Shares of Valley National Bancorp. slumped Wednesday after the Wayne, N.J., company reported a first-quarter profit that fell short of analysts' expectations.
The $21.7 billion-asset company said Wednesday that its net income increased 13% from a year earlier, to $34.4 million, on strong gains in both interest and fee income. Net interest income totaled $148.2 million, up 12% from a year earlier, as loans increased 17% to $16.1 billion, thanks largely to gains in commercial real estate loans and continued growth in collateralized personal lines of credit, Valley said.
Noninterest income rose 15% to $21.4 million as the company recorded upticks in fees from insurance commissions.
Valley's shares were down 5.3% in heavy trading late Wednesday, to $9.54. Investors seemed to be disappointed that the net interest margin declined by 12 basis points and that its total revenue of $169 million fell well shy of analysts' targets. Its earnings per share of 14 cents came in a penny below estimates of analysts polled by Bloomberg.
Noninterest expenses totaled $118.2 million, up roughly 9% from a year earlier. Valley National said it expects costs to decline in the second quarter as it completes its acquisition of CNLBancshares in Orlando. The company has made a push into Florida by buying CNLBancshares in December and 1st United Bank in Boca Raton in 2014.
Valley has completed half of the 28 branch closings it announced last year and the remaining 14 should be closed by June 30. These closings should result in roughly $10 million in ongoing cost savings, the company said.