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Valley National Bancorp Announces Second Quarter 2024 Results
Источник: Nasdaq GlobeNewswire / 25 июл 2024 07:00:07 America/New_York
NEW YORK, July 25, 2024 (GLOBE NEWSWIRE) -- 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.
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VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTSSELECTED 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 BANCORP
CONSOLIDATED 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 BANCORP
CONSOLIDATED 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 VALLEY NATIONAL BANCORP
Quarterly Analysis of Average Assets, Liabilities and Shareholders' Equity and
Net Interest Income on a Tax Equivalent BasisThree 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 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 Total assets $ 61,518,639 $ 61,256,868 $ 61,877,464 Liabilities and shareholders' equity Interest bearing liabilities: 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 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 40,925,791 367,694 3.59 Non-interest bearing deposits 11,223,562 11,183,127 12,756,862 Other liabilities 1,964,752 1,791,458 1,648,359 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 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 % _______________
(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 RELATIONS
Requests 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. Hagedorn
Senior Executive Vice President and
Chief Financial Officer
973-872-4885
