Valley National Bancorp in Wayne, N.J., reported higher earnings driven by loan growth, lower costs and improvements in credit quality.
The $16 billion-asset company's profit was $27.7 million, up 2.2% from a year earlier. Earnings per share remained flat at 14 cents.
Total loans increased 6.7%, to $12.1 billion. The net interest margin narrowed by 4 basis points, to 3.16%, largely because of lower yields on new and refinanced loans, but net interest income still increased 2.6%, to $114.7 million.
"A large portion of the loan production was closed late in the third quarter," Chairman and Chief Executive Gerald H. Lipkin said in a press release Wednesday. Loan growth and the expected benefits from Valley National's deal to buy 1st United Bancorp in Boca Raton, Fla., "should benefit our net interest income in the future," he said. That deal is expected to be completed this quarter.
Noninterest income fell 37%, to $14.1 million, on lower insurance commissions and service charges on deposits. Noninterest expense fell 4% to $90.8 million, despite higher advertising costs and $480,000 in professional and legal fees related to the 1st United deal.
Asset quality improved, allowing Valley to lower its allowance for credit losses by 10%, to $105 million. The company recorded a credit of $423,000 to its provision for loan losses, which compares with a provision of $5.3 million a year earlier.