Valley National Bancorp in Wayne, N.J., announced that fourth quarter earnings fell after several special charges.
The company's net income fell 30% from the third quarter and 35% from a year earlier, to $24.8 million. The company said in a Thursday press release that its other-than-temporary impairment charges rose $19.1 million from a year earlier because of issues with trust-preferred securities issued by another banking company and a charge tied to a private label mortgage-backed security. Valley National also paid $1.3 million in professional fees in the fourth quarter tied to its purchase of State Bancorp Inc. earlier this month.
Valley National also reported a higher loan-loss provision and net chargeoffs during the quarter. Two newly impaired loan relationships made up two-thirds of the $9.6 million increase in chargeoffs from the previous quarter, excluding loans from the Federal Deposit Insurance Corp.
Valley National's net interest margin shrank 12 basis points from a quarter earlier, to 3.74%, largely due to lower yields on investments and loans. Valley National also modified the terms on Federal Home Loan Bank advances in November, December and January, which reduced the average interest rate by 86 basis points, to 3.99%.
For the full year, net income rose nearly 2% from 2010, to $133.7 million. Valley National remains well-capitalized with a total risk-based capital ratio of 12.75% at Dec. 31.