Valley National Bancorp in Wayne, N.J., reported that second-quarter earnings declined because of a significant drop in noninterest income.
The $16.3 billion- asset company said on Wednesday that net income was $29.5 million, down 13% from a year earlier. Earnings per share of 15 cents beat the estimates of analysts polled by Bloomberg by a penny.
Noninterest income plunged 62%, to $12.4 million. This decline was partly attributed to net gains on sales of loans falling 95%, to $679,000, as mortgage refinance activity slowed.
Noninterest expenses dropped 1%, to $94.2 million, from a year earlier because of lower advertising costs and a reduced FDIC insurance assessment. These decreases were partially offset by higher seasonal maintenance costs like snow removal and a rise in professional and legal fees related to the planned merger with 1st United Bancorp. That deal is expected to close in the fourth quarter.
Valley National's net interest income rose 7%, to $117.4 million. The company's net interest margin expanded 12 basis points, to 3.27%.
The company also reported year over year increases for several lending categories, including commercial and industrial, automobile, commercial real estate and residential mortgage.
"The commercial loan pipeline, with the exception of construction loans, in the early stages of the third quarter has remained strong and has shown signs of broadening across many customer business segments of the portfolio," Gerald Lipkin, chairman and chief executive for Valley National, said in a press release.