WAYNE, N.J., April 27, 2016 /PRNewswire/ -- Valley National
Bancorp (NYSE: VLY), the holding company for Valley National Bank,
today reported net income for the first quarter of 2016 of
$36.2 million, or $0.14 per diluted common share as compared to the
first quarter of 2015 earnings of $30.3
million, or $0.13 per diluted
common share and net income of $4.7
million, or $0.01 per diluted
common share, for the fourth quarter of 2015. The fourth
quarter of 2015 included a pre-tax loss of $51.1 million on the extinguishment of higher
cost debt, as well as other infrequent items.
Key financial highlights for the first quarter:
- Loan Portfolio: Loans increased by $92.9 million, or 2.3 percent on an annualized
basis, to $16.1 billion at
March 31, 2016 from December 31, 2015 largely due to a $181.6 million net increase in total commercial
real estate loans and continued growth in collateralized personal
lines of credit within the other consumer loans category, partially
offset by decreases in the automobile, residential mortgage and
home equity loan portfolios. Total new organic loan originations,
excluding new lines of credit, totaled over $600 million mostly in the commercial loan
categories during the first quarter of 2016. The new loan volumes
were largely offset by a high level of loan repayment (partly due
to credit risk considerations), including a $125.1 million decline in the acquired purchased
credit-impaired (PCI) loan portion of the portfolio. Total
commercial real estate loan growth, totaling 8.9 percent on an
annualized basis, compared to the total balance at December 31, 2015, was partly due to solid
organic loan volumes from our Florida markets and purchased loan
participations in the latter part of the first quarter, consisting
of multi-family loans within our local market. See additional
information under the "Loans, Deposits and Other Borrowings"
section below.
- Asset Quality: Non-performing assets (including
non-accrual loans) decreased by 0.8 percent to $77.6 million at March 31,
2016 as compared to $78.2
million at December 31, 2015.
Total accruing past due and non-accrual loans as a percentage of
our entire loan portfolio of $16.1
billion moderately increased to 0.61 percent at March 31, 2016 from 0.55 percent at December 31, 2015. See further details under the
"Credit Quality" section below.
- Provision for Credit Losses: During the first quarter of
2016, we recorded an $800 thousand
provision for credit losses as compared to a $3.5 million provision recorded for the fourth
quarter of 2015 and no provision for the first quarter of 2015. For
the first quarter of 2016, we recognized net loan charge-offs
totaling $1.5 million as compared to
net charge-offs totaling $1.8 million
for the fourth quarter of 2015 and net recoveries of $278 thousand for the first quarter of 2015. See
the "Credit Quality" section below for more details on our
provision and allowance for credit losses.
- Net Interest Income and Margin: Net interest income of
$148.2 million for the three months
ended March 31, 2016 increased
$16.1 million as compared to the
first quarter of 2015 and increased $107
thousand as compared to the fourth quarter of 2015. On a tax
equivalent basis, our net interest margin of 3.08 percent for the
first quarter of 2016 decreased 12 basis points as compared to the
first quarter of 2015, and decreased by 22 basis points as compared
to the fourth quarter of 2015. The decline in net interest margin
for the first quarter of 2016 as compared to the linked fourth
quarter was partially due to a $5.6
million aggregate decline in periodic commercial loan fee
income and interest recovery income from certain PCI loan pools, as
well as lower interest income caused by a decline in prepayment
speeds coupled with improved credit quality within certain PCI loan
pools. See the "Net Interest Income and Margin" section below for
more details.
- Non-Interest Expense: Non-interest expense decreased
$56.7 million to $118.2 million for the first quarter of 2016 from
$174.9 million for the fourth quarter
of 2015 largely due to decreases of $51.1
million and $5.8 million in
debt prepayment penalties and amortization of tax credit
investments, respectively. Valley anticipates additional cost
reductions in the second quarter of 2016 related to our
consolidation of the CNLBancshares, Inc. (CNL) operations acquired
in December 2015. See the
"Non-Interest Expense" section below for additional
information.
- Branch Efficiency Plan: In 2015, we disclosed our plan
to close and consolidate 28 branch locations based upon our
continuous evaluation of customer delivery channel preferences,
branch usage patterns, and other factors. As of March 31, 2016, 14 of the 28 branches were
closed, including 1 branch closed during the first quarter of 2016.
The remaining 14 branches currently identified under the plan are
expected to be closed by June 30,
2016. Valley estimates that the 28 branch closures will
result in an annualized reduction of approximately $10 million in ongoing operating expenses, of
which 45 percent should be realized by the end of 2016.
- Capital Strength: Valley's regulatory capital ratios
continue to reflect its strong capital position. Valley's total
risk-based capital, Tier 1 capital, Tier 1 leverage capital, and
Tier 1 common capital ratios were 11.81 percent, 9.48 percent, 7.32
percent and 8.83 percent, respectively, at March 31, 2016.
Gerald H. Lipkin, Chairman,
President and CEO commented that, "The first quarter of 2016
earnings were positively impacted by our decision to prepay several
high cost borrowings in the fourth quarter of 2015 and cost
reductions related to branch consolidations and other operational
measures, but remained challenged by the low interest rate
environment and continued competition for strong loan
relationships. While our loan growth was negatively impacted by
higher payoffs from our PCI portfolio, we remain optimistic about
the commercial and residential mortgage lending demand in our
markets and the strength of our current loan pipelines for most
loan categories. Additionally, the credit quality of our
balance sheet has remained healthy, as reflected by our annualized
net charge-offs to average loans totaling 0.04 percent for the
first quarter of 2016."
Mr. Lipkin added, "In late February
2016, we completed the full systems integration related to
the acquired operations of CNL and its 16-branch offices added to
our Florida branch network during
the fourth quarter of 2015. Our continued ability to quickly
integrate our banking acquisitions, specifically our last two in
Florida, has allowed our
management team to be extremely focused on our expansion efforts in
these markets, as well as other opportunities in our New Jersey and New
York metro footprint. Additionally, staffing
reductions related to the back office integration of CNL were
completed at the end of March 2016,
and the benefit of such synergies will be fully reflected in our
operating expense during the second quarter of 2016."
Net Interest Income and Margin
Net interest income on a tax equivalent basis totaling
$150.1 million for the first quarter
of 2016 increased $16.1 million and
$64 thousand from the first quarter
of 2015 and fourth quarter of 2015, respectively. Interest
income on a tax equivalent basis remained relatively unchanged at
$187.6 million for the first quarter
of 2016 as compared to the fourth quarter of 2015 as increases in
interest income from our taxable investments, excess overnight cash
liquidity (primarily interest bearing balances held at the Federal
Reserve Bank of New York) and PCI
loans acquired from CNL were largely offset by a decrease in the
yield on total average loans and, to a much lesser extent, one less
day during the first quarter of 2016. The decline in yield on
average loans for the first quarter of 2016 as compared to the
linked fourth quarter was due, in part, to lower periodic fee
income from derivative interest rate swaps executed with commercial
lending customers, lower commercial lending prepayment penalty
fees, as well as a decrease in interest income from certain PCI
loan pools acquired before 2014, including periodic recovery income
from closed PCI loan pools. Interest expense of $37.4 million for the three months ended
March 31, 2016 decreased $1.5 million from the first quarter of 2015 and
$104 thousand as compared to the
fourth quarter of 2015. The decrease in interest expense from the
fourth quarter of 2015 was net of the additional costs related to
$526 million in FHLB advances issued
in late December 2015 to take
advantage of a FHLB program that allowed us to reduce a portion of
the prepayment penalty incurred in the fourth quarter of 2015.
These decreases were partially offset by an increase in interest
expense on savings, NOW and money markets, as well as short-term
borrowings. Interest expense for the first quarter of 2016
was also negatively impacted by higher average brokered money
market account balances and short-term securities sold under
agreements to repurchase (repos) used to partially fund the
prepayment of $845 million in high
cost long-term borrowings during the fourth quarter of 2015.
However, a $258.8 million decrease in
average long-term borrowings, a 1 basis point decrease in the cost
of average time deposits and one less day during the first quarter
of 2016 all contributed to the overall decline in interest expense
during the first quarter of 2016.
The net interest margin on a tax equivalent basis of 3.08
percent for the first quarter of 2016 decreased 12 basis points and
22 basis points as compared to the first quarter of 2015 and fourth
quarter of 2015, respectively. The yield on average interest
earning assets also decreased by 27 basis points on a linked
quarter basis. The decrease in loan yield to 4.15 percent was
partly caused by the $5.6 million
aggregate decline in income from the fourth quarter of 2015
previously discussed. Additionally, certain PCI loan pools
experienced a decline in yield due to extended duration mostly
caused by decreased prepayment speeds coupled with improved credit
quality. Our yield on average taxable and non-taxable investment
securities decreased by 27 basis points and 21 basis points during
the first quarter of 2016, respectively, as compared to the first
quarter of 2015 largely due to short-term U.S. Treasury securities
purchased in late December 2015 and
non-taxable investment securities acquired from CNL. The
overall cost of average interest bearing liabilities decreased by 8
basis points from 1.12 percent in the linked fourth quarter of 2015
primarily due to the aforementioned prepayment and maturities of
high cost long-term borrowings during the fourth quarter of 2015
and March 2016, the run-off of some
higher rate retail certificates of deposit and one less day during
the first quarter. Our cost of total deposits increased 2
basis points to 0.46 percent for the first quarter of 2016 as
compared to the three months ended December
31, 2015.
Loans, Deposits and Other Borrowings
Loans. Loans increased
$92.9 million, or 2.3 percent on an
annualized basis, to approximately $16.1
billion at March 31, 2016 from December 31, 2015,
net of a $125.1 million decline in
the acquired PCI loan portion of the portfolio primarily due to
larger loan repayments (some resulting from efforts by management
to encourage borrower prepayment).
Total commercial and industrial loans decreased $2.9 million, or 0.5 percent on an annualized
basis from December 31, 2015 to approximately $2.5 billion at March 31, 2016 due to a
decline of $23.3 million in the PCI
loan portion of the portfolio during the first quarter of 2016. The
non-PCI commercial and industrial loan portfolio increased
approximately 3.8 percent on an annualized basis to $2.2 billion at March 31,
2016 from December 31,
2015. The loan growth within this portfolio continues to be
challenged by strong market competition for both new and existing
commercial loan borrowers within our primary markets.
Commercial real estate loans (excluding construction loans)
increased $160.5 million from
December 31, 2015 to $7.6 billion at March 31,
2016 mainly due to a $235.4
million, or 15.5 percent on an annualized basis, increase in
the non-PCI loan portfolio. The increase in non-PCI loans was
partly due to solid organic loan volumes from our Florida markets and $158 million of participations in multi-family
loans (mostly in New York City)
purchased in the latter part of the first quarter. While solid
organic loan volumes were generated across a broad based segment of
borrowers within the commercial real estate portfolio, most of the
new loan volume was offset by a $74.9
million decline in the acquired PCI loan portion of the
portfolio. Construction loans increased $21.1 million, or 11.2 percent on an annualized
basis, from December 31, 2015 to
$776.1 million at March 31, 2016 primarily due to a continued
uptick in new organic loan volumes that began for us in the fourth
quarter of 2015. Much of the increased loan volumes in the first
quarter of 2016 were due to advances on new and existing
multi-family and condominium property development projects in both
New Jersey and New York City.
Total residential mortgage loans decreased $28.7 million to approximately $3.1 billion at March 31, 2016 from
December 31, 2015 mostly due to a larger percentage of loans
originated for sale rather than investment. Valley sold
approximately $54.0 million of
fixed-rate residential mortgage loans originated for sale during
the first quarter of 2016. New and refinanced residential mortgage
loan originations totaled approximately $83.6 million for the first quarter of 2016 as
compared to $72.4 million and
$121.8 million for the fourth quarter
of 2015 and the first quarter of 2015, respectively.
Additionally, Valley supplemented it's organic loan originations
with the purchase of mostly adjustable rate 1-4 family loans (that
are guaranteed by the third party originator) totaling $31.7 million during the first quarter of
2016.
Automobile loans decreased by $51.3
million, or 16.5 percent on an annualized basis, to
$1.2 billion at March 31, 2016
as compared to December 31, 2015 as our new indirect auto loan
volumes did not keep pace with the normal portfolio repayment
activity in the first quarter of 2016. The decline in
indirect auto originations was largely caused by current market
loan pricing and fee constraints resulting from recent regulatory
lending guidance. Management is currently assessing its strategic
alternatives for the auto loan portion of the consumer lending
business segment, and we can provide no assurance that our auto
loan portfolio will not decline further in future
periods.
Home equity loans totaling $491.6
million at March 31, 2016 decreased by $19.6 million as compared to December 31,
2015 due to a high level of repayment activity. New home equity
volumes and customer usage of existing home equity lines of credit
continue to be weak, despite the relatively favorable low interest
rate environment. However, other consumer loans increased
$13.8 million, or 12.5 percent on an
annualized basis, to $455.8 million
at March 31, 2016 as compared to $442.0
million at December 31, 2015 mainly due to continued
growth and customer usage of collateralized personal lines of
credit.
Deposits. Total deposits increased $154.9 million, or 1.0 percent, to approximately
$16.4 billion at March 31, 2016
from December 31, 2015 mostly due to increases in non-interest
bearing, money market and savings account balances, partially
offset by continued run-off of promotional retail certificates of
deposit during the first quarter of 2016. Non-interest bearing
deposits; savings, NOW, money market deposits; and time deposits
represented approximately 31 percent, 50 percent and 19 percent of
total deposits as of March 31, 2016. The composition of
deposits based upon the period end balances remained relatively
unchanged at March 31, 2016 as compared to December 31,
2015.
Other Borrowings. Long-term borrowings decreased
$150.4 million to $1.7 billion at March 31, 2016 as compared
to December 31, 2015 primarily due to the maturity of
$155 million in FHLB advances repaid
in March 2016. Short-term borrowings increased $93.6 million to $1.2
billion at March 31, 2016 as compared to
December 31, 2015 due to $155
million in new FHLB advances used to fund the repayment of
the aforementioned long-term advances that matured in March 2016, partially offset by a $50 million decrease in federal funds purchases
and a moderate decline in customer deposit balances swept into
overnight repo accounts.
Credit Quality
Non-Performing Assets. Our past due loans and
non-accrual loans discussed further below exclude PCI loans. Under
U.S. GAAP, the PCI loans (acquired at a discount that is due, in
part, to credit quality) are accounted for on a pool basis and are
not subject to delinquency classification in the same manner as
loans originated by Valley. At March 31, 2016, our PCI
loan portfolio totaled $2.1 billion,
or 13.1 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 moderately declined to $77.6 million at March 31, 2016 as compared
to $78.2 million at December 31,
2015. Non-accrual loans represented 0.39 percent of total
loans at both March 31, 2016 and
December 31, 2015.
Total accruing past due loans (i.e., loans past due 30 days or
more and still accruing interest) increased $10.3 million to $36.5
million, or 0.23 percent of total loans, at March 31,
2016 as compared to $26.1 million, or
0.16 percent of total loans, at December 31, 2015. The
increase was largely due to a $10.4
million increase in the loans past due 30 to 59 days
category comprised of higher balances mostly within the residential
mortgage loan and commercial and industrial loan types as compared
to December 31, 2015. Although we believe our overall credit
quality metrics are strong and reflective of our solid underwriting
standards at March 31, 2016, we can provide no assurances as
to the future level of our loan delinquencies.
Allowance for Credit Losses. The following table
summarizes the allocation of the allowance for credit losses to
specific loan categories and the allocation as a percentage of each
loan category (including PCI loans) at March 31, 2016,
December 31, 2015, and March 31, 2015:
|
|
March 31,
2016
|
|
December 31,
2015
|
|
March 31,
2015
|
|
|
|
|
Allocation
|
|
|
|
Allocation
|
|
|
|
Allocation
|
|
|
|
|
as a %
of
|
|
|
|
as a %
of
|
|
|
|
as a %
of
|
|
|
Allowance
|
|
Loan
|
|
Allowance
|
|
Loan
|
|
Allowance
|
|
Loan
|
($ in
thousands)
|
Allocation
|
|
Category
|
|
Allocation
|
|
Category
|
|
Allocation
|
|
Category
|
Loan
Category:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial loans*
|
$
|
50,677
|
|
|
2.00
|
%
|
|
$
|
50,956
|
|
|
2.01
|
%
|
|
$
|
46,827
|
|
|
1.98
|
%
|
Commercial real
estate loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
31,812
|
|
|
0.42
|
%
|
|
32,037
|
|
|
0.43
|
%
|
|
26,335
|
|
|
0.42
|
%
|
|
Construction
|
16,642
|
|
|
2.14
|
%
|
|
15,969
|
|
|
2.12
|
%
|
|
15,321
|
|
|
2.83
|
%
|
Total commercial real
estate loans
|
48,454
|
|
|
0.58
|
%
|
|
48,006
|
|
|
0.59
|
%
|
|
41,656
|
|
|
0.62
|
%
|
Residential mortgage
loans
|
4,209
|
|
|
0.14
|
%
|
|
4,625
|
|
|
0.15
|
%
|
|
4,092
|
|
|
0.15
|
%
|
Consumer
loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
equity
|
1,061
|
|
|
0.22
|
%
|
|
1,010
|
|
|
0.20
|
%
|
|
1,588
|
|
|
0.33
|
%
|
|
Auto and other
consumer
|
3,274
|
|
|
0.20
|
%
|
|
3,770
|
|
|
0.22
|
%
|
|
3,384
|
|
|
0.23
|
%
|
Total consumer
loans
|
4,335
|
|
|
0.20
|
%
|
|
4,780
|
|
|
0.22
|
%
|
|
4,972
|
|
|
0.25
|
%
|
Unallocated
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
7,018
|
|
|
—
|
|
Total allowance for
credit losses
|
$
|
107,675
|
|
|
0.67
|
%
|
|
$
|
108,367
|
|
|
0.68
|
%
|
|
$
|
104,565
|
|
|
0.76
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Includes the
reserve for unfunded letters of credit.
|
|
|
|
Our loan portfolio, totaling $16.1
billion at March 31, 2016, had net loan charge-offs of
$1.5 million for the first quarter of
2016 as compared to net charge-offs totaling $1.8 million for the fourth quarter of 2015 and
net recoveries of $278 thousand for
the first quarter of 2015. The quarter over quarter decline
in net loan charge-offs was largely due to a decrease in valuation
write-downs on impaired commercial and industrial loans, as well as
a decline in recoveries of net charge-offs in this same loan
category. During the first quarter of 2016, we recorded an
$800 thousand provision for credit
losses as compared to a $3.5 million
provision recorded for the fourth quarter of 2015 and no provision
for the first quarter of 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 0.67 percent at March 31, 2016
as compared to 0.68 percent and 0.76 percent at December 31,
2015 and March 31, 2015, respectively. At March 31,
2016, our allowance allocations for losses as a percentage of total
loans moderately decreased within several loan categories as
compared to December 31, 2015 due, in part, to the lower level
of net loan charge-offs and loan growth during the first quarter;
relatively stable levels of delinquent and impaired loans; and a
decline in internally classified loans at March 31,
2016. The overall mix of these items, assumptions based on
the current economic environment, as well as other qualitative
factors impacted our estimate of the allowance for credit losses at
March 31, 2016.
Our allowance for credit losses as a percentage of total non-PCI
loans (excluding PCI loans with carrying values totaling
approximately $2.1 billion) was 0.77
percent at March 31, 2016 as compared to 0.79 percent and 0.87
percent at December 31, 2015 and March
31, 2015, respectively. PCI loans, including all of
the loans acquired from CNL during the fourth quarter of 2015, are
accounted for on a pool basis and initially recorded net of fair
valuation discounts related to credit which may be used to absorb
future losses on such loans before any allowance for loan losses is
recognized subsequent to acquisition. Due to the adequacy of
such discounts, there were no allowance reserves related to PCI
loans at March 31, 2016.
Non-Interest Income
Non-interest income decreased $2.6
million to $21.4 million for
the first quarter of 2016 from $24.0
million for the linked quarter ended December 31, 2015
mainly due to a $2.9 million decrease
in net gains on sales of assets. Net gains for the fourth
quarter of 2015 included $4.8 million
of net gains related to the sale of two branch office properties.
Net gains on sales of loans increased $584
thousand to $1.8 million for
the first quarter of 2016 as compared to the fourth quarter of 2015
largely due to a higher volume of residential mortgage loans sold
and the successful promotion of our low fixed cost mortgage
purchase and refinance programs.
Non-Interest Expense
Non-interest expense decreased approximately $56.7 million to $118.2 million for the first
quarter of 2016 as compared to $174.9
million for the fourth quarter of 2015 largely due to
decreases in both debt prepayment penalties and amortization of tax
credit investments totaling $51.1
million and $5.8 million,
respectively. Professional and legal fees declined
$3.0 million to $3.9 million for the three months ended
March 31, 2016 as compared to the
linked fourth quarter due to a lower level of litigation activity
and professional fees related to our acquisition of CNL. Net
occupancy and equipment expense also decreased $1.9 million to $22.8
million for the first quarter of 2016 as compared to the
fourth quarter of 2015 due, in part, to (1) lower rental expense
related to branch closures commencing in the second half of 2015
(note: we recognized $2.6 million of
additional lease obligation expense in the fourth quarter of 2015
related to the planned branch closures in 2016), partially offset
by (2) mostly seasonal increases in cleaning and maintenance
expenses and (3) general increases (largely rental and depreciation
expense) related to the 16-branch network acquired from CNL. Salary
and employee benefit expense increased $4.1
million to $60.3 million for
the first quarter of 2016 as compared to the fourth quarter of 2015
largely due to normal increases in payroll tax expense and higher
medical health insurance expense combined with higher salary
expenses due to a full quarter of additional staffing expense
related to our acquisition of CNL on December 1, 2015. Within other non-interest
expense, advertising expense increased $967
thousand in the first quarter of 2016 from the fourth
quarter of 2015 mainly due to new promotional campaigns for our
fixed cost mortgage refinance programs, including media
communications targeted for our new Florida markets.
During the second quarter of 2016, we anticipate additional
operating cost reductions from the full systems integration of
CNL's operation into Valley in late February
2016 and the related CNL staffing reductions effective
April 1, 2016.
Income Tax Expense
Income tax expense was $14.4
million for the three months ended March 31, 2016
reflecting an effective tax rate of 28.5 percent, as compared to
income tax benefit of $11.0 million
for the fourth quarter of 2015 and income tax expense of
$12.3 million for the first quarter
of 2015 reflecting an effective tax rate of 28.8 percent. The
increase in income tax expense during the first quarter of 2016 as
compared to the fourth quarter of 2015 was largely due to several
items during the fourth quarter, including (1) lower pre-tax income
largely caused by debt prepayment penalties totaling $51.1 million and (2) additional tax credits of
$9.4 million, partially offset by (3)
a $6.4 million charge mostly caused
by the effect of the CNL acquisition and the debt prepayment
penalties on the valuation of our deferred tax assets.
For the remainder of 2016, we anticipate that our effective
tax rate will range from 27 percent to 30 percent primarily
reflecting the impacts of tax-exempt income, tax-advantaged
investments and general business credits.
About Valley
Valley National Bancorp is a regional bank holding company
headquartered in Wayne, New Jersey
with approximately $21.7 billion in
assets. Its principal subsidiary, Valley National Bank, currently
operates 226 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;
- unexpected changes in market interest rates for interest
earning assets and/or interest bearing liabilities;
- 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;
- less than expected cost savings in 2016 and 2017 from Valley's
branch efficiency and cost reduction plans;
- lower than expected cash flows from purchased credit-impaired
loans;
- claims and litigation pertaining to fiduciary responsibility,
contractual issues, environmental laws 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;
- 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;
- 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);
- higher than expected loan losses within one or more segments of
our loan portfolio;
- 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;
- unanticipated credit deterioration in our loan portfolio;
- unanticipated loan delinquencies, loss of collateral, decreased
service revenues, and other potential negative effects on our
business caused by severe weather or other external events;
- an unexpected decline in real estate values within our market
areas;
- changes in accounting policies or accounting standards,
including the potential issuance of new authoritative accounting
guidance which may increase the required level of our allowance for
credit losses;
- higher than expected income tax expense or tax rates, including
increases resulting from changes in tax laws, regulations and case
law;
- higher than expected FDIC insurance assessments;
- the failure of other financial institutions with whom we have
trading, clearing, counterparty and other financial
relationships;
- lack of liquidity to fund our various cash obligations;
- unanticipated reduction in our deposit base;
- potential acquisitions that may disrupt our business;
- declines in value in our investment portfolio, including
additional other-than-temporary impairment charges on our
investment securities;
- future goodwill impairment due to changes in our business,
changes in market conditions, or other factors;
- legislative and regulatory actions (including the impact of the
Dodd-Frank Wall Street Reform and Consumer Protection Act and
related regulations) subject us to additional regulatory oversight
which may result in higher compliance costs and/or require us to
change our business model;
- our inability to promptly adapt to technological changes;
- our internal controls and procedures may not be adequate to
prevent losses;
- the inability to realize expected revenue synergies from the
CNL merger in the amounts or in the timeframe anticipated;
- inability to retain customers and employees, including those of
CNL; and
- other unexpected material adverse changes in our operations or
earnings.
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.
VALLEY NATIONAL
BANCORP CONSOLIDATED FINANCIAL HIGHLIGHTS
|
|
|
|
SELECTED FINANCIAL
DATA
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
($ in thousands,
except for share data)
|
2016
|
|
2015
|
|
2015
|
|
FINANCIAL
DATA:
|
|
|
|
|
|
|
Net interest
income
|
$
|
148,153
|
|
|
$
|
148,046
|
|
|
$
|
132,086
|
|
|
Net interest income -
FTE (1)
|
150,144
|
|
|
150,080
|
|
|
134,037
|
|
|
Non-interest
income
|
21,448
|
|
|
24,039
|
|
|
18,645
|
|
|
Non-interest
expense
|
118,225
|
|
|
174,893
|
|
|
108,118
|
|
|
Income tax expense
(benefit)
|
14,389
|
|
|
(10,987)
|
|
|
12,272
|
|
|
Net income
|
36,187
|
|
|
4,672
|
|
|
30,341
|
|
|
Dividends on
preferred stock
|
1,797
|
|
|
1,797
|
|
|
—
|
|
|
Net income available
to common shareholders
|
$
|
34,390
|
|
|
$
|
2,875
|
|
|
$
|
30,341
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
254,075,349
|
|
|
239,916,562
|
|
|
232,338,775
|
|
|
|
Diluted
|
254,347,420
|
|
|
239,972,546
|
|
|
232,341,921
|
|
|
Per common share
data:
|
|
|
|
|
|
|
|
Basic
earnings
|
$
|
0.14
|
|
|
$
|
0.01
|
|
|
$
|
0.13
|
|
|
|
Diluted
earnings
|
0.14
|
|
|
0.01
|
|
|
0.13
|
|
|
|
Cash dividends
declared
|
0.11
|
|
|
0.11
|
|
|
0.11
|
|
|
Closing stock price -
high
|
9.67
|
|
|
11.14
|
|
|
9.77
|
|
|
Closing stock price -
low
|
8.31
|
|
|
9.67
|
|
|
9.05
|
|
|
FINANCIAL
RATIOS:
|
|
|
|
|
|
|
Net interest
margin
|
3.04
|
%
|
|
3.25
|
%
|
|
3.16
|
%
|
|
Net interest margin -
FTE (1)
|
3.08
|
|
|
3.30
|
|
|
3.20
|
|
|
Annualized return on
average assets
|
0.67
|
|
|
0.09
|
|
|
0.64
|
|
|
Annualized return on
average shareholders' equity
|
6.52
|
|
|
0.90
|
|
|
6.49
|
|
|
Annualized return on
average tangible shareholders' equity (2)
|
9.75
|
|
|
1.29
|
|
|
9.66
|
|
|
Efficiency ratio
(3)
|
69.71
|
|
|
101.63
|
|
|
71.73
|
|
|
AVERAGE BALANCE
SHEET ITEMS:
|
|
|
|
|
|
Assets
|
$
|
21,680,278
|
|
|
$
|
20,257,422
|
|
|
$
|
18,850,025
|
|
|
Interest earning
assets
|
19,487,470
|
|
|
18,216,020
|
|
|
16,738,899
|
|
|
Loans
|
15,993,543
|
|
|
15,343,468
|
|
|
13,569,031
|
|
|
Interest bearing
liabilities
|
14,335,698
|
|
|
13,368,128
|
|
|
12,598,669
|
|
|
Deposits
|
16,380,594
|
|
|
15,521,476
|
|
|
14,110,547
|
|
|
Shareholders'
equity
|
2,219,570
|
|
|
2,069,084
|
|
|
1,869,754
|
|
|
VALLEY NATIONAL
BANCORP CONSOLIDATED FINANCIAL HIGHLIGHTS
|
|
|
As
Of
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
($ in
thousands)
|
2016
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
BALANCE SHEET
ITEMS:
|
|
|
|
|
|
|
|
|
|
Assets
|
$
|
21,727,523
|
|
|
$
|
21,612,616
|
|
|
$
|
19,571,532
|
|
|
$
|
19,290,005
|
|
|
$
|
18,980,010
|
|
Total
loans
|
16,135,987
|
|
|
16,043,107
|
|
|
|
15,016,814
|
|
|
|
14,480,294
|
|
|
13,734,461
|
|
Non-PCI
loans
|
14,020,566
|
|
|
13,802,636
|
|
|
13,539,026
|
|
|
12,908,822
|
|
|
12,085,279
|
|
Deposits
|
16,408,426
|
|
|
16,253,551
|
|
|
14,499,863
|
|
|
14,331,031
|
|
|
14,216,743
|
|
Shareholders'
equity
|
2,219,602
|
|
|
2,207,091
|
|
|
1,996,949
|
|
|
1,985,527
|
|
|
1,867,153
|
|
|
|
|
|
|
|
|
|
|
|
LOANS:
|
|
|
|
|
|
|
|
|
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
$
|
2,537,545
|
|
|
$
|
2,540,491
|
|
|
$
|
2,400,618
|
|
|
$
|
2,372,031
|
|
|
$
|
2,367,927
|
|
Commercial real
estate:
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
7,585,139
|
|
|
7,424,636
|
|
|
6,960,677
|
|
|
6,783,149
|
|
|
6,205,873
|
|
Construction
|
776,057
|
|
|
754,947
|
|
|
569,653
|
|
|
586,068
|
|
|
542,014
|
|
Total
commercial real estate
|
8,361,196
|
|
|
8,179,583
|
|
|
7,530,330
|
|
|
7,369,217
|
|
|
6,747,887
|
|
Residential
mortgage
|
3,101,814
|
|
|
3,130,541
|
|
|
2,999,262
|
|
|
2,704,081
|
|
|
2,648,011
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
Home
equity
|
491,555
|
|
|
511,203
|
|
|
478,129
|
|
|
482,366
|
|
|
485,859
|
|
Automobile
|
1,188,063
|
|
|
1,239,313
|
|
|
1,219,758
|
|
|
1,198,064
|
|
|
1,162,963
|
|
Other
consumer
|
455,814
|
|
|
441,976
|
|
|
388,717
|
|
|
354,535
|
|
|
321,814
|
|
Total consumer
loans
|
2,135,432
|
|
|
2,192,492
|
|
|
2,086,604
|
|
|
2,034,965
|
|
|
1,970,636
|
|
Total
loans
|
$
|
16,135,987
|
|
|
$
|
16,043,107
|
|
|
$
|
15,016,814
|
|
|
$
|
14,480,294
|
|
|
$
|
13,734,461
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS:
|
|
|
|
|
|
|
|
|
|
Book value
|
$
|
8.29
|
|
|
$
|
8.26
|
|
|
$
|
8.10
|
|
|
$
|
8.06
|
|
|
$
|
8.03
|
|
Tangible book value
(2)
|
5.40
|
|
|
5.36
|
|
|
5.48
|
|
|
5.43
|
|
|
5.40
|
|
Tangible common
equity to tangible assets (2)
|
6.54
|
%
|
|
6.52
|
%
|
|
6.73
|
%
|
|
6.76
|
%
|
|
6.83
|
%
|
Tier 1
leverage
|
7.32
|
|
|
7.90
|
|
|
7.67
|
|
|
7.76
|
|
|
7.17
|
|
Tier 1 common
capital
|
8.83
|
|
|
9.01
|
|
|
9.18
|
|
|
9.31
|
|
|
9.45
|
|
Risk-based capital -
Tier 1
|
9.48
|
|
|
9.72
|
|
|
9.93
|
|
|
10.07
|
|
|
9.45
|
|
Risk-based capital -
Total Capital
|
11.81
|
|
|
12.02
|
|
|
12.43
|
|
|
12.62
|
|
|
11.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VALLEY NATIONAL
BANCORP CONSOLIDATED FINANCIAL HIGHLIGHTS
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
($ in
thousands)
|
2016
|
|
2015
|
|
2015
|
ALLOWANCE FOR
CREDIT LOSSES:
|
|
|
|
|
|
Beginning balance -
Allowance for credit losses
|
$
|
108,367
|
|
|
$
|
106,697
|
|
|
$
|
104,287
|
|
Loans
charged-off:
|
|
|
|
|
|
|
Commercial and
industrial
|
(1,251)
|
|
|
(2,825)
|
|
|
(753)
|
|
|
Commercial real
estate
|
(105)
|
|
|
—
|
|
|
(77)
|
|
|
Construction
|
—
|
|
|
(10)
|
|
|
(73)
|
|
|
Residential
mortgage
|
(81)
|
|
|
(314)
|
|
|
(49)
|
|
|
Consumer
|
(1,074)
|
|
|
(799)
|
|
|
(714)
|
|
|
|
Total loans
charged-off
|
(2,511)
|
|
|
(3,948)
|
|
|
(1,666)
|
|
Charged-off loans
recovered:
|
|
|
|
|
|
|
Commercial and
industrial
|
526
|
|
|
1,646
|
|
|
1,051
|
|
|
Commercial real
estate
|
89
|
|
|
73
|
|
|
23
|
|
|
Construction
|
—
|
|
|
—
|
|
|
437
|
|
|
Residential
mortgage
|
15
|
|
|
26
|
|
|
114
|
|
|
Consumer
|
389
|
|
|
366
|
|
|
319
|
|
|
|
Total loans
recovered
|
1,019
|
|
|
2,111
|
|
|
1,944
|
|
Net (charge-offs)
recoveries
|
(1,492)
|
|
|
(1,837)
|
|
|
278
|
|
Provision for credit
losses
|
800
|
|
|
3,507
|
|
|
—
|
|
Ending balance -
Allowance for credit losses
|
$
|
107,675
|
|
|
$
|
108,367
|
|
|
$
|
104,565
|
|
Components of
allowance for credit losses:
|
|
|
|
|
|
|
Allowance for loan
losses
|
$
|
105,415
|
|
|
$
|
106,178
|
|
|
$
|
102,631
|
|
|
Allowance for
unfunded letters of credit
|
2,260
|
|
|
2,189
|
|
|
1,934
|
|
Allowance for credit
losses
|
$
|
107,675
|
|
|
$
|
108,367
|
|
|
$
|
104,565
|
|
Components of
provision for credit losses:
|
|
|
|
|
|
|
Provision for loan
losses
|
$
|
729
|
|
|
$
|
3,464
|
|
|
$
|
—
|
|
|
Provision for
unfunded letters of credit
|
71
|
|
|
43
|
|
|
—
|
|
Provision for credit
losses
|
$
|
800
|
|
|
$
|
3,507
|
|
|
$
|
—
|
|
Annualized ratio of
total net charge-offs
|
|
|
|
|
|
|
to average
loans
|
0.04
|
%
|
|
0.05
|
%
|
|
(0.01)
|
%
|
Allowance for credit
losses as
|
|
|
|
|
|
|
a % of total
loans
|
0.67
|
%
|
|
0.68
|
%
|
|
0.76
|
%
|
VALLEY NATIONAL
BANCORP CONSOLIDATED FINANCIAL HIGHLIGHTS
|
|
|
|
|
As
Of
|
($ in
thousands)
|
March
31,
|
|
December
31,
|
|
March
31,
|
ASSET
QUALITY: (4)
|
2016
|
|
2015
|
|
2015
|
Accruing past due
loans:
|
|
|
|
|
|
30 to 59 days past
due:
|
|
|
|
|
|
|
Commercial and
industrial
|
$
|
8,395
|
|
|
$
|
3,920
|
|
|
$
|
4,472
|
|
|
Commercial real
estate
|
1,389
|
|
|
2,684
|
|
|
4,775
|
|
|
Construction
|
1,326
|
|
|
1,876
|
|
|
6,577
|
|
|
Residential
mortgage
|
14,628
|
|
|
6,681
|
|
|
12,498
|
|
|
Consumer
|
3,200
|
|
|
3,348
|
|
|
2,875
|
|
Total 30 to 59 days
past due
|
28,938
|
|
|
18,509
|
|
|
31,197
|
|
60 to 89 days past
due:
|
|
|
|
|
|
|
Commercial and
industrial
|
613
|
|
|
524
|
|
|
90
|
|
|
Commercial real
estate
|
120
|
|
|
—
|
|
|
1,883
|
|
|
Construction
|
—
|
|
|
2,799
|
|
|
—
|
|
|
Residential
mortgage
|
3,056
|
|
|
1,626
|
|
|
1,782
|
|
|
Consumer
|
731
|
|
|
626
|
|
|
837
|
|
Total 60 to 89 days
past due
|
4,520
|
|
|
5,575
|
|
|
4,592
|
|
90 or more days past
due:
|
|
|
|
|
|
|
Commercial and
industrial
|
221
|
|
|
213
|
|
|
208
|
|
|
Commercial real
estate
|
131
|
|
|
131
|
|
|
2,792
|
|
|
Construction
|
—
|
|
|
—
|
|
|
—
|
|
|
Residential
mortgage
|
2,613
|
|
|
1,504
|
|
|
564
|
|
|
Consumer
|
66
|
|
|
208
|
|
|
262
|
|
Total 90 or more days
past due
|
3,031
|
|
|
2,056
|
|
|
3,826
|
|
Total accruing past
due loans
|
$
|
36,489
|
|
|
$
|
26,140
|
|
|
$
|
39,615
|
|
Non-accrual
loans:
|
|
|
|
|
|
|
Commercial and
industrial
|
$
|
11,484
|
|
|
$
|
10,913
|
|
|
$
|
8,285
|
|
|
Commercial real
estate
|
26,604
|
|
|
24,888
|
|
|
24,850
|
|
|
Construction
|
5,978
|
|
|
6,163
|
|
|
5,144
|
|
|
Residential
mortgage
|
16,747
|
|
|
17,930
|
|
|
17,127
|
|
|
Consumer
|
1,807
|
|
|
2,206
|
|
|
2,138
|
|
Total non-accrual
loans
|
62,620
|
|
|
62,100
|
|
|
57,544
|
|
Other real estate
owned (5)
|
12,368
|
|
|
13,563
|
|
|
13,184
|
|
Other repossessed
assets
|
495
|
|
|
437
|
|
|
477
|
|
Non-accrual debt
securities (6)
|
2,102
|
|
|
2,142
|
|
|
2,030
|
|
Total non-performing
assets
|
$
|
77,585
|
|
|
$
|
78,242
|
|
|
$
|
73,235
|
|
Performing troubled
debt restructured loans
|
$
|
80,506
|
|
|
$
|
77,627
|
|
|
$
|
100,524
|
|
Total non-accrual
loans as a % of loans
|
0.39
|
%
|
|
0.39
|
%
|
|
0.42
|
%
|
Total accruing past
due and non-accrual loans
|
|
|
|
|
|
|
as a % of
loans
|
0.61
|
%
|
|
0.55
|
%
|
|
0.71
|
%
|
Allowance for loan
losses as a % of
|
|
|
|
|
|
|
non-accrual
loans
|
168.34
|
%
|
|
170.98
|
%
|
|
178.35
|
%
|
Non-performing
purchased credit-impaired loans (7)
|
$
|
32,987
|
|
|
$
|
38,625
|
|
|
$
|
44,919
|
|
VALLEY NATIONAL
BANCORP CONSOLIDATED FINANCIAL HIGHLIGHTS
|
|
NOTES TO SELECTED
FINANCIAL DATA
|
|
|
(1)
|
Net interest income
and net interest margin are presented on a tax equivalent basis
using a 35 percent federal tax rate. Valley believes that
this presentation provides comparability of net interest income and
net interest margin arising from both taxable and tax-exempt
sources and is consistent with industry practice and SEC
rules.
|
(2)
|
This press release
contains certain supplemental financial information, described in
the Notes below, which has been determined by methods other than
U.S. Generally Accepted Accounting Principles ("GAAP") that
management uses in its analysis of Valley's performance.
Management believes these non-GAAP financial measures provide
information useful to investors in understanding Valley's financial
results. Specifically, Valley provides measures based on what it
believes are its operating earnings on a consistent basis and
excludes material non-core operating items which affect the GAAP
reporting of results of operations. Management utilizes these
measures for internal planning and forecasting purposes. Management
believes that Valley's presentation and discussion, together with
the accompanying reconciliations, provides a complete understanding
of factors and trends affecting Valley's business and allows
investors to view performance in a manner similar to management.
These non-GAAP measures should not be considered a substitute for
GAAP basis measures and results and Valley strongly encourages
investors to review its consolidated financial statements in their
a substitute for GAAP basis measures and results and Valley
strongly encourages investors to review its consolidated financial
statements in their entirety and not to rely on any single
financial measure. Because non-GAAP financial measures are
not standardized, it may not be possible to compare these financial
measures with other companies' non-GAAP financial measures having
the same or similar names.
|
|
As
Of
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
($ in thousands,
except for share data)
|
2016
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
Tangible book
value per common share:
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding
|
254,285,434
|
|
|
253,787,561
|
|
|
232,789,880
|
|
|
232,619,748
|
|
|
232,428,108
|
|
Shareholders'
equity
|
$
|
2,219,602
|
|
|
$
|
2,207,091
|
|
|
$
|
1,996,949
|
|
|
$
|
1,985,527
|
|
|
$
|
1,867,153
|
|
Less: Preferred
stock
|
(111,590)
|
|
|
(111,590)
|
|
|
(111,590)
|
|
|
(111,590)
|
|
|
—
|
|
Less: Goodwill and
other intangible assets
|
(735,744)
|
|
|
(735,221)
|
|
|
(608,916)
|
|
|
(610,640)
|
|
|
(612,558)
|
|
Tangible common
shareholders' equity
|
$
|
1,372,268
|
|
|
$
|
1,360,280
|
|
|
$
|
1,276,443
|
|
|
$
|
1,263,297
|
|
|
$
|
1,254,595
|
|
Tangible book value per common share
|
$5.40
|
|
|
$5.36
|
|
|
$5.48
|
|
|
$5.43
|
|
|
$5.40
|
|
Tangible common
equity to tangible assets:
|
|
|
|
|
|
|
|
|
Tangible common
shareholders' equity
|
$
|
1,372,268
|
|
|
$
|
1,360,280
|
|
|
$
|
1,276,443
|
|
|
$
|
1,263,297
|
|
|
$
|
1,254,595
|
|
Total
assets
|
21,727,523
|
|
|
21,612,616
|
|
|
19,571,532
|
|
|
19,290,005
|
|
|
18,980,010
|
|
Less: Goodwill and
other intangible assets
|
(735,744)
|
|
|
(735,221)
|
|
|
(608,916)
|
|
|
(610,640)
|
|
|
(612,558)
|
|
Tangible
assets
|
$
|
20,991,779
|
|
|
$
|
20,877,395
|
|
|
$
|
18,962,616
|
|
|
$
|
18,679,365
|
|
|
$
|
18,367,452
|
|
Tangible common equity to tangible assets
|
6.54
|
%
|
|
6.52
|
%
|
|
6.73
|
%
|
|
6.76
|
%
|
|
6.83
|
%
|
|
Three Months
Ended
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
($ in
thousands)
|
2016
|
|
2015
|
|
2015
|
Annualized return
on average tangible shareholders' equity:
|
|
|
|
|
|
Net income
|
$
|
36,187
|
|
|
$
|
4,672
|
|
|
$
|
30,341
|
|
Average shareholders'
equity
|
2,219,570
|
|
|
2,069,084
|
|
|
1,869,754
|
|
Less: Average
goodwill and other intangible assets
|
(735,438)
|
|
|
(621,635)
|
|
|
(613,556)
|
|
Average tangible shareholders' equity
|
$
|
1,484,132
|
|
|
$
|
1,447,449
|
|
|
$
|
1,256,198
|
|
Annualized return on average tangible
|
|
|
|
|
|
shareholders' equity
|
9.75
|
%
|
|
1.29
|
%
|
|
9.66
|
%
|
(3)
|
The efficiency ratio
measures Valley's total non-interest expense as a percentage of net
interest income plus total non-interest income. See the
"Non-Interest Expense" section to this press release for additional
information.
|
(4)
|
Past due loans and
non-accrual loans exclude purchased credit-impaired (PCI)
loans. These 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 $2.4
million, $5.0 million and $8.6 million, at March 31, 2016, December
31, 2015, and March 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 $651 thousand, $610
thousand, and $723 thousand at March 31, 2016, December 31, 2015
and March 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 Dianne Grenz, EVP, Director of Sales, Shareholder and
Public Relations, Valley National Bancorp, 1455 Valley Road, Wayne,
New Jersey, 07470, by telephone at (973) 305-4005, by fax at (973)
305-1364 or by e-mail at dgrenz@valleynationalbank.com.
|
VALLEY NATIONAL
BANCORP CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION (in thousands, except for share
data)
|
|
|
March
31,
|
|
December
31,
|
|
2016
|
|
2015
|
Assets
|
(Unaudited)
|
|
|
Cash and due from
banks
|
$
|
243,265
|
|
|
$
|
243,575
|
|
Interest bearing
deposits with banks
|
233,228
|
|
|
170,225
|
|
Investment
securities:
|
|
|
|
Held to maturity
(fair value of $1,660,224 at March 31, 2016 and $1,621,039 at
December 31, 2015)
|
1,618,466
|
|
|
1,596,385
|
|
Available for
sale
|
1,452,489
|
|
|
1,506,861
|
|
Total investment
securities
|
3,070,955
|
|
|
3,103,246
|
|
Loans held for sale,
at fair value
|
15,347
|
|
|
16,382
|
|
Loans
|
16,135,987
|
|
|
16,043,107
|
|
Less: Allowance for
loan losses
|
(105,415)
|
|
|
(106,178)
|
|
Net loans
|
16,030,572
|
|
|
15,936,929
|
|
Premises and
equipment, net
|
300,072
|
|
|
298,943
|
|
Bank owned life
insurance
|
389,500
|
|
|
387,542
|
|
Accrued interest
receivable
|
62,973
|
|
|
63,554
|
|
Due from customers on
acceptances outstanding
|
1,119
|
|
|
1,185
|
|
Goodwill
|
689,589
|
|
|
686,339
|
|
Other intangible
assets, net
|
46,155
|
|
|
48,882
|
|
Other
assets
|
644,748
|
|
|
655,814
|
|
Total
Assets
|
$
|
21,727,523
|
|
|
$
|
21,612,616
|
|
Liabilities
|
|
|
|
Deposits:
|
|
|
|
Non-interest
bearing
|
$
|
5,053,478
|
|
|
$
|
4,914,285
|
|
Interest
bearing:
|
|
|
|
Savings, NOW and
money market
|
8,273,936
|
|
|
8,181,362
|
|
Time
|
3,081,012
|
|
|
3,157,904
|
|
Total
deposits
|
16,408,426
|
|
|
16,253,551
|
|
Short-term
borrowings
|
1,170,623
|
|
|
1,076,991
|
|
Long-term
borrowings
|
1,660,284
|
|
|
1,810,728
|
|
Junior subordinated
debentures issued to capital trusts
|
41,455
|
|
|
41,414
|
|
Bank acceptances
outstanding
|
1,119
|
|
|
1,185
|
|
Accrued expenses and
other liabilities
|
226,014
|
|
|
221,656
|
|
Total
Liabilities
|
19,507,921
|
|
|
19,405,525
|
|
Shareholders'
Equity
|
|
|
|
Preferred stock (no
par value, authorized 30,000,000 shares; issued 4,600,000 shares at
March 31, 2016 and December 31, 2015)
|
111,590
|
|
|
111,590
|
|
Common stock (no par
value, authorized 332,023,233 shares; issued 254,326,257 shares at
March 31, 2016 and 253,787,561 shares at December 31,
2015)
|
88,735
|
|
|
88,626
|
|
Surplus
|
1,930,844
|
|
|
1,927,399
|
|
Retained
earnings
|
131,494
|
|
|
125,171
|
|
Accumulated other
comprehensive loss
|
(42,695)
|
|
|
(45,695)
|
|
Treasury stock, at
cost (40,823 common shares at March 31, 2016)
|
(366)
|
|
|
—
|
|
Total
Shareholders' Equity
|
2,219,602
|
|
|
2,207,091
|
|
Total Liabilities
and Shareholders' Equity
|
$
|
21,727,523
|
|
|
$
|
21,612,616
|
|
VALLEY NATIONAL
BANCORP CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (in thousands, except for share
data)
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
2016
|
|
2015
|
|
2015
|
|
Interest
Income
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
166,071
|
|
|
$
|
167,412
|
|
|
$
|
150,482
|
|
|
Interest and
dividends on investment securities:
|
|
|
|
|
|
|
Taxable
|
13,999
|
|
|
12,737
|
|
|
14,932
|
|
|
Tax-exempt
|
3,690
|
|
|
3,768
|
|
|
3,612
|
|
|
Dividends
|
1,480
|
|
|
1,544
|
|
|
1,739
|
|
|
Interest on federal
funds sold and other short-term investments
|
357
|
|
|
133
|
|
|
220
|
|
|
Total interest
income
|
185,597
|
|
|
185,594
|
|
|
170,985
|
|
|
Interest
Expense
|
|
|
|
|
|
|
Interest on
deposits:
|
|
|
|
|
|
|
Savings, NOW and
money market
|
9,243
|
|
|
7,331
|
|
|
5,995
|
|
|
Time
|
9,585
|
|
|
9,795
|
|
|
7,974
|
|
|
Interest on
short-term borrowings
|
1,872
|
|
|
492
|
|
|
94
|
|
|
Interest on long-term
borrowings and junior subordinated debentures
|
16,744
|
|
|
19,930
|
|
|
24,836
|
|
|
Total interest
expense
|
37,444
|
|
|
37,548
|
|
|
38,899
|
|
|
Net Interest
Income
|
148,153
|
|
|
148,046
|
|
|
132,086
|
|
|
Provision for credit
losses
|
800
|
|
|
3,507
|
|
|
—
|
|
|
Net Interest
Income After Provision for Credit Losses
|
147,353
|
|
|
144,539
|
|
|
132,086
|
|
|
Non-Interest
Income
|
|
|
|
|
|
|
Trust and investment
services
|
2,440
|
|
|
2,500
|
|
|
2,494
|
|
|
Insurance
commissions
|
4,708
|
|
|
4,779
|
|
|
4,205
|
|
|
Service charges on
deposit accounts
|
5,103
|
|
|
5,382
|
|
|
5,290
|
|
|
Gains on securities
transactions, net
|
271
|
|
|
6
|
|
|
2,416
|
|
|
Fees from loan
servicing
|
1,594
|
|
|
1,693
|
|
|
1,603
|
|
|
Gains on sales of
loans, net
|
1,795
|
|
|
1,211
|
|
|
598
|
|
|
(Losses) gains on
sales of assets, net
|
(10)
|
|
|
2,853
|
|
|
281
|
|
|
Bank owned life
insurance
|
1,963
|
|
|
1,627
|
|
|
1,764
|
|
|
Change in FDIC
loss-share receivable
|
(560)
|
|
|
54
|
|
|
(3,920)
|
|
|
Other
|
4,144
|
|
|
3,934
|
|
|
3,914
|
|
|
Total non-interest
income
|
21,448
|
|
|
24,039
|
|
|
18,645
|
|
|
Non-Interest
Expense
|
|
|
|
|
|
|
Salary and employee
benefits expense
|
60,259
|
|
|
56,164
|
|
|
56,712
|
|
|
Net occupancy and
equipment expense
|
22,789
|
|
|
24,663
|
|
|
22,200
|
|
|
FDIC insurance
assessment
|
5,099
|
|
|
4,895
|
|
|
3,792
|
|
|
Amortization of other
intangible assets
|
2,849
|
|
|
2,448
|
|
|
2,393
|
|
|
Professional and
legal fees
|
3,895
|
|
|
6,902
|
|
|
3,341
|
|
|
Loss on
extinguishment of debt
|
—
|
|
|
51,129
|
|
|
—
|
|
|
Amortization of tax
credit investments
|
7,264
|
|
|
13,081
|
|
|
4,496
|
|
|
Telecommunication
expense
|
2,386
|
|
|
2,158
|
|
|
2,006
|
|
|
Other
|
13,684
|
|
|
13,453
|
|
|
13,178
|
|
|
Total non-interest
expense
|
118,225
|
|
|
174,893
|
|
|
108,118
|
|
|
Income Before
Income Taxes
|
50,576
|
|
|
(6,315)
|
|
|
42,613
|
|
|
Income tax
expense
|
14,389
|
|
|
(10,987)
|
|
|
12,272
|
|
|
Net
Income
|
36,187
|
|
|
4,672
|
|
|
30,341
|
|
|
Dividends on
preferred stock
|
1,797
|
|
|
1,797
|
|
|
—
|
|
|
Net Income
Available to Common Shareholders
|
$
|
34,390
|
|
|
$
|
2,875
|
|
|
$
|
30,341
|
|
|
Earnings Per
Common Share:
|
|
|
|
|
|
|
Basic
|
$
|
0.14
|
|
|
$
|
0.01
|
|
|
$
|
0.13
|
|
|
Diluted
|
0.14
|
|
|
0.01
|
|
|
0.13
|
|
|
Cash Dividends
Declared per Common Share
|
0.11
|
|
|
0.11
|
|
|
0.11
|
|
|
Weighted Average
Number of Common Shares Outstanding:
|
|
|
|
|
|
|
Basic
|
254,075,349
|
|
|
239,916,562
|
|
|
232,338,775
|
|
|
Diluted
|
254,347,420
|
|
|
239,972,546
|
|
|
232,341,921
|
|
|
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,
2016
|
|
December 31,
2015
|
|
March 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)
|
$
|
15,993,543
|
|
|
$
|
166,075
|
|
|
4.15
|
%
|
|
$
|
15,343,468
|
|
|
$
|
167,417
|
|
|
4.36
|
%
|
|
$
|
13,569,031
|
|
|
$
|
150,488
|
|
|
4.44
|
%
|
|
Taxable investments
(3)
|
2,497,986
|
|
|
15,479
|
|
|
2.48
|
%
|
|
2,076,720
|
|
|
14,281
|
|
|
2.75
|
%
|
|
2,285,155
|
|
|
16,671
|
|
|
2.92
|
%
|
|
Tax-exempt
investments (1)(3)
|
569,265
|
|
|
5,677
|
|
|
3.99
|
%
|
|
552,471
|
|
|
5,797
|
|
|
4.20
|
%
|
|
540,838
|
|
|
5,557
|
|
|
4.11
|
%
|
|
Federal funds sold
and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
interest bearing
deposits
|
426,676
|
|
|
357
|
|
|
0.33
|
%
|
|
243,361
|
|
|
133
|
|
|
0.22
|
%
|
|
343,875
|
|
|
220
|
|
|
0.26
|
%
|
|
Total interest
earning assets
|
19,487,470
|
|
|
187,588
|
|
|
3.85
|
%
|
|
18,216,020
|
|
|
187,628
|
|
|
4.12
|
%
|
|
16,738,899
|
|
|
172,936
|
|
|
4.13
|
%
|
|
Other
assets
|
2,192,808
|
|
|
|
|
|
|
2,041,402
|
|
|
|
|
|
|
2,111,126
|
|
|
|
|
|
|
Total
assets
|
$
|
21,680,278
|
|
|
|
|
|
|
$
|
20,257,422
|
|
|
|
|
|
|
$
|
18,850,025
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW and
money market deposits
|
$
|
8,334,289
|
|
|
$
|
9,243
|
|
|
0.44
|
%
|
|
$
|
7,724,927
|
|
|
$
|
7,331
|
|
|
0.38
|
%
|
|
$
|
7,143,643
|
|
|
$
|
5,995
|
|
|
0.34
|
%
|
|
|
Time
deposits
|
3,127,842
|
|
|
9,585
|
|
|
1.23
|
%
|
|
3,154,781
|
|
|
9,795
|
|
|
1.24
|
%
|
|
2,757,077
|
|
|
7,974
|
|
|
1.16
|
%
|
|
|
Short-term
borrowings
|
1,061,011
|
|
|
1,872
|
|
|
0.71
|
%
|
|
417,097
|
|
|
492
|
|
|
0.47
|
%
|
|
128,085
|
|
|
94
|
|
|
0.29
|
%
|
|
|
Long-term borrowings
(4)
|
1,812,556
|
|
|
16,744
|
|
|
3.70
|
%
|
|
2,071,323
|
|
|
19,930
|
|
|
3.85
|
%
|
|
2,569,864
|
|
|
24,836
|
|
|
3.87
|
%
|
|
Total interest
bearing liabilities
|
14,335,698
|
|
|
37,444
|
|
|
1.04
|
%
|
|
13,368,128
|
|
|
37,548
|
|
|
1.12
|
%
|
|
12,598,669
|
|
|
38,899
|
|
|
1.24
|
%
|
|
Non-interest bearing
deposits
|
4,918,463
|
|
|
|
|
|
|
4,641,768
|
|
|
|
|
|
|
4,209,827
|
|
|
|
|
|
|
Other
liabilities
|
206,547
|
|
|
|
|
|
|
178,442
|
|
|
|
|
|
|
171,775
|
|
|
|
|
|
|
Shareholders'
equity
|
2,219,570
|
|
|
|
|
|
|
2,069,084
|
|
|
|
|
|
|
1,869,754
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
21,680,278
|
|
|
|
|
|
|
$
|
20,257,422
|
|
|
|
|
|
|
$
|
18,850,025
|
|
|
|
|
|
|
Net interest
income/interest rate spread (5)
|
|
|
$
|
150,144
|
|
|
2.81
|
%
|
|
|
|
$
|
150,080
|
|
|
3.00
|
%
|
|
|
|
$
|
134,037
|
|
|
2.89
|
%
|
|
Tax equivalent
adjustment
|
|
|
(1,991)
|
|
|
|
|
|
|
(2,034)
|
|
|
|
|
|
|
(1,951)
|
|
|
|
|
Net interest income,
as reported
|
|
|
$
|
148,153
|
|
|
|
|
|
|
$
|
148,046
|
|
|
|
|
|
|
$
|
132,086
|
|
|
|
|
Net interest margin
(6)
|
|
|
|
|
3.04
|
%
|
|
|
|
|
|
3.25
|
%
|
|
|
|
|
|
3.16
|
%
|
|
Tax equivalent
effect
|
|
|
|
|
0.04
|
%
|
|
|
|
|
|
0.05
|
%
|
|
|
|
|
|
0.04
|
%
|
|
Net interest margin
on a fully tax equivalent basis (6)
|
|
|
|
|
3.08
|
%
|
|
|
|
|
|
3.30
|
%
|
|
|
|
|
|
3.20
|
%
|
|
_________________________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Interest income is presented on
a tax equivalent basis using a 35 percent federal tax
rate.
|
|
|
|
|
|
|
(2) Loans are stated net of unearned
income and include non-accrual loans.
|
|
|
|
|
|
|
(3) The yield for securities that
are classified as available for sale is based on the average
historical amortized cost.
|
|
|
|
|
|
(4) Includes junior subordinated
debentures issued to capital trusts which are presented separately
on the consolidated statements of condition.
|
|
|
|
|
|
|
(5) Interest rate spread represents
the difference between the average yield on interest earning assets
and the average cost of interest bearing liabilities and is
presented on a fully tax equivalent basis.
|
|
|
(6) Net interest income as a
percentage of total average interest earning assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/valley-national-bancorp-reports-a-19-percent-increase-in-first-quarter-net-income-full-integration-of-its-recent-bank-acquisition-and-solid-asset-quality-300258121.html
SOURCE Valley National Bancorp