Valley National Bancorp’s deposits were lower than analysts expected in the first quarter as earnings at the New Jersey firm also missed estimates with an increase in expenses.
(Bloomberg) — Valley National Bancorp’s deposits were lower than analysts expected in the first quarter as earnings at the New Jersey firm also missed estimates with an increase in expenses.
Deposits at the Wayne-based bank totaled $47.6 billion as of March 31, falling short of the $48.2 billion than the average analyst estimate in a Bloomberg survey and little changed from the end of last year. Earnings per share excluding some items totaled 30 cents a share, less than the 33 cents analysts forecast.
The earnings miss came as non-interest expenses climbed to $272.2 million, up 38% from a year earlier and more than expected, partly the result of an increase in the bank’s Federal Deposit Insurance Corp. insurance assessment. Net interest income — the revenue collected from loan payments minus what depositors are paid — also missed analysts’ estimates.
“Given the miss in NII as well as seasonally higher expenses and the increased FDIC assessment rate, the efficiency ratio ticked back up to 54%,” an increase from both the fourth quarter and a year earlier, Piper Sandler analysts Frank Schiraldi and Justin Crowley said in a note to clients Thursday.
The bank’s shares slipped 4.3% to $8.21 at 10:33 a.m. in New York, the lowest intraday level since November 2020.
Valley National’s shares have fallen 27% this year as a run on deposits struck several US banks. Rising interest rates depressed the value of fixed-income investments held by regional lenders as a sudden surge in customer withdrawals forced many of the banks to sell those assets at a loss.
Valley National said it increased its long-term borrowings to about $2.2 billion as of March 31 from $1.5 billion at the end of the year, mainly due to new Federal Home Loan Bank advances during the quarter.
“We continue to closely monitor changes in the current banking environment and have substantial access to additional liquidity,” Valley National said.
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