Valley National Corp., whose principal subsidiaries are The Valley National Bank of Arizona and Valley Utah Bancorporation, had earnings for the second quarter of $16 million, or 81 cents per share, compared to a net loss of $62.1 million for the corresponding quarter in 1987.
Net income for the first half of 1988 was $29.9 million, or $1.51 per share, compared to a net loss of $42.7 million for the first half 1987. The 1987 results were impacted by the establishment of a special reserve for credit losses, which Valley management said was consistent with actions taken by other banks throughout the country."This quarter's earnings display a significant improvement, not only when compared to last year, but also to this year's first quarter," said Chairman James Simmons. "After netting out the effects of an accounting change and our restructuring expense in the first quarter, earnings increased from 58 cents per share to 81 cents per share. We've achieved an earnings turnaround which we expect to continue."
During the second quarter, the corporation's nonperforming assets decreased to $386.6 million from the $390.1 million reported March 31. Net credit losses for the second quarter 1988 were $21.7 million, a decrease of $3.8 million from $25.5 million in the first quarter 1988.
"Although still at a level higher than we would like, this was the first quarterly drop in nonperforming assets since the $12.2 million decrease in second quarter 1987," Simmons said. "This quarter's net credit losses were also lower than any of the previous four quarters."
Another positive result in the second quarter, said Simmons, is the strengthening of the net interest margin, reversing an adverse trend that began in the third quarter 1987. The increase in margin resulted from a favorable interest rate environment.
"We are pleased with the progress made during the second quarter to stabilize nonperforming assets, control noninterest expenses, and improve the net interest margin," Simmons said.