Valley National Bancorp's stock shot up Wednesday after the Wayne, N.J., company reported that second-quarter net income increased 4.5% from a year earlier, to $41.5 million.
The $13 billion-asset Valley said lower deposit costs and loan growth more than offset a decline in yield from its assets. Its net interest margin rose 13 basis points from the previous quarter and 5 basis points from a year earlier, to 3.48%. Loans climbed 4.3% from the previous quarter and 10.5% from a year earlier, to $9 billion.
Valley attributed the loan growth to its ability to take advantage of competitors' "capital limitations."
It also called credit quality "strong" and said delinquencies and losses are below the industry average.
Its nonperforming assets rose 17% from the previous quarter, to $36.1 million, and net chargeoffs rose 26%, to $4.9 million. Still, the nonperforming asset ratio rose only 2 basis points from the previous quarter, to 0.4% of loans.
Valley said its results do not reflect the July 1 acquisition of Greater Community Bancorp, though they do include a 5% stock dividend issued in May. Earnings per share increased 6.5%, to 33 cents, or 8 cents above the average of analysts' expectations, according to Thomson Reuters.
After hitting a 52-week low Tuesday, Valley's stock bounced back 16% by late Wednesday, to $16.73.
