MERGER-RELATED ACTIVITY

9 Months Ended

Sep. 30, 2011

12. MERGER-RELATED ACTIVITY

On April 28, 2011, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Valley, providing for the merger of the Company with and into Valley, with Valley as the surviving entity (the “Merger”). Immediately following the Merger, the Bank will merge with and into Valley National Bank, a national banking association and wholly-owned subsidiary of Valley, with Valley National Bank surviving the merger. Subject to the terms and conditions of the Merger Agreement, upon consummation of the Merger, each share of common stock of the Company will be converted into one share of Valley common stock, subject to the payment of cash in lieu of fractional shares. The Merger Agreement provides that, prior to the consummation of the Merger, Valley will fund the purchase by either Valley or the Company from the U.S. Treasury of each share of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, of the Company (the “TARP Preferred Stock”) issued and outstanding on that date. In addition, Valley may, but is not required to, purchase the outstanding warrant (the “TARP Warrant”) to purchase Company common stock. If Valley does not purchase the TARP Warrant, such warrant will be converted at the effective time of the Merger into a warrant to purchase Valley common stock, subject to appropriate adjustments in accordance with its terms.

The Board of Directors of the Company has unanimously approved the Merger. The Merger is subject to the approval of the Company’s stockholders, approvals from applicable banking regulators and other customary conditions. The Office of the Comptroller of the Currency granted its approval of the Merger on July 7, 2011. On July 15, 2011, the Company received written confirmation that the transaction may proceed without the prior approval of the Federal Reserve Bank of New York. We expect the Merger to be effective in early January 2012.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

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+ Details

STATE BANCORP INC 10-Q