WAYNE, N.J., July 23 /PRNewswire-FirstCall/ -- Valley National Bancorp (NYSE: VLY), the holding company for Valley National Bank, today reported net income for second quarter of $15.0 million, $0.06 per diluted common share, compared to second quarter of 2008 earnings of $41.5 million, or $0.31 per diluted common share. Diluted earnings per common share were impacted by a $24.4 million ($0.11 per common share) non-cash charge due to the change in the fair value of junior subordinated debentures carried at fair value, a $6.5 million ($0.03 per common share) industry-wide FDIC special assessment, and accrued preferred stock dividends and accretion totaling $5.8 million ($0.04 per common share) for the second quarter of 2009. All common per share data presented was adjusted to reflect the stock dividend issued on May 22, 2009.
The following performance highlights and significant events occurred during the second quarter of 2009:
- The net interest margin on a fully tax equivalent basis increased by 17 basis points to 3.52 percent mainly due to a $3.6 million increase in net interest income on a fully tax equivalent basis. Net interest income improved over the linked quarter as our cost of funds declined $5.8 million. See "Net Interest Income and Margin" section below for more details.
- Total loans past due 30 days or more on our entire loan portfolio of $9.6 billion were 1.49 percent at June 30, 2009 compared to 1.34 percent at March 31, 2009. Our commercial mortgage portfolio had loans past due 30 days or more totaling 1.24 percent at June 30, 2009 compared to 1.35 percent at March 31, 2009.
- At June 30, 2009, our home equity and residential mortgage loan portfolios totaling approximately 23,000 individual loans had only 134 loans past due 30 days or more compared to 123 loans at March 31, 2009. These delinquencies totaled $31.3 million, or 1.18 percent of $2.6 billion in total home equity and residential mortgage loans at June 30, 2009. See "Credit Quality" section below for more details.
- On June 3, 2009, we repurchased from the U.S. Department of the Treasury 75,000 out of the 300,000 shares of our Series A Fixed Rate Cumulative Perpetual Preferred Stock that were issued to the Treasury on November 14, 2008 under the Capital Purchase Program. The aggregate purchase price for the repurchased preferred shares was approximately $75.2 million (including accrued and unpaid dividends) and resulted in an accelerated accretion charge of $1.9 million to retained earnings in the second quarter of 2009 based on the difference between the par value of $75 million and the carrying value of $73.1 million.
- Our regulatory capital ratios continue to reflect Valley's strong capital position. The Company's total risk-based capital, Tier I capital, and leverage capital were 12.94 percent, 11.09 percent, and 8.74 percent, respectively at June 30, 2009.
- Valley extended over $450 million in new credit to quality existing and new customers during the second quarter. However, the overall loan portfolio declined 8.9 percent on an annualized basis mainly due to management's decision to sell most refinanced and new residential mortgage loan originations in the secondary market, as well as continued declines in our automobile portfolio caused by the lack of consumer demand and our high underwriting standards.
- Valley engaged in minimal trading activities during the period. Net income included net trading losses of $18.6 million for the second quarter of 2009 mainly consisting of a $24.4 million non-cash charge on the change in the fair value of the junior subordinated debentures carried at fair value, partially offset by $4.2 million in mark to market gains on the fair value of trading securities and $1.6 million in realized gains on sales of trading securities. As of June 30, 2009, the junior subordinated debentures carried at fair value had a carrying value of $150.7 million and an unpaid contractual principal balance of $157.0 million.
- We accrued and expensed a $6.5 million FDIC special assessment equal to 5 basis points of our total assets minus Tier 1 capital as of June 30, 2009. The FDIC indicated an additional special assessment in 2009 is probable, but the amount is uncertain at this time.
- Valley recorded other-than-temporary impairment charges totaling $2.4 million ($1.5 million after taxes) for estimated credit losses on four private label mortgage backed securities classified as available for sale during the second quarter of 2009. After the write downs, these four securities had a combined book value and carrying value of $46.9 million and $41.6 million, respectively, at June 30, 2009.
- On June 8, 2009, we entered into an equity distribution agreement to sell from time to time up to 5.67 million shares of our no par value common stock. Under the agreement, we issued approximately 43 thousand shares at a weighted average price of $12.29 during June 2009. From June 8, 2009 to June 30, 2009, Valley's common stock traded at prices between $12.64 and $10.81 as reported by the New York Stock Exchange.
- Effective June 26, 2009, Valley's Dividend Reinvestment Plan was enhanced to allow our common stockholders to purchase additional shares of Valley National Bancorp common stock utilizing optional cash payments up to $100,000 per quarter, in addition to the reinvestment of all or part of their cash dividends. Shares purchased under this plan will be issued directly from Valley or in open market transactions as directed by Valley. No new common shares were issued under this plan during the second quarter of 2009.
Chairman's Comments
Gerald H. Lipkin, Chairman, President and CEO noted that, "The recession continues to impact our economy and all entities, especially financial institutions. Mindful of these conditions, management is pleased with Valley's operating performance and the level of loan delinquencies which remain below most of our peers. As reflected in our net interest income and margin, we continue to manage our marginal cost of funds with a similar discipline used in managing our loan portfolio. Excluding the non-cash charge of $24.4 million and the $6.5 million FDIC special assessment charge our net income was good given the current operating conditions.
Total delinquencies 30 days or more past due for the entire loan portfolio were 1.49 percent, of which only 0.80 percent are greater than 90 days past due or non-accrual loans. Delinquencies on our commercial mortgage portfolio 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 to date, we recorded a $13.1 million provision for credit losses during the quarter, approximately $4.8 million greater than net charge-offs. The addition to our reserves was, among other things, to provide for the potential risk of loan deterioration resulting from a continued downturn in the U.S. economy. The allowance for credit losses as a percentage of total loans increased 7 basis points to 1.06 percent at June 30, 2009 as compared to March 31, 2009 and increased 22 basis points compared to June 30, 2008.
During the second quarter we repurchased 25 percent of our preferred shares issued to the Treasury after careful analysis of the results from our stress test on Valley's balance sheet and earnings. This reduction in our preferred shares should increase net income available to our common stockholders in future periods as preferred dividends will decline. Management will continue to assess the changes in the economic environment, Valley's credit risk, capital position, and other factors prior to any future redemption requests.
We continue to serve our customers, our communities and our stockholders during these difficult times. We believe our commitment to quality loans and consistent underwriting standards should allow us to prevail as the economy continues to work through the recession."
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 $9.6 billion, net loan charge-offs for the second quarter of 2009 were $8.2 million compared to $7.2 million for the first quarter of 2009, and $4.9 million for the second quarter of 2008.
Valley's allocated reserves for the commercial loan portfolio increased $5.9 million or 39 basis points as a percentage of the portfolio during the period due to increases in reserves for non-accrual loans and other factors identified by management. 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:
June 30, 2009 March 31, 2009 June 30, 2008
------------- -------------- -------------
Allocation Allocation Allocation
as a % as a % as a %
of of of
Allowance loan Allowance loan Allowance loan
Allocation category Allocation category Allocation category
---------- -------- ---------- -------- ---------- --------
Loan category:
Commercial* $53,721 2.92% $47,796 2.53% $35,330 2.10%
Mortgage:
Construction 14,856 3.10% 15,621 3.10% 11,676 2.92%
Residential
mortgage 4,911 0.24% 4,750 0.22% 3,364 0.15%
Commercial
mortgage 10,398 0.31% 9,824 0.29% 10,177 0.40%
------ ----- ------
Total mortgage
loans 30,165 0.51% 30,195 0.50% 25,217 0.49%
Consumer:
Home equity 1,686 0.29% 1,702 0.28% 1,549 0.29%
Other
consumer 10,721 0.86% 11,419 0.86% 10,041 0.61%
------ ------ ------
Total consumer
loans 12,407 0.67% 13,121 0.68% 11,590 0.53%
Unallocated 6,024 NA 6,365 NA 3,812 NA
----- ----- -----
$102,317 1.06% $97,477 0.99% $75,949 0.84%
======== ======= =======
* 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 $66.4 million, or 0.69 percent of loans at June 30, 2009 compared to $57.0 million, or 0.58 percent of loans at March 31, 2009. Non-accrual loans increased $10.3 million at June 30, 2009 as compared to March 31, 2009, while OREO and other repossessed assets declined a combined $895 thousand over the same period. The increase in non-accrual loans was mostly due to three commercial mortgage loans totaling $5.9 million and one $2.6 million commercial loan.
Loans past due 90 days or more and still accruing increased $6.0 million to $19.5 million, or 0.20 percent of total loans at June 30, 2009 compared to $13.5 million, or 0.14 percent at March 31, 2009. The increase was mainly due to one commercial loan and four commercial mortgage loans with a combined total of $3.6 million, as well as ten additional residential mortgage loans totaling $2.0 million. 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, increased $14.1 million to $21.9 million at June 30, 2009 as compared to $7.8 million at March 31, 2009, primarily due to one aviation related commercial loan relationship.
Loans and Deposits
During the quarter, loans decreased $219.6 million to approximately $9.6 billion at June 30, 2009. The linked quarter decrease was mainly comprised of decreases in residential mortgage, automobile, commercial and construction loans of $104.4 million, $80.0 million, $49.7 million and $25.1 million, respectively, partially offset by a $52.0 million increase in commercial mortgage loans. The decline and lack of growth in the residential mortgage loan portfolio continued during the second quarter of 2009 as expected by management. The decrease was due to our sale of most refinanced loans and new loan originations in the secondary market based on the current level of interest rates and our management strategies for balance sheet and interest rate risk. Our automobile loan portfolio has declined for four consecutive quarters mainly due to low consumer demand for such products, as well as Valley's move to further strengthen its already conservative auto loan underwriting standards in light of current economic conditions. The decline in commercial loans is mainly due to a slowdown in new commercial loan activity and a slight decrease in usage of commercial lines of credit by our customers. 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 mortgage loans continue to modestly increase quarter over quarter as we benefit from the dislocation in the credit markets for new loans with quality borrowers. We may experience further declines in automobile and residential mortgage loans during 2009 if the recession continues and we maintain our current asset/liability management strategies.
During the quarter, deposits decreased $98.1 million to approximately $9.3 billion at June 30, 2009. At June 30, 2009, time deposits decreased $512.8 million, partially offset by increases in savings, NOW, and money market deposits and non-interest bearing deposits totaling $287.3 million and $127.4 million, respectively, as compared to March 31, 2009. Time deposits declined 14.0 percent during the second quarter as management chose to be less competitive on interest rates to retain certificates of deposit due to growth in other deposits and a decline in overall loan volumes. The increases in both non-interest bearing and savings, NOW, and money market deposits were mainly due to higher customer balances which may be reflective of the surge in the U.S. household savings rate caused in part by the economic recession. We also continued to see some migration of customer repo sweep account balances (recorded as short-term borrowings) into these accounts due to lower interest rates.
Net Interest Income and Margin
Net interest income on a tax equivalent basis was $114.4 million for the second quarter of 2009, an increase of $10.5 million from the same quarter of 2008 and an increase of $3.6 million from the linked quarter ended March 31, 2009. The linked quarter increase was primarily due to lower interest expense caused by maturing high cost time deposits and short-term FHLB advances during the second quarter of 2009 and latter half of the first quarter of 2009. A four basis point increase in the yield on average loans also contributed to the increase in net interest income for the second quarter of 2009. The positive effect of these items on our net interest income was partially negated by a $244.8 million decrease in average loans during the three months ended June 30, 2009.
The net interest margin on a tax equivalent basis was 3.52 percent for the second quarter of 2009, an increase of 17 basis points from 3.35 percent for the linked quarter ended March 31, 2009 and an increase of 4 basis points as compared to the second quarter of 2008. The cost of average interest bearing liabilities declined 13 basis points from the first quarter of 2009 mainly due to a 24 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 increased by 5 basis points on a linked quarter basis mainly due to a 4 basis point increase in yield on average loans as compared to the three months ended March 31, 2009.
Our cost of total deposits totaled 1.36 percent for the second quarter of 2009 compared to 1.54 percent for the three months ended March 31, 2009. The decrease of 18 basis points was due to lower interest rates on savings, NOW, and money market accounts, maturing high cost certificates of deposit and a $96.8 million increase in average non-interest bearing deposits. The cost of average short-term borrowings decreased by 118 basis points as compared to the first quarter of 2009 as higher cost short-term FHLB advances represented a smaller portion of the average balance. Valley had $200 million in short-term FHLB advances that matured between February and March of 2009 and $100 million that matured in April 2009. Short-term borrowings, primarily consisting of customer repo account balances, did not include FHLB advances at June 30, 2009.
Non-Interest Income (Loss)
Second quarter of 2009 compared with second quarter of 2008
Non-interest income for the second quarter of 2009 decreased $18.3 million to a non-interest loss of $389 thousand as compared to non-interest income of approximately $18.0 million for the quarter ended June 30, 2008 mainly due to net trading losses of $18.6 million in the second quarter of 2009. The net trading losses consisted of a $24.4 million non-cash charge on the change in the fair value of the junior subordinated debentures carried at fair value, partially offset by $4.2 million in mark to market gains on the fair value of trading securities and $1.6 million in realized gains on sales of trading securities. BOLI income decreased $1.5 million as compared to the second 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. Net impairment losses on securities increased by $1.0 million to $2.4 million for the second quarter of 2009 compared to $1.4 million for the same period of 2008. The 2009 period included, as noted above, other-than-temporary impairment charges for estimated credit losses on four private label mortgage-backed securities and the 2008 period included total other-than-temporary impairment charges on equity securities issued by two financial institutions and one Freddie Mac perpetual preferred security. Net gains on sales of loans increased $2.0 million to $2.4 million for the quarter ended June 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.
Second quarter of 2009 compared with first quarter of 2009
Non-interest income for the second quarter of 2009 decreased $31.4 million to a non-interest loss of $389 thousand as compared to non-interest income of $31.0 million for the first quarter of 2009 mainly due to a decline in net trading gains of $31.9 million. The majority of the decrease in net trading gains 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 $13.8 million non-cash gain recognized on the change in the fair value of these debentures in the first quarter of 2009.
Non-Interest Expense
Second quarter of 2009 compared with second quarter of 2008
Non-interest expense increased approximately $14.1 million to $78.1 million for the quarter ended June 30, 2009 from $64.0 million for the quarter ended June 30, 2008 mainly due to a $10.0 million increase in the FDIC insurance assessment. The majority of the increased assessment consists of a five basis point special assessment (imposed on all insured depository institutions based on assets minus Tier 1 capital as of June 30, 2009) which totaled $6.5 million for Valley. The FDIC insurance assessment also increased 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. Salary and employee benefits increased a combined $2.3 million and net occupancy and equipment expense increased $1.6 million as compared to the second quarter of 2008 primarily due to Valley's acquisition of Greater Community Bancorp and its 16 full-service branches on July 1, 2008, as well as additional staffing at 5 de novo branches opened since June 30, 2008. Management maintains a strong focus on controlling operating expenses as our branch network expands through strategic growth opportunities in our primary markets.
Second quarter of 2009 compared with first quarter of 2009
Non-interest expense increased by $1.2 million, or 1.5 percent to $78.1 million for the second quarter of 2009 from $76.9 million for the linked quarter ended March 31, 2009. The FDIC's insurance assessment increased $7.1 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 decreased a combined $2.4 million mainly due to staffing efficiencies realized in the second quarter of 2009, as well as lower payroll taxes caused by maximums reached on certain annual tax limits. Amortization of other intangible assets decreased $1.8 million 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 as compared to a $1.1 million impairment charge incurred on loan servicing rights in the first quarter of 2009. Net occupancy and equipment expense decreased $1.2 million mainly as a result of normal seasonal declines in utilities and other maintenance expenses.
Income Tax Expense
Income tax expense was $6.6 million for the second quarter of 2009, reflecting an effective tax rate of 30.4 percent, compared with $9.3 million for the second quarter of 2008, reflecting an effective tax rate of 18.3 percent. The higher effective tax rate for the second quarter of 2009 as compared to the same period of 2008 was primarily the result of lower tax advantaged income (caused by a reduction in BOLI income, and a decrease in non-taxable income and dividends from investment securities), higher state tax expense and a $6.5 million reduction in Valley's deferred tax asset valuation allowance in the second quarter of 2008.
Income tax expense was $22.8 million for the six months ended June 30, 2009, reflecting an effective tax rate of 30.3 percent, compared with $21.0 million for the six months ended June 30, 2008, reflecting an effective tax rate of 22.4 percent. The higher effective tax rate for the six months ended June 30, 2009 as compared to the same period of 2008 was mainly the result of lower tax advantaged income, higher state tax expense, and the reduction of Valley's deferred tax asset valuation allowance in the second quarter of 2008.
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 the remainder 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. We opened three new branch offices during the first half of 2009, including our fourteenth branch in Manhattan, and our sixth and third branches located in Brooklyn and Queens, respectively. Valley anticipates completing eight additional de novo branch projects during the remainder of 2009, including two branch offices in Brooklyn and three branch offices in 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. To partially mitigate such increases, Valley continuously monitors the profitability and service coverage of its branch network. Based on such analysis, two branch locations in New Jersey, one owned and one leased, were closed during the first quarter of 2009. The owned location is under contract to be sold and such sale is expected to be completed in the third quarter of 2009. The sale will result in an immaterial gain.
About Valley
Valley is a regional bank holding company, headquartered in Wayne, New Jersey, with $14.1 billion in assets. Its principal subsidiary, Valley National Bank, currently operates 195 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 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.
-Tables to Follow-
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
Three Months Ended Six Months Ended
----------------------------- ----------------
($ in thousands, June March June June June
except for 30, 31, 30, 30, 30,
share data) 2009 2009 2008 2009 2008
---- ---- ---- ---- ----
FINANCIAL DATA:
---------------
Net interest
income $113,113 $109,564 $102,578 $222,677 $198,160
Net interest
income -
FTE(2) 114,403 110,845 103,914 225,248 200,940
Non-interest
(loss)
income(3) (389) 30,985 17,954 30,596 37,181
Non-interest
expense 78,106 76,946 63,959 155,052 131,437
Income tax
expense 6,557 16,238 9,290 22,795 21,038
Net income 14,997 37,384 41,483 52,381 73,066
Dividends on
preferred
stock and
accretion 5,789 4,224 - 10,013 -
Net income
available to
common
stockholders 9,208 33,160 41,483 42,368 73,066
Weighted
average
number of
shares
outstanding
(4):
Basic 141,804,034 141,775,444 132,252,624 141,789,818 132,219,176
Diluted 141,804,908 141,775,452 132,371,581 141,790,489 132,343,069
Per common
share data (4):
Basic
earnings $0.06 $0.23 $0.31 $0.30 $0.55
Diluted
earnings 0.06 0.23 0.31 0.30 0.55
Cash dividends
declared 0.19 0.19 0.19 0.38 0.38
Book value 7.75 7.73 7.19 7.75 7.19
Tangible
book
value (1) 5.50 5.48 5.67 5.50 5.67
Closing
stock price -
high 15.03 18.91 18.39 18.91 18.56
Closing
stock price -
low 10.95 8.38 15.02 8.38 15.02
CORE ADJUSTED
FINANCIAL DATA (1):
--------------------
Net income
available
to common
stockholders,
as adjusted $10,731 $34,519 $42,324 $45,250 $75,602
Basic earnings
per share,
as adjusted 0.08 0.24 0.32 0.32 0.57
Diluted earnings
per share,
as adjusted 0.08 0.24 0.32 0.32 0.57
FINANCIAL RATIOS:
-----------------
Net interest
margin 3.48% 3.31% 3.44% 3.39% 3.37%
Net interest
margin -
FTE (2) 3.52 3.35 3.48 3.43 3.42
Annualized
return on
average assets 0.42 1.03 1.28 0.73 1.14
Annualized
return on
average
shareholders'
equity 4.41 10.94 17.20 7.68 15.24
Annualized
return on
average
tangible
shareholders'
equity (1) 5.77 14.29 21.76 10.05 19.33
Efficiency
ratio (5) 69.29 54.75 53.06 61.22 55.85
CORE ADJUSTED
FINANCIAL
RATIOS (1):
-------------
Annualized
return on
average
assets, as
adjusted 0.46% 1.07% 1.31% 0.77% 1.18%
Annualized
return on
average
shareholders'
equity,
as adjusted 4.86 11.33 17.55 8.11 15.77
Annualized
return on
average tangible
shareholders'
equity,
as adjusted 6.36 14.81 22.20 10.60 20.00
Efficiency ratio,
as adjusted 67.83 53.91 52.46 60.13 55.44
Three Months Ended Six Months Ended
----------------------------- ----------------
June March June June June
30, 31, 30, 30, 30,
($ in thousands) 2009 2009 2008 2009 2008
---- ---- ---- ---- ----
AVERAGE BALANCE
SHEET ITEMS:
---------------
Assets $14,214,185 $14,471,260 $12,960,231 $14,342,013 $12,771,342
Interest
earning
assets 12,987,850 13,254,991 11,940,528 13,120,683 11,758,613
Loans 9,770,280 10,015,090 8,897,004 9,892,009 8,718,408
Interest
bearing
liabil-
ities 10,502,379 10,839,876 10,024,260 10,670,195 9,856,732
Deposits 9,369,630 9,379,081 8,353,900 9,374,330 8,267,683
Shareholders'
equity 1,359,500 1,367,247 964,914 1,363,352 959,077
ALLOWANCE
FOR CREDIT
LOSSES:
-----------
Beginning of
period $97,477 $94,738 $75,030 $94,738 $74,935
Provision for
credit losses 13,064 9,981 5,800 23,045 9,800
Charge-offs (9,202) (8,041) (5,447) (17,243) (10,049)
Recoveries 978 799 566 1,777 1,263
--- --- --- ----- -----
End of period $102,317 $97,477 $75,949 $102,317 $75,949
Components:
Allowance
for loan
losses $100,761 $95,913 $73,729 $100,761 $73,729
Reserve for
unfunded
letters of
credit 1,556 1,564 2,220 1,556 2,220
----- ----- ----- ----- -----
Allowance
for credit
losses $102,317 $97,477 $75,949 $102,317 $75,949
As of
--------------------------------------------
June March December June
30, 31, 31, 30,
2009 2009 2008 2008
---- ---- ---- ----
BALANCE SHEET
ITEMS:
-------------
Assets $14,132,031 $14,429,597 $14,718,129 $12,987,718
Loans 9,618,377 9,837,932 10,143,690 9,044,095
Deposits 9,320,447 9,418,591 9,232,923 8,372,403
Shareholders'
equity 1,318,896 1,387,387 1,363,609 951,331
CAPITAL RATIOS:
---------------
Tier 1
leverage ratio 8.74% 9.17% 9.10% 7.51%
Risk-based
capital -
Tier 1 11.09 12.07 11.45 9.51
Risk-based
capital -
Total Capital 12.94 13.91 13.19 11.25
ASSET QUALITY:
--------------
Non-accrual
loans $57,731 $47,388 $33,073 $27,559
Other real
estate owned 4,993 5,241 8,278 4,416
Other repossessed
assets 3,699 4,346 4,317 4,158
----- ----- ----- -----
Total non-
performing
assets (NPAs) $66,423 $56,975 $45,668 $36,133
Loans past
due 90 days
or more and
still accruing 19,523 13,486 15,557 11,249
Troubled debt
restructured
loans 21,850 7,757 7,628 8,895
ASSET QUALITY
RATIOS:
-------------
Non-performing
loans as a %
of loans 0.60% 0.48% 0.33% 0.30%
NPAs as a %
of loans and
NPAs 0.69 0.58 0.45 0.40
Loans past
due 30 days
or more as a
% of loans 1.49 1.34 1.06 0.82
Allowance for
credit losses
to total
loans 1.06 0.99 0.93 0.84
Annualized
net charge-
offs to
average loans 0.31 0.29 0.21 0.20
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 Six Months Ended
----------------------------- ----------------
($ in June March June June June
thousands, 30, 31, 30, 30, 30,
except for 2009 2009 2008 2009 2008
share data) ---- ---- ---- ---- ----
Tangible book
value per
common share
-------------
Common shares
out-
standing 141,843,774 141,775,940 132,274,669 141,843,774 132,274,669
----------- ----------- ----------- ----------- -----------
Shareholders'
equity $1,318,896 $1,387,387 $951,331 $1,318,896 $951,331
Less:
Preferred
stock (219,333) (292,013) - (219,333) -
Less:
Goodwill and
other
intangible
assets (320,043) (318,907) (201,738) (320,043) (201,738)
-------- -------- -------- -------- --------
Tangible
shareholders'
equity $779,520 $776,467 $749,593 $779,520 $749,593
Tangible book
value $5.50 $5.48 $5.67 $5.50 $5.67
Annualized
return on
average
tangible
equity
----------
Net income $14,997 $37,384 $41,483 $52,381 $73,066
------- ------- ------- ------- -------
Average
shareholders'
equity 1,359,500 1,367,247 964,914 $1,363,352 $959,077
Less: Average
goodwill and
other intangible
assets (320,434) (320,635) (202,410) (320,534) (203,104)
-------- -------- -------- -------- --------
Average
tangible
shareholders'
equity $1,039,066 $1,046,612 $762,504 $1,042,818 $755,973
Annualized
return on
average
tangible
shareholders'
equity 5.77% 14.29% 21.76% 10.05% 19.33%
Adjusted net
income available
to common
stockholders
-----------------
Net income,
as reported $14,997 $37,384 $41,483 $52,381 $73,066
Add: Impairment
charges on
investment
securities,
net 1,523 1,359 841 2,882 1,071
----- ----- --- ----- -----
Net income, as
adjusted 16,520 38,743 42,324 $55,263 $75,602
Dividends on
preferred
stock and
accretion 5,789 4,224 - 10,013 -
----- ----- --- ------ ---
Net income
available
to common
stockholders,
as adjusted $10,731 $34,519 $42,324 $45,250 $75,602
Adjusted per
common share
data
-------------
Net income
available
to common
stockholders,
as adjusted $10,731 $34,519 $42,324 $45,250 $75,602
Average number
of basic
shares out-
standing 141,804,034 141,775,444 132,252,624 141,789,818 132,219,176
Basic earnings,
as adjusted $0.08 $0.24 $0.32 $0.32 $0.57
Average number
of diluted
shares out-
standing 141,804,908 141,775,452 132,371,581 141,790,489 132,343,069
Diluted
earnings,
as adjusted $0.08 $0.24 $0.32 $0.32 $0.57
Adjusted annualized
return on
average assets
-------------------
Net income,
as adjusted $16,520 $38,743 $42,324 $55,263 $75,602
Average
assets 14,214,185 14,471,260 12,960,231 14,342,013 12,771,342
Annualized
return on
average assets,
as adjusted 0.46% 1.07% 1.31% 0.77% 1.18%
NOTES TO SELECTED FINANCIAL DATA - CONTINUED
Three Months Ended Six Months Ended
--------------------------- ----------------
($ in June March June June June
thousands, 30, 31, 30, 30, 30,
except for 2009 2009 2008 2009 2008
share data) ---- ---- ---- ---- ----
Adjusted annualized
return on average
shareholders' equity
----------------------
Net income,
as adjusted $16,520 $38,743 $42,324 $55,263 $75,602
Average
shareholders'
equity 1,359,500 1,367,247 964,914 1,363,352 959,077
Annualized
return on average
shareholders'
equity, as
adjusted 4.86% 11.33% 17.55% 8.11% 15.77%
Adjusted annualized
return on average
tangible
shareholders' equity
---------------------
Net income,
as adjusted $16,520 $38,743 $42,324 $55,263 $75,602
Average tangible
shareholders'
equity 1,039,066 1,046,612 762,504 1,042,818 755,973
Annualized
return on
average tangible
shareholders'
equity, as
adjusted 6.36% 14.81% 22.20% 10.60% 20.00%
Adjusted
efficiency ratio
-----------------
Non-interest
expense $78,106 $76,946 $63,959 $155,052 $131,437
Net interest
income 113,113 109,564 102,578 222,677 198,160
Non-interest
(loss) income (389) 30,985 17,954 30,596 37,181
Add: Impairment
charges on
investment
securities 2,434 2,171 1,382 4,605 1,737
----- ----- --- ----- -----
Gross operating
income,
as adjusted $115,158 $142,720 $121,914 $257,878 $237,078
Efficiency ratio,
as adjusted 67.83% 53.91% 52.46% 60.13% 55.44%
(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 $5,802 ($536) ($2,158) $5,266 ($2,562)
Junior
subordinated
debentures (24,433) 13,755 1,979 (10,678) 264
FHLB advances - - (122) - (1,194)
--- --- ---- --- ------
Total trading
(losses) gains,
net ($18,631) $13,219 ($301) ($5,412) ($3,492)
(4) Share data reflects the five percent common stock dividend issued on
May 22, 2009.
(5) The efficiency ratio measures Valley's total non-interest expense as
a percentage of net interest income plus total non-interest income.
SHAREHOLDER RELATIONS
---------------------
Requests for copies of reports and/or other inquiries should be directed
to Dianne Grenz, Director of Shareholder and Public Relations,
Valley National Bancorp, 1455 Valley Road, Wayne, New Jersey, 07470, by
telephone at (973) 305-3380, by fax at (973) 696-2044 or by e-mail at
dgrenz@valleynationalbank.com.
VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
($ in thousands, except for share data)
June 30, December 31,
2009 2008
---- ----
Assets
Cash and due from banks $253,206 $237,497
Interest bearing deposits with banks 89,853 343,010
Investment securities:
Held to maturity, fair value of
$1,512,779 at June 30, 2009 and
$1,069,245 at December 31, 2008 1,575,972 1,154,737
Available for sale 1,319,544 1,435,442
Trading securities 32,821 34,236
------ ------
Total investment securities 2,928,337 2,624,415
--------- ---------
Loans held for sale, at fair value 27,596 4,542
Loans 9,618,377 10,143,690
Less: Allowance for loan losses (100,761) (93,244)
-------- -------
Net loans 9,517,616 10,050,446
--------- ----------
Premises and equipment, net 271,062 256,343
Bank owned life insurance 302,014 300,058
Accrued interest receivable 57,359 57,717
Due from customers on acceptances
outstanding 5,252 9,410
Goodwill 295,631 295,146
Other intangible assets, net 24,412 25,954
Other assets 359,693 513,591
------- -------
Total Assets $14,132,031 $14,718,129
=========== ===========
Liabilities
Deposits:
Non-interest bearing $2,333,195 $2,118,249
Interest bearing
Savings, NOW and money market 3,843,513 3,493,415
Time 3,143,739 3,621,259
--------- ---------
Total deposits 9,320,447 9,232,923
--------- ---------
Short-term borrowings 193,281 640,304
Long-term borrowings 2,971,829 3,008,753
Junior subordinated debentures issued
to capital trusts (includes fair
value of $150,743 at June 30, 2009
and $140,065 at December 31, 2008
for VNB Capital Trust I) 176,034 165,390
Bank acceptances outstanding 5,252 9,410
Accrued expenses and other
liabilities 146,292 297,740
------- -------
Total Liabilities 12,813,135 13,354,520
---------- ----------
Shareholders' Equity*
Preferred stock, no par value,
authorized 30,000,000 shares;
issued 225,000 shares at
June 30, 2009 and 300,000 shares
at December 31, 2008 219,333 291,539
Common stock, no par value, authorized
200,430,392 shares; issued 143,766,225
shares at June 30, 2009 and
143,722,114 at December 31, 2008 50,631 48,228
Surplus 1,047,146 1,047,085
Retained earnings 81,785 85,234
Accumulated other comprehensive loss (33,191) (60,931)
Treasury stock, at cost (1,922,451
common shares at June 30, 2009 and
1,946,882 common shares at
December 31, 2008) (46,808) (47,546)
------- -------
Total Shareholders' Equity 1,318,896 1,363,609
--------- ---------
Total Liabilities and
Shareholders' Equity $14,132,031 $14,718,129
=========== ===========
----------------
* Share data reflects the five percent common stock dividend issued on
May 22, 2009.
VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
($ in thousands, except per share data)
Three Months Ended Six Months Ended
------------------------- ------------------------
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
------------ ----------- ----------- ------------
Interest Income
Interest and fees
on loans $141,358 $134,613 $285,213 $270,242
Interest and
dividends on
investment securities:
Taxable 34,147 36,065 69,492 70,207
Tax-exempt 2,389 2,470 4,761 5,135
Dividends 2,709 2,345 3,982 4,597
Interest on federal
funds sold and other
short-term investments 218 406 448 1,902
--- --- --- -----
Total interest
income 180,821 175,899 363,896 352,083
------- ------- ------- -------
Interest Expense
Interest on deposits:
Savings, NOW and
money market 5,796 11,155 11,683 25,220
Time 26,106 27,162 56,285 57,650
Interest on short-term
borrowings 579 2,212 3,130 4,519
Interest on long-term
borrowings and junior
subordinated debentures 35,227 32,792 70,121 66,534
------ ------ ------ ------
Total interest
expense 67,708 73,321 141,219 153,923
------ ------ ------- -------
Net Interest Income 113,113 102,578 222,677 198,160
Provision for credit
losses 13,064 5,800 23,045 9,800
------ ----- ------ -----
Net Interest Income
after Provision for
Credit Losses 100,049 96,778 199,632 188,360
------- ------ ------- -------
Non-Interest Income
Trust and investment
services 1,592 1,744 3,237 3,512
Insurance premiums 2,577 2,264 5,570 5,636
Service charges on
deposit accounts 6,563 7,041 13,200 13,622
Gains on securities
transactions, net 288 424 251 924
Other-than-temporary
impairment losses on
securities - (1,382) (5,905) (1,737)
Portion recognized
in other
comprehensive income (2,434) - 1,300 -
------ --- ----- ---
Net impairment losses (2,434) (1,382) (4,605) (1,737)
Trading losses, net (18,631) (301) (5,412) (3,492)
Fees from loan servicing 1,193 1,195 2,369 2,447
Gains on sales of
loans, net 2,432 391 4,576 724
Gains (losses) on sale
of assets, net 175 (8) 349 85
Bank owned life insurance 1,397 2,905 2,768 6,145
Other 4,459 3,681 8,293 9,315
----- ----- ----- -----
Total non-interest
(loss) income (389) 17,954 30,596 37,181
---- ------ ------ ------
Non-Interest Expense
Salary expense 31,397 30,138 63,844 60,301
Employee benefit expense 7,938 6,897 17,208 15,852
Net occupancy and
equipment expense 14,344 12,775 29,895 26,256
FDIC insurance
Assessment 10,279 231 13,431 475
Amortization of
intangible assets 1,011 1,402 3,827 3,148
Professional and
legal fees 2,147 1,897 4,239 4,186
Advertising 322 341 1,167 717
Other 10,668 10,278 21,441 20,502
------ ------ ------ ------
Total non-interest
expense 78,106 63,959 155,052 131,437
------ ------ ------- -------
Income Before
Income Taxes 21,554 50,773 75,176 94,104
Income tax expense 6,557 9,290 22,795 21,038
----- ----- ------ ------
Net Income 14,997 41,483 52,381 73,066
Dividends on preferred
stock and accretion 5,789 - 10,013 -
----- --- ------ ---
Net Income Available to
Common Stockholders $9,208 $41,483 $42,368 $73,066
====== ======= ======= =======
Earnings Per Common
Share:*
Basic $0.06 $0.31 $0.30 $0.55
Diluted 0.06 0.31 0.30 0.55
Cash Dividends Declared
Per Common Share* 0.19 0.19 0.38 0.38
Weighted Average Number
of Shares
Outstanding:*
Basic 141,804,034 132,252,624 141,789,818 132,219,176
Diluted 141,804,908 132,371,581 141,790,489 132,343,069
-----------------
* Share data reflects the five percent common stock dividend issued on
May 22, 2009.
Valley National Bancorp
-----------------------
($ in thousands)
For the periods ended
-------------------------------------------------------
6/30/2009 3/31/2009 12/31/2008 9/30/2008 6/30/2008
Loan Portfolio --------- --------- ---------- --------- ---------
Commercial Loans $1,838,895 $1,888,564 $1,965,372 $1,905,469 $1,680,337
---------- ---------- ---------- ---------- ----------
Mortgage Loans:
Construction 479,294 504,416 510,519 470,006 399,279
Residential
Mortgage 2,061,244 2,165,641 2,269,935 2,297,868 2,228,197
Commercial
Mortgage 3,399,560 3,347,568 3,324,082 3,204,537 2,564,605
--------- --------- --------- --------- ---------
Total Mortgage
Loans 5,940,098 6,017,625 6,104,536 5,972,411 5,192,081
--------- --------- --------- --------- ---------
Consumer Loans:
Home Equity 585,722 598,467 607,700 600,623 537,913
Credit Card 9,956 9,531 9,916 9,872 9,459
Automobile 1,165,159 1,245,192 1,364,343 1,474,328 1,531,537
Other Consumer 78,547 78,553 91,823 94,578 92,768
------ ------ ------ ------ ------
Total Consumer
Loans 1,839,384 1,931,743 2,073,782 2,179,401 2,171,677
--------- --------- --------- --------- ---------
Total Loans $9,618,377 $9,837,932 $10,143,690 $10,057,281 $9,044,095
========== ========== =========== =========== ==========
Quarterly Analysis of Average Assets, Liabilities and
Shareholders' Equity and Net Interest Income on a Tax Equivalent Basis
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%
====
Quarter End - 6/30/2008
-----------------------------
Average Avg.
Balance Interest Rate
---------- ------------ ----
Assets
Interest earning assets:
Loans (1)(2) $8,897,004 $134,619 6.05%
Taxable investments (3) 2,723,835 38,410 5.64%
Tax-exempt investments (1)(3) 244,551 3,800 6.22%
Federal funds sold and other
interest bearing deposits 75,138 406 2.16%
------ --- ----
Total interest
earning assets 11,940,528 177,235 5.94%
Other assets 1,019,703
---------
Total Assets $12,960,231
===========
Liabilities and shareholders' equity
Interest bearing liabilities:
Savings, NOW and money
market deposits $3,479,046 $11,155 1.28%
Time deposits 2,981,166 27,162 3.64%
Short-term borrowings 555,799 2,212 1.59%
Long-term borrowings (4) 3,008,249 32,792 4.36%
--------- ------ ----
Total interest bearing
liabilities 10,024,260 73,321 2.93%
Non-interest bearing deposits 1,893,688
Other liabilities 77,369
Shareholders' equity 964,914
-------
Total liabilities and
shareholders' equity $12,960,231
===========
Net interest income/interest
rate spread (5) 103,914 3.01%
----
Tax equivalent adjustment (1,336)
------
Net interest income, as reported $102,578
========
Net interest margin (6) 3.44%
Tax equivalent effect 0.04%
----
Net interest margin on a fully
tax equivalent basis (6) 3.48%
====
(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.
