Valley National Bancorp Reports Increase in Third Quarter Earnings, Solid Net Interest Margin and Strong Capital Position

WAYNE, N.J., Oct. 27, 2011 /PRNewswire/ -- Valley National Bancorp (NYSE: VLY), the holding company for Valley National Bank, today reported net income for the third quarter of 2011 of $35.4 million, or $0.21 per diluted common share, as compared to the third quarter of 2010 earnings of $32.6 million, or $0.19 per diluted common share.  

Key highlights for the third quarter:

  • Net Interest Income and Margin: Net interest income increased $4.2 million to $121.9 million for the quarter ended September 30, 2011 as compared to $117.7 million for the quarter ended June 30, 2011.  On a tax equivalent basis, our net interest margin increased 15 basis points to 3.86 percent in the third quarter of 2011 as compared to 3.71 percent for the second quarter of 2011, and was 8 basis points higher than the 3.78 percent net interest margin for the third quarter of 2010.  The increases in the net interest income and margin were mainly due to additional cash flows on covered loan pools and an increase in non-covered loan prepayment fees and recovered interest on non-accrual loans. See the “Net Interest Income and Margin” section below for more details.
  • Loan Growth: Total non-covered loans (i.e., loans which are not subject to our loss-sharing agreements with the FDIC) increased by $35.1 million to $9.3 billion at September 30, 2011 from June 30, 2011.  Our commercial real estate and residential mortgage loans grew by $38.3 million and $25.2 million, or 4.4 percent and 4.7 percent, respectively, on an annualized basis, during the third quarter of 2011.  However, auto, construction and home equity loans continued to decline during the third quarter. Total covered loans (i.e., loans subject to our loss-sharing agreements with the FDIC) decreased to $282.4 million, or 2.9 percent of our total loans, at September 30, 2011 as compared to $308.4 million at June 30, 2011 mainly due to normal payment activity.
  • Asset Quality: Total loans past due 30 days or more were 1.73 percent of the loan portfolio at September 30, 2011 compared to 1.66 percent at June 30, 2011.  Total non-accrual loans were $107.7 million, or 1.12 percent of our entire loan portfolio of $9.6 billion, at September 30, 2011. The residential mortgage and home equity loan portfolios totaling approximately 23,000 individual loans had only 269 loans past due 30 days or more at September 30, 2011.  At September 30, 2011, residential mortgage and home equity loans delinquent 30 days or more totaled $47.6 million, or 1.80 percent of the $2.7 billion in total loans within these categories. See “Credit Quality” section below for more details.
  • Provision for Losses on Non-Covered Loans and Unfunded Letters of Credit: The provision for losses on non-covered loans and unfunded letters of credit increased to $7.8 million for the third quarter of 2011 as compared to $6.8 million for the second quarter of 2011 and declined from $9.3 million for the third quarter of 2010. Net loan charge-offs on non-covered loans declined to $4.8 million for the three months ended September 30, 2011 compared to $6.2 million for the second quarter of 2011 and $6.1 million for the third quarter of 2010. At September 30, 2011, our allowance for losses on non-covered loans and unfunded letters of credit totaled $125.1 million and was 1.34 percent of non-covered loans, as compared to 1.32 percent and 1.28 percent at June 30, 2011 and September 30, 2010, respectively.
  • Allowance for Losses on Covered Loans:  Our allowance for losses on covered loans totaled $12.6 million at September 30, 2011 as compared to $18.7 million at June 30, 2011 and was reduced by loan charge-offs totaling $6.1 million in impaired loan pools during the third quarter of 2011.  
  • Change in FDIC Loss-Share Receivable:  We recognized a $1.6 million reduction in non-interest income during the third quarter of 2011 due to a decrease in our FDIC loss-share receivable primarily caused by a $2.9 million adjustment attributable to the effect of increased cash flows from certain covered loan pools in excess of originally forecasted cash flows, all of which is recognized on a prospective basis. The $2.9 million adjustment was partially offset by income from reimbursable expenses under the loss sharing agreements and accretion of the receivable discount recorded upon acquisition.
  • Other Intangible Assets: We recognized a $1.6 million ($0.01 per common share) impairment charge on certain loan servicing rights during the third quarter of 2011 as compared to an $810 thousand charge in the third quarter of 2010.  The impairment charges are mainly the result of higher expected prepayments caused by the low interest rate environment.  Loan servicing rights totaled $10.4 million at September 30, 2011, net of a $2.6 million valuation allowance.
  • Trading Mark to Market Impact on Earnings: Net income for the third quarter of 2011 included net trading gains of $776 thousand (less than $0.01 per common share) as compared to net trading losses of $2.6 million ($0.01 per common share) for the third quarter of 2010. Trading gains and losses mainly represent non-cash mark to market gains and losses on our junior subordinated debentures carried at fair value.
  • Capital Strength: Our regulatory capital ratios continue to reflect Valley’s strong capital position. The Company's total risk-based capital, Tier 1 capital, and leverage capital were 12.65 percent, 10.82 percent, and 8.10 percent, respectively, at September 30, 2011.

Gerald H. Lipkin, Chairman, President and CEO commented that, “Given the current sluggish operating environment, we believe our performance continued to be very solid during the third quarter.  Overall, our loan growth remained somewhat tempered by the weakened economy, as well as our decision to sell approximately 45 percent of our new and renewed residential mortgage originations during the quarter. Our very successful one price mortgage refinancing program continues to be one of several bright spots in our operations and especially for our refinance customers who have benefited from significant cost savings on their mortgage loans in this low rate environment.

As previously announced in April 2011, we entered into a merger agreement with State Bancorp, Inc. and its principal subsidiary, State Bank of Long Island with approximately $1.6 billion in assets and a 17 branch network. We are excited about the merger’s potential to expand the Valley brand into this attractive new market and build new customer relationships in these communities.  The Office of the Comptroller of the Currency and the Federal Reserve Bank of New York have granted their approval of the merger.  We anticipate the closing of the merger to occur after the close of business on December 31, 2011 with an effective date of January 1, 2012, contingent upon receiving the approval of the State Bancorp shareholders, the purchase from the Treasury Department of State Bancorp’s Series A Preferred Stock and other customary closing conditions.”  

Net Interest Income and Margin

Net interest income on a tax equivalent basis was $123.6 million for the third quarter of 2011, a $4.6 million increase from the second quarter of 2011 and an increase of $4.4 million from the third quarter of 2010. The linked quarter increase was mainly driven by higher interest income on loans, which included the effect of additional cash flows on covered loan pools totaling $3.9 million and an increase in non-covered loan prepayment fees and interest received in the payoff of a non-accrual construction loan totaling a combined $2.1 million in the third quarter of 2011. The increase in interest income on loans was partially offset by lower interest income on investment securities caused by a decline in average taxable investments and a slight decrease in the yield on such securities.

The net interest margin on a tax equivalent basis was 3.86 percent for the third quarter of 2011, an increase of 15 basis points from 3.71 percent in the linked second quarter of 2011, and an 8 basis point increase from 3.78 percent for the quarter ended September 30, 2010. The yield on average interest earning assets increased by 14 basis points on a linked quarter basis mainly as a result of a higher yield on average loans due to the aforementioned increases in interest income, partially offset by both a decrease in average taxable investments and the yield on such investments.  The cost of average interest bearing liabilities declined one basis point from the second quarter of 2011 mainly due to a three basis point decrease in the cost of average long-term borrowings caused, in part, by the maturity of $90 million in FHLB borrowings during late April 2011 and a decline in average interest-bearing deposits.  Our cost of total deposits was 0.71 percent for the third quarter of 2011 compared to 0.72 percent for the three months ended June 30, 2011.  

Although our net interest margin experienced growth during the third quarter of 2011 primarily due to the infrequent loan income items described above, we believe our margin will continue to face strong headwinds into the foreseeable future due to the current low level of interest rates on most interest earning asset alternatives.  However, we continue to tightly manage our balance sheet and our cost of funds to optimize our returns.  During the third quarter of 2011, we reduced the interest rates on many of our deposit products, including time deposits, and we have yet to fully realize the benefits of these recent reductions. We believe these actions and other asset/liability strategies will partially temper the negative impact of the current interest rate environment.

Credit Quality

Total loan delinquencies as a percentage of total loans were 1.73 percent at September 30, 2011 as compared to 1.66 percent at June 30, 2011 and 1.70 percent at September 30, 2010.  With a non-covered loan portfolio totaling $9.3 billion, net loan charge-offs on non-covered loans for the third quarter of 2011 totaled $4.8 million as compared to $6.2 million for the second quarter of 2011 and $6.1 million for the third quarter of 2010.  Charge-offs on loans in our impaired covered loan pools totaled $6.1 million and $639 thousand for the third and second quarters of 2011, respectively, and are substantially covered by loss-sharing agreements with the FDIC.

The following table summarizes the allocation of the allowance for credit losses to specific loan categories and the allocation as a percentage of each loan category at September 30, 2011, June 30, 2011 and September 30, 2010:


September 30, 2011


June 30, 2011


September 30, 2010


Allowance
Allocation

Allocation
as a % of
Loan
Category


Allowance
Allocation

Allocation
as a % of
Loan
Category


Allowance
Allocation

Allocation
as a % of
Loan
Category

Loan Category:









Commercial and Industrial loans*

$62,717

3.44%


$59,919

3.28%


$55,346

3.03%

Commercial real estate loans:









Commercial real estate

20,079

0.58%


18,310

0.53%


15,980

0.47%

Construction

14,614

3.53%


13,863

3.35%


14,485

3.29%

Total commercial real estate loans

34,693

0.89%


32,173

0.82%


30,465

0.79%

Residential mortgage loans

10,158

0.47%


10,913

0.51%


8,196

0.43%










Consumer loans:









Home equity

2,794

0.58%


2,791

0.58%


1,628

0.31%

Auto and other consumer

7,297

0.79%


8,284

0.90%


11,952

1.24%

Total consumer loans

10,091

0.72%


11,075

0.79%


13,580

0.91%

Covered loans

12,587

4.08%


18,719

6.07%


-

0.00%

Unallocated

7,455

NA


8,094

NA


8,128

NA

Allowance for credit losses

$137,701

1.44%


$140,893

1.47%


$115,715

1.23%

* Includes the reserve for unfunded letters of credit.



Total non-performing assets (“NPAs”), consisting of non-accrual loans, other real estate owned (OREO) and other repossessed assets, totaled $122.6 million, or 1.26 percent of loans and NPAs at September 30, 2011 compared to $125.5 million, or 1.29 percent of loans and NPAs at June 30, 2011. The $2.9 million decrease in non-performing assets was mostly due to a $4.5 million payoff of one non-accrual construction loan during the third quarter, partially offset by moderate increases in non-accrual commercial and industrial, residential mortgage, and consumer loans.

Non-accrual loans decreased $6.1 million to $107.7 million at September 30, 2011 as compared to $113.8 million at June 30, 2011 mainly due to the aforementioned $4.5 million construction loan payoff, and the transfer to OREO of a $3.5 million commercial property collateralizing a construction loan.  Although the timing of collection is uncertain, management believes that most of the non-accrual loans are well secured and largely collectible based on, in part, our quarterly review of impaired loans. Our impaired loans, mainly consisting of non-accrual and troubled debt restructured commercial and commercial real estate loans, totaled $170.4 million at September 30, 2011 and had $19.8 million in related specific reserves included in our total allowance for loan losses. OREO (which consists of 13 commercial and residential properties) and other repossessed assets, excluding OREO subject to loss-sharing agreements with the FDIC, totaled a combined $14.9 million at September 30, 2011 as compared to $11.7 million at June 30, 2011.

Loans past due 90 days or more and still accruing increased $1.2 million to $3.9 million, or 0.04 percent of total loans at September 30, 2011 compared to $2.7 million, or 0.03 percent at June 30, 2011 primarily due to the addition of one performing, but matured construction loan totaling $2.2 million, partly offset by a decline in commercial real estate loans within this delinquency category.  

Loans past due 30 to 89 days increased $11.3 million to $54.1 million at September 30, 2011 compared to June 30, 2011 primarily due to the inclusion of two potential problem loans totaling $12.6 million within the commercial real estate portfolio. Potential problem loans are performing loans about which management has serious doubts as to the ability of the borrowers to comply with the present loan repayment terms and which may result in a loan becoming non-performing.  Our decision to characterize such performing loans as potential problem loans does not necessarily mean that management expects losses to occur, but that management recognizes potential problem loans carry a higher probability of default.  Of the $12.6 million, an immaterial amount is estimated to be at risk after collateral values and guarantees are taken into consideration.

Troubled debt restructured loans (“TDRs”) represent loan modifications for customers experiencing financial difficulties where a concession has been granted.  Performing TDRs (i.e., TDRs not reported as loans 90 days or more past due and still accruing or as non-accrual loans) totaled $103.7 million at September 30, 2011 and consisted of 58 loans (primarily in the commercial and industrial loan and commercial real estate portfolios) as compared to 50 loans totaling $101.4 million at June 30, 2011.  On an aggregate basis, the $103.7 million in performing TDRs at September 30, 2011 had a modified weighted average interest rate of approximately 5.14 percent as compared to a pre-modification weighted average interest rate of 6.07 percent.  During the third quarter of 2011, we adopted the provisions of Accounting Standard’s Update No. 2011-02, “Receivables (Topic 310) – A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring.”  The adoption did not materially impact the number of TDRs identified by us, or the specific reserves for such loans included in our allowance for loan losses at September 30, 2011.

Loans and Deposits

Total loans moderately increased by $9.1 million as compared to June 30, 2011 and remained at approximately $9.6 billion as of September 30, 2011.  See discussion below for a complete analysis of the change in mix between each loan category.

Non-Covered Loans. Non-covered loans are loans not subject to loss-sharing agreements with the FDIC.  Non-covered loans increased $35.1 million, or 1.5 percent on an annualized basis, to approximately $9.3 billion at September 30, 2011 from June 30, 2011.  The linked quarter increase was mainly comprised of increases in commercial real estate, residential mortgage, and commercial and industrial loans of $38.3 million, $25.2 million and $7.4 million, respectively, partially offset by decreases of $22.0 million and $12.8 million in automobile and construction loans, respectively.  Commercial real estate loans continued to increase quarter over quarter due to our stronger business emphasis on co-op and multifamily loan lending in our primary markets during the first nine months of 2011, as well as a slight increase in new loan demand mainly from our current borrowers.  Residential mortgage loans increased due to the continued success of our $499 refinance program (including our television and radio ad campaigns) and the current low level of market interest rates. During the third quarter of 2011, we originated over $225 million in new and refinanced residential mortgage loans and retained approximately 55 percent of these loans in our loan portfolio at September 30, 2011.  Commercial and industrial loans remained relatively unchanged as soft loan demand coupled with strong competition for quality credits challenged loan growth in this category during the quarter. Automobile loan balances have continued to decline due to several factors, including our high credit standards, acceptable loan to collateral value levels, and high unemployment levels.  Additionally, in an attempt to build market share, some large competitors continue to offer rates and terms that we have elected not to match.  These factors may continue to constrain the levels of our auto loan originations during the fourth quarter of 2011 and the foreseeable future.  Construction loans also continue to paydown as loan demand has remained tepid due to the current state of the U.S. economy and housing markets.

Covered Loans. Loans for which Valley National Bank will share losses with the FDIC are referred to as “covered loans,” and consist of loans acquired from LibertyPointe Bank and The Park Avenue Bank as a part of FDIC-assisted transactions during the first quarter of 2010.  Our covered loans consist primarily of commercial real estate loans and commercial and industrial loans and totaled $282.4 million at September 30, 2011 as compared to $308.4 million at June 30, 2011.  These loans are accounted for on a pool basis.  For loan pools with better than originally expected cash flows, the forecasted increase is recorded as a prospective adjustment to our interest income on loans over future periods.  Additionally, on a prospective basis, we will reduce the FDIC loss-share receivable by the guaranteed portion of the additional cash flows expected to be received on those loan pools.  During the third and second quarters of 2011, we reduced our FDIC loss-share receivable by $2.9 million each period due to the prospective recognition of the effect of additional cash flows from pooled loans with a corresponding reduction in non-interest income for the period.  

Deposits. Total deposits decreased $86.1 million to approximately $9.6 billion at September 30, 2011 from June 30, 2011. Time deposits decreased $133.6 million during the third quarter mainly due to lower interest rates offered on our shorter term certificate of deposit products. Non-interest bearing deposits increased $51.6 million as compared to June 30, 2011 mainly due to general increases in both commercial and retail deposits. Savings, NOW and money market deposits totaled approximately $4.3 billion at September 30, 2011 and remained relatively unchanged from June 30, 2011.

Non-Interest Income

Third quarter of 2011 compared with third quarter of 2010

Non-interest income for the third quarter of 2011 increased $2.9 million to $20.2 million as compared to $17.3 million for the same period of 2010.  Net trading gains increased to $776 thousand for the third quarter of 2011 as compared to a net trading loss of $2.6 million for the third quarter of 2010 mainly due to non-cash mark to market losses on our trust preferred debentures carried at fair value.  Net gains on sales of loans also increased $1.3 million to $2.9 million for the third quarter of 2011 as compared to the third quarter of 2010 mainly due to higher sales volumes of our new and refinanced residential mortgage loan originations.  However, the change in the FDIC loss-share receivable resulted in a $1.6 million reduction in non-interest income as compared to the third quarter of 2010 mainly due to the effect of better than originally expected cash flows on certain covered loan pools, partially offset by income from reimbursable expenses under the loss sharing agreements and accretion of the receivable discount recognized on the FDIC-assisted transaction dates.

Third quarter of 2011 compared with second quarter of 2011

Non-interest income for the third quarter of 2011 decreased $13.3 million from $33.5 million for the quarter ended June 30, 2011.  Net gains on securities transactions decreased $15.6 million from $16.5 million during the second quarter of 2011 to $863 thousand in the third quarter. During the second quarter of 2011, we elected to sell $253.0 million in residential mortgage-backed securities issued by government agencies, perpetual preferred securities issued by Freddie Mac and Fannie Mae, and U.S. Treasury securities classified as available for sale. We reinvested the net proceeds mainly in Ginnie Mae mortgage-backed securities, which are fully guaranteed by the federal government and do not require related regulatory capital to be held by our bank subsidiary. Net trading gains increased $1.8 million from a net trading loss of $1.0 million for the second quarter of 2011 mainly due to non-cash mark to market gains in the third quarter on our trust preferred debentures carried at fair value.  Net gains on sales of loans also increased $1.3 million from $1.6 million in the second quarter of 2011 mainly due to higher sales volumes as we held a lower percentage of our new and refinanced residential mortgage loan originations for investment.  

Non-Interest Expense

Third quarter of 2011 compared with third quarter of 2010

Non-interest expense increased $6.4 million to $85.3 million for the three months ended September 30, 2011 from $78.9 million for the same period of 2010.  Other non-interest expense increased $1.6 million to $12.3 million largely due to an increase in OREO and other expenses related to assets acquired in the two FDIC-assisted transactions in March 2010. Salary and employee benefits expense also increased $1.6 million to $45.1 million for the three months ended September 30, 2011 mainly due to normal annual increases in salary expense, higher major medical expense, and an increase in stock-based compensation expense mostly related to accelerated expensing of stock awards to retirement eligible employees. Advertising expense increased $1.4 million to $2.2 million for the third quarter of 2011 mainly due to an increase in promotional campaigns, including television and radio.  Professional and legal fees increased $1.2 million to $3.7 million for the three months ended September 30, 2011 primarily due to increases in legal expenses related to assets acquired in the FDIC-assisted transactions, as well as expenses related to our pending acquisition of State Bancorp, Inc. and other general corporate matters.    

Third quarter of 2011 compared with second quarter of 2011

Non-interest expense increased by $2.2 million from $83.1 million for the linked quarter ended June 30, 2011.  Amortization of other intangible assets increased approximately $1.6 million due to our recognition of a $1.6 million impairment charge on certain loan servicing rights during the third quarter of 2011 as compared to a $49 thousand net valuation allowance recovery on the fair value of previously impaired loan servicing rights during the second quarter of 2011. The impairment charge was mainly the result of higher expected prepayments caused by the low interest rate environment.  Salary and employee benefit expense increased $1.0 million from $44.1 million for the second quarter of 2011 mainly due to an increase in stock-based compensation expense mostly related to accelerated expensing of stock awards to retirement eligible employees and higher major medical insurance expense.

Income Tax Expense

Income tax expense was $13.7 million for the three months ended September 30, 2011, reflecting an effective tax rate of 27.9 percent, compared with $14.2 million for the third quarter of 2010, reflecting an effective tax rate of 30.3 percent.  The effective tax rate decreased by 2.4 percent to 27.9 percent for the third quarter of 2011 largely due to our increased and planned investment in additional tax credits during 2011.

Income tax expense was $56.0 million for the nine months ended September 30, 2011, reflecting an effective tax rate of 34.0 percent, compared with $40.4 million for the same period of 2010, reflecting an effective tax rate of 30.3 percent.   The effective tax rate increased by 3.7 percent to 34.0 percent for the nine months ended September 30, 2011, largely due to a one-time tax provision of $8.5 million related to a change in tax law during the second quarter of 2011, partially offset by our increased and planned investment in additional tax credits during 2011.

For the fourth quarter of 2011, we anticipate that our effective tax rate will approximate 29 percent.    

About Valley

Valley is a regional bank holding company with over $14 billion in assets, headquartered in Wayne, New Jersey. Its principal subsidiary, Valley National Bank, currently operates 197 branches in 135 communities serving 14 counties throughout northern and central New Jersey, Manhattan, Brooklyn and Queens. Valley National Bank is one of the largest commercial banks headquartered in New Jersey and is committed to providing the most convenient service, the latest in product innovations and an experienced and knowledgeable staff with a high priority on friendly customer service 24 hours a day, 7 days a week. Valley National Bank offers a wide range of deposit products, mortgage loans and cash management services to consumers and businesses including products tailored for the medical, insurance and leasing business. Valley National Bank’s comprehensive delivery channels enable customers to bank in person, by telephone or online.

For more information about Valley National Bank and its products and services, please visit www.valleynationalbank.com or call the local 24/7 Customer Service at 800-522-4100.

Forward Looking Statements

The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology as “should,” “expect,” “believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “typically,” “usually,” “anticipate,” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:

  • a continued weakness or unexpected decline in the U.S. economy, in particular in New Jersey and the New York Metropolitan area;
  • other-than-temporary impairment charges on our investment securities;
  • higher than expected increases in our allowance for loan losses;
  • higher than expected increases in loan losses or in the level of nonperforming loans;
  • unexpected changes in interest rates;
  • higher than expected tax rates, including increases resulting from changes in tax laws, regulations and case law;
  • a continued or unexpected decline in real estate values within our market areas;
  • declines in value in our investment portfolio;
  • charges against earnings related to the change in fair value of our junior subordinated debentures;
  • higher than expected FDIC insurance assessments;
  • the failure of other financial institutions with whom we have trading, clearing, counterparty and other financial relationships;
  • lack of liquidity to fund our various cash obligations;
  • unanticipated reduction in our deposit base;  
  • potential acquisitions that may disrupt our business;
  • government intervention in the U.S. financial system and the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve;
  • legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulations) subject us to additional regulatory oversight which may result in increased compliance costs and/or require us to change our business model;
  • changes in accounting policies or accounting standards;
  • our inability to promptly adapt to technological changes;
  • our internal controls and procedures may not be adequate to prevent losses;
  • claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters;
  • the possibility that the expected benefits of acquisitions will not be fully realized, including lower than expected cash flows from covered loan pools acquired in FDIC-assisted transactions;
  • failure to obtain shareholder approval for the merger of State Bancorp with Valley or to satisfy other conditions to the merger on the proposed terms and within the proposed timeframe including, without limitation, the purchase from the United States Department of the Treasury of each share of State Bancorp’s Series A Preferred Stock issued under the Treasury’s Capital Purchase Program; and
  • other unexpected material adverse changes in our operations or earnings.

A detailed discussion of factors that could affect our results is included in our SEC filings, including the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2010 and our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011 and our Form 10-Q/A for such period.  We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations.