Aided by its January purchase State Bancorp, Valley National Bancorp (VLY) in Wayne, N.J., reported strong loan and deposit growth in the first quarter, though its overall earnings declined slightly from the prior year due to merger related costs and other one-time events.

The $16 billion-asset company said Monday that it earned $34.5 million in the quarter, down 5.7% from the same period last year. Earnings per share fell 3 cents, to 18 cents, a penny shy of estimates of analysts polled by Thomson Reuters.

The company's net interest income climbed 9% year over year, to $127.5 million, due in large part to a 16% jump in total loans.

The deal for State Bancorp added roughly $1.7 billion of loans in the greater New York area while strong refinancing activity led to a sharp increase in mortgage loans. Its net interest margin declined by a basis point, however, to 3.70%, due to lower loan yields.

"Our margin has remained remarkably resilient against the downward market rate pressures, despite a high level of prepayment and refinance activity resulting in lower yields on most of our earning assets," Valley Chairman, President and Chief Executive Gerald H. Lipkin said in a news release. "Residential mortgage loan volume, without question, remains one of bright spots for Valley in this low-rate environment."

Total deposits climbed 13%, to $11 billion, aided by $1.4 billion of deposits it inherited in the State Bancorp acquisition.

Valley's shares were trading at $12.78 early Thursday, down 1.5% from Wednesday's closing price.

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