WAYNE, N.J., Jan. 22 /PRNewswire-FirstCall/ -- Valley National Bancorp (NYSE: VLY) ("Valley"), the holding company for Valley National Bank, announced today fourth quarter and annual results for 2008. Net income for the fourth quarter of 2008 was $16.9 million or $0.11 per fully diluted common share. The results of the fourth quarter of 2008 include impairment charges on investment securities totaling $10.8 million after taxes, or $0.08 per diluted share.
Net income for the year ended December 31, 2008 was $93.6 million or $0.70 per fully diluted common share. The 2008 annual results include impairment charges on investment securities totaling $50.3 million after taxes, or $0.39 per diluted share.
Set forth below are highlights of several significant events that occurred during the fourth quarter of 2008:
- Valley's home equity and residential mortgage loan delinquencies remained below the banking industry averages. At December 31, 2008, Valley's home equity and residential mortgage loan portfolios totaling approximately 25,000 individual loans had only 102 loans past due 30 days or more. These delinquencies totaled $20.5 million, or 0.71 percent of $2.9 billion in total home equity and residential mortgage loans. Total loans past due 30 days or more on Valley's entire loan portfolio of $10.1 billion were 1.06 percent. See "Credit Quality" section below for more details.
- On November 14, 2008, Valley completed its $300 million nonvoting senior preferred stock issuance to the U.S. Treasury under its TARP Capital Purchase Program. The issuance brought additional strength to Valley's already well-capitalized position during the quarter. At December 31, 2008, Valley National Bank's capital ratios were all above the minimum level required to be categorized as "well capitalized." Valley National Bank's total risk-based capital, Tier I capital, and leverage capital were 10.65 percent, 8.91 percent, and 7.09 percent, respectively, at December 31, 2008.
- Valley continued to extend credit to new and existing customers while maintaining its conservative underwriting standards. Total loans grew by $86.4 million, or 3.4 percent on an annualized basis, to approximately $10.1 billion at December 31, 2008 compared to September 30, 2008 primarily due to organic loan growth in the commercial mortgage, commercial, and construction loan portfolios.
- Valley recorded other than temporary impairment charges totaling $17.5 million ($10.8 million after taxes) on securities held in its available for sale and held to maturity investment portfolios. Of this amount, $3.3 million related to the write down of Fannie Mae and Freddie Mac perpetual preferred stocks whose market values have continued to decline since the U.S. Government's decision to place these companies into conservatorship and suspend their preferred stock dividends in the third quarter of 2008. After the write down, these Fannie Mae and Freddie Mac securities had a total adjusted carrying value of $1.3 million at December 31, 2008. The remaining impairment of $14.2 million was recorded on two of three pooled trust preferred securities, principally issued by banks, which are classified as held to maturity and one private label mortgage-backed security classified as available for sale. After the write down, the two pooled trust preferred securities had a total adjusted carrying value of $1.1 million and the one mortgage-backed security had an adjusted carrying value of $9.4 million at December 31, 2008.
- Net trading gains decreased to a net loss of $8.1 million mainly due to the change in the fair value of Valley's junior subordinated debentures issued to VNB Capital Trust I (which are carried at fair value) and mark to market losses on single-issuer bank trust preferred securities held in the trading securities portfolio.
- Net interest income on a fully tax equivalent basis decreased $7.9 million from the third quarter of 2008 mainly due to the decline in short-term interest rates, higher rates and volume of certificates of deposit, the loss of interest from the Fannie Mae and Freddie Mac trust preferred securities, the reduction in cash dividends on Federal Home Loan Bank ("FHLB") of New York stock and the asset sensitivity of Valley's balance sheet. Valley's net interest margin also declined by 34 basis points to 3.30 percent. Due to the current trend in interest rates, management expects the net interest margin will begin to increase during the first quarter of 2009. See "Net Interest Income and Margin" section below for more details.
- Other non-interest expense includes a $3.1 million expense which was accelerated due to the termination of a hedging relationship in November 2008 for two interest rate caps designated as cash flow hedges to protect against movements in interest rates on certain borrowings based on the effective federal funds rate. The hedging relationship was rendered ineffective due to the historically unprecedented low level of the effective federal funds rate.
- In late December 2008, Valley discovered a check fraud scheme perpetrated by a long-time commercial customer of Valley National Bank and recorded an estimated $4.6 million loss in other non-interest expense. Valley anticipates future recoveries to offset this loss, although it took the appropriate approach by recording the entire loss on the check fraud at this time.
- Unless there are changes in the regulatory environment or unexpected earnings charges, Valley anticipates no change in its regular $0.20 per share quarterly cash dividend to common shareholders during 2009. However, dividends are only payable when and if declared by the Board.
Chairman's Comments
Gerald H. Lipkin, Chairman, President and CEO noted that, "We are disappointed with our results for both the quarter and full year of 2008. Much of the negative results were based upon mark to market of investments as well as capital and liquidity issues resulting from the economic environment. During the fourth quarter we issued $300 million in preferred stock under the TARP program as a precautionary measure to protect Valley and its shareholders from the current turbulence found throughout the financial markets. Prior to the issuance our capital ratios were consistent with those of a well-capitalized bank, as such ratios are today, and we are positioned to lend and support the economic recovery. However, mark to market issues will need to be addressed by the Government's new administration in order to protect banks' capital in an environment where market values are based upon abnormal illiquid markets causing continued erosion of earnings and capital.
We are pleased with the continued low level of delinquencies and overall performance of our loan portfolios, especially in light of the current climate impacting our nation's economy and most other financial institutions. Our credit quality, the hallmark of Valley, remains very high. Total delinquencies 30 days or more past due for the entire loan portfolio were 1.06 percent. Despite our satisfactory loan performance, we recorded an $11.6 million provision for credit losses during the quarter, approximately $5.0 million greater than net charge-offs. The addition to our reserves was to provide for the potential risk of loan losses resulting from a continued downturn in the U.S. economy. The allowance for credit losses as a percentage of total loans increased 4 basis points to 0.93 percent at December 31, 2008 as compared to September 30, 2008 and increased 5 basis points compared to December 31, 2007.
During the quarter, we utilized a portion of the TARP funds in our lending operations using our traditional conservative lending philosophy. We believe this use of funds is consistent with the expectations of the U.S. Treasury. Our loan portfolio grew by 9.2 percent annualized for the quarter, exclusive of our automobile portfolio which declined by almost $110 million for the same period largely due to slower automobile sales. The TARP capital, in conjunction with our common stock, retained earnings and trust preferred securities provide Valley with sufficient levels of capital to continue our lending and to also absorb unforeseen losses during this economic environment.
We continue to serve our customers, our communities and our shareholders during these difficult times. We believe our commitment to quality loans and consistent underwriting standards will allow us to prevail as the economy continues to work through the recession."
Credit Quality
Management believes that Valley's credit quality remains good given the state of the U.S. economy and the low level of Valley's loan delinquencies and losses relative to its peers. Valley's focus has been and continues to be on traditional lending, utilizing our time-tested conservative underwriting approach. With a loan portfolio totaling approximately $10.1 billion, net loan charge-offs for the fourth quarter of 2008 were $6.7 million compared to $4.4 million for the third quarter of 2008, and $4.6 million for the fourth quarter of 2007.
Valley's allocated reserves for the commercial mortgage loan portfolio declined during the period as loan performance in our new markets, primarily in Brooklyn and Queens, produced better than expected results. 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:
December 31, 2008 September 30, 2008 December 31, 2007
Allocation Allocation Allocation
as a % of as a % of as a % of
Allowance loan Allowance loan Allowance loan
Allocation category Allocation category Allocation category
Loan category:
Commercial* $44,163 2.25% $40,546 2.13% $31,638 2.02%
Mortgage:
Construction 15,885 3.11% 14,397 3.06% 11,748 2.92%
Residential
mortgage 4,153 0.18% 3,771 0.16% 3,124 0.15%
Commercial
mortgage 10,035 0.30% 12,520 0.39% 8,788 0.37%
Total mortgage
loans 30,073 0.49% 30,688 0.51% 23,660 0.49%
Consumer:
Home equity 1,696 0.28% 1,627 0.27% 1,634 0.29%
Other consumer 12,622 0.86% 11,428 0.72% 9,181 0.60%
Total
consumer loans 14,318 0.69% 13,055 0.60% 10,815 0.52%
Unallocated 6,184 NA 5,472 NA 8,822 NA
$94,738 0.93% $89,761 0.89% $74,935 0.88%
* 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 $45.7 million, or 0.45 percent of loans at December 31, 2008 compared to $41.8 million, or 0.42 percent of loans at September 30, 2008. Non-accrual loans and OREO increased $2.4 million and $1.2 million, respectively, at December 31, 2008 as compared to September 30, 2008. The increase in non-accrual loans was mainly due to four commercial loans totaling $3.0 million and one $714 thousand commercial mortgage loan partially offset by transfers to OREO.
Loans past due 90 days or more and still accruing increased $3.0 million to $15.7 million, or 0.15 percent of total loans at December 31, 2008 compared to $12.7 million, or 0.13 percent at September 30, 2008. Loans past due 90 days or more and still accruing include matured performing loans in the normal process of renewal which totaled approximately $4.0 million and $6.4 million at December 31, 2008 and September 30, 2008, respectively. Management believes the current level of delinquencies reflects the strength of its underwriting policies given the difficult economic climate and the problems currently being reported by other financial service providers.
Loans and Deposits
During the quarter, loans increased $86.4 million to approximately $10.1 billion at December 31, 2008. The linked quarter organic loan growth was mainly comprised of increases in commercial mortgage, commercial, and construction loans of $119.5 million, $59.9 million and $40.5 million, respectively, partially offset by a $110.0 million decrease in automobile loans. Valley's lending operations continue to benefit from the dislocation in the credit markets and the expansion of Valley's lending teams through its growing branch network, including the addition of 16 full-service branches from the Greater Community Bancorp ("Greater Community") acquisition on July 1, 2008. The continued decline in automobile loans during the fourth quarter of 2008 has resulted from Valley's tightening of its already conservative auto loan credit standards during the third quarter of 2008, as well as lower consumer demand for such products in the current economic environment.
During the quarter, deposits increased $169.5 million to approximately $9.2 billion at December 31, 2008. At December 31, 2008, time deposits and non-interest bearing deposits increased by $262.9 million and $11.1 million, respectively, as compared to September 30, 2008. Valley increased its time deposits primarily by offering competitive retail time deposit rates on products with six to twelve month maturities during the period. This deposit initiative was implemented, in part, to offset fluctuations in money market and non-interest bearing account balances experienced during the fourth quarter of 2008. The declines were due to several factors caused by the current uncertain market conditions, including some depositors' preference for Treasury securities, as well as interest rate pressure caused by weaker competitors in need of liquidity. Future deposit growth is expected to be dependent on earning asset demand combined with the rates dictated by market competition versus the cost of alternative funding sources.
Net Interest Income and Margin
Net interest income on a tax equivalent basis was $108.7 million for the fourth quarter of 2008, an $11.9 million increase from the same quarter of 2007 and a decrease of $7.9 million from the linked quarter ended September 30, 2008. The linked quarter decrease was primarily due to a 30 basis point decline in the yield on interest earning assets during the fourth quarter of 2008 and additional interest expense related mainly to higher average interest-bearing liabilities. During the fourth quarter of 2008, the yield on interest earning assets declined due to several factors, including the U.S. Government's elimination of dividends on Freddie Mac and Fannie Mae preferred securities held in the available for sale portfolio, a reduction in cash dividends on FHLB stock, lower yields on prime based loans, and a decrease of 98 basis points in the average target Federal funds rate which negatively affected Valley's increased cash position as compared to the third quarter of 2008.
The net interest margin on a tax equivalent basis was 3.30 percent for the fourth quarter of 2008, a decrease of 34 basis points from 3.64 percent for the linked quarter ended September 30, 2008 and a decrease of 11 basis points from 3.41 percent for the fourth quarter of 2007. The yield on average interest earning assets decreased by 30 basis points on a linked quarter basis mainly due to an 18 basis point decrease in yield on average taxable investment securities as compared to the three months ended September 30, 2008. The cost of average interest bearing liabilities increased seven basis points from the third quarter of 2008 mainly due to the higher cost of long and short-term borrowings.
Valley's cost of total deposits remained relatively low by industry standards at 1.76 percent for the fourth quarter of 2008 compared to 1.77 percent for the three months ended September 30, 2008. The decrease of one basis point was due to lower interest rates on savings, NOW, and money market accounts and a $38.6 million increase in average non-interest bearing deposits, partially offset by higher six to twelve month interest rates offered on new retail time deposits during the fourth quarter of 2008. The cost of short term borrowings increased by $1.4 million due to additional borrowings initiated near the end of the third quarter of 2008 to provide liquidity during this turbulent market period. These short term borrowings, consisting of FHLB advances, totaled $400 million of which $100 million matured by the end of 2008 and $300 million will mature between February and April 2009.
Non-Interest Income (Loss)
Fourth quarter of 2008 compared with fourth quarter of 2007
Non-interest income for the fourth quarter of 2008 decreased $8.5 million to a non-interest loss of $1.8 million from non-interest income of $6.7 million for the quarter ended December 31, 2007 primarily due to a decrease in net trading gains of $10.9 million from a year ago. This was mainly due to a loss of $5.9 million on the change in the fair value of Valley's junior subordinated debentures carried at fair value in the fourth quarter of 2008 compared to a gain of $2.5 million in the same period of 2007. Net trading gains also included losses recognized on the mark to market value of trading securities of $2.2 million for the fourth quarter of 2008, a decline of $3.5 million from a gain of $1.3 million for the fourth quarter of 2007. In the fourth quarter of 2007, net trading gains included a loss of $973 thousand on the change in fair value of certain Federal Home Loan Bank advances held at fair value (no advances were held at fair value in the comparable 2008 period). Bank owned life insurance ("BOLI") income decreased $1.9 million as compared to the fourth quarter of 2007 mainly due to the financial markets negative impact on the performance of the underlying investment securities of the BOLI asset. Partially offsetting these decreases, net losses on securities transactions declined by $4.4 million to a net loss of $11.5 million for the three months ended December 31, 2008 compared to a net loss of $15.9 million in the same period of 2007. The decline was due to a $4.0 million increase in net gains on the sale of securities classified as available for sale and a $401 thousand decrease in other-than-temporary impairment charges on investment securities. During the fourth quarter of 2008, Valley recognized impairment charges totaling $17.5 million ($10.8 million after taxes) on twelve Freddie Mac and Fannie Mae perpetual preferred securities and one private label mortgage-backed security classified as available for sale and two pooled trust preferred securities classified as held to maturity. Valley recognized a $17.9 million ($10.4 million after taxes) impairment charge on the same Freddie Mac and Fannie Mae perpetual preferred securities during the fourth quarter of 2007.
Fourth quarter of 2008 compared with third quarter of 2008
Non-interest loss decreased $30.3 million to $1.8 million for the quarter ended December 31, 2008 compared to a non-interest loss of $32.1 million for the quarter ended September 30, 2008 mainly due to a $55.9 million decline in net losses on securities transactions from the linked quarter. The decline was mainly due to other-than-temporary impairment and realized losses of $70.9 million ($44.1 million after taxes) on Fannie Mae and Freddie Mac perpetual preferred stock in the third quarter of 2008 as compared to other-than-temporary impairment charges totaling $17.5 million ($10.8 million after taxes) on these same securities, one private label mortgage-backed security and two pooled trust preferred securities in the fourth quarter of 2008, net of gains on the sale of certain available for sale securities in both periods. Partially offsetting the increase in non-interest income, net trading gains decreased $22.8 million to a net loss of $8.1 million for the fourth quarter of 2008 compared to a net gain of $14.7 million for the third quarter of 2008. This was mainly due to a loss of $5.9 million on the change in the fair value of Valley's junior subordinated debentures carried at fair value in the fourth quarter of 2008 compared to a gain of $20.8 million recognized in the third quarter of 2008. Net trading gains also included losses on the mark to market value of trading securities totaled $2.2 million for the fourth quarter of 2008, declining $3.9 million from a loss of $6.1 million for the third quarter of 2008. BOLI income decreased $1.3 million as compared to the third quarter of 2008 mainly due to the financial markets negative impact on the performance of the underlying investment securities of the BOLI asset. Other non-interest income also decreased $1.4 million mainly due to general decreases in other fee income during the fourth quarter of 2008.
Non-Interest Expense
Fourth quarter of 2008 compared with fourth quarter of 2007
Non-interest expense increased approximately $16.6 million to $80.0 million for the quarter ended December 31, 2008 from $63.3 million for the quarter ended December 31, 2007. Other non-interest expense increased by $10.3 million partially due to a $4.6 million loss recorded on discovery of a check fraud scheme perpetrated by a long-time commercial customer of Valley National Bank. Additionally, other non-interest expense includes a $3.1 million expense which was accelerated from future periods to the current quarter due to a hedging relationship terminated in November 2008 for two interest rate caps based on the effective federal funds rate. Salary and employee benefits increased a combined $4.5 million and net occupancy and equipment expense increased $1.2 million primarily due to the acquisition of Greater Community during the third quarter of 2008. Professional and legal fees increased $2.2 million mainly due to a $1.7 million reduction in litigation contingencies in the fourth quarter of 2007. Partially offsetting these increases, there were no goodwill impairment charges in the fourth quarter of 2008 compared to a $2.3 million ($1.5 million after taxes) impairment recognized in the fourth quarter of 2007 due to Valley's decision to sell its former wholly owned broker-dealer subsidiary.
Fourth quarter of 2008 compared with third quarter of 2008
Non-interest expense increased by $6.1 million, or 8.3 percent from $73.8 million for the quarter ended September 30, 2008 primarily due to a $7.1 million increase in other non-interest expense. Other non-interest expense increased due to a $4.6 million loss recorded on discovery of a check fraud scheme perpetrated by a long-time commercial customer in December 2008 and a $3.1 million expense incurred on the termination of a hedging relationship in November 2008. Partially offsetting the increase, salary and employee benefits declined a combined $1.3 million mainly due to higher accruals for payroll taxes, healthcare insurance and stock incentive, pension and 401K plans during third quarter of 2008.
Income Tax Expense
Income tax benefit was ($2.9) million for the fourth quarter of 2008, reflecting an effective tax benefit of (21.1) percent, compared with income tax expense of $6.1 million for the fourth quarter of 2007, reflecting an effective tax rate of 18.1 percent. The change in taxes compared to the fourth quarter of 2007 was due to the reversal of the $2.9 million state tax valuation allowance for capital losses setup in the third quarter of 2008, and lower book income in the fourth quarter of 2008 compared to 2007.
Income tax expense was $16.9 million for the year ended December 31, 2008, reflecting an effective tax rate of 15.3 percent, compared with $51.7 million for year ended December 31, 2007, reflecting an effective tax rate of 25.2 percent. The reduction in taxes compared to 2007 was due to the lower book income for 2008 and the reversal of the $6.5 million valuation allowance attributable to the capital loss carryforward of the prior year.
Management expects that Valley's adherence to FIN 48 will continue to result in increased volatility in Valley's 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 2009, Valley anticipates an effective tax rate of 31.0 percent, compared to 15.3 percent for 2008.
De novo Branch Program
Valley maintains a branch expansion plan which focuses on finding attractive building sites and expanding its presence in the New Jersey counties and towns neighboring Valley's current office locations, as well as in Manhattan, Kings and Queens Counties in New York. During 2008, ten new branch offices were opened, including Valley's first two locations in Queens and its fourth and fifth branch offices in Brooklyn. Valley anticipates completing nine additional de novo branch projects during 2009, including four locations in Queens and three in Brooklyn. The slowing 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 can add immediate 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 as the branch operations become individually profitable.
About Valley
Valley is a regional bank holding company, headquartered in Wayne, New Jersey, with $14.7 billion in assets. Its principal subsidiary, Valley National Bank, currently operates 196 branches in 132 communities serving 14 counties throughout northern and central New Jersey and Manhattan, Brooklyn and Queens. Valley 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 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'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 from those contemplated by such forward-looking statements include, among others, the following: unanticipated changes in the financial markets and the resulting unanticipated effects on financial instruments in Valley's investment portfolio; unanticipated changes in the direction of interest rates; volatility in earnings due to certain financial assets and liabilities held at fair value; the occurrence of an other-than-temporary impairment to investment securities classified as available for sale or held to maturity; passage by Congress of a law which unilaterally amends the terms of the Treasury's preferred stock investment in Valley in a way that adversely affects Valley; bank regulatory rules, regulations or polices that restrict or direct certain actions; stronger competition from banks, other financial institutions and other companies; changes in loan, investment and mortgage prepayment assumptions; insufficient allowance for credit losses; a higher level of net loan charge-offs and delinquencies than anticipated; the inability to realize expected cost savings and synergies from the Greater Community merger in the amounts or in the timeframe anticipated; material adverse changes in Valley's operations or earnings; the inability to retain Greater Community's customers and employees; a decline in the economy in Valley's primary market areas, mainly in New Jersey and New York; changes in relationships with major customers; changes in effective income tax rates; higher or lower cash flow levels than anticipated; inability to hire or retain qualified employees; a decline in the levels of deposits or loss of alternate funding sources; a decrease in loan origination volume; a change in legal and regulatory barriers including issues related to compliance with anti-money laundering ("AML") and bank secrecy act ("BSA") laws; adoption, interpretation and implementation of new or pre-existing accounting pronouncements; the development of new tax strategies or the disallowance of prior tax strategies; operational risks, including the risk of fraud by employees or outsiders and unanticipated litigation pertaining to Valley's fiduciary responsibility; and the inability to successfully implement new lines of business or new products and services.
-Tables to Follow-
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
-----------------------
Three Months Ended Years Ended
December 31, December 31,
(in thousands,
except for share
data) 2008 2007 2008 2007
----------------- ---- ---- ---- ----
FINANCIAL DATA:
---------------
Net interest
income $107,407 $95,318 $420,799 $381,685
Net interest
income - FTE (2) 108,730 96,791 426,258 387,866
Non-interest
(loss) income (1,821) 6,670 3,256 89,028
Non-interest
expense 79,969 63,335 285,248 253,912
Income tax
(benefit)
expense (2,945) 6,128 16,934 51,698
Net income 16,930 27,661 93,591 153,228
Dividends on
preferred
stock and
accretion 2,090 0 2,090 0
Net income
available to
common
stockholders 14,840 27,661 91,501 153,228
Weighted average
number of shares
outstanding (3):
Basic 134,971,655 125,899,054 130,435,853 126,272,915
Diluted 135,032,047 126,081,621 130,507,649 126,646,859
Per common share
data (3):
Basic earnings $0.11 $0.22 $0.70 $1.21
Diluted
earnings 0.11 0.22 0.70 1.21
Cash dividends
declared 0.20 0.20 0.80 0.80
Book value 7.93 7.54 7.93 7.54
Tangible book
value (1) 5.56 5.92 5.56 5.92
Closing stock
price - high 22.79 22.34 24.00 23.98
Closing stock
price - low 15.41 16.89 14.44 16.89
CORE ADJUSTED
FINANCIAL DATA (1):
-------------------
Net income
available to
common
stockholders, as
adjusted $25,592 $39,543 $141,761 $165,110
Basic earnings
per share, as
adjusted 0.19 0.31 1.09 1.31
Diluted earnings
per share, as
adjusted 0.19 0.31 1.09 1.30
FINANCIAL RATIOS:
-----------------
Net interest
margin 3.26% 3.36% 3.40% 3.37%
Net interest
margin - FTE (2) 3.30 3.41 3.44 3.43
Annualized
return on
average assets 0.47 0.89 0.69 1.25
Annualized
return on
average
shareholders'
equity 5.44 11.68 8.74 16.43
Annualized
return on
average tangible
shareholders'
equity (1) 7.33 14.94 11.57 21.17
Efficiency ratio
(4) 75.74 62.10 67.27 53.94
CORE ADJUSTED
FINANCIAL RATIOS (1):
----------------------
Annualized
return on
average assets,
as adjusted 0.77% 1.28% 1.07% 1.34%
Annualized
return on
average
shareholders'
equity, as
adjusted 8.90 16.69 13.43 17.70
Annualized
return on
average tangible
shareholders'
equity, as
adjusted 11.99 21.35 17.79 22.81
Efficiency
ratio, as
adjusted 64.94 50.88 55.98 51.49
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL
DATA
------------------
Three Months Ended Years Ended
December 31, December 31,
(in thousands) 2008 2007 2008 2007
-------------- ---- ---- ---- ----
AVERAGE BALANCE SHEET
ITEMS:
---------------------
Assets $14,392,629 $12,380,543 $13,488,463 $12,304,814
Interest earning
assets 13,185,979 11,343,372 12,384,625 11,312,253
Loans 10,107,769 8,362,192 9,386,987 8,261,111
Interest bearing
liabilities 10,954,697 9,413,844 10,355,760 9,353,296
Deposits 9,160,293 8,306,622 8,689,456 8,353,273
Shareholders' equity 1,244,827 947,444 1,071,358 932,637
ALLOWANCE FOR CREDIT
LOSSES:
--------------------
Beginning of period $89,761 $74,624 $74,935 $74,718
Provision for credit
losses 11,632 4,864 28,282 11,875
Charge-offs (7,417) (5,455) (22,663) (15,135)
Recoveries 762 902 2,774 3,477
Addition from Greater
Community Bancorp
acquisition 0 0 11,410 0
--- --- ------ ---
End of period $94,738 $74,935 $94,738 $74,935
======= ======= ======= =======
Components:
Allowance for loan
losses $93,244 $72,664 $93,244 $72,664
Reserve for unfunded
letters of credit 1,494 2,271 1,494 2,271
----- ----- ----- -----
Allowance for credit
losses $94,738 $74,935 $94,738 $74,935
======= ======= ======= =======
As of December 31,
------------------
2008 2007
---- ----
BALANCE SHEET ITEMS:
--------------------
Assets $14,718,129 $12,748,959
Loans 10,143,690 8,496,221
Deposits 9,232,923 8,091,004
Shareholders' equity 1,363,609 949,060
-------------------- --------- -------
CAPITAL RATIOS:
---------------
Tier 1 leverage ratio 9.10% 7.62%
Risk-based capital - Tier 1 11.45 9.55
Risk-based capital - Total Capital 13.19 11.35
---------------------------------- ----- -----
ASSET QUALITY:
--------------
Non-accrual loans $33,073 $30,623
Other real estate owned 8,278 609
Other repossessed assets 4,317 1,466
----- -----
Total non-performing assets $45,668 $32,698
------- -------
Loans past due 90 days or more and still accruing $15,557 $8,462
------------------------------------------------- ------- ------
ASSET QUALITY RATIOS:
---------------------
Non-performing assets to total loans 0.45% 0.38%
Loans past due 30 days or more to total loans 1.06 1.00
Allowance for credit losses to total loans 0.93 0.88
Net charge-offs to average loans 0.21 0.14
-------------------------------- ---- ----
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.
(Dollars in Three Months Ended Years Ended
thousands, except December 31, December 31,
for share data) 2008 2007 2008 2007
---- ---- ---- ----
Tangible Book Value Per
Common Share
-----------------------
Common shares
outstanding 135,024,030 125,844,074 135,024,030 125,844,074
----------- ----------- ----------- -----------
Shareholders' equity $1,363,609 $949,060 $1,363,609 $949,060
Less: Preferred stock (293,226) 0 (293,226) 0
Less: Goodwill and
other intangible
assets (320,007) (204,547) (320,007) (204,547)
-------- -------- -------- --------
Tangible
shareholders' equity $750,376 $744,513 $750,376 $744,513
-------- -------- -------- --------
Tangible book
value $5.56 $5.92 $5.56 $5.92
===== ===== ===== =====
Return on Average
Tangible Equity
----------------
Net income $16,930 $27,661 $93,591 $153,228
------- ------- ------- --------
Average
shareholders'
equity $1,244,827 $947,444 $1,071,358 $932,637
Less: Average
goodwill and other
intangible assets (321,560) (206,672) (262,613) (208,797)
-------- -------- -------- --------
Average tangible
shareholders'
equity $923,267 $740,772 $808,745 $723,840
-------- -------- -------- --------
Annualized return
on average
tangible
shareholders'
equity 7.33% 14.94% 11.57% 21.17%
==== ===== ===== =====
Adjusted net income
available to common
stockholders
--------------------
Net income, as
reported $16,930 $27,661 $93,591 $153,228
Add: Impairment
charges on
investment
securities, net 10,752 10,417 50,260 10,417
Add: Impairment
charges on goodwill,
net 0 1,465 0 1,465
--- ----- --- -----
Net income, as
adjusted $27,682 $39,543 $143,851 $165,110
Dividends on
preferred stock and
accretion 2,090 0 2,090 0
----- --- ----- ---
Net income available
to common
stockholders, as
adjusted $25,592 $39,543 $141,761 $165,110
======= ======= ======== ========
Adjusted per common
share data
-------------------
Net income available
to common
stockholders, as
adjusted $25,592 $39,543 $141,761 $165,110
------- ------- -------- --------
Average number of
basic shares
outstanding 134,971,655 125,899,054 130,435,853 126,272,915
----------- ----------- ----------- -----------
Basic earnings,
as adjusted $0.19 $0.31 $1.09 $1.31
===== ===== ===== =====
Average number of
diluted shares
outstanding 135,032,047 126,081,621 130,507,649 126,646,859
----------- ----------- ----------- -----------
Diluted earnings,
as adjusted $0.19 $0.31 $1.09 $1.30
===== ===== ===== =====
Adjusted annualized
return on average
assets
-------------------
Net income, as
adjusted $27,682 $39,543 $143,851 $165,110
Average assets 14,392,629 12,380,543 13,488,463 12,304,814
---------- ---------- ---------- ----------
Annualized return on
average assets, as
adjusted 0.77% 1.28% 1.07% 1.34%
---- ---- ---- ----
Valley National Bancorp
Consolidated Financial Highlights
NOTES TO SELECTED FINANCIAL DATA - CONTINUED
Three Months Ended Years Ended
December 31, December 31,
(Dollars in
thousands, except
for share data) 2008 2007 2008 2007
---- ---- ---- ----
Adjusted annualized return
on average shareholders'
equity
--------------------------
Net income, as
adjusted $27,682 $39,543 $143,851 $165,110
------- ------- -------- --------
Average
shareholders' equity 1,244,827 947,444 1,071,358 932,637
Annualized return on
average shareholders'
equity, as adjusted 8.90% 16.69% 13.43% 17.70%
Adjusted annualized return
on average tangible
shareholders' equity
--------------------------
Net income, as
adjusted $27,682 $39,543 $143,851 $165,110
------- ------- -------- --------
Average tangible
shareholders' equity 923,267 740,772 808,745 723,840
------- ------- ------- -------
Annualized return on
average tangible
shareholders' equity,
as adjusted 11.99% 21.35% 17.79% 22.81%
===== ===== ===== =====
Adjusted efficiency ratio
-------------------------
Total non-interest
expense $79,969 $63,335 $285,248 $253,912
Less: Impairment
charges on goodwill 0 (2,310) 0 (2,310)
--- ------ --- ------
Gross non-interest
expense, as
adjusted $79,969 $61,025 $285,248 $251,602
------- ------- -------- --------
Net interest income $107,407 $95,318 $420,799 $381,685
Non-interest income (1,821) 6,670 3,256 89,028
Add: Impairment
charges on
investment
securities 17,548 17,949 85,478 17,949
------ ------ ------ ------
Gross operating
income, as
adjusted $123,134 $119,937 $509,533 $488,662
======== ======== ======== ========
Efficiency ratio, as
adjusted 64.94% 50.88% 55.98% 51.49%
===== ===== ===== =====
(2) Net interest income and net interest margin are presented on a tax
equivalent basis using a 35 percent federal tax rate. Valley believes
that this presentation provides comparability of net interest income and
net interest margin arising from both taxable and tax-exempt sources and
is consistent with industry practice and SEC rules.
(3) Share data reflects the five percent common stock dividend issued on
May 23, 2008.
(4) The efficiency ratio measures Valley's total non-interest expense as a
percentage of net interest income plus total non-interest income.
SHAREHOLDER RELATIONS
---------------------
Requests for copies of reports and/or other inquiries should be directed
to Dianne Grenz, Director of Shareholder and Public Relations, Valley
National Bancorp, 1455 Valley Road, Wayne, New Jersey, 07470, by
telephone at (973) 305-3380, by fax at (973) 696-2044 or by e-mail at
dgrenz@valleynationalbank.com.
VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
($ in thousands, except for share data)
December 31, December 31,
2008 2007
---- ----
Assets
Cash and due from banks $577,850 $218,896
Interest bearing deposits with banks 2,657 9,569
Federal funds sold - 9,000
Investment securities:
Held to maturity, fair value of
$1,070,304 at December 31, 2008 and
$548,353 at December 31, 2007 1,155,796 556,113
Available for sale 1,434,383 1,606,410
Trading securities 34,236 722,577
------ -------
Total investment securities 2,624,415 2,885,100
--------- ---------
Loans held for sale, at fair value 4,542 2,984
Loans 10,143,690 8,496,221
Less: Allowance for loan losses (93,244) (72,664)
------- -------
Net loans 10,050,446 8,423,557
---------- ---------
Premises and equipment, net 256,343 227,553
Bank owned life insurance 300,058 273,613
Accrued interest receivable 57,717 56,578
Due from customers on acceptances
outstanding 9,410 8,875
Goodwill 294,053 179,835
Other intangible assets, net 25,954 24,712
Other assets 514,684 428,687
------- -------
Total Assets $14,718,129 $12,748,959
=========== ===========
Liabilities
Deposits:
Non-interest bearing $2,118,249 $1,929,555
Interest bearing
Savings, NOW and money market 3,493,415 3,382,474
Time 3,621,259 2,778,975
--------- ---------
Total deposits 9,232,923 8,091,004
--------- ---------
Short-term borrowings 640,304 605,154
Long-term borrowings (includes fair
value of $41,359 for a Federal Home
Loan Bank advance at December 31,
2007) 3,008,753 2,801,195
Junior subordinated debentures issued
to capital trusts (includes fair
value of $140,065 at December 31,
2008 and $163,233 at December 31,
2007 for VNB Capital Trust I) 165,390 163,233
Bank acceptances outstanding 9,410 8,875
Accrued expenses and other
liabilities 297,740 130,438
------- -------
Total Liabilities 13,354,520 11,799,899
---------- ----------
Shareholders' Equity*
Preferred stock, no par value,
authorized 30,000,000 shares;
issued 300,000 shares at
December 31, 2008 293,226 -
Common stock, no par value, authorized
190,886,088 shares; issued 136,970,912
shares at December 31, 2008 and
128,503,294 shares at December 31,
2007 48,228 43,185
Surplus 1,045,398 879,892
Retained earnings 85,234 104,225
Accumulated other comprehensive loss (60,931) (12,982)
Treasury stock, at cost (1,946,882
common shares at December 31, 2008
and 2,659,220 common shares at
December 31, 2007) (47,546) (65,260)
------- -------
Total Shareholders' Equity 1,363,609 949,060
--------- -------
Total Liabilities and
Shareholders' Equity $14,718,129 $12,748,959
=========== ===========
* Share data reflects the 5% common stock dividend issued on
May 23, 2008.
VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
($ in thousands, except per share data)
Three Months Ended Years Ended
December 31, December 31,
------------ ------------
2008 2007 2008 2007
---- ---- ---- ----
Interest Income
Interest and fees on
loans $150,805 $140,354 $572,918 $560,066
Interest and dividends
on investment
securities:
Taxable 33,286 35,585 137,763 134,969
Tax-exempt 2,447 2,716 10,089 11,268
Dividends (85) 2,099 6,734 8,002
Interest on federal funds
sold and other short-term
investments 158 809 2,190 10,702
--- --- ----- ------
Total interest
income 186,611 181,563 729,694 725,007
------- ------- ------- -------
Interest Expense
Interest on deposits:
Savings, NOW
and money market 8,661 17,825 45,961 75,695
Time 31,600 33,876 117,152 134,674
Interest on short-term
borrowings 3,522 4,489 10,163 17,645
Interest on long-term
borrowings and junior
subordinated
debentures 35,421 30,055 135,619 115,308
------ ------ ------- -------
Total interest
expense 79,204 86,245 308,895 343,322
------ ------ ------- -------
Net Interest Income 107,407 95,318 420,799 381,685
Provision for credit
losses 11,632 4,864 28,282 11,875
------ ----- ------ ------
Net Interest Income after
Provision for Credit
Losses 95,775 90,454 392,517 369,810
------ ------ ------- -------
Non-Interest Income
Trust and investment
services 1,875 1,863 7,161 7,381
Insurance premiums 2,066 2,438 10,053 10,711
Service charges on
deposit accounts 7,172 7,028 28,274 26,803
Losses on
securities
transactions, net (11,546) (15,894) (79,815) (15,810)
Trading (losses)
gains, net (8,089) 2,763 3,166 7,399
Fees from loan servicing 1,546 1,323 5,236 5,494
Gains on sales of
loans, net 268 161 1,274 4,785
Gains on sale of
assets, net 262 93 518 16,051
Bank owned life insurance 1,363 3,291 10,167 11,545
Other 3,262 3,604 17,222 14,669
----- ----- ------ ------
Total non-
Interest
income (loss) (1,821) 6,670 3,256 89,028
------ ----- ----- ------
Non-Interest Expense
Salary expense 32,762 29,250 126,210 116,389
Employee benefit expense 7,451 6,480 31,666 29,261
Net occupancy and
equipment expense 13,754 12,571 54,042 49,570
Amortization of
Intangible assets 2,117 1,820 7,224 7,491
Goodwill impairment - 2,310 - 2,310
Professional and legal
fees 2,203 40 8,241 5,110
Advertising 1,015 510 2,697 2,917
Other 20,667 10,354 55,168 40,864
------ ------ ------ ------
Total non-
interest
expense 79,969 63,335 285,248 253,912
------ ------ ------- -------
Income Before Income
Taxes 13,985 33,789 110,525 204,926
Income tax (benefit)
expense (2,945) 6,128 16,934 51,698
------ ----- ------ ------
Net Income $16,930 $27,661 $93,591 $153,228
Dividends on
preferred stock and
accretion 2,090 - 2,090 -
----- --- ----- ---
Net Income Available
to Common Stockholders $14,840 $27,661 $91,501 $153,228
======= ======= ======= ========
Earnings Per Common
Share:*
Basic $0.11 $0.22 $0.70 $1.21
Diluted 0.11 0.22 0.70 1.21
Cash Dividends
Declared Per Common
Share* 0.20 0.20 0.80 0.80
Weighted Average Number
of Shares Outstanding:*
Basic 134,971,655 125,899,054 130,435,853 126,272,915
Diluted 135,032,047 126,081,621 130,507,649 126,646,859
* Share data reflects the 5% common stock dividend issued on May 23, 2008.
Valley National Bancorp
-----------------------
(dollars in thousands)
For the periods ended
---------------------
Loan
Portfolio 12/31/2008 9/30/2008 6/30/2008 3/31/2008 12/31/2007
---------- --------- --------- --------- ----------
Commercial
Loans $1,965,372 $1,905,469 $1,680,337 $1,584,190 $1,563,150
---------- ---------- ---------- ---------- ----------
Mortgage
Loans:
Construction 510,519 470,006 399,279 399,069 402,806
Residential
Mortgage 2,269,935 2,297,868 2,228,197 2,128,949 2,063,242
Commercial
Mortgage 3,324,082 3,204,537 2,564,605 2,443,719 2,370,345
--------- --------- --------- --------- ---------
Total
Mortgage
Loans 6,104,536 5,972,411 5,192,081 4,971,737 4,836,393
--------- --------- --------- --------- ---------
Consumer Loans:
Home Equity 607,700 600,623 537,913 542,162 554,830
Credit Card 9,916 9,872 9,459 9,338 10,077
Automobile 1,364,343 1,474,328 1,531,537 1,483,067 1,447,838
Other Consumer 91,823 94,578 92,768 76,990 83,933
------ ------ ------ ------ ------
Total
Consumer
Loans 2,073,782 2,179,401 2,171,677 2,111,557 2,096,678
--------- --------- --------- --------- ---------
Total Loans $10,143,690 $10,057,281 $9,044,095 $8,667,484 $8,496,221
=========== =========== ========== ========== ==========
---------------------------------------------
Quarterly Analysis of Average Assets,
Liabilities and Shareholders' Equity and
Net Interest Income on a Tax Equivalent Basis
---------------------------------------------
Quarter End - 12/31/2008 Quarter End - 9/30/2008
------------------------ -----------------------
Average Avg. Average Avg.
Balance Interest Rate Balance Interest Rate
------- -------- ---- ------- -------- ----
Assets
Interest earning
assets:
Loans (1)(2) $10,107,769 $150,810 5.97% $9,988,829 $151,877 6.08%
Taxable
investments (3) 2,387,822 33,201 5.56% 2,544,825 36,492 5.74%
Tax-exempt
investments
(1)(3) 252,823 3,765 5.96% 262,079 3,857 5.89%
Federal funds
sold and
other interest
bearing deposits 437,565 158 0.14% 25,951 130 2.00%
------- --- ---- ------ --- ----
Total interest
earning assets 13,185,979 187,934 5.70% 12,821,684 192,356 6.00%
Other assets 1,206,650 1,181,268
--------- ---------
Total Assets $14,392,629 $14,002,952
=========== ===========
Liabilities and
shareholders'
equity
Interest bearing
liabilities:
Savings, NOW and
money market
deposits $3,512,391 $8,661 0.99% $3,766,357 $12,080 1.28%
Time deposits 3,551,132 31,600 3.56% 3,228,453 27,902 3.46%
Short-term
borrowings 727,550 3,522 1.94% 530,408 2,122 1.60%
Long-term
borrowings (4) 3,163,624 35,421 4.48% 3,218,820 33,664 4.18%
--------- ------ ---- --------- ------ ----
Total interest
bearing
liabilities 10,954,697 79,204 2.89% 10,744,038 75,768 2.82%
Non-interest
bearing deposits 2,096,770 2,058,190
Other liabilities 96,335 80,713
Shareholders'
equity 1,244,827 1,120,011
--------- ---------
Total
liabilities
and
shareholders'
equity $14,392,629 $14,002,952
=========== ===========
Net interest
income/interest
rate spread (5) 108,730 2.81% 116,588 3.18%
---- ----
Tax equivalent
adjustment (1,323) (1,356)
------ ------
Net interest
income, as
reported $107,407 $115,232
======== ========
Net interest
margin (6) 3.26% 3.59%
Tax equivalent
effect 0.04% 0.05%
---- ----
Net interest
margin on a
fully tax
equivalent
basis (6) 3.30% 3.64%
==== ====
Quarter End - 6/30/2008 Quarter End - 3/31/2008
----------------------- -----------------------
Average Avg. Average Avg.
Balance Interest Rate Balance Interest Rate
------- -------- ---- ------- -------- ----
Assets
Interest earning
assets:
Loans (1)(2) $8,897,004 $134,619 6.05% $8,539,812 $135,638 6.35%
Taxable
investments (3) 2,723,835 38,410 5.64% 2,590,800 36,394 5.62%
Tax-exempt
investments
(1)(3) 244,551 3,800 6.22% 254,701 4,100 6.44%
Federal funds
sold and
other interest
bearing deposits 75,138 406 2.16% 191,384 1,496 3.13%
------ --- ---- ------- ----- ----
Total interest
earning assets 11,940,528 177,235 5.94% 11,576,697 177,628 6.14%
Other assets 1,019,703 1,005,756
--------- ---------
Total Assets $12,960,231 $12,582,453
=========== ===========
Liabilities and
shareholders'
equity
Interest bearing
liabilities:
Savings, NOW and
money market
deposits $3,479,046 $11,155 1.28% $3,386,570 $14,065 1.66%
Time deposits 2,981,166 27,162 3.64% 2,918,671 30,488 4.18%
Short-term
borrowings 555,799 2,212 1.59% 406,726 2,307 2.27%
Long-term
borrowings (4) 3,008,249 32,792 4.36% 2,977,234 33,742 4.53%
--------- ------ ---- --------- ------ ----
Total interest
bearing
liabilities 10,024,260 73,321 2.93% 9,689,201 80,602 3.33%
Non-interest
bearing deposits 1,893,688 1,876,223
Other liabilities 77,369 63,789
Shareholders'
equity 964,914 953,240
------- -------
Total
liabilities
and
shareholders'
equity $12,960,231 $12,582,453
=========== ===========
Net interest
income/interest
rate spread (5) 103,914 3.01% 97,026 2.81%
---- ----
Tax equivalent
adjustment (1,336) (1,444)
------ ------
Net interest
income, as
reported $102,578 $95,582
======== =======
Net interest
margin (6) 3.44% 3.30%
Tax equivalent
effect 0.04% 0.05%
---- ----
Net interest
margin on a
fully tax
equivalent
basis (6) 3.48% 3.35%
==== ====
Quarter End - 12/31/07
----------------------
Average Avg.
Balance Interest Rate
------- -------- ----
Assets
Interest earning assets:
Loans (1)(2) $8,362,192 $140,365 6.71%
Taxable investments (3) 2,649,378 37,684 5.69%
Tax-exempt investments (1)(3) 262,269 4,178 6.37%
Federal funds sold and other
interest bearing deposits 69,533 809 4.65%
------ --- ----
Total interest earning assets 11,343,372 183,036 6.45%
Other assets 1,037,171
---------
Total Assets $12,380,543
===========
Liabilities and shareholders' equity
Interest bearing liabilities:
Savings, NOW and money market
deposits $3,407,805 $17,825 2.09%
Time deposits 2,969,684 33,876 4.56%
Short-term borrowings 487,852 4,489 3.68%
Long-term borrowings (4) 2,548,503 30,055 4.72%
--------- ------ ----
Total interest bearing
liabilities 9,413,844 86,245 3.66%
Non-interest bearing deposits 1,929,133
Other liabilities 90,122
Shareholders' equity 947,444
-------
Total liabilities and
shareholders' equity $12,380,543
===========
Net interest income/interest rate
spread (5) 96,791 2.79%
----
Tax equivalent adjustment (1,473)
------
Net interest income, as reported $95,318
=======
Net interest margin (6) 3.36%
Tax equivalent effect 0.05%
----
Net interest margin on a fully tax
equivalent basis (6) 3.41%
====
(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.
