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Section 1: S-4 (FORM S-4)

Form S-4
Table of Contents

As filed with the Securities and Exchange Commission on August 30, 2019

Registration No. 333-            

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

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.)

One Penn Plaza, Suite 2930

New York, New York 10119

973-305-8800

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Ira Robbins, Chairman, President and Chief Executive Officer

Valley National Bancorp

One Penn Plaza, Suite 2930

New York, New York 10119

(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

Senior Executive Vice President and General Counsel

Valley National Bancorp

One Penn Plaza, Suite 2930

New York, New York 10119

(973) 305-8800

 

MICHAEL T. RAVE, ESQ.

Day Pitney LLP

One Jefferson Road

Parsippany, New Jersey 07054

(973) 966-6300

 

KEVIN J. LYNCH

Chairman, President and Chief Executive Officer

Oritani Financial Corp.

370 Pascack Road

Township of Washington, New Jersey 07676

(201) 664-5400

 

JOHN J. GORMAN, ESQ.

MARC P. LEVY, ESQ.

Luse Gorman, PC

5335 Wisconsin Avenue, NW

Suite 780

Washington, DC 20015

(202) 274-2000

 

 

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 joint 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.

 

Large Accelerated Filer      Accelerated Filer  
Non-Accelerated Filer      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

  75,711,589 Shares(1)   N/A   $798,993,861(2)   $96,838.06

 

 

(1)

Represents the maximum number of shares of Valley National Bancorp (“Valley”) common stock estimated to be issuable upon the completion of the merger of Oritani Financial Corp. (“Oritani”) with and into Valley, based on the number of shares of Oritani common stock outstanding immediately prior to the merger, assuming that all stock options granted by Oritani outstanding on the date hereof are exercised, and the exchange of each share of Oritani common stock for shares of Valley common stock pursuant to the formula set forth in the Agreement and Plan of Merger, dated as of June 25, 2019, between Valley and Oritani (the “merger agreement”).

(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) $16.885, which is the average of the high and low prices per share of Oritani common stock on August 27, 2019 as quoted on the NASDAQ Global Market, multiplied by (2) 47,319,743, which is the sum of the aggregate 45,097,052 shares of Oritani common stock outstanding as of August 27, 2019, plus 2,222,691, which is (i) the aggregate number of shares of Oritani common stock issuable upon the exercise of Oritani stock options, and (ii) the aggregate number of shares of Oritani common stock issuable upon the vesting of Oritani restricted stock.

 

 

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.

 

 

 


Table of Contents

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.

 

PRELIMINARY – SUBJECT TO COMPLETION – DATED AUGUST 30, 2019

 

LOGO    LOGO
Proxy Statement of Oritani Financial Corp.    Proxy Statement and Prospectus of Valley National Bancorp

 

MERGER OF ORITANI FINANCIAL CORP. 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 Oritani Financial Corp. and Valley National Bancorp:

We are pleased to report that the Boards of Directors of Valley National Bancorp (“Valley”) and Oritani Financial Corp. (“Oritani”) have approved an Agreement and Plan of Merger (the “merger agreement”). Under the merger agreement, Oritani will merge with and into Valley, with Valley as the surviving company in the merger (the “merger”). Immediately following the merger, Oritani’s wholly-owned subsidiary, Oritani Bank, will merge with and into Valley’s wholly-owned subsidiary, Valley National Bank, with Valley National Bank as the surviving bank. We cannot complete the merger transaction without your approval.

Under the terms of the merger agreement, if the merger is completed, Oritani shareholders will be entitled to receive 1.60 shares of Valley common stock for each share of Oritani common stock that they hold and the payment of cash in lieu of fractional shares.

Each of Oritani 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 Oritani common stock will vote at a special meeting of Oritani shareholders to be held on [●], 2019 to approve the merger agreement and to vote on related proposals. Holders of shares of Valley common stock will vote at a special meeting of Valley common shareholders to be held on [●], 2019 to approve the issuance of up to 75,711,589 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 75,711,589 shares that Valley common shareholders are being asked to approve is the maximum number of shares of Valley common stock that would be issuable in the transaction in exchange for Oritani shares and upon the exercise of Oritani stock options. Although the number of shares of Valley common stock that holders of Oritani common stock will be entitled to receive is fixed, the market value of the stock consideration will fluctuate with the market price of Valley common stock and will not be known at the time Oritani shareholders vote on the merger. Additionally, as described in more detail elsewhere in this joint proxy statement-prospectus, under the terms of the merger agreement, if the average price of Valley common stock over a specified period of time decreases below certain specified thresholds, Oritani would have a right to terminate the merger agreement, unless Valley elects to increase the exchange ratio, which would result in additional shares of Valley common stock being issued.

Valley common stock is listed on the Nasdaq Global Select Market under the symbol “VLY.” Oritani common stock is quoted on the Nasdaq Global Market (which we refer to, together with the NASDAQ Global Select Market, as “NASDAQ”) under the symbol “ORIT.” Based on the closing price of Valley common stock on NASDAQ on June 25, 2019, the last trading day before public announcement of the merger, the value of the per share merger consideration payable to holders of Oritani common stock would be $16.29. Based on the closing price of Valley common stock on NASDAQ on [●], 2019, the last practicable trading date before the date of the attached joint proxy statement-prospectus, the value of the per share merger consideration payable to holders of Oritani common stock would be $[●]. The value of the Valley common stock at the time of completion of the merger could be greater than, less than or the same as the value of Valley common stock on the date of the accompanying joint proxy statement-prospectus. We urge you to obtain current market quotations for both Valley common stock and Oritani common stock.

We generally expect the merger to be tax-free with respect to the Valley common stock that Oritani shareholders receive.

Assuming the exchange ratio is 1.60, if the merger is completed and all of the outstanding Oritani stock options are exercised prior to the closing of the merger, Oritani shareholders will own approximately 75.7 million shares, or approximately 18.6%, of Valley’s outstanding common stock.

The Oritani Board of Directors unanimously recommends that Oritani shareholders vote “FOR” the approval of the merger agreement and the related proposals.

The Valley Board of Directors unanimously recommends that Valley common shareholders vote “FOR” the approval of the issuance of up to 75,711,589 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 Oritani 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 Oritani and Valley common shareholders and as a prospectus for the shares of Valley common stock to be issued in connection with the merger to Oritani shareholders, 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 [] for a discussion of the risks related to the proposed merger. You can also obtain information about Valley and Oritani from documents that they have filed with the Securities and Exchange Commission.

 

Kevin J. Lynch

Chairman, President and Chief Executive Officer

Oritani Financial Corp.

 

Ira Robbins

Chairman, President and Chief Executive Officer

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 [●], 2019, and is first being mailed to Oritani and Valley shareholders on [●], 2019.


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HOW TO GET COPIES OF RELATED DOCUMENTS

This joint proxy statement-prospectus incorporates important business and financial information about Valley National Bancorp and Oritani Financial Corp. that is not included in or delivered with this document. This information is available to you without charge upon your written or oral request. You can obtain the documents incorporated by reference in this joint proxy statement-prospectus through the Securities and Exchange Commission website at http://www.sec.gov or by requesting them in writing or by telephone at the appropriate address below:

 

if you are a Valley shareholder:

 

Tina Zarkadas

Assistant Vice President, Shareholder Relations Specialist
Valley National Bancorp
1455 Valley Road, Wayne, New Jersey 07470
telephone number (973) 305-3380

 

if you are an Oritani shareholder:

 

Phillip M. Wyks
Corporate Secretary

Oritani Financial Corp.
370 Pascack Road, Township of Washington, New Jersey 07676; telephone number (201) 664-5400

We will respond to your request as soon as practicable by sending the requested documents by first class mail or other equally prompt means. To obtain timely delivery of these documents, you must request them no later than five (5) business days before the date of the applicable special meeting. This means that holders of Oritani common stock requesting documents must do so by [●], 2019, to receive them before the Oritani special meeting, and holders of Valley common stock requesting documents must do so by [●], 2019, to receive them before the Valley special meeting.

No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this joint proxy statement-prospectus. This joint proxy statement-prospectus is dated [●], 2019, and you should assume that the information in this joint proxy statement-prospectus is accurate only as of such date. You should assume that the information incorporated by reference into this joint proxy statement-prospectus is accurate as of the date of such incorporated document. Neither the mailing of this joint proxy statement-prospectus to holders of Valley common stock or holders of Oritani common stock nor the issuance by Valley of shares of Valley common stock in connection with the merger will create any implication to the contrary.

This joint proxy statement-prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Information contained in, or incorporated by reference into, this joint proxy statement-prospectus regarding Valley has been provided by Valley and information contained in, or incorporated by reference into, this joint proxy statement-prospectus regarding Oritani has been provided by Oritani.


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Oritani Financial Corp.

370 Pascack Road

Washington Township, New Jersey 07676

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON []

At the direction of the Board of Directors of Oritani Financial Corp. (which we refer to as “Oritani”), NOTICE IS HEREBY GIVEN that a special meeting of shareholders of Oritani will be held at [●], on [●], at [●] (local time) to consider and vote upon the following matters:

 

  (1)

Approval of the Agreement and Plan of Merger, dated as of June 25, 2019, between Valley National Bancorp and Oritani pursuant to which Oritani will merge with and into Valley National Bancorp;

 

  (2)

Approval, on a non-binding advisory basis, of the compensation that will or may become payable to the named executive officers of Oritani based on or related to the merger (which we refer to as the “executive compensation proposal”); and

 

  (3)

Approval of a proposal to authorize the Oritani Board of Directors to adjourn or postpone the Oritani 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 (which we refer to as the “Oritani adjournment proposal”).

The Oritani Board of Directors has fixed [●], 2019 as the record date for the determination of the Oritani shareholders entitled to notice of and to vote at the Oritani special meeting, and only Oritani shareholders of record on said date will be entitled to receive notice of and to vote at said meeting.

The Oritani Financial Corp. Board of Directors unanimously recommends that shareholders vote:

 

  (1)

“FOR” approval of the merger agreement;

 

  (2)

“FOR” approval of the executive compensation proposal; and

 

  (3)

“FOR” approval of the Oritani adjournment proposal.

Your vote is very important. Your proxy is being solicited by Oritani’s board of directors. For the proposed merger to be completed, the proposal to approve the merger agreement must be approved by the affirmative vote of a majority of the issued and outstanding shares of Oritani common stock. The executive compensation proposal will be approved if a majority of the votes cast on such proposal at the Oritani special meeting are voted in favor of such proposal. The Oritani adjournment proposal will be approved if a majority of the votes cast on such proposal at the Oritani special meeting are voted in favor of such proposal.

 

By Order of the Board of Directors,

 

Kevin J. Lynch

Chairman of the Board, President and

Chief Executive Officer

Township of Washington, New Jersey

[●], 2019

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. VOTING BY INTERNET OR PHONE, OR RETURNING THE PROXY CARD BY MAIL WILL NOT PREVENT YOU FROM VOTING IN PERSON IF YOU ATTEND THE ORITANI SPECIAL MEETING.


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Valley National Bancorp

One Penn Plaza

New York, New York

NOTICE OF SPECIAL MEETING OF COMMON SHAREHOLDERS

TO BE HELD ON [], 2019

At the direction of the Board of Directors of Valley National Bancorp (which we refer to as “Valley”), NOTICE IS HEREBY GIVEN that a special meeting of common shareholders of Valley will be held at [●], on [●], 2019, at [●] (local time) to consider and vote upon the following matters:

 

  (1)

Approval of the issuance of up to 75,711,589 shares of Valley common stock in connection with the merger with Oritani Financial Corp. (which we refer to as the “Valley share issuance proposal”); and

 

  (2)

Approval of a proposal to authorize 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 issuance of up to 75,711,589 shares of Valley common stock in connection with the merger with Oritani Financial Corp. or to vote on other matters properly before such special meeting (which we refer to as the “Valley adjournment proposal”).

The Valley Board of Directors has fixed [●], 2019, as the record date for the determination of the Valley common shareholders entitled to notice of and to vote at the Valley special meeting, and only Valley 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 Valley share issuance proposal; and

 

  (2)

“FOR” approval of the Valley adjournment proposal.

Your vote is very important. Your proxy is being solicited by Valley’s board of directors. For the proposed merger to be completed, the proposal to issue up to 75,711,589 shares of Valley common stock in connection with the merger with Oritani 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 will be approved if a majority of the votes cast on such proposal at the Valley special meeting are voted in favor of such proposal.

 

By Order of the Board of Directors,

 

Ronald H. Janis

Secretary

New York, New York

[●], 2019

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. VOTING BY INTERNET OR PHONE, OR RETURNING THE PROXY CARD BY MAIL WILL NOT PREVENT YOU FROM VOTING IN PERSON IF YOU ATTEND THE VALLEY SPECIAL 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  

Oritani Special Meeting

     9  

Valley Special Meeting

     11  

The Companies

     11  

The Merger

     12  

Other Proposals at Oritani Special Meeting

     19  

Approval of the Issuance of up to 75,711,589 Shares of Valley Common Stock in Connection with the Merger

     20  

Other Proposal at Valley Special Meeting

     21  

SELECTED HISTORICAL FINANCIAL DATA OF VALLEY

     22  

SELECTED HISTORICAL FINANCIAL DATA OF ORITANI

     25  

UNAUDITED PRO FORMA FINANCIAL DATA

     27  

COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA AND COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

     32  

RISK FACTORS

     34  

FORWARD-LOOKING STATEMENTS

     40  

CERTAIN INFORMATION ABOUT VALLEY

     42  

CERTAIN INFORMATION ABOUT ORITANI

     43  

INFORMATION ABOUT THE ORITANI MEETING

     44  

Date, Time and Place

     44  

Purpose

     44  

Oritani Board of Directors Recommendations

     44  

Record Date; Quorum; Required Vote; Voting Agreements

     44  

Voting Rights; Proxies

     45  

Participants in the Oritani ESOP or the Oritani 401(k) Plan

     46  

Solicitation of Proxies

     46  

INFORMATION ABOUT THE VALLEY MEETING

     47  

Date, Time and Place

     47  

Purpose

     47  

Board Recommendations

     47  

Record Date; Quorum; Required Vote

     47  

Voting Rights; Proxies

     48  

Solicitation of Proxies

     48  

PROPOSAL 1 OF THE ORITANI SPECIAL MEETING – THE MERGER

     50  

Background of the Merger

     50  

Oritani’s Reasons for the Merger; Recommendation of Oritani’s Board of Directors

     55  

Recommendation of the Oritani Board of Directors

     56  

Valley’s Reasons for the Merger

     57  

Interests of Certain Persons in the Merger

     57  

Opinion of Oritani’s Financial Advisor

     66  

Unaudited Financial Forecasts

     78  

Regulatory Approvals

     81  

Resale Considerations Regarding Valley Common Stock and Preferred Stock

     82  

Accounting Treatment of the Merger

     82  

Material Federal Income Tax Consequences of the Merger

     82  

No Dissenters’ Rights

     85  

 

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     Page  

THE MERGER AGREEMENT

     86  

General Description

     86  

Consideration

     86  

Treatment of Oritani Stock Options and Restricted Stock

     86  

Bank Merger

     87  

Certificate of Incorporation and By-laws

     87  

Board of Directors

     87  

Exchange of Shares

     87  

Representations and Warranties

     88  

Covenants and Agreements

     90  

Employment and Director Matters

     93  

Agreement Not to Solicit Other Offers

     94  

Costs and Expenses

     96  

Indemnification and Insurance

     96  

Conditions to Complete the Merger

     96  

Termination

     97  

Termination Fees and Termination Expenses

     98  

Voting Agreements

     99  

DESCRIPTION OF VALLEY CAPITAL STOCK

     100  

General

     100  

Common Stock

     100  

Dividend Rights

     100  

Voting Rights

     100  

Liquidation Rights

     101  

Assessment and Redemption

     101  

Other Matters

     101  

“Blank Check” Preferred Stock

     101  

COMPARISON OF THE RIGHTS OF SHAREHOLDERS OF VALLEY AND ORITANI

     102  

Authorized Capital Stock

     102  

Limitation on Voting Rights

     102  

Size of Board of Directors

     102  

Classes and Election of Directors

     102  

Removal of Directors

     103  

Filling Vacancies on the Board of Directors

     103  

Proxy Access

     103  

Calling Special Meetings of Shareholders

     104  

Notice of Meeting of Shareholders

     104  

Nomination of Director Candidates and Proposal of Business by Shareholders

     104  

Anti-Takeover Provisions; Dissenters’ Appraisal Rights

     105  

Indemnification of Directors and Officers; Limitation of Liability

     107  

Amendments to Certificates of Incorporation and By-laws

     108  

PROPOSAL 2 OF THE ORITANI SPECIAL MEETING – NON-BINDING, ADVISORY VOTE TO APPROVE THE COMPENSATION THAT WILL OR MAY BECOME PAYABLE TO THE NAMED EXECUTIVE OFFICERS OF ORITANI BASED ON OR RELATED TO THE MERGER

     109  

PROPOSAL 3 OF THE ORITANI SPECIAL MEETING – AUTHORIZATION TO VOTE ON ADJOURNMENT OR OTHER MATTERS

     110  

Vote Required for Approval

     110  

Recommendation of the Oritani Board of Directors

     110  

 

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     Page  

PROPOSAL 1 OF THE VALLEY SPECIAL MEETING – APPROVAL OF THE ISSUANCE OF UP TO 75,711,589 SHARES OF VALLEY COMMON STOCK IN CONNECTION WITH THE MERGER

     111  

Reasons for the Valley Share Issuance Proposal

     111  

Interests of Valley Officers and Directors

     111  

Golden Parachute Compensation Payable to Valley Named Executive Officers

     111  

Opinion of Valley’s Financial Advisor

     111  

Vote Required for Approval

     120  

Recommendation of the Valley Board of Directors

     120  

PROPOSAL 2 OF THE VALLEY SPECIAL MEETING – AUTHORIZATION TO VOTE ON ADJOURNMENT OR OTHER MATTERS

     121  

Vote Required for Approval

     121  

Recommendation of the Valley Board of Directors

     121  

VALLEY SHAREHOLDER PROPOSALS

     122  

ORITANI SHAREHOLDER PROPOSALS

     122  

INFORMATION INCORPORATED BY REFERENCE

     123  

OTHER MATTERS

     124  

LEGAL OPINION

     124  

EXPERTS

     125  

APPENDIX A     AGREEMENT AND PLAN OF MERGER

     A-1  

APPENDIX B     OPINION OF KEEFE, BRUYETTE  & WOODS, INC.

     B-1  

APPENDIX C     OPINION OF J.P. MORGAN SECURITIES LLC

     C-1  

 

 

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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETINGS

The following are answers to certain questions that you may have regarding the merger and the Oritani and Valley special meetings. We urge you to read carefully the remainder of this document because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the Appendices to, and the documents incorporated by reference in, this document.

 

Q:

WHAT IS THE PURPOSE OF THIS DOCUMENT?

 

A:

This document serves as both a joint proxy statement of Oritani Financial Corp. (“Oritani”) and Valley National Bancorp (“Valley”) and a prospectus of Valley. As a joint proxy statement-prospectus, it is being provided to Oritani shareholders because the Oritani Board of Directors is soliciting their proxy for use at the Oritani special meeting of shareholders at which the Oritani shareholders will consider and vote on (i) approval of the merger agreement between Oritani and Valley pursuant to which Oritani will merge with and into Valley, (ii) approval, on a non-binding advisory basis, of the compensation that will or may become payable to the named executive officers of Oritani based on or related to the merger (the “executive compensation proposal”), and (iii) approval of the authorization of the Oritani Board of Directors to adjourn or postpone the Oritani 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 “Oritani adjournment proposal”).

As a joint proxy statement-prospectus, 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 75,711,589 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 75,711,589 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 to be issued upon the exercise of Oritani stock options.

As a prospectus, it is being provided to Oritani shareholders because Valley is offering to exchange shares of its common stock for their shares of Oritani common stock upon completion of the merger.

 

Q:

WHAT WILL ORITANI SHAREHOLDERS RECEIVE IN THE MERGER?

 

A:

Upon completion of the merger, Oritani shareholders will receive 1.60 shares of Valley common stock for each share of Oritani common stock that they hold, subject to the payment of cash in lieu of fractional shares. The foregoing is referred to in this document as the “merger consideration.” Based on the closing price of Valley common stock on NASDAQ on June 25, 2019, the last trading day before public announcement of the merger, the value of the per share merger consideration payable to holders of Oritani common stock would be $16.29. Based on the closing price of Valley common stock on NASDAQ on [●], 2019, the last practicable trading date before the date of the attached joint proxy statement-prospectus, the value of the per share merger consideration payable to holders of Oritani common stock would be $[●].

 

Q:

WHAT HAPPENS IF AN ORITANI SHAREHOLDER IS ELIGIBLE TO RECEIVE A FRACTION OF A SHARE OF VALLEY COMMON STOCK AS PART OF THE MERGER CONSIDERATION?

 

A:

Valley will not issue any fractional shares of Valley common stock in the merger. If the aggregate number of shares of Valley common stock that you are entitled to receive as part of the merger consideration

 

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  includes a fraction of a share of Valley common stock, you will receive cash instead of that fractional share. Valley will pay to each former Oritani shareholder who holds fractional shares an amount in cash determined by multiplying the average of the closing sale prices of Valley common stock for the five full trading days ending on the trading day immediately preceding the closing date of the merger, which we refer to as the “average closing price,” by the fraction of a share of Valley common stock that such Oritani shareholder would otherwise be entitled to receive. See the section entitled “The Merger Agreement – Consideration” beginning on page [●] of this document.

 

Q:

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

 

A:

Under the merger agreement, each outstanding Oritani stock option will vest only to the extent set forth in the Oritani stock plans and option grant agreements. Such, Oritani 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 Oritani common stock underlying such Oritani 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 Oritani common stock subject to such Oritani stock option divided by the exchange ratio. In all other respects, such Oritani stock options will be subject to the terms and conditions of the applicable Oritani stock plan and option grant agreement as in effective immediately prior to the effective time of the merger.

 

Q:

I HOLD RESTRICTED STOCK GRANTED BY ORITANI. HOW WILL IT BE TREATED IN THE MERGER?

 

A:

Under the merger agreement, each outstanding share of Oritani restricted stock under an Oritani stock plan will vest only to the extent set forth in the Oritani stock plans and award agreements. All shares of outstanding restricted stock that have vested as of the effective time of the merger will be converted into the right to receive the same consideration that holders of Oritani common stock are receiving in the merger, and all outstanding shares of restricted stock of Oritani that are unvested as of the effective time of the merger will be converted into shares of Valley restricted stock at the 1.60 exchange ratio.

 

Q:

AS AN ORITANI SHAREHOLDER, HOW DO I VOTE?

 

A:

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

 

   

Via internet at [●];

 

   

Via telephone by calling [●];

 

   

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

 

   

Vote in person at the Oritani 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 Oritani 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 Oritani common stock as of the Oritani record date.

 

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Shares Held in Oritani Bank Employee Stock Ownership Plan. Participants in the Oritani Bank Employee Stock Ownership Plan (the “Oritani ESOP”) will each receive a Voting Instruction Form that reflects all of the shares that the participant may direct the trustee to vote on his or her behalf under the Oritani ESOP. Under the terms of the Oritani ESOP, the Oritani ESOP trustee votes all shares held by the Oritani ESOP, but each Oritani ESOP participant may direct the trustee how to vote the shares of Oritani common stock allocated to his or her account. The Oritani ESOP trustee will vote all unallocated shares of Oritani common stock held by the Oritani ESOP and allocated shares for which no voting instructions are received in the same proportion as shares for which it has received timely voting instructions.

Shares Held in Oritani Bank 401(k) Plan. Participants in the Oritani Bank Employees’ Savings Plan (the “Oritani 401(k) Plan”) with an interest in the Oritani Financial Corp. Stock Fund (the “Oritani Stock Fund”) will receive a Voting Instruction Form that allows them to direct the Oritani 401(k) Plan trustee to vote their interest in the Oritani Stock Fund. If a participant does not direct the Oritani 401(k) Plan trustee how to vote his or her interests in the Oritani Stock Fund, the trustee will vote such interest in the same proportion as it has received timely voting instructions from other Oritani 401(k) Plan participants.

 

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:

 

   

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

 

   

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

 

   

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

 

   

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.

Shares Held in Valley’s 401(k) Plan. If you are a participant in the Valley National Bank Savings and Investment Plan (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.

 

Q:

WHY IS THE VOTE OF HOLDERS OF ORITANI COMMON STOCK IMPORTANT?

 

A:

The approval of the merger agreement requires the affirmative vote of the holders of at least a majority of the Oritani common stock outstanding. If you do not vote by proxy, telephone or internet or in person at the Oritani 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 executive compensation proposal or the Oritani adjournment proposal. Failure to vote, however, may affect whether a quorum is present.

Oritani is seeking a nonbinding advisory vote with respect to certain payments that will or may become payable to Oritani’s named executive officers based on or related to the merger. The vote with respect to the executive compensation proposal is advisory in nature and a vote for or against approval will not be binding

 

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on Oritani or the Oritani Board of Directors. Therefore, if the merger agreement is approved by Oritani’s shareholders, payments may still be paid to Oritani’s named executive officers if and to the extent required or allowed under applicable law even if Oritani shareholders do not approve the executive compensation proposal. Approval of the executive compensation proposal requires the affirmative vote of the holders of at least a majority of the votes cast at the Oritani special meeting.

Approval of the Oritani adjournment proposal requires the affirmative vote of the holders of at least a majority of the votes cast at the Oritani special meeting.

 

Q:

WHAT DOES THE ORITANI BOARD OF DIRECTORS RECOMMEND?

 

A:

The Oritani Board of Directors has unanimously approved the merger agreement and believes that the proposed merger is advisable and in the best interests of Oritani shareholders. Accordingly, the Oritani Board of Directors unanimously recommends that Oritani shareholders vote “FOR” approval of the merger agreement.

The Oritani Board of Directors also unanimously recommends a vote “FOR” approval of the executive compensation proposal and “FOR” approval of the Oritani 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 75,711,589 shares of common stock in connection with the merger, which is a condition to closing of the merger. The 75,711,589 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 to be issued upon the exercise of Oritani stock options. 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.

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 75,711,589 shares of common stock in connection with the merger, and believes that the proposed merger is advisable and in the best interests of Valley shareholders and unanimously recommends that you vote “FOR” approval of the Valley share issuance proposal.

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

 

Q:

WHEN AND WHERE IS THE ORITANI SPECIAL MEETING?

 

A:

The Oritani special meeting is scheduled to be held at [●], on [●], at [●] (local time).

 

Q:

WHEN AND WHERE IS THE VALLEY SPECIAL MEETING?

 

A:

The Valley special meeting is scheduled to be held at [●], on [●], at [●] (local time).

 

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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 Oritani 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 Oritani 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 at the Oritani special meeting are effectively a vote AGAINST the merger agreement but will have no effect on any of the other proposals at the Oritani special meeting and will have no effect at Valley special meeting. “Broker non-votes” are proxies received from brokers who, in the absence of specific voting instructions from beneficial owners of shares of Oritani 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 Oritani special meeting and the Valley special meeting, as applicable, and will have the effect of a vote at the Oritani special meeting AGAINST approval of the merger agreement, but will have no effect on any other proposals at the Oritani 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:

 

   

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

 

   

executing a later Internet or telephone vote;

 

   

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

 

   

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

Oritani shareholders should send written revocations to Phillip M. Wyks, Corporate Secretary, Oritani Financial Corp., 370 Pascack Road, Township of Washington, New Jersey 07676. Attendance at the Oritani special meeting will not in and of itself revoke a proxy, unless you choose to cast a ballot at such special meeting.

Valley common shareholders should send written revocations to Ronald H. Janis, Secretary, Valley National Bancorp, One Penn Plaza, Suite 2930, New York, New York, 10119. 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 vote by the Internet, you can change your vote at the Internet address shown on your Oritani or Valley proxy card, as applicable. The Internet voting system for Oritani shareholders is available 24 hours a day until [●], Eastern Time, on [●][●], 2019. The Internet voting system for Valley shareholders is available 24 hours a day until [●], Eastern Time, on [●][●], 2019.

If you vote by telephone, you can change your vote by using the toll-free telephone number shown on your Oritani or Valley proxy card, as applicable. The telephone voting system for Oritani shareholders is available 24 hours a day in the United States until [●], Eastern Time, on [●][●], 2019. The telephone voting system for Valley shareholders is available 24 hours a day in the United States until [●], Eastern Time, on [●][●], 2019.

Oritani shareholders may revoke their instructions to the Oritani 401(k) Plan’s administrator with respect to voting of the shares of common stock held in their Oritani 401(k) Plan account by submitting to the Oritani

 

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

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 administrator.

 

Q:

IF I AM A HOLDER OF ORITANI COMMON STOCK WITH SHARES REPRESENTED BY STOCK CERTIFICATES, SHOULD I SEND IN MY ORITANI STOCK CERTIFICATES NOW?

 

A:

No. No later than five (5) business days following the effective time of the merger, Oritani shareholders will receive a letter of transmittal from American Stock Transfer & Trust Company, who has been appointed as the exchange agent for the Oritani common stock, which will provide them with instructions as to how they will exchange their Oritani common stock for Valley common stock. The shares of Valley common stock that Oritani shareholders will receive in the merger will be issued in book-entry form. Please do not send in Oritani stock certificates with the Oritani proxy card.

 

Q:

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

 

A:

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

 

Q:

WHO CAN ORITANI SHAREHOLDERS CONTACT IF THEY CANNOT LOCATE THEIR ORITANI STOCK CERTIFICATE(S)?

 

A:

If Oritani shareholders are unable to locate their original Oritani stock certificate(s), they should contact Continental Stock Transfer & Trust Company, Oritani’s transfer agent, at 212-509-4000.

 

Q:

WHAT ARE THE TAX CONSEQUENCES OF THE MERGER TO ORITANI SHAREHOLDERS?

 

A:

We expect that for federal income tax purposes, the merger generally will not be a taxable event to Oritani shareholders. It is a condition to the completion of the merger that Oritani and Valley receive written opinions from their respective counsel to the effect that the merger will be treated as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). Subject to the limitations and qualifications described in the section entitled “Proposal 1 of the Oritani Special Meeting – The Merger – Material Federal Income Tax Consequences of the Merger,” if you are a United States holder of Oritani common stock, generally you will not recognize any gain or loss with respect to the exchange of shares of Oritani common stock for shares of Valley common stock in the merger. However, Oritani shareholders generally will recognize gain or loss with respect to cash received instead of fractional shares of Valley common stock that the Oritani shareholders would otherwise be entitled to receive.

 

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We urge Oritani 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 Oritani shareholders’ particular facts and circumstances. See “Proposal 1 of the Oritani Special Meeting – The Merger – Material Federal Income Tax Consequences of the Merger,” beginning at page [●].

 

Q:

DO ORITANI SHAREHOLDERS HAVE THE RIGHT TO DISSENT FROM THE MERGER?

 

A:

No. Under the provisions of the Delaware General Corporation Law (the “DGCL”), the holders of Oritani common stock are not entitled to dissenters’ rights in the merger. See “Proposal 1 of the Oritani Special Meeting – The Merger – No Dissenters’ Rights,” beginning at page [●].

 

Q:

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

 

A:

Yes. The merger must be approved by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) and the Office of the Comptroller of the Currency (the “OCC”). Valley received approval of the merger from the OCC on August 22, 2019. The receipt of a waiver or, if necessary, approval of the Federal Reserve Board is still necessary. As of the date of this joint proxy statement-prospectus, Valley has requested that the Federal Reserve Board waive its application requirement. While Valley does not know of any reason why it would not obtain this waiver or, if necessary, approval in a timely manner, Valley cannot be certain when or if it will receive the requested Federal Reserve Board waiver or, if necessary, Federal Reserve Board approval.

In addition, the merger agreement must be approved by the Oritani shareholders and the Valley share issuance proposal must be approved by Valley common shareholders.

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.

Completion of the merger is also subject to certain other customary closing conditions that must be satisfied. See “The Merger Agreement – Conditions to Complete the Merger,” beginning at page [●].

 

Q:

IS THERE OTHER INFORMATION I SHOULD CONSIDER?

 

A:

Yes. Much of the business and financial information about Oritani or 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 and Oritani with the Securities and Exchange Commission (the “SEC”). This means that Oritani or 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 [●] for a list of documents that Oritani and Valley have 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 Oritani or the Valley documents incorporated by reference. Similarly, information in documents that Oritani or 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.

 

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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 fourth quarter of 2019. We cannot close the merger until after Oritani shareholders approve the merger agreement, the Valley common shareholders approve the Valley share issuance proposal and all regulatory approvals have been obtained, among other conditions.

 

Q:

ARE THERE ANY RISKS THAT I SHOULD CONSIDER IN DECIDING WHETHER TO VOTE FOR THE APPROVAL OF THE MERGER AGREEMENT, THE APPROVAL OF THE VALLEY SHARE ISSUANCE PROPOSAL, OR THE APPROVAL OF THE OTHER PROPOSALS TO BE CONSIDERED AT THE ORITANI SPECIAL MEETING AND THE VALLEY SPECIAL MEETING, RESPECTIVELY?

 

A:

Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page [●]. You also should read and carefully consider the risk factors of Oritani and Valley contained in the documents that are incorporated by reference into this joint proxy statement-prospectus.

 

Q:

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

 

A:

If you are an Oritani shareholder and have questions about the Oritani special meeting or if you need additional copies of this joint proxy statement-prospectus, you should contact Oritani’s proxy solicitor at the address or telephone number listed below:

Alliance Advisors, LLC.

200 Broadacres Drive, Suite 300

Bloomfield, New Jersey 07003

Shareholders please call 855-973-0095

Banks and brokers please call: 973-873-7780

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 Valley’s proxy solicitor at the address or telephone number listed below:

EQ Proxy

90 Park Avenue

New York, New York 10016

(833) 503-4127

 

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SUMMARY

This summary highlights selected information in this joint proxy statement-prospectus and may not contain all of the information that is important to you. You should carefully read this entire joint proxy statement-prospectus and the other documents we refer you to for a more complete understanding of the matters being considered at the special meetings. In addition, we incorporate by reference important business and financial information about Oritani and Valley into this joint proxy statement-prospectus. You may obtain the information incorporated by reference into this joint proxy statement-prospectus without charge by following the instructions in the section entitled “Where You Can Find More Information” beginning on page [] of this joint proxy statement-prospectus.

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 Oritani, including future financial and operating results and performance; statements about Valley’s and Oritani’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 Oritani’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 Oritani. 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. See “Forward-Looking Statements” on page [].

What this Document is About

The Board of Directors of Oritani and the Board of Directors of Valley have each approved an Agreement and Plan of Merger for the merger of Oritani with and into Valley. In order to complete the merger, the shareholders of Oritani must approve the merger agreement and the common shareholders of Valley must approve the issuance of up to 75,711,589 shares of Valley common stock in connection with the merger. The 75,711,589 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 to be issued upon the exercise of Oritani stock options. The Oritani Board of Directors has called a special meeting of Oritani shareholders to vote on approval of the merger agreement, to vote on approval of the executive compensation proposal, and to vote on approval of the Oritani adjournment proposal. The Valley Board of Directors has called a special meeting of Valley common shareholders to vote on approval of the Valley share issuance proposal and to vote on approval of the Valley adjournment proposal. This document is the joint proxy statement used by the Oritani Board of Directors and the Valley Board of Directors to solicit proxies for their respective company’s special meeting. It is also the prospectus of Valley regarding the Valley common stock to be issued to Oritani common shareholders if the merger is completed.

Oritani Special Meeting (page [])

 

Shares Entitled to Vote (page [●])

The Oritani Board of Directors has selected [●] as the record date for the Oritani special meeting. Each of the [●] shares of Oritani common stock outstanding on the record date is entitled to vote at the Oritani special meeting.


 

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  As of the Oritani record date, directors and executive officers of Oritani and their affiliates owned or had the right to vote a total of [●] shares or [●]% of the outstanding Oritani common stock. As of the Oritani record date, none of Valley’s directors or executive officers, or their respective affiliates, had the right to vote any shares of Oritani common stock entitled to be voted at the Oritani special meeting.

 

Quorum (page [●])

The presence at the special meeting, in person or by proxy, of holders of a majority of outstanding shares of Oritani common stock as of the Oritani record date will constitute a quorum for the transaction of business. If you submit a properly completed proxy or if you appear at the Oritani special meeting to vote in person, your shares of Oritani common stock will be counted for purposes of determining whether a quorum is present. Abstentions and broker non-votes will be counted as present to determine if a quorum for the transaction of business exists.

 

  If there is no quorum present, the holders of a majority of the shares of common stock present in person or represented by proxy at the Oritani special meeting may adjourn such special meeting.

 

Oritani Vote Required to Approve the Merger Agreement (page [●])

Approval of the merger agreement requires the affirmative vote of the holders of a majority of the shares of Oritani common stock outstanding.

 

Vote Required to Approve the Executive Compensation Proposal (page [●])

Approval of the executive compensation proposal requires the affirmative vote of the holders of at least a majority of the votes cast at the Oritani special meeting. The vote with respect to the executive compensation proposal is advisory in nature and a vote “FOR” or “AGAINST” approval will not be binding on Oritani or the Oritani Board of Directors. Therefore, if the merger agreement is approved by Oritani’s shareholders, payments may still be paid to Oritani’s named executive officers if and to the extent required or allowed under applicable law, even if Oritani shareholders do not approve the executive compensation proposal.

 

Vote Required to Approve the Oritani Adjournment Proposal (page [●])

Approval of the Oritani adjournment proposal requires the affirmative vote of the holders of at least a majority of the votes cast at the Oritani special meeting.

 

Voting Agreements (page [●])

In connection with the execution of the merger agreement, Valley entered into voting agreements with each Oritani director. Pursuant to the voting agreements, the Oritani directors have each agreed to vote the shares of Oritani common stock beneficially owned by them (whether solely or jointly with others), and which the director has the power to vote or direct the voting of, in favor of approval of the merger agreement. As of June 25, 2019, the date on which the voting agreements were executed, the Oritani directors that are a party to these voting agreements beneficially owned a total of 4,348,370 shares of common stock representing approximately 9.64% of the



 

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outstanding Oritani common stock. Those agreements do not restrict the directors from taking action under or relating to the merger agreement in accordance with their fiduciary duties as directors.

Valley Special Meeting (page [])

 

Shares Entitled to Vote (page [●])

The Valley Board of Directors has selected [●], 2019 as the record date for the Valley special meeting. Each of the [●] shares of Valley common stock outstanding on the record date is entitled to vote at the Valley special meeting.

 

  As of the Valley record date, directors and executive officers of Valley and their affiliates owned or had the right to vote a total of [●] shares or [●]% of the outstanding Valley common stock. As of the Valley record date, none of Oritani’s directors or executive officers, or their respective affiliates, had the right to vote any shares of Valley common stock entitled to be voted at the Valley special meeting, except for Kevin J. Lynch, who owns 10,000 shares of Valley common stock.

 

Quorum (page [●])

The presence at the 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 Valley record date will constitute a quorum for the transaction of business. If you submit a properly completed proxy or if you appear at the Valley special meeting to vote in person, your shares of Valley 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.

 

Vote Required to Approve the Valley Share
Issuance Proposal (page [●])

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.

 

Vote Required to Approve the Valley Adjournment

Proposal (page [●])

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

The Companies

 

Valley

Valley, a New Jersey corporation, is the bank holding company for Valley National Bank. Valley is a regional bank holding company with approximately $33 billion in assets as of June 30, 2019. Its principal subsidiary, Valley National Bank, currently operates many convenient branch locations throughout northern and central New Jersey, the New York City boroughs of Manhattan, Brooklyn and Queens, Long Island, New York, Florida and Alabama. Valley’s principal executive offices are located at One Penn Plaza, Suite 2930, New York, New York, and its telephone number is (973) 305-8800.


 

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Oritani

Oritani, a Delaware corporation, is the stock holding company for Oritani Bank. Oritani is a savings and loan holding company headquartered in the Township of Washington, New Jersey, with consolidated assets of $4.1 billion as of June 30, 2019. Oritani’s principal subsidiary, Oritani Bank, is a New Jersey chartered savings bank, which operates lending offices in New York City and Cherry Hill, New Jersey and 25 branch offices located in the New Jersey counties of Bergen, Hudson, Essex and Passaic. Oritani’s principal executive offices are located at 370 Pascack Road, Township of Washington, New Jersey 07676, and its telephone number is (201) 664-5400.

 

The Merger (page [])

 

 

General Description (page [●])

Pursuant to the merger agreement, Oritani will merge with and into Valley, with Valley as the surviving entity. Immediately following the merger, Oritani’s wholly-owned subsidiary, Oritani Bank, will merge with and into Valley’s wholly-owned subsidiary, Valley National Bank, with Valley National Bank as the surviving bank.

 

  The merger is expected to occur on a date which is the last day of the month which is three (3) business days following the last to occur of (i) the receipt of all necessary regulatory and governmental approvals and consents (and the expiration of all statutory waiting periods in respect thereof) and (ii) the satisfaction or waiver of all other conditions to closing, unless the parties agree in writing to a different date. The terms of the proposed merger are set forth in a merger agreement signed by Oritani and Valley. A copy of the merger agreement is attached as Appendix A to this document and is incorporated herein by reference.

 

Consideration to Oritani Shareholders (page [●])

In the merger, Oritani shareholders will receive 1.60 shares of Valley common stock for each share of Oritani common stock that they hold, subject to the payment of cash in lieu of fractional shares.

 

  Assuming all of the outstanding Oritani stock options are exercised and all of the outstanding shares of Oritani restricted stock have vested prior to the closing of the merger, the parties currently estimate that Valley will issue approximately 75.7 million shares of its common stock in connection with the merger.

 

Share Information and Market Prices (page [●])

Valley common stock is listed on the NASDAQ under the symbol “VLY” and Oritani common stock is listed on NASDAQ under the symbol “ORIT.” The following table shows the closing prices of Valley common stock and Oritani common stock on June 25, 2019, the last trading day before the announcement of the merger, the closing prices of Valley common stock and Oritani common stock on [●], 2019, the last practicable trading date before the date of this joint proxy statement-prospectus, and the equivalent value of one share of Oritani common stock on each date giving effect to the merger . The



 

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equivalent value of one share of Oritani common stock is computed by multiplying the price of a share of Valley common stock by the 1.60 exchange ratio. You should obtain current market quotations for Valley and Oritani common stock. Because the exchange ratio is fixed and trading prices fluctuate, Oritani shareholders are not assured of receiving any specific market value of Valley common stock.

 

Date

  Closing Sale
Price Per
Share
of Valley
Common
Stock
    Closing Sale
Price Per Share
of Oritani
Common Stock
    Equivalent
Value of
Consideration
Per Share of
Oritani
Common Stock
 

June 25, 2019

  $ 10.18     $ 16.21     $ 16.29  

[●][●], 2019

  $ [●   $ [●   $ [●

 

Oritani Stock Options (page [●])

Each outstanding Oritani stock option will vest only to the extent set forth in the Oritani stock plans and option grant agreements. In addition, such Oritani 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 Oritani common stock underlying such Oritani 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 Oritani common stock subject to such Oritani stock option divided by the exchange ratio.

 

Oritani Restricted Stock (page [●])

Each outstanding share of Oritani restricted stock under an Oritani stock plan will vest only to the extent set forth in the Oritani stock plans and award agreements. All outstanding shares of restricted stock 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 Oritani common stock are receiving in the merger, and all shares of restricted stock that are unvested as of the effective time of the merger will be converted into shares of Valley restricted stock at the 1.60 exchange ratio, subject to adjustment as provided under the relevant Oritani stock plan and award agreement for such Oritani restricted stock.

 

Listing of Valley Common Stock (page [●])

The shares of Valley common stock to be issued in the merger will be listed on the NASDAQ Global Select Market, where Valley common stock is currently listed.

 

Tax-Free Nature of the Merger (page [●])

The merger is intended to be treated as a reorganization within the meaning of Section 368(a) of the Code, and it is a condition to our respective obligations to complete the merger that each of Valley and Oritani receive a legal opinion to that effect. Accordingly, U.S. holders of Oritani common stock generally will not recognize any gain or loss on the exchange of shares of Oritani common stock for shares of Valley common stock. However, a U.S. holder of Oritani common stock generally will be subject to U.S. federal income tax on



 

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cash received in lieu of any fractional share of Valley common stock that a holder would otherwise be entitled to receive.

 

  Tax matters are very complicated, and the tax consequences of the merger to each Oritani shareholder will depend on the facts of that shareholder’s particular situation. We urge you to read the more complete description of the merger’s tax consequences beginning on page [●] and to consult with your own tax advisor regarding the specific tax consequences of the merger to you under applicable tax laws.

 

Exchanging Oritani Common Stock Certificates (page [●])

Not later than 5 business days following the closing of the merger, Oritani shareholders will receive a letter of transmittal and instructions for exchanging their Oritani common stock certificates. In order to receive their Valley common stock, Oritani shareholders must send their stock certificates to American Stock Transfer & Trust Company, who is acting as the exchange agent for the exchange of Oritani common stock, after the closing. Oritani shareholders will need to carefully review and complete these materials and return them as instructed along with their stock certificates for Oritani common stock.

 

  If Oritani shareholders do not have stock certificates but hold shares of Oritani common stock with their broker in “street name,” the shares will be exchanged for them by their broker.

 

Dividends (page [●])

Oritani paid on August 16, 2019 a quarterly cash dividend of $0.25 per share of Oritani common stock with respect to the quarter ended June 30, 2019. All quarterly cash dividends declared and paid thereafter by Oritani are permitted under the merger agreement to be equal to $0.18 per share of Oritani common stock; provided, that, for each quarter beginning in the fourth calendar quarter of 2019 until the effective time of the merger, Oritani will have a record and payment date for its quarterly cash dividend consistent with Valley’s record and payment date.

 

Reselling the Stock You Receive in the Merger

The shares of Valley common stock, if any, to be issued in the merger will be registered under the Securities Act of 1933, as amended. You may freely transfer those shares after you receive them.

 

Recommendation of Oritani Board of Directors (page [●])

The Oritani Board of Directors unanimously approved the merger agreement and the proposed merger. The Oritani Board of Directors believes that the merger agreement, including the merger, is in the best interests of Oritani and its shareholders, and therefore unanimously recommends that Oritani shareholders vote “FOR” the approval of the merger agreement.

 

Opinion of Oritani’s Financial Advisor (page [●])

In connection with the merger, Oritani’s financial advisor, Keefe, Bruyette & Woods, Inc. (“KBW”), delivered a written opinion, dated June 25, 2019, to the Oritani board of directors as to the fairness,



 

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from a financial point of view and as of the date of the opinion, to the holders of Oritani common stock of the exchange ratio in the proposed merger. The full text of the opinion, which describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW in preparing the opinion, is attached as Appendix B to this document. The opinion was for the information of, and was directed to, the Oritani Board of Directors (in its capacity as such) in connection with its consideration of the financial terms of the merger. The opinion does not address the underlying business decision of Oritani to engage in the merger or enter into the merger agreement or constitute a recommendation to the Oritani Board of Directors in connection with the merger, and it does not constitute a recommendation to any holder of Oritani common stock or any shareholder of any other entity as to how to vote or act in connection with the merger or any other matter.

 

Holders of Oritani Common Stock Do Not Have
Dissenters’
Rights (page [●])

Dissenters’ rights are statutory rights that, if applicable under law, enable shareholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares in cash as determined by a court in a judicial proceeding instead of receiving the consideration offered to shareholders in connection with the extraordinary transaction. Dissenters’ rights are not available in all circumstances, and exceptions to these rights are provided under the DGCL. Under the provisions of the DGCL, the holders of Oritani common stock are not entitled to dissenters’ rights in the merger. See the section entitled “Proposal 1 of the Oritani Special Meeting – The Merger – No Dissenters’ Rights” on page [●].

 

Conditions That Must Be Satisfied or Waived for
the
Merger
to Occur (page [●])

Currently, we expect to complete the merger during the fourth quarter of 2019. As more fully described in this document and in the merger agreement, the completion of the merger depends on a number of customary closing conditions being satisfied or, where legally permissible, waived. These conditions include, among others, the receipt of the requisite approvals of Oritani and Valley shareholders, the receipt of all required regulatory approvals, consents, exemptions or waivers, including from the Federal Reserve Board and the OCC, and the receipt of legal opinions by each company regarding the United States federal income tax treatment of the merger. Valley received approval of the merger from the OCC on August 22, 2019.

 

  We cannot be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed.

 

Termination of the Merger Agreement (page [●])

Oritani and Valley may mutually agree to terminate the merger agreement before completing the merger, even after their respective common shareholders’ approval.


 

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  The merger agreement can be terminated by either party in any of the following circumstances:

 

   

the merger has not been completed by April 30, 2020, unless the failure to complete the merger by that time was due to a material breach of a representation, warranty, covenant or agreement by the party seeking to terminate the merger agreement;

 

   

the Oritani or Valley common shareholders fail to approve the merger agreement at the their respective meeting of shareholders (or any adjournment or postponement thereof);

 

   

any required regulatory approval has been denied by final, non-appealable action by such governmental entity, provided that the failure to receive such approval was not the result of such party’s failure to comply with the merger agreement; or

 

   

the other party breaches any of its representations, warranties, covenants or other agreements contained in the merger agreement and such breach is not cured within 30 days following notice or cannot be cured prior to April 30, 2020 and would result in (i) the failure to satisfy any of the closing conditions by April 30, 2020, or (ii) a material adverse effect on the party committing such breach, provided that the terminating party is not in material breach of any representation, warranty, covenant or agreement.

 

  The merger agreement can be terminated by Valley, if, among other things: in any of the following circumstances (among others):

 

   

prior to receipt of the Oritani shareholders’ approval, Oritani, its Board of Directors or any committee of its Board of Directors (1) withdraws, modifies or qualifies in a manner adverse to Valley, or refuses to make, the recommendation that its common shareholders approve the merger agreement or adopts, approves, recommends, endorses or otherwise declares advisable certain other business combination proposals, (2) fails to recommend the merger and the approval of the merger agreement by its common shareholders, (3) breaches its non-solicitation obligations under the merger agreement in any material respect adverse to Valley, or (4) in response to a tender or exchange offer for 10% or more of the outstanding shares of Oritani’s common stock being commenced (other than by Valley or a subsidiary thereof), recommends that its common shareholders tender their shares or otherwise fails to recommend that their common shareholders reject such offer; or

 

   

Oritani cannot meet the closing conditions by April 30, 2020.

 

  The merger agreement can be terminated by Oritani, if, among other things:

 

   

prior to receipt of the Oritani shareholders’ approval, Oritani receives a proposal that the Oritani Board of Directors concludes



 

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to be more favorable than the merger with Valley and enters into an acquisition agreement with a third-party with respect to such superior proposal; or

 

   

prior to receipt of the Oritani shareholders’ approval, the Oritani Board of Directors determines in good faith, after consultation with Oritani’s counsel and financial advisor, that the Oritani Board of Directors would be breaching its fiduciary duties under applicable law by not withdrawing its recommendation to Oritani shareholders of approval of the merger with Valley or by not entering into an agreement which is intended to or is reasonably likely to lead to an acquisition proposal; or

 

   

Valley cannot meet the closing conditions by April 30, 2020; or

 

   

as of the date on which the last required approval of a governmental entity is obtained with respect to the merger, without regard to any requisite waiting period (the “determination date”), (i) the volume-weighted average price, rounded to the nearest one-tenth of a cent, of Valley common stock for the ten (10) trading day period ending on the trading date immediately preceding the determination date (the “average determination price”), is less than 80% of the volume-weighted average price of Valley common stock for the ten trading day period ending on June 24, 2019, rounded to the nearest one-tenth of a cent (the “Valley starting price”); and (ii) the number obtained by dividing the average determination price by the Valley starting price is less than the number obtained by dividing (A) the average, rounded to the nearest one-tenth of a cent, of the closing prices of the KBW NASDAQ Regional Banking Index for the same trading days used in calculating the average determination price by (B) the average, rounded to the nearest one-tenth of a cent, of the closing prices of the KBW NASDAQ Regional Banking Index for the same trading days used in calculating the Valley starting price, and subtracting 0.20 from such quotient. However, if Oritani chooses to exercise this termination right, Valley has the option, within five days of receipt of notice from Oritani, to adjust the merger consideration and prevent termination under this provision.

 

  For a more complete description of these and other termination rights available to Oritani and Valley, see page [●].

 

Termination Fee and Termination Expenses (page [●])

Under certain circumstances described in the merger agreement in connection with the termination of the merger, including circumstances involving if the merger agreement is terminated and Oritani is acquired or executes a definitive agreement to be acquired by another entity within 12 months after the termination, Valley is entitled to receive a termination fee from Oritani of $28 million, plus Valley’s reasonable out-of-pocket expenses up to $1.8 million. Under certain circumstances, if the merger agreement is terminated by



 

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Valley or Oritani due to the breach by the other party of any representations, warranties, covenants or other agreements contained in the merger agreement and such breach is not cured and would result in the failure to satisfy any of the closing conditions by April 30, 2020 or a material adverse effect on the party committing such breach, then the non-breaching party is entitled to receive reasonable out of pocket expenses up to $1.8 million from the breaching party. For a more complete description of the termination fee and termination expenses potentially payable under the merger agreement, see page [●].

 

Valley Board of Directors Following
Completion of the Merger (page [●])

Valley has agreed to increase the size of its Board of Directors by one director and to elect Kevin J. Lynch, Chairman, President and Chief Executive Officer of Oritani, to serve as a Valley director, subject to his meeting Valley’s qualifications for service on Valley’s Board of Directors.

 

Oritani has Agreed Not to Solicit Alternative Transactions (page [●])

In the merger agreement, Oritani has agreed not to initiate, solicit or knowingly encourage or facilitate inquiries with, or engage in negotiations with, or provide any information to, any person other than Valley concerning an acquisition transaction involving Oritani or Oritani Bank. However, Oritani may take certain of these actions if its Board of Directors determines that it should do so. This determination by the Oritani Board of Directors must be made after such Board of Directors consults with counsel and its financial advisor, and must be in accordance with the Oritani Board of Directors’ fiduciary duties. This restriction may deter other potential acquirors of Oritani.

 

The Rights of Oritani Shareholders Will
Change as a Result of the Merger (page [●])

The rights of Oritani shareholders are governed by Delaware law, as well as the Oritani Certificate of Incorporation, and the Oritani By-laws. After completion of the merger, the rights of former Oritani shareholders who receive Valley common stock in the merger will be governed by New Jersey law and the Valley Restated Certificate of Incorporation and the Valley By-laws. For a description of the material differences in shareholder rights, see the section entitled “Comparison of the Rights of Shareholders of Valley and Oritani” beginning on page [●].

 

Interests of Oritani’s Directors and Executive Officers in the Merger (page [●])

In considering the information contained in this document, you should be aware that Oritani’s executive officers and directors have employment and other compensation agreements or plans that give them financial interests in the merger that are different from, or in addition to, the interests of Oritani shareholders generally. The Oritani Board of Directors was aware of these interests at the time it approved the merger agreement. These interests include, among other things:

 

  On the record date of the Oritani special meeting, directors and executive officers of Oritani and their affiliates owned or had the right to vote a total of [●] shares or [●]% of the outstanding Oritani common stock on such date.


 

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  Certain Oritani directors and executive officers have interests in the merger as individuals in addition to, or different from, their interests as shareholders, such as receiving salaries or other benefits.

 

  Kevin J. Lynch, Chairman, President and Chief Executive Officer, John M. Fields, Jr., Executive Vice President and Chief Financial Officer, Louis Manderino, Executive Vice President and Chief Risk Officer, Kurt Breitenstein, Executive Vice President and Chief Lending Officer, and Philip M. Wyks, Senior Vice President and Corporate Secretary, and two other executive officers have employment agreements that generally provide for cash severance payments if the executive officer’s employment is terminated for any reason (other than cause, death, or disability) following a change in control during the term of the agreement.

 

  Additionally, six other executive officers have change in control agreements that generally provide for cash severance payments if the executive officer’s employment is terminated involuntarily without cause or voluntarily for good reason following a change in control during the term of the agreement.

 

  Pursuant to the merger agreement, Valley will honor the existing employment and change in control arrangements between Oritani and its executive officers and will pay out Oritani directors and executive officers in accordance with the terms of certain Oritani benefit plans that will be terminated in connection with the merger.

 

  Valley has agreed to indemnify the directors and officers of Oritani against certain liabilities for a six-year period following the merger.

 

  For additional information on the benefits of the merger to Oritani directors and management, see page [●].

Other Proposals at Oritani Special
Meeting
(page [
])

 

Approval of the Executive Compensation
Proposal (page [●])

In accordance with SEC rules, Oritani is providing its shareholders with the opportunity to vote on approval, on a non-binding advisory basis, of the compensation that will or may become payable to the named executive officers of Oritani based on or related to the merger, as described on page [●], and the associated narrative discussion. The Oritani Board of Directors unanimously recommends that Oritani shareholders vote FOR approval of the executive compensation proposal.

 

Approval of the Oritani
Adjournment Proposal (page [●])

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



 

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meeting. The Oritani Board of Directors unanimously recommends that Oritani shareholders vote “FOR” the Oritani adjournment proposal.

Approval of the Issuance of up to 75,711,589
Shares
of Valley Common Stock
in Connection with the Merger

(page [
])

 

Approval of the Valley Share
Issuance Proposal (page [●])

As a condition to the closing of the transactions contemplated by the merger agreement, Valley shareholders are required to approve the issuance of up to 75,711,589 shares of Valley common stock in connection with the merger. The 75,711,589 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 to be issued upon the exercise of Oritani stock options. Accordingly, if Valley common shareholders fail to approve the proposed issuance of Valley common stock, Valley cannot complete the merger. The Valley Board of Directors unanimously recommends that Valley common shareholders vote “FOR” approval of the Valley share issuance proposal.

 

Opinion of Valley’s Financial
Advisor (page [●])

At the meeting of the Valley Board of Directors on June 25, 2019, Valley’s financial advisor, J.P. Morgan Securities LLC (“J.P. Morgan”), rendered its oral opinion to the Valley Board of Directors, subsequently confirmed in writing, that, as of such date and based upon and subject to the factors and assumptions set forth in its opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to Valley.

 

  The full text of J.P. Morgan’s opinion, which sets forth the assumptions made, matters considered and limits on the review undertaken, is attached as Appendix C to this joint proxy statement- prospectus and is incorporated herein by reference. The summary of the J.P. Morgan opinion set forth in this joint proxy statement-prospectus is qualified in its entirety by reference to the full text of such opinion. Valley’s shareholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion was addressed to the Valley Board of Directors (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed merger, was directed only to the exchange ratio in the merger and did not address any other aspect of the merger. J.P. Morgan expressed no opinion as to the fairness of the exchange ratio to the holders of any class of securities, creditors or other constituencies of Valley or as to the underlying decision by Valley to engage in the merger. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. The opinion does not constitute a recommendation to any shareholder of Valley as to how such shareholder should vote with respect to the proposed merger or any other matter.


 

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  For more information, see the section entitled “Proposal 1 of the Valley Special Meeting – Issuance of up to 75,711,589 Shares of Valley Common in Connection with the Merger – Opinion of Valley’s Financial Advisor” beginning on page [●] of this joint proxy statement-prospectus and the copy of the J.P. Morgan opinion included in this joint proxy statement-prospectus as Appendix C.

Other Proposal at Valley Special Meeting (page [])

Approval of the Valley

Adjournment Proposal (page [●])

Valley shareholders are being asked to approve a proposal to authorize 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 Board of Directors unanimously recommends that Valley shareholders vote “FOR” the Valley adjournment proposal.

 

Risk Factors (page [])

You should consider all the information contained in or incorporated by reference into this document in deciding how to vote for the proposals presented in the document. In particular, you should consider the factors described under “Risk Factors” beginning on page [●].


 

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SELECTED HISTORICAL FINANCIAL DATA OF VALLEY

Valley is providing the following information to aid you in your analysis of the financial aspects of the merger. Valley derived the financial information as of and for the fiscal years ended December 31, 2014 through December 31, 2018 from its historical audited financial statements for these fiscal years. Valley derived the financial information as of and for the six months ended June 30, 2018 and 2019 from its unaudited financial statements, which financial statements include, in the opinion of Valley’s management, all adjustments, consisting of normal and recurring adjustments, necessary for a fair statement of those results. The per common share data below have been restated to give retroactive effect to stock splits and stock dividends.

The results for the six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2019. This information is only a summary, and you should read it in conjunction with Valley’s consolidated financial statements and the related notes contained in Valley’s periodic reports filed with the SEC that have been incorporated by reference in this joint proxy statement-prospectus. See “Information Incorporated by Reference” beginning on page [●].

 

(dollars in thousands,
except per share data)

 

   As of and for the Six
Months Ended June 30,
    As of and for the Year Ended December 31,  
   2019     2018     2018     2017     2016     2015     2014  
     (Unaudited)     (Unaudited)                                

Selected Financial Condition Data:

              

Total assets

   $ 33,027,741     $ 30,182,979     $ 31,863,088     $ 24,002,306     $ 22,864,439     $ 21,612,616     $ 18,792,491  

Loans and loans held for sale

     25,838,803       23,267,386       25,070,624       18,346,699       17,293,811       16,059,489       13,498,208  

Allowance for loan losses

     (155,105     (138,762     (151,859     (120,856     (114,419     (106,178     (102,353

Investment securities

     3,847,586       3,863,661       3,817,790       3,336,596       3,222,945       3,103,246       2,679,519  

Cash and interest bearing deposits with banks

     455,196       472,266       428,629       416,110       392,501       413,800       830,407  

Goodwill and other intangible assets

     1,155,250       1,162,858       1,161,655       733,144       736,121       735,221       614,667  

Deposits

     24,733,929       21,640,772       24,452,974       18,153,462       17,730,708       16,253,551       14,034,116  

Borrowings

     4,243,510       5,037,101       3,828,552       3,106,221       2,556,443       2,929,133       2,713,077  

Shareholders’ equity

     3,504,118       3,277,312       3,350,454       2,533,165       2,377,156       2,207,091       1,863,017  

Selected Operating Data:

              

Interest income

   $ 647,966     $ 547,613     $ 1,159,248     $ 834,154     $ 766,923     $ 707,023     $ 636,603  

Interest expense

     209,084       129,263       302,045       174,107       148,774       156,754       161,846  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     438,882       418,350       857,203       660,047       618,149       550,269       474,757  

Provision for credit losses

     10,100       18,090       32,501       9,942       11,869       8,101       1,884  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan losses

     428,782       400,260       824,702       650,105       606,280       542,168       472,873  

Non-interest income

     135,276       70,320       134,052       111,706       103,225       83,802       77,616  

Non-interest expense

     289,532       323,668       629,061       509,073       476,125       499,075       403,255  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     274,526       146,912       329,693       252,738       233,380       126,895       147,234  

Income tax expense

     84,728       32,145       68,265       90,831       65,234       23,938       31,062  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     189,798       114,767       261,428       161,907       168,146       102,957       116,172  

Dividends on preferred stock

     6,344       6,344       12,688       9,449       7,188       3,813       —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income available to common shareholders

   $ 183,454     $ 108,423     $ 248,740     $ 152,458     $ 160,958     $ 99,144     $ 116,172  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Table of Contents

(dollars in thousands,
except per share data)

 

   As of and for the Six
Months Ended June 30,
    As of and for the Year Ended December 31,  
   2019     2018     2018     2017     2016     2015     2014  
     (Unaudited)     (Unaudited)                                

 

Selected Financial Ratios and Other Data:

              

Performance Ratios:

              

Return on average assets

     1.17     0.78     0.86     0.69     0.76     0.53     0.69

Return on average shareholders’ equity

     11.04       6.99       7.91       6.55       7.46       5.26       7.18  

Net interest margin

     2.95       3.10       3.09       3.07       3.12       3.16       3.16  

Efficiency ratio(1)

     50.43       66.23       63.46       65.96       66.00       78.71       73.00  

Average interest-earning assets to average interest-bearing liabilities

     1.33       1.36       1.35       1.37       1.37       1.35       1.33  

Per Common Share Data:

              

Basic earnings per share

   $ 0.55     $ 0.33     $ 0.75     $ 0.58     $ 0.63     $ 0.42     $ 0.56  

Diluted earnings per share

     0.55       0.33       0.75       0.58       0.63       0.42       0.56  

Dividends declared

     0.22       0.22       0.44       0.44       0.44       0.44       0.44  

Book value (end of period)

     9.93       9.26       9.48       8.79       8.59       8.26       8.03  

Tangible book value(2)

     6.45       5.75       5.97       6.01       5.80       5.36       5.38  

Dividend payout ratio

     39.93     66.67     58.67     75.86     69.80     105.00     78.40

Capital Ratios:

              

Average shareholders’ equity to average assets

     10.58     11.12     10.93     10.53     10.08     10.08     9.62

Shareholders’ equity to total assets

     10.61       10.86       10.52       10.55       10.40       10.21       9.91  

Tangible common equity to tangible assets(3)

     6.71       6.56       6.45       6.83       6.91       6.52       6.87  

Regulatory Capital Ratios(4):

              

Tier 1 Leverage capital

     7.62     7.72     7.57     8.03     7.74     7.90     7.46

Common equity tier 1 capital

     8.59       8.71       8.43       9.22       9.27       9.01       N/A  

Tier 1 risk-based capital

     9.43       9.65       9.30       10.41       9.90       9.72       9.73  

Total risk-based capital

     11.39       11.77       11.34       12.61       12.15       12.02       11.42  

Asset Quality Ratios:

              

Non-performing assets (“NPAs”)

   $ 106,714     $ 97,078     $ 98,631     $ 57,641     $ 49,439     $ 78,242     $ 83,097  

Non-accrual loans to total loans

     0.37     0.36     0.35     0.26     0.22     0.39     0.41

NPAs to total loans and NPAs

     0.41       0.42       0.39       0.31       0.29       0.49       0.61  

Net loan charge-offs to average loans

     0.07       (0.01     0.00       0.01       0.02       0.03       0.12  

Allowance for loan losses to total loans

     0.60       0.60       0.61       0.66       0.66       0.66       0.76  

Allowance for credit losses to total loans

     0.61       0.62       0.62       0.68       0.68       0.68       0.77  

Notes to Selected Financial Data:

 

(1)

The efficiency ratio measures total non-interest expense as a percentage of net interest income plus total non-interest income.

(2)

Tangible book value per common share, which is a non-GAAP measure, is computed by dividing shareholders’ equity less goodwill and other intangible assets by common shares outstanding, as follows:

 

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Table of Contents

(dollars in thousands, except
per share data)

 

  At June 30,     At December 31,  
  2019     2018     2018     2017     2016     2015     2014  
    (Unaudited)     (Unaudited)                                

 

Common shares outstanding

    331,788,149       331,454,025       331,431,217       264,468,851       263,638,830       253,787,561       232,110,975  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Shareholders’ equity

  $ 3,504,118     $ 3,277,312     $ 3,350,454     $ 2,533,165     $ 2,377,156     $ 2,207,091     $ 1,863,017  

Less: Preferred Stock

    209,691       209,691       209,691       209,691       111,590       111,590       —    

Less: Goodwill and other intangible assets

    1,155,250       1,162,858       1,161,655       733,144       736,121       735,221       614,667  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible common shareholders’ equity

  $ 2,139,177     $ 1,904,763     $ 1,979,108     $ 1,590,330     $ 1,529,445     $ 1,360,280     $ 1,248,350  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible book value per common share

  $ 6.45     $ 5.75     $ 5.97     $ 6.01     $ 5.80     $ 5.36     $ 5.38  

 

(3)

Tangible common shareholders’ equity to tangible assets, which is a non-GAAP measure, is computed by dividing tangible shareholders’ equity (shareholders’ equity less goodwill and other intangible assets) by tangible assets, as follows:

 

     At June 30,     At December 31,  
(dollars in thousands)    2019     2018     2018     2017     2016     2015     2014  
     (Unaudited)     (Unaudited)                                

 

Tangible common shareholders’ equity

   $ 2,139,177     $ 1,904,763     $ 1,979,108     $ 1,590,330     $ 1,529,445     $ 1,360,280     $ 1,248,350  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

     33,027,741       30,182,979       31,863,088       24,002,306       22,864,439       21,612,616       18,792,491  

Less: Goodwill and other intangible assets

     1,155,250       1,162,858       1,161,655       733,144       736,121       735,221       614,667  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible assets

   $ 31,872,491     $ 29,020,121     $ 30,701,433     $ 23,269,162     $ 22,128,318     $ 20,877,395     $ 18,177,824  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible common shareholders’ equity to tangible assets

     6.71     6.56     6.45     6.83     6.91     6.52     6.87

 

(4)

As of December 31, 2015, Valley’s capital ratios were calculated under the new Basel III capital rules which became effective January 1, 2015.

 

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Table of Contents

SELECTED HISTORICAL FINANCIAL DATA OF ORITANI

The following tables present selected historical consolidated financial data for Oritani as of and for each of the years ended June 30, 2019, 2018, 2017, 2016 and 2015. This information has been derived in part from and should be read in conjunction with the audited consolidated financial statements of Oritani. This information is only a summary, and you should read it in conjunction with Oritani’s consolidated financial statements and the related notes contained in Oritani’s periodic reports filed with the SEC that have been incorporated by reference in this joint proxy statement-prospectus. See “Information Incorporated by Reference” beginning on page [●].

 

     At June 30,  
     2019     2018      2017      2016      2015  
     (In thousands)  

Selected Financial Condition Data:

             

Total assets

   $ 4,070,516     $ 4,167,039      $ 4,137,684      $ 3,669,338      $ 3,353,065  

Loans, net

     3,491,322       3,540,903        3,566,703        3,131,957        2,756,212  

Securities available for sale, at market value

     32,752       43,126        97,930        141,850        258,963  

Mortgage-backed securities held to maturity

     332,215       335,374        239,631        168,107        107,990  

Bank owned life insurance

     100,872       98,438        95,946        93,327        90,609  

Federal Home Loan Bank of New York stock, at cost

     25,925       30,365        32,504        38,003        39,898  

Accrued interest receivable

     11,935       11,261        10,620        9,943        9,266  

Investments in real estate joint ventures, net

     —         —          —          4,307        6,658  

Real estate held for investment

     —         —          —          —          655  

Deposits

     2,923,244       2,915,128        2,856,478        2,260,003        1,962,737  

Borrowings

     521,555       596,372        642,059        781,623        796,372  

Stockholders’ equity

     529,147       559,346        559,223        535,200        517,670  

Selected Operating Data:

             

Interest income

   $ 155,755     $ 152,826      $ 142,462      $ 134,324      $ 131,759  

Interest expense

     54,667       42,900        37,851        34,023        35,009  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Net interest income

     101,088       109,926        104,611        100,301        96,750  

Provision for loan losses

     (2,000     —          —          —          200  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Net interest income after provision for loan losses

     103,088       109,926        104,611        100,301        96,550  

Other income

     4,758       3,594        16,968        44,244        19,282  

Other expense

     38,785       39,510        46,053        63,716        42,716  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Income before income tax expense

     69,061       74,010        75,526        80,829        73,116  

Income tax expense

     17,002       31,116        26,382        28,534        26,214  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 52,059     $ 42,894      $ 49,144      $ 52,295      $ 46,902  
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

 

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Table of Contents
     At or For the Years Ended June 30,  
     2019     2018     2017     2016     2015  

Selected Financial Ratios and Other Data:

          

Performance Ratios:

          

Return on assets (ratio of net income to average total assets)

     1.27     1.11     1.24     1.50     1.44

Return on equity (ratio of net income to average equity)

     9.60     8.16     8.98     9.91     9.10

Average interest rate spread(1)

     2.41     2.65     2.66     2.89     2.97

Net interest margin(2)

     2.59     2.79     2.79     3.04     3.14

Efficiency ratio(3)

     36.64     34.54     37.82     44.08     36.81

Non-interest expense to average total assets

     0.95     0.95     1.16     1.83     1.31

Average interest-earning assets to average interest-bearing liabilities

     112.94     113.01     113.40     114.96     115.18

Asset Quality Ratios:

          

Non-performing assets to total assets

     0.26     0.23     0.25     0.28     0.50

Non-performing loans to total loans

     0.28     0.22     0.28     0.31     0.45

Allowance for loan losses to total loans

     0.81     0.85     0.84     0.94     1.10

Capital Ratios:

          

Common equity Tier 1 capital (to risk-weighted assets)

     14.57     14.82     15.02     16.77     17.79

Total capital (to risk-weighted assets)

     15.36     15.64     15.84     17.69     18.85

Tier I capital (to risk-weighted assets)

     14.57     14.82     15.02     16.77     17.79

Tier I capital (to average assets)

     12.98     13.25     13.51     14.94     15.67

Other Data:

          

Number of full service offices

     26       26       26       26       25  

Full time equivalent employees

     215       222       221       216       209  

Notes to Selected Financial Data:

 

(1)

The average interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.

(2)

The net interest margin represents net interest income as a percent of average interest-earning assets for the period.

(3)

The efficiency ratio represents non-interest expense divided by the sum of net interest income before provision for loan losses and non-interest income.

 

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Table of Contents

UNAUDITED PRO FORMA FINANCIAL DATA

The following unaudited pro forma condensed combined financial information is based on the historical financial statements of Valley and Oritani and has been prepared to illustrate the financial effect of the merger of Oritani with and into Valley. The following unaudited pro forma condensed combined financial information combines the historical consolidated financial position and results of operations of Valley and its subsidiaries and Oritani and its subsidiaries, as an acquisition by Valley of Oritani using the acquisition method of accounting and giving effect to the related pro forma adjustments described in the accompanying notes. Under the acquisition method of accounting, the assets and liabilities of Oritani will be recorded by Valley at their respective fair values as of the date the merger is completed.

The unaudited pro forma condensed combined balance sheet information as of June 30, 2019 gives effect to the merger as if it occurred on June 30, 2019, and combines the historical balance sheets of Valley and Oritani as of June 30, 2019. The unaudited pro forma condensed combined income statements for the six months ended June 30, 2019 and the year ended December 31, 2018 give effect to the transaction as if the transaction had become effective at the beginning of the periods presented.

These unaudited pro forma condensed combined financial statements reflect the merger of Oritani with and into Valley based upon estimated preliminary acquisition accounting adjustments. Actual adjustments will be made as of the effective date of the merger and, therefore, may differ from those reflected in the unaudited pro forma condensed combined financial information.

Valley and Oritani have different fiscal years. Oritani utilizes a fiscal year ending on June 30 of each year and Valley’s fiscal year ends on December 31 of each year. As the fiscal years differed by more than 93 days, pursuant to SEC rules, Oritani’s financial information was adjusted for the purpose of preparing the unaudited pro forma condensed combined income statements. The historical income statement information of Oritani used in the unaudited pro forma condensed combined income statements for the year ended December 31, 2018 was prepared by taking the audited condensed combined income statement for the year ended June 30, 2018, subtracting the unaudited condensed combined income statement for the six months ended December 31, 2017 and adding the unaudited condensed combined income statement for the six months ended December 31, 2018. The historical financial statement information of Oritani used in the unaudited pro forma condensed combined income statements for the six months ended June 30, 2019 was prepared by taking the audited condensed combined income statement for the year ended June 30, 2019 and subtracting the unaudited condensed combined income statement for the six months ended December 31, 2018.

The unaudited pro forma condensed combined financial statements included herein are presented for informational purposes only and do not necessarily reflect the financial results of the combined company had the companies actually been combined at the beginning of each period presented. The adjustments included in these unaudited pro forma condensed financial statements are preliminary and may be revised. This information also does not reflect the benefits of the expected cost savings and expense efficiencies, opportunities to earn additional revenue, potential impacts of current market conditions on revenues, or asset dispositions, among other factors, and includes various preliminary estimates and may not necessarily be indicative of the financial position or results of operations that would have occurred if the merger had been consummated on the date or at the beginning of the period indicated or which may be attained in the future. The unaudited pro forma combined condensed consolidated financial information has been derived from and should be read in conjunction with the historical consolidated financial statements and the related notes of Valley, which have been separately filed by Valley with the SEC and are incorporated by reference in this joint proxy statement-prospectus, and of Oritani, which have been separately filed by Oritani with the SEC and are incorporated by reference in this joint proxy statement-prospectus.

 

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Table of Contents

Valley National Bancorp

Consolidated Pro Forma Statements of Financial Condition (Unaudited)

(in thousands)

 

     June 30, 2019  
     Valley
Historical
    Oritani
Historical
    Adjustments1     Pro Forma  
     (Unaudited)                    

Assets

        

Cash and Interest bearing deposits with banks

   $ 455,196     $ 26,511     $ —       $ 481,707  

Investment securities

     3,847,586       392,250       3,420 2      4,243,256  

Loans held for sale

     36,641       —         —         36,641  

Loans

     25,802,162       3,519,918       (28,148 )3      29,293,932  

Less: Allowance for loan losses

     (155,105     (28,596     28,596       (155,105
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loans

     25,647,057       3,491,322       448       29,138,827  
  

 

 

   

 

 

   

 

 

   

 

 

 

Goodwill

     1,084,665       —         230,350 4      1,315,015  

Other intangible assets, net

     70,585       —         14,855 5      85,440  

Other assets

     1,886,011       160,433       1,800 6      2,048,244  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Assets

   $ 33,027,741     $ 4,070,516     $ 250,873     $ 37,349,130  
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities

        

Deposits

        

Non-interest bearing

   $ 6,327,789     $ 142,218     $ —       $ 6,470,007  

Interest bearing

     18,446,140       2,781,026       721 7      21,227,887  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

     24,773,929       2,923,244       721       27,697,894  
  

 

 

   

 

 

   

 

 

   

 

 

 

Borrowings

     4,243,510       521,555       5,513 8      4,770,578  

Other liabilities

     506,184       96,570       2,128 9      604,882  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Liabilities

   $ 29,523,623     $ 3,541,369     $ 8,362     $ 33,073,354  
  

 

 

   

 

 

   

 

 

   

 

 

 

Shareholders’ Equity

        

Preferred equity

     209,691       —         —         209,691  

Common equity

     3,294,427       529,147       242,511 10      4,066,085  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Shareholders’ Equity

     3,504,118       529,147       242,511       4,275,776  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Liabilities and Shareholders’ Equity

   $ 33,027,741     $ 4,070,516     $ 250,873     $ 37,349,130  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

28


Table of Contents

Valley National Bancorp

Consolidated Pro Forma Statements of Income (Unaudited)

(in thousands, except for share data)

 

     Six Months Ended June 30, 2019  
     Valley
Historical
     Oritani
Historical
    Adjustments1     Pro Forma  
     (Unaudited)                     

Interest Income

         

Interest and fees on loans

   $ 585,211      $ 72,420     $ 471 11    $ 658,102  

Interest and dividends on investment securities

     60,494        5,652       (185 )12      65,961  

Other interest income

     2,261        —         —         2,261  
  

 

 

    

 

 

   

 

 

   

 

 

 

Total interest income

     647,966        78,072       286       726,324  
  

 

 

    

 

 

   

 

 

   

 

 

 

Interest Expense

         

Interest on deposits

     152,805        22,662       (361 )13      175,106  

Interest on borrowings

     56,279        6,644       (1,361 )14      61,562  
  

 

 

    

 

 

   

 

 

   

 

 

 

Total interest expense

     209,084        29,306       (1,722     236,668  
  

 

 

    

 

 

   

 

 

   

 

 

 

Net Interest Income

     438,882        48,766       2,008       489,656  

Provision for credit losses

     10,100        —         —         10,100  
  

 

 

    

 

 

   

 

 

   

 

 

 

Net Interest Income After Provision for Credit Losses

     428,782        48,766       2,008       479,556  
  

 

 

    

 

 

   

 

 

   

 

 

 

Non-Interest Income

         

Trust and investment services

     6,000        —         —         6,000  

Insurance commissions

     5,174        —         —         5,174  

Service charges on deposit accounts

     11,730        1,016       —         12,746  

Gains on sales of loans, net

     8,506        —         —         8,506  

Other

     103,866        1,279       —         105,145  
  

 

 

    

 

 

   

 

 

   

 

 

 

Total non-interest income

     135,276        2,295       —         137,571  
  

 

 

    

 

 

   

 

 

   

 

 

 

Non-Interest Expense

         

Salary and employee benefits expense

     159,288        12,166       —         171,454  

Net occupancy and equipment expense

     57,586        1,554       —         59,140  

FDIC insurance assessment

     11,052        540       —         11,592  

Amortization of other intangible assets

     8,481        —         1,071 15      9,552  

Amortization of tax credit investments

     12,036        —         —         12,036  

Other

     41,089        4,150       —         45,239  
  

 

 

    

 

 

   

 

 

   

 

 

 

Total non-interest expense

     289,532        18,410       1,071       309,013  
  

 

 

    

 

 

   

 

 

   

 

 

 

Income Before Income Taxes

     274,526        32,651       937       308,114  

Income tax expense

     84,728        7,418       272 16      92,418  
  

 

 

    

 

 

   

 

 

   

 

 

 

Net Income

   $ 189,798      $ 25,233     $ 665     $ 215,696  

Dividends on preferred stock

     6,344        —         —         6,344  
  

 

 

    

 

 

   

 

 

   

 

 

 

Net Income Available to Common Shareholders

   $ 183,454      $ 25,233     $ 665     $ 209,352  
  

 

 

    

 

 

   

 

 

   

 

 

 

Earnings Per Common Share:

         

Basic

   $ 0.55      $ 0.58     $ (0.03 )19    $ 0.53  

Diluted

   $ 0.55      $ 0.58     $ (0.03   $ 0.52  

Weighted Average Number of Common Shares Outstanding:

         

Basic

     331,675,313        43,164,661 17      23,829,329 18      398,669,303  

Diluted

     332,929,359        43,796,070 17      24,208,175 18      400,933,604  

 

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Valley National Bancorp

Consolidated Pro Forma Statements of Income

(in thousands, except for share data)

 

     For the Year Ended December 31, 2018  
     Valley
Historical
     Oritani
Historical
    Adjustments1     Pro Forma  

Interest Income

         

Interest and fees on loans

   $ 1,033,993      $ 144,360     $ 469 11    $ 1,178,822  

Interest and dividends on investment securities

     122,019        10,177       (185 )12      132,011  

Other interest income

     3,236        —         —         3,236  
  

 

 

    

 

 

   

 

 

   

 

 

 

Total interest income

     1,159,248        154,537       284       1,314,069  
  

 

 

    

 

 

   

 

 

   

 

 

 

Interest Expense

         

Interest on deposits

     190,353        35,459       (721 )13      225,091  

Interest on borrowings

     111,692        12,082       (2,297 )14      121,477  
  

 

 

    

 

 

   

 

 

   

 

 

 

Total interest expense

     302,045        47,541       (3,018     346,568  
  

 

 

    

 

 

   

 

 

   

 

 

 

Net Interest Income

     857,203        106,996       3,302       967,501  

Provision for credit losses

     32,501        (2,000     2,000       32,501  
  

 

 

    

 

 

   

 

 

   

 

 

 

Net Interest Income After Provision for Credit Losses

     824,702        108,996       1,302       935,000  
  

 

 

    

 

 

   

 

 

   

 

 

 

Non-Interest Income

         

Trust and investment services

     12,633        —         —         12,633  

Insurance commissions

     15,213        —         —         15,213  

Service charges on deposit accounts

     26,817        1,410       —         28,227  

Gains on sales of loans, net

     20,515        —         —         20,515  

Other

     58,874        3,049       —         61,923  
  

 

 

    

 

 

   

 

 

   

 

 

 

Total non-interest income

     134,052        4,459       —         138,511  
  

 

 

    

 

 

   

 

 

   

 

 

 

Non-Interest Expense

         

Salary and employee benefits expense

     333,816        23,252       —         357,068  

Net occupancy and equipment expense

     108,763        3,161       —         111,924  

FDIC insurance assessment

     28,266        1,185       —         29,451  

Amortization of other intangible assets

     18,416        —         2,985 15      21,401  

Amortization of tax credit investments

     24,200        —         —         24,200  

Other

     115,600        12,558       —         128,158  
  

 

 

    

 

 

   

 

 

   

 

 

 

Total non-interest expense

     629,061        40,156       2,985       672,202  
  

 

 

    

 

 

   

 

 

   

 

 

 

Income Before Income Taxes

     329,693        73,299       (1,683     401,309  

Income tax expense

     68,265        19,545       (478 )16      87,332  
  

 

 

    

 

 

   

 

 

   

 

 

 

Net Income

   $ 261,428      $ 53,754     $ (1,205   $ 313,977  

Dividends on preferred stock

     12,688        —         —         12,688  
  

 

 

    

 

 

   

 

 

   

 

 

 

Net Income Available to Common Shareholders

   $ 248,740      $ 53,754     $ (1,205   $ 301,289  
  

 

 

    

 

 

   

 

 

   

 

 

 

Earnings Per Common Share:

         

Basic

   $ 0.75      $ 1.21     $ 0.00     $ 0.75  

Diluted

   $ 0.75      $ 1.20     $ 0.00     $ 0.75  

Weighted Average Number of Common Shares Outstanding:

         

Basic

     331,258,964        44,251,796 17      24,388,859 18      399,899,619  

Diluted

     332,693,718        44,881,417 17      24,766,632 18      402,341,766  

 

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Notes to Pro Forma Combined Condensed Consolidated Financial Statements (Unaudited)

 

1.

Estimated merger costs, exclusive of estimated fair value adjustments, of $29.3 million (net of $12.0 million of taxes) are excluded from the pro forma financial statements. It is expected that these costs will be recognized over time. Valley’s cost estimates are forward-looking. The type and amount of actual costs incurred could change, possibly materially, from these estimates if future developments differ from the underlying assumptions used by management in determining the current estimate of these costs. The current estimates of the merger costs, exclusive of estimated fair value adjustments, primarily comprised of anticipated cash charges, are as follows:

 

Change in control, severance and retention plan payments

   $ 22,400  

Professional fees*

     9,717  

Data processing, termination and conversion

     9,185  
  

 

 

 

Pre-tax merger costs

     41,302  

Taxes

     11,994  
  

 

 

 

Total merger costs

   $ 29,308  
  

 

 

 

 

  *

A portion of professional fees are not tax deductible.

 

2.

Adjustment to reflect the estimated fair value of acquired investment securities.

 

3.

Adjustment to reflect acquired loans at their estimated fair value.

 

4.

Adjustment to reflect preliminary estimated goodwill from this business transaction.

 

5.

Adjustment to reflect core deposit intangibles.

 

6.

Adjustment to reflect approximately ($5.4) million to net deferred tax assets due to the business combination, $2.1 million to reflect the right of use asset related to acquired operating leases asset and $5.1 million to reflect acquired property, plant and equipment at their estimated fair value.

 

7.

Adjustment to reflect the preliminary estimate of fair value on interest-bearing deposits.

 

8.

Adjustment to reflect the preliminary estimate of fair value on borrowings.

 

9.

Adjustment to reflect the lease liability related to acquired operating leases.

 

10.

Adjustment primarily reflects the elimination of Oritani Financial Corp. shareholders’ equity.

 

         Six Months Ended     Year Ended  
         June 30, 2019     December 31, 2018  

11.

  Yield adjustment for interest income on loans      471       469  

12.

  Yield adjustment for interest income on investment securities      (185     (185

13.

  Yield adjustment for interest income on interest bearing deposits      (361     (721

14.

  Yield adjustment for interest income on borrowings      (1,361     (2,297

 

15.

Adjustment reflects the net increase in amortization of other intangible assets from the acquired other intangible assets.

 

16.

Represents income tax expense on the pro-forma adjustments at the estimated rate of 29.04 percent for the six months ended June 30, 2019 and 28.38 percent for the year ended December 31, 2018.

 

17.

Number of basic and diluted common shares outstanding for Oritani is the weighted average share count based on the three months ended March 31, 2018, June 30, 2018, September 30, 2018, December 31, 2018, March 31, 2019 and June 30, 2019 to align with Valley’s reporting period.

 

18.

Adjustment reflects the additional number of basic and diluted common shares issued by Valley which is reduced by the number of common shares related to the termination of Oritani’s Employee Stock Ownership Plan loan balance.

 

19.

Adjustment to basic earnings per common share rounded up to the nearest whole cent.

 

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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA AND

COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

Set forth below are the earnings per share, period-end book value per share and cash dividends per share for the common stock of Valley and Oritani for the periods noted. The data is presented on a historical and pro forma basis. The historical per share data for Valley was derived from the financial statements of Valley that have been filed with the SEC, certain of which are incorporated by reference herein. See “Information Incorporated by Reference” on page [●]. The historical per share data for Oritani was derived from the financial statements of Oritani that have been filed with the SEC, certain of which are incorporated by reference herein. See “Information Incorporated by Reference” on page [●]. The pro forma combined share data has been derived after giving effect to the Oritani merger as if it occurred at the beginning of the periods presented using the acquisition method of accounting. See “Selected Historical Financial Data of Valley” on page [●] and “Selected Historical Financial Data of Oritani” on page [●].

Valley and Oritani have different fiscal years. Oritani utilizes a fiscal year ending on June 30 of each year and Valley’s fiscal year ends on December 31 of each year. As the fiscal years differed by more than 93 days, pursuant to SEC rules, Oritani’s financial information was adjusted for the purpose of preparing the pro forma combined share data. The historical income statement information of Oritani used in the historical and pro forma combined share data for the year ended December 31, 2018 was prepared by taking the audited condensed combined income statement for the year ended June 30, 2018, subtracting the unaudited condensed combined income statement for the six months ended December 31, 2017 and adding the unaudited condensed combined income statement for the six months ended December 31, 2018. The historical financial statement information of Oritani used in the historical and pro forma combined share data for the six months ended June 30, 2019 was prepared by taking the audited condensed combined income statement for the year ended June 30, 2019 and subtracting the unaudited condensed combined income statement for the six months ended December 31, 2018. The preliminary pro forma financial information reflects estimated adjustments to record Oritani’s assets and liabilities at their respective fair values based on Valley management’s best estimate using the information available at this time.

The preliminary pro forma adjustments will be revised as additional information becomes available and as additional analyses are performed. The final allocation of the purchase price will be determined after the merger is completed and after the completion of a final analysis to determine the fair values of Oritani’s tangible and identifiable intangible assets and liabilities as of the closing date. The final purchase price adjustments may differ materially from the estimated pro forma adjustments reflected in the preliminary pro forma financial information. Increases or decreases in the fair value of certain balance sheet amounts and other items of Oritani as compared to the estimates reflected in the preliminary pro forma financial information may change the amount of the purchase price allocated to goodwill and other assets and liabilities and may impact the statement of income due to adjustments in yield and/or amortization of adjusted assets and liabilities.

It is anticipated that the merger will provide Valley with financial benefits, such as possible expense efficiencies and revenue enhancements, among other factors, although no assurances can be given that these benefits will actually be achieved. The impact of these benefits has not been reflected in the preliminary pro forma financial information.

The preliminary pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the financial results of the combined companies had the merger actually been completed as of or at the beginning of each period presented nor does it indicate future results for any other interim or full-year period.

Book value per share for the pro forma combined presentation is based upon outstanding shares of Valley common stock, adjusted to include the estimated number of shares of Valley common stock to be issued in the merger for outstanding shares of Oritani common stock at the time the merger is completed, assuming that the

 

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exchange ratio is 1.60 shares of Valley common stock for each share of Oritani common stock. The per share equivalent pro forma combined data for shares of Oritani common stock is also based on the assumption that the exchange ratio is 1.60 shares of Valley common stock for each share of Oritani common stock.

The dividend per share data shown below does not necessarily indicate the dividends that you should expect for any future period. The amount of future dividends payable by Valley or Oritani, if any, is at the discretion of their respective Boards of Directors. When declaring dividends, the Boards of Directors normally consider cash needs, general business conditions, dividends from subsidiaries and applicable governmental regulations and policies. Pro forma amounts assume that Valley would have declared cash dividends per share on Valley common stock, including the Valley common stock issued in the merger for Oritani common stock, equal to its historical cash dividends per share declared on Valley common stock.

 

     Historical
Valley
     Historical
Oritani
     Pro Forma
Combined
     Per Equivalent
Oritani

Share
 

Six Months Ended June 30, 2019

           

Earnings per share:

           

Basic

   $ 0.55      $ 0.58      $ 0.53      $ 0.84  

Diluted

     0.55        0.58        0.52        0.84  

Period-end book value per share

     9.93        11.73        10.13        16.21  

Cash dividends per share

     0.22        0.50        0.22        0.35  

Year Ended December 31, 2018

           

Earnings per share:

           

Basic

   $ 0.75      $ 1.21      $ 0.75      $ 1.21  

Diluted

     0.75        1.20        0.75        1.20  

Period-end book value per share

     9.48        11.78        9.77        15.63  

Cash dividends per share

     0.44        1.15        0.44        0.70  

Valley common stock is listed on NASDAQ under the symbol “VLY” and Oritani common stock is listed on NASDAQ under the symbol “ORIT.” Because trading prices fluctuate, Oritani shareholders are not assured of receiving any specific market value of Valley common stock. The price of Valley common stock when the merger becomes effective may be higher or lower than its price when the merger agreement was signed, when this joint proxy statement-prospectus was mailed or when Oritani shareholders meet to vote on the merger or when Valley shareholder meet to vote on the Valley share issuance proposal.

The table below presents the closing sale prices per share of Valley common stock and Oritani common stock on June 25, 2019 (the last trading day before the public announcement of the merger), and on [●], 2019 (the most recent practicable trading day prior to the date of this joint proxy statement-prospectus). The table also sets forth the implied value of one share of Oritani common stock on June 25, 2019 (the last trading day before the public announcement of the merger), and on [●], 2019 (the most recent practicable trading day prior to the date of this joint proxy statement-prospectus), computed by multiplying Valley’s closing price on those dates by the assumed exchange ratio of 1.60.

 

Date

   Closing Sale
Price Per Share
of Valley
Common Stock
     Closing Sale
Price Per Share
of Oritani
Common Stock
     Equivalent
Value of Merger
Consideration Per
Share of Oritani
Common Stock(1)
 

June 25, 2019

   $ 10.18      $ 16.21      $ 16.29  

[●], 2019

   $ [●    $ [●    $ [●

 

(1)

Assumes an exchange ratio of 1.60.

There were approximately [●] shareholders of record of Valley as of the Valley record date. There were approximately [●] shareholders of record of Oritani as of the Oritani record date.

 

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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 [], Oritani 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. In addition, Oritani and Valley shareholders should read and consider the risks associated with the business of Valley because these risks will relate to the combined company. Certain of these risks with respect to the business of Valley can be found in Valley’s annual report on Form 10-K for the fiscal year ended December 31, 2018, and quarterly reports on Form 10-Q for each of the quarters ended March 31, 2019 and June 30, 2019, which reports are incorporated by reference into this joint proxy statement-prospectus. Certain of these risks with respect to the business of Oritani can be found in Oritani’s annual report on Form 10-K for the fiscal year ended June 30, 2019, which is incorporated by reference into this joint proxy statement-prospectus. See “How to Get Copies of Related Documents” beginning on page [] and “Information Incorporated by Reference” beginning on page [].

Oritani 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.

Upon completion of the merger, Oritani shareholders will be entitled to receive 1.60 shares of Valley common stock for each share of Oritani common stock that they hold, subject to the payment of cash in lieu of fractional shares. 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 Valley and Oritani shareholders, on the date of the special meeting of Oritani shareholders and on the date we complete the merger. Stock price changes may result from a variety of factors, including general market and economic conditions, changes in Valley’s or Oritani’s respective businesses, operations and prospects, and regulatory considerations. Many of these factors are beyond Valley’s or Oritani’s control. 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 Oritani shareholders will receive upon completion of the merger. Accordingly, at the time of the Oritani special meeting, Oritani shareholders will not know or be able to calculate the market value of the merger consideration they would receive upon completion of the merger. For example, based on the range of closing prices of Valley common stock during the period from June 25, 2019, the last trading day before public announcement of the merger, through [●], 2019, the last practicable date before the date of this document, the merger consideration represented a market value ranging from a low of $[●] to a high of $[●] for each share of Oritani common stock. You should obtain current market quotations for shares of Valley common stock and Oritani common stock.

There will be no adjustment to the merger consideration for changes in the market price of either shares of Valley common stock or shares of Oritani common stock. Stock price changes may result from a variety of factors, including general market and economic conditions, changes in Valley’s or Oritani’s respective businesses, operations and prospects, and regulatory considerations. Many of these factors are beyond Valley’s or Oritani’s control. Oritani shareholders should obtain current market quotations for shares of Valley common stock and for shares of Oritani common stock before they vote on the merger.

The merger is subject to the receipt of consents and approvals or waivers from government entities that may not be received, may take longer than expected or may impose burdensome conditions.

Before the merger may be completed, approvals or waivers must be obtained from the Federal Reserve Board and the OCC. Valley received approval of the merger from the OCC on August 22, 2019. Receipt of a waiver from or, if necessary, approval of the Federal Reserve Board is still necessary. The Federal Reserve Board could impose conditions on its approval of the merger or require changes to the terms of the merger. Such conditions or changes could have the effect of delaying or preventing completion of the merger or imposing

 

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additional costs on or limiting the revenues of the combined company following the merger, any of which might have an adverse effect on the combined company following 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 Oritani in a manner that permits growth opportunities to be realized and does not materially disrupt the existing customer relationships of Oritani nor result in decreased revenues due to any loss of customers. However, to realize these anticipated benefits, the businesses of Valley and Oritani 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 Oritani 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 closure of certain Valley or Oritani branches and from the absorption by Valley of many of Oritani’s back-office administrative functions and the conversion of Oritani’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 wider variety of financial products, and from increased lending out of Valley’s substantially larger capital base, to Oritani’s existing customers and to new customers in Oritani’s market area who may be attracted by the combined company’s enhanced offerings. An inability to successfully market Valley’s products to Oritani’s customer base could cause the earnings of the combined company to be less than anticipated.

Valley may be unable to retain Oritani’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 key employees who Valley expects to retain. However, Valley may not be successful in retaining those employees for the time period necessary to successfully integrate Oritani’s operations with those of Valley. The loss of Oritani employees could have an adverse effect on the business and results of operation of Valley following the merger.

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

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 Oritani’s customers will not seek products or services elsewhere as a result of the merger because Valley’s community banking model is similar to Oritani’s community banking model. However, there can be no assurances that Valley will be able to retain all of Oritani’s customers or grow the customer base.

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

The businesses of Valley and Oritani 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

 

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affected by factors different from those currently affecting the independent results of operations of Valley and Oritani. 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 [●].

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

Holders of Valley common stock are entitled to receive only 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 Oritani’s ability to pursue an alternative acquisition proposal and requires Oritani to pay a termination fee of $28 million, plus Valley’s reasonable out of pocket expenses up to $1.8 million, under certain circumstances relating to alternative acquisition proposals.

The merger agreement prohibits Oritani 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 Oritani 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 Oritani of a termination fee in the amount of $28 million, plus Valley’s reasonable out of pocket expenses up to $1.8 million, in the event that Valley or Oritani terminate the merger agreement for certain reasons. See “The Merger Agreement – Agreement Not to Solicit Other Offers” on page [●].

These provisions could discourage a potential competing acquiror that might have an interest in acquiring Oritani 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.

Failure to complete the merger could negatively impact the stock prices and future businesses and financial results of Valley and Oritani.

There can be no assurance that the merger will be completed. If the merger is not completed, the ongoing businesses of Valley and Oritani may be adversely affected and Valley and Oritani will be subject to a number of risks, including the following:

 

   

Valley and Oritani will be required to pay certain costs relating to the merger, whether or not the merger is completed, such as legal, accounting, financial advisor, proxy solicitation and printing fees;

 

   

under the merger agreement, Valley and Oritani are subject to certain restrictions on the conduct of their respective businesses before completing the merger, which may adversely affect the ability of each to execute certain of its business strategies if the merger is terminated; and

 

   

matters relating to the merger may require substantial commitments of time and resources by Valley and Oritani management, which could otherwise have been devoted to other opportunities that may have been beneficial to Valley and Oritani as independent companies, as the case may be.

 

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In addition, if the merger is not completed, Valley and/or Oritani may experience negative reactions from the financial markets and from their respective customers and employees. Valley and/or Oritani also could be subject to litigation related to any failure to complete the merger or to proceedings commenced by Valley or Oritani against the other seeking damages or to compel the other to perform its obligations under the merger agreement. These factors and similar risks could have an adverse effect on the results of operation, business and stock prices of Valley and Oritani.

Oritani 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 Oritani and Valley. These uncertainties may also impair Oritani’s ability to attract, retain and motivate strategic personnel until the merger is consummated, and could cause their customers and others that deal with Oritani to seek to change their existing business relationship, which could negatively impact Valley upon consummation of the merger. In addition, the merger agreement restricts Oritani from taking certain specified actions without Valley’s consent until the merger is consummated or the merger agreement is terminated. These restrictions may prevent Oritani from pursuing or taking advantage of attractive business opportunities that may arise prior to the completion of the merger. See “The Merger Agreement – Covenants and Agreements” beginning on page [●].

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 Oritani shareholders. 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 Oritani may terminate the merger agreement under certain circumstances even if the merger is approved by Oritani 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” on page [●].

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

Oritani’s executive officers and directors have interests in the merger that are in addition to, and may be different from, the interests of Oritani shareholders generally. With respect to certain Oritani executive officers, these interests include acceleration of vesting and payouts of certain Oritani equity compensation awards, the right to receive change-in-control payments and accelerated payouts under Oritani’s benefit plans. Furthermore, Oritani’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 Oritani Special Meeting – The Merger – Interests of Certain of Persons in the Merger – Interests of Oritani Executive Officers and Directors in the Merger” beginning on page [●] for a discussion of these interests.

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

Upon completion of the merger, Oritani 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 Oritani common stock are different from the rights associated with Valley common stock. Please see “Comparison of the Rights of Shareholders of Valley and Oritani” beginning on page [●] for a discussion of the different rights associated with Valley common stock.

 

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Both Valley and Oritani shareholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management.

Each of Valley’s and Oritani’s common shareholders currently have the right to vote in the election of their respective Boards of Directors and on other matters affecting their respective companies. When the merger occurs, each Oritani 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 Oritani. Because of this, Oritani shareholders will have less influence on the management and policies of Valley than they now have on the management and policies of Oritani. Further, because shares of Valley common stock will be issued to existing Oritani shareholders, the shareholders of Valley common stock will have their ownership and voting interests diluted by approximately [●]%.

The opinions delivered by the respective financial advisors of Oritani 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.

KBW, Oritani’s financial advisor in connection with the proposed merger, has delivered to the Board of Directors of Oritani its opinion, dated June 25, 2019, as to the fairness, from a financial point of view and as of the date of such opinion, to the holders of Oritani common stock, of the exchange ratio in the proposed merger. At the meeting of the Valley Board of Directors on June 25, 2019, J.P. Morgan, Valley’s financial advisor, rendered its oral opinion to the Valley Board of Directors, subsequently confirmed in writing, that, as of such date and based upon and subject to the factors and assumptions set forth in its opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to Valley.

Changes in the operations and prospects of Valley or Oritani, general market and economic conditions and other factors which may be beyond the control of Valley and Oritani may have altered the value of Valley or Oritani or the prices of shares of Valley common stock and shares of Oritani 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 KBW’s opinion, please refer to “Proposal 1 of the Oritani Special Meeting – The Merger – Opinion of Oritani’s Financial Advisor” beginning on page [●]. For a description of J.P. Morgan’s opinion, please refer to “Proposal 1 of the Valley Special Meeting – Issuance of up to 75,711,589 Shares of Valley Common Stock in Connection with the Merger – Opinion of Valley’s Financial Advisor” beginning on page [●]. For a description of the other factors considered by Oritani’s Board of Directors in determining whether to approve the merger, please refer to “Proposal 1 of the Oritani Special Meeting – The Merger – Oritani’s Reasons for the Merger” beginning on page [●]. 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 Oritani Special Meeting – The Merger – Valley’s Reasons for the Merger” beginning on page [●].

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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The combined company will continue to have an elevated concentration in commercial real estate lending.

As a part of their regulatory oversight, the OCC and other federal banking regulators have issued guidance on Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices (“CRE Concentration Guidance”), with respect to a financial institution’s concentrations in CRE lending activities. This guidance was issued in response to the agencies’ concerns that rising CRE concentrations might expose institutions to unanticipated earnings and capital volatility in the event of adverse changes in the CRE market. The guidance does not limit banks’ CRE lending, but rather guides institutions in developing risk management practices and levels of capital that are commensurate with the level and nature of their CRE concentrations. The CRE Concentration Guidance identifies certain concentration levels that, if exceeded, will expose the institution to additional supervisory analysis with regard to the institution’s CRE concentration risk. The CRE Concentration Guidance is designed to promote appropriate levels of capital and sound loan and risk management practices for institutions with a concentration of CRE loans. In general, the CRE Concentration Guidance establishes the following supervisory criteria as preliminary indications of possible CRE concentration risk: (1) the institution’s total construction, land development and other land loans represent 100% or more of total capital; or (2) total CRE loans as defined in this guidance (“Regulatory CRE”), represent 300% or more of total capital, and the institution’s Regulatory CRE has increased by 50% or more during the prior 36-month period.

Valley’s current CRE concentration is in excess of the CRE Concentration Guidance. Oritani’s CRE concentration is higher than Valley’s CRE concentration. As a result, following the closing of the merger the combined bank’s CRE levels will continue to be in excess of the CRE Concentration Guidance and Valley’s CRE concentration will be higher than it was prior to the merger. Valley intends to actively work to manage the combined bank’s Regulatory CRE concentration and believes that its’s underwriting policies, management information systems, independent credit administration process, and monitoring of real estate loan concentrations are currently sufficient to address the CRE Concentration Guidance. Valley has implemented enhanced CRE monitoring techniques as expected by the OCC.

 

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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 Oritani, including future financial and operating results and performance; statements about Valley’s and Oritani’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 Oritani’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 Oritani. 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 [●] 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:

 

   

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

 

   

the failure of the shareholders of Oritani to approve the merger agreement;

 

   

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

 

   

the failure to obtain governmental approvals of the merger or to satisfy other conditions to the merger on the proposed terms and within the proposed timeframe;

 

   

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

 

   

increases in Valley’s or Oritani’s allowance for credit losses due to higher than expected loan losses within one or more loan portfolio segments;

 

   

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

 

   

weakness or a decline in the economy, mainly in New Jersey, New York, Florida and Alabama;

 

   

a decline in the commercial real estate values within our market areas, including the potential negative impact of recent changes to New York City’s rent laws;

 

   

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

 

   

higher or lower than expected income tax expense or tax rates, including increases or decreases resulting from changes in uncertain tax position liabilities, tax laws, regulations and case law;

 

   

further changes to Valley’s uncertain tax position reserve due to the DC Solar investment and alleged Ponzi scheme;

 

   

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

 

   

higher than expected FDIC insurance assessments;

 

   

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

 

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

 

   

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

 

   

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;

 

   

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 Oritani to additional regulatory oversight and may result in increased compliance costs and/or require Valley and Oritani to change their business models;

 

   

changes in accounting policies or accounting standards, including the new authoritative accounting guidance (known as the current expected credit loss (CECL) model) which may increase the required level of our allowance for credit losses after adoption on January 1, 2020;

 

   

greater than expected technology-related costs due to, among other factors, prolonged or failed implementations, additional project staffing and obsolescence caused by continuous and rapid market innovations;

 

   

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

 

   

unexpected regulatory restrictions on Valley’s business due to its increased concentration in CRE lending resulting from the merger;

 

   

damage verdicts or settlements or restrictions related to existing or potential litigation arising from claims of breach of fiduciary responsibility, negligence, fraud, contractual claims, environmental laws, patent or trademark infringement, employment-related claims, consumer law-related claims, and other matters;

 

   

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

 

   

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

 

   

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

 

   

the inability to retain Oritani’s customers and employees;

 

   

cyber-attacks, computer viruses or other malware that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage our systems; and

 

   

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

Additional factors that could cause Valley’s and Oritani’s results to differ materially from those described in the forward-looking statements can be found in Valley’s and Oritani’s respective filings with the SEC, including their Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC. See “How to Get Copies of Related Documents” beginning on page [●].

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 Oritani 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 Oritani 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 is a New Jersey corporation organized in 1983 and is registered as a bank holding company with the Board of Governors of the Federal Reserve System 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, State Bancorp Capital Trusts I and II, and Aliant Statutory Trust II through which trust preferred securities were issued.

As of June 30, 2019, Valley had:

 

   

consolidated total assets of $33.0 billion;

 

   

total deposits of $24.8 billion;

 

   

total loans of $25.8 billion; and

 

   

total shareholders’ equity of $3.5 billion.

Valley’s principal executive offices and telephone number are:

One Penn Plaza, Suite 2930

New York, New York 10119

(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, the Bank has over 200 branches serving northern and central New Jersey, the New York City boroughs of Manhattan, Brooklyn and Queens, Long Island, Florida and Alabama. The Bank offers commercial, retail, insurance and wealth management financial services products. The 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. In addition, certain international banking services are available to customers including standby letters of credit, documentary letters of credit and related products, and certain ancillary services such as foreign exchange transactions, documentary collections, foreign wire transfers, 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, but are not limited to:

 

   

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

 

   

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

 

   

a title insurance agency in New York with services in New Jersey;

 

   

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

 

   

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

 

   

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

 

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CERTAIN INFORMATION ABOUT ORITANI

General

Oritani Financial Corp. is the stock holding company and savings and loan holding company for Oritani Bank. It is a Delaware corporation that was incorporated in March 2010. The Company is the successor to Oritani Financial Corp., a federal corporation and former stock holding company of Oritani Bank.

Oritani Financial Corp. owns 100% of the outstanding shares of common stock of Oritani Bank. Oritani Financial Corp. primarily engages in the business of holding the common stock of Oritani Bank as well as two inactive limited liability companies that owned a variety of real estate investments. Oritani Financial Corp.’s executive office is located at 370 Pascack Road, in the Township of Washington, New Jersey 07676, and its telephone number is (201) 664-5400. Oritani Financial Corp. is subject to comprehensive regulation and examination by the Board of Governors of the Federal Reserve System.

As of June 30, 2019, Oritani had:

 

   

consolidated assets of approximately $4.07 billion;

 

   

total deposits of $2.92 billion;

 

   

total loans of $3.49 billion; and

 

   

total shareholders’ equity of $529.1 million.

Oritani’s principal executive offices and telephone number are:

370 Pascack Road

Township of Washington, New Jersey 07676

(201) 664-5400

Oritani Bank

Oritani Bank is a New Jersey-chartered savings bank headquartered in the Township of Washington, New Jersey. Oritani Bank was originally founded in 1911, as a New Jersey building and loan association. Oritani Bank conducts business from its corporate office located at 370 Pascack Road, in the Township of Washington, New Jersey, lending offices in New York City and Cherry Hill, New Jersey. and its 25 branch offices located in the New Jersey counties of Bergen, Hudson, Essex and Passaic. The telephone number at its corporate office is (201) 664-5400.

Oritani Bank’s principal business consists of attracting retail and commercial bank deposits from the general public in the areas surrounding our corporate office in the Township of Washington, New Jersey and our branch offices located in the New Jersey Counties of Bergen, Hudson, Essex and Passaic, and investing those deposits, together with funds generated from operations, in commercial real estate loans, one to four family residential mortgage loans as well as in second mortgage and equity loans, and investment securities.

 

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INFORMATION ABOUT THE ORITANI MEETING

Date, Time and Place

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

[●], 2019, at [●] (local time)

[●]

[●]

[●]

[●]

Purpose

At the meeting, Oritani shareholders will consider and vote on:

 

   

approval of the merger agreement;

 

   

approval of the executive compensation proposal; and

 

   

approval of the Oritani adjournment proposal.

Oritani Board of Directors Recommendations

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

 

   

approval of the merger agreement;

 

   

approval of the executive compensation proposal; and

 

   

approval of the Oritani adjournment proposal.

Record Date; Quorum; Required Vote; Voting Agreements

As of the record date, [●], 2019, [●] shares of common stock of Oritani were issued and outstanding. The common stock is Oritani’s only class of securities entitled to vote, each share being entitled to one vote. The presence at the Oritani special meeting, in person or by proxy, of holders of a majority of the issued and outstanding shares of Oritani common stock as of the record date will constitute a quorum for the transaction of business. If Oritani shareholders submit a properly completed proxy or if they appear at the Oritani 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 Oritani special meeting will be adjourned or postponed.

The merger cannot be completed without Oritani shareholders’ approval of the merger agreement. The affirmative vote of a majority of the shares of Oritani common stock outstanding on the record date is required to approve the merger agreement. Failure to submit valid proxy instructions or to vote in person will have the same effect as a vote “AGAINST” the merger agreement. Broker non-votes and abstentions from voting will have the same effect as voting “AGAINST” the merger agreement.

On June 25, 2019, the directors and executive officers of Oritani as a group beneficially owned a total of 4,606,513 shares of Oritani common stock, representing 10.2% of the issued and outstanding common stock. In connection with the execution of the merger agreement, Valley entered into voting agreements with each Oritani director. Pursuant to the voting agreements, the Oritani directors have each agreed to vote the shares of common stock of Oritani beneficially owned by them (whether solely or jointly with others) in favor of approval of the

 

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merger agreement. On the record date, a total of [●] shares of common stock representing approximately [●]% of the outstanding Oritani common stock are covered by the voting agreements. As of [●], 2019, Valley did not own any shares of Oritani common stock.

The vote with respect to the executive compensation proposal is advisory in nature and a vote for or against approval will not be binding on Oritani or the Oritani Board of Directors. Therefore, if the merger agreement is approved by Oritani’s shareholders, payments may still be paid to Oritani’s named executive officers if and to the extent required or allowed under applicable law even if Oritani shareholders do not approve the executive compensation proposal. Approval of the executive compensation proposal requires the affirmative vote of the holders of at least a majority of the votes cast at the Oritani special meeting.

Approval of the Oritani adjournment proposal requires the affirmative vote of the holders of at least a majority of the votes cast at the Oritani special meeting.

The matters to be considered at the Oritani special meeting are of great importance to the shareholders of Oritani. 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

Oritani shareholders may vote in person or by proxy at the Oritani special meeting. Oritani recommends that shareholders vote by proxy even if they plan to attend the special meeting.

Oritani shareholders “of record,” can vote their shares:

 

   

Via internet at [●];

 

   

Via telephone by calling [●];

 

   

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

 

   

By voting in person at the special meeting.

Please refer to the specific instructions set forth on the proxy card. Oritani encourages its shareholders to vote via the internet or by telephone.

Oritani shareholders whose shares are held in “street name” by a broker, bank or other nominee must follow the instructions provided by their broker, bank or other nominee to vote their shares. The broker, bank or other nominee may allow shareholders to submit voting instructions via telephone or the internet. Oritani shareholders whose shares are held in “street name” who wish to vote in person at the special meeting will have to obtain a “legal proxy” from their broker, bank or other nominee entitling them to vote at the special meeting.

For holders of record of Oritani common stock, voting instructions are included on the enclosed proxy card. Proxies that are properly completed and submitted in a timely manner will be voted as directed. Oritani shareholders may vote for, against or abstain with respect to each matter. Proxies that are that are properly submitted without specifying a voting instruction will be voted “FOR” each of the proposals. For Oritani shareholders whose shares are held in “street name” who return an incomplete instruction card to their broker, bank or other nominee, their broker, bank or other nominee will not vote such shares with respect to any matter.

Oritani shareholders may revoke their proxy at any time before it is voted at the special meeting by:

 

   

filing with the Secretary of Oritani a duly executed revocation of proxy;

 

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submitting a new proxy with a later date;

 

   

voting again via the internet or by telephone not later than [●]:[●] [●].m., Eastern Time, on [●], 2019; or

 

   

voting in person at the special meeting.

Oritani shareholders whose shares are held in “street name” should contact their broker, bank or other nominee to change their vote.

Attendance at the Oritani special meeting will not, in and of itself, constitute a revocation of a proxy. All written notices of revocation and other communication with respect to the revocation of proxies should be addressed to:

Oritani Financial Corp.

370 Pascack Road

Township of Washington, New Jersey 07676

Attention: Phillip M. Wyks

Participants in the Oritani ESOP or the Oritani 401(k) Plan

Participants in the Oritani ESOP will each receive a Voting Instruction Form that reflects all of the shares that the participant may direct the trustee to vote on his or her behalf under the Oritani ESOP. Under the terms of the Oritani ESOP, the Oritani ESOP trustee votes all shares held by the Oritani ESOP, but each Oritani ESOP participant may direct the trustee how to vote the shares of Oritani common stock allocated to his or her account. The Oritani ESOP trustee will vote all unallocated shares of Oritani common stock held by the Oritani ESOP and allocated shares for which no voting instructions are received in the same proportion as shares for which it has received timely voting instructions.

In addition, Participants in the Oritani 401(k) Plan with an interest in the Oritani Stock Fund will receive a Voting Instruction Form that allows them to direct the Oritani 401(k) Plan trustee to vote their interest in the Oritani Stock Fund. If a participant does not direct the Oritani 401(k) Plan trustee how to vote his or her interests in the Oritani Stock Fund, the trustee will vote such interest in the same proportion as interests for which it has received timely voting instructions from other Oritani 401(k) Plan participants. The deadline for returning a Voting Instruction Form to each plan’s trustee is [], 2019.

Solicitation of Proxies

Oritani will bear all costs of soliciting proxies for the Oritani special meeting. Alliance Advisors, LLC has been retained to assist in the solicitation of proxies under a contract providing for payment of an estimated fee of $7,500, plus reimbursement for its expenses. In addition to solicitations by mail, the directors, officers and employees of Oritani may solicit proxies for the Oritani special meeting from Oritani shareholders in person or by telephone. These directors, officers and employees will not be specifically compensated for their services. Oritani 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.

Assistance

If you need assistance in completing your Oritani proxy card, have questions regarding Oritani’s special meeting or would like additional copies of this joint proxy statement-prospectus, please contact Oritani’s proxy solicitor, Alliance Advisors, LLC, at 855-973-0095.

 

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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:

[●], 2019, at [●] (local time)

[●]

[●]

[●]

[●]

Purpose

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

 

   

approval of the Valley share issuance proposal; and

 

   

approval of the Valley adjournment proposal.

Valley Board of Directors Recommendations

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

 

   

approval of the Valley share issuance proposal; and

 

   

approval of the Valley adjournment proposal.

Record Date; Quorum; Required Vote

As of the record date, [●], 2019, [●] 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 will constitute 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 Valley share issuance proposal. The 75,711,589 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 to be issued upon the conversion or exchange of Oritani stock options and Oritani restricted stock, respectively. 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 [●] shares of Valley common stock, representing [●]% of the issued and outstanding shares of common stock. As of [●], 2019, Oritani did not own any shares of Valley 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 Valley share issuance proposal, 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 Ronald H. Janis, Secretary, Valley National Bancorp, One Penn Plaza, Suite 2930, New York, New York, 10119. 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 [●], Eastern Time, on [●], 2019.

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 [●], Eastern Time, on [●], 2019.

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. Equiniti (US) Services LLC has been retained to assist in the solicitation of proxies under a contract providing for payment of an estimated fee of $9,000, plus reimbursement for its expenses. In addition to solicitations by mail and by Equiniti (US)

 

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Services LLC, 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.

Assistance

If you need assistance in completing your Valley proxy card, have questions regarding Valley’s special meeting or would like additional copies of this joint proxy statement-prospectus, please contact Valley’s proxy solicitor, Equiniti (US) Services LLC, at 833-503-4127.

 

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PROPOSAL 1 OF THE ORITANI SPECIAL MEETING – THE MERGER

Background of the Merger

Since its conversion from the mutual holding company form of organization to stock corporation form in June 2010, Oritani has managed its capital through stock repurchases, cash dividends and controlled organic growth, primarily in its commercial loan portfolio. In addition, the Oritani Board of Directors has regularly reviewed and discussed Oritani’s business strategy, performance and prospects in the context of the national and local economic environment, developments in the regulation of financial institutions and the competitive landscape. Among other things, these reviews and discussions have included possible strategic initiatives available to Oritani, such as capital management strategies, including paying regular and special cash dividends, potential acquisitions and business combinations involving other financial institutions. These reviews and discussions included analyses of the mergers and acquisitions environment, including multiples and premiums being paid and an assessment of potential partners for Oritani. In connection with the evaluation of these strategic initiatives, Kevin J. Lynch, Chairman, President and Chief Executive Officer of Oritani, has had, from time to time, informal discussions with representatives of other financial institutions, including Valley, and has regularly updated the Oritani Board of Directors regarding such discussions.

As Oritani entered 2017, management discussed with Oritani’s Board of Directors the challenges it faced in terms of continuing Oritani’s loan, deposits and earnings growth, which challenges included but were not limited to the increasingly competitive landscape for loans and deposits, Oritani’s continued high concentration in commercial real estate lending, its increased regulatory costs and operational uncertainties, and the increasingly difficult interest rate environment, in particular the flattening of the yield curve, which put pressure on Oritani’s cost of funds and earnings as its balance sheet was liability sensitive. Management discussed with Oritani’s Board of Directors the need to consider strategic opportunities that could further enhance shareholder value, including seeking a larger financial institution as a strategic acquirer. As a result of these discussions, Oritani’s Board of Directors authorized Mr. Lynch to approach institutions about a possible strategic acquisition of Oritani.

In January 2017, informal conversations began between Oritani and a larger, in-state bank holding company (“Company A”) regarding a possible acquisition of Oritani. Following the initial approach from Company A, on January 26, 2017 Mr. Lynch had a telephone call with the President and Chief Executive Officer of Company A to more substantively discuss Company A’s interest in a possible acquisition of Oritani, with both parties agreeing that such acquisition could be a good fit. Later that month, a joint confidentiality agreement was signed between Oritani and Company A for the purpose of facilitating further discussions.

In February and March of 2017, substantive negotiations took place between Oritani and Company A and each party engaged in a due diligence review of the other party. In March 2017, Oritani engaged KBW as its financial advisor in connection with the potential transaction with Company A or another acquiror. At the regular February and March Oritani Board of Directors meetings, Mr. Lynch updated the Board of Directors on the status of Oritani’s discussions with Company A.

On March 22, 2017, Oritani, Company A and their respective legal and financial advisors met for reciprocal management interviews as part of Oritani’s and Company A’s due diligence process. However, in early April 2017, Company A terminated its due diligence process and ended the negotiations as the parties were unable to reach an agreement on certain material financial terms.

At a regular Board of Directors meeting held on August 29, 2017, the Oritani Board of Directors again discussed possible merger and acquisition opportunities for Oritani. Following the meeting, the Oritani Board of Directors instructed Mr. Lynch to continue to reach out to potentially interested parties regarding a strategic transaction with Oritani.

 

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During the Fall of 2017, at Oritani’s direction, KBW contacted 22 potential strategic partners, including Valley, regarding their level of interest in a possible business combination with Oritani. While Valley did not express interest in a business combination with Oritani at that time, four of the parties contacted did show preliminary interest and executed nondisclosure agreements with Oritani for the purpose of facilitating further discussions. However, after further general discussions with each party, none of the four companies expressed interest in proceeding with an acquisition of Oritani.

From time to time, the President and Chief Executive Officer of Company B, a larger, out-of-state bank holding company (“Company B”), and Mr. Lynch had informally, in various industry settings, discussed a potential acquisition of Oritani by Company B, but no specific action was ever taken following such informal discussions. Company B was also one of the 22 potential strategic partners contacted by KBW in the Fall of 2017, with Company B declining to pursue a possible business combination with Oritani at that time. However, in late 2017, early 2018 and in June 2018, substantive conversations were held between Oritani and Company B and their respective financial advisors regarding Company B’s potential acquisition of Oritani. Each time following these conversations, Company B and Oritani mutually agreed to terminate their conversations about a strategic transaction due to the parties’ inability to reach an agreement on certain material financial terms and Company B’s level of interest in a potential transaction. Throughout Company B’s interest in acquiring Oritani, Mr. Lynch kept the Oritani Board of Directors apprised of the status of the discussions with Company B.

In May 2018, Mr. Lynch met with the Chairman, President and Chief Executive Officer of Valley, Ira Robbins, while at an industry conference. Mr. Lynch and Mr. Robbins discussed industry-related topics, Oritani’s history and current operations. No terms of a business combination were discussed and no specific action was taken or follow up planned as a result of this meeting. Mr. Lynch reported this discussion to the Oritani Board of Directors.

In July 2018, conversations between senior executive officers from Oritani and Company C, a larger, in-state bank holding company (“Company C”) and their respective financial advisors took place regarding Company C’s interest in a potential acquisition of Oritani. Company C signed a nondisclosure agreement with Oritani for the purpose of facilitating further discussions.

Also in July 20, 2018, senior executive officers from Oritani and Valley met and discussed industry-related topics and the current operations of the two entities. The executives agreed that the parties should remain in contact. At the regular Oritani Board of Directors meeting held on July 24, 2018, Mr. Lynch updated the Board of Directors on the status of Oritani’s discussions with Company C and management’s meeting with the management of Valley.

On July 31, 2018, senior executive officers from Oritani and Company C met together with their respective financial advisors to discuss Company C’s interest in a potential acquisition of Oritani. However, discussions between Oritani and Company C were terminated shortly after the July 31, 2018 meeting as the parties were unable agree on the general financial terms of a potential transaction and Company C’s internal regulatory constraints appeared to limit the possibility of Company C receiving regulatory approval of a transaction between the two parties. At the regular Oritani Board of Directors meeting held on August 28, 2018, Mr. Lynch updated the Board of Directors as to Company C.

In August 2018, following the termination of Oritani’s discussions with Company C and prior to the Oritani Board of Directors meeting on August 28, 2018 or the resumption of solicitation efforts by or on behalf Oritani, representatives of KBW met with members of Valley’s management for a general discussion regarding various potential business combinations involving Valley, during which a possible combination with Oritani was briefly discussed. At this meeting, Valley requested more information regarding Oritani and the potential financial impact of a transaction with Oritani. Following the meeting, KBW updated Oritani regarding its discussion with Valley about a potential transaction with Oritani and the possibility that Valley would be in contact with Oritani and, with Oritani’s approval, KBW furnished Valley with information Valley had requested regarding Oritani

 

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and the potential financial impact of a transaction with Oritani. Valley requested updates to this information in January and February 2019 and further information regarding the potential financial impact of a transaction with Oritani in April 2019 and, with Oritani’s approval, KBW furnished Valley with the requested updates and information.

On October 24, 2018, Mr. Lynch met with Mr. Robbins and discussed a potential merger of Oritani with and into Valley. At this meeting, the parties discussed the general histories and cultures of Oritani and Valley, how Oritani’s franchise fit within Valley’s strategic plans and the potential benefits of a transaction between the two parties. No specific terms of a business combination were discussed and no specific action was taken or follow up was planned as a result of this meeting. Mr. Lynch updated the Board of Directors on the meeting with Mr. Robbins.

Throughout late 2018 and early 2019, KBW as Oritani’s financial advisor continued to contact companies, including Valley, on behalf of Oritani regarding a possible transaction with Oritani. Further informal discussions took place between KBW and Company B. However, Company B continued to defer taking steps towards a transaction. In addition, Valley indicated that it had further interest in exploring a transaction with Oritani but also indicated that it was reviewing other potential acquisitions as well.

On March 20, 2019, Mr. Lynch and Mr. Robbins met again to discuss a possible acquisition of Oritani by Valley. At this meeting, Mr. Lynch and Mr. Robbins agreed that members of the management teams for both parties should meet to further discuss certain financial aspects of a potential transaction between the parties.

On March 26, 2019, at a regularly scheduled Oritani Board of Directors meeting, Mr. Lynch provided an update to the Oritani Board of Directors as to discussions with Valley and a summary of the sale process to date. Oritani’s Board of Directors directed Mr. Lynch to continue discussions with Valley.

On April 3, 2019, senior executive officers from Oritani and Valley met to discuss certain financial aspects of a potential transaction between the parties, including the potential for cost savings. The executives agreed that a potential combination of the two parties had financial merit and the executives agreed that further substantive discussions regarding a potential transaction should take place. On April 12, 2019, Valley executed a nondisclosure agreement with Oritani for the purpose of facilitating further discussions regarding a potential merger.

At an industry conference in early May 2019, senior executive officers from Oritani, Valley and representatives of KBW as Oritani’s financial advisor participated in meetings regarding Valley’s potential acquisition of Oritani. During these meetings, Valley expressed interest in effecting a potential acquisition of Oritani and a second acquisition at the same time but did not pursue concurrent transactions at Oritani’s request. The parties also informally discussed an exchange ratio of 1.61 shares of Valley common stock for each share of Oritani common stock. On May 8, 2019, Oritani and Valley executed a mutual nondisclosure agreement for the purpose of facilitating further discussions and due diligence regarding a potential merger. Additionally, on May 13 and 14, 2019, senior executive officers from Oritani and Valley met to discuss certain financial and structural items regarding Valley’s potential acquisition of Oritani.

In mid-May 2019, Oritani and Valley exchanged initial due diligence materials and each party was provided with access to each other’s virtual data room.

On May 22, 2019, senior executive officers from Oritani and Valley met to discuss in greater detail certain financial and structural items regarding a possible acquisition of Oritani by Valley. At the end of the meeting, Valley provided Oritani with an initial non-binding indication of interest. Valley proposed an all-stock transaction with a value of $16.45 per share to shareholders of Oritani based on a fixed exchange ratio of 1.60 shares of Valley common stock for each share of Oritani common stock (using a Valley stock price of $10.28 per share). At the meeting, senior executives of Valley also orally indicated to Oritani that they would be willing to

 

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increase the exchange ratio to 1.61. The initial indication of interest also proposed one seat on the Valley Board of Directors post-merger for a current director of Oritani.

On May 23, 2019, the Oritani Board of Directors met to discuss the terms of the non-binding indication of interest with management, representatives of KBW and Oritani’s legal advisor, Luse Gorman, PC (“Luse Gorman”) also in attendance. Luse Gorman discussed the Board of Directors’ fiduciary duties in general and in connection with a merger and acquisition transaction. A representative of KBW reviewed the financial aspects of the non-binding indication of interest. The Oritani Board of Directors then engaged in a discussion regarding the non-binding indication of interest, including discussions regarding the use of a fixed exchange ratio and the impact on Oritani shareholders of using a fixed exchange ratio. The Oritani Board of Directors also considered Valley’s current operations and future prospects, and the potential that Valley could provide superior long-term value to Oritani’s shareholders. After the discussion with KBW and Luse Gorman, the Oritani Board of Directors directed management to move forward with negotiating a potential transaction with Valley.

Over the next several days, management of Oritani and Valley and their respective legal and financial advisors discussed the proposed terms of the indication of interest, with Oritani seeking an increase in the exchange ratio.

On June 5 and 6, 2019, senior management for Oritani and representatives of Luse Gorman met for due diligence discussions with senior management for Valley, and representatives of Day Pitney LLP. The parties discussed Oritani’s business matters, including financial performance and expectations for the future, employee matters, regulatory and legal issues. Representatives of KBW and J.P. Morgan Securities LLC (“J.P. Morgan”) were also in attendance.

On June 6, 2019, Day Pitney LLP provided Luse Gorman with an initial draft merger agreement and related agreements (including voting agreements to be entered into by the Oritani directors) for the proposed transaction. The initial draft of the merger agreement provided for a fixed exchange ratio of 1.61 shares of Valley common stock for each share of Oritani common stock. Over the following days, Oritani and Valley continued their reciprocal due diligence efforts.

On June 11, 2019, senior management for Oritani and representatives of Luse Gorman met for reverse due diligence discussions with senior management for Valley and representatives of Day Pitney LLP. The parties discussed Valley’s business matters, including financial performances and expectations for the future, employee matters, regulatory and legal issues. Representatives of KBW and J.P. Morgan were also in attendance.

On June 20, 2019, Day Pitney LLP provided a revised draft of the merger agreement in response to comments from Luse Gorman, which draft indicated that the exchange ratio was an open item and further discussions between senior management for Oritani and Valley and their respective financial advisors were needed.

On June 21, 2019, the Oritani Board of Directors held a meeting with management and representatives of Oritani’s legal and financial advisors in attendance. At the meeting, representatives of KBW reviewed financial aspects of the proposed transaction, including a comparison of transaction pricing ratios and multiples, and discussed with the Board of Directors Oritani’s strategic rationale for a combination with Valley and the pro forma characteristics of the combined company. During its presentation, KBW informed the Oritani Board of Directors of the investment banking and financial advisory services that it had performed for Valley during the previous two years regarding matters unrelated to KBW’s engagement with Oritani. Luse Gorman reviewed the then-current draft of the merger agreement including but not limited to, the transaction structure, merger consideration, the representations, warranties and covenants that were being made by each of Oritani and Valley, closing conditions and termination rights of the parties. The Board of Directors was also informed of the positive results of Oritani’s due diligence review of Valley. The Oritani Board of Directors and Luse Gorman then reviewed in detail the terms of the ancillary documents, including the voting agreements to be entered into by the

 

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directors. The Oritani directors engaged in a discussion regarding the terms of the agreement, including the exchange ratio, the restrictions on Oritani’s dividend practices prior to closing and the handling of certain benefits agreements and plans in which Oritani’s directors and officers are participants. At the conclusion of the discussion, the Oritani Board of Directors directed management, with the assistance of Luse Gorman and KBW, to continue to negotiate the outstanding terms of the merger agreement and related items with Valley, including continuing discussions regarding the exchange ratio.

Over the following days, Oritani and Valley, with the assistance of their financial and legal advisors, continued to negotiate the outstanding terms of the merger agreement and related items, particularly regarding the exchange ratio, restrictions on Oritani’s dividend practice during the pendency of the merger and the handling, post-closing, of certain benefits agreements and plans in which Oritani’s directors and officers are participants.

On June 24, 2019, the parties reached an agreement on the outstanding terms of the merger agreement and related items, including an agreement to an exchange ratio of 1.60. Valley had requested a return to the 1.60 exchange ratio due to, among other things, the changes in the stock prices of both Valley and Oritani.

On June 25, 2019, the Oritani Board of Directors held a meeting with management and Oritani’s legal and financial advisors in attendance. At the meeting, the Oritani Board of Directors considered the approval of the merger agreement and the transactions contemplated by the merger agreement. The Oritani Board of Directors had been provided with a set of meeting materials in advance of the meeting, including the merger agreement and a summary of the material terms of the merger agreement and a financial presentation provided by KBW. At this meeting, KBW reviewed the financial aspects of the proposed merger and rendered to the Oritani 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 merger was fair, from a financial point of view, to the holders of Oritani common stock. A copy of the opinion is attached to this joint proxy statement/prospectus as Appendix B. Luse Gorman again reviewed with the Oritani Board of Directors their fiduciary duties as directors in connection with its consideration of the proposed merger. Luse Gorman then reviewed in detail the terms and conditions of the proposed definitive merger agreement with Oritani, including but not limited to, the changes to the merger agreement since the meeting on June 21, 2019, the transaction structure, merger consideration, the representations, warranties and covenants that were being made by each of Oritani and Valley, closing conditions, the fact that Oritani’s dividend will be limited to the exchange ratio adjusted rate paid by Valley following the fourth quarter dividend and during the pendency of the transaction, and termination rights of the parties. After considering the proposed terms of the merger agreement and related transaction documents, and taking into consideration the matters discussed during that meeting and prior meetings of the Oritani Board of Directors, including the strategic alternatives discussed at those meetings and the factors described under the section of this joint proxy statement/prospectus entitled “Oritani’s Reasons for the Merger; Recommendation of Oritani’s Board of Directors,” the Oritani board unanimously determined that entering into the merger agreement and the other related agreements with Valley was advisable and in the best interests of Oritani and its shareholders, and the directors unanimously approved the merger agreement and unanimously determined to recommend that Oritani’s shareholders approve the merger and adopt the merger agreement.

On June 25, 2019, the Valley Board of Directors and the Valley National Bank Board of Directors held a joint meeting, at which representatives of J.P. Morgan 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 Oritani and information regarding the proposed merger and the combined business. In addition, at the meeting, J.P. Morgan reviewed with the Valley Board of Directors J.P. Morgan’s financial analyses regarding the exchange ratio. Following discussion, J.P. Morgan rendered its oral opinion to the Valley Board of Directors, which was subsequently confirmed in writing, that, as of June 25, 2019 and based upon and subject to the factors and assumptions set forth in its

 

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opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to Valley. For a full description of J.P. Morgan’s opinion, see “Proposal 1 of the Valley Special Meeting – Issuance of up to 75,711,589 Shares of Valley Common Stock in Connection with the Merger – Opinion of Valley’s Financial Advisor” beginning on page [●]. 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 June 25, 2019, following the respective board meetings of Oritani and Valley, Oritani and Valley executed the merger agreement and the directors of Oritani executed the voting agreements with Valley. On June 26, 2019, Oritani and Valley issued a joint press release announcing the execution of the merger agreement.

Oritani’s Reasons for the Merger

After careful consideration during a series of board meetings, the Oritani Board of Directors, at a meeting held on June 25, 2019, determined that the merger with Valley is in the best interests of Oritani and its common shareholders and approved and declared advisable the merger agreement and the transactions contemplated therein, including the merger, and recommends that Oritani’s common shareholders vote “FOR” the adoption of the Oritani merger proposal. In reaching its decision to approve and recommend the adoption of the merger agreement, the Oritani Board of Directors evaluated the merger and the merger agreement in consultation with Oritani’s management, as well as Oritani’s financial and legal advisors, and considered a number of factors, including the following material factors:

 

   

each of Oritani’s, Valley’s and the combined company’s business, operations, financial condition, asset quality, earnings and prospects;

 

   

its consideration that the transaction with Valley was more favorable to the Oritani shareholders than the potential value that might result from other alternatives reasonably available to Oritani, including, but not limited to, remaining independent;

 

   

its belief that Valley common stock represents an attractive form of consideration for Oritani shareholders, and its expectation that Oritani shareholders would benefit from holding Valley common stock in light of the strategic value of the combination over the long term;

 

   

the Oritani Board of Directors’ belief that, based on the complementary nature of Valley’s business and operations, the transaction is likely to provide substantial value to Oritani’s shareholders, including the combined company’s longstanding and strong market presence in New Jersey, a more diversified loan portfolio and attractive funding base and the expected superior pro forma earnings growth prospects compared to on a stand-alone basis;

 

   

the attractiveness and strategic fit of Valley as a potential merger partner given its loan portfolio, its knowledge of the New Jersey banking market and its history of integrating previous acquisitions;

 

   

the complementary nature of the respective cultures and product mix of the two companies, including with respect to strategic focus, target markets and client service;

 

   

the expanded possibilities, including organic growth potential and future acquisitions, that would be available to the combined company, given its larger size, asset base, diverse product offerings, capital and liquidity;

 

   

Valley’s successful track record in executing mergers and the likelihood of receipt of regulatory approvals and completion of the merger in a timely manner;

 

   

the anticipated pro forma impact of the merger on the combined company, including the expected improvement in the estimated return on average assets while maintaining pro forma earnings per share;

 

   

the fact that the merger would enable the Oritani shareholders, who will own approximately 18% of the combined company, to participate in the future earnings and growth of the combined company;

 

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its understanding of the current and prospective environment in which Oritani and Valley operate, including national and local economic conditions, the interest rate environment, increasing operating costs resulting from regulatory initiatives and compliance mandates, the competitive environment for financial institutions generally, and the likely effect of these factors on Oritani both with and without the proposed transaction;

 

   

the fact that Valley discussed in general terms of the proposed acquisition with its regulators and the regulators did not voice an objection;

 

   

its review and discussions with Oritani’s management concerning the due diligence examination of the business of Valley;

 

   

the positive impact on the combined company’s capital position and the anticipated substantial internal capital generation to support future growth;

 

   

the expectation that the transaction will be generally tax-free for United States federal income tax purposes to Oritani’s shareholders;

 

   

the written opinion, dated June 25, 2019, of KBW to the Oritani Board of Directors as to the fairness, from a financial point of view and as of the date of such opinion, to the holders of Oritani common stock of the exchange ratio in the merger, as more fully described under “Proposal 1 of the Oritani Special Meeting – The Merger – Opinion of Oritani’s Financial Advisor;” and

 

   

the fact that the exchange ratio is fixed, which the Oritani Board of Directors believed was consistent with market practice for transactions of this type and with the strategic purpose of the transaction.

The Board of Directors of Oritani also considered the potential risks related to the merger but concluded that the anticipated benefits of the merger were likely to substantially outweigh these risks. These potential risks included:

 

   

the potential risks associated with achieving anticipated cost synergies and savings and successfully integrating Oritani’s business, operations and workforce with those of Valley;

 

   

the transaction-related restructuring charges and other merger-related costs;

 

   

the risk that the market would react negatively to Valley’s announcement of the merger transaction;

 

   

the nature and amount of payments to be received by Oritani’s management and directors in connection with the merger;

 

   

the potential risk of diverting management attention and resources from the operation of Oritani’s business and towards the completion of the merger; and

 

   

the regulatory and other approvals required in connection with the merger and the expectation that such regulatory approvals will be received in a timely manner and without the imposition of unacceptable conditions.

The foregoing discussion of the information and factors considered by the Oritani Board of Directors is not intended to be exhaustive, but includes the material factors considered by the Oritani Board of Directors. In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the Oritani Board of Directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The Oritani Board of Directors considered all these factors as a whole and overall considered the factors to be favorable to, and to support, its determination.

 

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Recommendation of the Oritani Board of Directors

THE BOARD OF DIRECTORS OF ORITANI UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THIS PROPOSAL 1 TO APPROVE THE AGREEMENT AND PLAN OF MERGER, DATED AS OF JUNE 25, 2019, BETWEEN VALLEY NATIONAL BANCORP AND ORITANI PURSUANT TO WHICH ORITANI WILL MERGE WITH AND INTO VALLEY NATIONAL BANCORP.

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 New Jersey market;

 

   

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

 

   

a transaction which is expected to bolster Valley’s capital while preserving earnings per share;

 

   

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

 

   

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

 

   

that the Oritani acquisition would enable Valley to densify its presence in the attractive Bergen County, New Jersey banking market;

 

   

the financial and other terms and ability of the Oritani Board of Directors to entertain third party acquisition proposals to acquire Oritani and conditions of the merger agreement, including providing for payment by Oritani to Valley of a termination fee of $28 million, plus reasonable out-of-pocket expenses up to $1.8 million, if the merger agreement is terminated under certain circumstances;

 

   

J.P. Morgan’s oral opinion to the Valley Board of Directors, which was subsequently confirmed in writing, that, as of June 25, 2019 and based upon and subject to the factors and assumptions set forth in its opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to Valley. For a description of J.P. Morgan’s opinion, please refer to “Proposal 1 of the Valley Special Meeting – Issuance of up to 75,711,589 Shares of Valley Common in Connection with the Merger – Opinion of Valley’s Financial Advisor” beginning on page [●]; and

 

   

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.

Interests of Certain Persons in the Merger

Interests of Oritani Executive Officers and Directors in the Merger

In considering the recommendation of Oritani’s Board of Directors with respect to the merger, Oritani’s stockholders should be aware that the executive officers and directors of Oritani and Oritani Bank have certain interests in the merger that may be different from, or in addition to, the interests of Oritani stockholders generally. Oritani’s Board of Directors was aware of these interests and considered them, among other matters, in making its recommendation that Oritani vote to adopt the merger proposal.

 

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Treatment of Stock Options

Certain directors and executive officers hold outstanding options to purchase shares of Oritani common stock granted under the Oritani Financial Corp. 2011 Equity Incentive Plan and the Oritani Financial Corp. 2007 Equity Incentive Plan (collectively, the “Oritani Equity Plans”). The Oritani Equity Plans, including the number of shares of Oritani common stock reserved thereunder, have been previously approved by shareholders of Oritani.

The merger agreement provides that, at the effective time of the merger, each outstanding stock option granted under the Oritani Equity Plans will vest to the extent set forth in the Oritani Equity Plans and the underlying awards agreements and convert into an option to purchase shares of Valley common stock in an amount equal to the number of shares of Oritani common stock subject to the option multiplied by the exchange ratio of 1.60 (rounded down to the nearest whole share). The exercise price per share of such converted option will be equal to the exercise price of the Oritani stock option divided by the exchange ratio of 1.60 (rounded up to the nearest cent). Except as otherwise provided, the Oritani stock options that have been converted into Valley stock options will be subject to the same duration and terms that were in effect prior to the effective time of the merger.

The following table reflects the number of stock options held by each executive officer and director as of June 25, 2019, the date that the merger agreement was executed, without regard to any subsequent exercise of stock options pursuant to the terms of the awards, prior to the effective date of the merger. The estimated value of the stock options is based on (1) a share closing price of the average closing market price of Valley’s common stock over the first five (5) business days following the first public announcement of the merger beginning on June 26, 2019 multiplied by the exchange ratio for a per share merger consideration of $16.94, net the applicable exercise price for the stock options, multiplied by (2) the total number of shares subject to each stock option award. As of the date of the merger agreement, June 25, 2019, all but 52,000 stock options held by executive officers and directors were vested.

 

Name

   Oritani
Stock Options
(#)
     Weighted-Average
Exercise Price

($)
     Aggregate Stock
Option Value

($)
 

Kevin J. Lynch

     901,697      $ 11.95      $ 4,499,468.03  

John M. Fields, Jr.

     263,160        11.95        1,313,168.40  

Louis Manderino

     52,000        13.28        190,480.00  

Kurt Breitenstein

     50,000        15.50        72,000.00  

Philip M. Wyks

     24,456        11.95        122,035.44  

All other executive officers as group (6 persons)

     144,000        12.31        666,560.00  

All non-employee directors as a group (5 persons)

     932,500        11.95        4,653,175.00  

 

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Treatment of Restricted Stock

Certain directors and executive officers hold shares of Oritani restricted stock granted under the Oritani Equity Plans. Under the merger agreement, at the effective time of the merger, each outstanding Oritani restricted stock award will be converted into the number of shares of Valley common stock equal to the product of (x) the number of restricted shares of Oritani common stock subject to the restricted stock award, multiplied by (y) the exchange ratio of 1.60 (rounded down to the nearest whole share), subject to the same terms and conditions, including vesting, as were applicable to such awards prior to the merger. The following table sets forth the number of shares of restricted stock held by each named executive officer and the other executive officers and directors of Oritani and Oritani Bank as of June 25, 2019, the date the merger agreement was executed, and is expected to remain unvested as of the assumed merger closing date of December 1, 2019. The estimated value of the restricted stock is based on (1) a share closing price of the average closing market price of Valley’s common stock over the first five (5) business days following the first public announcement of the transaction beginning on June 26, 2019 multiplied by the exchange ratio for a per share merger consideration of $16.94, multiplied by (2) the total number of shares subject to each restricted stock award.

 

Name

   Unvested Oritani
Restricted Stock
Awards

(#)
     Aggregate Restricted
Stock
Award Value
($)
 

Kevin J. Lynch

     —        $ —    

John M. Fields, Jr.

     —          —    

Louis Manderino

     —          —    

Kurt Breitenstein

     4,000        67,760  

Philip M. Wyks

     —          —    

All other executive officers as a group (6 persons)

     —          —    

All non-employee directors as a group (5 persons)

     —          —    

Employment Agreements with Certain Executive Officers

Oritani Bank previously entered into employment agreements with Kevin J. Lynch, President and Chief Executive Officer, John M Fields, Jr., Executive Vice President and Chief Financial Officer, Louis Manderino, Executive Vice President and Chief Risk Officer, Kurt Breitenstein, Executive Vice President and Chief Lending Officer and Philip M. Wyks, Senior Vice President and Corporate Secretary, and two other executive officers. Pursuant to the merger agreement, Valley has agreed to honor in accordance with their terms all benefits payable under these employment agreements, which provide certain benefits in the event the executive officer’s employment is terminated under specified circumstances and within a specified period of time following a change in control, such as the merger. Each such employment agreement has an initial two-year term (or three-year term with respect to Mr. Lynch’s agreement) that automatically renews for an additional year on each anniversary of the effective date of the agreement, unless notice of non-renewal has been delivered.

If, during the term of the employment agreement and within one year of a change in control (such as the merger) (1) an executive officer’s employment is terminated without “cause,” other than due to death, “normal retirement” or “disability,” (each term as defined in the employment agreements) or (2) the executive officer terminates his or her employment for any reason (or no reason) within one year of the occurrence of a change in control (referred to as a “qualifying termination”), each executive is entitled to the payments and benefits as follows:

 

   

Severance Payment. A cash severance payment equal to three (3) times (in the case of Mr. Lynch) or two (2) times (in the case of Messrs. Fields, Manderino, Breitenstein and Wyks and the two other executive officers) the sum of the executive officer’s (1) highest rate of annual base salary paid during the term of the employment agreement; and (2) highest annual cash bonus paid to the executive officer with respect any of the three (3) (in the case of Mr. Lynch) or two (2) in the case of Messrs. Fields,

 

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Manderino, Breitenstein and Wyks and the two other executive officers) completed fiscal years prior to the date of termination. The cash severance is generally payable in a lump-sum payment within 60 days following the executive officer’s date of termination, except to the extent that the payment is delayed to comply with Section 409A of the Code, and then any portion delayed will be paid in a lump sum on the first day of the seventh (7th) month following the executive officer’s separation from service.

 

   

Health and Welfare Insurance. Continued life, disability, medical and dental insurance for a period of 36 months (in the case of Mr. Lynch) or 24 months (in the case of Messrs. Fields, Manderino, Breitenstein and Wyks and the two other executive officers) or, if applicable, as provided in Oritani Bank’s non-qualified Senior Officers Medical Benefit Plan.

Each employment agreement provides that the payments thereunder would be reduced by the minimum amount necessary to avoid penalties with respect to Sections 280G and 4999 of the Code.

Valley has acknowledged in the merger agreement that Mr. Lynch’s termination of employment in connection with the merger will be considered a qualifying termination event for purposes of his employment agreement.

The non-competition and non-solicitation covenants contained in the employment agreements do not apply in the event of termination of employment after a change in control (including the merger).

For an estimate of the amounts payable to Messrs. Lynch, Fields, Manderino, Breitenstein and Wyks under their employment agreements in connection with a qualifying termination of employment following the merger, see “– Merger-Related Compensation for Oritani’s Named Executive Officers below. Assuming the merger was completed and the executive officer experienced a qualifying termination of employment on December 1, 2019, the estimated amount of cash severance payable to the two other executive officers under their employment agreements, as a group, is $2.0 million and the aggregate estimated value of the continued group health, life and disability coverage benefits that would be provided to such group is $59,512.

Change in Control Agreements with Certain Executive Officers

Oritani Bank previously entered into change in control agreements with four executive officers who are not parties to employment agreements with Oritani Bank. Pursuant to the merger agreement, Valley has agreed to honor in accordance with their terms all benefits payable under these change in control agreements, which provide certain benefits in the event the executive officer’s employment is terminated under specified circumstances and within a specified period of time following a change in control, such as the merger. Three of the change in control agreements have an initial two-year term that automatically renews for an additional year on each anniversary of the effective date of the agreement, unless notice of non-renewal has been delivered. One of the change in control agreements has an initial one-year term that automatically renews for an additional year on each anniversary of the effective date of the agreement, unless notice of non-renewal has been delivered

If during the term of the change in control agreement, the executive officer has a qualifying termination (a qualifying termination would be the executive officer’s involuntary termination without “cause” or voluntary resignation for “good reason,” each term as defined in the change in control agreements), each executive officer is entitled to the payments and benefits as follows:

 

   

Severance Payment. A cash severance payment equal to two (2) times (in the case of the one-year agreement, one (1) times) the sum of the executive officer’s (i) highest rate of annual base salary paid during the term of the employment agreement; and (ii) highest annual cash bonus paid to the executive officer with respect any of the two (2) completed fiscal years prior to the date of termination. The cash severance is generally payable in a lump-sum payment within 30 days (for one of the agreements, sixty (60) days) following the executive officer’s date of termination, except to the extent that the payment is delayed to comply with Section 409A of the Code, and then any portion delayed will be paid in a lump sum on the first day of the seventh (7th) month following the executive officer’s separation from service.

 

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Health and Welfare Insurance. Continued life, disability, medical and dental insurance for 24 months (in the case of the one-year agreement, twelve (12) months) or, if applicable, as provided in Oritani Bank’s non-qualified Senior Officers Medical Benefit Plan.

Each change in control agreement provides that the payments thereunder would be reduced by the minimum amount necessary to avoid penalties with respect to Sections 280G and 4999 of the Code.

Assuming the merger was completed and the executive officer experienced a qualifying termination of employment on December 1, 2019, the estimated amount of cash severance payable to the four other executive officers under their change in control agreements, as a group, is $1.4 million and the aggregate estimated value of the continued group health, life and disability coverage benefits that would be provided to such group is $128,418.

Executive Officer Incentive Plan

The Executive Officer Incentive Plan provides annual cash bonus opportunities, determined as a percentage of base salary, for executive officers based on the satisfaction of both company-wide and individual performance measures established by the Compensation Committee of the Board of Directors of Oritani. The plan incorporates three levels of achievement for each performance measure: (1) threshold; (2) target; and (3) maximum, as well as a “net income gate” that provides certain levels of earnings performance below which cash bonuses plan under the plan would not be paid or would be authorized and approved at less than maximum level of achievement. The plan includes both a short-term incentive program component (“STIP”) and a long-term component (“LTIP”). Payment of bonuses attributable to the STIP are paid in a cash lump sum as soon as practicable following the completion of the annual performance period. Payment of bonuses attributable to the LTIP are paid after the completion of the three-year performance period, commencing on the first day of Oritani’s fiscal year with respect to the STIP.

Notwithstanding the foregoing, pursuant to the merger agreement, each executive officer below (1) was awarded an individual annual bonus under the plan at the maximum level achievement under both the STIP and the LTIP; and (2) is entitled to receive a pro-rata bonus at target level of achievement for the fiscal year ending on June 30, 2020, based on the number of days through the closing date of the merger, so long as the executive officer remains in employed with Oritani Bank as of the closing date of the merger.

The annual bonuses awarded to the executive officers under the Executive Officer Incentive Plan for the annual performance period ending on June 30, 2019 are as follows:

 

Name

   STIP Component
($)
     LTIP Component
($)
     Total ($)(1)  

Kevin J. Lynch

   $ 553,875      $ 369,250      $ 923,125  

John M. Fields, Jr.

     179,802        125,861        305,663  

Louis Manderino

     142,500        99,750        242,250  

Kurt Breitenstein

     131,250        91,875        223,125  

Philip M. Wyks

     49,280        32,853        82,133  

 

(1)

Without regard to the merger, each executive officer earned the following individual bonuses: (i) Mr. Lynch, $369,250; (ii) Mr. Fields, $125,861; (iii) Mr. Manderino $99,750; (iv) Mr. Breitenstein, $91,875 and Mr. Wyks, $32,853. These bonus amounts were earned based on target level of achievement with respect to the STIP component of the Executive Officer Incentive Plan for the annual performance period ending on June 30, 2019.

 

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The estimated pro-rata bonuses to be awarded to the executive officers under the Executive Officer Incentive Plan for the fiscal year ended on June 30, 2020, assuming that the closing date of the merger is December 1, 2019 are as follows:

 

Name

   Estimated Pro-Rata
Bonus

($)
 

Kevin J. Lynch

   $ 263,128  

John M. Fields, Jr.

     90,442  

Louis Manderino

     71,679  

Kurt Breitenstein

     66,020  

Philip M. Wyks

     22,952  

Supplemental Executive Retirement and Other Deferred Compensation Arrangements for Executive Officers

Oritani Bank provides supplemental retirement benefits to Mr. Lynch under the Amended and Restated Executive Supplemental Retirement Income Plan (the “SERP”), which is designed to provide Mr. Lynch an annuitized annual benefit equal to 70% of his highest average annual base salary and bonus over the 36-consecutive-month period within the last 120 months of employment, reduced by the sum of his annuitized value of: (1) the benefits payable under Oritani Bank’s tax-qualified and non-qualified defined benefit plans; and (2) Social Security benefits attributable to the Social Security taxes paid by Oritani Bank on behalf of Mr. Lynch, reduced by the Social Security offset under Oritani Bank’s tax-qualified defined benefit plan. The benefit will be paid in monthly installments for Mr. Lynch’s life, but not less than 240 months, commencing on the first day of the month following Mr. Lynch’s date of termination. Mr. Lynch is fully vested in this benefit without regard to the merger because he has attained the normal retirement age of 65 under the plan.

Oritani Bank also provides supplemental retirement benefits for certain executive officers under the 2008 Benefit Equalization Plan (the “BEP,” which consists of both a defined benefit and a 401(k) supplemental benefit) and the Supplemental Employee Stock Ownership Plan (the “Supplemental ESOP”). Together, these plans provide participants with benefits to which they would otherwise be entitled under Oritani Bank’s tax-qualified pension plan, 401(k) plan and employee stock ownership plan but for the compensation limitations imposed by the Internal Revenue Service. Messrs. Lynch and Fields are participants in the defined portion of the BEP, Messrs. Lynch, Fields, Manderino and five other executive officers are participants in the 401(k) portion of the BEP and Messrs. Lynch, Fields, Wyks and two other executive officers are participants in the Supplemental ESOP. Pursuant to the plans, in the event of a change in control (such as a merger), the accumulated benefits thereunder would be paid to the participants in a lump sum within 30 days thereafter, unless an alternative form of payment was previously elected by the participants. The distribution of the benefits under the Supplemental ESOP will be made in the form of common stock. The benefits payable under the plans have been fully earned and vested by the participants without regard to the merger.

The SERP, BEP and Supplemental ESOP each provide that within 30 days prior to the date of a change in control (such as the merger), Oritani Bank must make an irrevocable contribution to a rabbi trust in an amount that is sufficient to pay each participant and beneficiary the benefits to which they are entitled under the plans as of the date of the change in control.

Director Retirement Plans

Oritani Bank maintains the Amended and Restated 2005 Directors Deferred Fee Plan (the “Director Deferred Fee Plan”), under which participants accumulate benefits based on voluntary deferral elections of director fees. The Director Deferred Fee Plan provides that in the event of a change in control, such as the merger, each participant’s accumulated benefits will be paid in a lump sum within 30 days of a change in control, unless the participant has elected an alternative method of payment pursuant to the plan. Each non-employee director of Oritani, except for Judith Schumacher-Tilton, is a participant in the Director Deferred Fee Plan.

 

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Oritani Bank also maintains the Amended and Restated Directors’ Retirement Plan (the “Director Retirement Plan”), which provides certain benefits to a director with at least five (5) years of service who retires from service on or after reaching age 65. Messrs. Lynch and Fields and each of the non-employee directors of Oritani, except for Ms. Schumacher-Tilton, are participants in the Director Retirement Plan. Each participant is eligible to receive the full normal retirement benefit if the participant has completed 10 or more years of service. Upon retirement, the full benefit is equal to 50% of the aggregate annual compensation paid to a participant with respect to the year in which the retirement occurs. The benefit is paid in the form of either a life annuity, a joint and survivor annuity or a lump sum actuarial equivalent. In the event of a change in control, such as a merger, each director will be deemed to have attained age 65 and completed 10 years of service and would receive the full normal retirement benefit. Without regard to the merger, Mr. Fields and one other participant are not vested in the normal retirement benefit because they have not attained age 60.

Pursuant to the merger agreement, within 30 days prior to the closing of the merger, the Director Deferred Fee Plan and the Director Retirement Plan will be terminated by Oritani, as directed by Valley. The accumulated benefits due under the plans will be paid to each participant in a cash lump sum payment within 12 months following the date that the election is taken to terminate the plans.

For an estimate of the value of the enhanced benefit for Mr. Fields under the Director Retirement Plan in connection with its termination, see “The Merger – Merger-Related Compensation for Oritani’s Named Executive Officers” below. The estimated value of the enhanced benefit for the one other non-employee director under the Director Retirement Plan is $1,168,133. Except for the foregoing, each director is fully vested in all benefits under the Director Deferred Fee Plan and the Director Retirement Plan.

Retiree Health Benefits

Oritani Bank maintains two plans that provide for post-retirement health benefits: (1) the Senior Officer Post-Retirement Plan (the “Officer Retiree Health Plan”); and (2) the Post-Retirement Director Medical Plan (the “Director Retiree Health Plan’). Executive officers who are designated by the Board of Directors of Oritani Bank who have attained age 52 and completed at least five years of service are eligible to participate in the Officer Retiree Health Plan. Under this plan, eligible officers and their spouses are entitled to participate in Oritani Bank’s group health plan for life, at no cost to the executive officer so long as Oritani Bank’s costs do not exceed two times the premium cost of such health coverage provided to the executive officer at the time of retirement. Messrs. Lynch, Fields, Wyks and two other executive officers are eligible to receive post-retirement health coverage under the Officer Retiree Health Plan without regard to the merger because each officer has satisfied the plan’s eligibility requirements.

The Director Retiree Health Plan is a component of the Director Retirement Plan. Each of the non-employee directors participating in the Director Retirement Plan is entitled to receive lifetime medical benefits, the cost of which will be fully paid by Oritani Bank up to 200% of the annual cost of such benefits at the time of the non-employee director’s retirement.

Under the Merger Agreement, Valley has agreed to pay the five (5) non-employee directors under the Director Retiree Health Plan and Mr. Lynch under the Officer Retiree Health Plan an aggregate payment of $3.0 million to terminate Oritani Bank’s future retiree health obligations to the five (5) non-employee directors and Mr. Lynch, which would be paid in a lump sum at, or as soon as practicable after, the closing date of the merger. Valley has also agreed to settle any post-termination retiree health benefits for all participants in the Officer Retiree Health Plan prior to the closing date of the merger, provided, however, that any settlement or payment of cash in lieu of the retiree health benefits must comply with Section 409A of the Code. In consideration of receiving a settlement payment, each participant in Officer Retiree Health Plan or the Director Retiree Health Plan must enter into a release agreement with Valley.

 

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Group Life Insurance Plan

Oritani Bank maintains a Group Life Insurance Plan for employees and non-employee directors. A participant who retires while participating (or is terminated due to a change in control) is entitled to the benefit in the event of the participant’s death. In such event, the participant’s beneficiary will receive either: (1) two times the annual base salary for Vice Presidents and above; (2) one times the annual base salary for Assistant Vice President and below; or (3) $50,000 for non-employee directors. The plan is funded through split dollar life insurance on the participants’ lives under an endorsement split dollar arrangement, where Oritani Bank owns the policy and a portion of the death benefit is “endorsed” to the participant. In the event of the participant’s disability, retirement (defined as retirement on or after age 65 or after the participant’s age and service equal at least “70”) or in the event of a change in control, such as the merger, the policy will be maintained for the participant until his or her death. Participants in the plan include Messrs. Lynch, Fields, Manderino, Wyks, six (6) other executive officers and five (5) non-employee directors, all of whom, except for one executive officer, are fully vested in the aforementioned benefits without regard to the merger.

Employee Stock Ownership Plan

The Oritani Bank Employee Stock Ownership Plan (the “ESOP”) is a tax-qualified plan that covers substantially all of the employees of Oritani Bank who have attained age 21 and completed 1,000 hours of service. The ESOP received a loan from Oritani, the proceeds of which were used to acquire shares of Oritani common stock for the benefit of plan participants. The ESOP has pledged the shares acquired with the loan as collateral for the loan and holds them in a suspense account, releasing them to participants’ accounts as the loan is repaid, using contributions received from Oritani Bank. Prior to the effective time of the merger, the outstanding ESOP loan will be repaid by the ESOP by delivering a sufficient number of unallocated shares of Oritani common stock to Oritani. Any unallocated shares remaining in the ESOP suspense account (after the repayment of the outstanding loan) will be allocated to the active plan participants pro-rata as earnings. As of the effective time of the merger, the ESOP will be terminated and all allocated shares of common stock held by the ESOP will be converted into the merger consideration.

As a result of the foregoing, Oritani’s executive officers, as well as other employees who participate in the ESOP, will receive a benefit in connection with the ESOP’s termination to the extent that the stock price of Oritani common stock multiplied by the number of shares held in the suspense account exceeds the outstanding loan used to acquire those shares.

For an estimate of the additional benefits that Oritani’s named executive officers would receive upon the effective time of the merger, see “– Merger-Related Compensation for Oritani’s Named Executive Officers” below. Based on account levels as of June 25, 2019, and a stock price of $16.94, which is the average closing price of Valley’s common stock over the first five (5) business days following the first public announcement of the merger beginning on June 26, 2019 multiplied by the exchange ratio, the estimated value of the additional benefits that the six other executive officers would receive, as a group, is $2.1 million.

New Arrangements with Oritani Executive Officers

Prior to and from time to time since the execution of the merger agreement, Valley has engaged, and it expects to continue to engage, in discussions with certain executive officers of Oritani about potential roles with the combined company after the consummation of the merger. There is at this time no assurance that those discussions will result in any additional agreements with Valley or, if so, what the terms and conditions of any such agreements would be.

Merger-Related Executive Compensation for Oritani’s Named Executive Officers

This section sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation for each of Oritani’s named executive officers that is based on or otherwise relates to the merger. This compensation is referred to as “golden parachute” compensation by the applicable SEC disclosure rules.

 

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The following table sets forth the amount of payments and benefits that each of Oritani’s named executive officers would as a result of the merger, assuming the following assumptions (except as otherwise provided in the footnotes to the following table): (1) the effective time of the merger is December 1, 2019; and (2) each named executive officer experiences a qualifying termination of employment on December 1, 2019. The table does not include the value of benefits that the named executive officers are vested in without regard to the occurrence of a change in control. Amounts below are based on certain assumptions that may or may not actually occur. As a result, the actual amounts to be received by a named executive officer may materially differ from the amounts set forth below.

 

Name

   Cash(1)      Equity(2)      Pension/
NQDC(3)
     Perquisites/
  Benefits(4)  
     Other(5)      Total  

Kevin J. Lynch

   $ 6,699,126      $ —        $ —        $ —        $ 669,185      $ 7,368,311  

John M. Fields, Jr.

     1,600,775        —          1,200,819        —          669,185        3,470,779  

Louis Manderino

     1,226,679        24,640        —          45,353        423,136        1,719,808  

Kurt Breitenstein

     1,168,520        115,040        —          57,030        40,393        1,380,983  

Philip Wyks

     674,537        —          —          —          531,148        1,205,685  

 

(1)

As described above, the cash payments payable to each of the Oritani named executive officers consist of (a) for all named executive officers, a lump sum payment equal to two (2) times (and in the case of Mr. Lynch, three (3) times) the sum of (i) the highest rate of base salary and (ii) the highest annual bonus paid in the preceding three years, payable pursuant to their employment agreements, the payment of which does not assume any reduction to avoid penalties under Section 280G of the Code; (b) for all named executive officers, a lump sum payment equal to the portion of their bonus awards under the Executive Officer Incentive Plan for the fiscal year ended June 30, 2019 that was earned as a result of the merger; (c) for all named executive officers, a lump sum payment equal to their pro-rata bonus payable under the Executive Officer Incentive Plan for the fiscal year ending June 30, 2020; and (d) for Mr. Lynch, the estimated portion of the $3.0 million that will be used to settle his future retiree health obligations under the Officer Retiree Health Plan. For Messrs. Fields and Wyks, the settlement of their future retiree obligations under the Officer Retiree Health Plan is still to be negotiated with Valley. The payments described in clause (a) are “modified single trigger” payments because the payments may be triggered due to the named executive officer’s voluntary resignation for any reason within one year following the merger. The payments described in clause (b), (c) and (d) are “single trigger” payments because they are payable solely as a result of, or in connection with, the merger.

Set forth below are the separate values of each of payments described in clauses (a), (b), (c) and (d) above.

 

Name

   (a)      (b)      (c)      (d)  

Kevin J. Lynch

   $ 4,984,875      $ 553,875      $ 263,128      $ 897,248  

John M. Fields, Jr.

     1,330,531        179,802        90,442        —    

Louis Manderino

     1,012,500        142,500        71,679        —    

Kurt Breitenstein

     971,250        131,250        66,020        —    

Philip Wyks

     602,305        49,280        22,952        —    

 

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(2)

All unvested restricted stock and stock options awarded to the named effective officers will become vested upon the named executive officer’s qualifying termination event following the change in control, as determined under the Oritani Equity Plans (i.e., a “double-trigger vesting” because the vesting is contingent upon a qualifying termination event at or following the merger). Set forth below are the values of the unvested equity awards, based on a per share price of each type of equity-based award that would become vested and be settled upon the effective time of the merger, based on a price per share of $16.94 (i.e., the average closing price per share of Valley’s common stock over the first five business days following the announcement of the merger agreement, multiplied by the exchange ratio).

 

Name

   Restricted
Stock
     Stock
Options
 

Kevin J. Lynch

   $ —        $ —    

John M. Fields, Jr.

     —          —    

Louis Manderino

     —          24,640  

Kurt Breitenstein

     67,760        47,280  

Philip Wyks

     —          —    

 

(3)

With respect to Mr. Fields, whose benefit payable under the Director Retirement Plan will become fully vested because he will be deemed to be age 65 and have completed 10 years of service as a result of the merger (i.e., a single trigger vesting), the amount reflects the enhanced portion of Mr. Fields’ normal retirement benefit, which will be payable in a cash lump sum in connection with the expected termination of the Director Retirement Plan as described above. The enhanced portion of Mr. Field’s normal retirement benefit is a single trigger payment because the payment is conditioned solely upon a change in control, such as the merger.

(4)

The amounts in this column represent the present value of the cash equivalent of the cost of providing continued coverage for Messrs. Manderino and Breitenstein under the health insurance plans and other welfare arrangements currently sponsored by Oritani Bank for two years pursuant to their employment agreements. The present value was calculated using a discount rate equal to 120% of the applicable federal rate (compounded semi-annually) for August 2019, as published by the Internal Revenue Service. Messrs. Lynch, Fields and Wyks are entitled to continued health benefits pursuant to their participation in the Officer Retiree Health Plan, which they are entitled to receive without regard to the merger.

(5)

This column represents the estimated dollar value of additional allocations to the named executive officers in connection with the termination of the ESOP and repayment of the outstanding ESOP loan balance at closing. Following the repayment of the ESOP loan with unallocated shares, the remaining shares in the ESOP suspense account will be exchanged for the merger consideration and will be allocated to all eligible employees, including the named executive officers, as earnings of the ESOP based on the eligible employee’s account balance. The estimated dollar value attributable to each named executive officer as set forth above is based on a number of assumptions that may or not be accurate at the closing of the merger, including that eligible participants who are currently employed by Oritani Bank remain employed by Oritani Bank through the merger closing date and the merger consideration value is $16.94 (the average value of Valley’s common stock as of the first five (5) business days commencing after the public announcement of the merger, multiplied by the exchange ratio).

Interests of Valley’s Directors and Executive Officers in the Merger

No person serving as a director or executive officer of Valley at any time while the merger was under discussion has any interest, direct or indirect, in any matter to be acted upon by Valley’s shareholders, except as a shareholder of Valley.

Opinion of Oritani’s Financial Advisor

Oritani engaged KBW to render financial advisory and investment banking services to Oritani, including an opinion to the Oritani Board of Directors as to the fairness, from a financial point of view, to the holders of

 

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Oritani common stock of the exchange ratio in the proposed merger of Oritani with and into Valley. Oritani selected KBW because KBW is a nationally recognized investment banking firm with substantial experience in transactions similar to the merger. As part of its investment banking business, KBW is continually engaged in the valuation of financial services businesses and their securities in connection with mergers and acquisitions.

As part of its engagement, representatives of KBW attended the meeting of the Oritani Board of Directors held on June 25, 2019, at which the Oritani Board of Directors evaluated the proposed merger. At this meeting, KBW reviewed the financial aspects of the proposed merger and rendered to the Oritani Board of Directors an opinion 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 KBW as set forth in its opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to the holders of Oritani common stock. The Oritani Board of Directors approved the merger agreement at this meeting.

The description of the opinion set forth herein is qualified in its entirety by reference to the full text of the opinion, which is attached as Appendix B to this document and is incorporated herein by reference, and describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW in preparing the opinion.

KBW’s opinion speaks only as of the date of the opinion. The opinion was for the information of, and was directed to, the Oritani Board of Directors (in its capacity as such) in connection with its consideration of the financial terms of the merger. The opinion addressed only the fairness, from a financial point of view, of the exchange ratio in the merger to the holders of Oritani common stock. It did not address the underlying business decision of Oritani to engage in the merger or enter into the merger agreement or constitute a recommendation to the Oritani Board of Directors in connection with the merger, and it does not constitute a recommendation to any holder of Oritani common stock or any shareholder of any other entity as to how to vote in connection with the merger or any other matter, nor does it constitute a recommendation regarding whether or not any such shareholder should enter into a voting, shareholders’ or affiliates’ agreement with respect to the merger or exercise any dissenters’ or appraisal rights that may be available to such shareholder.

KBW’s opinion was reviewed and approved by KBW’s Fairness Opinion Committee in conformity with its policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.

In connection with the opinion, KBW reviewed, analyzed and relied upon material bearing upon the financial and operating condition of Oritani and Valley and bearing upon the merger, including, among other things:

 

   

a draft of the merger agreement dated June 21, 2019 (the most recent draft then made available to KBW);

 

   

the audited financial statements and the Annual Reports on Form 10-K for the three fiscal years ended June 30, 2018 of Oritani;

 

   

the unaudited quarterly financial statements and Quarterly Reports on Form 10-Q for the quarters ended September 30, 2018, December 31, 2018 and March 31, 2019 of Oritani;

 

   

the audited financial statements and Annual Reports on Form 10-K for the three fiscal years ended December 31, 2018 of Valley;

 

   

the unaudited quarterly financial statements and Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 of Valley;

 

   

certain regulatory filings of Oritani and Valley and their respective subsidiaries, including the quarterly reports on Form FR Y-9C and call reports filed with respect to each quarter during the three-year

 

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period ended June 30, 2018 as well as the quarters ended September 30, 2018, December 31, 2018 and March 31, 2019 (in the case of Oritani) and during the three-year period ended December 31, 2018 as well as the quarter ended March 31, 2019 (in the case of Valley);

 

   

certain other interim reports and other communications of Oritani and Valley to their respective shareholders; and

 

   

other financial information concerning the businesses and operations of Oritani and Valley that was furnished to KBW by Oritani and Valley or which KBW was otherwise directed to use for purposes of KBW’s analyses.

KBW’s consideration of financial information and other factors that it deemed appropriate under the circumstances or relevant to its analyses included, among others, the following:

 

   

the historical and current financial position and results of operations of Oritani and Valley;

 

   

the assets and liabilities of Oritani and Valley;

 

   

the nature and terms of certain other merger transactions and business combinations in the banking industry;

 

   

a comparison of certain financial and stock market information for Oritani and Valley with similar information for certain other companies the securities of which were publicly traded;

 

   

publicly available consensus “street estimates” of Oritani, as well as assumed long-term Oritani growth rates provided to KBW by Oritani management, all of which information was discussed with KBW by Oritani management and used and relied upon by KBW at the direction of such management and with the consent of the Oritani Board of Directors;

 

   

publicly available consensus “street estimates” of Valley, as well as assumed long-term Valley growth rates provided to KBW by Valley management, all of which information was discussed with KBW by Valley management and used and relied upon by KBW based on such discussions, at the direction of Oritani management and with the consent of the Oritani Board of Directors; and

 

   

estimates regarding certain pro forma financial effects of the merger on Valley (including, without limitation, the cost savings and related expenses expected to result or be derived from the merger) that were prepared by, and provided to and discussed with KBW by, Valley management and that were used and relied upon by KBW based on such discussions, at the direction of Oritani management and with the consent of the Oritani Board of Directors.

KBW also performed such other studies and analyses as it considered appropriate and took into account its assessment of general economic, market and financial conditions and its experience in other transactions, as well as its experience in securities valuation and knowledge of the banking industry generally. KBW also participated in discussions held by the managements of Oritani and Valley regarding the past and current business operations, regulatory relations, financial condition and future prospects of their respective companies and such other matters as KBW deemed relevant to its inquiry. In addition, KBW considered the results of the efforts undertaken by Oritani, with KBW’s assistance, to solicit indications of interest from third parties regarding a potential transaction with Oritani.

In conducting its review and arriving at its opinion, KBW relied upon and assumed the accuracy and completeness of all of the financial and other information that was provided to it or that was publicly available and KBW did not independently verify the accuracy or completeness of any such information or assume any responsibility or liability for such verification, accuracy or completeness. KBW relied upon the management of Oritani as to the reasonableness and achievability of the publicly available consensus “street estimates” of Oritani and the assumed Oritani long-term growth rates referred to above (and the assumptions and bases therefor), and KBW assumed that all such information was reasonably prepared and represented, or in the case of the Oritani

 

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“street estimates” referred to above that such estimates were consistent with, the best currently available estimates and judgments of such management and that the forecasts, projections and estimates reflected in such information would be realized in the amounts and in the time periods estimated. KBW further relied, with the consent of Oritani, upon Valley management as to the reasonableness and achievability of the publicly available consensus “street estimates” of Valley, the assumed Valley long-term growth rates, and the estimates regarding certain pro forma financial effects of the merger on Valley (including, without limitation, the cost savings and related expenses expected to result or be derived from the merger), all as referred to above (and the assumptions and bases for all such information), and KBW assumed that all such information was reasonably prepared and represented, or in the case of the Valley “street estimates” referred to above that such estimates were consistent with, the best currently available estimates and judgments of Valley management and that the forecasts, projections and estimates reflected in such information would be realized in the amounts and in the time periods estimated.

It is understood that the portion of the foregoing financial information of Oritani and Valley that was provided to KBW was not prepared with the expectation of public disclosure and that all of the foregoing financial information, including the publicly available consensus “street estimates” of Oritani and Valley, was based on numerous variables and assumptions that are inherently uncertain (including, without limitation, factors related to general economic and competitive conditions) and, accordingly, actual results could vary significantly from those set forth in such information. KBW assumed, based on discussions with the respective managements of Oritani and Valley and with the consent of the Oritani Board of Directors, that all such information provided a reasonable basis upon which KBW could form its opinion and KBW expressed no view as to any such information or the assumptions or bases therefor. KBW relied on all such information without independent verification or analysis and did not in any respect assume any responsibility or liability for the accuracy or completeness thereof.

KBW also assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of either Oritani or Valley since the date of the last financial statements of each such entity that were made available to KBW. KBW is not an expert in the independent verification of the adequacy of allowances for loan and lease losses and KBW assumed, without independent verification and with Oritani’s consent, that the aggregate allowances for loan and lease losses for Oritani and Valley are adequate to cover such losses. In rendering its opinion, KBW did not make or obtain any evaluations or appraisals or physical inspection of the property, assets or liabilities (contingent or otherwise) of Oritani or Valley, the collateral securing any of such assets or liabilities, or the collectability of any such assets, nor did KBW examine any individual loan or credit files, nor did it evaluate the solvency, financial capability or fair value of Oritani or Valley under any state or federal laws, including those relating to bankruptcy, insolvency or other matters. Estimates of values of companies and assets do not purport to be appraisals or necessarily reflect the prices at which companies or assets may actually be sold. Because such estimates are inherently subject to uncertainty, KBW assumed no responsibility or liability for their accuracy.

KBW assumed, in all respects material to its analyses:

 

   

that the merger and any related transactions (including, without limitation, the bank merger and the dividends on Oritani common stock permitted to be paid by Oritani prior to the consummation of the merger) would be completed substantially in accordance with the terms set forth in the merger agreement (the final terms of which KBW assumed would not differ in any respect material to KBW’s analyses from the draft reviewed by KBW and referred to above) with no adjustments to the exchange ratio and with no other consideration or payments in respect of Oritani common stock;

 

   

that the representations and warranties of each party in the merger agreement and in all related documents and instruments referred to in the merger agreement were true and correct;

 

   

that each party to the merger agreement and all related documents would perform all of the covenants and agreements required to be performed by such party under such documents;

 

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that there were no factors that would delay or subject to any adverse conditions, any necessary regulatory or governmental approval for the merger or any related transactions and that all conditions to the completion of the merger and any related transaction would be satisfied without any waivers or modifications to the merger agreement or any of the related documents; and

 

   

that in the course of obtaining the necessary regulatory, contractual, or other consents or approvals for the merger and any related transaction, no restrictions, including any divestiture requirements, termination or other payments or amendments or modifications, would be imposed that would have a material adverse effect on the future results of operations or financial condition of Oritani, Valley or the pro forma entity, or the contemplated benefits of the merger, including without limitation the cost savings and related expenses expected to result or be derived from the merger.

KBW assumed that the merger would be consummated in a manner that complies with the applicable provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all other applicable federal and state statutes, rules and regulations. KBW was further advised by representatives of Oritani that Oritani relied upon advice from its advisors (other than KBW) or other appropriate sources as to all legal, financial reporting, tax, accounting and regulatory matters with respect to Oritani, Valley, the merger and any related transaction, and the merger agreement. KBW did not provide advice with respect to any such matters.

KBW’s opinion addressed only the fairness, from a financial point of view, as of the date of the opinion, of the exchange ratio in the merger to the holders of Oritani common stock. KBW expressed no view or opinion as to any other terms or aspects of the merger or any term or aspect of any related transaction (including, without limitation, the termination of Oritani’s Employee Stock Ownership Plan and any related agreement on the Closing Date (as defined in the merger agreement)), including without limitation, the form or structure of the merger or any such related transaction, any consequences of the merger or any such related transaction to Oritani, its shareholders, creditors or otherwise, or any terms, aspects, merits or implications of any employment, consulting, voting, support, shareholder or other agreements, arrangements or understandings contemplated or entered into in connection with the merger or otherwise. KBW’s opinion was necessarily based upon conditions as they existed and could be evaluated on the date of such opinion and the information made available to KBW through such date. Developments subsequent to the date of KBW’s opinion may have affected, and may affect, the conclusion reached in KBW’s opinion and KBW did not and does not have an obligation to update, revise or reaffirm its opinion. KBW’s opinion did not address, and KBW expressed no view or opinion with respect to:

 

   

the underlying business decision of Oritani to engage in the merger or enter into the merger agreement;

 

   

the relative merits of the merger as compared to any strategic alternatives that are, have been or may be available to or contemplated by Oritani or the Oritani Board of Directors;

 

   

the fairness of the amount or nature of any compensation to any of Oritani’s officers, directors or employees, or any class of such persons, relative to the compensation to the holders of Oritani common stock;

 

   

the effect of the merger or any related transaction on, or the fairness of the consideration to be received by, holders of any class of securities of Oritani (other than the holders of Oritani common stock, solely with respect to the exchange ratio as described in KBW’s opinion and not relative to the consideration to be received by holders of any other class of securities) or holders of any class of securities of Valley or any other party to any transaction contemplated by the merger agreement;

 

   

any adjustment (as provided in the merger agreement) to the exchange ratio assumed for purposes of KBW’s opinion;

 

   

the actual value of Valley common stock to be issued in the merger;

 

   

the prices, trading range or volume at which Oritani common stock or Valley common stock would trade following the public announcement of the merger or the prices, trading range or volume at which Valley common stock would trade following the consummation of the merger;

 

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any advice or opinions provided by any other advisor to any of the parties to the merger or any other transaction contemplated by the merger agreement; or

 

   

any legal, regulatory, accounting, tax or similar matters relating to Oritani, Valley, their respective shareholders, or relating to or arising out of or as a consequence of the merger or any related transaction (including the bank merger), including whether or not the merger would qualify as a tax-free reorganization for United States federal income tax purposes.

In performing its analyses, KBW made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, which are beyond the control of KBW, Oritani and Valley. Any estimates contained in the analyses performed by KBW are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by these analyses. Additionally, estimates of the value of businesses or securities do not purport to be appraisals or to reflect the prices at which such businesses or securities might actually be sold. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty. In addition, KBW’s opinion was among several factors taken into consideration by the Oritani Board of Directors in making its determination to approve the merger agreement and the merger. Consequently, the analyses described below should not be viewed as determinative of the decision of the Oritani Board of Directors with respect to the fairness of the exchange ratio. The type and amount of consideration payable in the merger were determined through negotiation between Oritani and Valley and the decision of Oritani to enter into the merger agreement was solely that of the Oritani Board of Directors.

The following is a summary of the material financial analyses presented by KBW to the Oritani Board of Directors in connection with its opinion. The summary is not a complete description of the financial analyses underlying the opinion or the presentation made by KBW to the Oritani Board of Directors, but summarizes the material analyses performed and presented in connection with such opinion. The financial analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex analytic process involving various determinations as to appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, KBW did not attribute any particular weight to any analysis or factor that it considered, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, KBW believes that its analyses and the summary of its analyses must be considered as a whole and that selecting portions of its analyses and factors or focusing on the information presented below in tabular format, without considering all analyses and factors or the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the process underlying its analyses and opinion.

For purposes of the financial analyses described below, KBW utilized an implied transaction value for the merger of $16.30 per outstanding share of Oritani common stock, or $744.5 million in the aggregate (inclusive of the implied value of in-the-money Oritani stock options), based on the 1.60x exchange ratio in the proposed merger and the closing price of Valley common stock on June 24, 2019. In addition to the financial analyses described below, KBW reviewed with the Oritani Board of Directors for informational purposes, among other things, an implied transaction multiple for the proposed merger (based on the implied transaction value for the merger of $16.30 per outstanding share of Oritani common stock) of 14.9x Oritani’s estimated calendar 2019 earnings per share (“EPS”) using the publicly available calendar year 2019 net income consensus “street estimate” for Oritani and a diluted Oritani share count as of March 31, 2019 per Oritani management.

Oritani Selected Companies Analysis. Using publicly available information, KBW compared the financial performance, financial condition and market performance of Oritani to 11 selected major exchange-traded banks which were headquartered in the Northeast or Mid-Atlantic United States and which had total assets between $1.5 billion and $10.0 billion and tangible common equity to tangible asset ratios greater than 10.0%. Merger targets and mutual holding companies were excluded from the selected companies.

 

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The selected companies were as follows:

 

Eagle Bancorp, Inc.

First Bank

Howard Bancorp, Inc.

Kearny Financial Corp.

Meridian Bancorp, Inc.

Metropolitan Bank Holding Corp.

  

Northfield Bancorp, Inc.

Parke Bancorp, Inc.

PCSB Financial Corporation

Provident Financial Services, Inc.

Western New England Bancorp, Inc.

To perform this analysis, KBW used profitability and other financial information for the latest 12 months (“LTM”) or most recent completed fiscal quarter (“MRQ”) available or as of the end of such periods and market price information as of June 24, 2019. KBW also used 2019 and 2020 EPS estimates taken from consensus “street estimates” for Oritani (utilized as noted below) and the 10 selected companies for which consensus “street estimates” were available. Where consolidated holding company level financial data for the selected companies was unreported, subsidiary bank level data was utilized to calculate ratios. Certain financial data prepared by KBW, and as referenced in the tables presented below, may not correspond to the data presented in Oritani’s historical financial statements, or the data used by J.P. Morgan presented under the section “– Opinion of Valley’s Financial Advisor,” as a result of the different periods, assumptions and methods used by KBW to compute the financial data presented.

KBW’s analysis showed the following concerning the financial performance of Oritani and the selected companies:

 

           Selected Companies  
     Oritani     25th
Percentile
    Median     Average     75th
Percentile
 

Core Return on Average Assets(1)

     1.22     0.74     0.91     1.07     1.39

Core Return on Average Tangible Common Equity(1)

     9.33     5.95     8.94     9.49     13.02

Net Interest Margin

     2.48     2.89     3.38     3.24     3.64

Fee Income / Revenue Ratio(2)

     4.0     5.9     9.1     9.4     11.5

Efficiency Ratio

     36.4     63.3     59.9     58.0     55.5

 

(1)

Core income excluded extraordinary items, nonrecurring items, gains/losses on sale of securities and amortization of intangibles.

(2)

Excluded gains/losses on sale of securities.

KBW’s analysis also showed the following concerning the financial condition of Oritani and the selected companies:

 

           Selected Companies  
     Oritani     25th
Percentile
    Median     Average     75th
Percentile
 

Tangible Common Equity / Tangible Assets

     13.02     10.20     10.34     11.93     13.38

Total Capital Ratio

     15.25     13.15     14.80     15.87     17.11

Loans / Deposits

     121.6     100.5     103.2     102.6     107.1

Commercial Real Estate Loans(1) / Total Risk Based Capital

     576     271     329     337     372

Loan Loss Reserve / Gross Loans

     0.81     0.71     0.84     0.87     0.98

Nonperforming Assets / Loans and OREO

     0.31     1.05     0.87     0.89     0.58

Net Charge-Offs / Average Loans

     0.01     0.04     0.01     0.02     (0.00 %) 

 

(1)

Regulatory definition excluded owner-occupied commercial real estate.

 

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In addition, KBW’s analysis showed the following concerning the market performance of Oritani and, to the extent publicly available, the selected companies (excluding the impact of 2019 EPS and 2020 EPS multiples for one of the selected companies, which multiples were considered to be not meaningful because they were greater than 30.0x):

 

           Selected Companies  
     Oritani     25th
Percentile
    Median     Average     75th
Percentile
 

One-Year Stock Price Change

     (5.5 %)      (18.3 %)      (15.4 %)      (14.6 %)      (10.6 %) 

One-Year Total Return

     1.4     (17.3 %)      (14.2 %)      (13.2 %)      (8.1 %) 

Year-To-Date Stock Price Change

     8.9     (2.2 %)      0.5     7.3     15.3

Stock Price / Tangible Book Value per Share

     1.36     1.19     1.28     1.36     1.48

Stock Price / 2019 EPS Estimate(1)

     14.6 x(1)      12.3     14.0     15.4     15.9

Stock Price / 2020 EPS Estimate(2)

     14.9 x(2)      10.9     12.2     14.3     14.3

Dividend Yield

     6.2     0.9     1.7     1.7     2.4

LTM Dividend Payout(3)

     84.0     16.3     24.8     27.2     41.5

 

(1)

Based on the calendar year 2019 net income consensus “street estimate” for Oritani and a diluted Oritani share count as of March 31, 2019 per Oritani management.

(2)

Based on the first two quarters of calendar year 2020 net income consensus “street estimates” for Oritani annualized and a diluted Oritani share count as of March 31, 2019 per Oritani management.

(3)

Excluded special dividends.

No company used as a comparison in the above selected companies analysis is identical to Oritani. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Valley Selected Companies Analysis. Using publicly available information, KBW compared the financial performance, financial condition and market performance of Valley to 14 selected major exchange-traded banks which were headquartered in the Northeast or Mid-Atlantic United States and which had total assets between $10.0 billion and $75.0 billion. Merger targets and mutual holding companies were excluded from the selected companies.

The selected companies were as follows:

 

Berkshire Hills Bancorp, Inc.

CIT Group Inc.

Community Bank System, Inc.

Customers Bancorp, Inc.

F.N.B. Corporation

Fulton Financial Corporation

Investors Bancorp, Inc.

  

New York Community Bancorp, Inc

Northwest Bancshares, Inc.

People’s United Financial, Inc.

Signature Bank

Sterling Bancorp

Webster Financial Corporation

WSFS Financial Corporation

To perform this analysis, KBW used profitability and other financial information for the latest 12 months or most recent completed fiscal quarter available or as of the end of such periods and market price information as of June 24, 2019. KBW also used 2019 and 2020 EPS estimates taken from consensus “street estimates” for Valley and the selected companies. Certain financial data prepared by KBW, and as referenced in the tables presented below, may not correspond to the data presented in Valley’s historical financial statements, or the data used by J.P. Morgan presented under the section “The Merger – Opinion of Valley’s Financial Advisor,” as a result of the different periods, assumptions and methods used by KBW to compute the financial data presented.

 

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KBW’s analysis showed the following concerning the financial performance of Valley and the selected companies:

 

           Selected Companies  
     Valley     25th
Percentile
    Median     Average     75th
Percentile
 

Core Return on Average Assets(1)

     0.83     0.96     1.12     1.15     1.38

Core Return on Average Tangible Common Equity(1)

     13.16     10.77     13.12     13.80     17.78

Net Interest Margin

     2.98     2.83     3.21     3.23     3.68

Fee Income / Revenue Ratio(2)

     11.8     13.7     22.0     21.5     24.3

Efficiency Ratio

     57.8     59.8     58.6     55.7     53.1

 

(1)

Core income excluded extraordinary items, nonrecurring items, gains/losses on sale of securities and amortization of intangibles.

(2)

Excluded gain/losses on sale of securities.

KBW’s analysis showed the following concerning the financial condition of Valley and the selected companies:

 

           Selected Companies  
     Valley     25th
Percentile
    Median     Average     75th
Percentile
 

Tangible Common Equity / Tangible Assets

     6.70     7.82     8.75     8.82     9.50

Total Capital Ratio

     11.37     12.95     13.42     13.92     14.57

Loans / Deposits

     102.1     94.0     98.5     100.6     107.6

Commercial Real Estate Loans(1) / Total Risk Based Capital

     395     154     231     284     375

Loan Loss Reserve / Gross Loans

     0.61     0.55     0.69     0.76     0.95

Nonperforming Assets / Loans and OREO

     0.69     1.08     0.65     0.79     0.49

Net Charge-Offs / Average Loans

     0.08     0.16     0.12     0.13     0.06

 

(1)

Regulatory definition excluded owner-occupied commercial real estate.

In addition, KBW’s analysis showed the following concerning the market performance of Valley and the selected companies:

 

           Selected Companies  
     Valley     25th
Percentile
    Median     Average     75th
Percentile
 

One-Year Stock Price Change

     (20.0 %)      (26.9 %)      (16.1 %)      (17.1 %)      (9.6 %) 

One-Year Total Return

     (16.6 %)      (25.7 %)      (13.3 %)      (14.7 %)      (6.4 %) 

Year-To-Date Stock Price Change

     14.8     2.2     9.5     8.9     12.8

Stock Price / Tangible Book Value per Share

     1.61     1.25     1.57     1.60     1.77

Stock Price / 2019 EPS Estimate

     10.9     10.4     11.1     11.9     12.2

Stock Price / 2020 EPS Estimate

     9.9     9.2     10.7     11.1     11.3

Dividend Yield

     4.3     2.1     3.2     3.1     4.2

LTM Dividend Payout

     45.8     23.6     41.4     40.8     52.9

No company used as a comparison in the above selected companies analysis is identical to Valley. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Selected Transactions Analysis. KBW reviewed publicly available information related to 23 selected U.S. bank transactions announced since January 1, 2016 with announced transaction values between $250 million and $2.0 billion and acquired company tangible common equity to tangible asset ratios greater than 10.0%.

 

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The selected transactions were as follows:

 

Acquiror

  

Acquired Company

CenterState Bank Corporation

Independent Bank Corp.

First Busey Corporation

WSFS Financial Corporation

Cadence Bancorporation

Allegiance Bancshares, Inc.

CenterState Bank Corporation

WesBanco, Inc.

Ameris Bancorp

Banco de Credito e Inversiones SA

Kearny Financial Corp.

CenterState Bank Corporation

Associated Banc-Corp

OceanFirst Financial Corp

Union Bankshares Corporation

Home BancShares, Inc.

Simmons First National Corporation

Independent Bank Group, Inc.

Collins Family Trust

Cathay General Bancorp

First Midwest Bancorp, Inc.

Chemical Financial Corporation

Old National Bancorp

  

National Commerce Corporation

Blue Hills Bancorp, Inc.

Banc Ed Corp.

Beneficial Bancorp, Inc.

State Bank Financial Corporation

Post Oak Bancshares, Inc.

Charter Financial Corporation

Farmers Capital Bank Corporation

Hamilton State Bancshares

TotalBank

Clifton Bancorp, Inc.

HCBF Holding Company, Inc.

Bank Mutual Corporation

Sun Bancorp, Inc.

Xenith Bankshares, Inc.

Stonegate Bank

Southwest Bancorp, Inc.

Carlile Bancshares, Inc.

Inter National Bank

SinoPac Bancorp

Standard Bancshares, Inc.

Talmer Bancorp, Inc.

Anchor BanCorp Wisconsin Inc.

For each selected transaction, KBW derived the following implied transaction statistics, in each case based on the transaction consideration value paid for the acquired company and using financial data based on the acquired company’s then latest publicly available financial statements prior to the announcement of the respective transaction and, to the extent then publicly available, EPS consensus “street estimates” for the first full calendar year following the announcement of the respective transaction:

 

   

Price per common share to tangible book value per share of the acquired company (in the case of selected transactions involving a private acquired company, this transaction statistic was calculated as total transaction consideration divided by total tangible common equity);

 

   

Tangible equity premium to core deposits (total deposits less time deposits greater than $100,000) of the acquired company, referred to as core deposit premium;

 

   

Price per common share to LTM EPS of the acquired company (in the case of selected transactions involving a private acquired company, this transaction statistic was calculated as total transaction consideration divided by LTM earnings); and

 

   

Price per common share to forward year estimated EPS of the acquired company in the 13 selected transactions in which consensus “street estimates” for the acquired company were then available.

KBW also reviewed the price per common share paid for the acquired company for the 15 selected transactions involving publicly traded acquired companies as a premium/(discount) to the closing price of the acquired company one day prior to the announcement of the acquisition (expressed as a percentage and referred to as the one day market premium). The resulting transaction multiples and premiums for the selected transactions were compared with the corresponding transaction multiples and premiums for the proposed merger based on the implied transaction value for the merger of $16.30 per outstanding share of Oritani common stock and using historical financial information for Oritani as of or through March 31, 2019, the estimated calendar

 

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year 2020 EPS for Oritani (calculated using the first two quarters of calendar year 2020 net income consensus “street estimates” for Oritani annualized and a diluted Oritani share count as of March 31, 2019 per Oritani management) and the closing price of Oritani common stock on June 24, 2019.

The results of the analysis are set forth in the following table (excluding the impact of the LTM EPS multiples for seven of the selected transactions, which multiples were considered to be not meaningful because they were negative or greater than 35.0x):