10-Q 1 d10q.htm FORM 10-Q Form 10-Q
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 10-Q

 

 

(Mark One)

x Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 2008

OR

 

¨ Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the transition period from              to             

Commission File Number 1-11277

 

 

VALLEY NATIONAL BANCORP

(Exact name of registrant as specified in its charter)

 

 

 

New Jersey   22-2477875

(State or other jurisdiction of

Incorporation or Organization)

  

(I.R.S. Employer

Identification Number)

 

1455 Valley Road

Wayne, NJ

   07470
(Address of principal executive office)   (Zip code)

973-305-8800

(Registrant’s telephone number, including area code)

 

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):

 

Large Accelerated Filer   x    Accelerated Filer   ¨
Non-accelerated Filer   ¨  (Do not check if a smaller reporting company)    Smaller reporting company   ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock (no par value), of which 134,943,161 shares were outstanding as of November 5, 2008.

 

 

 

Table of Contents

TABLE OF CONTENTS

 

          Page
Number

PART I

    FINANCIAL INFORMATION   

Item 1.

   

Financial Statements (Unaudited)

   
  

Consolidated Statements of Financial Condition
September 30, 2008 and December 31, 2007

    3
  

Consolidated Statements of Income
Three and Nine Months Ended September 30, 2008 and 2007

    4
  

Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2008 and 2007

    5
  

Notes to Consolidated Financial Statements – September 30, 2008

    7

Item 2.

   

Management’s Discussion and Analysis of Financial Condition and Results of Operations

    22

Item 3.

   

Quantitative and Qualitative Disclosures About Market Risk

    50

Item 4.

   

Controls and Procedures

    51

PART II

    OTHER INFORMATION   

Item 1.

   

Legal Proceedings

    51

Item 1A.

   

Risk Factors

    51

Item 2.

   

Unregistered Sales of Equity Securities and Use of Proceeds

    52

Item 6.

   

Exhibits

    52
SIGNATURES    53

 

2

Table of Contents

PART 1 - FINANCIAL INFORMATION

 

Item 1. Financial Statements

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)

(in thousands, except for share data)

 

     September 30,
2008		     December 31,
2007		  

Assets

     

Cash and due from banks

    $ 246,937     $ 218,896  

Interest bearing deposits with banks

      151,984       9,569  

Federal funds sold

      100,000       9,000  

Investment securities:

     

Held to maturity, fair value of $558,038 at September 30, 2008 and $548,353 at December 31, 2007

      654,193       556,113  

Available for sale

      1,713,061       1,606,410  

Trading securities

      61,383       722,577  
                

Total investment securities

      2,428,637       2,885,100  
                

Loans held for sale, at fair value

      2,367       2,984  

Loans

      10,057,281       8,496,221  

Less: Allowance for loan losses

      (88,158 )     (72,664 )
                

Net loans

      9,969,123       8,423,557  
                

Premises and equipment, net

      254,285       227,553  

Bank owned life insurance

      298,695       273,613  

Accrued interest receivable

      61,619       56,578  

Due from customers on acceptances outstanding

      7,943       8,875  

Goodwill

      293,988       179,835  

Other intangible assets, net

      27,960       24,712  

Other assets

      444,613       428,687  
                

Total Assets

    $ 14,288,151     $ 12,748,959  
                

Liabilities

     

Deposits:

     

Non-interest bearing

    $ 2,107,112     $ 1,929,555  

Interest bearing:

     

Savings, NOW and money market

      3,597,921       3,382,474  

Time

      3,358,373       2,778,975  
                

Total deposits

      9,063,406       8,091,004  
                

Short-term borrowings

      798,669       605,154  

Long-term borrowings (includes fair value of $41,359 for an Federal Home Loan Bank advance at December 31, 2007)

      3,009,212       2,801,195  

Junior subordinated debentures issued to capital trusts (includes fair value of $134,193 at September 30, 2008 and $163,233 at December 31, 2007 for VNB Capital Trust I)

      159,534       163,233  

Bank acceptances outstanding

      7,943       8,875  

Accrued expenses and other liabilities

      160,775       130,438  
                

Total Liabilities

      13,199,539       11,799,899  
                

Shareholders’ Equity*

     

Preferred stock, no par value, authorized 30,000,000 shares; none issued

      —         —    

Common stock, no par value, authorized 190,886,088 shares; issued 136,971,037 shares at September 30, 2008 and 128,503,294 shares at December 31, 2007

      48,237       43,185  

Surplus

      1,038,836       879,892  

Retained earnings

      98,147       104,225  

Accumulated other comprehensive loss

      (46,884 )     (12,982 )

Treasury stock, at cost (2,030,261 common shares at September 30, 2008 and 2,659,220 common shares at December 31, 2007)

      (49,724 )     (65,260 )
                

Total Shareholders’ Equity

      1,088,612       949,060  
                

Total Liabilities and Shareholders’ Equity

    $ 14,288,151     $ 12,748,959  
                

 

* Share data reflects a five percent common stock dividend issued on May 23, 2008.

See accompanying notes to consolidated financial statements.

 

3

Table of Contents

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except for share data)

 

     Three Months Ended
September 30,		     Nine Months Ended
September 30,
     2008     2007     2008     2007

Interest Income

         

Interest and fees on loans

    $ 151,871     $ 141,177     $ 422,113     $ 419,712

Interest and dividends on investment securities:

         

Taxable

      34,270       33,859       104,477       99,384

Tax-exempt

      2,507       2,745       7,642       8,552

Dividends

      2,222       1,873       6,819       5,903

Interest on federal funds sold and other short-term investments

      130       3,505       2,032       9,893
                              

Total interest income

      191,000       183,159       543,083       543,444
                              

Interest Expense

         

Interest on deposits:

         

Savings, NOW, and money market

      12,080       19,236       37,300       57,870

Time

      27,902       35,891       85,552       100,798

Interest on short-term borrowings

      2,122       4,656       6,641       13,156

Interest on long-term borrowings and junior subordinated debentures

      33,664       28,962       100,198       85,253
                              

Total interest expense

      75,768       88,745       229,691       257,077
                              

Net Interest Income

      115,232       94,414       313,392       286,367

Provision for credit losses

      6,850       2,713       16,650       7,011
                              

Net Interest Income after Provision for Credit Losses

      108,382       91,701       296,742       279,356
                              

Non-Interest Income

         

Trust and investment services

      1,774       1,897       5,286       5,518

Insurance premiums

      2,351       2,509       7,987       8,273

Service charges on deposit accounts

      7,480       7,133       21,102       19,775

(Losses) gains on securities transactions, net

      (67,456 )     14       (68,269 )     84

Trading gains, net

      14,747       731       11,255       4,636

Fees from loan servicing

      1,243       1,387       3,690       4,171

Gains on sales of loans, net

      282       262       1,006       4,624

Gains (losses) on sales of assets, net

      171       (645 )     256       15,958

Bank owned life insurance

      2,659       3,239       8,804       8,254

Other

      4,645       3,772       13,960       11,065
                              

Total non-interest (loss) income

      (32,104 )     20,299       5,077       82,358
                              

Non-Interest Expense

         

Salary expense

      33,147       29,459       93,448       87,139

Employee benefit expense

      8,363       7,342       24,215       22,781

Net occupancy and equipment expense

      14,032       12,285       40,288       36,999

Amortization of other intangible assets

      1,959       1,881       5,107       5,671

Professional and legal fees

      1,852       2,003       6,038       5,070

Advertising

      965       665       1,682       2,407

Other

      13,524       10,538       34,501       30,510
                              

Total non-interest expense

      73,842       64,173       205,279       190,577
                              

Income Before Income Taxes

      2,436       47,827       96,540       171,137

Income tax (benefit) expense

      (1,159 )     11,373       19,879       45,570
                              

Net Income

    $ 3,595     $ 36,454     $ 76,661     $ 125,567
                              

Earnings Per Common Share:*

         

Basic

    $ 0.03     $ 0.29     $ 0.59     $ 0.99

Diluted

      0.03       0.29       0.59       0.99

Cash Dividends Declared Per Common Share*

      0.20       0.20       0.60       0.60

Weighted Average Number of Common Shares Outstanding:*

         

Basic

      134,827,600