New Jersey | 1-11277 | 22-2477875 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
1455 Valley Road, Wayne, New Jersey | 07470 | |
(Address of Principal Executive Offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 7.01 | Regulation FD Disclosure. |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit No. | Description |
(d) | Exhibits. |
99.1 | |
The Press Release disclosed in this Item 9.01 as Exhibit 99 shall be considered “furnished” but not “filed” for purposes of the Securities Exchange Act of 1934, as amended. | |
99.2 | |
The Presentation materials disclosed in this Item 9.01 as Exhibit 99.2 shall be considered “furnished” but not “filed” for purposes of the Securities Exchange Act of 1934, as amended. |
Dated: October 25, 2018 | VALLEY NATIONAL BANCORP | ||
By: | /s/ Alan D. Eskow | ||
Alan D. Eskow | |||
Senior Executive Vice President and | |||
Chief Financial Officer (Principal Financial Officer) |
![]() | News Release |
FOR IMMEDIATE RELEASE | Contact: | Alan D. Eskow | |
Senior Executive Vice President and | |||
Chief Financial Officer | |||
973-305-4003 |
• | Loan Portfolio: Loans increased $876.6 million, or 15.1 percent on an annualized basis, to approximately $24.1 billion at September 30, 2018 from June 30, 2018. The increase was largely due to solid organic loan growth within most loan categories. Additionally, we sold approximately $151 million of residential mortgage loans resulting in pre-tax gains of $3.7 million during the third quarter of 2018. |
• | Net Interest Income: Net interest income on a tax equivalent basis of $218.1 million for the third quarter of 2018 increased $5.9 million as compared to the second quarter of 2018 largely due to our new higher rate loan volumes and growth through the nine months ended September 30, 2018. |
• | Net Interest Margin: Our net interest margin on a tax equivalent basis of 3.12 percent for the third quarter of 2018 increased by 1 basis point from 3.11 percent for the second quarter of 2018. See the "Net Interest Income and Margin" section below for more details. |
• | Provision for Credit Losses: The provision for credit losses declined $590 thousand to $6.6 million for the third quarter of 2018 as compared to the second quarter of 2018. |
• | Credit Quality: Net loan charge-offs totaled only $231 thousand for the third quarter of 2018 as compared to $692 thousand for the second quarter of 2018. Net recoveries totaled $381 thousand |
• | Non-interest Income: Non-interest income decreased $9.0 million, or 23.7 percent, to $29.0 million for the third quarter of 2018 as compared to the second quarter of 2018 largely due to a $4.9 million decrease in other income driven by net expenses related to changes in our FDIC loss-share receivable and $1.8 million of branch related asset impairments (included in net losses on sale of assets within this line item), and a $3.9 million decline in net gains on sales of loans. See the "Branch Transformation" section below for more details on our branch network. |
• | Non-interest Expense: Non-interest expense increased $1.8 million, or 1.2 percent, to $151.7 million for the third quarter of 2018 as compared to the second quarter of 2018 primarily due to a $1.8 million increase in salary and employee benefits expense and litigation reserves totaling $1.7 million included in professional and legal expense for the third quarter of 2018, partially offset by moderate declines in several other expense categories. |
• | Performance Ratios: Annualized return on average assets (ROA), shareholders’ equity (ROE) and tangible ROE were 0.91 percent, 8.41 percent and 12.96 percent for the third quarter of 2018, respectively. Annualized ROA, ROE and tangible ROE, adjusted for infrequent charges, was 0.96 percent, 8.84 percent and 13.61 percent for the third quarter of 2018, respectively. |
• | Efficiency Ratio: Our efficiency ratio was 61.70 percent for the third quarter of 2018 as compared to 60.25 percent and 69.43 percent for the second quarter of 2018 and third quarter of 2017, respectively. Excluding merger expense, amortization of tax credit investments, litigation reserve expense and branch related asset impairments, if applicable in the period, our adjusted efficiency ratio was 57.85 percent for the third quarter of 2018 as compared to 57.15 percent and 59.21 percent for the second quarter of 2018 and third quarter of 2017, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding this non-GAAP measure. |
• | Income Tax Expense: The effective tax rate was 20.6 percent for the third quarter of 2018 as compared to 20.7 percent for the second quarter of 2018. The New Jersey surtax effective July 1, 2018 did not have a material impact on our reported income tax expense for the third quarter of 2018. For the remainder of 2018, we currently estimate that our effective tax rate will range from 21 percent to 23 percent. |
September 30, 2018 | June 30, 2018 | September 30, 2017 | |||||||||||||||||||
Allocation | Allocation | Allocation | |||||||||||||||||||
as a % of | as a % of | as a % of | |||||||||||||||||||
Allowance | Loan | Allowance | Loan | Allowance | Loan | ||||||||||||||||
Allocation | Category | Allocation | Category | Allocation | Category | ||||||||||||||||
($ in thousands) | |||||||||||||||||||||
Loan Category: | |||||||||||||||||||||
Commercial and industrial loans* | $ | 88,509 | 2.20 | % | $ | 78,649 | 2.05 | % | $ | 57,203 | 2.11 | % | |||||||||
Commercial real estate loans: | |||||||||||||||||||||
Commercial real estate | 29,093 | 0.24 | % | 33,234 | 0.28 | % | 36,626 | 0.39 | % | ||||||||||||
Construction | 21,037 | 1.49 | % | 20,578 | 1.49 | % | 18,673 | 2.07 | % | ||||||||||||
Total commercial real estate loans | 50,130 | 0.37 | % | 53,812 | 0.40 | % | 55,299 | 0.54 | % | ||||||||||||
Residential mortgage loans | 4,919 | 0.13 | % | 4,624 | 0.13 | % | 3,892 | 0.13 | % | ||||||||||||
Consumer loans: | |||||||||||||||||||||
Home equity | 576 | 0.11 | % | 604 | 0.12 | % | 592 | 0.13 | % | ||||||||||||
Auto and other consumer | 5,341 | 0.25 | % | 5,465 | 0.26 | % | 4,494 | 0.24 | % | ||||||||||||
Total consumer loans | 5,917 | 0.22 | % | 6,069 | 0.23 | % | 5,086 | 0.22 | % | ||||||||||||
Total allowance for credit losses | $ | 149,475 | 0.62 | % | $ | 143,154 | 0.62 | % | $ | 121,480 | 0.67 | % | |||||||||
Allowance for credit losses as a % | |||||||||||||||||||||
of non-PCI loans | 0.76 | % | 0.77 | % | 0.73 | % | |||||||||||||||
* Includes the reserve for unfunded letters of credit. |
• | weakness or a decline in the economy, mainly in New Jersey, New York, Florida and Alabama, as well as an unexpected decline in commercial real estate values within our market areas; |
• | the inability to retain USAB’s customers and employees; |
• | less than expected cost reductions and revenue enhancement from Valley's cost reduction plans including its earnings enhancement program called "LIFT" and branch transformation strategy; |
• | greater than expected technology related costs due to, among other factors, prolonged or failed implementations, additional project staffing and obsolescence caused by continuous and rapid market innovations; |
• | the loss of or decrease in lower-cost funding sources within our deposit base, including our inability to achieve deposit retention targets under Valley's branch transformation strategy; |
• | higher or lower than expected income tax expense or tax rates, including increases or decreases resulting from the impact of the Tax Cuts and Jobs Act and other changes in tax laws, regulations and case law; |
• | damage verdicts or settlements or restrictions related to existing or potential litigations arising from claims of breach of fiduciary responsibility, negligence, fraud, contractual claims, environmental laws, patent or trade mark infringement, employment related claims, and other matters; |
• | the loss of or decrease in lower-cost funding sources within our deposit base may adversely impact our net interest income and net income; |
• | cyber attacks, computer viruses or other malware that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage our systems; |
• | results of examinations by the OCC, the FRB, the CFPB and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for credit losses, write-down assets, reimburse customers, change the way we do business, or limit or eliminate certain other banking activities; |
• | changes in accounting policies or accounting standards, including the new authoritative accounting guidance (known as the current expected credit loss (CECL) model) which may increase the required level of our allowance for credit losses after adoption on January 1, 2020; |
• | our inability or determination not to pay dividends at current levels, or at all, because of inadequate earnings, regulatory restrictions or limitations, changes in our capital requirements or a decision to increase capital by retaining more earnings; |
• | higher than expected loan losses within one or more segments of our loan portfolio; |
• | unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather or other external events; |
• | unexpected significant declines in the loan portfolio due to the lack of economic expansion, increased competition, large prepayments, changes in regulatory lending guidance or other factors; and |
• | the failure of other financial institutions with whom we have trading, clearing, counterparty and other financial relationships. |
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | ||||||||||||||||
($ in thousands, except for share data) | 2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||
FINANCIAL DATA: | |||||||||||||||||||
Net interest income | $ | 216,800 | $ | 210,752 | $ | 163,945 | $ | 635,150 | $ | 490,633 | |||||||||
Net interest income - FTE (1) | 218,136 | 212,252 | 165,969 | 639,508 | 496,956 | ||||||||||||||
Non-interest income | 29,038 | 38,069 | 26,997 | 99,358 | 81,547 | ||||||||||||||
Non-interest expense | 151,681 | 149,916 | 132,565 | 475,349 | 372,756 | ||||||||||||||
Income tax expense | 18,046 | 18,961 | 17,088 | 50,191 | 55,873 | ||||||||||||||
Net income | 69,559 | 72,802 | 39,649 | 184,326 | 135,809 | ||||||||||||||
Dividends on preferred stock | 3,172 | 3,172 | 2,683 | 9,516 | 6,277 | ||||||||||||||
Net income available to common shareholders | $ | 66,387 | $ | 69,630 | $ | 36,966 | $ | 174,810 | $ | 129,532 | |||||||||
Weighted average number of common shares outstanding: | |||||||||||||||||||
Basic | 331,486,500 | 331,318,381 | 264,058,174 | 331,180,213 | 263,938,786 | ||||||||||||||
Diluted | 333,000,242 | 332,895,483 | 264,936,220 | 332,694,080 | 264,754,845 | ||||||||||||||
Per common share data: | |||||||||||||||||||
Basic earnings | $ | 0.20 | $ | 0.21 | $ | 0.14 | $ | 0.53 | $ | 0.49 | |||||||||
Diluted earnings | 0.20 | 0.21 | 0.14 | 0.53 | 0.49 | ||||||||||||||
Cash dividends declared | 0.11 | 0.11 | 0.11 | 0.33 | 0.33 | ||||||||||||||
Closing stock price - high | 13.04 | 13.26 | 12.40 | 13.38 | 12.76 | ||||||||||||||
Closing stock price - low | 11.25 | 11.91 | 10.71 | 11.19 | 10.71 | ||||||||||||||
CORE ADJUSTED FINANCIAL DATA: (2) | |||||||||||||||||||
Net income available to common shareholders, as adjusted | $ | 69,888 | $ | 71,982 | $ | 43,759 | $ | 200,419 | $ | 136,326 | |||||||||
Basic earnings per share, as adjusted | 0.21 | 0.22 | 0.17 | 0.61 | 0.52 | ||||||||||||||
Diluted earnings per share, as adjusted | 0.21 | 0.22 | 0.17 | 0.60 | 0.51 | ||||||||||||||
FINANCIAL RATIOS: | |||||||||||||||||||
Net interest margin | 3.10 | % | 3.09 | % | 3.03 | % | 3.10 | % | 3.07 | % | |||||||||
Net interest margin - FTE (1) | 3.12 | 3.11 | 3.07 | 3.12 | 3.11 | ||||||||||||||
Annualized return on average assets | 0.91 | 0.98 | 0.67 | 0.82 | 0.78 | ||||||||||||||
Annualized return on avg. shareholders' equity | 8.41 | 8.88 | 6.34 | 7.46 | 7.42 | ||||||||||||||
Annualized return on avg. tangible shareholders' equity (2) | 12.96 | 13.76 | 8.96 | 11.54 | 10.61 | ||||||||||||||
Efficiency ratio (3) | 61.70 | 60.25 | 69.43 | 64.72 | 65.15 | ||||||||||||||
CORE ADJUSTED FINANCIAL RATIOS: (2) | |||||||||||||||||||
Annualized return on average assets, as adjusted | 0.96 | % | 1.01 | % | 0.79 | % | 0.94 | % | 0.81 | % | |||||||||
Annualized return on average shareholders' equity, as adjusted | 8.84 | 9.17 | 7.42 | 8.50 | 7.79 | ||||||||||||||
Annualized return on average tangible shareholders' equity, as adjusted | 13.61 | 14.21 | 10.50 | 13.14 | 11.14 | ||||||||||||||
Efficiency ratio, as adjusted | 57.85 | 57.15 | 59.21 | 58.39 | 59.46 | ||||||||||||||
AVERAGE BALANCE SHEET ITEMS: | |||||||||||||||||||
Assets | $ | 30,493,175 | $ | 29,778,210 | $ | 23,604,252 | $ | 29,858,764 | $ | 23,334,491 | |||||||||
Interest earning assets | 27,971,712 | 27,256,959 | 21,642,846 | 27,330,965 | 21,338,866 | ||||||||||||||
Loans | 23,659,190 | 22,840,235 | 18,006,274 | 22,939,106 | 17,676,222 | ||||||||||||||
Interest bearing liabilities | 20,758,249 | 20,129,492 | 15,737,738 | 20,196,547 | 15,546,272 | ||||||||||||||
Deposits | 22,223,203 | 21,846,582 | 17,353,099 | 21,985,189 | 17,336,068 | ||||||||||||||
Shareholders' equity | 3,307,690 | 3,279,616 | 2,502,538 | 3,292,439 | 2,441,227 |
As Of | |||||||||||||||||||
BALANCE SHEET ITEMS: | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
(In thousands) | 2018 | 2018 | 2018 | 2017 | 2017 | ||||||||||||||
Assets | $ | 30,881,948 | $ | 30,182,979 | $ | 29,464,357 | $ | 24,002,306 | $ | 23,780,661 | |||||||||
Total loans | 24,111,290 | 23,234,716 | 22,552,767 | 18,331,580 | 18,201,462 | ||||||||||||||
Non-PCI loans | 19,681,255 | 18,587,015 | 17,636,934 | 16,944,365 | 16,729,607 | ||||||||||||||
Deposits | 22,588,272 | 21,640,772 | 21,959,846 | 18,153,462 | 17,312,766 | ||||||||||||||
Shareholders' equity | 3,302,936 | 3,277,312 | 3,245,003 | 2,533,165 | 2,537,984 | ||||||||||||||
LOANS: | |||||||||||||||||||
(In thousands) | |||||||||||||||||||
Commercial and industrial | $ | 4,015,280 | $ | 3,829,525 | $ | 3,631,597 | $ | 2,741,425 | $ | 2,706,912 | |||||||||
Commercial real estate: | |||||||||||||||||||
Commercial real estate | 12,251,231 | 11,913,830 | 11,706,228 | 9,496,777 | 9,351,068 | ||||||||||||||
Construction | 1,416,259 | 1,376,732 | 1,372,508 | 851,105 | 903,640 | ||||||||||||||
Total commercial real estate | 13,667,490 | 13,290,562 | 13,078,736 | 10,347,882 | 10,254,708 | ||||||||||||||
Residential mortgage | 3,782,972 | 3,528,682 | 3,321,560 | 2,859,035 | 2,941,435 | ||||||||||||||
Consumer: | |||||||||||||||||||
Home equity | 521,797 | 520,849 | 549,329 | 446,280 | 448,842 | ||||||||||||||
Automobile | 1,288,902 | 1,281,735 | 1,222,721 | 1,208,902 | 1,171,685 | ||||||||||||||
Other consumer | 834,849 | 783,363 | 748,824 | 728,056 | 677,880 | ||||||||||||||
Total consumer loans | 2,645,548 | 2,585,947 | 2,520,874 | 2,383,238 | 2,298,407 | ||||||||||||||
Total loans | $ | 24,111,290 | $ | 23,234,716 | $ | 22,552,767 | $ | 18,331,580 | $ | 18,201,462 | |||||||||
CAPITAL RATIOS: | |||||||||||||||||||
Book value per common share | $ | 9.33 | $ | 9.26 | $ | 9.16 | $ | 8.79 | $ | 8.81 | |||||||||
Tangible book value per common share (2) | 5.81 | 5.75 | 5.65 | 6.01 | 6.04 | ||||||||||||||
Tangible common equity to tangible assets (2) | 6.48 | % | 6.56 | % | 6.61 | % | 6.83 | % | 6.92 | % | |||||||||
Tier 1 leverage capital | 7.63 | 7.72 | 7.71 | 8.03 | 8.13 | ||||||||||||||
Common equity tier 1 capital | 8.56 | 8.71 | 8.77 | 9.22 | 9.22 | ||||||||||||||
Tier 1 risk-based capital | 9.46 | 9.65 | 9.73 | 10.41 | 10.42 | ||||||||||||||
Total risk-based capital | 11.55 | 11.77 | 11.89 | 12.61 | 12.61 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES: | September 30, | June 30, | September 30, | September 30, | |||||||||||||||
($ in thousands) | 2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||
Beginning balance - Allowance for credit losses | $ | 143,154 | $ | 136,704 | $ | 118,621 | $ | 124,452 | $ | 116,604 | |||||||||
Loans charged-off: | |||||||||||||||||||
Commercial and industrial | (833 | ) | (642 | ) | (265 | ) | (1,606 | ) | (4,889 | ) | |||||||||
Commercial real estate | — | (38 | ) | — | (348 | ) | (553 | ) | |||||||||||
Construction | — | — | — | — | — | ||||||||||||||
Residential mortgage | — | (99 | ) | (129 | ) | (167 | ) | (488 | ) | ||||||||||
Total Consumer | (1,150 | ) | (1,422 | ) | (1,335 | ) | (3,783 | ) | (3,467 | ) | |||||||||
Total loans charged-off | (1,983 | ) | (2,201 | ) | (1,729 | ) | (5,904 | ) | (9,397 | ) | |||||||||
Charged-off loans recovered: | |||||||||||||||||||
Commercial and industrial | 1,131 | 819 | 2,320 | 4,057 | 3,480 | ||||||||||||||
Commercial real estate | 12 | 15 | 42 | 396 | 530 | ||||||||||||||
Construction | — | — | — | — | 294 | ||||||||||||||
Residential mortgage | 9 | 180 | 220 | 269 | 903 | ||||||||||||||
Total Consumer | 600 | 495 | 366 | 1,563 | 1,324 | ||||||||||||||
Total loans recovered | 1,752 | 1,509 | 2,948 | 6,285 | 6,531 | ||||||||||||||
Net (charge-offs) recoveries | (231 | ) | (692 | ) | 1,219 | 381 | (2,866 | ) | |||||||||||
Provision for credit losses | 6,552 | 7,142 | 1,640 | 24,642 | 7,742 | ||||||||||||||
Ending balance - Allowance for credit losses | $ | 149,475 | $ | 143,154 | $ | 121,480 | $ | 149,475 | $ | 121,480 | |||||||||
Components of allowance for credit losses: | |||||||||||||||||||
Allowance for loan losses | $ | 144,963 | $ | 138,762 | $ | 118,966 | $ | 144,963 | $ | 118,966 | |||||||||
Allowance for unfunded letters of credit | 4,512 | 4,392 | 2,514 | 4,512 | 2,514 | ||||||||||||||
Allowance for credit losses | $ | 149,475 | $ | 143,154 | $ | 121,480 | $ | 149,475 | $ | 121,480 | |||||||||
Components of provision for credit losses: | |||||||||||||||||||
Provision for loan losses | $ | 6,432 | $ | 6,592 | $ | 1,301 | $ | 23,726 | $ | 7,413 | |||||||||
Provision for unfunded letters of credit | 120 | 550 | 339 | 916 | 329 | ||||||||||||||
Provision for credit losses | $ | 6,552 | $ | 7,142 | $ | 1,640 | $ | 24,642 | $ | 7,742 | |||||||||
Annualized ratio of total net charge-offs (recoveries) to average loans | 0.00 | % | 0.01 | % | (0.03 | )% | 0.00 | % | 0.02 | % | |||||||||
Allowance for credit losses as a % of non-PCI loans | 0.76 | % | 0.77 | % | 0.73 | % | 0.76 | % | 0.73 | % | |||||||||
Allowance for credit losses as a % of total loans | 0.62 | % | 0.62 | % | 0.67 | % | 0.62 | % | 0.67 | % |
As of | |||||||||||||||||||
ASSET QUALITY: (4) | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
($ in thousands) | 2018 | 2018 | 2018 | 2017 | 2017 | ||||||||||||||
Accruing past due loans: | |||||||||||||||||||
30 to 59 days past due: | |||||||||||||||||||
Commercial and industrial | $ | 9,462 | $ | 6,780 | $ | 5,405 | $ | 3,650 | $ | 1,186 | |||||||||
Commercial real estate | 3,387 | 4,323 | 3,699 | 11,223 | 4,755 | ||||||||||||||
Construction | 15,576 | 175 | 532 | 12,949 | — | ||||||||||||||
Residential mortgage | 10,058 | 7,961 | 6,460 | 12,669 | 7,942 | ||||||||||||||
Total Consumer | 7,443 | 6,573 | 5,244 | 8,409 | 5,205 | ||||||||||||||
Total 30 to 59 days past due | 45,926 | 25,812 | 21,340 | 48,900 | 19,088 | ||||||||||||||
60 to 89 days past due: | |||||||||||||||||||
Commercial and industrial | 1,431 | 1,533 | 804 | 544 | 3,043 | ||||||||||||||
Commercial real estate | 2,502 | — | — | — | 626 | ||||||||||||||
Construction | 36 | — | 1,099 | 18,845 | 2,518 | ||||||||||||||
Residential mortgage | 3,270 | 1,978 | 4,081 | 7,903 | 1,604 | ||||||||||||||
Total Consumer | 1,249 | 860 | 1,489 | 1,199 | 1,019 | ||||||||||||||
Total 60 to 89 days past due | 8,488 | 4,371 | 7,473 | 28,491 | 8,810 | ||||||||||||||
90 or more days past due: | |||||||||||||||||||
Commercial and industrial | 1,618 | 560 | 653 | — | 125 | ||||||||||||||
Commercial real estate | 27 | 27 | 27 | 27 | 389 | ||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||
Residential mortgage | 1,877 | 2,324 | 3,361 | 2,779 | 1,433 | ||||||||||||||
Total Consumer | 282 | 198 | 372 | 284 | 301 | ||||||||||||||
Total 90 or more days past due | 3,804 | 3,109 | 4,413 | 3,090 | 2,248 | ||||||||||||||
Total accruing past due loans | $ | 58,218 | $ | 33,292 | $ | 33,226 | $ | 80,481 | $ | 30,146 | |||||||||
Non-accrual loans: | |||||||||||||||||||
Commercial and industrial | $ | 52,929 | $ | 53,596 | $ | 25,112 | $ | 20,890 | $ | 11,983 | |||||||||
Commercial real estate | 7,103 | 7,452 | 8,679 | 11,328 | 13,870 | ||||||||||||||
Construction | — | 1,100 | 732 | 732 | 1,116 | ||||||||||||||
Residential mortgage | 16,083 | 19,303 | 22,694 | 12,405 | 12,974 | ||||||||||||||
Total Consumer | 2,248 | 3,003 | 3,104 | 1,870 | 1,844 | ||||||||||||||
Total non-accrual loans | 78,363 | 84,454 | 60,321 | 47,225 | 41,787 | ||||||||||||||
Other real estate owned (OREO) | 9,863 | 11,760 | 13,773 | 9,795 | 10,770 | ||||||||||||||
Other repossessed assets | 445 | 864 | 858 | 441 | 480 | ||||||||||||||
Non-accrual debt securities | — | — | — | — | 2,115 | ||||||||||||||
Total non-performing assets | $ | 88,671 | $ | 97,078 | $ | 74,952 | $ | 57,461 | $ | 55,152 | |||||||||
Performing troubled debt restructured loans | $ | 81,141 | $ | 83,694 | $ | 116,414 | $ | 117,176 | $ | 113,677 | |||||||||
Total non-accrual loans as a % of loans | 0.33 | % | 0.36 | % | 0.27 | % | 0.26 | % | 0.23 | % | |||||||||
Total accruing past due and non-accrual loans as a % of loans | 0.57 | % | 0.51 | % | 0.41 | % | 0.70 | % | 0.40 | % | |||||||||
Allowance for losses on loans as a % of non-accrual loans | 184.99 | % | 164.30 | % | 220.26 | % | 255.92 | % | 284.70 | % | |||||||||
Non-performing purchased credit-impaired loans (5) | $ | 75,422 | $ | 57,311 | $ | 62,857 | $ | 38,088 | $ | 25,413 |
(1) | Net interest income and net interest margin are presented on a tax equivalent basis using a 21 percent and 35 percent federal tax rate for periods ending in 2018 and 2017, respectively. 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. |
(2) | This press release contains certain supplemental financial information, described in the Notes below, which has been determined by methods other than U.S. 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 excludes material 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 | Nine Months Ended | ||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | ||||||||||||||||
($ in thousands, except for share data) | 2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||
Adjusted net income available to common shareholders: | |||||||||||||||||||
Net income, as reported | $ | 69,559 | $ | 72,802 | $ | 39,649 | $ | 184,326 | $ | 135,809 | |||||||||
Add: LIFT program expense (net of tax)* | — | — | 5,753 | — | 5,753 | ||||||||||||||
Add: Branch related asset impairment (net of tax)** | 1,304 | — | — | 1,304 | — | ||||||||||||||
Add: Losses (gains) on securities transactions (net of tax) | 56 | 26 | (3 | ) | 630 | (3 | ) | ||||||||||||
Add: Legal expenses (litigation reserve impact only, net of tax) | 1,206 | — | — | 8,726 | — | ||||||||||||||
Add: Merger related expenses (net of tax)*** | 935 | 2,326 | 1,043 | 12,949 | 1,044 | ||||||||||||||
Add: Income Tax Expense (USAB charge impact only) | — | — | — | 2,000 | — | ||||||||||||||
Net income, as adjusted | $ | 73,060 | $ | 75,154 | $ | 46,442 | $ | 209,935 | $ | 142,603 | |||||||||
Dividends on preferred stock | 3,172 | 3,172 | 2,683 | 9,516 | 6,277 | ||||||||||||||
Net income available to common shareholders, as adjusted | $ | 69,888 | $ | 71,982 | $ | 43,759 | $ | 200,419 | $ | 136,326 | |||||||||
__________ | |||||||||||||||||||
* LIFT program expenses are primarily within professional and legal fees, and salary and employee benefits expense. | |||||||||||||||||||
** Branch related asset impairment is included in net losses on sale of assets within non-interest income. | |||||||||||||||||||
*** Merger related expenses are primarily within salary and employee benefits and other expense. | |||||||||||||||||||
Adjusted per common share data: | |||||||||||||||||||
Net income available to common shareholders, as adjusted | $ | 69,888 | $ | 71,982 | $ | 43,759 | $ | 200,419 | $ | 136,326 | |||||||||
Average number of shares outstanding | 331,486,500 | 331,318,381 | 264,058,174 | 331,180,213 | 263,938,786 | ||||||||||||||
Basic earnings, as adjusted | $ | 0.21 | $ | 0.22 | $ | 0.17 | $ | 0.61 | $ | 0.52 | |||||||||
Average number of diluted shares outstanding | 333,000,242 | 332,895,483 | 264,936,220 | 332,694,080 | 264,754,845 | ||||||||||||||
Diluted earnings, as adjusted | $ | 0.21 | $ | 0.22 | $ | 0.17 | $ | 0.60 | $ | 0.51 | |||||||||
Adjusted annualized return on average tangible shareholders' equity: | |||||||||||||||||||
Net income, as adjusted | $ | 73,060 | $ | 75,154 | $ | 46,442 | $ | 209,935 | $ | 142,603 | |||||||||
Average shareholders' equity | 3,307,690 | 3,279,616 | 2,502,538 | 3,292,439 | 2,441,227 | ||||||||||||||
Less: Average goodwill and other intangible assets | 1,161,167 | 1,163,575 | 733,450 | 1,162,980 | 734,738 | ||||||||||||||
Average tangible shareholders' equity | $ | 2,146,523 | $ | 2,116,041 | $ | 1,769,088 | $ | 2,129,459 | $ | 1,706,489 | |||||||||
Annualized return on average tangible shareholders' equity, as adjusted | 13.61 | % | 14.21 | % | 10.50 | % | 13.14 | % | 11.14 | % | |||||||||
Adjusted annualized return on average assets: | |||||||||||||||||||
Net income, as adjusted | $ | 73,060 | $ | 75,154 | $ | 46,442 | $ | 209,935 | $ | 142,603 | |||||||||
Average assets | $ | 30,493,175 | $ | 29,778,210 | $ | 23,604,252 | $ | 29,858,764 | $ | 23,334,491 | |||||||||
Annualized return on average assets, as adjusted | 0.96 | % | 1.01 | % | 0.79 | % | 0.94 | % | 0.81 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | ||||||||||||||||
($ in thousands) | 2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||
Adjusted annualized return on average shareholders' equity: | |||||||||||||||||||
Net income, as adjusted | $ | 73,060 | $ | 75,154 | $ | 46,442 | $ | 209,935 | $ | 142,603 | |||||||||
Average shareholders' equity | $ | 3,307,690 | $ | 3,279,616 | $ | 2,502,538 | $ | 3,292,439 | $ | 2,441,227 | |||||||||
Annualized return on average shareholders' equity, as adjusted | 8.84 | % | 9.17 | % | 7.42 | % | 8.50 | % | 7.79 | % | |||||||||
Annualized return on average tangible shareholders' equity: | |||||||||||||||||||
Net income, as reported | $ | 69,559 | $ | 72,802 | $ | 39,649 | $ | 184,326 | $ | 135,809 | |||||||||
Average shareholders' equity | 3,307,690 | 3,279,616 | 2,502,538 | 3,292,439 | 2,441,227 | ||||||||||||||
Less: Average goodwill and other intangible assets | 1,161,167 | 1,163,575 | 733,450 | 1,162,980 | 734,738 | ||||||||||||||
Average tangible shareholders' equity | $ | 2,146,523 | $ | 2,116,041 | $ | 1,769,088 | $ | 2,129,459 | $ | 1,706,489 | |||||||||
Annualized return on average tangible shareholders' equity | 12.96 | % | 13.76 | % | 8.96 | % | 11.54 | % | 10.61 | % | |||||||||
Adjusted efficiency ratio: | |||||||||||||||||||
Non-interest expense, as reported | $ | 151,681 | $ | 149,916 | $ | 132,565 | $ | 475,349 | $ | 372,756 | |||||||||
Less: LIFT program expense (pre-tax) | — | — | 9,875 | — | 9,875 | ||||||||||||||
Less: Legal expenses (litigation reserve impact only, pre-tax) | 1,684 | — | — | 12,184 | — | ||||||||||||||
Less: Merger-related expenses (pre-tax) | 1,304 | 3,248 | 1,241 | 18,080 | 1,242 | ||||||||||||||
Less: Amortization of tax credit investments (pre-tax) | 5,412 | 4,470 | 8,389 | 15,156 | 21,445 | ||||||||||||||
Non-interest expense, as adjusted | $ | 143,281 | $ | 142,198 | $ | 113,060 | $ | 429,929 | $ | 340,194 | |||||||||
Net interest income | 216,800 | 210,752 | 163,945 | 635,150 | 490,633 | ||||||||||||||
Non-interest income, as reported | 29,038 | 38,069 | 26,997 | 99,358 | 81,547 | ||||||||||||||
Add: Branch related asset impairment (pre-tax) | 1,821 | — | — | 1,821 | — | ||||||||||||||
Non-interest income, as adjusted | $ | 30,859 | $ | 38,069 | $ | 26,997 | $ | 101,179 | $ | 81,547 | |||||||||
Gross operating income, as adjusted | $ | 247,659 | $ | 248,821 | $ | 190,942 | $ | 736,329 | $ | 572,180 | |||||||||
Efficiency ratio, as adjusted | 57.85 | % | 57.15 | % | 59.21 | % | 58.39 | % | 59.46 | % |
As of | |||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
($ in thousands, except for share data) | 2018 | 2018 | 2018 | 2017 | 2017 | ||||||||||||||
Tangible book value per common share: | |||||||||||||||||||
Common shares outstanding | 331,501,424 | 331,454,025 | 331,189,859 | 264,468,851 | 264,197,172 | ||||||||||||||
Shareholders' equity | $ | 3,302,936 | $ | 3,277,312 | $ | 3,245,003 | $ | 2,533,165 | $ | 2,537,984 | |||||||||
Less: Preferred stock | 209,691 | 209,691 | 209,691 | 209,691 | 209,691 | ||||||||||||||
Less: Goodwill and other intangible assets | 1,166,481 | 1,162,858 | 1,165,379 | 733,144 | 733,498 | ||||||||||||||
Tangible common shareholders' equity | $ | 1,926,764 | $ | 1,904,763 | $ | 1,869,933 | $ | 1,590,330 | $ | 1,594,795 | |||||||||
Tangible book value per common share | $ | 5.81 | $ | 5.75 | $ | 5.65 | $ | 6.01 | $ | 6.04 | |||||||||
Tangible common equity to tangible assets: | |||||||||||||||||||
Tangible common shareholders' equity | $ | 1,926,764 | $ | 1,904,763 | $ | 1,869,933 | $ | 1,590,330 | $ | 1,594,795 | |||||||||
Total assets | 30,881,948 | 30,182,979 | 29,464,357 | 24,002,306 | 23,780,661 | ||||||||||||||
Less: Goodwill and other intangible assets | 1,166,481 | 1,162,858 | 1,165,379 | 733,144 | 733,498 | ||||||||||||||
Tangible assets | $ | 29,715,467 | $ | 29,020,121 | $ | 28,298,978 | $ | 23,269,162 | $ | 23,047,163 | |||||||||
Tangible common equity to tangible assets | 6.48 | % | 6.56 | % | 6.61 | % | 6.83 | % | 6.92 | % |
(3) | The efficiency ratio measures Valley's total non-interest expense as a percentage of net interest income plus total non-interest income. | |||||||||
(4) | Past due loans and non-accrual loans exclude purchased credit-impaired (PCI) loans. PCI loans are accounted for on a pool basis under U.S. GAAP and are not subject to delinquency classification in the same manner as loans originated by Valley. | |||||||||
(5) | Represent PCI loans meeting Valley's definition of non-performing loan (i.e., non-accrual loans), but are not subject to such classification under U.S. GAAP because the loans are accounted for on a pooled basis and are excluded from the non-accrual loans in the table above. | |||||||||
SHAREHOLDERS RELATIONS Requests for copies of reports and/or other inquiries should be directed to Tina Zarkadas, Assistant Vice President, Shareholder Relations Specialist, Valley National Bancorp, 1455 Valley Road, Wayne, New Jersey, 07470, by telephone at (973) 305-3380, by fax at (973) 305-1364 or by e-mail at tzarkadas@valley.com. |
September 30, | December 31, | ||||||
2018 | 2017 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Cash and due from banks | $ | 262,653 | $ | 243,310 | |||
Interest bearing deposits with banks | 93,726 | 172,800 | |||||
Investment securities: | |||||||
Held to maturity (fair value of $2,016,354 at September 30, 2018 and $1,837,620 at December 31, 2017) | 2,072,363 | 1,842,691 | |||||
Available for sale | 1,749,001 | 1,493,905 | |||||
Total investment securities | 3,821,364 | 3,336,596 | |||||
Loans held for sale, at fair value | 31,675 | 15,119 | |||||
Loans | 24,111,290 | 18,331,580 | |||||
Less: Allowance for loan losses | (144,963 | ) | (120,856 | ) | |||
Net loans | 23,966,327 | 18,210,724 | |||||
Premises and equipment, net | 341,060 | 287,705 | |||||
Bank owned life insurance | 438,238 | 386,079 | |||||
Accrued interest receivable | 92,666 | 73,990 | |||||
Goodwill | 1,085,710 | 690,637 | |||||
Other intangible assets, net | 80,771 | 42,507 | |||||
Other assets | 667,758 | 542,839 | |||||
Total Assets | $ | 30,881,948 | $ | 24,002,306 | |||
Liabilities | |||||||
Deposits: | |||||||
Non-interest bearing | $ | 6,135,001 | $ | 5,224,928 | |||
Interest bearing: | |||||||
Savings, NOW and money market | 11,036,700 | 9,365,013 | |||||
Time | 5,416,571 | 3,563,521 | |||||
Total deposits | 22,588,272 | 18,153,462 | |||||
Short-term borrowings | 2,968,431 | 748,628 | |||||
Long-term borrowings | 1,728,805 | 2,315,819 | |||||
Junior subordinated debentures issued to capital trusts | 55,283 | 41,774 | |||||
Accrued expenses and other liabilities | 238,221 | 209,458 | |||||
Total Liabilities | 27,579,012 | 21,469,141 | |||||
Shareholders’ Equity | |||||||
Preferred stock, no par value; authorized 50,000,000: | |||||||
Series A (4,600,000 shares issued at September 30, 2018 and December 31, 2017) | 111,590 | 111,590 | |||||
Series B (4,000,000 shares issued at September 30, 2018 and December 31, 2017) | 98,101 | 98,101 | |||||
Common stock (no par value, authorized 450,000,000 shares; issued 331,622,970 shares at September 30, 2018 and 264,498,643 shares at December 31, 2017) | 116,154 | 92,727 | |||||
Surplus | 2,793,158 | 2,060,356 | |||||
Retained earnings | 262,368 | 216,733 | |||||
Accumulated other comprehensive loss | (76,944 | ) | (46,005 | ) | |||
Treasury stock, at cost (121,546 common shares at September 30, 2018 and 29,792 common shares at December 31, 2017) | (1,491 | ) | (337 | ) | |||
Total Shareholders’ Equity | 3,302,936 | 2,533,165 | |||||
Total Liabilities and Shareholders’ Equity | $ | 30,881,948 | $ | 24,002,306 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | ||||||||||||||||
2018 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||
Interest Income | |||||||||||||||||||
Interest and fees on loans | $ | 265,870 | $ | 247,690 | $ | 185,864 | $ | 751,146 | $ | 541,937 | |||||||||
Interest and dividends on investment securities: | |||||||||||||||||||
Taxable | 21,362 | 22,222 | 17,922 | 64,907 | 54,439 | ||||||||||||||
Tax-exempt | 5,023 | 5,639 | 3,752 | 16,383 | 11,726 | ||||||||||||||
Dividends | 3,981 | 3,728 | 2,657 | 9,648 | 6,945 | ||||||||||||||
Interest on federal funds sold and other short-term investments | 805 | 839 | 546 | 2,570 | 1,156 | ||||||||||||||
Total interest income | 297,041 | 280,118 | 210,741 | 844,654 | 616,203 | ||||||||||||||
Interest Expense | |||||||||||||||||||
Interest on deposits: | |||||||||||||||||||
Savings, NOW and money market | 28,775 | 24,756 | 15,641 | 75,848 | 38,538 | ||||||||||||||
Time | 20,109 | 16,635 | 10,852 | 51,360 | 30,571 | ||||||||||||||
Interest on short-term borrowings | 15,193 | 10,913 | 5,161 | 31,838 | 14,578 | ||||||||||||||
Interest on long-term borrowings and junior subordinated debentures | 16,164 | 17,062 | 15,142 | 50,458 | 41,883 | ||||||||||||||
Total interest expense | 80,241 | 69,366 | 46,796 | 209,504 | 125,570 | ||||||||||||||
Net Interest Income | 216,800 | 210,752 | 163,945 | 635,150 | 490,633 | ||||||||||||||
Provision for credit losses | 6,552 | 7,142 | 1,640 | 24,642 | 7,742 | ||||||||||||||
Net Interest Income After Provision for Credit Losses | 210,248 | 203,610 | 162,305 | 610,508 | 482,891 | ||||||||||||||
Non-Interest Income | |||||||||||||||||||
Trust and investment services | 3,143 | 3,262 | 3,062 | 9,635 | 8,606 | ||||||||||||||
Insurance commissions | 3,646 | 4,026 | 4,519 | 11,493 | 13,938 | ||||||||||||||
Service charges on deposit accounts | 6,597 | 6,679 | 5,558 | 20,529 | 16,136 | ||||||||||||||
(Losses) gains on securities transactions, net | (79 | ) | (36 | ) | 6 | (880 | ) | 5 | |||||||||||
Fees from loan servicing | 2,573 | 2,045 | 1,895 | 6,841 | 5,541 | ||||||||||||||
Gains on sales of loans, net | 3,748 | 7,642 | 5,520 | 18,143 | 14,439 | ||||||||||||||
Bank owned life insurance | 2,545 | 2,652 | 1,541 | 6,960 | 5,705 | ||||||||||||||
Other | 6,865 | 11,799 | 4,896 | 26,637 | 17,177 | ||||||||||||||
Total non-interest income | 29,038 | 38,069 | 26,997 | 99,358 | 81,547 | ||||||||||||||
Non-Interest Expense | |||||||||||||||||||
Salary and employee benefits expense | 80,778 | 78,944 | 69,286 | 253,014 | 198,777 | ||||||||||||||
Net occupancy and equipment expense | 26,295 | 26,901 | 22,756 | 81,120 | 68,400 | ||||||||||||||
FDIC insurance assessment | 7,421 | 8,044 | 4,603 | 20,963 | 14,658 | ||||||||||||||
Amortization of other intangible assets | 4,697 | 4,617 | 2,498 | 13,607 | 7,596 | ||||||||||||||
Professional and legal fees | 6,638 | 5,337 | 11,110 | 29,022 | 20,107 | ||||||||||||||
Amortization of tax credit investments | 5,412 | 4,470 | 8,389 | 15,156 | 21,445 | ||||||||||||||
Telecommunication expense | 3,327 | 3,015 | 2,464 | 9,936 | 7,830 | ||||||||||||||
Other | 17,113 | 18,588 | 11,459 | 52,531 | 33,943 | ||||||||||||||
Total non-interest expense | 151,681 | 149,916 | 132,565 | 475,349 | 372,756 | ||||||||||||||
Income Before Income Taxes | 87,605 | 91,763 | 56,737 | 234,517 | 191,682 | ||||||||||||||
Income tax expense | 18,046 | 18,961 | 17,088 | 50,191 | 55,873 | ||||||||||||||
Net Income | 69,559 | 72,802 | 39,649 | 184,326 | 135,809 | ||||||||||||||
Dividends on preferred stock | 3,172 | 3,172 | 2,683 | 9,516 | 6,277 | ||||||||||||||
Net Income Available to Common Shareholders | $ | 66,387 | $ | 69,630 | $ | 36,966 | $ | 174,810 | $ | 129,532 | |||||||||
Earnings Per Common Share: | |||||||||||||||||||
Basic | $ | 0.20 | $ | 0.21 | $ | 0.14 | $ | 0.53 | $ | 0.49 | |||||||||
Diluted | 0.20 | 0.21 | 0.14 | 0.53 | 0.49 | ||||||||||||||
Cash Dividends Declared per Common Share | 0.11 | 0.11 | 0.11 | 0.33 | 0.33 | ||||||||||||||
Weighted Average Number of Common Shares Outstanding: | |||||||||||||||||||
Basic | 331,486,500 | 331,318,381 | 264,058,174 | 331,180,213 | 263,938,786 | ||||||||||||||
Diluted | 333,000,242 | 332,895,483 | 264,936,220 | 332,694,080 | 264,754,845 |
VALLEY NATIONAL BANCORP | ||||||||||||||||||||||||||||||||
Quarterly Analysis of Average Assets, Liabilities and Shareholders' Equity and | ||||||||||||||||||||||||||||||||
Net Interest Income on a Tax Equivalent Basis | ||||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||||
September 30, 2018 | June 30, 2018 | September 30, 2017 | ||||||||||||||||||||||||||||||
Average | Avg. | Average | Avg. | Average | Avg. | |||||||||||||||||||||||||||
($ in thousands) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Interest earning assets: | ||||||||||||||||||||||||||||||||
Loans (1)(2) | $ | 23,659,190 | $ | 265,871 | 4.50 | % | $ | 22,840,235 | $ | 247,691 | 4.34 | % | $ | 18,006,274 | $ | 185,867 | 4.13 | % | ||||||||||||||
Taxable investments (3) | 3,399,910 | 25,343 | 2.98 | % | 3,438,842 | 25,950 | 3.02 | % | 2,905,400 | 20,579 | 2.83 | % | ||||||||||||||||||||
Tax-exempt investments (1)(3) | 730,711 | 6,358 | 3.48 | % | 750,896 | 7,138 | 3.80 | % | 556,061 | 5,773 | 4.15 | % | ||||||||||||||||||||
Federal funds sold and other interest bearing deposits | 181,901 | 805 | 1.77 | % | 226,986 | 839 | 1.48 | % | 175,111 | 546 | 1.25 | % | ||||||||||||||||||||
Total interest earning assets | 27,971,712 | 298,377 | 4.27 | % | 27,256,959 | 281,618 | 4.13 | % | 21,642,846 | 212,765 | 3.93 | % | ||||||||||||||||||||
Other assets | 2,521,463 | 2,521,251 | 1,961,406 | |||||||||||||||||||||||||||||
Total assets | $ | 30,493,175 | $ | 29,778,210 | $ | 23,604,252 | ||||||||||||||||||||||||||
Liabilities and shareholders' equity | ||||||||||||||||||||||||||||||||
Interest bearing liabilities: | ||||||||||||||||||||||||||||||||
Savings, NOW and money market deposits | $ | 11,032,866 | $ | 28,775 | 1.04 | % | $ | 10,978,067 | $ | 24,756 | 0.90 | % | $ | 8,799,955 | $ | 15,641 | 0.71 | % | ||||||||||||||
Time deposits | 4,967,691 | 20,109 | 1.62 | % | 4,700,456 | 16,635 | 1.42 | % | 3,368,153 | 10,852 | 1.29 | % | ||||||||||||||||||||
Short-term borrowings | 2,766,398 | 15,193 | 2.20 | % | 2,166,837 | 10,913 | 2.01 | % | 1,537,562 | 5,161 | 1.34 | % | ||||||||||||||||||||
Long-term borrowings (4) | 1,991,294 | 16,164 | 3.25 | % | 2,284,132 | 17,062 | 2.99 | % | 2,032,068 | 15,142 | 2.98 | % | ||||||||||||||||||||
Total interest bearing liabilities | 20,758,249 | 80,241 | 1.55 | % | 20,129,492 | 69,366 | 1.38 | % | 15,737,738 | 46,796 | 1.19 | % | ||||||||||||||||||||
Non-interest bearing deposits | 6,222,646 | 6,168,059 | 5,184,991 | |||||||||||||||||||||||||||||
Other liabilities | 204,590 | 201,043 | 178,985 | |||||||||||||||||||||||||||||
Shareholders' equity | 3,307,690 | 3,279,616 | 2,502,538 | |||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 30,493,175 | $ | 29,778,210 | $ | 23,604,252 | ||||||||||||||||||||||||||
Net interest income/interest rate spread (5) | $ | 218,136 | 2.72 | % | $ | 212,252 | 2.75 | % | $ | 165,969 | 2.74 | % | ||||||||||||||||||||
Tax equivalent adjustment | (1,336 | ) | (1,500 | ) | (2,024 | ) | ||||||||||||||||||||||||||
Net interest income, as reported | $ | 216,800 | $ | 210,752 | $ | 163,945 | ||||||||||||||||||||||||||
Net interest margin (6) | 3.10 | % | 3.09 | % | 3.03 | % | ||||||||||||||||||||||||||
Tax equivalent effect | 0.02 | % | 0.02 | % | 0.04 | % | ||||||||||||||||||||||||||
Net interest margin on a fully tax equivalent basis (6) | 3.12 | % | 3.11 | % | 3.07 | % |
(1) | Interest income is presented on a tax equivalent basis using a 21 percent and 35 percent federal tax rate for 2018 and 2017, respectively. |
(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. |
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