WAYNE, N.J., April 18 /PRNewswire-FirstCall/ -- Valley National Bancorp
(NYSE: VLY) ("Valley"), the holding company for Valley National Bank,
announced today first quarter results for 2007. Net income was $49.4
million for the first quarter of 2007 compared to $40.9 million for the
first quarter of 2006, an increase of 20.8 percent. Adjusting for a five
percent stock dividend declared April 11, 2007, payable May 25, 2007 to
shareholders of record on May 11, 2007, fully diluted earnings per common
share were $0.41 for the first quarter of 2007 as compared to $0.33 per
common share from the same quarter of 2006.
All other common share data presented was adjusted to reflect the stock
dividend.
Set forth below are highlights of several significant events that
occurred during or after the first quarter of 2007:
-- On January 1, 2007, Valley elected to adopt Statements of Financial
Accounting Standards ("SFAS") No. 159 and 157 prior to the required
effective date of each standard. Valley selected the fair value
measurement option for certain pre-existing financial assets and
liabilities with carrying values totaling $1.6 billion and $246.2
million, respectively, immediately before the date of adoption. As a
result of this election, Valley reduced stockholders' equity by $29.5
million on January 1, 2007. See further discussion under the "Balance
Sheet" section below.
-- During April 2007, Valley executed a series of interest rate
derivative transactions. The purpose of the derivative transactions
is to offset changes in the market value of the financial assets to
which SFAS No. 159 has been applied. These derivative transactions
will not be designated as hedges under SFAS No. 133, but will be
marked to market through income.
-- Net income for the first quarter of 2007 includes $5.4 million in net
gains before income taxes on the change in fair value of financial
assets and liabilities measured under SFAS No. 159.
-- Net interest margin on a fully tax equivalent basis improved three
basis points from the fourth quarter of 2006 to 3.45 percent mainly
due to a reduction in higher cost time deposits.
-- Net interest income on a fully tax equivalent basis decreased $524
thousand from the fourth quarter of 2006 as loan prepayment penalties
declined and there were two less days in the first quarter of 2007.
-- Valley sold a nine-story building in Manhattan for approximately $37.5
million while simultaneously entering into a long-term lease for its
branch office located on the first floor of the same building. The
transaction resulted in a $32.3 million pre-tax gain, of which $16.4
million was immediately recognized in earnings as allowed under sale-
leaseback accounting rules. The remaining $15.9 million portion of
the gain was deferred and will be amortized into earnings over the 20
year term of the lease.
-- Valley repurchased approximately 770 thousand of its common shares at
an average price per share of $23.81 pursuant to its publicly
announced share repurchase plan on May 14, 2003.
-- Valley opened two new branches, including its first branch office in
Brooklyn, New York.
-- Moody's investors service raised its rating of Valley National Bank
from A2 to A1 on bank deposits and issuer rating.
-- The U.S. Banker Magazine ranked Valley 11th best among the 100 largest
banks in America for its three year average return on equity.
Chairman's Comments
Gerald H. Lipkin, Chairman, President and CEO noted that, "Valley
experienced stronger than normal first quarter earnings with an annualized
average return on tangible shareholders' equity of 27.99 percent, while our
annualized return on average shareholders' equity for the quarter was 21.57
percent. While we are pleased with our overall performance and credit
quality, the inverted yield curve continues to contribute to higher overall
funding costs and a decline in the net interest margin for the quarter
compared to the same period one year ago. Valley has and will continue to
diligently manage operating expenses and its balance sheet to optimize
long- term returns for our shareholders.
During the first quarter, Valley took advantage of a unique situation
and sold an office building in New York City for $37.5 million, far above
its book or perceived value. We only needed a small portion of the building
for our branch office and the sale allowed us to convert a non-earning
asset into cash that can be invested to improve future earnings. Although
Valley is not in the real estate business, Valley owns over 90 properties
with estimated unrealized equity of over $200 million. While there are no
current plans to sell these properties, management is always attentive to
opportunities that will produce the best long-term returns for our
shareholders.
As of March 31, 2007, Valley's residential and home equity loan
delinquency levels remained relatively low at 0.25 percent, in contrast to
approximately 2.87 percent for industry-wide prime mortgage loan portfolios
as recently reported by Moody's Economy.com. We would like to reaffirm
Valley is not a participant in sub-prime lending or negative amortization
loan markets. Currently, less than two percent of Valley's residential loan
portfolio has certain characteristics that are common with loans often
referred to as Alternative A, or Alt-A loans in the banking industry.
Valley mitigates the risks associated with such loans through various
underwriting requirements, such as higher income, more equity, higher FICO
scores or additional guarantors unlike typical Alt-A originators who simply
increase rates to reflect the higher risk. Valley's risk-based underwriting
approach has been and continues to be a key element in producing superior
loan performance at Valley, as evidenced by Valley's low current
delinquency rates on the residential loan portfolio and only two Alt-A
loans which are currently delinquent 30 days or more.
While the overall loan portfolio experienced seasonally low volumes
during the first quarter, auto loans increased 13.8 percent on an
annualized basis. Much of the increase is attributable to Valley's
strategic efforts to expand the geographic presence of its indirect auto
loan origination franchise. Nearly 40 percent of Valley dealer auto
originations were made outside of New Jersey during the first quarter of
2007, as compared to only 26 percent in the same period one year ago.
In the current interest rate environment, we believe targeted
repurchases of Valley's common shares are an attractive use of
shareholders' capital. We actively repurchased approximately 770 thousand
common shares at an average price per share of $23.81 during the first
quarter of 2007. On January 17, 2007, Valley's Board of Directors approved
the repurchase of approximately 3.7 million common shares in the open
market or in privately negotiated transactions, in addition to
approximately 326 thousand common shares available pursuant to Valley's
share repurchase plan publicly announced on May 14, 2003.
In 2007, Valley intends to continue its focused branch expansion in
northern and central New Jersey and New York City. During the first
quarter, two new branch offices were opened, including Valley's first of at
least three new branches expected to be opened in Brooklyn during 2007.
Valley anticipates opening approximately ten de novo branches through the
remainder of 2007. Our expansion strategy is to find the most attractive
building sites and expand our presence in neighboring New Jersey counties,
as well as Kings and Queens Counties in New York. New offices immediately
add franchise value, but the additional operating costs will have a
negative impact on non-interest expense in the short-term."
Net Interest Income and Margin
Net interest income on a tax equivalent basis was $97.8 million for the
first quarter of 2007, a $2.5 million decrease from the same quarter of
2006 and a decrease of $524 thousand from the linked quarter ended December
31, 2006. The moderate decline in net interest income during the quarter
was mainly a result of a decrease in loan prepayment penalties and two less
days during the first quarter of 2007 compared to the fourth quarter of
2006.
The net interest margin on a tax equivalent basis was 3.45 percent for
the first quarter of 2007, an increase of 3 basis points from the linked
quarter ended December 31, 2006 and a decrease of 5 basis points from the
prior year first quarter. The cost of average interest bearing liabilities
declined 13 basis points from the fourth quarter of 2006 as Valley
continued its efforts to reduce higher cost funding sources. However, the
yield on average interest earning assets decreased 5 basis points mainly
due to a 16 basis point decline in the yield on average total loans from
the three months ended December 31, 2006.
Valley's cost of total deposits remained relatively low by industry
standards at 2.44 percent for the first quarter of 2007 compared to 2.52
percent for the three months ended December 31, 2006. The decrease of 8
basis points was primarily due to a $55 million reduction in higher cost
brokered certificates of deposit during the first quarter of 2007.
Non-Interest Income
First quarter of 2007 compared with first quarter of 2006
Non-interest income for the first quarter of 2007 increased $21.7
million, or 112.0 percent from $19.4 million for the quarter ended March
31, 2006 mainly due to the $16.4 million gain on sale of the Manhattan
office building. Additionally, net gains on trading securities increased
$5.1 million due to the mark to market adjustment on approximately $1.2
billion in trading securities at March 31, 2007.
First quarter of 2007 compared with fourth quarter of 2006
Non-interest income for the first quarter of 2007 increased $21.3
million, or 107.4 percent from $19.8 million for the quarter ended December
31, 2006 mainly due to a $12.6 million increase in net gains on sale of
premises and equipment. In the fourth quarter of 2006 and first quarter of
2007, Valley sold Manhattan office space and recognized gains of $3.8
million and $16.4 million, respectively. Net gains on trading securities
increased $5.2 million from the fourth quarter of 2006 primarily due to the
mark to market adjustment on approximately $1.2 billion in trading
securities at March 31, 2007. Net gains on sales of loans increased $1.5
million from the fourth quarter of 2006 due to a $1.3 million mark to
market adjustment on approximately $240.8 million in mortgage loans held
for sale that Valley elected to carry at fair value under SFAS No. 159 on
January 1, 2007. Also contributing to the increase in non-interest income
for the first quarter of 2007 were net gains on securities transactions
totaling $26 thousand compared to net losses on securities transactions of
$2.3 million in the fourth quarter of 2006.
Non-Interest Expense
First quarter of 2007 compared with first quarter of 2006
Non-interest expense increased by $3.5 million, or 5.7 percent to
approximately $64.2 million for the quarter ended March 31, 2007 from $60.8
million for the quarter ended March 31, 2006 primarily due to the addition
of ten de novo branches over last twelve month period. The de novo branch
openings expanded Valley's branch network by nearly four percent as
compared to the first quarter of 2006 and contributed to a $2.8 million
increase in salary and employee benefits and a $431 thousand increase in
net occupancy and equipment expense. Additionally, other non-interest
expense increased $1.6 million due to a $1.4 million mark to market
adjustment on $210.0 million in junior subordinated debentures issued to
capital trusts that Valley elected to carry at fair value under SFAS No.
159 on January 1, 2007. Partially offsetting the increases, advertising
expense decreased $863 thousand from $1.8 million in the first quarter of
2006 mainly due to a decrease in various Valley branding promotions.
First quarter of 2007 compared with fourth quarter of 2006
Non-interest expense increased $2.2 million, or 3.5 percent to $64.2
million for the first quarter of 2007 from $62.0 million for the linked
quarter ended December 31, 2006. Salary and employee benefits increased
$1.6 million primarily due to higher payroll taxes during the current
period as annual tax limits on employee income reduced such expenses in the
fourth quarter of 2006. Other non-interest expense also increased due to a
$1.4 million mark to market adjustment on $210.0 million in junior
subordinated debentures issued to capital trusts. Partially offsetting the
increases, advertising expense decreased $882 thousand from $1.8 million in
the fourth quarter of 2007 mainly due to a decrease in various Valley
branding promotions.
Income Tax Expense
Income tax expense was $21.7 million for the first quarter of 2007,
reflecting an effective tax rate of 30.5 percent, compared with $14.9
million for the first quarter of 2006, reflecting an effective tax rate of
26.8 percent. The increase over the prior comparable quarter was primarily
due to higher state income tax expense.
Balance Sheet
Early Adoption of SFAS No. 159
Effective January 1, 2007, Valley elected early adoption of SFAS No.159
and 157. SFAS No. 159, which was issued in February 2007, generally permits
the measurement of selected eligible financial instruments at fair value at
specified election dates. Upon adoption of SFAS No. 159, Valley selected
the fair value measurement option for various pre-existing financial assets
and liabilities, including investment securities from both the held to
maturity and available for sale portfolios with carrying values immediately
prior to adoption totaling approximately $1.3 billion, mortgage loans of
$254.4 million, Federal Home Loan Bank advances of $40.0 million and junior
subordinated debentures issued to capital trusts (commonly known as "trust
preferred securities") of $206.2 million. The initial fair value
measurement of these items resulted in a $29.5 million reduction in
stockholders' equity as of January 1, 2007. This one-time charge is
comprised of a $42.9 million cumulative-effect adjustment, net of tax,
recorded as a reduction in retained earnings offset by a $13.4 million
decrease in accumulated other comprehensive loss relating to Valley's
election of the fair value option for approximately $820.5 million
available for sale securities at January 1, 2007. Under SFAS No. 159, this
one-time charge will not be recognized in current earnings.
Valley believes its adoption of SFAS No. 159 will have a positive
impact on its ability to better manage the balance sheet and the market and
interest rate risks associated with certain financial instruments, while
potentially benefiting the net interest margin, net interest income, net
income and earnings per common share during the remainder of 2007, as well
as in future periods.
During April 2007, Valley executed a series of interest rate derivative
transactions. The purpose of the derivative transactions was to offset
volatility in changes in the market value of the certain financial assets
subject to SFAS No. 159. These derivative transactions will not be
designated as hedges under SFAS No. 133, but will be marked to market
through income.
Loan Portfolio
During the quarter, loans decreased $291.3 million to approximately
$8.0 billion at March 31, 2007 primarily due to Valley's election to
transfer $240.8 million in residential mortgage loans, at fair value as of
March 31, 2007, to loans held for sale. The remaining linked quarter
decrease in loans is mainly comprised of decreases in construction,
commercial mortgage and commercial loans of $33.2 million, $27.3 million,
and $19.7 million, respectively, partially offset by a $46.2 million
increase in consumer loans. The marginal decreases seen in the loan
categories above are primarily due to overall lower new loan originations
combined with some anticipated large principal paydowns during the first
quarter. The seasonally slow loan growth during the first quarter,
especially in residential and the New York commercial lines of credit was
not unexpected. However, consumer loans grew as automobile loans increased
$42.7 million, or 13.8 percent on an annualized basis, during the quarter.
Automobile loan volumes were exceptionally strong as Valley has focused
efforts to expand the geographic presence of its indirect auto loan
origination franchise.
Deposit Activity
During the quarter, deposits decreased $146.4 million from
approximately $8.5 billion at December 31, 2006 due to a $56.7 million
decrease in time deposits, $52.5 million decrease in non-interest bearing
deposits, and a $37.2 million decline in savings, NOW, and money market
deposits. Time deposits declined primarily due to management's reduction of
higher cost brokered certificates of deposit during the quarter and bids
lost to retain approximately $25 million in custodial deposits. Most of the
decrease in savings, NOW and money market deposits and non-interest bearing
deposits was the result of seasonal declines generally seen in New York
commercial customer accounts. 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 first quarter of 2007 were approximately
$1.1 million compared to $584 thousand for the first quarter of 2006, and
$3.9 million for the fourth quarter of 2006. The provision for credit
losses was $1.9 million for the first quarter of 2007 compared to $1.3
million for the first quarter of 2006, and $3.2 million for the fourth
quarter of 2006. Total non-performing assets, consisting of non-accrual
loans, other real estate owned and other repossessed assets, totaled $30.8
million, or 0.38 percent of loans at March 31, 2007 up slightly from $28.9
million, or 0.35 percent of loans at December 31, 2006.
Loans past due 90 days or more and still accruing at March 31, 2007
were $3.0 million, or 0.04 percent of $8.0 billion of total loans, compared
to $2.6 million at March 31, 2006 and $3.8 million at December 31, 2006.
Total loans past due in excess of 30 days were 0.81 percent of total loans
at March 31, 2007 compared with 0.84 percent at December 31, 2006.
Financial Ratios
Valley's annualized return on average shareholders' equity was 21.57
percent and 17.40 percent for the three months ended March 31, 2007 and
2006, respectively. On a comparative basis, adjusting for Valley's goodwill
and other intangible assets, the annualized return on average tangible
equity was 27.99 percent and 22.61 percent for the same periods. See "Notes
to Selected Financial Data" section in the tables that follow for
information regarding the computation of these ratios.
For the quarter ended March 31, 2007 and 2006, annualized return on
average assets was 1.63 percent and 1.34 percent, respectively.
Valley's risk-based capital ratios were 10.50 percent for Tier 1
capital, 12.42 percent for total capital and 7.93 percent for Tier 1
leverage at March 31, 2007.
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 169 branches in 111
communities serving 13 counties throughout northern and central New Jersey
and New York City.
Forward Looking Statement
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: the impact
of management's implementation of SFAS No. 159, 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
March 31,
(in thousands, except for share data) 2007 2006
FINANCIAL DATA:
Net income $49,434 $40,911
Net interest income 96,172 98,541
Net interest income - FTE (2) 97,768 100,238
Weighted Average Number of Shares
Outstanding (3):
Basic 120,892,151 122,695,496
Diluted 121,420,900 123,123,321
Per share data (3):
Basic earnings $0.41 $0.33
Diluted earnings 0.41 0.33
Cash dividends declared 0.20 0.20
Book value 7.74 7.63
Tangible book value (1) 6.00 5.87
Closing stock price - high 25.18 23.24
Closing stock price - low 23.05 21.01
FINANCIAL RATIOS:
Net interest margin 3.39 % 3.44 %
Net interest margin - FTE (2) 3.45 3.50
Annualized return on average assets 1.63 1.34
Annualized return on average
shareholders' equity 21.57 17.40
Annualized return on average tangible
shareholders' equity (1) 27.99 22.61
Efficiency ratio (4) 46.79 51.53
AVERAGE BALANCE SHEET ITEMS:
Assets $12,158,989 $12,254,878
Interest earning assets 11,321,169 11,457,458
Loans 8,292,884 8,151,381
Interest bearing liabilities 9,312,079 9,351,694
Deposits 8,378,033 8,386,199
Shareholders' equity 916,693 940,319
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
Three Months Ended
March 31,
(Dollars in thousands) 2007 2006
ALLOWANCE FOR CREDIT LOSSES:
Beginning of period $74,718 $75,188
Provision for credit losses 1,910 1,294
Charge-offs 1,730 1,394
Recoveries 635 810
End of period $75,533 $75,898
Components:
Allowance for loan losses $73,200 $75,898
Reserve for unfunded letters of credit (5) 2,333 0
Allowance for credit losses $75,533 $75,898
As of March 31,
2007 2006
BALANCE SHEET ITEMS:
Assets $12,302,728 $12,317,577
Loans 8,040,397 8,160,800
Deposits 8,341,195 8,359,034
Shareholders' equity 930,993 936,306
CAPITAL RATIOS:
Tier 1 leverage ratio 7.93 % 8.07 %
Risk-based capital - Tier 1 10.50 10.57
Risk-based capital - Total Capital 12.42 12.49
ASSET QUALITY:
Non-accrual loans $29,069 $32,907
Other real estate owned 560 2,157
Other repossessed assets 1,130 981
Total non-performing assets $30,759 $36,045
Loans past due 90 days or more and
still accruing $2,969 $2,627
ASSET QUALITY RATIOS:
Non-performing assets to total loans 0.38 % 0.44 %
Allowance for loan losses to total loans 0.91 0.93
Allowance for credit losses to total loans 0.94 0.93
Annualized net charge-offs to average loans 0.05 0.03
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
March 31,
(Dollars in thousands, except for
share data) 2007 2006
Common shares outstanding 120,223,981 122,698,775
Shareholders' equity $930,993 $936,306
Less: Goodwill and other
intangible assets 209,624 215,505
Tangible shareholders' equity $721,369 $720,801
Tangible book value $6.00 $5.87
Net income $49,434 $40,911
Average shareholders' equity $916,693 $940,319
Less: Average goodwill and other
intangible assets 210,202 216,521
Average tangible shareholders'
equity $706,491 $723,798
Annualized return on average
tangible shareholders' equity 27.99% 22.61%
(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 the five percent stock dividend declared on April
11, 2007, to be issued May 25, 2007 to shareholders of record on May
11, 2007.
(4) The efficiency ratio measures Valley's total non-interest expense as a
percentage of net interest income plus total non-interest income.
(5) On January 1, 2007, Valley transferred the portion of the allowance
for loan losses related commercial lending letters of credit to other
liabilities.
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)
March 31, December 31,
Assets 2007 2006
Cash and due from banks $204,026 $236,354
Interest bearing deposits with banks 11,059 7,795
Federal funds sold 222,000 175,000
Investment securities:
Held to maturity, fair value of
$604,772 and $1,090,883
at March 31, 2007 and December
31, 2006, respectively 603,921 1,108,885
Available for sale 1,055,701 1,769,981
Trading securities 1,166,984 4,655
Total investment securities 2,826,606 2,883,521
Loans held for sale (includes fair
value of $240,790 for mortgage
loans held at March 31, 2007) 243,130 4,674
Loans 8,040,397 8,331,685
Less: Allowance for loan losses (73,200) (74,718)
Net loans 7,967,197 8,256,967
Premises and equipment, net 212,744 209,397
Bank owned life insurance 190,964 189,157
Accrued interest receivable 62,584 63,356
Due from customers on acceptances
outstanding 8,954 9,798
Goodwill 181,497 181,497
Other intangible assets, net 28,127 29,858
Other assets 143,840 147,653
Total assets $12,302,728 $12,395,027
Liabilities
Deposits:
Non-interest bearing $1,943,714 $1,996,237
Interest bearing:
Savings, NOW and money market 3,524,577 3,561,807
Time 2,872,904 2,929,607
Total deposits 8,341,195 8,487,651
Short-term borrowings 381,609 362,615
Long-term borrowings 2,278,581 2,278,728
Junior subordinated debentures issued
to capital trusts 209,979 206,186
Bank acceptances outstanding 8,954 9,798
Accrued expenses and other
liabilities 151,417 100,459
Total liabilities 11,371,735 11,445,437
Shareholders' Equity*
Preferred stock, no par value, authorized
30,000,000 shares; none issued --- ---
Common stock, no par value,
authorized 181,796,274 shares; issued
122,412,902 shares and 122,658,486
shares at March 31, 2007 and December
31, 2006, respectively 41,211 41,212
Surplus 881,533 881,022
Retained earnings 78,533 97,639
Accumulated other comprehensive loss (14,535) (30,873)
Less: Treasury stock, at cost,
2,188,921 shares and 1,533,355
shares at March 31, 2007 and December 31,
2006, respectively (55,749) (39,410)
Total shareholders' equity 930,993 949,590
Total liabilities and
shareholders' equity $12,302,728 $12,395,027
*Share data reflects the five percent common stock dividend declared on
April 11, 2007 to be issued May 25, 2007 to shareholders of record on
May 11, 2007.
VALLEY NATIONAL BANCORP
Consolidated Statements of Income (Unaudited)
(in thousands, except for share data)
Three Months Ended March 31,
2007 2006
Interest Income
Interest and fees on loans $138,947 $127,428
Interest and dividends on investment
securities:
Taxable 33,048 36,245
Tax-exempt 2,897 3,073
Dividends 2,037 1,429
Interest on federal funds sold and
other short-term investments 2,200 222
Total interest income 179,129 168,397
Interest Expense
Interest on deposits:
Savings, NOW and money market 19,418 17,023
Time 31,764 21,721
Interest on short-term borrowings 3,978 5,411
Interest on long-term borrowings and
junior subordinated debentures 27,797 25,701
Total interest expense 82,957 69,856
Net Interest Income 96,172 98,541
Provision for credit losses 1,910 1,294
Net interest income after provision
for loan losses 94,262 97,247
Non-Interest Income
Trust and investment services 1,780 1,682
Insurance premiums 2,961 2,639
Service charges on deposit accounts 5,696 5,590
Gains on securities transactions, net 26 954
Gains on trading securities, net 5,428 376
Fees from loan servicing 1,390 1,587
Gains on sales of loans, net 1,671 665
Gains on sales of premises and equipment, net 16,373 0
Bank owned life insurance 2,127 2,003
Other 3,606 3,873
Total non-interest income 41,058 19,369
Non-Interest Expense
Salary expense 28,528 26,516
Employee benefit expense 7,961 7,172
Net occupancy and equipment expense 12,016 11,585
Amortization of other intangible assets 1,924 2,188
Professional and legal fees 1,655 1,933
Advertising 936 1,799
Other 11,195 9,569
Total non-interest expense 64,215 60,762
Income before income taxes 71,105 55,854
Income tax expense 21,671 14,943
Net Income $49,434 $40,911
Earnings Per Common Share:*
Basic $0.41 $0.33
Diluted 0.41 0.33
Cash Dividends Declared Per Common Share* 0.20 0.20
Weighted Average Number of Common
Shares Outstanding:*
Basic 120,892,151 122,695,496
Diluted 121,420,900 123,123,321
*Share data reflects the five percent common stock dividend declared on
April 11, 2007, to be issued May 25, 2007 to shareholders of record on
May 11, 2007.
Valley National Bancorp
(dollars in thousands)
Loan Portfolio
For the periods ended
03/31/2007 12/31/2006 09/30/2006 06/30/2006 03/31/2006
Commercial Loans $1,447,165 $1,466,862 $1,443,539 $1,492,688 $1,449,207
Construction 493,095 526,318 514,842 515,683 456,478
Residential Mortgage 1,849,069 2,106,306 2,082,233 2,093,694 2,099,696
Commercial Mortgage 2,281,871 2,309,217 2,354,791 2,311,897 2,298,239
Total Mortgage
Loans 4,624,035 4,941,841 4,951,866 4,921,274 4,854,413
Home Equity 560,577 571,138 577,587 570,500 559,118
Credit Card 8,498 8,764 8,490 8,279 8,061
Automobile 1,280,809 1,238,145 1,229,450 1,234,005 1,194,749
Other Consumer 119,313 104,935 102,155 108,946 95,252
Total Consumer
Loans 1,969,197 1,922,982 1,917,682 1,921,730 1,857,180
Total Loans $8,040,397 $8,331,685 $8,313,087 $8,335,692 $8,160,800
Quarterly Analysis of Average Assets, Liabilities
and Shareholders' Equity and
Net Interest Income on a Tax Equivalent Basis
Quarter End - 3/31/07
Average Avg.
Balance Interest Rate
Assets
Interest earning assets:
Loans (1)(2) $8,292,884 $138,983 6.70%
Taxable investments (3) 2,580,236 35,085 5.44%
Tax-exempt investments (1)(3) 279,176 4,457 6.39%
Federal funds sold and other
interest bearing deposits 168,873 2,200 5.21%
Total interest earning assets 11,321,169 180,725 6.39%
Other assets 837,820
Total assets $12,158,989
Liabilities and shareholders' equity
Interest bearing liabilities:
Savings, NOW and money market deposits $3,559,302 $19,418 2.18%
Time deposits 2,894,086 31,764 4.39%
Short-term borrowings 371,911 3,978 4.28%
Long-term borrowings (4) 2,486,780 27,797 4.47%
Total interest bearing liabilities 9,312,079 82,957 3.56%
Demand deposits 1,924,645
Other liabilities 5,572
Shareholders' equity 916,693
Total liabilities and shareholders'
equity $12,158,989
Net interest income/interest rate
spread (5) 97,768 2.83%
Tax equivalent adjustment (1,596)
Net interest income, as reported $96,172
Net interest margin (6) 3.40%
Tax equivalent adjustment 0.05%
Net interest margin on a fully tax
equivalent basis (6) 3.45%
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 (4) 2,493,764 29,144 4.67%
Total interest bearing liabilities 9,410,401 86,797 3.69%
Demand 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 (5) 98,292 2.75%
Tax equivalent adjustment (1,606)
Net interest income, as reported $96,686
Net interest margin (6) 3.37%
Tax equivalent adjustment 0.05%
Net interest margin on a fully tax
equivalent basis (6) 3.42%
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 (4) 2,492,702 27,831 4.47%
Total interest bearing liabilities 9,446,002 83,608 3.54%
Demand 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 (5) 99,171 2.81%
Tax equivalent adjustment (1,614)
Net interest income, as reported $97,557
Net interest margin (6) 3.39%
Tax equivalent adjustment 0.05%
Net interest margin on a fully tax
equivalent basis (6) 3.44%
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 (4) 2,410,614 26,887 4.46%
Total interest bearing liabilities 9,363,120 75,989 3.25%
Demand 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 (5) 99,978 2.87%
Tax equivalent adjustment (1,641)
Net interest income, as reported $98,337
Net interest margin (6) 3.42%
Tax equivalent adjustment 0.06%
Net interest margin on a fully tax
equivalent basis (6) 3.48%
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 (4) 2,339,703 25,701 4.39%
Total interest bearing liabilities 9,351,694 69,856 2.99%
Demand 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 (5) 100,238 2.95%
Tax equivalent adjustment (1,697)
Net interest income, as reported $98,541
Net interest margin (6) 3.44%
Tax equivalent adjustment 0.06%
Net interest margin on a fully tax
equivalent basis (6) 3.50%
(1) Interest income is presented on a tax equivalent basis using a 35
percent federal tax rate.
(2) Loans are stated net of unearned income and include non-accrual loans.
(3) The yield for securities that are classified as available for sale is
based on the average historical amortized cost.
(4) Includes junior subordinated debentures issued to capital trusts which
are presented separately on the consolidated statements of condition.
(5) Interest rate spread represents the difference between the average
yield on interest earning assets and the average cost of interest
bearing liabilities and is presented on a fully tax equivalent basis.
(6) Net interest income as a percentage of total average interest earning
assets.
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, +1-973-305-4003
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