Valley National Bancorp has announced a merger agreement with 1st United Bancorp Inc., a $1.7 billion bank holding company headquartered in Boca Raton, Fla. An acquisition this far from its home market is a significant shift in Valley's long-held business strategy and might introduce additional operational and credit risks that the franchise does not currently face. The acquisition would also modestly increase Valley's already heavy commercial real estate exposure. As a result, we are revising our rating outlook on Valley to negative from stable, and we are affirming our 'BBB+' issuer credit rating. The negative outlook reflects the potential for increased strategic risks that could result from the bank entering a new geography, particularly one that has historically exhibited high
