WAYNE, N.J., July 19 /PRNewswire-FirstCall/ -- Valley National Bancorp
(NYSE: VLY) ("Valley"), the holding company for Valley National Bank,
announced today six months and second quarter results for 2006. Net income
for the six months ended June 30, 2006 was $81.7 million compared to $77.3
million for the same period in 2005, an increase of 5.7 percent. Adjusting
for a five percent stock dividend issued on May 22, 2006, fully diluted
earnings per common share were $0.70 for the six months ended June 30,
2006, compared to $0.69 per common share for the six months ended June 30,
2005. All common share data presented below was adjusted to reflect the
stock dividend.
Net income for the second quarter of 2006 was $40.8 million compared to
$39.0 million for the second quarter of 2005, an increase of 4.6 percent.
Fully diluted earnings per common share were $0.35 for the second quarter
of 2006, compared to $0.34 per common share in the same quarter of 2005.
Chairman's Comments
Gerald H. Lipkin, Chairman, President and CEO noted that, "Although the
current economic and interest rate environment remains challenging, once
again, Valley generated excellent shareholder returns. For the quarter, the
average return on tangible shareholders' equity exceeded 22.0 percent.
Management continues to focus on structuring the balance sheet in a manner
which optimizes long-term returns as compared with immediate results.
Loan growth during the quarter was robust as the portfolio grew by 8.6
percent on an annualized basis. New loan originations in the second quarter
of 2006 exceeded originations in the same period of 2005 by approximately
20.0 percent. Additionally, the interest rate on new originations was
nearly 7.00 percent, compared to 5.75 percent a year earlier. Management
continues to utilize various funding sources to support loan growth. During
the first six months of 2006, Valley repriced and entered into nearly $800
million of short and long-term borrowings at an average interest rate of
4.42 percent with an average life of 2-1/2 years. During the second quarter
of 2006, market interest rates on wholesale funds escalated, making
deposits a better funding alternative. Valley's deposit growth initiatives
coupled with enhanced marketing efforts have returned solid results during
the second quarter as deposits increased over 10.0 percent on an annualized
basis. Additionally, new checking and saving account originations during
the first six months in 2006 approached nearly 39 thousand.
The contraction of two basis points in the net interest margin from the
first quarter reflects the smallest linked quarter decrease since the third
quarter of 2004. Stabilization of the margin coupled with growth in
interest earning assets and the structure of deposit and borrowed funds
should produce positive results for the remainder of 2006."
Net Interest Income and Margin
Net interest income on a tax equivalent basis was $100.0 million for
the second quarter of 2006, a $1.6 million decrease from the same quarter
of 2005 and a decrease of $263 thousand from the linked quarter ended March
31, 2006. The decrease during the quarter was mainly a result of an
increase in funding costs of $6.1 million, or 26 basis points from the
first quarter of 2006.
The net interest margin on a tax equivalent basis was 3.48 percent for
the second quarter of 2006, a decline of two basis points from the linked
quarter ended March 31, 2006. However, the yield on average total loans
continue to improve as the second quarter of 2006 equaled 6.49 percent, an
increase of 54 basis points from the same period a year ago and a 23 basis
point increase from the first quarter of 2006.
Valley's cost of total deposits remained relatively low by industry
standards at 2.11 percent for the second quarter of 2006 compared to 1.85
percent for the three months ended March 31, 2006. Management is pleased
with an increase of only 26 basis points as the average federal funds rate
increased approximately 47 basis points from the first quarter.
Valley entered into cash flow hedges in July 2004, which negatively
impacted net interest income during the six months ended June 30, 2006.
When the hedges expire on August 1, 2006, Valley expects net interest
income to improve by approximately $1.5 million per quarter and the net
interest margin to increase by over four basis points, on an annual basis,
based upon the current level of interest rates and anticipated loan volume.
Non-Interest Income
Non-interest income was unchanged from the first quarter of 2006,
totaling approximately $19.4 million for the three months ended June 30,
2006. However, service charges on deposit accounts increased $348 thousand.
While, trust and investment services also increased $249 thousand to $1.9
million from the prior quarter mainly due to an increase in managed account
fees. Partially offsetting the increases, net gains on securities
transactions decreased $401 thousand as compared to the first quarter of
2006.
Non-interest income increased $55 thousand from a year ago, totaling
approximately $19.4 million for the three months ended June 30, 2006
compared to $19.3 million for the same period in 2005. Trust and investment
services increased $312 thousand, or 19.3 percent, from $1.6 million for
the second quarter of 2005 mainly due to an increase in managed account
fees. Bank owned life insurance income increased $286 thousand, or 16.3
percent, primarily due to a higher yield on the underlying investment
securities. However, fees from loan servicing decreased $299 thousand to
$1.5 million for the second quarter of 2006 compared to the same period in
2005 mainly due to smaller balances of loans serviced resulting from
refinance and payoff activity.
Non-Interest Expense
Non-interest expense increased by $1.4 million, or 2.4 percent to $61.9
million for the quarter ended June 30, 2006 from $60.5 million for the
quarter ended June 30, 2005 primarily due to a $1.1 million increase in net
occupancy and equipment expense. The increase in net occupancy and
equipment expense is mainly attributed to the acquisition of NorCrown Bank
on June 3, 2005, which added 15 offices to Valley's branch network.
Non-interest expense increased $1.1 million, or 1.9 percent to $61.9
million for the second quarter of 2006 from $60.8 million for the linked
quarter ended March 31, 2006. Advertising expense increased $651 thousand
primarily due to new checking account and certificate of deposit promotions
during the second quarter. Other non-interest expense also increased $738
thousand mainly due to customer events, CRA expenses, and postage for
additional customer mailings during the period.
Income Tax Expense
Income tax expense as a percentage of income before income taxes was
22.6 percent and 32.5 percent for the three months ended June 30, 2006 and
2005, respectively. The decline was mainly due to lower state income tax
expense, settlement of income tax examinations, and an increase in low
income housing tax credits from a year ago.
For the remainder of 2006, Valley anticipates an effective tax rate of
approximately 27.0 percent, compared to 24.7 percent for the six months
ended June 30, 2006. The 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 second quarter loans increased 2.1 percent, or 8.6 percent
on an annualized basis, to approximately $8.3 billion at June 30, 2006
compared to $8.2 billion at March 31, 2006. The linked quarter growth in
loans is mainly comprised of increases in construction, commercial, and
automobile loans of $59.2 million, $43.5 million and $39.3 million,
respectively. The increase is mainly attributable to new originations
augmented slightly by an increase in commercial loan line usage.
During the quarter deposits increased $212.2 million, or 10.2 percent
on an annualized basis, from $8.4 billion at March 31, 2006. The increase
in deposits reflects Valley's deposit growth initiatives introduced in the
first quarter of 2006 carried through the second quarter. The largest
increases were in time deposits and money market accounts, partially offset
by a decrease in municipal deposits. For the remainder of 2006, deposit
growth is expected to be dependent on the rates dictated by market
competition versus the cost of alternative funding sources. Valley intends
to maintain a funding strategy dependent on the Bank's consolidated
interest earning asset mix.
Credit Quality
Net loan charge-offs for the second quarter of 2006 were $3.3 million
compared to $936 thousand for the second quarter of 2005, and $584 thousand
for the first quarter of 2006. The increase in net loan charge-offs is
mainly due to charge-offs totaling $2.2 million on two commercial loans,
which were on non-accrual. The provision for loan losses was $3.1 million
for the second quarter of 2006 compared to $925 thousand for the second
quarter of 2005, and $1.3 million for the first quarter of 2006. Total
non-performing assets, consisting of non-accrual loans and other real
estate owned, totaled $30.7 million, or 0.37 percent of loans and other
real estate owned at June 30, 2006 down from $35.1 million or 0.43 percent
at March 31, 2006.
Loans past due 90 days or more and still accruing at June 30, 2006 were
$7.4 million, or 0.09 percent of $8.3 billion of total loans, compared to
$5.0 million at June 30, 2005 and $2.6 million at March 31, 2006. Total
loans past due in excess of 30 days were 0.65 percent of total loans at
June 30, 2006 compared with 0.74 percent at March 31, 2006.
Financial Ratios
Valley's annualized return on average shareholders' equity was 17.25
percent and 18.41 percent for the three months ended June 30, 2006 and
2005, respectively. The decrease is mainly attributable to additional
goodwill and net core deposit intangibles generated from the NorCrown Bank
acquisition on June 3, 2005, which totaled approximately $97.4 million. On
a comparative basis, adjusting for Valley's goodwill and other intangible
assets, the annualized return on average tangible shareholders' equity was
22.31 percent and 22.51 percent, respectively, for the quarter ended June
30, 2006 and 2005. See "Notes to Selected Financial Data" section in the
tables that follow for information regarding the computation of these
ratios.
For the second quarter of 2006 and 2005, annualized return on average
assets was 1.33 percent and 1.35 percent, respectively.
Valley's risk-based capital ratios were 10.54 percent for Tier 1
capital, 12.41 percent for total capital and 8.18 percent for Tier 1
leverage at June 30, 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 163 offices in 107
communities serving 12 counties throughout northern and central New Jersey
and Manhattan.
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 Six Months Ended
June 30, June 30,
(Dollars in
thousands, except
for share data) 2006 2005 2006 2005
FINANCIAL DATA:
Net income $40,786 $38,991 $81,697 $77,259
Net interest
income 98,337 99,840 196,878 194,433
Net interest
income - FTE (2) 99,976 101,581 200,216 197,819
Weighted Average
Number of Shares
Outstanding (3):
Basic 116,883,643 114,805,491 116,868,333 111,937,007
Diluted 117,408,282 115,240,814 117,328,091 112,410,101
Per share data (3):
Basic earnings $0.35 $0.34 $0.70 $0.69
Diluted earnings 0.35 0.34 0.70 0.69
Cash dividends
declared 0.22 0.21 0.43 0.41
Book value 8.08 7.85 8.08 7.85
Tangible book
value (1) 6.24 5.91 6.24 5.91
Closing stock
price - high 25.71 24.06 25.71 25.23
Closing stock
price - low 23.90 21.73 22.06 21.73
FINANCIAL RATIOS:
Net interest
margin 3.42% 3.70% 3.43% 3.71%
Net interest
margin - FTE (2) 3.48 3.76 3.49 3.78
Annualized return
on average assets 1.33 1.35 1.33 1.38
Annualized return
on average
shareholders' equity 17.25 18.41 17.32 19.77
Annualized return
on average
tangible
shareholders'
equity (1) 22.31 22.51 22.46 22.68
Efficiency ratio (4) 52.59 50.75 52.06 49.81
AVERAGE BALANCE
SHEET ITEMS:
Assets $12,294,841 $11,583,688 $12,274,970 $11,173,330
Interest earning
assets 11,501,020 10,801,202 11,479,359 10,468,622
Loans 8,243,355 7,480,523 8,197,622 7,234,991
Interest bearing
liabilities 9,363,120 8,774,898 9,357,439 8,505,138
Deposits 8,503,424 8,200,244 8,445,135 7,857,009
Shareholders'
equity 946,018 847,214 943,184 781,730
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
Three Months Ended Six Months Ended
June 30, June 30,
(Dollars in
thousands) 2006 2005 2006 2005
ALLOWANCE FOR
LOAN LOSSES:
Beginning of
period $75,898 $69,029 $75,188 $65,699
Provision for
loan losses 3,117 925 4,411 1,677
Charge-offs 3,845 1,886 5,239 3,264
Recoveries 526 950 1,336 1,695
Additions from
acquisitions -- 6,041 -- 9,252
End of period $75,696 $75,059 $75,696 $75,059
As of June 30,
2006 2005
BALANCE SHEET ITEMS:
Assets $12,429,815 $12,267,025
Loans 8,335,692 7,838,985
Deposits 8,571,267 8,627,093
Shareholders' equity 944,511 916,725
CAPITAL RATIOS:
Tier 1 leverage ratio 8.18% 8.01%
Risk-based capital - Tier 1 10.54 10.18
Risk-based capital - Total Capital 12.41 11.02
ASSET QUALITY:
Non-accrual loans $29,015 $25,037
Other real estate owned (OREO) 1,728 1,083
Total non-performing assets 30,743 26,120
Loans past due 90 days or more and still accruing 7,374 4,984
ASSET QUALITY RATIOS:
Non-performing assets to total loans plus OREO 0.37% 0.33%
Allowance for loan losses to loans 0.91 0.96
Annualized net charge-offs to average loans 0.10 0.04
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. Valley's management believes these non-GAAP financial
measures provide information useful to investors in understanding the
underlying operational performance of Valley, its business and
performance trends and facilitates comparisons with the performance of
others in 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 common shares
outstanding.
-- Return on average tangible shareholders' equity is computed by
dividing net income by average shareholders' equity less average
goodwill and average other intangible assets.
Three Months Ended Six Months Ended
June 30, June 30,
(Dollars in
thousands,
except for
share data) 2006 2005 2006 2005
-----------------------------------------------------------------------
Common shares
outstanding 116,904,122 116,843,367 116,904,122 116,843,367
----------- ----------- ----------- -----------
Shareholders'
equity $944,511 $916,725 $944,511 $916,725
Less: Goodwill
and other
intangible
assets (214,758) (226,096) (214,758) (226,096)
----------- ----------- ----------- -----------
Tangible
shareholders'
equity $729,753 $690,629 $729,753 $690,629
----------- ----------- ----------- -----------
Tangible
book value $6.24 $5.91 $6.24 $5.91
=========== =========== =========== ===========
Net income $40,786 $38,991 $81,697 $77,259
----------- ----------- ----------- -----------
Average
shareholders'
equity 946,018 847,214 943,184 781,730
Less: Average
goodwill and
other
intangible
assets (214,874) (154,263) (215,693) (100,446)
----------- ----------- ----------- -----------
Average
tangible
shareholders'
equity $731,144 $692,951 $727,491 $681,284
----------- ----------- ----------- -----------
Annualized
return on
average
tangible
shareholders'
equity 22.31% 22.51% 22.46% 22.68%
=========== =========== =========== ==========
(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)
(Dollars in thousands, except for share data)
June 30, December 31,
--------- -----------
Assets 2006 2005
--------- -----------
Cash and due from banks $221,364 $246,119
Interest bearing deposits with banks 12,301 13,926
Federal funds sold 10,000 --
Investment securities:
Held to maturity, fair value of
$1,182,556 at June 30, 2006 and
$1,218,081 at December 31, 2005 1,215,678 1,229,190
Available for sale 1,886,641 2,038,894
Trading securities 1,922 4,208
----------------------------
Total investment securities 3,104,241 3,272,292
----------------------------
Loans held for sale -- 3,497
Loans 8,335,692 8,130,457
Less: Allowance for loan losses (75,696) (75,188)
----------------------------
Net loans 8,259,996 8,055,269
----------------------------
Premises and equipment, net 195,185 182,739
Bank owned life insurance 186,831 182,789
Accrued interest receivable 56,448 57,280
Due from customers on acceptances outstanding 12,241 11,314
Goodwill 180,718 179,898
Other intangible assets, net 34,040 37,456
Other assets 156,450 193,523
----------------------------
Total assets $12,429,815 $12,436,102
============================
Liabilities
Deposits:
Non-interest bearing $2,001,717 $2,048,218
Interest bearing:
Savings, NOW and money market 3,808,398 4,026,249
Time 2,761,152 2,495,534
----------------------------
Total deposits 8,571,267 8,570,001
----------------------------
Short-term borrowings 343,898 582,575
Long-term borrowings 2,475,377 2,245,570
Bank acceptances outstanding 12,241 11,314
Accrued expenses and other liabilities 82,521 94,732
----------------------------
Total liabilities 11,485,304 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 116,943,418 shares at June 30, 2006
and 116,985,373 shares at December 31, 2005 41,250 39,302
Surplus 882,589 741,456
Retained earnings 66,650 177,332
Unallocated common stock held by the
employee benefit plan -- --
Accumulated other comprehensive loss (45,060) (24,036)
Less: Treasury stock, at cost,
39,296 common shares at June 30, 2006
and 92,320 shares at December 31, 2005 (918) (2,144)
----------------------------
Total shareholders' equity 944,511 931,910
----------------------------
Total liabilities and
shareholders' equity $12,429,815 $12,436,102
============================
* Share data reflects a five percent common stock dividend issued May 22,
2006.
VALLEY NATIONAL BANCORP
Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ---------------------
2006 2005 2006 2005
---------------------- ---------------------
Interest Income
Interest and fees on
loans $133,672 $111,183 $261,100 $212,377
Interest and
dividends on
investment
securities:
Taxable 35,745 36,007 71,990 70,200
Tax-exempt 2,974 3,155 6,047 6,136
Dividends 1,362 1,432 2,791 2,121
Interest on federal
funds sold and
other short-term
investments 573 291 795 397
---------- --------- --------- ---------
Total interest
income 174,326 152,068 342,723 291,231
---------- --------- --------- ---------
Interest Expense
Interest on deposits:
Savings, NOW and
money market 18,865 12,073 35,888 20,707
Time 26,095 15,739 47,816 28,658
Interest on short-term
borrowings 4,142 3,769 9,553 7,119
Interest on long-term
borrowings 26,887 20,647 52,588 40,314
---------- --------- --------- ---------
Total interest
expense 75,989 52,228 145,845 96,798
---------- --------- --------- ---------
Net Interest Income 98,337 99,840 196,878 194,433
Provision for loan
losses 3,117 925 4,411 1,677
---------- --------- --------- ---------
Net interest income
after provision for
loan losses 95,220 98,915 192,467 192,756
Non-Interest Income
Trust and investment
services 1,931 1,619 3,613 3,196
Insurance premiums 2,779 2,773 5,418 6,063
Service charges on
deposit accounts 5,938 5,921 11,528 10,864
Gains on securities
transactions, net 553 585 1,507 2,318
Gains on trading
securities, net 302 471 678 907
Fees from loan
servicing 1,489 1,788 3,076 3,562
Gains on sales of
loans, net 529 559 1,194 1,067
Bank owned life
insurance 2,039 1,753 4,042 3,312
Other 3,827 3,863 7,700 7,401
---------- --------- --------- ---------
Total non-interest
income 19,387 19,332 38,756 38,690
---------- --------- --------- ---------
Non-Interest Expense
Salary expense 27,053 27,004 53,569 51,446
Employee benefit expense 6,713 7,121 13,885 13,778
Net occupancy and
equipment expense 11,139 10,064 22,724 19,899
Amortization of other
intangible assets 2,183 2,340 4,371 4,076
Professional and
legal fees 2,065 1,885 3,998 3,847
Advertising 2,450 2,459 4,249 4,433
Other 10,307 9,604 19,876 18,644
---------- --------- --------- ---------
Total non-interest
expense 61,910 60,477 122,672 116,123
---------- --------- --------- ---------
Income before income
taxes 52,697 57,770 108,551 115,323
Income tax expense 11,911 18,779 26,854 38,064
---------- --------- --------- ---------
Net Income $40,786 $38,991 $81,697 $77,259
========== ========= ========= =========
Weighted Average
Number of Common
Shares
Outstanding:*
Basic 116,883,643 114,805,491 116,868,333 111,937,007
Diluted 117,408,282 115,240,814 117,328,091 112,410,101
Earnings Per Common
Share:*
Basic $0.35 $0.34 $0.70 $0.69
Diluted 0.35 0.34 0.70 0.69
Cash Dividends
Declared Per Common
Share* 0.22 0.21 0.43 0.41
* Share data reflects a five percent common stock dividend issued
May 22, 2006.
Valley National Bancorp
(Dollars in thousands)
End of Period - End of Period -
06/30/06 03/31/06
--------------- ---------------
Loan Portfolio Loan Portfolio Loan Portfolio
--------------- ---------------
--------------- ---------------
Commercial Loans $1,492,688 $1,449,207
--------------- ---------------
Construction 515,683 456,478
Residential Mortgage 2,093,694 2,099,696
Commercial Mortgage 2,311,897 2,298,239
--------------- ---------------
Total Mortgage Loans 4,921,274 4,854,413
--------------- ---------------
Home Equity 570,500 559,118
Credit Card 8,279 8,061
Automobile 1,234,005 1,194,749
Other Consumer 108,946 95,252
--------------- ---------------
Total Consumer Loans 1,921,730 1,857,180
--------------- ---------------
Total Loans $8,335,692 $8,160,800
=============== ===============
End of End of End of
Period - Period - Period -
12/31/05 09/30/05 06/30/05
--------- -------- ----------
Loan Loan Loan
Loan Portfolio Portfolio Portfolio Portfolio
--------- --------- ----------
--------- ---------- ----------
Commercial Loans $1,449,919 $1,414,639 $1,363,119
--------- ---------- ----------
Construction 471,560 459,935 457,258
Residential Mortgage 2,083,004 2,061,366 2,044,101
Commercial Mortgage 2,234,950 2,230,586 2,189,195
--------- ---------- ----------
Total Mortgage Loans 4,789,514 4,751,887 4,690,554
--------- ---------- ----------
Home Equity 565,960 571,441 559,049
Credit Card 9,044 8,764 8,849
Automobile 1,221,525 1,233,125 1,104,749
Other Consumer 94,495 101,956 112,665
--------- ---------- ----------
Total Consumer Loans 1,891,024 1,915,286 1,785,312
--------- ---------- ----------
Total Loans $8,130,457 $8,081,812 $7,838,985
========== ========== ==========
Quarterly Analysis of Average Assets, Liabilities and Shareholders'
Equity and Net Interest Income on a Tax Equivalent Basis
Quarter End - 06/30/06 Quarter End - 03/31/06
------------------------- --------------------------
Average Avg. Average Avg.
Balance Interest Rate Balance Interest Rate
------- -------- ---- ---------- -------- -----
Assets
Interest earning
assets:
Loans (1)(2) $8,243,355 $133,709 6.49% $8,151,381 $127,472 6.26%
Taxable
investments (3) 2,919,614 37,107 5.08% 2,990,948 37,674 5.04%
Tax-exempt
investments(1)(3) 292,738 4,576 6.25% 297,505 4,726 6.35%
Federal funds sold
and other interest
bearing deposits 45,313 573 5.06% 17,624 222 5.04%
--------------------------------------------------------
Total interest
earning assets 11,501,020 175,965 6.12% 11,457,458 170,094 5.94%
Other assets 793,821 797,420
----------- -----------
Total assets $12,294,841 $12,254,878
=========== ===========
Liabilities and
shareholders'
equity
Interest bearing
liabilities:
Savings, NOW and
money market
deposits $3,853,598 $18,865 1.96% $3,916,783 $17,023 1.74%
Time deposits 2,683,610 26,095 3.89% 2,529,421 21,721 3.43%
Short-term
borrowings 415,298 4,142 3.99% 565,787 5,411 3.83%
Long-term
borrowings 2,410,614 26,887 4.46% 2,339,703 25,701 4.39%
-----------------------------------------------------------
Total interest
bearing
liabilities 9,363,120 75,989 3.25% 9,351,694 69,856 2.99%
Non-interest
bearing deposits 1,966,216 1,939,995
Other liabilities 19,487 22,870
Shareholders'
equity 946,018 940,319
----------- -----------
Total liabilities
and shareholders'
equity $12,294,841 $12,254,878
============ ===========
Net interest
income/interest
rate spread (4) 99,976 2.87% 100,238 2.95%
------- ------
Tax equivalent
adjustment (1,639) (1,697)
--------- --------
Net interest
income, as
reported $98,337 $98,541
========= =======
Net interest margin (4) 3.42% 3.44%
Tax equivalent effect 0.06% 0.06%
----- -----
Net interest margin
on a fully tax
equivalent basis (5) 3.48% 3.50%
===== =====
Quarter End - 12/31/05 Quarter End - 09/30/05
------------------------- -------------------------
Average Avg. Average Avg.
Balance Interest Rate Balance Interest Rate
-------- -------- ----- -------- --------- -----
Assets
Interest earning
assets:
Loans (1)(2) $8,106,582 $127,026 6.27% $7,962,189 $122,127 6.14%
Taxable
investments (3) 3,115,049 39,196 5.03% 3,114,714 38,549 4.95%
Tax-exempt
investments(1)(3) 301,445 4,731 6.28% 313,324 4,799 6.13%
Federal funds sold
and other interest
bearing deposits 59,887 600 4.01% 30,114 247 3.28%
Total interest
earning assets 11,582,963 171,553 5.92% 11,420,341 165,722 5.80%
Other assets 827,871 835,459
---------- ----------
Total assets $12,410,834 $12,255,800
=========== ===========
Liabilities and
shareholders'
equity
Interest bearing
liabilities:
Savings, NOW and
money market
deposits $4,206,136 $18,620 1.77% $4,249,153 $16,129 1.52%
Time deposits 2,482,182 20,781 3.35% 2,430,264 18,162 2.99%
Short-term
borrowings 584,695 5,099 3.49% 555,043 4,298 3.10%
Long-term
borrowings 2,192,011 24,250 4.43% 2,074,478 22,522 4.34%
---------------------------------------------------------
Total interest
bearing
liabilities 9,465,024 68,750 2.91% 9,308,938 61,111 2.63%
Non-interest
bearing deposits 1,973,843 1,964,872
Other liabilities 48,387 60,013
Shareholders'
equity 923,580 921,977
--------- ---------
Total liabilities
and shareholders'
equity $12,410,834 $12,255,800
=========== ===========
Net interest
income/interest
rate spread (4) 102,803 3.01% 104,611 3.17%
----- -----
Tax equivalent
adjustment (1,700) (1,723)
-------- --------
Net interest
income, as
reported $101,103 $102,888
======== ========
Net interest margin (4) 3.49% 3.60%
Tax equivalent effect 0.06% 0.06%
----- -----
Net interest margin
on a fully tax
equivalent basis (5) 3.55% 3.66%
===== =====
Quarter End - 06/30/05
----------------------------
Average Avg.
Balance Interest Rate
------- -------- -----
Assets
Interest earning assets:
Loans (1)(2) $7,480,523 $111,225 5.95%
Taxable investments (3) 2,960,641 37,439 5.06%
Tax-exempt investments (1)(3) 325,138 4,854 5.97%
Federal funds sold and other
interest bearing deposits 34,900 291 3.34%
------------------------------
Total interest earning assets 10,801,202 153,809 5.70%
Other assets 782,486
-----------
Total assets $11,583,688
===========
Liabilities and shareholders' equity
Interest bearing liabilities:
Savings, NOW and money market deposits $3,993,938 $12,073 1.21%
Time deposits 2,285,187 15,739 2.75%
Short-term borrowings 535,485 3,769 2.82%
Long-term borrowings 1,960,288 20,647 4.21%
------------------------------
Total interest bearing liabilities 8,774,898 52,228 2.38%
Non-interest bearing deposits 1,921,119
Other liabilities 40,457
Shareholders' equity 847,214
-----------
Total liabilities and shareholders'
equity $11,583,688
===========
Net interest income/interest rate
spread (4) 101,581 3.32%
-----
Tax equivalent adjustment (1,741)
-------
Net interest income, as reported $99,840
=======
Net interest margin (4) 3.70%
Tax equivalent effect 0.06%
-----
Net interest margin on a fully tax
equivalent basis (5) 3.76%
=====
(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 on a tax equivalent basis as a percentage of total
average interest earning assets.
SOURCE Valley National Bancorp
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