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Five analysts and top management from twenty-three sector firms examine the Financial Services sector in this special Tucker Anthony Sutro Fifth Annual Bank & Thrift Conference issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info422.htm

TWST: Could we begin with a brief overview of the Valley National (NYSE:VLY)?

Mr. Lipkin: The company is a commercial bank, founded in 1927. It has served the northeastern New Jersey marketplace ever since its formation. The bank today has 118 offices in northern New Jersey, serving 79 communities and seven offices in Manhattan. We serve a little over 425,000 households and currently have in excess of 8.1 billion in assets. We are listed on the New York Stock Exchange as NYSE:BLY and the company has had 74 consecutive years of profitable operations without ever having a loosing quarter. We increased our cash dividends 32 out of the last 33 years and we currently pay $1.06 a share.

TWST: Could you give us the recent financial history and the important milestones there?

Mr. Lipkin: It has just been a steady increase. Last year, the bank, adjusted for the acquisition of Merchants Bank, earned $1.67 a share. It had an ROA of 1.72 and an ROE of 20.28. This year for the first six months on an annualized basis we have an ROA of 1.77 an ROE of 20.72 and our earnings per share for six months were 89 cents.

TWST: So, that puts you above the industry standard by the sounds of it.

Mr. Lipkin: Yes, in fact since 1981 the lowest ROA is around 1.29%. The lowest ROE we have had since 1981 was 14.54%. For 10 of the 20 years we were in excess of 20%.

TWST: Looking at the footprint that you have, the 79 communities you serve, what are the characteristics and demographics that impact your business?

Mr. Lipkin: Northern New Jersey is the single most densely populated area on earth. There are more people per square mile in northern New Jersey than there are in India, China, Japan or anyplace else. We have the highest median family income in the United States in that area. So, we serve a very densely populated and affluent area, which is not dominated by any single industry. It is economically diverse and has a wonderful labor market. Its employment base is stratified from everything from unskilled to blue collar to white collar and executive. It is a very highly educated area and is continuing to grow. We have a 5.6% market share in northern New Jersey, which gives us a 94.4% growth potential. We service a population just in northern New Jersey of over five million people. There are more people who live in our trade area than reside in 32 of the 50 states, all within 40 miles of our headquarters.

TWST: What about the diversification of the product range? Do you have a good balance there?

Mr. Lipkin: Yes, our balance sheet is made up primarily of loans and investments. Our loan portfolio is divided into 50% commercial loans, 25% residential mortgages and 25% auto and consumer loans. It varies by one or two percent year-to-year but basically those are the numbers.

TWST: Looking at the Manhattan aspect of the company, what does that bring aboard? Is that a relatively new avenue for you to go down?

Mr. Lipkin: We went into Manhattan through the acquisition of Merchants Bank in January of this year.

TWST: What is the strategy there?

Mr. Lipkin: It was a bank that operates in middle market, very much the way we do. They operated through seven offices, all located in the central part of Manhattan. It was a pure commercial bank; they did no residential lending and virtually no automobile lending. They did virtually nothing other than commercial lines of credit. So, it really helped fortify our commercial portfolio and it gave us an opportunity to expand the franchise.

This special conference issue includes:

1) Midwest Commerical Banks - In an in-depth (2,800 words) Analyst Interview, Terry McEvoy, Equity Research Analyst with Tucker Anthony Sutro Capital Markets, examines the outlook for the sector and shares specific stock recommendations.

2) Outlook for Banking Stocks - In an in-depth (3,600 words) Analyst Interview, Gerard Cassidy, Managing Director of Equity Research with Tucker Anthony Sutro Capital Markets, examines the outlook for the sector and shares specific stock recommendations.

3) Outlook for Financial Services - In an in-depth (1,800 words) Analyst Interview, Thomas Rudkin, Managing Director and Head of the Financial Institutions Group of Tucker Anthony Sutro Capital Markets, examines the outlook for the sector and shares specific stock recommendations.

4) Finance, Systems & Operations Consulting - In an in-depth (2,400 words) Analyst Interview, Robert Kafafian, President of Consulting Services and Managing Director of Investment Banking at Tucker Anthony Sutro Capital Markets, examines the outlook for the sector and shares specific stock recommendations.

5) Outlook for the Thrift Industry - In an in-depth (2,200 words) Analyst Interview, James Ackor, Vice President and Equity Research Analyst with Tucker Anthony Sutro Capital Markets, examines the outlook for the sector and shares specific stock recommendations.

6) CEO interviews (average 2,500 words). Top management of twenty-three sector firms examine the outlook for their firm and the sector.