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Valley National Bancorp Reports First Quarter Net Income And Strong Organic Loan Growth

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Valley National Bancorp Reports First Quarter Net Income And Strong Organic Loan Growth

PR Newswire

WAYNE, N.J., April 26, 2018 /PRNewswire/ -- Valley National Bancorp (NYSE:VLY), the holding company for Valley National Bank, today reported net income for the first quarter of 2018 of $42.0 million, or $0.12 per diluted common share, as compared to the first quarter of 2017 earnings of $46.1 million, or $0.17 per diluted common share, and net income of $26.1 million, or $0.09 per diluted common share, for the fourth quarter of 2017.  Net income for first quarter of 2018 included infrequent charges totaling $25.9 million ($19.1 million after-tax) which mainly consisted of $13.4 million of merger expenses related to our acquisition of USAmeriBancorp, Inc. ("USAB") effective January 1, 2018 and a $10.5 million increase in litigation reserves.  The fourth quarter of 2017 results included infrequent charges of $21.1 million ($19.7 million after-tax) mainly due to the impact of the Tax Cuts and Jobs Act ("the Tax Act") and, to a much lesser extent, USAB merger expenses. Excluding these charges and other non-core items, our adjusted net income was $61.5 million, or $0.18 per diluted common share, for the first quarter of 2018, and $45.8 million, or $0.16 per diluted common share, for the fourth quarter of 2017. See further details below, including the "Consolidated Financial Highlights" tables.

Key financial highlights for the first quarter:

  • Acquisition of USAmeriBancorp, Inc.: On January 1, 2018 Valley completed its acquisition of USAB and its wholly-owned subsidiary, USAmeriBank, headquartered in Clearwater, Florida. USAB had approximately $5.1 billion in assets, $3.7 billion in loans and $3.6 billion in deposits, after purchase accounting adjustments, and a branch network of 29 offices. The acquisition represents a significant addition to Valley's Florida franchise, specifically in the Tampa Bay market. The acquisition also brought Valley to the Birmingham, Montgomery, and Tallapoosa areas in Alabama, where Valley now operates 15 branch office locations. The common shareholders of USAB received 6.1 shares of Valley common stock for each USAB share they owned. The total consideration for the acquisition was approximately $737 million, and the transaction resulted in $388 million of goodwill and $46 million of core deposit intangible assets subject to amortization. Full systems integration is expected to be completed in the second quarter of 2018.
  • Loan Portfolio: Loans increased $4.2 billion to approximately $22.6 billion at March 31, 2018 from December 31, 2017 largely due to $3.7 billion in acquired loans from USAB. The remaining increase was largely due to strong quarter over quarter organic growth in total commercial real estate loans, commercial and industrial loans and residential mortgage loans. Additionally, we sold $234.2 million of residential mortgage loans resulting in pre-tax gains of $6.8 million during the first quarter of 2018. See additional information under the "Loans, Deposits and Other Borrowings" section below.
  • Credit Quality: Net loan recoveries totaled $1.3 million for the first quarter of 2018, and represented our third consecutive quarter of net recoveries. Non-accrual loans represented 0.27 percent of total loans at March 31, 2018 compared to 0.26 percent at December 31, 2017.
  • Net Interest Income: Net interest income on a tax equivalent basis of $209.1 million for the first quarter of 2018 increased $45.1 million and $37.7 million as compared to the first quarter of 2017 and fourth quarter of 2017, respectively, largely due to acquired and organic loan growth.
  • Provision for Credit Losses: During the first quarter of 2018, we recorded a $10.9 million provision for credit losses as compared to $2.5 million and $2.2 million for the first quarter of 2017 and fourth quarter of 2017, respectively. The increased provision was mainly due to higher specific reserves allocated to impaired taxi medallion loans at March 31, 2018, as well as the organic loan growth during the first quarter of 2018.
  • Net Interest Margin: Our net interest margin on a tax equivalent basis of 3.13 percent for the first quarter of 2018 remained unchanged as compared to both the first quarter of 2017 and fourth quarter of 2017. See the "Net Interest Income and Margin" section below for more details.
  • Efficiency Ratio: Our efficiency ratio was 72.44 percent for the first quarter of 2018 as compared to 68.30 percent and 64.48 percent for the fourth quarter of 2017 and first quarter of 2017, respectively. Excluding litigation reserve expense, merger expense and amortization of tax credit investments included in non-interest expense, our adjusted efficiency ratio was 60.29 percent for the first quarter of 2018 as compared to 57.44 percent and 61.64 percent for the fourth quarter of 2017 and first quarter of 2017, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding this non-GAAP measure.
  • Income Tax Expense: The effective tax rate was 23.9 percent for the first quarter of 2018 reflecting the reduction of the federal corporate income tax rate from 35 percent to 21 percent by the Tax Act. Income tax expense totaled $13.2 million for the first quarter of 2018 and included a $2 million charge related to effect of the USAB acquisition on our state deferred tax assets.

Ira Robbins, CEO and President commented, "Our first quarter of 2018 reflected improved operating performance highlighting Valley's tremendous potential.  The organic loan and deposit growth we originated illustrates just some of the prospects that remain in front of us.  Despite several unusual items during the quarter, our core earnings are headed in the right direction.  I look forward to focusing on enhancing the operating leverage and demonstrating the true earnings power of this growing franchise. We continue to transform Valley into a preeminent financial institution that delivers strong financial performance while establishing relevancy in both the near and long term. Additionally, I would like to thank all of our employees that are working tirelessly to ensure the success of our upcoming systems integration of USAmeriBank."

Net Interest Income and Margin

Net interest income consists of interest income and dividends earned on interest earning assets less interest expense on interest bearing liabilities and represents the main source of income for Valley.  During the first quarter of 2018, Valley elected to reclassify fee income related to derivative interest rate swaps executed with commercial loan customers totaling $3.3 million from interest and fees on loans to other non-interest income within the presentation of our consolidated statements of income and net interest margin (included in the "Consolidated Financial Highlights" tables below). The applicable prior period amounts have also been reclassified to conform to this current presentation.  See further discussion of the swap fees in the "Non-Interest Income" section below.

Net interest income on a tax equivalent basis totaling $209.1 million for the first quarter of 2018 increased $45.1 million and $37.7 million as compared to the first quarter of 2017 and fourth quarter of 2017, respectively, largely due to the USAB acquisition. Interest income on a tax equivalent basis increased $49.1 million to $269.0 million for the first quarter of 2018 as compared to the fourth quarter of 2017 mainly due to a $4.1 billion increase in average loans, partially offset by a lower yield on average investment securities. The decrease in yield on average investments for the first quarter of 2018 as compared to the linked fourth quarter was due, in part, to a lower tax equivalent yield on non-taxable securities caused by the Tax Act. Interest expense of $59.9 million for the first quarter of 2018 increased $11.4 million as compared to the fourth quarter of 2017 largely driven by the interest bearing liabilities assumed from USAB and organic growth from our current deposit gathering initiatives.

Our net interest margin on a tax equivalent basis of 3.13 percent for the first quarter of 2018 remained unchanged as compared to both the first quarter of 2017 and fourth quarter of 2017. The yield on average interest earning assets increased by 1 basis point on a linked quarter basis mostly due to an increase in the yield on average loans, partially offset by a decline in yield on average investment securities and two less days during the first quarter of 2018. The yield on average loans increased by 4 basis points to 4.26 percent for the first quarter of 2018 as compared to the fourth quarter of 2017 due to the high volume of new loan originations, but was partially offset by somewhat elevated repayments of high yielding loans over the last six month period, as well as moderately lower accretion on the pre-existing purchased credit-impaired ("PCI") loan portfolio (i.e., exclusive of recently acquired USAB loans). The yield on average taxable and non-taxable investment securities in the first quarter of 2018 decreased by 14 basis points and 37 basis points, respectively, as compared to the fourth quarter of 2017.  The overall cost of average interest bearing liabilities was 1.22 percent for the first quarter of 2018 and remained unchanged as compared to the linked fourth quarter of 2017. Our cost of total deposits was 0.68 percent for the first quarter of 2018 as compared to 0.65 percent for the fourth quarter of 2017 due to a slight shift in average non-interest bearing deposits within the mix of total average deposits.

Non-Interest Income

Non-interest income increased $2.1 million, or 6.9 percent, to $32.3 million for the first quarter of 2018 from $30.2 million for the fourth quarter of 2017 mostly due to higher service charges on deposit accounts driven by the acquisition of USAB on January 1, 2018.  Other non-interest income included fee income related to derivative interest rate swaps executed with commercial loan customers totaling $3.3 million and $2.6 million for first quarter of 2018 and fourth quarter of 2017, respectively.  

Non-Interest Expense

Non-interest expense increased $37.4 million, or 27.5 percent, to $173.8 million for the first quarter of 2018 from the fourth quarter of 2017 mainly due to increases of $28.7 million and $11.3 million in salary and employee benefits and professional and legal fees, respectively.  The increase in salary and employee benefits was due, in part, to the additional staffing costs and $9.6 million of change in control, severance and retention expenses related to the USAB acquisition, mostly normal increases in payroll and stock-based compensation expense, and, to a lesser extent, expansion of our home mortgage consultant team as compared to the fourth quarter.  Professional and legal fees included a $10.5 million charge related to an increase in our litigation reserves during the first quarter of 2018. Total USAB merger related expenses were $13.4 million (including the $9.6 million of aforementioned salary and employee benefit expenses) and $1.4 million for the first quarter of 2018 and fourth quarter of 2017, respectively.  Amortization of tax credit investments decreased $15.0 million to $5.3 million for the first quarter of 2018 as compared to fourth quarter of 2017 largely due to the timing of tax credits and a fourth quarter impairment charge of $4.3 million related to the Tax Act.

Income Tax Expense

Income tax expense totaled $13.2 million for the first quarter of 2018 as compared to $35.0 million and $18.1 million for the fourth quarter of 2017 and first quarter of 2017, respectively.  Our effective tax rate was 23.9 percent, 57.3 percent and 28.2 percent for the first quarter of 2018, fourth quarter of 2017, and first quarter of 2017, respectively.  The higher income tax expense and effective tax rate for the fourth quarter of 2017 reflect a $15.4 million charge resulting from the re-measurement of Valley's estimated net deferred tax assets as of December 31, 2017 under the provisions of the Tax Act. For the remainder of 2018, we currently estimate that our effective tax rate will range from 20 percent to 22 percent primarily reflecting the impacts of the Tax Act, tax-exempt income, tax-advantaged investments and general business credits.

Loans, Deposits and Other Borrowings

Loans. Loans increased $4.2 billion to approximately $22.6 billion at March 31, 2018 from December 31, 2017 largely due to $3.7 billion in acquired PCI loans from USAB on January 1, 2018. The remaining increase was mainly due to strong quarter over quarter organic growth in total commercial real estate loans, commercial and industrial loans and residential mortgage loans.  During the first quarter of 2018, Valley also originated $228 million of residential mortgage loans for sale rather than held for investment.  Residential mortgage loans held for sale totaled $8.4 million and $15.1 million at March 31, 2018 and December 31, 2017, respectively.

Total commercial and industrial loans increased $890.2 million from December 31, 2017 to approximately $3.6 billion at March 31, 2018 mostly due to $721.6 million in PCI loans acquired from USAB and strong organic growth largely within the newly expanded Florida markets.

Commercial real estate loans (excluding construction loans) increased $2.2 billion from December 31, 2017 to $11.7 billion at March 31, 2018 mostly due to $2.0 billion in PCI loans acquired from USAB. The non-PCI loans increased $242.9 million, or 11.3 percent on an annualized basis, due to solid organic loan volumes in our primary markets, including approximately $129 million of loans from the new Florida markets. Construction loans increased $521.4 million to $1.4 billion at March 31, 2018 from December 31, 2017 largely due to $384.5 million of PCI loans acquired from USAB. The remaining net increase was mainly driven by organic growth in the new Florida markets, as well as advances on existing construction projects.

Total residential mortgage loans increased $462.5 million to approximately $3.3 billion at March 31, 2018 from December 31, 2017 mostly due to $365.9 million in PCI loans acquired from USAB and new and refinanced loan originations held for investment. Our growing team of home mortgage consultants continued to produce strong origination volumes during the first quarter. New and refinanced residential mortgage loan originations totaled approximately $372 million for the first quarter of 2018 as compared to $291 million and $164 million for the fourth quarter of 2017 and first quarter of 2017, respectively.

Home equity loans totaling $549.3 million at March 31, 2018 increased by $103.0 million as compared to December 31, 2017 due to $109.8 million of PCI loans acquired from USAB.  Exclusive of the acquired loans, new home equity loan volumes and customer usage of existing home equity lines of credit continues to be weak.  We believe this trend may continue in 2018 due to many factors, including the recent Tax Act changes that limit the deductibility of mortgage interest expense for homeowners.

Automobile loans increased by $13.8 million, or 4.6 percent on an annualized basis, to $1.2 billion at March 31, 2018 as compared to December 31, 2017.  However, the overall new auto loan origination volumes decreased approximately 12.9 percent during the first quarter of 2018 as compared to the fourth quarter of 2017 mainly due to the impact of inclement weather on auto sales in the Northeast region. Our Florida dealership network contributed over $35 million in auto loan originations, representing approximately 24 percent of Valley's total new auto loan production during the first quarter of 2018 and was relatively consistent with the linked fourth quarter of 2017.

Other consumer loans increased $20.8 million to $748.8 million at March 31, 2018 as compared to $728.1 million at December 31, 2017 partly due to $10.6 million of PCI loans acquired from USAB and continued growth and customer usage of collateralized personal lines of credit. 

Deposits. Total deposits increased $3.8 billion to approximately $22.0 billion at March 31, 2018 from December 31, 2017 largely due to $3.6 billion in deposits assumed in the USAB acquisition. The remaining increase is largely due to the continued success of our time deposit and other interest bearing deposit initiatives commencing in 2017. Non-interest bearing deposits; savings, NOW, money market deposits; and time deposits represented approximately 28 percent, 50 percent and 22 percent of total deposits as of March 31, 2018, respectively.

Other Borrowings. Short-term borrowings increased $869.8 million to approximately $1.6 billion at March 31, 2018 as compared to December 31, 2017 largely due to $650.0 of borrowings assumed in the USAB acquisition, consisting of FHLB borrowings and securities sold under agreements to repurchase. The remaining increase was mostly due to new FHLB advances used for normal loan funding activity  and liquidity purposes during the first quarter of 2018. Long-term borrowings increased $37.7 million to $2.4 billion at March 31, 2018 as compared to December 31, 2017 mostly due to subordinated notes assumed in the USAB acquisition.

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. Our PCI loan portfolio totaled $4.9 billion, or 21.8 percent, of our total loan portfolio at March 31, 2018 and included all of the loans acquired from USAB on January 1, 2018.

Total non-performing assets (NPAs), consisting of non-accrual loans, other real estate owned (OREO) and other repossessed assets increased $17.5 million to $75.0 million at March 31, 2018 as compared to December 31, 2017 mainly due to increases in non-accrual loans and OREO during the first quarter of 2018.  OREO totaled $13.8 million at March 31, 2018 and included $4.1 million of acquired OREO from USAB.   

Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) decreased $47.3 million to $33.2 million, or 0.15 percent of total loans, at March 31, 2018 as compared to $80.5 million, or 0.44 percent of total loans, at December 31, 2017. The lower level of accruing past due loans was primarily caused by decreases of $27.6 million and $21.0 million in the loans 30 to 59 days past due and 60 to 89 days past due loan categories at March 31, 2018, respectively, as compared to December 31, 2017.  These decreases were largely caused by the renewal of matured performing loans and the improved performance of several loan relationships previously reported within the commercial real estate and construction loan delinquency categories at December 31, 2017.

During the first quarter of 2018, we continued to closely monitor our NYC and Chicago taxi medallion loans within the commercial and industrial loan portfolio.  While the vast majority of the taxi medallion loans are currently performing, negative trends in the market valuations of the underlying taxi medallion collateral could impact the future performance and internal classification of this portfolio. At March 31, 2018, the NYC and Chicago taxi medallion loans totaling $126.8 million and $9.3 million, respectively, were largely classified as substandard and special mention loans.  The criticized loan classifications are primarily due to the elevated general risk associated with the current medallion market. At March 31, 2018, the medallion portfolio included impaired loans totaling $65.0 million with related reserves of $19.9 million within the allowance for loan losses as compared to impaired loans totaling $63.9 million with related reserves of $9.1 million at December 31, 2017.  At March 31, 2018, the impaired medallion loans largely consisted of performing troubled debt restructured (TDR) loans classified as substandard loans, as well as $13.9 million of non-accrual taxi cab medallion loans classified as doubtful loans.

Valley's historical taxi medallion lending criteria had been conservative in regards to capping the loan amounts in relation to market valuations, as well as obtaining personal guarantees and other collateral in certain instances. However, the severe decline in the market valuation of taxi medallions has adversely affected the estimated fair valuation of these loans and, as a result, increased the level of our allowance for loan losses at March 31, 2018 (see further discussion below).  Potential further declines in the market valuation of taxi medallions could also negatively impact the future performance of this portfolio.

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, 2018, December 31, 2017, and March 31, 2017:

 



March 31, 2018


December 31, 2017


March 31, 2017





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*

$

70,388



1.94

%


$

60,828



2.22

%


$

53,541



2.03

%

Commercial real estate loans:













Commercial real estate

36,109



0.31

%


36,293



0.38

%


38,146



0.42

%


Construction

20,570



1.50

%


18,661



2.19

%


18,156



2.17

%

Total commercial real estate loans

56,679



0.43

%


54,954



0.53

%


56,302



0.57

%

Residential mortgage loans

4,100



0.12

%


3,605



0.13

%


3,592



0.13

%

Consumer loans:













Home equity

547



0.10

%


579



0.13

%


433



0.09

%


Auto and other consumer

4,990



0.25

%


4,486



0.23

%


3,828



0.22

%

Total consumer loans

5,537



0.22

%


5,065



0.21

%


4,261



0.19

%

Total allowance for credit losses

$

136,704



0.61

%


$

124,452



0.68

%


$

117,696



0.67

%

Allowance for credit losses as a %












of non-PCI loans



0.78

%




0.73

%




0.75

%














* Includes the reserve for unfunded letters of credit.











 

Our loan portfolio, totaling $22.6 billion at March 31, 2018, had net recoveries of loan charge-offs totaling $1.3 million and $772 thousand for the first quarter of 2018 and the fourth quarter of 2017, respectively, as compared to net loan charge-offs of $1.4 million for the first quarter of 2017. The net loan recoveries during the first quarter of 2018 was mainly due to one commercial and industrial loan charge-off recovery totaling $1.6 million and the continued low level of loan charge-offs.  During the first quarter of 2018, we recorded a $10.9 million provision for credit losses as compared to $2.2 million and $2.5 million for the fourth quarter of 2017 and the first quarter of 2017, respectively. The quarter over quarter increase in the provision was mainly due to higher specific reserves allocated to impaired taxi medallion loans at March 31, 2018, as well as non-PCI loan growth during the first quarter of 2018.

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 0.61 percent, 0.68 percent and 0.67 percent at March 31, 2018, December 31, 2017 and March 31, 2017, respectively.  At March 31, 2018, our allowance allocations for losses as a percentage of total loans decreased across most loan categories as compared to December 31, 2017 mainly due to higher loan balances resulting from the USAB acquisition on January 1, 2018 and the prolonged low level of net loan charge-offs in the portfolio.

Our allowance for credit losses as a percentage of total non-PCI loans (excluding PCI loans with carrying values totaling approximately $4.9 billion) was 0.78 percent, 0.73 percent and 0.75 percent March 31, 2018, December 31, 2017 and  March 31, 2017, respectively. 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 March 31, 2018, December 31, 2017 and March 31, 2017.

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 11.94 percent, 9.78 percent, 7.75 percent and 8.82 percent, respectively, at March 31, 2018.  

Investor Conference Call

Valley will host a conference call with investors and the financial community at 11:00 AM Eastern Standard Time, today to discuss the first quarter 2018 earnings.  Those wishing to participate in the call may dial toll-free (800) 230-1085.  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 $29.5 billion in assets, reflecting the recent acquisition of USAB. Its principal subsidiary, Valley National Bank, currently operates over 230 branch locations in northern and central New Jersey, the New York City boroughs of Manhattan, Brooklyn, Queens and Long Island, Florida and Alabama. 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. For more information about Valley National Bank and its products and services, please visit www.valleynationalbank.com or call our Customer Service Center at 800-522-4100.  

Forward Looking Statements

The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements are not historical facts and include expressions about management's confidence and strategies and management's expectations about new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. 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, Florida and Alabama, as well as an unexpected decline in commercial real estate values within our market areas;
  • 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 merger integration; the inability to realize expected cost savings and synergies from the merger of USAB with Valley in the amounts or in the timeframe anticipated;
  • the inability to retain USAB's customers and employees;
  • less than expected cost reductions and revenue enhancement from Valley's cost reduction plans including its earnings enhancement program called "LIFT";
  • higher or lower than expected income tax expense or tax rates, including increases or decreases resulting from the impact of the Tax Act and other changes in tax laws, regulations and case law;
  • 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;
  • 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; and
  • the failure of other financial institutions with whom we have trading, clearing, counterparty and other financial relationships.

A detailed discussion of factors that could affect our results is included in our SEC filings, including the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 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


March 31,


December 31,


March 31,

($ in thousands, except for share data)

2018


2017


2017

FINANCIAL DATA:






Net interest income

$

207,598



$

169,414



$

161,868


Net interest income - FTE (1)

209,120



171,394



164,041


Non-interest income

32,251



30,159



25,720


Non-interest expense

173,752



136,317



120,952


Income tax expense

13,184



34,958



18,071


Net income

41,965



26,098



46,095


Dividends on preferred stock

3,172



3,172



1,797


Net income available to common shareholders

$

38,793



$

22,926



$

44,298


Weighted average number of common shares outstanding:






Basic

330,727,416



264,332,895



263,797,024


Diluted

332,465,527



265,288,067



264,546,266


Per common share data:






Basic earnings

$

0.12



$

0.09



$

0.17


Diluted earnings

0.12



0.09



0.17


Cash dividends declared

0.11



0.11



0.11


Closing stock price - high

13.38



12.17



12.76


Closing stock price - low

11.19



11.00



11.28


CORE ADJUSTED FINANCIAL DATA: (2)






Net income available to common shareholders, as adjusted

$

58,334



$

42,591



$

44,311


Basic earnings per share, as adjusted


0.18




0.16




0.17


Diluted earnings per share, as adjusted

0.18



0.16



0.17


FINANCIAL RATIOS:






Net interest margin

3.10

%


3.09

%


3.09

%

Net interest margin - FTE (1)

3.13



3.13



3.13


Annualized return on average assets

0.57



0.44



0.80


Annualized return on avg. shareholders' equity

5.10



4.07



7.69


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

7.90



5.71



11.09


Efficiency ratio (3)

72.44



68.30



64.48


CORE ADJUSTED FINANCIAL RATIOS: (2)






Annualized return on average assets, as adjusted

0.84

%


0.77

%


0.80

%

Annualized return on average shareholders' equity, as adjusted

7.48



7.14



7.69


Annualized return on average tangible shareholders' equity, as adjusted

11.57



10.00



11.09


Efficiency ratio, as adjusted

60.29



57.44



61.64


AVERAGE BALANCE SHEET ITEMS:





Assets

$

29,291,703



$

23,907,011



$

22,996,286


Interest earning assets

26,750,806



21,932,517



20,949,464


Loans

22,302,991



18,242,690



17,313,100


Interest bearing liabilities

19,690,165



15,919,382



15,285,171


Deposits

21,882,034



17,812,343



17,366,768


Shareholders' equity

3,289,815



2,562,326



2,399,159


 

 

VALLEY NATIONAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS



As Of

BALANCE SHEET ITEMS:

March 31,


December 31,


September 30,


June 30,


March 31,

(In thousands)

2018


2017


2017


2017


2017

Assets

$

29,464,357



$

24,002,306



$

23,780,661



$

23,449,350



$

23,220,456


Total loans

22,552,767



18,331,580



18,201,462



17,710,760



17,449,498


Non-PCI loans

17,636,934



16,944,365



16,729,607



16,169,291



15,794,797


Deposits

21,959,846



18,153,462



17,312,766



17,250,018



17,331,141


Shareholders' equity

3,245,003



2,533,165



2,537,984



2,423,901



2,398,541












LOANS:










(In thousands)










Commercial and industrial

$

3,631,597



$

2,741,425



$

2,706,912



$

2,631,312



$

2,642,319


Commercial real estate:










   Commercial real estate

11,706,228



9,496,777



9,351,068



9,230,514



9,016,418


   Construction

1,372,508



851,105



903,640



881,073



835,854


 Total commercial real estate

13,078,736



10,347,882



10,254,708



10,111,587



9,852,272


Residential mortgage

3,321,560



2,859,035



2,941,435



2,724,777



2,745,447


Consumer:










   Home equity

549,329



446,280



448,842



450,510



458,891


   Automobile

1,222,721



1,208,902



1,171,685



1,150,343



1,150,053


   Other consumer

748,824



728,056



677,880



642,231



600,516


Total consumer loans

2,520,874



2,383,238



2,298,407



2,243,084



2,209,460


Total loans

$

22,552,767



$

18,331,580



$

18,201,462



$

17,710,760



$

17,449,498












CAPITAL RATIOS:










Book value per common share

$

9.16



$

8.79



$

8.81



$

8.76



$

8.67


Tangible book value per common share (2)

5.65



6.01



6.04



5.98



5.88


Tangible common equity to tangible assets (2)

6.61

%


6.83

%


6.92

%


6.95

%


6.90

%

Tier 1 leverage capital

7.75



8.03



8.13



7.69



7.70


Common equity tier 1 capital

8.82



9.22



9.22



9.18



9.12


Tier 1 risk-based capital

9.78



10.41



10.42



9.81



9.76


Total risk-based capital

11.94



12.61



12.61



11.99



11.96


 

 

VALLEY NATIONAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS



Three Months Ended

ALLOWANCE FOR CREDIT LOSSES:

March 31,


December 31,


March 31,

($ in thousands)

2018


2017


2017

Beginning balance - Allowance for credit losses

$

124,452



$

121,480



$

116,604


Loans charged-off:






Commercial and industrial

(131)



(532)



(1,714)


Commercial real estate

(310)



(6)



(414)


Construction






Residential mortgage

(68)



(42)



(130)


Total Consumer

(1,211)



(1,097)



(1,121)


Total loans charged-off

(1,720)



(1,677)



(3,379)


Charged-off loans recovered:






Commercial and industrial

2,107



1,256



848


Commercial real estate

369



22



142


Construction



579




Residential mortgage

80



113



448


Total Consumer

468



479



563


Total loans recovered

3,024



2,449



2,001


Net recoveries (charge-offs)

1,304



772



(1,378)


Provision for credit losses

10,948



2,200



2,470


Ending balance - Allowance for credit losses

$

136,704



$

124,452



$

117,696


Components of allowance for credit losses:






Allowance for loan losses

$

132,862



$

120,856



$

115,443


Allowance for unfunded letters of credit

3,842



3,596



2,253


Allowance for credit losses

$

136,704



$

124,452



$

117,696


Components of provision for credit losses:






Provision for loan losses

$

10,702



$

1,118



$

2,402


Provision for unfunded letters of credit

246



1,082



68


Provision for credit losses

$

10,948



$

2,200



$

2,470


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

(0.02)

%


(0.02)

%


0.03

%

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

0.78

%


0.73

%


0.75

%

Allowance for credit losses as a % of total loans

0.61

%


0.68

%


0.67

%

 

 

VALLEY NATIONAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS



As of

ASSET QUALITY: (4)

March 31,


December 31,


September 30,


June 30,


March 31,

($ in thousands)

2018


2017


2017


2017


2017

Accruing past due loans:










30 to 59 days past due:










Commercial and industrial

$

5,405



$

3,650



$

1,186



$

2,391



$

29,734


Commercial real estate

3,699



11,223



4,755



6,983



11,637


Construction

532



12,949







7,760


Residential mortgage

6,460



12,669



7,942



4,677



7,533


Total Consumer

5,244



8,409



5,205



4,393



3,740


Total 30 to 59 days past due

21,340



48,900



19,088



18,444



60,404


60 to 89 days past due:










Commercial and industrial

804



544



3,043



2,686



341


Commercial real estate





626



8,233



359


Construction

1,099



18,845



2,518



854




Residential mortgage

4,081



7,903



1,604



1,721



4,177


Total Consumer

1,489



1,199



1,019



1,007



787


Total 60 to 89 days past due

7,473



28,491



8,810



14,501



5,664


90 or more days past due:










Commercial and industrial

653





125





405


Commercial real estate

27



27



389



2,315




Construction







2,879




Residential mortgage

3,361



2,779



1,433



3,353



1,355


Total Consumer

372



284



301



275



314


Total 90 or more days past due

4,413



3,090



2,248



8,822



2,074


Total accruing past due loans

$

33,226



$

80,481



$

30,146



$

41,767



$

68,142


Non-accrual loans:










Commercial and industrial

$

25,112



$

20,890



$

11,983



$

11,072



$

8,676


Commercial real estate

8,679



11,328



13,870



15,514



15,106


Construction

732



732



1,116



1,334



1,461


Residential mortgage

22,694



12,405



12,974



12,825



11,650


Total Consumer

3,104



1,870



1,844



1,409



1,395


Total non-accrual loans

60,321



47,225



41,787



42,154



38,288


Other real estate owned (OREO)

13,773



9,795



10,770



10,182



10,737


Other repossessed assets

858



441



480



342



475


Non-accrual debt securities (5)





2,115



1,878



2,007


Total non-performing assets

$

74,952



$

57,461



$

55,152



$

54,556



$

51,507


Performing troubled debt restructured loans

$

116,414



$

117,176



$

113,677



$

109,802



$

80,360


Total non-accrual loans as a % of loans

0.27

%


0.26

%


0.23

%


0.24

%


0.22

%

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

0.41

%


0.70

%


0.40

%


0.47

%


0.61

%

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

220.26

%


255.92

%


284.70

%


276.24

%


301.51

%

Non-performing purchased credit-impaired loans (6)

$

62,857



$

38,088



$

25,413



$

33,715



$

25,857


 

 

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 21 and 35 percent federal tax rate for periods ending in 2018 and 2017, respectively.  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



March 31,


December 31,


March 31,


($ in thousands, except for share data)

2018


2017


2017


Adjusted net income available to common shareholders:







Net income, as reported

$

41,965



$

26,098



$

46,095



Add:  Losses on securities transactions (net of tax)

446



15



13



Add:  Legal expenses (litigation reserve impact only, net of tax)

7,520







Add:  Merger related expenses (net of tax)*

9,575



1,073





Add: Amortization of tax credit investments (Tax Act impact only, net of 
        tax)



3,136






Add: Income Tax Expense (USAB charge and Tax Act impacts only)

2,000



15,441






Net income, as adjusted

$

61,506



$

45,763



$

46,108



Dividends on preferred stock

3,172



3,172



1,797



Net income available to common shareholders, as adjusted

$

58,334



$

42,591



$

44,311










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


Adjusted per common share data:







Net income available to common shareholders, as adjusted

$

58,334



$

42,591



$

44,311



Average number of shares outstanding

330,727,416



264,332,895



263,797,024



Basic earnings, as adjusted

$

0.18



$

0.16



$

0.17



Average number of diluted shares outstanding

332,465,527



265,288,067



264,546,266



Diluted earnings, as adjusted

$

0.18



$

0.16



$

0.17



Adjusted annualized return on average tangible shareholders' equity:







Net income, as adjusted

$

61,506



$

45,763



$

46,108



Average shareholders' equity

3,289,815



2,562,326



2,399,159



Less: Average goodwill and other intangible assets

(1,164,230)



(732,604)



(736,178)



Average tangible shareholders' equity

$

2,125,585



$

1,829,722



$

1,662,981



Annualized return on average tangible shareholders' equity

 

11.57

%


10.00

%


11.09

%


Adjusted annualized return on average assets:







Net income, as adjusted

$

61,506



$

45,763



$

46,108



Average assets

$

29,291,703



$

23,907,011



$

22,996,286



Annualized return on average assets, as adjusted

0.84

%


0.77

%


0.80

%


Adjusted annualized return on average shareholders' equity:







Net income, as adjusted

$

61,506



$

45,763



$

46,108



Average shareholders' equity

$

3,289,815



$

2,562,326



$

2,399,159



Annualized return on average shareholders' equity, as adjusted

7.48

%


7.14

%


7.69

%

 

 

 

VALLEY NATIONAL BANCORP

CONSOLIDATED FINANCIAL HIGHLIGHTS



Three Months Ended


March 31,


December 31,


March 31,

($ in thousands)

2018


2017


2017

Annualized return on average tangible shareholders' equity:






Net income, as reported

$

41,965



$

26,098



$

46,095


Average shareholders' equity

3,289,815



2,562,326



2,399,159


   Less: Average goodwill and other intangible assets

(1,164,230)



(732,604)



(736,178)


Average tangible shareholders' equity

$

2,125,585



$

1,829,722



$

1,662,981


Annualized return on average tangible shareholders' equity, as adjusted

7.90

%


5.71

%


11.09

%

Adjusted efficiency ratio:






Non-interest expense

$

173,752



$

136,317



$

120,952


   Less:  Legal expenses (litigation reserve impact only, pre-tax)

10,500






   Less:  Merger-related expenses (pre-tax)

13,369



1,378




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

5,274



20,302



5,324


Non-interest expense, as adjusted

$

144,609



$

114,637



$

115,628


Net interest income

207,598



169,414



161,868


Non-interest income

32,251



30,159



25,720


Gross operating income

$

239,849



$

199,573



$

187,588


Efficiency ratio, as adjusted

60.29

%


57.44

%


61.64

%

 

 


As of


March 31,


December 31,


September 30,


June 30,


March 31,

($ in thousands, except for share data)

2018


2017


2017


2017


2017

Tangible book value per common share:










Common shares outstanding

331,189,859



264,468,851



264,197,172



263,971,766



263,842,268


Shareholders' equity

$

3,245,003



$

2,533,165



$

2,537,984



$

2,423,901



$

2,398,541


   Less: Preferred stock

(209,691)



(209,691)



(209,691)



(111,590)



(111,590)


   Less: Goodwill and other intangible assets

(1,165,379)



(733,144)



(733,498)



(734,337)



(735,595)


Tangible common shareholders' equity

$

1,869,933



$

1,590,330



$

1,594,795



$

1,577,974



$

1,551,356


Tangible book value per common share

$

5.65



$

6.01



$

6.04



$

5.98



$

5.88


Tangible common equity to tangible assets:









Tangible common shareholders' equity

$

1,869,933



$

1,590,330



$

1,594,795



$

1,577,974



$

1,551,356


Total assets

29,464,357



24,002,306



23,780,661



23,449,350



23,220,456


   Less: Goodwill and other intangible assets

(1,165,379)



(733,144)



(733,498)



(734,337)



(735,595)


Tangible assets

$

28,298,978



$

23,269,162



$

23,047,163



$

22,715,013



$

22,484,861


Tangible common equity to tangible assets

6.61

%


6.83

%


6.92

%


6.95

%


6.90

%



(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) 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 and $745 thousand at September 30, 2017, June 30, 2017 and March 31, 2017, respectively) after recognition of all credit impairments.  There were
      no non-accrual debt securities at March 31, 2018 and December 31, 2017.

(6) 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)



March 31,


December 31,


2018


2017


 (Unaudited)



Assets




Cash and due from banks

$

222,311



$

243,310


Interest bearing deposits with banks

274,349



172,800


Investment securities:




Held to maturity (fair value of $2,014,954 at March 31, 2018 and $1,837,620 at
        December 31, 2017)

2,048,583



1,842,691


Available for sale

1,843,514



1,493,905


Total investment securities

3,892,097



3,336,596


Loans held for sale, at fair value

8,449



15,119


Loans

22,552,767



18,331,580


Less: Allowance for loan losses

(132,862)



(120,856)


Net loans

22,419,905



18,210,724


Premises and equipment, net

346,700



287,705


Bank owned life insurance

436,334



386,079


Accrued interest receivable

86,804



73,990


Goodwill

1,078,892



690,637


Other intangible assets, net

86,487



42,507


Other assets

612,029



542,839


Total Assets

$

29,464,357



$

24,002,306


Liabilities




Deposits:




Non-interest bearing

$

6,124,256



$

5,224,928


Interest bearing:




Savings, NOW and money market

11,077,789



9,365,013


Time

4,757,801



3,563,521


Total deposits

21,959,846



18,153,462


Short-term borrowings

1,618,416



748,628


Long-term borrowings

2,353,548



2,315,819


Junior subordinated debentures issued to capital trusts

55,109



41,774


Accrued expenses and other liabilities

232,435



209,458


Total Liabilities

26,219,354



21,469,141


Shareholders' Equity




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




Series A (4,600,000 shares issued at March 31, 2018 and December 31, 2017)

111,590



111,590


Series B (4,000,000 shares issued at March 31, 2018 and December 31, 2017)

98,101



98,101


Common stock (no par value, authorized 450,000,000 shares; issued 331,202,537 shares at
     March 31, 2018 and 264,498,643 shares at December 31, 2017)

115,824



92,727


Surplus

2,784,194



2,060,356


Retained earnings

199,555



216,733


Accumulated other comprehensive loss

(64,103)



(46,005)


Treasury stock, at cost (12,678 common shares at March 31, 2018 and 29,792 common 
      shares at December 31, 2017)

(158)



(337)


Total Shareholders' Equity

3,245,003



2,533,165


Total Liabilities and Shareholders' Equity

$

29,464,357



$

24,002,306


 

 

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except for share data)



Three Months Ended


March 31,


December 31,


March 31,


2018


2017


2017

Interest Income






Interest and fees on loans

$

237,586



$

192,537



$

174,353


Interest and dividends on investment securities:






Taxable

21,323



18,237



17,589


Tax-exempt

5,721



3,673



4,031


Dividends

1,939



2,867



2,151


Interest on federal funds sold and other short-term investments

926



637



331


Total interest income

267,495



217,951



198,455


Interest Expense






Interest on deposits:






Savings, NOW and money market

22,317



16,762



10,183


Time

14,616



11,975



9,553


Interest on short-term borrowings

5,732



3,456



3,901


Interest on long-term borrowings and junior subordinated debentures

17,232



16,344



12,950


Total interest expense

59,897



48,537



36,587


Net Interest Income

207,598



169,414



161,868


Provision for credit losses

10,948



2,200



2,470


Net Interest Income After Provision for Credit Losses

196,650



167,214



159,398


Non-Interest Income






Trust and investment services

3,230



2,932



2,744


Insurance commissions

3,821



4,218



5,061


Service charges on deposit accounts

7,253



5,393



5,236


Losses on securities transactions, net

(765)



(25)



(23)


Fees from loan servicing

2,223



1,843



1,815


Gains on sales of loans, net

6,753



6,375



4,128


Bank owned life insurance

1,763



1,633



2,463


Other

7,973



7,790



4,296


Total non-interest income

32,251



30,159



25,720


Non-Interest Expense






Salary and employee benefits expense

93,292



64,560



65,927


Net occupancy and equipment expense

27,924



23,843



23,035


FDIC insurance assessment

5,498



5,163



5,127


Amortization of other intangible assets

4,293



2,420



2,536


Professional and legal fees

17,047



5,727



4,695


Amortization of tax credit investments

5,274



20,302



5,324


Telecommunication expense

3,594



2,091



2,659


Other

16,830



12,211



11,649


Total non-interest expense

173,752



136,317



120,952


Income Before Income Taxes

55,149



61,056



64,166


Income tax expense

13,184



34,958



18,071


Net Income

41,965



26,098



46,095


Dividends on preferred stock

3,172



3,172



1,797


Net Income Available to Common Shareholders

$

38,793



$

22,926



$

44,298


Earnings Per Common Share:






Basic

$

0.12



$

0.09



$

0.17


Diluted

0.12



0.09



0.17


Cash Dividends Declared per Common Share

0.11



0.11



0.11


Weighted Average Number of Common Shares Outstanding:






Basic

330,727,416



264,332,895



263,797,024


Diluted

332,465,527



265,288,067



264,546,266


 

 

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, 2018


December 31, 2017


March 31, 2017


 Average




Avg.


 Average




Avg.


 Average




Avg.

($ in thousands)

 Balance


Interest


Rate


 Balance


Interest


Rate


 Balance


Interest


Rate

Assets


















Interest earning assets:
















Loans (1)(2)

$

22,302,991



$

237,587



4.26

%


$

18,242,690



$

192,539



4.22

%


$

17,313,100



$

174,356



4.03

%

Taxable investments (3)

3,401,743



23,262



2.74

%


2,931,144



21,104



2.88

%


2,836,300



19,740



2.78

%

Tax-exempt investments (1)(3)

741,001



7,242



3.91

%


528,681



5,651



4.28

%


612,946



6,201



4.05

%

Federal funds sold and other interest

bearing deposits

305,071



926



1.21

%


230,002



637



1.11

%


187,118



331



0.71

%

Total interest earning assets

26,750,806



269,017



4.02

%


21,932,517



219,931



4.01

%


20,949,464



200,628



3.83

%

Other assets

2,540,897







1,974,494







2,046,822






Total assets

$

29,291,703







$

23,907,011







$

22,996,286






Liabilities and shareholders' equity


















Interest bearing liabilities:


















Savings, NOW and money market
deposits

$

11,175,982



$

22,317



0.80

%


$

9,085,986



$

16,762



0.74

%


$

9,049,446



$

10,183



0.45

%

Time deposits

4,594,368



14,616



1.27

%


3,478,046



11,975



1.38

%


3,178,452



9,553



1.20

%

Short-term borrowings

1,487,272



5,732



1.54

%


1,011,130



3,456



1.37

%


1,563,000



3,901



1.00

%

Long-term borrowings (4)

2,432,543



17,232



2.83

%


2,344,220



16,344



2.79

%


1,494,273



12,950



3.47

%

Total interest bearing liabilities

19,690,165



59,897



1.22

%


15,919,382



48,537



1.22

%


15,285,171



36,587



0.96

%

Non-interest bearing deposits

6,111,684







5,248,311







5,138,870






Other liabilities

200,039







176,992







173,086






Shareholders' equity

3,289,815







2,562,326







2,399,159






Total liabilities and shareholders' equity

$

29,291,703







$

23,907,011







$

22,996,286
























Net interest income/interest rate spread (5)



$

209,120



2.80

%




$

171,394



2.79

%




$

164,041



2.87

%

Tax equivalent adjustment



(1,522)







(1,980)







(2,173)




Net interest income, as reported



$

207,598







$

169,414







$

161,868




Net interest margin (6)





3.10

%






3.09

%






3.09

%

Tax equivalent effect





0.03

%






0.04

%






0.04

%

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





3.13

%






3.13

%






3.13

%



(1)           Interest income is presented on a tax equivalent basis using a 21 percent and 35 percent federal tax rate for 2018 and 2017, respectively.

(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.

 

Cision View original content:http://www.prnewswire.com/news-releases/valley-national-bancorp-reports-first-quarter-net-income-and-strong-organic-loan-growth-300636881.html

SOURCE Valley National Bancorp

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