Valley National Bancorp (
NASDAQ:VLY), the holding
company for Valley National Bank, today reported net income for the
first quarter 2022 of $116.7 million, or $0.27 per diluted common
share, as compared to the first quarter 2021 earnings of $115.7
million, or $0.28 per diluted common share, and net income of
$115.0 million, or $0.27 per diluted common share, for the fourth
quarter 2021. Excluding non-core charges, our adjusted net income
(a non-GAAP measure) was $120.3 million, or $0.28 per diluted
common share, for the first quarter 2022, $115.8 million, or $0.28
per diluted common share, for first quarter 2021, and $120.5
million, or $0.28 per diluted common share, for the fourth quarter
2021. See further details below, including a reconciliation of our
adjusted net income in the “Consolidated Financial Highlights”
tables.
Key financial highlights for the first
quarter:
- Loan
Portfolio: Total loans increased $1.2 billion to $35.4
billion at March 31, 2022 from December 31, 2021, despite
a $232.3 million decrease in SBA Paycheck Protection Program (PPP)
loans within the commercial and industrial loan category. Our
non-PPP loan portfolio increased $1.4 billion, or 17.1 percent on
an annualized basis, largely due to well-balanced commercial loan
production across our primary markets and an uptick in new
residential mortgage loans originated for investment rather than
sale. See the “Loans, Deposits and Other Borrowings” section below
for more details.
- Net
Interest Income and Margin: Net interest income on a tax
equivalent basis of $318.4 million for the first quarter 2022
increased $2.4 million and $24.8 million as compared to the fourth
quarter 2021 and first quarter 2021, respectively. Our net interest
margin on a tax equivalent basis decreased by 7 basis points to
3.16 percent in the first quarter 2022 as compared to 3.23 percent
for the fourth quarter 2021. The lower margin as compared to the
fourth quarter 2021 was largely driven by a $10.1 million decrease
in PPP loan related interest and fees. Our costs of average
interest bearing liabilities decreased 4 basis points from the
fourth quarter 2021 mainly due to continued run-off of maturing
higher cost time deposits and lower cost of other borrowings. See
the “Net Interest Income and Margin” section below for more
details.
-
Allowance and Provision for Credit Losses for
Loans: The allowance for credit losses for loans totaled
$379.3 million and $375.7 million at March 31, 2022 and
December 31, 2021, respectively, representing 1.07 percent and
1.10 percent of total loans at each respective date. During the
first quarter 2022, we recorded a provision for credit losses for
loans of $3.5 million as compared to $11.6 million and $9.0 million
for the fourth quarter 2021 and first quarter 2021, respectively.
Net recoveries of charged-off loans totaled $50 thousand for the
first quarter 2022 as compared to net recoveries of $624 thousand
for the fourth quarter 2021. The moderate first quarter 2022
provision and increase in our allowance at March 31, 2022
largely reflects additional reserves required due to the strong
loan growth during the first quarter 2022, partially offset by
lower expected credit losses mainly within the commercial real
estate portfolio.
- Credit
Quality: Non-accrual loans represented 0.65 percent and
0.70 percent of total loans at March 31, 2022 and
December 31, 2021, respectively. Total accruing past due loans
increased $36.9 million to $92.8 million, or 0.26 percent of total
loans, at March 31, 2022 as compared to $55.9 million, or 0.16
percent of total loans, at December 31, 2021. See the “Credit
Quality” section below for more details.
-
Non-Interest Income: Non-interest income increased
$1.0 million to $39.3 million for the first quarter 2022 as
compared to the fourth quarter 2021 mainly due to a $9.6 million
increase in swap fee income related to new commercial loan
transactions, largely offset by decreases in net gains on sales of
residential mortgage loans and securities transactions totaling
$5.7 million and $1.6 million, respectively. The decrease in net
gains on sales of loans was mainly due to mark to market losses on
loans held for sale (at fair value) and, to a lesser extent, lower
volumes of residential mortgage sales during the first quarter 2022
as compared with the fourth quarter 2021.
-
Non-Interest Expense: Non-interest expense
increased $12.8 million to $197.3 million for the first quarter
2022 as compared to the fourth quarter 2021. The overall increase
in non-interest expense was mostly due to normal seasonal increases
within salary and employee benefits and net occupancy expense,
increased consulting and managed service fees within the
professional and legal fees category, as well as incrementally
higher operating expenses related to the acquisition of The
Westchester Bank Holding Corporation on December 1, 2021. Merger
related expenses (mainly reported within salary and employee
benefits) totaled $4.6 million and $7.6 million for the first
quarter 2022 and fourth quarter 2021, respectively.
-
Efficiency Ratio: Our efficiency ratio was 55.29
percent for the first quarter 2022 as compared to 52.19 percent and
49.46 percent for the fourth quarter 2021 and first quarter 2021,
respectively. Our adjusted efficiency ratio was 53.18 percent for
the first quarter 2022 as compared to 49.44 percent and 48.60
percent for the fourth quarter 2021 and first quarter 2021,
respectively. See the “Consolidated Financial Highlights” tables
below for additional information regarding our non-GAAP
measures.
- Performance
Ratios: Annualized return on average assets (ROA),
shareholders’ equity (ROE) and tangible ROE were 1.07 percent, 9.15
percent, and 13.09 percent for the first quarter 2022,
respectively. Annualized ROA, ROE and tangible ROE, adjusted for
non-core charges, were 1.10 percent, 9.43 percent and 13.49 percent
for the first quarter 2022, respectively. See the “Consolidated
Financial Highlights” tables below for additional information
regarding our non-GAAP measures.
Ira Robbins, CEO and President commented, “Our
first quarter results were highlighted by robust commercial loan
growth, strong credit metrics, and a stable core net interest
margin. The continued momentum on the lending side reflects our
ability to attract and service new clients while simultaneously
deepening our existing relationships. Excluding PPP loans, our net
interest margin would have increased slightly from the fourth
quarter despite the seasonal overhang of fewer days in the first
quarter. Funding costs continued to decline, and we benefited from
liquidity deployment into higher-yielding loans. For the third
consecutive quarter, we recognized net recoveries or de minimis
loan charge-offs. Valley’s credit quality remains a differentiating
characteristic and reflects our strong underwriting standards.”
Mr. Robbins continued, “On April 1, 2022, we
closed our acquisition of Bank Leumi USA. Leveraging Bank Leumi’s
core business relationships is expected to provide additional
differentiated growth opportunities for Valley. Bank Leumi further
solidifies Valley as one of the nation’s premier full-service
commercial banks. I am extremely excited about what the future
holds for our associates and clients.”
Net Interest Income and Margin
Net interest income on a tax equivalent basis
totaling $318.4 million for the first quarter 2022 increased $2.4
million as compared to the fourth quarter 2021 and increased $24.8
million from the first quarter 2021. Interest income on a tax
equivalent basis in the first quarter 2022 increased $475 thousand
to $341.2 million as compared to the fourth quarter 2021. The
increase was mainly due to increases in average loans and taxable
investments totaling $1.3 billion and $275.1 million, respectively,
largely offset by a $10.1 million decrease in PPP loan related
interest and fees during the first quarter 2022 caused by the
significant wind down of our remaining PPP loan portfolio over the
last several quarters. Interest expense of $22.8 million for the
first quarter 2022 decreased $1.9 million as compared to the fourth
quarter 2021 as we reduced our cost of funding from deposits and
borrowings.
Our net interest margin on a tax equivalent
basis of 3.16 percent for the first quarter 2022 decreased by 7
basis points and increased by 2 basis points from 3.23 percent and
3.14 percent for the fourth quarter 2021 and first quarter 2021,
respectively. The yield on average interest earning assets
decreased by 9 basis points on a linked quarter basis mostly due to
the lower yield on loans and two less days in the first quarter
2022 as compared to the fourth quarter 2021. The yield on average
loans decreased by 16 basis points to 3.67 percent for the first
quarter 2022 as compared to the fourth quarter 2021 largely due to
the decrease in PPP loan related interest and fees. The overall
cost of average interest bearing liabilities decreased 4 basis
points to 0.35 percent for the first quarter 2022 as compared to
the fourth quarter 2021. The decrease was mainly due to a 22 basis
point decrease in the cost of average long-term borrowings, the
continued runoff of maturing higher cost time deposits, and the
moderately lower costs of our average non-maturity interest bearing
deposits. Our cost of total average deposits was 0.14 percent for
the first quarter 2022 as compared to 0.15 percent for the fourth
quarter 2021.
Loans, Deposits and Other Borrowings
Loans. Loans increased $1.2
billion to approximately $35.4 billion at March 31, 2022 from
December 31, 2021 primarily due to growth in the commercial
real estate, construction, non-PPP commercial and industrial and
residential mortgage loan categories, despite a $232.3 million
decrease in commercial and industrial PPP loans. Total commercial
real estate loans (including construction loans) increased $1.1
billion, or 22.1 percent on an annualized basis, to $21.9 billion
at March 31, 2022 as compared to December 31, 2021
reflecting continued strong organic loan production across most of
our geographic footprints. Commercial and industrial non-PPP loans
increased $176.2 million, or 13.0 percent on an annualized basis,
during the first quarter 2022 mainly resulting from the solid new
loan pipeline in most of our markets driven by direct calling
efforts of our growing commercial lending team. Residential
mortgage loans increased $146.9 million, or 12.9 percent on an
annualized basis, during the first quarter 2022 mainly due to new
loan activity in the purchased home market, and, to a lesser
extent, refinance loan volumes. Additionally, we originated
approximately $144 million of residential mortgage loans for
sale rather than investment during the first quarter 2022 as
compared to $229 million in the fourth quarter 2021. Residential
mortgage loans held for sale at fair value totaled $77.6 million
and $139.5 million at March 31, 2022 and December 31,
2021, respectively.
Deposits. Total deposits
increased $14.9 million to approximately $35.6 billion at
March 31, 2022 from December 31, 2021 due to increases of
$271.3 million and $16.3 million in the non-interest bearing and
non-maturity interest bearing deposit categories, respectively,
mostly offset by a $272.7 million decrease in time deposits. The
decrease in time deposits was driven by normal run-off of maturing
retail CDs with some continued migration to the more liquid deposit
product categories. Total brokered deposits (consisting of money
market deposit accounts) decreased approximately $203 million to
$1.2 billion at March 31, 2022 as compared to $1.4 billion at
December 31, 2021 as our funding mix continued to shift to our
commercial and retail deposit customers. Non-interest bearing
deposits; savings, NOW and money market deposits; and time deposits
represented approximately 33 percent, 57 percent and 10 percent of
total deposits as of March 31, 2022, respectively.
Other Borrowings. Short-term
borrowings decreased $171.5 million to $484.2 million at
March 31, 2022 as compared to December 31, 2021 largely
due to normal repayments of FHLB advances, partially offset by $125
million of federal funds purchased at March 31, 2022.
Long-term borrowings totaled $1.4 billion at March 31, 2022
and remained relatively unchanged from December 31, 2021.
Credit Quality
Non-Performing Assets (NPAs).
Total NPAs, consisting of non-accrual loans, other real estate
owned (OREO) and other repossessed assets decreased $12.7 million
to $232.7 million at March 31, 2022 as compared to
December 31, 2021 mainly due to a $9.8 million decrease in
non-accrual loans. Non-accrual loans decreased largely due to loan
payoffs net of new activity in several loan categories during the
first quarter 2022. Non-accrual loans represented 0.65 percent of
total loans at March 31, 2022 compared to 0.70 percent at
December 31, 2021.
Non-performing Taxi Medallion Loan
Portfolio. We continue to closely monitor our
non-performing taxi medallion loans totaling $85.3 million within
the non-accrual commercial and industrial loan category at
March 31, 2022. At March 31, 2022, all taxi medallion
loans were on non-accrual status and had related reserves of $58.2
million, or 68.2 percent of such loans, within the allowance for
loan losses.
Accruing Past Due Loans. Total
accruing past due loans (i.e., loans past due 30 days or more and
still accruing interest) increased $36.9 million to $92.8 million,
or 0.26 percent of total loans, at March 31, 2022 as compared
to $55.9 million, or 0.16 percent of total loans at
December 31, 2021. Commercial real estate loans past due 30 to
59 days and 60 to 89 days increased $16.4 million and $6.3 million,
respectively, to $30.8 million and $6.3 million, respectively at
March 31, 2022 as compared to December 31, 2021 mainly
due to two loans totaling $13.2 million and $6.0 million included
in these respective delinquency categories at March 31, 2022.
Commercial and industrial loans past due 60 to 89 days and 90 days
or more increased $6.6 million and $8.0 million, respectively, as
compared to December 31, 2021 mainly due to a few additional
loans that are considered well-secured and in the process of
collection.
Forbearance. In response to the
COVID-19 pandemic and its economic impact on certain customers,
Valley implemented short-term loan modifications under the CARES
Act such as payment deferrals, fee waivers, extensions of repayment
terms, or delays in payment, when requested by customers. At
March 31, 2022, Valley had approximately $23 million of
outstanding loans remaining in their payment deferral period under
short-term modifications, as compared to $28 million of loans in
deferral at December 31, 2021.
Allowance for Credit Losses for Loans
and Unfunded Commitments. The following table summarizes
the allocation of the allowance for credit losses to loan
categories and the allocation as a percentage of each loan category
at March 31, 2022, December 31, 2021 and March 31,
2021:
| |
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
| |
|
|
|
Allocation |
|
|
|
Allocation |
|
|
|
Allocation |
| |
|
|
|
as a % of |
|
|
|
as a % of |
|
|
|
as a % of |
| |
|
Allowance |
|
Loan |
|
Allowance |
|
Loan |
|
Allowance |
|
Loan |
| |
Allocation |
|
Category |
|
Allocation |
|
Category |
|
Allocation |
|
Category |
| |
($ in thousands) |
| Loan
Category: |
|
|
|
|
|
|
|
|
|
|
|
| Commercial and
industrial loans |
$ |
101,203 |
|
1.75 |
% |
|
$ |
103,090 |
|
1.76 |
% |
|
$ |
126,408 |
|
1.77 |
% |
| Commercial real
estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
189,927 |
|
0.96 |
|
|
|
193,258 |
|
1.02 |
% |
|
|
153,680 |
|
0.91 |
|
| |
Construction |
|
30,022 |
|
1.38 |
|
|
|
24,232 |
|
1.31 |
% |
|
|
20,556 |
|
1.15 |
|
| Total commercial
real estate loans |
|
219,949 |
|
1.00 |
|
|
|
217,490 |
|
1.05 |
% |
|
|
174,236 |
|
0.93 |
|
| Residential
mortgage loans |
|
28,189 |
|
0.60 |
|
|
|
25,120 |
|
0.55 |
% |
|
|
27,172 |
|
0.67 |
|
| Consumer
loans: |
|
|
|
|
|
|
|
|
|
|
|
| |
Home equity |
|
3,656 |
|
0.93 |
|
|
|
3,889 |
|
0.97 |
% |
|
|
4,199 |
|
1.03 |
|
| |
Auto and other consumer |
|
9,513 |
|
0.37 |
|
|
|
9,613 |
|
0.37 |
% |
|
|
10,865 |
|
0.46 |
|
| Total consumer
loans |
|
13,169 |
|
0.45 |
|
|
|
13,502 |
|
0.45 |
% |
|
|
15,064 |
|
0.54 |
|
| Allowance for loan
losses |
|
362,510 |
|
1.03 |
|
|
|
359,202 |
|
1.05 |
% |
|
|
342,880 |
|
1.05 |
|
| Allowance for
unfunded credit commitments |
|
16,742 |
|
|
|
|
16,500 |
|
|
|
|
11,433 |
|
|
| Total allowance
for credit losses for loans |
$ |
379,252 |
|
|
|
$ |
375,702 |
|
|
|
$ |
354,313 |
|
|
| Allowance for
credit losses for |
|
|
|
|
|
|
|
|
|
|
|
|
loans as a % total loans |
|
|
1.07 |
% |
|
|
|
1.10 |
% |
|
|
|
1.08 |
% |
Our loan portfolio, totaling $35.4 billion at
March 31, 2022, had net recoveries of loan charge-offs
totaling $50 thousand for the first quarter 2022 as compared to net
recoveries of $624 thousand for the fourth quarter 2021 and net
loan charge-offs of $6.1 million for the first quarter 2021. There
were charge-offs of taxi medallion loans of $206 thousand in the
first quarter 2022 as compared to $3.3 million during the first
quarter 2021. There were no charge-offs of taxi medallion loans in
the fourth quarter 2021.
The allowance for credit losses for loans,
comprised of our allowance for loan losses and unfunded credit
commitments, as a percentage of total loans was 1.07 percent at
March 31, 2022 as compared to 1.10 percent and 1.08 percent at
December 31, 2021 and March 31, 2021, respectively.
During the first quarter 2022, we recorded a provision for credit
losses for loans of $3.5 million as compared to a provision of
$11.6 million and $9.0 million for the fourth quarter 2021 and
first quarter 2021, respectively. The allocated reserves as a
percentage of commercial real estate loans decreased 6 basis points
to 0.96 percent at March 31, 2021 from December 31, 2021
mainly due to lower quantitative reserves for non-owner occupied
loans caused by improvement in the expected loss rates at
March 31, 2021.
Capital Adequacy
Valley’s regulatory capital ratios continue to
reflect its well capitalized position. Valley’s total risk-based
capital, common equity Tier 1 capital, Tier 1 capital and Tier 1
leverage capital ratios were 12.65 percent, 9.67 percent, 10.27
percent and 8.70 percent, respectively, at March 31, 2022.
Investor Conference Call
Valley will host a conference call with
investors and the financial community at 11:00 AM Eastern Daylight
Savings Time, today to discuss the first quarter 2022 earnings.
Those wishing to participate in the call may dial toll-free
866-354-0432 Conference Id: 3674992. The teleconference will also
be webcast live: https://edge.media-server.com/mmc/p/8n68sc23 and
archived on Valley’s website through Monday, May 30,
2022. Investor presentation materials will be made available
prior to the conference call at www.valley.com.
About Valley
As the principal subsidiary of Valley National
Bancorp, Valley National Bank is a regional bank with approximately
$50 billion in assets, including our recent acquisition of Bank
Leumi USA. Valley is committed to giving people and businesses the
power to succeed. Valley operates many convenient branch locations
and commercial banking offices across New Jersey, New York,
Florida, Alabama, California, and Illinois, and is committed to
providing the most convenient service, the latest innovations and
an experienced and knowledgeable team dedicated to meeting customer
needs. Helping communities grow and prosper is the heart of
Valley’s corporate citizenship philosophy. To learn more about
Valley, go to www.valley.com or call our Customer Care Center 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 our business, 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:
- the
inability to realize expected cost savings and synergies from the
Bank Leumi USA acquisition in amounts or in the timeframe
anticipated;
- greater than
expected costs or difficulties relating to Bank Leumi USA
integration matters;
- the inability to
retain customers and qualified employees of Bank Leumi USA;
- greater than
expected non-recurring charges related to the Bank Leumi USA
acquisition;
- the continued
impact of COVID-19 on the U.S. and global economies,
including business disruptions, reductions in employment and an
increase in business failures, specifically among our clients;
- the continued
impact of COVID-19 on our employees and our ability to provide
services to our customers and respond to their needs as more cases
of COVID-19 may arise in our primary markets;
- the impact of
forbearances or deferrals we are required or agree to as a result
of customer requests and/or government actions, including, but not
limited to our potential inability to recover fully deferred
payments from the borrower or the collateral;
- the risks
related to the discontinuation of the London Interbank Offered Rate
and other reference rates, including increased expenses and
litigation and the effectiveness of hedging strategies;
- damage verdicts
or settlements or restrictions related to existing or potential
class action litigation or individual litigation arising from
claims of violations of laws or regulations, contractual claims,
breach of fiduciary responsibility, negligence, fraud,
environmental laws, patent or trademark infringement, employment
related claims, and other matters;
- a prolonged
downturn in the economy, mainly in New Jersey, New York, Florida,
Alabama, California, and Illinois, as well as an unexpected decline
in commercial real estate values within our market areas;
- higher or lower
than expected income tax expense or tax rates, including increases
or decreases resulting from changes in uncertain tax position
liabilities, tax laws, regulations and case law;
- the inability to
grow customer deposits to keep pace with loan growth;
- a material
change in our allowance for credit losses under CECL due to
forecasted economic conditions and/or unexpected credit
deterioration in our loan and investment portfolios;
- the need to
supplement debt or equity capital to maintain or exceed internal
capital thresholds;
- greater than
expected technology related costs due to, among other factors,
prolonged or failed implementations, additional project staffing
and obsolescence caused by continuous and rapid market
innovations;
- the loss of or
decrease in lower-cost funding sources within our deposit base,
including our inability to achieve deposit retention targets under
Valley’s branch transformation strategy;
- cyber-attacks,
ransomware attacks, computer viruses or other malware that may
breach the security of our websites or other systems to obtain
unauthorized access to confidential information, destroy data,
disable or degrade service, or sabotage our systems;
- results of
examinations by the Office of the Comptroller of the Currency
(OCC), the Federal Reserve Bank (FRB), the Consumer Financial
Protection Bureau (CFPB) and other regulatory authorities,
including the possibility that any such regulatory authority may,
among other things, require us to increase our allowance for credit
losses, write-down assets, reimburse customers, change the way we
do business, or limit or eliminate certain other banking
activities;
- our inability or
determination not to pay dividends at current levels, or at all,
because of inadequate earnings, regulatory restrictions or
limitations, changes in our capital requirements or a decision to
increase capital by retaining more earnings;
- unanticipated
loan delinquencies, loss of collateral, decreased service revenues,
and other potential negative effects on our business caused by
severe weather, the COVID-19 pandemic or other external events;
and
- unexpected
significant declines in the loan portfolio due to the lack of
economic expansion, increased competition, large prepayments,
changes in regulatory lending guidance or other factors.
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, 2021.
We undertake no duty to update any
forward-looking statement to conform the statement to actual
results or changes in our expectations. Although we believe that
the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity,
performance or achievements.
-Tables to Follow-
SELECTED FINANCIAL DATA
| |
Three Months Ended |
| |
March 31, |
|
December 31, |
|
March 31, |
|
($ in thousands, except for share data) |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
| FINANCIAL
DATA: |
|
|
|
|
|
| Net interest income - FTE
(1) |
$ |
318,363 |
|
|
$ |
316,000 |
|
|
$ |
293,584 |
|
| Net interest income |
$ |
317,669 |
|
|
$ |
315,301 |
|
|
$ |
292,667 |
|
| Non-interest income |
|
39,270 |
|
|
|
38,223 |
|
|
|
31,233 |
|
| Total revenue |
|
356,939 |
|
|
|
353,524 |
|
|
|
323,900 |
|
| Non-interest expense |
|
197,340 |
|
|
|
184,514 |
|
|
|
160,213 |
|
| Pre-provision net revenue |
|
159,599 |
|
|
|
169,010 |
|
|
|
163,687 |
|
| Provision for credit
losses |
|
3,557 |
|
|
|
11,699 |
|
|
|
8,656 |
|
| Income tax expense |
|
39,314 |
|
|
|
42,273 |
|
|
|
39,321 |
|
| Net income |
|
116,728 |
|
|
|
115,038 |
|
|
|
115,710 |
|
| Dividends on preferred
stock |
|
3,172 |
|
|
|
3,172 |
|
|
|
3,172 |
|
| Net income available to common
shareholders |
$ |
113,556 |
|
|
$ |
111,866 |
|
|
$ |
112,538 |
|
| Weighted average number of
common shares outstanding: |
|
|
|
|
|
|
Basic |
|
421,573,843 |
|
|
|
411,775,590 |
|
|
|
405,152,605 |
|
|
Diluted |
|
423,506,550 |
|
|
|
414,472,820 |
|
|
|
407,636,765 |
|
| Per common share data: |
|
|
|
|
|
|
Basic earnings |
$ |
0.27 |
|
|
$ |
0.27 |
|
|
$ |
0.28 |
|
|
Diluted earnings |
|
0.27 |
|
|
|
0.27 |
|
|
|
0.28 |
|
|
Cash dividends declared |
|
0.11 |
|
|
|
0.11 |
|
|
|
0.11 |
|
| Closing stock price -
high |
|
15.02 |
|
|
|
14.82 |
|
|
|
14.37 |
|
| Closing stock price - low |
|
12.91 |
|
|
|
13.04 |
|
|
|
9.74 |
|
| CORE ADJUSTED
FINANCIAL DATA: (2) |
|
|
|
|
|
| Net income available to common
shareholders, as adjusted |
$ |
117,141 |
|
|
$ |
117,366 |
|
|
$ |
112,623 |
|
| Basic earnings per share, as
adjusted |
|
0.28 |
|
|
|
0.29 |
|
|
|
0.28 |
|
| Diluted earnings per share, as
adjusted |
|
0.28 |
|
|
|
0.28 |
|
|
|
0.28 |
|
| FINANCIAL
RATIOS: |
|
|
|
|
|
| Net interest margin |
|
3.15 |
% |
|
|
3.22 |
% |
|
|
3.13 |
% |
| Net interest margin - FTE
(1) |
|
3.16 |
|
|
|
3.23 |
|
|
|
3.14 |
|
| Annualized return on average
assets |
|
1.07 |
|
|
|
1.08 |
|
|
|
1.14 |
|
| Annualized return on avg.
shareholders’ equity |
|
9.15 |
|
|
|
9.38 |
|
|
|
9.96 |
|
| Annualized return on avg.
tangible shareholders’ equity (2) |
|
13.09 |
|
|
|
13.44 |
|
|
|
14.49 |
|
| Efficiency ratio (3) |
|
55.29 |
|
|
|
52.19 |
|
|
|
49.46 |
|
| CORE ADJUSTED
FINANCIAL RATIOS: (2) |
|
|
|
|
|
| Annualized return on average
assets, as adjusted |
|
1.10 |
% |
|
|
1.14 |
% |
|
|
1.14 |
% |
| Annualized return on average
shareholders’ equity, as adjusted |
|
9.43 |
|
|
|
9.83 |
|
|
|
9.97 |
|
| Annualized return on average
tangible shareholders’ equity, as adjusted |
|
13.49 |
|
|
|
14.08 |
|
|
|
14.50 |
|
| Efficiency ratio, as
adjusted |
|
53.18 |
|
|
|
49.44 |
|
|
|
48.60 |
|
| |
|
|
|
|
|
| AVERAGE BALANCE SHEET
ITEMS: |
|
|
|
|
|
| Assets |
$ |
43,570,251 |
|
|
$ |
42,473,828 |
|
|
$ |
40,770,731 |
|
| Interest earning assets |
|
40,283,048 |
|
|
|
39,193,014 |
|
|
|
37,386,219 |
|
| Loans |
|
34,623,402 |
|
|
|
33,338,128 |
|
|
|
32,582,479 |
|
| Interest bearing
liabilities |
|
26,147,915 |
|
|
|
25,582,956 |
|
|
|
25,954,182 |
|
| Deposits |
|
35,763,683 |
|
|
|
34,746,786 |
|
|
|
31,835,286 |
|
| Shareholders’ equity |
|
5,104,709 |
|
|
|
4,905,343 |
|
|
|
4,645,400 |
|
| |
As Of |
| BALANCE SHEET
ITEMS: |
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
(In thousands) |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
| Assets |
$ |
43,551,457 |
|
|
$ |
43,446,443 |
|
|
$ |
41,278,007 |
|
|
$ |
41,274,228 |
|
|
$ |
41,178,011 |
|
| Total loans |
|
35,364,405 |
|
|
|
34,153,657 |
|
|
|
32,606,814 |
|
|
|
32,457,454 |
|
|
|
32,686,416 |
|
| Deposits |
|
35,647,336 |
|
|
|
35,632,412 |
|
|
|
33,632,605 |
|
|
|
33,194,774 |
|
|
|
32,585,209 |
|
| Shareholders’ equity |
|
5,096,384 |
|
|
|
5,084,066 |
|
|
|
4,822,498 |
|
|
|
4,737,807 |
|
|
|
4,659,670 |
|
| |
|
|
|
|
|
|
|
|
|
| LOANS: |
|
|
|
|
|
|
|
|
|
| (In thousands) |
|
|
|
|
|
|
|
|
|
| Commercial and industrial
loans: |
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
$ |
5,587,781 |
|
|
$ |
5,411,601 |
|
|
$ |
4,761,227 |
|
|
$ |
4,733,771 |
|
|
$ |
4,784,017 |
|
|
Commercial and industrial PPP loans |
|
203,609 |
|
|
|
435,950 |
|
|
|
874,033 |
|
|
|
1,350,684 |
|
|
|
2,364,627 |
|
|
Total commercial and industrial |
|
5,791,390 |
|
|
|
5,847,551 |
|
|
|
5,635,260 |
|
|
|
6,084,455 |
|
|
|
7,148,644 |
|
| Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
19,763,202 |
|
|
|
18,935,486 |
|
|
|
17,912,070 |
|
|
|
17,512,142 |
|
|
|
16,923,627 |
|
|
Construction |
|
2,174,542 |
|
|
|
1,854,580 |
|
|
|
1,804,580 |
|
|
|
1,752,838 |
|
|
|
1,786,331 |
|
|
Total commercial real estate |
|
21,937,744 |
|
|
|
20,790,066 |
|
|
|
19,716,650 |
|
|
|
19,264,980 |
|
|
|
18,709,958 |
|
| Residential mortgage |
|
4,691,935 |
|
|
|
4,545,064 |
|
|
|
4,332,422 |
|
|
|
4,226,975 |
|
|
|
4,060,492 |
|
| Consumer: |
|
|
|
|
|
|
|
|
|
|
Home equity |
|
393,538 |
|
|
|
400,779 |
|
|
|
402,658 |
|
|
|
410,856 |
|
|
|
409,576 |
|
|
Automobile |
|
1,552,928 |
|
|
|
1,570,036 |
|
|
|
1,563,698 |
|
|
|
1,531,262 |
|
|
|
1,444,883 |
|
|
Other consumer |
|
996,870 |
|
|
|
1,000,161 |
|
|
|
956,126 |
|
|
|
938,926 |
|
|
|
912,863 |
|
|
Total consumer loans |
|
2,943,336 |
|
|
|
2,970,976 |
|
|
|
2,922,482 |
|
|
|
2,881,044 |
|
|
|
2,767,322 |
|
| Total loans |
$ |
35,364,405 |
|
|
$ |
34,153,657 |
|
|
$ |
32,606,814 |
|
|
$ |
32,457,454 |
|
|
$ |
32,686,416 |
|
| |
|
|
|
|
|
|
|
|
|
| CAPITAL
RATIOS: |
|
|
|
|
|
|
|
|
|
| Book value per common
share |
$ |
11.60 |
|
|
$ |
11.57 |
|
|
$ |
11.32 |
|
|
$ |
11.15 |
|
|
$ |
10.97 |
|
| Tangible book value per common
share (2) |
|
7.93 |
|
|
|
7.94 |
|
|
|
7.78 |
|
|
|
7.59 |
|
|
|
7.39 |
|
| Tangible common equity to
tangible assets (2) |
|
7.96 |
% |
|
|
7.98 |
% |
|
|
7.95 |
% |
|
|
7.73 |
% |
|
|
7.55 |
% |
| Tier 1 leverage capital |
|
8.70 |
|
|
|
8.88 |
|
|
|
8.63 |
|
|
|
8.49 |
|
|
|
8.37 |
|
| Common equity tier 1
capital |
|
9.67 |
|
|
|
10.06 |
|
|
|
10.06 |
|
|
|
10.04 |
|
|
|
10.08 |
|
| Tier 1 risk-based capital |
|
10.27 |
|
|
|
10.69 |
|
|
|
10.73 |
|
|
|
10.73 |
|
|
|
10.79 |
|
| Total risk-based capital |
|
12.65 |
|
|
|
13.10 |
|
|
|
13.24 |
|
|
|
13.36 |
|
|
|
12.76 |
|
| |
Three Months Ended |
| ALLOWANCE FOR CREDIT
LOSSES: |
March 31, |
|
December 31, |
|
March 31, |
|
($ in thousands) |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
| Allowance for credit
losses for loans |
|
|
|
|
|
| Beginning balance |
$ |
375,702 |
|
|
$ |
356,927 |
|
|
$ |
351,354 |
|
| Allowance for purchased credit
deteriorated (PCD) loans |
|
— |
|
|
|
6,542 |
|
|
|
— |
|
| Loans charged-off: |
|
|
|
|
|
|
Commercial and industrial |
|
(1,571 |
) |
|
|
(2,224 |
) |
|
|
(7,142 |
) |
|
Commercial real estate |
|
(173 |
) |
|
|
— |
|
|
|
(382 |
) |
|
Residential mortgage |
|
(26 |
) |
|
|
(1 |
) |
|
|
(138 |
) |
|
Total consumer |
|
(825 |
) |
|
|
(914 |
) |
|
|
(1,138 |
) |
| Total loans charged-off |
|
(2,595 |
) |
|
|
(3,139 |
) |
|
|
(8,800 |
) |
| Charged-off loans
recovered: |
|
|
|
|
|
|
Commercial and industrial |
|
824 |
|
|
|
1,153 |
|
|
|
1,589 |
|
|
Commercial real estate |
|
107 |
|
|
|
1,794 |
|
|
|
65 |
|
|
Construction |
|
— |
|
|
|
— |
|
|
|
4 |
|
|
Residential mortgage |
|
457 |
|
|
|
100 |
|
|
|
157 |
|
|
Total consumer |
|
1,257 |
|
|
|
716 |
|
|
|
930 |
|
| Total loans recovered |
|
2,645 |
|
|
|
3,763 |
|
|
|
2,745 |
|
| Net recoveries
(charge-offs) |
|
50 |
|
|
|
624 |
|
|
|
(6,055 |
) |
| Provision for credit losses
for loans |
|
3,500 |
|
|
|
11,609 |
|
|
|
9,014 |
|
| Ending balance |
$ |
379,252 |
|
|
$ |
375,702 |
|
|
$ |
354,313 |
|
| Components of
allowance for credit losses for loans: |
|
|
|
|
|
|
Allowance for loan losses |
$ |
362,510 |
|
|
$ |
359,202 |
|
|
$ |
342,880 |
|
|
Allowance for unfunded credit commitments |
|
16,742 |
|
|
|
16,500 |
|
|
|
11,433 |
|
| Allowance for credit losses
for loans |
$ |
379,252 |
|
|
$ |
375,702 |
|
|
$ |
354,313 |
|
| Components of
provision for credit losses for loans: |
|
|
|
|
|
|
Provision for credit losses for loans |
$ |
3,258 |
|
|
$ |
9,509 |
|
|
$ |
8,692 |
|
|
Provision for unfunded credit commitments |
|
242 |
|
|
|
2,100 |
|
|
|
322 |
|
| Total provision for credit
losses for loans |
$ |
3,500 |
|
|
$ |
11,609 |
|
|
$ |
9,014 |
|
| Annualized ratio of total net
(recoveries) charge-offs to average loans |
|
0.00 |
% |
|
|
(0.01 |
)% |
|
|
0.07 |
% |
| Allowance for credit losses
for loans as a % of total loans |
|
1.07 |
|
|
|
1.10 |
|
|
|
1.08 |
|
| |
As of |
| ASSET
QUALITY: |
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
($ in thousands) |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
| Accruing past due loans: |
|
|
|
|
|
|
|
|
|
| 30 to 59 days past due: |
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
$ |
6,723 |
|
|
$ |
6,717 |
|
|
$ |
2,677 |
|
|
$ |
3,867 |
|
|
$ |
3,763 |
|
|
Commercial real estate |
|
30,807 |
|
|
|
14,421 |
|
|
|
22,956 |
|
|
|
40,524 |
|
|
|
11,655 |
|
|
Construction |
|
1,708 |
|
|
|
1,941 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Residential mortgage |
|
9,266 |
|
|
|
10,999 |
|
|
|
9,293 |
|
|
|
8,479 |
|
|
|
16,004 |
|
|
Total consumer |
|
5,862 |
|
|
|
6,811 |
|
|
|
5,463 |
|
|
|
6,242 |
|
|
|
5,480 |
|
| Total 30 to 59 days past
due |
|
54,366 |
|
|
|
40,889 |
|
|
|
40,389 |
|
|
|
59,112 |
|
|
|
36,902 |
|
| 60 to 89 days past due: |
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
|
14,461 |
|
|
|
7,870 |
|
|
|
985 |
|
|
|
1,361 |
|
|
|
1,768 |
|
|
Commercial real estate |
|
6,314 |
|
|
|
— |
|
|
|
5,897 |
|
|
|
11,451 |
|
|
|
5,455 |
|
|
Construction |
|
3,125 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Residential mortgage |
|
2,560 |
|
|
|
3,314 |
|
|
|
974 |
|
|
|
1,608 |
|
|
|
2,233 |
|
|
Total consumer |
|
554 |
|
|
|
1,020 |
|
|
|
1,617 |
|
|
|
985 |
|
|
|
1,021 |
|
| Total 60 to 89 days past
due |
|
27,014 |
|
|
|
12,204 |
|
|
|
9,473 |
|
|
|
15,405 |
|
|
|
10,477 |
|
| 90 or more days past due: |
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
|
9,261 |
|
|
|
1,273 |
|
|
|
2,083 |
|
|
|
2,351 |
|
|
|
2,515 |
|
|
Commercial real estate |
|
— |
|
|
|
32 |
|
|
|
1,942 |
|
|
|
1,948 |
|
|
|
— |
|
|
Residential mortgage |
|
1,746 |
|
|
|
677 |
|
|
|
1,002 |
|
|
|
956 |
|
|
|
2,472 |
|
|
Total consumer |
|
400 |
|
|
|
789 |
|
|
|
325 |
|
|
|
463 |
|
|
|
417 |
|
| Total 90 or more days past
due |
|
11,407 |
|
|
|
2,771 |
|
|
|
5,352 |
|
|
|
5,718 |
|
|
|
5,404 |
|
| Total accruing past due
loans |
$ |
92,787 |
|
|
$ |
55,864 |
|
|
$ |
55,214 |
|
|
$ |
80,235 |
|
|
$ |
52,783 |
|
| Non-accrual loans: |
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
$ |
96,631 |
|
|
$ |
99,918 |
|
|
$ |
100,614 |
|
|
$ |
102,594 |
|
|
$ |
108,988 |
|
|
Commercial real estate |
|
79,180 |
|
|
|
83,592 |
|
|
|
95,843 |
|
|
|
58,893 |
|
|
|
54,004 |
|
|
Construction |
|
17,618 |
|
|
|
17,641 |
|
|
|
17,653 |
|
|
|
17,660 |
|
|
|
71 |
|
|
Residential mortgage |
|
33,275 |
|
|
|
35,207 |
|
|
|
33,648 |
|
|
|
35,941 |
|
|
|
33,655 |
|
|
Total consumer |
|
3,754 |
|
|
|
3,858 |
|
|
|
4,073 |
|
|
|
4,924 |
|
|
|
7,292 |
|
| Total non-accrual loans |
|
230,458 |
|
|
|
240,216 |
|
|
|
251,831 |
|
|
|
220,012 |
|
|
|
204,010 |
|
| Other real estate owned
(OREO) |
|
1,024 |
|
|
|
2,259 |
|
|
|
3,967 |
|
|
|
4,523 |
|
|
|
4,521 |
|
| Other repossessed assets |
|
1,176 |
|
|
|
2,931 |
|
|
|
1,896 |
|
|
|
2,060 |
|
|
|
1,857 |
|
| Non-accrual debt
securities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
129 |
|
| Total non-performing
assets |
$ |
232,658 |
|
|
$ |
245,406 |
|
|
$ |
257,694 |
|
|
$ |
226,595 |
|
|
$ |
210,517 |
|
| Performing troubled debt
restructured loans |
$ |
56,538 |
|
|
$ |
71,330 |
|
|
$ |
64,832 |
|
|
$ |
64,080 |
|
|
$ |
67,102 |
|
| Total non-accrual loans as a %
of loans |
|
0.65 |
% |
|
|
0.70 |
% |
|
|
0.77 |
% |
|
|
0.68 |
% |
|
|
0.62 |
% |
| Total accruing past due and
non-accrual loans as a % of loans |
|
0.91 |
% |
|
|
0.87 |
% |
|
|
0.94 |
% |
|
|
0.93 |
% |
|
|
0.79 |
% |
| Allowance for losses on loans
as a % of non-accrual loans |
|
157.30 |
% |
|
|
149.53 |
% |
|
|
136.01 |
% |
|
|
154.23 |
% |
|
|
168.07 |
% |
NOTES TO SELECTED FINANCIAL DATA
|
(1 |
) |
Net interest income and net interest margin are presented on a tax
equivalent basis using a 21 percent federal tax rate. Valley
believes that this presentation provides comparability of net
interest income and net interest margin arising from both taxable
and tax-exempt sources and is consistent with industry practice and
SEC rules. |
|
(2 |
) |
This press release contains certain supplemental financial
information, described in the Notes below, which has been
determined by methods other than U.S. Generally Accepted Accounting
Principles (“GAAP”) that management uses in its analysis of
Valley’s performance. Management believes these non-GAAP financial
measures provide information useful to investors in understanding
Valley’s financial results. Specifically, Valley provides measures
based on what it believes are its core operating earnings on a
consistent basis and excludes material non-core operating items
which affect the GAAP reporting of results of operations.
Management utilizes these measures for internal planning and
forecasting purposes. Management believes that Valley’s
presentation and discussion, together with the accompanying
reconciliations, provides a complete understanding of factors and
trends affecting Valley’s business and allows investors to view
performance in a manner similar to management. These non-GAAP
measures should not be considered a substitute for GAAP basis
measures and results and Valley strongly encourages investors to
review its consolidated financial statements in their entirety and
not to rely on any single financial measure. Because non-GAAP
financial measures are not standardized, it may not be possible to
compare these financial measures with other companies’ non-GAAP
financial measures having the same or similar names. |
| |
Three Months Ended |
| |
March 31, |
|
December 31, |
|
March 31, |
|
($ in thousands, except for share data) |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
| Adjusted net income
available to common shareholders: |
|
|
|
|
|
| Net income, as reported |
$ |
116,728 |
|
|
$ |
115,038 |
|
|
$ |
115,710 |
|
|
Add: Losses on available for sale and held to maturity securities
transactions (net of tax)(a) |
|
6 |
|
|
|
9 |
|
|
|
85 |
|
|
Add: Merger related expenses (net of tax)(b) |
|
3,579 |
|
|
|
5,491 |
|
|
|
— |
|
| Net income, as adjusted |
$ |
120,313 |
|
|
$ |
120,538 |
|
|
$ |
115,795 |
|
| Dividends on preferred
stock |
|
3,172 |
|
|
|
3,172 |
|
|
|
3,172 |
|
| Net income available to common
shareholders, as adjusted |
$ |
117,141 |
|
|
$ |
117,366 |
|
|
$ |
112,623 |
|
| __________ |
|
|
|
|
|
|
(a) Included in (losses) gains on securities transactions,
net. |
|
(b) Merger related expenses are primarily within salary and
employee benefits expense, professional and legal fees and other
expense. |
| |
| Adjusted per common
share data: |
|
|
|
|
|
| Net income available to common
shareholders, as adjusted |
$ |
117,141 |
|
|
$ |
117,366 |
|
|
$ |
112,623 |
|
| Average number of shares
outstanding |
|
421,573,843 |
|
|
|
411,775,590 |
|
|
|
405,152,605 |
|
|
Basic earnings, as adjusted |
$ |
0.28 |
|
|
$ |
0.29 |
|
|
$ |
0.28 |
|
| Average number of diluted
shares outstanding |
|
423,506,550 |
|
|
|
414,472,820 |
|
|
|
407,636,765 |
|
|
Diluted earnings, as adjusted |
$ |
0.28 |
|
|
$ |
0.28 |
|
|
$ |
0.28 |
|
| Adjusted annualized
return on average tangible shareholders’ equity: |
|
|
|
|
|
| Net income, as adjusted |
$ |
120,313 |
|
|
$ |
120,538 |
|
|
$ |
115,795 |
|
| Average shareholders’
equity |
$ |
5,104,709 |
|
|
$ |
4,905,343 |
|
|
$ |
4,645,400 |
|
|
Less: Average goodwill and other intangible assets |
|
1,538,356 |
|
|
|
1,481,951 |
|
|
|
1,451,750 |
|
| Average tangible shareholders’
equity |
$ |
3,566,353 |
|
|
$ |
3,423,392 |
|
|
$ |
3,193,650 |
|
| Annualized return on average
tangible shareholders’ equity, as adjusted |
|
13.49 |
% |
|
|
14.08 |
% |
|
|
14.50 |
% |
| Adjusted annualized
return on average assets: |
|
|
|
|
|
| Net income, as adjusted |
$ |
120,313 |
|
|
$ |
120,538 |
|
|
$ |
115,795 |
|
| Average assets |
$ |
43,570,251 |
|
|
$ |
42,473,828 |
|
|
$ |
40,770,731 |
|
| Annualized return on average
assets, as adjusted |
|
1.10 |
% |
|
|
1.14 |
% |
|
|
1.14 |
% |
| |
Three Months Ended |
| |
March 31, |
|
December 31, |
|
March 31, |
|
($ in thousands) |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
| Adjusted annualized
return on average shareholders’ equity: |
|
|
|
|
|
| Net income, as adjusted |
$ |
120,313 |
|
|
$ |
120,538 |
|
|
$ |
115,795 |
|
| Average shareholders’
equity |
$ |
5,104,709 |
|
|
$ |
4,905,343 |
|
|
$ |
4,645,400 |
|
| Annualized return on average
shareholders’ equity, as adjusted |
|
9.43 |
% |
|
|
9.83 |
% |
|
|
9.97 |
% |
| Annualized return on
average tangible shareholders’ equity: |
|
|
|
|
|
| Net income, as reported |
$ |
116,728 |
|
|
$ |
115,038 |
|
|
$ |
115,710 |
|
| Average shareholders’
equity |
$ |
5,104,709 |
|
|
$ |
4,905,343 |
|
|
$ |
4,645,400 |
|
|
Less: Average goodwill and other intangible assets |
|
1,538,356 |
|
|
|
1,481,951 |
|
|
|
1,451,750 |
|
| Average tangible shareholders’
equity |
$ |
3,566,353 |
|
|
$ |
3,423,392 |
|
|
$ |
3,193,650 |
|
| Annualized return on average
tangible shareholders’ equity |
|
13.09 |
% |
|
|
13.44 |
% |
|
|
14.49 |
% |
| Adjusted efficiency
ratio: |
|
|
|
|
|
| Non-interest expense, as
reported |
$ |
197,340 |
|
|
$ |
184,514 |
|
|
$ |
160,213 |
|
|
Less: Merger-related expenses (pre-tax) |
|
4,628 |
|
|
|
7,613 |
|
|
|
— |
|
|
Less: Amortization of tax credit investments (pre-tax) |
|
2,896 |
|
|
|
2,115 |
|
|
|
2,744 |
|
|
Non-interest expense, as adjusted |
$ |
189,816 |
|
|
$ |
174,786 |
|
|
$ |
157,469 |
|
| Net interest income |
|
317,669 |
|
|
|
315,301 |
|
|
|
292,667 |
|
| Non-interest income, as
reported |
|
39,270 |
|
|
|
38,223 |
|
|
|
31,233 |
|
| Add: Losses on available for
sale and held to maturity securities transactions, net
(pre-tax) |
|
9 |
|
|
|
12 |
|
|
|
118 |
|
| Non-interest income, as
adjusted |
$ |
39,279 |
|
|
$ |
38,235 |
|
|
$ |
31,351 |
|
|
Gross operating income, as adjusted |
$ |
356,948 |
|
|
$ |
353,536 |
|
|
$ |
324,018 |
|
|
Efficiency ratio, as adjusted |
|
53.18 |
% |
|
|
49.44 |
% |
|
|
48.60 |
% |
| |
As of |
| |
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
($ in thousands, except for share data) |
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
|
|
2021 |
|
| Tangible book value
per common share: |
|
|
|
|
|
|
|
|
|
| Common shares outstanding |
|
421,394,277 |
|
|
|
421,437,068 |
|
|
|
407,313,664 |
|
|
|
406,083,790 |
|
|
|
405,797,538 |
|
| Shareholders’ equity |
$ |
5,096,384 |
|
|
$ |
5,084,066 |
|
|
$ |
4,822,498 |
|
|
$ |
4,737,807 |
|
|
$ |
4,659,670 |
|
|
Less: Preferred stock |
|
209,691 |
|
|
|
209,691 |
|
|
|
209,691 |
|
|
|
209,691 |
|
|
|
209,691 |
|
|
Less: Goodwill and other intangible assets |
|
1,543,238 |
|
|
|
1,529,394 |
|
|
|
1,444,967 |
|
|
|
1,447,965 |
|
|
|
1,450,414 |
|
| Tangible common shareholders’
equity |
$ |
3,343,455 |
|
|
$ |
3,344,981 |
|
|
$ |
3,167,840 |
|
|
$ |
3,080,151 |
|
|
$ |
2,999,565 |
|
|
Tangible book value per common share |
$ |
7.93 |
|
|
$ |
7.94 |
|
|
$ |
7.78 |
|
|
$ |
7.59 |
|
|
$ |
7.39 |
|
| Tangible
common equity to tangible assets: |
|
|
|
|
|
|
|
|
| Tangible common shareholders’
equity |
$ |
3,343,455 |
|
|
$ |
3,344,981 |
|
|
$ |
3,167,840 |
|
|
$ |
3,080,151 |
|
|
$ |
2,999,565 |
|
| Total assets |
$ |
43,551,457 |
|
|
$ |
43,446,443 |
|
|
$ |
41,278,007 |
|
|
$ |
41,274,228 |
|
|
$ |
41,178,011 |
|
|
Less: Goodwill and other intangible assets |
|
1,543,238 |
|
|
|
1,529,394 |
|
|
|
1,444,967 |
|
|
|
1,447,965 |
|
|
|
1,450,414 |
|
| Tangible assets |
$ |
42,008,219 |
|
|
$ |
41,917,049 |
|
|
$ |
39,833,040 |
|
|
$ |
39,826,263 |
|
|
$ |
39,727,597 |
|
|
Tangible common equity to tangible assets |
|
7.96 |
% |
|
|
7.98 |
% |
|
|
7.95 |
% |
|
|
7.73 |
% |
|
|
7.55 |
% |
| |
|
|
(3 |
) |
The efficiency ratio measures Valley’s total non-interest expense
as a percentage of net interest income plus total non-interest
income. |
| |
|
| |
SHAREHOLDERS
RELATIONSRequests for copies of reports and/or other
inquiries should be directed to Tina Zarkadas, Assistant Vice
President, Shareholder Relations Specialist, Valley National
Bancorp, 1455 Valley Road, Wayne, New Jersey, 07470, by telephone
at (973) 305-3380, by fax at (973) 305-1364 or by e-mail at
tzarkadas@valley.com. |
| |
March 31, |
|
December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
| |
(Unaudited) |
|
|
| Assets |
|
|
|
| Cash and due from banks |
$ |
424,035 |
|
|
$ |
205,156 |
|
| Interest bearing deposits with
banks |
|
306,885 |
|
|
|
1,844,764 |
|
| Investment securities: |
|
|
|
|
Equity securities |
|
35,992 |
|
|
|
36,473 |
|
|
Trading debt securities |
|
11,739 |
|
|
|
38,130 |
|
|
Available for sale debt securities |
|
1,015,034 |
|
|
|
1,128,809 |
|
|
Held to maturity debt securities (net of allowance for credit
losses of $1,222 at March 31, 2022 and $1,165 at December 31,
2021) |
|
3,071,983 |
|
|
|
2,667,532 |
|
|
Total investment securities |
|
4,134,748 |
|
|
|
3,870,944 |
|
| Loans held for sale, at fair
value |
|
77,632 |
|
|
|
139,516 |
|
| Loans |
|
35,364,405 |
|
|
|
34,153,657 |
|
|
Less: Allowance for loan losses |
|
(362,510 |
) |
|
|
(359,202 |
) |
|
Net loans |
|
35,001,895 |
|
|
|
33,794,455 |
|
| Premises and equipment, net |
|
337,479 |
|
|
|
326,306 |
|
| Lease right of use assets |
|
258,512 |
|
|
|
259,117 |
|
| Bank owned life insurance |
|
566,440 |
|
|
|
566,770 |
|
| Accrued interest receivable |
|
102,667 |
|
|
|
96,882 |
|
| Goodwill |
|
1,468,354 |
|
|
|
1,459,008 |
|
| Other intangible assets, net |
|
74,884 |
|
|
|
70,386 |
|
| Other assets |
|
797,926 |
|
|
|
813,139 |
|
|
Total Assets |
$ |
43,551,457 |
|
|
$ |
43,446,443 |
|
| Liabilities |
|
|
|
| Deposits: |
|
|
|
|
Non-interest bearing |
$ |
11,947,001 |
|
|
$ |
11,675,748 |
|
|
Interest bearing: |
|
|
|
|
Savings, NOW and money market |
|
20,285,967 |
|
|
|
20,269,620 |
|
|
Time |
|
3,414,368 |
|
|
|
3,687,044 |
|
|
Total deposits |
|
35,647,336 |
|
|
|
35,632,412 |
|
| Short-term borrowings |
|
484,181 |
|
|
|
655,726 |
|
| Long-term borrowings |
|
1,409,142 |
|
|
|
1,423,676 |
|
| Junior subordinated debentures
issued to capital trusts |
|
56,500 |
|
|
|
56,413 |
|
| Lease liabilities |
|
282,437 |
|
|
|
283,106 |
|
| Accrued expenses and other
liabilities |
|
575,477 |
|
|
|
311,044 |
|
|
Total Liabilities |
|
38,455,073 |
|
|
|
38,362,377 |
|
| Shareholders’
Equity |
|
|
|
| Preferred stock, no par value;
50,000,000 authorized shares: |
|
|
|
|
Series A (4,600,000 shares issued at March 31, 2022 and December
31, 2021) |
|
111,590 |
|
|
|
111,590 |
|
|
Series B (4,000,000 shares issued at March 31, 2022 and December
31, 2021) |
|
98,101 |
|
|
|
98,101 |
|
| Common stock (no par value,
authorized 650,000,000 shares; issued 423,034,027 at March 31, 2022
and December 31, 2021) |
|
148,482 |
|
|
|
148,482 |
|
| Surplus |
|
3,872,236 |
|
|
|
3,883,035 |
|
| Retained earnings |
|
945,225 |
|
|
|
883,645 |
|
| Accumulated other comprehensive
loss |
|
(56,098 |
) |
|
|
(17,932 |
) |
| Treasury stock, at cost
(1,639,750 shares at March 31, 2022 and 1,596,959 common shares at
December 31, 2021) |
|
(23,152 |
) |
|
|
(22,855 |
) |
|
Total Shareholders’ Equity |
|
5,096,384 |
|
|
|
5,084,066 |
|
|
Total Liabilities and Shareholders’ Equity |
$ |
43,551,457 |
|
|
$ |
43,446,443 |
|
| |
Three Months Ended |
| |
March 31, |
|
December 31, |
|
March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
2021 |
|
| Interest
Income |
|
|
|
|
|
| Interest and fees on loans |
$ |
317,365 |
|
|
$ |
319,141 |
|
$ |
313,181 |
|
| Interest and dividends on
investment securities: |
|
|
|
|
|
|
Taxable |
|
18,439 |
|
|
|
15,852 |
|
|
13,166 |
|
|
Tax-exempt |
|
2,517 |
|
|
|
2,535 |
|
|
3,356 |
|
|
Dividends |
|
1,676 |
|
|
|
1,814 |
|
|
1,871 |
|
| Interest on federal funds sold
and other short-term investments |
|
461 |
|
|
|
637 |
|
|
224 |
|
|
Total interest income |
|
340,458 |
|
|
|
339,979 |
|
|
331,798 |
|
| Interest
Expense |
|
|
|
|
|
| Interest on deposits: |
|
|
|
|
|
|
Savings, NOW and money market |
|
9,627 |
|
|
|
9,983 |
|
|
11,125 |
|
|
Time |
|
2,831 |
|
|
|
3,328 |
|
|
11,093 |
|
| Interest on short-term
borrowings |
|
806 |
|
|
|
984 |
|
|
1,758 |
|
| Interest on long-term borrowings
and junior subordinated debentures |
|
9,525 |
|
|
|
10,383 |
|
|
15,155 |
|
|
Total interest expense |
|
22,789 |
|
|
|
24,678 |
|
|
39,131 |
|
| Net Interest
Income |
|
317,669 |
|
|
|
315,301 |
|
|
292,667 |
|
| Provision (credit) for credit
losses for held to maturity securities |
|
57 |
|
|
|
90 |
|
|
(358 |
) |
| Provision for credit losses for
loans |
|
3,500 |
|
|
|
11,609 |
|
|
9,014 |
|
|
Net Interest Income After Provision for Credit
Losses |
|
314,112 |
|
|
|
303,602 |
|
|
284,011 |
|
| Non-Interest
Income |
|
|
|
|
|
| Trust and investment
services |
|
5,131 |
|
|
|
4,499 |
|
|
3,329 |
|
| Insurance commissions |
|
1,859 |
|
|
|
2,005 |
|
|
1,558 |
|
| Service charges on deposit
accounts |
|
6,212 |
|
|
|
5,810 |
|
|
5,103 |
|
| (Losses) gains on securities
transactions, net |
|
(1,072 |
) |
|
|
495 |
|
|
101 |
|
| Fees from loan servicing |
|
2,781 |
|
|
|
2,671 |
|
|
2,899 |
|
| Gains on sales of loans, net |
|
986 |
|
|
|
6,653 |
|
|
3,513 |
|
| Bank owned life insurance |
|
2,046 |
|
|
|
1,993 |
|
|
2,331 |
|
| Other |
|
21,327 |
|
|
|
14,097 |
|
|
12,399 |
|
|
Total non-interest income |
|
39,270 |
|
|
|
38,223 |
|
|
31,233 |
|
| Non-Interest
Expense |
|
|
|
|
|
| Salary and employee benefits
expense |
|
107,733 |
|
|
|
102,675 |
|
|
88,103 |
|
| Net occupancy and equipment
expense |
|
36,806 |
|
|
|
34,986 |
|
|
32,259 |
|
| FDIC insurance assessment |
|
4,158 |
|
|
|
3,889 |
|
|
3,276 |
|
| Amortization of other intangible
assets |
|
4,437 |
|
|
|
5,074 |
|
|
6,006 |
|
| Professional and legal fees |
|
14,749 |
|
|
|
11,182 |
|
|
6,272 |
|
| Amortization of tax credit
investments |
|
2,896 |
|
|
|
2,115 |
|
|
2,744 |
|
| Telecommunication expense |
|
3,271 |
|
|
|
2,902 |
|
|
3,160 |
|
| Other |
|
23,290 |
|
|
|
21,691 |
|
|
18,393 |
|
|
Total non-interest expense |
|
197,340 |
|
|
|
184,514 |
|
|
160,213 |
|
| Income Before Income
Taxes |
|
156,042 |
|
|
|
157,311 |
|
|
155,031 |
|
| Income tax expense |
|
39,314 |
|
|
|
42,273 |
|
|
39,321 |
|
| Net Income |
|
116,728 |
|
|
|
115,038 |
|
|
115,710 |
|
| Dividends on preferred stock |
|
3,172 |
|
|
|
3,172 |
|
|
3,172 |
|
| Net Income Available to
Common Shareholders |
$ |
113,556 |
|
|
$ |
111,866 |
|
$ |
112,538 |
|
| |
Three Months Ended |
| |
March 31, |
|
December 31, |
|
March 31, |
|
|
2022 |
|
2021 |
|
2021 |
| Earnings Per Common
Share: |
|
|
|
|
|
|
Basic |
$ |
0.27 |
|
$ |
0.27 |
|
$ |
0.28 |
|
Diluted |
|
0.27 |
|
|
0.27 |
|
|
0.28 |
| Cash Dividends Declared
per Common Share |
|
0.11 |
|
|
0.11 |
|
|
0.11 |
| Weighted Average
Number of Common Shares Outstanding: |
|
|
|
|
|
|
Basic |
|
421,573,843 |
|
|
411,775,590 |
|
|
405,152,605 |
|
Diluted |
|
423,506,550 |
|
|
414,472,820 |
|
|
407,636,765 |
| |
Three Months Ended |
|
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
|
Average |
|
|
|
Avg. |
|
Average |
|
|
|
Avg. |
|
Average |
|
|
|
Avg. |
| ($ in thousands) |
Balance |
|
Interest |
|
Rate |
|
Balance |
|
Interest |
|
Rate |
|
Balance |
|
Interest |
|
Rate |
| Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1)(2) |
$ |
34,623,402 |
|
$ |
317,390 |
|
3.67 |
% |
|
$ |
33,338,128 |
|
$ |
319,165 |
|
3.83 |
% |
|
$ |
32,582,479 |
|
$ |
313,206 |
|
3.85 |
% |
|
Taxable investments (3) |
|
3,838,468 |
|
|
20,115 |
|
2.1 |
|
|
|
3,563,329 |
|
|
17,667 |
|
1.98 |
|
|
|
3,111,116 |
|
|
15,037 |
|
1.93 |
|
|
Tax-exempt investments (1)(3) |
|
401,742 |
|
|
3,186 |
|
3.17 |
|
|
|
418,049 |
|
|
3,209 |
|
3.07 |
|
|
|
513,809 |
|
|
4,248 |
|
3.31 |
|
|
Interest bearing deposits with banks |
|
1,419,436 |
|
|
461 |
|
0.13 |
|
|
|
1,873,508 |
|
|
636 |
|
0.14 |
|
|
|
1,178,815 |
|
|
224 |
|
0.08 |
|
| Total interest earning
assets |
|
40,283,048 |
|
|
341,152 |
|
3.39 |
|
|
|
39,193,014 |
|
|
340,677 |
|
3.48 |
|
|
|
37,386,219 |
|
|
332,715 |
|
3.56 |
|
| Other assets |
|
3,287,203 |
|
|
|
|
|
|
3,280,814 |
|
|
|
|
|
|
3,384,512 |
|
|
|
|
| Total assets |
$ |
43,570,251 |
|
|
|
|
|
$ |
42,473,828 |
|
|
|
|
|
$ |
40,770,731 |
|
|
|
|
| Liabilities and
shareholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW and money market deposits |
$ |
20,522,629 |
|
$ |
9,627 |
|
0.19 |
% |
|
$ |
19,685,730 |
|
$ |
9,983 |
|
0.20 |
% |
|
$ |
16,617,762 |
|
$ |
11,125 |
|
0.27 |
% |
|
Time deposits |
|
3,554,520 |
|
|
2,831 |
|
0.32 |
|
|
|
3,744,792 |
|
|
3,328 |
|
0.36 |
|
|
|
5,844,524 |
|
|
11,093 |
|
0.76 |
|
|
Short-term borrowings |
|
594,297 |
|
|
806 |
|
0.54 |
|
|
|
670,433 |
|
|
983 |
|
0.59 |
|
|
|
1,168,617 |
|
|
1,758 |
|
0.6 |
|
|
Long-term borrowings (4) |
|
1,476,469 |
|
|
9,525 |
|
2.58 |
|
|
|
1,482,001 |
|
|
10,383 |
|
2.8 |
|
|
|
2,323,279 |
|
|
15,155 |
|
2.61 |
|
| Total interest bearing
liabilities |
|
26,147,915 |
|
|
22,789 |
|
0.35 |
|
|
|
25,582,956 |
|
|
24,677 |
|
0.39 |
|
|
|
25,954,182 |
|
|
39,131 |
|
0.6 |
|
| Non-interest bearing
deposits |
|
11,686,534 |
|
|
|
|
|
|
11,316,264 |
|
|
|
|
|
|
9,373,000 |
|
|
|
|
| Other liabilities |
|
631,093 |
|
|
|
|
|
|
669,265 |
|
|
|
|
|
|
798,149 |
|
|
|
|
| Shareholders’ equity |
|
5,104,709 |
|
|
|
|
|
|
4,905,343 |
|
|
|
|
|
|
4,645,400 |
|
|
|
|
| Total liabilities and
shareholders’ equity |
$ |
43,570,251 |
|
|
|
|
|
$ |
42,473,828 |
|
|
|
|
|
$ |
40,770,731 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest income/interest
rate spread (5) |
|
|
$ |
318,363 |
|
3.04 |
% |
|
|
|
$ |
316,000 |
|
3.09 |
% |
|
|
|
$ |
293,584 |
|
2.96 |
% |
| Tax equivalent adjustment |
|
|
|
(694 |
) |
|
|
|
|
|
(699 |
) |
|
|
|
|
|
(917 |
) |
|
| Net interest income, as
reported |
|
|
$ |
317,669 |
|
|
|
|
|
$ |
315,301 |
|
|
|
|
|
$ |
292,667 |
|
|
| Net interest margin (6) |
|
|
|
|
3.15 |
|
|
|
|
|
|
3.22 |
|
|
|
|
|
|
3.13 |
|
|
Tax equivalent effect |
|
|
|
|
0.01 |
|
|
|
|
|
|
0.01 |
|
|
|
|
|
|
0.01 |
|
| Net interest margin on a fully
tax equivalent basis (6) |
|
|
|
|
3.16 |
% |
|
|
|
|
|
3.23 |
% |
|
|
|
|
|
3.14 |
% |
_____________(1) Interest income is presented on a
tax equivalent basis using a 21 percent federal tax rate.(2)
Loans are stated net of unearned income and include
non-accrual loans.(3) The yield for securities that are
classified as available for sale is based on the average historical
amortized cost.(4) Includes junior subordinated
debentures issued to capital trusts which are presented separately
on the consolidated statements of condition.(5)
Interest rate spread represents the difference between the
average yield on interest earning assets and the average cost of
interest bearing liabilities and is presented on a fully tax
equivalent basis.(6) Net interest income as a
percentage of total average interest earning assets.
| Contact: |
Michael D.
Hagedorn |
| |
Senior Executive Vice President and |
| |
Chief Financial Officer |
| |
973-872-4885 |
Valley National Bancorp (NASDAQ:VLY)
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Valley National Bancorp (NASDAQ:VLY)
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