Valley National Bancorp, headquartered in Wayne, New Jersey, is a New Jersey
corporation organized in 1983 and is registered as a bank holding company with
the Board of Governors of the Federal Reserve System under the Bank Holding
Company Act of 1956, as amended (“Holding Company Act”). Valley
owns all of the voting and common shares of GCB Capital Trust III and State
Bancorp Capital Trusts I and II through which trust preferred securities were
issued. These trusts are not consolidated subsidiaries.
Valley National Bank is a national banking association chartered in 1927 under
the laws of the United States. Currently, the Bank has 227 branches serving
northern and central New Jersey, the New York City boroughs of Manhattan, Brooklyn,
Queens and Long Island, and Florida. The Bank provides a full range of commercial,
retail, insurance and wealth management financial services products. The Bank
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. The Bank also
provides certain international banking services to customers including standby
letters of credit, documentary letters of credit and related products, and certain
ancillary services such as foreign exchange, documentary collections, foreign
wire transfers and the maintenance of foreign bank accounts.
Subsidiaries include:
an all-line insurance agency offering property and casualty, life and health
insurance;
asset management advisers which are Securities and Exchange Commission (SEC)
registered investment advisers;
title insurance agencies in New Jersey, New York and Florida;
subsidiaries which hold, maintain and manage investment assets for the Bank;
a subsidiary which owns and services auto loans;
a subsidiary which specializes in health care equipment lending and other commercial
equipment leases;
a subsidiary which owns and services existing general aviation aircraft loans
and existing commercial equipment leases; and
a subsidiary which owns and services New York commercial loans.
The 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 their 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.
From time to time, the Bank makes bulk purchases of commercial real estate
loans, residential mortgage loans, automobile loans, and other loan types, originated
by, and sometimes serviced by, other financial institutions. The purchase decision
is usually based on several factors, including current loan origination volumes,
market interest rates, excess liquidity, our continuous efforts to meet the
credit needs of certain borrowers under Community Reinvestment Act, as well
as other asset/liability management strategies.
Effective risk management is critical to our success. Financial institutions
must manage a variety of business risks that can significantly affect their
financial performance. Significant risks we confront are credit risks and asset/liability
management risks, which include interest rate and liquidity risks. Credit risk
is the risk of not collecting payments pursuant to the contractual terms of
loan, lease and investment assets. Interest rate risk results from changes in
interest rates which may impact the re-pricing of assets and liabilities in
different amounts or at different dates. Liquidity risk is the risk that we
will be unable to fund obligations to loan customers, depositors or other creditors
at a reasonable cost.
Valley’s Board performs its risk oversight function primarily through
several standing committees, including the Risk Committee, all of which report
to the full Board. The Risk Committee assists the Board by, among other things,
establishing an enterprise-wide risk management framework that is appropriate
for Valley’s capital, business activities, size and risk appetite. The
Risk Committee also reviews and recommends to the Board appropriate risk tolerances
and limits for credit, compliance, interest rate, liquidity, operational, strategic
and price risk (and ensures that risk is managed within those tolerances), and
monitors compliance with laws and regulations. With guidance from and oversight
by the Risk Committee, management continually refines and enhances its risk
management policies and procedures to maintain effective risk management programs
and processes.
