VALLEY NATIONAL BANCORP - FORM 8-K - EX-99 - PRESS RELEASE

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EXHIBIT 99


FOR IMMEDIATE RELEASE	Contact:	Alan D. Eskow
		Senior Executive Vice President and
		Chief Financial Officer
		973-305-4003

VALLEY NATIONAL BANCORP REPORTS INCREASE IN THIRD QUARTER EARNINGS,

SOLID NET INTEREST MARGIN AND STRONG CAPITAL POSITION

WAYNE, NJ – October 27, 2011 — Valley National Bancorp (NYSE:VLY), the holding company for Valley National Bank, today reported net income for the third quarter of 2011 of $35.4 million, or $0.21 per diluted common share, as compared to the third quarter of 2010 earnings of $32.6 million, or $0.19 per diluted common share.

Key highlights for the third quarter:

•

Net Interest Income and Margin: Net interest income increased $4.2 million to $121.9 million for the quarter ended September 30, 2011 as compared to $117.7 million for the quarter ended June 30, 2011. On a tax equivalent basis, our net interest margin increased 15 basis points to 3.86 percent in the third quarter of 2011 as compared to 3.71 percent for the second quarter of 2011, and was 8 basis points higher than the 3.78 percent net interest margin for the third quarter of 2010. The increases in the net interest income and margin were mainly due to additional cash flows on covered loan pools and an increase in non-covered loan prepayment fees and recovered interest on non-accrual loans. See the “Net Interest Income and Margin” section below for more details.

•

Loan Growth: Total non-covered loans (i.e., loans which are not subject to our loss-sharing agreements with the FDIC) increased by $35.1 million to $9.3 billion at September 30, 2011 from June 30, 2011. Our commercial real estate and residential mortgage loans grew by $38.3 million and $25.2 million, or 4.4 percent and 4.7 percent, respectively, on an annualized basis, during the third quarter of 2011. However, auto, construction and home equity loans continued to decline during the third quarter. Total covered loans (i.e., loans subject to our loss-sharing agreements with the FDIC) decreased to $282.4 million, or 2.9 percent of our total loans, at September 30, 2011 as compared to $308.4 million at June 30, 2011 mainly due to normal payment activity.

•

Asset Quality: Total loans past due 30 days or more were 1.73 percent of the loan portfolio at September 30, 2011 compared to 1.66 percent at June 30, 2011. Total non-accrual loans were $107.7 million, or 1.12 percent of our entire loan portfolio of $9.6 billion, at September 30, 2011. The residential mortgage and home equity loan portfolios totaling approximately 23,000 individual loans had only 269 loans past due 30 days or more at September 30, 2011. At September 30, 2011, residential mortgage and home equity loans delinquent 30 days or more totaled $47.6 million, or 1.80 percent of the $2.7 billion in total loans within these categories. See “Credit Quality” section below for more details.

Valley National Bancorp (NYSE: VLY)

2011 Third Quarter Earnings

October 27, 2011

•

Provision for Losses on Non-Covered Loans and Unfunded Letters of Credit: The provision for losses on non-covered loans and unfunded letters of credit increased to $7.8 million for the third quarter of 2011 as compared to $6.8 million for the second quarter of 2011 and declined from $9.3 million for the third quarter of 2010. Net loan charge-offs on non-covered loans declined to $4.8 million for the three months ended September 30, 2011 compared to $6.2 million for the second quarter of 2011 and $6.1 million for the third quarter of 2010. At September 30, 2011, our allowance for losses on non-covered loans and unfunded letters of credit totaled $125.1 million and was 1.34 percent of non-covered loans, as compared to 1.32 percent and 1.28 percent at June 30, 2011 and September 30, 2010, respectively.

•

Allowance for Losses on Covered Loans: Our allowance for losses on covered loans totaled $12.6 million at September 30, 2011 as compared to $18.7 million at June 30, 2011 and was reduced by loan charge-offs totaling $6.1 million in impaired loan pools during the third quarter of 2011.

•

Change in FDIC Loss-Share Receivable: We recognized a $1.6 million reduction in non-interest income during the third quarter of 2011 due to a decrease in our FDIC loss-share receivable primarily caused by a $2.9 million adjustment attributable to the effect of increased cash flows from certain covered loan pools in excess of originally forecasted cash flows, all of which is recognized on a prospective basis. The $2.9 million adjustment was partially offset by income from reimbursable expenses under the loss sharing agreements and accretion of the receivable discount recorded upon acquisition.

•

Other Intangible Assets: We recognized a $1.6 million ($0.01 per common share) impairment charge on certain loan servicing rights during the third quarter of 2011 as compared to an $810 thousand charge in the third quarter of 2010. The impairment charges are mainly the result of higher expected prepayments caused by the low interest rate environment. Loan servicing rights totaled $10.4 million at September 30, 2011, net of a $2.6 million valuation allowance.

•

Trading Mark to Market Impact on Earnings: Net income for the third quarter of 2011 included net trading gains of $776 thousand (less than $0.01 per common share) as compared to net trading losses of $2.6 million ($0.01 per common share) for the third quarter of 2010. Trading gains and losses mainly represent non-cash mark to market gains and losses on our junior subordinated debentures carried at fair value.

•

Capital Strength: Our regulatory capital ratios continue to reflect Valley’s strong capital position. The Company’s total risk-based capital, Tier 1 capital, and leverage capital were 12.65 percent, 10.82 percent, and 8.10 percent, respectively, at September 30, 2011.

Gerald H. Lipkin, Chairman, President and CEO commented that, “Given the current sluggish operating environment, we believe our performance continued to be very solid during the third quarter. Overall, our loan growth remained somewhat tempered by the weakened economy, as well as our decision to sell approximately 45 percent of our new and renewed residential mortgage originations during the quarter. Our very successful one price mortgage refinancing program continues to be one of several bright spots in our operations and especially for our refinance customers who have benefited from significant cost savings on their mortgage loans in this low rate environment.

Valley National Bancorp (NYSE: VLY)

2011 Third Quarter Earnings

October 27, 2011

As previously announced in April 2011, we entered into a merger agreement with State Bancorp, Inc. and its principal subsidiary, State Bank of Long Island with approximately $1.6 billion in assets and a 17 branch network. We are excited about the merger’s potential to expand the Valley brand into this attractive new market and build new customer relationships in these communities. The Office of the Comptroller of the Currency and the Federal Reserve Bank of New York have granted their approval of the merger. We anticipate the closing of the merger to occur after the close of business on December 31, 2011 with an effective date of January 1, 2012, contingent upon receiving the approval of the State Bancorp shareholders, the purchase from the Treasury Department of State Bancorp’s Series A Preferred Stock and other customary closing conditions.”

Net Interest Income and Margin

Net interest income on a tax equivalent basis was $123.6 million for the third quarter of 2011, a $4.6 million increase from the second quarter of 2011 and an increase of $4.4 million from the third quarter of 2010. The linked quarter increase was mainly driven by higher interest income on loans, which included the effect of additional cash flows on covered loan pools totaling $3.9 million and an increase in non-covered loan prepayment fees and interest received in the payoff of a non-accrual construction loan totaling a combined $2.1 million in the third quarter of 2011. The increase in interest income on loans was partially offset by lower interest income on investment securities caused by a decline in average taxable investments and a slight decrease in the yield on such securities.

The net interest margin on a tax equivalent basis was 3.86 percent for the third quarter of 2011, an increase of 15 basis points from 3.71 percent in the linked second quarter of 2011, and an 8 basis point increase from 3.78 percent for the quarter ended September 30, 2010. The yield on average interest earning assets increased by 14 basis points on a linked quarter basis mainly as a result of a higher yield on average loans due to the aforementioned increases in interest income, partially offset by both a decrease in average taxable investments and the yield on such investments. The cost of average interest bearing liabilities declined one basis point from the second quarter of 2011 mainly due to a three basis point decrease in the cost of average long-term borrowings caused, in part, by the maturity of $90 million in FHLB borrowings during late April 2011 and a decline in average interest-bearing deposits. Our cost of total deposits was 0.71 percent for the third quarter of 2011 compared to 0.72 percent for the three months ended June 30, 2011.

Although our net interest margin experienced growth during the third quarter of 2011 primarily due to the infrequent loan income items described above, we believe our margin will continue to face strong headwinds into the foreseeable future due to the current low level of interest rates on most interest earning asset alternatives. However, we continue to tightly manage our balance sheet and our cost of funds to optimize our returns. During the third quarter of 2011, we reduced the interest rates on many of our deposit products, including time deposits, and we have yet to fully realize the benefits of these recent reductions. We believe these actions and other asset/liability strategies will partially temper the negative impact of the current interest rate environment.

Valley National Bancorp (NYSE: VLY)

2011 Third Quarter Earnings

October 27, 2011

Credit Quality

Total loan delinquencies as a percentage of total loans were 1.73 percent at September 30, 2011 as compared to 1.66 percent at June 30, 2011 and 1.70 percent at September 30, 2010. With a non-covered loan portfolio totaling $9.3 billion, net loan charge-offs on non-covered loans for the third quarter of 2011 totaled $4.8 million as compared to $6.2 million for the second quarter of 2011 and $6.1 million for the third quarter of 2010. Charge-offs on loans in our impaired covered loan pools totaled $6.1 million and $639 thousand for the third and second quarters of 2011, respectively, and are substantially covered by loss-sharing agreements with the FDIC.

The following table summarizes the allocation of the allowance for credit losses to specific loan categories and the allocation as a percentage of each loan category at September 30, 2011, June 30, 2011 and September 30, 2010:


	September 30, 2011					June 30, 2011					September 30, 2010
	Allowance Allocation		Allocation as a % of Loan Category			Allowance Allocation		Allocation as a % of Loan Category			Allowance Allocation		Allocation as a % of Loan Category
Loan Category:
Commercial and Industrial loans*	$	62,717		3.44	%	$	59,919		3.28	%	$	55,346		3.03	%

Commercial real estate loans:
Commercial real estate		20,079		0.58	%		18,310		0.53	%		15,980		0.47	%
Construction		14,614		3.53	%		13,863		3.35	%		14,485		3.29	%

Total commercial real estate loans		34,693		0.89	%		32,173		0.82	%		30,465		0.79	%

Residential mortgage loans		10,158		0.47	%		10,913		0.51	%		8,196		0.43	%

Consumer loans:
Home equity		2,794		0.58	%		2,791		0.58	%		1,628		0.31	%
Auto and other consumer		7,297		0.79	%		8,284		0.90	%		11,952		1.24	%


Total consumer loans		10,091		0.72	%		11,075		0.79	%		13,580		0.91	%

Covered loans		12,587		4.08	%		18,719		6.07	%		—		0.00	%
Unallocated		7,455		NA			8,094		NA			8,128		NA

Allowance for credit losses	$	137,701		1.44	%	$	140,893		1.47	%	$	115,715		1.23	%

*	Includes the reserve for unfunded letters of credit.

Total non-performing assets (“NPAs”), consisting of non-accrual loans, other real estate owned (OREO) and other repossessed assets, totaled $122.6 million, or 1.26 percent of loans and NPAs at September 30, 2011 compared to $125.5 million, or 1.29 percent of loans and NPAs at June 30, 2011. The $2.9 million decrease in non-performing assets was mostly due to a $4.5 million payoff of one non-accrual construction loan during the third quarter, partially offset by moderate increases in non-accrual commercial and industrial, residential mortgage, and consumer loans.

Non-accrual loans decreased $6.1 million to $107.7 million at September 30, 2011 as compared to $113.8 million at June 30, 2011 mainly due to the aforementioned $4.5 million construction loan payoff, and the transfer to OREO of a $3.5 million commercial property collateralizing a construction loan. Although the timing of collection is uncertain, management believes that most of the non-

Valley National Bancorp (NYSE: VLY)

2011 Third Quarter Earnings

October 27, 2011

accrual loans are well secured and largely collectible based on, in part, our quarterly review of impaired loans. Our impaired loans, mainly consisting of non-accrual and troubled debt restructured commercial and commercial real estate loans, totaled $170.4 million at September 30, 2011 and had $19.8 million in related specific reserves included in our total allowance for loan losses. OREO (which consists of 13 commercial and residential properties) and other repossessed assets, excluding OREO subject to loss-sharing agreements with the FDIC, totaled a combined $14.9 million at September 30, 2011 as compared to $11.7 million at June 30, 2011.

Loans past due 90 days or more and still accruing increased $1.2 million to $3.9 million, or 0.04 percent of total loans at September 30, 2011 compared to $2.7 million, or 0.03 percent at June 30, 2011 primarily due to the addition of one performing, but matured construction loan totaling $2.2 million, partly offset by a decline in commercial real estate loans within this delinquency category.

Loans past due 30 to 89 days increased $11.3 million to $54.1 million at September 30, 2011 compared to June 30, 2011 primarily due to the inclusion of two potential problem loans totaling $12.6 million within the commercial real estate portfolio. Potential problem loans are performing loans about which management has serious doubts as to the ability of the borrowers to comply with the present loan repayment terms and which may result in a loan becoming non-performing. Our decision to characterize such performing loans as potential problem loans does not necessarily mean that management expects losses to occur, but that management recognizes potential problem loans carry a higher probability of default. Of the $12.6 million, an immaterial amount is estimated to be at risk after collateral values and guarantees are taken into consideration.

Troubled debt restructured loans (“TDRs”) represent loan modifications for customers experiencing financial difficulties where a concession has been granted. Performing TDRs (i.e., TDRs not reported as loans 90 days or more past due and still accruing or as non-accrual loans) totaled $103.7 million at September 30, 2011 and consisted of 58 loans (primarily in the commercial and industrial loan and commercial real estate portfolios) as compared to 50 loans totaling $101.4 million at June 30, 2011. On an aggregate basis, the $103.7 million in performing TDRs at September 30, 2011 had a modified weighted average interest rate of approximately 5.14 percent as compared to a pre-modification weighted average interest rate of 6.07 percent. During the third quarter of 2011, we adopted the provisions of Accounting Standard’s Update No. 2011-02, “Receivables (Topic 310) – A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring.” The adoption did not materially impact the number of TDRs identified by us, or the specific reserves for such loans included in our allowance for loan losses at September 30, 2011.

Loans and Deposits

Total loans moderately increased by $9.1 million as compared to June 30, 2011 and remained at approximately $9.6 billion as of September 30, 2011. See discussion below for a complete analysis of the change in mix between each loan category.

Non-Covered Loans. Non-covered loans are loans not subject to loss-sharing agreements with the FDIC. Non-covered loans increased $35.1 million, or 1.5 percent on an annualized basis, to approximately $9.3 billion at September 30, 2011 from June 30, 2011. The linked quarter increase was mainly comprised of increases in commercial real estate, residential mortgage, and commercial and

Valley National Bancorp (NYSE: VLY)

2011 Third Quarter Earnings

October 27, 2011

industrial loans of $38.3 million, $25.2 million and $7.4 million, respectively, partially offset by decreases of $22.0 million and $12.8 million in automobile and construction loans, respectively. Commercial real estate loans continued to increase quarter over quarter due to our stronger business emphasis on co-op and multifamily loan lending in our primary markets during the first nine months of 2011, as well as a slight increase in new loan demand mainly from our current borrowers. Residential mortgage loans increased due to the continued success of our $499 refinance program (including our television and radio ad campaigns) and the current low level of market interest rates. During the third quarter of 2011, we originated over $225 million in new and refinanced residential mortgage loans and retained approximately 55 percent of these loans in our loan portfolio at September 30, 2011. Commercial and industrial loans remained relatively unchanged as soft loan demand coupled with strong competition for quality credits challenged loan growth in this category during the quarter. Automobile loan balances have continued to decline due to several factors, including our high credit standards, acceptable loan to collateral value levels, and high unemployment levels. Additionally, in an attempt to build market share, some large competitors continue to offer rates and terms that we have elected not to match. These factors may continue to constrain the levels of our auto loan originations during the fourth quarter of 2011 and the foreseeable future. Construction loans also continue to paydown as loan demand has remained tepid due to the current state of the U.S. economy and housing markets.

Covered Loans. Loans for which Valley National Bank will share losses with the FDIC are referred to as “covered loans,” and consist of loans acquired from LibertyPointe Bank and The Park Avenue Bank as a part of FDIC-assisted transactions during the first quarter of 2010. Our covered loans consist primarily of commercial real estate loans and commercial and industrial loans and totaled $282.4 million at September 30, 2011 as compared to $308.4 million at June 30, 2011. These loans are accounted for on a pool basis. For loan pools with better than originally expected cash flows, the forecasted increase is recorded as a prospective adjustment to our interest income on loans over future periods. Additionally, on a prospective basis, we will reduce the FDIC loss-share receivable by the guaranteed portion of the additional cash flows expected to be received on those loan pools. During the third and second quarters of 2011, we reduced our FDIC loss-share receivable by $2.9 million each period due to the prospective recognition of the effect of additional cash flows from pooled loans with a corresponding reduction in non-interest income for the period.

Deposits. Total deposits decreased $86.1 million to approximately $9.6 billion at September 30, 2011 from June 30, 2011. Time deposits decreased $133.6 million during the third quarter mainly due to lower interest rates offered on our shorter term certificate of deposit products. Non-interest bearing deposits increased $51.6 million as compared to June 30, 2011 mainly due to general increases in both commercial and retail deposits. Savings, NOW and money market deposits totaled approximately $4.3 billion at September 30, 2011 and remained relatively unchanged from June 30, 2011.

Valley National Bancorp (NYSE: VLY)

2011 Third Quarter Earnings

October 27, 2011

Non-Interest Income

Third quarter of 2011 compared with third quarter of 2010

Non-interest income for the third quarter of 2011 increased $2.9 million to $20.2 million as compared to $17.3 million for the same period of 2010. Net trading gains increased to $776 thousand for the third quarter of 2011 as compared to a net trading loss of $2.6 million for the third quarter of 2010 mainly due to non-cash mark to market losses on our trust preferred debentures carried at fair value. Net gains on sales of loans also increased $1.3 million to $2.9 million for the third quarter of 2011 as compared to the third quarter of 2010 mainly due to higher sales volumes of our new and refinanced residential mortgage loan originations. However, the change in the FDIC loss-share receivable resulted in a $1.6 million reduction in non-interest income as compared to the third quarter of 2010 mainly due to the effect of better than originally expected cash flows on certain covered loan pools, partially offset by income from reimbursable expenses under the loss sharing agreements and accretion of the receivable discount recognized on the FDIC-assisted transaction dates.

Third quarter of 2011 compared with second quarter of 2011

Non-interest income for the third quarter of 2011 decreased $13.3 million from $33.5 million for the quarter ended June 30, 2011. Net gains on securities transactions decreased $15.6 million from $16.5 million during the second quarter of 2011 to $863 thousand in the third quarter. During the second quarter of 2011, we elected to sell $253.0 million in residential mortgage-backed securities issued by government agencies, perpetual preferred securities issued by Freddie Mac and Fannie Mae, and U.S. Treasury securities classified as available for sale. We reinvested the net proceeds mainly in Ginnie Mae mortgage-backed securities, which are fully guaranteed by the federal government and do not require related regulatory capital to be held by our bank subsidiary. Net trading gains increased $1.8 million from a net trading loss of $1.0 million for the second quarter of 2011 mainly due to non-cash mark to market gains in the third quarter on our trust preferred debentures carried at fair value. Net gains on sales of loans also increased $1.3 million from $1.6 million in the second quarter of 2011 mainly due to higher sales volumes as we held a lower percentage of our new and refinanced residential mortgage loan originations for investment.

Non-Interest Expense

Third quarter of 2011 compared with third quarter of 2010

Non-interest expense increased $6.4 million to $85.3 million for the three months ended September 30, 2011 from $78.9 million for the same period of 2010. Other non-interest expense increased $1.6 million to $12.3 million largely due to an increase in OREO and other expenses related to assets acquired in the two FDIC-assisted transactions in March 2010. Salary and employee benefits expense also increased $1.6 million to $45.1 million for the three months ended September 30, 2011 mainly due to normal annual increases in salary expense, higher major medical expense, and an increase in stock-based compensation expense mostly related to accelerated expensing of stock awards to retirement eligible employees. Advertising expense increased $1.4 million to $2.2 million for the third quarter of 2011 mainly due to an increase in promotional campaigns, including television and radio. Professional and legal fees increased $1.2 million to $3.7 million for the three months ended September

Valley National Bancorp (NYSE: VLY)

2011 Third Quarter Earnings

October 27, 2011

30, 2011 primarily due to increases in legal expenses related to assets acquired in the FDIC-assisted transactions, as well as expenses related to our pending acquisition of State Bancorp, Inc. and other general corporate matters.

Third quarter of 2011 compared with second quarter of 2011

Non-interest expense increased by $2.2 million from $83.1 million for the linked quarter ended June 30, 2011. Amortization of other intangible assets increased approximately $1.6 million due to our recognition of a $1.6 million impairment charge on certain loan servicing rights during the third quarter of 2011 as compared to a $49 thousand net valuation allowance recovery on the fair value of previously impaired loan servicing rights during the second quarter of 2011. The impairment charge was mainly the result of higher expected prepayments caused by the low interest rate environment. Salary and employee benefit expense increased $1.0 million from $44.1 million for the second quarter of 2011 mainly due to an increase in stock-based compensation expense mostly related to accelerated expensing of stock awards to retirement eligible employees and higher major medical insurance expense.

Income Tax Expense

Income tax expense was $13.7 million for the three months ended September 30, 2011, reflecting an effective tax rate of 27.9 percent, compared with $14.2 million for the third quarter of 2010, reflecting an effective tax rate of 30.3 percent. The effective tax rate decreased by 2.4 percent to 27.9 percent for the third quarter of 2011 largely due to our increased and planned investment in additional tax credits during 2011.

Income tax expense was $56.0 million for the nine months ended September 30, 2011, reflecting an effective tax rate of 34.0 percent, compared with $40.4 million for the same period of 2010, reflecting an effective tax rate of 30.3 percent. The effective tax rate increased by 3.7 percent to 34.0 percent for the nine months ended September 30, 2011, largely due to a one-time tax provision of $8.5 million related to a change in tax law during the second quarter of 2011, partially offset by our increased and planned investment in additional tax credits during 2011.

For the fourth quarter of 2011, we anticipate that our effective tax rate will approximate 29 percent.

About Valley

Valley is a regional bank holding company with over $14 billion in assets, headquartered in Wayne, New Jersey. Its principal subsidiary, Valley National Bank, currently operates 197 branches in 135 communities serving 14 counties throughout northern and central New Jersey, Manhattan, Brooklyn and Queens. Valley National Bank is one of the largest commercial banks headquartered in New Jersey and is committed to providing the most convenient service, the latest in product innovations and an experienced and knowledgeable staff with a high priority on friendly customer service 24 hours a day, 7 days a week. Valley National Bank offers a wide range of deposit products, mortgage loans and cash management services to consumers and businesses including products tailored for the medical, insurance and leasing business. Valley National Bank’s comprehensive delivery channels enable customers to bank in person, by telephone or online.

Valley National Bancorp (NYSE: VLY)

2011 Third Quarter Earnings

October 27, 2011

For more information about Valley National Bank and its products and services, please visit www.valleynationalbank.com or call the local 24/7 Customer Service at 800-522-4100.

Forward Looking Statements

The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology as “should,” “expect,” “believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “typically,” “usually,” “anticipate,” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:

•

a continued weakness or unexpected decline in the U.S. economy, in particular in New Jersey and the New York Metropolitan area;

•

other-than-temporary impairment charges on our investment securities;

•

higher than expected increases in our allowance for loan losses;

•

higher than expected increases in loan losses or in the level of nonperforming loans;

•

unexpected changes in interest rates;

•

higher than expected tax rates, including increases resulting from changes in tax laws, regulations and case law;

•

a continued or unexpected decline in real estate values within our market areas;

•

declines in value in our investment portfolio;

•

charges against earnings related to the change in fair value of our junior subordinated debentures;

•

higher than expected FDIC insurance assessments;

•

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

•

lack of liquidity to fund our various cash obligations;

•

unanticipated reduction in our deposit base;

•

potential acquisitions that may disrupt our business;

•

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;

•

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

•

changes in accounting policies or accounting standards;

•

our inability to promptly adapt to technological changes;

•

our internal controls and procedures may not be adequate to prevent losses;

Valley National Bancorp (NYSE: VLY)

2011 Third Quarter Earnings

October 27, 2011

•

claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters;

•

the possibility that the expected benefits of acquisitions will not be fully realized, including lower than expected cash flows from covered loan pools acquired in FDIC-assisted transactions;

•

failure to obtain shareholder approval for the merger of State Bancorp with Valley or to satisfy other conditions to the merger on the proposed terms and within the proposed timeframe including, without limitation, the purchase from the United States Department of the Treasury of each share of State Bancorp’s Series A Preferred Stock issued under the Treasury’s Capital Purchase Program; and

•

other unexpected material adverse changes in our operations or earnings.

A detailed discussion of factors that could affect our results is included in our SEC filings, including the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2010 and our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011 and our Form 10-Q/A for such period. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

# # #

-Tables to Follow-

VALLEY NATIONAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS

SELECTED FINANCIAL DATA


	Three Months Ended									Nine Months Ended September 30,
	September 30,			June 30,			September 30,			Nine Months Ended September 30,
($ in thousands, except for share data)	2011			2011			2010			2011			2010

FINANCIAL DATA:
Net interest income	$	121,935		$	117,670		$	117,734		$	356,497		$	349,611
Net interest income - FTE ⁽⁴⁾		123,611			118,979			119,212			360,833			353,863
Non-interest income ⁽²⁾		20,203			33,535			17,328			98,525			55,481
Non-interest expense		85,302			83,080			78,947			252,211			237,274
Income tax expense		13,696			25,205			14,168			56,004			40,449
Net income		35,357			36,894			32,639			108,836			93,012
Weighted average number of common shares outstanding: ⁽⁵⁾
Basic		170,007,399			169,843,354			169,177,275			169,841,859			169,007,369
Diluted		170,007,983			169,852,912			169,178,469			169,846,010			169,008,779
Per common share data: ⁽⁵⁾
Basic earnings	$	0.21		$	0.22		$	0.19		$	0.64		$	0.55
Diluted earnings		0.21			0.22			0.19			0.64			0.55
Cash dividends declared		0.17			0.17			0.17			0.52			0.52
Book value		7.69			7.72			7.55			7.69			7.55
Tangible book value ⁽¹⁾		5.69			5.71			5.56			5.69			5.56
Tangible common equity to tangible assets ⁽¹⁾		6.96	%		6.86	%		6.84	%		6.96	%		6.84	%
Closing stock price - high	$	14.09		$	13.72		$	14.17		$	14.20		$	15.19
Closing stock price - low		9.89			12.82			11.83			9.89			11.83

CORE ADJUSTED FINANCIAL DATA: ⁽¹⁾
Net income, as adjusted	$	35,357		$	36,894		$	32,639		$	109,353		$	95,917
Basic earnings per share, as adjusted		0.21			0.22			0.19			0.64			0.57
Diluted earnings per share, as adjusted		0.21			0.22			0.19			0.64			0.57

FINANCIAL RATIOS:														`
Net interest margin		3.80	%		3.67	%		3.73	%		3.71	%		3.67	%
Net interest margin - FTE ⁽⁴⁾		3.86			3.71			3.78			3.76			3.72
Annualized return on average assets		0.99			1.03			0.93			1.02			0.88
Annualized return on average shareholders’ equity		10.74			11.24			10.24			11.07			9.80
Annualized return on average tangible shareholders’ equity ⁽¹⁾		14.52			15.22			13.86			14.99			13.26
Efficiency ratio ⁽⁶⁾		60.01			54.95			58.45			55.43			58.57

CORE ADJUSTED FINANCIAL RATIOS: ⁽¹⁾
Annualized return on average assets, as adjusted		0.99	%		1.03	%		0.93	%		1.02	%		0.91	%
Annualized return on average shareholders’ equity as adjusted		10.74			11.24			10.24			11.12			10.11
Annualized return on average tangible shareholders’ equity, as adjusted		14.52			15.22			13.86			15.07			13.67
Efficiency ratio, as adjusted		60.01			54.95			58.45			55.33			57.91

AVERAGE BALANCE SHEET ITEMS:
Assets	$	14,283,783		$	14,275,283		$	14,050,659		$	14,258,029		$	14,125,719
Interest earning assets		12,821,312			12,828,039			12,615,556			12,803,553			12,699,554
Loans		9,642,366			9,619,959			9,474,723			9,574,183			9,480,609
Interest bearing liabilities		10,295,144			10,348,181			10,302,898			10,331,193			10,413,462
Deposits		9,788,550			9,802,061			9,454,380			9,705,926			9,523,414
Shareholders’ equity		1,316,733			1,312,501			1,274,742			1,310,750			1,264,926

VALLEY NATIONAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS


	As Of
	September 30,			June 30,			December 31,			September 30,
($ in thousands)	2011			2011			2010			2010
BALANCE SHEET ITEMS:
Assets	$	14,231,155		$	14,469,776			14,143,826		$	14,087,611
Total loans		9,600,087			9,591,023			9,365,795			9,431,697
Non-covered loans		9,317,691			9,282,599			9,009,140			9,054,661
Deposits		9,620,339			9,706,447			9,363,614			9,268,703
Shareholders’ equity		1,307,102			1,311,218			1,295,205			1,278,019

CAPITAL RATIOS:
Tier 1 leverage ratio		8.10	%		8.37	%		8.31	%		8.27	%
Risk-based capital - Tier 1		10.82			11.07			10.94			10.73
Risk-based capital - Total Capital		12.65			13.09			12.91			12.58


	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
($ in thousands)	2011			2011			2010			2011			2010
ALLOWANCE FOR CREDIT LOSSES:
Beginning balance - Allowance for credit losses	$	140,893		$	141,722		$	112,504		$	126,504		$	103,655
Loans charged-off: ⁽³⁾
Commercial and industrial		(9,297	)		(3,056	)		(3,223	)		(19,025	)		(13,882	)
Commercial real estate		(719	)		(3,631	)		(307	)		(5,173	)		(1,723	)
Construction		(520	)		—			(5	)		(520	)		(424	)
Residential mortgage		(269	)		(443	)		(844	)		(1,495	)		(3,011	)
Consumer		(1,251	)		(1,355	)		(2,485	)		(4,364	)		(8,873	)

Total loans charged-off		(12,056	)		(8,485	)		(6,864	)		(30,577	)		(27,913	)

Charged-off loans recovered:
Commercial and industrial		559			741			187			1,748			3,317
Commercial real estate		2			5			19			28			139
Construction		—			197			—			197			—
Residential mortgage		16			69			28			106			80
Consumer		504			618			533			1,724			2,080

Total loans recovered		1,081			1,630			767			3,803			5,616

Net charge-offs		(10,975	)		(6,855	)		(6,097	)		(26,774	)		(22,297	)
Provision charged for credit losses		7,783			6,026			9,308			37,971			34,357

Ending balance - Allowance for credit losses	$	137,701		$	140,893		$	115,715		$	137,701		$	115,715

Components of allowance for credit losses:
Allowance for non-covered loans	$	122,775		$	119,907		$	113,786		$	122,775		$	113,786
Allowance for covered loans		12,587			18,719			—			12,587			—

Allowance for loan losses		135,362			138,626			113,786			135,362			113,786
Allowance for unfunded letters of credit		2,339			2,267			1,929			2,339			1,929

Allowance for credit losses	$	137,701		$	140,893		$	115,715		$	137,701		$	115,715

Components of provision for credit losses:
Provision for losses on non-covered loans	$	7,711		$	6,422		$	9,238		$	19,338		$	34,093
Provision for losses on covered loans		—			(788	)		—			18,094			—
Provision for unfunded letters of credit		72			392			70			539			264

Provision for credit losses	$	7,783		$	6,026		$	9,308		$	37,971		$	34,357

Annualized ratio of net charge-offs of non-covered loans to average loans		0.20	%		0.26	%		0.26	%		0.21	%		0.31	%
Annualized ratio of total net charge-offs to average loans		0.46			0.29			0.26			0.37			0.31
Allowance for non-covered loan losses as a % of non-covered loans		1.32			1.29			1.26			1.32			1.26
Allowance for credit losses asa % of total loans		1.43			1.47			1.23			1.43			1.23

VALLEY NATIONAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS


	As Of
	September 30,			June 30,			December 31,			September 30,
($ in thousands)	2011			2011			2010			2010
ASSET QUALITY (NON-COVERED ASSETS): ⁽⁷⁾
Accruing past due loans:
30 to 89 days past due:
Commercial and industrial	$	9,866		$	10,915		$	13,852		$	9,917
Commercial real estate		22,220			7,710			14,563			7,281
Construction		—			1,710			2,804			3,750
Residential mortgage		12,556			13,819			12,682			13,426
Consumer		9,456			8,661			14,638			15,937

Total 30 to 89 days past due		54,098			42,815			58,539			50,311
90 or more days past due:
Commercial and industrial		164			12			12			722
Commercial real estate		268			1,682			—			1,424
Construction		2,216			—			196			—
Residential mortgage		721			687			1,556			1,297
Consumer		483			319			723			924

Total 90 or more days past due		3,852			2,700			2,487			4,367

Total accruing past due loans	$	57,950		$	45,515		$	61,026		$	54,678

Non-accrual loans:
Commercial and industrial	$	16,737		$	15,882		$	13,721		$	16,967
Commercial real estate		41,453			43,041			32,981			29,833
Construction		14,449			22,004			27,312			29,535
Residential mortgage		31,401			29,815			28,494			27,198
Consumer		3,645			3,009			2,547			2,069

Total non-accrual loans		107,685			113,751			105,055			105,602
Other real estate owned ⁽⁸⁾		14,091			10,797			10,498			4,698
Other repossessed assets		822			929			1,707			1,849

Total non-performing assets (“NPAs”)	$	122,598		$	125,477		$	117,260		$	112,149

Performing troubled debt restructured loans	$	103,690		$	101,444		$	89,696		$	48,229
Total non-accrual loans as a % of loans		1.12	%		1.19	%		1.12	%		1.12	%
Total NPAs as a % of loans and NPAs		1.26			1.29			1.24			1.18
Total accruing past due and non-accrual loans as a % of loans ⁽⁸⁾		1.73			1.66			1.77			1.70
Allowance for losses on non-covered loans as a % of non-accrual loans		114.01			105.41			112.63			107.75

NOTES TO SELECTED FINANCIAL DATA

⁽¹⁾

This press release contains certain supplemental financial information, described in the following notes, which has been determined by methods other than U.S. Generally Accepted Accounting Principles (“GAAP”) that management uses in its analysis of Valley’s performance. Management believes these non-GAAP financial measures provide information useful to investors in understanding Valley’s financial results. Specifically, Valley provides measures based on what it believes are its operating earnings on a consistent basis and excludes non-core operating items which affect the GAAP reporting of results of operations. Management utilizes these measures for internal planning and forecasting purposes. Management believes that Valley’s presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting Valley’s business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and Valley strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.


	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
($ in thousands, except for share data)	2011			2011			2010			2011			2010
Tangible book value per common share:
Common shares outstanding		170,025,364			169,851,372			169,179,574			170,025,364			169,179,574

Shareholders’ equity	$	1,307,102		$	1,311,218		$	1,278,019		$	1,307,102		$	1,278,019
Less: Goodwill and other intangible assets		(339,850	)		(341,893	)		(337,431	)		(339,850	)		(337,431	)

Tangible shareholders’ equity	$	967,252		$	969,325		$	940,588		$	967,252		$	940,588
Tangible book value	$	5.69		$	5.71		$	5.56		$	5.69		$	5.56

VALLEY NATIONAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS

NOTES TO SELECTED FINANCIAL DATA - CONTINUED


	Three Months Ended									Nine Months Ended September 30,
	September 30,			June 30,			September 30,			Nine Months Ended September 30,
($ in thousands, except for share data)	2011			2011			2010			2011			2010

Annualized return on average tangible equity:
Net income	$	35,357		$	36,894		$	32,639		$	108,836		$	93,012

Average shareholders’ equity		1,316,733			1,312,501			1,274,742			1,310,750			1,264,926
Less: Average goodwill and other intangible assets		(342,506	)		(342,590	)		(333,091	)		(342,996	)		(329,647	)

Average tangible shareholders’ equity	$	974,227		$	969,911		$	941,651		$	967,754		$	935,279
Annualized return on average tangible shareholders’ equity		14.52	%		15.22	%		13.86	%		14.99	%		13.26	%

Adjusted net income available to common stockholders:
Net income, as reported	$	35,357		$	36,894		$	32,639		$	108,836		$	93,012
Net impairment losses on securities recognized in earnings (net of tax)		—			—			—			517			2,905

Net income, as adjusted		35,357			36,894			32,639			109,353			95,917

Adjusted per common share data:
Net income, as adjusted	$	35,357		$	36,894		$	32,639		$	109,353		$	95,917
Average number of basic shares outstanding		170,007,399			169,843,354			169,177,275			169,841,859			169,007,369
Basic earnings, as adjusted	$	0.21		$	0.22		$	0.19		$	0.64		$	0.57
Average number of diluted shares outstanding		170,007,983			169,852,912			169,178,469			169,846,010			169,008,779
Diluted earnings, as adjusted	$	0.21		$	0.22		$	0.19		$	0.64		$	0.57

Adjusted annualized return on average assets:
Net income, as adjusted	$	35,357		$	36,894		$	32,639		$	109,353		$	95,917
Average assets		14,283,783			14,275,283			14,050,659			14,258,029			14,125,719
Annualized return on average assets, as adjusted		0.99	%		1.03	%		0.93	%		1.02	%		0.91	%

Adjusted annualized return on average shareholders’ equity:
Net income, as adjusted	$	35,357		$	36,894		$	32,639		$	109,353		$	95,917
Average shareholders’ equity		1,316,733			1,312,501			1,274,742			1,310,750			1,264,926
Annualized return on average shareholders’ equity, as adjusted		10.74	%		11.24	%		10.24	%		11.12	%		10.11	%

Adjusted annualized return on average tangible shareholders’ equity:
Net income, as adjusted	$	35,357		$	36,894		$	32,639		$	109,353		$	95,917
Average tangible shareholders’ equity		974,227			969,911			941,651			967,754			935,279
Annualized return on average tangible shareholders’ equity, as adjusted		14.52	%		15.22	%		13.86	%		15.07	%		13.67	%

Adjusted efficiency ratio:
Non-interest expense	$	85,302		$	83,080		$	78,947		$	252,211		$	237,274

Net interest income		121,935			117,670			117,734			356,497			349,611
Non-interest income		20,203			33,535			17,328			98,525			55,481
Add: Net impairment losses on securities recognized in earnings		—			—			—			825			4,642

Gross operating income, as adjusted	$	142,138		$	151,205		$	135,062		$	455,847		$	409,734
Efficiency ratio, as adjusted		60.01	%		54.95	%		58.45	%		55.33	%		57.91	%

Tangible common equity to tangible assets:
Tangible shareholders’ equity	$	967,252		$	969,325		$	940,588		$	967,252		$	940,588

Total assets		14,231,155			14,469,776			14,087,611			14,231,155			14,087,611
Less: Goodwill and other intangible assets		(339,850	)		(341,893	)		(337,431	)		(339,850	)		(337,431	)

Tangible assets	$	13,891,305		$	14,127,883		$	13,750,180		$	13,891,305		$	13,750,180
Tangible common equity to tangible assets		6.96	%		6.86	%		6.84	%		6.96	%		6.84	%

VALLEY NATIONAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS

NOTES TO SELECTED FINANCIAL DATA - CONTINUED


	Three Months Ended									Nine Months Ended September 30,
	September 30,			June 30,			September 30,			Nine Months Ended September 30,
	2011			2011			2010			2011			2010
⁽²⁾ Non-interest income includes net trading gains (losses):
Trading securities	$	136		$	(106	)	$	(517	)	$	523		$	(862	)
Junior subordinated debentures		640			(942	)		(2,110	)		2,587			(3,957	)

Total trading gains (losses), net	$	776		$	(1,048	)	$	(2,627	)	$	3,110		$	(4,819	)


⁽³⁾ Total loans charged-off includes the following covered loan charge-offs:
Commercial and industrial	$	(6,131	)	$	(639	)	$	—		$	(11,736	)	$	—
Commercial real estate		—			—			—			(38	)		—
Construction		—			—			—			—			—
Residential mortgage		—			—			—			(110	)		—

Total covered loans charged-off	$	(6,131	)	$	(639	)	$	—		$	(11,884	)	$	—

⁽⁴⁾

Net interest income and net interest margin are presented on a tax equivalent basis using a 35 percent federal tax rate. Valley believes that this presentation provides comparability of net interest income and net interest margin arising from both taxable and tax-exempt sources and is consistent with industry practice and SEC rules.

⁽⁵⁾	Share data reflects the five percent common stock dividend issued on May 20, 2011.

⁽⁶⁾	The efficiency ratio measures Valley’s total non-interest expense as a percentage of net interest income plus total non-interest income.

⁽⁷⁾	Past due loans and non-accrual loans excludes loans that were acquired as part of the Liberty Pointe Bank and The Park Avenue Bank transactions. These loans are accounted for on a pool basis.

⁽⁸⁾

Excludes OREOs that is related to the Liberty Pointe Bank and The Park Avenue Bank FDIC-assisted transactions. OREOs related to the FDIC-assisted transactions, which totaled $6.2 million, $6.7 million $7.8 million and $12.5 million at September 30, 2011, June 30, 2011, December 31, 2010 and September 30, 2010, respectively, is subject to the loss-sharing agreements with the FDIC.

SHAREHOLDER RELATIONS

Requests for copies of reports and/or other inquiries should be directed to Dianne Grenz, Director of Shareholder and Public Relations, Valley National Bancorp, 1455 Valley Road, Wayne, New Jersey, 07470, by telephone at (973) 305-3380, by fax at (973) 696-2044 or by e-mail at dgrenz@valleynationalbank.com.

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)

(in thousands, except for share data)


	September 30, 2011			December 31, 2010
Assets
Cash and due from banks	$	354,625		$	302,629
Interest bearing deposits with banks		40,603			63,657
Investment securities:
Held to maturity, fair value of $2,100,562 at September 30, 2011 and $1,898,872 at December 31, 2010		2,084,446			1,923,993
Available for sale		770,142			1,035,282
Trading securities		21,446			31,894

Total investment securities		2,876,034			2,991,169


Loans held for sale, at fair value		34,350			58,958

Non-covered loans		9,317,691			9,009,140
Covered loans		282,396			356,655
Less: Allowance for loan losses		(135,362	)		(124,704	)

Net loans		9,464,725			9,241,091


Premises and equipment, net		265,294			265,570
Bank owned life insurance		305,142			304,956
Accrued interest receivable		62,516			59,126
Due from customers on acceptances outstanding		6,916			6,028
FDIC loss-share receivable		78,602			89,359
Goodwill		317,962			317,891
Other intangible assets, net		21,888			25,650
Other assets		402,498			417,742

Total Assets	$	14,231,155		$	14,143,826


Liabilities
Deposits:
Non-interest bearing	$	2,613,128		$	2,524,299
Interest bearing:
Savings, NOW and money market		4,312,605			4,106,464
Time		2,694,606			2,732,851

Total deposits		9,620,339			9,363,614

Short-term borrowings		222,574			192,318
Long-term borrowings		2,727,290			2,933,858
Junior subordinated debentures issued to capital trusts (includes fair value of $159,147 at September 30, 2011 and $161,734 at December 31, 2010 for VNB Capital Trust I)		184,283			186,922
Bank acceptances outstanding		6,916			6,028
Accrued expenses and other liabilities		162,651			165,881

Total Liabilities		12,924,053			12,848,621

Shareholders’ Equity*
Preferred stock, no par value, authorized 30,000,000 shares; none issued		—			—
Common stock, no par value, authorized 220,974,508 shares; issued 170,146,143 shares at September 30, 2011 and 170,131,085 shares at December 31, 2010		59,919			57,041
Surplus		1,177,701			1,178,325
Retained earnings		96,101			79,803
Accumulated other comprehensive loss		(23,802	)		(5,719	)
Treasury stock, at cost (120,779 common shares at September 30, 2011 and 597,459 common shares at December 31, 2010)		(2,817	)		(14,245	)

Total Shareholders’ Equity		1,307,102			1,295,205

Total Liabilities and Shareholders’ Equity	$	14,231,155		$	14,143,826

*	Share data reflects the five percent common stock dividend issued on May 20, 2011.

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except for share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Interest Income
Interest and fees on loans	$	140,303		$	137,742		$	409,010			409,531
Interest and dividends on investment securities:
Taxable		26,552			28,361			84,734			88,861
Tax-exempt		3,109			2,743			8,043			7,886
Dividends		1,565			1,679			5,212			5,153
Interest on federal funds sold and other short-term investments		110			61			253			291

Total interest income		171,639			170,586			507,252			511,722

Interest Expense
Interest on deposits:
Savings, NOW and money market		4,961			4,711			14,722			14,384
Time		12,424			13,233			37,206			43,551
Interest on short-term borrowings		293			334			910			995
Interest on long-term borrowings and junior subordinated debentures		32,026			34,574			97,917			103,181

Total interest expense		49,704			52,852			150,755			162,111

Net Interest Income		121,935			117,734			356,497			349,611
Provision for losses on non-covered loans and unfunded letters of credit		7,783			9,308			19,877			34,357
Provision for losses on covered loans		—			—			18,094			—

Net Interest Income After Provision for Credit Losses		114,152			108,426			318,526			315,254

Non-Interest Income
Trust and investment services		1,769			1,930			5,744			5,752
Insurance commissions		3,416			2,561			11,496			8,417
Service charges on deposit accounts		5,616			6,562			16,908			19,487
Gains on securities transactions, net		863			112			20,034			4,631
Other-than-temporary impairment losses on securities		—			—			—			(1,393	)
Portion recognized in other comprehensive income (before taxes)		—			—			(825	)		(3,249	)

Net impairment losses on securities recognized in earnings		—			—			(825	)		(4,642	)
Trading gains (losses), net		776			(2,627	)		3,110			(4,819	)
Fees from loan servicing		989			1,187			3,356			3,634
Gains on sales of loans, net		2,890			1,548			8,060			5,087
Gains on sales of assets, net		179			78			382			382
Bank owned life insurance		1,989			1,697			5,575			5,008
Change in FDIC loss-share receivable		(1,577	)		—			11,989			—
Other		3,293			4,280			12,696			12,544

Total non-interest income		20,203			17,328			98,525			55,481

Non-Interest Expense
Salary and employee benefits expense		45,125			43,566			133,359			130,774
Net occupancy and equipment expense		15,656			15,241			48,309			47,270
FDIC insurance assessment		2,993			3,497			9,624			10,473
Amortization of other intangible assets		3,351			2,602			7,109			6,747
Professional and legal fees		3,666			2,460			10,459			7,192
Advertising		2,185			826			6,370			2,849
Other		12,326			10,755			36,981			31,969

Total non-interest expense		85,302			78,947			252,211			237,274

Income Before Income Taxes		49,053			46,807			164,840			133,461
Income tax expense		13,696			14,168			56,004			40,449

Net Income	$	35,357		$	32,639		$	108,836		$	93,012

*Earnings Per Common Share:**
Basic	$	0.21		$	0.19		$	0.64		$	0.55
Diluted		0.21			0.19			0.64			0.55
Cash Dividends Declared per Common Share*		0.17			0.17			0.52			0.52
*Weighted Average Number of Common Shares Outstanding:**
Basic		170,007,399			169,177,275			169,841,859			169,007,369
Diluted		170,007,983			169,178,469			169,846,010			169,008,779

*	Share data reflects the five percent common stock dividend issued on May 20, 2011.

VALLEY NATIONAL BANCORP

LOAN PORTFOLIO

(in thousands)


	*09/30/2011*		*06/30/2011*		*03/31/2011*		*12/31/2010*		*09/30/2010*
Non-covered Loans
Commercial and industrial	$	1,833,211	$	1,825,782	$	1,859,626	$	1,825,066	$	1,824,014
Commercial real estate:
Commercial real estate		3,524,891		3,486,597		3,457,768		3,378,252		3,406,089
Construction		401,166		413,951		418,304		428,232		440,929

Total commercial real estate		3,926,057		3,900,548		3,876,072		3,806,484		3,847,018
Residential mortgage		2,172,601		2,147,362		2,047,898		1,925,430		1,890,439
Consumer:
Home equity		477,517		484,812		492,328		512,745		531,168
Automobile		785,443		807,489		827,485		850,801		877,298
Other consumer		122,862		116,606		106,184		88,614		84,724

Total consumer loans		1,385,822		1,408,907		1,425,997		1,452,160		1,493,190

Total non-covered loans	$	9,317,691	$	9,282,599	$	9,209,593	$	9,009,140	$	9,054,661

Covered loans*		282,396		308,424		336,576		356,655		377,036

Total loans	$	9,600,087	$	9,591,023	$	9,546,169	$	9,365,795	$	9,431,697

*	Loans that Valley National Bank will share losses with the FDIC are referred to as “covered loans”.


	Quarterly Analysis of Average Assets, Liabilities and Shareholders’ Equity and Net Interest Income on a Tax Equivalent Basis
	*Quarter End - 09/30/2011*								*Quarter End - 06/30/2011*								*Quarter End - 03/31/2011*								*Quarter End - 12/31/2010*								*Quarter End - 09/30/2010*
($ in thousands)	Average Balance		*Interest*			Avg. Rate			Average Balance		*Interest*			Avg. Rate			Average Balance		*Interest*			Avg. Rate			Average Balance		*Interest*			Avg. Rate			Average Balance		*Interest*			Avg. Rate
Assets
Interest earning assets
Loans ⁽¹⁾⁽²⁾	$	9,642,366	$	140,305			5.82	%	$	9,619,959	$	135,085			5.62	%	$	9,458,201	$	133,625			5.65	%	$	9,458,332	$	133,480			5.64	%	$	9,474,723	$	137,744			5.82	%
Taxable investments ⁽³⁾		2,537,173		28,117			4.43	%		2,698,706		30,193			4.48	%		2,823,185		31,636			4.48	%		2,567,952		29,007			4.52	%		2,610,933		30,040			4.60	%
Tax-exempt investments ⁽¹⁾⁽³⁾		464,873		4,783			4.12	%		372,002		3,737			4.02	%		400,049		3,854			3.85	%		401,511		3,815			3.80	%		433,559		4,219			3.89	%
Federal funds sold and other interest bearing deposits		176,900		110			0.25	%		137,372		88			0.26	%		79,208		55			0.28	%		193,212		125			0.26	%		96,341		61			0.25	%

Total interest earning assets		12,821,312		173,315			5.41	%		12,828,039		169,103			5.27	%		12,760,643		169,170			5.30	%		12,621,007		166,427			5.27	%		12,615,556		172,064			5.46	%

Other assets		1,462,471								1,447,244								1,453,613								1,478,972								1,435,103

Total assets	$	14,283,783							$	14,275,283							$	14,214,256							$	14,099,979							$	14,050,659


Liabilities and shareholders’ equity
Interest bearing liabilities:
Savings, NOW and money market deposits	$	4,395,239	$	4,961			0.45	%	$	4,431,929	$	5,082			0.46	%	$	4,303,555	$	4,679			0.43	%	$	4,198,511	$	4,742			0.45	%	$	4,270,386	$	4,711			0.44	%
Time deposits		2,782,254		12,424			1.79	%		2,815,223		12,616			1.79	%		2,731,981		12,166			1.78	%		2,693,056		12,247			1.82	%		2,761,018		13,233			1.92	%
Short-term borrowings		175,636		293			0.67	%		167,864		276			0.66	%		241,786		341			0.56	%		207,027		350			0.68	%		198,938		334			0.67	%
Long-term borrowings ⁽⁴⁾		2,942,015		32,026			4.35	%		2,933,165		32,150			4.38	%		3,073,543		33,741			4.39	%		3,118,510		34,610			4.44	%		3,072,556		34,574			4.50	%

Total interest bearing liabilities		10,295,144		49,704			1.93	%		10,348,181		50,124			1.94	%		10,350,865		50,927			1.97	%		10,217,104		51,949			2.03	%		10,302,898		52,852			2.05	%

Non-interest bearing deposits		2,611,057								2,554,909								2,488,726								2,529,687								2,422,976
Other liabilities		60,849								59,692								71,802								65,048								50,043
Shareholders’ equity		1,316,733								1,312,501								1,302,863								1,288,140								1,274,742

Total liabilities and shareholders’ equity	$	14,283,783							$	14,275,283							$	14,214,256							$	14,099,979							$	14,050,659

Net interest income/interest rate spread ⁽⁵⁾			$	123,611			3.48	%			$	118,979			3.33	%			$	118,243			3.33	%			$	114,478			3.24	%			$	119,212			3.41	%
Tax equivalent adjustment				(1,676	)							(1,309	)							(1,351	)							(1,337	)							(1,478	)

Net interest income, as reported			$	121,935							$	117,670							$	116,892							$	113,141							$	117,734

Net interest margin ⁽⁶⁾							3.80	%							3.67	%							3.66	%							3.59	%							3.73	%
Tax equivalent effect							0.06	%							0.04	%							0.05	%							0.04	%							0.05	%

Net interest margin on a fully tax equivalent basis ⁽⁶⁾							3.86	%							3.71	%							3.71	%							3.63	%							3.78	%

⁽¹⁾	Interest income is presented on a tax equivalent basis using a 35 percent federal tax rate.

⁽²⁾	Loans are stated net of unearned income and include non-accrual loans.

⁽³⁾	The yield for securities that are classified as available for sale is based on the average historical amortized cost.

⁽⁴⁾	Includes junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of condition.

⁽⁵⁾	Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities and is presented on a fully tax equivalent basis.

⁽⁶⁾	Net interest income as a percentage of total average interest earning assets.

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VALLEY NATIONAL BANCORP Reports