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Valley National to Sell & Leaseback Properties, Cut 60 Jobs

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Valley National Bancorp (VLY - Free Report) recently announced a deal to sell and leaseback 29 “currently owned” properties (consisting of one corporate location and 28 branches), for roughly $107 million. Further, the company plans to cut nearly 60 corporate jobs to improve operating efficiency.

Valley National expects the financial impact of the above-mentioned decisions to be slightly accretive to earnings over the first full year of the transactions. This will exclude severance charges likely to be incurred by the company.

Valley National projects a pre-tax gain of nearly $81 million in the sale-and-leaseback transaction, which is anticipated to close in the first or second quarter of 2019. The transaction is subject to due diligence on the identified properties.

Additionally, the company's intention to eliminate jobs will lead to cost savings, with majority of these to be recorded in the second quarter of 2019. Further, the bank expects annualized salary and benefit expenses related with the job cuts to be more than $5 million.

Valley National’s CFO, Alan Eskow, stated that the properties identified in the sale-and-leaseback transaction fit within the company’s long-term strategic plan, as well as the previously-announced Branch Transformation.

Further, the bank is aimed at achieving efficiency ratio of less than 51% by 2020 through Branch Transformation.

Valley National’s shares have lost 7.4% over the past six months compared with the industry’s decline of 8.8%.

 

Valley National currently carries Zacks Rank #4 (Sell).

Stocks to Consider

Atlantic Capital Bancshares, Inc. sports a Zacks Rank #1 (Strong Buy), at present. Its shares have rallied 8.3%, in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Currently, Community Bank System, Inc. (CBU - Free Report) carries a Zacks Rank #2 (Buy). Its shares have appreciated 18%, in a year’s time.

Camden National Corporation (CAC - Free Report) currently carries a Zacks Rank of 2. Its shares have gained 4.7%, over the past year.

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