Valley Chases Wealthy to Boca in Year’s Biggest Bank Deal

Valley National Bancorp (VLY), the New Jersey-based lender, will buy Florida’s 1st United Bancorp for $312 million in stock in the biggest U.S. bank takeover announced this year.

Stockholders of 1st United will receive 0.89 of a share of Valley, the companies said today in a statement. The deal will help Valley cuts costs and gain access to a growing population including people who have moved from the New York metropolitan region and already know Valley’s brand, Chief Executive Officer Gerald Lipkin said in an interview.

Valley will look for more targets in New York and Florida as it seeks to expand lending, Lipkin said. Suitors have said they’re holding back on bids for lenders because of new U.S. rules that raise costs, and the fate of M&T Bank Corp.’s acquisition of New Jersey’s Hudson City Bancorp, which is still pending after more than 18 months of scrutiny from regulators.

“We are gaining entree into a pure growth market at pricing multiples far more favorable than those we believe are available for desirable acquisition targets in Valley’s current New Jersey or New York footprint,” Lipkin, 73, said during a conference call with investors.

The combined company would have 225 branches and more than $18 billion in assets, according to the statement. Valley is based in Wayne and has 204 outlets in central New Jersey and New York’s Manhattan, Brooklyn, Queens and Long Island, while 1st United is based in Boca Raton with 21 branches.

“Who’s moved there? It’s the wealthy people,” Lipkin said in a phone interview. “It’s the guy who relocated his business there.”

Shares of 1st United advanced 9.7 percent to $8.02 at 12:44 p.m. in New York, while Valley fell 2.6 percent to $9.51.

To contact the reporter on this story: Craig Giammona in New York at cgiammona@bloomberg.net

To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net Rick Green

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