Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Lehman Brothers 2006 Financial Services Conference
29 slides from Valley National Bancorp's conference presentation, Sep 12, 2006
Slide 1: Lehman Brothers 2006 Financial Services Conference
Lehman Brothers 2006 Financial Services Conference September 12, 2006 • EXHIBIT 99.1
Slide 2: Forward-looking statements
This presentation contains forward looking statements concerning Valley’s future business outlook, financial condition and operating results. Generally, the words "will," "may," "should," "continue," "believes," "expects," "anticipates" or similar expressions identify forward looking statements. Rea
Slide 3: Overview of Valley National Bancorp
Overview of Valley National Bancorp 79 Year Commercial Banking History Listed on the NYSE: VLY (twelve years as of December 5, 2005) Management Longevity/Ownership Big Bank – Act Like Small Privately Owned Company Marketplace Sound Asset Quality Strong Financial Performance Consistent Shareholder Re
Slide 4: Retail Strategy
Retail Strategy Superior customer service Long hours – Sunday Banking Coin counting machines Drive-in facilities Emphasis on cross-selling Community focus Take advantage of attractive growth opportunities through expansion and acquisitions
Slide 5: Concentrated Focus and Market Share
County Valley Offices 1 Market Share by Deposits 2 60 Miles from Wayne 60 Minutes from Wayne Valley National Bancorp’s Concentrated Focus and Market Share As of September 12, 2006 June 2005 Total Deposits Non-Retail bank branches were excluded from county totals. Passaic 25.86% Essex 9.11 Sussex 9.4
Slide 6: Focused Growth
Focused Growth Branches under Development Open – 6 Branches Cranford – Union County Rivervale – Bergen County Woodbridge – Middlesex County Hudson/Laight – Manhattan Paterson – Passaic County 88 th Street and 3 rd Avenue – Manhattan Expect to Open – 5 Branches Denville – Morris County Highlands – Mo
Slide 7: Deposit Composition
45% 23% Deposit Composition (as of June 30, 2006) 32% Non-Interest Bearing Savings, NOW and Money Market Time Total Deposits $8,571 ($ in millions)
Slide 8: Cost of Deposits
Cost of Deposits 2001- 6/30/2006 3.04% 2.57% 1.87% 1.56% 1.26% 1.02% 1.11% 0.95% 1.63% 1.49% 2.36% 2.11% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 6/30/2006 Peer Average Valley Peer Source – SNL Suggested Regional Group © 2000-2006 SNL Financial (snl.com) All rights reserved (Qtr. -annualized)
Slide 9: Average Life Distribution of Non-maturity Deposits
Average Life Distribution of Non-maturity Deposits (as of June 30, 2006) 1.48 5.77 3.20 7.06 1.38 2.57 3.20 2.95 3.20 13.33 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 Commercial DDA Retail DDA Money Market Savings NOW Peer Average Valley * Peer Average reflects FDICIA 305 non-maturity specific guide
Slide 10: Loan Strategy
Loan Strategy Focus on quality and profitability over growth Anticipate customer needs Provide convenient products and services Focus on small and mid-size market that is poorly serviced by bigger banks Remain aggressive yet disciplined Continue to provide exceptional service while maintaining outst
Slide 11: Total Loan Portfolio Composition
24% 23% 28% 25% Commercial & Construction Loans Commercial Mortgages Residential Mortgages Consumer Loans ($ in millions) Total Loans $8,336 Total Loan Portfolio Composition (as of June 30, 2006)
Slide 12: Loan Quality
Loan Quality 2001- 6/30/2006 0.35% 0.27% 0.38% 0.24% 0.36% 0.11% 0.44% 0.11% 0.32% 0.05% 0.37% 0.10% 0.00% 0.50% 1.00% 1.50% 2.00% 6/30/2006 Non-Performing Loans to Total Loans Net Charge-Offs to Average Loans (annualized)
Slide 13: Net Interest Margin and the Yield Curve
As the slope of the yield curve steepens, Valley’s Net Interest Margin will increase Exclusive of other factors, with the expiration of a cash flow hedge on August 1, 2006, Net Interest Margin is expected to increase 4 bps annually Yields on loans originated in the second quarter of 2006 were 61 bps
Slide 14: Net Interest Margin Trend
3.76% 3.66% 3.55% 3.50% 3.48% Net Interest Margin Trend Net Interest Margin is presented on a tax equivalent basis using a 35% tax rate 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 9/30/2005 12/31/2005 3/31/2006 6/30/2006 6/30/2005
Slide 15: Valley National Bank - Sensitivity Analysis
20.92% 22.68% 22.33% 23.39% 22.08% 21.48% Valley National Bank - Sensitivity Analysis Repricing Loan Cash Flow in One Year 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 6/30/2006 Prime-Based Loans Reprice Cash Flow
Slide 16: Valley's Capital Position
Valley’s Capital Position Average five year annual return on average tangible shareholders’ equity through 12/31/05 is 24.02% Capital position is continuously well above minimum capital requirements Additional benefit of unrealized gain on Valley owned facilities
Slide 17: Strong Capital Position
Strong Capital Position Includes $200 Million Trust Preferred Issued November 2001. Total Capital Ratio Includes $100 Million Sub-debt Issued July 2005. 8.2% 10.5% 12.4% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 6/30/2006 Leverage Ratio Tier 1 Ratio Total Capital Ratio (annualized)
Slide 18: Unrealized Capital Position
Unrealized Capital Position (as of June 30, 2006) Marked-to-Market Facilities Number of facilities owned – Approximate Unrealized Gain on Facilities owned - $200 Million over Book
Slide 19: Management Longevity/Ownership
Management Longevity/Ownership Executive management has an average 30+ years of banking or financial experience Valley’s superior executive team is continually praised by Wall Street as being one of the finest Customer access to all levels of management separates Valley from its competition
Slide 20: Inside Ownership Comparison
7.78% 4.76% 5.77% Inside Ownership Comparison (as of June, 2006) © 2000-2006 SNL Financial (snl.com) All rights reserved 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% Valley SNL Y- Merge Suggested Regional SNL Y- Merge Suggested Highly Valued
Slide 21: Valley's Competitive Shareholder Advantage
Valley’s Competitive Shareholder Advantage High dividend payout ratio Total return exceeds indices Consistent shareholder returns
Slide 22: Dividend Yield Comparison
Dividend Yield Comparison 3.16% 3.36% 3.05% 3.22% 3.63% 3.28% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 6/30/2006 LTM Valley SNL National Public Bank Median SNL Y- Merge Suggested Regional SNL Y- Merge Suggested Highly Valued © 2000-2006 SNL Financial (snl.com) All rights reserved
Slide 23: Dividend Growth Per Share
.16 .21 .23 .25 .26 .26 .27 .30 .36 .40 .42 .47 .53 .59 .64 .67 .72 .76 .80 .83 Annual Dividend paid, adjusted for stock splits and stock dividends Current annual rate is $0.86 per share Dividend Growth Per Share
Slide 24: Net Income Per Diluted Share
1.14 (1) 1.36 (2) 1.40 1.41 1.42 Net Income Per Diluted Share 0.69 0.70 $0.00 $0.50 $1.00 $1.50 6/30/2006 All share data is adjusted to reflect a percent stock dividend issued on May 22, 2006. (1) Amount for 2001 includes merger-related charges of $7.0 million for Merchants acquisition. (2) Includes
Slide 25: Total Returns 6/30/96 - 6/30/06
12.70% Annual 8.52% Annual 8.31% Annual Total Returns – 6/30/96 – 6/30/06* 230.91% 63.22% 126.75% 16.92% 122.31% 13.09% 0% 50% 100% 150% 200% 250% Valley Russell 1000 Index S&P Index 10 Years 5 Years *Source- Bloomberg 10.28% Annual 3.17% Annual 2.49% Annual
Slide 26: Scarcity Value
218 125 90 75 Scarcity Value New Jersey New York * Source - FDIC
Slide 27: Future Goals
Future Goals Maintain exceptional asset quality Remain active in the lending community Emphasize business lending Take advantage of changing banking market in the Tri-State area
Slide 28: For More Information
For More Information Log onto our web site: www.valleynationalbank.com Visit our kids site: www.vnbkids.com E-mail requests to: dgrenz@valleynationalbank.com Call Shareholder Relations at: (973) 305-3380 Write to: Valley National Bank 1455 Valley Road Wayne, New Jersey 07470 Attn: Dianne M. Grenz, S
Slide 29: Non-GAAP Disclosure Reconciliation
Non-GAAP Disclosure Reconciliation These materials contain the average five year annual return on average tangible shareholders’ equity, a financial measure determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The aver
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