the transaction of business is present. In the absence of a quorum, the Valley special meeting will be adjourned or postponed.

The merger cannot be completed without Valley common shareholders’ approval of the issuance of up to 76,334,259 shares of Valley common stock in connection with the merger. The 76,334,259 shares that Valley common shareholders are being asked to approve is the maximum number of shares that would be issuable in the transaction, including shares of Valley common stock underlying Valley warrants, Valley stock options and Valley restricted stock units to be issued in exchange for USAmeriBancorp warrants, USAmeriBancorp stock options and USAmeriBancorp restricted stock units, respectively, and assuming that the average closing price of Valley common stock is $10.00. Valley expects substantially fewer shares of Valley common stock will be issued in the merger. Valley and USAmeriBancorp may each terminate the merger agreement if the average closing price is below $11.00. The Valley share issuance proposal will be approved if a majority of the votes cast by the holders of Valley common stock at the Valley special meeting are “FOR” approval of such proposal.

On the record date, the directors and executive officers of Valley as a group beneficially owned a total of approximately 6,351,243 shares of Valley common stock, representing 2.4% of the issued and outstanding shares of common stock.

 

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The Valley adjournment proposal will be approved if a majority of the votes cast by the holders of Valley common stock at the Valley special meeting are “FOR” approval of such proposal.

The matters to be considered at the Valley special meeting are of great importance to the common shareholders of Valley. Accordingly, you are urged to read and carefully consider the information presented in this joint proxy statement-prospectus, and to complete, date, sign and promptly return the enclosed proxy in the enclosed postage paid envelope as instructed on the proxy card or to vote by Internet or telephone.

Voting Rights; Proxies

If Valley common shareholders properly execute a proxy card and send it to Valley in the enclosed envelope in a timely manner, their proxy will be voted in accordance with the instructions they indicate, unless they revoke their proxy prior to the vote. If Valley common shareholders send Valley a proxy card that does not instruct Valley how to vote, their shares will be voted (1) ”FOR” approval of the issuance of up to 76,334,259 shares of Valley common stock in connection with the merger, and (2) ”FOR” approval of the Valley adjournment proposal.

Valley common shareholders may revoke their grant of a proxy at any time before it is voted by:

 

(a)

filing a written revocation of the proxy with the Secretary of Valley;

 

(b)

executing a later Internet or telephone vote;

 

(c)

submitting a signed proxy card bearing a later date; or

 

(d)

attending and voting in person at the Valley special meeting.

Written revocations should be sent to Alan D. Eskow, Secretary, Valley National Bancorp, 1455 Valley Road, Wayne, New Jersey 07470. Attendance at the Valley special meeting will not in and of itself revoke a proxy, unless you choose to cast a ballot at such special meeting.

If Valley common shareholders use the Internet, they can change their vote at the Internet address shown on their proxy card. The Internet voting system is available 24 hours a day until 11:59 p.m., Eastern Time, on December 13, 2017.

If Valley common shareholders vote by telephone, they can change their vote by using the toll free telephone number shown on their proxy card. The telephone voting system is available 24 hours a day in the United States until 11:59 p.m., Eastern Time, on December 13, 2017.

The inspectors of election appointed for the Valley special meeting, who will determine whether or not a quorum is present, will tabulate votes cast by proxy or in person at such special meeting. Abstentions and “broker non-votes” will be treated as shares that are present and entitled to vote for purposes of determining the presence of a quorum. Abstentions occur when proxies are marked as abstentions, or when common shareholders appear in person but abstain from voting. “Broker non-votes” occur when a broker indicates on a proxy that it does not have discretionary authority regarding certain shares of common stock. Abstentions and broker non-votes will have no effect on any of the proposals at the Valley special meeting.

If Valley common shareholders do not vote by proxy, telephone or internet or in person at the Valley special meeting, it will have no effect on the vote to approve the Valley share issuance proposal or the vote to approve the Valley adjournment proposal. Failure to vote, however, may affect whether a quorum is present.

Solicitation of Proxies

Valley will bear all costs of soliciting proxies for the Valley special meeting. Laurel Hill Advisory Group has been retained to assist in the solicitation of proxies under a contract providing for payment of an estimated

 

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fee of $8,500, plus reimbursement for its expenses. In addition to solicitations by mail and by Laurel Hill Advisory Group, the directors, officers and employees of Valley may solicit proxies for the Valley special meeting from Valley common shareholders in person or by telephone. These directors, officers and employees will not be specifically compensated for their services. Valley will also make arrangements with brokerage firms and other custodians, nominees and fiduciaries to send proxy materials to their principals and will reimburse those parties for their expenses in doing so.

 

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PROPOSAL 1 OF THE USAMERIBANCORP SPECIAL MEETING – THE MERGER

Background of the Merger

As part of its ongoing consideration and evaluation of its long-term prospects and strategies, USAmeriBancorp’s Board of Directors and senior management have regularly reviewed and assessed USAmeriBancorp’s business strategies and objectives, including strategic opportunities and challenges, and have considered various strategic options potentially available to them, all with the goal of enhancing value for its shareholders. These strategic discussions have focused on, among other things, the business, competitive and regulatory environment facing financial institutions generally and USAmeriBancorp in particular, as well as conditions and ongoing consolidation in the financial services industry. In addition, members of USAmeriBancorp’s Board of Directors and senior management have received, from time to time, inquiries from representatives of other financial institutions about potential business combinations and USAmeriBancorp’s Board of Directors was regularly updated regarding these contacts.

In connection with the periodic review of its strategic alternatives, USAmeriBancorp’s Board of Directors met on April 19, 2017 to receive from one of USAmeriBancorp’s outside financial consultants an overview of the mergers and acquisitions market, which included updates relating to the banking industry in general and bank mergers and acquisitions activity in particular. USAmeriBancorp’s Board of Directors also discussed USAmeriBancorp’s strategic options, including remaining independent while continuing to execute its strategic plan, and also considering a possible sale of the organization with its respective advantages and disadvantages.

Subsequent to this meeting, USAmeriBancorp’s management received an unsolicited inquiry from Valley regarding a possible business combination to be effected through an all stock merger. Executive officers of USAmeriBancorp and Valley engaged in preliminary discussions outlining the broad terms of a possible acquisition and pricing terms. On May 19, 2017, USAmeriBancorp’s Board of Directors met again, and at this meeting, USAmeriBancorp’s management described the discussions with Valley and the terms of a possible transaction and provided members with an overview of Valley and its operations. USAmeriBancorp’s Board of Directors discussed in detail possible next steps and concluded by directing Chairman Steans and Mr. Chillura to further investigate the possibility of a strategic transaction with Valley, and to negotiate the terms of any formal offer made by Valley pursuant to a letter of intent or otherwise.

After several rounds of discussions between representatives of USAmeriBancorp and Valley, the parties signed a letter of intent on May 26, 2017. USAmeriBancorp held a Board meeting on May 30, 2017 to discuss the terms of the letter of intent and other related business and legal issues. Barack Ferrazzano, USAmeriBancorp’s outside legal counsel, discussed the fiduciary and legal obligations applicable to directors when considering a sale or merger of USAmeriBancorp and how those duties applied in the current process. The Board also heard a detailed financial presentation from one of USAmeriBancorp’s outside financial advisors that reviewed (i) general merger and acquisition activity, including activity in the Florida market, (ii) the financial terms of Valley’s proposed offer included in the letter of intent and (iii) the range of projected book and earnings multiples applicable to USAmeriBancorp’s stock price represented by these financial terms. USAmeriBancorp’s Board of Directors directed Chairman Steans and Mr. Chillura, with the assistance of USAmeriBancorp’s outside legal and financial advisors, to attempt to negotiate a merger agreement in accordance with the terms expressed in the letter of intent.

Between May 26, 2017 and July 25, 2017, Valley performed its due diligence review of the financial condition and operations of USAmeriBancorp and USAmeriBank, USAmeriBancorp’s and USAmeriBank’s material agreements and other information concerning USAmeriBancorp and USAmeriBank.

On June 27, 2017, Valley distributed to USAmeriBancorp an initial draft of the merger agreement. Between that date and July 24, 2017, USAmeriBancorp and Valley and their respective representatives and advisors negotiated the terms of the merger agreement. During this time, the parties and their legal advisors exchanged a

 

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number of drafts of the merger agreement and its exhibits, and worked toward finalizing the terms of the transaction. Also during this period, each party prepared, distributed and finalized a set of disclosure schedules listing certain supplemental information and exceptions to the representations and warranties contained in the merger agreement.

While the merger agreement was being negotiated, USAmeriBancorp presented Valley with a “reverse” due diligence list requesting information about Valley and its financial condition and operations. Members of USAmeriBancorp’s senior management and its outside financial advisors reviewed the documentation provided by Valley while USAmeriBancorp and Valley continued to negotiate the terms of the merger agreement. In addition, USAmeriBancorp and its advisors reviewed information about Valley that was publicly available, including reports and other materials filed with the SEC. On June 12 and 13, 2017, members of USAmeriBancorp’s senior management and its outside financial advisors visited Valley’s headquarters in New Jersey to review additional documents supplied by Valley and held personal interviews with a number of members of Valley’s executive management to discuss Valley’s current operations, financial condition and prospects. On June 29, 2017, Mr. Chillura and Chairman Steans visited Valley’s headquarters in New Jersey to further discuss due diligence matters and deal terms.

On July 14, 2017, the Valley Board of Directors and the Valley National Bank Board of Directors held a joint meeting at which the terms and conditions of the then-current draft of the merger agreement were extensively reviewed and discussed and at which senior management answered questions that the directors had with respect to the prospective merger. At the time of this meeting, Valley was still in the process of conducting due diligence on USAmeriBancorp and USAmeriBank and had not yet received a draft of USAmeriBancorp’s disclosure schedules in connection with the merger agreement. Following the meeting, on July 17 and 18, as part of Valley’s ongoing due diligence process, certain members of the Valley Board of Directors visited a number of banking offices of USAmeriBank located in Tampa Bay, Florida, and in Alabama.

On July 21, 2017, USAmeriBancorp’s management distributed to the USAmeriBancorp Board of Directors (i) a substantially final, negotiated version of the merger agreement and related exhibits, (ii) a report by USAmeriBancorp’s outside financial advisors summarizing the results of the reverse due diligence review of Valley, (iii) a financial presentation prepared by Sandler providing an overview of Valley and the financial terms of the proposed acquisition and (iv) draft board resolutions prepared by Barack Ferrazzano approving the merger with Valley. A joint meeting of the Boards of Directors of USAmeriBancorp and USAmeriBank was held on July 21, 2017 to discuss the proposed transaction. At the meeting, the joint Boards of Directors received a full report from USAmeriBancorp management and its outside advisors. Barack Ferrazzano discussed again the fiduciary obligations of USAmeriBancorp’s directors in considering a sale or merger of the company and answered director questions on the topic. Barack Ferrazzano also provided a comprehensive review of the proposed merger agreement. Various provisions of the merger agreement were discussed and director questions regarding the merger agreement were asked and answered.

Representatives of Sandler presented its financial analysis, which included a review of the fairness opinion process, a summary of the financial terms of the proposed merger, including the merger consideration, valuation multiples of the merger consideration compared to precedent transactions, pro forma analyses and transaction analyses. At the end of its presentation, Sandler delivered its oral opinion, which was subsequently confirmed in writing, to the effect that, as of July 21, 2017, and based on the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Sandler as set forth in its opinion, the merger consideration was fair to the common shareholders of USAmeriBancorp from a financial point of view.

The USAmeriBancorp Board of Directors engaged in a detailed and extensive discussion of the merger agreement, the financial analyses and the fairness opinion. The USAmeriBancorp Board considered the analyses of Sandler regarding the valuation of USAmeriBancorp as a stand-alone entity and discussed the attributes of Valley’s common stock, including its recent market performance, its dividend payout ratio, its trading volume and its relative valuation compared to its peers. The Board also discussed Valley’s commitment to community

 

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banking and its business culture and philosophy. Following extensive discussion and questions and answers, including consideration of the factors described under “Recommendation of USAmeriBancorp’s Board of Directors and Reasons for the Merger,” USAmeriBancorp’s Board of Directors unanimously determined that the merger agreement and the transactions contemplated thereby, including the merger, were in the best interests of USAmeriBancorp and its shareholders and authorized USAmeriBancorp’s management to execute and deliver the merger agreement.

On July 25, 2017, the Valley Board of Directors and the Valley National Bank Board of Directors held a joint meeting, at which representatives of KBW were present, to consider approval of the merger agreement and the transactions contemplated by the merger agreement, including the merger and the bank merger. At the meeting, the Valley Board of Directors and the Valley National Bank Board of Directors received an update from Valley’s management team on the status of negotiations with USAmeriBancorp and information regarding the proposed merger and the combined business. In addition, at the meeting, KBW reviewed the financial aspects of the proposed merger and rendered to the Valley Board of Directors an opinion to the effect that, as of that date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW as set forth in such opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to Valley. Following further discussion among the Valley directors, the Valley Board of Directors determined that the merger agreement and the transactions contemplated by the merger agreement were advisable and voted unanimously to approve the merger agreement and the transactions contemplated by the merger agreement, and the other transaction agreements.

On the morning of July 26, 2017, USAmeriBancorp and Valley executed the merger agreement and issued a joint press release announcing the transaction.

Recommendation of USAmeriBancorp’s Board of Directors and Reasons for the Merger

USAmeriBancorp’s Board of Directors believes that the merger is advisable to its shareholders. Accordingly, USAmeriBancorp’s Board of Directors has approved the merger agreement and recommends that USAmeriBancorp’s common shareholders vote “FOR” the approval of the merger agreement.

In reaching its decision to approve the merger agreement, USAmeriBancorp’s Board of Directors consulted with USAmeriBancorp’s outside legal counsel and USAmeriBancorp’s financial advisor regarding the merger and considered a variety of factors, including the following:

 

•

the USAmeriBancorp Board of Directors’ familiarity with and review of USAmeriBancorp’s business, financial condition, results of operations and prospects, including, but not limited to, its business plan and its potential for growth, development, productivity and profitability;

 

•

the current and prospective environment in which USAmeriBancorp operates, including national and local economic conditions (including net interest margin pressures), the competitive environment for financial institutions generally, the increased regulatory burden on financial institutions generally, and the trend toward consolidation in the financial services industry;

 

•

USAmeriBancorp’s belief that USAmeriBancorp needs to grow to be in a position to deliver a competitive return to its shareholders and such growth would require, among other things, the raising of capital;

 

•

the USAmeriBancorp Board of Directors’ review, with the assistance of USAmeriBancorp’s legal and financial advisors, of strategic alternatives to the merger, including the possibility of remaining independent;

 

•

the likelihood that acquisition opportunities for USAmeriBancorp as a buyer are limited since potential targets within USAmeriBancorp’s market area are either very small, have credit quality issues, are at prices that do not make sense for USAmeriBancorp, or have clearly expressed a strong desire to remain independent for the foreseeable future;

 

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•

the USAmeriBancorp Board of Directors’ review, based in part on presentations by USAmeriBancorp’s management and advisors and on the due diligence performed in connection with the transaction, of Valley’s business, financial condition, results of operations and management; the recent performance of Valley’s common stock on both a historical and prospective basis; the strategic fit between the parties; the potential synergies expected from the merger; and the business risks associated with the merger;

 

•

the expectation that the merger will provide holders of USAmeriBancorp common stock with the opportunity to receive a substantial premium over the historical trading prices for their shares and that the exchange of Valley common stock for USAmeriBancorp common stock and the exchange of Valley Series C preferred stock, if any, for USAmeriBancorp Series C preferred stock, will be tax-free for federal income tax purposes;

 

•

the expected pro forma financial impact of the transaction, taking into account anticipated cost savings and other factors, on both USAmeriBancorp common shareholders and Valley common shareholders;

 

•

the prospects for continuation of Valley’s regular quarterly dividend rate, which is currently $0.11 per share of common stock, when compared to USAmeriBancorp’s regular quarterly dividend rate, which is currently $0.175 per share of common stock. Assuming an exchange ratio of 6.100 and Valley’s regular quarterly dividend rate remains unchanged, the equivalent quarterly dividend to be paid to holders of USAmeriBancorp common stock is $0.671 per share;

 

•

the expectation that the historical liquidity of Valley common stock will offer USAmeriBancorp common shareholders the opportunity to participate in the growth and opportunities of Valley by retaining their Valley common stock following the merger, or to exit their investment, should they prefer to do so;

 

•

the lack of prospects for a superior offer for a strategic combination that affords USAmeriBancorp common shareholders the ability to continue their equity investment in a tax-efficient manner;

 

•

the USAmeriBancorp Board of Directors’ review with USAmeriBancorp’s legal advisors of the non-solicitation and termination provisions of the merger agreement, the flexibility of the USAmeriBancorp Board of Directors to consider unsolicited proposals from other institutions after the execution of the merger agreement, and the $30 million termination fee in favor of Valley in the event the merger agreement is terminated under certain specified circumstances;

 

•

the collar on the Valley consideration such that the minimum value of the consideration which USAmeriBancorp common shareholders would receive is $69.00 per share and the maximum value of the consideration which USAmeriBancorp common shareholders would receive is $79.30 per share;

 

•

the opinion, dated July 21, 2017, to USAmeriBancorp’s Board of Directors of Sandler, financial advisor to USAmeriBancorp, to the effect that, as of such date and subject to the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Sandler as set forth in its opinion, the merger consideration was fair to holders of USAmeriBancorp common stock from a financial point of view, as more fully described under “Proposal 1 of the USAmeriBancorp Special Meeting - The Merger - Opinion of USAmeriBancorp’s Financial Advisor” beginning on page 72;

 

•

the similarity between USAmeriBancorp’s and Valley’s management philosophies, approaches and commitments to the communities, customers and shareholders they each serve and their respective employees;

 

•

the impact of the merger on depositors, customers and communities served by USAmeriBancorp and the expectation that the combined entity will continue to provide quality service to the communities and customers currently served by USAmeriBancorp;

 

•

the effects of the merger on USAmeriBancorp’s employees, including the prospects for continued employment and the severance and other benefits agreed to be provided by Valley; and

 

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•

Valley’s requirement that certain of USAmeriBancorp’s executive officers and certain other key employees identified by Valley execute employment or retention agreements with Valley to provide economic incentives for such persons to remain with the resulting entity for six months to three years following the closing of the merger to allow for an orderly and successful transition.

The USAmeriBancorp Board of Directors also considered potential risks relating to the merger, including the following:

 

•

the need to obtain regulatory approvals to complete the merger;

 

•

the need for Valley to obtain the approval of its common shareholders for the issuance of up to 76,334,259 shares of Valley common stock in connection with the merger;

 

•

the potential for diversion of management and employee attention, and for employee attrition, during the period prior to the completion of the merger and the potential effect on USAmeriBancorp’s business and relations with customers, service providers and other stakeholders, whether or not the merger is completed;

 

•

the merger agreement provisions generally requiring USAmeriBancorp to conduct its business in the ordinary course and the other restrictions on the conduct of USAmeriBancorp’s business prior to completion of the merger, which may delay or prevent USAmeriBancorp from undertaking business opportunities that may arise pending completion of the merger;

 

•

Valley could experience a decrease in profitability or regulatory pressure that would force it to reduce its dividends from historical levels;

 

•

expected benefits and synergies sought in the merger, including cost savings and Valley’s ability to successfully market its financial products to USAmeriBancorp’s customers, may not be realized or may not be realized within the expected time period;

 

•

the challenges of integrating the businesses, operations and employees of USAmeriBancorp and Valley;

 

•

certain provisions of the merger agreement prohibit USAmeriBancorp from soliciting, and limit its ability to respond to, proposals for alternative transactions;

 

•

USAmeriBancorp’s obligation to pay to Valley a termination fee of $30 million plus up to $2 million in expenses if USAmeriBancorp recommends or accepts an alternative acquisition proposal may deter others from proposing an alternative transaction that may be more advantageous to USAmeriBancorp’s common shareholders;

 

•

Valley’s right to terminate the merger agreement if the average closing price is below $11.00;

 

•

the possible effects on USAmeriBancorp should the parties fail to complete the merger, including the possible effects on USAmeriBancorp’s common stock and the associated business and opportunity costs;

 

•

that USAmeriBancorp’s directors and executive officers have interests in the merger that are different from or in addition to those of its common shareholders generally, as described in the section entitled “Proposal 1 of the USAmeriBancorp Special Meeting - The Merger - Interests of Certain Persons in the Merger - Interests of USAmeriBancorp Executive Officers and Directors in the Merger” beginning on page 66; and

 

•

the other risks described in the section entitled “Risk Factors” beginning on page 39 and the risks of investing in Valley common stock and preferred stock identified in the Risk Factors sections of Valley’s periodic reports filed with the SEC and incorporated by reference herein.

The discussion of the information and factors considered by the USAmeriBancorp Board of Directors is not exhaustive, but includes the material factors considered by the USAmeriBancorp Board of Directors. In view of

 

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the wide variety of factors considered by the USAmeriBancorp Board of Directors in connection with its evaluation of the merger and the complexity of these matters, the USAmeriBancorp Board of Directors did not attempt to quantify, rank or otherwise assign relative weights to the specific factors that it considered in reaching its decision. Furthermore, in considering the factors described above, individual members of USAmeriBancorp’s Board of Directors may have given different weights to different factors. The USAmeriBancorp Board of Directors evaluated the factors described above, including asking questions of USAmeriBancorp’s management and USAmeriBancorp’s legal and financial advisors, and reached the unanimous decision that the merger was advisable to USAmeriBancorp shareholders. The Board of Directors realized that there can be no assurance about future results, including results expected or considered in the factors listed above. However, the Board of Directors concluded that the potential positive factors outweighed the potential risks of completing the merger. It should be noted that this explanation of the USAmeriBancorp Board of Directors’ reasoning and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading “Forward-Looking Statements” beginning on page 45.

On the basis of these considerations, USAmeriBancorp’s Board of Directors unanimously approved the merger agreement.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE COMMON SHAREHOLDERS OF USAMERIBANCORP VOTE “FOR” THE APPROVAL OF THE MERGER AGREEMENT.

Valley’s Reasons for the Merger

In reaching its decision to approve the merger agreement, the Valley Board of Directors evaluated the merger and the merger agreement in consultation with Valley’s management and Valley’s outside legal counsel and financial advisor, and considered a variety of factors, including the following:

 

•

Valley’s ongoing strategy of highly focused growth through acquisitions of other strong financial institutions, including in the Florida market;

 

•

its knowledge of Valley’s business, operations, financial condition, earnings and prospects and knowledge of USAmeriBancorp’s business, operations, financial condition, earnings and prospects, taking into account the results of Valley’s due diligence review of USAmeriBancorp;

 

•

its belief that USAmeriBancorp and Valley share a compatible community banking model;

 

•

the similarity between Valley’s and USAmeriBancorp’s approach to banking, which both focus on strong asset quality, customer service and earnings;

 

•

that USAmeriBancorp would enable Valley to expand its presence into desirable and economically growing Florida urban banking markets and to enter into the Alabama urban banking markets;

 

•

the financial and other terms and ability of the USAmeriBancorp Board of Directors to entertain third party acquisition proposals to acquire USAmeriBancorp and conditions of the merger agreement, including providing for payment by USAmeriBancorp to Valley of a termination fee of $30 million, plus reasonable out of pocket expenses up to $2,000,000, if the merger agreement is terminated under certain circumstances;

 

•

the opinion, dated July 25, 2017, of KBW to the Valley Board of Directors as to the fairness, from a financial point of view and as of the date of the opinion, to Valley of the exchange ratio in the proposed merger, as more fully described below under “Opinion of Valley’s Financial Advisor” beginning on page 123;

 

•

the regulatory and other approvals required in connection with the transaction and the likelihood such approvals will be received in a timely manner and without unacceptable conditions; and

 

•

the ability of Valley to terminate the merger agreement without penalty or liability in the event the average closing price is below $11.00.

 

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Interests of Certain Persons in the Merger

Interests of USAmeriBancorp Executive Officers and Directors in the Merger

In considering the recommendations of the USAmeriBancorp Board of Directors, USAmeriBancorp’s common shareholders should be aware that some of the executive officers and directors of USAmeriBancorp have interests in the merger that differ from, or may be in addition to, the interests of USAmeriBancorp’s common shareholders. These interests may present such executive officers and directors with actual or potential conflicts of interests, and these interests, to the extent material, are described below:

Ownership of USAmeriBancorp

Some of the directors of USAmeriBancorp and executive officers of USAmeriBancorp and USAmeriBank currently own USAmeriBancorp common stock and some of the directors of USAmeriBancorp and executive officers of USAmeriBancorp and USAmeriBank have been granted USAmeriBancorp stock options and restricted stock units. In addition, some of the directors of USAmeriBancorp and executive officers of USAmeriBancorp and USAmeriBank hold USAmeriBancorp warrants to purchase shares of USAmeriBancorp common stock. As of July 26, 2017, such directors and executive officers beneficially owned an aggregate of 2,869,214 shares of USAmeriBancorp common stock, which total includes shares of USAmeriBancorp common stock underlying USAmeriBancorp stock options exercisable within 60 days of such date, shares of USAmeriBancorp common stock underlying restricted stock units that have been settled or will be settled within 60 days of such date and shares of USAmeriBancorp common stock underlying USAmeriBancorp warrants that are immediately exercisable.

Indemnification; Directors’ and Officers’ Insurance

Pursuant to the merger agreement, for a period of six years after the effective time of the merger, Valley has agreed to indemnify, defend, hold harmless and advance expenses to each present and former officer and director of USAmeriBancorp and its subsidiaries to the fullest extent authorized or permitted by law. Valley also has agreed that all rights to indemnification and advancement of expenses from liabilities under USAmeriBancorp’s articles of incorporation with respect to acts or omissions occurring prior to the effective time of the merger now existing in favor of current and former officers and directors of USAmeriBancorp or any of its subsidiaries will survive the merger and continue in full force and effect in accordance with their terms and without regard to any subsequent amendment thereof.

The merger agreement further provides that Valley will cause the officers and directors of USAmeriBancorp and its subsidiaries to be covered for a period of six years after the effective time of the merger under Valley’s then current directors’ and officers’ liability insurance policy or an extension of USAmeriBancorp’s existing directors’ and officers’ liability insurance policy, provided, however, that Valley is only required to obtain such coverage at an aggregate cost not to exceed 300% of the annual premium currently paid by USAmeriBancorp for such coverage.

Summary of Payments and Benefits to Directors

Non-employee directors of USAmeriBancorp are not expected to receive any compensation based on or related to the merger that has not already accrued or vested in them, other than the acceleration of vesting of stock options and restricted stock units as discussed below.

Equity Compensation Awards

USAmeriBancorp’s directors and executive officers and USAmeriBank’s executive officers participate in USAmeriBancorp’s equity-based compensation plans and hold outstanding stock options and restricted stock units granted under such plans. All outstanding USAmeriBancorp stock options and restricted stock units will

 

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vest only to the extent set forth in the USAmeriBancorp equity-based compensation plans and the grant or award agreements pursuant to which the USAmeriBancorp stock options and restricted stock units were granted or awarded. Accordingly, the vesting of USAmeriBancorp stock options and restricted stock units will be accelerated if the holders of such stock options and restricted stock units are involuntarily terminated by Valley and/or its subsidiaries without cause or by the employee for good reason within 24 months following a change in control such as the merger. In addition, if the vesting of a USAmeriBancorp stock option or restricted stock unit granted under the USAmeriBancorp, Inc. 2015 Long Term Incentive Plan is conditioned upon the achievement of performance measures, then such stock option or restricted stock unit will become fully vested if at the time of a change in control, such as the merger, the established performance measures are at least 50% attained. If at the time of a change in control, such as the merger, the established performance measures are less than 50% attained, then such USAmeriBancorp stock option or restricted stock unit will become vested on a fractional basis determined by dividing the percentage of attainment of the established performance measures by 50%.

All outstanding USAmeriBancorp stock options will be converted, at the effective time of the merger, into Valley stock options to acquire Valley common stock where the number of shares of Valley common stock underlying such Valley stock options will be equal to the number of shares of USAmeriBancorp common stock underlying such USAmeriBancorp stock options multiplied by the exchange ratio and the exercise price per share of Valley common stock subject to such Valley stock options will be equal to the exercise price per share of USAmeriBancorp common stock subject to such USAmeriBancorp stock option divided by the exchange ratio. In addition, all outstanding restricted stock units that have vested as of the effective time of the merger will be converted into the right to receive the same consideration as holders of USAmeriBancorp common stock are receiving in the merger, and all restricted stock units that are unvested as of the effective time of the merger will remain outstanding and be converted into the right to receive Valley common stock where the number of shares of Valley common stock underlying such restricted stock units will be equal to the number of shares of USAmeriBancorp common stock underlying such USAmeriBancorp restricted stock units multiplied by the exchange ratio. Notwithstanding the foregoing, if Valley elects to make a cash payment to USAmeriBancorp common shareholders as described under the section entitled “Summary - The Merger - Consideration to USAmeriBancorp Common Shareholders,” the exchange ratio will be based on the total merger consideration so that the USAmeriBancorp stock options and restricted stock units are converted on economically equivalent terms as outstanding shares of USAmeriBancorp common stock.

The following table sets forth, based on outstanding awards under USAmeriBancorp’s equity plans and other compensatory arrangements as of July 26, 2017, the number and value of all outstanding and unexercised USAmeriBancorp stock options held by each of USAmeriBancorp’s directors and executive officers:

USAmeriBancorp

Stock Options

 

		Number of Shares Underlying Stock Options												Estimated Dollar Value of Stock Options (1)
Name		Unvested				Vested				Total				Unvested				Vested				Total
Jennifer W. Steans			—				—				—			$	—			$	—			$	—
George P. Bauer			—				—				—				—				—				—
Joseph V. Chillura			23,425				—				23,425				921,876				—				921,876
John P. Connelly			—				—				—				—				—				—
Mark S. Klein			—				—				—				—				—				—
Thomas B. McMurtrey, III			—				—				—				—				—				—
Harrison I. Steans			—				—				—				—				—				—
Alfred T. Rogers			12,643				—				12,643				522,819				—				522,819
James G. Olivier			20,377				—				20,377				851,629				—				851,629

 

(1)	Based on closing sale price of $12.40 per share of Valley common stock on July 25, 2017 and assuming an exchange ratio of 6.100, which is calculated as $75.64. The estimated dollar value is calculated by

 

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multiplying (A) the number of stock options with exercise prices below $75.64 and (B) the difference between $75.64 and the exercise prices of such stock options.

The following table sets forth, based on outstanding awards under USAmeriBancorp’s equity plans and other compensatory arrangements as of July 26, 2017, the number and value of all outstanding USAmeriBancorp restricted stock units held by each of USAmeriBancorp’s directors and executive officers:

USAmeriBancorp

Restricted Stock Units

 

		Number of Shares												Estimated Dollar Value of Restricted Stock Units (1)
Name		Unvested				Vested				Total				Unvested				Vested				Total
Jennifer W. Steans			—				—				—			$	—			$	—			$	—
George P. Bauer			—				—				—				—				—				—
Joseph V. Chillura			9,240				—				9,240				698,913				—				698,913
John P. Connelly			—				—				—				—				—				—
Mark S. Klein			—				—				—				—				—				—
Thomas B. McMurtrey, III			—				—				—				—				—				—
Harrison I. Steans			—				—				—				—				—				—
Alfred T. Rogers			6,223				—				6,223				470,707				—				470,707
James G. Olivier			3,959				—				3,959				299,458				—				299,458

 

(1)	Based on closing sale price per share of Valley Common Stock on July 25, 2017 and assuming an exchange ratio of 6.100, which is calculated as $75.64.

USAmeriBancorp Executive Change in Control Severance Plan and New Employment Agreements for Joseph V. Chillura and Alfred T. Rogers

Joseph V. Chillura and Alfred T. Rogers are each a party to a Participation Agreement in connection with the USAmeriBancorp Executive Change in Control Severance Plan (collectively, the “Change in Control Plan”). In connection with the execution of the merger agreement on July 26, 2017, each of Messrs. Chillura and Rogers entered into a new employment agreement with Valley on July 25, 2017 to be effective at the effective time of the merger pursuant to which they each agreed, among other things, to waive and release all of their respective rights under the Change in Control Plan immediately prior to the effective date of the merger in exchange for a lump sum payment.

Under Mr. Chillura’s new employment agreement with Valley, Mr. Chillura is to receive a lump sum payment to be determined prior to the closing of the merger based on the terms of the Change in Control Plan, which is estimated at approximately $2,326,299, (i) in full satisfaction of all of his rights under the Change in Control Plan and (ii) in consideration for Mr. Chillura’s agreements and covenants related to confidentiality, non-competition, non-solicitation and non-disparagement set forth in his new employment agreement with Valley. Mr. Chillura will receive this lump sum payment immediately prior to the effective date of the merger.

Under Mr. Rogers’ new employment agreement with Valley, Mr. Rogers is to receive a lump sum payment to be determined prior to the closing of the merger based on the terms of the Change in Control Plan, which is estimated at approximately $961,443, (i) in full satisfaction of all of his rights under the Change in Control Plan and (ii) in consideration for Mr. Rogers’ agreements and covenants related to confidentiality, non-competition, non-solicitation and non-disparagement set forth in his new employment agreement with Valley. Mr. Rogers will receive this lump sum payment immediately prior to the effective date of the merger.

 

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The new Valley employment agreements, entered into as of July 25, 2017, take effect at the effective time of the merger and contain the following material terms in addition to the provision for lump sum payments discussed in the three immediately preceding paragraphs:

 

•

Employment terms of 3 years for Mr. Chillura and 2 years for Mr. Rogers;

 

•

Base salaries at an annual rate of $510,000 and $330,000 for Mr. Chillura and Mr. Rogers, respectively;

 

•

Eligibility for an annual bonus and annual equity awards;

 

•

Fringe benefits and perquisites generally available to similarly situated Valley executives;

 

•

If the executives are terminated without Cause or for Good Reason (as each term is defined in the new Valley employment agreements), they will be entitled to receive their normal base salary payments that would have been earned had they remained employed until the greater of: (A) twelve months from the termination date; and (B) the end of the employment term;

 

•

If Messrs. Chillura or Rogers is terminated without Cause or for Good Reason on or within one year following a change in control of Valley, Messrs. Chillura and Rogers shall receive, instead of the payments set forth in the immediately preceding bullet point, a lump sum payment equal to the greater of:

 

•

(A) 24 months of normal base salary payments and (B) normal base salary payments until the end of the term, in the case of Mr. Chillura; and

 

•

(A) 18 months of normal base salary payments and (B) normal base salary payments until the end of the term, in the case of Mr. Rogers; and

 

•

As consideration for the payments discussed in the two immediately preceding paragraphs, Messrs. Chillura and Rogers each agree, for a period of two years following termination of employment, to not (i) engage in any business activity in which Valley National Bank engages in within 50 miles of any Valley or Valley National Bank location, and (ii) solicit Valley National Bank customers or employees.

USAmeriBancorp Executive Change in Control Severance Plan and New Employment Letter Agreement for James G. Olivier

James G. Olivier is also a party to the Change in Control Plan. In connection with the execution of the merger agreement on July 26, 2017, Mr. Olivier entered into new employment letter agreement with Valley on July 25, 2017 pursuant to which Valley agreed, assuming Mr. Olivier remains employed by USAmeriBank until the effective date of the merger and joins Valley after such date, to accelerate any severance payments that Mr. Olivier would be entitled to receive under the Change in Control Plan by paying him the total amount due in a lump sum payment to be made immediately prior to the effective date of the merger or within 30 days after the effective date of the merger. Such lump sum payment would be conditioned on his execution and non-revocation of a Release and Severance Agreement substantially in the form attached to the USAmeriBancorp Executive Change in Control Severance Plan (the “Release and Severance Agreement”). The amount of such lump sum payment is expected to be $945,972.

Mr. Olivier’s new employment letter agreement with Valley, entered into as of July 25, 2017, sets forth the following material terms in addition to the provision for a lump sum payment discussed in the immediately preceding paragraph:

 

•

Employment term of one year;

 

•

Base salary at an annual rate of $315,180 and a bonus of $185,000 at the end of one year;

 

•

The vesting of any of Mr. Olivier’s unvested USAmeriBancorp stock options that are converted to Valley stock options in accordance with the merger agreement on the earlier to occur of the following

 

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dates: (i) the date the stock options are scheduled to vest, (ii) the date that is one year after the effective date of the merger or (iii) the date on which Mr. Olivier’s employment with Valley is terminated for any reason;

 

•

Substantially the same benefits that Mr. Olivier currently has with USAmeriBank during the term of Mr. Olivier’s new employment letter agreement with Valley;

 

•

In the event Valley terminates Mr. Olivier’s employment for any reason before the end of one year, Valley will continue to pay Mr. Olivier for the one year period and make any Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”), payments that Mr. Olivier may be eligible for under the Change in Control Plan for the eighteen month COBRA period applicable to him (including COBRA coverage at active employee rates), upon his execution and non-revocation of a Release and Severance Agreement; and

 

•

During the term of Mr. Olivier’s employment and thereafter, Mr. Olivier agrees to be bound by the restrictive covenants contained in the Change in Control Plan related to confidentiality, non-competition (for a period of twelve months) and non-solicitation (for a period of twenty four months).

USAmeriBancorp Executive Change in Control Severance Plan – Other Officers

USAmeriBancorp previously entered into Participation Agreements in connection with the USAmeriBancorp Executive Change in Control Severance Plan with thirteen other officers. Pursuant to the merger agreement, Valley has agreed to honor in accordance with their terms all benefits payable under the Change in Control Plan, which provides certain benefits in the event the officer’s employment is terminated under specified circumstances and within a specified period of time following a change in control, such as the merger. Under the Change in Control Plan, these officers may be entitled to severance payments ranging from 50%–200% of such officer’s base salary plus target bonus and a pro-rata bonus upon a termination by Valley without cause or by the officer for good reason within 12–24 months following the effective time of the merger, COBRA coverage at active employee rates for a period ranging from 6–18 months, and for certain officers, retention payments ranging from 50%–75% of such officer’s base salary plus target bonus over the one year period following the effective time of the merger. The officers are also subject to a 12 month non-compete covenant and non-solicitation covenants with respect to customers and employees for a period ranging from 12–24 months. Under the Change in Control Plan, Valley may be required to pay an aggregate of approximately $5,009,277 to these thirteen officers. Valley has entered into an employment agreement with one of these officers in which Valley agrees to make the required payments to such officer in exchange for further restrictive covenants.

Other Employee Benefits

Before or following consummation of the merger, Valley will decide whether to continue each employee welfare benefit plan, within the meaning of ERISA, for the benefit of employees of USAmeriBancorp and USAmeriBank or have such employees become covered under a Valley welfare plan. Subject to the foregoing, following consummation of the merger, Valley will make available to all officers and employees of USAmeriBancorp who become employees of Valley National Bank coverage under the benefit plans generally available to Valley National Bank’s officers and employees. No prior existing condition limitation not currently imposed by USAmeriBancorp or USAmeriBank medical or dental plans will be imposed on employees of USAmeriBancorp or USAmeriBank under Valley’s or Valley National Bank’s medical or dental plans. Employees of USAmeriBancorp or USAmeriBank will receive credit for any deductibles paid under USAmeriBancorp or USAmeriBank medical or dental plans. USAmeriBancorp employees will be given credit for eligibility and vesting purposes (but not for benefit accrual purposes) under Valley National Bank’s medical, life, vacation, sick leave, disability and other welfare plans for prior service with USAmeriBancorp. USAmeriBancorp employees will be granted credit for prior service with USAmeriBancorp solely for purposes of eligibility and vesting under Valley National Bank’s 401(k) plan.

 

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Officers and employees of USAmeriBancorp and USAmeriBank who are not party to employment or change in control agreements or the Change in Control Plan and are terminated involuntarily other than for cause by Valley or Valley National Bank upon or within one year following the consummation of the merger, will be eligible for severance payments. The amount of severance payments will vary based on the employment level and the number of years worked at USAmeriBancorp for each affected employee. In general, affected employees will be eligible for severance pay in an amount equal to four weeks of pay, plus one additional week for each complete year of service, up to a maximum of 26 weeks. USAmeriBancorp employees are eligible for enhanced benefits to the extent that they sign a standard separation agreement and waiver. None of Messrs. Chillura, Rogers or Olivier or the thirteen executive officers who are party to the Change in Control Plan are eligible for these benefits as they each have separate change in control arrangements as described above.

Election of Jennifer W. Steans to Boards of Directors of Valley and Valley National Bank

Upon consummation of the merger, Jennifer W. Steans (currently the Chairman of the Board of Directors of USAmeriBancorp) will be appointed to the Boards of Directors of Valley and Valley National Bank (if she is unable or unwilling to serve, another person from the current Board of Directors of USAmeriBancorp will be designated by Valley to serve as a director of Valley and Valley National Bank). Prior to Ms. Steans joining the Boards of Directors of Valley and Valley National Bank, she will resign as a director of MB Financial, Inc. (“MB”), the bank holding company of MB Financial Bank, a bank headquartered in Chicago, Illinois, in order to avoid the limitations of the Depository Institution Management Interlocks Act.

Ms. Steans, age 54, was an original organizer of USAmeriBank and has served as a director since USAmeriBank was founded. From 1989 through 1993, Ms. Steans served as a senior consultant and manager for Deloitte & Touche. Ms. Steans then served as Treasurer of Prime Graphics, Inc. from 1993 until founding Financial Investments Corporation in 1994. As Chief Executive Officer of Financial Investments Corporation (“FIC”), she oversees private equity investments and the Steans family office operations. In 2000, Ms. Steans joined the Board of Directors of PCB Bancorp, Inc. and served as a director until its sale to Colonial BancGroup, Inc. in 2004. Ms. Steans’ other business affiliations include service as a director of Chicago Deferred Exchange Corp., Provest Holdings, LLC, Centerline Solutions, LLC, Catastrophe Solutions International, LLC, and MB. In addition, she serves as an advisory board member of Carlyle Asia Growth Partners III, Resource Land Fund III, LP, and Siena Capital Partners.

The Board of Directors of Valley has determined that Ms. Steans will be an “independent” director for purposes of the independence standards of the New York Stock Exchange. The Board of Directors of Valley based this determination primarily on a review of the responses of Ms. Steans to questions regarding employment and transaction history, affiliations and family and other relationships and on discussions with Ms. Steans.

The table below lists the compensation earned by Ms. Steans for her services as Chairman of the Board of Directors of USAmeriBancorp for the year ended December 31, 2016.

2016 DIRECTOR COMPENSATION

 

Name		Fees Earned or Paid in Cash				Stock Awards				Change in Pension Value and Non-Qualified Deferred  Compensation Earnings				All Other Compensation				Total
Jennifer W. Steans		$	11,150			$	0			$	0			$	225,000	(1)		$	236,150

 

(1)

During 2016, USAmeriBancorp paid to FIC a management fee in the amount of $225,000 for certain management, advisory and consulting services provided to USAmeriBancorp by FIC. Ms. Steans serves as the Chief Executive Officer of FIC. USAmeriBancorp believes that FIC was retained in the ordinary course of business and that such services are provided by FIC on terms no less favorable to USAmeriBancorp than those that would have been realized in transactions with unaffiliated entities or individuals.

 

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USAmeriBancorp Board Considerations

The USAmeriBancorp Board of Directors was aware of all of the above different and/or additional interests and considered them, among other matters, in their respective evaluations and negotiations of the merger agreement.

Ownership Interests of Directors and Executive Officers

The following table sets forth, for each of the USAmeriBancorp directors and executive officers, the total number of shares of USAmeriBancorp common stock in which such director or executive officer owns, directly or indirectly, a beneficial interest, as of September 4, 2017. The information concerning the beneficial ownership of USAmeriBancorp directors and officers is based solely on information provided by those individuals. Unless otherwise stated, the beneficial owner has sole voting and investment power over the listed USAmeriBancorp common stock, or shares such power with his or her spouse.

 

		Common Stock Beneficially Owned(1)
Name of Beneficial Owner		Number of Shares of Common Stock				Percentage of Class
Jennifer W. Steans			563,525				5.35	%
George P. Bauer			520,551				4.95	%
Joseph V. Chillura			268,476				2.55	%
John P. Connelly			312,696				2.97	%
Mark S. Klein			148,489				1.41	%
Thomas B. McMurtrey, III			90,699				0.86	%
Harrison I. Steans			756,807				7.19	%
Alfred T. Rogers			260,184				2.47	%
James G. Olivier			50,809				0.48	%
All executive officers and directors as a group (9 persons)			2,972,236				28.25	%

 

(1)

For purposes of this table, a person is considered to beneficially own shares of common stock if he or she directly or indirectly has or shares voting power, which includes the power to vote or to direct the voting of the shares, or investment power, which includes the power to dispose or direct the disposition of the shares, or if he/she has the right to acquire the shares under warrants or options which are exercisable currently or within 60 days of September 4, 2017. Each person named in the above table has sole voting power and sole investment power with respect to the indicated shares unless otherwise noted. A person is considered to have shared voting and investment power over shares indicated as being owned by the spouse or the IRA of the spouse of that person.

Interests of Valley Officers and Directors

Ms. Mary Guilfoile, a director of Valley, is also a director and officer of MG Advisors, Inc. (“MG Advisors”). MG Advisors provided financial advisory services to Valley in connection with the merger although Ms. Guilfoile did not participate in such services. MG Advisors is paid a monthly fee by Valley of $7,500 per month and will be paid an additional fee of $375,000 by Valley in connection with the merger.

Opinion of USAmeriBancorp’s Financial Advisor

Opinion of Sandler O’Neill & Partners, L.P.

By letter dated June 20, 2017, USAmeriBancorp retained Sandler to act as an independent financial advisor to the Board of Directors of USAmeriBancorp and its subsidiaries in connection with USAmeriBancorp’s consideration of a possible business combination. Sandler is a nationally recognized investment banking firm whose principal business specialty is financial institutions. In the ordinary course of its investment banking business, Sandler is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.

 

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Sandler acted as financial advisor in connection with the proposed merger and participated in certain of the negotiations leading to the execution of the merger agreement. At the July 21, 2017 meeting at which USAmeriBancorp’s Board of Directors considered and discussed the terms of the merger agreement and the merger, Sandler delivered to the Board its oral opinion, which was subsequently confirmed in writing, to the effect that, as of such date, the merger consideration was fair to the holders of USAmeriBancorp’s common stock from a financial point of view. The full text of Sandler’s opinion is attached as Appendix B to this joint proxy statement-prospectus. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Sandler in rendering its opinion. The description of the opinion set forth below is qualified in its entirety by reference to the full text of the opinion. Holders of USAmeriBancorp’s common stock are urged to read the entire opinion carefully in connection with their consideration of the proposed merger.

Sandler’s opinion speaks only as of the date of the opinion. The opinion was directed to USAmeriBancorp’s Board of Directors in connection with its consideration of the merger and is directed only to the fairness, from a financial point of view, of the merger consideration to the holders of USAmeriBancorp common stock. Sandler’s opinion does not constitute a recommendation to any holder of USAmeriBancorp common stock as to how such holder of USAmeriBancorp common stock should vote with respect to the merger or any other matter. It does not address the underlying business decision of USAmeriBancorp to engage in the merger, the relative merits of the merger as compared to any other alternative business strategies that might exist for USAmeriBancorp or the effect of any other transaction in which USAmeriBancorp might engage. Sandler did not express any opinion as to the fairness of the amount or nature of the compensation to be received in the merger by USAmeriBancorp’s officers, directors, or employees, or class of such persons, if any, relative to the merger consideration to be received by USAmeriBancorp’s common shareholders. Sandler’s opinion was approved by Sandler’s fairness opinion committee.

In connection with rendering its opinion, Sandler reviewed and considered, among other things:

 

•

a draft of the merger agreement dated July 20, 2017;

 

•

certain publicly available financial statements and other historical financial information of USAmeriBancorp and its banking subsidiary that Sandler deemed relevant;

 

•

certain publicly available financial statements and other historical financial information of Valley that Sandler deemed relevant;

 

•

certain internal financial projections for USAmeriBancorp for the years ending December 31, 2017 through December 31, 2021, as provided by the senior management of USAmeriBancorp;

 

•

publicly available consensus median analyst earnings per share estimates for Valley for the years ending December 31, 2017 and December 31, 2018 and publicly available consensus analyst long-term earnings per share growth rate for the years thereafter, as confirmed by the senior management of Valley, as well as guidance with respect to an estimated long-term dividends per share growth rate for the years thereafter, as provided the senior management of Valley;

 

•

the pro forma financial impact of the merger on Valley was based on certain assumptions relating to purchase accounting adjustments, cost savings and transaction expenses, certain cash dividends to be paid by USAmeriBancorp to USAmeriBancorp’s common shareholders prior to closing of the merger, the redemption of USAmeriBancorp’s currently outstanding preferred stock at par value at closing of the merger and the offer and sale by Valley of approximately $75 million of Valley preferred stock immediately following the announcement of the merger, as provided to Sandler by the senior management of Valley;

 

•

the publicly reported historical price and trading activity for Valley common stock, including a comparison of certain stock market information for Valley common stock and certain stock indices as well as publicly available information for certain other similar companies, the securities of which are publicly traded;

 

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•

a comparison of certain financial information for USAmeriBancorp and Valley with similar financial institutions for which information is publicly available;

 

•

the financial terms of certain other recent merger and acquisition transactions in the banking industry (on a regional and nationwide basis), to the extent publicly available;

 

•

the current market environment generally and the banking environment in particular; and

 

•

such other information, financial studies, analyses and investigations and financial, economic and market criteria as Sandler considered relevant.

Sandler also discussed with certain members of senior management of USAmeriBancorp the business, financial condition, results of operations and prospects of USAmeriBancorp and held similar discussions with the senior management of Valley regarding the business, financial condition, results of operations and prospects of Valley

In performing its review, Sandler relied upon the accuracy and completeness of all of the financial and other information that was available to it from public sources, that was provided to it by USAmeriBancorp and Valley or that was otherwise reviewed by it and Sandler assumed such accuracy and completeness for purposes of preparing its opinion. Sandler further relied on the assurances of the senior management of USAmeriBancorp and Valley that they were not aware of any facts or circumstances that would have made any of such information inaccurate or misleading in any material respect. Sandler was not asked to undertake, and did not undertake, an independent verification of any such information and does not assume any responsibility or liability for the accuracy and completeness thereof. Sandler did not make an independent evaluation or appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of USAmeriBancorp or Valley, nor did Sandler review any individual credit files of USAmeriBancorp or Valley. Sandler did not make an independent evaluation of the adequacy of the allowance for loan losses of USAmeriBancorp or Valley and Sandler assumed, with USAmeriBancorp’s consent, that the respective allowances for loan losses for both USAmeriBancorp and Valley were adequate to cover such losses and would be adequate on a pro forma basis for the combined entity.

In preparing its analyses, Sandler used certain internal financial projections for USAmeriBancorp for the years ending December 31, 2017 through December 31, 2021, as provided by the senior management of USAmeriBancorp. In addition, Sandler used publicly available consensus median analyst earnings per share estimates for Valley for the years ending December 31, 2017 and December 31, 2018, and publicly available consensus analyst long-term earnings per share growth rates for the years thereafter, as confirmed by the senior management of Valley, as well as guidance with respect to an estimated long-term dividends per share growth rate for the years thereafter, as provided by the senior management of Valley. Sandler also received and used in its analyses certain assumptions related to purchase accounting adjustments, cost savings and transaction expenses, certain cash dividends to be paid by USAmeriBancorp to USAmeriBancorp’s common shareholders prior to closing of the merger, the redemption of USAmeriBancorp’s currently outstanding preferred stock at par value at closing of the merger and the offer and sale by Valley of approximately $75 million of Valley preferred stock immediately following the announcement of the merger, as provided to Sandler by the senior management of Valley. With respect to the foregoing information, the respective senior managements of USAmeriBancorp and Valley confirmed to Sandler that such information reflected (or, in the case of the publicly available consensus median analyst earnings per share estimates referred to above, were consistent with) the best available projections, estimates and judgments of those respective senior managements as to the future financial performance of USAmeriBancorp and Valley, respectively, and the other matters covered thereby, and Sandler assumed that the future financial performance reflected in such information would be achieved. Sandler expressed no opinion as to any such estimates or the assumptions on which they were based. Sandler assumed that there had been no material change in the respective assets, financial condition, results of operations, business or prospects of USAmeriBancorp or Valley since the date of the most recent financial statements made available to Sandler. Sandler also assumed in all respects material to its analysis that USAmeriBancorp and Valley would remain as going concerns for all periods relevant to its analyses.

 

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Sandler also assumed, with USAmeriBancorp’s consent, that (i) each of the parties to the merger agreement would comply in all material respects with all material terms of the merger agreement, that all of the representations and warranties contained in the merger agreement were true and correct in all material respects, that each of the parties to the merger agreement would perform in all material respects all of the covenants required to be performed by such party under the merger agreement and that the conditions precedent in the merger agreement were not waived, (ii) in the course of obtaining the necessary regulatory or third party approvals, consents and releases with respect to the merger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on USAmeriBancorp, Valley or the merger in any respect that would be material to Sandler’s analyses, (iii) the merger and any related transaction would be consummated in accordance with the terms of the merger agreement without any waiver, modification or amendment of any material term, condition or agreement thereof and in compliance with all applicable laws and other requirements, and (iv) the merger would qualify as a tax-free reorganization for federal income tax purposes. Sandler expressed no opinion as to any of the legal, accounting or tax matters relating to the merger or any other transactions contemplated in connection therewith.

Sandler’s analyses and the views expressed therein were necessarily based on financial, economic, regulatory, market and other conditions as in effect on, and the information made available to Sandler as of, the date of its opinion. Events occurring after the date of the opinion could materially affect Sandler’s views. Sandler has not undertaken to update, revise, reaffirm or withdraw its opinion or otherwise comment upon events occurring after the date thereof.

In rendering its opinion, Sandler performed a variety of financial analyses. The summary below is not a complete description of all the analyses underlying Sandler’s opinion or the presentation made by Sandler to USAmeriBancorp’s Board of Directors, but is a summary of the material analyses performed and presented by Sandler. The summary includes information presented in tabular format. In order to fully understand the financial analyses, these tables must be read together with the accompanying text. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. Sandler believes that its analyses must be considered as a whole and that selecting portions of the factors and analyses to be considered without considering all factors and analyses, or attempting to ascribe relative weights to some or all such factors and analyses, could create an incomplete view of the evaluation process underlying its opinion. Also, no company included in Sandler’s comparative analyses described below is identical to USAmeriBancorp or Valley and no transaction is identical to the merger. Accordingly, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or merger transaction values, as the case may be, of USAmeriBancorp and Valley and the companies to which they are being compared. In arriving at its opinion, Sandler did not attribute any particular weight to any analysis or factor that it considered. Rather, Sandler made qualitative judgments as to the significance and relevance of each analysis and factor. Sandler did not form an opinion as to whether any individual analysis or factor (positive or negative) considered in isolation supported or failed to support its opinion; rather, Sandler made its determination as to the fairness of the merger consideration on the basis of its experience and professional judgment after considering the results of all its analyses taken as a whole.

In performing its analyses, Sandler also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which cannot be predicted and are beyond the control of USAmeriBancorp, Valley and Sandler. The analyses performed by Sandler are not necessarily indicative of actual values or future results, both of which may be significantly more or less favorable than suggested by such analyses. Sandler prepared its analyses solely for purposes of rendering its opinion and provided such analyses to USAmeriBancorp’s Board of Directors at its July 21, 2017 meeting. Estimates on the values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold. Such estimates are inherently subject to uncertainty and actual values may be

 

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materially different. Accordingly, Sandler’s analyses do not necessarily reflect the value of USAmeriBancorp common stock or the prices at which USAmeriBancorp or Valley common stock may be sold at any time. The analyses of Sandler and its opinion were among a number of factors taken into consideration by USAmeriBancorp’s Board of Directors in making its determination to approve the merger agreement and the analyses described below should not be viewed as determinative of the decision of USAmeriBancorp’s Board of Directors or management with respect to the fairness of the merger.

Summary of Proposed Merger Consideration and Implied Transaction Metrics. Sandler reviewed the financial terms of the proposed merger. As described in the merger agreement, each share of USAmeriBancorp common stock issued and outstanding immediately prior to the effective time of the merger, other than certain shares described in the merger agreement, will be converted into the right to receive, subject to certain adjustments set forth in the merger agreement, the number of shares of Valley common stock equal to the Exchange Ratio. As defined more fully in the merger agreement, the “Exchange Ratio” shall mean: (i) if the average closing price is between $11.50 and $13.00, the Exchange Ratio shall be equal to 6.100; (ii) if the average closing price is less than $11.50 but equal to or greater than $11.00, the Exchange Ratio shall be $69.00 divided by the average closing price, rounded to three decimal places; (iii) if the average closing price is greater than $13.00 but equal to or less than $13.50, the Exchange Ratio shall be $79.30 divided by the average closing price, rounded to three decimal places; (iv) if the average closing price is less than $11.00, the Exchange Ratio shall be $69.00 divided by the average closing price, rounded to three decimal places; (v) if the average closing price is greater than $13.50, the Exchange Ratio shall be $79.30 divided by the average closing price, rounded to three decimal places; or (vi) in the event that at any time after the date of the merger agreement Valley has entered into a definitive acquisition agreement whereby it has agreed to be acquired by a third party and the average closing price is in excess of $13.50, the Exchange Ratio shall equal 5.874. The adjustment to the exchange ratio if the average closing price is less than $11.50 is not linear; therefore if the average closing price is between $11.32 and $11.49, the exchange ratio will decrease slightly and if the average closing price is less than $11.32, the exchange ratio will increase. Additionally, the merger agreement permits USAmeriBancorp to pay its shareholders a dividend, in addition to any dividend which USAmeriBancorp may declare and pay in the ordinary course of its business, equivalent to the amount of Valley’s most recently declared dividend using an assumed exchange ratio of 6.100x (a quarterly increase of approximately $0.496 per share for USAmeriBancorp). Based upon Valley’s price per share of common stock of $11.85 as of July 20, 2017 and the Exchange Ratio of 6.100x, Sandler calculated an aggregate implied transaction value of approximately $788.6 million, or an implied transaction price per share of $73.28, including the $0.992 in incremental dividends, and an aggregate implied transaction value of $778.6 million, or an implied transaction price per share of $72.29, excluding the $0.992 in incremental dividends. Based upon financial information for USAmeriBancorp as of or for the period ending June 30, 2017 (unless otherwise indicated), Sandler calculated the following implied transaction metrics both including and excluding the $0.992 in incremental dividends:

 

		Including/Excluding Incremental Dividends
Transaction Price / Tangible Book Value Per Share:		230% /227%
Transaction Price / Book Value Per Share:		222% /219%
Transaction Price / LTM Earnings Per Share:		15.9x /15.7x
Transaction Price / 2017 Earnings Per Share1:		15.5x /15.3x
Transaction Price / 2018 Earnings Per Share1:		14.0x /13.8x
Tangible Book Premium / Core Deposits2:		16.2% /15.8%

 

1)	As provided by USAmeriBancorp’s management

2)	Core deposits defined as total deposits less time deposits greater than $100k, brokered deposits, and listing service deposits

For illustrative purposes and to facilitate discussion among members of the USAmeriBancorp Board of Directors, Sandler also calculated, assuming Valley’s Average Closing Stock Price was below $11.50, the aggregate implied transaction value of approximately $752.3 million, or an implied transaction price per share of

 

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$69.99 (including the $0.992 in incremental dividends). Excluding the $0.992 in incremental dividends, Sandler calculated an aggregate implied transaction value of approximately $742.3 million, or an implied transaction price per share of $69.00. Based upon financial information for USAmeriBancorp as of or for the period ending June 30, 2017 (unless otherwise indicated), Sandler calculated the following implied transaction metrics both including and excluding the $0.992 in incremental dividends:

 

		Including/Excluding Incremental Dividends
Transaction Price / Tangible Book Value Per Share:		220% /217%
Transaction Price / Book Value Per Share:		212% /209%
Transaction Price / LTM Earnings Per Share:		15.2x /15.0x
Transaction Price / 2017 Earnings Per Share1:		14.8x /14.6x
Transaction Price / 2018 Earnings Per Share1:		13.3x /13.1x
Tangible Book Premium / Core Deposits2:		14.9% /14.5%

 

1)	As provided by USAmeriBancorp’s management

2)	Core deposits defined as total deposits less time deposits greater than $100k, brokered deposits, and listing service deposits

Stock Trading History. Sandler reviewed the history of the publicly reported trading prices of Valley common stock for the three-year period ending July 20, 2017. Sandler then compared the relationship between the movements in the price of Valley common stock to movements in its peer group (as described below) as well as certain stock indices.

Three-Year Stock Performance

 

		Beginning Value July 20, 2014				Ending Value July 20, 2017
Valley			100	%			121.9	%
S&P 500			100	%			125.0	%
NASDAQ Bank			100	%			147.6	%
Valley Peer Group			100	%			127.8	%

Comparable Company Analysis. Sandler used publicly available information to compare selected financial information for USAmeriBancorp with a group of financial institutions selected by Sandler. USAmeriBancorp’s peer group consisted of nationwide banks whose securities are publicly traded on the NASDAQ, NYSE or NYSE MKT with assets between $2.5 billion and $6.0 billion, last-twelve-months return on average assets greater than 0.75%, tangible common equity / tangible assets less than 8.0%, excluding targets of announced mergers and Meta Financial Group (the “USAB Peer Group”). The USAB Peer Group also excluded Washington Trust Bancorp and TriStateCapital Holdings, which have over $5.0 billion in assets under management in their trust/wealth businesses. The USAB Peer Group consisted of the following companies:

 

Southside Bancshares, Inc. Fidelity Southern Corporation First Bancorp Camden National Corporation Financial Institutions, Inc. First Foundation, Inc. Franklin Financial Network, Inc. First Mid-Illinois Bancshares, Inc. CNB Financial Corporation

 

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The analysis compared publicly available financial information for USAmeriBancorp with the corresponding data for the USAB Peer Group as of or for the period ending March 31, 2017 (unless otherwise indicated), with pricing data as of July 20, 2017. The table below sets forth the data for USAmeriBancorp, and the median, mean, high and low data for the USAB Peer Group.

Comparable Company Analysis¹

 

		USAB5				USAB Peer Group Median				USAB Peer Group Mean				USAB Peer Group High				USAB Peer Group Low
Total assets (in millions)		$	4,383			$	3,860			$	3,900			$	5,656			$	2,679
Tangible common equity/Tangible assets			7.39	%			7.80	%			7.62	%			7.97	%			6.16	%
Leverage ratio			8.05	%			8.48	%			8.85	%			11.05	%			7.30	%
Total risk-based capital ratio			12.07	%			12.89	%			13.98	%			20.01	%			12.11	%
CRE2/Total RBC			384.0	%			215.0	%			245.7	%			656.3	%			129.2	%
LTM Return on average assets			1.12	%			0.95	%			0.94	%			1.07	%			0.78	%
LTM Return on average common equity			14.43	%			10.45	%			10.42	%			13.09	%			7.43	%
LTM Net interest margin			3.31	%			3.30	%			3.39	%			4.03	%			3.08	%
LTM Efficiency ratio			52.9	%			58.2	%			60.2	%			71.0	%			51.1	%
Non-performing assets3/Total assets			1.12	%			0.68	%			0.68	%			1.35	%			0.15	%
Price/Tangible book value			—				196	%			202	%			235	%			166	%
Price/LTM Earnings per share			—				16.2x				17.4x				23.1x				13.2x
Price/2017 Estimated Earnings per share4			—				15.4x				16.0x				18.7x				14.4x
Current Dividend Yield			—				2.1	%			1.7	%			3.1	%			0.0	%
LTM Dividend Ratio			—				30.1	%			27.5	%			54.5	%			0.0	%
Market value (in millions)			—			$	558			$	598			$	1,026			$	392

 

1)	Financial data for CNB Financial Corporation as of June 30, 2017, with the exception of CNB Financial Corporation’s LTM Net Interest Margin which was as of March 31, 2017.

2)	CRE defined as total non-owner-occupied commercial real estate loans (including construction and land development loans), as defined in the 2006 Federal Reserve guidance; most recent regulatory data available used.

3)	Nonperforming assets include nonaccrual loans and leases, renegotiated loans and leases and real estate owned.

4)	Price/ forward earnings multiples based on analyst consensus mean estimates from SNL CapIQ.

5)	USAmeriBancorp financials as of June 30, 2017; LTM profitability based on March 31, 2017 financials.

Sandler used publicly available information to perform a similar analysis for Valley and a group of financial institutions selected by Sandler. The peer group consisted of nationwide banks whose securities trade on the NASDAQ, NYSE or NYSE MKT with assets between $20.0 billion and $26.0 billion (the “Valley National Peer Group”). The Valley National Peer Group excluded announced merger targets. The Valley National Peer Group consisted of the following companies:

 

Wintrust Financial Corporation Hancock Holding Company Commerce Bancshares, Inc. Umpqua Holdings Corporation Investors Bancorp, Inc.