Valley National Bancorp (
NASDAQ:VLY), the holding
company for Valley National Bank, today reported net income for the
first quarter 2021 of $115.7 million, or $0.28 per diluted common
share, as compared to the first quarter 2020 earnings of $87.3
million, or $0.21 per diluted common share, and net income of
$105.4 million, or $0.25 per diluted common share, for the fourth
quarter 2020.
Key financial
highlights for
the first
quarter:
- Net Interest Income and
Margin: Net interest income on a tax equivalent basis of
$293.6 million for the first quarter 2021 increased $4.8 million
and $27.3 million as compared to the fourth quarter 2020 and first
quarter 2020, respectively. Our net interest margin on a tax
equivalent basis increased by 8 basis points to 3.14 percent in the
first quarter 2021 as compared to 3.06 percent for the fourth
quarter 2020. The increases as compared to the fourth quarter 2020
were largely due to a $8.7 million increase in interest and fees
related to our SBA Paycheck Protection Program (PPP) loan
portfolio, a 9 basis point reduction in our costs of average
interest bearing liabilities, as well as the prepayment of certain
long-term borrowings in December 2020. See the "Net Interest Income
and Margin" section below for additional information.
- Loan
Portfolio: Loans increased $469.3 million to $32.7 billion
at March 31, 2021, or 6 percent on an annualized basis from
December 31, 2020. The increase was largely due to new loan volumes
within the commercial and industrial, commercial real estate and
automobile loan portfolios in the first quarter 2021. Within
commercial and industrial loans, PPP loans increased $212.5 million
to approximately $2.4 billion at March 31, 2021 from December 31,
2020. Our first quarter new and refinanced loan originations
included approximately $288 million of residential mortgage loans
originated for sale rather than investment. Net gains on sales of
residential loans were $3.5 million and $16.0 million in the first
quarter 2021 and fourth quarter 2020, respectively. See the "Loans,
Deposits and Other Borrowings" section below for more details.
-
Allowance and Provision for Credit Losses for
Loans: The allowance for credit losses for loans totaled
$354.3 million and $351.4 million at March 31, 2021 and December
31, 2020, respectively. During the first quarter 2021, we recorded
a provision for credit losses for loans of $9.0 million as compared
to $19.0 million and $33.9 million for the fourth quarter 2020 and
first quarter 2020, respectively. The moderate increase in our
allowance at March 31, 2021 reflects, among other factors,
additional reserves related to non-PPP loan growth and certain
segments of our commercial real estate portfolio, partially offset
by the lower qualitative reserves for customers impacted by the
pandemic and the improvement in our economic forecast component of
the reserve as compared to December 31, 2020.
-
Credit Quality: Total accruing
past due loans decreased $46.2 million to $52.8 million, or 0.16
percent of total loans, at March 31, 2021 as compared to $99.0
million, or 0.31 percent of total loans, at December 31, 2020.
Non-accrual loans represented 0.62 percent and 0.58 percent of
total loans at March 31, 2021 and December 31, 2020, respectively.
Net loan charge-offs totaled $6.1 million for the first quarter
2021 as compared to $3.0 million for the fourth quarter 2020. See
the "Credit Quality" Section below for more details.
-
Non-interest Income: Non-interest income decreased
$16.3 million to $31.2 million for the first quarter 2021 as
compared to the fourth quarter 2020 mainly due to a decrease of
$12.5 million in net gains on sales of residential mortgage loans,
as well as a $4.7 million decline in swap fee income related to new
commercial loan transactions. The decrease in net gains on loan
sales was primarily due to a decline in the mark to market gain
component related to our residential loans originated for sale
portfolio (and carried at fair value) at March 31, 2021 as compared
to such loans held for sale at December 31, 2020. The $4.7 million
decrease in swap fee income as compared to the fourth quarter 2020
was largely due to lower transaction volumes.
-
Non-interest Expense: Non-interest expense
decreased $12.9 million to $160.2 million for the first quarter
2021 as compared to the fourth quarter 2020 mainly due to a $9.7
million loss on extinguishment of debt recognized during the fourth
quarter 2020 and a $3.4 million decrease in professional fees
largely associated with our technology transformation efforts.
-
Efficiency Ratio: Our efficiency ratio was 49.46
percent for the first quarter 2021 as compared to 51.61 percent and
50.75 percent for the fourth quarter 2020 and first quarter 2020,
respectively. Our adjusted efficiency ratio was 48.60 percent for
the first quarter 2021 as compared to 46.99 percent and 49.26
percent for the fourth quarter 2020 and first quarter 2020,
respectively. See the "Consolidated Financial Highlights" tables
below for additional information regarding our non-GAAP
measures.
-
Performance Ratios: Annualized return on average
assets, shareholders’ equity and tangible shareholders' equity were
1.14 percent, 9.96 percent, and 14.49 percent for the first quarter
2021, respectively, as compared to 1.02 percent, 9.20 percent and
13.45 percent for the fourth quarter 2020, respectively. See the
"Consolidated Financial Highlights" tables below for additional
information regarding our non-GAAP measures.
Ira Robbins, CEO and President commented, "I'm
pleased with the first quarter 2021 results and overall
demonstrated strengths of our balance sheet and credit quality
during the pandemic. I believe our measured approach to loan
origination activities, ability to manage our funding costs, and
keen focus on operating efficiencies and the adoption of new
technologies has positioned Valley for continued success in
2021."
Net Interest
Income and
Margin
Net interest income on a tax equivalent basis
totaling $293.6 million for the first quarter 2021 increased $4.8
million and $27.2 million as compared to the fourth quarter 2020
and first quarter 2020, respectively. The increase as compared to
the fourth quarter 2020 was mainly due to (i) increased interest
and fee income from PPP loans, (ii) continued run-off of higher
cost time deposits, (iii) the prepayment of $534 million of
long-term FHLB advances with a combined weighted average interest
rate of 2.48 percent in December 2020, and (iv) lower rates on our
deposit products combined with a continued customer shift to
deposits without stated maturities. Interest expense of $39.1
million for the first quarter 2021 decreased $7.0 million as
compared to the fourth quarter 2020. Interest income on a tax
equivalent basis in the first quarter 2021 decreased by $2.3
million to $332.7 million as compared to the fourth quarter 2020
mainly due to lower overall yields on average taxable investment
securities and loans and a decline in average balances within the
investment portfolio due to normal repayment activity, partially
offset by a $8.7 million increase in interest and fees on PPP loans
caused by recognition of fee income on loans forgiven by the SBA
during the first quarter 2021. See the "Loan, Deposit and Other
Borrowings" section for more information on PPP loans.
Our net interest margin on a tax equivalent
basis of 3.14 percent for the first quarter 2021 increased by 8
basis points and 7 basis points from 3.06 percent and 3.07 percent
for the first quarter 2020 and fourth quarter 2020, respectively.
The yield on average interest earning assets increased by 2 basis
points on a linked quarter basis, mostly due to the higher yield on
the PPP loan portfolio and reduced excess liquidity held in
overnight investments. The yield on average loans decreased by 1
basis point to 3.85 percent for the first quarter 2021 as compared
to the fourth quarter 2020. This decrease was mainly due to new and
refinanced loan originations at lower market interest rates and two
less days during the first quarter 2021, which were mostly offset
by the increased yield on our PPP loan portfolio. The overall cost
of average interest bearing liabilities decreased 9 basis points to
0.60 percent for the first quarter 2021 as compared to the linked
fourth quarter 2020 and was largely due to the lower rates offered
on deposit products, maturing time deposits and a 4 basis point
decrease in the average cost of short-term borrowings. Our cost of
total average deposits was 0.28 percent for the first quarter 2021
as compared to 0.33 percent for the fourth quarter 2020.
Loans,
Deposits and
Other Borrowings
Loans. Loans increased $469.3
million to approximately $32.7 billion at March 31, 2021 from
December 31, 2020. The increase was mainly due to organic growth in
the commercial and industrial, commercial real estate, and
automobile loan portfolios during the first quarter 2021.
Commercial and industrial loans increased $286.9 million, or 16.7
percent on an annualized basis, to $7.1 billion at March 31, 2021
as compared to December 31, 2020 mostly due to a $212.5 million
increase in PPP loans, which was net of over $630 million of PPP
loans forgiven by the SBA during the first quarter 2021. Commercial
real estate loans increased $198.6 million, or 4.8 percent on an
annualized basis, to $16.9 billion at March 31, 2021 as compared to
December 31, 2020 reflecting the recovery of our loan commitment
pipeline near the end of 2020, particularly in our Florida markets.
Automobile loans increased $88.9 million, or 26.2 percent on an
annualized basis, during first quarter 2021 due to strong consumer
demand seen across the auto industry during the period. Residential
mortgage loans declined $123.3 million, or 11.8 percent on an
annualized basis, during the first quarter 2021 mainly due to
continued refinance activity and $288 million of loans originated
for sale rather than held for investment in the first quarter 2021.
Residential mortgage loans held for sale at fair value totaled
$232.1 million and $301.4 million at March 31, 2021 and December
31, 2020, respectively.
Deposits. Total deposits
increased $649.6 million to approximately $32.6 billion at March
31, 2021 from December 31, 2020 largely due to increases of $847.8
million and $1.1 billion in the non-interest bearing and
non-maturity interest bearing deposit categories, respectively,
partially offset by a $1.3 billion decrease in time deposits. The
decrease in time deposits was driven by normal run-off of maturing
retail and brokered CDs with some continued migration of retail
balances to more liquid deposit product categories. Total brokered
deposits (consisting of both time and money market deposit
accounts) decreased approximately $800 million to $2.3 billion at
March 31, 2021 as compared to $3.1 billion at December 31, 2020.
Non-interest bearing deposits; savings, NOW and money market
deposits; and time deposits represented approximately 31 percent,
52 percent and 17 percent of total deposits as of March 31, 2021,
respectively.
Other Borrowings. Short-term
and long-term borrowings decreased $63.3 million and $52.7 million
to $1.1 billion and $2.2 billion, respectively, at March 31, 2021
as compared to December 31, 2020. The decreases in both categories
were largely attributable to the normal maturities of FHLB
borrowings.
Credit Quality
Non-Performing Assets (NPAs).
Total NPAs, consisting of non-accrual loans, other real estate
owned (OREO), other repossessed assets and non-accrual debt
securities increased $16.0 million to $210.5 million at March 31,
2021 as compared to December 31, 2020. The increase in NPAs was
mainly due to a $18.7 million increase in non-accrual loans driven
by one $8.4 million commercial real estate loan and a $7.8 million
increase in non-accrual residential mortgage loans partially caused
by the migration of loans previously reported in the 60-89 days
past due category at December 31, 2020. Non-accrual loans
represented 0.62 percent of total loans at March 31, 2021 compared
to 0.58 percent at December 31, 2020.
Non-performing Taxi Medallion Loan
Portfolio. We continue to closely monitor our
non-performing New York City and Chicago taxi medallion loans
totaling $87.2 million and $6.6 million, respectively, within the
commercial and industrial loan portfolio at March 31, 2021. At
March 31, 2021, all taxi medallion loans totaling $93.8 million
were on non-accrual status and had related reserves of $63.2
million, or 67.2 percent of such loans, within the allowance for
loan losses.
Accruing Past Due Loans. Total
accruing past due loans (i.e., loans past due 30 days or more and
still accruing interest) decreased $46.2 million to $52.8 million,
or 0.16 percent of total loans, at March 31, 2021 as compared to
$99.0 million, or 0.31 percent of total loans, at December 31, 2020
driven by declines in early stage delinquencies for most loan
categories. Commercial real estate loans past due 30 to 59 days
decreased $23.4 million to $11.7 million at March 31, 2021 as
compared to December 31, 2020. The decrease was largely due to a
$12.3 million matured loan (in the process of restructuring its
terms) reported in this delinquency category at December 31, 2020
and the aforementioned $8.4 million loan placed on non-accrual
status at March 31, 2021. Commercial and industrial loans past due
90 or more days decreased $6.6 million at March 31, 2021 primarily
due to premium finance loans (related to two insurance carriers)
totaling $6.1 million reclassified to non-accrual status during the
first quarter 2021. Residential loans past due 60 to 89 days
decreased by $8.1 million as compared to December 31, 2020 mainly
due to loans migrating to non-accrual status.
Forbearance. In response to the
COVID-19 pandemic and its economic impact to certain customers,
Valley implemented short-term loan modifications such as payment
deferrals, fee waivers, extensions of repayment terms, or delays in
payment that are insignificant, when requested by customers.
Generally, the modification terms allow for a deferral of payments
for up to 90 days, which Valley may extend for an additional 90
days. Any extensions beyond this period were done in accordance
with applicable regulatory guidance. As of March 31, 2021, Valley
had approximately $284 million of outstanding loans remaining in
their payment deferral period under short-term modifications, as
compared to $361 million of loans in deferral at December 31,
2020.
Allowance for
Credit Losses
for Loans and
Unfunded Commitments. The
following table summarizes the allocation of the allowance for
credit losses to loan categories and the allocation as a percentage
of each loan category at March 31, 2021, December 31, 2020, and
March 31, 2020:
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|
|
|
|
|
|
March 31,
2021 |
|
|
December 31,
2020 |
|
|
March 31, 2020 |
|
|
|
|
|
|
Allocation |
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|
|
Allocation |
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|
Allocation |
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as a % of |
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|
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|
as a % of |
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|
|
|
as a % of |
|
|
|
Allowance |
|
|
Loan |
|
|
Allowance |
|
|
Loan |
|
|
Allowance |
|
Loan |
|
|
|
Allocation |
|
|
Category |
|
|
Allocation |
|
|
Category |
|
|
Allocation |
|
Category |
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|
|
|
($ in
thousands) |
|
|
|
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|
|
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Loan
Category: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans |
$ |
126,408 |
|
|
2.64 |
% |
$ |
131,070 |
|
|
1.91 |
% |
$ |
127,437 |
|
2.55 |
% |
Commercial real estate
loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
153,680 |
|
|
0.91 |
% |
|
146,009 |
|
|
0.87 |
% |
|
97,876 |
|
0.60 |
% |
Construction |
|
20,556 |
|
|
1.15 |
% |
|
18,104 |
|
|
1.04 |
% |
|
13,709 |
|
0.79 |
% |
Total
commercial real estate loans |
|
174,236 |
|
|
0.93 |
% |
|
164,113 |
|
|
0.89 |
% |
|
111,585 |
|
0.62 |
% |
Residential mortgage loans |
|
27,172 |
|
|
0.67 |
% |
|
28,873 |
|
|
0.69 |
% |
|
29,456 |
|
0.66 |
% |
Consumer
loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity |
|
4,199 |
|
|
1.03 |
% |
|
4,675 |
|
|
1.08 |
% |
|
4,463 |
|
0.93 |
% |
Auto and other consumer |
|
10,865 |
|
|
0.46 |
% |
|
11,512 |
|
|
0.51 |
% |
|
10,401 |
|
0.44 |
% |
Total
consumer loans |
|
15,064 |
|
|
0.54 |
% |
|
16,187 |
|
|
0.60 |
% |
|
14,864 |
|
0.52 |
% |
Allowance for loan losses |
|
342,880 |
|
|
1.13 |
% |
|
340,243 |
|
|
1.06 |
% |
|
283,342 |
|
0.93 |
% |
Allowance for unfunded credit commitments |
|
11,433 |
|
|
|
|
|
11,111 |
|
|
|
|
|
10,019 |
|
|
|
Total
allowance for credit losses for loans |
$ |
354,313 |
|
|
|
|
$ |
351,354 |
|
|
|
|
$ |
293,361 |
|
|
|
Allowance for credit losses for loans as a % loans |
|
|
|
|
1.08 |
% |
|
|
|
|
1.09 |
% |
|
|
|
0.96 |
% |
Our loan portfolio, totaling $32.7 billion at
March 31, 2021, had net loan charge-offs totaling $6.1 million for
the first quarter 2021 as compared to $3.0 million and $4.8 million
for the fourth quarter 2020 and first quarter 2020, respectively.
Net loan charge-offs increased during the first quarter 2021 mainly
due to partial charge-offs of certain taxi medallion loans and a
full charge-off of a $1.9 million unsecured, non-performing
commercial and industrial loan relationship. Gross charge-offs of
taxi medallion loans totaled $3.3 million for the first quarter
2021 as compared to $2.3 million and $1.3 million for the fourth
quarter 2020 and first quarter 2020, respectively.
The allowance for credit losses for loans,
comprised of our allowance for loan losses and unfunded credit
commitments, as a percentage of total loans was 1.08 percent, 1.09
percent and 0.96 percent at March 31, 2021, December 31, 2020 and
March 31, 2020, respectively. During the first quarter 2021, we
recorded a provision for credit losses for loans of $9.0 million as
compared to a provision of $19.0 million and $33.9 million for the
fourth quarter 2020 and first quarter 2020, respectively.
At March 31, 2021, the allowance allocations for
credit losses as a percentage of total loans increased in the
commercial real estate and construction loan categories while
decreasing in the other loan categories as compared to December 31,
2020. The allocated reserves as a percentage of commercial and
industrial loans declined by 14 basis points partially due to the
loan charge-offs in the first quarter 2021 within this loan
category, as well as the increase in PPP loans guaranteed by the
SBA with no related allowance at March 31, 2021.
Capital Adequacy
Valley's regulatory capital ratios continue to
reflect its well capitalized position. Valley's total risk- based
capital, common equity Tier 1 capital, Tier 1 capital and Tier 1
leverage capital ratios were 12.76 percent, 10.08 percent, 10.79
percent and 8.37 percent, respectively, at March 31, 2021.
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 first quarter 2021 earnings. Those
wishing to participate in the call may dial toll-free (855)
638-5437 Conference ID: 1474989. The teleconference will also be
webcast live: https://edge.media-server.com/mmc/p/5gkztcw5 and
archived on Valley's website through Monday, May 31, 2021. Investor
presentation materials will be made available prior to the
conference call at www.valley.com.
About Valley
As the principal subsidiary of Valley National
Bancorp, Valley National Bank is a regional bank with approximately
$41 billion in assets. Valley is committed to giving people and
businesses the power to succeed. Valley operates many convenient
branch locations across New Jersey, New York, Florida and Alabama,
and is committed to providing the most convenient service, the
latest innovations and an experienced and knowledgeable team
dedicated to meeting customer needs. Helping communities grow and
prosper is the heart of Valley’s corporate citizenship philosophy.
To learn more about Valley, go to www.valley.com or call our
Customer Care Center 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, including
the potential effects of the COVID-19 pandemic on our businesses
and financial results and conditions. 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:
- the continued impact of COVID-19 on
the U.S. and global economies, including business disruptions,
reductions in employment and an increase in business failures,
specifically among our clients;
- the continued impact of COVID-19 on
our employees and our ability to provide services to our customers
and respond to their needs as more cases of COVID-19 may arise in
our primary markets;
- potential judgments, claims,
damages, penalties, fines and reputational damage resulting from
pending or future litigation and regulatory and government actions,
including as a result of our participation in and execution of
government programs related to the COVID-19 pandemic or as a result
of our actions in response to, or failure to implement or
effectively implement, federal, state and local laws, rules or
executive orders requiring that we grant forbearances or not act to
collect our loans;
- the impact of forbearances or
deferrals we are required or agree to as a result of customer
requests and/or government actions, including, but not limited to
our potential inability to recover fully deferred payments from the
borrower or the collateral;
- the risks related to the
discontinuation of the London Interbank Offered Rate and other
reference rates, including increased expenses and litigation and
the effectiveness of hedging strategies;
- damage verdicts or settlements or
restrictions related to existing or potential class action
litigation or individual litigation arising from claims of
violations of laws or regulations, contractual claims, breach of
fiduciary responsibility, negligence, fraud, environmental laws,
patent or trademark infringement, employment related claims, and
other matters;
- a prolonged downturn in the
economy, mainly in New Jersey, New York, Florida and Alabama, as
well as an unexpected decline in commercial real estate values
within our market areas;
- higher or lower than expected
income tax expense or tax rates, including increases or decreases
resulting from changes in uncertain tax position liabilities, tax
laws, regulations and case law;
- the inability to grow customer
deposits to keep pace with loan growth;
- a material change in our allowance
for credit losses under CECL due to forecasted economic conditions
and/or unexpected credit deterioration in our loan and investment
portfolios;
- the need to supplement debt or
equity capital to maintain or exceed internal capital
thresholds;
- greater than expected technology
related costs due to, among other factors, prolonged or failed
implementations, additional project staffing and obsolescence
caused by continuous and rapid market innovations;
- the loss of or decrease in
lower-cost funding sources within our deposit base, including our
inability to achieve deposit retention targets under Valley's
branch transformation strategy;
- 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
Office of the Comptroller of the Currency (OCC), the Federal
Reserve Bank (FRB), the Consumer Financial Protection Bureau (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,
reimburse customers, change the way we do business, or limit or
eliminate certain other banking activities;
- our inability or determination not
to pay dividends at current levels, or at all, because of
inadequate earnings, regulatory restrictions or limitations,
changes in our capital requirements or a decision to increase
capital by retaining more earnings;
- unanticipated loan delinquencies,
loss of collateral, decreased service revenues, and other potential
negative effects on our business caused by severe weather, the
COVID-19 pandemic 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; and
- the failure of other financial
institutions with whom we have trading, clearing, counterparty and
other financial relationships.
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, 2020.
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 |
($ in
thousands, except for share data) |
March
31,2021 |
December
31,2020 |
March
31,2020 |
FINANCIAL DATA: |
|
|
|
Net interest income - FTE (1) |
$ |
293,584 |
|
|
$ |
288,833 |
|
|
$ |
266,383 |
|
Net
interest income |
$ |
292,667 |
|
|
$ |
287,920 |
|
|
$ |
265,339 |
|
Non-interest income |
|
31,233 |
|
|
|
47,533 |
|
|
|
41,397 |
|
Total
revenue |
|
323,900 |
|
|
|
335,453 |
|
|
|
306,736 |
|
Non-interest expense |
|
160,213 |
|
|
|
173,141 |
|
|
|
155,656 |
|
Pre-provision net revenue |
|
163,687 |
|
|
|
162,312 |
|
|
|
151,080 |
|
Provision for credit losses |
|
8,656 |
|
|
|
18,975 |
|
|
|
34,683 |
|
Income
tax expense |
|
39,321 |
|
|
|
37,974 |
|
|
|
29,129 |
|
Net
income |
|
115,710 |
|
|
|
105,363 |
|
|
|
87,268 |
|
Dividends on preferred stock |
|
3,172 |
|
|
|
3,172 |
|
|
|
3,172 |
|
Net
income available to common shareholders |
$ |
112,538 |
|
|
$ |
102,191 |
|
|
$ |
84,096 |
|
Weighted
average number of common shares outstanding: |
|
|
|
Basic |
|
405,152,605 |
|
|
|
403,872,459 |
|
|
|
403,519,088 |
|
Diluted |
|
407,636,765 |
|
|
|
405,799,507 |
|
|
|
405,424,123 |
|
Per
common share data: |
|
|
|
Basic earnings |
$ |
0.28 |
|
|
$ |
0.25 |
|
|
$ |
0.21 |
|
Diluted earnings |
|
0.28 |
|
|
|
0.25 |
|
|
|
0.21 |
|
Cash dividends declared |
|
0.11 |
|
|
|
0.11 |
|
|
|
0.11 |
|
Closing
stock price - high |
|
14.37 |
|
|
|
10.09 |
|
|
|
11.46 |
|
Closing
stock price - low |
|
9.74 |
|
|
|
6.90 |
|
|
|
6.37 |
|
CORE ADJUSTED
FINANCIAL DATA: (2) |
|
|
|
Net
income available to common shareholders, as adjusted |
$ |
112,623 |
|
|
$ |
110,266 |
|
|
$ |
85,061 |
|
Basic
earnings per share, as adjusted |
|
0.28 |
|
|
|
0.27 |
|
|
|
0.21 |
|
Diluted
earnings per share, as adjusted |
|
0.28 |
|
|
|
0.27 |
|
|
|
0.21 |
|
FINANCIAL RATIOS: |
|
|
|
Net
interest margin |
|
3.13 |
% |
|
|
3.05 |
|
% |
|
3.06 |
% |
Net
interest margin - FTE (1) |
|
3.14 |
|
|
|
3.06 |
|
|
|
3.07 |
|
Annualized return on average assets |
|
1.14 |
|
|
|
1.02 |
|
|
|
0.92 |
|
Annualized return on avg. shareholders' equity |
|
9.96 |
|
|
|
9.20 |
|
|
|
7.92 |
|
Annualized return on avg. tangible shareholders' equity (2) |
|
14.49 |
|
|
|
13.45 |
|
|
|
11.84 |
|
Efficiency ratio (3) |
|
49.46 |
|
|
|
51.61 |
|
|
|
50.75 |
|
CORE ADJUSTED
FINANCIAL RATIOS: (2) |
|
|
|
Annualized return on average assets, as adjusted |
|
1.14 |
% |
|
|
1.10 |
|
% |
|
0.93 |
% |
Annualized return on average shareholders' equity, as adjusted |
|
9.97 |
|
|
|
9.90 |
|
|
|
8.01 |
|
Annualized return on average tangible shareholders' equity, as
adjusted |
|
14.50 |
|
|
|
14.48 |
|
|
|
11.97 |
|
Efficiency ratio, as adjusted |
|
48.60 |
|
|
|
46.99 |
|
|
|
49.26 |
|
AVERAGE BALANCE
SHEET ITEMS: |
|
|
|
Assets |
$ |
40,770,731 |
|
|
$ |
41,308,943 |
|
|
$ |
38,116,850 |
|
Interest
earning assets |
|
37,386,219 |
|
|
|
37,806,500 |
|
|
|
34,674,075 |
|
Loans |
|
32,582,479 |
|
|
|
32,570,902 |
|
|
|
29,999,428 |
|
Interest
bearing liabilities |
|
25,954,182 |
|
|
|
26,708,223 |
|
|
|
26,235,064 |
|
Deposits |
|
31,835,286 |
|
|
|
31,755,838 |
|
|
|
28,831,418 |
|
Shareholders' equity |
|
4,645,400 |
|
|
|
4,582,329 |
|
|
|
4,408,585 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VALLEY NATIONAL BANCORP |
CONSOLIDATED FINANCIAL HIGHLIGHTS |
|
|
As Of |
BALANCE SHEET
ITEMS: |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
(In thousands) |
2021 |
2020 |
2020 |
2020 |
2020 |
Assets |
$ |
41,178,011 |
|
$ |
40,686,076 |
|
$ |
40,747,492 |
|
$ |
41,626,497 |
|
$ |
39,089,443 |
|
Total
loans |
|
32,686,416 |
|
|
32,217,112 |
|
|
32,415,586 |
|
|
32,314,611 |
|
|
30,428,067 |
|
Deposits |
|
32,585,209 |
|
|
31,935,602 |
|
|
31,187,982 |
|
|
31,337,237 |
|
|
28,985,802 |
|
Shareholders' equity |
|
4,659,670 |
|
|
4,592,120 |
|
|
4,533,763 |
|
|
4,474,488 |
|
|
4,420,998 |
|
|
|
|
|
|
|
LOANS: |
|
|
|
|
|
(In
thousands) |
|
|
|
|
|
Commercial and industrial loans: |
|
|
|
|
|
Commercial and industrial |
$ |
4,784,017 |
|
$ |
4,709,569 |
|
$ |
4,625,880 |
|
$ |
4,670,362 |
|
$ |
4,998,731 |
|
Commercial and industrial PPP loans |
|
2,364,627 |
|
|
2,152,139 |
|
|
2,277,465 |
|
|
2,214,327 |
|
|
— |
|
Total commercial and industrial |
|
7,148,644 |
|
|
6,861,708 |
|
|
6,903,345 |
|
|
6,884,689 |
|
|
4,998,731 |
|
Commercial real estate: |
|
|
|
|
|
Commercial real estate |
|
16,923,627 |
|
|
16,724,998 |
|
|
16,815,587 |
|
|
16,571,877 |
|
|
16,390,236 |
|
Construction |
|
1,786,331 |
|
|
1,745,825 |
|
|
1,720,775 |
|
|
1,721,352 |
|
|
1,727,046 |
|
Total commercial real estate |
|
18,709,958 |
|
|
18,470,823 |
|
|
18,536,362 |
|
|
18,293,229 |
|
|
18,117,282 |
|
Residential mortgage |
|
4,060,492 |
|
|
4,183,743 |
|
|
4,284,595 |
|
|
4,405,147 |
|
|
4,478,982 |
|
Consumer: |
|
|
|
|
|
Home equity |
|
409,576 |
|
|
431,553 |
|
|
457,083 |
|
|
471,115 |
|
|
481,751 |
|
Automobile |
|
1,444,883 |
|
|
1,355,955 |
|
|
1,341,659 |
|
|
1,369,489 |
|
|
1,436,734 |
|
Other consumer |
|
912,863 |
|
|
913,330 |
|
|
892,542 |
|
|
890,942 |
|
|
914,587 |
|
Total consumer loans |
|
2,767,322 |
|
|
2,700,838 |
|
|
2,691,284 |
|
|
2,731,546 |
|
|
2,833,072 |
|
Total
loans |
$ |
32,686,416 |
|
$ |
32,217,112 |
|
$ |
32,415,586 |
|
$ |
32,314,611 |
|
$ |
30,428,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL RATIOS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book
value per common share |
$ |
10.97 |
|
$ |
10.85 |
|
$ |
10.71 |
|
$ |
10.56 |
|
$ |
10.43 |
|
Tangible
book value per common share (2) |
|
7.39 |
|
|
7.25 |
|
|
7.12 |
|
|
6.96 |
|
|
6.82 |
|
Tangible
common equity to tangible assets (2) |
|
7.55 |
% |
|
7.47 |
% |
|
7.32 |
% |
|
7.00 |
% |
|
7.32 |
% |
Tier 1
leverage capital |
|
8.37 |
|
|
8.06 |
|
|
7.89 |
|
|
7.70 |
|
|
8.24 |
|
Common
equity tier 1 capital |
|
10.08 |
|
|
9.94 |
|
|
9.71 |
|
|
9.51 |
|
|
9.24 |
|
Tier 1
risk-based capital |
|
10.79 |
|
|
10.66 |
|
|
10.42 |
|
|
10.23 |
|
|
9.95 |
|
Total
risk-based capital |
|
12.76 |
|
|
12.64 |
|
|
12.37 |
|
|
12.19 |
|
|
11.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VALLEY NATIONAL BANCORP |
CONSOLIDATED FINANCIAL HIGHLIGHTS |
|
|
Three Months
Ended |
ALLOWANCE
FOR CREDIT
LOSSES: |
March 31, |
December 31, |
March 31, |
($ in thousands) |
2021 |
2020 |
2020 |
Allowance for
credit losses
for loans |
|
|
|
|
|
|
|
|
|
Beginning balance |
$ |
351,354 |
|
$ |
335,328 |
|
$ |
164,604 |
|
Impact of the adoption of ASU 2016-13 (4) |
|
— |
|
|
— |
|
|
37,989 |
|
Allowance for purchased credit deteriorated (PCD) loans |
|
— |
|
|
— |
|
|
61,643 |
|
Beginning balance,
adjusted |
|
351,354 |
|
|
335,328 |
|
|
264,236 |
|
Loans charged-off: |
|
|
|
Commercial and industrial |
|
(7,142 |
) |
|
(3,281 |
) |
|
(3,360 |
) |
Commercial real estate |
|
(382 |
) |
|
(1 |
) |
|
(44 |
) |
Residential mortgage |
|
(138 |
) |
|
(250 |
) |
|
(336 |
) |
Total consumer |
|
(1,138 |
) |
|
(1,670 |
) |
|
(2,565 |
) |
Total loans charged-off |
|
(8,800 |
) |
|
(5,202 |
) |
|
(6,305 |
) |
Charged-off loans
recovered: |
|
|
|
Commercial and industrial |
|
1,589 |
|
|
160 |
|
|
569 |
|
Commercial real estate |
|
65 |
|
|
890 |
|
|
73 |
|
Construction |
|
4 |
|
|
372 |
|
|
20 |
|
Residential mortgage |
|
157 |
|
|
44 |
|
|
50 |
|
Total consumer |
|
930 |
|
|
734 |
|
|
794 |
|
Total loans recovered |
|
2,745 |
|
|
2,200 |
|
|
1,506 |
|
Net charge-offs |
|
(6,055 |
) |
|
(3,002 |
) |
|
(4,799 |
) |
Provision for credit losses
for loans |
|
9,014 |
|
|
19,028 |
|
|
33,924 |
|
Ending balance |
$ |
354,313 |
|
$ |
351,354 |
|
$ |
293,361 |
|
Components
of allowance for
credit losses
for loans: |
|
|
|
Allowance for loan losses |
$ |
342,880 |
|
$ |
340,243 |
|
$ |
283,342 |
|
Allowance for unfunded credit commitments |
|
11,433 |
|
|
11,111 |
|
|
10,019 |
|
Allowance for credit losses
for loans |
$ |
354,313 |
|
$ |
351,354 |
|
$ |
293,361 |
|
Components
of provision for
credit losses
for loans: |
|
|
|
Provision for credit losses for loans |
$ |
8,692 |
|
$ |
18,213 |
|
$ |
33,851 |
|
Provision for unfunded credit commitments |
|
322 |
|
|
815 |
|
|
73 |
|
Total provision for credit
losses for loans |
$ |
9,014 |
|
$ |
19,028 |
|
$ |
33,924 |
|
Annualized ratio of total net
charge-offs to average loans |
|
0.07 |
% |
|
0.04 |
% |
|
0.06 |
% |
Allowance for credit losses
for loans as a % of total loans |
|
1.08 |
|
|
1.09 |
|
|
0.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VALLEY NATIONAL BANCORP |
CONSOLIDATED FINANCIAL HIGHLIGHTS |
|
|
As of |
ASSET
QUALITY: |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
($
in thousands) |
|
2021 |
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
Accruing past due loans: |
|
|
|
|
|
30 to 59 days past due: |
|
|
|
|
|
Commercial and industrial |
$ |
3,763 |
|
$ |
6,393 |
|
$ |
6,587 |
|
$ |
6,206 |
|
$ |
9,780 |
|
Commercial real estate |
|
11,655 |
|
|
35,030 |
|
|
26,038 |
|
|
13,912 |
|
|
41,664 |
|
Construction |
|
— |
|
|
315 |
|
|
142 |
|
|
— |
|
|
7,119 |
|
Residential mortgage |
|
16,004 |
|
|
17,717 |
|
|
22,528 |
|
|
35,263 |
|
|
38,965 |
|
Total consumer |
|
5,480 |
|
|
10,257 |
|
|
8,979 |
|
|
12,962 |
|
|
19,508 |
|
Total 30 to 59 days past due |
|
36,902 |
|
|
69,712 |
|
|
64,274 |
|
|
68,343 |
|
|
117,036 |
|
60 to 89 days past due: |
|
|
|
|
|
Commercial and industrial |
|
1,768 |
|
|
2,252 |
|
|
3,954 |
|
|
4,178 |
|
|
7,624 |
|
Commercial real estate |
|
5,455 |
|
|
1,326 |
|
|
610 |
|
|
1,543 |
|
|
15,963 |
|
Construction |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
49 |
|
Residential mortgage |
|
2,233 |
|
|
10,351 |
|
|
3,760 |
|
|
4,169 |
|
|
9,307 |
|
Total consumer |
|
1,021 |
|
|
1,823 |
|
|
1,352 |
|
|
3,786 |
|
|
2,309 |
|
Total 60 to 89 days past due |
|
10,477 |
|
|
15,752 |
|
|
9,676 |
|
|
13,676 |
|
|
35,252 |
|
90 or more days past due: |
|
|
|
|
|
Commercial and industrial |
|
2,515 |
|
|
9,107 |
|
|
6,759 |
|
|
5,220 |
|
|
4,049 |
|
Commercial real estate |
|
— |
|
|
993 |
|
|
1,538 |
|
|
— |
|
|
161 |
|
Residential mortgage |
|
2,472 |
|
|
3,170 |
|
|
891 |
|
|
3,812 |
|
|
1,798 |
|
Total consumer |
|
417 |
|
|
271 |
|
|
753 |
|
|
2,082 |
|
|
1,092 |
|
Total 90 or more days past
due |
|
5,404 |
|
|
13,541 |
|
|
9,941 |
|
|
11,114 |
|
|
7,100 |
|
Total accruing past due
loans |
$ |
52,783 |
|
$ |
99,005 |
|
$ |
83,891 |
|
$ |
93,133 |
|
$ |
159,388 |
|
Non-accrual loans: |
|
|
|
|
|
Commercial and industrial |
$ |
108,988 |
|
$ |
106,693 |
|
$ |
115,667 |
|
$ |
130,876 |
|
$ |
132,622 |
|
Commercial real estate |
|
54,004 |
|
|
46,879 |
|
|
41,627 |
|
|
43,678 |
|
|
41,616 |
|
Construction |
|
71 |
|
|
84 |
|
|
2,497 |
|
|
3,308 |
|
|
2,972 |
|
Residential mortgage |
|
33,655 |
|
|
25,817 |
|
|
23,877 |
|
|
25,776 |
|
|
24,625 |
|
Total consumer |
|
7,292 |
|
|
5,809 |
|
|
7,441 |
|
|
6,947 |
|
|
4,095 |
|
Total non-accrual loans |
|
204,010 |
|
|
185,282 |
|
|
191,109 |
|
|
210,585 |
|
|
205,930 |
|
Other real estate owned
(OREO) |
|
4,521 |
|
|
5,118 |
|
|
7,746 |
|
|
8,283 |
|
|
10,198 |
|
Other repossessed assets |
|
1,857 |
|
|
3,342 |
|
|
3,988 |
|
|
3,920 |
|
|
3,842 |
|
Non-accrual debt securities |
|
129 |
|
|
815 |
|
|
783 |
|
|
1,365 |
|
|
531 |
|
Total non-performing assets |
$ |
210,517 |
|
$ |
194,557 |
|
$ |
203,626 |
|
$ |
224,153 |
|
$ |
220,501 |
|
Performing troubled debt
restructured loans |
$ |
67,102 |
|
$ |
57,367 |
|
$ |
58,090 |
|
$ |
53,936 |
|
$ |
48,024 |
|
Total non-accrual loans as a % of
loans |
|
0.62 |
% |
|
0.58 |
% |
|
0.59 |
% |
|
0.65 |
% |
|
0.68 |
% |
Total accruing past due and
non-accrual loans as a % of loans |
|
0.79 |
% |
|
0.88 |
% |
|
0.85 |
% |
|
0.94 |
% |
|
1.20 |
% |
Allowance for losses on loans as
a % of non- accrual loans |
|
168.07 |
% |
|
183.64 |
% |
|
170.08 |
% |
|
147.03 |
% |
|
137.59 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VALLEY NATIONAL
BANCORPCONSOLIDATED FINANCIAL
HIGHLIGHTS
NOTES TO
SELECTED FINANCIAL
DATA
(1) |
Net interest income and net interest margin are presented on a tax
equivalent basis using a 21 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 |
($ in
thousands, except for share data) |
March
31,2021 |
December
31,2020 |
March
31,2020 |
Adjusted net
income available
to common
shareholders: |
|
|
|
Net income, as reported |
$ |
115,710 |
|
$ |
105,363 |
|
$ |
87,268 |
|
Add: Loss on extinguishment of debt (net of tax) |
|
— |
|
|
6,958 |
|
|
— |
|
Add: Losses (gains) on securities transaction (net of tax) |
|
85 |
|
|
(468 |
) |
|
29 |
|
Add: Severance expense (net of tax)(a) |
|
— |
|
|
1,489 |
|
|
— |
|
Add: Merger related expenses (net of tax)(b) |
|
— |
|
|
96 |
|
|
936 |
|
Net
income, as adjusted |
$ |
115,795 |
|
$ |
113,438 |
|
$ |
88,233 |
|
Dividends on preferred stock |
|
3,172 |
|
|
3,172 |
|
|
3,172 |
|
Net
income available to common shareholders, as adjusted |
$ |
112,623 |
|
$ |
110,266 |
|
$ |
85,061 |
|
_____________ |
|
|
|
|
(a) Severance is included in salary and employee benefits
expense. |
(b) Merger related expenses are primarily within professional and
legal fees, and other non-interest expense. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted per
common share
data: |
|
|
|
Net
income available to common shareholders, as adjusted |
$ |
112,623 |
|
$ |
110,266 |
|
$ |
85,061 |
|
Average
number of shares outstanding |
|
405,152,605 |
|
|
403,872,459 |
|
|
403,519,088 |
|
Basic earnings, as adjusted |
$ |
0.28 |
|
$ |
0.27 |
|
$ |
0.21 |
|
Average
number of diluted shares outstanding |
|
407,636,765 |
|
|
405,799,507 |
|
|
405,424,123 |
|
Diluted earnings, as adjusted |
$ |
0.28 |
|
$ |
0.27 |
|
$ |
0.21 |
|
Adjusted annualized
return on
average tangible
shareholders' equity: |
|
|
|
Net
income, as adjusted |
$ |
115,795 |
|
$ |
113,438 |
|
$ |
88,233 |
|
Average
shareholders' equity |
$ |
4,645,400 |
|
$ |
4,582,329 |
|
$ |
4,408,585 |
|
Less: Average goodwill and other intangible assets |
|
1,451,750 |
|
|
1,447,838 |
|
|
1,460,988 |
|
Average
tangible shareholders' equity |
$ |
3,193,650 |
|
$ |
3,134,491 |
|
$ |
2,947,597 |
|
Annualized return on average tangible shareholders' equity, as
adjusted |
|
14.50 |
% |
|
14.48 |
% |
|
11.97 |
% |
Adjusted annualized
return on
average assets: |
|
|
|
Net
income, as adjusted |
$ |
115,795 |
|
$ |
113,438 |
|
$ |
88,233 |
|
Average
assets |
$ |
40,770,731 |
|
$ |
41,308,943 |
|
$ |
38,116,850 |
|
Annualized return on average assets, as adjusted |
|
1.14 |
% |
|
1.10 |
% |
|
0.93 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
($ in
thousands) |
March
31,2021 |
December
31,2020 |
March
31,2020 |
Adjusted annualized
return on
average shareholders'
equity: |
|
|
|
Net
income, as adjusted |
$ |
115,795 |
|
$ |
113,438 |
|
$ |
88,233 |
|
Average
shareholders' equity |
$ |
4,645,400 |
|
$ |
4,582,329 |
|
$ |
4,408,585 |
|
Annualized return on average shareholders' equity, as adjusted |
|
9.97 |
% |
|
9.90 |
% |
|
8.01 |
% |
Annualized return
on average
tangible shareholders'
equity: |
|
|
|
Net
income, as reported |
$ |
115,710 |
|
$ |
105,363 |
|
$ |
87,268 |
|
Average
shareholders' equity |
$ |
4,645,400 |
|
$ |
4,582,329 |
|
$ |
4,408,585 |
|
Less: Average goodwill and other intangible assets |
|
1,451,750 |
|
|
1,447,838 |
|
|
1,460,988 |
|
Average
tangible shareholders' equity |
$ |
3,193,650 |
|
$ |
3,134,491 |
|
$ |
2,947,597 |
|
Annualized return on average tangible shareholders' equity |
|
14.49 |
% |
|
13.45 |
% |
|
11.84 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VALLEY NATIONAL BANCORP |
CONSOLIDATED FINANCIAL HIGHLIGHTS |
|
Adjusted efficiency
ratio: |
|
Non-interest expense, as reported |
$ |
160,213 |
|
$ |
173,141 |
|
$ |
155,656 |
|
Less: Loss on extinguishment of debt (pre-tax) |
|
— |
|
|
9,683 |
|
|
— |
|
Less: Severance expense (pre-tax) |
|
— |
|
|
2,072 |
|
|
— |
|
Less: Merger-related expenses (pre-tax) |
|
— |
|
|
133 |
|
|
1,302 |
|
Less: Amortization of tax credit investments (pre-tax) |
|
2,744 |
|
|
3,932 |
|
|
3,228 |
|
Non-interest expense, as adjusted |
$ |
157,469 |
|
$ |
157,321 |
|
$ |
151,126 |
|
Net interest
income |
|
292,667 |
|
|
287,920 |
|
|
265,339 |
|
Non-interest
income, as reported |
|
31,233 |
|
|
47,533 |
|
|
41,397 |
|
Add: Losses (gains) on securities transactions, net (pre-tax) |
|
118 |
|
|
(651 |
) |
|
40 |
|
Non-interest
income, as adjusted |
$ |
31,351 |
|
$ |
46,882 |
|
$ |
41,437 |
|
Gross operating income, as adjusted |
$ |
324,018 |
|
$ |
334,802 |
|
$ |
306,776 |
|
Efficiency ratio, as adjusted |
|
48.60 |
% |
|
46.99 |
% |
|
49.26 |
% |
|
|
|
As of |
|
|
($ in thousands, except for share
data) |
March
31,2021 |
December
31,2020 |
September
30,2020 |
June
30,2020 |
March
31,2020 |
Tangible book
value per common
share: |
|
|
|
|
|
Common shares outstanding |
|
405,797,538 |
|
|
403,858,998 |
|
|
403,878,744 |
|
|
403,795,699 |
|
|
403,744,148 |
|
Shareholders' equity |
$ |
4,659,670 |
|
$ |
4,592,120 |
|
$ |
4,533,763 |
|
$ |
4,474,488 |
|
$ |
4,420,998 |
|
Less: Preferred stock |
|
209,691 |
|
|
209,691 |
|
|
209,691 |
|
|
209,691 |
|
|
209,691 |
|
Less: Goodwill and other intangible assets |
|
1,450,414 |
|
|
1,452,891 |
|
|
1,449,282 |
|
|
1,453,330 |
|
|
1,458,095 |
|
Tangible common shareholders' equity |
$ |
2,999,565 |
|
$ |
2,929,538 |
|
$ |
2,874,790 |
|
$ |
2,811,467 |
|
$ |
2,753,212 |
|
Tangible book value per common share |
$ |
7.39 |
|
$ |
7.25 |
|
$ |
7.12 |
|
$ |
6.96 |
|
$ |
6.82 |
|
Tangible common
equity to
tangible assets: |
|
|
|
|
|
Tangible common shareholders' equity |
$ |
2,999,565 |
|
$ |
2,929,538 |
|
$ |
2,874,790 |
|
$ |
2,811,467 |
|
$ |
2,753,212 |
|
Total assets |
|
41,178,011 |
|
|
40,686,076 |
|
|
40,747,492 |
|
|
41,626,497 |
|
|
39,089,443 |
|
Less: Goodwill and other intangible assets |
|
1,450,414 |
|
|
1,452,891 |
|
|
1,449,282 |
|
|
1,453,330 |
|
|
1,458,095 |
|
Tangible assets |
$ |
39,727,597 |
|
$ |
39,233,185 |
|
$ |
39,298,210 |
|
$ |
40,173,167 |
|
$ |
37,631,348 |
|
Tangible common equity to tangible assets |
|
7.55 |
% |
|
7.47 |
% |
|
7.32 |
% |
|
7.00 |
% |
|
7.32 |
% |
(3) |
The efficiency
ratio measures Valley's total non-interest expense as a percentage
of net interest income plus total non-interest income. |
(4) |
The adjustment represents an increase in the allowance for
credit losses for loans as a result of the adoption of ASU 2016-13
effective January 1, 2020. |
|
|
SHAREHOLDERS
RELATIONSRequests 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@valley.com.
|
|
VALLEY
NATIONAL BANCORP |
CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION |
(in
thousands, except for share data) |
|
|
March
31,2021 |
|
December
31,2020 |
(Unaudited) |
|
|
Assets |
|
|
|
Cash and due from banks |
$ |
280,915 |
|
|
$ |
257,845 |
|
Interest
bearing deposits with banks |
|
1,352,918 |
|
|
|
1,071,360 |
|
Investment securities: |
|
|
|
Equity securities |
|
32,973 |
|
|
|
29,378 |
|
Available for sale debt securities |
|
1,116,221 |
|
|
|
1,339,473 |
|
Held to maturity debt securities (net of allowance for credit
losses of $1,070 at March 31, 2021 and $1,428 at December 31,
2020) |
|
2,389,956 |
|
|
|
2,171,583 |
|
Total investment securities |
|
3,539,150 |
|
|
|
3,540,434 |
|
Loans
held for sale, at fair value |
|
232,068 |
|
|
|
301,427 |
|
Loans |
|
32,686,416 |
|
|
|
32,217,112 |
|
Less: Allowance for loan losses |
|
(342,880 |
) |
|
|
(340,243 |
) |
Net loans |
|
32,343,536 |
|
|
|
31,876,869 |
|
Premises
and equipment, net |
|
323,841 |
|
|
|
319,797 |
|
Lease
right of use assets |
|
242,190 |
|
|
|
252,053 |
|
Bank
owned life insurance |
|
535,620 |
|
|
|
535,209 |
|
Accrued
interest receivable |
|
107,790 |
|
|
|
106,230 |
|
Goodwill |
|
1,382,442 |
|
|
|
1,382,442 |
|
Other
intangible assets, net |
|
67,972 |
|
|
|
70,449 |
|
Other
assets |
|
769,569 |
|
|
|
971,961 |
|
Total Assets |
$ |
41,178,011 |
|
|
$ |
40,686,076 |
|
Liabilities |
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
Non-interest bearing |
$ |
10,053,026 |
|
|
$ |
9,205,266 |
|
Interest bearing: |
|
|
|
|
|
|
|
Savings, NOW and money market |
|
17,081,105 |
|
|
|
16,015,658 |
|
Time |
|
5,451,078 |
|
|
|
6,714,678 |
|
Total deposits |
|
32,585,209 |
|
|
|
31,935,602 |
|
Short-term borrowings |
|
1,084,666 |
|
|
|
1,147,958 |
|
Long-term borrowings |
|
2,242,931 |
|
|
|
2,295,665 |
|
Junior
subordinated debentures issued to capital trusts |
|
56,152 |
|
|
|
56,065 |
|
Lease
liabilities |
|
266,407 |
|
|
|
276,675 |
|
Accrued
expenses and other liabilities |
|
282,976 |
|
|
|
381,991 |
|
Total Liabilities |
|
36,518,341 |
|
|
|
36,093,956 |
|
Shareholders’ Equity |
|
|
|
|
|
|
|
Preferred stock, no par value; 50,000,000 authorized shares: |
|
|
|
|
|
|
|
Series A (4,600,000 shares issued at March 31, 2021 and December
31, 2020) |
|
111,590 |
|
|
|
111,590 |
|
Series B (4,000,000 shares issued at March 31, 2021 and December
31, 2020) |
|
98,101 |
|
|
|
98,101 |
|
Common
stock (no par value, authorized 650,000,000 shares; issued
405,801,304 shares at March 31, 2021 and 403,881,488 shares at
December 31, 2020) |
|
142,435 |
|
|
|
141,746 |
|
Surplus |
|
3,651,948 |
|
|
|
3,637,468 |
|
Retained
earnings |
|
672,651 |
|
|
|
611,158 |
|
Accumulated other comprehensive loss |
|
(17,005 |
) |
|
|
(7,718 |
) |
Treasury
stock, at cost (3,766 common shares at March 31, 2021 and 22,490
common shares at December 31, 2020) |
|
(50 |
) |
|
|
(225 |
) |
Total Shareholders’
Equity |
|
4,659,670 |
|
|
|
4,592,120 |
|
Total Liabilities
and Shareholders’
Equity |
$ |
41,178,011 |
|
|
$ |
40,686,076 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VALLEY NATIONAL BANCORP |
CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION |
(in thousands, except for share data) |
|
|
Three Months Ended |
|
March
31,2021 |
December
31,2020 |
March
31,2020 |
Interest Income |
|
|
|
Interest and fees on loans |
$ |
313,181 |
|
$ |
313,968 |
|
$ |
333,068 |
|
Interest
and dividends on investment securities: |
|
|
|
Taxable |
|
13,166 |
|
|
14,024 |
|
|
21,933 |
|
Tax-exempt |
|
3,356 |
|
|
3,339 |
|
|
3,926 |
|
Dividends |
|
1,871 |
|
|
2,467 |
|
|
3,401 |
|
Interest on federal funds sold and other short-term
investments |
|
224 |
|
|
260 |
|
|
1,465 |
|
Total interest income |
|
331,798 |
|
|
334,058 |
|
|
363,793 |
|
Interest Expense |
|
|
|
|
|
|
|
|
|
Interest
on deposits: |
|
|
|
Savings, NOW and money market |
|
11,125 |
|
|
11,706 |
|
|
34,513 |
|
Time |
|
11,093 |
|
|
14,368 |
|
|
42,814 |
|
Interest
on short-term borrowings |
|
1,758 |
|
|
2,097 |
|
|
4,707 |
|
Interest on long-term borrowings and junior subordinated
debentures |
|
15,155 |
|
|
17,967 |
|
|
16,420 |
|
Total interest expense |
|
39,131 |
|
|
46,138 |
|
|
98,454 |
|
Net Interest
Income |
|
292,667 |
|
|
287,920 |
|
|
265,339 |
|
(Credit)
provision for credit losses for held to maturity securities |
|
(358 |
) |
|
(53 |
) |
|
759 |
|
Provision for credit losses for loans |
|
9,014 |
|
|
19,028 |
|
|
33,924 |
|
Net Interest
Income After
Provision for
Credit Losses |
|
284,011 |
|
|
268,945 |
|
|
230,656 |
|
Non-Interest Income |
|
|
|
Trust
and investment services |
|
3,329 |
|
|
3,108 |
|
|
3,413 |
|
Insurance commissions |
|
1,558 |
|
|
1,972 |
|
|
1,951 |
|
Service
charges on deposit accounts |
|
5,103 |
|
|
5,068 |
|
|
5,680 |
|
(Losses)
gains on securities transactions, net |
|
(118 |
) |
|
651 |
|
|
(40 |
) |
Fees
from loan servicing |
|
2,899 |
|
|
2,826 |
|
|
2,748 |
|
Gains on
sales of loans, net |
|
3,513 |
|
|
15,998 |
|
|
4,550 |
|
(Losses)
gains on sales of assets, net |
|
(196 |
) |
|
(2,607 |
) |
|
121 |
|
Bank
owned life insurance |
|
2,331 |
|
|
2,422 |
|
|
3,142 |
|
Other |
|
12,814 |
|
|
18,095 |
|
|
19,832 |
|
Total non-interest income |
|
31,233 |
|
|
47,533 |
|
|
41,397 |
|
Non-Interest Expense |
|
|
|
Salary
and employee benefits expense |
|
88,103 |
|
|
85,335 |
|
|
85,728 |
|
Net
occupancy and equipment expense |
|
32,259 |
|
|
32,228 |
|
|
32,441 |
|
FDIC
insurance assessment |
|
3,276 |
|
|
4,091 |
|
|
3,876 |
|
Amortization of other intangible assets |
|
6,006 |
|
|
6,117 |
|
|
5,470 |
|
Professional and legal fees |
|
6,272 |
|
|
9,702 |
|
|
6,087 |
|
Loss on
extinguishment of debt |
|
— |
|
|
9,683 |
|
|
— |
|
Amortization of tax credit investments |
|
2,744 |
|
|
3,932 |
|
|
3,228 |
|
Telecommunication expense |
|
3,160 |
|
|
3,490 |
|
|
2,287 |
|
Other |
|
18,393 |
|
|
18,563 |
|
|
16,539 |
|
Total non-interest expense |
|
160,213 |
|
|
173,141 |
|
|
155,656 |
|
Income Before Income
Taxes |
|
155,031 |
|
|
143,337 |
|
|
116,397 |
|
Income
tax expense |
|
39,321 |
|
|
37,974 |
|
|
29,129 |
|
Net Income |
|
115,710 |
|
|
105,363 |
|
|
87,268 |
|
Dividends on preferred stock |
|
3,172 |
|
|
3,172 |
|
|
3,172 |
|
Net Income
Available to
Common Shareholders |
$ |
112,538 |
|
$ |
102,191 |
|
$ |
84,096 |
|
|
|
VALLEY NATIONAL BANCORP |
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
(in thousands, except for share data) |
|
|
Three Months Ended |
|
March
31,2021 |
December
31,2020 |
March
31,2020 |
Earnings Per
Common Share: |
|
|
|
Basic |
$ |
0.28 |
$ |
0.25 |
$ |
0.21 |
Diluted |
|
0.28 |
|
0.25 |
|
0.21 |
Cash Dividends
Declared per
Common Share |
|
0.11 |
|
0.11 |
|
0.11 |
Weighted Average
Number of Common
Shares Outstanding: |
|
|
|
|
|
|
Basic |
|
405,152,605 |
|
403,872,459 |
|
403,519,088 |
Diluted |
|
407,636,765 |
|
405,799,507 |
|
405,424,123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
|
|
|
Average |
|
|
|
|
Avg. |
|
Average |
|
|
|
|
Avg. |
Average |
|
Avg. |
($ in thousands) |
|
Balance |
|
|
Interest |
|
Rate |
|
Balance |
|
|
Interest |
|
Rate |
Balance |
Interest |
Rate |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1)(2) |
$ |
32,582,479 |
|
$ |
313,206 |
|
3.85 |
% |
|
$ |
32,570,902 |
|
$ |
313,993 |
|
3.86 |
% |
|
$ |
29,999,428 |
$ |
333,068 |
|
4.44 |
% |
Taxable investments (3) |
|
3,111,116 |
|
|
15,037 |
|
1.93 |
|
|
|
3,204,974 |
|
|
16,491 |
|
2.06 |
|
|
|
3,557,913 |
|
25,334 |
|
2.85 |
|
Tax-exempt investments (1)(3) |
|
513,809 |
|
|
4,248 |
|
3.31 |
|
|
|
506,748 |
|
|
4,227 |
|
3.34 |
|
|
|
585,987 |
|
4,970 |
|
3.39 |
|
Interest bearing deposits with banks |
|
1,178,815 |
|
|
224 |
|
0.08 |
|
|
|
1,523,876 |
|
|
260 |
|
0.07 |
|
|
|
530,747 |
|
1,465 |
|
1.10 |
|
Total
interest earning assets |
|
37,386,219 |
|
|
332,715 |
|
3.56 |
|
|
|
37,806,500 |
|
|
334,971 |
|
3.54 |
|
|
|
34,674,075 |
|
364,837 |
|
4.21 |
|
Other
assets |
|
3,384,512 |
|
|
|
|
|
|
3,502,443 |
|
|
|
|
|
|
3,442,775 |
|
|
|
|
Total
assets |
$ |
40,770,731 |
|
|
|
|
|
$ |
41,308,943 |
|
|
|
|
|
$ |
38,116,850 |
|
|
|
|
Liabilities and
shareholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW and money market |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
deposits |
$ |
16,617,762 |
|
$ |
11,125 |
|
0.27 |
% |
|
$ |
15,606,081 |
|
$ |
11,706 |
|
0.30 |
% |
|
$ |
13,239,382 |
$ |
34,513 |
|
1.04 |
% |
Time deposits |
|
5,844,524 |
|
|
11,093 |
|
0.76 |
|
|
|
7,005,804 |
|
|
14,368 |
|
0.82 |
|
|
|
8,897,934 |
|
42,814 |
|
1.92 |
|
Short-term borrowings |
|
1,168,617 |
|
|
1,758 |
|
0.60 |
|
|
|
1,316,706 |
|
|
2,097 |
|
0.64 |
|
|
|
1,322,699 |
|
4,707 |
|
1.42 |
|
Long-term borrowings (4) |
|
2,323,279 |
|
|
15,155 |
|
2.61 |
|
|
|
2,779,632 |
|
|
17,967 |
|
2.59 |
|
|
|
2,775,049 |
|
16,420 |
|
2.37 |
|
Total
interest bearing liabilities |
|
25,954,182 |
|
|
39,131 |
|
0.60 |
|
|
|
26,708,223 |
|
|
46,138 |
|
0.69 |
|
|
|
26,235,064 |
|
98,454 |
|
1.50 |
|
Non-interest bearing deposits |
|
9,373,000 |
|
|
|
9,143,953 |
|
|
|
|
|
|
|
|
6,694,102 |
|
|
|
|
Other
liabilities |
|
798,149 |
|
|
|
874,438 |
|
|
|
|
|
|
|
|
779,099 |
|
|
|
|
Shareholders' equity |
|
4,645,400 |
|
|
|
4,582,329 |
|
|
|
|
|
|
|
|
4,408,585 |
|
|
|
|
Total
liabilities and shareholders' equity |
$ |
40,770,731 |
|
|
$ |
41,308,943 |
|
|
|
|
|
|
|
$ |
38,116,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income/interest rate spread (5) |
|
|
$ |
293,584 |
|
2.96 |
% |
|
|
|
$ |
288,833 |
|
2.85 |
% |
|
|
$ |
266,383 |
|
2.71 |
% |
Tax
equivalent adjustment |
|
|
|
(917 |
) |
|
|
|
|
(913 |
) |
|
|
|
|
|
(1,044 |
) |
|
Net
interest income, as reported |
|
|
$ |
292,667 |
|
|
|
|
$ |
287,920 |
|
|
|
|
|
$ |
265,339 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest margin (6) |
|
|
|
|
|
3.13 |
|
|
|
|
|
|
|
3.05 |
|
|
|
|
|
|
3.06 |
|
Tax equivalent effect |
|
|
|
|
|
0.01 |
|
|
|
|
|
|
|
0.01 |
|
|
|
|
|
|
0.01 |
|
Net
interest margin on a fully tax equivalent basis (6) |
|
|
|
|
|
3.14 |
% |
|
|
|
|
|
|
3.06 |
% |
|
|
|
|
|
3.07 |
% |
_____________
(1) |
Interest income is presented on a tax equivalent basis using a
21 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. |
|
|
|
|
Contact: |
Michael D. Hagedorn |
|
Senior Executive Vice President and |
|
Chief Financial Officer |
|
973-872-4885 |
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