Valley National Bancorp has a market cap of $2.27 billion; its shares were traded at around $14.85 with a P/E ratio of 24.3 and P/S ratio of 2.9. The dividend yield of Valley National Bancorp stocks is 5.1%.VLY is in the portfolios of John Paulson of Paulson & Co., Chuck Royce of Royce& Associates, Richard Snow of Snow Capital Management, L.P., Richard Snow of Snow Capital Management, L.P., Jim Simons of Renaissance Technologies LLC.
This is the annual revenues and earnings per share of VLY over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of VLY.
Highlight of Business Operations:Net income for the first quarter of 2010 was $27.4 million, or $0.17 per diluted common share, compared to $37.4 million, or $0.22 per diluted common share (adjusted for preferred dividends and accretion of $4.2 million), for the first quarter of 2009. The decrease in net income was largely due to (i) a $16.2 million decline in net trading gains mainly due to non-cash mark to market losses on our junior subordinated debentures carried at fair value during the first quarter of 2010 and (ii) a $2.6 million increase in the provision for credit losses due to higher net charge-offs and non-performing loans caused by deterioration in economic conditions, partially offset by (iii) a $5.3 million increase in net interest income resulting mainly from a decrease in the cost of interest bearing deposits and (iv) a $4.0 million decrease in income tax expense.
Despite recently reported improvements in certain economic indicators, the current economic downturn continues to present significant challenges to us, as well as the entire banking industry. Mindful of such a poor operating environment and the higher delinquency rates reported by many other banks, we believe that our loan portfolios performance remains at an acceptable level as of March 31, 2010. Total loans past due in excess of 30 days increased 0.07 percent to 1.68 percent of our total loan portfolio at March 31, 2010 as compared to 1.61 percent at December 31, 2009 due to higher loans past due 30 to 89 days. However, loans past due 90 days or more and still accruing decreased to $4.1 million at March 31, 2010 compared to $5.1 million at December 31, 2009 primarily due to the decline in commercial and industrial loans within this delinquency category. Non-accrual loans also decreased to $91.6 million or 0.96 percent of total loans at March 31, 2010 as compared to $92.0 million, or 0.98 percent of total loans at December 31, 2009. Although the timing of collection is uncertain, management believes most of the non-accrual loans are well secured and, largely collectible based on, in part, our quarterly valuation of impaired loans. Our lending strategy is based on underwriting standards designed to maintain high credit quality; however, due to the potential for future credit deterioration from a weak economy, management cannot provide assurance that our loan portfolio performance will not decline from the levels reported as of March 31, 2010. See Non-performing Assets section at page 57 for further analysis of our credit quality.
During the quarter, total deposits increased $232.3 million to approximately $9.8 billion at March 31, 2010 due to deposits assumed in the two FDIC-assisted transactions during March 2010. The deposits assumed in the FDIC-assisted transactions decreased $184.9 million from $654.2 million from the dates of assumption to $469.3 million at March 31, 2010, and continued to decline during the second quarter of 2010. The decreases were expected and were primarily a result of the early redemption of higher rate certificates of deposit assumed. Under the purchase agreements with the FDIC, we opted to immediately reduce the interest rates on such instruments. This strategy allowed us to deploy some of our excess liquidity, which was caused, in part, by the current economys negative impact on loan demand and the low level of interest rates during March 2010. Excluding the $469.3 million in deposits assumed in the FDIC-assisted transactions, we experienced declines in all deposit categories during the first quarter of 2010 mainly as a result of low loan demand and our desire not to generate for higher cost deposits until demand returns.
For the three months ended March 31, 2010, we reported an annualized return on average shareholders equity (ROE) of 8.72 percent and an annualized return on average assets (ROA) of 0.77 percent which includes intangible assets. Our annualized return on average tangible shareholders equity (ROATE) was 11.75 percent for the first quarter of 2010. The comparable ratios for the first quarter of 2009 were an annualized ROE of 10.94 percent, an annualized ROA of 1.03 percent, and an annualized ROATE of 14.29 percent. All of the above ratios were impacted by the change in fair value of our junior subordinated debentures carried at fair value and net impairment losses on securities. Net income included a non-cash charge of $3.3 million ($2.1 million after-taxes) for the first quarter of 2010, as compared to a non-cash gain of $13.8 million ($8.9 million after-taxes) for the same period of 2009 due to the change in fair value of the debentures. Net impairment losses on securities totaled $2.6 million ($1.6 million after-taxes) and $2.2 million ($1.4 million after-taxes) for the three months ended March 31, 2010 and 2009, respectively.
For the first quarter of 2010, average loans and average federal funds sold and other interest bearing deposits decreased by $592.9 million and $97.3 million, respectively, while average investments securities increased $182.5 million as compared to the first quarter of 2009. Compared to the fourth quarter of 2009, average loans decreased by $42.1 million during the first quarter of 2010 primarily due to a decrease in automobile loans, as well as decreases across all other non-covered loan categories. Our automobile loan portfolio has declined for seven consecutive quarters mainly due to a decline in auto sales caused by the high level of unemployment, competitive direct financing by some automakers and Valleys move to further strengthen its auto loan underwriting standards in light of the weakened economy.
Average interest bearing liabilities for the first quarter of 2010 decreased $331.1 million, or 0.61 percent compared with the same quarter of 2009 mainly due to run-off of excess liquidity caused by lower loan demand. Compared to the fourth quarter of 2009, average interest bearing liabilities decreased $83.3 million or 0.14 percent during the first quarter of 2010. Average total interest bearing deposits decreased $58.6 million, or 0.18 percent from the fourth quarter of 2009 mainly due to declines in all deposit categories, excluding deposits assumed in the FDIC-assisted transactions in March 2010, mainly as a result of low loan demand and little need for higher cost deposits until such demand returns to our markets. Average short-term borrowings declined $22.5 million from the fourth quarter of 2009 due to normal decreases in customer repo account balances.
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