S&P could lower Valley National

Standard & Poor's said it placed its BBB+ issuer credit rating on Valley National Bancorp (VLY) and its A-/A-2 issuer credit ratings on Valley National Bank on CreditWatch with negative implications.

The CreditWatch placement follows VLY's announcement that it entered into an agreement to acquire CNLBancshares Inc., a $1.3 billion bank holding company headquartered in Orlando in a stock transaction valued at $207 million.

"Although the planned acquisition is not large, it follows the recent purchase of $1.7 billion 1st United Bancorp of Boca Raton, Fla. and is further evidence of VLY's commitment to a much larger presence in Florida," S&P credit analyst Richard Zell said in a news release.

"Pro forma, we expect that the Florida loan book will represent approximately 13% of total loans. However, we believe that VLY will likely use the increased presence in Florida to grow the bank organically and will probably make further acquisitions in Florida. We expect that, longer term, the credit exposure in Florida will rival the current exposures in each of New Jersey and New York, a significant and relatively recent change in VLY's growth strategy."

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