Valley National Bancorp (
NASDAQ:VLY), the holding
company for Valley National Bank, today reported net income for the
second quarter 2024 of $70.4 million, or $0.13 per diluted common
share, as compared to the first quarter 2024 net income of $96.3
million, or $0.18 per diluted common share, and net income of
$139.1 million, or $0.27 per diluted common share, for the second
quarter 2023. Excluding all non-core income and charges, our
adjusted net income (a non-GAAP measure) was $71.6 million, or
$0.13 per diluted common share, for the second quarter 2024, $99.4
million, or $0.19 per diluted common share, for the first quarter
2024, and $147.1 million, or $0.28 per diluted common share, for
the second quarter 2023. See further details below, including a
reconciliation of our non-GAAP adjusted net income, in the
"Consolidated Financial Highlights" tables.
Ira Robbins, CEO commented, "During the quarter
we took steps to incrementally build balance sheet flexibility as
we progress towards the goals that we have previously laid out.
These efforts had the combined impact of enhancing regulatory
capital and reducing our commercial real estate concentration as a
percent of regulatory capital. As it relates to credit quality, our
reported non-accrual and past due loans were generally stable at
June 30, 2024. The allowance to loan coverage ratio trended higher,
but in line with our expectations, reflecting, among other factors,
our continuous monitoring and internal risk classification of
commercial loans. The increase in the provision also resulted, in
part, from specific reserves, a single commercial and industrial
loan charge-off and a single commercial real estate loan
charge-off. We continue to focus on accelerating commercial and
industrial loan growth and core deposit growth as we further
diversify and strengthen our balance sheet."
Mr. Robbins continued, "The sequential increase
in net interest income was the result of both interest income
growth and interest expense reduction relative to the first quarter
2024. We continue to work to optimize our funding base from a
pricing and composition perspective. While fee income compressed
during the second quarter, expenses remain well-controlled and we
believe we are positioned for pre-provision earnings growth through
the remainder of the year."
Key financial highlights for
the second quarter
2024:
- Net
Interest Income and Margin: Net interest income on a tax
equivalent basis of $403.0 million for the second quarter 2024
increased $8.1 million compared to the first quarter 2024 and
decreased $18.3 million as compared to the second quarter 2023. The
increase from the first quarter 2024 was mostly due to additional
interest income from targeted growth within our available for sale
securities portfolio, continued expansion of the yield on average
loans and a four basis point decline in the cost of average
interest bearing liabilities. Our net interest margin on a tax
equivalent basis increased by 5 basis points to 2.84 percent in the
second quarter 2024 as compared to 2.79 percent for the first
quarter 2024. See the "Net Interest Income and Margin" section
below for more details.
- Loan
Portfolio: Total loans increased $389.7 million, or 3.1
percent on an annualized basis, to $50.3 billion at June 30,
2024 from March 31, 2024 mainly as a result of our focus on
new commercial and industrial loan production during the second
quarter 2024. Strong indirect automobile loan originations from our
dealer network, as well as modest organic commercial real estate
loan volumes also contributed to the growth in total loans during
the second quarter 2024. Loans held for sale decreased $41.9
million to $19.9 million at June 30, 2024 from March 31,
2024 mostly due to the previously disclosed sale of $34.1 million
of construction loans at par during April 2024. See the "Loans"
section below for more details.
-
Deposits: Total average deposits increased $807.2
million during the second quarter 2024 as compared to the first
quarter 2024 driven by higher average balances across several
deposit categories, including non-interest bearing deposits. Actual
ending balances for deposits increased $1.0 billion to $50.1
billion at June 30, 2024 as compared to $49.1 billion at
March 31, 2024 mainly due to higher levels of indirect
customer certificates of deposit, partially offset by period-end
balance fluctuations mostly within direct commercial customer
deposit accounts. During the second quarter 2024, management
entered into fair value swaps with a combined notional value of
approximately $400 million that will effectively convert a portion
of the fixed rate indirect time deposit portfolio to variable
interest rates starting in the first quarter 2025. See the
"Deposits" section below for more details.
- Credit
Risk Transfer: During June 2024, we completed a synthetic
credit risk transfer transaction, consisting of a credit default
swap, related to approximately $1.5 billion of our $1.8 billion
automobile loan portfolio at June 30, 2024. While we have
retained the auto loans on-balance sheet, the new credit protection
significantly reduced the risk-weighted assets associated with
these loans for regulatory capital purposes. As a result, Valley’s
total risk-based capital, common equity Tier 1 capital and Tier 1
capital ratios benefited by approximately 20 basis points at
June 30, 2024. Total transaction costs included $400 thousand
of one-time charges and $1.1 million of premium expense recorded in
other expense during the second quarter 2024. The premium expense
associated with the credit protection is estimated to be
approximately $6.0 million for the remainder of 2024. See the
"Capital Adequacy" section below for more details.
-
Allowance and Provision for Credit Losses for
Loans: The allowance for credit losses for loans totaled
$532.5 million and $487.3 million at June 30, 2024 and
March 31, 2024, respectively, representing 1.06 percent and
0.98 percent of total loans at each respective date. During the
second quarter 2024, we recorded a provision for credit losses for
loans of $82.1 million as compared to $45.3 million and $6.3
million for the first quarter 2024 and second quarter 2023,
respectively. The increase in the second quarter 2024 provision was
mainly due to higher quantitative reserves allocated to commercial
real estate loans, commercial and industrial loan growth, and
additional specific reserves and charge-offs associated with the
revaluation of collateral dependent commercial loans at
June 30, 2024.
- Credit
Quality: Total accruing past due loans (i.e., loans past
due 30 days or more and still accruing interest) decreased to 0.14
percent of total loans at June 30, 2024 as compared to 0.15
percent at March 31, 2024, while non-accrual loans increased
to 0.60 percent of total loans at June 30, 2024 as compared to
0.58 percent at March 31, 2024. Net loan charge-offs totaled
$36.8 million for the second quarter 2024 as compared to $23.6
million and $8.6 million for the first quarter 2024 and second
quarter 2023, respectively. The loan charge-offs in the second
quarter 2024 included partial charge-offs totaling a combined $31.6
million related to two commercial loan relationships. See the
"Credit Quality" section below for more details.
-
Non-Interest Income: Non-interest income decreased
$10.2 million to $51.2 million for the second quarter 2024 as
compared to the first quarter 2024 mainly due to previously
anticipated decreases in periodic revenue associated with our tax
credit advisory subsidiary (within wealth management and trust
fees) and net gains on sale of assets totaling $4.8 million and
$3.7 million, respectively. Other income also decreased $5.5
million as compared to first quarter 2024 due, in part, to the
decline in the valuation of certain equity method investments at
June 30, 2024. These decreases were partially offset by
increases in swap fees related to commercial loan transactions
(within capital market fees), insurance commissions and bank owned
life insurance income.
-
Non-Interest Expense: Non-interest expense
decreased $2.8 million to $277.5 million for the second quarter
2024 as compared to the first quarter 2024 largely due to a lower
FDIC insurance assessment expense. During the second quarter 2024
and first quarter 2024, we recorded additional estimated expenses
of $1.4 million and $7.4 million, respectively, related to the FDIC
special assessment. The decrease was partially offset by higher
professional and legal expense and other expense during the second
quarter 2024. Other expense increased $1.5 million from the first
quarter 2024 partially due to costs related to the loan credit risk
transfer transaction (described above).
-
Efficiency Ratio: Our efficiency ratio was 59.62
percent for the second quarter 2024 as compared to 59.10 percent
and 55.59 percent for the first quarter 2024 and second quarter
2023, 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 0.46 percent, 4.17
percent and 5.95 percent for the second quarter 2024, respectively.
Annualized ROA, ROE, and tangible ROE, adjusted for non-core income
and charges, were 0.47 percent, 4.24 percent and 6.05 percent for
the second quarter 2024, respectively. See the "Consolidated
Financial Highlights" tables below for additional information
regarding our non-GAAP measures.
Net Interest Income and Margin
Net interest income on a tax equivalent basis of
$403.0 million for the second quarter 2024 increased $8.1 million
compared to the first quarter 2024 and decreased $18.3 million as
compared to the second quarter 2023. Interest income on a tax
equivalent basis increased $4.8 million to $834.8 million for the
second quarter 2024 as compared to the first quarter 2024 mostly
due to additional interest income from targeted investment
purchases within the available for sale securities portfolio, as
well as higher average overnight interest bearing deposits with
banks during the second quarter 2024. A higher yield on average
loans also contributed to the increase in interest income, but was
more than offset by the impact of lower average loan balances
during the second quarter 2024 mostly caused by the sale of certain
commercial loans in the first quarter 2024 and April 2024. Total
interest expense decreased $3.3 million to $431.8 million for the
second quarter 2024 as compared to the first quarter 2024 mainly
due to greater utilization of long-term FHLB borrowings and
indirect customer time deposits as liquidity funding sources and a
reduction in higher cost short-term FHLB borrowings starting in
March 2024. See the "Deposits" and "Other Borrowings" sections
below for more details.
Net interest margin on a tax equivalent basis of
2.84 percent for the second quarter 2024 increased by 5 basis
points from 2.79 percent for the first quarter 2024 and decreased
10 basis points from 2.94 percent for the second quarter 2023. The
increase as compared to the first quarter 2024 was largely driven
by the combination of a higher yield on average interest earning
assets and a decline in the cost of average interest bearing
liabilities. The yield on average interest earning assets increased
by 2 basis points to 5.88 percent on a linked quarter basis largely
due to higher yielding investment purchases and new loan
originations during the second quarter 2024. The overall cost of
average interest bearing liabilities decreased 4 basis points to
4.15 percent for the second quarter 2024 as compared to the first
quarter 2024 primarily due to a reduction in both higher cost
short-term FHLB borrowings and government banking non-maturity
deposit account balances. Our cost of total average deposits was
3.18 percent for the second quarter 2024 as compared to 3.16
percent and 2.45 percent for the first quarter 2024 and the second
quarter 2023, respectively.
Loans, Deposits and Other Borrowings
Loans. Total loans increased
$389.7 million, or 3.1 percent on an annualized basis, to
$50.3 billion at June 30, 2024 from March 31, 2024.
Commercial and industrial loans grew by $376.2 million, or 16.5
percent on an annualized basis, to $9.5 billion at June 30,
2024 from March 31, 2024 largely due to our stronger focus on
new loan production within this category. Total commercial real
estate (including construction) loans increased $63.4 million,
or only 0.8 percent on an annualized basis, to $31.8 billion at
June 30, 2024 from March 31, 2024 as we remained highly
selective on new originations and projects. Automobile loan
balances increased by $62.3 million, or 14.7 percent on an
annualized basis, to $1.8 billion at June 30, 2024 from
March 31, 2024 mainly due to continued consumer demand
generated by our indirect auto dealer network and low prepayment
activity within the portfolio. Other consumer loans decreased
$122.2 million, or 39.7 percent on an annualized basis, to $1.1
billion at June 30, 2024 from March 31, 2024 primarily
due to the negative impact of high market interest rates on the
demand and usage of collateralized personal lines of credit.
Deposits. Actual ending
balances for deposits increased $1.0 billion to $50.1 billion at
June 30, 2024 from March 31, 2024 mainly due to an
increase of $1.5 billion in time deposits, partially offset by a
decrease of $349.8 million in savings, NOW and money market
deposits and a decrease of $155.6 million in non-interest bearing
deposits. The increase in time deposits was mainly due to a $1.7
billion increase in indirect customer CDs. During the second
quarter 2024, management entered into fair value swap transactions
with a combined notional value of approximately $400 million that
will effectively convert a portion of its fixed rate indirect CD
portfolio to variable interest rates starting in the first quarter
2025 and expiring at various dates during the second quarters 2026
and 2027. Non-interest bearing deposit and savings, NOW and money
market deposit balances declined at June 30, 2024 from
March 31, 2024 partly due to period-end fluctuations within
certain direct commercial customer deposit accounts. Non-interest
bearing deposits; savings, NOW and money market deposits; and time
deposits represented approximately 22 percent, 49 percent and 29
percent of total deposits as of June 30, 2024, respectively,
as compared to 23 percent, 51 percent and 26 percent of total
deposits as of March 31, 2024, respectively.
Other
Borrowings. Short-term borrowings
decreased $11.5 million to $63.8 million at June 30, 2024 as
compared to March 31, 2024 mainly due to a moderate decline in
securities sold under repurchase agreements. Long-term borrowings
totaled $3.3 billion at June 30, 2024 and also remained
relatively unchanged as compared to March 31, 2024.
Credit Quality
Non-Performing Assets (NPAs).
Total NPAs, consisting of non-accrual loans, other real estate
owned (OREO) and other repossessed assets, increased $24.2 million
to $312.9 million at June 30, 2024 as compared to
March 31, 2024. Non-accrual commercial real estate loans
increased $23.0 million to $123.0 million at June 30, 2024 as
compared to March 31, 2024 mainly due to two additional
non-performing loan relationships totaling $24.1 million placed on
non-accrual status during the second quarter 2024. Non-accrual
loans represented 0.60 percent of total loans at June 30, 2024
as compared to 0.58 percent of total loans at March 31, 2024.
OREO increased $8.0 million at June 30, 2024 from
March 31, 2024 due to the foreclosure and transfer of two
commercial real estate properties from the loan portfolio during
the second quarter 2024.
Accruing Past Due Loans. Total
accruing past due loans (i.e., loans past due 30 days or more and
still accruing interest) decreased $2.0 million to $72.4 million,
or 0.14 percent of total loans, at June 30, 2024 as compared
to $74.4 million, or 0.15 percent of total loans at March 31,
2024. Loans 30 to 59 days past due decreased $851 thousand to $46.0
million at June 30, 2024 as compared to March 31, 2024.
Loans 60 to 89 days past due decreased $2.3 million to $11.9
million at June 30, 2024 as compared to March 31, 2024
mostly due to a commercial real estate loan relationship totaling
$3.7 million at March 31, 2024 that migrated from this past
due category to non-accrual loans during the second quarter 2024.
Loans 90 days or more past due and still accruing interest
increased $1.1 million to $14.5 million at June 30, 2024 as
compared to March 31, 2024 largely due to one commercial real
estate loan. All loans 90 days or more past due and still accruing
interest are well-secured and in the process of collection.
Allowance for Credit Losses for Loans
and Unfunded Commitments. The following table summarizes
the allocation of the allowance for credit losses to loan
categories and the allocation as a percentage of each loan category
at June 30, 2024, March 31, 2024 and June 30,
2023:
| |
June 30, 2024 |
|
March 31, 2024 |
|
June 30, 2023 |
| |
|
|
Allocation |
|
|
|
Allocation |
|
|
|
Allocation |
| |
|
|
as a % of |
|
|
|
as a % of |
|
|
|
as a % of |
| |
Allowance |
|
Loan |
|
Allowance |
|
Loan |
|
Allowance |
|
Loan |
| |
Allocation |
|
Category |
|
Allocation |
|
Category |
|
Allocation |
|
Category |
| |
($ in thousands) |
| Loan Category: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans |
$ |
149,243 |
|
|
|
1.57 |
% |
|
$ |
138,593 |
|
|
|
1.52 |
% |
|
$ |
128,245 |
|
|
|
1.38 |
% |
| Commercial real estate
loans: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
246,316 |
|
|
|
0.87 |
|
|
|
209,355 |
|
|
|
0.74 |
|
|
|
194,177 |
|
|
|
0.70 |
|
|
Construction |
|
54,777 |
|
|
|
1.54 |
|
|
|
56,492 |
|
|
|
1.59 |
|
|
|
45,518 |
|
|
|
1.19 |
|
| Total commercial real estate
loans |
|
301,093 |
|
|
|
0.95 |
|
|
|
265,847 |
|
|
|
0.84 |
|
|
|
239,695 |
|
|
|
0.76 |
|
| Residential mortgage
loans |
|
47,697 |
|
|
|
0.85 |
|
|
|
44,377 |
|
|
|
0.79 |
|
|
|
44,153 |
|
|
|
0.79 |
|
| Consumer loans: |
|
|
|
|
|
|
|
|
|
|
|
|
Home equity |
|
3,077 |
|
|
|
0.54 |
|
|
|
2,809 |
|
|
|
0.50 |
|
|
|
4,020 |
|
|
|
0.75 |
|
|
Auto and other consumer |
|
18,200 |
|
|
|
0.63 |
|
|
|
17,622 |
|
|
|
0.60 |
|
|
|
20,319 |
|
|
|
0.70 |
|
| Total consumer loans |
|
21,277 |
|
|
|
0.62 |
|
|
|
20,431 |
|
|
|
0.58 |
|
|
|
24,339 |
|
|
|
0.71 |
|
| Allowance for loan losses |
|
519,310 |
|
|
|
1.03 |
|
|
|
469,248 |
|
|
|
0.94 |
|
|
|
436,432 |
|
|
|
0.88 |
|
| Allowance for unfunded credit
commitments |
|
13,231 |
|
|
|
|
|
18,021 |
|
|
|
|
|
22,244 |
|
|
|
| Total allowance for credit
losses for loans |
$ |
532,541 |
|
|
|
|
$ |
487,269 |
|
|
|
|
$ |
458,676 |
|
|
|
|
Allowance for credit losses for loans as a % total loans |
|
|
|
1.06 |
% |
|
|
|
|
0.98 |
% |
|
|
|
|
0.92 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our loan portfolio, totaling $50.3 billion at
June 30, 2024, had net loan charge-offs totaling $36.8 million
for the second quarter 2024 as compared to $23.6 million and $8.6
million for the first quarter 2024 and the second quarter 2023,
respectively. The loan charge-offs in the second quarter 2024
included partial charge-offs totaling $20.6 million and $11.0
million related to a single commercial real estate loan
relationship and one commercial and industrial loan, respectively.
The commercial and industrial loan had specific reserves totaling
$8.0 million within the allowance for loan losses at March 31,
2024.
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 1.06 percent at
June 30, 2024, 0.98 percent at March 31, 2024, and 0.92
percent at June 30, 2023. For the second quarter 2024, the
provision for credit losses for loans totaled $82.1 million as
compared to $45.3 million and $6.3 million for the first quarter
2024 and second quarter 2023, respectively. The increased provision
for credit losses for the second quarter 2024 was mainly due to
higher quantitative reserves allocated to commercial real estate
loans, commercial and industrial loan growth, and additional
specific reserves and charge-offs associated with the revaluation
of collateral dependent commercial loans at June 30, 2024. The
allowance for unfunded credit commitments declined to $13.2 million
at June 30, 2024 mainly due to a continued decline in the
level of our commercial real estate loan commitments pipeline.
Capital Adequacy
Valley's total risk-based capital, common equity
Tier 1 capital, Tier 1 capital and Tier 1 leverage capital ratios
were 12.18 percent, 9.55 percent, 9.99 percent and 8.19 percent,
respectively, at June 30, 2024 as compared to 11.88 percent,
9.34 percent, 9.78 percent, 8.20 percent, respectively at
March 31, 2024. The increases in the total risk-based capital,
common equity Tier 1 capital, and Tier 1 capital ratios as compared
to March 31, 2024 were largely due to the aforementioned
credit risk transfer transaction related to a portion of the
automobile loan portfolio executed in June 2024.
Investor Conference Call
Valley will host a conference call with
investors and the financial community at 11:00 AM (ET) today to
discuss the second quarter 2024 earnings and related matters.
Interested parties should preregister using this link:
https://register.vevent.com/register to receive the dial-in number
and a personal PIN, which are required to access the conference
call. The teleconference will also be webcast live:
https://edge.media-server.com and archived on Valley’s website
through Monday, September 2, 2024. 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 over $62
billion in assets. 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 “intend,” “should,” “expect,” “believe,” “view,”
“opportunity,” “allow,” “continues,” “reflects,” “typically,”
“usually,” “anticipate,” “may,” “estimate,” “outlook,” “project” 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 impact of
monetary and fiscal policies of the U.S. federal government and its
agencies, including in connection with prolonged inflationary
pressures, as well as the impact of the 2024 U.S presidential
election, which could have a material adverse effect on our
clients, as well as our business, our employees, and our ability to
provide services to our customers;
- the impact of
unfavorable macroeconomic conditions or downturns, including an
actual or threatened U.S. government shutdown, debt default or
rating downgrade, instability or volatility in financial markets,
unanticipated loan delinquencies, loss of collateral, decreased
service revenues, increased business disruptions or failures,
reductions in employment, and other potential negative effects on
our business, employees or clients caused by factors outside of our
control, such as geopolitical instabilities or events (including
the Israel-Hamas war); natural and other disasters (including
severe weather events); health emergencies; acts of terrorism; or
other external events;
- the impact of
potential instability within the U.S. financial sector in the
aftermath of the banking failures in 2023 and continued volatility
thereafter, including the possibility of a run on deposits by a
coordinated deposit base, and the impact of the actual or perceived
soundness, or concerns about the creditworthiness of other
financial institutions, including any resulting disruption within
the financial markets, increased expenses, including Federal
Deposit Insurance Corporation insurance assessments, or adverse
impact on our stock price, deposits or our ability to borrow or
raise capital;
- the impact of
negative public opinion regarding Valley or banks in general that
damages our reputation and adversely impacts business and
revenues;
- changes in the
statutes, regulations, policy, or enforcement priorities of the
federal bank regulatory agencies;
- the loss of or
decrease in lower-cost funding sources within our deposit
base;
- 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, trademark or other intellectual
property infringement, misappropriation or other violation,
employment related claims, and other matters;
- a prolonged
downturn and contraction in the economy, as well as an unexpected
decline in commercial real estate values collateralizing a
significant portion of our loan portfolio;
- 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;
- changes in our
business, strategy, market conditions or other factors that may
negatively impact the estimated fair value of our goodwill and
other intangible assets and result in future impairment
charges;
- 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;
- cyberattacks,
ransomware attacks, computer viruses, malware or other
cybersecurity incidents that may breach the security of our
websites or other systems or networks to obtain unauthorized access
to personal, confidential, proprietary or sensitive information,
destroy data, disable or degrade service, or sabotage our systems
or networks;
- results of
examinations by the Office of the Comptroller of the Currency
(OCC), the Federal Reserve Bank, 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;
- application of
the OCC heightened regulatory standards for certain large insured
national banks, and the expenses we will incur to develop policies,
programs, and systems that comply with the enhanced standards
applicable to us;
- 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, pandemics or other public health crises, acts of
terrorism or other external events;
- our ability to
successfully execute our business plan and strategic initiatives;
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 Item
1A. "Risk Factors" of our Annual Report on Form 10-K for the year
ended December 31, 2023.
We undertake no duty to update any
forward-looking statement to conform the statement to actual
results or changes in our expectations, except as required by law.
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-
|
VALLEY NATIONAL BANCORPCONSOLIDATED FINANCIAL
HIGHLIGHTS |
SELECTED FINANCIAL DATA
| |
Three Months Ended |
|
Six Months Ended |
| ($ in thousands,
except for share data and stock price) |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| FINANCIAL
DATA: |
|
|
|
|
|
|
|
|
|
| Net interest income - FTE
(1) |
$ |
402,984 |
|
|
$ |
394,847 |
|
|
$ |
421,275 |
|
|
$ |
797,831 |
|
|
$ |
858,733 |
|
| Net interest income |
|
401,685 |
|
|
|
393,548 |
|
|
|
419,765 |
|
|
$ |
795,233 |
|
|
$ |
855,785 |
|
| Non-interest income |
|
51,213 |
|
|
|
61,415 |
|
|
|
60,075 |
|
|
|
112,628 |
|
|
|
114,374 |
|
| Total revenue |
|
452,898 |
|
|
|
454,963 |
|
|
|
479,840 |
|
|
|
907,861 |
|
|
|
970,159 |
|
| Non-interest expense |
|
277,497 |
|
|
|
280,310 |
|
|
|
282,971 |
|
|
|
557,807 |
|
|
|
555,137 |
|
| Pre-provision net revenue |
|
175,401 |
|
|
|
174,653 |
|
|
|
196,869 |
|
|
|
350,054 |
|
|
|
415,022 |
|
| Provision for credit
losses |
|
82,070 |
|
|
|
45,200 |
|
|
|
6,050 |
|
|
|
127,270 |
|
|
|
20,487 |
|
| Income tax expense |
|
22,907 |
|
|
|
33,173 |
|
|
|
51,759 |
|
|
|
56,080 |
|
|
|
108,924 |
|
| Net income |
|
70,424 |
|
|
|
96,280 |
|
|
|
139,060 |
|
|
|
166,704 |
|
|
|
285,611 |
|
| Dividends on preferred
stock |
|
4,108 |
|
|
|
4,119 |
|
|
|
4,030 |
|
|
|
8,227 |
|
|
|
7,904 |
|
| Net income available to common
shareholders |
$ |
66,316 |
|
|
$ |
92,161 |
|
|
$ |
135,030 |
|
|
$ |
158,477 |
|
|
$ |
277,707 |
|
| Weighted average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
509,141,252 |
|
|
|
508,340,719 |
|
|
|
507,690,043 |
|
|
|
508,740,986 |
|
|
|
507,402,268 |
|
|
Diluted |
|
510,338,502 |
|
|
|
510,633,945 |
|
|
|
508,643,025 |
|
|
|
510,437,959 |
|
|
|
509,076,303 |
|
| Per common share data: |
|
|
|
|
|
|
|
|
|
|
Basic earnings |
$ |
0.13 |
|
|
$ |
0.18 |
|
|
$ |
0.27 |
|
|
$ |
0.31 |
|
|
$ |
0.55 |
|
|
Diluted earnings |
|
0.13 |
|
|
|
0.18 |
|
|
|
0.27 |
|
|
|
0.31 |
|
|
|
0.55 |
|
|
Cash dividends declared |
|
0.11 |
|
|
|
0.11 |
|
|
|
0.11 |
|
|
|
0.22 |
|
|
|
0.22 |
|
| Closing stock price -
high |
|
8.02 |
|
|
|
10.80 |
|
|
|
9.38 |
|
|
|
10.80 |
|
|
|
12.59 |
|
| Closing stock price - low |
|
6.52 |
|
|
|
7.43 |
|
|
|
6.59 |
|
|
|
6.52 |
|
|
|
6.59 |
|
| FINANCIAL
RATIOS: |
|
|
|
|
|
|
|
|
|
| Net interest margin |
|
2.83 |
% |
|
|
2.78 |
% |
|
|
2.93 |
% |
|
|
2.81 |
% |
|
|
3.04 |
% |
| Net interest margin - FTE
(1) |
|
2.84 |
|
|
|
2.79 |
|
|
|
2.94 |
|
|
|
2.82 |
|
|
|
3.05 |
|
| Annualized return on average
assets |
|
0.46 |
|
|
|
0.63 |
|
|
|
0.90 |
|
|
|
0.54 |
|
|
|
0.94 |
|
| Annualized return on avg.
shareholders' equity |
|
4.17 |
|
|
|
5.73 |
|
|
|
8.50 |
|
|
|
4.95 |
|
|
|
8.80 |
|
| NON-GAAP FINANCIAL
DATA AND RATIOS: (3) |
|
|
|
|
|
|
|
|
|
| Basic earnings per share, as
adjusted |
$ |
0.13 |
|
|
$ |
0.19 |
|
|
$ |
0.28 |
|
|
$ |
0.32 |
|
|
$ |
0.58 |
|
| Diluted earnings per share, as
adjusted |
|
0.13 |
|
|
|
0.19 |
|
|
|
0.28 |
|
|
|
0.32 |
|
|
|
0.58 |
|
| Annualized return on average
assets, as adjusted |
|
0.47 |
% |
|
|
0.65 |
% |
|
|
0.95 |
% |
|
|
0.56 |
% |
|
|
0.99 |
% |
| Annualized return on average
shareholders' equity, as adjusted |
|
4.24 |
|
|
|
5.91 |
|
|
|
8.99 |
|
|
|
5.08 |
|
|
|
9.29 |
|
| Annualized return on avg.
tangible shareholders' equity |
|
5.95 |
% |
|
|
8.19 |
% |
|
|
12.37 |
% |
|
|
7.07 |
% |
|
|
12.87 |
% |
| Annualized return on average
tangible shareholders' equity, as adjusted |
|
6.05 |
|
|
|
8.46 |
|
|
|
13.09 |
|
|
|
7.25 |
|
|
|
13.59 |
|
| Efficiency ratio |
|
59.62 |
|
|
|
59.10 |
|
|
|
55.59 |
|
|
|
59.36 |
|
|
|
54.69 |
|
| |
|
|
|
|
|
|
|
|
|
| AVERAGE BALANCE SHEET
ITEMS: |
|
|
|
|
|
|
|
|
|
| Assets |
$ |
61,518,639 |
|
|
$ |
61,256,868 |
|
|
$ |
61,877,464 |
|
|
$ |
61,387,754 |
|
|
$ |
60,877,792 |
|
| Interest earning assets |
|
56,772,950 |
|
|
|
56,618,797 |
|
|
|
57,351,808 |
|
|
|
56,695,874 |
|
|
|
56,362,794 |
|
| Loans |
|
50,020,901 |
|
|
|
50,246,591 |
|
|
|
49,457,937 |
|
|
|
50,133,746 |
|
|
|
48,663,070 |
|
| Interest bearing
liabilities |
|
41,576,344 |
|
|
|
41,556,588 |
|
|
|
40,925,791 |
|
|
|
41,566,466 |
|
|
|
39,281,405 |
|
| Deposits |
|
49,383,209 |
|
|
|
48,575,974 |
|
|
|
47,464,469 |
|
|
|
48,979,591 |
|
|
|
47,309,554 |
|
| Shareholders' equity |
|
6,753,981 |
|
|
|
6,725,695 |
|
|
|
6,546,452 |
|
|
|
6,739,838 |
|
|
|
6,493,627 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
As Of |
| BALANCE SHEET
ITEMS: |
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
(In thousands) |
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2023 |
|
| Assets |
$ |
62,058,974 |
|
|
$ |
61,000,188 |
|
|
$ |
60,934,974 |
|
|
$ |
61,183,352 |
|
|
$ |
61,703,693 |
|
| Total loans |
|
50,311,702 |
|
|
|
49,922,042 |
|
|
|
50,210,295 |
|
|
|
50,097,519 |
|
|
|
49,877,248 |
|
| Deposits |
|
50,112,177 |
|
|
|
49,077,946 |
|
|
|
49,242,829 |
|
|
|
49,885,314 |
|
|
|
49,619,815 |
|
| Shareholders' equity |
|
6,737,737 |
|
|
|
6,727,139 |
|
|
|
6,701,391 |
|
|
|
6,627,299 |
|
|
|
6,575,184 |
|
| |
|
|
|
|
|
|
|
|
|
| LOANS: |
|
|
|
|
|
|
|
|
|
| (In thousands) |
|
|
|
|
|
|
|
|
|
| Commercial and industrial |
$ |
9,479,147 |
|
|
$ |
9,104,193 |
|
|
$ |
9,230,543 |
|
|
$ |
9,274,630 |
|
|
$ |
9,287,309 |
|
| Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
Non owner-occupied |
|
13,710,015 |
|
|
|
14,962,851 |
|
|
|
15,078,464 |
|
|
|
14,741,668 |
|
|
|
14,581,531 |
|
|
Multifamily |
|
8,976,264 |
|
|
|
8,818,263 |
|
|
|
8,860,219 |
|
|
|
8,863,529 |
|
|
|
8,796,008 |
|
|
Owner occupied |
|
5,536,844 |
|
|
|
4,367,839 |
|
|
|
4,304,556 |
|
|
|
4,435,853 |
|
|
|
4,415,533 |
|
|
Construction |
|
3,545,723 |
|
|
|
3,556,511 |
|
|
|
3,726,808 |
|
|
|
3,833,269 |
|
|
|
3,815,761 |
|
|
Total commercial real estate |
|
31,768,846 |
|
|
|
31,705,464 |
|
|
|
31,970,047 |
|
|
|
31,874,319 |
|
|
|
31,608,833 |
|
| Residential mortgage |
|
5,627,113 |
|
|
|
5,618,355 |
|
|
|
5,569,010 |
|
|
|
5,562,665 |
|
|
|
5,560,356 |
|
| Consumer: |
|
|
|
|
|
|
|
|
|
|
Home equity |
|
566,467 |
|
|
|
564,083 |
|
|
|
559,152 |
|
|
|
548,918 |
|
|
|
535,493 |
|
|
Automobile |
|
1,762,852 |
|
|
|
1,700,508 |
|
|
|
1,620,389 |
|
|
|
1,585,987 |
|
|
|
1,632,875 |
|
|
Other consumer |
|
1,107,277 |
|
|
|
1,229,439 |
|
|
|
1,261,154 |
|
|
|
1,251,000 |
|
|
|
1,252,382 |
|
|
Total consumer loans |
|
3,436,596 |
|
|
|
3,494,030 |
|
|
|
3,440,695 |
|
|
|
3,385,905 |
|
|
|
3,420,750 |
|
| Total loans |
$ |
50,311,702 |
|
|
$ |
49,922,042 |
|
|
$ |
50,210,295 |
|
|
$ |
50,097,519 |
|
|
$ |
49,877,248 |
|
| |
|
|
|
|
|
|
|
|
|
| CAPITAL
RATIOS: |
|
|
|
|
|
|
|
|
|
| Book value per common
share |
$ |
12.82 |
|
|
$ |
12.81 |
|
|
$ |
12.79 |
|
|
$ |
12.64 |
|
|
$ |
12.54 |
|
| Tangible book value per common
share (3) |
|
8.87 |
|
|
|
8.84 |
|
|
|
8.79 |
|
|
|
8.63 |
|
|
|
8.51 |
|
| Tangible common equity to
tangible assets (3) |
|
7.52 |
% |
|
|
7.62 |
% |
|
|
7.58 |
% |
|
|
7.40 |
% |
|
|
7.24 |
% |
| Tier 1 leverage capital |
|
8.19 |
|
|
|
8.20 |
|
|
|
8.16 |
|
|
|
8.08 |
|
|
|
7.86 |
|
| Common equity tier 1
capital |
|
9.55 |
|
|
|
9.34 |
|
|
|
9.29 |
|
|
|
9.21 |
|
|
|
9.03 |
|
| Tier 1 risk-based capital |
|
9.99 |
|
|
|
9.78 |
|
|
|
9.72 |
|
|
|
9.64 |
|
|
|
9.47 |
|
| Total risk-based capital |
|
12.18 |
|
|
|
11.88 |
|
|
|
11.76 |
|
|
|
11.68 |
|
|
|
11.52 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| ALLOWANCE FOR CREDIT
LOSSES: |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
($ in thousands) |
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Allowance for credit
losses for loans |
|
|
|
|
|
|
|
|
|
| Beginning balance |
$ |
487,269 |
|
|
$ |
465,550 |
|
|
$ |
460,969 |
|
|
$ |
465,550 |
|
|
$ |
483,255 |
|
| Impact of the adoption of ASU
No. 2022-02 |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,368 |
) |
| Beginning balance,
adjusted |
|
487,269 |
|
|
|
465,550 |
|
|
|
460,969 |
|
|
|
465,550 |
|
|
|
481,887 |
|
| Loans charged-off: |
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
|
(14,721 |
) |
|
|
(14,293 |
) |
|
|
(3,865 |
) |
|
|
(29,014 |
) |
|
|
(29,912 |
) |
|
Commercial real estate |
|
(22,144 |
) |
|
|
(1,204 |
) |
|
|
(2,065 |
) |
|
|
(23,348 |
) |
|
|
(2,065 |
) |
|
Construction |
|
(212 |
) |
|
|
(7,594 |
) |
|
|
(4,208 |
) |
|
|
(7,806 |
) |
|
|
(9,906 |
) |
|
Residential mortgage |
|
— |
|
|
|
— |
|
|
|
(149 |
) |
|
|
— |
|
|
|
(149 |
) |
|
Total consumer |
|
(1,262 |
) |
|
|
(1,809 |
) |
|
|
(1,040 |
) |
|
|
(3,071 |
) |
|
|
(1,868 |
) |
| Total loans charged-off |
|
(38,339 |
) |
|
|
(24,900 |
) |
|
|
(11,327 |
) |
|
|
(63,239 |
) |
|
|
(43,900 |
) |
| Charged-off loans
recovered: |
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
|
742 |
|
|
|
682 |
|
|
|
2,173 |
|
|
|
1,424 |
|
|
|
3,572 |
|
|
Commercial real estate |
|
150 |
|
|
|
241 |
|
|
|
4 |
|
|
|
391 |
|
|
|
28 |
|
|
Residential mortgage |
|
5 |
|
|
|
25 |
|
|
|
135 |
|
|
|
30 |
|
|
|
156 |
|
|
Total consumer |
|
603 |
|
|
|
397 |
|
|
|
390 |
|
|
|
1,000 |
|
|
|
1,151 |
|
| Total loans recovered |
|
1,500 |
|
|
|
1,345 |
|
|
|
2,702 |
|
|
|
2,845 |
|
|
|
4,907 |
|
| Total net charge-offs |
|
(36,839 |
) |
|
|
(23,555 |
) |
|
|
(8,625 |
) |
|
|
(60,394 |
) |
|
|
(38,993 |
) |
| Provision for credit losses
for loans |
|
82,111 |
|
|
|
45,274 |
|
|
|
6,332 |
|
|
|
127,385 |
|
|
|
15,782 |
|
| Ending balance |
$ |
532,541 |
|
|
$ |
487,269 |
|
|
$ |
458,676 |
|
|
$ |
532,541 |
|
|
$ |
458,676 |
|
| Components of
allowance for credit losses for loans: |
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
$ |
519,310 |
|
|
$ |
469,248 |
|
|
$ |
436,432 |
|
|
$ |
519,310 |
|
|
$ |
436,432 |
|
|
Allowance for unfunded credit commitments |
|
13,231 |
|
|
|
18,021 |
|
|
|
22,244 |
|
|
|
13,231 |
|
|
|
22,244 |
|
| Allowance for credit losses
for loans |
$ |
532,541 |
|
|
$ |
487,269 |
|
|
$ |
458,676 |
|
|
$ |
532,541 |
|
|
$ |
458,676 |
|
| Components of
provision for credit losses for loans: |
|
|
|
|
|
|
|
|
|
|
Provision for credit losses for loans |
$ |
86,901 |
|
|
$ |
46,723 |
|
|
$ |
8,159 |
|
|
$ |
133,624 |
|
|
$ |
18,138 |
|
|
Credit for unfunded credit commitments |
|
(4,790 |
) |
|
|
(1,449 |
) |
|
|
(1,827 |
) |
|
|
(6,239 |
) |
|
|
(2,356 |
) |
| Total provision for credit
losses for loans |
$ |
82,111 |
|
|
$ |
45,274 |
|
|
$ |
6,332 |
|
|
$ |
127,385 |
|
|
$ |
15,782 |
|
| Annualized ratio of total net
charge-offs to total average loans |
|
0.29 |
% |
|
|
0.19 |
% |
|
|
0.07 |
% |
|
|
0.24 |
% |
|
|
0.16 |
% |
| Allowance for credit losses
for loans as a % of total loans |
|
1.06 |
% |
|
|
0.98 |
% |
|
|
0.92 |
% |
|
|
1.06 |
% |
|
|
0.92 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
As Of |
| ASSET
QUALITY: |
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
($ in thousands) |
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2023 |
|
| Accruing past due loans: |
|
|
|
|
|
|
|
|
|
| 30 to 59 days past due: |
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
$ |
5,086 |
|
|
$ |
6,202 |
|
|
$ |
9,307 |
|
|
$ |
10,687 |
|
|
$ |
6,229 |
|
|
Commercial real estate |
|
1,879 |
|
|
|
5,791 |
|
|
|
3,008 |
|
|
|
8,053 |
|
|
|
3,612 |
|
|
Residential mortgage |
|
17,389 |
|
|
|
20,819 |
|
|
|
26,345 |
|
|
|
13,159 |
|
|
|
15,565 |
|
|
Total consumer |
|
21,639 |
|
|
|
14,032 |
|
|
|
20,554 |
|
|
|
15,509 |
|
|
|
8,431 |
|
| Total 30 to 59 days past
due |
|
45,993 |
|
|
|
46,844 |
|
|
|
59,214 |
|
|
|
47,408 |
|
|
|
33,837 |
|
| 60 to 89 days past due: |
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
|
1,621 |
|
|
|
2,665 |
|
|
|
5,095 |
|
|
|
5,720 |
|
|
|
7,468 |
|
|
Commercial real estate |
|
— |
|
|
|
3,720 |
|
|
|
1,257 |
|
|
|
2,620 |
|
|
|
— |
|
|
Residential mortgage |
|
6,632 |
|
|
|
5,970 |
|
|
|
8,200 |
|
|
|
9,710 |
|
|
|
1,348 |
|
|
Total consumer |
|
3,671 |
|
|
|
1,834 |
|
|
|
4,715 |
|
|
|
1,720 |
|
|
|
4,126 |
|
| Total 60 to 89 days past
due |
|
11,924 |
|
|
|
14,189 |
|
|
|
19,267 |
|
|
|
19,770 |
|
|
|
12,942 |
|
| 90 or more days past due: |
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
|
2,739 |
|
|
|
5,750 |
|
|
|
5,579 |
|
|
|
6,629 |
|
|
|
6,599 |
|
|
Commercial real estate |
|
4,242 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,242 |
|
|
Construction |
|
3,990 |
|
|
|
3,990 |
|
|
|
3,990 |
|
|
|
3,990 |
|
|
|
3,990 |
|
|
Residential mortgage |
|
2,609 |
|
|
|
2,884 |
|
|
|
2,488 |
|
|
|
1,348 |
|
|
|
1,165 |
|
|
Total consumer |
|
898 |
|
|
|
731 |
|
|
|
1,088 |
|
|
|
391 |
|
|
|
1,006 |
|
| Total 90 or more days past
due |
|
14,478 |
|
|
|
13,355 |
|
|
|
13,145 |
|
|
|
12,358 |
|
|
|
15,002 |
|
| Total accruing past due
loans |
$ |
72,395 |
|
|
$ |
74,388 |
|
|
$ |
91,626 |
|
|
$ |
79,536 |
|
|
$ |
61,781 |
|
| Non-accrual loans: |
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
$ |
102,942 |
|
|
$ |
102,399 |
|
|
$ |
99,912 |
|
|
$ |
87,655 |
|
|
$ |
84,449 |
|
|
Commercial real estate |
|
123,011 |
|
|
|
100,052 |
|
|
|
99,739 |
|
|
|
83,338 |
|
|
|
82,712 |
|
|
Construction |
|
45,380 |
|
|
|
51,842 |
|
|
|
60,851 |
|
|
|
62,788 |
|
|
|
63,043 |
|
|
Residential mortgage |
|
28,322 |
|
|
|
28,561 |
|
|
|
26,986 |
|
|
|
21,614 |
|
|
|
20,819 |
|
|
Total consumer |
|
3,624 |
|
|
|
4,438 |
|
|
|
4,383 |
|
|
|
3,545 |
|
|
|
3,068 |
|
| Total non-accrual loans |
|
303,279 |
|
|
|
287,292 |
|
|
|
291,871 |
|
|
|
258,940 |
|
|
|
254,091 |
|
| Other real estate owned
(OREO) |
|
8,059 |
|
|
|
88 |
|
|
|
71 |
|
|
|
71 |
|
|
|
824 |
|
| Other repossessed assets |
|
1,607 |
|
|
|
1,393 |
|
|
|
1,444 |
|
|
|
1,314 |
|
|
|
1,230 |
|
| Total non-performing
assets |
$ |
312,945 |
|
|
$ |
288,773 |
|
|
$ |
293,386 |
|
|
$ |
260,325 |
|
|
$ |
256,145 |
|
| Total non-accrual loans as a %
of loans |
|
0.60 |
% |
|
|
0.58 |
% |
|
|
0.58 |
% |
|
|
0.52 |
% |
|
|
0.51 |
% |
| Total accruing past due and
non-accrual loans as a % of loans |
|
0.75 |
|
|
|
0.72 |
|
|
|
0.76 |
|
|
|
0.68 |
|
|
|
0.63 |
|
| Allowance for losses on loans
as a % of non-accrual loans |
|
171.23 |
|
|
|
163.33 |
|
|
|
152.83 |
|
|
|
170.76 |
|
|
|
171.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
|
Non-GAAP Reconciliations. 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. The
Company believes that the non-GAAP financial measures provide
useful supplemental information to both management and investors in
understanding Valley’s underlying operational performance, business
and performance trends, and may facilitate comparisons of our
current and prior performance with the performance of others in the
financial services industry. Management utilizes these measures for
internal planning, forecasting and analysis purposes. Management
believes that Valley’s presentation and discussion of this
supplemental information, together with the accompanying
reconciliations to the GAAP financial measures, also allows
investors to view performance in a manner similar to management.
These non-GAAP financial measures should not be considered in
isolation or as a substitute for or superior to financial measures
calculated in accordance with U.S. GAAP. These non-GAAP financial
measures may also be calculated differently from similar measures
disclosed by other companies. |
|
|
|
|
|
Non-GAAP Reconciliations to GAAP Financial
Measures |
| |
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
($ in thousands, except for share data) |
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Adjusted net income
available to common shareholders (non-GAAP): |
|
|
|
|
|
|
|
|
|
| Net income, as reported
(GAAP) |
$ |
70,424 |
|
|
$ |
96,280 |
|
|
$ |
139,060 |
|
|
$ |
166,704 |
|
|
$ |
285,611 |
|
|
Add: FDIC Special assessment (a) |
|
1,363 |
|
|
|
7,394 |
|
|
|
— |
|
|
|
8,757 |
|
|
|
— |
|
|
Add: Losses on available for sale and held to maturity debt
securities, net (b) |
|
4 |
|
|
|
7 |
|
|
|
9 |
|
|
|
11 |
|
|
|
33 |
|
|
Add: Restructuring charge (c) |
|
334 |
|
|
|
620 |
|
|
|
11,182 |
|
|
|
954 |
|
|
|
11,182 |
|
|
Less: Gain on sale of commercial premium finance lending division
(d) |
|
— |
|
|
|
(3,629 |
) |
|
|
— |
|
|
|
(3,629 |
) |
|
|
— |
|
|
Add: Provision for credit losses for available for sale securities
(e) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,000 |
|
|
Add: Merger related expenses (f) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,133 |
|
| Total non-GAAP adjustments to
net income |
|
1,701 |
|
|
|
4,392 |
|
|
|
11,191 |
|
|
|
6,093 |
|
|
|
20,348 |
|
|
Income tax adjustments related to non-GAAP adjustments (g) |
|
(482 |
) |
|
|
(1,224 |
) |
|
|
(3,170 |
) |
|
|
(1,706 |
) |
|
|
(4,348 |
) |
| Net income, as adjusted
(non-GAAP) |
$ |
71,643 |
|
|
$ |
99,448 |
|
|
$ |
147,081 |
|
|
$ |
171,091 |
|
|
$ |
301,611 |
|
| Dividends on preferred
stock |
|
4,108 |
|
|
|
4,119 |
|
|
|
4,030 |
|
|
|
8,227 |
|
|
|
7,904 |
|
| Net income available to common
shareholders, as adjusted (non-GAAP) |
$ |
67,535 |
|
|
$ |
95,329 |
|
|
$ |
143,051 |
|
|
$ |
162,864 |
|
|
$ |
293,707 |
|
| __________ |
|
|
|
|
|
|
|
|
|
|
(a) Included in the FDIC insurance expense. |
|
(b) Included in gains on securities transactions, net. |
|
(c) Represents severance expense related to workforce reductions
within salary and employee benefits expense. |
|
(d) Included in net (losses) gains on sale of assets. |
|
(e) Included in provision for credit losses for available for sale
and held to maturity securities (tax disallowed). |
|
(f) Represents salary and employee benefits expense during the
second quarter 2023. |
|
(g) Calculated using the appropriate blended statutory tax rate for
the applicable period. |
| |
| Adjusted per common
share data (non-GAAP): |
|
|
|
|
|
|
|
|
|
| Net income available to common
shareholders, as adjusted (non-GAAP) |
$ |
67,535 |
|
|
$ |
95,329 |
|
|
$ |
143,051 |
|
|
$ |
162,864 |
|
|
$ |
293,707 |
|
| Average number of shares
outstanding |
|
509,141,252 |
|
|
|
508,340,719 |
|
|
|
507,690,043 |
|
|
|
508,740,986 |
|
|
|
507,402,268 |
|
|
Basic earnings, as adjusted (non-GAAP) |
$ |
0.13 |
|
|
$ |
0.19 |
|
|
$ |
0.28 |
|
|
$ |
0.32 |
|
|
$ |
0.58 |
|
| Average number of diluted
shares outstanding |
|
510,338,502 |
|
|
|
510,633,945 |
|
|
|
508,643,025 |
|
|
|
510,437,959 |
|
|
|
509,076,303 |
|
|
Diluted earnings, as adjusted (non-GAAP) |
$ |
0.13 |
|
|
$ |
0.19 |
|
|
$ |
0.28 |
|
|
$ |
0.32 |
|
|
$ |
0.58 |
|
| Adjusted annualized
return on average tangible shareholders' equity
(non-GAAP): |
|
|
|
|
|
|
|
|
|
| Net income, as adjusted
(non-GAAP) |
$ |
71,643 |
|
|
$ |
99,448 |
|
|
$ |
147,081 |
|
|
$ |
171,091 |
|
|
$ |
301,611 |
|
| Average shareholders'
equity |
$ |
6,753,981 |
|
|
$ |
6,725,695 |
|
|
$ |
6,546,452 |
|
|
|
6,739,838 |
|
|
|
6,493,627 |
|
|
Less: Average goodwill and other intangible assets |
|
2,016,766 |
|
|
|
2,024,999 |
|
|
|
2,051,591 |
|
|
|
2,020,883 |
|
|
|
2,056,487 |
|
| Average tangible shareholders'
equity |
$ |
4,737,215 |
|
|
$ |
4,700,696 |
|
|
$ |
4,494,861 |
|
|
$ |
4,718,955 |
|
|
$ |
4,437,140 |
|
| Annualized return on average
tangible shareholders' equity, as adjusted (non-GAAP) |
|
6.05 |
% |
|
|
8.46 |
% |
|
|
13.09 |
% |
|
|
7.25 |
% |
|
|
13.59 |
% |
| Adjusted annualized
return on average assets (non-GAAP): |
|
|
|
|
|
|
|
|
|
| Net income, as adjusted
(non-GAAP) |
$ |
71,643 |
|
|
$ |
99,448 |
|
|
$ |
147,081 |
|
|
$ |
171,091 |
|
|
$ |
301,611 |
|
| Average assets |
$ |
61,518,639 |
|
|
$ |
61,256,868 |
|
|
$ |
61,877,464 |
|
|
$ |
61,387,754 |
|
|
$ |
60,877,792 |
|
| Annualized return on average
assets, as adjusted (non-GAAP) |
|
0.47 |
% |
|
|
0.65 |
% |
|
|
0.95 |
% |
|
|
0.56 |
% |
|
|
0.99 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Reconciliations to GAAP Financial Measures
(Continued) |
| |
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
($ in thousands, except for share data) |
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Adjusted annualized
return on average shareholders' equity (non-GAAP): |
|
|
|
|
|
|
|
|
|
| Net income, as adjusted
(non-GAAP) |
$ |
71,643 |
|
|
$ |
99,448 |
|
|
$ |
147,081 |
|
|
$ |
171,091 |
|
|
$ |
301,611 |
|
| Average shareholders'
equity |
$ |
6,753,981 |
|
|
$ |
6,725,695 |
|
|
$ |
6,546,452 |
|
|
$ |
6,739,838 |
|
|
$ |
6,493,627 |
|
| Annualized return on average
shareholders' equity, as adjusted (non-GAAP) |
|
4.24 |
% |
|
|
5.91 |
% |
|
|
8.99 |
% |
|
|
5.08 |
% |
|
|
9.29 |
% |
| Annualized return on
average tangible shareholders' equity (non-GAAP): |
|
|
|
|
|
|
|
|
|
| Net income, as reported
(GAAP) |
$ |
70,424 |
|
|
$ |
96,280 |
|
|
$ |
139,060 |
|
|
$ |
166,704 |
|
|
$ |
285,611 |
|
| Average shareholders'
equity |
|
6,753,981 |
|
|
|
6,725,695 |
|
|
|
6,546,452 |
|
|
|
6,739,838 |
|
|
|
6,493,627 |
|
|
Less: Average goodwill and other intangible assets |
|
2,016,766 |
|
|
|
2,024,999 |
|
|
|
2,051,591 |
|
|
|
2,020,883 |
|
|
|
2,056,487 |
|
| Average tangible shareholders'
equity |
$ |
4,737,215 |
|
|
$ |
4,700,696 |
|
|
$ |
4,494,861 |
|
|
$ |
4,718,955 |
|
|
$ |
4,437,140 |
|
| Annualized return on average
tangible shareholders' equity (non-GAAP) |
|
5.95 |
% |
|
|
8.19 |
% |
|
|
12.37 |
% |
|
|
7.07 |
% |
|
|
12.87 |
% |
| Efficiency ratio
(non-GAAP): |
|
|
|
|
|
|
|
|
|
| Non-interest expense, as
reported (GAAP) |
$ |
277,497 |
|
|
$ |
280,310 |
|
|
$ |
282,971 |
|
|
$ |
557,807 |
|
|
$ |
555,137 |
|
|
Less: FDIC Special assessment (pre-tax) |
|
1,363 |
|
|
|
7,394 |
|
|
|
— |
|
|
|
8,757 |
|
|
|
— |
|
|
Less: Restructuring charge (pre-tax) |
|
334 |
|
|
|
620 |
|
|
|
11,182 |
|
|
|
954 |
|
|
|
11,182 |
|
|
Less: Merger-related expenses (pre-tax) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,133 |
|
|
Less: Amortization of tax credit investments (pre-tax) |
|
5,791 |
|
|
|
5,562 |
|
|
|
5,018 |
|
|
|
11,353 |
|
|
|
9,271 |
|
| Non-interest expense, as
adjusted (non-GAAP) |
$ |
270,009 |
|
|
$ |
266,734 |
|
|
$ |
266,771 |
|
|
$ |
536,743 |
|
|
$ |
530,551 |
|
| Net interest income, as
reported (GAAP) |
|
401,685 |
|
|
|
393,548 |
|
|
|
419,765 |
|
|
|
795,233 |
|
|
|
855,785 |
|
| Non-interest income, as
reported (GAAP) |
|
51,213 |
|
|
|
61,415 |
|
|
|
60,075 |
|
|
|
112,628 |
|
|
|
114,374 |
|
|
Add: Losses on available for sale and held to maturity securities
transactions, net (pre-tax) |
|
4 |
|
|
|
7 |
|
|
|
9 |
|
|
|
11 |
|
|
|
33 |
|
|
Less: Gain on sale of premium finance division (pre-tax) |
|
— |
|
|
|
(3,629 |
) |
|
|
— |
|
|
|
(3,629 |
) |
|
|
— |
|
| Non-interest income, as
adjusted (non-GAAP) |
$ |
51,217 |
|
|
$ |
57,793 |
|
|
$ |
60,084 |
|
|
$ |
109,010 |
|
|
$ |
114,407 |
|
|
Gross operating income, as adjusted (non-GAAP) |
$ |
452,902 |
|
|
$ |
451,341 |
|
|
$ |
479,849 |
|
|
$ |
904,243 |
|
|
$ |
970,192 |
|
|
Efficiency ratio (non-GAAP) |
|
59.62 |
% |
|
|
59.10 |
% |
|
|
55.59 |
% |
|
|
59.36 |
% |
|
|
54.69 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
As of |
| |
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
($ in thousands, except for share data) |
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2023 |
|
| Tangible book value
per common share (non-GAAP): |
|
|
|
|
|
|
|
|
|
| Common shares outstanding |
|
509,205,014 |
|
|
|
508,893,059 |
|
|
|
507,709,927 |
|
|
|
507,660,742 |
|
|
|
507,619,430 |
|
| Shareholders' equity
(GAAP) |
$ |
6,737,737 |
|
|
$ |
6,727,139 |
|
|
$ |
6,701,391 |
|
|
$ |
6,627,299 |
|
|
$ |
6,575,184 |
|
|
Less: Preferred stock |
|
209,691 |
|
|
|
209,691 |
|
|
|
209,691 |
|
|
|
209,691 |
|
|
|
209,691 |
|
|
Less: Goodwill and other intangible assets |
|
2,012,580 |
|
|
|
2,020,405 |
|
|
|
2,029,267 |
|
|
|
2,038,202 |
|
|
|
2,046,882 |
|
| Tangible common shareholders'
equity (non-GAAP) |
$ |
4,515,466 |
|
|
$ |
4,497,043 |
|
|
$ |
4,462,433 |
|
|
$ |
4,379,406 |
|
|
$ |
4,318,611 |
|
|
Tangible book value per common share (non-GAAP) |
$ |
8.87 |
|
|
$ |
8.84 |
|
|
$ |
8.79 |
|
|
$ |
8.63 |
|
|
$ |
8.51 |
|
| Tangible common equity
to tangible assets (non-GAAP): |
|
|
|
|
|
|
|
|
|
| Tangible common shareholders'
equity (non-GAAP) |
$ |
4,515,466 |
|
|
$ |
4,497,043 |
|
|
$ |
4,462,433 |
|
|
$ |
4,379,406 |
|
|
$ |
4,318,611 |
|
| Total assets (GAAP) |
|
62,058,974 |
|
|
|
61,000,188 |
|
|
|
60,934,974 |
|
|
|
61,183,352 |
|
|
|
61,703,693 |
|
|
Less: Goodwill and other intangible assets |
|
2,012,580 |
|
|
|
2,020,405 |
|
|
|
2,029,267 |
|
|
|
2,038,202 |
|
|
|
2,046,882 |
|
| Tangible assets
(non-GAAP) |
$ |
60,046,394 |
|
|
$ |
58,979,783 |
|
|
$ |
58,905,707 |
|
|
$ |
59,145,150 |
|
|
$ |
59,656,811 |
|
|
Tangible common equity to tangible assets (non-GAAP) |
|
7.52 |
% |
|
|
7.62 |
% |
|
|
7.58 |
% |
|
|
7.40 |
% |
|
|
7.24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VALLEY NATIONAL BANCORPCONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION(in thousands,
except for share data)
| |
June 30, |
|
December 31, |
|
|
|
2024 |
|
|
|
2023 |
|
| |
(Unaudited) |
|
|
|
Assets |
|
|
|
| Cash and
due from banks |
$ |
478,006 |
|
|
$ |
284,090 |
|
| Interest
bearing deposits with banks |
|
531,067 |
|
|
|
607,135 |
|
|
Investment securities: |
|
|
|
|
Equity securities |
|
69,105 |
|
|
|
64,464 |
|
|
Trading debt securities |
|
3,979 |
|
|
|
3,973 |
|
|
Available for sale debt securities |
|
2,212,092 |
|
|
|
1,296,576 |
|
| Held to
maturity debt securities (net of allowance for credit losses of
$1,090 at June 30, 2024 and $1,205 at December 31,
2023) |
|
3,650,364 |
|
|
|
3,739,208 |
|
|
Total investment securities |
|
5,935,540 |
|
|
|
5,104,221 |
|
| Loans
held for sale (includes fair value of $11,137 at June 30, 2024
and $20,640 at December 31, 2023 for loans originated for
sale) |
|
19,887 |
|
|
|
30,640 |
|
|
Loans |
|
50,311,702 |
|
|
|
50,210,295 |
|
|
Less: Allowance for loan losses |
|
(519,310 |
) |
|
|
(446,080 |
) |
|
Net loans |
|
49,792,392 |
|
|
|
49,764,215 |
|
| Premises and equipment,
net |
|
363,038 |
|
|
|
381,081 |
|
| Lease
right of use assets |
|
337,947 |
|
|
|
343,461 |
|
| Bank
owned life insurance |
|
725,879 |
|
|
|
723,799 |
|
| Accrued
interest receivable |
|
251,167 |
|
|
|
245,498 |
|
|
Goodwill |
|
1,868,936 |
|
|
|
1,868,936 |
|
| Other
intangible assets, net |
|
143,644 |
|
|
|
160,331 |
|
| Other
assets |
|
1,611,471 |
|
|
|
1,421,567 |
|
|
Total Assets |
$ |
62,058,974 |
|
|
$ |
60,934,974 |
|
|
Liabilities |
|
|
|
|
Deposits: |
|
|
|
|
Non-interest bearing |
$ |
11,117,746 |
|
|
$ |
11,539,483 |
|
|
Interest bearing: |
|
|
|
|
Savings, NOW and money market |
|
24,711,083 |
|
|
|
24,526,622 |
|
|
Time |
|
14,283,348 |
|
|
|
13,176,724 |
|
|
Total deposits |
|
50,112,177 |
|
|
|
49,242,829 |
|
| Short-term borrowings |
|
63,770 |
|
|
|
917,834 |
|
|
Long-term borrowings |
|
3,264,530 |
|
|
|
2,328,375 |
|
| Junior
subordinated debentures issued to capital trusts |
|
57,282 |
|
|
|
57,108 |
|
| Lease
liabilities |
|
398,179 |
|
|
|
403,781 |
|
| Accrued
expenses and other liabilities |
|
1,425,299 |
|
|
|
1,283,656 |
|
|
Total Liabilities |
|
55,321,237 |
|
|
|
54,233,583 |
|
|
Shareholders’ Equity |
|
|
|
|
Preferred stock, no par value; 50,000,000 authorized shares: |
|
|
|
| Series A
(4,600,000 shares issued at June 30, 2024 and
December 31, 2023) |
|
111,590 |
|
|
|
111,590 |
|
| Series B
(4,000,000 shares issued at June 30, 2024 and
December 31, 2023) |
|
98,101 |
|
|
|
98,101 |
|
| Common
stock (no par value, authorized 650,000,000 shares; issued
509,205,014 shares at June 30, 2024 and 507,896,910 shares at
December 31, 2023) |
|
178,645 |
|
|
|
178,187 |
|
|
Surplus |
|
4,995,638 |
|
|
|
4,989,989 |
|
| Retained
earnings |
|
1,516,376 |
|
|
|
1,471,371 |
|
|
Accumulated other comprehensive loss |
|
(162,613 |
) |
|
|
(146,456 |
) |
| Treasury
stock, at cost (186,983 common shares at December 31,
2023) |
|
— |
|
|
|
(1,391 |
) |
|
Total Shareholders’ Equity |
|
6,737,737 |
|
|
|
6,701,391 |
|
|
Total Liabilities and Shareholders’ Equity |
$ |
62,058,974 |
|
|
$ |
60,934,974 |
|
|
|
|
|
|
|
|
|
|
VALLEY NATIONAL BANCORPCONSOLIDATED
STATEMENTS OF INCOME (Unaudited)(in thousands,
except for share data)
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Interest Income |
|
|
|
|
|
|
|
|
|
| Interest
and fees on loans |
$ |
770,964 |
|
|
$ |
771,553 |
|
|
$ |
715,172 |
|
|
$ |
1,542,517 |
|
|
$ |
1,370,398 |
|
| Interest
and dividends on investment securities: |
|
|
|
|
|
|
|
|
|
|
Taxable |
|
40,460 |
|
|
|
35,797 |
|
|
|
31,919 |
|
|
|
76,257 |
|
|
|
64,208 |
|
|
Tax-exempt |
|
4,799 |
|
|
|
4,796 |
|
|
|
5,575 |
|
|
|
9,595 |
|
|
|
10,900 |
|
|
Dividends |
|
6,341 |
|
|
|
6,828 |
|
|
|
7,517 |
|
|
|
13,169 |
|
|
|
12,702 |
|
| Interest
on federal funds sold and other short-term investments |
|
10,902 |
|
|
|
9,682 |
|
|
|
27,276 |
|
|
|
20,584 |
|
|
|
49,481 |
|
|
Total interest income |
|
833,466 |
|
|
|
828,656 |
|
|
|
787,459 |
|
|
|
1,662,122 |
|
|
|
1,507,689 |
|
|
Interest Expense |
|
|
|
|
|
|
|
|
|
| Interest
on deposits: |
|
|
|
|
|
|
|
|
|
|
Savings, NOW and money market |
|
231,597 |
|
|
|
232,506 |
|
|
|
164,842 |
|
|
|
464,103 |
|
|
|
315,608 |
|
|
Time |
|
160,442 |
|
|
|
151,065 |
|
|
|
125,764 |
|
|
|
311,507 |
|
|
|
206,062 |
|
| Interest
on short-term borrowings |
|
691 |
|
|
|
20,612 |
|
|
|
50,208 |
|
|
|
21,303 |
|
|
|
84,156 |
|
|
Interest on long-term borrowings and junior subordinated
debentures |
|
39,051 |
|
|
|
30,925 |
|
|
|
26,880 |
|
|
|
69,976 |
|
|
|
46,078 |
|
|
Total interest expense |
|
431,781 |
|
|
|
435,108 |
|
|
|
367,694 |
|
|
|
866,889 |
|
|
|
651,904 |
|
|
Net Interest Income |
|
401,685 |
|
|
|
393,548 |
|
|
|
419,765 |
|
|
|
795,233 |
|
|
|
855,785 |
|
| (Credit)
provision for credit losses for available for sale and held to
maturity securities |
|
(41 |
) |
|
|
(74 |
) |
|
|
(282 |
) |
|
|
(115 |
) |
|
|
4,705 |
|
|
Provision for credit losses for loans |
|
82,111 |
|
|
|
45,274 |
|
|
|
6,332 |
|
|
|
127,385 |
|
|
|
15,782 |
|
|
Net Interest Income After Provision for Credit
Losses |
|
319,615 |
|
|
|
348,348 |
|
|
|
413,715 |
|
|
|
667,963 |
|
|
|
835,298 |
|
|
Non-Interest Income |
|
|
|
|
|
|
|
|
|
| Wealth
management and trust fees |
|
13,136 |
|
|
|
17,930 |
|
|
|
11,176 |
|
|
|
31,066 |
|
|
|
20,763 |
|
|
Insurance commissions |
|
3,958 |
|
|
|
2,251 |
|
|
|
3,139 |
|
|
|
6,209 |
|
|
|
5,559 |
|
| Capital
markets |
|
7,779 |
|
|
|
5,670 |
|
|
|
16,967 |
|
|
|
13,449 |
|
|
|
27,859 |
|
| Service
charges on deposit accounts |
|
11,212 |
|
|
|
11,249 |
|
|
|
10,542 |
|
|
|
22,461 |
|
|
|
21,018 |
|
| Gains on
securities transactions, net |
|
3 |
|
|
|
49 |
|
|
|
217 |
|
|
|
52 |
|
|
|
595 |
|
| Fees
from loan servicing |
|
2,691 |
|
|
|
3,188 |
|
|
|
2,702 |
|
|
|
5,879 |
|
|
|
5,373 |
|
| Gains on
sales of loans, net |
|
884 |
|
|
|
1,618 |
|
|
|
1,240 |
|
|
|
2,502 |
|
|
|
1,729 |
|
| (Losses)
gains on sales of assets, net |
|
(2 |
) |
|
|
3,694 |
|
|
|
161 |
|
|
|
3,692 |
|
|
|
285 |
|
| Bank
owned life insurance |
|
4,545 |
|
|
|
3,235 |
|
|
|
2,443 |
|
|
|
7,780 |
|
|
|
5,027 |
|
|
Other |
|
7,007 |
|
|
|
12,531 |
|
|
|
11,488 |
|
|
|
19,538 |
|
|
|
26,166 |
|
|
Total non-interest income |
|
51,213 |
|
|
|
61,415 |
|
|
|
60,075 |
|
|
|
112,628 |
|
|
|
114,374 |
|
|
Non-Interest Expense |
|
|
|
|
|
|
|
|
|
| Salary
and employee benefits expense |
|
140,815 |
|
|
|
141,831 |
|
|
|
149,594 |
|
|
|
282,646 |
|
|
|
294,580 |
|
| Net
occupancy expense |
|
24,252 |
|
|
|
24,323 |
|
|
|
25,949 |
|
|
|
48,575 |
|
|
|
49,205 |
|
|
Technology, furniture and equipment expense |
|
35,203 |
|
|
|
35,462 |
|
|
|
32,476 |
|
|
|
70,665 |
|
|
|
68,984 |
|
| FDIC
insurance assessment |
|
14,446 |
|
|
|
18,236 |
|
|
|
10,426 |
|
|
|
32,682 |
|
|
|
19,581 |
|
|
Amortization of other intangible assets |
|
8,568 |
|
|
|
9,412 |
|
|
|
9,812 |
|
|
|
17,980 |
|
|
|
20,331 |
|
|
Professional and legal fees |
|
17,938 |
|
|
|
16,465 |
|
|
|
21,406 |
|
|
|
34,403 |
|
|
|
38,220 |
|
|
Amortization of tax credit investments |
|
5,791 |
|
|
|
5,562 |
|
|
|
5,018 |
|
|
|
11,353 |
|
|
|
9,271 |
|
|
Other |
|
30,484 |
|
|
|
29,019 |
|
|
|
28,290 |
|
|
|
59,503 |
|
|
|
54,965 |
|
|
Total non-interest expense |
|
277,497 |
|
|
|
280,310 |
|
|
|
282,971 |
|
|
|
557,807 |
|
|
|
555,137 |
|
|
Income Before Income Taxes |
|
93,331 |
|
|
|
129,453 |
|
|
|
190,819 |
|
|
|
222,784 |
|
|
|
394,535 |
|
| Income
tax expense |
|
22,907 |
|
|
|
33,173 |
|
|
|
51,759 |
|
|
|
56,080 |
|
|
|
108,924 |
|
|
Net Income |
|
70,424 |
|
|
|
96,280 |
|
|
|
139,060 |
|
|
|
166,704 |
|
|
|
285,611 |
|
|
Dividends on preferred stock |
|
4,108 |
|
|
|
4,119 |
|
|
|
4,030 |
|
|
|
8,227 |
|
|
|
7,904 |
|
|
Net Income Available to Common Shareholders |
$ |
66,316 |
|
|
$ |
92,161 |
|
|
$ |
135,030 |
|
|
$ |
158,477 |
|
|
$ |
277,707 |
|
|
|
|
|
|
|
|
|
|
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VALLEY NATIONAL BANCORPQuarterly
Analysis of Average Assets, Liabilities and Shareholders' Equity
andNet Interest Income on a Tax Equivalent
Basis
| |
Three Months Ended |
| |
June 30, 2024 |
|
March 31, 2024 |
|
June 30, 2023 |
| |
Average |
|
|
|
Avg. |
|
Average |
|
|
|
Avg. |
|
Average |
|
|
|
Avg. |
| ($ in thousands) |
Balance |
|
Interest |
|
Rate |
|
Balance |
|
Interest |
|
Rate |
|
Balance |
|
Interest |
|
Rate |
| Assets |
|
|
|
|
|
|
|
|
|
|
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|
|
| Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1)(2) |
$ |
50,020,901 |
|
$ |
770,987 |
|
|
6.17 |
% |
|
$ |
50,246,591 |
|
$ |
771,577 |
|
|
6.14 |
% |
|
$ |
49,457,937 |
|
$ |
715,195 |
|
|
5.78 |
% |
|
Taxable investments (3) |
|
5,379,101 |
|
|
46,801 |
|
|
3.48 |
|
|
|
5,094,978 |
|
|
42,625 |
|
|
3.35 |
|
|
|
5,065,812 |
|
|
39,436 |
|
|
3.11 |
|
|
Tax-exempt investments (1)(3) |
|
575,272 |
|
|
6,075 |
|
|
4.22 |
|
|
|
579,842 |
|
|
6,071 |
|
|
4.19 |
|
|
|
629,342 |
|
|
7,062 |
|
|
4.49 |
|
|
Interest bearing deposits with banks |
|
797,676 |
|
|
10,902 |
|
|
5.47 |
|
|
|
697,386 |
|
|
9,682 |
|
|
5.55 |
|
|
|
2,198,717 |
|
|
27,276 |
|
|
4.96 |
|
| Total interest earning
assets |
|
56,772,950 |
|
|
834,765 |
|
|
5.88 |
|
|
|
56,618,797 |
|
|
829,955 |
|
|
5.86 |
|
|
|
57,351,808 |
|
|
788,969 |
|
|
5.50 |
|
| Other assets |
|
4,745,689 |
|
|
|
|
|
|
4,638,071 |
|
|
|
|
|
|
4,525,656 |
|
|
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| Total assets |
$ |
61,518,639 |
|
|
|
|
|
$ |
61,256,868 |
|
|
|
|
|
$ |
61,877,464 |
|
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| Liabilities and
shareholders' equity |
|
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| Interest bearing
liabilities: |
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Savings, NOW and money market deposits |
$ |
24,848,266 |
|
$ |
231,597 |
|
|
3.73 |
% |
|
$ |
24,793,452 |
|
$ |
232,506 |
|
|
3.75 |
% |
|
$ |
22,512,128 |
|
$ |
164,843 |
|
|
2.93 |
% |
|
Time deposits |
|
13,311,381 |
|
|
160,442 |
|
|
4.82 |
|
|
|
12,599,395 |
|
|
151,065 |
|
|
4.80 |
|
|
|
12,195,479 |
|
|
125,764 |
|
|
4.12 |
|
|
Short-term borrowings |
|
97,502 |
|
|
691 |
|
|
2.83 |
|
|
|
1,537,879 |
|
|
20,612 |
|
|
5.36 |
|
|
|
3,878,457 |
|
|
50,207 |
|
|
5.18 |
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|
Long-term borrowings (4) |
|
3,319,195 |
|
|
39,051 |
|
|
4.71 |
|
|
|
2,625,862 |
|
|
30,925 |
|
|
4.71 |
|
|
|
2,339,727 |
|
|
26,880 |
|
|
4.60 |
|
| Total interest bearing
liabilities |
|
41,576,344 |
|
|
431,781 |
|
|
4.15 |
|
|
|
41,556,588 |
|
|
435,108 |
|
|
4.19 |
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|
40,925,791 |
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|
367,694 |
|
|
3.59 |
|
| Non-interest bearing
deposits |
|
11,223,562 |
|
|
|
|
|
|
11,183,127 |
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|
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|
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12,756,862 |
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| Other liabilities |
|
1,964,752 |
|
|
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|
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1,791,458 |
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|
1,648,359 |
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|
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| Shareholders' equity |
|
6,753,981 |
|
|
|
|
|
|
6,725,695 |
|
|
|
|
|
|
6,546,452 |
|
|
|
|
| Total liabilities and
shareholders' equity |
$ |
61,518,639 |
|
|
|
|
|
$ |
61,256,868 |
|
|
|
|
|
$ |
61,877,464 |
|
|
|
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| |
|
|
|
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|
|
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| Net interest income/interest
rate spread (5) |
|
|
$ |
402,984 |
|
|
1.73 |
% |
|
|
|
$ |
394,847 |
|
|
1.67 |
% |
|
|
|
$ |
421,275 |
|
|
1.91 |
% |
| Tax equivalent adjustment |
|
|
|
(1,299 |
) |
|
|
|
|
|
|
(1,299 |
) |
|
|
|
|
|
|
(1,510 |
) |
|
|
| Net interest income, as
reported |
|
|
$ |
401,685 |
|
|
|
|
|
|
$ |
393,548 |
|
|
|
|
|
|
$ |
419,765 |
|
|
|
| Net interest margin (6) |
|
|
|
|
2.83 |
|
|
|
|
|
|
2.78 |
|
|
|
|
|
|
2.93 |
|
|
Tax equivalent effect |
|
|
|
|
0.01 |
|
|
|
|
|
|
0.01 |
|
|
|
|
|
|
0.01 |
|
| Net interest margin on a fully
tax equivalent basis (6) |
|
|
|
|
2.84 |
% |
|
|
|
|
|
2.79 |
% |
|
|
|
|
|
2.94 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
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|
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|
_______________(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.
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, 70 Speedwell Avenue, Morristown, New Jersey,
07960, by telephone at (973) 305-3380, by fax at (973) 305-1364 or
by e-mail at tzarkadas@valley.com.
|
Contact: |
|
Michael D. HagedornSenior Executive Vice President andChief
Financial Officer973-872-4885 |
|
|
|
|
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