Merchants New York Bancorp, New York, which does nearly a third of its business lending to jewelers, is now a wholly owned subsidiary of Valley National Bancorp, Wayne, N.J. Less than 5% of Valley’s business is loans to the jewelry industry.
Valley recently acquired Merchants for $375 million in common stock. Some 18,647,543 shares of Merchants’ stock exchanged for 0.7634 shares of Valley common stock. Valley issued 14,235,534 shares of its stock in exchange for the outstanding Merchants shares. The combined banks have nearly $8 billion-$1.4 billion from Merchants-in assets and operate 124 branches in New Jersey and New York.
Similar lending philosophies and a focus on the middle market borrower helped unite the two banks. Merchants also wanted to add features, including mortgage services and in-house automatic teller machines, which it couldn’t offer as a ‘niche’ commercial lender.
Loan terms for jewelers won’t change, says Spencer Witty, chief executive officer of Merchants. The new, improved, and larger bank has no intention of ”getting risky.”
Gerald Lipkin, chief executive officer of Valley, says Merchants’ jewelry clients can look forward to a lending capacity five times greater than previously available. Merchants’ existing clients can buy larger sites and sell greater amounts of jewelry to mom-and-pop jewelers. Valley is prepared to take on larger jewelers with larger lending needs.
Three Merchants executives, including Witty, will sit on the new joint board of directors.