Valley National Bancorp in Wayne, N.J., reported a jump in third-quarter earnings on growth in lending and fee income.
The $19.6 billion-asset company's net income rose 30% to $35.9 million on a year-over year basis. Earnings per share fell 7.1% to 15 cents, one cent higher than the average estimate of analysts polled by Bloomberg.
Net interest income before the loan-loss provision rose 16.8% to $133.9 million. Total loans grew 22.9% to $15 billion. Commercial real estate loans increased 29.3% to $7.5 billion. Business loans rose 16.7% to $2.1 billion. The net interest margin compressed 6 basis points to 3.05%.
Noninterest income rose 42% to $20.9 million. Valley's Federal Deposit Insurance Corp. loss-share receivable shrank to a $55,000 loss from a $3.4 million loss. Fees from insurance commissions rose 13.9% to $4.1 million and bank-owned life insurance rose 12.5% to $1.8 million.
Noninterest expense grew 18.6% to $108.6 million on a 26.5% increase in occupancy and equipment costs and a 19.3% increase in salaries and employee benefits. The efficiency ratio worsened 4 basis points to 70.15%.
Additionally, Valley said it plans to close 15 branches in 2016. Combined with a cost-cutting effort announced in July, Valley will close a total of 28 branches this year and next year. The total closings are expected to produce about $10 million in yearly savings. Valley also plans to cut additional staff and streamline other operations, to produce an additional $8 million in yearly savings by 2017.