CRE expansion pays off at Valley National

Profits at Valley National Bancorp in Wayne, N.J., rose 29% year over year to $44 million in the first quarter, as an increase in commercial real estate loans went a long way toward offsetting a decline in residential mortgages.

Earnings per share were 17 cents, which met the average of analysts’ estimates compiled by FactSet Research Systems.

lipkin-gerald-valley-national-2015

“Our net income for the first quarter continued to benefit from strong loan growth mainly within the commercial real estate portfolio and our ability to maintain a low overall cost of funds,” Chairman and CEO Gerald Lipkin said in a news release Wednesday.

Net interest income at the $23 billion-asset bank rose almost 10% to $162.5 million. The net interest margin expanded 6 basis points to 3.10%. Meanwhile, CRE loans increased 18% to $9.9 billion, and residential mortgage loans fell by 11% to $2.7 billion.

The bank expanded its overall loan portfolio by 8% to $17.4 billion, while it more than tripled its loan-loss provision to $2.4 million. The amount of loans it charged off rose 35% to $3.4 million.

Noninterest income rose by nearly 17% to $25 million primarily because of gains on loan sales and income tied to bank-owned life insurance policies.

Noninterest expenses rose by 2% to $121 million.

For reprint and licensing requests for this article, click here.
Earnings CRE Commercial banking Mortgages Community banking New Jersey New York
MORE FROM NATIONAL MORTGAGE NEWS