Newspaper article The Record (Bergen County, NJ)

Valley National Posts Dip in Profit

Newspaper article The Record (Bergen County, NJ)

Valley National Posts Dip in Profit

Article excerpt

Wayne-based Valley National Bancorp, the holding company for Valley National Bank, said on Thursday that fourth-quarter earnings fell more than a third as income from "solid" loan growth was offset by slimmer lending margins year-over-year, tough price competition for business loans and a sharp decline in non-interest revenue.

In addition, merger-related expenses and prepayment penalties on long-term bank debt -- paid off early to bolster future margins -- further cut into the quarter's profits.

The full-service commercial bank, which acquired 1st United Bancorp in the quarter, said its earnings fell 36.6 percent, to $25.1 million from $39.6 million in the year-earlier period. Per- share earnings slid to 11 cents from 20 cents. Revenue rose less than 1 percent, to $200.5 million.

Chief Executive Gerald Lipkin, known for promoting the bank's "$499" home refinance loans on television commercials, said the earnings report "reflected the solid organic loan growth experienced since the latter part of the third quarter of 2014, strong credit quality, and the positive impact of our new Florida operations since the acquisition date."

Valley National is one of the biggest business lenders in North Jersey, and does large volume in residential mortgages and automobile loans in the region. It has more than $18 billion in assets, making it the largest remaining New Jersey-based commercial bank.

With the recent addition of 20 offices in Florida, its first branches in that state, Valley now has 224 branches. Most are spread throughout northern and central New Jersey, on Long Island and in Brooklyn, Queens and Manhattan, where it has benefited from a buoyant New York City real estate market.

Valley, like many other banks, has faced thinning profit spreads on lending, as reflected by the tighter fourth-quarter net interest margin it reported on Thursday. …

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