Ladies and gentlemen, thank you for standing by. Welcome to the Valley National Bancorp First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) I would now like to hand the conference over Ms. Dianne Grenz. Please go ahead, madam.

Good morning. Welcome to Valley’s first quarter 2012 earnings conference call. If you have not read the earnings release we issued earlier this morning, you may access it along with the financial tables and schedules for the first quarter from our website at valleynationalbank.com. Comments made during this call may contain forward-looking statements relating to the Valley National Bancorp and the banking industry. 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’d like to turn the call over to Valley’s Chairman, President and CEO, Gerald Lipkin.

Thank you, Dianne. Good morning and welcome to our first quarter earnings conference call. Valley reported first quarter net income of $34.5 million compared to $24.8 million in the prior linked-quarter. We are pleased with the financial results for the period although net income was negatively impacted by both non-cash trading losses and non-recurring State Bank merger charges. Alan will provide a little more color on each of those shortly. During the first quarter, we closed our State Bank acquisition and officially expanded the franchise into the Long Island market. We now operate 44 full service branches in the Boroughs and Long Island. Valley’s total deposits in this market now exceeds $2.8 billion and over one-third of the Valley’s entire C&I portfolio in summer sales in New York. Long Island’s demographics are similar to our Northern New Jersey market, and will provide an excellent opportunity for our customer-focused sale rep to cultivate both new and current customers. Similar to our previous (inaudible) into the New York market with our Merchants Bank acquisition in 2001, State Bank offered very little consumer-based products. This will be an area of focus for Valley in the future. We have begun to aggressively market Valley’s residential mortgage refinance program throughout the former State Bank branch network and anticipate introducing an enhanced low fixed-cost residential mortgage refinance program for your customers in the coming months. Currently, Valley’s New York residential mortgage refinance program reflects a flat fee of $1,999, which includes all Bank’s fees and titled insurance. Even at this price, we have begun to reduce initial consumer success on Long Island, as residential mortgage applications from that market exceeded 200 units in the first quarter. We anticipate a much expanded market penetration when we introduce Valley’s new lower-priced, enhanced product. From a commercial lending perspective,…

Thank you, Jerry. As indicated in the press release, my comments this morning reflect the 5% stock dividend declared on April 18, 2012 to be issued May 25 of 2012, as a result all share data has been adjusted. For the first quarter, Valley reported net income available to common shareholders of $34.5 million or $0.18 per share. Net income was negatively impacted by approximately $1 million or less than $0.01 per share due to the non-cash mark to market losses on Valley’s owned trust preferred securities targeted fair value. In addition the financial results for the quarter were influenced due to the integration in merger expenses associated with the State Bank Corp acquisition. Direct nonrecurring merger expenses associated with State added approximately $1 million to Valley’s first quarter noninterest expense. Additionally, first quarter noninterest expense included a significant amount of expenses that Valley anticipates eliminating through future cost saving measures. With the transferred value of all the former State Bank Back Office Operations in February, Valley expects many of the projected cost saves to materialize in the second quarter. The majority of cost saves will be recognized through employee salary attrition and the elimination of data processing expenses of which Valley projects will total approximately $1 million less in the second quarter than the expense recognized in the first quarter. For the full year of 2012, Valley anticipates realizing approximately 23% cost saves on the former State Bank’s noninterest expense base, increasing to approximately 27% in the annual periods thereafter. : For the investment portfolio, the impact was significant as the stated coupon rate on the investment portfolio of 4.02% was marked down to 3.08%. Although the purchased accounting mark positively affected tangible book value there is an equal and then offsetting negative impact, the net income and the…

Thank you. (Operator Instructions). The first question comes from Steven Alexopoulos of JPMorgan. Please go ahead, sir. Steven Alexopoulos – JPMorgan: Hi, good morning everyone.

Good morning.

Good morning. Steven Alexopoulos – JPMorgan: Maybe I’ll start following up on Alan’s comment that the expenses would come down around $1 million in 2Q. If we look at this quarter and take out the merger costs, we’re running on $93.5 million. Once the costs has fully in the numbers should that run rate be somewhere around $91 million, is that what you’re thinking?

That seems to be right. Steven Alexopoulos – JPMorgan: Okay. And now would that be by the fourth quarter or is that really we think about that in – maybe the early part of 2013?

Second quarter, that should be about the second quarter. Steven Alexopoulos – JPMorgan: You think it will be by second quarter. Okay. And what were the cost saves – I might have missed it, in this quarter?

Well, the total was 23% – at 23% annualized at this point. Steven Alexopoulos – JPMorgan: I got it. Okay, I got it, I missed that. And Alan, on the margin given all the moving pieces you have highlighted, how do we think about a base margin here heading into the second quarter?

We had to start with where we are. I think I try to keep telling everybody that there is a lot of moving parts, loan yields are down, investment yields are down, we keep working hard on the cost of funds to bring those down. I think in addition we’ve seen a lot of – seen some growth in non-interest bearing deposits, which has really helped us. So, the best I can tell you, Steve, is that we’re working in order to keep that margin as high as we can. Steven Alexopoulos – JPMorgan: Great. But then we work from the 370 or part of this quarter or are we starting second quarter at a different point just given there is a lot of moving pieces this quarter?

No, I think you got to started 370. Steven Alexopoulos – JPMorgan: Okay. Got you. And finally, Gerry I think I asked you every quarter for seeing any sign of refi wave of slowing, I’m going to ask you again.

Slightly in New Jersey, but I think New York and Long Island is going to more than pick that up, so I don’t think that over the next quarter or two we’re going to see much change unless interest rates make a move. Steven Alexopoulos – JPMorgan: Okay.

Having more and more people are waking up to the fact that if they haven’t already done so, they really will. Steven Alexopoulos – JPMorgan: All right. Okay. Thanks for all the color. I appreciate it.

All right.

Thank you the next question comes from Craig Siegenthaler from Credit Suisse. Please go ahead, sir. Craig Siegenthaler – Credit Suisse: Thank you. Good morning, everyone.

Good morning, Craig.

Good morning, Craig. Craig Siegenthaler – Credit Suisse: First question just kind of on your aggregate loan pipeline. If I look at it – if you guys look at first quarter versus fourth quarter, if you can provide any commentary there? And also, as you are looking at kind of early trends in the second quarter in April, what type of kind of lending activity are you seeing broadly in the second quarter versus the first quarter?

I think it’s just generally getting out on the street picking up business from our competitors that I said. I don’t think there has been a major shift on the part of our borrowers then suddenly wakening up and deciding they want to borrow money. I think it’s more of that we’re taking market share away from others. We try to give very close the best attention to our borrowers, high-level attention to our larger borrowers. And as a result, a lot of them have been referring friends to us and we’re picking up additional borrowers. So I’m encouraged by what I saw in the first quarter coming out of State Bank. Hopefully that trend that we’re seeing will continue into the second quarter and throughout the rest of the year, very positive. Craig Siegenthaler – Credit Suisse: And then the positive kind of point you’re seeing out of State Bank, how much is it coming from products that State Bank wasn’t allowed to offer 12 months ago – either the notional size is too larger or they weren’t large enough in the consumer area?

Nothing yet.

Nothing particularly large, a little bit on the (inaudible) We had a couple of borrowers who would come to us because State Bank couldn’t accommodate what their needs were in the past. But for the most part it’s just more of the same, the same borrowers coming into us, not because they could not come to State, but I think the confidence that they’re dealing with a larger bank is a more comfort to do more of their borrowing from us. Craig Siegenthaler – Credit Suisse: And then just one final question. Your rates are really low which makes a lot of areas of potential securities purchases, pretty unattractive. And then commercial demand arguably isn’t necessary strong right now in most areas. But then you had a lot of refi. So how does resi mortgage continue play a role in terms of your loan portfolio?

It’s been a big helpful for us. Because if you look at what a mortgage-backed security would produce in the way of yield, it probably talking in the high 2s, and we could hold a resi mortgage at least a 100 basis points and maybe more higher than that, it’s an attraction to us to let the mortgage-backed security portion of our portfolio go down and allow the residential mortgage portfolio to go up. Quite frankly, from an asset quality standpoint, we never had serious problems with the residential mortgage portfolio. Our delinquencies today are a fraction, a small fraction of the national average as far as delinquencies are concerned. So we’re comfortable in our underwriting standards in holding in portfolio a larger portion of the resi originations. That being said, if you look back historically at what our combined resi portfolio and mortgage back portfolio were, if you look back 10-15 years ago to where they are today, we have not – we are not exceeding the point of where they were at the high point in fact we’re down from what the combined figure was 200%. Craig Siegenthaler – Credit Suisse: Got it. All right great. Gerry, thanks for taking my question.

Sure.

Thanks very much. The next question comes from Kenneth (inaudible) from Morgan Stanley. Please go ahead, sir. Kenneth – Morgan Stanley: Hi, thanks. Just a little more on the resi side, can you just remind us the duration of the new mortgages you are putting on and I thought I heard something about moving more into a fixed rate products going forward, (inaudible). Do you see that (inaudible)

The duration – it’s kind of hard to project because you don’t really know. It depends how long interest rate stay low – we are figuring that the duration will probably be in the 4 to 5 year range – Kenneth – Morgan Stanley: But are these – I’m sorry, are these like?

But they could be 10 years. But people don’t stay in the house for 30 years, so while it’s a 30-year product, it’s a rear mortgage that’s faced on the books to 30 years historically. Kenneth – Morgan Stanley: Okay. I think that 30 year was what I was getting at, probably in this book there, but okay.

Yeah, it’s rear that a mortgage stays that long I mean historically it was six to seven years I think it was. And I don’t know going forward – someone have to achieve mortgage loan, their spouses have a hard time convincing than they order re and buy a new home when they have a low interest rates and now rates are up, so that they should sell. That being said people do move, unfortunately they die, they move, they change their jobs, so mortgages don’t stands of the 30 years. Kenneth – Morgan Stanley: Understood, okay. And then on just a little bit of a Long Island, are your plans are kind of expand into Long Island. Is that something you guys can do, they feel comfortable we can do on our organic basis, are you looking more for smaller roll ups to there to accelerate your expansion?

We look with equal figure to both, okay, if there is an opportunity they acquire a franchisee on Long Island that we feel will fit into our growth strategy, we’d be happy to do the acquisition there. In the absence of that, they don’t know. Kenneth – Morgan Stanley: Understood okay. All right, perfect. Thank you.

All right.

Thank you the question comes from (Inaudible). Please go ahead.

Good morning.

Good morning.

Good morning.

Alan, maybe just sharpening the discussion a little bit around expenses, maybe would you mind giving us some color around impact of seasonal items and non-interest expenses quarter, it looks like common benefits was a little higher than we were looking for, and maybe quantify if you can the impact of seasonality and occupancy expense?

Yeah, in occupancy just I start down for a moment, obviously that’s down just based on the fact that we included in there things like snow plough removal and we had a almost non-existent during this quarter so as compared to last quarter. So if you are looking from quarter to – year-over-year you would see that that would be down probably significantly. That’s a seasonal item that I would say that the rest of the quarters other than the occupancy being up for new rent that for new branches that we’ve taken over from State and so forth and the maintenance on those things are going to go higher than where we were in quarters 2, 3 and 4 last year. In terms of salaries and benefits, our own salaries we figured roughly about 2.2% over the prior year and then there was about a $3 million increase because of the State Bank and on just salaries alone in addition because of the way payroll taxes were up because of that. So all of those kind of go hand-in-hand. Additionally, pension expense is going up for everybody that runs a pension plan as compared to last year. So there is a lot of benefit expenses at the moment that are higher, some of those will go back down as we consolidate in the State Bank people and in areas less people are here versus what we see in the first quarter. So it’s obviously running higher in this first quarter than we will see in future quarters.

On the FDS, no removal expense in there? How much is that?

Yeah, on the top of my head, I don’t know what it is. Yeah, it could be about a $1.5 million.

Okay, great. And then in terms of the securities portfolio, the securities book, how would you characterize the health of the trust preferred portfolio at this point or maybe more specifically your level of concern around having to take potentially additional OTTI charges later this year.

I think we’re pretty comfortable with what we have at the moment. For the most part, most our trust preferred securities are from the biggest name banks around the country. Some of them were roll-offs from other banks they acquired, so we’re pretty comfortable with those. I can’t obviously project what’s going to happen as the year moves up, but I think we’re pretty comfortable with what we’re holding. I mean there is always the possibility as in small OTTI and maybe some PMBSs or whatever as we go through the year, but I don’t expect anything major at this point.

Okay. Great. Thanks guys.

Thank you. The next question comes from the Dan Werner from Morningstar Equity Research. Please go ahead. Dan Werner – Morningstar Equity: Good morning.

Good morning.

Good morning. Dan Werner – Morningstar Equity: I wanted to ask about the loan acquisition for $112 million. You said it’s from $185 borrowers, were those all originated by another local bank?

Yes. Dan Werner – Morningstar Equity: Okay. Do you anticipate any additional purchases from this source going forward or is just kind of a one-off?

It is a one-off. Dan Werner – Morningstar Equity: Okay. And then looking at the average balance sheet in terms of the long-term borrowings and the footnote says that the trusts are included. If you took out those trusts, about what would the – would it move the needle much on the average rate, as far as the average cost of borrowings?

It would bring it down somewhat sure, there is no doubt about it. I mean there is almost $200 million in there of higher than the average balance year of 4.3% on long-term borrowings. So they are probably closer to 7%. Dan Werner – Morningstar Equity: Okay. And then you talked about the refinancing that you’ve done over the last two quarters, any opportunities to do anymore of that going forward?

No, we continually look at it. As of right now, we don’t have anything specific in mind, but we will obviously as this low rate environment continues, we will continue to look at that. Dan Werner – Morningstar Equity: Okay. And then lastly, you talked about the multi-family growth in the quarter in the commercial real estate. Can you kind of give me a sense of how much growth you saw from fourth quarter to first quarter and how large book of business that is?

First of all, those mostly are underlying co-op loans Dan Werner – Morningstar Equity: Yeah.

With a very, very low – traditionally they can be 10% loans to value.

7%.

7% on average is the loan to value – and those brings couple of hundred million.

250.

250 million. Dan Werner – Morningstar Equity: Okay.

Understand (inaudible) it’s a misconception that we’re heavily into apartment lending and that has not been the case. Dan Werner – Morningstar Equity: Okay.

So I tried to clarify that. Dan Werner – Morningstar Equity: All right. Thank you.

Thank you. The next question comes from Collyn Gilbert from Stifel Nicolaus. Please go ahead. Travis Lan – Stifel Nicolaus: Thanks. This is actually Travis Lan filling in for Collyn. Good morning, gentlemen.

Hi, good morning.

Good morning. Travis Lan – Stifel Nicolaus: I believe the initial expected merger charges with State were about $21 million and it looks like you recognized $3.5 million, so are there any merger charges left to be taken? And if so, kind of what’s the timeline?

Yeah, a lot of those actual charges came through on State’s books before we closed. Travis Lan – Stifel Nicolaus: Okay. So you would...

That’s why you didn’t see anything major. There may be small amounts coming through, but at this point most of its been recognized either on our books last year or their books last year. Travis Lan – Stifel Nicolaus: Got you. Thanks. And then exclusively acquired loans, or I guess, can you quantify the commercial pipeline right now and then kind of what’s the slip between legacy Valley and State? So in other words, kind of what’s the contribution on the commercial side you are seeing from State with kind of one quarter and above?

We’re beginning to see some very nice activity from State. On a weekly basis we are looking at new products of a reasonable size. There is a fairly decent pipeline in the C&I portfolio in New Jersey and the commercial mortgage pipeline continues to be very active. Travis Lan – Stifel Nicolaus: And then last one I may have missed it, but do you have an expected timeline to get the low cost refinance program up and running in Long Island?

We expect to do it by the end of this quarter. Travis Lan – Stifel Nicolaus: Got you, all right. Thank you very much.

Thank you the next question comes from Nancy Bush from NAB Research. Please go ahead. Nancy Bush – NAB Research: Good morning, guys.

Good morning, Nancy. Nancy Bush – NAB Research: I have a big picture question for you and I’m sure it’s a big picture that you would live everyday but in looking at your progression of earnings over the past several quarters and excluding fourth quarter where you had some special items, you kind of been plus or minus $0.20 for a while now. And I guess given that we’ve got this interest rate environment that looks like it’s going to hang around for this a way longer, I mean, are there enough levers to pull there, to kind of get you out of this earnings better?

Well, I think a couple of other things we did, this quarter for example the loan purchase which didn’t really impact us in this quarter, well, in the next quarter. I think a lot of the savings on State Bank’s are going to start the materialize which will help us going forward. One never knows so when you are operating in this prolonged interest rate situation on what that impact is going to be. That’s one reason, we don’t project, we don’t start in some income. We will – it’s our job to work as far as we can to get as much income as we can.

I think, Nancy, the only of the thing I could say is that the obvious to me is to grow the balance sheet. And I think that’s what our key drivers that to be, we’ve got to get more loans into door and I think coming up with something like state and this other acquisition. We did all of those things brining more loans in the doors as long as our legacy customers that we have that we hear before there was acquisitions. So as long as we can continue to drive those things, we will continue to see earnings come in, at least it is good, if not better than they are.

Lot of (inaudible) regulators, not only us but I think all banks are impacted by that. In the last dozen years or so, I think we have identified somewhere in the $40 million to $50 million range the expenses that have grown as a result of the regulators FDIC insurance, everything else things that we didn’t pay for them. They keep adding it on to us. That impacts our earnings growth unfortunately. Nancy Bush – NAB Research: Just one follow-up, if we do get a – should we get a change at the top in November in Washington, do you think that really would make any difference, Gerry, to the regulatory outlook or is so much stuff baked in right now that there really wouldn’t be that much change?

I wish I knew the answer to that. I would hope that if there were a change that the incoming administration would look more favorably on banks as a whole and stop blaming the entire industry for the misdeeds of the few. Remember, it wasn’t the industry that all did subprime lending. It was a handful of institutions and many of them weren’t even banks, they were mortgage companies. But yet we have legislation that came out of Washington that was quite (inaudible) linked to all banks. We need somebody who is going to stand up and say wait a minute, it isn’t the industry that did this, it was a handful of companies that did this and stop punishing the industry because all that does is come back and punish the consumer. The industry is trying to make up for things like the Durbin amendment. Where the consumer got free checking in the past, it’s going to be a rare think to get free checking because that’s the only place the industry can go into make pull those revenue, unintended consequences? Nancy Bush – NAB Research: All right. Thank you.

(Operator Instructions). Our next question is from (inaudible). Please go ahead.

Good morning, gentlemen. How are you?

Good morning.

A quick question for Alan. Alan, you made a filling about two to three weeks ago. Most of that potential issuance, is that going to be through acquisition, is that going to be for repaying of your existing preferred, could you shed some light on that?

I don’t think we have any specific plans, it’s just the shelf that we have filed for when and if decide to need it.

Okay. All right. Thank you.

You are welcome.

Thank you very much. We have no further questions at this time. So I hand it out to management.

Thank you for joining us on conference call and have a nice day.