Contact: Alan D. Eskow
Senior Vice President/Controller
(973) 305-4003
Valley National Bancorp Continues its Strong Earnings
WAYNE, N.J., October l8 -- Valley National Bancorp (NYSE: VLY) reported nine
months ended September 30, 2000 per diluted share earnings of $1.30 an increase
of 5.7 percent over the $1.23 for the nine months ended September 30, 1999. Net
income was $80.0 million for the nine months ended September 30, 2000, compared
with $79.2 million for the same period in 1999.
For the third quarter ended September 30, 2000 diluted share earnings were
$0.44, an increase of 2.3 percent over the $0.43 for the third quarter of 1999.
Net income was $26.4 million for the third quarter of 2000, compared with $27.3
million for the third quarter of 1999.
The quarter ended September 30, 2000 produced a return on average assets ("ROA")
of 1.70 percent and a return on average equity ("ROE") of 20.35 percent. The
efficiency ratio for the nine months ended September 30, 2000 was 44.62 percent.
Each of the above performance measures places Valley among the best banks in the
industry.
Gerald H. Lipkin, Valley's Chairman, President and CEO stated, "Our earnings for
the third quarter of 2000 reflect our continued strong performance. The
repurchase of our stock during the 4th quarter of 1999 and all of 2000 reduced
net interest income and net income during the current quarter and nine months of
2000. However, returns to our shareholders increased through earnings per share
growth as a result of less shares outstanding. Valley's ability to generate new
loans during the quarter was inhibited by slow consumer loan demand, however,
Valley continues to internally generate its strong volume of commercial loans,
commercial and residential mortgage loans and does not participate in syndicated
or purchased credits. The overall loan growth is a result of Valley's lending
policies that strive to avoid higher risk loans, especially, at this time in the
credit cycle. This business strategy has resulted in steady and consistent net
income, while loan chargeoffs, delinquencies and non-accrual loans remain at low
levels."
At September 30, 2000, among total loans of $4.6 billion, non-accrual loans,
representing 0.06 percent of loans, were $2.9 million, a decrease from $3.5
million at December 31, 1999 and down from $6.2 million at September 30, 1999.
Total non-performing assets, which include non-accrual loans and OREO, totaled
$3.5 million, or 0.08 percent of loans and OREO, a decrease from $5.7 million at
December 31, 1999 and a decrease from $7.0 million at September 30, 1999. Loans
past due 90 days or more and still accruing at September 30, 2000 were $13.8
million, an increase from $11.7 million at both December 31, 1999 and September
30, 1999. Loans past due in excess of 30 days as a percentage of the loan
portfolio, at September 30, 2000, were 0.88 percent for commercial loans, 1.91
percent for consumer loans and 1.62 percent for residential loans. Valley
continues to maintain a low level of delinquencies.
Commenting further, Mr. Lipkin said, "We recently entered into a definitive
merger agreement with Merchants New York Bancorp, Inc. which is expected to
close during the 1st quarter of 2001. We are very excited about the prospect of
having branches and lending opportunities in Manhattan. We anticipate top line
revenue to be enhanced by this merger as products in existence at Valley are
added to the Merchants' menu of available products."
During August 2000 Valley entered into a contract to sell its ShopRite
MasterCard credit card portfolio to American Express and expects to record and
close the transaction during the first quarter of 2001.
In view of increased interest rates, the net interest margin for the third
quarter of 2000 was 4.40 percent compared with 4.58 percent for the third
quarter of 1999. While the net interest margin declined, net interest income on
a fully-taxable equivalent basis was $65.9 million for the third quarter of 2000
relatively unchanged from the third quarter of 1999. However, we are pleased to
note that the net interest margin increased 7 basis points in the third quarter
from the 4.33 percent reported for the second quarter of 2000.
Non-interest income for the quarter increased $1.2 million or 10.7 percent over
the prior year period. Service charges on deposit accounts increased $673
thousand or 18.7 percent, and fees from loan servicing increased $632 thousand
or 29.6 percent, between the third quarter of 1999 and 2000.
Non-interest expense increased $1.5 million or 4.5 percent from the third
quarter of 1999 to the same quarter in 2000. Occupancy and equipment expense
increased $815 thousand as a result of costs associated with new computer
equipment and additional branches. Amortization of intangibles increased due to
increased mortgage servicing portfolios acquired and the goodwill created from
the asset management and the title company acquisitions.
The effective tax rate for the third quarter of 2000 was 34.3 percent compared
with 32.7 percent for the third quarter of 1999. The effective tax rate for the
remainder of 2000 is expected to approximate 34 percent.
Capital Adequacy
Shareholders' equity was $523.6 million on September 30, 2000. Valley's
risk-based capital ratios were 10.82 percent for Tier 1 capital and 11.95
percent for Total capital. The Tier 1 leverage ratio was 8.56 percent.
On May 23, 2000, the Valley National Bancorp Board of Directors approved a
repurchase of up to 3,000,000 shares of Valley's common stock. The repurchased
shares will be used for stock dividends, acquisitions, employee benefit plans
and other corporate purposes. On September 19, 2000, the Valley National Bancorp
Board of Directors cancelled the May 23, 2000 authorized buyback in conjunction
with Valley's announcement of a merger with Merchants. As of September 19, 2000,
Valley had purchased 571,070 shares under this program.
Valley National Bancorp is a regional bank holding company headquartered in
Wayne, NJ. Its principal subsidiary, Valley National Bank, operates 117 offices
located in 76 communities serving 10 counties throughout northern New Jersey.
Valley's web site can be found at http://www.valleynationalbank.com.
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, technology and market conditions. These
statements may be identified by such forward-looking terminology as "expect",
"look", "believe", "anticipate", "may", "will", or similar statements or
variations of such terms. Such forward-looking statements involve certain risks
and uncertainties. These include, but are not limited to, the direction of
interest rates, continued levels of loan quality and origination volume,
continued relationships with major customers including sources for loans, as
well as the effects of economic conditions and legal and regulatory barriers and
structure. Actual results may differ materially from such forward-looking
statements. Valley assumes no obligation for updating any such forward-looking
statement at any time.
VALLEY NATIONAL BANCORP
Consolidated Statements of Financial Condition
($ in thousands)
September 30,
2000 1999
---- ----
Assets
Cash and due from banks $ 172,939 $ 161,686
Federal funds sold 0 0
Investment securities 1,331,081 1,405,159
Loans 4,592,211 4,387,267
Loans held for sale 10,296 9,141
Less: Allowance for loan losses (55,363) (54,746)
Loans, net 4,547,144 4,341,662
Premises and equipment 86,236 82,381
Accrued interest receivable 38,225 36,829
Other assets 90,773 82,081
Total assets $6,266,398 $6,109,798
Liabilities
Deposits:
Non-interest bearing $ 958,278 $ 921,497
Interest bearing:
Savings 1,910,657 1,977,994
Time 2,062,200 2,062,116
Total deposits 4,931,135 4,961,607
Other borrowings 759,883 530,557
Accrued expenses and other liabilities 51,812 49,351
Total liabilities 5,742,830 5,541,515
Shareholders' Equity
Preferred stock, no par value 0 0
30,000,000 shares authorized; none issued
Common stock, no par value, authorized
108,527,344 shares; issued 60,610,684 shares
in 2000 and 60,624,940 shares in 1999 25,963 25,959
Surplus 325,901 326,061
Retained earnings 203,801 233,478
Unallocated common stock
held by employee benefit plan (822) (1,097)
Accumulated other comprehensive loss (14,178) (10,475)
540,665 573,926
Treasury stock, at cost (671,212 common
shares in 2000 and 200,700 in 1999) (17,097) (5,643)
Total shareholders' equity 523,568 568,283
Total liabilities and shareholders' equity $6,266,398 $6,109,798
VALLEY NATIONAL BANCORP
Consolidated Statements of Income
($ in thousands, except per share data)
Three Months Ended
September 30,
2000 1999
---- ----
Interest Income
Interest and fees on loans $94,475 $85,839
Interest and dividends on investment securities 21,114 21,431
Interest on federal funds sold
and other short term investments 1,131 636
Total interest income 116,720 107,906
Interest Expense
Interest on deposits:
Savings deposits 12,104 10,298
Time deposits 28,873 25,410
Interest on other borrowings 10,953 6,726
Total interest expense 51,930 42,434
Net interest income 64,790 65,472
Provision for loan losses 1,730 2,320
Net interest income after
provision for loan losses 63,060 63,152
Non-Interest Income
Trust and investment services 940 672
Service charges on deposit accounts 4,272 3,599
Gains on securities transactions, net 117 140
Fees from loan servicing 2,769 2,137
Credit card fee income 2,110 2,299
Gain on sale of loans, net 437 442
Other 1,901 2,042
Total non-interest income 12,546 11,331
Non-Interest Expense
Salary expense 15,950 14,721
Employee benefit expense 3,423 3,667
FDIC insurance premiums 258 303
Occupancy and equipment expense 5,956 5,141
Credit card expense 1,233 1,286
Amortization of intangible assets 2,000 1,505
Other 6,635 7,300
Total non-interest expense 35,455 33,923
Income before income taxes 40,151 40,560
Income tax expense 13,768 13,281
Net income $26,383 $27,279
Earnings per share:(1)
Basic $0.44 $0.43
Diluted $0.44 $0.43
Weighted Average Number of Shares
Outstanding:(1)
Basic 60,004,266 63,241,185
Diluted 60,596,952 63,907,683
Note: (1) 1999 earnings per share and average shares outstanding have
been restated to reflect the 5% stock dividend declared on
April 6, 2000 and issued on May 16, 2000.
VALLEY NATIONAL BANCORP
Consolidated Statements of Income
($ in thousands, except per share data)
Nine Months Ended
September 30,
2000 1999
---- ----
Interest Income
Interest and fees on loans $277,498 $250,977
Interest and dividends on investment securities 63,406 62,914
Interest on federal funds sold and other
short term investments 2,695 2,954
Total interest income 343,599 316,845
Interest Expense
Interest on deposits:
Savings deposits 36,288 30,401
Time deposits 82,953 75,864
Interest on other borrowings 31,336 17,267
Total interest expense 150,577 123,532
Net interest income 193,022 193,313
Provision for loan losses 5,430 6,095
Net interest income after
provision for loan losses 187,592 187,218
Non-Interest Income
Trust and investment services 2,443 1,769
Service charges on deposit accounts 12,232 10,691
Gains on securities transactions, net 117 2,570
Fees from loan servicing 8,281 5,990
Credit card fee income 6,162 6,497
Gain on sale of loans, net 1,787 1,890
Other 5,789 6,446
Total non-interest income 36,811 35,853
Non-Interest Expense
Salary expense 46,590 43,186
Employee benefit expense 10,003 9,978
FDIC insurance premiums 783 927
Occupancy and equipment expense 15,896 14,937
Credit card expense 3,808 3,932
Amortization of intangible assets 5,579 3,647
Merger - related charges 0 3,005
Other 21,021 21,812
Total non-interest expense 103,680 101,424
Income before income taxes 120,723 121,647
Income tax expense 40,738 42,482
Net income $79,985 $79,165
Earnings per share:(1)
Basic $1.32 $1.24
Diluted $1.30 $1.23
Weighted Average Number of Shares Outstanding:(1)
Basic 60,803,028 63,905,848
Diluted 61,363,585 64,554,774
Note: (1) 1999 earnings per share and average shares outstanding have
been restated to reflect the 5% stock dividend declared on
April 6, 2000 and issued on May 16, 2000.
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
(Dollars in thousands except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
---- ---- ---- ----
NET INCOME $26,383 $27,279 $79,985 $79,165
Net interest income 64,790 65,472 193,022 193,313
Net interest
income (FTE) 65,872 66,646 196,324 196,638
Per share data:*
Basic earnings 0.44 0.43 1.32 1.24
Diluted earnings 0.44 0.43 1.30 1.23
Cash dividends declared 0.26 0.25 0.77 0.72
Book value 8.73 8.96 8.73 8.96
Closing stock
price - high 27.50 27.86 27.50 27.92
Closing stock
price - low 23.75 23.52 20.59 22.45
FINANCIAL RATIOS:
Net interest
margin - FTE 4.40% 4.58% 4.37% 4.56%
Return on average assets 1.70 1.80 1.71 1.76
Return on average
shareholders' equity 20.35 19.25 20.28 18.14
Efficiency ratio 45.28 43.49 44.62 42.88
For the nine months ended September 30, 1999, net income, per share data and the
financial ratios include the merger-related charges, net of tax, recorded during
the second quarter of 1999 in connection with the Ramapo Financial corporation
merger on June 11, 1999 of $2.2 million or $0.03 per diluted share. * Per share
figures have been adjusted for a 5 percent stock dividend issued May 16, 2000.
SELECTED BALANCE SHEET ITEMS AND RATIOS
(Dollars in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
---- ---- ---- ----
AVERAGE BALANCE
SHEET ITEMS:
Assets $6,215,773 $6,072,900 $6,222,403 $6,009,784
Interest
earning assets 5,982,854 5,824,412 5,987,796 5,746,678
Loans 4,577,593 4,307,991 4,568,706 4,224,704
Interest bearing
liabilities 4,735,358 4,587,076 4,742,730 4,514,682
Deposits 4,969,426 5,012,406 4,988,778 4,977,728
Shareholders' equity 518,588 566,882 525,754 581,902
ALLOWANCE FOR LOAN LOSSES:
Beginning of period $55,150 $54,894 $55,120 $54,641
Provision of loan losses 1,730 2,320 5,430 6,095
Charge-offs 2,371 3,383 7,864 8,789
Recoveries 854 915 2,677 2,799
End of period 55,363 54,746 55,363 54,746
As of September 30,
2000 1999
---- ----
BALANCE SHEET ITEMS:
Assets $6,266,398 $6,109,798
Loans 4,602,507 4,396,408
Deposits 4,931,135 4,961,607
Shareholders' equity 523,568 568,283
CAPITAL RATIOS:
Tier 1 leverage ratio 8.56% 9.48%
Risk-based capital - Tier 1 10.82 12.05
Risk-based capital - Total Capital 11.95 13.20
Valley National Bancorp
Consolidated Financial Highlights
SELECTED FINANCIAL DATA
(Dollars in thousands)
As of September 30,
2000 1999
---- ----
ASSET QUALITY:
Non-accrual loans $2,937 $6,199
Other real estate owned (OREO) 591 795
Total non-performing assets 3,528 6,994
Loans past due 90 days or
more and still accruing 13,756 11,653
ASSET QUALITY RATIOS:
Non-performing assets
to total loans plus other
real estate owned (OREO) 0.08% 0.16%
Allowance for loan losses to loans 1.20 1.25
Net charge-offs to average loans 0.15 0.19
SHAREHOLDER RELATIONS
Requests for copies of reports providing more detailed financial statements and
analysis, as well as all other inquiries regarding Shareholder Relations should
be directed to Dianne Grenz at Valley National Bancorp, 1455 Valley Road, Wayne,
New Jersey, 07470 or by telephone at 973-305-3380, or fax at 973-696-2044.