I consider Valley National Bank (NYSE:VLY) to be an exceptionally well run hometown bank despite its 198 full-service banking offices located in northern and central New Jersey and New York City. Its CEO Gerald Lipkin has been known to personally do their commercials and he seems very accessable. It wouldn't surprise me if one day Valley National Bank is acquired. After all Hudson City Savings Bank, another NJ based community oriented bank, was recently acquired by M&T Bank.
The Valley National Bank 7 3/4% TOPrS Trust Preferred Securities Class A closed at $25.79 yesterday. This translated to a 7.51% current yield for this investment grade security (rated BBB- by Standard and Poor's). The icing on the cake so to speak is this stock goes X Dividend today in the amount of .48. This security can be called at any time and $10 Million face of a total of $175 Million face of this security was called on 1/17/12. Thus far, Valley National Bank has not called any more of this stock, even though lots of other banks have called their preferred stocks in recent months because their trust preferred securities no longer qualify as Tier 1 capital under the Dodd-Frank act. Even if this stock is called at $25.00 today with no notice which seems unlikely, the risk is low since a $25.79 current price minus the $.48 X Dividend = a risk of just .31 or about 1.2%.
Valley National Bank has remained profitable even during such challenging years for banks as 2008 and 2009. I was fortunate to have acquired shares of Valley National Bank Preferred A back in 2009 in the $19-$20 per share range. I liked this stock since it rarely traded below $19 a share back in 2009 (other too big to fail preferred shares reached as low as lower single digits) while it has a par value of $25. It subsequently reached a high of around $27 a share in late 2011 and more recently have settled in the $25-$26 range.
Valley National Bank reported its fourth quarter financial numbers on 1/30/13. Its net income stood at 19 cents per share, meeting consensus estimates. The net income increased by 48.4% when compared to the same quarter one year prior, rising from $24.82 million to $36.83 million. The company's net interest income remained flat, but it managed to improve its net interest margin by 33 basis points on a Year-over-Year basis. The bank also reported strong uptrend in new loan originations, especially in the residential mortgage originations. The company has also kept non-performing asset ratio low, increasing efficiency. Currently, this conservatively managed bank's non-performing assets make up slightly more than 1 percent of its total assets.
Valley National Bancorp, through its subsidiary, Valley National Bank, provides retail and commercial banking services, including depository banking, consumer and commercial lending, trust and pension services. It operates through four reportable business segments: Consumer Lending, Commercial Lending, Investment Management and Corporate and Other Adjustments. The Consumer Lending segment provides residential mortgages, home equity loans and automobile loans. The Commercial Lending segment comprised of floating rate and adjustable rate commercial and industrial loans, as well as fixed rate owner occupied and commercial real estate loans. The Investment Management segment comprised of fixed rate investments, trading securities, and depending on liquid cash position, federal funds sold and interest-bearing deposits with banks. The Corporate and Other Adjustments segment represents cnd net impairment losses on securities not reported in the investment management segment. Valley National Bancorp's subsidiaries are engaged in asset management, mortgage servicing, and multi-line insurance. The company was founded in 1983 and is headquartered in Wayne, NJ.
Additional disclosure: I own VLY-Pa preferred stock.