WAYNE, N.J., April 20 /PRNewswire-FirstCall/ -- Valley National Bancorp
(NYSE: VLY) today reported net income of $0.37 per diluted share or
$38.3 million for the first quarter ended March 31, 2005, compared to
$0.37 per diluted share or $38.4 million for the first quarter of 2004. All
share data reflects the 5 percent stock dividend that was declared at the
annual shareholders' meeting on April 6, 2005. Earnings per share before the
5 percent stock dividend were $0.39 for the first quarter of 2005 and 2004.
Gerald H. Lipkin, Valley's Chairman, President and CEO stated, "We are
pleased with Valley's results as we continue to absorb the costs associated
with the external challenges and pressures arising from net interest margin
compression resulting from a flattening yield curve, loan and deposit pricing
pressures, and the overall costs and time devoted to government regulation.
Earnings remained flat partly as a result of a decline in the net interest
margin, branch opening expenses and an increased regulatory burden with a cost
of approximately $5 million per year above levels experienced prior to the
enactment of the US Patriot Act and Sarbanes-Oxley.
"Despite these challenges, our business expansion efforts targeting middle
market businesses enabled total commercial lending to grow by approximately 14
percent from the first quarter of 2004, without including the loans acquired
from Shrewsbury on March 31, 2005. For the quarter, total loans increased
$111 million or 6.4 percent annualized. We have in the last few weeks begun to
see higher automobile loan volume, from the typically slow first quarter. In
addition, commercial lines of credit in New York are very seasonal and are
expected to increase during the second quarter. These lines usually decline
beginning in November and typically increase after the first quarter.
Deposits increased 4.1 percent between March 31, 2005 and the same quarter in
2004. This includes growth in savings accounts of 9.3 percent and demand
deposits of 5.4 percent.
"The previously announced acquisition of Shrewsbury closed on March 31,
2005. We are very pleased to bring the Shrewsbury customers, staff and
shareholders into the Valley organization. We have met with many of the
borrowing customers and are excited about the opportunity to expand these
relationships and add additional customers in Monmouth County, a new market
for Valley. Since the closing, we have had a favorable response to our deposit
products in that market. Deposits in Shrewsbury have exceeded our expectations
growing over 4 percent in total dollars and almost 8 percent in number of
accounts since April 1st. We anticipate similar results in our various lending
operations as we incorporate Valley's higher lending limits and broader
products and services.
"The acquisition of Shrewsbury also provides us with an opportunity to
accelerate the expansion of our footprint into Middlesex County via de novo
branches. Our branch strategy today continues to exceed expectations in
deposit growth and we anticipate opening eight to ten new branches during
2005. Of the branches opened within the last two years, the average branch
deposits approximated $32 million with a cost of funds lower than current
wholesale funding costs."
For the quarter ended March 31, 2005, Valley achieved an annualized return
on average shareholders' equity (ROE) of 21.39 percent, an annualized return
on average assets (ROA) of 1.42 percent and an efficiency ratio of
48.8 percent. Valley's risk-based capital ratios at March 31, 2005 were
11.07 percent for Tier 1 capital, 11.89 percent for total capital and
8.72 percent for Tier 1 leverage. Excluding Valley's prior ownership of
Shrewsbury common stock, almost 87 percent of Shrewsbury shareholders chose to
exchange their shares for Valley stock. The high rate of election of Valley
stock by Shrewsbury shareholders improved Valley's capital ratios and book
value.
Gross revenues for the first quarter of 2005 increased 8.2 percent over
the first quarter of 2004. Net interest income for the first quarter
increased to $94.6 million, an increase of $4.4 million or 4.9 percent over
the first quarter of 2004. The net interest margin on a tax equivalent basis
was 3.80 percent or 10 basis points below the fourth quarter of 2004. This
decline was mainly the result of a flattening of the yield curve causing
funding costs to increase faster than yields on new and re-pricing term loans
and investments. While the overall yield on loans and investments did not
increase over the fourth quarter of 2004, deposit and borrowing costs
increased 12 basis points causing most of the narrowing of the margin.
Deposit costs have been increasing due to competitive pricing pressures and
Valley anticipates these increases will continue.
Net charge-offs for the first quarter were $633 thousand compared to
$1.7 million for the first quarter of 2004 and $2.8 million for the fourth
quarter of 2004. The provision for loan losses was $752 thousand for the first
quarter of 2005 compared to $1.8 million for the first quarter of 2004 and
$3.2 million for the fourth quarter of 2004. Total non-performing assets,
which include non-accrual loans and other real estate owned ("OREO"), totaled
$26.0 million, or 0.35 percent of loans and OREO, at March 31, 2005, down from
$30.8 million at December 31, 2004, primarily as the result of collection
efforts.
Loans past due 90 days or more and still accruing at March 31, 2005 were
$1.5 million, or 0.02 percent of $7.3 billion of total loans, compared to
$3.5 million at March 31, 2004 and $2.9 million at December 31, 2004. Total
loans past due in excess of 30 days were 0.63 percent of all loans at March
31, 2005 compared with 0.90 percent at December 31, 2004.
Non-interest income for the first quarter of 2005 was $19.4 million
compared to $23.0 million for the first quarter of 2004. The decrease was
mainly due to lower securities gains.
Non-interest expense for the first quarter of 2005 increased $2.6 million
or 4.8 percent to $55.6 million from the 2004 first quarter reflecting higher
pension, medical, stock option and occupancy expenses.
Valley National Bancorp is a regional bank holding company headquartered
in Wayne, New Jersey. Its principal subsidiary, Valley National Bank,
currently operates 146 offices located in 97 communities serving 12 counties
throughout northern and central New Jersey and Manhattan. Valley's web site
can be found at http://www.valleynationalbank.com .
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 prepayment 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, consummation of the acquisition of NorCrown including
the receipt of regulatory approval and the ability of Valley to successfully
integrate NorCrown without the loss of significant loan and deposit business.
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
(Dollars in thousands, March 31,
except for share data) 2005 2004
FINANCIAL DATA:
Net income $38,268 $38,432
Net interest income 94,593 90,217
Net interest income - FTE (1) 96,240 91,772
Weighted Average Number of
Shares Outstanding:(2)
Diluted 104,338,065 104,104,219
Per share data: (2)
Basic earnings $0.37 $0.37
Diluted earnings 0.37 0.37
Cash dividends declared 0.21 0.20
Book value 7.57 6.53
Closing stock price - high 27.82 27.43
Closing stock price - low 25.20 25.73
FINANCIAL RATIOS:
Net interest margin - FTE (1) 3.80 % 4.02 %
Annualized return on average assets 1.42 1.57
Annualized return on average equity 21.39 23.22
Efficiency ratio (3) 48.83 46.88
AVERAGE BALANCE SHEET ITEMS:
Assets $10,758,412 $9,771,051
Interest earning assets 10,132,346 9,137,528
Loans 6,986,730 6,230,219
Interest bearing liabilities 8,232,380 7,354,329
Deposits 7,509,960 7,219,232
Shareholders' equity 715,519 662,187
(1) Net interest income and net interest margin are presented on a tax
equivalent basis using a 35 percent federal tax rate. Valley believes
that this presentation provides comparability of net interest income
and net interest margin arising from both taxable and tax-exempt
sources and is consistent with industry practice and SEC rules.
(2) Share data (except for closing stock prices) reflects the 5 percent
stock dividend declared on April 6, 2005, to be issued May 20, 2005 to
shareholders of record on May 6, 2005.
(3) The efficiency ratio measures Valley's total non-interest expense as a
percentage of net interest income plus total non-interest income.
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
As of March 31,
(Dollars in thousands) 2005 2004
BALANCE SHEET ITEMS:
Assets $11,407,946 $10,139,088
Loans 7,321,025 6,278,900
Deposits 7,892,723 7,255,399
Shareholders' equity 820,869 676,697
CAPITAL RATIOS:
Tier 1 leverage ratio 8.72 % 8.48 %
Risk-based capital - Tier 1 11.07 11.17
Risk-based capital - Total Capital 11.89 12.05
ALLOWANCE FOR LOAN LOSSES:
Beginning of period $65,699 $64,650
Provision for loan losses 752 1,848
Charge-offs 1,378 3,479
Recoveries 745 1,777
Allowance for loan losses - Shrewsbury 3,211 0
End of period $69,029 $64,796
ASSET QUALITY:
Non-accrual loans $24,915 $20,724
Other real estate owned (OREO) 1,036 601
Total non-performing assets 25,951 21,325
Loans past due 90 days or
more and still accruing 1,537 3,529
ASSET QUALITY RATIOS:
Non-performing assets to total loans
plus other real estate owned (OREO) 0.35 % 0.34 %
Allowance for loan losses to loans 0.94 1.03
Net charge-offs to average loans 0.04 0.11
SHAREHOLDER RELATIONS
Requests for copies of reports providing more detailed financial
statements and analysis, as well as all other inquiries regarding
Shareholder Relations should be directed to Dianne Grenz, Senior Vice
President, Director of Shareholder & Public Relations, Valley National
Bancorp, 1455 Valley Road, Wayne, New Jersey, 07470, by telephone
at (973) 305-3380, by fax at (973) 696-2044 or by e-mail at
dgrenz@valleynationalbank.com.
VALLEY NATIONAL BANCORP
Consolidated Statements of Financial Condition
($ in thousands, except for share data)
March 31,
Assets 2005 2004
Cash and due from banks $208,710 $202,938
Federal funds sold 12,600 0
Securities:
Available for sale 1,998,298 1,891,506
Held to maturity 1,261,202 1,287,239
Trading account 2,435 2,446
Total securities 3,261,935 3,181,191
Loans held for sale 490 6,457
Loans 7,320,535 6,272,443
Less: Allowance for loan losses (69,029) (64,796)
Loans, net 7,251,506 6,207,647
Premises and equipment, net 166,306 131,007
Due from customers on acceptances outstanding 10,977 12,244
Accrued interest receivable 52,590 43,911
Intangible assets 126,217 50,688
Bank owned life insurance 177,296 165,982
Other assets 139,319 137,023
Total assets $11,407,946 $10,139,088
Liabilities
Deposits:
Non-interest bearing $1,882,101 $1,684,616
Interest bearing:
Savings 3,842,754 3,340,679
Time 2,167,868 2,230,104
Total deposits 7,892,723 7,255,399
Federal funds purchased
and securities sold under
agreements to repurchase 588,746 339,808
Treasury tax and loan account and
other short-term borrowings 3,198 8,974
Long-term debt 1,928,788 1,620,320
Bank acceptances outstanding 10,977 12,244
Accrued expenses and other liabilities 162,645 225,646
Total liabilities 10,587,077 9,462,391
Shareholders' Equity*
Preferred stock, no par value
30,000,000 shares authorized; none issued 0 0
Common stock, no par value, authorized
164,894,580 shares; issued
108,469,434 shares in 2005 and
103,844,630 shares in 2004 36,482 33,303
Surplus 550,617 318,836
Retained earnings 248,361 304,333
Unallocated common stock held by
the employee benefit plan (48) (213)
Accumulated other comprehensive (loss)gain (14,543) 24,994
820,869 681,253
Treasury stock, at cost
(0 common shares in 2005 and 190,441 in 2004) 0 (4,556)
Total shareholders' equity 820,869 676,697
Total liabilities and
shareholders' equity $11,407,946 $10,139,088
* Share data reflects the 5 percent stock dividend declared on April 6,
2005, to be issued May 20, 2005 to shareholders of record on May 6,
2005.
VALLEY NATIONAL BANCORP
Consolidated Statements of Income Three Months Ended
($ in thousands, except for share data) March 31,
2005 2004
Interest Income
Interest and fees on loans $101,194 $87,832
Interest and dividends on investment securities 37,863 35,593
Interest on federal funds sold and
other short-term investments 106 90
Total interest income 139,163 123,515
Interest Expense
Interest on deposits:
Savings deposits 8,634 4,713
Time deposits 12,919 11,403
Interest on other borrowings 23,017 17,182
Total interest expense 44,570 33,298
Net Interest Income 94,593 90,217
Provision for loan losses 752 1,848
Net interest income after
provision for loan losses 93,841 88,369
Non-Interest Income
Trust and investment services 2,013 2,232
Insurance premiums 3,290 3,672
Service charges on deposit accounts 4,943 4,827
Gains on securities transactions, net 1,733 3,566
Fees from loan servicing 1,774 2,177
Gains on sales of loans, net 508 817
Bank owned life insurance 1,559 1,578
Other 3,538 4,130
Total non-interest income 19,358 22,999
Non-Interest Expense
Salary expense 24,442 24,106
Employee benefit expense 6,657 5,416
Net occupancy expense 9,835 9,270
Amortization of intangible assets 1,736 2,199
Other 12,976 12,090
Total non-interest expense 55,646 53,081
Income before income taxes 57,553 58,287
Income tax expense 19,285 19,855
Net Income $38,268 $38,432
Earnings Per Share:*
Basic $0.37 $0.37
Diluted $0.37 $0.37
Weighted Average Number of Shares Outstanding:*
Basic 103,844,428 103,529,733
Diluted 104,338,065 104,104,219
* Share data reflects the 5 percent stock dividend declared on
April 6, 2005, to be issued May 20, 2005 to shareholders of record
on May 6, 2005.
Valley National Bancorp
(dollars in thousands)
End of End of End of End of End of
Period Period Period Period Period
03/31/05 12/31/04 09/30/04 06/30/04 03/31/04
Loan Loan Loan Loan Loan
Portfolio Portfolio Portfolio Portfolio Portfolio
Commercial
Loans $1,310,757 $1,261,854 $1,316,972 $1,205,739 $1,180,310
Construction 435,812 368,120 282,299 254,007 265,993
Residential
Mortgage 1,980,833 1,853,708 1,774,827 1,699,035 1,614,999
Commercial
Mortgage 1,877,144 1,745,155 1,741,674 1,692,201 1,607,486
Total Mortgage
Loans 4,293,789 3,966,983 3,798,800 3,645,243 3,488,478
Home Equity 554,534 517,325 510,790 486,962 477,793
Credit Card 8,745 9,691 9,433 9,636 9,743
Automobile 1,064,150 1,079,050 1,098,375 1,058,238 1,011,844
Other Consumer 89,050 99,412 89,255 101,871 110,731
Total Consumer
Loans 1,716,479 1,705,478 1,707,853 1,656,707 1,610,111
Total Loans $7,321,025 $6,934,315 $6,823,625 $6,507,689 $6,278,899
Quarter End - 03/31/05
Average Avg.
Balance Interest Rate
Assets
Loans $6,986,730 $101,235 5.80%
Taxable Investments 2,809,959 34,882 4.97%
Non-Taxable Investments 323,590 4,587 5.67%
Fed Funds and Other Int. Earning Assets 12,067 106 3.51%
Total Int. Earning Assets 10,132,346 140,810 5.56%
Other Assets 626,066
Total Average Assets $10,758,412
Liabilities and Shareholders' Equity
Savings $3,658,713 $8,634 0.94%
Time Deposits 2,093,702 12,919 2.47%
S/T Borrowings 590,699 3,350 2.27%
Long-term Debt 1,889,266 19,667 4.16%
Interest Bearing Liabilities 8,232,380 44,570 2.17%
Non-Interest Bearing Deposits 1,757,545
Other Liabilities 52,968
Shareholders' Equity 715,519
Total Average Liabilities and
Shareholders' Equity $10,758,412
Net Interest Income and Margin -
tax equivalent basis $96,240 3.80%
Quarter End - 12/31/04
Average Avg.
Balance Interest Rate
Assets
Loans $6,913,293 $100,085 5.79%
Taxable Investments 2,749,399 34,191 4.97%
Non-Taxable Investments 322,141 4,572 5.68%
Fed Funds and Other Int. Earning Assets 18,545 96 2.07%
Total Int. Earning Assets 10,003,378 138,944 5.56%
Other Assets 640,628
Total Average Assets $10,644,006
Liabilities and Shareholders' Equity
Savings $3,569,992 $7,354 0.82%
Time Deposits 2,157,664 12,570 2.33%
S/T Borrowings 508,105 2,235 1.76%
Long-term Debt 1,859,993 19,200 4.13%
Interest Bearing Liabilities 8,095,754 41,359 2.04%
Non-Interest Bearing Deposits 1,801,238
Other Liabilities 44,795
Shareholders' Equity 702,219
Total Average Liabilities and
Shareholders' Equity $10,644,006
Net Interest Income and Margin -
tax equivalent basis $97,585 3.90%
Quarter End - 09/30/04
Average Avg.
Balance Interest Rate
Assets
Loans $6,644,741 $94,114 5.67%
Taxable Investments 2,803,510 35,307 5.04%
Non-Taxable Investments 325,127 4,576 5.63%
Fed Funds and Other Int. Earning Assets 16,989 76 1.79%
Total Int. Earning Assets 9,790,367 134,073 5.48%
Other Assets 611,625
Total Average Assets $10,401,992
Liabilities and Shareholders' Equity
Savings $3,491,498 $5,886 0.67%
Time Deposits 2,160,260 11,821 2.19%
S/T Borrowings 484,850 1,603 1.32%
Long-term Debt 1,802,459 18,350 4.07%
Interest Bearing Liabilities 7,939,067 37,660 1.90%
Non-Interest Bearing Deposits 1,762,175
Other Liabilities 34,581
Shareholders' Equity 666,169
Total Average Liabilities and
Shareholders' Equity $10,401,992
Net Interest Income and Margin -
tax equivalent basis $96,413 3.94%
Quarter End - 06/30/04
Average Avg.
Balance Interest Rate
Assets
Loans $6,371,083 $89,002 5.59%
Taxable Investments 2,819,716 33,850 4.80%
Non-Taxable Investments 317,298 4,342 5.47%
Fed Funds and Other Int. Earning Assets 13,882 34 0.98%
Total Int. Earning Assets 9,521,979 127,228 5.34%
Other Assets 620,343
Total Average Assets $10,142,322
Liabilities and Shareholders' Equity
Savings $3,446,731 $5,162 0.60%
Time Deposits 2,167,642 11,038 2.04%
S/T Borrowings 372,815 921 0.99%
Long-term Debt 1,695,362 17,169 4.05%
Interest Bearing Liabilities 7,682,550 34,290 1.79%
Non-Interest Bearing Deposits 1,715,696
Other Liabilities 62,689
Shareholders' Equity 681,387
Total Average Liabilities and
Shareholders' Equity $10,142,322
Net Interest Income and Margin -
tax equivalent basis $92,938 3.90%
Quarter End - 03/31/04
Average Avg.
Balance Interest Rate
Assets
Loans $6,230,219 $87,869 5.64%
Taxable Investments 2,593,634 32,774 5.05%
Non-Taxable Investments 289,643 4,337 5.99%
Fed Funds and Other Int. Earning Assets 24,032 90 1.50%
Total Int. Earning Assets 9,137,528 125,070 5.48%
Other Assets 633,523
Total Average Assets $9,771,051
Liabilities and Shareholders' Equity
Savings $3,299,834 $4,713 0.57%
Time Deposits 2,242,311 11,403 2.03%
S/T Borrowings 236,586 499 0.84%
Long-term Debt 1,575,598 16,683 4.24%
Interest Bearing Liabilities 7,354,329 33,298 1.81%
Non-Interest Bearing Deposits 1,677,087
Other Liabilities 77,448
Shareholders' Equity 662,187
Total Average Liabilities and
Shareholders' Equity $9,771,051
Net Interest Income and Margin -
tax equivalent basis $91,772 4.02%
Notes:
Interest income is presented on a tax equivalent basis using a 35 percent
federal tax rate.
Loans are stated net of unearned income and include non-accrual loans.
SOURCE Valley National Bancorp
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