Valley National Bancorp in Wayne, N.J., said Thursday that its net income rose 27% year over year in the third quarter, to $32.6 million.
The $14 billion-asset parent company of Valley National Bank said the profit for the three months included $6 million in dividends and accretion on its preferred stock.
Valley National said the earnings reflected $3.5 million in net trading losses, which it said stemmed from a change in the market value of its trust preferred debentures.
Valley National's chairman, president and chief executive, Gerald Lipkin, said in a press release that despite challenges, "we were able to produce strong third-quarter 2010 results and expand our net interest margin, while increasing our allowance for credit losses as a percentage of loans."
The company's net interest margin was 3.73% in the third quarter, up from 3.68% in the second quarter and 3.57% a year earlier.
Valley National increased its allowance for loan losses to 1.28% as a percentage of noncovered loans, compared with 1.24% on June 30. The company partly attributed the higher allowance to a larger-than-expected increase in nonperforming assets, which rose 2%, to $112.1 million, from the second quarter.
"Overall credit quality, a hallmark of our institution, remains both stable and better than many of our competitors," Lipkin said.