WAYNE, N.J., Oct. 25, 2017 /PRNewswire/ -- Valley
National Bancorp (NYSE: VLY), the holding company for Valley
National Bank, today reported net income for the third quarter of
2017 of $39.6 million, or
$0.14 per diluted common share, as
compared to the third quarter of 2016 earnings of $42.8 million, or $0.16 per diluted common share, and net income of
$50.1 million, or $0.18 per diluted common share, for the second
quarter of 2017. Net income for the third quarter of 2017
included infrequent charges totaling $11.1
million ($6.8 million
after-tax) that mostly consist of professional fees and employee
severance expense related to our LIFT earnings enhancement program,
and, to a lesser extent, merger expenses related to the proposed
acquisition of USAmeriBancorp, Inc. ("USAB"). Excluding the
infrequent charges, our adjusted net income was $46.4 million, or $0.17 per diluted common share, for the third
quarter of 2017. See further details below.
Key financial highlights for the third quarter:
- Loan Portfolio: Loans increased by $490.7 million, or 11.1 percent on an annualized
basis, to $18.2 billion at
September 30, 2017 from June 30, 2017 largely due to net increases of
$216.7 million, $143.1 million and $75.6
million in residential mortgage loans, total commercial real
estate loans and commercial and industrial loans, respectively. The
residential mortgage loan growth was largely driven by solid loan
production from our expanding internal team of mortgage
consultants covering New Jersey,
New York and Florida. Additionally, during the third
quarter of 2017, we sold $176 million
of residential mortgage loans (including approximately $139 million of loans held for sale at
June 30, 2017) resulting in pre-tax
gains of $5.5 million. See additional
information under the "Loans, Deposits and Other Borrowings"
section below.
- Earnings Enhancement Program: In July 2017, we completed the idea generation and
approval phase of the our company-wide earning enhancement
initiative called LIFT. As a result of these efforts, we plan to
achieve approximately $22 million in
total cost reductions and revenue enhancements on an annualized
pre-tax run-rate through a combination of workforce reduction and
other efficiency and revenue initiatives. We estimate that these
changes will result in employee severance and other implementation
costs of approximately $11 million,
of which the vast majority was recognized in the third quarter of
2017. The implementation phase of the initiative enhancements is
expected to be fully phased-in by June 30,
2019. During the third quarter of 2017, Valley implemented
several enhancements that we anticipate will result in cost
reductions of $9 million on an
annualized pre-tax basis beginning in the fourth quarter of
2017.
- Efficiency Ratio: Our efficiency ratio was 69.43 percent
for the third quarter of 2017 compared to 63.28 percent and 61.57
percent for the third quarter of 2016 and second quarter of 2017,
respectively. Excluding the aforementioned $11.1 million of infrequent charges and
amortization of tax credit investments included in non-interest
expense, our adjusted efficiency ratio was 59.21 percent for the
third quarter of 2017 as compared to 59.68 percent and 57.58
percent for the third quarter of 2016 and second quarter of 2017,
respectively. See the "Consolidated Financial Highlights" tables
below for additional information regarding this non-GAAP
measure.
- Net Interest Income and Margin: Net interest income on a
tax equivalent basis of $166.9
million for the third quarter of 2017 increased $10.6 million as compared to the third quarter of
2016 and decreased $4.2 million from
the second quarter of 2017. Our net interest margin on a tax
equivalent basis of 3.08 percent for the third quarter of 2017
decreased by 6 basis points and 12 basis points as compared to the
third quarter of 2016 and second quarter of 2017, respectively. The
decrease in net interest income and margin for the third quarter of
2017 as compared to the linked second quarter was partly caused by
a combined decrease of $4.1 million
in commercial loan interest rate swap fees and interest income
recoveries from non-performing loans, as well as an increase in
interest expense on deposits. See the "Net Interest Income and
Margin" section below for more details.
Gerald H. Lipkin, Chairman &
CEO commented that, "Our net income continued to benefit from
strong new loan volumes mainly within residential mortgage and
commercial real estate loans during the third quarter.
Additionally, the credit quality of our balance sheet remained
well-controlled as reflected in the decrease in accruing loans past
due to 0.17 percent of total loans and net recoveries of loan
charge-offs totaling $1.2 million for
the third quarter of 2017."
The acquisition of USAB, and its wholly owned subsidiary,
USAmeriBank, is expected to close in the first quarter of 2018, and
Valley has received all necessary banking regulatory approvals to
complete the merger. However, the merger is still subject to a
number of conditions, including shareholder approval. Valley has
filed an S-4 registration containing a joint proxy statement with
the Securities Exchange Commission ("SEC"). When the SEC
process allows the registration statement to become effective,
Valley and USAB will announce the dates of their shareholder
meetings that are expected to be held in December 2017.
Net Interest Income and Margin
Net interest income on a tax equivalent basis totaling
$166.9 million for the third quarter
of 2017 increased $10.6 million as
compared to the third quarter of 2016 and decreased $4.2 million from the second quarter of 2017.
Interest income on a tax equivalent basis increased $401 thousand to $213.7
million for the third quarter of 2017 as compared to the
second quarter of 2017 mainly due to a $304.6 million increase in average loans,
partially offset by a 5 basis point decrease in the yield on
average loans. The decrease in yield on average loans for the third
quarter of 2017 as compared to the linked second quarter was
largely due to a combined decrease of $4.1
million in periodic commercial loan fee income related to
derivative interest rate swaps executed with customers and interest
income recoveries from non-performing loans. Interest expense
of $46.8 million for the third
quarter of 2017 increased $4.6
million as compared to the second quarter of 2017. During
the third quarter of 2017, our interest expense on deposits
increased by approximately $3.6
million from the linked second quarter largely due to an
increase in short-term market interest rates on interest bearing
deposits without stated maturities and one more day during the
third quarter compared to the second quarter. Interest
expense on long-term borrowings also increased $1.4 million in the third quarter of 2017 as
compared to the second quarter of 2017 due, in part, to an increase
of $352.4 million in the average
balances. Average long-term borrowings increased as compared
to the second quarter of 2017 mostly due to new long-term FHLB
borrowings replacing short-term FHLB advances that matured during
the second and third quarters of 2017. As a result, both the
interest expense on short-term borrowings and average balances
declined by $355 thousand and
$300.2 million, respectively, during
the third quarter of 2017 as compared to the second quarter of
2017.
Our net interest margin on a tax equivalent basis of 3.08
percent for the third quarter of 2017 decreased by 6 basis points
and 12 basis points as compared to the third quarter of 2016 and
second quarter of 2017, respectively. The yield on average interest
earning assets decreased by 3 basis points on a linked quarter
basis mostly due to the aforementioned decline in commercial loan
swap fees and interest income recoveries which negatively impacted
the yield by 8 basis points. The yield on average loans also
decreased 5 basis points to 4.15 percent for the third quarter of
2017 as compared to the second quarter of 2017 due to the
aforementioned decreases which negatively impacted the loan yield
by approximately 9 basis points. The yield on average taxable and
non-taxable investment securities also moderately decreased by 1
basis point and 2 basis points, respectively, as compared to the
second quarter of 2017. The overall cost of average interest
bearing liabilities increased by 11 basis points to 1.19 percent
during the third quarter of 2017 from 1.08 percent in the linked
second quarter of 2017. The increase was due, in part, to
higher interest rates on most deposits and short-term borrowings, a
shift in the overall mix of borrowings from short-term to more
long-term FHLB advances (with maturities less than two years), as
well as one more day during the third quarter of 2017 compared to
the second quarter. Our cost of total deposits was 0.61
percent for the third quarter of 2017 as compared to 0.53 percent
for the second quarter of 2017.
Non-Interest Income
Non-interest income increased $1.4
million, or 5.7 percent, to $26.1
million for the third quarter of 2017 from $24.7 million for the second quarter of 2017
mostly due to an increase in net gains on sales of residential
mortgage loans caused by higher sales volume.
Non-Interest Expense
Non-interest expense increased $13.3
million, or 11.2 percent, to $132.6
million for the third quarter of 2017 from the second
quarter of 2017 mainly due to increases of $6.8 million and $5.7
million in professional and legal fees and salary and
employee benefits, respectively. For the third quarter of 2017,
these expense categories included charges of $7.1 million and $3.8
million, respectively, related to our LIFT initiative and
proposed USAB merger. Other non-interest expense also included
$266 thousand of USAB merger related
expenses during the third quarter of 2017.
Income Tax Expense
Income tax expense totaled $17.1
million for the third quarter of 2017 as compared to
$20.7 million and $17.0 million for the second quarter of 2017 and
third quarter of 2016, respectively. Our effective tax rate was
30.1 percent, 29.3 percent, and 28.5 percent for the third quarter
of 2017, second quarter of 2017, and third 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.
Loans, Deposits and Other Borrowings
Loans. Loans increased
$490.7 million, or 11.1 percent on an
annualized basis, to approximately $18.2
billion at September 30, 2017 from June 30, 2017,
net of $69.6 million decline in the
PCI loan portion of the portfolio. Residential mortgage loans
held for sale totaled $13.3 million
and $139.6 million at
September 30, 2017 and June 30, 2017, respectively.
See additional information regarding our residential mortgage loan
activities below.
Total commercial and industrial loans increased $75.6 million, or 11.5 percent on an annualized
basis, from June 30, 2017 to approximately $2.7 billion at September 30, 2017 due to a
$86.7 million, or 14.3 percent on an
annualized basis, increase in the non-PCI loan portfolio, partially
offset by normal run-off in the PCI loan portfolio.
Commercial real estate loans (excluding construction loans)
increased $120.6 million from
June 30, 2017 to $9.4 billion at
September 30, 2017 mostly due to a $158.6 million, or 7.7 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, New Jersey and Florida, particularly amongst our pre-existing
long-term customer base during the third quarter of 2017.
Construction loans increased $22.6
million, or 10.2 percent on an annualized basis, to
$903.6 million at September 30,
2017 from June 30, 2017. The increase was mostly due to
advances on existing construction projects.
Total residential mortgage loans increased $216.7 million, or approximately 31.8 percent on
an annualized basis, to approximately $2.9
billion at September 30, 2017 from June 30, 2017
due to strong loan volumes generated by our new and expanding
internal team of mortgage consultants covering our primary
markets and a high level of such loans originated for portfolio
investment rather than sale during the third quarter of 2017.
New and refinanced residential mortgage loan originations totaled
approximately $307 million for the
third quarter of 2017 as compared to $194
million and $258 million for
the second quarter of 2017 and third quarter of 2016,
respectively.
Home equity loans totaling $448.8
million at September 30, 2017 decreased by $1.7 million as compared to June 30, 2017
mostly due to PCI loan repayment activity. New home equity
loan volumes and customer usage of existing home equity lines of
credit continue to be weak, despite a relatively attractive
interest rate environment.
Automobile loans increased by $21.3
million, or 7.4 percent on an annualized basis, to
$1.2 billion at September 30,
2017 as compared to June 30, 2017. New auto loan
origination volumes increased approximately 12.9 percent during the
third quarter of 2017 as compared to the second quarter of 2017
largely due to stronger application activity. Our Florida
dealership network contributed over $25
million in auto loan originations, representing
approximately 17 percent of Valley's total new auto loan production
for the third quarter of 2017 as compared to approximately
$23.2 million, or 18 percent, of
Valley's total auto originations for the second quarter of
2017.
Other consumer loans increased $35.6
million, or 22.2 percent on an annualized basis, to
$677.9 million at September 30,
2017 as compared to $642.2 million at
June 30, 2017 mainly due to continued growth and customer
usage of collateralized personal lines of credit.
Deposits. Total deposits increased $62.7 million, or 1.5 percent on an annualized
basis, to approximately $17.3 billion
at September 30, 2017 from June 30, 2017 largely due to
increases in the Savings, NOW, and money market accounts, as well
as time deposits resulting from ongoing retail and business account
initiatives in 2017. However, non-interest bearing deposits
and brokered money market account balances declined $98.6 million and $96.2
million at September 30, 2017,
respectively, as compared to June 30,
2017. Non-interest bearing deposits; savings, NOW, money
market deposits; and time deposits represented approximately 29
percent, 51 percent and 20 percent of total deposits as of
September 30, 2017. The composition of deposits based
upon the period end balances remained relatively unchanged at
September 30, 2017 as compared to June 30, 2017.
Other Borrowings. Short-term borrowings decreased
$251.7 million to approximately
$1.5 billion at September 30,
2017 as compared to June 30, 2017 largely due to the maturity
of several FHLB advances. Long-term borrowings increased
$395.6 million to $2.2 billion at September 30, 2017 as
compared to June 30, 2017 mostly due to new FHLB advances with
contractual terms less than two years utilized to replace the
matured short-term advances and provide additional liquidity for
loan growth during the third quarter of 2017.
Credit Quality
Hurricane Irma. The credit quality of our Florida loan portfolio has remained resilient
in the aftermath of Hurricane Irma, which hit Florida in mid-September. Through our loan
customer outreach efforts, we offered loan payment deferrals up to
90 days to distressed borrowers. Under the deferral program,
we have currently granted 53 loan deferral requests with a combined
outstanding balance of approximately $37.6
million. At this time, no material loan losses are
expected as a result of the hurricane.
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. Our PCI loan portfolio totaled
$1.5 billion, or 8.1 percent, of our
total loan portfolio at September 30, 2017.
Total non-performing assets (NPAs), consisting of non-accrual
loans, other real estate owned properties and other repossessed
assets (foreclosed assets), and non-accrual debt securities
increased $596 thousand, or 1.1
percent, to $55.2 million at
September 30, 2017 as compared to June 30, 2017 mainly
due to a moderate increase in foreclosed assets during the third
quarter of 2017.
Total accruing past due loans (i.e., loans past due 30 days or
more and still accruing interest) decreased $11.6 million to $30.1
million, or 0.17 percent of total loans, at
September 30, 2017 as compared to $41.8
million, or 0.24 percent of total loans, at June 30,
2017. The lower level of accruing past due loans was primarily
caused by decreases of $6.6 million
and $5.7 million in the loans past
due 90 or more days and loans past due 60 to 89 days categories at
September 30, 2017, respectively, as compared to June 30,
2017. The decreases were largely caused by the third quarter
renewal of matured performing loans and the improved performance of
one internally classified loan relationship previously reported in
the respective delinquency categories at June 30, 2017.
At September 30, 2017, our commercial and industrial loan
portfolio included NYC and
Chicago taxi medallion loans
totaling $129.3 million and
$10.0 million, respectively. At
September 30, 2017, the medallion portfolio included impaired
loans of $40.5 million with related
reserves of $5.0 million within the
allowance for loan losses as compared to impaired loans of
$37.4 million with related reserves
of $3.7 million at June 30,
2017. At September 30, 2017, the impaired medallion
loans largely consisted of performing troubled debt restructured
(TDR) loans, as well as $5.6 million
of non-accrual Chicago taxi cab
medallion loans. At September 30, 2017, loans past due
60 to 89 days included $2.2 million
of matured performing NYC taxi
medallions. We are currently renegotiating the terms of these past
due loans. In addition, $18.2 million of performing
NYC taxi medallion loans have
contractual maturity dates in the fourth quarter of
2017. Valley's historical taxi medallion lending criteria has
been conservative in regards to capping the loan amounts in
relation to market valuations, as well as obtaining personal
guarantees and other collateral whenever possible. However,
we continue to closely monitor this portfolio's performance and the
potential impact of the changes in market valuation for taxi
medallions due to competing car service providers and other
factors.
Despite the increase in performing taxi medallion loans
classified as impaired TDR loans, we believe our overall credit
quality metrics continued to reflect our solid underwriting
standards at September 30, 2017. However, we can provide
no assurances as to the future level of our loan delinquencies.
Allowance for Credit Losses. The following table
summarizes the allocation of the allowance for credit losses to
specific loan categories and the allocation as a percentage of each
loan category (including PCI loans) at September 30, 2017,
June 30, 2017, and September 30, 2016:
|
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
2016
|
|
|
|
|
Allocation
|
|
|
|
Allocation
|
|
|
|
Allocation
|
|
|
|
|
as a %
of
|
|
|
|
as a %
of
|
|
|
|
as a %
of
|
|
|
Allowance
|
|
Loan
|
|
Allowance
|
|
Loan
|
|
Allowance
|
|
Loan
|
|
Allocation
|
|
Category
|
|
Allocation
|
|
Category
|
|
Allocation
|
|
Category
|
|
($ in
thousands)
|
Loan
Category:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial loans*
|
$
|
57,203
|
|
|
2.11
|
%
|
|
$
|
53,792
|
|
|
2.04
|
%
|
|
$
|
52,969
|
|
|
2.07
|
%
|
Commercial real
estate loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
36,626
|
|
|
0.39
|
%
|
|
37,180
|
|
|
0.40
|
%
|
|
35,513
|
|
|
0.43
|
%
|
|
Construction
|
18,673
|
|
|
2.07
|
%
|
|
18,275
|
|
|
2.07
|
%
|
|
16,947
|
|
|
2.11
|
%
|
Total commercial real
estate loans
|
55,299
|
|
|
0.54
|
%
|
|
55,455
|
|
|
0.55
|
%
|
|
52,460
|
|
|
0.58
|
%
|
Residential mortgage
loans
|
3,892
|
|
|
0.13
|
%
|
|
4,186
|
|
|
0.15
|
%
|
|
3,378
|
|
|
0.12
|
%
|
Consumer
loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
equity
|
592
|
|
|
0.13
|
%
|
|
582
|
|
|
0.13
|
%
|
|
796
|
|
|
0.17
|
%
|
|
Auto and other
consumer
|
4,494
|
|
|
0.24
|
%
|
|
4,606
|
|
|
0.26
|
%
|
|
3,311
|
|
|
0.20
|
%
|
Total consumer
loans
|
5,086
|
|
|
0.22
|
%
|
|
5,188
|
|
|
0.23
|
%
|
|
4,107
|
|
|
0.19
|
%
|
Total allowance for
credit losses
|
$
|
121,480
|
|
|
0.67
|
%
|
|
$
|
118,621
|
|
|
0.67
|
%
|
|
$
|
112,914
|
|
|
0.68
|
%
|
Allowance for credit
losses as a %
|
|
|
|
|
|
|
|
|
|
|
|
of non-PCI
loans
|
|
|
0.73
|
%
|
|
|
|
0.73
|
%
|
|
|
|
0.76
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Includes the
reserve for unfunded letters of credit.
|
|
|
|
|
|
|
|
|
|
|
Our loan portfolio, totaling $18.2
billion at September 30, 2017, had net recoveries of
loan charge-offs totaling $1.2
million for the third quarter of 2017 as compared to net
loan charge-offs of $2.7 million and
$3.3 million for the second quarter
of 2017 and the third quarter of 2016, respectively. The
improvement in net loan charge-offs as compared to the second
quarter of 2017 was mainly due to one large commercial and
industrial loan recovery totaling $1.8
million during the third quarter of 2017 and a decline in
charge-offs within the same loan category mainly due to an
unrelated charged-off loan relationship totaling $1.9 million in the second quarter of 2017.
During the third quarter of 2017, we recorded a $1.6 million provision for credit losses as
compared to $3.6 million and
$5.8 million for the second quarter
of 2017 and the third quarter of 2016, respectively. The
quarter over quarter decrease in the provision was due, in part, to
our aforementioned net recoveries of loan charge-offs and the
moderate levels of actual and estimated loss experience across the
majority of the loan portfolio which is reflective of both Valley's
underwriting standards and current economic conditions.
Additionally, our analysis of the adequacy of the allowance for
loan losses included an assessment of the impact of Hurricane Irma
on our Florida loan portfolio at
September 30, 2017. As result
of the assessment, we do not expect a material amount of loan
losses related to Hurricane Irma.
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 both
September 30, 2017 and June 30, 2017 and 0.68
percent at September 30, 2016. At September 30, 2017, our
allowance allocations for losses as a percentage of total loans
remained relatively stable in most loan categories as compared to
June 30, 2017, but increased 0.07 percent for commercial and
industrial loans. The increase was partly attributable to an
increase in specific and qualitative reserves related to the
collateral valuation of taxi medallion loans.
Our allowance for credit losses as a percentage of total non-PCI
loans (excluding PCI loans with carrying values totaling
approximately $1.5 billion) was 0.73
percent at both September 30, 2017 and June 30, 2017 as
compared to 0.76 percent at September 30, 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 September 30, 2017, June 30, 2017 and
September 30, 2016.
Capital Adequacy
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 common equity Tier 1 capital
ratios were 12.61 percent, 10.42 percent, 8.13 percent and 9.22
percent, respectively, at September 30,
2017. On August 3, 2017,
Valley issued $100 million of 5.50
percent (fixed-to-floating rate) non-cumulative perpetual preferred
stock (Series B) which was included in Valley's Tier 1 capital and
total risk-based capital at September 30,
2017. Net proceeds to Valley after deducting underwriting
discounts, commissions and offering expenses were approximately
$98.1 million.
Investor Conference Call
Valley will host a conference call with investors and the
financial community at 11:00 AM Eastern
Standard Time, today to discuss the 2017 third quarter
earnings. Those wishing to participate in the call may dial
toll-free (800) 230-1093. Investor presentation materials
will be made available prior to the conference call at
www.valleynationalbank.com.
About Valley
Valley National Bancorp is a regional bank holding company
headquartered in Wayne, New Jersey
with nearly $24 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 economy, mainly in New Jersey, New
York and Florida, as well
as an unexpected decline in commercial real estate values within
our market areas;
- less than expected cost reductions 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 or determination not to pay dividends at current
levels, or at all, because of inadequate future earnings,
regulatory restrictions or limitations, changes in our capital
requirements or a decision to increase capital by retaining more
earnings;
- 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.
- failure to close the merger with USAB for any reason, including
the failure to obtain shareholder approval for the merger within
the proposed timeframe or the stock price of Valley during the 30
day pricing period prior to the closing of the merger gives either
Valley or USAB the right to terminate the merger agreement;
- the risk that the businesses of Valley and USAB may not be
combined successfully, or such combination may take longer or be
more difficult, time-consuming or costly to accomplish than
expected;
- the diversion of management's time on issues relating to the
merger; the inability to realize expected cost savings and
synergies from the merger of USAB with Valley in the amounts or in
the timeframe anticipated; and
- the inability to retain USAB's customers and 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 and Quarterly
Report on Form 10-Q for the period ended June 30, 2017.
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
|
|
Nine Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
($ in thousands,
except for share data)
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
FINANCIAL
DATA:
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
164,854
|
|
|
$
|
168,960
|
|
|
$
|
154,146
|
|
|
$
|
496,343
|
|
|
$
|
453,754
|
|
Net interest income -
FTE (1)
|
166,878
|
|
|
171,086
|
|
|
156,315
|
|
|
502,666
|
|
|
459,930
|
|
Non-interest
income
|
26,088
|
|
|
24,690
|
|
|
24,853
|
|
|
75,837
|
|
|
70,565
|
|
Non-interest
expense
|
132,565
|
|
|
119,239
|
|
|
113,268
|
|
|
372,756
|
|
|
351,296
|
|
Income tax
expense
|
17,088
|
|
|
20,714
|
|
|
17,049
|
|
|
55,873
|
|
|
46,898
|
|
Net income
|
39,649
|
|
|
50,065
|
|
|
42,842
|
|
|
135,809
|
|
|
118,056
|
|
Dividends on
preferred stock
|
2,683
|
|
|
1,797
|
|
|
1,797
|
|
|
6,277
|
|
|
5,391
|
|
Net income available
to common shareholders
|
$
|
36,966
|
|
|
$
|
48,268
|
|
|
$
|
41,045
|
|
|
$
|
129,532
|
|
|
$
|
112,665
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
264,058,174
|
|
|
263,958,292
|
|
|
254,473,994
|
|
|
263,938,786
|
|
|
254,310,769
|
|
|
Diluted
|
264,936,220
|
|
|
264,778,242
|
|
|
254,940,307
|
|
|
264,754,845
|
|
|
254,698,593
|
|
Per common share
data:
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings
|
$
|
0.14
|
|
|
$
|
0.18
|
|
|
$
|
0.16
|
|
|
$
|
0.49
|
|
|
$
|
0.44
|
|
|
Diluted
earnings
|
0.14
|
|
|
0.18
|
|
|
0.16
|
|
|
0.49
|
|
|
0.44
|
|
|
Cash dividends
declared
|
0.11
|
|
|
0.11
|
|
|
0.11
|
|
|
0.33
|
|
|
0.33
|
|
Closing stock price -
high
|
12.40
|
|
|
12.23
|
|
|
9.80
|
|
|
12.76
|
|
|
10.13
|
|
Closing stock price -
low
|
10.71
|
|
|
11.28
|
|
|
8.86
|
|
|
10.71
|
|
|
8.31
|
|
CORE ADJUSTED
FINANCIAL DATA: (2)
|
|
|
|
|
|
|
|
|
|
Net income available
to common shareholders, as adjusted
|
$
|
43,762
|
|
|
$
|
48,268
|
|
|
$
|
41,045
|
|
|
$
|
136,329
|
|
|
$
|
112,665
|
|
Basic earnings per
share, as adjusted
|
$
|
0.17
|
|
|
$
|
0.18
|
|
|
$
|
0.16
|
|
|
$
|
0.52
|
|
|
$
|
0.44
|
|
Diluted earnings per
share, as adjusted
|
0.17
|
|
|
0.18
|
|
|
0.16
|
|
|
0.51
|
|
|
0.44
|
|
FINANCIAL
RATIOS:
|
|
|
|
|
|
|
|
|
|
Net interest
margin
|
3.05
|
%
|
|
3.16
|
%
|
|
3.10
|
%
|
|
3.10
|
%
|
|
3.08
|
%
|
Net interest margin -
FTE (1)
|
3.08
|
|
|
3.20
|
|
|
3.14
|
|
|
3.14
|
|
|
3.12
|
|
Annualized return on
average assets
|
0.67
|
|
|
0.86
|
|
|
0.78
|
|
|
0.78
|
|
|
0.72
|
|
Annualized return on
avg. shareholders' equity
|
6.34
|
|
|
8.27
|
|
|
7.61
|
|
|
7.42
|
|
|
7.04
|
|
Annualized return on
avg. tangible shareholders' equity (2)
|
8.96
|
|
|
11.88
|
|
|
11.29
|
|
|
10.61
|
|
|
10.48
|
|
Efficiency ratio
(3)
|
69.43
|
|
|
61.57
|
|
|
63.28
|
|
|
65.15
|
|
|
67.00
|
|
CORE ADJUSTED
FINANCIAL RATIOS: (2)
|
|
|
|
|
|
|
|
|
|
Annualized return on
average assets, as adjusted
|
0.79
|
%
|
|
0.86
|
%
|
|
0.78
|
%
|
|
0.81
|
%
|
|
0.72
|
%
|
Annualized return on
average shareholders' equity, as adjusted
|
7.42
|
|
|
8.27
|
|
|
7.61
|
|
|
7.79
|
|
|
7.04
|
|
Annualized return on
average tangible shareholders' equity, as adjusted
(2)
|
10.50
|
|
|
11.88
|
|
|
11.29
|
|
|
11.14
|
|
|
10.48
|
|
Efficiency ratio, as
adjusted (3)
|
59.21
|
|
|
57.58
|
|
|
59.68
|
|
|
59.46
|
|
|
62.93
|
|
AVERAGE BALANCE
SHEET ITEMS:
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
$
|
23,604,252
|
|
|
$
|
23,396,259
|
|
|
$
|
22,081,470
|
|
|
$
|
23,334,491
|
|
|
$
|
21,831,622
|
|
Interest earning
assets
|
21,642,846
|
|
|
21,416,671
|
|
|
19,896,832
|
|
|
21,338,866
|
|
|
19,641,559
|
|
Loans
|
18,006,274
|
|
|
17,701,676
|
|
|
16,570,723
|
|
|
17,676,222
|
|
|
16,273,482
|
|
Interest bearing
liabilities
|
15,737,738
|
|
|
15,610,935
|
|
|
14,550,002
|
|
|
15,546,272
|
|
|
14,389,474
|
|
Deposits
|
17,353,099
|
|
|
17,288,487
|
|
|
16,668,925
|
|
|
17,336,068
|
|
|
16,501,615
|
|
Shareholders'
equity
|
2,502,538
|
|
|
2,420,848
|
|
|
2,251,461
|
|
|
2,441,227
|
|
|
2,236,569
|
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
|
As
Of
|
BALANCE SHEET
ITEMS:
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
(In
thousands)
|
2017
|
|
2017
|
|
2017
|
|
2016
|
|
2016
|
Assets
|
$
|
23,780,661
|
|
|
$
|
23,449,350
|
|
|
$
|
23,220,456
|
|
|
$
|
22,864,439
|
|
|
$
|
22,368,453
|
|
Total
loans
|
18,201,462
|
|
|
17,710,760
|
|
|
17,449,498
|
|
|
17,236,103
|
|
|
16,634,135
|
|
Non-PCI
loans
|
16,729,607
|
|
|
16,169,291
|
|
|
15,794,797
|
|
|
15,464,601
|
|
|
14,777,020
|
|
Deposits
|
17,312,766
|
|
|
17,250,018
|
|
|
17,331,141
|
|
|
17,730,708
|
|
|
16,972,183
|
|
Shareholders'
equity
|
2,537,984
|
|
|
2,423,901
|
|
|
2,398,541
|
|
|
2,377,156
|
|
|
2,257,073
|
|
|
|
|
|
|
|
|
|
|
|
LOANS:
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
$
|
2,706,912
|
|
|
$
|
2,631,312
|
|
|
$
|
2,642,319
|
|
|
$
|
2,638,195
|
|
|
$
|
2,558,968
|
|
Commercial real
estate:
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
9,351,068
|
|
|
9,230,514
|
|
|
9,016,418
|
|
|
8,719,667
|
|
|
8,313,855
|
|
Construction
|
903,640
|
|
|
881,073
|
|
|
835,854
|
|
|
824,946
|
|
|
802,568
|
|
Total
commercial real estate
|
10,254,708
|
|
|
10,111,587
|
|
|
9,852,272
|
|
|
9,544,613
|
|
|
9,116,423
|
|
Residential
mortgage
|
2,941,435
|
|
|
2,724,777
|
|
|
2,745,447
|
|
|
2,867,918
|
|
|
2,826,130
|
|
Total
Consumer:
|
|
|
|
|
|
|
|
|
|
Home
equity
|
448,842
|
|
|
450,510
|
|
|
458,891
|
|
|
469,009
|
|
|
476,820
|
|
Automobile
|
1,171,685
|
|
|
1,150,343
|
|
|
1,150,053
|
|
|
1,139,227
|
|
|
1,121,606
|
|
Other
consumer
|
677,880
|
|
|
642,231
|
|
|
600,516
|
|
|
577,141
|
|
|
534,188
|
|
Total consumer
loans
|
2,298,407
|
|
|
2,243,084
|
|
|
2,209,460
|
|
|
2,185,377
|
|
|
2,132,614
|
|
Total
loans
|
$
|
18,201,462
|
|
|
$
|
17,710,760
|
|
|
$
|
17,449,498
|
|
|
$
|
17,236,103
|
|
|
$
|
16,634,135
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS:
|
|
|
|
|
|
|
|
|
|
Book value per common
share
|
$
|
8.81
|
|
|
$
|
8.76
|
|
|
$
|
8.67
|
|
|
$
|
8.59
|
|
|
$
|
8.43
|
|
Tangible book value
per common share (2)
|
6.04
|
|
|
5.98
|
|
|
5.88
|
|
|
5.80
|
|
|
5.55
|
|
Tangible common
equity to tangible assets (2)
|
6.92
|
%
|
|
6.95
|
%
|
|
6.90
|
%
|
|
6.91
|
%
|
|
6.53
|
%
|
Tier 1 leverage
capital
|
8.13
|
|
|
7.69
|
|
|
7.70
|
|
|
7.74
|
|
|
7.35
|
|
Common equity tier 1
capital
|
9.22
|
|
|
9.18
|
|
|
9.12
|
|
|
9.27
|
|
|
8.73
|
|
Tier 1 risk-based
capital
|
10.42
|
|
|
9.81
|
|
|
9.76
|
|
|
9.90
|
|
|
9.36
|
|
Total risk-based
capital
|
12.61
|
|
|
11.99
|
|
|
11.96
|
|
|
12.15
|
|
|
11.64
|
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
ALLOWANCE FOR
CREDIT LOSSES:
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
($ in
thousands)
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Beginning balance -
Allowance for credit losses
|
$
|
118,621
|
|
|
$
|
117,696
|
|
|
$
|
110,414
|
|
|
$
|
116,604
|
|
|
$
|
108,367
|
|
Loans
charged-off:
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
(265)
|
|
|
(2,910)
|
|
|
(3,763)
|
|
|
(4,889)
|
|
|
(5,507)
|
|
|
Commercial real
estate
|
—
|
|
|
(139)
|
|
|
—
|
|
|
(553)
|
|
|
(519)
|
|
|
Construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Residential
mortgage
|
(129)
|
|
|
(229)
|
|
|
(518)
|
|
|
(488)
|
|
|
(750)
|
|
|
Total
Consumer
|
(1,335)
|
|
|
(1,011)
|
|
|
(782)
|
|
|
(3,467)
|
|
|
(2,553)
|
|
|
Total loans
charged-off
|
(1,729)
|
|
|
(4,289)
|
|
|
(5,063)
|
|
|
(9,397)
|
|
|
(9,329)
|
|
Charged-off loans
recovered:
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
2,320
|
|
|
312
|
|
|
902
|
|
|
3,480
|
|
|
2,418
|
|
|
Commercial real
estate
|
42
|
|
|
346
|
|
|
34
|
|
|
530
|
|
|
1,581
|
|
|
Construction
|
—
|
|
|
294
|
|
|
10
|
|
|
294
|
|
|
10
|
|
|
Residential
mortgage
|
220
|
|
|
235
|
|
|
495
|
|
|
903
|
|
|
604
|
|
|
Total
Consumer
|
366
|
|
|
395
|
|
|
282
|
|
|
1,324
|
|
|
1,194
|
|
|
Total loans
recovered
|
2,948
|
|
|
1,582
|
|
|
1,723
|
|
|
6,531
|
|
|
5,807
|
|
Net recoveries
(charge-offs)
|
1,219
|
|
|
(2,707)
|
|
|
(3,340)
|
|
|
(2,866)
|
|
|
(3,522)
|
|
Provision for credit
losses
|
1,640
|
|
|
3,632
|
|
|
5,840
|
|
|
7,742
|
|
|
8,069
|
|
Ending balance -
Allowance for credit losses
|
$
|
121,480
|
|
|
$
|
118,621
|
|
|
$
|
112,914
|
|
|
$
|
121,480
|
|
|
$
|
112,914
|
|
Components of
allowance for credit losses:
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses
|
$
|
118,966
|
|
|
$
|
116,446
|
|
|
$
|
110,697
|
|
|
$
|
118,966
|
|
|
$
|
110,697
|
|
|
Allowance for
unfunded letters of credit
|
2,514
|
|
|
2,175
|
|
|
2,217
|
|
|
2,514
|
|
|
2,217
|
|
Allowance for credit
losses
|
$
|
121,480
|
|
|
$
|
118,621
|
|
|
$
|
112,914
|
|
|
$
|
121,480
|
|
|
$
|
112,914
|
|
Components of
provision for credit losses:
|
|
|
|
|
|
|
|
|
|
|
Provision for loan
losses
|
$
|
1,301
|
|
|
$
|
3,710
|
|
|
$
|
5,949
|
|
|
$
|
7,413
|
|
|
$
|
8,041
|
|
|
Provision for
unfunded letters of credit
|
339
|
|
|
(78)
|
|
|
(109)
|
|
|
329
|
|
|
28
|
|
Provision for credit
losses
|
$
|
1,640
|
|
|
$
|
3,632
|
|
|
$
|
5,840
|
|
|
$
|
7,742
|
|
|
$
|
8,069
|
|
Annualized ratio of
total net (recoveries) charge-
offs to average loans
|
(0.03)
|
%
|
|
0.06
|
%
|
|
0.08
|
%
|
|
0.02
|
%
|
|
0.03
|
%
|
Allowance for credit
losses as a % of non-PCI loans
|
0.73
|
%
|
|
0.73
|
%
|
|
0.76
|
%
|
|
0.73
|
%
|
|
0.76
|
%
|
Allowance for credit
losses as a % of total loans
|
0.67
|
%
|
|
0.67
|
%
|
|
0.68
|
%
|
|
0.67
|
%
|
|
0.68
|
%
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
|
As
of
|
ASSET
QUALITY: (4)
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
($ in
thousands)
|
2017
|
|
2017
|
|
2017
|
|
2016
|
|
2016
|
Accruing past due
loans:
|
|
|
|
|
|
|
|
|
|
30 to 59 days past
due:
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
$
|
1,186
|
|
|
$
|
2,391
|
|
|
$
|
29,734
|
|
|
$
|
6,705
|
|
|
$
|
4,306
|
|
|
Commercial real
estate
|
4,755
|
|
|
6,983
|
|
|
11,637
|
|
|
5,894
|
|
|
9,385
|
|
|
Construction
|
—
|
|
|
—
|
|
|
7,760
|
|
|
6,077
|
|
|
—
|
|
|
Residential
mortgage
|
7,942
|
|
|
4,677
|
|
|
7,533
|
|
|
12,005
|
|
|
9,982
|
|
|
Total
Consumer
|
5,205
|
|
|
4,393
|
|
|
3,740
|
|
|
4,197
|
|
|
3,146
|
|
Total 30 to 59 days
past due
|
19,088
|
|
|
18,444
|
|
|
60,404
|
|
|
34,878
|
|
|
26,819
|
|
60 to 89 days past
due:
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
3,043
|
|
|
2,686
|
|
|
341
|
|
|
5,010
|
|
|
788
|
|
|
Commercial real
estate
|
626
|
|
|
8,233
|
|
|
359
|
|
|
8,642
|
|
|
4,291
|
|
|
Construction
|
2,518
|
|
|
854
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Residential
mortgage
|
1,604
|
|
|
1,721
|
|
|
4,177
|
|
|
3,564
|
|
|
2,733
|
|
|
Total
Consumer
|
1,019
|
|
|
1,007
|
|
|
787
|
|
|
1,147
|
|
|
1,234
|
|
Total 60 to 89 days
past due
|
8,810
|
|
|
14,501
|
|
|
5,664
|
|
|
18,363
|
|
|
9,046
|
|
90 or more days past
due:
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
125
|
|
|
—
|
|
|
405
|
|
|
142
|
|
|
145
|
|
|
Commercial real
estate
|
389
|
|
|
2,315
|
|
|
—
|
|
|
474
|
|
|
478
|
|
|
Construction
|
—
|
|
|
2,879
|
|
|
—
|
|
|
1,106
|
|
|
1,881
|
|
|
Residential
mortgage
|
1,433
|
|
|
3,353
|
|
|
1,355
|
|
|
1,541
|
|
|
590
|
|
|
Total
Consumer
|
301
|
|
|
275
|
|
|
314
|
|
|
209
|
|
|
226
|
|
Total 90 or more days
past due
|
2,248
|
|
|
8,822
|
|
|
2,074
|
|
|
3,472
|
|
|
3,320
|
|
Total accruing past
due loans
|
$
|
30,146
|
|
|
$
|
41,767
|
|
|
$
|
68,142
|
|
|
$
|
56,713
|
|
|
$
|
39,185
|
|
Non-accrual
loans:
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
$
|
11,983
|
|
|
$
|
11,072
|
|
|
$
|
8,676
|
|
|
$
|
8,465
|
|
|
$
|
7,875
|
|
|
Commercial real
estate
|
13,870
|
|
|
15,514
|
|
|
15,106
|
|
|
15,079
|
|
|
14,452
|
|
|
Construction
|
1,116
|
|
|
1,334
|
|
|
1,461
|
|
|
715
|
|
|
1,136
|
|
|
Residential
mortgage
|
12,974
|
|
|
12,825
|
|
|
11,650
|
|
|
12,075
|
|
|
14,013
|
|
|
Total
Consumer
|
1,844
|
|
|
1,409
|
|
|
1,395
|
|
|
1,174
|
|
|
965
|
|
Total non-accrual
loans
|
41,787
|
|
|
42,154
|
|
|
38,288
|
|
|
37,508
|
|
|
38,441
|
|
Other real estate
owned (OREO) (5)
|
10,770
|
|
|
10,182
|
|
|
10,737
|
|
|
9,612
|
|
|
10,257
|
|
Other repossessed
assets
|
480
|
|
|
342
|
|
|
475
|
|
|
384
|
|
|
307
|
|
Non-accrual debt
securities (6)
|
2,115
|
|
|
1,878
|
|
|
2,007
|
|
|
1,935
|
|
|
2,025
|
|
Total non-performing
assets
|
$
|
55,152
|
|
|
$
|
54,556
|
|
|
$
|
51,507
|
|
|
$
|
49,439
|
|
|
$
|
51,030
|
|
Performing troubled
debt restructured loans
|
$
|
113,677
|
|
|
$
|
109,802
|
|
|
$
|
80,360
|
|
|
$
|
85,166
|
|
|
$
|
81,093
|
|
Total non-accrual
loans as a % of loans
|
0.23
|
%
|
|
0.24
|
%
|
|
0.22
|
%
|
|
0.22
|
%
|
|
0.23
|
%
|
Total accruing past
due and non-accrual
loans as a % of loans
|
0.40
|
%
|
|
0.47
|
%
|
|
0.61
|
%
|
|
0.55
|
%
|
|
0.47
|
%
|
Allowance for losses
on loans as a % of
non-accrual loans
|
284.70
|
%
|
|
276.24
|
%
|
|
301.51
|
%
|
|
305.05
|
%
|
|
287.97
|
%
|
Non-performing
purchased credit-impaired
loans (7)
|
$
|
25,413
|
|
|
$
|
33,715
|
|
|
$
|
25,857
|
|
|
$
|
27,011
|
|
|
$
|
30,055
|
|
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
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.
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
($ in thousands,
except for share data)
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Adjusted net
income available to common
shareholders:
|
|
|
|
|
|
|
|
|
|
Net income, as
reported
|
$
|
39,649
|
|
|
$
|
50,065
|
|
|
$
|
42,842
|
|
|
$
|
135,809
|
|
|
$
|
118,056
|
|
Add: LIFT
program expenses (net of tax)*
|
5,753
|
|
|
—
|
|
|
—
|
|
|
5,753
|
|
|
—
|
|
Add: Merger
related expenses (net of tax)**
|
1,043
|
|
|
—
|
|
|
—
|
|
|
1,044
|
|
|
—
|
|
Net income, as
adjusted
|
$
|
46,445
|
|
|
$
|
50,065
|
|
|
$
|
42,842
|
|
|
$
|
142,606
|
|
|
$
|
118,056
|
|
Dividends on
preferred stock
|
2,683
|
|
|
1,797
|
|
|
1,797
|
|
|
6,277
|
|
|
5,391
|
|
Net income available
to common shareholders, as
adjusted
|
$
|
43,762
|
|
|
$
|
48,268
|
|
|
$
|
41,045
|
|
|
$
|
136,329
|
|
|
$
|
112,665
|
|
__________
|
|
|
|
|
|
|
|
|
|
* LIFT program
expenses are primarily within professional and legal fees, and
salary and employee benefits expense.
|
** Merger
related expenses are primarily within professional and legal
fees.
|
Adjusted per
common share data:
|
|
|
|
|
|
|
|
|
|
Net income available
to common shareholders, as adjusted
|
$
|
43,762
|
|
|
$
|
48,268
|
|
|
$
|
41,045
|
|
|
$
|
136,329
|
|
|
$
|
112,665
|
|
Average number of
shares outstanding
|
264,058,174
|
|
|
263,958,292
|
|
|
254,473,994
|
|
|
263,938,786
|
|
|
254,310,769
|
|
Basic earnings, as
adjusted
|
$
|
0.17
|
|
|
$
|
0.18
|
|
|
$
|
0.16
|
|
|
$
|
0.52
|
|
|
$
|
0.44
|
|
Average number of
diluted shares outstanding
|
264,936,220
|
|
|
264,778,242
|
|
|
254,940,307
|
|
|
264,754,845
|
|
|
254,698,593
|
|
Diluted earnings, as
adjusted
|
$
|
0.17
|
|
|
$
|
0.18
|
|
|
$
|
0.16
|
|
|
$
|
0.51
|
|
|
$
|
0.44
|
|
Annualized return
on average tangible shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
39,649
|
|
|
$
|
50,065
|
|
|
$
|
42,842
|
|
|
$
|
135,809
|
|
|
$
|
118,056
|
|
Average shareholders'
equity
|
2,502,538
|
|
|
2,420,848
|
|
|
2,251,461
|
|
|
2,441,227
|
|
|
2,236,569
|
|
Less: Average
goodwill and other intangible assets
|
(733,450)
|
|
|
(734,616)
|
|
|
(733,830)
|
|
|
(734,738)
|
|
|
(734,791)
|
|
Average tangible shareholders' equity
|
$
|
1,769,088
|
|
|
$
|
1,686,232
|
|
|
$
|
1,517,631
|
|
|
$
|
1,706,489
|
|
|
$
|
1,501,778
|
|
Annualized return on average tangible
|
|
|
|
|
|
|
|
|
|
shareholders' equity
|
8.96
|
%
|
|
11.88
|
%
|
|
11.29
|
%
|
|
10.61
|
%
|
|
10.48
|
%
|
Adjusted
annualized return on average assets:
|
|
|
|
|
|
|
|
|
|
Net income, as
adjusted
|
$
|
46,445
|
|
|
$
|
50,065
|
|
|
$
|
42,842
|
|
|
$
|
142,606
|
|
|
$
|
118,056
|
|
Average
assets
|
$
|
23,604,252
|
|
|
$
|
23,396,259
|
|
|
$
|
22,081,470
|
|
|
$
|
23,334,491
|
|
|
$
|
21,831,622
|
|
Annualized return on
average assets, as adjusted
|
0.79
|
%
|
|
0.86
|
%
|
|
0.78
|
%
|
|
0.81
|
%
|
|
0.72
|
%
|
Adjusted
annualized return on average shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
Net income, as
adjusted
|
$
|
46,445
|
|
|
$
|
50,065
|
|
|
$
|
42,842
|
|
|
$
|
142,606
|
|
|
$
|
118,056
|
|
Average shareholders'
equity
|
$
|
2,502,538
|
|
|
$
|
2,420,848
|
|
|
$
|
2,251,461
|
|
|
$
|
2,441,227
|
|
|
$
|
2,236,569
|
|
Annualized return on
average shareholders' equity, as
adjusted
|
7.42
|
%
|
|
8.27
|
%
|
|
7.61
|
%
|
|
7.79
|
%
|
|
7.04
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
($ in thousands,
except for share data)
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Adjusted
annualized return on average tangible
shareholders' equity:
|
|
|
|
|
|
|
|
|
|
Net income, as
adjusted
|
$
|
46,445
|
|
|
$
|
50,065
|
|
|
$
|
42,842
|
|
|
$
|
142,606
|
|
|
$
|
118,056
|
|
Average tangible
shareholders' equity
|
$
|
1,769,088
|
|
|
$
|
1,686,232
|
|
|
$
|
1,517,631
|
|
|
$
|
1,706,489
|
|
|
$
|
1,501,778
|
|
Annualized return on
average tangible shareholders'
equity, as adjusted
|
10.50
|
%
|
|
11.88
|
%
|
|
11.29
|
%
|
|
11.14
|
%
|
|
10.48
|
%
|
Adjusted
efficiency ratio:
|
|
|
|
|
|
|
|
|
|
Non-interest
expense
|
$
|
132,565
|
|
|
$
|
119,239
|
|
|
$
|
113,268
|
|
|
$
|
372,756
|
|
|
$
|
351,296
|
|
Less: LIFT
program expenses (pre-tax)
|
9,875
|
|
|
—
|
|
|
—
|
|
|
9,875
|
|
|
—
|
|
Less:
Merger-related expenses (pre-tax)
|
1,241
|
|
|
—
|
|
|
—
|
|
|
1,242
|
|
|
—
|
|
Less:
Amortization of tax credit investments (pre-tax)
|
8,389
|
|
|
7,732
|
|
|
6,450
|
|
|
21,445
|
|
|
21,360
|
|
Non-interest expense,
as adjusted
|
$
|
113,060
|
|
|
$
|
111,507
|
|
|
$
|
106,818
|
|
|
$
|
340,194
|
|
|
$
|
329,936
|
|
Net interest
income
|
164,854
|
|
|
168,960
|
|
|
154,146
|
|
|
496,343
|
|
|
453,754
|
|
Non-interest
income
|
26,088
|
|
|
24,690
|
|
|
24,853
|
|
|
75,837
|
|
|
70,565
|
|
Gross operating
income
|
190,942
|
|
|
193,650
|
|
|
178,999
|
|
|
572,180
|
|
|
524,319
|
|
Efficiency ratio, as
adjusted
|
59.21
|
%
|
|
57.58
|
%
|
|
59.68
|
%
|
|
59.46
|
%
|
|
62.93
|
%
|
|
|
As
of
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
($ in thousands,
except for share data)
|
2017
|
|
2017
|
|
2017
|
|
2016
|
|
2016
|
Tangible book
value per common share:
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding
|
264,197,172
|
|
|
263,971,766
|
|
|
263,842,268
|
|
|
263,638,830
|
|
|
254,461,906
|
|
Shareholders'
equity
|
$
|
2,537,984
|
|
|
$
|
2,423,901
|
|
|
$
|
2,398,541
|
|
|
$
|
2,377,156
|
|
|
$
|
2,257,073
|
|
Less: Preferred
stock
|
(209,691)
|
|
|
(111,590)
|
|
|
(111,590)
|
|
|
(111,590)
|
|
|
(111,590)
|
|
Less: Goodwill and
other intangible assets
|
(733,498)
|
|
|
(734,337)
|
|
|
(735,595)
|
|
|
(736,121)
|
|
|
(733,627)
|
|
Tangible common
shareholders' equity
|
$
|
1,594,795
|
|
|
$
|
1,577,974
|
|
|
$
|
1,551,356
|
|
|
$
|
1,529,445
|
|
|
$
|
1,411,856
|
|
Tangible book value per common share
|
$6.04
|
|
|
$5.98
|
|
|
$5.88
|
|
|
$5.80
|
|
|
$5.55
|
|
Tangible common
equity to tangible assets:
|
|
|
|
|
|
|
|
|
Tangible common
shareholders' equity
|
$
|
1,594,795
|
|
|
$
|
1,577,974
|
|
|
$
|
1,551,356
|
|
|
$
|
1,529,445
|
|
|
$
|
1,411,856
|
|
Total
assets
|
23,780,661
|
|
|
23,449,350
|
|
|
23,220,456
|
|
|
22,864,439
|
|
|
22,368,453
|
|
Less: Goodwill and
other intangible assets
|
(733,498)
|
|
|
(734,337)
|
|
|
(735,595)
|
|
|
(736,121)
|
|
|
(733,627)
|
|
Tangible
assets
|
$
|
23,047,163
|
|
|
$
|
22,715,013
|
|
|
$
|
22,484,861
|
|
|
$
|
22,128,318
|
|
|
$
|
21,634,826
|
|
Tangible common equity to tangible assets
|
6.92
|
%
|
|
6.95
|
%
|
|
6.90
|
%
|
|
6.91
|
%
|
|
6.53
|
%
|
|
|
(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 $1.0 million at December 31, 2016 and September 30,
2016, respectively. These assets are covered by the
loss-sharing agreements with the FDIC. There were no covered
OREO properties at September 30, 2017, June 30, 2017 and March 31,
2017.
|
(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 $637 thousand, $875
thousand, $745 thousand, $817 thousand and $728 thousand at
September 30, 2017, June 30, 2017, March 31, 2017, December 31,
2016 and September 30, 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)
|
|
|
September
30,
|
|
December
31,
|
|
2017
|
|
2016
|
Assets
|
(Unaudited)
|
|
|
Cash and due from
banks
|
$
|
215,600
|
|
|
$
|
220,791
|
|
Interest bearing
deposits with banks
|
128,226
|
|
|
171,710
|
|
Investment
securities:
|
|
|
|
Held to maturity
(fair value of $1,831,145 at September 30, 2017 and $1,924,597
at
December 31, 2016)
|
1,823,622
|
|
|
1,925,572
|
|
Available for
sale
|
1,447,737
|
|
|
1,297,373
|
|
Total investment
securities
|
3,271,359
|
|
|
3,222,945
|
|
Loans held for sale,
at fair value
|
13,321
|
|
|
57,708
|
|
Loans
|
18,201,462
|
|
|
17,236,103
|
|
Less: Allowance for
loan losses
|
(118,966)
|
|
|
(114,419)
|
|
Net loans
|
18,082,496
|
|
|
17,121,684
|
|
Premises and
equipment, net
|
289,153
|
|
|
291,180
|
|
Bank owned life
insurance
|
386,874
|
|
|
391,830
|
|
Accrued interest
receivable
|
72,063
|
|
|
66,816
|
|
Goodwill
|
690,637
|
|
|
690,637
|
|
Other intangible
assets, net
|
42,861
|
|
|
45,484
|
|
Other
assets
|
588,071
|
|
|
583,654
|
|
Total
Assets
|
$
|
23,780,661
|
|
|
$
|
22,864,439
|
|
Liabilities
|
|
|
|
Deposits:
|
|
|
|
Non-interest
bearing
|
$
|
5,099,376
|
|
|
$
|
5,252,825
|
|
Interest
bearing:
|
|
|
|
Savings, NOW and
money market
|
8,792,734
|
|
|
9,339,012
|
|
Time
|
3,420,656
|
|
|
3,138,871
|
|
Total
deposits
|
17,312,766
|
|
|
17,730,708
|
|
Short-term
borrowings
|
1,482,709
|
|
|
1,080,960
|
|
Long-term
borrowings
|
2,215,219
|
|
|
1,433,906
|
|
Junior subordinated
debentures issued to capital trusts
|
41,716
|
|
|
41,577
|
|
Accrued expenses and
other liabilities
|
190,267
|
|
|
200,132
|
|
Total
Liabilities
|
21,242,677
|
|
|
20,487,283
|
|
Shareholders'
Equity
|
|
|
|
Preferred stock, no
par value; 50,000,000 shares authorized:
|
|
|
|
Series A (4,600,000
shares issued at September 30, 2017 and December 31,
2016)
|
111,590
|
|
|
111,590
|
|
Series B (4,000,000
shares issued at September 30, 2017)
|
98,101
|
|
|
—
|
|
Common stock (no par
value, authorized 450,000,000 shares; issued 264,197,172 shares
at
September 30, 2017 and 263,804,877 shares at December
31, 2016)
|
92,569
|
|
|
92,353
|
|
Surplus
|
2,054,843
|
|
|
2,044,401
|
|
Retained
earnings
|
214,981
|
|
|
172,754
|
|
Accumulated other
comprehensive loss
|
(34,100)
|
|
|
(42,093)
|
|
Treasury stock, at
cost (166,047 shares at December 31, 2016)
|
—
|
|
|
(1,849)
|
|
Total
Shareholders' Equity
|
2,537,984
|
|
|
2,377,156
|
|
Total Liabilities
and Shareholders' Equity
|
$
|
23,780,661
|
|
|
$
|
22,864,439
|
|
VALLEY NATIONAL
BANCORP
CONSOLIDATED
STATEMENTS OF INCOME (Unaudited)
(in thousands,
except for share data)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Interest
Income
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
186,773
|
|
|
$
|
185,860
|
|
|
$
|
171,143
|
|
|
$
|
547,647
|
|
|
$
|
506,640
|
|
Interest and
dividends on investment securities:
|
|
|
|
|
|
|
|
|
|
Taxable
|
17,922
|
|
|
18,928
|
|
|
14,232
|
|
|
54,439
|
|
|
42,487
|
|
Tax-exempt
|
3,752
|
|
|
3,943
|
|
|
4,023
|
|
|
11,726
|
|
|
11,447
|
|
Dividends
|
2,657
|
|
|
2,137
|
|
|
1,612
|
|
|
6,945
|
|
|
4,408
|
|
Interest on federal
funds sold and other short-term
investments
|
546
|
|
|
279
|
|
|
193
|
|
|
1,156
|
|
|
846
|
|
Total interest
income
|
211,650
|
|
|
211,147
|
|
|
191,203
|
|
|
621,913
|
|
|
565,828
|
|
Interest
Expense
|
|
|
|
|
|
|
|
|
|
Interest on
deposits:
|
|
|
|
|
|
|
|
|
|
Savings, NOW and
money market
|
15,641
|
|
|
12,714
|
|
|
10,165
|
|
|
38,538
|
|
|
29,369
|
|
Time
|
10,852
|
|
|
10,166
|
|
|
9,412
|
|
|
30,571
|
|
|
28,220
|
|
Interest on
short-term borrowings
|
5,161
|
|
|
5,516
|
|
|
3,545
|
|
|
14,578
|
|
|
8,537
|
|
Interest on long-term
borrowings and junior
subordinated debentures
|
15,142
|
|
|
13,791
|
|
|
13,935
|
|
|
41,883
|
|
|
45,948
|
|
Total interest
expense
|
46,796
|
|
|
42,187
|
|
|
37,057
|
|
|
125,570
|
|
|
112,074
|
|
Net Interest
Income
|
164,854
|
|
|
168,960
|
|
|
154,146
|
|
|
496,343
|
|
|
453,754
|
|
Provision for credit
losses
|
1,640
|
|
|
3,632
|
|
|
5,840
|
|
|
7,742
|
|
|
8,069
|
|
Net Interest
Income After Provision for Credit
Losses
|
163,214
|
|
|
165,328
|
|
|
148,306
|
|
|
488,601
|
|
|
445,685
|
|
Non-Interest
Income
|
|
|
|
|
|
|
|
|
|
Trust and investment
services
|
3,062
|
|
|
2,800
|
|
|
2,628
|
|
|
8,606
|
|
|
7,612
|
|
Insurance
commissions
|
4,519
|
|
|
4,358
|
|
|
4,580
|
|
|
13,938
|
|
|
14,133
|
|
Service charges on
deposit accounts
|
5,558
|
|
|
5,342
|
|
|
5,263
|
|
|
16,136
|
|
|
15,460
|
|
Gains (losses) on
securities transactions, net
|
6
|
|
|
22
|
|
|
(10)
|
|
|
5
|
|
|
258
|
|
Fees from loan
servicing
|
1,895
|
|
|
1,831
|
|
|
1,598
|
|
|
5,541
|
|
|
4,753
|
|
Gains on sales of
loans, net
|
5,520
|
|
|
4,791
|
|
|
4,823
|
|
|
14,439
|
|
|
9,723
|
|
Bank owned life
insurance
|
1,541
|
|
|
1,701
|
|
|
1,683
|
|
|
5,705
|
|
|
5,464
|
|
Other
|
3,987
|
|
|
3,845
|
|
|
4,288
|
|
|
11,467
|
|
|
13,162
|
|
Total non-interest
income
|
26,088
|
|
|
24,690
|
|
|
24,853
|
|
|
75,837
|
|
|
70,565
|
|
Non-Interest
Expense
|
|
|
|
|
|
|
|
|
|
Salary and employee
benefits expense
|
67,062
|
|
|
61,338
|
|
|
58,107
|
|
|
192,116
|
|
|
174,438
|
|
Net occupancy and
equipment expense
|
22,756
|
|
|
22,609
|
|
|
20,658
|
|
|
68,400
|
|
|
65,615
|
|
FDIC insurance
assessment
|
4,603
|
|
|
4,928
|
|
|
4,804
|
|
|
14,658
|
|
|
14,998
|
|
Amortization of other
intangible assets
|
2,498
|
|
|
2,562
|
|
|
2,675
|
|
|
7,596
|
|
|
8,452
|
|
Professional and
legal fees
|
11,110
|
|
|
4,302
|
|
|
4,031
|
|
|
20,107
|
|
|
13,398
|
|
Amortization of tax
credit investments
|
8,389
|
|
|
7,732
|
|
|
6,450
|
|
|
21,445
|
|
|
21,360
|
|
Telecommunication
expense
|
2,464
|
|
|
2,707
|
|
|
2,459
|
|
|
7,830
|
|
|
7,139
|
|
Other
|
13,683
|
|
|
13,061
|
|
|
14,084
|
|
|
40,604
|
|
|
45,896
|
|
Total non-interest
expense
|
132,565
|
|
|
119,239
|
|
|
113,268
|
|
|
372,756
|
|
|
351,296
|
|
Income Before
Income Taxes
|
56,737
|
|
|
70,779
|
|
|
59,891
|
|
|
191,682
|
|
|
164,954
|
|
Income tax
expense
|
17,088
|
|
|
20,714
|
|
|
17,049
|
|
|
55,873
|
|
|
46,898
|
|
Net
Income
|
39,649
|
|
|
50,065
|
|
|
42,842
|
|
|
135,809
|
|
|
118,056
|
|
Dividends on
preferred stock
|
2,683
|
|
|
1,797
|
|
|
1,797
|
|
|
6,277
|
|
|
5,391
|
|
Net Income
Available to Common Shareholders
|
$
|
36,966
|
|
|
$
|
48,268
|
|
|
$
|
41,045
|
|
|
$
|
129,532
|
|
|
$
|
112,665
|
|
Earnings Per
Common Share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.14
|
|
|
$
|
0.18
|
|
|
$
|
0.16
|
|
|
$
|
0.49
|
|
|
$
|
0.44
|
|
Diluted
|
0.14
|
|
|
0.18
|
|
|
0.16
|
|
|
0.49
|
|
|
0.44
|
|
Cash Dividends
Declared per Common Share
|
0.11
|
|
|
0.11
|
|
|
0.11
|
|
|
0.33
|
|
|
0.33
|
|
Weighted Average
Number of Common Shares
Outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
264,058,174
|
|
|
263,958,292
|
|
|
254,473,994
|
|
|
263,938,786
|
|
|
254,310,769
|
|
Diluted
|
264,936,220
|
|
|
264,778,242
|
|
|
254,940,307
|
|
|
264,754,845
|
|
|
254,698,593
|
|
VALLEY NATIONAL
BANCORP
|
Quarterly Analysis
of Average Assets, Liabilities and Shareholders' Equity
and
|
Net Interest
Income on a Tax Equivalent Basis
|
|
|
|
|
|
Three Months
Ended
|
|
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
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)
|
$
|
18,006,274
|
|
|
$
|
186,776
|
|
|
4.15
|
%
|
|
$
|
17,701,676
|
|
|
$
|
185,863
|
|
|
4.20
|
%
|
|
$
|
16,570,723
|
|
|
$
|
171,146
|
|
|
4.13
|
%
|
Taxable investments
(3)
|
2,905,400
|
|
|
20,579
|
|
|
2.83
|
%
|
|
2,967,729
|
|
|
21,065
|
|
|
2.84
|
%
|
|
2,531,202
|
|
|
15,844
|
|
|
2.50
|
%
|
Tax-exempt
investments (1)(3)
|
556,061
|
|
|
5,773
|
|
|
4.15
|
%
|
|
581,263
|
|
|
6,066
|
|
|
4.17
|
%
|
|
628,951
|
|
|
6,189
|
|
|
3.94
|
%
|
Federal funds sold
and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
interest bearing
deposits
|
175,111
|
|
|
546
|
|
|
1.25
|
%
|
|
166,003
|
|
|
279
|
|
|
0.67
|
%
|
|
165,956
|
|
|
193
|
|
|
0.47
|
%
|
Total interest
earning assets
|
21,642,846
|
|
|
213,674
|
|
|
3.95
|
%
|
|
21,416,671
|
|
|
213,273
|
|
|
3.98
|
%
|
|
19,896,832
|
|
|
193,372
|
|
|
3.89
|
%
|
Other
assets
|
1,961,406
|
|
|
|
|
|
|
1,979,588
|
|
|
|
|
|
|
2,184,638
|
|
|
|
|
|
Total
assets
|
$
|
23,604,252
|
|
|
|
|
|
|
$
|
23,396,259
|
|
|
|
|
|
|
$
|
22,081,470
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW and
money market deposits
|
$
|
8,799,955
|
|
|
$
|
15,641
|
|
|
0.71
|
%
|
|
$
|
8,803,028
|
|
|
$
|
12,715
|
|
|
0.58
|
%
|
|
$
|
8,509,793
|
|
|
$
|
10,165
|
|
|
0.48
|
%
|
Time
deposits
|
3,368,153
|
|
|
10,852
|
|
|
1.29
|
%
|
|
3,290,407
|
|
|
10,166
|
|
|
1.24
|
%
|
|
3,082,100
|
|
|
9,412
|
|
|
1.22
|
%
|
Short-term
borrowings
|
1,537,562
|
|
|
5,161
|
|
|
1.34
|
%
|
|
1,837,809
|
|
|
5,516
|
|
|
1.20
|
%
|
|
1,439,352
|
|
|
3,545
|
|
|
0.99
|
%
|
Long-term borrowings
(4)
|
2,032,068
|
|
|
15,142
|
|
|
2.98
|
%
|
|
1,679,691
|
|
|
13,790
|
|
|
3.28
|
%
|
|
1,518,757
|
|
|
13,935
|
|
|
3.67
|
%
|
Total interest
bearing liabilities
|
15,737,738
|
|
|
46,796
|
|
|
1.19
|
%
|
|
15,610,935
|
|
|
42,187
|
|
|
1.08
|
%
|
|
14,550,002
|
|
|
37,057
|
|
|
1.02
|
%
|
Non-interest bearing
deposits
|
5,184,991
|
|
|
|
|
|
|
5,195,052
|
|
|
|
|
|
|
5,077,032
|
|
|
|
|
|
Other
liabilities
|
178,985
|
|
|
|
|
|
|
169,424
|
|
|
|
|
|
|
202,975
|
|
|
|
|
|
Shareholders'
equity
|
2,502,538
|
|
|
|
|
|
|
2,420,848
|
|
|
|
|
|
|
2,251,461
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
23,604,252
|
|
|
|
|
|
|
$
|
23,396,259
|
|
|
|
|
|
|
$
|
22,081,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income/interest rate spread (5)
|
|
|
$
|
166,878
|
|
|
2.76
|
%
|
|
|
|
$
|
171,086
|
|
|
2.90
|
%
|
|
|
|
$
|
156,315
|
|
|
2.87
|
%
|
Tax equivalent
adjustment
|
|
|
(2,024)
|
|
|
|
|
|
|
(2,126)
|
|
|
|
|
|
|
(2,169)
|
|
|
|
Net interest income,
as reported
|
|
|
$
|
164,854
|
|
|
|
|
|
|
$
|
168,960
|
|
|
|
|
|
|
$
|
154,146
|
|
|
|
Net interest margin
(6)
|
|
|
|
|
3.05
|
%
|
|
|
|
|
|
3.16
|
%
|
|
|
|
|
|
3.10
|
%
|
Tax equivalent
effect
|
|
|
|
|
0.03
|
%
|
|
|
|
|
|
0.04
|
%
|
|
|
|
|
|
0.04
|
%
|
Net interest margin
on a fully tax
equivalent basis (6)
|
|
|
|
|
3.08
|
%
|
|
|
|
|
|
3.20
|
%
|
|
|
|
|
|
3.14
|
%
|
__________
|
|
(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.
|
View original
content:http://www.prnewswire.com/news-releases/valley-national-bancorp-reports-third-quarter-net-income-strong-loan-growth-and-solid-credit-quality-300542661.html
SOURCE Valley National Bancorp