New Jersey | 1-11277 | 22-2477875 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
1455 Valley Road, Wayne, New Jersey | 07470 | |
(Address of Principal Executive Offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Dated: April 27, 2016 | VALLEY NATIONAL BANCORP | |||
By: | /s/ Alan D. Eskow | |||
Alan D. Eskow | ||||
Senior Executive Vice President and | ||||
Chief Financial Officer (Principal Financial Officer) | ||||
FOR IMMEDIATE RELEASE | Contact: | Alan D. Eskow | |
Senior Executive Vice President and | |||
Chief Financial Officer | |||
973-305-4003 |
• | Loan Portfolio: Loans increased by $92.9 million, or 2.3 percent on an annualized basis, to $16.1 billion at March 31, 2016 from December 31, 2015 largely due to a $181.6 million net increase in total commercial real estate loans and continued growth in collateralized personal lines of credit within the other consumer loans category, partially offset by decreases in the automobile, residential mortgage and home equity loan portfolios. Total new organic loan originations, excluding new lines of credit, totaled over $600 million mostly in the commercial loan categories during the first quarter of 2016. The new loan volumes were largely offset by a high level of loan repayment (partly due to credit risk considerations), including a $125.1 million decline in the acquired purchased credit-impaired (PCI) loan portion of the portfolio. Total commercial real estate loan growth, totaling 8.9 percent on an annualized basis, compared to the total balance at December 31, 2015, was partly due to solid organic loan volumes from our Florida markets and purchased loan participations in the latter part of the first quarter, consisting of multi-family loans within our local market. See additional information under the "Loans, Deposits and Other Borrowings" section below. |
• | Asset Quality: Non-performing assets (including non-accrual loans) decreased by 0.8 percent to $77.6 million at March 31, 2016 as compared to $78.2 million at December 31, 2015. Total accruing past due and non-accrual loans as a percentage of our entire loan portfolio of $16.1 billion moderately increased to 0.61 percent at March 31, 2016 from 0.55 percent at December 31, 2015. See further details under the "Credit Quality" section below. |
• | Provision for Credit Losses: During the first quarter of 2016, we recorded an $800 thousand provision for credit losses as compared to a $3.5 million provision recorded for the fourth quarter of 2015 and no provision for the first quarter of 2015. For the first quarter of 2016, we recognized net loan charge-offs totaling $1.5 million as compared to net charge-offs totaling $1.8 million for the fourth quarter of 2015 and net recoveries of $278 thousand for the first quarter of 2015. See |
• | Net Interest Income and Margin: Net interest income of $148.2 million for the three months ended March 31, 2016 increased $16.1 million as compared to the first quarter of 2015 and increased $107 thousand as compared to the fourth quarter of 2015. On a tax equivalent basis, our net interest margin of 3.08 percent for the first quarter of 2016 decreased 12 basis points as compared to the first quarter of 2015, and decreased by 22 basis points as compared to the fourth quarter of 2015. The decline in net interest margin for the first quarter of 2016 as compared to the linked fourth quarter was partially due to a $5.6 million aggregate decline in periodic commercial loan fee income and interest recovery income from certain PCI loan pools, as well as lower interest income caused by a decline in prepayment speeds coupled with improved credit quality within certain PCI loan pools. See the "Net Interest Income and Margin" section below for more details. |
• | Non-Interest Expense: Non-interest expense decreased $56.7 million to $118.2 million for the first quarter of 2016 from $174.9 million for the fourth quarter of 2015 largely due to decreases of $51.1 million and $5.8 million in debt prepayment penalties and amortization of tax credit investments, respectively. Valley anticipates additional cost reductions in the second quarter of 2016 related to our consolidation of the CNLBancshares, Inc. (CNL) operations acquired in December 2015. See the "Non-Interest Expense" section below for additional information. |
• | Branch Efficiency Plan: In 2015, we disclosed our plan to close and consolidate 28 branch locations based upon our continuous evaluation of customer delivery channel preferences, branch usage patterns, and other factors. As of March 31, 2016, 14 of the 28 branches were closed, including 1 branch closed during the first quarter of 2016. The remaining 14 branches currently identified under the plan are expected to be closed by June 30, 2016. Valley estimates that the 28 branch closures will result in an annualized reduction of approximately $10 million in ongoing operating expenses, of which 45 percent should be realized by the end of 2016. |
• | Capital Strength: Valley's regulatory capital ratios continue to reflect its strong capital position. Valley's total risk-based capital, Tier 1 capital, Tier 1 leverage capital, and Tier 1 common capital ratios were 11.81 percent, 9.48 percent, 7.32 percent and 8.83 percent, respectively, at March 31, 2016. |
March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||||||||||||||
Allocation | Allocation | Allocation | |||||||||||||||||||
as a % of | as a % of | as a % of | |||||||||||||||||||
Allowance | Loan | Allowance | Loan | Allowance | Loan | ||||||||||||||||
($ in thousands) | Allocation | Category | Allocation | Category | Allocation | Category | |||||||||||||||
Loan Category: | |||||||||||||||||||||
Commercial and industrial loans* | $ | 50,677 | 2.00 | % | $ | 50,956 | 2.01 | % | $ | 46,827 | 1.98 | % | |||||||||
Commercial real estate loans: | |||||||||||||||||||||
Commercial real estate | 31,812 | 0.42 | % | 32,037 | 0.43 | % | 26,335 | 0.42 | % | ||||||||||||
Construction | 16,642 | 2.14 | % | 15,969 | 2.12 | % | 15,321 | 2.83 | % | ||||||||||||
Total commercial real estate loans | 48,454 | 0.58 | % | 48,006 | 0.59 | % | 41,656 | 0.62 | % | ||||||||||||
Residential mortgage loans | 4,209 | 0.14 | % | 4,625 | 0.15 | % | 4,092 | 0.15 | % | ||||||||||||
Consumer loans: | |||||||||||||||||||||
Home equity | 1,061 | 0.22 | % | 1,010 | 0.20 | % | 1,588 | 0.33 | % | ||||||||||||
Auto and other consumer | 3,274 | 0.20 | % | 3,770 | 0.22 | % | 3,384 | 0.23 | % | ||||||||||||
Total consumer loans | 4,335 | 0.20 | % | 4,780 | 0.22 | % | 4,972 | 0.25 | % | ||||||||||||
Unallocated | — | — | — | 7,018 | — | ||||||||||||||||
Total allowance for credit losses | $ | 107,675 | 0.67 | % | $ | 108,367 | 0.68 | % | $ | 104,565 | 0.76 | % | |||||||||
* Includes the reserve for unfunded letters of credit. |
• | weakness or a decline in the U.S. economy, in particular in New Jersey, New York Metropolitan area (including Long Island) and Florida; |
• | unexpected changes in market interest rates for interest earning assets and/or interest bearing liabilities; |
• | less than expected cost savings from the maturity, modification or prepayment of long-term borrowings that mature through 2022; |
• | further prepayment penalties related to the early extinguishment of high cost borrowings; |
• | less than expected cost savings in 2016 and 2017 from Valley's branch efficiency and cost reduction plans; |
• | lower than expected cash flows from purchased credit-impaired loans; |
• | claims and litigation pertaining to fiduciary responsibility, contractual issues, environmental laws and other matters; |
• | cyber attacks, computer viruses or other malware that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage our systems; |
• | Results of examinations by the OCC, the FRB, the CFPB and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for credit losses, write-down assets, require us to reimburse customers, change the way we do business, or limit or eliminate certain other banking activities; |
• | government intervention in the U.S. financial system and the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve; |
• | our inability to pay dividends at current levels, or at all, because of inadequate future earnings, regulatory restrictions or limitations, and changes in the composition of qualifying regulatory capital and minimum capital requirements (including those resulting from the U.S. implementation of Basel III requirements); |
• | higher than expected loan losses within one or more segments of our loan portfolio; |
• | unexpected significant declines in the loan portfolio due to the lack of economic expansion, increased competition, large prepayments, changes in regulatory lending guidance or other factors; |
• | unanticipated credit deterioration in our loan portfolio; |
• | unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather or other external events; |
• | an unexpected decline in real estate values within our market areas; |
• | changes in accounting policies or accounting standards, including the potential issuance of new authoritative accounting guidance which may increase the required level of our allowance for credit losses; |
• | higher than expected income tax expense or tax rates, including increases resulting from changes in tax laws, regulations and case law; |
• | higher than expected FDIC insurance assessments; |
• | the failure of other financial institutions with whom we have trading, clearing, counterparty and other financial relationships; |
• | lack of liquidity to fund our various cash obligations; |
• | unanticipated reduction in our deposit base; |
• | potential acquisitions that may disrupt our business; |
• | declines in value in our investment portfolio, including additional other-than-temporary impairment charges on our investment securities; |
• | future goodwill impairment due to changes in our business, changes in market conditions, or other factors; |
• | legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulations) subject us to additional regulatory oversight which may result in higher compliance costs and/or require us to change our business model; |
• | our inability to promptly adapt to technological changes; |
• | our internal controls and procedures may not be adequate to prevent losses; |
• | the inability to realize expected revenue synergies from the CNL merger in the amounts or in the timeframe anticipated; |
• | inability to retain customers and employees, including those of CNL; and |
• | other unexpected material adverse changes in our operations or earnings. |
Three Months Ended | ||||||||||||||
March 31, | December 31, | March 31, | ||||||||||||
($ in thousands, except for share data) | 2016 | 2015 | 2015 | |||||||||||
FINANCIAL DATA: | ||||||||||||||
Net interest income | $ | 148,153 | $ | 148,046 | $ | 132,086 | ||||||||
Net interest income - FTE (1) | 150,144 | 150,080 | 134,037 | |||||||||||
Non-interest income | 21,448 | 24,039 | 18,645 | |||||||||||
Non-interest expense | 118,225 | 174,893 | 108,118 | |||||||||||
Income tax expense (benefit) | 14,389 | (10,987 | ) | 12,272 | ||||||||||
Net income | 36,187 | 4,672 | 30,341 | |||||||||||
Dividends on preferred stock | 1,797 | 1,797 | — | |||||||||||
Net income available to common shareholders | $ | 34,390 | $ | 2,875 | $ | 30,341 | ||||||||
Weighted average number of common shares outstanding: | ||||||||||||||
Basic | 254,075,349 | 239,916,562 | 232,338,775 | |||||||||||
Diluted | 254,347,420 | 239,972,546 | 232,341,921 | |||||||||||
Per common share data: | ||||||||||||||
Basic earnings | $ | 0.14 | $ | 0.01 | $ | 0.13 | ||||||||
Diluted earnings | 0.14 | 0.01 | 0.13 | |||||||||||
Cash dividends declared | 0.11 | 0.11 | 0.11 | |||||||||||
Closing stock price - high | 9.67 | 11.14 | 9.77 | |||||||||||
Closing stock price - low | 8.31 | 9.67 | 9.05 | |||||||||||
FINANCIAL RATIOS: | ||||||||||||||
Net interest margin | 3.04 | % | 3.25 | % | 3.16 | % | ||||||||
Net interest margin - FTE (1) | 3.08 | 3.30 | 3.20 | |||||||||||
Annualized return on average assets | 0.67 | 0.09 | 0.64 | |||||||||||
Annualized return on average shareholders' equity | 6.52 | 0.90 | 6.49 | |||||||||||
Annualized return on average tangible shareholders' equity (2) | 9.75 | 1.29 | 9.66 | |||||||||||
Efficiency ratio (3) | 69.71 | 101.63 | 71.73 | |||||||||||
AVERAGE BALANCE SHEET ITEMS: | ||||||||||||||
Assets | $ | 21,680,278 | $ | 20,257,422 | $ | 18,850,025 | ||||||||
Interest earning assets | 19,487,470 | 18,216,020 | 16,738,899 | |||||||||||
Loans | 15,993,543 | 15,343,468 | 13,569,031 | |||||||||||
Interest bearing liabilities | 14,335,698 | 13,368,128 | 12,598,669 | |||||||||||
Deposits | 16,380,594 | 15,521,476 | 14,110,547 | |||||||||||
Shareholders' equity | 2,219,570 | 2,069,084 | 1,869,754 |
As Of | |||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
($ in thousands) | 2016 | 2015 | 2015 | 2015 | 2015 | ||||||||||||||
BALANCE SHEET ITEMS: | |||||||||||||||||||
Assets | $ | 21,727,523 | $ | 21,612,616 | $ | 19,571,532 | $ | 19,290,005 | $ | 18,980,010 | |||||||||
Total loans | 16,135,987 | 16,043,107 | 15,016,814 | 14,480,294 | 13,734,461 | ||||||||||||||
Non-PCI loans | 14,020,566 | 13,802,636 | 13,539,026 | 12,908,822 | 12,085,279 | ||||||||||||||
Deposits | 16,408,426 | 16,253,551 | 14,499,863 | 14,331,031 | 14,216,743 | ||||||||||||||
Shareholders' equity | 2,219,602 | 2,207,091 | 1,996,949 | 1,985,527 | 1,867,153 | ||||||||||||||
LOANS: | |||||||||||||||||||
($ in thousands) | |||||||||||||||||||
Commercial and industrial | $ | 2,537,545 | $ | 2,540,491 | $ | 2,400,618 | $ | 2,372,031 | $ | 2,367,927 | |||||||||
Commercial real estate: | |||||||||||||||||||
Commercial real estate | 7,585,139 | 7,424,636 | 6,960,677 | 6,783,149 | 6,205,873 | ||||||||||||||
Construction | 776,057 | 754,947 | 569,653 | 586,068 | 542,014 | ||||||||||||||
Total commercial real estate | 8,361,196 | 8,179,583 | 7,530,330 | 7,369,217 | 6,747,887 | ||||||||||||||
Residential mortgage | 3,101,814 | 3,130,541 | 2,999,262 | 2,704,081 | 2,648,011 | ||||||||||||||
Consumer: | |||||||||||||||||||
Home equity | 491,555 | 511,203 | 478,129 | 482,366 | 485,859 | ||||||||||||||
Automobile | 1,188,063 | 1,239,313 | 1,219,758 | 1,198,064 | 1,162,963 | ||||||||||||||
Other consumer | 455,814 | 441,976 | 388,717 | 354,535 | 321,814 | ||||||||||||||
Total consumer loans | 2,135,432 | 2,192,492 | 2,086,604 | 2,034,965 | 1,970,636 | ||||||||||||||
Total loans | $ | 16,135,987 | $ | 16,043,107 | $ | 15,016,814 | $ | 14,480,294 | $ | 13,734,461 | |||||||||
CAPITAL RATIOS: | |||||||||||||||||||
Book value | $ | 8.29 | $ | 8.26 | $ | 8.10 | $ | 8.06 | $ | 8.03 | |||||||||
Tangible book value (2) | 5.40 | 5.36 | 5.48 | 5.43 | 5.40 | ||||||||||||||
Tangible common equity to tangible assets (2) | 6.54 | % | 6.52 | % | 6.73 | % | 6.76 | % | 6.83 | % | |||||||||
Tier 1 leverage | 7.32 | 7.90 | 7.67 | 7.76 | 7.17 | ||||||||||||||
Tier 1 common capital | 8.83 | 9.01 | 9.18 | 9.31 | 9.45 | ||||||||||||||
Risk-based capital - Tier 1 | 9.48 | 9.72 | 9.93 | 10.07 | 9.45 | ||||||||||||||
Risk-based capital - Total Capital | 11.81 | 12.02 | 12.43 | 12.62 | 11.35 |
Three Months Ended | |||||||||||||
March 31, | December 31, | March 31, | |||||||||||
($ in thousands) | 2016 | 2015 | 2015 | ||||||||||
ALLOWANCE FOR CREDIT LOSSES: | |||||||||||||
Beginning balance - Allowance for credit losses | $ | 108,367 | $ | 106,697 | $ | 104,287 | |||||||
Loans charged-off: | |||||||||||||
Commercial and industrial | (1,251 | ) | (2,825 | ) | (753 | ) | |||||||
Commercial real estate | (105 | ) | — | (77 | ) | ||||||||
Construction | — | (10 | ) | (73 | ) | ||||||||
Residential mortgage | (81 | ) | (314 | ) | (49 | ) | |||||||
Consumer | (1,074 | ) | (799 | ) | (714 | ) | |||||||
Total loans charged-off | (2,511 | ) | (3,948 | ) | (1,666 | ) | |||||||
Charged-off loans recovered: | |||||||||||||
Commercial and industrial | 526 | 1,646 | 1,051 | ||||||||||
Commercial real estate | 89 | 73 | 23 | ||||||||||
Construction | — | — | 437 | ||||||||||
Residential mortgage | 15 | 26 | 114 | ||||||||||
Consumer | 389 | 366 | 319 | ||||||||||
Total loans recovered | 1,019 | 2,111 | 1,944 | ||||||||||
Net (charge-offs) recoveries | (1,492 | ) | (1,837 | ) | 278 | ||||||||
Provision for credit losses | 800 | 3,507 | — | ||||||||||
Ending balance - Allowance for credit losses | $ | 107,675 | $ | 108,367 | $ | 104,565 | |||||||
Components of allowance for credit losses: | |||||||||||||
Allowance for loan losses | $ | 105,415 | $ | 106,178 | $ | 102,631 | |||||||
Allowance for unfunded letters of credit | 2,260 | 2,189 | 1,934 | ||||||||||
Allowance for credit losses | $ | 107,675 | $ | 108,367 | $ | 104,565 | |||||||
Components of provision for credit losses: | |||||||||||||
Provision for loan losses | $ | 729 | $ | 3,464 | $ | — | |||||||
Provision for unfunded letters of credit | 71 | 43 | — | ||||||||||
Provision for credit losses | $ | 800 | $ | 3,507 | $ | — | |||||||
Annualized ratio of total net charge-offs | |||||||||||||
to average loans | 0.04 | % | 0.05 | % | (0.01 | )% | |||||||
Allowance for credit losses as | |||||||||||||
a % of total loans | 0.67 | % | 0.68 | % | 0.76 | % |
As Of | |||||||||||||
($ in thousands) | March 31, | December 31, | March 31, | ||||||||||
ASSET QUALITY: (4) | 2016 | 2015 | 2015 | ||||||||||
Accruing past due loans: | |||||||||||||
30 to 59 days past due: | |||||||||||||
Commercial and industrial | $ | 8,395 | $ | 3,920 | $ | 4,472 | |||||||
Commercial real estate | 1,389 | 2,684 | 4,775 | ||||||||||
Construction | 1,326 | 1,876 | 6,577 | ||||||||||
Residential mortgage | 14,628 | 6,681 | 12,498 | ||||||||||
Consumer | 3,200 | 3,348 | 2,875 | ||||||||||
Total 30 to 59 days past due | 28,938 | 18,509 | 31,197 | ||||||||||
60 to 89 days past due: | |||||||||||||
Commercial and industrial | 613 | 524 | 90 | ||||||||||
Commercial real estate | 120 | — | 1,883 | ||||||||||
Construction | — | 2,799 | — | ||||||||||
Residential mortgage | 3,056 | 1,626 | 1,782 | ||||||||||
Consumer | 731 | 626 | 837 | ||||||||||
Total 60 to 89 days past due | 4,520 | 5,575 | 4,592 | ||||||||||
90 or more days past due: | |||||||||||||
Commercial and industrial | 221 | 213 | 208 | ||||||||||
Commercial real estate | 131 | 131 | 2,792 | ||||||||||
Construction | — | — | — | ||||||||||
Residential mortgage | 2,613 | 1,504 | 564 | ||||||||||
Consumer | 66 | 208 | 262 | ||||||||||
Total 90 or more days past due | 3,031 | 2,056 | 3,826 | ||||||||||
Total accruing past due loans | $ | 36,489 | $ | 26,140 | $ | 39,615 | |||||||
Non-accrual loans: | |||||||||||||
Commercial and industrial | $ | 11,484 | $ | 10,913 | $ | 8,285 | |||||||
Commercial real estate | 26,604 | 24,888 | 24,850 | ||||||||||
Construction | 5,978 | 6,163 | 5,144 | ||||||||||
Residential mortgage | 16,747 | 17,930 | 17,127 | ||||||||||
Consumer | 1,807 | 2,206 | 2,138 | ||||||||||
Total non-accrual loans | 62,620 | 62,100 | 57,544 | ||||||||||
Other real estate owned (5) | 12,368 | 13,563 | 13,184 | ||||||||||
Other repossessed assets | 495 | 437 | 477 | ||||||||||
Non-accrual debt securities (6) | 2,102 | 2,142 | 2,030 | ||||||||||
Total non-performing assets | $ | 77,585 | $ | 78,242 | $ | 73,235 | |||||||
Performing troubled debt restructured loans | $ | 80,506 | $ | 77,627 | $ | 100,524 | |||||||
Total non-accrual loans as a % of loans | 0.39 | % | 0.39 | % | 0.42 | % | |||||||
Total accruing past due and non-accrual loans | |||||||||||||
as a % of loans | 0.61 | % | 0.55 | % | 0.71 | % | |||||||
Allowance for loan losses as a % of | |||||||||||||
non-accrual loans | 168.34 | % | 170.98 | % | 178.35 | % | |||||||
Non-performing purchased credit-impaired loans (7) | $ | 32,987 | $ | 38,625 | $ | 44,919 |
(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) | This press release contains certain supplemental financial information, described in the Notes below, which has been determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP") that management uses in its analysis of Valley's performance. Management believes these non-GAAP financial measures provide information useful to investors in understanding Valley's financial results. Specifically, Valley provides measures based on what it believes are its operating earnings on a consistent basis and excludes material non-core operating items which affect the GAAP reporting of results of operations. Management utilizes these measures for internal planning and forecasting purposes. Management believes that Valley's presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting Valley's business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and Valley strongly encourages investors to review its consolidated financial statements in their a substitute for GAAP basis measures and results and Valley strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. |
As Of | |||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
($ in thousands, except for share data) | 2016 | 2015 | 2015 | 2015 | 2015 | ||||||||||||||
Tangible book value per common share: | |||||||||||||||||||
Common shares outstanding | 254,285,434 | 253,787,561 | 232,789,880 | 232,619,748 | 232,428,108 | ||||||||||||||
Shareholders' equity | $ | 2,219,602 | $ | 2,207,091 | $ | 1,996,949 | $ | 1,985,527 | $ | 1,867,153 | |||||||||
Less: Preferred stock | (111,590 | ) | (111,590 | ) | (111,590 | ) | (111,590 | ) | — | ||||||||||
Less: Goodwill and other intangible assets | (735,744 | ) | (735,221 | ) | (608,916 | ) | (610,640 | ) | (612,558 | ) | |||||||||
Tangible common shareholders' equity | $ | 1,372,268 | $ | 1,360,280 | $ | 1,276,443 | $ | 1,263,297 | $ | 1,254,595 | |||||||||
Tangible book value per common share | $5.40 | $5.36 | $5.48 | $5.43 | $5.40 | ||||||||||||||
Tangible common equity to tangible assets: | |||||||||||||||||||
Tangible common shareholders' equity | $ | 1,372,268 | $ | 1,360,280 | $ | 1,276,443 | $ | 1,263,297 | $ | 1,254,595 | |||||||||
Total assets | 21,727,523 | 21,612,616 | 19,571,532 | 19,290,005 | 18,980,010 | ||||||||||||||
Less: Goodwill and other intangible assets | (735,744 | ) | (735,221 | ) | (608,916 | ) | (610,640 | ) | (612,558 | ) | |||||||||
Tangible assets | $ | 20,991,779 | $ | 20,877,395 | $ | 18,962,616 | $ | 18,679,365 | $ | 18,367,452 | |||||||||
Tangible common equity to tangible assets | 6.54 | % | 6.52 | % | 6.73 | % | 6.76 | % | 6.83 | % |
Three Months Ended | |||||||||||
March 31, | December 31, | March 31, | |||||||||
($ in thousands) | 2016 | 2015 | 2015 | ||||||||
Annualized return on average tangible shareholders' equity: | |||||||||||
Net income | $ | 36,187 | $ | 4,672 | $ | 30,341 | |||||
Average shareholders' equity | 2,219,570 | 2,069,084 | 1,869,754 | ||||||||
Less: Average goodwill and other intangible assets | (735,438 | ) | (621,635 | ) | (613,556 | ) | |||||
Average tangible shareholders' equity | $ | 1,484,132 | $ | 1,447,449 | $ | 1,256,198 | |||||
Annualized return on average tangible | |||||||||||
shareholders' equity | 9.75 | % | 1.29 | % | 9.66 | % |
(3) | The efficiency ratio measures Valley's total non-interest expense as a percentage of net interest income plus total non-interest income. See the "Non-Interest Expense" section to this press release for additional information. | |||||||||
(4) | Past due loans and non-accrual loans exclude purchased credit-impaired (PCI) loans. These loans are accounted for on a pool basis under U.S. GAAP and are not subject to delinquency classification in the same manner as loans originated by Valley. | |||||||||
(5) | Excludes OREO properties related to FDIC-assisted transactions totaling $2.4 million, $5.0 million and $8.6 million, at March 31, 2016, December 31, 2015, and March 31, 2015, respectively. These assets are covered by the loss-sharing agreements with the FDIC. | |||||||||
(6) | Includes other-than-temporarily impaired trust preferred securities classified as available for sale, which are presented at carrying value (net of unrealized losses totaling $651 thousand, $610 thousand, and $723 thousand at March 31, 2016, December 31, 2015 and March 31, 2015, respectively) after recognition of all credit impairments. | |||||||||
(7) | Represent PCI loans meeting Valley's definition of non-performing loan (i.e., non-accrual loans), but are not subject to such classification under U.S. GAAP because the loans are accounted for on a pooled basis and are excluded from the non-accrual loans in the table above. | |||||||||
SHAREHOLDERS RELATIONS Requests for copies of reports and/or other inquiries should be directed to Dianne Grenz, EVP, Director of Sales, Shareholder and Public Relations, Valley National Bancorp, 1455 Valley Road, Wayne, New Jersey, 07470, by telephone at (973) 305-4005, by fax at (973) 305-1364 or by e-mail at dgrenz@valleynationalbank.com. |
March 31, | December 31, | ||||||
2016 | 2015 | ||||||
Assets | (Unaudited) | ||||||
Cash and due from banks | $ | 243,265 | $ | 243,575 | |||
Interest bearing deposits with banks | 233,228 | 170,225 | |||||
Investment securities: | |||||||
Held to maturity (fair value of $1,660,224 at March 31, 2016 and $1,621,039 at December 31, 2015) | 1,618,466 | 1,596,385 | |||||
Available for sale | 1,452,489 | 1,506,861 | |||||
Total investment securities | 3,070,955 | 3,103,246 | |||||
Loans held for sale, at fair value | 15,347 | 16,382 | |||||
Loans | 16,135,987 | 16,043,107 | |||||
Less: Allowance for loan losses | (105,415 | ) | (106,178 | ) | |||
Net loans | 16,030,572 | 15,936,929 | |||||
Premises and equipment, net | 300,072 | 298,943 | |||||
Bank owned life insurance | 389,500 | 387,542 | |||||
Accrued interest receivable | 62,973 | 63,554 | |||||
Due from customers on acceptances outstanding | 1,119 | 1,185 | |||||
Goodwill | 689,589 | 686,339 | |||||
Other intangible assets, net | 46,155 | 48,882 | |||||
Other assets | 644,748 | 655,814 | |||||
Total Assets | $ | 21,727,523 | $ | 21,612,616 | |||
Liabilities | |||||||
Deposits: | |||||||
Non-interest bearing | $ | 5,053,478 | $ | 4,914,285 | |||
Interest bearing: | |||||||
Savings, NOW and money market | 8,273,936 | 8,181,362 | |||||
Time | 3,081,012 | 3,157,904 | |||||
Total deposits | 16,408,426 | 16,253,551 | |||||
Short-term borrowings | 1,170,623 | 1,076,991 | |||||
Long-term borrowings | 1,660,284 | 1,810,728 | |||||
Junior subordinated debentures issued to capital trusts | 41,455 | 41,414 | |||||
Bank acceptances outstanding | 1,119 | 1,185 | |||||
Accrued expenses and other liabilities | 226,014 | 221,656 | |||||
Total Liabilities | 19,507,921 | 19,405,525 | |||||
Shareholders’ Equity | |||||||
Preferred stock (no par value, authorized 30,000,000 shares; issued 4,600,000 shares at March 31, 2016 and December 31, 2015) | 111,590 | 111,590 | |||||
Common stock (no par value, authorized 332,023,233 shares; issued 254,326,257 shares at March 31, 2016 and 253,787,561 shares at December 31, 2015) | 88,735 | 88,626 | |||||
Surplus | 1,930,844 | 1,927,399 | |||||
Retained earnings | 131,494 | 125,171 | |||||
Accumulated other comprehensive loss | (42,695 | ) | (45,695 | ) | |||
Treasury stock, at cost (40,823 common shares at March 31, 2016) | (366 | ) | — | ||||
Total Shareholders’ Equity | 2,219,602 | 2,207,091 | |||||
Total Liabilities and Shareholders’ Equity | $ | 21,727,523 | $ | 21,612,616 |
Three Months Ended | ||||||||||||
March 31, | December 31, | March 31, | ||||||||||
2016 | 2015 | 2015 | ||||||||||
Interest Income | ||||||||||||
Interest and fees on loans | $ | 166,071 | $ | 167,412 | $ | 150,482 | ||||||
Interest and dividends on investment securities: | ||||||||||||
Taxable | 13,999 | 12,737 | 14,932 | |||||||||
Tax-exempt | 3,690 | 3,768 | 3,612 | |||||||||
Dividends | 1,480 | 1,544 | 1,739 | |||||||||
Interest on federal funds sold and other short-term investments | 357 | 133 | 220 | |||||||||
Total interest income | 185,597 | 185,594 | 170,985 | |||||||||
Interest Expense | ||||||||||||
Interest on deposits: | ||||||||||||
Savings, NOW and money market | 9,243 | 7,331 | 5,995 | |||||||||
Time | 9,585 | 9,795 | 7,974 | |||||||||
Interest on short-term borrowings | 1,872 | 492 | 94 | |||||||||
Interest on long-term borrowings and junior subordinated debentures | 16,744 | 19,930 | 24,836 | |||||||||
Total interest expense | 37,444 | 37,548 | 38,899 | |||||||||
Net Interest Income | 148,153 | 148,046 | 132,086 | |||||||||
Provision for credit losses | 800 | 3,507 | — | |||||||||
Net Interest Income After Provision for Credit Losses | 147,353 | 144,539 | 132,086 | |||||||||
Non-Interest Income | ||||||||||||
Trust and investment services | 2,440 | 2,500 | 2,494 | |||||||||
Insurance commissions | 4,708 | 4,779 | 4,205 | |||||||||
Service charges on deposit accounts | 5,103 | 5,382 | 5,290 | |||||||||
Gains on securities transactions, net | 271 | 6 | 2,416 | |||||||||
Fees from loan servicing | 1,594 | 1,693 | 1,603 | |||||||||
Gains on sales of loans, net | 1,795 | 1,211 | 598 | |||||||||
(Losses) gains on sales of assets, net | (10 | ) | 2,853 | 281 | ||||||||
Bank owned life insurance | 1,963 | 1,627 | 1,764 | |||||||||
Change in FDIC loss-share receivable | (560 | ) | 54 | (3,920 | ) | |||||||
Other | 4,144 | 3,934 | 3,914 | |||||||||
Total non-interest income | 21,448 | 24,039 | 18,645 | |||||||||
Non-Interest Expense | ||||||||||||
Salary and employee benefits expense | 60,259 | 56,164 | 56,712 | |||||||||
Net occupancy and equipment expense | 22,789 | 24,663 | 22,200 | |||||||||
FDIC insurance assessment | 5,099 | 4,895 | 3,792 | |||||||||
Amortization of other intangible assets | 2,849 | 2,448 | 2,393 | |||||||||
Professional and legal fees | 3,895 | 6,902 | 3,341 | |||||||||
Loss on extinguishment of debt | — | 51,129 | — | |||||||||
Amortization of tax credit investments | 7,264 | 13,081 | 4,496 | |||||||||
Telecommunication expense | 2,386 | 2,158 | 2,006 | |||||||||
Other | 13,684 | 13,453 | 13,178 | |||||||||
Total non-interest expense | 118,225 | 174,893 | 108,118 | |||||||||
Income Before Income Taxes | 50,576 | (6,315 | ) | 42,613 | ||||||||
Income tax expense (benefit) | 14,389 | (10,987 | ) | 12,272 | ||||||||
Net Income | 36,187 | 4,672 | 30,341 | |||||||||
Dividends on preferred stock | 1,797 | 1,797 | — | |||||||||
Net Income Available to Common Shareholders | $ | 34,390 | $ | 2,875 | $ | 30,341 | ||||||
Earnings Per Common Share: | ||||||||||||
Basic | $ | 0.14 | $ | 0.01 | $ | 0.13 | ||||||
Diluted | 0.14 | 0.01 | 0.13 | |||||||||
Cash Dividends Declared per Common Share | 0.11 | 0.11 | 0.11 | |||||||||
Weighted Average Number of Common Shares Outstanding: | ||||||||||||
Basic | 254,075,349 | 239,916,562 | 232,338,775 | |||||||||
Diluted | 254,347,420 | 239,972,546 | 232,341,921 |
VALLEY NATIONAL BANCORP | ||||||||||||||||||||||||||||||||||||
Quarterly Analysis of Average Assets, Liabilities and Shareholders' Equity and | ||||||||||||||||||||||||||||||||||||
Net Interest Income on a Tax Equivalent Basis | ||||||||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||||||||
March 31, 2016 | December 31, 2015 | March 31, 2015 | ||||||||||||||||||||||||||||||||||
Average | Avg. | Average | Avg. | Average | Avg. | |||||||||||||||||||||||||||||||
($ in thousands) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Interest earning assets | ||||||||||||||||||||||||||||||||||||
Loans (1)(2) | $ | 15,993,543 | $ | 166,075 | 4.15 | % | $ | 15,343,468 | $ | 167,417 | 4.36 | % | $ | 13,569,031 | $ | 150,488 | 4.44 | % | ||||||||||||||||||
Taxable investments (3) | 2,497,986 | 15,479 | 2.48 | % | 2,076,720 | 14,281 | 2.75 | % | 2,285,155 | 16,671 | 2.92 | % | ||||||||||||||||||||||||
Tax-exempt investments (1)(3) | 569,265 | 5,677 | 3.99 | % | 552,471 | 5,797 | 4.20 | % | 540,838 | 5,557 | 4.11 | % | ||||||||||||||||||||||||
Federal funds sold and other | ||||||||||||||||||||||||||||||||||||
interest bearing deposits | 426,676 | 357 | 0.33 | % | 243,361 | 133 | 0.22 | % | 343,875 | 220 | 0.26 | % | ||||||||||||||||||||||||
Total interest earning assets | 19,487,470 | 187,588 | 3.85 | % | 18,216,020 | 187,628 | 4.12 | % | 16,738,899 | 172,936 | 4.13 | % | ||||||||||||||||||||||||
Other assets | 2,192,808 | 2,041,402 | 2,111,126 | |||||||||||||||||||||||||||||||||
Total assets | $ | 21,680,278 | $ | 20,257,422 | $ | 18,850,025 | ||||||||||||||||||||||||||||||
Liabilities and shareholders' equity | ||||||||||||||||||||||||||||||||||||
Interest bearing liabilities: | ||||||||||||||||||||||||||||||||||||
Savings, NOW and money market deposits | $ | 8,334,289 | $ | 9,243 | 0.44 | % | $ | 7,724,927 | $ | 7,331 | 0.38 | % | $ | 7,143,643 | $ | 5,995 | 0.34 | % | ||||||||||||||||||
Time deposits | 3,127,842 | 9,585 | 1.23 | % | 3,154,781 | 9,795 | 1.24 | % | 2,757,077 | 7,974 | 1.16 | % | ||||||||||||||||||||||||
Short-term borrowings | 1,061,011 | 1,872 | 0.71 | % | 417,097 | 492 | 0.47 | % | 128,085 | 94 | 0.29 | % | ||||||||||||||||||||||||
Long-term borrowings (4) | 1,812,556 | 16,744 | 3.70 | % | 2,071,323 | 19,930 | 3.85 | % | 2,569,864 | 24,836 | 3.87 | % | ||||||||||||||||||||||||
Total interest bearing liabilities | 14,335,698 | 37,444 | 1.04 | % | 13,368,128 | 37,548 | 1.12 | % | 12,598,669 | 38,899 | 1.24 | % | ||||||||||||||||||||||||
Non-interest bearing deposits | 4,918,463 | 4,641,768 | 4,209,827 | |||||||||||||||||||||||||||||||||
Other liabilities | 206,547 | 178,442 | 171,775 | |||||||||||||||||||||||||||||||||
Shareholders' equity | 2,219,570 | 2,069,084 | 1,869,754 | |||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 21,680,278 | $ | 20,257,422 | $ | 18,850,025 | ||||||||||||||||||||||||||||||
Net interest income/interest rate spread (5) | $ | 150,144 | 2.81 | % | $ | 150,080 | 3.00 | % | $ | 134,037 | 2.89 | % | ||||||||||||||||||||||||
Tax equivalent adjustment | (1,991 | ) | (2,034 | ) | (1,951 | ) | ||||||||||||||||||||||||||||||
Net interest income, as reported | $ | 148,153 | $ | 148,046 | $ | 132,086 | ||||||||||||||||||||||||||||||
Net interest margin (6) | 3.04 | % | 3.25 | % | 3.16 | % | ||||||||||||||||||||||||||||||
Tax equivalent effect | 0.04 | % | 0.05 | % | 0.04 | % | ||||||||||||||||||||||||||||||
Net interest margin on a fully tax equivalent basis (6) | 3.08 | % | 3.30 | % | 3.20 | % | ||||||||||||||||||||||||||||||
_________________________ |
(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. |
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