Valley National Bancorp to Acquire 1st United Bancorp, Inc.

Wayne-based Valley National Bancorp and 1st United Bancorp, Inc. have entered into a merger agreement whereby the common shareholders of 1st United will receive 0.89 of a share of Valley common stock for each 1st United share they own, subject to adjustment in the event Valley’s average stock price falls below $8.09 or rises above $12.13 prior to closing.  The transaction is valued at an estimated $312 million, based on Valley’s closing stock price on May 5, 2014 (and includes the cash consideration that will be paid to 1st United stock option holders).

1st United, and its wholly-owned subsidiary, 1st United Bank, with approximately $1.7 billion in assets, $1.2 billion in loans, and $1.4 billion in deposits, has a 21 branch network covering the most attractive urban banking markets in Florida, including locations throughout southeast Florida, the Treasure Coast, central Florida and central Gulf Coast regions. This bold and unique expansion opportunity will provide an entrée for Valley into Florida’s high growth market, beyond its traditional Northeastern regional footprint. 1st United’s experienced management team will join Valley to lead its continued expansion efforts in Florida, and complement Valley’s growth initiatives in the New Jersey and New York Metropolitan markets.  Valley’s decision to enter the Florida market was due to, among other things, Valley’s sizable residential mortgage and automobile lending platforms, past real estate and consumer lending experience in the Florida markets, as well as bolstered by the following attractive key demographics and facts about Florida:

  • The 4th largest population in the U.S. (projected to be 3rd largest by 2015);
  • Projected population change +5 percent over the next 3 years;
  • Highly attractive tax climate, business friendly attitude with a strong labor force;
  • The 21st largest economy in the world & 4th largest GDP in the U.S.;
  • Personal income ranked 1st in the Southeast; and
  • A high level of organic and bank acquisition expansion opportunities.

Valley anticipates that the merger with 1st United will be a non-taxable transaction. The combined company is expected to have approximately $18.1 billion in assets, $12.9 billion in loans, $12.7 billion in deposits, 225 branches covering northern and central New Jersey, New York (including Manhattan, Brooklyn, Queens and Long Island), and southeast and central Florida.

“Valley has always employed a highly focused geographic growth strategy based on creating long-term shareholder value, however, we ultimately welcomed this tremendous opportunity to expand into one of the premiere growth markets of the United States,” remarked Valley Chairman, President & CEO Gerald H. Lipkin.  Mr. Lipkin added, “1st United is currently the seventh largest publicly-held bank headquartered in Florida by deposits, and shares a similar corporate culture to Valley.  With its middle market commercial corporate emphasis, 1st United has an experienced and conservative banking team, and strong core deposit and capital bases. Rudy Schupp, 1st United’s CEO, with the support of their Board of Directors led by Chairman Warren Orlando along with President and Chief Financial Officer John Marino, have done an excellent job of opportunistically expanding the 1st United franchise since 2003. We are excited about their team’s competitive positioning and attractive client base.  With this merger, we add a well-positioned institution located in regions of Florida with very strong demographics that should provide us the necessary springboard for the initial introduction of the Valley brand, as well as a strong foundation for future growth opportunities. We would like to extend our warmest welcome to the 1st United Shareholders, customers, and employees and we look forward to you joining the Valley family.”

The Boards of Directors of both companies after extensive review and due diligence have unanimously approved the transaction.  Transaction closing is anticipated early in the fourth quarter of 2014, subject to approvals from regulators, 1st United shareholder approval of the merger and Valley shareholder approval of an amendment of its certificate of incorporation to increase its authorized common shares, as well as other customary conditions.

Commenting on the announcement, 1st United’s CEO Rudy Schupp stated, “We at 1st United are excited about combining with Valley and the opportunity it provides our shareholders, customers, and employees. Valley’s substantial resources, similar culture, additional commercial and consumer product lines, and shared growth aspirations, combined with our team of Florida bankers, will provide the valuable ingredients needed to expand the Florida franchise for Valley to levels that we expect will make a tremendous contribution to Valley’s future results.”

Terms of Agreement

Under the terms of the definitive agreement signed by the companies, each 1st United shareholder will receive 0.89 shares of Valley National Bancorp common stock for each share of 1st United common stock.  In the event Valley’s average share price during the 20 business day period ending 5 days prior to closing is less than $8.09, then Valley will increase the 0.89 exchange ratio so that 1st United shareholders receive $7.20 in Valley common stock or $7.20 in Valley common stock and cash for each 1st United share they hold. In the event Valley’s average share price during the 20 business day period ending 5 days prior to closing is greater than $12.13, then Valley will decrease the 0.89 exchange ratio so that 1st United shareholders receive $10.80 in Valley common stock for each 1st United share they hold.

Valley has successfully completed six bank and branch network acquisitions over the last ten years.  Each merger was completed efficiently and with no disruption to the existing customer service.