WAYNE, N.J., April 26, 2017 /PRNewswire/ -- Valley
National Bancorp (NYSE: VLY), the holding company for Valley
National Bank, today reported net income for the first quarter of
2017 of $46.1 million, or
$0.17 per diluted common share as
compared to the first quarter of 2016 earnings of $36.2 million, or $0.14 per diluted common share and net income of
$50.1 million, or $0.19 per diluted common share, for the fourth
quarter of 2016. Net income for the fourth quarter of 2016 included
$7.3 million in pre-tax gains
realized on $170 million of seasoned
30-year fixed rate residential mortgage loans sold, as well as
higher periodic loan fee income.
Key financial highlights for the first quarter:
- Net Interest Income and Margin: Net interest income on a
tax equivalent basis of $164.7
million for the first quarter of 2017 increased $14.6 million as compared to the first quarter of
2016, and decreased $1.9 million as
compared to the fourth quarter of 2016. Our net interest margin on
a tax equivalent basis of 3.14 percent for the first quarter of
2017 increased by 6 basis points as compared to the first quarter
of 2016, and decreased 13 basis points from the fourth quarter of
2016. The decrease in net interest income and margin for the first
quarter of 2017 as compared to the linked fourth quarter was mainly
caused by a combined $5.9 million
decline in interest income from derivative swap and loan prepayment
fees. See the "Net Interest Income and Margin" section below for
more details.
- Loan Portfolio: Loans increased by $213.4 million, or 5.0 percent on an annualized
basis, to $17.4 billion at
March 31, 2017 from December 31, 2016 largely due to a $307.7 million net increase in total commercial
real estate loans. The overall loan growth was partially offset by
a decrease of $122.5 million in
residential mortgage loans caused, in part, by the transfer of
approximately $104 million of
performing 30-year fixed rate mortgages to loans held for sale at
March 31, 2017. The sale of these
loans is expected to be completed during the second quarter of 2017
and result in a pre-tax gain greater than $3
million. Total new organic loan originations, excluding new
lines of credit and purchased loans, totaled approximately
$740 million mostly within the
commercial loan categories during the first quarter of 2017. See
additional information under the "Loans, Deposits and Other
Borrowings" section below.
- Asset Quality: Non-performing assets (including
non-accrual loans) increased by 4.2 percent to $51.5 million at March 31,
2017 as compared to $49.4
million at December 31, 2016
due to moderate increases 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 $17.4 billion increased to 0.61 percent at
March 31, 2017 from 0.55 percent at
December 31, 2016 mostly due to an
increase in commercial loans past due 30 to 59 days.
- Provision for Credit Losses: During the first quarter of
2017, we recorded a $2.5 million
provision for credit losses as compared to a provision of
$3.8 million and $800 thousand for the fourth quarter of 2016 and
first quarter of 2016, respectively. For the first quarter of 2017,
we recognized net loan charge-offs totaling $1.4 million as compared to $110 thousand and $1.5
million for the fourth quarter of 2016 and first quarter of
2016, respectively. The increase in net loan charge-offs from the
fourth quarter was largely due to an increase in commercial and
industrial loan charge-offs. See further details under the "Credit
Quality" section below.
- Non-Interest Income: Non-interest income decreased
$7.6 million, or 23.3 percent, to
$25.1 million for the first quarter
of 2017 from $32.7 million for the
fourth quarter of 2016 mostly due to an $8.2
million decrease in net gains on sales of residential
mortgage loans caused by the aforementioned sale of $170 million of residential mortgage loans during
the linked fourth quarter. This decline in non-interest income was
partially offset by a $1.2 million
increase in non-interest income from bank owned life insurance
which was largely related to death benefits received in the first
quarter of 2017.
- Non-Interest Expense: Non-interest expense decreased
$3.9 million, or 3.1 percent, to
$121.0 million for the first quarter
of 2017 from the fourth quarter of 2016 mainly due to a
$8.1 million decrease in the
amortization of tax credit investments. The decrease was partially
offset by (i) a $2.3 million increase
in salary and employee benefit expense largely driven by normal
increases in payroll taxes and stock-based compensation expense and
(ii) a $1.5 million increase in net
occupancy and equipment expense mostly due to seasonal maintenance
expense.
- Income Tax Expense: Income tax expense totaled
$18.1 million for the first quarter
of 2017 and remained relatively stable as a percentage of pre-tax
income as compared to the linked quarter. Our effective tax rate
was 28.2 percent, 26.8 percent, and 28.5 percent for the first
quarter of 2017, fourth quarter of 2016, and first quarter of 2016,
respectively. For the remainder of 2017, we anticipate that our
effective tax rate will range from 28 percent to 31 percent
primarily reflecting the impacts of tax-exempt income,
tax-advantaged investments and general business credits.
- Capital Strength: Valley's regulatory capital ratios
continue to reflect its strong capital position. Valley's total
risk-based capital, Tier 1 capital, Tier 1 leverage capital, and
Tier 1 common capital ratios were 11.96 percent, 9.76 percent, 7.70
percent and 9.12 percent, respectively, at March 31, 2017.
Gerald H. Lipkin, Chairman &
CEO commented that, "We are pleased with our earnings performance
in the first quarter of 2017 which reflected a 27 percent increase
in net income as compared to the first quarter of 2016 driven by a
solid net interest margin of 3.14 percent despite lower commercial
loan and swap fees as compared to the linked fourth quarter. Our
net income for the first quarter continued to benefit from strong
loan growth mainly within the commercial real estate portfolio and
our ability to maintain a low overall cost of funds. The
credit quality of our balance sheet remained well-controlled as net
loan charge-offs to average loans totaled 0.03 percent for the
first quarter of 2017."
Mr. Lipkin added, "In December
2016, Valley announced a company-wide earnings enhancement
initiative called LIFT. The discovery and feasibility study
phases for LIFT are currently underway and expected to be completed
on schedule in the second quarter of 2017. The implementation
phase of the initiative will commence in the third quarter of 2017
and is expected to be fully phased-in over a 24 month period.
Although it is premature to provide specific details on LIFT at
this time, we can report that we are delighted with the significant
efforts by our dedicated management team and employees to
ultimately make this program a success for Valley, its customers
and shareholders. We fully expect this endeavor, combined with our
continued growth strategies, to strongly position Valley to deliver
on its future performance goals and allow us to provide the
financial banking experience expected in today's rapidly changing
environment."
Net Interest Income and Margin
Net interest income on a tax equivalent basis totaling
$164.7 million for the first quarter
of 2017 increased $14.6 million from
the first quarter of 2016 and decreased $1.9
million as compared to the fourth quarter of 2016.
Interest income on a tax equivalent basis decreased $2.0 million to $201.3
million for the first quarter of 2017 as compared to the
fourth quarter of 2016 mainly due to a 23 basis point decline in
the yield on average loans, partially offset by increases of
$533.3 million and $156.1 million in average loans and taxable
investments, respectively, and a 18 basis point increase in the
yield on average taxable investments. The decrease in yield
on average loans for the first quarter of 2017 as compared to the
linked fourth quarter was mostly due to a decline of $5.9 million in periodic commercial loan fee
income related to derivative interest rate swaps executed with
customers and loan prepayment penalty fees. Interest expense
of $36.6 million for the three months
ended March 31, 2017 decreased
$113 thousand as compared to the
fourth quarter of 2016. During the first quarter of 2017, our
interest expense on deposits and long-term borrowings declined by
approximately $237 thousand and
$292 thousand, respectively, from the
linked fourth quarter largely due to two less days during the first
quarter. The reduction in interest expense from these
interest bearing liabilities was largely offset by additional
interest expense from increased short-term borrowings during the
first quarter of 2017. Average short-term borrowings
increased $296.7 million as compared
to the fourth quarter of 2016 due to new FHLB borrowings used to
offset a decline in deposits and fund new loans during the first
quarter of 2017.
Our net interest margin on a tax equivalent basis of 3.14
percent for the first quarter of 2017 increased by 6 basis points
as compared to the first quarter of 2016, and decreased 13 basis
points from the fourth quarter of 2016. The yield on average
interest earning assets decreased by 15 basis points on a linked
quarter basis mostly due to the lower yield on average loans. The
yield on average loans decreased 23 basis points to 4.04 percent
for the first quarter of 2017 and was negatively impacted by the
aforementioned decreases in periodic commercial loan fees as
compared to the fourth quarter of 2016. The yield on average
taxable investment securities increased by 18 basis points to 2.78
percent for the first quarter of 2017 from the fourth quarter of
2016 largely due to a decline in premium amortization expense
caused by lower principal repayments on residential mortgage-backed
securities. The overall cost of average interest bearing
liabilities decreased by 2 basis points during the first quarter of
2017 from 0.98 percent in the linked fourth quarter of 2016.
The decrease was due, in part, to a 8 basis point decline in the
cost of long-term borrowings mostly caused by two less days during
the first quarter of 2017. Our cost of total deposits was
0.45 percent for the first quarter of 2017 as compared to 0.46
percent for the fourth quarter of 2016.
Loans, Deposits and Other Borrowings
Loans. Loans increased
$213.4 million, or 5.0 percent on an
annualized basis, to approximately $17.4
billion at March 31, 2017 from December 31, 2016,
net of the $104 million of
residential mortgage loans transferred to loans held for sale
during the first quarter of 2017 and a $116.8 million decline in the PCI loan portion of
the portfolio. During the first quarter of 2017, Valley also
originated $112.7 million of
residential mortgage loans for sale rather than investment. Loans
held for sale totaled $115.1 million
and $57.7 million at March 31,
2017 and December 31, 2016, respectively. See additional
information regarding our residential mortgage loan activities
below.
Total commercial and industrial loans increased $4.1 million, or 0.6 percent on an annualized
basis, from December 31, 2016 to approximately $2.6 billion at March 31, 2017. The
loan volumes were largely offset by a $37.0
million decline in the PCI loan portion of the portfolio
during the first quarter of 2017. Exclusive of the decline in PCI
loans, the non-PCI commercial and industrial loan portfolio
increased by approximately 7.0 percent on an annualized basis to
$2.4 billion at March 31, 2017
from December 31, 2016. This 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 loan
growth within this portfolio continues to be challenged by strong
market competition for both new and existing commercial loan
borrowers within our primary markets.
Commercial real estate loans (excluding construction loans)
increased $296.8 million from
December 31, 2016 to $9.0
billion at March 31, 2017 mostly due to a $322.9 million, or 16.9 percent on an annualized
basis, increase in the non-PCI loan portfolio. The increase in
non-PCI loans was primarily due to solid organic loan volumes in
New York and New Jersey, as well as approximately
$178 million of loan participations
(mostly multi-family loans in New York
City) purchased in the first quarter of 2017. The purchased
participation loans continue to be predominantly seasoned loans
with expected shorter durations. Each purchased participation loan
is reviewed by Valley under its normal underwriting criteria and
stress-tested to assure its credit quality. The organic loan
volumes generated across a broad-based segment of borrowers within
the commercial real estate portfolio were partially offset by a
$26.2 million decline in the acquired
PCI loan portion of the portfolio. Construction loans
increased $10.9 million, or 5.3
percent on an annualized basis, to $835.9
million at March 31, 2017 from December 31,
2016. The increase was mostly due to advances on existing
construction projects.
Total residential mortgage loans decreased $122.5 million, or approximately 17.1 percent on
an annualized basis, to approximately $2.7
billion at March 31, 2017 from December 31, 2016
mostly due to the aforementioned mortgages transferred to loans
held for sale, as well as a large percentage of new loans
originated for sale rather than investment during the first quarter
of 2017. Valley sold approximately $159.9
million of residential mortgage loans originated for sale
(including $57.7 million of loans
held for sale at December 31, 2016) during the first quarter
of 2017. New and refinanced residential mortgage loan originations
totaled approximately $163.7 million
for the first quarter of 2017 as compared to $371.3 million and $83.6
million for the fourth quarter of 2016 and first quarter of
2016, respectively. Of the $163.7
million in total originations, $15.3
million, or 9.3 percent, represented new Florida residential mortgage loans.
Home equity loans totaling $458.9
million at March 31, 2017 decreased by $10.1 million as compared to December 31,
2016 mostly due to normal repayment activity, including a
$3.1 million decline in 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 $10.8
million, or 3.8 percent on an annualized basis, to
$1.2 billion at March 31, 2017
as compared to December 31, 2016. Our auto volumes have
continued to outpace repayments for two consecutive quarters since
we introduced an automated tool to improve the decision-making
process for our auto dealer network during the third quarter of
2016. The enhanced decision model and continued growth in our
relatively new Florida markets are
expected to continue a moderately positive growth trend in the auto
portfolio during the second quarter of 2017. During the first
quarter of 2017, the Florida
dealership network contributed over $24
million in auto loan originations, representing
approximately 17 percent of Valley's total new auto loan production
for the period.
Other consumer loans increased $23.4
million, or 16.2 percent on an annualized basis, to
$600.5 million at March 31, 2017
as compared to $577.1 million at
December 31, 2016 mainly due to continued growth and customer
usage of collateralized personal lines of credit.
Deposits. Total deposits decreased $399.6 million, or 2.3 percent, to approximately
$17.3 billion at March 31, 2017
from December 31, 2016 mostly due to runoff related to one
large commercial money market customer, a $68.6 million decrease in brokered money market
deposit account balances and general period end fluctuations in
both commercial and retail customer balances. Non-interest bearing
deposits; savings, NOW, money market deposits; and time deposits
represented approximately 30 percent, 51 percent and 19 percent of
total deposits as of March 31, 2017. The composition of
deposits based upon the period end balances remained relatively
unchanged at March 31, 2017 as compared to December 31,
2016.
Other Borrowings. Short-term borrowings increased
$564.0 million to $1.6 billion at March 31, 2017 as compared
to December 31, 2016 largely due to new FHLB advances used as
alternate funding for the aforementioned decline in money market
deposits, as well as for additional liquidity and loan funding
purposes. Long-term borrowings also increased $200.1 million to $1.6
billion at March 31, 2017 as compared to
December 31, 2016 due to new FHLB advances with contractual
terms between 13 and 15 months.
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 March 31, 2017, our PCI
loan portfolio totaled $1.7 billion,
or 9.5 percent of our total loan portfolio.
Total non-performing assets (NPAs), consisting of non-accrual
loans, other real estate owned (OREO) properties, other repossessed
assets, and non-accrual debt securities increased $2.1 million, or 4.2 percent, to $51.5 million at March 31, 2017 as compared
to $49.4 million at December 31,
2016 mostly due to moderate increases in non-accrual loans and
other real estate owned during the first quarter of 2017.
However, non-accrual loans continued to represent only 0.22 percent
of our total loans at both March 31, 2017 and
December 31, 2016.
Total accruing past due loans (i.e., loans past due 30 days or
more and still accruing interest) increased $11.4 million to $68.1
million, or 0.39 percent of total loans, at March 31,
2017 as compared to $56.7 million, or
0.33 percent of total loans, at December 31, 2016. The higher
level of accruing past due loans was primarily caused by increases
of $23.0 million and
$5.7 million in commercial and
industrial loans and commercial real estate loans past due 30 to 59
days at March 31, 2017, respectively, as compared to
December 31, 2016. The increase in the past due commercial and
industrial loans was mainly due to loans collateralized by
New York City (NYC) taxi cab medallions totaling $21.6 million, of which $15.3 million represented performing matured
loans in the normal process of renewal. The $5.7 million increase in past due commercial real
estate loans was largely due to one internally classified
relationship totaling $5.9 million.
Partially offsetting these increases, loans past due 60 to 89 days
and loans 90 days or more past due categories declined by
$12.7 million and $1.4 million at March 31, 2017,
respectively, mostly due to the renewal of matured loans reported
in such categories at December 31, 2016.
At March 31, 2017, our entire taxi medallion loan portfolio
totaled $150.2 million, consisting of
$139.4 million and $10.8 million of NYC and Chicago taxi medallion loans,
respectively. At March 31, 2017, the Chicago medallion portfolio included impaired
loans of $6.3 million with related
reserves of $2.6 million within the
allowance for loan losses. Loans past due 30 to 59 days included
the aforementioned $21.6 million of
NYC taxi medallion loans at
March 31, 2017 which are mostly in the process of renewal.
Valley's historical taxi medallion lending criteria has been
conservative in regards to capping the loan amounts in relation to
market valuations, as well as obtaining personal guarantees and
other collateral whenever possible. We will continue to
closely monitor this portfolio's performance and the potential
impact of the changes in market valuation for taxi medallions due
to competing car service providers and other factors. Despite the
slight increase in our total delinquent loans, we believe our
credit quality metrics continued to reflect our solid underwriting
standards at March 31, 2017. However, we can provide no
assurances as to the future level of our loan delinquencies.
Allowance for Credit Losses. The following table
summarizes the allocation of the allowance for credit losses to
specific loan categories and the allocation as a percentage of each
loan category (including PCI loans) at March 31, 2017,
December 31, 2016, and March 31, 2016:
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
|
|
|
Allocation
|
|
|
|
Allocation
|
|
|
|
Allocation
|
|
|
|
|
as a %
of
|
|
|
|
as a %
of
|
|
|
|
as a %
of
|
|
|
Allowance
|
|
Loan
|
|
Allowance
|
|
Loan
|
|
Allowance
|
|
Loan
|
|
Allocation
|
|
Category
|
|
Allocation
|
|
Category
|
|
Allocation
|
|
Category
|
|
($ in
thousands)
|
Loan
Category:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial loans*
|
$
|
53,541
|
|
|
2.03
|
%
|
|
$
|
53,005
|
|
|
2.01
|
%
|
|
$
|
50,677
|
|
|
2.00
|
%
|
Commercial real
estate loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
38,146
|
|
|
0.42
|
%
|
|
36,405
|
|
|
0.42
|
%
|
|
31,812
|
|
|
0.42
|
%
|
|
Construction
|
18,156
|
|
|
2.17
|
%
|
|
19,446
|
|
|
2.36
|
%
|
|
16,642
|
|
|
2.14
|
%
|
Total commercial real
estate loans
|
56,302
|
|
|
0.57
|
%
|
|
55,851
|
|
|
0.59
|
%
|
|
48,454
|
|
|
0.58
|
%
|
Residential mortgage
loans
|
3,592
|
|
|
0.13
|
%
|
|
3,702
|
|
|
0.13
|
%
|
|
4,209
|
|
|
0.14
|
%
|
Consumer
loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
equity
|
433
|
|
|
0.09
|
%
|
|
486
|
|
|
0.10
|
%
|
|
1,061
|
|
|
0.22
|
%
|
|
Auto and other
consumer
|
3,828
|
|
|
0.22
|
%
|
|
3,560
|
|
|
0.21
|
%
|
|
3,274
|
|
|
0.20
|
%
|
Total consumer
loans
|
4,261
|
|
|
0.19
|
%
|
|
4,046
|
|
|
0.19
|
%
|
|
4,335
|
|
|
0.20
|
%
|
Total allowance for
credit losses
|
$
|
117,696
|
|
|
0.67
|
%
|
|
$
|
116,604
|
|
|
0.68
|
%
|
|
$
|
107,675
|
|
|
0.67
|
%
|
Allowance for credit
losses as a %
|
|
|
|
|
|
|
|
|
|
|
|
of non-PCI
loans
|
|
|
0.75
|
%
|
|
|
|
0.75
|
%
|
|
|
|
0.77
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Includes the
reserve for unfunded letters of credit.
|
|
|
|
|
|
|
|
|
|
|
Our loan portfolio, totaling $17.4
billion at March 31, 2017, had net loan charge-offs of
$1.4 million for the first quarter of
2017 as compared to $110 thousand and
$1.5 million for the fourth quarter
of 2016 and the first quarter of 2016, respectively. The
linked quarter over quarter increase in net loan charge-offs was
mainly due to the full charge-off of one loan relationship totaling
$1.5 million within the commercial
and industrial loan portfolio. During the first quarter of 2017, we
recorded a $2.5 million provision for
credit losses as compared to $3.8
million and $800 thousand for
the fourth quarter of 2016 and the first quarter of 2016,
respectively. The quarter over quarter increase in the
provision was mostly due to solid first quarter loan growth and an
increase in allocated reserves for internally classified loans at
March 31, 2017.
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 0.67 percent at March 31, 2017
as compared to 0.68 percent and 0.67 percent of total loans at
December 31, 2016 and March 31, 2016, respectively.
At March 31, 2017, our allowance allocations for losses as a
percentage of total loans remained relatively stable in most loan
categories as compared to December 31, 2016, but declined 0.19
percent for construction loans primarily due to the continued low
level of recent loss experience in this portfolio. There were
no construction loan charge-offs in the first quarter of 2017 and
the year ended December 31, 2016.
Our allowance for credit losses as a percentage of total non-PCI
loans (excluding PCI loans with carrying values totaling
approximately $1.7 billion) was 0.75
percent at both March 31, 2017 and December 31, 2016, as
compared to 0.77 percent at March 31, 2016. PCI loans
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 March 31, 2017, December 31, 2016
and March 31, 2016.
About Valley
Valley National Bancorp is a regional bank holding company
headquartered in Wayne, New Jersey
with over $23 billion in assets. Its
principal subsidiary, Valley National Bank, currently operates over
200 branch locations in 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 with Executive
Offices in Manhattan and
West Palm Beach. Helping
communities grow and prosper is the heart of Valley's corporate
citizenship philosophy. For more information about Valley National
Bank and its products and services, please visit a convenient
branch location, www.valleynationalbank.com or call our 24/7
Customer Service Team 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, employment
related claims, and other matters;
- the loss of or decrease in lower-cost funding sources within
our deposit base may adversely impact our net interest income and
net income;
- 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;
- our inability to pay dividends at current levels, or at all,
because of inadequate future earnings, regulatory restrictions or
limitations, and changes in our capital requirements;
- higher than expected loan losses within one or more segments of
our loan portfolio;
- 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, 2016.
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
|
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
($ in thousands,
except for share data)
|
2017
|
|
2016
|
|
2016
|
FINANCIAL
DATA:
|
|
|
|
|
|
Net interest
income
|
$
|
162,529
|
|
|
$
|
164,395
|
|
|
$
|
148,153
|
|
Net interest income -
FTE (1)
|
164,702
|
|
|
166,601
|
|
|
150,144
|
|
Non-interest
income
|
25,059
|
|
|
32,660
|
|
|
21,448
|
|
Non-interest
expense
|
120,952
|
|
|
124,829
|
|
|
118,225
|
|
Income tax
expense
|
18,071
|
|
|
18,336
|
|
|
14,389
|
|
Net income
|
46,095
|
|
|
50,090
|
|
|
36,187
|
|
Dividends on
preferred stock
|
1,797
|
|
|
1,797
|
|
|
1,797
|
|
Net income available
to common shareholders
|
$
|
44,298
|
|
|
$
|
48,293
|
|
|
$
|
34,390
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
Basic
|
263,797,024
|
|
|
256,422,437
|
|
|
254,075,349
|
|
Diluted
|
264,546,266
|
|
|
256,952,036
|
|
|
254,347,420
|
|
Per common share
data:
|
|
|
|
|
|
Basic
earnings
|
$
|
0.17
|
|
|
$
|
0.19
|
|
|
$
|
0.14
|
|
Diluted
earnings
|
0.17
|
|
|
0.19
|
|
|
0.14
|
|
Cash
dividends declared
|
0.11
|
|
|
0.11
|
|
|
0.11
|
|
Closing stock price -
high
|
12.76
|
|
|
11.97
|
|
|
9.67
|
|
Closing stock price -
low
|
11.28
|
|
|
9.46
|
|
|
8.31
|
|
FINANCIAL
RATIOS:
|
|
|
|
|
|
Net interest
margin
|
3.10
|
%
|
|
3.23
|
%
|
|
3.04
|
%
|
Net interest margin -
FTE (1)
|
3.14
|
|
|
3.27
|
|
|
3.08
|
|
Annualized return on
average assets
|
0.80
|
|
|
0.88
|
|
|
0.67
|
|
Annualized return on
average shareholders' equity
|
7.69
|
|
|
8.70
|
|
|
6.52
|
|
Annualized return on
average tangible shareholders' equity (2)
|
11.09
|
|
|
12.76
|
|
|
9.75
|
|
Efficiency ratio
(3)
|
64.48
|
|
|
63.35
|
|
|
69.71
|
|
AVERAGE BALANCE
SHEET ITEMS:
|
|
|
|
|
Assets
|
$
|
22,996,286
|
|
|
$
|
22,679,991
|
|
|
$
|
21,680,278
|
|
Interest earning
assets
|
20,949,464
|
|
|
20,388,486
|
|
|
19,487,470
|
|
Loans
|
17,313,100
|
|
|
16,779,765
|
|
|
15,993,543
|
|
Interest bearing
liabilities
|
15,285,171
|
|
|
14,928,160
|
|
|
14,335,698
|
|
Deposits
|
17,366,768
|
|
|
17,428,646
|
|
|
16,380,594
|
|
Shareholders'
equity
|
2,399,159
|
|
|
2,304,208
|
|
|
2,219,570
|
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
|
As
Of
|
BALANCE SHEET
ITEMS:
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
(In
thousands)
|
2017
|
|
2016
|
|
2016
|
|
2016
|
|
2016
|
Assets
|
$
|
23,220,456
|
|
|
$
|
22,864,439
|
|
|
$
|
22,368,453
|
|
|
$
|
21,809,738
|
|
|
$
|
21,727,523
|
|
Total
loans
|
17,449,498
|
|
|
17,236,103
|
|
|
16,634,135
|
|
|
16,499,180
|
|
|
16,135,987
|
|
Non-PCI
loans
|
15,794,797
|
|
|
15,464,601
|
|
|
14,777,020
|
|
|
14,523,779
|
|
|
14,020,566
|
|
Deposits
|
17,331,141
|
|
|
17,730,708
|
|
|
16,972,183
|
|
|
16,356,058
|
|
|
16,408,426
|
|
Shareholders'
equity
|
2,398,541
|
|
|
2,377,156
|
|
|
2,257,073
|
|
|
2,232,212
|
|
|
2,219,602
|
|
|
|
|
|
|
|
|
|
|
|
LOANS:
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
$
|
2,642,319
|
|
|
$
|
2,638,195
|
|
|
$
|
2,558,968
|
|
|
$
|
2,528,749
|
|
|
$
|
2,537,545
|
|
Commercial real
estate:
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
9,016,418
|
|
|
8,719,667
|
|
|
8,313,855
|
|
|
8,018,794
|
|
|
7,585,139
|
|
Construction
|
835,854
|
|
|
824,946
|
|
|
802,568
|
|
|
768,847
|
|
|
776,057
|
|
Total
commercial real estate
|
9,852,272
|
|
|
9,544,613
|
|
|
9,116,423
|
|
|
8,787,641
|
|
|
8,361,196
|
|
Residential
mortgage
|
2,745,447
|
|
|
2,867,918
|
|
|
2,826,130
|
|
|
3,055,353
|
|
|
3,101,814
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
Home
equity
|
458,891
|
|
|
469,009
|
|
|
476,820
|
|
|
485,730
|
|
|
491,555
|
|
Automobile
|
1,150,053
|
|
|
1,139,227
|
|
|
1,121,606
|
|
|
1,141,793
|
|
|
1,188,063
|
|
Other
consumer
|
600,516
|
|
|
577,141
|
|
|
534,188
|
|
|
499,914
|
|
|
455,814
|
|
Total consumer
loans
|
2,209,460
|
|
|
2,185,377
|
|
|
2,132,614
|
|
|
2,127,437
|
|
|
2,135,432
|
|
Total
loans
|
$
|
17,449,498
|
|
|
$
|
17,236,103
|
|
|
$
|
16,634,135
|
|
|
$
|
16,499,180
|
|
|
$
|
16,135,987
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS:
|
|
|
|
|
|
|
|
|
|
Book value
|
$
|
8.67
|
|
|
$
|
8.59
|
|
|
$
|
8.43
|
|
|
$
|
8.34
|
|
|
$
|
8.29
|
|
Tangible book value
per common share (2)
|
5.88
|
|
|
5.80
|
|
|
5.55
|
|
|
5.45
|
|
|
5.40
|
|
Tangible common
equity to tangible assets (2)
|
6.90
|
%
|
|
6.91
|
%
|
|
6.53
|
%
|
|
6.58
|
%
|
|
6.54
|
%
|
Tier 1 leverage
capital
|
7.70
|
|
|
7.74
|
|
|
7.35
|
|
|
7.38
|
|
|
7.32
|
|
Common equity tier 1
capital
|
9.12
|
|
|
9.27
|
|
|
8.73
|
|
|
8.74
|
|
|
8.81
|
|
Tier 1 risk-based
capital
|
9.76
|
|
|
9.90
|
|
|
9.36
|
|
|
9.39
|
|
|
9.46
|
|
Total risk-based
capital
|
11.96
|
|
|
12.15
|
|
|
11.64
|
|
|
11.69
|
|
|
11.79
|
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
|
|
Three Months
Ended
|
ALLOWANCE FOR
CREDIT LOSSES:
|
March
31,
|
|
December
31,
|
|
March
31,
|
($ in
thousands)
|
2017
|
|
2016
|
|
2016
|
Beginning balance -
Allowance for credit losses
|
$
|
116,604
|
|
|
$
|
112,914
|
|
|
$
|
108,367
|
|
Loans
charged-off:
|
|
|
|
|
|
|
Commercial and
industrial
|
(1,714)
|
|
|
(483)
|
|
|
(1,251)
|
|
|
Commercial real
estate
|
(414)
|
|
|
(131)
|
|
|
(105)
|
|
|
Construction
|
—
|
|
|
—
|
|
|
—
|
|
|
Residential
mortgage
|
(130)
|
|
|
(116)
|
|
|
(81)
|
|
|
Total
Consumer
|
(1,121)
|
|
|
(911)
|
|
|
(1,074)
|
|
|
|
Total loans
charged-off
|
(3,379)
|
|
|
(1,641)
|
|
|
(2,511)
|
|
Charged-off loans
recovered:
|
|
|
|
|
|
|
Commercial and
industrial
|
848
|
|
|
435
|
|
|
526
|
|
|
Commercial real
estate
|
142
|
|
|
466
|
|
|
89
|
|
|
Construction
|
—
|
|
|
—
|
|
|
—
|
|
|
Residential
mortgage
|
448
|
|
|
171
|
|
|
15
|
|
|
Total
Consumer
|
563
|
|
|
459
|
|
|
389
|
|
|
|
Total loans
recovered
|
2,001
|
|
|
1,531
|
|
|
1,019
|
|
Net
charge-offs
|
(1,378)
|
|
|
(110)
|
|
|
(1,492)
|
|
Provision for credit
losses
|
2,470
|
|
|
3,800
|
|
|
800
|
|
Ending balance -
Allowance for credit losses
|
$
|
117,696
|
|
|
$
|
116,604
|
|
|
$
|
107,675
|
|
Components of
allowance for credit losses:
|
|
|
|
|
|
|
Allowance for losses
on loans
|
$
|
115,443
|
|
|
$
|
114,419
|
|
|
$
|
105,415
|
|
|
Allowance for
unfunded letters of credit
|
2,253
|
|
|
2,185
|
|
|
2,260
|
|
Allowance for credit
losses
|
$
|
117,696
|
|
|
$
|
116,604
|
|
|
$
|
107,675
|
|
Components of
provision for credit losses:
|
|
|
|
|
|
|
Provision for loan
losses
|
$
|
2,402
|
|
|
$
|
3,832
|
|
|
$
|
729
|
|
|
Provision for
unfunded letters of credit
|
68
|
|
|
(32)
|
|
|
71
|
|
Provision for credit
losses
|
$
|
2,470
|
|
|
$
|
3,800
|
|
|
$
|
800
|
|
Annualized ratio of
total net charge-offs to average loans
|
0.03
|
%
|
|
0.00
|
%
|
|
0.04
|
%
|
Allowance for credit
losses as a % of non-PCI loans
|
0.75
|
%
|
|
0.75
|
%
|
|
0.77
|
%
|
Allowance for credit
losses as a % of total loans
|
0.67
|
%
|
|
0.68
|
%
|
|
0.67
|
%
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
As
Of
|
ASSET
QUALITY: (4)
|
March
31,
|
|
December
31,
|
|
March
31,
|
($ in
thousands)
|
2017
|
|
2016
|
|
2016
|
Accruing past due
loans:
|
|
|
|
|
|
30 to 59 days past
due:
|
|
|
|
|
|
|
Commercial and
industrial
|
$
|
29,734
|
|
|
$
|
6,705
|
|
|
$
|
8,395
|
|
|
Commercial real
estate
|
11,637
|
|
|
5,894
|
|
|
1,389
|
|
|
Construction
|
7,760
|
|
|
6,077
|
|
|
1,326
|
|
|
Residential
mortgage
|
7,533
|
|
|
12,005
|
|
|
14,628
|
|
|
Total
Consumer
|
3,740
|
|
|
4,197
|
|
|
3,200
|
|
Total 30 to 59 days
past due
|
60,404
|
|
|
34,878
|
|
|
28,938
|
|
60 to 89 days past
due:
|
|
|
|
|
|
|
Commercial and
industrial
|
341
|
|
|
5,010
|
|
|
613
|
|
|
Commercial real
estate
|
359
|
|
|
8,642
|
|
|
120
|
|
|
Construction
|
—
|
|
|
—
|
|
|
—
|
|
|
Residential
mortgage
|
4,177
|
|
|
3,564
|
|
|
3,056
|
|
|
Total
Consumer
|
787
|
|
|
1,147
|
|
|
731
|
|
Total 60 to 89 days
past due
|
5,664
|
|
|
18,363
|
|
|
4,520
|
|
90 or more days past
due:
|
|
|
|
|
|
|
Commercial and
industrial
|
405
|
|
|
142
|
|
|
221
|
|
|
Commercial real
estate
|
—
|
|
|
474
|
|
|
131
|
|
|
Construction
|
—
|
|
|
1,106
|
|
|
—
|
|
|
Residential
mortgage
|
1,355
|
|
|
1,541
|
|
|
2,613
|
|
|
Total
Consumer
|
314
|
|
|
209
|
|
|
66
|
|
Total 90 or more days
past due
|
2,074
|
|
|
3,472
|
|
|
3,031
|
|
Total accruing past
due loans
|
$
|
68,142
|
|
|
$
|
56,713
|
|
|
$
|
36,489
|
|
Non-accrual
loans:
|
|
|
|
|
|
|
Commercial and
industrial
|
$
|
8,676
|
|
|
$
|
8,465
|
|
|
$
|
11,484
|
|
|
Commercial real
estate
|
15,106
|
|
|
15,079
|
|
|
26,604
|
|
|
Construction
|
1,461
|
|
|
715
|
|
|
5,978
|
|
|
Residential
mortgage
|
11,650
|
|
|
12,075
|
|
|
16,747
|
|
|
Total
Consumer
|
1,395
|
|
|
1,174
|
|
|
1,807
|
|
Total non-accrual
loans
|
38,288
|
|
|
37,508
|
|
|
62,620
|
|
Other real estate
owned (OREO)(5)
|
10,737
|
|
|
9,612
|
|
|
12,368
|
|
Other repossessed
assets
|
475
|
|
|
384
|
|
|
495
|
|
Non-accrual debt
securities (6)
|
2,007
|
|
|
1,935
|
|
|
2,102
|
|
Total non-performing
assets
|
$
|
51,507
|
|
|
$
|
49,439
|
|
|
$
|
77,585
|
|
Performing troubled
debt restructured loans
|
$
|
80,360
|
|
|
$
|
85,166
|
|
|
$
|
80,506
|
|
Total non-accrual
loans as a % of loans
|
0.22
|
%
|
|
0.22
|
%
|
|
0.39
|
%
|
Total accruing past
due and non-accrual loans as a % of loans
|
0.61
|
%
|
|
0.55
|
%
|
|
0.61
|
%
|
Allowance for losses
on loans as a % of non-accrual loans
|
301.51
|
%
|
|
305.05
|
%
|
|
168.34
|
%
|
Non-performing
purchased credit-impaired loans (7)
|
$
|
25,857
|
|
|
$
|
27,011
|
|
|
$
|
32,987
|
|
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
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
($ in thousands,
except for share data)
|
2017
|
|
2016
|
|
2016
|
|
2016
|
|
2016
|
Tangible book
value per common share:
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding
|
263,842,268
|
|
|
263,638,830
|
|
|
254,461,906
|
|
|
254,362,314
|
|
|
254,285,434
|
|
Shareholders'
equity
|
$
|
2,398,541
|
|
|
$
|
2,377,156
|
|
|
$
|
2,257,073
|
|
|
$
|
2,232,212
|
|
|
$
|
2,219,602
|
|
Less: Preferred
stock
|
(111,590)
|
|
|
(111,590)
|
|
|
(111,590)
|
|
|
(111,590)
|
|
|
(111,590)
|
|
Less: Goodwill and
other intangible assets
|
(735,595)
|
|
|
(736,121)
|
|
|
(733,627)
|
|
|
(734,432)
|
|
|
(735,744)
|
|
Tangible common
shareholders' equity
|
$
|
1,551,356
|
|
|
$
|
1,529,445
|
|
|
$
|
1,411,856
|
|
|
$
|
1,386,190
|
|
|
$
|
1,372,268
|
|
Tangible book value per common share
|
$5.88
|
|
|
$5.80
|
|
|
$5.55
|
|
|
$5.45
|
|
|
$5.40
|
|
Tangible common
equity to tangible assets:
|
|
|
|
|
|
|
|
|
Tangible common
shareholders' equity
|
$
|
1,551,356
|
|
|
$
|
1,529,445
|
|
|
$
|
1,411,856
|
|
|
$
|
1,386,190
|
|
|
$
|
1,372,268
|
|
Total
assets
|
23,220,456
|
|
|
22,864,439
|
|
|
22,368,453
|
|
|
21,809,738
|
|
|
21,727,523
|
|
Less: Goodwill and
other intangible assets
|
(735,595)
|
|
|
(736,121)
|
|
|
(733,627)
|
|
|
(734,432)
|
|
|
(735,744)
|
|
Tangible
assets
|
$
|
22,484,861
|
|
|
$
|
22,128,318
|
|
|
$
|
21,634,826
|
|
|
$
|
21,075,306
|
|
|
$
|
20,991,779
|
|
Tangible common equity to tangible assets
|
6.90
|
%
|
|
6.91
|
%
|
|
6.53
|
%
|
|
6.58
|
%
|
|
6.54
|
%
|
|
Three Months
Ended
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
Annualized return
on average tangible shareholders' equity:
|
2017
|
|
2016
|
|
2016
|
($ in
thousands)
|
|
|
|
|
|
Net income
|
$
|
46,095
|
|
|
$
|
50,090
|
|
|
$
|
36,187
|
|
Average shareholders'
equity
|
2,399,159
|
|
|
2,304,208
|
|
|
2,219,570
|
|
Less: Average
goodwill and other intangible assets
|
(736,178)
|
|
|
(733,714)
|
|
|
(735,438)
|
|
Average tangible shareholders' equity
|
$
|
1,662,981
|
|
|
$
|
1,570,494
|
|
|
$
|
1,484,132
|
|
Annualized return on average tangible shareholders'
equity
|
11.09
|
%
|
|
12.76
|
%
|
|
9.75
|
%
|
(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 and $2.4 million at December 31, 2016 and March 31,
2016, 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 $745 thousand, $817
thousand and $651 thousand at March 31, 2017, December 31, 2016 and
March 31, 2016, 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
tzarkadas@valleynationalbank.com.
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION
(in thousands,
except for share data)
|
|
|
March
31,
|
|
December
31,
|
|
2017
|
|
2016
|
Assets
|
(Unaudited)
|
|
|
Cash and due from
banks
|
$
|
225,443
|
|
|
$
|
220,791
|
|
Interest bearing
deposits with banks
|
111,283
|
|
|
171,710
|
|
Investment
securities:
|
|
|
|
Held to maturity
(fair value of $1,904,523 at March 31, 2017 and $1,924,597 at
December 31, 2016)
|
1,902,329
|
|
|
1,925,572
|
|
Available for
sale
|
1,454,331
|
|
|
1,297,373
|
|
Total investment
securities
|
3,356,660
|
|
|
3,222,945
|
|
Loans held for sale
(includes fair value of $11,184 at March 31, 2017 and $57,708
at
December 31, 2016 for loans
originated for sale)
|
115,067
|
|
|
57,708
|
|
Loans
|
17,449,498
|
|
|
17,236,103
|
|
Less: Allowance for
loan losses
|
(115,443)
|
|
|
(114,419)
|
|
Net loans
|
17,334,055
|
|
|
17,121,684
|
|
Premises and
equipment, net
|
289,426
|
|
|
291,180
|
|
Bank owned life
insurance
|
392,295
|
|
|
391,830
|
|
Accrued interest
receivable
|
68,245
|
|
|
66,816
|
|
Goodwill
|
690,637
|
|
|
690,637
|
|
Other intangible
assets, net
|
44,958
|
|
|
45,484
|
|
Other
assets
|
592,387
|
|
|
583,654
|
|
Total
Assets
|
$
|
23,220,456
|
|
|
$
|
22,864,439
|
|
Liabilities
|
|
|
|
Deposits:
|
|
|
|
Non-interest
bearing
|
$
|
5,213,451
|
|
|
$
|
5,252,825
|
|
Interest
bearing:
|
|
|
|
Savings, NOW and
money market
|
8,902,596
|
|
|
9,339,012
|
|
Time
|
3,215,094
|
|
|
3,138,871
|
|
Total
deposits
|
17,331,141
|
|
|
17,730,708
|
|
Short-term
borrowings
|
1,644,964
|
|
|
1,080,960
|
|
Long-term
borrowings
|
1,634,008
|
|
|
1,433,906
|
|
Junior subordinated
debentures issued to capital trusts
|
41,617
|
|
|
41,577
|
|
Accrued expenses and
other liabilities
|
170,185
|
|
|
200,132
|
|
Total
Liabilities
|
20,821,915
|
|
|
20,487,283
|
|
Shareholders'
Equity
|
|
|
|
Preferred stock (no
par value, authorized 30,000,000 shares; issued 4,600,000 shares
at
March 31, 2017 and December 31,
2016)
|
111,590
|
|
|
111,590
|
|
Common stock (no par
value, authorized 332,023,233 shares; issued 263,990,791 shares
at
March 31, 2017 and
263,804,877 shares at December 31, 2016)
|
92,370
|
|
|
92,353
|
|
Surplus
|
2,047,357
|
|
|
2,044,401
|
|
Retained
earnings
|
188,089
|
|
|
172,754
|
|
Accumulated other
comprehensive loss
|
(39,086)
|
|
|
(42,093)
|
|
Treasury stock, at
cost (148,523 common shares at March 31, 2017 and 166,047 shares at
December 31, 2016)
|
(1,779)
|
|
|
(1,849)
|
|
Total
Shareholders' Equity
|
2,398,541
|
|
|
2,377,156
|
|
Total Liabilities
and Shareholders' Equity
|
$
|
23,220,456
|
|
|
$
|
22,864,439
|
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED
STATEMENTS OF INCOME (Unaudited)
(in thousands,
except for share data)
|
|
Three Months
Ended
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
2017
|
|
2016
|
|
2016
|
Interest
Income
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
175,014
|
|
|
$
|
179,271
|
|
|
$
|
166,071
|
|
Interest and
dividends on investment securities:
|
|
|
|
|
|
Taxable
|
17,589
|
|
|
15,656
|
|
|
13,999
|
|
Tax-exempt
|
4,031
|
|
|
4,090
|
|
|
3,690
|
|
Dividends
|
2,151
|
|
|
1,798
|
|
|
1,480
|
|
Interest on federal
funds sold and other short-term investments
|
331
|
|
|
280
|
|
|
357
|
|
Total interest
income
|
199,116
|
|
|
201,095
|
|
|
185,597
|
|
Interest
Expense
|
|
|
|
|
|
Interest on
deposits:
|
|
|
|
|
|
Savings, NOW and
money market
|
10,183
|
|
|
10,418
|
|
|
9,243
|
|
Time
|
9,553
|
|
|
9,555
|
|
|
9,585
|
|
Interest on
short-term borrowings
|
3,901
|
|
|
3,485
|
|
|
1,872
|
|
Interest on long-term
borrowings and junior subordinated debentures
|
12,950
|
|
|
13,242
|
|
|
16,744
|
|
Total interest
expense
|
36,587
|
|
|
36,700
|
|
|
37,444
|
|
Net Interest
Income
|
162,529
|
|
|
164,395
|
|
|
148,153
|
|
Provision for credit
losses
|
2,470
|
|
|
3,800
|
|
|
800
|
|
Net Interest
Income After Provision for Credit Losses
|
160,059
|
|
|
160,595
|
|
|
147,353
|
|
Non-Interest
Income
|
|
|
|
|
|
Trust and investment
services
|
2,744
|
|
|
2,733
|
|
|
2,440
|
|
Insurance
commissions
|
5,061
|
|
|
4,973
|
|
|
4,708
|
|
Service charges on
deposit accounts
|
5,236
|
|
|
5,419
|
|
|
5,103
|
|
(Losses) gains on
securities transactions, net
|
(23)
|
|
|
519
|
|
|
271
|
|
Fees from loan
servicing
|
1,815
|
|
|
1,688
|
|
|
1,594
|
|
Gains on sales of
loans, net
|
4,128
|
|
|
12,307
|
|
|
1,795
|
|
Bank owned life
insurance
|
2,463
|
|
|
1,230
|
|
|
1,963
|
|
Other
|
3,635
|
|
|
3,791
|
|
|
3,574
|
|
Total non-interest
income
|
25,059
|
|
|
32,660
|
|
|
21,448
|
|
Non-Interest
Expense
|
|
|
|
|
|
Salary and employee
benefits expense
|
63,716
|
|
|
61,415
|
|
|
60,259
|
|
Net occupancy and
equipment expense
|
23,035
|
|
|
21,525
|
|
|
22,789
|
|
FDIC insurance
assessment
|
5,127
|
|
|
5,102
|
|
|
5,099
|
|
Amortization of other
intangible assets
|
2,536
|
|
|
2,875
|
|
|
2,849
|
|
Professional and
legal fees
|
4,695
|
|
|
4,357
|
|
|
3,895
|
|
Amortization of tax
credit investments
|
5,324
|
|
|
13,384
|
|
|
7,264
|
|
Telecommunication
expense
|
2,659
|
|
|
2,882
|
|
|
2,386
|
|
Other
|
13,860
|
|
|
13,289
|
|
|
13,684
|
|
Total non-interest
expense
|
120,952
|
|
|
124,829
|
|
|
118,225
|
|
Income Before
Income Taxes
|
64,166
|
|
|
68,426
|
|
|
50,576
|
|
Income tax
expense
|
18,071
|
|
|
18,336
|
|
|
14,389
|
|
Net
Income
|
46,095
|
|
|
50,090
|
|
|
36,187
|
|
Dividends on
preferred stock
|
1,797
|
|
|
1,797
|
|
|
1,797
|
|
Net Income
Available to Common Shareholders
|
$
|
44,298
|
|
|
$
|
48,293
|
|
|
$
|
34,390
|
|
Earnings Per
Common Share:
|
|
|
|
|
|
Basic
|
$
|
0.17
|
|
|
$
|
0.19
|
|
|
$
|
0.14
|
|
Diluted
|
0.17
|
|
|
0.19
|
|
|
0.14
|
|
Cash Dividends
Declared per Common Share
|
0.11
|
|
|
0.11
|
|
|
0.11
|
|
Weighted Average
Number of Common Shares Outstanding:
|
|
|
|
|
|
Basic
|
263,797,024
|
|
|
256,422,437
|
|
|
254,075,349
|
|
Diluted
|
264,546,266
|
|
|
256,952,036
|
|
|
254,347,420
|
|
VALLEY NATIONAL
BANCORP
|
Quarterly Analysis
of Average Assets, Liabilities and Shareholders' Equity
and
|
Net Interest
Income on a Tax Equivalent Basis
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
|
Average
|
|
|
|
Avg.
|
|
Average
|
|
|
|
Avg.
|
|
Average
|
|
|
|
Avg.
|
($ in
thousands)
|
Balance
|
|
Interest
|
|
Rate
|
|
Balance
|
|
Interest
|
|
Rate
|
|
Balance
|
|
Interest
|
|
Rate
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest earning
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
(1)(2)
|
$
|
17,313,100
|
|
|
$
|
175,017
|
|
|
4.04
|
%
|
|
$
|
16,779,765
|
|
|
$
|
179,275
|
|
|
4.27
|
%
|
|
$
|
15,993,543
|
|
|
$
|
166,075
|
|
|
4.15
|
%
|
Taxable investments
(3)
|
2,836,300
|
|
|
19,740
|
|
|
2.78
|
%
|
|
2,680,175
|
|
|
17,454
|
|
|
2.60
|
%
|
|
2,497,986
|
|
|
15,479
|
|
|
2.48
|
%
|
Tax-exempt
investments (1)(3)
|
612,946
|
|
|
6,201
|
|
|
4.05
|
%
|
|
632,011
|
|
|
6,292
|
|
|
3.98
|
%
|
|
569,265
|
|
|
5,677
|
|
|
3.99
|
%
|
Federal funds sold
and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
interest bearing
deposits
|
187,118
|
|
|
331
|
|
|
0.71
|
%
|
|
296,535
|
|
|
280
|
|
|
0.38
|
%
|
|
426,676
|
|
|
357
|
|
|
0.33
|
%
|
Total interest
earning assets
|
20,949,464
|
|
|
201,289
|
|
|
3.84
|
%
|
|
20,388,486
|
|
|
203,301
|
|
|
3.99
|
%
|
|
19,487,470
|
|
|
187,588
|
|
|
3.85
|
%
|
Other
assets
|
2,046,822
|
|
|
|
|
|
|
2,291,505
|
|
|
|
|
|
|
2,192,808
|
|
|
|
|
|
Total
assets
|
$
|
22,996,286
|
|
|
|
|
|
|
$
|
22,679,991
|
|
|
|
|
|
|
$
|
21,680,278
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW and
money market deposits
|
$
|
9,049,446
|
|
|
$
|
10,183
|
|
|
0.45
|
%
|
|
$
|
9,034,605
|
|
|
$
|
10,418
|
|
|
0.46
|
%
|
|
$
|
8,334,289
|
|
|
$
|
9,243
|
|
|
0.44
|
%
|
Time
deposits
|
3,178,452
|
|
|
9,553
|
|
|
1.20
|
%
|
|
3,137,057
|
|
|
9,555
|
|
|
1.22
|
%
|
|
3,127,842
|
|
|
9,585
|
|
|
1.23
|
%
|
Short-term
borrowings
|
1,563,000
|
|
|
3,901
|
|
|
1.00
|
%
|
|
1,266,311
|
|
|
3,485
|
|
|
1.10
|
%
|
|
1,061,011
|
|
|
1,872
|
|
|
0.71
|
%
|
Long-term borrowings
(4)
|
1,494,273
|
|
|
12,950
|
|
|
3.47
|
%
|
|
1,490,187
|
|
|
13,242
|
|
|
3.55
|
%
|
|
1,812,556
|
|
|
16,744
|
|
|
3.70
|
%
|
Total interest
bearing liabilities
|
15,285,171
|
|
|
36,587
|
|
|
0.96
|
%
|
|
14,928,160
|
|
|
36,700
|
|
|
0.98
|
%
|
|
14,335,698
|
|
|
37,444
|
|
|
1.04
|
%
|
Non-interest bearing
deposits
|
5,138,870
|
|
|
|
|
|
|
5,256,984
|
|
|
|
|
|
|
4,918,463
|
|
|
|
|
|
Other
liabilities
|
173,086
|
|
|
|
|
|
|
190,639
|
|
|
|
|
|
|
206,547
|
|
|
|
|
|
Shareholders'
equity
|
2,399,159
|
|
|
|
|
|
|
2,304,208
|
|
|
|
|
|
|
2,219,570
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
22,996,286
|
|
|
|
|
|
|
$
|
22,679,991
|
|
|
|
|
|
|
$
|
21,680,278
|
|
|
|
|
|
Net interest
income/interest rate spread (5)
|
|
|
$
|
164,702
|
|
|
2.88
|
%
|
|
|
|
$
|
166,601
|
|
|
3.01
|
%
|
|
|
|
$
|
150,144
|
|
|
2.81
|
%
|
Tax equivalent
adjustment
|
|
|
(2,173)
|
|
|
|
|
|
|
(2,206)
|
|
|
|
|
|
|
(1,991)
|
|
|
|
Net interest income,
as reported
|
|
|
$
|
162,529
|
|
|
|
|
|
|
$
|
164,395
|
|
|
|
|
|
|
$
|
148,153
|
|
|
|
Net interest margin
(6)
|
|
|
|
|
3.10
|
%
|
|
|
|
|
|
3.23
|
%
|
|
|
|
|
|
3.04
|
%
|
Tax equivalent
effect
|
|
|
|
|
0.04
|
%
|
|
|
|
|
|
0.04
|
%
|
|
|
|
|
|
0.04
|
%
|
Net interest margin
on a fully tax equivalent basis (6)
|
|
|
|
|
3.14
|
%
|
|
|
|
|
|
3.27
|
%
|
|
|
|
|
|
3.08
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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-a-27-percent-increase-in-first-quarter-net-income-300445687.html
SOURCE Valley National Bancorp