WAYNE, N.J., Jan. 17 /PRNewswire-FirstCall/ -- Valley National Bancorp
(NYSE: VLY) ("Valley"), the holding company for Valley National Bank,
announced today annual and fourth quarter results for 2006. Net income for
the year ended December 31, 2006 was $163.7 million compared to $163.4
million for the same period in 2005. Fully diluted earnings per common
share were $1.40 for the year ended December 31, 2006 compared to $1.42 per
common share for the year ended December 31, 2005. All common share data is
adjusted to reflect a five percent stock dividend issued on May 22, 2006.
Net income for the fourth quarter of 2006 was $38.1 million compared to
$44.2 million for the fourth quarter of 2005. Fully diluted earnings per
common share were $0.33 for the fourth quarter of 2006, compared to $0.38
per common share in the same quarter of 2005. The decrease from 2005 was
mainly attributable to a decrease in income tax expense as a result of
management's reassessment of tax accruals during the fourth quarter of 2005
(See "Income Tax Expense" section below).
Set forth below are highlights of several significant events that
occurred during the fourth quarter of 2006:
-- Total interest income on a fully tax equivalent basis increased $2.3
million as the tax equivalent yield on average total loans improved by
10 basis points.
-- Net interest margin on a fully tax equivalent basis declined two basis
points from the third quarter to 3.42 percent primarily due to an
increase in funding costs.
-- Valley incurred $2.3 million in investment securities losses primarily
due to $67.6 million of investment securities called for redemption
prior to their scheduled maturity date.
-- Valley recognized a $3.8 million gain on the sale of an office
building located in Manhattan. The building, under a purchase
agreement since 2004 and closed in November 2006, was intended for
construction of a new branch, however, Valley ultimately decided to
sell the property and not pursue the project.
-- Valley repurchased approximately 1.3 million of its common shares at
an average price per share of $25.71 pursuant to its publicly
announced repurchase plan on May 14, 2003.
-- Due to the adoption of Statement of Financial Accounting Standards No.
158 on December 31, 2006, Valley recorded an $11.9 million decrease to
accumulated other comprehensive income to recognize the unfunded
portion of its various employee, officer, and director pension plans.
-- Valley opened three new branches in New Jersey. Additionally on
January 3, 2007, Valley opened its first branch office in Brooklyn.
Chairman's Comments
Gerald H. Lipkin, Chairman, President and CEO noted that, "Valley once
again recorded strong shareholder returns with an annual average return on
tangible shareholders' equity that exceeded 22.0 percent for the year,
while our annual return on average shareholders' equity for the year was
17.24 percent. We are pleased with our annual performance and credit
quality despite the persistence of the inverted yield curve that
contributed to slower loan growth and higher overall funding costs during
2006. Valley continues to diligently manage operating expenses and maintain
its balance sheet to optimize long-term returns for our shareholders.
During 2007, Valley intends to place more emphasis on non-interest
income derived from our substantial automobile lending operations. Valley
currently approves approximately half of the loan applications received
through its network of automobile dealers. Working in connection with third
parties, in 2007 Valley expects to originate and sell, without recourse,
some of the loan applications it historically has not approved and closed
as loans. We expect that the anticipated gains on sale and loan servicing
income from this activity will help increase non-interest income.
Additionally, we plan to originate for sale residential mortgage and
home equity loans with a broader customer risk profile to increase our
gains on sales of loans in the secondary market. Lastly, we will offer a
no-frills, low interest rate credit card to Valley's existing automobile
and mortgage loan customers. This initiative is expected to produce
additional credit card balances and interest income while minimizing the
risks normally associated with new card markets.
Valley's net interest margin remained relatively stable during the
fourth quarter of 2006, contracting only two basis points from the third
quarter of 2006. The margin contraction mainly reflects the competitive
deposit pricing within our markets, and we anticipate continued pressure on
the margin during the first half of 2007.
In the current interest rate environment, we believe targeted
repurchases of Valley's common shares are an attractive use of
shareholders' capital. As a result, we actively repurchased approximately
1.3 million common shares at an average price per share of $25.71 during
the fourth quarter. On January 17, 2007, Valley's Board of Directors
approved the repurchase of 3.5 million common shares in the open market or
in privately negotiated transactions, in addition to approximately 1.0
million common shares available to repurchase pursuant to Valley's publicly
announced repurchase plan on May 14, 2003.
Valley continued its focused branch expansion within one hour of our
headquarters in Wayne, New Jersey opening three additional branches in New
Jersey during the fourth quarter and nine new branch offices, including
three in Manhattan, since the beginning of 2006. In January 2007, Valley
opened the first of at least three new branches expected to be opened in
Brooklyn during 2007. Our expansion strategy is to find the most attractive
building sites to fill in and expand our presence in neighboring counties,
including Kings and Queens Counties in New York. While these new offices
immediately add franchise value, the additional operating costs will have a
negative impact on non-interest expense in the near-term."
Net Interest Income and Margin
Net interest income on a tax equivalent basis was $98.3 million for the
fourth quarter of 2006, a $4.5 million decrease from the same quarter of
2005 and a decrease of $879 thousand from the linked quarter ended
September 30, 2006. The decrease during the quarter was mainly a result of
an increase in funding costs of $3.2 million, or 15 basis points from the
third quarter of 2006.
The net interest margin on a tax equivalent basis was 3.42 percent for
the fourth quarter of 2006, a decline of two basis points from the linked
quarter ended September 30, 2006. The yield on average total loans
continued to improve as the fourth quarter of 2006 yield equaled 6.86
percent, an increase of 59 basis points from the same period a year ago and
a 10 basis point increase from the third quarter of 2006.
Valley's cost of total deposits remained relatively low by industry
standards at 2.52 percent for the fourth quarter of 2006 compared to 2.43
percent for the three months ended September 30, 2006. The increase of nine
basis points was within management's expectations given the competitive
rate environment.
Non-Interest Income
Non-interest income increased $6.3 million, or 46.6 percent, from the
third quarter of 2006, totaling approximately $19.8 million for the three
months ended December 31, 2006. Other income increased $4.0 million
primarily due to a $3.8 million gain on the sale of the Manhattan office
building during the fourth quarter of 2006. Net losses on securities
transactions were $2.5 million lower in the fourth quarter of 2006 compared
to the third quarter of 2006 primarily due to Valley's recognition of a
$4.7 million impairment loss on certain mortgage-backed and equity
securities held available for sale during the third quarter of 2006.
Comparatively, Valley incurred $2.3 million in investment securities losses
during the fourth quarter primarily due to $67.6 million of investment
securities called for redemption prior to their scheduled maturity date.
Non-interest income for the year ended December 31, 2006 decreased $1.7
million from $73.7 million for the same period in 2005. Net losses on
securities transactions increased $5.0 million from a year ago primarily
due to the $4.7 million impairment loss described above. Fees from loan
servicing decreased $1.0 million to $6.0 million for the year ended
December 31, 2006 compared to the same period in 2005 mainly due to smaller
balances of loans serviced resulting from refinance and payoff activity.
However, other income increased $3.5 million due to a $3.8 million gain on
the sale of the Manhattan office building during the fourth quarter of
2006. Bank owned life insurance income also increased $1.1 million, or 15.9
percent, primarily due to a higher yield on the underlying investment
securities.
Non-Interest Expense
Non-interest expense decreased $3.6 million, or 5.5 percent to $62.0
million for the fourth quarter of 2006 from $65.6 million for the linked
quarter ended September 30, 2006. Professional and legal fees decreased
$1.3 million from the linked quarter mainly due to tax planning fees
recognized during the third quarter of 2006. Salary and employee benefits
also declined $1.1 million in the fourth quarter when compared to the third
quarter of 2006 due to higher accruals for health care insurance, incentive
compensation, and pension costs during the third quarter.
Non-interest expense increased by $12.7 million, or 5.4 percent to
$250.3 million for the year ended December 31, 2006 from $237.6 million for
the year ended December 31, 2005. Salary and employee benefits increased
$6.2 million, or 4.7 percent, largely due to additional personnel at the
nine de novo branches opened during 2006 and the two acquisitions during
the first and second quarter of 2005, respectively. Net occupancy and
equipment expense increased $4.4 million from last year due to Valley's
branch expansion and two acquisitions in 2005, which includes, among other
things, additional rents, utilities, real estate taxes, and depreciation
charges in connection with investments in technology and facilities. Other
non-interest expense increased $1.8 million for the year ended December 31,
2006 compared to the same period in 2005 due to a slight rise in data
processing, telephone, debit card and service fees also mainly caused by
the branch expansion and acquisitions.
Income Tax Expense
Income tax expense was $13.1 million for the fourth quarter of 2006,
reflecting an effective tax rate of 25.6 percent, compared with $11.1
million for the fourth quarter of 2005, reflecting an effective tax rate of
20.0 percent. The increase over the prior comparable quarter was primarily
due to management's reassessment of required tax accruals in the fourth
quarter of 2005.
Income tax expense was $39.9 million for the year ended December 31,
2006, reflecting an effective tax rate of 19.6 percent, compared with $66.8
million for the year ended December 31, 2005, reflecting an effective tax
rate of 29.0 percent. The decrease is a result of increased low income
housing tax credits, higher tax exempt investment income, decreased state
income tax expense and tax benefits recognized during management's
reassessment of required tax accruals.
For 2007, Valley anticipates an effective tax rate of 29.0 percent,
compared to 19.6 percent for 2006. This rate is projected based upon
management's judgment regarding future results and could vary due to
changes in income, tax planning strategies and federal or state income tax
laws.
Loans and Deposits
During the quarter, loans increased $18.6 million to approximately $8.3
billion at December 31, 2006. The linked quarter increase in loans is
mainly comprised of increases in residential mortgage, commercial,
construction and consumer loans of $24.1 million, $23.3 million, $11.5
million and $5.3 million, respectively, partially offset by a $45.6 million
decrease in commercial mortgage loans. The decrease in commercial mortgage
loans was mainly due to lower loan volumes combined with some anticipated
large principal paydowns during the fourth quarter.
During the quarter, deposits increased $20.8 million from $8.5 billion
at September 30, 2006 primarily due to a $38.5 million increase in
non-interest bearing deposits, partially offset by an $18.8 million decline
in time deposits. The increase in non-interest bearing deposits is
primarily due to seasonal growth generally seen from our New York
commercial customers in the fourth quarter. Time deposits declined
primarily due to a reduction in higher cost municipal deposits, partially
offset by new retail deposits at the de novo branches. Future deposit
growth is expected to be dependent on earning asset demand combined with
the rates dictated by market competition versus the cost of alternative
funding sources.
Credit Quality
Net loan charge-offs for the fourth quarter of 2006 were $3.9 million
compared to $1.5 million for the fourth quarter of 2005, and $2.0 million
for the third quarter of 2006. The increase in net loan charge-offs from
the linked quarter is mainly due to three commercial loans totaling $1.8
million that were charged-off in the fourth quarter of 2006. The provision
for loan losses was $3.2 million for the fourth quarter of 2006 compared to
$1.5 million for the fourth quarter of 2005, and $1.6 million for the third
quarter of 2006. Total non-performing assets, consisting of non-accrual
loans, other real estate owned and other repossessed assets, totaled $28.9
million, or 0.35 percent of loans at December 31, 2006 down from $34.7
million or 0.42 percent at September 30, 2006. The decrease from the prior
quarter is primarily due to a decline in non-accrual loans caused by
significant paydown activity and the charge-off of two non-accrual
commercial loans totaling $750 thousand.
Loans past due 90 days or more and still accruing at December 31, 2006
were $3.8 million, or 0.05 percent of total loans, compared to $4.4
million, or 0.05 percent at December 31, 2005 and $2.1 million, or 0.02
percent at September 30, 2006. Total loans past due in excess of 30 days
were 0.84 percent of total loans at December 31, 2006 compared with 0.69
percent at September 30, 2006.
Financial Ratios
Valley's annualized return on average shareholders' equity was 15.89
percent and 19.16 percent for the fourth quarter of 2006 and 2005,
respectively, and was 17.24 percent and 19.17 percent for the years ended
December 31, 2006 and 2005, respectively. On a comparative basis, adjusting
for Valley's goodwill and other intangible assets, the annualized return on
average tangible shareholders' equity was 20.40 percent and 25.10 percent,
respectively, for the fourth quarter 2006 and 2005, and was 22.26 percent
and 23.61 percent for the years ended December 31, 2006 and 2005,
respectively. See "Notes to Selected Financial Data" section in the tables
that follow for information regarding the computation of these ratios.
For the fourth quarter of 2006 and 2005, annualized return on average
assets was 1.24 percent and 1.43 percent, respectively. For the years ended
December 31, 2006 and 2005, annualized return on average assets was 1.33
percent and 1.39 percent, respectively.
Valley's risk-based capital ratios were 10.56 percent for Tier 1
capital, 12.44 percent for total capital and 8.10 percent for Tier 1
leverage at December 31, 2006.
Valley National Bancorp is a regional bank holding company with over
$12 billion in assets, headquartered in Wayne, New Jersey. Its principal
subsidiary, Valley National Bank, currently operates 168 offices in 110
communities serving 13 counties throughout northern and central New Jersey,
Manhattan and Brooklyn.
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, relationships, opportunities, taxation, technology
and market conditions. These statements may be identified by such
forward-looking terminology as "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 from those contemplated by such
forward-looking statements include, among others, the following:
unanticipated changes in the direction of interest rates, effective income
tax rates, loan and investment prepayments and assumptions, levels of loan
quality and origination volume, relationships with major customers, as well
as the effects of unanticipated economic conditions and legal and
regulatory barriers including compliance issues related to AML/BSA
compliance and the development of new tax strategies or the disallowance of
prior tax strategies. Valley assumes no obligation for updating any such
forward-looking statement at any time.
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
Three Months Ended Years Ended
December 31, December 31,
(in thousands,
except for
share data) 2006 2005 2006 2005
FINANCIAL
DATA:
Net income $38,112 $44,248 $163,691 $163,449
Net interest
income 96,686 101,104 391,121 398,425
Net interest
income -
FTE(2) 98,292 102,803 397,680 405,234
Weighted
Average
Number of
Shares
Outstanding(3):
Basic 115,547,399 116,812,663 116,542,296 114,396,427
Diluted 116,101,969 117,225,108 117,017,758 114,819,259
Per share
data(3):
Basic
earnings $0.33 $0.38 $1.40 $1.43
Diluted
earnings 0.33 0.38 1.40 1.42
Cash
dividends
declared 0.22 0.21 0.85 0.83
Book value 8.23 7.97 8.23 7.97
Tangible book
value(1) 6.40 6.11 6.40 6.11
Closing
stock
price - high 26.60 23.84 27.00 25.23
Closing
stock
price - low 25.22 20.98 22.06 20.98
FINANCIAL RATIOS:
Net interest
margin 3.37% 3.49% 3.40% 3.63%
Net interest
margin - FTE(2) 3.42 3.55 3.46 3.69
Annualized
return on
average
assets 1.24 1.43 1.33 1.39
Annualized
return on
average
shareholders'
equity 15.89 19.16 17.24 19.17
Annualized
return on
average
tangible
shareholders'
equity(1) 20.40 25.10 22.26 23.61
Efficiency
ratio(4) 53.26 51.34 54.05 50.32
AVERAGE BALANCE
SHEET ITEMS:
Assets $12,322,751 $12,410,834 $12,299,281 $11,758,090
Interest
earning
assets 11,489,327 11,582,963 11,492,790 10,989,382
Loans 8,346,362 8,106,582 8,262,739 7,637,973
Interest
bearing
liabilities 9,410,401 9,465,024 9,393,111 8,949,683
Deposits 8,472,082 8,662,161 8,462,193 8,258,388
Shareholders'
equity 959,663 923,580 949,613 852,834
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
Three Months Ended Years Ended
December 31, December 31,
(Dollars in
thousands) 2006 2005 2006 2005
ALLOWANCE FOR LOAN
LOSSES:
Beginning of
period $75,362 $75,180 $75,188 $65,699
Provision for loan
losses 3,241 1,538 9,270 4,340
Charge-offs 4,441 2,448 12,088 7,601
Recoveries 556 918 2,348 3,498
Additions from
acquisitions 0 0 0 9,252
End of period $74,718 $75,188 $74,718 $75,188
As of December 31,
2006 2005
BALANCE SHEET
ITEMS:
Assets $12,395,027 $12,436,102
Loans 8,331,685 8,130,457
Deposits 8,487,651 8,570,001
Shareholders'
equity 949,590 931,910
CAPITAL RATIOS:
Tier 1 leverage
ratio 8.10% 7.82%
Risk-based capital
- Tier 1 10.56 10.28
Risk-based capital
- Total Capital 12.44 12.16
ASSET QUALITY:
Non-accrual loans $27,244 $25,794
Other real estate
owned 779 2,023
Other repossessed
assets 844 608
Total non-
performing assets 28,867 28,425
Loans past due 90
days or more and
still accruing 3,775 4,442
ASSET QUALITY
RATIOS:
Non-performing
assets to total
loans 0.35% 0.35%
Allowance for loan
losses to loans 0.90 0.92
Net charge-offs to
average loans 0.12 0.05
Valley National Bancorp
Consolidated Financial Highlights
NOTES TO SELECTED FINANCIAL DATA
(1) This press release contains certain supplemental financial
information, described in the following notes, which has been
determined by methods other than 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 and facilitates comparisons with the performance of
peers within the financial services industry.
Tangible book value and return on average tangible equity, which
represent non-GAAP measures, are computed as follows:
- Tangible book value is computed by dividing total
shareholders' equity less goodwill and other intangible assets
by shares outstanding.
- Return on average tangible equity is computed by dividing net
income by average shareholders' equity less average goodwill
and average identifiable intangible assets.
Three Months Ended Years Ended
December 31, December 31,
(Dollars in
thousands,
except for
share data) 2006 2005 2006 2005
Common
shares
outstanding
115,357,268 116,893,053 115,357,268 116,893,053
Shareholders'
equity $949,590 $931,910 $949,590 $931,910
Less:
Goodwill
and other
intangible
assets 211,355 217,354 211,355 217,354
Tangible
shareholders'
equity 738,235 714,556 738,235 714,556
Tangible
book
value $6.40 $6.11 $6.40 $6.11
Net income $38,112 $44,248 $163,691 $163,449
Average
shareholders'
equity 959,663 923,580 949,613 852,834
Less:
Average
goodwill
and other
intangible
assets 212,332 218,451 214,338 160,607
Average
tangible
share
holders'
equity 747,331 705,129 735,275 692,227
Annualized
return on
average
tangible
share
holders'
equity 20.40% 25.10% 22.26% 23.61%
(2) 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.
(3) Share data reflects a five percent stock dividend issued on May 22,
2006.
(4) The efficiency ratio measures Valley's total non-interest expense
as a percentage of net interest income plus total non-interest
income.
SHAREHOLDER RELATIONS
Requests for copies of reports and/or other inquiries should be directed
to Dianne Grenz, Director of Shareholder and Public Relations, Valley
National Bancorp, 1455 Valley Road, Wayne, New Jersey, 07470, by telephone
at (973) 305-3380, by fax at (973) 696-2044 or by e-mail at
dgrenz@valleynationalbank.com.
VALLEY NATIONAL BANCORP
Consolidated Statements of Financial Condition (Unaudited)
(in thousands, except for share data)
December 31,
Assets 2006 2005
Cash and due from banks $236,354 $246,119
Interest bearing deposits with banks 7,795 13,926
Federal funds sold 175,000 ---
Investment securities:
Held to maturity, fair value of
$1,090,883 and $1,218,081
at December 31, 2006 and 2005,
respectively 1,108,885 1,229,190
Available for sale 1,769,981 2,038,894
Trading securities 4,655 4,208
Total investment securities 2,883,521 3,272,292
Loans held for sale 4,674 3,497
Loans 8,331,685 8,130,457
Less: Allowance for loan losses (74,718) (75,188)
Net loans 8,256,967 8,055,269
Premises and equipment, net 209,397 182,739
Bank owned life insurance 189,157 182,789
Accrued interest receivable 63,356 57,280
Due from customers on acceptances
outstanding 9,798 11,314
Goodwill 181,497 179,898
Other intangible assets, net 29,858 37,456
Other assets 147,653 193,523
Total assets $12,395,027 $12,436,102
Liabilities
Deposits:
Non-interest bearing $1,996,237 $2,048,218
Interest bearing:
Savings, NOW and money market 3,561,807 4,026,249
Time 2,929,607 2,495,534
Total deposits 8,487,651 8,570,001
Short-term borrowings 362,615 582,575
Long-term borrowings 2,484,914 2,245,570
Bank acceptances outstanding 9,798 11,314
Accrued expenses and other
liabilities 100,459 94,732
Total liabilities 11,445,437 11,504,192
Shareholders' Equity*
Preferred stock, no par value,
authorized 30,000,000 shares; none
issued --- ---
Common stock, no par value,
authorized 173,139,309 shares;
issued 116,890,623 shares and
116,985,373 shares at
December 31, 2006
and 2005, respectively 41,212 39,302
Surplus 881,022 741,456
Retained earnings 97,639 177,332
Accumulated other comprehensive loss (30,873) (24,036)
Less: Treasury stock, at cost,
1,533,355 shares and 92,320 shares
at December 31, 2006 and 2005,
respectively (39,410) (2,144)
Total shareholders' equity 949,590 931,910
Total liabilities and
shareholders' equity $12,395,027 $12,436,102
* Share data reflects a five percent common stock dividend issued May 22,
2006.
VALLEY NATIONAL BANCORP
Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
Three Months Ended Years Ended
December 31, December 31,
2006 2005 2006 2005
Interest Income
Interest and fees on
loans $143,023 $126,982 $544,440 $461,443
Interest and
dividends on
investment
securities:
Taxable 33,858 37,696 140,979 145,266
Tax-exempt 2,913 3,076 11,886 12,331
Dividends 1,626 1,500 5,896 4,800
Interest on federal
funds sold and
other short-term
investments 2,063 600 4,170 1,244
Total interest
income 183,483 169,854 707,371 625,084
Interest Expense
Interest on
deposits:
Savings, NOW and
money market 20,048 18,620 75,822 55,456
Time 33,265 20,781 112,654 67,601
Interest on short-
term borrowings 4,340 5,099 18,211 16,516
Interest on long-
term borrowings 29,144 24,250 109,563 87,086
Total interest
expense 86,797 68,750 316,250 226,659
Net Interest Income 96,686 101,104 391,121 398,425
Provision for loan
losses 3,241 1,538 9,270 4,340
Net interest income
after provision for
loan losses 93,445 99,566 381,851 394,085
Non-Interest Income
Trust and investment
services 1,701 1,688 7,108 6,487
Insurance premiums 2,763 2,652 11,074 11,719
Service charges on
deposit accounts 5,943 5,643 23,242 22,382
Losses on securities
transactions, net (2,259) (3,140) (5,464) (461)
Gains on trading
securities, net 206 457 1,208 1,717
Fees from loan
servicing 1,433 1,740 5,970 7,011
Gains on sales of
loans, net 143 540 1,516 2,108
Bank owned life
insurance 2,076 1,921 8,171 7,053
Other 7,789 4,214 19,239 15,717
Total non-
interest
income 19,795 15,715 72,064 73,733
Non-Interest Expense
Salary expense 28,097 27,171 109,775 105,988
Employee benefit
expense 6,792 5,611 28,592 26,163
Net occupancy and
equipment expense 11,335 10,552 46,078 41,694
Amortization of
other intangible
assets 2,151 2,446 8,687 8,797
Professional and
legal fees 1,795 2,978 8,878 9,378
Advertising 2,402 1,525 8,469 7,535
Other 9,461 9,696 39,861 38,036
Total non-
interest
expense 62,033 59,979 250,340 237,591
Income before income
taxes 51,207 55,302 203,575 230,227
Income tax expense 13,095 11,054 39,884 66,778
Net Income $38,112 $44,248 $163,691 $163,449
Weighted Average
Number of Common
Shares
Outstanding:*
Basic 115,547,399 116,812,663 116,542,296 114,396,427
Diluted 116,101,969 117,225,108 117,017,758 114,819,259
Earnings Per Common
Share:*
Basic $0.33 $0.38 $1.40 $1.43
Diluted 0.33 0.38 1.40 1.42
Cash Dividends
Declared Per Common
Share* 0.22 0.21 0.85 0.83
* Share data reflects a five percent common stock dividend issued May 22,
2006.
Valley National Bancorp
(dollars in thousands)
Loan Portfolio
For the periods ended
12/31/2006 9/30/2006 6/30/2006
Commercial Loans $1,466,862 $1,443,539 $1,492,688
Construction 526,318 514,842 515,683
Residential Mortgage 2,106,306 2,082,233 2,093,694
Commercial Mortgage 2,309,217 2,354,791 2,311,897
Total Mortgage Loans 4,941,841 4,951,866 4,921,274
Home Equity 571,138 577,587 570,500
Credit Card 8,764 8,490 8,279
Automobile 1,238,145 1,229,450 1,234,005
Other Consumer 104,935 102,155 108,946
Total Consumer Loans 1,922,982 1,917,682 1,921,730
Total Loans $8,331,685 $8,313,087 $8,335,692
3/31/2006 12/31/2005
Commercial Loans $1,449,207 $1,449,919
Construction 456,478 471,560
Residential Mortgage 2,099,696 2,083,004
Commercial Mortgage 2,298,239 2,234,950
Total Mortgage Loans 4,854,413 4,789,514
Home Equity 559,118 565,960
Credit Card 8,061 9,044
Automobile 1,194,749 1,221,525
Other Consumer 95,252 94,495
Total Consumer Loans 1,857,180 1,891,024
Total Loans $8,160,800 $8,130,457
Quarterly Analysis of Average Assets, Liabilities and
Shareholders' Equity and Net Interest Income on a Tax Equivalent Basis
Quarter End - 12/31/06
Average Avg.
Balance Interest Rate
Assets
Interest earning assets:
Loans(1)(2) $8,346,362 $143,060 6.86%
Taxable investments(3) 2,709,053 35,484 5.24%
Tax-exempt investments(1)(3) 281,366 4,482 6.37%
Federal funds sold and other
interest bearing deposits 152,546 2,063 5.41%
Total interest earning assets 11,489,327 185,089 6.44%
Other assets 833,424
Total assets 12,322,751
Liabilities and shareholders' equity
Interest bearing liabilities:
Savings, NOW and money market
deposits $3,603,822 $20,048 2.23%
Time deposits 2,938,977 33,265 4.53%
Short-term borrowings 373,838 4,340 4.64%
Long-term borrowings 2,493,764 29,144 4.67%
Total interest bearing liabilities 9,410,401 86,797 3.69%
Non-interest bearing deposits 1,929,283
Other liabilities 23,404
Shareholders' equity 959,663
Total liabilities and shareholders'
equity $12,322,751
Net interest income/interest rate
spread(4) 98,292 2.75%
Tax equivalent adjustment (1,606)
Net interest income, as reported $96,686
Net interest margin(5) 3.37%
Tax equivalent effect 0.05%
Net interest margin on a fully tax
equivalent basis(5) 3.42%
Quarterly Analysis of Average Assets, Liabilities and
Shareholders' Equity and Net Interest Income on a Tax Equivalent Basis
Quarter End - 9/30/06
Average Avg.
Balance Interest Rate
Assets
Interest earning assets:
Loans(1)(2) $8,307,228 $140,355 6.76%
Taxable investments(3) 2,830,076 36,610 5.17%
Tax-exempt investments(1)(3) 285,387 4,502 6.31%
Federal funds sold and other
interest bearing deposits 99,987 1,312 5.25%
Total interest earning assets 11,522,678 182,779 6.35%
Other assets 800,964
Total assets 12,323,642
Liabilities and shareholders' equity
Interest bearing liabilities:
Savings, NOW and money market
deposits $3,666,485 $19,886 2.17%
Time deposits 2,900,781 31,573 4.35%
Short-term borrowings 386,034 4,318 4.47%
Long-term borrowings 2,492,702 27,831 4.47%
Total interest bearing liabilities 9,446,002 83,608 3.54%
Non-interest bearing deposits 1,918,596
Other liabilities 6,832
Shareholders' equity 952,212
Total liabilities and shareholders'
equity $12,323,642
Net interest income/interest rate
spread(4) 99,171 2.81%
Tax equivalent adjustment (1,614)
Net interest income, as reported $97,557
Net interest margin(5) 3.39%
Tax equivalent effect 0.05%
Net interest margin on a fully tax
equivalent basis(5) 3.44%
Quarterly Analysis of Average Assets, Liabilities and
Shareholders' Equity and Net Interest Income on a Tax Equivalent Basis
Quarter End - 6/30/06
Average Avg.
Balance Interest Rate
Assets
Interest earning assets:
Loans(1)(2) $8,243,355 $133,710 6.49%
Taxable investments(3) 2,919,614 37,107 5.08%
Tax-exempt investments(1)(3) 292,738 4,577 6.25%
Federal funds sold and other
interest bearing deposits 45,313 573 5.06%
Total interest earning assets 11,501,020 175,967 6.12%
Other assets 793,821
Total assets 12,294,841
Liabilities and shareholders' equity
Interest bearing liabilities:
Savings, NOW and money market
deposits $3,853,598 $18,865 1.96%
Time deposits 2,683,610 26,095 3.89%
Short-term borrowings 415,298 4,142 3.99%
Long-term borrowings 2,410,614 26,887 4.46%
Total interest bearing liabilities 9,363,120 75,989 3.25%
Non-interest bearing deposits 1,966,216
Other liabilities 19,487
Shareholders' equity 946,018
Total liabilities and shareholders'
equity $12,294,841
Net interest income/interest rate
spread(4) 99,978 2.87%
Tax equivalent adjustment (1,641)
Net interest income, as reported $98,337
Net interest margin(5) 3.42%
Tax equivalent effect 0.06%
Net interest margin on a fully tax
equivalent basis(5) 3.48%
Quarterly Analysis of Average Assets, Liabilities and
Shareholders' Equity and Net Interest Income on a Tax Equivalent Basis
Quarter End - 3/31/06
Average Avg.
Balance Interest Rate
Assets
Interest earning assets:
Loans(1)(2) $8,151,381 $127,472 6.26%
Taxable investments(3) 2,990,948 37,674 5.04%
Tax-exempt investments(1)(3) 297,505 4,726 6.35%
Federal funds sold and other
interest bearing deposits 17,624 222 5.04%
Total interest earning assets 11,457,458 170,094 5.94%
Other assets 797,420
Total assets 12,254,878
Liabilities and shareholders' equity
Interest bearing liabilities:
Savings, NOW and money market
deposits $3,916,783 $17,023 1.74%
Time deposits 2,529,421 21,721 3.43%
Short-term borrowings 565,787 5,411 3.83%
Long-term borrowings 2,339,703 25,701 4.39%
Total interest bearing liabilities 9,351,694 69,856 2.99%
Non-interest bearing deposits 1,939,995
Other liabilities 22,870
Shareholders' equity 940,319
Total liabilities and shareholders'
equity $12,254,878
Net interest income/interest rate
spread(4) 100,238 2.95%
Tax equivalent adjustment (1,697)
Net interest income, as reported $98,541
Net interest margin(5) 3.44%
Tax equivalent effect 0.06%
Net interest margin on a fully tax
equivalent basis(5) 3.50%
Quarterly Analysis of Average Assets, Liabilities and
Shareholders' Equity and Net Interest Income on a Tax Equivalent Basis
Quarter End - 12/31/05
Average Avg.
Balance Interest Rate
Assets
Interest earning assets:
Loans(1)(2) $8,106,582 $127,026 6.27%
Taxable investments(3) 3,115,049 39,196 5.03%
Tax-exempt investments(1)(3) 301,445 4,731 6.28%
Federal funds sold and other
interest bearing deposits 59,887 600 4.01%
Total interest earning assets 11,582,963 171,553 5.92%
Other assets 827,871
Total assets 12,410,834
Liabilities and shareholders' equity
Interest bearing liabilities:
Savings, NOW and money market
deposits $4,206,136 $18,620 1.77%
Time deposits 2,482,182 20,781 3.35%
Short-term borrowings 584,695 5,099 3.49%
Long-term borrowings 2,192,011 24,250 4.43%
Total interest bearing liabilities 9,465,024 68,750 2.91%
Non-interest bearing deposits 1,973,843
Other liabilities 48,387
Shareholders' equity 923,580
Total liabilities and shareholders'
equity $12,410,834
Net interest income/interest rate
spread(4) 102,803 3.01%
Tax equivalent adjustment (1,700)
Net interest income, as reported $101,103
Net interest margin(5) 3.49%
Tax equivalent effect 0.06%
Net interest margin on a fully tax
equivalent basis(5) 3.55%
(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) 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.
(5) Net interest income as a percentage of total average interest earning
assets.
SOURCE Valley National Bancorp
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Related links:
http://www.valleynationalbank.com
http://www.prnewswire.com/comp/141340.html /
CONTACT:
Alan D. Eskow, Executive Vice President and
Chief Financial Officer, Valley National Bancorp, +1-973-305-4003
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