Published on 26 Apr 2024 on Zacks via Yahoo Finance

Valley National (VLY) Q1 Earnings Miss on High Provisions

Valley National Bancorp’s VLY first-quarter 2024 adjusted earnings per share of 19 cents lagged the Zacks Consensus Estimate by a penny. The bottom line declined 36.7% on a year-over-year basis.Results were adversely impacted by a rise in expenses and huge provisions. Further, lower net interest income (NII) due to rise deposit expenses, and fall in loans and deposits were spoilsports. However, a rise in non-interest income provided some relief.Results excluded non-core income and charges. After considering these, net income available to common shareholders was $96.3 million or 18 cents per share, down from $146.6 million or 28 cents per share in the year-ago quarter.

Revenues Fall, Expenses Rise

Quarterly total revenues were $455 million, down 7.2% year over year. However, the top line surpassed the Zacks Consensus Estimate of $447.4 million.NII (fully-taxable-equivalent or FTE basis) was $394.8 million, declining 9.7%. This was due to higher interest expenses. Net interest margin (FTE basis) was 2.79%, down 37 basis points.Non-interest income was up 13.1% to $61.4 million. It included $3.6 million of gain on the sale of the premium finance division. Excluding this, adjusted non-interest income of $57.8 million, up 6.4%. The rise was largely driven by an increase in wealth management and trust fees and fees from loan servicing.Non-interest expenses of $280.3 million increased 3%. Adjusted expenses rose 1.1% to $266.7 million.The adjusted efficiency ratio was 59.10%, up from 53.79% in the prior year quarter. A rise in the efficiency ratio indicates a deterioration in profitability.As of Mar 31, 2024, total loans were $50 billion, down marginally sequentially. As of the same date, total deposits amounted to $49.1 billion, declining slightly.