Thank you, Diane. Good Morning and welcome to our second quarter earnings conference call.
The banking industry continues to be besieged with a litany of external variables, ranging from additional regulatory expenses to the Federal Reserve’s direct intervention on market interest rates. Community Banks have historically been a catalyst to economic growth within the neighborhoods they operate. Banks and the communities they serve have a mutual interest in the prosperity of each other.
In today’s difficult economic environment, the health and profitability of our industry will be closely tied to improving employment and economic conditions. New and additional regulatory guidance surrounding the increased amount and form of capital held at every financial institution stands as an impediment to that expansion.To further this disconnect, the new draft capital requirements, issued by the joint regulatory agencies, are inconsistent with the treatment of capital as outlined in the Collins amendment as they further limit the eligible forms of capital for many banks. On the other hand, the proposed regulatory adjustments to the measurement of risk weighted assets, for certain loan categories is an improvement, as we have always believed every borrower needs skin in the game. Specifically, the proposed Basel III guidance provides an advantage to those institutions, like Valley, which have emphasized larger borrower equity in their underwriting standards. Based on a recent third party review of Valley’s first lien conforming residential mortgage portfolio, the adjusted mark to market loan to value ratio was approximately 48%. As a result, under the proposed guidance, we anticipate a significant reduction in the calculation of risk weighted assets for that portfolio. Therefore, based upon our initial review of the proposed Basel Three capital requirements, we believe we currently meet the enhanced 2019 well capitalized definition for all regulatory capital ratios, as defined under the new proposal. As the market level of interest rates remains constrained due to a multitude of factors, Valley’s emphasis on non-interest income revenue generating sources will continue to receive much greater focus.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV