Ladies and gentlemen, thank you for standing by and welcome to the third quarter 2008 earnings release conference call. At this time, all participants are in a listen-only mode. Later, we’ll conduct a question-and-answer session and instructions will be given at that time (Operator Instructions). As a reminder, this conference is being recorded. I would like to turn the conference over to our host, Director of Shareholder and Public Relations, Ms. Dianne Grenz. Please go ahead.

Thank you, and good morning. I would like to thank everyone for participating in Valley’s third quarter 2008 Earnings Call both by telephone and through the webcast. If you have not received the earnings release we issued earlier this morning, you may access it as well with the financial tables and schedules from our website at valleynationalbank.com by clicking on the shareholder relations link. Also, before we start, I would like to mention that comments made during this call may contain forward-looking statements relating to the banking industry and to Valley’s National Bancorp. Valley encourages participants to refer to our SEC filings including those found on Form 8-K, 10-K and 10-Q for a complete discussion of forward-looking statements. And now I turn the call over to our Chairman, President and CEO, Gerald Lipkin.

Thank you, Dianne. Good morning and welcome to our third quarter 2008 earnings conference call exclusive on impairment and realized loss on Fannie Mae and Freddie Mac perpetual stock, which we'll discuss. We are pleased with our quarter results. Our avoidance of subprime mortgages, SIVs and other forms of exotic high risk financial instruments allowed us to produce consistent results in a very tumultuous market. Without the charge, Valley's fundamental business performance and core operating earnings for the quarter were strong and in line with our expectations reaffirming the fact that all financial institutions are not experiencing significant asset deterioration. Our core adjusted return on average tangible equity was 23.92% for the quarter compared to 20.18% in the year ago period. Our core adjusted return on average assets and efficiency ratios were all in line with Valley's historical averages and actually reflected an improvement from the second quarter of 2008. Our operating earnings for the quarter exclusive of Fannie Mae and Freddie Mac charges were $47.7 million or $0.35 per fully diluted share. The linked quarter increase in earnings is mainly derived from strong loan growth coupled with an expansion of the net interest margin from 3.48% to 3.64%. As I mentioned earlier, and as we have preliminarily disclosed in Valley's Form 8-K on September 4th, 2008, during the quarter Valley incurred a net after tax charge of $44.1 million associated with 12 separate Fannie Mae and Freddie Mac perpetual preferred securities. We are obviously disappointed with the governments’ decision to forgo their implied guarantee on these securities and suspend their dividends. While both Fannie Mae and Freddie Mac are not in bankruptcy or receivership and may in the future resume paying the dividends, accounting guidelines require us to write-down the value of these investments at this time. Nevertheless, our…

Thank you, Jerry. Good morning, as indicated earlier in Jerry’s comments an exclusive of the impact of the Fannie Mae and Freddie Mac preferred securities. We are quite pleased with Valley’s third quarter core operating results. Valley’s conservative lending philosophy, coupled with our balance sheet management strategies, have proved valuable in creating and preserving the shareholder value, while providing a foundation and opportunities with which to capitalize on current market conditions. Reported net income for the quarter was $3.6 million, or $0.03, per diluted share and included a number of significant items which impacted the results. Also affecting operations in the third quarter was the acquisition of Greater Community Bancorp. While the newly issued over $8.7 million shares of Valley stock to Greater Community Bancorp shareholders are immediately added to Valley’s outstanding share account. Many of the cost saves and synergies anticipated from the merger will not be realized until the fourth quarter of 2008 and into the first quarter of 2009. In August, we converted all of Greater Community Banks back office operations and presently run the entire bank on one network managed and operated by Valley. Until the completion of the combined back office functions, many of the redundant operations at Greater Community were necessary resulting in the third quarter non-interest expense, which should decline in the fourth quarter of 2008. On a sequential quarter basis the net interest margin expanded 16 basis points in addition to the 13 basis point increase in the second quarter. The increase is mainly attributable to a reduction in the cost of deposits and borrowings combined with higher new loan origination rates which exceed the existing portfolio. Additionally, $25 million of federal home loan bank advances were prepaid during September, resulting in a one-time reduction of interest expense equal to $1.8 million,…

Thank you (Operator Instructions). Our first question comes from Morgan Stanley's Ken Zerbe. Please go ahead, sir.

Thanks. The first quarter has been increasing funding through CDs, but a number of firms this quarter have seen a decline in the core checking and savings and they have been offsetting through CDs and it seems the Valley is no exception there. Can you just talk about A, I guess the duration of the CDs that you’re putting on? And how sticky those are? And this is something that is sustainable at where you want to be over the long-term by shifting more into CDs? Thanks.

We always look to bring in the core deposits as our first source of funding. We like to match funds against our loan portfolio or assets to the extent that we can. To the extent we get in longer term CDs then we are happier because most of our term lending is for more than a three or six month period. The competition in our area continues to be very stiff especially with regards to certificates and deposit and the pricing that we’re facing is what we're adjusting our rates too. I'd be very happy if the competition in this area, where to drop a bit and we’ll be able to drop it. We did experience, as I'm sure many financial institutions did, a lot of concern on depositors with regard to their deposits being in amounts in excess of FDIC insurance and initially we did start to see some withdrawals of funds. That seems to have reversed itself though ever since the FDIC has increased its limits I think there is more comfort on the street, I hope that when [the street] recharge numbers and they see the level of our performance that will further fortify the confidence of the depositor base and we'll continue to see deposit inflows.

Then what was the duration of the CDs you’re putting on during the quarter, the average duration?

Nine months is probably on the average.

I see. Okay. The second question, I had, was under the assumption that where the de-novos of your auto portfolio is still holding up very well relative to the industry. I guess, when you look going forward, I mean, obviously the economy is weakening. What do you look at that’s being sort of the potential drivers of that? I mean is it just as easy as raising unemployment, if that goes up by 100 basis points then auto your losses are likely to pickup or are there other things that you also look out for?

I think you have to look at the geography of where we do most of our lending. People need their car to get back and forth to work. They need their car for survival. It’s not a luxury item. So I think the fact that they continue to pay is heavily driven by that factor. We do look to make our loans to people, who have strong FICO credits, strong clear TRW Experian credit reports. Also we’re seeing the price of gasoline drop materially in New Jersey and particularly the price of gasoline since we’re lot lower than the rest of the country, where we've been well below $3 for sometime now. So I think that's what helping it. But I think most of it has to do with how we underwrite. I think that has more to do with the fact that our loans tend to perform.

Great. All right. Thank you.

Thank you. (Operator Instructions) And our next question comes from FTN Midwest Securities, Peyton Green. Please go ahead Sir.

I was wondering if you could comment maybe on how your collection process is a little different maybe because it seems like there is a lot of art in getting paid back on loans, so….

This is Jerry. I’m with the bank for almost 34 years. We’ve always had more people collecting loans and making loans. The squeaky wheel is one that gets the [large]. We jump right on a case if somebody goes couple of days delinquent. We’re already on the case. The card has been setout there very long. We’ll reposess the card certainly by 60 days and maybe in some cases 45 days. So, we really monitor it very closely. Again, it’s grinding our business; you’ve to keep making phone calls, getting in touch with the borrowers.

Okay. And then on the commercial end, you are not seeing anything not necessarily in non-performing obviously, but in terms of your credit classifications are you seeing any change in grades that concerns you more about the credit outlook six to nine months down the road?

No, no.

Okay.

Our experience has really been in fact and I said this repeatedly that we’re facing more a crisis of confidence than anything else. The economy in our part of the world still is pretty robust. We’ve got rising unemployment, but you’ve to look at what levels. I was at a restaurant in New York City last night and it’s a pretty big restaurant and they didn’t have an empty table. So people are still going out. They’re still spending money in this part of the country.

Okay. Going forward and at least the quarter go anyway, there seem to be a pretty good opportunity for you all to take business just because (inaudible) turned off in a lot of places, is that still trading?

That is very true.

Okay.

More so now than I think, we call in the last 15 years?

Okay. And I guess, have you all changed your underwriting criteria or is it it’s just the markets move towards to you?

No. The market moves to us. We’ve continued to take good care of our existing customers. A lot of times people are having problems with banks they talk to their friends and they say Jerry we bank at Valley and they never told me no. When I needed money obviously as long as the customer has the capacity to handle the credit, we’re anxious to lend them the money.

Okay. All right. Great. Thank you.

Thank you. And our next question comes from Sandra Osborne of KBW. Please go ahead.

Thanks. I was just wondering if you could talk briefly about the sustainability of the net interest margins especially given the limited pricing flexibility that you have in deposits and also the….

That’s a good question because what we’re seeing now is return to rational pricing on the asset side, while we’re still facing a lot of competition on the deposits and funding side for rates. We’re seeing now a much better margins coming in our loans even above the higher pricing of deposits. The marketplace is starting to price risks back into loans again and we’re starting to see a much more rational pricing.

Should the better asset yield completely mitigate deposit pricing?

Well, it is going to largely mitigate it. I think there is no doubt about it. And remember that even in the environment, we just coming through, where rates were unreasonable on the deposit side from some of the depository institutions out there. Our margins still increase. So I think we’ve already seen that. I think if anything, we might see some of those deposit pricing start to come down as we go further out into the end of the year and into '09. So I think the margin should hold up.

Right. That's all I have. Thanks.

Thank you. We have no more questions in queue. Please continue.

Well, if there are no other questions, we thank everybody for tuning in on our comments today. I look forward to speaking to you at the end of next quarter.

Thank you. Ladies and gentlemen this conference will be available for replay after 1 pm Eastern Time today through the midnight October 30th, 2008. You may access the AT&T replay system by dialing 1-800-475-6701 and entering the access code 960018. International participants may dial 320-365-3844. Those numbers again are 1-800-475-6701 and 320-365-3844, access code 960018. And that does conclude our conference for today. Thank you for your participation and for using AT&T Executive Teleconference Service.