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Lipkin sees better loan growth in Northeast after Florida carries company in Q1


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Lipkin sees better loan growth in Northeast after Florida carries company in Q1

Chairman,President and CEO Gerald Lipkin expects loan growth to pick up at the bank amid"tepid" economic improvement in the company's core New Jersey and NewYork markets.

Lipkinsaid the bank has "reason to be optimistic about levels of lending in the Northeastfor the balance of the year" during an earnings conference call. "I makethat statement based on the fact that our approved, committed pipeline in the Northeasthad grown to over $500 million by quarter-end," he added.

ValleyNational said in its April 27 earnings release that loans increased by $92.9 millionor 2.3% annualized during the first quarter. The bank originated more than $600million in new organic loans, but reported that it saw a high level of repaymentsduring the quarter, including a $125.1 million decline in its acquired purchasedcredit-impaired loans.

Lipkinsaid much of the growth the company is seeing is in its Florida markets, which thecompany entered in recent years with acquisitions. He said net outstanding creditsincreased at a double-digit pace at the bank's Florida division, which also hasa current committed pipeline that is up about 15% over the prior quarter.

ValleyNational said in its earnings release that its 8.9% annualized growth during thequarter in the commercial real estate segment was driven in part by organic growthin the Florida market, as well as multifamily participation loans in its New Jerseyand New York markets.

The bank also provided updates on itsbranch consolidation plans:As of March 31, the bank had closed 14 of the 28 locations it plans to shutter,including one branch during the first quarter. Valley National expects to closethe remaining 14 branches by June 30 and estimates that the 28 closures willlead to an annualized reduction of about $10 million in ongoing operating expenses;45% of that amount should be realized by the end of 2016.

In February, the bank finished the systems integration relatedto its acquisitionof Orlando, Fla.-based CNLBancshares Inc., and in March Valley National completedstaffing reductions related to the back-office integration of CNL. The bank expectsto see the benefit of these synergies in its second-quarter operating expenses.

Valley National reported first-quarter net incomeavailable to common shareholders of $34.4 millionor 14 cents per diluted share. This was up from $30.3 million or 13 cents per sharea year earlier.