WAYNE, N.J., Jan. 25, 2017 /PRNewswire/ -- Valley National
Bancorp (NYSE: VLY), the holding company for Valley National
Bank, today reported net income for the fourth quarter of 2016 of
$50.1 million, or $0.19 per diluted common share, as compared to
the fourth quarter of 2015 earnings of $4.7
million, or $0.01 per diluted
common share, and net income of $42.8
million, or $0.16 per diluted
common share, for the third quarter of 2016.
Net income for the year ended December 31, 2016 was
$168.1 million, or $0.63 per diluted common share, compared to 2015
earnings of $103.0 million, or
$0.42 per diluted common share. The
earnings for both the fourth quarter of 2015 and the year ended
December 31, 2015 included a pre-tax $51.1 million loss on the extinguishment of
$845 million in high-cost debt.
Key financial highlights for the fourth quarter:
- Net Interest Income and Margin: Net interest income on a
tax equivalent basis of $166.6
million for the fourth quarter of 2016 increased
$10.3 million as compared to the
third quarter of 2016 and increased $16.5
million as compared to the fourth quarter of 2015. Our net
interest margin on a tax equivalent basis increased 13 basis points
to 3.27 percent in the fourth quarter of 2016 as compared to 3.14
percent for the third quarter of 2016, and decreased 3 basis points
from 3.30 percent in the fourth quarter of 2015. The increase in
both net interest income and margin from the third quarter of 2016
was due, in part, to an increase in periodic loan fee income,
higher interest accretion from certain purchased credit-impaired
(PCI) loan pools, strong loan growth, as well as a moderate
decrease in our cost of funds during the fourth quarter. Our cost
of funds declined to 73 basis point for the fourth quarter of 2016
as compared to 76 basis points for the third quarter of 2016 partly
due to the full-quarter benefit realized from our August 2016 modification of high-cost borrowings
totaling $405 million. See the "Net
Interest Income and Margin" section below for more details.
- Loan Portfolio: Loans increased $602.0 million, or 14.5 percent on an annualized
basis, to approximately $17.2 billion
at December 31, 2016 from
September 30, 2016 largely due to
increases of $427.9 million and
$79.2 million in total commercial
real estate loans and commercial and industrial loans,
respectively. Residential mortgage loans also increased
$41.8 million to $2.9 billion at December
31, 2016 from September 30,
2016 exclusive of $82.7
million of new fixed-rate mortgages originated for sale
during the fourth quarter. Total new organic loan originations,
excluding new lines of credit and purchased loans, totaled over
$1.4 billion mostly in the commercial
loan categories during the fourth quarter of 2016. See additional
information under the "Loans, Deposits and Other Borrowings"
section below.
- Asset Quality: Non-performing assets (including
non-accrual loans) decreased by 3.1 percent to $49.4 million at December
31, 2016 as compared to $51.0
million at September 30, 2016
due to moderate declines in both non-accrual loans and other real
estate owned. Total accruing past due and non-accrual loans as a
percentage of our entire loan portfolio of $17.2 billion increased to 0.55 percent at
December 31, 2016 from 0.47 percent
at September 30, 2016 due, in part,
to several matured performing commercial loans in the normal
process of renewal at December 31,
2016.
- Provision for Credit Losses: During the fourth quarter
of 2016, we recorded a provision for credit losses totaling
$3.8 million as compared to
$5.8 million for the third quarter of
2016 and $3.5 million for the fourth
quarter of 2015. For the fourth quarter of 2016, we recognized net
loan charge-offs of $110 thousand as
compared to $3.3 million for the
third quarter of 2016 and $1.8
million for the fourth quarter of 2015. See the "Credit
Quality" section below for more details on our provision and
allowance for credit losses.
- Non-Interest Income: Non-interest income increased
$7.8 million to $32.7 million for the three months ended
December 31, 2016 from $24.9 million for the third quarter of 2016
mainly due to an increase of $7.5
million in net gains on the sale of residential mortgage
loans. The increase in net gains was mostly due to the completion
of the sale of approximately $170
million of performing 30-year fixed rate mortgages that were
transferred to loans held for sale from the loan portfolio during
the third quarter of 2016.
- Non-Interest Expense: Non-interest expense increased
$11.6 million to $124.8 million for the fourth quarter of 2016
from $113.3 million for the third
quarter of 2016 largely due to a $6.9
million increase in the amortization of tax credit
investments, a $3.3 million increase
in cash incentive compensation accruals, as well as a moderate
increase in repairs and maintenance expense.
- Earnings Enhancement Program: In December 2016, Valley announced a company-wide
earnings enhancement initiative called LIFT. The LIFT program will
seek to identify both additional operating expense reduction and
revenue enhancement opportunities, which together are anticipated
to contribute to sustainable improvement in our earnings for years
to come. Valley has selected EHS Partners, LLC, a New York based consulting firm, to help
achieve its program goals. The planning and discovery phase for
LIFT has already commenced and is scheduled for completion during
the first half of 2017 (with the implementation phase beginning
soon thereafter).
- Income Tax Expense: Income tax expense totaled
$18.3 million during the fourth
quarter of 2016, representing an effective tax rate of 26.8
percent, as compared to $17.0 million
for the third quarter of 2016, representing an effective tax rate
of 28.5 percent. The decline in the effective tax rate from the
third quarter of 2016 was primarily due to an increase in tax
credits. For 2017, we anticipate that our effective tax rate will
range from 27 percent to 31 percent primarily reflecting the
impacts of tax-exempt income, tax-advantaged investments and
general business credits, exclusive of any potential future tax
reform measures or other unanticipated changes in tax laws and
regulations.
- Capital Strength: Our regulatory capital ratios reflect
a strong capital position at December 31,
2016. Valley's total risk-based capital, Tier 1 risk-based
capital, Tier 1 leverage capital, and common equity Tier 1 capital
ratios were 12.15 percent, 9.90 percent, 7.74 percent and 9.27
percent, respectively, at December 31,
2016. In December 2016, Valley
issued and sold 9.24 million shares of its common stock in a
registered public offering. The net proceeds totaled $106.4 million and, among other things, will be
used to support continued loan growth.
Gerald H. Lipkin, Chairman and
CEO commented that, "We are pleased with our earnings performance
in the fourth quarter of 2016 which reflected a 17.7 percent
increase in net income available to common shareholders as compared
to the third quarter of 2016. Our net income for the fourth
quarter continued to benefit from the strong loan growth in 2016
and our continued efforts to reduce our overall cost of
funds. The 2016 loan growth totaled 7.4 percent despite a
large number of residential mortgage loans and originations sold,
in part, to manage the overall interest rate risk of our balance
sheet."
Mr. Lipkin added, "The recently announced earnings enhancement
program follows our success in recognizing over $19 million in operating cost savings derived
from our 2015 Branch Efficiency and Cost Reduction Plans largely
executed and completed in 2016. While Valley showed its ability to
produce strong growth in 2016, future exceptional financial
performance will require our commitment to accomplish such growth
on an expense platform that is more efficient and effective, and
can deliver a customer experience that is second to none. As
we look forward to 2017, we are excited about the opportunities
this new endeavor and our continued growth strategies will present
to Valley and its customers and shareholders."
Net Interest Income and Margin
Net interest income on a tax equivalent basis totaling
$166.6 million for the fourth quarter
of 2016 increased $10.3 million and
$16.5 million as compared to the
third quarter of 2016 and fourth quarter of 2015,
respectively. Interest income on a tax equivalent basis
increased $9.9 million to
$203.3 million for the fourth quarter
of 2016 as compared to the third quarter of 2016 largely due to a
14 basis point increase in the yield on average loans, and
increases of $209.0 million and
$152.0 million in average loans and
investment securities, respectively. The increase in loan
yield was supplemented by higher interest accretion on certain
acquired PCI loan pools caused by improvements in their forecasted
cash flows during the fourth quarter of 2016, as well as a moderate
increase in market interest rates, including higher rates on our
prime rate-indexed loan portfolios during mid-December. The loan
yield for the fourth quarter of 2016 also included approximately
$5.0 million of additional periodic
fee income related to derivative interest rate swaps executed with
commercial lending customers and loan prepayment penalty fees as
compared to the third quarter of 2016. Interest expense of
$36.7 million for the three months
ended December 31, 2016 decreased $357
thousand from the third quarter of 2016, and decreased
$848 thousand as compared to the
fourth quarter of 2015. During the fourth quarter of 2016,
our interest expense on long-term borrowings declined by
$693 thousand largely due to the
full-quarter benefit of the interest rate reduction resulting from
the modification of $405 million in
FHLB borrowings during August 2016,
as well as the maturity of $75
million in high-cost borrowings in late July 2016. The decrease was partially offset by
higher interest expense on savings, NOW and money market deposits
resulting from a $524.8 million
increase in average balances as compared to the third quarter of
2016. The increase in average balances resulted from our
utilization of more low-cost brokered money market deposits for
liquidity and loan funding purposes, and a moderate shift from
short-term borrowings that were previously used, in part, to fund
the repayment of matured long-term borrowings during 2016.
The net interest margin on a tax equivalent basis was 3.27
percent for the fourth quarter of 2016, an increase of 13 basis
points from 3.14 percent in the linked third quarter of 2016 and a
3 basis point decrease from 3.30 percent for the three months ended
December 31, 2015. The yield on average interest earning
assets also increased by 10 basis points on a linked quarter
basis. The higher yield was mainly a result of the
aforementioned increase in the yield on average loans to 4.27
percent for the fourth quarter of 2016. This was caused, in
part, by the aforementioned $5.0
million increase in periodic loan fee income as compared to
the third quarter of 2016. The $5.0
million increase represented approximately 12 basis points
of the 4.27 percent yield on average loans for the fourth quarter
of 2016, and 10 basis points of the 13 basis point increase in our
net interest margin from the third quarter of 2016. The yield on
average investment securities also moderately increased during the
fourth quarter of 2016. The overall cost of average interest
bearing liabilities decreased by 4 basis points from 1.02 percent
in the linked third quarter of 2016. The decrease was
primarily due to a 12 basis point decrease in the cost of long-term
borrowings mostly caused by the aforementioned debt modification
and an increase in the portion of our funding base represented by
low-cost brokered deposits, partially offset by an 11 basis point
increase in the cost of short-term borrowings. Our cost of
deposits totaled 0.46 percent for the fourth quarter of 2016 as
compared to 0.47 percent for the three months ended September 30, 2016.
Loans, Deposits and Other Borrowings
Loans. Loans increased
$602.0 million to approximately
$17.2 billion at December 31,
2016 from September 30, 2016, net of
a $85.6 million decline in the PCI
loan portion of the portfolio. During the fourth quarter of
2016, Valley also originated $82.7
million of residential mortgage loans for sale rather than
investment. Loans held for sale totaled $57.7 million and $202.4
million at December 31, 2016 and September 30, 2016, respectively.
Total commercial and industrial loans increased $79.0 million, or 12.4 percent on an annualized
basis, from September 30, 2016 to
approximately $2.6 billion at
December 31, 2016, despite a $11.4
million decline in the PCI loan portion of the portfolio
during the fourth quarter of 2016. The growth in non-PCI loans was
largely due to a few large customer relationships, including a
secured commercial lending arrangement with a large regional auto
retailer. In addition to the PCI loan repayments, the level
of new loan volumes within this portfolio continues to be
challenged by strong market competition for both new and existing
commercial loan borrowers within our primary markets.
Total commercial real estate loans (excluding construction
loans) increased $405.8 million from
September 30, 2016 to $8.7 billion at December 31, 2016 mostly due
to an increase in the non-PCI loan portfolio of $449.5 million, or 25.0 percent on an annualized
basis. The increase in non-PCI loans was mainly caused by
solid organic loan volumes in New
York and New Jersey, as
well as approximately $153 million of
participations in multi-family loans (mostly in New York City) purchased during the fourth
quarter of 2016. The purchased participation loans continue
to be seasoned loans with expected shorter durations. Each
purchased participation loan was stress-tested by Valley under its
normal underwriting criteria to further satisfy ourselves as to
their credit quality. These participations and the organic
loan volumes that were generated across a broad based segment
of borrowers within the commercial real estate portfolio were
partially offset by a $43.7 million
decline in the acquired PCI loan portion of the portfolio.
Construction loans increased $22.4
million, or 11.2 percent on an annualized basis, to
$824.9 million at December 31,
2016 from September 30, 2016.
The quarter over quarter increase continued to be mainly due to
advances on existing construction projects.
Total residential mortgage loans increased $41.8 million, or 5.9 percent on annualized
basis, to approximately $2.9 billion
at December 31, 2016 from September 30,
2016 mostly due to an increase in total loans originations,
as well as a larger percentage of such loans originated for
investment rather than sale as compared to the third quarter of
2016. As a result, Valley's loans originated for sale
declined to $82.7 million for the
fourth quarter of 2016 from $171.9
million for the third quarter of 2016. Total new and
refinanced residential mortgage loan originations were
approximately $371.3 million for the
fourth quarter of 2016 as compared to $258.3
million and $72.4 million for
the third quarter of 2016 and fourth quarter of 2015,
respectively. Of the $371.3
million in total originations, $18.8
million, or 5.1 percent, represented new residential
mortgage loans originated in Florida.
Home equity loans decreased by $7.8
million to $469.0 million at
December 31, 2016 as compared to September 30, 2016 mostly due to normal repayment
activity largely within the PCI loan portion of the
portfolio. New home equity loan volumes and customer usage of
existing home equity lines of credit continue to be weak, despite
the relatively favorable low interest rate environment.
Automobile loans increased by $17.9
million, or 6.4 percent on an annualized basis, to
$1.1 billion at December 31,
2016 as compared to September 30,
2016. The fourth quarter increase in auto loans reversed a
negative trend in the level of our new indirect auto loan volumes
experienced during the first nine months of 2016 which was caused,
in part, by new regulatory constraints on market pricing and fees.
During the third quarter of 2016, management implemented various
strategies to enhance new auto volumes, including new technology to
improve the decision-making process for our auto dealer
network. These enhancements and continued growth in our
relatively new Florida markets led
to higher new loan volumes during the fourth quarter of 2016.
While we are optimistic that this positive trend in new loan
production will continue into the first quarter of 2017, we can
provide no assurance that our auto loans will not decline in future
periods.
Other consumer loans increased $43.0
million, or 32.2 percent on an annualized basis, to
$577.1 million at December 31,
2016 as compared to September 30,
2016 mainly due to continued growth and customer usage of
collateralized personal lines of credit.
Deposits. Total deposits increased $758.5 million, or 4.5 percent, to approximately
$17.7 billion at December 31,
2016 from September 30, 2016 mostly
due to an increased use of low-cost brokered money market deposits
as part of our current funding strategy, as well as normal
fluctuations in our non-interest bearing deposit accounts.
Non-interest bearing deposits; savings, NOW and money market
deposits; and time deposits represented approximately 29 percent,
53 percent and 18 percent of total deposits, respectively, as of
December 31, 2016. The composition of deposits based upon the
period end balances remained relatively unchanged at
December 31, 2016 as compared to September 30, 2016.
Other Borrowings. Short-term borrowings decreased
$352.4 million, or 24.6 percent, to
approximately $1.1 billion at
December 31, 2016 from September 30,
2016 mostly due to the maturity of $326 million of FHLB borrowings and a shift to
additional lower cost brokered deposits from these matured
instruments during the fourth quarter of 2016. Long-term
borrowing totaled $1.4 billion at
December 31, 2016 and remained relatively unchanged from
September 30, 2016.
Credit Quality
Non-Performing Assets. Our past due loans and
non-accrual loans discussed further below exclude PCI loans. Under
U.S. GAAP, the PCI loans (acquired at a discount that is due, in
part, to credit quality) are accounted for on a pool basis and are
not subject to delinquency classification in the same manner as
loans originated by Valley. At December 31, 2016, our
PCI loan portfolio totaled $1.8
billion, or 10.3 percent of our total loan portfolio.
Total non-performing assets (NPAs), consisting of non-accrual
loans, other real estate owned (OREO), other repossessed assets and
non-accrual debt securities totaled $49.4
million at December 31, 2016 compared to $51.0 million at September
30, 2016. The $1.6 million
decrease in NPAs from September 30,
2016 was mostly due to decreases of $933 thousand and $645
thousand in non-accrual loans and OREO at December 31,
2016, respectively. Non-accrual loans represented only 0.22
percent and 0.23 percent of total loans at December 31, 2016
and September 30, 2016,
respectively.
Total accruing past due loans (i.e., loans past due 30 days or
more and still accruing interest) increased $17.5 million to
$56.7 million, or 0.33 percent of
total loans, at December 31, 2016 as compared to $39.2 million, or 0.24 percent of total loans, at
September 30, 2016. The
increase was due, in part, to a $6.1 million increase in construction loans
30 to 59 days past due primarily caused by the late receipt of
payment from a $4.2 million
relationship now current to all contractual payments, as well as a
$1.5 million matured performing loan
in the normal process of renewal at December
31, 2016. Within the loans 60 to 89 days past due category,
commercial real estate loans and commercial and industrial loans
also increased $4.4 million and
$4.2 million at December 31, 2016, respectively, from
September 30, 2016. The
increase in commercial real estate loans was caused by two matured
performing loans with a combined total of $4.5 million at December
31, 2016. The $4.2 million
increase in commercial and industrial loans 60 to 89 days past due
was also due to matured performing loans with an aggregate total of
$4.5 million at December 31, 2016. The $4.5 million in matured loans represent one loan
relationship collateralized by New York
City (NYC) taxi cab
medallions. Valley believes this relationship is well-secured
and in the normal process of collection.
At December 31, 2016, our entire
taxi medallion loan portfolio totaled $151.2
million, consisting of $140.2
million and $11.0 million of
NYC and Chicago taxi medallion loans,
respectively. During the fourth quarter of 2016, $4.9 million of performing Chicago taxi medallion loans were restructured
into amortizing loans and had related reserves within the allowance
of loan losses totaling $2.7 million
at December 31, 2016. At
December 31, 2016, the Chicago medallion portfolio included one other
impaired non-accrual loan relationship totaling $1.5 million, after a $3.7
million charge-off recognized in the third quarter of
2016. With the exception of the aforementioned performing
$4.5 million NYC medallion relationship that matured during
the fourth quarter of 2016 (and is in the process of renewal),
there were no past due or non-accruing loans within the
NYC medallion portfolio at
December 31, 2016. Valley's
historical taxi medallion lending criteria has been conservative in
regards to capping the loan amounts in relation to market
valuations, as well as obtaining personal guarantees and other
collateral whenever possible. We will continue to closely
monitor this portfolio's performance and the potential impact of
the changes in market valuation for taxi medallions due to
competing car service providers and other factors. Overall, we
believe our credit quality metrics continue to reflect our solid
underwriting standards at December 31, 2016. However, we can
provide no assurances as to the future level of our loan
delinquencies.
The following table summarizes the allocation of the allowance
for credit losses to specific loan categories and the allocation as
a percentage of each loan category (including PCI loans) at
December 31, 2016, September 30,
2016, and December 31, 2015:
|
|
December 31,
2016
|
|
September 30,
2016
|
|
December 31,
2015
|
|
|
|
|
Allocation
|
|
|
|
Allocation
|
|
|
|
Allocation
|
|
|
|
|
as a %
of
|
|
|
|
as a %
of
|
|
|
|
as a %
of
|
|
|
Allowance
|
|
Loan
|
|
Allowance
|
|
Loan
|
|
Allowance
|
|
Loan
|
|
|
Allocation
|
|
Category
|
|
Allocation
|
|
Category
|
|
Allocation
|
|
Category
|
|
|
($ in
thousands)
|
Loan
Category:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial loans*
|
$
|
53,005
|
|
|
2.01
|
%
|
|
$
|
52,969
|
|
|
2.07
|
%
|
|
$
|
50,956
|
|
|
2.01
|
%
|
Commercial real
estate loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
36,405
|
|
|
0.42
|
%
|
|
35,513
|
|
|
0.43
|
%
|
|
32,037
|
|
|
0.43
|
%
|
|
Construction
|
19,446
|
|
|
2.36
|
%
|
|
16,947
|
|
|
2.11
|
%
|
|
15,969
|
|
|
2.12
|
%
|
Total commercial real
estate loans
|
55,851
|
|
|
0.59
|
%
|
|
52,460
|
|
|
0.58
|
%
|
|
48,006
|
|
|
0.59
|
%
|
Residential mortgage
loans
|
3,702
|
|
|
0.13
|
%
|
|
3,378
|
|
|
0.12
|
%
|
|
4,625
|
|
|
0.15
|
%
|
Consumer
loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
equity
|
486
|
|
|
0.10
|
%
|
|
796
|
|
|
0.17
|
%
|
|
1,010
|
|
|
0.20
|
%
|
|
Auto and other
consumer
|
3,560
|
|
|
0.21
|
%
|
|
3,311
|
|
|
0.20
|
%
|
|
3,770
|
|
|
0.22
|
%
|
Total consumer
loans
|
4,046
|
|
|
0.19
|
%
|
|
4,107
|
|
|
0.19
|
%
|
|
4,780
|
|
|
0.22
|
%
|
Total allowance for
credit losses
|
$
|
116,604
|
|
|
0.68
|
%
|
|
$
|
112,914
|
|
|
0.68
|
%
|
|
$
|
108,367
|
|
|
0.68
|
%
|
Allowance for credit
losses as a %
|
|
|
|
|
|
|
|
|
|
|
|
of non-PCI
loans
|
|
|
0.75
|
%
|
|
|
|
0.76
|
%
|
|
|
|
0.79
|
%
|
|
|
|
|
|
|
|
|
|
|
|
* Includes
the reserve for unfunded letters of credit.
|
|
|
|
|
|
|
|
|
Our loan portfolio, totaling $17.2
billion at December 31, 2016, had net loan charge-offs
of $110 thousand for the fourth
quarter of 2016 as compared to $3.3
million and $1.8 million for
the third quarter of 2016 and fourth quarter of 2015,
respectively. The quarter over quarter decrease in net loan
charge-offs was largely due to a decline in commercial and
industrial loan gross charge-offs, as a Chicago tax medallion relationship was
partially charged off by $3.7 million
in the linked third quarter of 2016. Overall, net loan charge-offs
decreased to $3.6 million for the
year ended December 31, 2016 from $4.0
million for the year ended December 31, 2015.
During the fourth quarter of 2016, we recorded a provision for
credit losses totaling $3.8 million
as compared to $5.8 million for the
third quarter of 2016 and $3.5
million for the fourth quarter of 2015. Overall, our
provision for credit losses was $11.9
million for the year ended December 31, 2016 as
compared to $8.1 million for the year
ended December 31, 2015.
The allowance for credit losses, comprised of our allowance for
loan losses and reserve for unfunded letters of credit, as a
percentage of total loans was 0.68 percent at December 31,
2016 and remained unchanged from both September 30, 2016 and December 31,
2015. At December 31, 2016, our allowance allocations
for losses as a percentage of total loans remained relatively
stable in most loan categories as compared to September 30, 2016, but increased 0.25 percent
for construction loans primarily due to changes in our qualitative
loss factor estimate related to the volume of loans serviced by
third parties in this portfolio. In addition to this factor,
significant loan growth within several loan categories, the level
of net charge-offs and internally classified loans, assumptions
based on the current economic environment, as well as other
qualitative factors, impacted our estimate of the allowance for
credit losses at December 31,
2016.
Our allowance for credit losses as a percentage of total non-PCI
loans (excluding PCI loans with carrying values totaling
approximately $1.8 billion) was 0.75
percent at December 31, 2016 as compared to 0.76 percent and
0.79 percent at September 30, 2016
and December 31, 2015, respectively. PCI loans, largely
acquired through prior bank acquisitions, are accounted for on a
pool basis and initially recorded net of fair valuation discounts
related to credit which may be used to absorb future losses on such
loans before any allowance for loan losses is recognized subsequent
to acquisition. Due to the adequacy of such discounts, there
were no allowance reserves related to PCI loans at
December 31, 2016.
About Valley
Valley National Bancorp is a regional bank holding company
headquartered in Wayne, New Jersey
with approximately $22.9 billion in
assets. Its principal subsidiary, Valley National Bank, currently
operates 209 branch locations serving northern and central
New Jersey, the New York City boroughs of Manhattan, Brooklyn, Queens and Long
Island, and Florida. Valley
National Bank is one of the largest commercial banks headquartered
in New Jersey and is committed to
providing the most convenient service, the latest in product
innovations and an experienced and knowledgeable staff with a high
priority on friendly customer service 24 hours a day, 7 days a
week. For more information about Valley National Bank and its
products and services, please visit www.valleynationalbank.com or
call Customer Service, 24/7 at 800-522-4100.
Forward Looking Statements
The foregoing contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of
1995. Such statements are not historical facts and include
expressions about management's confidence and strategies and
management's expectations about new and existing programs and
products, acquisitions, relationships, opportunities, taxation,
technology, market conditions and economic expectations. These
statements may be identified by such forward-looking terminology as
"should," "expect," "believe," "view," "opportunity," "allow,"
"continues," "reflects," "typically," "usually," "anticipate," or
similar statements or variations of such terms. Such
forward-looking statements involve certain risks and uncertainties.
Actual results may differ materially from such forward-looking
statements. Factors that may cause actual results to differ
materially from those contemplated by such forward-looking
statements include, but are not limited to:
- weakness or a decline in the U.S. economy, in particular in
New Jersey, New York Metropolitan area (including
Long Island) and Florida as well as an unexpected decline in
commercial real estate values within our market areas;
- less than expected cost savings and revenue enhancement from
Valley's cost reduction plans including its earnings enhancement
program called "LIFT";
- damage verdicts or settlements or restrictions related to
existing or potential litigations arising from claims of breach of
fiduciary responsibility, negligence, fraud, contractual claims,
environmental laws, patent or trade mark infringement, and other
matters;
- cyber attacks, computer viruses or other malware that may
breach the security of our websites or other systems to obtain
unauthorized access to confidential information, destroy data,
disable or degrade service, or sabotage our systems;
- results of examinations by the OCC, the FRB, the CFPB and other
regulatory authorities, including the possibility that any such
regulatory authority may, among other things, require us to
increase our allowance for credit losses, write-down assets,
require us to reimburse customers, change the way we do business,
or limit or eliminate certain other banking activities;
- changes in accounting policies or accounting standards,
including the new authoritative accounting guidance (known as the
current expected credit loss (CECL) model) which may increase the
required level of our allowance for credit losses after adoption on
January 1, 2020;
- higher or lower than expected income tax expense or tax rates,
including increases or decreases resulting from changes in tax
laws, regulations and case law;
- government intervention in the U.S. financial system and the
effects of and changes in trade and monetary and fiscal policies
and laws, including the interest rate policies of the Federal
Reserve;
- unexpected changes in market interest rates for interest
earning assets and/or interest bearing liabilities;
- changes in investor sentiment or consumer spending savings
behavior;
- our inability to pay dividends at current levels, or at all,
because of inadequate future earnings, regulatory restrictions or
limitations, and changes in the composition of qualifying
regulatory capital and minimum capital requirements (including
those resulting from the U.S. implementation of Basel III
requirements);
- less than expected cost savings from the maturity, modification
or prepayment of long-term borrowings that mature through
2022;
- further prepayment penalties related to the early
extinguishment of high cost borrowings;
- higher than expected loan losses within one or more segments of
our loan portfolio;
- lower than expected cash flows from purchased credit-impaired
loans;
- unanticipated loan delinquencies, loss of collateral, decreased
service revenues, and other potential negative effects on our
business caused by severe weather or other external events;
- unexpected significant declines in the loan portfolio due to
the lack of economic expansion, increased competition, large
prepayments, changes in regulatory lending guidance or other
factors;
- the failure of other financial institutions with whom we have
trading, clearing, counterparty and other financial relationships;
and
- inability to retain and attract customers and qualified
employees.
A detailed discussion of factors that could affect our results
is included in our SEC filings, including the "Risk Factors"
section of our Annual Report on Form 10-K for the year ended
December 31, 2015.
We undertake no duty to update any forward-looking statement to
conform the statement to actual results or changes in our
expectations. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements.
-Tables to Follow-
VALLEY NATIONAL
BANCORP
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
|
SELECTED FINANCIAL
DATA
|
|
|
Three Months
Ended
|
|
Years
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
($ in thousands,
except for share data)
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
FINANCIAL
DATA:
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
164,395
|
|
|
$
|
154,146
|
|
|
$
|
148,046
|
|
|
$
|
618,149
|
|
|
$
|
550,269
|
|
Net interest income -
FTE (1)
|
166,601
|
|
|
156,315
|
|
|
150,080
|
|
|
626,531
|
|
|
558,135
|
|
Non-interest
income
|
32,660
|
|
|
24,853
|
|
|
24,039
|
|
|
103,225
|
|
|
83,803
|
|
Non-interest
expense
|
124,829
|
|
|
113,268
|
|
|
174,893
|
|
|
476,125
|
|
|
499,075
|
|
Income tax (benefit)
expense
|
18,336
|
|
|
17,049
|
|
|
(10,987)
|
|
|
65,234
|
|
|
23,938
|
|
Net income
|
50,090
|
|
|
42,842
|
|
|
4,672
|
|
|
168,146
|
|
|
102,958
|
|
Dividends on
preferred stock
|
1,797
|
|
|
1,797
|
|
|
1,797
|
|
|
7,188
|
|
|
3,814
|
|
Net income available
to common stockholders
|
$
|
48,293
|
|
|
$
|
41,045
|
|
|
$
|
2,875
|
|
|
$
|
160,958
|
|
|
$
|
99,144
|
|
Weighted average
number of common shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
256,422,437
|
|
|
254,473,994
|
|
|
239,916,562
|
|
|
254,841,571
|
|
|
234,405,909
|
|
Diluted
|
256,952,036
|
|
|
254,940,307
|
|
|
239,972,546
|
|
|
255,268,336
|
|
|
234,437,000
|
|
Per common share
data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings
|
$
|
0.19
|
|
|
$
|
0.16
|
|
|
$
|
0.01
|
|
|
$
|
0.63
|
|
|
$
|
0.42
|
|
Diluted
earnings
|
0.19
|
|
|
0.16
|
|
|
0.01
|
|
|
0.63
|
|
|
0.42
|
|
Cash dividends
declared
|
0.11
|
|
|
0.11
|
|
|
0.11
|
|
|
0.44
|
|
|
0.44
|
|
Closing stock price -
high
|
$
|
11.97
|
|
|
$
|
9.80
|
|
|
$
|
11.14
|
|
|
$
|
11.97
|
|
|
$
|
11.14
|
|
Closing stock price -
low
|
9.46
|
|
|
8.86
|
|
|
9.67
|
|
|
8.31
|
|
|
9.05
|
|
FINANCIAL
RATIOS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
margin
|
3.23
|
%
|
|
3.10
|
%
|
|
3.25
|
%
|
|
3.12
|
%
|
|
3.16
|
%
|
Net interest margin -
FTE (1)
|
3.27
|
|
|
3.14
|
|
|
3.30
|
|
|
3.16
|
|
|
3.20
|
|
Annualized return on
average assets
|
0.88
|
|
|
0.78
|
|
|
0.09
|
|
|
0.76
|
|
|
0.53
|
|
Annualized return on
average shareholders' equity
|
8.70
|
|
|
7.61
|
|
|
0.90
|
|
|
7.46
|
|
|
5.26
|
|
Annualized return on
average tangible
shareholders' equity (2)
|
12.76
|
|
|
11.29
|
|
|
1.29
|
|
|
11.07
|
|
|
7.66
|
|
Efficiency ratio
(3)
|
63.35
|
|
|
63.28
|
|
|
101.63
|
|
|
66.00
|
|
|
78.71
|
|
AVERAGE BALANCE
SHEET ITEMS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
$
|
22,679,991
|
|
|
$
|
22,081,470
|
|
|
$
|
20,257,422
|
|
|
$
|
22,044,874
|
|
|
$
|
19,438,055
|
|
Interest earning
assets
|
20,388,486
|
|
|
19,896,832
|
|
|
18,216,020
|
|
|
19,829,312
|
|
|
17,425,504
|
|
Loans
|
16,779,765
|
|
|
16,570,723
|
|
|
15,343,468
|
|
|
16,400,745
|
|
|
14,447,020
|
|
Interest bearing
liabilities
|
14,928,160
|
|
|
14,550,002
|
|
|
13,368,128
|
|
|
14,524,881
|
|
|
12,907,347
|
|
Deposits
|
17,428,646
|
|
|
16,668,925
|
|
|
15,521,476
|
|
|
16,734,639
|
|
|
14,609,858
|
|
Shareholders'
equity
|
2,304,208
|
|
|
2,251,461
|
|
|
2,069,084
|
|
|
2,253,570
|
|
|
1,958,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
|
As
Of
|
BALANCE SHEET
ITEMS:
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
(In
thousands)
|
2016
|
|
2016
|
|
2016
|
|
2016
|
|
2015
|
Assets
|
$
|
22,864,439
|
|
|
$
|
22,368,453
|
|
|
$
|
21,809,738
|
|
|
$
|
21,727,523
|
|
|
$
|
21,612,616
|
|
Total
loans
|
17,236,103
|
|
|
16,634,135
|
|
|
16,499,180
|
|
|
16,135,987
|
|
|
16,043,107
|
|
Non-PCI
loans
|
15,464,601
|
|
|
14,777,020
|
|
|
14,523,779
|
|
|
14,020,566
|
|
|
13,802,636
|
|
Deposits
|
17,730,708
|
|
|
16,972,183
|
|
|
16,356,058
|
|
|
16,408,426
|
|
|
16,253,551
|
|
Shareholders'
equity
|
2,377,156
|
|
|
2,257,073
|
|
|
2,232,212
|
|
|
2,219,602
|
|
|
2,207,091
|
|
|
|
|
|
|
|
|
|
|
|
LOANS:
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
$
|
2,638,195
|
|
|
$
|
2,558,968
|
|
|
$
|
2,528,749
|
|
|
$
|
2,537,545
|
|
|
$
|
2,540,491
|
|
Commercial real
estate:
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
8,719,667
|
|
|
8,313,855
|
|
|
8,018,794
|
|
|
7,585,139
|
|
|
7,424,636
|
|
Construction
|
824,946
|
|
|
802,568
|
|
|
768,847
|
|
|
776,057
|
|
|
754,947
|
|
Total
commercial real estate
|
9,544,613
|
|
|
9,116,423
|
|
|
8,787,641
|
|
|
8,361,196
|
|
|
8,179,583
|
|
Residential
mortgage
|
2,867,918
|
|
|
2,826,130
|
|
|
3,055,353
|
|
|
3,101,814
|
|
|
3,130,541
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
Home
equity
|
469,009
|
|
|
476,820
|
|
|
485,730
|
|
|
491,555
|
|
|
511,203
|
|
Automobile
|
1,139,227
|
|
|
1,121,606
|
|
|
1,141,793
|
|
|
1,188,063
|
|
|
1,239,313
|
|
Other
consumer
|
577,141
|
|
|
534,188
|
|
|
499,914
|
|
|
455,814
|
|
|
441,976
|
|
Total consumer
loans
|
2,185,377
|
|
|
2,132,614
|
|
|
2,127,437
|
|
|
2,135,432
|
|
|
2,192,492
|
|
Total
loans
|
$
|
17,236,103
|
|
|
$
|
16,634,135
|
|
|
$
|
16,499,180
|
|
|
$
|
16,135,987
|
|
|
$
|
16,043,107
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS:
|
|
|
|
|
|
|
|
|
|
Book value
|
$
|
8.59
|
|
|
$
|
8.43
|
|
|
$
|
8.34
|
|
|
$
|
8.29
|
|
|
$
|
8.26
|
|
Tangible book value
per common share (2)
|
5.80
|
|
|
5.55
|
|
|
5.45
|
|
|
5.40
|
|
|
5.36
|
|
Tangible common
equity to tangible assets (2)
|
6.91
|
%
|
|
6.53
|
%
|
|
6.58
|
%
|
|
6.54
|
%
|
|
6.52
|
%
|
Tier 1 leverage
capital
|
7.74
|
|
|
7.35
|
|
|
7.38
|
|
|
7.32
|
|
|
7.90
|
|
Common equity tier
1 capital
|
9.27
|
|
|
8.73
|
|
|
8.74
|
|
|
8.81
|
|
|
9.01
|
|
Tier 1 risk-based
capital
|
9.90
|
|
|
9.36
|
|
|
9.39
|
|
|
9.46
|
|
|
9.72
|
|
Total risk-based
capital
|
12.15
|
|
|
11.64
|
|
|
11.69
|
|
|
11.79
|
|
|
12.02
|
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
|
|
|
Three Months
Ended
|
|
Years
Ended
|
|
ALLOWANCE FOR
CREDIT LOSSES:
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
($ in
thousands)
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Beginning balance -
Allowance for credit
losses
|
$
|
112,914
|
|
|
$
|
110,414
|
|
|
$
|
106,697
|
|
|
$
|
108,367
|
|
|
$
|
104,287
|
|
|
Loans
charged-off:
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
(483)
|
|
|
(3,763)
|
|
|
(2,825)
|
|
|
(5,990)
|
|
|
(7,928)
|
|
|
Commercial real
estate
|
(131)
|
|
|
—
|
|
|
—
|
|
|
(650)
|
|
|
(1,864)
|
|
|
Construction
|
—
|
|
|
—
|
|
|
(10)
|
|
|
—
|
|
|
(926)
|
|
|
Residential
mortgage
|
(116)
|
|
|
(518)
|
|
|
(314)
|
|
|
(866)
|
|
|
(813)
|
|
|
Consumer
|
(911)
|
|
|
(782)
|
|
|
(799)
|
|
|
(3,463)
|
|
|
(3,441)
|
|
|
Total
loans charged-off
|
(1,641)
|
|
|
(5,063)
|
|
|
(3,948)
|
|
|
(10,969)
|
|
|
(14,972)
|
|
|
Charged-off loans
recovered:
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
435
|
|
|
902
|
|
|
1,646
|
|
|
2,852
|
|
|
7,233
|
|
|
Commercial real
estate
|
466
|
|
|
34
|
|
|
73
|
|
|
2,047
|
|
|
846
|
|
|
Construction
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
913
|
|
|
Residential
mortgage
|
171
|
|
|
495
|
|
|
26
|
|
|
774
|
|
|
421
|
|
|
Consumer
|
459
|
|
|
282
|
|
|
366
|
|
|
1,654
|
|
|
1,538
|
|
|
Total
loans recovered
|
1,531
|
|
|
1,723
|
|
|
2,111
|
|
|
7,337
|
|
|
10,951
|
|
|
Net
charge-offs
|
(110)
|
|
|
(3,340)
|
|
|
(1,837)
|
|
|
(3,632)
|
|
|
(4,021)
|
|
|
Provision for credit
losses
|
3,800
|
|
|
5,840
|
|
|
3,507
|
|
|
11,869
|
|
|
8,101
|
|
|
Ending balance -
Allowance for credit losses
|
$
|
116,604
|
|
|
$
|
112,914
|
|
|
$
|
108,367
|
|
|
$
|
116,604
|
|
|
$
|
108,367
|
|
|
Components of
allowance for credit losses:
|
|
|
|
|
|
|
|
|
|
|
Allowance for
loans
|
$
|
114,419
|
|
|
$
|
110,697
|
|
|
$
|
106,178
|
|
|
$
|
114,419
|
|
|
$
|
106,178
|
|
|
Allowance for unfunded
letters of credit
|
2,185
|
|
|
2,217
|
|
|
2,189
|
|
|
2,185
|
|
|
2,189
|
|
|
Allowance for credit
losses
|
$
|
116,604
|
|
|
$
|
112,914
|
|
|
$
|
108,367
|
|
|
$
|
116,604
|
|
|
$
|
108,367
|
|
|
Components of
provision for credit losses:
|
|
|
|
|
|
|
|
|
|
|
Provision for losses on
loans
|
$
|
3,832
|
|
|
$
|
5,949
|
|
|
$
|
3,464
|
|
|
$
|
11,873
|
|
|
$
|
7,846
|
|
|
Provision for unfunded
letters of credit
|
(32)
|
|
|
(109)
|
|
|
43
|
|
|
(4)
|
|
|
255
|
|
|
Provision for credit
losses
|
$
|
3,800
|
|
|
$
|
5,840
|
|
|
$
|
3,507
|
|
|
$
|
11,869
|
|
|
$
|
8,101
|
|
|
Annualized ratio of
total net charge-offs
|
|
|
|
|
|
|
|
|
|
|
to average
loans
|
0.00
|
%
|
|
0.08
|
%
|
|
0.05
|
%
|
|
0.02
|
%
|
|
0.03
|
%
|
|
Allowance for credit
losses as
|
|
|
|
|
|
|
|
|
|
|
a % of non-PCI
loans
|
0.75
|
%
|
|
0.76
|
%
|
|
0.79
|
%
|
|
0.75
|
%
|
|
0.79
|
%
|
|
Allowance for credit
losses as
|
|
|
|
|
|
|
|
|
|
|
a % of total
loans
|
0.68
|
%
|
|
0.68
|
%
|
|
0.68
|
%
|
|
0.68
|
%
|
|
0.68
|
%
|
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
|
As
Of
|
ASSET
QUALITY: (4)
|
December
31,
|
|
September
30,
|
|
December
31,
|
($ in
thousands)
|
2016
|
|
2016
|
|
2015
|
Accruing past due
loans:
|
|
|
|
|
|
30 to 59 days past
due:
|
|
|
|
|
|
Commercial and
industrial
|
$
|
6,705
|
|
|
$
|
4,306
|
|
|
$
|
3,920
|
|
Commercial real
estate
|
5,894
|
|
|
9,385
|
|
|
2,684
|
|
Construction
|
6,077
|
|
|
—
|
|
|
1,876
|
|
Residential
mortgage
|
12,005
|
|
|
9,982
|
|
|
6,681
|
|
Total
Consumer
|
4,197
|
|
|
3,146
|
|
|
3,348
|
|
Total 30 to 59 days
past due
|
34,878
|
|
|
26,819
|
|
|
18,509
|
|
60 to 89 days past
due:
|
|
|
|
|
|
Commercial and
industrial
|
5,010
|
|
|
788
|
|
|
524
|
|
Commercial real
estate
|
8,642
|
|
|
4,291
|
|
|
—
|
|
Construction
|
—
|
|
|
—
|
|
|
2,799
|
|
Residential
mortgage
|
3,564
|
|
|
2,733
|
|
|
1,626
|
|
Total
Consumer
|
1,147
|
|
|
1,234
|
|
|
626
|
|
Total 60 to 89 days
past due
|
18,363
|
|
|
9,046
|
|
|
5,575
|
|
90 or more days past
due:
|
|
|
|
|
|
Commercial and
industrial
|
142
|
|
|
145
|
|
|
213
|
|
Commercial real
estate
|
474
|
|
|
478
|
|
|
131
|
|
Construction
|
1,106
|
|
|
1,881
|
|
|
—
|
|
Residential
mortgage
|
1,541
|
|
|
590
|
|
|
1,504
|
|
Total
Consumer
|
209
|
|
|
226
|
|
|
208
|
|
Total 90 or more days
past due
|
3,472
|
|
|
3,320
|
|
|
2,056
|
|
Total accruing past
due loans
|
$
|
56,713
|
|
|
$
|
39,185
|
|
|
$
|
26,140
|
|
Non-accrual
loans:
|
|
|
|
|
|
Commercial and
industrial
|
$
|
8,465
|
|
|
$
|
7,875
|
|
|
$
|
10,913
|
|
Commercial real
estate
|
15,079
|
|
|
14,452
|
|
|
24,888
|
|
Construction
|
715
|
|
|
1,136
|
|
|
6,163
|
|
Residential
mortgage
|
12,075
|
|
|
14,013
|
|
|
17,930
|
|
Total
Consumer
|
1,174
|
|
|
965
|
|
|
2,206
|
|
Total non-accrual
loans
|
37,508
|
|
|
38,441
|
|
|
62,100
|
|
Other real estate
owned (OREO)(5)
|
9,612
|
|
|
10,257
|
|
|
13,563
|
|
Other repossessed
assets
|
384
|
|
|
307
|
|
|
437
|
|
Non-accrual debt
securities(6)
|
1,935
|
|
|
2,025
|
|
|
2,142
|
|
Total non-performing
assets
|
$
|
49,439
|
|
|
$
|
51,030
|
|
|
$
|
78,242
|
|
Performing troubled
debt restructured loans
|
$
|
85,166
|
|
|
$
|
81,093
|
|
|
$
|
77,627
|
|
Total non-accrual
loans as a % of loans
|
0.22
|
%
|
|
0.23
|
%
|
|
0.39
|
%
|
Total accruing past
due and non-accrual loans
|
|
|
|
|
|
as a % of
loans
|
0.55
|
%
|
|
0.47
|
%
|
|
0.55
|
%
|
Allowance for loan
losses as a % of non-accrual loans
|
305.05
|
%
|
|
287.97
|
%
|
|
170.98
|
%
|
Non-performing
purchased credit-impaired loans (7)
|
$
|
27,011
|
|
|
$
|
30,055
|
|
|
$
|
38,625
|
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
|
|
|
NOTES TO SELECTED
FINANCIAL DATA
|
|
|
(1)
|
Net interest income
and net interest margin are presented on a tax equivalent basis
using a 35 percent federal tax rate. Valley believes that
this presentation provides comparability of net interest income and
net interest margin arising from both taxable and tax-exempt
sources and is consistent with industry practice and SEC
rules.
|
|
|
(2)
|
This press release
contains certain supplemental financial information, described in
the Notes below, which has been determined by methods other than
U.S. Generally Accepted Accounting Principles ("GAAP") that
management uses in its analysis of Valley's performance.
Management believes these non-GAAP financial measures provide
information useful to investors in understanding Valley's financial
results. Specifically, Valley provides measures based on what it
believes are its operating earnings on a consistent basis and
excludes material non-core operating items which affect the GAAP
reporting of results of operations. Management utilizes these
measures for internal planning and forecasting purposes. Management
believes that Valley's presentation and discussion, together with
the accompanying reconciliations, provides a complete understanding
of factors and trends affecting Valley's business and allows
investors to view performance in a manner similar to management.
These non-GAAP measures should not be considered a substitute for
GAAP basis measures and results and Valley strongly encourages
investors to review its consolidated financial statements in their
a substitute for GAAP basis measures and results and Valley
strongly encourages investors to review its consolidated financial
statements in their entirety and not to rely on any single
financial measure. Because non-GAAP financial measures are
not standardized, it may not be possible to compare these financial
measures with other companies' non-GAAP financial measures having
the same or similar names.
|
|
As
Of
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
($ in thousands,
except for share data)
|
2016
|
|
2016
|
|
2016
|
|
2016
|
|
2015
|
Tangible book
value per common share:
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding
|
263,638,830
|
|
|
254,461,906
|
|
|
254,362,314
|
|
|
254,285,434
|
|
|
253,787,561
|
|
Shareholders'
equity
|
$
|
2,377,156
|
|
|
$
|
2,257,073
|
|
|
$
|
2,232,212
|
|
|
$
|
2,219,602
|
|
|
$
|
2,207,091
|
|
Less: Preferred
Stock
|
(111,590)
|
|
|
(111,590)
|
|
|
(111,590)
|
|
|
(111,590)
|
|
|
(111,590)
|
|
Less: Goodwill and
other intangible assets
|
(736,121)
|
|
|
(733,627)
|
|
|
(734,432)
|
|
|
(735,744)
|
|
|
(735,221)
|
|
Tangible common
shareholders' equity
|
$
|
1,529,445
|
|
|
$
|
1,411,856
|
|
|
$
|
1,386,190
|
|
|
$
|
1,372,268
|
|
|
$
|
1,360,280
|
|
Tangible book value per common share
|
$5.80
|
|
|
$5.55
|
|
|
$5.45
|
|
|
$5.40
|
|
|
$5.36
|
|
Tangible common
equity to tangible assets:
|
|
|
|
|
|
|
|
|
|
Tangible
shareholders' equity
|
$
|
1,529,445
|
|
|
$
|
1,411,856
|
|
|
$
|
1,386,190
|
|
|
$
|
1,372,268
|
|
|
$
|
1,360,280
|
|
Total
assets
|
$
|
22,864,439
|
|
|
$
|
22,368,453
|
|
|
$
|
21,809,738
|
|
|
$
|
21,727,523
|
|
|
$
|
21,612,616
|
|
Less: Goodwill and
other intangible assets
|
(736,121)
|
|
|
(733,627)
|
|
|
(734,432)
|
|
|
(735,744)
|
|
|
(735,221)
|
|
Tangible
assets
|
$
|
22,128,318
|
|
|
$
|
21,634,826
|
|
|
$
|
21,075,306
|
|
|
$
|
20,991,779
|
|
|
$
|
20,877,395
|
|
Tangible common equity to tangible assets
|
6.91
|
%
|
|
6.53
|
%
|
|
6.58
|
%
|
|
6.54
|
%
|
|
6.52
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Years
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Annualized return
on average tangible shareholders' equity:
|
|
|
|
|
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
50,090
|
|
|
$
|
42,842
|
|
|
$
|
4,672
|
|
|
$
|
168,146
|
|
|
$
|
102,958
|
|
Average shareholders'
equity
|
2,304,208
|
|
|
2,251,461
|
|
|
2,069,084
|
|
|
2,253,570
|
|
|
1,958,757
|
|
Less: Average
goodwill and other intangible assets
|
(733,714)
|
|
|
(733,830)
|
|
|
(621,635)
|
|
|
(734,520)
|
|
|
(614,084)
|
|
Average tangible shareholders' equity
|
$
|
1,570,494
|
|
|
$
|
1,517,631
|
|
|
$
|
1,447,449
|
|
|
$
|
1,519,050
|
|
|
$
|
1,344,673
|
|
Annualized return on average tangible
|
|
|
|
|
|
|
|
|
|
shareholders' equity
|
12.76
|
%
|
|
11.29
|
%
|
|
1.29
|
%
|
|
11.07
|
%
|
|
7.66
|
%
|
(3)
|
The efficiency ratio
measures Valley's total non-interest expense as a percentage of net
interest income plus total non-interest income.
|
|
|
(4)
|
Past due loans and
non-accrual loans exclude purchased credit-impaired (PCI)
loans. PCI loans are accounted for on a pool basis under U.S.
GAAP and are not subject to delinquency classification in the same
manner as loans originated by Valley.
|
|
|
(5)
|
Excludes OREO
properties related to FDIC-assisted transactions totaling $558
thousand, $1.0 million and $5.0 million, at December 31, 2016,
September 30, 2016 and December 31, 2015, respectively. These
assets are covered by the loss-sharing agreements with the
FDIC.
|
|
|
(6)
|
Includes
other-than-temporarily impaired trust preferred securities
classified as available for sale, which are presented at carrying
value (net of unrealized losses totaling $817 thousand, $728
thousand, and $610 thousand at December 31, 2016, September 30,
2016 and December 31, 2015, respectively) after recognition of all
credit impairments.
|
|
|
(7)
|
Represent PCI loans
meeting Valley's definition of non-performing loan (i.e.,
non-accrual loans), but are not subject to such classification
under U.S. GAAP because the loans are accounted for on a pooled
basis and are excluded from the non-accrual loans in the table
above.
|
|
|
SHAREHOLDERS
RELATIONS
Requests for copies of reports and/or other inquiries should be
directed to Tina Zarkadas, Assistant Vice President
Shareholder Relations
Specialist, Valley National Bancorp, 1455 Valley Road, Wayne, New
Jersey, 07470, by telephone at (973) 305-3380, by fax at (973)
305-1364 or by e-mail at
tscortes@valleynationalbank.com.
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION
(in thousands,
except for share data)
|
|
|
December
31,
|
|
2016
|
|
2015
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Cash and due from
banks
|
$
|
220,791
|
|
|
$
|
243,575
|
|
Interest bearing
deposits with banks
|
171,710
|
|
|
170,225
|
|
Investment
securities:
|
|
|
|
Held to maturity
(fair value of $1,924,597 at December 31, 2016 and $1,621,039
at
December 31, 2015)
|
1,925,572
|
|
|
1,596,385
|
|
Available for
sale
|
1,297,373
|
|
|
1,506,861
|
|
Total investment
securities
|
3,222,945
|
|
|
3,103,246
|
|
Loans held for sale,
at fair value
|
57,708
|
|
|
16,382
|
|
Loans
|
17,236,103
|
|
|
16,043,107
|
|
Less: Allowance for
loan losses
|
(114,419)
|
|
|
(106,178)
|
|
Net loans
|
17,121,684
|
|
|
15,936,929
|
|
Premises and
equipment, net
|
291,180
|
|
|
298,943
|
|
Bank owned life
insurance
|
391,830
|
|
|
387,542
|
|
Accrued interest
receivable
|
66,816
|
|
|
63,554
|
|
Goodwill
|
690,637
|
|
|
686,339
|
|
Other intangible
assets, net
|
45,484
|
|
|
48,882
|
|
Other
assets
|
583,654
|
|
|
656,999
|
|
Total
Assets
|
$
|
22,864,439
|
|
|
$
|
21,612,616
|
|
Liabilities
|
|
|
|
Deposits:
|
|
|
|
Non-interest
bearing
|
$
|
5,252,825
|
|
|
$
|
4,914,285
|
|
Interest
bearing:
|
|
|
|
Savings, NOW and
money market
|
9,339,012
|
|
|
8,181,362
|
|
Time
|
3,138,871
|
|
|
3,157,904
|
|
Total
deposits
|
17,730,708
|
|
|
16,253,551
|
|
Short-term
borrowings
|
1,080,960
|
|
|
1,076,991
|
|
Long-term
borrowings
|
1,433,906
|
|
|
1,810,728
|
|
Junior subordinated
debentures issued to capital trusts
|
41,577
|
|
|
41,414
|
|
Accrued expenses and
other liabilities
|
200,132
|
|
|
222,841
|
|
Total
Liabilities
|
20,487,283
|
|
|
19,405,525
|
|
Shareholders'
Equity
|
|
|
|
Preferred stock (no
par value, authorized 30,000,000 shares; issued 4,600,000 shares at
December
31,
2016 and December 31, 2015)
|
111,590
|
|
|
111,590
|
|
Common stock (no par
value, authorized 332,023,233 shares; issued 263,804,877 shares
at
December
31, 2016 and 253,787,561 shares at December 31,
2015)
|
92,353
|
|
|
88,626
|
|
Surplus
|
2,044,401
|
|
|
1,927,399
|
|
Retained
earnings
|
172,754
|
|
|
125,171
|
|
Accumulated other
comprehensive loss
|
(42,093)
|
|
|
(45,695)
|
|
Treasury stock, at
cost (166,047 common shares at December 31, 2016)
|
(1,849)
|
|
|
—
|
|
Total
Shareholders' Equity
|
2,377,156
|
|
|
2,207,091
|
|
Total Liabilities
and Shareholders' Equity
|
$
|
22,864,439
|
|
|
$
|
21,612,616
|
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED
STATEMENTS OF INCOME (Unaudited)
(in thousands,
except for share data)
|
|
|
Three Months
Ended
|
|
Years
Ended
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Interest
Income
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
179,271
|
|
|
$
|
171,143
|
|
|
$
|
167,412
|
|
|
$
|
685,911
|
|
|
$
|
633,199
|
|
|
Interest and
dividends on investment securities:
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
15,656
|
|
|
14,232
|
|
|
12,737
|
|
|
58,143
|
|
|
52,050
|
|
|
Tax-exempt
|
4,090
|
|
|
4,023
|
|
|
3,768
|
|
|
15,537
|
|
|
14,568
|
|
|
Dividends
|
1,798
|
|
|
1,612
|
|
|
1,544
|
|
|
6,206
|
|
|
6,557
|
|
|
Interest on federal
funds sold and other short-term investments
|
280
|
|
|
193
|
|
|
133
|
|
|
1,126
|
|
|
649
|
|
|
Total interest
income
|
201,095
|
|
|
191,203
|
|
|
185,594
|
|
|
766,923
|
|
|
707,023
|
|
|
Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits:
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW and
money market
|
10,418
|
|
|
10,165
|
|
|
7,331
|
|
|
39,787
|
|
|
24,824
|
|
|
Time
|
9,555
|
|
|
9,412
|
|
|
9,795
|
|
|
37,775
|
|
|
35,432
|
|
|
Interest on
short-term borrowings
|
3,485
|
|
|
3,545
|
|
|
492
|
|
|
12,022
|
|
|
919
|
|
|
Interest on long-term
borrowings and junior subordinated
debentures
|
13,242
|
|
|
13,935
|
|
|
19,930
|
|
|
59,190
|
|
|
95,579
|
|
|
Total interest
expense
|
36,700
|
|
|
37,057
|
|
|
37,548
|
|
|
148,774
|
|
|
156,754
|
|
|
Net Interest
Income
|
164,395
|
|
|
154,146
|
|
|
148,046
|
|
|
618,149
|
|
|
550,269
|
|
|
Provision for credit
losses
|
3,800
|
|
|
5,840
|
|
|
3,507
|
|
|
11,869
|
|
|
8,101
|
|
|
Net Interest
Income After Provision for Credit Losses
|
160,595
|
|
|
148,306
|
|
|
144,539
|
|
|
606,280
|
|
|
542,168
|
|
|
Non-Interest
Income
|
|
|
|
|
|
|
|
|
|
|
Trust and investment
services
|
2,733
|
|
|
2,628
|
|
|
2,500
|
|
|
10,345
|
|
|
10,020
|
|
|
Insurance
commissions
|
4,973
|
|
|
4,580
|
|
|
4,779
|
|
|
19,106
|
|
|
17,233
|
|
|
Service charges on
deposit accounts
|
5,419
|
|
|
5,263
|
|
|
5,382
|
|
|
20,879
|
|
|
21,176
|
|
|
Gains (losses) on
securities transactions, net
|
519
|
|
|
(10)
|
|
|
6
|
|
|
777
|
|
|
2,487
|
|
|
Fees from loan
servicing
|
1,688
|
|
|
1,598
|
|
|
1,693
|
|
|
6,441
|
|
|
6,641
|
|
|
Gains on sales of
loans, net
|
12,307
|
|
|
4,823
|
|
|
1,211
|
|
|
22,030
|
|
|
4,245
|
|
|
Gains on sales of
assets, net
|
349
|
|
|
310
|
|
|
2,853
|
|
|
1,358
|
|
|
2,776
|
|
|
Bank owned life
insurance
|
1,230
|
|
|
1,683
|
|
|
1,627
|
|
|
6,694
|
|
|
6,815
|
|
|
Change in FDIC
loss-share receivable
|
(419)
|
|
|
(313)
|
|
|
54
|
|
|
(1,291)
|
|
|
(3,326)
|
|
|
Other
|
3,861
|
|
|
4,291
|
|
|
3,934
|
|
|
16,886
|
|
|
15,736
|
|
|
Total non-interest
income
|
32,660
|
|
|
24,853
|
|
|
24,039
|
|
|
103,225
|
|
|
83,803
|
|
|
Non-Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
Salary and employee
benefits expense
|
61,415
|
|
|
58,107
|
|
|
56,164
|
|
|
235,853
|
|
|
221,765
|
|
|
Net occupancy and
equipment expense
|
21,525
|
|
|
20,658
|
|
|
24,663
|
|
|
87,140
|
|
|
90,521
|
|
|
FDIC insurance
assessment
|
5,102
|
|
|
4,804
|
|
|
4,895
|
|
|
20,100
|
|
|
16,867
|
|
|
Amortization of other
intangible assets
|
2,875
|
|
|
2,675
|
|
|
2,448
|
|
|
11,327
|
|
|
9,169
|
|
|
Professional and
legal fees
|
4,357
|
|
|
4,031
|
|
|
6,902
|
|
|
17,755
|
|
|
18,945
|
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
51,129
|
|
|
315
|
|
|
51,129
|
|
|
Amortization of tax
credit investments
|
13,384
|
|
|
6,450
|
|
|
13,081
|
|
|
34,744
|
|
|
27,312
|
|
|
Telecommunication
expense
|
2,882
|
|
|
2,459
|
|
|
2,158
|
|
|
10,021
|
|
|
8,259
|
|
|
Other
|
13,289
|
|
|
14,084
|
|
|
13,453
|
|
|
58,870
|
|
|
55,108
|
|
|
Total non-interest
expense
|
124,829
|
|
|
113,268
|
|
|
174,893
|
|
|
476,125
|
|
|
499,075
|
|
|
Income (Loss)
Before Income Taxes
|
68,426
|
|
|
59,891
|
|
|
(6,315)
|
|
|
233,380
|
|
|
126,896
|
|
|
Income tax (benefit)
expense
|
18,336
|
|
|
17,049
|
|
|
(10,987)
|
|
|
65,234
|
|
|
23,938
|
|
|
Net
Income
|
50,090
|
|
|
42,842
|
|
|
4,672
|
|
|
168,146
|
|
|
102,958
|
|
|
Dividends on
preferred stock
|
1,797
|
|
|
1,797
|
|
|
1,797
|
|
|
7,188
|
|
|
3,814
|
|
|
Net Income
Available to Common Shareholders
|
$
|
48,293
|
|
|
$
|
41,045
|
|
|
$
|
2,875
|
|
|
$
|
160,958
|
|
|
$
|
99,144
|
|
|
Earnings Per
Common Share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.19
|
|
|
$
|
0.16
|
|
|
$
|
0.01
|
|
|
$
|
0.63
|
|
|
$
|
0.42
|
|
|
Diluted
|
0.19
|
|
|
0.16
|
|
|
0.01
|
|
|
0.63
|
|
|
0.42
|
|
|
Cash Dividends
Declared per Common Share
|
0.11
|
|
|
0.11
|
|
|
0.11
|
|
|
0.44
|
|
|
0.44
|
|
|
Weighted Average
Number of Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
256,422,437
|
|
|
254,473,994
|
|
|
239,916,562
|
|
|
254,841,571
|
|
|
234,405,909
|
|
|
Diluted
|
256,952,036
|
|
|
254,940,307
|
|
|
239,972,546
|
|
|
255,268,336
|
|
|
234,437,000
|
|
|
|
|
|
|
VALLEY NATIONAL
BANCORP
|
|
|
|
|
Quarterly Analysis
of Average Assets, Liabilities and Shareholders' Equity
and
|
|
|
|
|
Net Interest
Income on a Tax Equivalent Basis
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
December 31,
2016
|
|
September 30,
2016
|
|
December 31,
2015
|
|
|
|
|
Average
|
|
|
|
Avg.
|
|
Average
|
|
|
|
Avg.
|
|
Average
|
|
|
|
Avg.
|
($ in
thousands)
|
Balance
|
|
Interest
|
|
Rate
|
|
Balance
|
|
Interest
|
|
Rate
|
|
Balance
|
|
Interest
|
|
Rate
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest earning
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
(1)(2)
|
$
|
16,779,765
|
|
|
$
|
179,275
|
|
|
4.27
|
%
|
|
$
|
16,570,723
|
|
|
$
|
171,146
|
|
|
4.13
|
%
|
|
$
|
15,343,468
|
|
|
$
|
167,417
|
|
|
4.36
|
%
|
Taxable investments
(3)
|
2,680,175
|
|
|
17,454
|
|
|
2.60
|
%
|
|
2,531,202
|
|
|
15,844
|
|
|
2.50
|
%
|
|
2,076,720
|
|
|
14,281
|
|
|
2.75
|
%
|
Tax-exempt
investments (1)(3)
|
632,011
|
|
|
6,292
|
|
|
3.98
|
%
|
|
628,951
|
|
|
6,189
|
|
|
3.94
|
%
|
|
552,471
|
|
|
5,797
|
|
|
4.20
|
%
|
Federal funds sold
and other
interest bearing
deposits
|
296,535
|
|
|
280
|
|
|
0.38
|
%
|
|
165,956
|
|
|
193
|
|
|
0.47
|
%
|
|
243,361
|
|
|
133
|
|
|
0.22
|
%
|
Total interest
earning assets
|
20,388,486
|
|
|
203,301
|
|
|
3.99
|
%
|
|
19,896,832
|
|
|
193,372
|
|
|
3.89
|
%
|
|
18,216,020
|
|
|
187,628
|
|
|
4.12
|
%
|
Other
assets
|
2,291,505
|
|
|
|
|
|
|
2,184,638
|
|
|
|
|
|
|
2,041,402
|
|
|
|
|
|
Total
assets
|
$
|
22,679,991
|
|
|
|
|
|
|
$
|
22,081,470
|
|
|
|
|
|
|
$
|
20,257,422
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW and
money market deposits
|
$
|
9,034,605
|
|
|
$
|
10,418
|
|
|
0.46
|
%
|
|
$
|
8,509,793
|
|
|
$
|
10,165
|
|
|
0.48
|
%
|
|
$
|
7,724,927
|
|
|
$
|
7,331
|
|
|
0.38
|
%
|
Time
deposits
|
3,137,057
|
|
|
9,555
|
|
|
1.22
|
%
|
|
3,082,100
|
|
|
9,412
|
|
|
1.22
|
%
|
|
3,154,781
|
|
|
9,795
|
|
|
1.24
|
%
|
Short-term
borrowings
|
1,266,311
|
|
|
3,485
|
|
|
1.10
|
%
|
|
1,439,352
|
|
|
3,545
|
|
|
0.99
|
%
|
|
417,097
|
|
|
492
|
|
|
0.47
|
%
|
Long-term borrowings
(4)
|
1,490,187
|
|
|
13,242
|
|
|
3.55
|
%
|
|
1,518,757
|
|
|
13,935
|
|
|
3.67
|
%
|
|
2,071,323
|
|
|
19,930
|
|
|
3.85
|
%
|
Total interest
bearing liabilities
|
14,928,160
|
|
|
36,700
|
|
|
0.98
|
%
|
|
14,550,002
|
|
|
37,057
|
|
|
1.02
|
%
|
|
13,368,128
|
|
|
37,548
|
|
|
1.12
|
%
|
Non-interest bearing
deposits
|
5,256,984
|
|
|
|
|
|
|
5,077,032
|
|
|
|
|
|
|
4,641,768
|
|
|
|
|
|
Other
liabilities
|
190,639
|
|
|
|
|
|
|
202,975
|
|
|
|
|
|
|
178,442
|
|
|
|
|
|
Shareholders'
equity
|
2,304,208
|
|
|
|
|
|
|
2,251,461
|
|
|
|
|
|
|
2,069,084
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
22,679,991
|
|
|
|
|
|
|
$
|
22,081,470
|
|
|
|
|
|
|
$
|
20,257,422
|
|
|
|
|
|
Net interest
income/interest rate spread (5)
|
|
|
$
|
166,601
|
|
|
3.01
|
%
|
|
|
|
$
|
156,315
|
|
|
2.87
|
%
|
|
|
|
$
|
150,080
|
|
|
3.00
|
%
|
Tax equivalent
adjustment
|
|
|
(2,206)
|
|
|
|
|
|
|
(2,169)
|
|
|
|
|
|
|
(2,034)
|
|
|
|
Net interest income,
as reported
|
|
|
$
|
164,395
|
|
|
|
|
|
|
$
|
154,146
|
|
|
|
|
|
|
$
|
148,046
|
|
|
|
Net interest margin
(6)
|
|
|
|
|
3.23
|
%
|
|
|
|
|
|
3.10
|
%
|
|
|
|
|
|
3.25
|
%
|
Tax equivalent
effect
|
|
|
|
|
0.04
|
%
|
|
|
|
|
|
0.04
|
%
|
|
|
|
|
|
0.05
|
%
|
Net interest margin
on a fully tax equivalent basis (6)
|
|
|
|
|
3.27
|
%
|
|
|
|
|
|
3.14
|
%
|
|
|
|
|
|
3.30
|
%
|
|
|
|
|
|
(1)
|
Interest income is
presented on a tax equivalent basis using a 35 percent federal tax
rate.
|
(2)
|
Loans are stated net
of unearned income and include non-accrual loans.
|
(3)
|
The yield for
securities that are classified as available for sale is based on
the average historical amortized cost.
|
(4)
|
Includes junior
subordinated debentures issued to capital trusts which are
presented separately on the consolidated statements of
condition.
|
(5)
|
Interest rate spread
represents the difference between the average yield on interest
earning assets and the average cost of interest bearing liabilities
and is presented on a fully tax equivalent basis.
|
(6)
|
Net interest income
as a percentage of total average interest earning
assets.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/valley-national-bancorp-reports-strong-increase-in-fourth-quarter-net-income-solid-net-interest-margin-and-commercial-loan-growth-300396108.html
SOURCE Valley National Bancorp