KCBD, NewsChannel 11 Lubbock |Valley National Bancorp Reports An Increase In Third Quarter Earnings
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WAYNE, N.J., Oct. 22 /PRNewswire-FirstCall/ -- Valley National Bancorp (NYSE: VLY), the holding company for Valley National Bank, today reported net income for the third quarter of 2009 of $31.6 million, $0.18 per diluted common share, compared to third quarter of 2008 earnings of $3.6 million, or $0.03 per diluted common share. Diluted earnings per common share were negatively impacted by accrued preferred stock dividends and accretion totaling $6.0 million ($0.04 per common share) and a $2.8 million ($0.01 per common share) non-cash charge due to the change in the fair value of junior subordinated debentures carried at fair value for the third quarter of 2009. For the third quarter of 2008, diluted earnings per common share were reduced by other-than-temporary impairment and realized losses totaling $70.9 million ($0.31 per common share) on Fannie and Freddie Mac perpetual preferred stock, partially offset by a $20.9 million ($0.10 per common share) non-cash gain due to the change in the fair value of junior subordinated debentures.
Performance Highlights
In September 2009, we repurchased 125,000 of our Series A Fixed Rate Cumulative Perpetual Preferred Stock from the U.S. Department of the Treasury for an aggregate purchase price of $125.7 million (including accrued and unpaid dividends). Including our repurchase of 75,000 shares in June 2009, we have repurchased $200 million of $300 million in senior preferred shares issued to the Treasury under the Capital Purchase Program during November 2008.
On September 29, 2009, the FDIC proposed a rule that would require insured institutions to prepay their estimated quarterly assessments through December 31, 2012 to strengthen the cash position of the Deposit Insurance Fund. Once final, the rule would require the cash prepayment on December 30, 2009. Management believes the prepayment (estimated to be approximately $48.5 million) will not have a significant impact on our future cash position or operations.
Chairman's Comments
Gerald H. Lipkin, Chairman, President and CEO commented that, "The third quarter 2009 results produced no real surprises as Valley continues to perform well in the face of one of the worst economic recessions in recent history. The economy's slow recovery from the recession continues to impact us as well as all financial institutions. However, our net interest margin, the main driver of our business, has shown continued strength and improved by 9 basis points from the second quarter of 2009 to 3.61 percent on a tax equivalent basis for the third quarter of 2009. The net interest margin results, including the increase in net interest income as compared to the second quarter of 2009, is a clear reflection of our disciplined management of lending and our marginal cost of funds.
We are pleased with the level of loan delinquencies when compared to the most recent results reported by our peers. Our total delinquencies 30 days or more past due for the entire loan portfolio were 1.60 percent, of which only 1.02 percent are greater than 90 days past due or non-accrual loans. Additionally, we believe our commercial real estate loan delinquencies totaling 1.05 percent at September 30, 2009 remain well controlled mainly due to our underwriting standards which typically require a combination of strong cash flow, substantial down payment, and personal guarantees.
Despite our acceptable loan performance, we recorded a provision for credit losses that was $2.7 million greater than net charge-offs during the third quarter of 2009. The addition to our reserves was, among other factors, to provide for potential loan deterioration that may result from a prolonged U.S. economic recession. The allowance for credit losses as a percentage of total loans increased 4 basis points to 1.10 percent at September 30, 2009 as compared to June 30, 2009 and increased 21 basis points compared to September 30, 2008.
Our capital levels remained strong, and as a result we were able to repurchase $125 million of our senior preferred shares from the Treasury after careful consideration of our balance sheet's credit risk and economic conditions. This repurchase will reduce future preferred dividends and should have a positive impact on net income available to our common stockholders. We may request future redemptions of part or all of our remaining $100 million in senior preferred shares depending on the path of the economy, our future performance and capital needs."
Credit Quality
Given the state of the U.S. economy and the current level of our loan delinquencies and losses relative to our peers, management believes that our credit quality remains good. Our focus has been and continues to be on traditional lending, utilizing our time-tested underwriting approach. With a loan portfolio totaling approximately $9.5 billion, net loan charge-offs for the third quarter of 2009 were $10.0 million compared to $8.2 million for the second quarter of 2009, and $4.4 million for the third quarter of 2008.
Valley's allocated reserves for the commercial and industrial loan portfolio increased $3.0 million or 22 basis points as a percentage of the commercial loan portfolio during the period mainly due to specific reserves for one new impaired loan relationship. The following table summarizes the allocation of the allowance for credit losses to specific loan categories and the allocation as a percentage of each loan category:
September 30, 2009 June 30, 2009
------------------ -------------
Allocation Allocation
as a % of as a % of
Allowance loan Allowance loan
Allocation category Allocation category
---------- -------- ---------- --------
Loan category:
Commercial and
Industrial loans* $56,682 3.14% $53,721 2.92%
Mortgage:
Construction 13,828 3.10% 14,856 3.10%
Residential
mortgage 5,538 0.28% 4,911 0.24%
Commercial real
estate 10,539 0.30% 10,398 0.31%
------ ------
Total mortgage loans 29,905 0.50% 30,165 0.51%
Consumer:
Home equity 1,708 0.30% 1,686 0.29%
Other consumer 10,683 0.89% 10,721 0.86%
------ ------
Total consumer loans 12,391 0.70% 12,407 0.67%
Unallocated 6,076 NA 6,024 NA
----- -----
$105,054 1.10% $102,317 1.06%
======== ========
September 30, 2008
------------------
Allocation
as a % of
Allowance loan
Allocation category
---------- --------
Loan category:
Commercial and
Industrial loans* $40,546 2.13%
Mortgage:
Construction 14,397 3.06%
Residential
mortgage 3,771 0.16%
Commercial real
estate 12,520 0.39%
------
Total mortgage loans 30,688 0.51%
Consumer:
Home equity 1,627 0.27%
Other consumer 11,428 0.72%
------
Total consumer loans 13,055 0.60%
Unallocated 5,472 NA
-----
$89,761 0.89%
=======
* Includes the reserve for unfunded letters of credit.
Total non-performing assets, consisting of non-accrual loans, other real estate owned (OREO) and other repossessed assets, totaled $82.8 million, or 0.87 percent of loans at September 30, 2009 compared to $66.4 million, or 0.69 percent of loans at June 30, 2009. Non-accrual loans increased $16.3 million to $74.0 million at September 30, 2009 as compared to $57.7 million at June 30, 2009. The increase in non-accrual loans was mostly due to three construction loans and two commercial real estate loans totaling $14.4 million and an increase in non-performing residential mortgage loans. Management believes most of the total non-accrual loans are well secured and, ultimately, collectible based on, in part, our quarterly valuation of impaired loans. OREO and other repossessed assets totaled a combined $8.7 million at September 30, 2009, unchanged from June 30, 2009.
Loans past due 90 days or more and still accruing increased $3.6 million to $23.1 million, or 0.24 percent of total loans at September 30, 2009 compared to $19.5 million, or 0.20 percent at June 30, 2009 primarily due to a $2.6 million increase in residential mortgage loans. The increase in loan delinquencies reflects the difficult economic climate, however, we believe our high underwriting policies continue to mitigate much of the potential impact of the economic environment as we view our overall delinquencies as relatively small in comparison to many other financial service providers.
Troubled debt restructured loans, with modified terms and not reported as loans 90 days or more past due and still accruing or non-accrual, decreased $2.6 million to $19.4 million at September 30, 2009 as compared to $22.0 million at June 30, 2009, primarily due to one commercial loan no longer classified as a troubled debt restructured loan (due to its performance to contractual terms over a period greater than 12 months).
Loans and Deposits
During the quarter, loans decreased $107.0 million to approximately $9.5 billion at September 30, 2009. The linked quarter decrease was mainly comprised of decreases in automobile, residential mortgage, commercial and industrial, and construction loans of $51.1 million, $49.7 million, $34.1 million and $32.6 million, respectively, partially offset by a $74.1 million increase in commercial real estate loans. Our automobile loan portfolio has declined for five consecutive quarters mainly due to low consumer demand for new and used vehicles, as well as Valley's move to further strengthen its auto loan underwriting standards in light of the weakened economy. The decline in the residential mortgage loan portfolio continued during the third quarter of 2009 as expected by management based on our secondary market sales of most refinanced loans and new loan originations. The decline in commercial and industrial loans is mainly due to a slowdown in new commercial loan activity and a decrease in line of credit usage by customers caused by the economy. Construction loans decreased due to normal incremental paydowns on existing loans coupled with lower new loan volume due to the slowdown in the housing market. Commercial real estate loans continued to modestly increase quarter over quarter as we benefited from the dislocation in the credit markets for new loans with quality borrowers meeting our credit standards. We may experience further declines in the loan portfolio during the remainder of 2009 and 2010 due to a slow economic recovery cycle or as a result of our asset/liability management strategies, including the sale of residential mortgage loan originations with low fixed interest rates.
During the quarter, total deposits increased $122.0 million to approximately $9.4 billion at September 30, 2009. At September 30, 2009, savings, NOW, and money market deposits increased $181.5 million and time deposits increased $48.1 million, partially offset by a $107.6 million decline in non-interest bearing deposits as compared to June 30, 2009. The increases in savings, NOW, and money market deposits and time deposits were due, in part, to additional deposits generated from de novo branch locations put in-service over the last twelve months. Non-interest bearing deposits decreased 4.6 percent during the third quarter of 2009 primarily due to normal fluctuations in both commercial and retail customer account balances.
Net Interest Income and Margin
Net interest income on a tax equivalent basis was $116.4 million for the third quarter of 2009, relatively unchanged from the same quarter of 2008 and an increase of $2.0 million from the linked quarter ended June 30, 2009. The linked quarter increase was primarily due to lower interest expense caused by maturing high cost time deposits during the third quarter of 2009. A three basis point increase in the yield on average loans also contributed to the increase in net interest income for the third quarter of 2009. The positive effect of these items on our net interest income was partially negated by a $188.9 million decrease in average loans during the three months ended September 30, 2009.
The net interest margin on a tax equivalent basis was 3.61 percent for the third quarter of 2009, an increase of 9 basis points from 3.52 percent for the linked quarter ended June 30, 2009 and a decrease of 3 basis points as compared to the third quarter of 2008. The cost of average interest bearing liabilities declined 19 basis points from the second quarter of 2009 mainly due to a 51 basis point decrease in the cost of average time deposits caused by maturing higher cost certificates of deposit. The yield on average interest earning assets decreased by 6 basis points on a linked quarter basis mainly due to a 41 basis point decrease in yield on average taxable investments as compared to the three months ended June 30, 2009.
Our cost of total deposits totaled 1.13 percent for the third quarter of 2009 compared to 1.36 percent for the three months ended June 30, 2009. The decrease of 23 basis points was due to maturing high cost certificates of deposit and a $12.3 million increase in average non-interest bearing deposits.
Non-Interest Income (Loss)
Third quarter of 2009 compared with third quarter of 2008
Non-interest income for the third quarter of 2009 increased $49.2 million to $17.1 million as compared to a non-interest loss of approximately $32.1 million for the quarter ended September 30, 2008. Net impairment losses on securities decreased by $64.8 million to $743 thousand in impairment related to additional estimated credit losses on certain private label mortgage-backed securities (that were originally deemed other-than-temporarily impaired in the first quarter of 2009) for the third quarter of 2009 compared to $65.5 million loss for the same period of 2008. The other-than-temporary impairment charges incurred during the third quarter of 2008 were due to substantial declines in value of Fannie Mae and Freddie Mac perpetual preferred securities resulting from the government's decision to place these companies into conservatorship. Net trading losses increased $18.2 million to $3.5 million for the third quarter of 2009 compared to a net trading gain of $14.7 million in the same period of 2008 primarily due to the change in the fair value of our junior subordinated debentures carried at fair value. Net gains on sales of loans increased $2.4 million to $2.7 million for the quarter ended September 30, 2009 mainly due to higher sale volumes. Valley is currently selling most refinanced and new residential mortgage loan originations in the secondary market due to the level of current interest rates. Net losses on securities transactions decreased $1.9 million due to realized losses on the sale of certain Fannie Mae and Freddie Mac preferred securities during the third quarter of 2008. Bank owned life insurance ("BOLI") income decreased $1.2 million as compared to the third quarter of 2008 mainly due to the severe downturn in financial markets and its negative impact on the performance of the underlying investment securities of the BOLI asset.
Third quarter of 2009 compared with second quarter of 2009
Non-interest income for the third quarter of 2009 increased $17.5 million to $17.1 million as compared to a non-interest loss of $389 thousand for the second quarter of 2009 mainly due to a decline in net trading losses of $15.2 million in the third quarter of 2009. The majority of the decrease in net trading losses was caused by a $24.4 million non-cash charge on the change in the fair value of the junior subordinated debentures in the second quarter of 2009, as compared to a $2.8 million non-cash charge recognized on the change in the fair value of these debentures in the third quarter of 2009. The losses for the second quarter of 2009 were partially offset by mark to market and realized gains on the trading securities portfolio. Net impairment losses on securities decreased $1.7 million during the third quarter of 2009 as compared to the linked second quarter of 2009. The third quarter of 2009 included $743 thousand in additional estimated credit losses on certain private label mortgage-backed securities as compared to $2.4 million in estimated credit losses recognized on the same securities during the second quarter of 2009.
Non-Interest Expense
Third quarter of 2009 compared with third quarter of 2008
Non-interest expense totaling $73.9 million for the three months ended September 30, 2009 remained relatively unchanged from the same period one year ago. However, the FDIC insurance assessment increased $2.9 million to $3.3 million for the third quarter of 2009 as compared to $412 thousand for the third quarter of 2008 due to the depletion of our prior period FDIC acquisition credit, higher normal assessment rates and our election to participate in the FDIC's Temporary Liquidity Guarantee Program since the prior year period. Other non-interest expense decreased $2.0 million to $11.1 million for the three months ended September 30, 2009 as compared to the same period of 2008 due to a $1.2 million prepayment penalty on $25.0 million in Federal Home Loan Bank advances during the third quarter of 2008 and lower other real estate owned expense during the 2009 period. Salary and employee benefits also decreased a combined $1.0 million as compared to the third quarter of 2008 primarily due to staffing efficiencies fully realized during 2009 relating to staff acquired in the acquisition of Greater Community Bancorp on July 1, 2008.
Third quarter of 2009 compared with second quarter of 2009
Non-interest expense decreased by $4.2 million, or 5.4 percent to $73.9 million for the third quarter of 2009 from $78.1 million for the linked quarter ended June 30, 2009. The FDIC's insurance assessment decreased $6.9 million from the linked quarter mainly due to a special assessment totaling $6.5 million imposed during the second quarter of 2009. Salary and employee benefits increased a combined $1.2 million mainly due to additional staffing caused, in part, by five de novo branches opened since the middle of the second quarter of 2009. Amortization of other intangible assets increased $699 thousand mainly due to a $681 thousand net valuation allowance recovery on the fair value of previously impaired loan servicing rights during the second quarter of 2009.
Income Tax Expense
Income tax expense was $14.0 million for the third quarter of 2009, reflecting an effective tax rate of 30.6 percent, compared with an income tax benefit of $1.2 million for the third quarter of 2008, reflecting an effective tax benefit rate of 47.6 percent. The increase in income tax expense from the 2008 period reflects the lower level of pre-tax income during the third quarter of 2008 caused by other-than-temporary impairment and realized losses on Fannie Mae and Freddie Mac perpetual preferred securities. Additionally, the effective tax rate for the third quarter of 2009 was adversely impacted by lower tax advantaged income (caused by a reduction in BOLI income, and a decrease in non-taxable income and dividends from investment securities) and higher state and local tax expense.
Income tax expense was $36.7 million for the nine months ended September 30, 2009, reflecting an effective tax rate of 30.4 percent, compared with $19.9 million for the same period of 2008, reflecting an effective tax rate of 20.6 percent. The increase was due to several factors, including the lower level of 2008 pre-tax income and a $6.5 million reduction in Valley's deferred tax asset valuation allowance in 2008. Additionally, the effective tax rate in 2009 was negatively impacted by lower tax advantaged income and higher state and local tax expense.
Management expects that our adherence to FIN 48 will continue to result in increased volatility in our future quarterly and annual effective income tax rates because FIN 48 requires that any change in judgment or change in measurement of a tax position taken in a prior annual period be recognized as a discrete event in the period in which it occurs. Factors that could impact management's judgment include changes in income tax laws and regulations, and tax planning strategies. For the fourth quarter of 2009, Valley anticipates an effective tax rate of approximately 30 percent.
De novo Branch Program
Over the last several years, we have maintained a branch expansion plan which focuses on expanding our presence in the New Jersey counties and towns neighboring our current office locations, as well as in Manhattan, Kings and Queens Counties in New York. During the third quarter of 2009, we opened four new branches, including our seventh and fourth branches located in Brooklyn and Queens, respectively, increasing our total new branches to seven for the first nine months of 2009. Valley anticipates completing three additional de novo branch projects during the fourth quarter of 2009, including one additional branch office in both Brooklyn and Queens.
The current downturn in the economy, coupled with the possibility that acquisition opportunities may become available, are expected to slow future branch expansions on a de novo basis. Generally, new branches add future franchise value; however, the additional operating costs and capital requirement will have a negative impact on non-interest expense and net income for several years until the branch operations become individually profitable.
About Valley
Valley is a regional bank holding company, headquartered in Wayne, New Jersey, with over $14 billion in assets. Its principal subsidiary, Valley National Bank, currently operates 199 branches in 135 communities serving 14 counties throughout northern and central New Jersey and Manhattan, Brooklyn and Queens. Valley National Bank is the largest commercial bank headquartered in New Jersey and is committed to providing the most convenient service, the latest in product innovations and an experienced and knowledgeable staff with a high priority on friendly customer service 24 hours a day, 7 days a week. Valley National Bank offers a wide range of deposit products, mortgage loans and cash management services to consumers and businesses including products tailored for the medical, insurance and leasing business. Valley National Bank's comprehensive delivery channels enable customers to bank in person, by telephone or online.
For more information about Valley National Bank and its products and services, please visit www.valleynationalbank.com or call Customer Service 24/7 at 1-800-522-4100.
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 materially from those contemplated by such forward-looking statements include, but are not limited to those factors disclosed in Valley's Annual Report on Form 10-K for the year ended December 31, 2008 and its subsequent Quarterly Reports on Form 10-Q.
-Tables to Follow-
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
Three Months Ended
------------------
($ in thousands, except for September 30, June 30, September 30,
share data) 2009 2009 2008
---- ---- ----
FINANCIAL DATA:
---------------
Net interest income $115,068 $113,113 $115,232
Net interest income - FTE (2) 116,371 114,403 116,588
Non-interest income (loss)(3) 17,078 (389) (32,104)
Non-interest expense 73,892 78,106 73,842
Income tax expense (benefit) 13,950 6,557 (1,159)
Net income 31,582 14,997 3,595
Dividends on preferred stock
and accretion 5,983 5,789 --
Net income available to
common stockholders 25,599 9,208 3,595
Weighted average number of
common shares outstanding (4):
Basic 145,052,655 141,804,034 141,568,980
Diluted 145,053,020 141,804,908 141,717,842
Per common share data (4):
Basic earnings $0.18 $0.06 $0.03
Diluted earnings 0.18 0.06 0.03
Cash dividends declared 0.19 0.19 0.19
Book value 8.03 7.75 7.68
Tangible book value (1) 5.87 5.50 5.41
Closing stock price - high 13.56 15.03 22.86
Closing stock price - low 10.91 10.95 13.75
CORE ADJUSTED FINANCIAL DATA (1):
----------------------------------
Net income available to
common stockholders, as
adjusted $26,064 $10,731 $47,675
Basic earnings per share, as
adjusted 0.18 0.08 0.34
Diluted earnings per share,
as adjusted 0.18 0.08 0.34
FINANCIAL RATIOS:
-----------------
Net interest margin 3.57% 3.48% 3.59%
Net interest margin - FTE (2) 3.61 3.52 3.64
Annualized return on average
assets 0.89 0.42 0.10
Annualized return on average
shareholders' equity 9.35 4.41 1.28
Annualized return on average
tangible shareholders'
equity (1) 12.25 5.77 1.80
Efficiency ratio (5) 55.92 69.29 88.83
CORE ADJUSTED FINANCIAL RATIOS (1):
-----------------------------------
Annualized return on average
assets, as adjusted 0.91% 0.46% 1.36%
Annualized return on average
shareholders' equity, as
adjusted 9.48 4.86 17.03
Annualized return on average
tangible shareholders'
equity, as adjusted 12.43 6.36 23.92
Efficiency ratio, as adjusted 55.60 67.83 49.67
Nine Months Ended
-----------------
($ in thousands, except for September 30,
share data) 2009 2008
---- ----
FINANCIAL DATA:
---------------
Net interest income $337,745 $313,392
Net interest income - FTE (2) 341,619 317,529
Non-interest income (loss)
(3) 47,674 5,077
Non-interest expense 228,944 205,279
Income tax expense (benefit) 36,745 19,879
Net income 83,963 76,661
Dividends on preferred stock
and accretion 15,996 --
Net income available to
common stockholders 67,967 76,661
Weighted average number of
common shares outstanding (4):
Basic 142,889,382 135,358,526
Diluted 142,889,911 135,437,231
Per common share data (4):
Basic earnings $0.48 $0.57
Diluted earnings 0.48 0.57
Cash dividends declared 0.57 0.57
Book value 8.03 7.68
Tangible book value (1) 5.87 5.41
Closing stock price - high 18.91 22.86
Closing stock price - low 8.38 13.75
CORE ADJUSTED FINANCIAL DATA (1):
----------------------------------
Net income available to
common stockholders, as
adjusted $71,313 $121,336
Basic earnings per share, as
adjusted 0.50 0.90
Diluted earnings per share,
as adjusted 0.50 0.90
FINANCIAL RATIOS:
-----------------
Net interest margin 3.45% 3.45%
Net interest margin - FTE (2) 3.49 3.49
Annualized return on average
assets 0.78 0.78
Annualized return on average
shareholders' equity 8.24 10.09
Annualized return on average
tangible shareholders'
equity (1) 10.77 13.27
Efficiency ratio (5) 59.40 64.46
CORE ADJUSTED FINANCIAL RATIOS (1):
-----------------------------------
Annualized return on average
assets, as adjusted 0.82% 1.23%
Annualized return on average
shareholders' equity, as
adjusted 8.56 15.97
Annualized return on average
tangible shareholders'
equity, as adjusted 11.20 21.01
Efficiency ratio, as adjusted 58.59 53.21
Valley National Bancorp
Consolidated Financial Highlights
Three Months Ended
------------------
September 30, June 30, September 30,
($ in thousands) 2009 2009 2008
---- ---- ----
AVERAGE BALANCE SHEET ITEMS:
----------------------------
Assets $14,133,543 $14,214,185 $14,002,952
Interest earning assets 12,876,771 12,987,850 12,821,684
Loans 9,581,388 9,770,280 9,988,829
Interest bearing liabilities 10,413,440 10,502,379 10,744,038
Deposits 9,341,766 9,369,630 9,053,000
Shareholders' equity 1,351,745 1,359,500 1,120,011
ALLOWANCE FOR CREDIT LOSSES:
----------------------------
Beginning of period $102,317 $97,477 $75,949
Provision for credit losses 12,722 13,064 6,850
Charge-offs (10,811) (9,202) (5,197)
Recoveries 826 978 749
Addition from acquisition -- -- 11,410
------- ------- -------
End of period $105,054 $102,317 $89,761
Components:
Allowance for loan losses $103,446 $100,761 $88,158
Reserve for unfunded
letters of credit 1,608 1,556 1,603
----- ----- -----
Allowance for credit losses $105,054 $102,317 $89,761
Nine Months Ended
-----------------
September 30,
($ in thousands) 2009 2008
---- ----
AVERAGE BALANCE SHEET ITEMS:
----------------------------
Assets $14,271,759 $13,184,875
Interest earning assets 13,038,485 12,115,556
Loans 9,787,331 9,144,973
Interest bearing liabilities 10,583,670 10,154,659
Deposits 9,363,356 8,531,366
Shareholders' equity 1,359,440 1,013,113
ALLOWANCE FOR CREDIT LOSSES:
----------------------------
Beginning of period $94,738 $74,935
Provision for credit losses 35,767 16,650
Charge-offs (28,054) (15,246)
Recoveries 2,603 2,012
Addition from acquisition -- 11,410
------ ------
End of period $105,054 $89,761
Components:
Allowance for loan losses $103,446 $88,158
Reserve for unfunded
letters of credit 1,608 1,603
----- -----
Allowance for credit losses $105,054 $89,761
As of and For the Period Ended
------------------------------
September 30, June 30, December 31, September 30,
2009 2009 2008 2008
---- ---- ---- ----
BALANCE SHEET ITEMS:
--------------------
Assets $14,231,870 $14,132,031 $14,718,129 $14,288,151
Loans 9,511,413 9,618,377 10,143,690 10,057,281
Deposits 9,442,471 9,320,447 9,232,923 9,063,406
Shareholders' equity 1,284,102 1,318,896 1,363,609 1,088,612
CAPITAL RATIOS:
---------------
Tier 1 leverage ratio 8.46% 8.74% 9.10% 7.26%
Risk-based capital
- Tier 1 10.77 11.09 11.45 8.94
Risk-based capital
- Total Capital 12.66 12.94 13.19 10.65
ASSET QUALITY:
--------------
Non-accrual loans $74,045 $57,731 $33,073 $30,663
Other real estate owned 3,816 4,993 8,278 7,119
Other repossessed assets 4,931 3,699 4,317 4,060
----- ----- ----- -----
Total non-performing
assets (NPAs) $82,792 $66,423 $45,668 $41,842
Loans past due 90 days
or more and still
accruing 23,094 19,523 15,557 12,677
Troubled debt
restructured loans 19,406 21,954 7,628 9,353
ASSET QUALITY RATIOS:
---------------------
Non-performing loans
as a % of loans 0.78% 0.60% 0.33% 0.30%
NPAs as a % of loans
and NPAs 0.87 0.69 0.45 0.42
Loans past due 30 days
or more as a % of loans 1.60 1.49 1.06 0.86
Allowance for credit
losses as a % of
total loans 1.10 1.06 0.93 0.89
Annualized net
charge-offs as a % of
average loans 0.35 0.31 0.21 0.19
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. Specifically, Valley
provides measures based on what it believes are its operating
earnings on a consistent basis and exclude 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 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.
Three Months Ended
------------------
($ in thousands, except September 30, June 30, September 30,
for share data) 2009 2009 2008
---- ---- ----
Tangible book value per
common share
-----------------------
Common shares outstanding 147,670,080 141,843,774 141,687,815
----------- ----------- -----------
Shareholders' equity $1,284,102 $1,318,896 $1,088,612
Less: Preferred stock (97,625) (219,333) --
Less: Goodwill and other
intangible assets (320,063) (320,043) (321,948)
-------- -------- --------
Tangible shareholders'
equity $866,414 $779,520 $766,664
Tangible book value $5.87 $5.50 $5.41
Annualized return on average
tangible equity
----------------------------
Net income $31,582 $14,997 $3,595
------- ------- ------
Average shareholders' equity 1,351,745 1,359,500 1,120,011
Less: Average goodwill and
other intangible assets (320,284) (320,434) (322,685)
-------- -------- --------
Average tangible
shareholders' equity $1,031,461 $1,039,066 $797,326
Annualized return on
average tangible
shareholders' equity 12.25% 5.77% 1.80%
Adjusted net income available
to common stockholders
-----------------------------
Net income, as reported $31,582 $14,997 $3,595
Add: Net impairment losses
on securities recognized
in earnings (net of tax) 465 1,523 44,080
--- ----- ------
Net income, as adjusted 32,047 16,520 47,675
Dividends on preferred
stock and accretion 5,983 5,789 --
----- ----- --
Net income available to
common stockholders, as
adjusted $26,064 $10,731 $47,675
Adjusted per common share data
------------------------------
Net income available to
common stockholders, as
adjusted $26,064 $10,731 $47,675
Average number of basic
shares outstanding 145,052,655 141,804,034 141,568,980
Basic earnings, as
adjusted $0.18 $0.08 $0.34
Average number of diluted
shares outstanding 145,053,020 141,804,908 141,717,842
Diluted earnings, as
adjusted $0.18 $0.08 $0.34
Adjusted annualized return
on average assets
--------------------------
Net income, as adjusted $32,047 $16,520 $47,675
Average assets 14,133,543 14,214,185 14,002,952
Annualized return on
average assets, as
adjusted 0.91% 0.46% 1.36%
------------------------ ---- ---- ----
Nine Months Ended
-----------------
($ in thousands, except September 30,
for share data) 2009 2008
---- ----
Tangible book value per
common share
-----------------------
Common shares outstanding 147,670,080 141,687,815
----------- -----------
Shareholders' equity $1,284,102 $1,088,612
Less: Preferred stock (97,625) --
Less: Goodwill and other
intangible assets (320,063) (321,948)
-------- --------
Tangible shareholders'
equity $866,414 $766,664
Tangible book value $5.87 $5.41
Annualized return on average
tangible equity
----------------------------
Net income $83,963 $76,661
------- -------
Average shareholders'
equity $1,359,440 $1,013,113
Less: Average goodwill and
other intangible assets (319,720) (242,964)
-------- --------
Average tangible
shareholders' equity $1,039,720 $770,149
Annualized return on
average tangible
shareholders' equity 10.77% 13.27%
Adjusted net income available
to common stockholders
-----------------------------
Net income, as reported $83,963 $76,661
Add: Net impairment losses
on securities recognized
in earnings (net of tax) 3,346 44,675
----- ------
Net income, as adjusted 87,309 121,336
Dividends on preferred
stock and accretion 15,996 --
------ --
Net income available to
common stockholders, as
adjusted $71,313 $121,336
Adjusted per common share data
------------------------------
Net income available to
common stockholders, as
adjusted $71,313 $121,336
Average number of basic
shares outstanding 142,889,382 135,358,526
Basic earnings, as
adjusted $0.50 $0.90
Average number of diluted
shares outstanding 142,889,911 135,437,231
Diluted earnings, as
adjusted $0.50 $0.90
Adjusted annualized return on
average assets
-----------------------------
Net income, as adjusted $87,309 $121,336
Average assets 14,271,759 13,184,875
Annualized return on
average assets, as
adjusted 0.82% 1.23%
------------------------ ---- ----
Valley National Bancorp
Consolidated Financial Highlights
NOTES TO SELECTED FINANCIAL DATA - CONTINUED
Three Months Ended
------------------
($ in thousands, except September 30, June 30, September 30,
for share data) 2009 2009 2008
---- ---- ----
Adjusted annualized return
on average shareholders'
equity
--------------------------
Net income, as adjusted $32,047 $16,520 $47,675
Average shareholders'
equity 1,351,745 1,359,500 1,120,011
Annualized return on
average shareholders'
equity, as adjusted 9.48% 4.86% 17.03%
Adjusted annualized return
on average tangible
shareholders' equity
--------------------------
Net income, as adjusted $32,047 $16,520 $47,675
Average tangible
shareholders' equity 1,031,461 1,039,066 797,326
Annualized return on
average tangible
shareholders' equity, as
adjusted 12.43% 6.36% 23.92%
Adjusted efficiency ratio
-------------------------
Non-interest expense $73,892 $78,106 $73,842
------- ------- -------
Net interest income 115,068 113,113 115,232
Non-interest income (loss) 17,078 (389) (32,104)
Add: Net impairment losses
on securities recognized
in earnings 743 2,434 65,549
--- ----- ------
Gross operating income, as
adjusted $132,889 $115,158 $148,677
Efficiency ratio, as
adjusted 55.60% 67.83% 49.67%
(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) Non-interest income includes net trading gains (losses):
Trading securities ($648) $5,802 ($6,105)
Junior subordinated debentures (2,826) (24,433) 20,852
FHLB advances -- -- --
-- -- --
Total trading (losses)
gains, net ($3,474) ($18,631) $14,747
(4) Share data reflects the five percent common stock dividend issued
on May 22, 2009.
(5) The efficiency ratio measures Valley's total non-interest expense
as a percentage of net interest income plus total non-interest
income.
Nine Months Ended
($ in thousands, except September 30,
for share data) 2009 2008
---- ----
Adjusted annualized return
on average shareholders'
equity
--------------------------
Net income, as adjusted $87,309 $121,336
Average shareholders'
equity 1,359,440 1,013,113
Annualized return on
average shareholders'
equity, as adjusted 8.56% 15.97%
Adjusted annualized return
on average tangible
shareholders' equity
--------------------------
Net income, as adjusted $87,309 $121,336
Average tangible
shareholders' equity 1,039,720 770,149
Annualized return on
average tangible
shareholders' equity, as
adjusted 11.20% 21.01%
Adjusted efficiency ratio
-------------------------
Non-interest expense $228,944 $205,279
-------- --------
Net interest income 337,745 313,392
Non-interest income (loss) 47,674 5,077
Add: Net impairment losses
on securities recognized
in earnings 5,348 67,286
----- ------
Gross operating income, as
adjusted $390,767 $385,755
Efficiency ratio, as
adjusted 58.59% 53.21%
(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) Non-interest income includes net trading gains (losses):
Trading securities $4,618 ($8,667)
Junior subordinated debentures (13,504) 21,116
FHLB advances -- (1,194)
-- -----
Total trading (losses)
gains, net ($8,886) $11,255
(4) Share data reflects the five percent common stock dividend issued
on May 22, 2009.
(5) 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 STATEMENTS OF FINANCIAL CONDITION (Unaudited)
(in thousands, except for share data)
September 30, December 31,
2009 2008
---- ----
Assets
Cash and due from banks $244,447 $237,497
Interest bearing deposits with banks 287,471 343,010
Investment securities:
Held to maturity, fair value of
$1,542,765 at September 30, 2009 and
$1,069,245 at December 31, 2008 1,578,746 1,154,737
Available for sale 1,345,864 1,435,442
Trading securities 32,173 34,236
------ ------
Total investment securities 2,956,783 2,624,415
--------- ---------
Loans held for sale, at fair value 14,218 4,542
Loans 9,511,413 10,143,690
Less: Allowance for loan losses (103,446) (93,244)
-------- -------
Net loans 9,407,967 10,050,446
--------- ----------
Premises and equipment, net 268,319 256,343
Bank owned life insurance 302,520 300,058
Accrued interest receivable 60,530 57,717
Due from customers on acceptances
outstanding 5,046 9,410
Goodwill 295,698 295,146
Other intangible assets, net 24,365 25,954
Other assets 364,506 513,591
------- -------
Total Assets $14,231,870 $14,718,129
=========== ===========
Liabilities
Deposits:
Non-interest bearing $2,225,626 $2,118,249
Interest bearing:
Savings, NOW and money market 4,025,047 3,493,415
Time 3,191,798 3,621,259
--------- ---------
Total deposits 9,442,471 9,232,923
--------- ---------
Short-term borrowings 199,392 640,304
Long-term borrowings 2,964,398 3,008,753
Junior subordinated debentures issued to
capital trusts (includes fair value
of $153,569 at September 30, 2009 and $140,065
at December 31, 2008 for VNB Capital Trust I) 178,843 165,390
Bank acceptances outstanding 5,046 9,410
Accrued expenses and other liabilities 157,618 297,740
------- -------
Total Liabilities 12,947,768 13,354,520
---------- ----------
Shareholders' Equity*
Preferred stock, no par value, authorized
30,000,000 shares; issued 100,000 shares at
September 30, 2009 and 300,000 shares at
December 31, 2008 97,625 291,539
Common stock, no par value, authorized 200,430,392
shares; issued 149,393,107 shares at
September 30, 2009 and 143,722,114 at
December 31, 2008 52,611 48,228
Surplus 1,117,240 1,047,085
Retained earnings 76,851 85,234
Accumulated other comprehensive loss (18,279) (60,931)
Treasury stock, at cost (1,723,027 common shares
at September 30, 2009 and 1,946,882 common
shares at December 31, 2008) (41,946) (47,546)
------- -------
Total Shareholders' Equity 1,284,102 1,363,609
--------- ---------
Total Liabilities and Shareholders'
Equity $14,231,870 $14,718,129
=========== ===========
* Share data reflects the five percent common stock dividend issued on May
22, 2009.
VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF
INCOME (Unaudited)
(in thousands, except Three Months Ended Nine Months Ended
per share data) September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Interest Income
Interest and fees on
loans $139,506 $151,871 $424,719 $422,113
Interest and dividends
on investment
securities:
Taxable 32,670 34,270 102,162 104,477
Tax-exempt 2,414 2,507 7,175 7,642
Dividends 2,493 2,222 6,475 6,819
Interest on federal funds
sold and other short-term
investments 198 130 646 2,032
--- --- --- -----
Total interest
income 177,281 191,000 541,177 543,083
------- ------- ------- -------
Interest Expense
Interest on deposits:
Savings, NOW and money
market 6,638 12,080 18,321 37,300
Time 19,833 27,902 76,118 85,552
Interest on short-term
borrowings 487 2,122 3,617 6,641
Interest on long-term
borrowings and junior
subordinated debentures 35,255 33,664 105,376 100,198
------ ------ ------- -------
Total interest
expense 62,213 75,768 203,432 229,691
------ ------ ------- -------
Net Interest Income 115,068 115,232 337,745 313,392
Provision for credit losses 12,722 6,850 35,767 16,650
------ ----- ------ ------
Net Interest Income after
Provision for
Credit Losses 102,346 108,382 301,978 296,742
------- ------- ------- -------
Non-Interest Income
Trust and investment services 1,811 1,774 5,048 5,286
Insurance premiums 2,504 2,351 8,074 7,987
Service charges on deposit
accounts 6,871 7,480 20,071 21,102
(Losses) gains on securities
transactions, net (5) (1,907) 246 (983)
Other-than-temporary impairment
losses on securities - (65,549) (5,905) (67,286)
Portion recognized in other
comprehensive income
(before taxes) (743) - 557 -
---- --- --- ---
Net impairment losses on
securities recognized
in earnings (743) (65,549) (5,348) (67,286)
Trading (losses) gains, net (3,474) 14,747 (8,886) 11,255
Fees from loan servicing 1,216 1,243 3,585 3,690
Gains on sales of loans, net 2,699 282 7,275 1,006
Gains on sale of assets, net 128 171 477 256
Bank owned life insurance 1,421 2,659 4,189 8,804
Other 4,650 4,645 12,943 13,960
----- ----- ------ ------
Total non-interest
Income (loss) 17,078 (32,104) 47,674 5,077
------ ------- ------ -----
Non-Interest Expense
Salary expense 32,205 33,147 96,049 93,448
Employee benefit expense 8,285 8,363 25,493 24,215
Net occupancy and equipment
expense 14,452 14,032 44,347 40,288
FDIC insurance assessment 3,355 412 16,786 887
Amortization of intangible
assets 1,710 1,959 5,537 5,107
Professional and legal fees 2,056 1,852 6,295 6,038
Advertising 701 965 1,868 1,682
Other 11,128 13,112 32,569 33,614
------ ------ ------ ------
Total non-interest
expense 73,892 73,842 228,944 205,279
------ ------ ------- -------
Income Before Income Taxes 45,532 2,436 120,708 96,540
Income tax expense (benefit) 13,950 (1,159) 36,745 19,879
------ ------ ------ ------
Net Income 31,582 3,595 83,963 76,661
Dividends on preferred
stock and accretion 5,983 - 15,996 -
----- --- ------ ---
Net Income Available to
Common Stockholders $25,599 $3,595 $67,967 $76,661
======= ====== ======= =======
Earnings Per Common Share:*
Basic $0.18 $0.03 $0.48 $0.57
Diluted 0.18 0.03 0.48 0.57
Cash Dividends Declared
Per Common Share* 0.19 0.19 0.57 0.57
Weighted Average Number
of Common Shares
Outstanding:*
Basic 145,052,655 141,568,980 142,889,382 135,358,526
Diluted 145,053,020 141,717,842 142,889,911 135,437,231
* Share data reflects the five percent common stock dividend issued on
May 22, 2009.
Valley National Bancorp
-----------------------
($ in thousands)
As Of
-----
Loan Portfolio 9/30/2009 6/30/2009 3/31/2009
--------- --------- ---------
Commercial and Industrial
Loans $1,804,822 $1,838,895 $1,888,564
---------- ---------- ----------
Mortgage Loans:
Construction 446,662 479,294 504,416
Residential Mortgage 2,011,532 2,061,244 2,165,641
Commercial Real Estate 3,473,628 3,399,560 3,347,568
--------- --------- ---------
Total Mortgage Loans 5,931,822 5,940,098 6,017,625
--------- --------- ---------
Consumer Loans:
Home Equity 575,332 585,722 598,467
Credit Card 9,916 9,956 9,531
Automobile 1,114,070 1,165,159 1,245,192
Other Consumer 75,451 78,547 78,553
------ ------ ------
Total Consumer Loans 1,774,769 1,839,384 1,931,743
--------- --------- ---------
Total Loans $9,511,413 $9,618,377 $9,837,932
========== ========== ==========
As Of
-----
Loan Portfolio 12/31/2008 9/30/2008
---------- ---------
Commercial and Industrial
Loans $1,965,372 $1,905,469
---------- ----------
Mortgage Loans:
Construction 510,519 470,006
Residential Mortgage 2,269,935 2,297,868
Commercial Real Estate 3,324,082 3,204,537
--------- ---------
Total Mortgage Loans 6,104,536 5,972,411
--------- ---------
Consumer Loans:
Home Equity 607,700 600,623
Credit Card 9,916 9,872
Automobile 1,364,343 1,474,328
Other Consumer 91,823 94,578
------ ------
Total Consumer Loans 2,073,782 2,179,401
--------- ---------
Total Loans $10,143,690 $10,057,281
=========== ===========
Quarterly Analysis of Average Assets, Liabilities and
Shareholders' Equity and Net Interest Income on a Tax
Equivalent Basis
Quarter End - 9/30/2009
-----------------------
Average Avg.
Balance Interest Rate
----------- ------------ ----
Assets
Interest earning assets:
Loans (1)(2) $9,581,388 $139,509 5.82%
Taxable investments (3) 2,731,907 35,163 5.15%
Tax-exempt investments (1)(3) 262,016 3,714 5.67%
Federal funds sold and other
interest bearing deposits 301,460 198 0.26%
------- --- ----
Total interest earning assets 12,876,771 178,584 5.55%
------- ----
Other assets 1,256,772
---------
Total assets $14,133,543
===========
Liabilities and shareholders' equity
Interest bearing liabilities:
Savings, NOW and money market
deposits $3,961,327 $6,638 0.67%
Time deposits 3,111,150 19,833 2.55%
Short-term borrowings 198,459 487 0.98%
Long-term borrowings (4) 3,142,504 35,255 4.49%
--------- ------ ----
Total interest bearing
liabilities 10,413,440 62,213 2.39%
------ ----
Non-interest bearing deposits 2,269,289
Other liabilities 99,069
Shareholders' equity 1,351,745
---------
Total liabilities and
shareholders' equity $14,133,543
===========
Net interest income/interest rate
spread (5) $116,371 3.16%
----
Tax equivalent adjustment (1,303)
------
Net interest income, as reported $115,068
========
Net interest margin (6) 3.57%
Tax equivalent effect 0.04%
----
Net interest margin on a fully tax
equivalent basis (6) 3.61%
====
Quarter End - 6/30/2009
-----------------------
Average Avg.
Balance Interest Rate
----------- ------------ ----
Assets
Interest earning assets:
Loans (1)(2) $9,770,280 $141,361 5.79%
Taxable investments (3) 2,651,711 36,856 5.56%
Tax-exempt investments (1)(3) 253,104 3,676 5.81%
Federal funds sold and other
interest bearing deposits 312,755 218 0.28%
------- --- ----
Total interest earning assets 12,987,850 182,111 5.61%
------- ----
Other assets 1,226,335
---------
Total assets $14,214,185
===========
Liabilities and shareholders' equity
Interest bearing liabilities:
Savings, NOW and money market
deposits $3,701,125 $5,796 0.63%
Time deposits 3,411,551 26,106 3.06%
Short-term borrowings 218,281 579 1.06%
Long-term borrowings (4) 3,171,422 35,227 4.44%
--------- ------ ----
Total interest bearing
liabilities 10,502,379 67,708 2.58%
------ ----
Non-interest bearing deposits 2,256,954
Other liabilities 95,352
Shareholders' equity 1,359,500
---------
Total liabilities and
shareholders' equity $14,214,185
===========
Net interest income/interest rate
spread (5) $114,403 3.03%
-------- ----
Tax equivalent adjustment (1,290)
------
Net interest income, as reported $113,113
========
Net interest margin (6) 3.48%
Tax equivalent effect 0.04%
----
Net interest margin on a fully tax
equivalent basis (6) 3.52%
====
Quarter End - 3/31/2009
-----------------------
Average Avg.
Balance Interest Rate
----------- ------------ ----
Assets
Interest earning assets:
Loans (1)(2) $10,015,090 $143,859 5.75%
Taxable investments (3) 2,663,019 36,618 5.50%
Tax-exempt investments (1)(3) 245,791 3,649 5.94%
Federal funds sold and other
interest bearing deposits 331,091 230 0.28%
------- --- ----
Total interest earning assets 13,254,991 184,356 5.56%
------- ----
Other assets 1,216,269
---------
Total assets $14,471,260
===========
Liabilities and shareholders' equity
Interest bearing liabilities:
Savings, NOW and money market
deposits $3,565,543 $5,887 0.66%
Time deposits 3,653,422 30,179 3.30%
Short-term borrowings 454,774 2,551 2.24%
Long-term borrowings (4) 3,166,137 34,894 4.41%
--------- ------ ----
Total interest bearing
liabilities 10,839,876 73,511 2.71%
------ ----
Non-interest bearing deposits 2,160,116
Other liabilities 104,021
Shareholders' equity 1,367,247
---------
Total liabilities and
shareholders' equity $14,471,260
===========
Net interest income/interest rate
spread (5) $110,845 2.85%
-------- ----
Tax equivalent adjustment (1,281)
------
Net interest income, as reported $109,564
========
Net interest margin (6) 3.31%
Tax equivalent effect 0.04%
----
Net interest margin on a fully tax
equivalent basis (6) 3.35%
====
Quarter End - 12/31/2008
------------------------
Average Avg.
Balance Interest Rate
----------- ------------ ----
Assets
Interest earning assets:
Loans (1)(2) $10,107,769 $150,810 5.97%
Taxable investments (3) 2,387,822 33,201 5.56%
Tax-exempt investments (1)(3) 252,823 3,765 5.96%
Federal funds sold and other
interest bearing deposits 437,565 158 0.14%
------- --- ----
Total interest earning assets 13,185,979 187,934 5.70%
------- ----
Other assets 1,206,650
---------
Total assets $14,392,629
===========
Liabilities and shareholders' equity
Interest bearing liabilities:
Savings, NOW and money market
deposits $3,512,391 $8,661 0.99%
Time deposits 3,551,132 31,600 3.56%
Short-term borrowings 727,550 3,522 1.94%
Long-term borrowings (4) 3,163,624 35,421 4.48%
--------- ------ ----
Total interest bearing
liabilities 10,954,697 79,204 2.89%
------ ----
Non-interest bearing deposits 2,096,770
Other liabilities 96,335
Shareholders' equity 1,244,827
---------
Total liabilities and
shareholders' equity $14,392,629
===========
Net interest income/interest rate
spread (5) $108,730 2.81%
-------- ----
Tax equivalent adjustment (1,323)
------
Net interest income, as reported $107,407
========
Net interest margin (6) 3.26%
Tax equivalent effect 0.04%
----
Net interest margin on a fully tax
equivalent basis (6) 3.30%
====
Quarter End - 9/30/2008
-----------------------
Average Avg.
Balance Interest Rate
----------- ------------ ----
Assets
Interest earning assets:
Loans (1)(2) $9,988,829 $151,877 6.08%
Taxable investments (3) 2,544,825 36,492 5.74%
Tax-exempt investments (1)(3) 262,079 3,857 5.89%
Federal funds sold and other
interest bearing deposits 25,951 130 2.00%
------ --- ----
Total interest earning assets 12,821,684 192,356 6.00%
------- ----
Other assets 1,181,268
---------
Total assets $14,002,952
===========
Liabilities and shareholders' equity
Interest bearing liabilities:
Savings, NOW and money market
deposits $3,766,357 $12,080 1.28%
Time deposits 3,228,453 27,902 3.46%
Short-term borrowings 530,408 2,122 1.60%
Long-term borrowings (4) 3,218,820 33,664 4.18%
--------- ------ ----
Total interest bearing
liabilities 10,744,038 75,768 2.82%
------ ----
Non-interest bearing deposits 2,058,190
Other liabilities 80,713
Shareholders' equity 1,120,011
---------
Total liabilities and
shareholders' equity $14,002,952
===========
Net interest income/interest rate
spread (5) $116,588 3.18%
-------- ----
Tax equivalent adjustment (1,356)
------
Net interest income, as reported $115,232
========
Net interest margin (6) 3.59%
Tax equivalent effect 0.05%
----
Net interest margin on a fully tax
equivalent basis (6) 3.64%
====
(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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