Valley National Bancorp Announces Second Quarter 2024 Results
Valley National Bancorp (NASDAQ:VLY) reported net income of $70.4 million ($0.13 per diluted share) for Q2 2024, down from $96.3 million ($0.18 per share) in Q1 2024 and $139.1 million ($0.27 per share) in Q2 2023. Adjusted net income was $71.6 million ($0.13 per share). Key highlights include:
- Net interest income increased to $403.0 million, up $8.1 million from Q1 2024
- Total loans grew 3.1% annualized to $50.3 billion
- Deposits increased $1.0 billion to $50.1 billion
- Provision for credit losses rose to $82.1 million
- Non-performing assets increased to $312.9 million (0.60% of total loans)
- Allowance for credit losses for loans increased to 1.06% of total loans
The company completed a credit risk transfer transaction on $1.5 billion of auto loans, boosting capital ratios by approximately 20 basis points.
Valley National Bancorp (NASDAQ:VLY) ha riportato un reddito netto di 70,4 milioni di dollari (0,13 dollari per azione diluita) per il secondo trimestre del 2024, in calo rispetto a 96,3 milioni di dollari (0,18 dollari per azione) nel primo trimestre del 2024 e 139,1 milioni di dollari (0,27 dollari per azione) nel secondo trimestre del 2023. Il reddito netto rettificato è stato di 71,6 milioni di dollari (0,13 dollari per azione). I principali punti salienti includono:
- Il reddito netto da interessi è aumentato a 403,0 milioni di dollari, con un incremento di 8,1 milioni di dollari rispetto al primo trimestre del 2024
- Il totale dei prestiti è cresciuto dell'3,1% annualizzato, raggiungendo 50,3 miliardi di dollari
- I depositi sono aumentati di 1,0 miliardi di dollari, raggiungendo 50,1 miliardi di dollari
- La previsione per le perdite su crediti è aumentata a 82,1 milioni di dollari
- Gli attivi non performanti sono aumentati a 312,9 milioni di dollari (0,60% del totale dei prestiti)
- Il fondo per le perdite su crediti sui prestiti è aumentato all'1,06% del totale dei prestiti
L'azienda ha completato una transazione di trasferimento del rischio di credito su 1,5 miliardi di dollari di prestiti auto, migliorando i rapporti patrimoniali di circa 20 punti base.
Valley National Bancorp (NASDAQ:VLY) reportó un ingreso neto de 70,4 millones de dólares (0,13 dólares por acción diluida) para el segundo trimestre de 2024, una disminución respecto a 96,3 millones de dólares (0,18 dólares por acción) en el primer trimestre de 2024 y 139,1 millones de dólares (0,27 dólares por acción) en el segundo trimestre de 2023. El ingreso neto ajustado fue de 71,6 millones de dólares (0,13 dólares por acción). Los aspectos destacados incluyen:
- Los ingresos netos por intereses aumentaron a 403,0 millones de dólares, un incremento de 8,1 millones de dólares respecto al primer trimestre de 2024
- El total de préstamos creció un 3,1% anualizado, alcanzando 50,3 mil millones de dólares
- Los depósitos aumentaron en 1,0 mil millones de dólares, alcanzando 50,1 mil millones de dólares
- La provisión para pérdidas crediticias se elevó a 82,1 millones de dólares
- Los activos no productivos aumentaron a 312,9 millones de dólares (0,60% del total de préstamos)
- La reserva para pérdidas crediticias sobre préstamos aumentó al 1,06% del total de préstamos
La compañía completó una transacción de transferencia de riesgo crediticio sobre 1,5 mil millones de dólares en préstamos de automóviles, aumentando los coeficientes de capital en aproximadamente 20 puntos básicos.
Valley National Bancorp (NASDAQ:VLY)는 2024년 2분기에 7,040만 달러의 순이익 (희석주당 0.13달러)를 보고했으며, 이는 2024년 1분기의 9,630만 달러 (주당 0.18달러)와 2023년 2분기의 1억 3,910만 달러 (주당 0.27달러)에서 감소한 수치입니다. 조정된 순이익은 7,160만 달러 (주당 0.13달러)였습니다. 주요 하이라이트는 다음과 같습니다:
- 순이자 수익이 4억 3,030만 달러로 증가했으며, 이는 2024년 1분기보다 810만 달러 증가한 수치입니다.
- 총 대출이 연율 3.1% 증가하여 5,030억 달러에 달했습니다.
- 예금이 10억 달러 증가하여 5,010억 달러에 도달했습니다.
- 신용 손실 충당금이 8,210만 달러로 증가했습니다.
- 부실 자산이 3억 1,290만 달러 (총 대출의 0.60%)로 증가했습니다.
- 대출에 대한 신용 손실 충당금이 총 대출의 1.06%로 증가했습니다.
회사는 15억 달러의 자동차 대출에 대한 신용 위험 전이 거래를 완료하여 자본 비율을 약 20 베이시스 포인트 만큼 개선했습니다.
Valley National Bancorp (NASDAQ:VLY) a annoncé un revenu net de 70,4 millions de dollars (0,13 dollar par action diluée) pour le deuxième trimestre 2024, en baisse par rapport à 96,3 millions de dollars (0,18 dollar par action) au premier trimestre 2024 et 139,1 millions de dollars (0,27 dollar par action) au deuxième trimestre 2023. Le revenu net ajusté s'élevait à 71,6 millions de dollars (0,13 dollar par action). Les points saillants incluent :
- Les revenus nets d'intérêts ont augmenté à 403,0 millions de dollars, soit une hausse de 8,1 millions de dollars par rapport au premier trimestre 2024
- Le total des prêts a augmenté de 3,1 % annualisé pour atteindre 50,3 milliards de dollars
- Les dépôts ont augmenté d'1,0 milliard de dollars, atteignant 50,1 milliards de dollars
- La provision pour pertes sur créances a augmenté à 82,1 millions de dollars
- Les actifs non performants ont augmenté à 312,9 millions de dollars (0,60 % du total des prêts)
- La réserve pour pertes sur créances pour les prêts a augmenté à 1,06 % du total des prêts
L'entreprise a complété une transaction de transfert de risque de crédit sur 1,5 milliard de dollars de prêts automobiles, améliorant les ratios de capital d'environ 20 points de base.
Valley National Bancorp (NASDAQ:VLY) hat einen Nettoertrag von 70,4 Millionen Dollar (0,13 Dollar pro verwässerter Aktie) für das zweite Quartal 2024 berichtet, was einen Rückgang im Vergleich zu 96,3 Millionen Dollar (0,18 Dollar pro Aktie) im ersten Quartal 2024 und 139,1 Millionen Dollar (0,27 Dollar pro Aktie) im zweiten Quartal 2023 darstellt. Der bereinigte Nettoertrag betrug 71,6 Millionen Dollar (0,13 Dollar pro Aktie). Zu den wichtigsten Highlights gehören:
- Der Nettozinsertrag stieg auf 403,0 Millionen Dollar, ein Anstieg um 8,1 Millionen Dollar im Vergleich zum ersten Quartal 2024
- Die Gesamtdarlehen wuchsen annualisiert um 3,1 % auf 50,3 Milliarden Dollar
- Die Einlagen stiegen um 1,0 Milliarden Dollar auf 50,1 Milliarden Dollar
- Die Rückstellung für Kreditverluste erhöhte sich auf 82,1 Millionen Dollar
- Nicht leistungsfähige Vermögenswerte stiegen auf 312,9 Millionen Dollar (0,60 % der Gesamtdarlehen)
- Die Rückstellung für Kreditverluste auf Darlehen stieg auf 1,06 % der Gesamtdarlehen
Das Unternehmen hat eine Transaktion zur Übertragung von Kreditrisiken über 1,5 Milliarden Dollar aus Autofinanzierungen abgeschlossen, wodurch die Kapitalquoten um etwa 20 Basispunkte erhöht wurden.
- Net interest income increased by $8.1 million compared to Q1 2024
- Total loans grew 3.1% annualized to $50.3 billion
- Deposits increased by $1.0 billion to $50.1 billion
- Completed credit risk transfer transaction, improving capital ratios by 20 basis points
- Net income decreased to $70.4 million from $96.3 million in Q1 2024 and $139.1 million in Q2 2023
- Provision for credit losses increased significantly to $82.1 million
- Non-performing assets rose to $312.9 million (0.60% of total loans)
- Net loan charge-offs increased to $36.8 million, up from $23.6 million in Q1 2024
Valley National Bancorp's Q2 2024 results reveal a mixed financial picture. Net income decreased to
On a positive note, net interest income increased by
The loan portfolio grew by
Deposits increased by
The efficiency ratio deteriorated slightly to
In conclusion, while Valley National shows some resilience in growing its balance sheet and managing net interest income, the declining profitability and increasing credit provisions are red flags that investors should monitor closely.
The credit quality metrics in Valley National's Q2 2024 report raise several concerns. Non-performing assets (NPAs) increased by
Of particular note is the
The provision for credit losses jumped significantly to
Net charge-offs also spiked to
The allowance for credit losses increased to
In conclusion, the credit quality trends at Valley National are worrisome. The increase in non-performing assets, higher provisions and significant charge-offs point to growing stress in the loan portfolio, particularly in commercial real estate. Investors should closely monitor these trends and management's strategies to address these credit challenges.
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
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
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
Deposits. Actual ending balances for deposits increased
Other Borrowings. Short-term borrowings decreased
Credit Quality
Non-Performing Assets (NPAs). Total NPAs, consisting of non-accrual loans, other real estate owned (OREO) and other repossessed assets, increased
Accruing Past Due Loans. Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) decreased
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
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
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
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 BANCORP CONSOLIDATED 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 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 | 3,650,364 | 3,739,208 | |||||
Total investment securities | 5,935,540 | 5,104,221 | |||||
Loans held for sale (includes fair value of | 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 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 | |||||||||||||||||||||||||||||
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 | |
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FAQ
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