Shares of Valley National Bancorp. slumped Wednesday after the Wayne, N.J., company reported a first-quarter profit that fell short of analysts' expectations.
The $21.7 billion-asset company said Wednesday that its net income increased 13% from a year earlier, to $34.4 million, on strong gains in both interest and fee income. Net interest income totaled $148.2 million, up 12% from a year earlier, as loans increased 17% to $16.1 billion, thanks largely to gains in commercial real estate loans and continued growth in collateralized personal lines of credit, Valley said.
Noninterest income rose 15% to $21.4 million as the company recorded upticks in fees from insurance commissions.
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Valley National Bancorp in Wayne, N.J., announced its second deal in Florida, a state that has been difficult for other out-of-state banks to enter.
May 27 -
Pressure from community groups forced Valley National Bancorp to strengthen its commitment to lend in low-and moderate-income neighborhoods in order to win approval for a Florida acquisition. Other banks, too, are now placing CRA efforts front-and-center as they aim to sell deals to the public and their regulators.
June 19 -
Given that Bank of the Ozarks has agreed to pay handsomely for C1 Financial in Florida, the relatively scarce number of large institutions in the state could command higher prices from acquirers.
November 10
Valley's shares were down 5.3% in heavy trading late Wednesday, to $9.54. Investors seemed to be disappointed that the net interest margin declined by 12 basis points and that its total revenue of $169 million fell well shy of analysts' targets. Its earnings per share of 14 cents came in a penny below estimates of analysts polled by Bloomberg.
Noninterest expenses totaled $118.2 million, up roughly 9% from a year earlier. Valley National said it expects costs to decline in the second quarter as it completes its acquisition of CNLBancshares in Orlando. The company has
Valley has completed half of the 28 branch closings it announced last year and the remaining 14 should be closed by June 30. These closings should result in roughly $10 million in ongoing cost savings, the company said.
