WAYNE, N.J., June 2 /PRNewswire-FirstCall/ -- Valley National Bancorp (NYSE: VLY)('Valley'), the holding company for Valley National Bank, announced today that it has received approval from the U.S. Department of the Treasury for its request to redeem $75 million of Valley's $300 million in Series A Preferred Stock issued to the Treasury pursuant to the Capital Purchase Program. On June 3, 2009, Valley will pay approximately $75.2 million to the Treasury to repurchase the preferred stock, including accrued and unpaid dividends for these shares. Valley's redemption of the shares is not subject to additional conditions or stipulations from the Treasury, including the issuance of additional capital.

Prior to making the decision to partially repurchase its outstanding preferred shares and without direction from the Treasury, Valley performed a rigorous stress test on its balance sheet and earnings. Based on the results of the stress test, management believes that Valley is well positioned to withstand current and future economic challenges. Nevertheless, Valley's management and board of directors believe that an incremental repayment at this time rather than a full repayment of the Capital Purchase Program funds is prudent based upon today's unpredictable economic environment. As previously disclosed in its bank holding company regulatory reports, Valley has a substantial amount of cash available for future repayments of the Capital Purchase Program funds.

'We are pleased with the Treasury's approval, without any stipulations, of our request to partially repurchase 25 percent of the outstanding preferred shares,' remarked Gerald H. Lipkin, Chairman, President & CEO of Valley National Bancorp. He added, 'We originally entered the Capital Purchase Program as an insurance policy against the uncertainties facing the U.S. economy. At that time we felt that by adding capital to Valley, we could meet the challenges of those uncertainties from a position of strength at a relatively low cost. We remain well aware of the risks that remain in this severe economic downtown, and at this time, have not requested permission from our regulators or the U.S. Treasury to repurchase the remaining preferred shares. Management will continue to assess the changes in the economic environment, Valley's credit risk, capital position and other factors prior to any future redemption requests.