Market Overview

Valley National Bancorp Reports Third Quarter Net Income, Strong Loan Growth And Solid Credit Quality

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WAYNE, N.J., Oct. 25, 2017 /PRNewswire/ -- Valley National Bancorp (NYSE: VLY), the holding company for Valley National Bank, today reported net income for the third quarter of 2017 of $39.6 million, or $0.14 per diluted common share, as compared to the third quarter of 2016 earnings of $42.8 million, or $0.16 per diluted common share, and net income of $50.1 million, or $0.18 per diluted common share, for the second quarter of 2017.  Net income for the third quarter of 2017 included infrequent charges totaling $11.1 million ($6.8 million after-tax) that mostly consist of professional fees and employee severance expense related to our LIFT earnings enhancement program, and, to a lesser extent, merger expenses related to the proposed acquisition of USAmeriBancorp, Inc. ("USAB").  Excluding the infrequent charges, our adjusted net income was $46.4 million, or $0.17 per diluted common share, for the third quarter of 2017.  See further details below.

Key financial highlights for the third quarter:

  • Loan Portfolio: Loans increased by $490.7 million, or 11.1 percent on an annualized basis, to $18.2 billion at September 30, 2017 from June 30, 2017 largely due to net increases of $216.7 million, $143.1 million and $75.6 million in residential mortgage loans, total commercial real estate loans and commercial and industrial loans, respectively. The residential mortgage loan growth was largely driven by solid loan production from our expanding internal team of mortgage consultants covering New Jersey, New York and Florida. Additionally, during the third quarter of 2017, we sold $176 million of residential mortgage loans (including approximately $139 million of loans held for sale at June 30, 2017) resulting in pre-tax gains of $5.5 million. See additional information under the "Loans, Deposits and Other Borrowings" section below.

  • Earnings Enhancement Program: In July 2017, we completed the idea generation and approval phase of the our company-wide earning enhancement initiative called LIFT. As a result of these efforts, we plan to achieve approximately $22 million in total cost reductions and revenue enhancements on an annualized pre-tax run-rate through a combination of workforce reduction and other efficiency and revenue initiatives. We estimate that these changes will result in employee severance and other implementation costs of approximately $11 million, of which the vast majority was recognized in the third quarter of 2017. The implementation phase of the initiative enhancements is expected to be fully phased-in by June 30, 2019. During the third quarter of 2017, Valley implemented several enhancements that we anticipate will result in cost reductions of $9 million on an annualized pre-tax basis beginning in the fourth quarter of 2017.

  • Efficiency Ratio: Our efficiency ratio was 69.43 percent for the third quarter of 2017 compared to 63.28 percent and 61.57 percent for the third quarter of 2016 and second quarter of 2017, respectively. Excluding the aforementioned $11.1 million of infrequent charges and amortization of tax credit investments included in non-interest expense, our adjusted efficiency ratio was 59.21 percent for the third quarter of 2017 as compared to 59.68 percent and 57.58 percent for the third quarter of 2016 and second quarter of 2017, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding this non-GAAP measure.

  • Net Interest Income and Margin: Net interest income on a tax equivalent basis of $166.9 million for the third quarter of 2017 increased $10.6 million as compared to the third quarter of 2016 and decreased $4.2 million from the second quarter of 2017. Our net interest margin on a tax equivalent basis of 3.08 percent for the third quarter of 2017 decreased by 6 basis points and 12 basis points as compared to the third quarter of 2016 and second quarter of 2017, respectively. The decrease in net interest income and margin for the third quarter of 2017 as compared to the linked second quarter was partly caused by a combined decrease of $4.1 million in commercial loan interest rate swap fees and interest income recoveries from non-performing loans, as well as an increase in interest expense on deposits. See the "Net Interest Income and Margin" section below for more details.

Gerald H. Lipkin, Chairman & CEO commented that, "Our net income continued to benefit from strong new loan volumes mainly within residential mortgage and commercial real estate loans during the third quarter.  Additionally, the credit quality of our balance sheet remained well-controlled as reflected in the decrease in accruing loans past due to 0.17 percent of total loans and net recoveries of loan charge-offs totaling $1.2 million for the third quarter of 2017."

The acquisition of USAB, and its wholly owned subsidiary, USAmeriBank, is expected to close in the first quarter of 2018, and Valley has received all necessary banking regulatory approvals to complete the merger. However, the merger is still subject to a number of conditions, including shareholder approval. Valley has filed an S-4 registration containing a joint proxy statement with the Securities Exchange Commission ("SEC").  When the SEC process allows the registration statement to become effective, Valley and USAB will announce the dates of their shareholder meetings that are expected to be held in December 2017.

Net Interest Income and Margin

Net interest income on a tax equivalent basis totaling $166.9 million for the third quarter of 2017 increased $10.6 million as compared to the third quarter of 2016 and decreased $4.2 million from the second quarter of 2017. Interest income on a tax equivalent basis increased $401 thousand to $213.7 million for the third quarter of 2017 as compared to the second quarter of 2017 mainly due to a $304.6 million increase in average loans, partially offset by a 5 basis point decrease in the yield on average loans. The decrease in yield on average loans for the third quarter of 2017 as compared to the linked second quarter was largely due to a combined decrease of $4.1 million in periodic commercial loan fee income related to derivative interest rate swaps executed with customers and interest income recoveries from non-performing loans.  Interest expense of $46.8 million for the third quarter of 2017 increased $4.6 million as compared to the second quarter of 2017. During the third quarter of 2017, our interest expense on deposits increased by approximately $3.6 million from the linked second quarter largely due to an increase in short-term market interest rates on interest bearing deposits without stated maturities and one more day during the third quarter compared to the second quarter.  Interest expense on long-term borrowings also increased $1.4 million in the third quarter of 2017 as compared to the second quarter of 2017 due, in part, to an increase of $352.4 million in the average balances.  Average long-term borrowings increased as compared to the second quarter of 2017 mostly due to new long-term FHLB borrowings replacing short-term FHLB advances that matured during the second and third quarters of 2017.  As a result, both the interest expense on short-term borrowings and average balances declined by $355 thousand and $300.2 million, respectively, during the third quarter of 2017 as compared to the second quarter of 2017.

Our net interest margin on a tax equivalent basis of 3.08 percent for the third quarter of 2017 decreased by 6 basis points and 12 basis points as compared to the third quarter of 2016 and second quarter of 2017, respectively. The yield on average interest earning assets decreased by 3 basis points on a linked quarter basis mostly due to the aforementioned decline in commercial loan swap fees and interest income recoveries which negatively impacted the yield by 8 basis points. The yield on average loans also decreased 5 basis points to 4.15 percent for the third quarter of 2017 as compared to the second quarter of 2017 due to the aforementioned decreases which negatively impacted the loan yield by approximately 9 basis points. The yield on average taxable and non-taxable investment securities also moderately decreased by 1 basis point and 2 basis points, respectively, as compared to the second quarter of 2017.  The overall cost of average interest bearing liabilities increased by 11 basis points to 1.19 percent during the third quarter of 2017 from 1.08 percent in the linked second quarter of 2017.  The increase was due, in part, to higher interest rates on most deposits and short-term borrowings, a shift in the overall mix of borrowings from short-term to more long-term FHLB advances (with maturities less than two years), as well as one more day during the third quarter of 2017 compared to the second quarter.  Our cost of total deposits was 0.61 percent for the third quarter of 2017 as compared to 0.53 percent for the second quarter of 2017.

Non-Interest Income

Non-interest income increased $1.4 million, or 5.7 percent, to $26.1 million for the third quarter of 2017 from $24.7 million for the second quarter of 2017 mostly due to an increase in net gains on sales of residential mortgage loans caused by higher sales volume.

Non-Interest Expense

Non-interest expense increased $13.3 million, or 11.2 percent, to $132.6 million for the third quarter of 2017 from the second quarter of 2017 mainly due to increases of $6.8 million and $5.7 million in professional and legal fees and salary and employee benefits, respectively. For the third quarter of 2017, these expense categories included charges of $7.1 million and $3.8 million, respectively, related to our LIFT initiative and proposed USAB merger. Other non-interest expense also included $266 thousand of USAB merger related expenses during the third quarter of 2017.

Income Tax Expense

Income tax expense totaled $17.1 million for the third quarter of 2017 as compared to $20.7 million and $17.0 million for the second quarter of 2017 and third quarter of 2016, respectively. Our effective tax rate was 30.1 percent, 29.3 percent, and 28.5 percent for the third quarter of 2017, second quarter of 2017, and third quarter of 2016, respectively. For the remainder of 2017, we anticipate that our effective tax rate will range from 28 percent to 31 percent primarily reflecting the impacts of tax-exempt income, tax- advantaged investments and general business credits.

Loans, Deposits and Other Borrowings

Loans. Loans increased $490.7 million, or 11.1 percent on an annualized basis, to approximately $18.2 billion at September 30, 2017 from June 30, 2017, net of $69.6 million decline in the PCI loan portion of the portfolio.  Residential mortgage loans held for sale totaled $13.3 million and $139.6 million at September 30, 2017 and June 30, 2017, respectively.  See additional information regarding our residential mortgage loan activities below.  

Total commercial and industrial loans increased $75.6 million, or 11.5 percent on an annualized basis, from June 30, 2017 to approximately $2.7 billion at September 30, 2017 due to a $86.7 million, or 14.3 percent on an annualized basis, increase in the non-PCI loan portfolio, partially offset by normal run-off in the PCI loan portfolio.

Commercial real estate loans (excluding construction loans) increased $120.6 million from June 30, 2017 to $9.4 billion at September 30, 2017 mostly due to a $158.6 million, or  7.7 percent on an annualized basis, increase in the non-PCI loan portfolio. The increase in non-PCI loans was primarily due to solid organic loan volumes in New York, New Jersey and Florida, particularly amongst our pre-existing long-term customer base during the third quarter of 2017.  Construction loans increased $22.6 million, or 10.2 percent on an annualized basis, to $903.6 million at September 30, 2017 from June 30, 2017.  The increase was mostly due to advances on existing construction projects.

Total residential mortgage loans increased $216.7 million, or approximately 31.8 percent on an annualized basis, to approximately $2.9 billion at September 30, 2017 from June 30, 2017 due to strong loan volumes generated by our new and expanding internal team of mortgage consultants covering our primary markets and a high level of such loans originated for portfolio investment rather than sale during the third quarter of 2017.  New and refinanced residential mortgage loan originations totaled approximately $307 million for the third quarter of 2017 as compared to $194 million and $258 million for the second quarter of 2017 and third quarter of 2016, respectively.

Home equity loans totaling $448.8 million at September 30, 2017 decreased by $1.7 million as compared to June 30, 2017 mostly due to PCI loan repayment activity.  New home equity loan volumes and customer usage of existing home equity lines of credit continue to be weak, despite a relatively attractive interest rate environment.

Automobile loans increased by $21.3 million, or 7.4 percent on an annualized basis, to $1.2 billion at September 30, 2017 as compared to June 30, 2017.  New auto loan origination volumes increased approximately 12.9 percent during the third quarter of 2017 as compared to the second quarter of 2017 largely due to stronger application activity.  Our Florida dealership network contributed over $25 million in auto loan originations, representing approximately 17 percent of Valley's total new auto loan production for the third quarter of 2017 as compared to approximately $23.2 million, or 18 percent, of Valley's total auto originations for the second quarter of 2017.

Other consumer loans increased $35.6 million, or 22.2 percent on an annualized basis, to $677.9 million at September 30, 2017 as compared to $642.2 million at June 30, 2017 mainly due to continued growth and customer usage of collateralized personal lines of credit. 

Deposits. Total deposits increased $62.7 million, or 1.5 percent on an annualized basis, to approximately $17.3 billion at September 30, 2017 from June 30, 2017 largely due to increases in the Savings, NOW, and money market accounts, as well as time deposits resulting from ongoing retail and business account initiatives in 2017.  However, non-interest bearing deposits and brokered money market account balances declined $98.6 million and $96.2 million at September 30, 2017, respectively, as compared to June 30, 2017. Non-interest bearing deposits; savings, NOW, money market deposits; and time deposits represented approximately 29 percent, 51 percent and 20 percent of total deposits as of September 30, 2017.  The composition of deposits based upon the period end balances remained relatively unchanged at September 30, 2017 as compared to June 30, 2017.

Other Borrowings. Short-term borrowings decreased $251.7 million to approximately $1.5 billion at September 30, 2017 as compared to June 30, 2017 largely due to the maturity of several FHLB advances. Long-term borrowings increased $395.6 million to $2.2 billion at September 30, 2017 as compared to June 30, 2017 mostly due to new FHLB advances with contractual terms less than two years utilized to replace the matured short-term advances and provide additional liquidity for loan growth during the third quarter of 2017.  

Credit Quality

Hurricane Irma. The credit quality of our Florida loan portfolio has remained resilient in the aftermath of Hurricane Irma, which hit Florida in mid-September. Through our loan customer outreach efforts, we offered loan payment deferrals up to 90 days to distressed borrowers.  Under the deferral program, we have currently granted 53 loan deferral requests with a combined outstanding balance of approximately $37.6 million.  At this time, no material loan losses are expected as a result of the hurricane.

Non-Performing Assets. Our past due loans and non-accrual loans discussed further below exclude PCI loans. Under U.S. GAAP, the PCI loans (acquired at a discount that is due, in part, to credit quality) are accounted for on a pool basis and are not subject to delinquency classification in the same manner as loans originated by Valley. Our PCI loan portfolio totaled $1.5 billion, or 8.1 percent, of our total loan portfolio at September 30, 2017. 

Total non-performing assets (NPAs), consisting of non-accrual loans, other real estate owned properties and other repossessed assets (foreclosed assets), and non-accrual debt securities increased $596 thousand, or 1.1 percent, to $55.2 million at September 30, 2017 as compared to June 30, 2017 mainly due to a moderate increase in foreclosed assets during the third quarter of 2017.  

Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) decreased $11.6 million to $30.1 million, or 0.17 percent of total loans, at September 30, 2017 as compared to $41.8 million, or 0.24 percent of total loans, at June 30, 2017. The lower level of accruing past due loans was primarily caused by decreases of $6.6 million and $5.7 million in the loans past due 90 or more days and loans past due 60 to 89 days categories at September 30, 2017, respectively, as compared to June 30, 2017.  The decreases were largely caused by the third quarter renewal of matured performing loans and the improved performance of one internally classified loan relationship previously reported in the respective delinquency categories at June 30, 2017.

At September 30, 2017, our commercial and industrial loan portfolio included NYC and Chicago taxi medallion loans totaling $129.3 million and $10.0 million, respectively. At September 30, 2017, the medallion portfolio included impaired loans of $40.5 million with related reserves of $5.0 million within the allowance for loan losses as compared to impaired loans of $37.4 million with related reserves of $3.7 million at June 30, 2017.  At September 30, 2017, the impaired medallion loans largely consisted of performing troubled debt restructured (TDR) loans, as well as $5.6 million of non-accrual Chicago taxi cab medallion loans.  At September 30, 2017, loans past due 60 to 89 days included $2.2 million of matured performing NYC taxi medallions. We are currently renegotiating the terms of these past due loans. In addition, $18.2 million of performing NYC taxi medallion loans have contractual maturity dates in the fourth quarter of 2017. Valley's historical taxi medallion lending criteria has been conservative in regards to capping the loan amounts in relation to market valuations, as well as obtaining personal guarantees and other collateral whenever possible.  However, we continue to closely monitor this portfolio's performance and the potential impact of the changes in market valuation for taxi medallions due to competing car service providers and other factors.

Despite the increase in performing taxi medallion loans classified as impaired TDR loans, we believe our overall credit quality metrics continued to reflect our solid underwriting standards at September 30, 2017.  However, we can provide no assurances as to the future level of our loan delinquencies.

Allowance for Credit Losses. The following table summarizes the allocation of the allowance for credit losses to specific loan categories and the allocation as a percentage of each loan category (including PCI loans) at September 30, 2017, June 30, 2017, and September 30, 2016:



September 30, 2017


June 30, 2017


September 30, 2016





Allocation




Allocation




Allocation





as a % of




as a % of




as a % of



Allowance


Loan


Allowance


Loan


Allowance


Loan


Allocation


Category


Allocation


Category


Allocation


Category


($ in thousands)

Loan Category:












Commercial and industrial loans*

$

57,203



2.11

%


$

53,792



2.04

%


$

52,969



2.07

%

Commercial real estate loans:













Commercial real estate

36,626



0.39

%


37,180



0.40

%


35,513



0.43

%


Construction

18,673



2.07

%


18,275



2.07

%


16,947



2.11

%

Total commercial real estate loans

55,299



0.54

%


55,455



0.55

%


52,460



0.58

%

Residential mortgage loans

3,892



0.13

%


4,186



0.15

%


3,378



0.12

%

Consumer loans:













Home equity

592



0.13

%


582



0.13

%


796



0.17

%


Auto and other consumer

4,494



0.24

%


4,606



0.26

%


3,311



0.20

%

Total consumer loans

5,086



0.22

%


5,188



0.23

%


4,107



0.19

%

Total allowance for credit losses

$

121,480



0.67

%


$

118,621



0.67

%


$

112,914



0.68

%

Allowance for credit losses as a %












of non-PCI loans



0.73

%




0.73

%




0.76

%














* Includes the reserve for unfunded letters of credit.











Our loan portfolio, totaling $18.2 billion at September 30, 2017, had net recoveries of loan charge-offs totaling $1.2 million for the third quarter of 2017 as compared to net loan charge-offs of $2.7 million and $3.3 million for the second quarter of 2017 and the third quarter of 2016, respectively.  The improvement in net loan charge-offs as compared to the second quarter of 2017 was mainly due to one large commercial and industrial loan recovery totaling $1.8 million during the third quarter of 2017 and a decline in charge-offs within the same loan category mainly due to an unrelated charged-off loan relationship totaling $1.9 million in the second quarter of 2017. During the third quarter of 2017, we recorded a $1.6 million provision for credit losses as compared to $3.6 million and $5.8 million for the second quarter of 2017 and the third quarter of 2016, respectively.  The quarter over quarter decrease in the provision was due, in part, to our aforementioned net recoveries of loan charge-offs and the moderate levels of actual and estimated loss experience across the majority of the loan portfolio which is reflective of both Valley's underwriting standards and current economic conditions.  Additionally, our analysis of the adequacy of the allowance for loan losses included an assessment of the impact of Hurricane Irma on our Florida loan portfolio at September 30, 2017.  As result of the assessment, we do not expect a material amount of loan losses related to Hurricane Irma.     

The allowance for credit losses, comprised of our allowance for loan losses and reserve for unfunded letters of credit, as a percentage of total loans was 0.67 percent at both September 30, 2017 and  June 30, 2017 and 0.68 percent at September 30, 2016. At September 30, 2017, our allowance allocations for losses as a percentage of total loans remained relatively stable in most loan categories as compared to June 30, 2017, but increased 0.07 percent for commercial and industrial loans.  The increase was partly attributable to an increase in specific and qualitative reserves related to the collateral valuation of taxi medallion loans.

Our allowance for credit losses as a percentage of total non-PCI loans (excluding PCI loans with carrying values totaling approximately $1.5 billion) was 0.73 percent at both September 30, 2017 and June 30, 2017 as compared to 0.76 percent at September 30, 2016. PCI loans are accounted for on a pool basis and initially recorded net of fair valuation discounts related to credit which may be used to absorb future losses on such loans before any allowance for loan losses is recognized subsequent to acquisition.  Due to the adequacy of such discounts, there were no allowance reserves related to PCI loans at September 30, 2017, June 30, 2017 and September 30, 2016.

Capital Adequacy

Valley's regulatory capital ratios continue to reflect its strong capital position. Valley's total risk-based capital, Tier 1 capital, Tier 1 leverage capital, and common equity Tier 1 capital ratios were 12.61 percent, 10.42 percent, 8.13 percent and 9.22 percent, respectively, at September 30, 2017. On August 3, 2017, Valley issued $100 million of 5.50 percent (fixed-to-floating rate) non-cumulative perpetual preferred stock (Series B) which was included in Valley's Tier 1 capital and total risk-based capital at September 30, 2017. Net proceeds to Valley after deducting underwriting discounts, commissions and offering expenses were approximately $98.1 million.

Investor Conference Call

Valley will host a conference call with investors and the financial community at 11:00 AM Eastern Standard Time, today to discuss the 2017 third quarter earnings.  Those wishing to participate in the call may dial toll-free (800) 230-1093.  Investor presentation materials will be made available prior to the conference call at www.valleynationalbank.com.

About Valley

Valley National Bancorp is a regional bank holding company headquartered in Wayne, New Jersey with nearly $24 billion in assets. Its principal subsidiary, Valley National Bank, currently operates over 200 branch locations in northern and central New Jersey, the New York City boroughs of Manhattan, Brooklyn, Queens and Long Island, and Florida. Valley National Bank is one of the largest commercial banks headquartered in New Jersey with executive offices in Manhattan and West Palm Beach. Helping communities grow and prosper is the heart of Valley's corporate citizenship philosophy. For more information about Valley National Bank and its products and services, please visit a convenient branch location, www.valleynationalbank.com or call our 24/7 Customer Service Team at 800-522-4100.

Forward Looking Statements

The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements are not historical facts and include expressions about management's confidence and strategies and management's expectations about new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology as "should," "expect," "believe," "view," "opportunity," "allow," "continues," "reflects," "typically," "usually," "anticipate," or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:

  • weakness or a decline in the economy, mainly in New Jersey, New York and Florida, as well as an unexpected decline in commercial real estate values within our market areas;
  • less than expected cost reductions and revenue enhancement from Valley's cost reduction plans including its earnings enhancement program called "LIFT";
  • damage verdicts or settlements or restrictions related to existing or potential litigations arising from claims of breach of fiduciary responsibility, negligence, fraud, contractual claims, environmental laws, patent or trade mark infringement, employment related claims, and other matters;
  • the loss of or decrease in lower-cost funding sources within our deposit base may adversely impact our net interest income and net income;
  • cyber attacks, computer viruses or other malware that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage our systems;
  • results of examinations by the OCC, the FRB, the CFPB and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for credit losses, write-down assets, require us to reimburse customers, change the way we do business, or limit or eliminate certain other banking activities;
  • changes in accounting policies or accounting standards, including the new authoritative accounting guidance (known as the current expected credit loss (CECL) model) which may increase the required level of our allowance for credit losses after adoption on January 1, 2020;
  • higher or lower than expected income tax expense or tax rates, including increases or decreases resulting from changes in tax laws, regulations and case law;
  • our inability or determination not to pay dividends at current levels, or at all, because of inadequate future earnings, regulatory restrictions or limitations, changes in our capital requirements or a decision to increase capital by retaining more earnings;
  • higher than expected loan losses within one or more segments of our loan portfolio;
  • unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather or other external events;
  • unexpected significant declines in the loan portfolio due to the lack of economic expansion, increased competition, large prepayments, changes in regulatory lending guidance or other factors;
  • the failure of other financial institutions with whom we have trading, clearing, counterparty and other financial relationships.
  • failure to close the merger with USAB for any reason, including the failure to obtain shareholder approval for the merger within the proposed timeframe or the stock price of Valley during the 30 day pricing period prior to the closing of the merger gives either Valley or USAB the right to terminate the merger agreement;
  • the risk that the businesses of Valley and USAB may not be combined successfully, or such combination may take longer or be more difficult, time-consuming or costly to accomplish than expected;
  • the diversion of management's time on issues relating to the merger; the inability to realize expected cost savings and synergies from the merger of USAB with Valley in the amounts or in the timeframe anticipated; and
  • the inability to retain USAB's customers and employees.

A detailed discussion of factors that could affect our results is included in our SEC filings, including the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2016 and Quarterly Report on Form 10-Q for the period ended June 30, 2017.

We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations.  Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

-Tables to Follow-

 

VALLEY NATIONAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS


SELECTED FINANCIAL DATA



Three Months Ended


Nine Months Ended


September 30,


June 30,


September 30,


September 30,

($ in thousands, except for share data)

2017


2017


2016


2017


2016

FINANCIAL DATA:










Net interest income

$

164,854



$

168,960



$

154,146



$

496,343



$

453,754


Net interest income - FTE (1)

166,878



171,086



156,315



502,666



459,930


Non-interest income

26,088



24,690



24,853



75,837



70,565


Non-interest expense

132,565



119,239



113,268



372,756



351,296


Income tax expense

17,088



20,714



17,049



55,873



46,898


Net income

39,649



50,065



42,842



135,809



118,056


Dividends on preferred stock

2,683



1,797



1,797



6,277



5,391


Net income available to common shareholders

$

36,966



$

48,268



$

41,045



$

129,532



$

112,665


Weighted average number of common shares outstanding:











Basic

264,058,174



263,958,292



254,473,994



263,938,786



254,310,769



Diluted

264,936,220



264,778,242



254,940,307



264,754,845



254,698,593


Per common share data:











Basic earnings

$

0.14



$

0.18



$

0.16



$

0.49



$

0.44



Diluted earnings

0.14



0.18



0.16



0.49



0.44



Cash dividends declared

0.11



0.11



0.11



0.33



0.33


Closing stock price - high

12.40



12.23



9.80



12.76



10.13


Closing stock price - low

10.71



11.28



8.86



10.71



8.31


CORE ADJUSTED FINANCIAL DATA: (2)










Net income available to common shareholders, as adjusted

$

43,762



$

48,268



$

41,045



$

136,329



$

112,665


Basic earnings per share, as adjusted

$

0.17



$

0.18



$

0.16



$

0.52



$

0.44


Diluted earnings per share, as adjusted

0.17



0.18



0.16



0.51



0.44


FINANCIAL RATIOS:










Net interest margin

3.05

%


3.16

%


3.10

%


3.10

%


3.08

%

Net interest margin - FTE (1)

3.08



3.20



3.14



3.14



3.12


Annualized return on average assets

0.67



0.86



0.78



0.78



0.72


Annualized return on avg. shareholders' equity

6.34



8.27



7.61



7.42



7.04


Annualized return on avg. tangible shareholders' equity (2)

8.96



11.88



11.29



10.61



10.48


Efficiency ratio (3)

69.43



61.57



63.28



65.15



67.00


CORE ADJUSTED FINANCIAL RATIOS: (2)










Annualized return on average assets, as adjusted

0.79

%


0.86

%


0.78

%


0.81

%


0.72

%

Annualized return on average shareholders' equity, as adjusted

7.42



8.27



7.61



7.79



7.04


Annualized return on average tangible shareholders' equity, as adjusted (2)

10.50



11.88



11.29



11.14



10.48


Efficiency ratio, as adjusted (3)

59.21



57.58



59.68



59.46



62.93


AVERAGE BALANCE SHEET ITEMS:












Assets

$

23,604,252



$

23,396,259



$

22,081,470



$

23,334,491



$

21,831,622


Interest earning assets

21,642,846



21,416,671



19,896,832



21,338,866



19,641,559


Loans

18,006,274



17,701,676



16,570,723



17,676,222



16,273,482


Interest bearing liabilities

15,737,738



15,610,935



14,550,002



15,546,272



14,389,474


Deposits

17,353,099



17,288,487



16,668,925



17,336,068



16,501,615


Shareholders' equity

2,502,538



2,420,848



2,251,461



2,441,227



2,236,569


 

 

VALLEY NATIONAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS



As Of

BALANCE SHEET ITEMS:

September 30,


June 30,


March 31,


December 31,


September 30,

(In thousands)

2017


2017


2017


2016


2016

Assets

$

23,780,661



$

23,449,350



$

23,220,456



$

22,864,439



$

22,368,453


Total loans

18,201,462



17,710,760



17,449,498



17,236,103



16,634,135


Non-PCI loans

16,729,607



16,169,291



15,794,797



15,464,601



14,777,020


Deposits

17,312,766



17,250,018



17,331,141



17,730,708



16,972,183


Shareholders' equity

2,537,984



2,423,901



2,398,541



2,377,156



2,257,073












LOANS:










(In thousands)










Commercial and industrial

$

2,706,912



$

2,631,312



$

2,642,319



$

2,638,195



$

2,558,968


Commercial real estate:










Commercial real estate

9,351,068



9,230,514



9,016,418



8,719,667



8,313,855


Construction

903,640



881,073



835,854



824,946



802,568


 Total commercial real estate

10,254,708



10,111,587



9,852,272



9,544,613



9,116,423


Residential mortgage

2,941,435



2,724,777



2,745,447



2,867,918



2,826,130


Total Consumer:










Home equity

448,842



450,510



458,891



469,009



476,820


Automobile

1,171,685



1,150,343



1,150,053



1,139,227



1,121,606


Other consumer

677,880



642,231



600,516



577,141



534,188


Total consumer loans

2,298,407



2,243,084



2,209,460



2,185,377



2,132,614


Total loans

$

18,201,462



$

17,710,760



$

17,449,498



$

17,236,103



$

16,634,135












CAPITAL RATIOS:










Book value per common share

$

8.81



$

8.76



$

8.67



$

8.59



$

8.43


Tangible book value per common share (2)

6.04



5.98



5.88



5.80



5.55


Tangible common equity to tangible assets (2)

6.92

%


6.95

%


6.90

%


6.91

%


6.53

%

Tier 1 leverage capital

8.13



7.69



7.70



7.74



7.35


Common equity tier 1 capital

9.22



9.18



9.12



9.27



8.73


Tier 1 risk-based capital

10.42



9.81



9.76



9.90



9.36


Total risk-based capital

12.61



11.99



11.96



12.15



11.64


 

 

VALLEY NATIONAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS




Three Months Ended


Nine Months Ended

ALLOWANCE FOR CREDIT LOSSES:

September 30,


June 30,


September 30,


September 30,

($ in thousands)

2017


2017


2016


2017


2016

Beginning balance - Allowance for credit losses

$

118,621



$

117,696



$

110,414



$

116,604



$

108,367


Loans charged-off:











Commercial and industrial

(265)



(2,910)



(3,763)



(4,889)



(5,507)



Commercial real estate



(139)





(553)



(519)



Construction











Residential mortgage

(129)



(229)



(518)



(488)



(750)



Total Consumer

(1,335)



(1,011)



(782)



(3,467)



(2,553)



Total loans charged-off

(1,729)



(4,289)



(5,063)



(9,397)



(9,329)


Charged-off loans recovered:











Commercial and industrial

2,320



312



902



3,480



2,418



Commercial real estate

42



346



34



530



1,581



Construction



294



10



294



10



Residential mortgage

220



235



495



903



604



Total Consumer

366



395



282



1,324



1,194



Total loans recovered

2,948



1,582



1,723



6,531



5,807


Net recoveries (charge-offs)

1,219



(2,707)



(3,340)



(2,866)



(3,522)


Provision for credit losses

1,640



3,632



5,840



7,742



8,069


Ending balance - Allowance for credit losses

$

121,480



$

118,621



$

112,914



$

121,480



$

112,914


Components of allowance for credit losses:











Allowance for loan losses

$

118,966



$

116,446



$

110,697



$

118,966



$

110,697



Allowance for unfunded letters of credit

2,514



2,175



2,217



2,514



2,217


Allowance for credit losses

$

121,480



$

118,621



$

112,914



$

121,480



$

112,914


Components of provision for credit losses:











Provision for loan losses

$

1,301



$

3,710



$

5,949



$

7,413



$

8,041



Provision for unfunded letters of credit

339



(78)



(109)



329



28


Provision for credit losses

$

1,640



$

3,632



$

5,840



$

7,742



$

8,069


Annualized ratio of total net (recoveries) charge-
offs to average loans

(0.03)

%


0.06

%


0.08

%


0.02

%


0.03

%

Allowance for credit losses as a % of non-PCI loans

0.73

%


0.73

%


0.76

%


0.73

%


0.76

%

Allowance for credit losses as a % of total loans

0.67

%


0.67

%


0.68

%


0.67

%


0.68

%


 

 

VALLEY NATIONAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS



As of

ASSET QUALITY: (4)

September 30,


June 30,


March 31,


December 31,


September 30,

($ in thousands)

2017


2017


2017


2016


2016

Accruing past due loans:










30 to 59 days past due:











Commercial and industrial

$

1,186



$

2,391



$

29,734



$

6,705



$

4,306



Commercial real estate

4,755



6,983



11,637



5,894



9,385



Construction





7,760



6,077





Residential mortgage

7,942



4,677



7,533



12,005



9,982



Total Consumer

5,205



4,393



3,740



4,197



3,146


Total 30 to 59 days past due

19,088



18,444



60,404



34,878



26,819


60 to 89 days past due:











Commercial and industrial

3,043



2,686



341



5,010



788



Commercial real estate

626



8,233



359



8,642



4,291



Construction

2,518



854









Residential mortgage

1,604



1,721



4,177



3,564



2,733



Total Consumer

1,019



1,007



787



1,147



1,234


Total 60 to 89 days past due

8,810



14,501



5,664



18,363



9,046


90 or more days past due:











Commercial and industrial

125





405



142



145



Commercial real estate

389



2,315





474



478



Construction



2,879





1,106



1,881



Residential mortgage

1,433



3,353



1,355



1,541



590



Total Consumer

301



275



314



209



226


Total 90 or more days past due

2,248



8,822



2,074



3,472



3,320


Total accruing past due loans

$

30,146



$

41,767



$

68,142



$

56,713



$

39,185


Non-accrual loans:











Commercial and industrial

$

11,983



$

11,072



$

8,676



$

8,465



$

7,875



Commercial real estate

13,870



15,514



15,106



15,079



14,452



Construction

1,116



1,334



1,461



715



1,136



Residential mortgage

12,974



12,825



11,650



12,075



14,013



Total Consumer

1,844



1,409



1,395



1,174



965


Total non-accrual loans

41,787



42,154



38,288



37,508



38,441


Other real estate owned (OREO) (5)

10,770



10,182



10,737



9,612



10,257


Other repossessed assets

480



342



475



384



307


Non-accrual debt securities (6)

2,115



1,878



2,007



1,935



2,025


Total non-performing assets

$

55,152



$

54,556



$

51,507



$

49,439



$

51,030


Performing troubled debt restructured loans

$

113,677



$

109,802



$

80,360



$

85,166



$

81,093


Total non-accrual loans as a % of loans

0.23

%


0.24

%


0.22

%


0.22

%


0.23

%

Total accruing past due and non-accrual
loans as a % of loans

0.40

%


0.47

%


0.61

%


0.55

%


0.47

%

Allowance for losses on loans as a % of
non-accrual loans

284.70

%


276.24

%


301.51

%


305.05

%


287.97

%

Non-performing purchased credit-impaired
loans (7)

$

25,413



$

33,715



$

25,857



$

27,011



$

30,055


 

VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS

NOTES TO SELECTED FINANCIAL DATA

(1)

Net interest income and net interest margin are presented on a tax equivalent basis using a 35 percent federal tax rate.  Valley believes that this presentation provides comparability of net interest income and net interest margin arising from both taxable and tax-exempt sources and is consistent with industry practice and SEC rules.

(2)

This press release contains certain supplemental financial information, described in the Notes below, which has been determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP") that management uses in its analysis of Valley's performance.  Management believes these non-GAAP financial measures provide information useful to investors in understanding Valley's financial results. Specifically, Valley provides measures based on what it believes are its operating earnings on a consistent basis and excludes material non-core operating items which affect the GAAP reporting of results of operations.  Management utilizes these measures for internal planning and forecasting purposes. Management believes that Valley's presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting Valley's business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and Valley strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure.  Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

 


Three Months Ended


Nine Months Ended


September 30,


June 30,


September 30,


September 30,

($ in thousands, except for share data)

2017


2017


2016


2017


2016

Adjusted net income available to common
shareholders:










Net income, as reported

$

39,649



$

50,065



$

42,842



$

135,809



$

118,056


Add:  LIFT program expenses (net of tax)*

5,753







5,753




Add:  Merger related expenses (net of tax)**

1,043







1,044




Net income, as adjusted

$

46,445



$

50,065



$

42,842



$

142,606



$

118,056


Dividends on preferred stock

2,683



1,797



1,797



6,277



5,391


Net income available to common shareholders, as
adjusted

$

43,762



$

48,268



$

41,045



$

136,329



$

112,665


__________










*  LIFT program expenses are primarily within professional and legal fees, and salary and employee benefits expense.

**  Merger related expenses are primarily within professional and legal fees.

Adjusted per common share data:










Net income available to common shareholders, as adjusted

$

43,762



$

48,268



$

41,045



$

136,329



$

112,665


Average number of shares outstanding

264,058,174



263,958,292



254,473,994



263,938,786



254,310,769


Basic earnings, as adjusted

$

0.17



$

0.18



$

0.16



$

0.52



$

0.44


Average number of diluted shares outstanding

264,936,220



264,778,242



254,940,307



264,754,845



254,698,593


Diluted earnings, as adjusted

$

0.17



$

0.18



$

0.16



$

0.51



$

0.44


Annualized return on average tangible shareholders'
equity:










Net income

$

39,649



$

50,065



$

42,842



$

135,809



$

118,056


Average shareholders' equity

2,502,538



2,420,848



2,251,461



2,441,227



2,236,569


Less: Average goodwill and other intangible assets

(733,450)



(734,616)



(733,830)



(734,738)



(734,791)


    Average tangible shareholders' equity

$

1,769,088



$

1,686,232



$

1,517,631



$

1,706,489



$

1,501,778


    Annualized return on average tangible










    shareholders' equity

8.96

%


11.88

%


11.29

%


10.61

%


10.48

%

Adjusted annualized return on average assets:










Net income, as adjusted

$

46,445



$

50,065



$

42,842



$

142,606



$

118,056


Average assets

$

23,604,252



$

23,396,259



$

22,081,470



$

23,334,491



$

21,831,622


Annualized return on average assets, as adjusted

0.79

%


0.86

%


0.78

%


0.81

%


0.72

%

Adjusted annualized return on average shareholders'
equity:










Net income, as adjusted

$

46,445



$

50,065



$

42,842



$

142,606



$

118,056


Average shareholders' equity

$

2,502,538



$

2,420,848



$

2,251,461



$

2,441,227



$

2,236,569


Annualized return on average shareholders' equity, as
adjusted

7.42

%


8.27

%


7.61

%


7.79

%


7.04

%





















 

 

VALLEY NATIONAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS



Three Months Ended


Nine Months Ended


September 30,


June 30,


September 30,


September 30,

($ in thousands, except for share data)

2017


2017


2016


2017


2016

Adjusted annualized return on average tangible
shareholders' equity:










Net income, as adjusted

$

46,445



$

50,065



$

42,842



$

142,606



$

118,056


Average tangible shareholders' equity

$

1,769,088



$

1,686,232



$

1,517,631



$

1,706,489



$

1,501,778


Annualized return on average tangible shareholders'
equity, as adjusted

10.50

%


11.88

%


11.29

%


11.14

%


10.48

%

Adjusted efficiency ratio:










Non-interest expense

$

132,565



$

119,239



$

113,268



$

372,756



$

351,296


Less:  LIFT program expenses (pre-tax)

9,875







9,875




Less:  Merger-related expenses (pre-tax)

1,241







1,242




Less:  Amortization of tax credit investments (pre-tax)

8,389



7,732



6,450



21,445



21,360


Non-interest expense, as adjusted

$

113,060



$

111,507



$

106,818



$

340,194



$

329,936


Net interest income

164,854



168,960



154,146



496,343



453,754


Non-interest income

26,088



24,690



24,853



75,837



70,565


Gross operating income

190,942



193,650



178,999



572,180



524,319


Efficiency ratio, as adjusted

59.21

%


57.58

%


59.68

%


59.46

%


62.93

%



As of


September 30,


June 30,


March 31,


December 31,


September 30,

($ in thousands, except for share data)

2017


2017


2017


2016


2016

Tangible book value per common share:










Common shares outstanding

264,197,172



263,971,766



263,842,268



263,638,830



254,461,906


Shareholders' equity

$

2,537,984



$

2,423,901



$

2,398,541



$

2,377,156



$

2,257,073


Less: Preferred stock

(209,691)



(111,590)



(111,590)



(111,590)



(111,590)


Less: Goodwill and other intangible assets

(733,498)



(734,337)



(735,595)



(736,121)



(733,627)


Tangible common shareholders' equity

$

1,594,795



$

1,577,974



$

1,551,356



$

1,529,445



$

1,411,856


    Tangible book value per common share

$6.04



$5.98



$5.88



$5.80



$5.55


Tangible common equity to tangible assets:









Tangible common shareholders' equity

$

1,594,795



$

1,577,974



$

1,551,356



$

1,529,445



$

1,411,856


Total assets

23,780,661



23,449,350



23,220,456



22,864,439



22,368,453


Less: Goodwill and other intangible assets

(733,498)



(734,337)



(735,595)



(736,121)



(733,627)


Tangible assets

$

23,047,163



$

22,715,013



$

22,484,861



$

22,128,318



$

21,634,826


    Tangible common equity to tangible assets

6.92

%


6.95

%


6.90

%


6.91

%


6.53

%



(3)

The efficiency ratio measures Valley's total non-interest expense as a percentage of net interest income plus total non-interest income.

(4)

Past due loans and non-accrual loans exclude purchased credit-impaired (PCI) loans.  PCI loans are accounted for on a pool basis under U.S. GAAP and are not subject to delinquency classification in the same manner as loans originated by Valley.

(5)

Excludes OREO properties related to FDIC-assisted transactions totaling $558 thousand and $1.0 million at December 31, 2016 and September 30, 2016, respectively.  These assets are covered by the loss-sharing agreements with the FDIC.  There were no covered OREO properties at September 30, 2017, June 30, 2017 and March 31, 2017.

(6)

Includes other-than-temporarily impaired trust preferred securities classified as available for sale, which are presented at carrying value (net of unrealized losses totaling $637 thousand, $875 thousand, $745 thousand, $817 thousand and $728 thousand at September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016 and September 30, 2016, respectively) after recognition of all credit impairments.

(7)

Represent PCI loans meeting Valley's definition of non-performing loan (i.e., non-accrual loans), but are not subject to such classification under U.S. GAAP because the loans are accounted for on a pooled basis and are excluded from the non-accrual loans in the table above.


SHAREHOLDERS RELATIONS
Requests for copies of reports and/or other inquiries should be directed to Tina Zarkadas, Assistant Vice President, Shareholder Relations Specialist, Valley National Bancorp, 1455 Valley Road, Wayne, New Jersey, 07470, by telephone at (973) 305-3380, by fax at (973) 305-1364 or by e-mail at tzarkadas@valleynationalbank.com.

 

 

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except for share data)



September 30,


December 31,


2017


2016

Assets

 (Unaudited)



Cash and due from banks

$

215,600



$

220,791


Interest bearing deposits with banks

128,226



171,710


Investment securities:




Held to maturity (fair value of $1,831,145 at September 30, 2017 and $1,924,597 at
   December 31, 2016)

1,823,622



1,925,572


Available for sale

1,447,737



1,297,373


Total investment securities

3,271,359



3,222,945


Loans held for sale, at fair value

13,321



57,708


Loans

18,201,462



17,236,103


Less: Allowance for loan losses

(118,966)



(114,419)


Net loans

18,082,496



17,121,684


Premises and equipment, net

289,153



291,180


Bank owned life insurance

386,874



391,830


Accrued interest receivable

72,063



66,816


Goodwill

690,637



690,637


Other intangible assets, net

42,861



45,484


Other assets

588,071



583,654


Total Assets

$

23,780,661



$

22,864,439


Liabilities




Deposits:




Non-interest bearing

$

5,099,376



$

5,252,825


Interest bearing:




Savings, NOW and money market

8,792,734



9,339,012


Time

3,420,656



3,138,871


Total deposits

17,312,766



17,730,708


Short-term borrowings

1,482,709



1,080,960


Long-term borrowings

2,215,219



1,433,906


Junior subordinated debentures issued to capital trusts

41,716



41,577


Accrued expenses and other liabilities

190,267



200,132


Total Liabilities

21,242,677



20,487,283


Shareholders' Equity




Preferred stock, no par value; 50,000,000 shares authorized:




Series A (4,600,000 shares issued at September 30, 2017 and December 31, 2016)

111,590



111,590


Series B (4,000,000 shares issued at September 30, 2017)

98,101




Common stock (no par value, authorized 450,000,000 shares; issued 264,197,172 shares at
   September 30, 2017 and 263,804,877 shares at December 31, 2016)

92,569



92,353


Surplus

2,054,843



2,044,401


Retained earnings

214,981



172,754


Accumulated other comprehensive loss

(34,100)



(42,093)


Treasury stock, at cost (166,047 shares at December 31, 2016)



(1,849)


Total Shareholders' Equity

2,537,984



2,377,156


Total Liabilities and Shareholders' Equity

$

23,780,661



$

22,864,439


 

 

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except for share data)



Three Months Ended


Nine Months Ended


September 30,


June 30,


September 30,


September 30,


2017


2017


2016


2017


2016

Interest Income










Interest and fees on loans

$

186,773



$

185,860



$

171,143



$

547,647



$

506,640


Interest and dividends on investment securities:










Taxable

17,922



18,928



14,232



54,439



42,487


Tax-exempt

3,752



3,943



4,023



11,726



11,447


Dividends

2,657



2,137



1,612



6,945



4,408


Interest on federal funds sold and other short-term
investments

546



279



193



1,156



846


Total interest income

211,650



211,147



191,203



621,913



565,828


Interest Expense










Interest on deposits:










Savings, NOW and money market

15,641



12,714



10,165



38,538



29,369


Time

10,852



10,166



9,412



30,571



28,220


Interest on short-term borrowings

5,161



5,516



3,545



14,578



8,537


Interest on long-term borrowings and junior
   subordinated debentures

15,142



13,791



13,935



41,883



45,948


Total interest expense

46,796



42,187



37,057



125,570



112,074


Net Interest Income

164,854



168,960



154,146



496,343



453,754


Provision for credit losses

1,640



3,632



5,840



7,742



8,069


Net Interest Income After Provision for Credit
Losses

163,214



165,328



148,306



488,601



445,685


Non-Interest Income










Trust and investment services

3,062



2,800



2,628



8,606



7,612


Insurance commissions

4,519



4,358



4,580



13,938



14,133


Service charges on deposit accounts

5,558



5,342



5,263



16,136



15,460


Gains (losses) on securities transactions, net

6



22



(10)



5



258


Fees from loan servicing

1,895



1,831



1,598



5,541



4,753


Gains on sales of loans, net

5,520



4,791



4,823



14,439



9,723


Bank owned life insurance

1,541



1,701



1,683



5,705



5,464


Other

3,987



3,845



4,288



11,467



13,162


Total non-interest income

26,088



24,690



24,853



75,837



70,565


Non-Interest Expense










Salary and employee benefits expense

67,062



61,338



58,107



192,116



174,438


Net occupancy and equipment expense

22,756



22,609



20,658



68,400



65,615


FDIC insurance assessment

4,603



4,928



4,804



14,658



14,998


Amortization of other intangible assets

2,498



2,562



2,675



7,596



8,452


Professional and legal fees

11,110



4,302



4,031



20,107



13,398


Amortization of tax credit investments

8,389



7,732



6,450



21,445



21,360


Telecommunication expense

2,464



2,707



2,459



7,830



7,139


Other

13,683



13,061



14,084



40,604



45,896


Total non-interest expense

132,565



119,239



113,268



372,756



351,296


Income Before Income Taxes

56,737



70,779



59,891



191,682



164,954


Income tax expense

17,088



20,714



17,049



55,873



46,898


Net Income

39,649



50,065



42,842



135,809



118,056


Dividends on preferred stock

2,683



1,797



1,797



6,277



5,391


Net Income Available to Common Shareholders

$

36,966



$

48,268



$

41,045



$

129,532



$

112,665


Earnings Per Common Share:










Basic

$

0.14



$

0.18



$

0.16



$

0.49



$

0.44


Diluted

0.14



0.18



0.16



0.49



0.44


Cash Dividends Declared per Common Share

0.11



0.11



0.11



0.33



0.33


Weighted Average Number of Common Shares
Outstanding:










Basic

264,058,174



263,958,292



254,473,994



263,938,786



254,310,769


Diluted

264,936,220



264,778,242



254,940,307



264,754,845



254,698,593



 

 

VALLEY NATIONAL BANCORP

Quarterly Analysis of Average Assets, Liabilities and Shareholders' Equity and

Net Interest Income on a Tax Equivalent Basis






Three Months Ended



September 30, 2017


June 30, 2017


September 30, 2016



 Average




Avg.


 Average




Avg.


 Average




Avg.

($ in thousands)

 Balance


 Interest


Rate


 Balance


 Interest


Rate


 Balance


 Interest


Rate

Assets


















Interest earning assets
















Loans (1)(2)

$

18,006,274



$

186,776



4.15

%


$

17,701,676



$

185,863



4.20

%


$

16,570,723



$

171,146



4.13

%

Taxable investments (3)

2,905,400



20,579



2.83

%


2,967,729



21,065



2.84

%


2,531,202



15,844



2.50

%

Tax-exempt investments (1)(3)

556,061



5,773



4.15

%


581,263



6,066



4.17

%


628,951



6,189



3.94

%

Federal funds sold and other


















interest bearing deposits

175,111



546



1.25

%


166,003



279



0.67

%


165,956



193



0.47

%

Total interest earning assets

21,642,846



213,674



3.95

%


21,416,671



213,273



3.98

%


19,896,832



193,372



3.89

%

Other assets

1,961,406







1,979,588







2,184,638






Total assets

$

23,604,252







$

23,396,259







$

22,081,470






Liabilities and shareholders' equity


















Interest bearing liabilities:


















Savings, NOW and money market deposits

$

8,799,955



$

15,641



0.71

%


$

8,803,028



$

12,715



0.58

%


$

8,509,793



$

10,165



0.48

%

Time deposits

3,368,153



10,852



1.29

%


3,290,407



10,166



1.24

%


3,082,100



9,412



1.22

%

Short-term borrowings

1,537,562



5,161



1.34

%


1,837,809



5,516



1.20

%


1,439,352



3,545



0.99

%

Long-term borrowings (4)

2,032,068



15,142



2.98

%


1,679,691



13,790



3.28

%


1,518,757



13,935



3.67

%

Total interest bearing liabilities

15,737,738



46,796



1.19

%


15,610,935



42,187



1.08

%


14,550,002



37,057



1.02

%

Non-interest bearing deposits

5,184,991







5,195,052







5,077,032






Other liabilities

178,985







169,424







202,975






Shareholders' equity

2,502,538







2,420,848







2,251,461






Total liabilities and shareholders' equity

$

23,604,252







$

23,396,259







$

22,081,470
























Net interest income/interest rate spread (5)



$

166,878



2.76

%




$

171,086



2.90

%




$

156,315



2.87

%

Tax equivalent adjustment



(2,024)







(2,126)







(2,169)




Net interest income, as reported



$

164,854







$

168,960







$

154,146




Net interest margin (6)





3.05

%






3.16

%






3.10

%

Tax equivalent effect





0.03

%






0.04

%






0.04

%

Net interest margin on a fully tax
equivalent basis (6)





3.08

%






3.20

%






3.14

%

 

__________


(1)

Interest income is presented on a tax equivalent basis using a 35 percent federal tax rate.

(2)

Loans are stated net of unearned income and include non-accrual loans.

(3)

The yield for securities that are classified as available for sale is based on the average historical amortized cost.

(4)

Includes junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of condition.

(5)

Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities and is presented on a fully tax equivalent basis.

(6)

Net interest income as a percentage of total average interest earning assets.

 

 

View original content:http://www.prnewswire.com/news-releases/valley-national-bancorp-reports-third-quarter-net-income-strong-loan-growth-and-solid-credit-quality-300542661.html

SOURCE Valley National Bancorp

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