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