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Valley National Bancorp Announces Third Quarter 2024 Results

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Valley National Bancorp (NASDAQ:VLY) reported Q3 2024 net income of $97.9 million, or $0.18 per diluted share, compared to Q2 2024 net income of $70.4 million ($0.13 per share) and Q3 2023 net income of $141.3 million ($0.27 per share). The company announced plans to sell over $800 million in performing commercial real estate loans at a 1% discount. Net interest income increased to $411.8 million, while net interest margin rose to 2.86%. Total loans decreased by $956.4 million to $49.4 billion, while deposits increased by $283.8 million to $50.4 billion. The provision for credit losses was $75.0 million, reflecting increased reserves for commercial real estate loans and impact of Hurricane Helene.

Valley National Bancorp (NASDAQ:VLY) ha riportato un utile netto per il terzo trimestre del 2024 di 97,9 milioni di dollari, pari a 0,18 dollari per azione diluita, rispetto a un utile netto del secondo trimestre del 2024 di 70,4 milioni di dollari (0,13 dollari per azione) e un utile netto del terzo trimestre del 2023 di 141,3 milioni di dollari (0,27 dollari per azione). L'azienda ha annunciato piani per vendere oltre 800 milioni di dollari in prestiti commerciali immobiliari performanti con uno sconto dell'1%. Il reddito netto da interessi è aumentato a 411,8 milioni di dollari, mentre il margine d'interesse netto è salito al 2,86%. I prestiti totali sono diminuiti di 956,4 milioni di dollari, portandosi a 49,4 miliardi di dollari, mentre i depositi sono aumentati di 283,8 milioni di dollari, raggiungendo 50,4 miliardi di dollari. La provvista per perdite su crediti è stata di 75,0 milioni di dollari, riflettendo l'aumento delle riserve per prestiti commerciali immobiliari e l'impatto dell'uragano Helene.

Valley National Bancorp (NASDAQ:VLY) reportó un ingreso neto del tercer trimestre de 2024 de 97.9 millones de dólares, o 0.18 dólares por acción diluida, en comparación con un ingreso neto del segundo trimestre de 2024 de 70.4 millones de dólares (0.13 dólares por acción) y un ingreso neto del tercer trimestre de 2023 de 141.3 millones de dólares (0.27 dólares por acción). La compañía anunció planes para vender más de 800 millones de dólares en préstamos comerciales inmobiliarios performantes con un descuento del 1%. Los ingresos netos por intereses aumentaron a 411.8 millones de dólares, mientras que el margen de interés neto subió al 2.86%. Los préstamos totales disminuyeron en 956.4 millones de dólares, alcanzando 49.4 mil millones de dólares, mientras que los depósitos aumentaron en 283.8 millones de dólares, alcanzando 50.4 mil millones de dólares. La provisión para pérdidas crediticias fue de 75.0 millones de dólares, reflejando el aumento de reservas para préstamos comerciales inmobiliarios y el impacto del huracán Helene.

Valley National Bancorp (NASDAQ:VLY)는 2024년 3분기 순이익이 9,790만 달러, 주당 0.18달러로 발표했으며, 이는 2024년 2분기 순이익 7,040만 달러(주당 0.13달러) 및 2023년 3분기 순이익 1억 4,130만 달러(주당 0.27달러)와 비교됩니다. 회사는 8억 달러 이상의 성과가 있는 상업용 부동산 대출을 1% 할인된 가격에 판매할 계획을 발표했습니다. 순이자 수익은 4억 1,180만 달러로 증가했고, 순이자 마진은 2.86%로 상승했습니다. 총 대출은 9억 5,640만 달러 감소해 494억 달러로 줄어들었고, 예금은 2억 8,380만 달러 증가해 504억 달러에 도달했습니다. 신용 손실 충당금은 7,500만 달러로, 상업용 부동산 대출에 대한 충당금 증가와 헬렌 허리케인의 영향을 반영하고 있습니다.

Valley National Bancorp (NASDAQ:VLY) a annoncé un bénéfice net de 97,9 millions de dollars pour le troisième trimestre 2024, soit 0,18 dollar par action diluée, par rapport à un bénéfice net de 70,4 millions de dollars pour le deuxième trimestre 2024 (0,13 dollar par action) et un bénéfice net de 141,3 millions de dollars pour le troisième trimestre 2023 (0,27 dollar par action). La société a annoncé des plans pour vendre plus de 800 millions de dollars de prêts immobiliers commerciaux performants avec une remise de 1%. Les revenus nets d'intérêts ont augmenté à 411,8 millions de dollars, tandis que la marge d'intérêt net a augmenté à 2,86%. Les prêts totaux ont diminué de 956,4 millions de dollars pour atteindre 49,4 milliards de dollars, tandis que les dépôts ont augmenté de 283,8 millions de dollars, atteignant 50,4 milliards de dollars. La provision pour pertes de crédit s'élevait à 75,0 millions de dollars, ce qui reflète l'augmentation des réserves pour les prêts immobiliers commerciaux et l'impact de l'ouragan Helene.

Valley National Bancorp (NASDAQ:VLY) hat für das dritte Quartal 2024 einen Nettogewinn von 97,9 Millionen Dollar beziehungsweise 0,18 Dollar je verwässerte Aktie berichtet, verglichen mit einem Nettogewinn von 70,4 Millionen Dollar (0,13 Dollar je Aktie) im zweiten Quartal 2024 und einem Nettogewinn von 141,3 Millionen Dollar (0,27 Dollar je Aktie) im dritten Quartal 2023. Das Unternehmen gab Pläne bekannt, über 800 Millionen Dollar an performanten gewerblichen Hypothekendarlehen mit einem Rabatt von 1% zu verkaufen. Die Nettozinsüberschüsse stiegen auf 411,8 Millionen Dollar, während die Nettozinsmarge auf 2,86% anstieg. Die Gesamtdarlehen sanken um 956,4 Millionen Dollar auf 49,4 Milliarden Dollar, während die Einlagen um 283,8 Millionen Dollar auf 50,4 Milliarden Dollar stiegen. Die Rückstellungen für Kreditverluste betrugen 75,0 Millionen Dollar, was auf die erhöhten Rücklagen für gewerbliche Hypothekendarlehen und die Auswirkungen des Hurrikans Helene zurückzuführen ist.

Positive
  • Net income increased to $97.9 million in Q3 2024 from $70.4 million in Q2 2024
  • Net interest income rose by $8.8 million to $411.8 million quarter-over-quarter
  • Net interest margin improved to 2.86% from 2.84% in Q2 2024
  • Commercial and industrial loans grew by $320.1 million (13.5% annualized)
  • Deposits increased by $283.8 million to $50.4 billion
Negative
  • Net income declined from $141.3 million in Q3 2023 to $97.9 million in Q3 2024
  • Total loans decreased by $956.4 million (7.6% annualized)
  • Net loan charge-offs increased to $42.9 million from $5.5 million in Q3 2023
  • Provision for credit losses remained elevated at $75.0 million
  • Non-performing assets totaled $305.1 million with increased loan delinquencies

Insights

Valley National Bancorp's Q3 2024 results show mixed performance with some concerning trends. Net income of $97.9 million ($0.18 per share) improved from Q2 but declined significantly from Q3 2023's $141.3 million. Key developments include:

The planned sale of $800 million in commercial real estate loans signals strategic balance sheet restructuring, though the 1% discount suggests some urgency to reduce CRE exposure. Net interest margin improved marginally to 2.86%, but remains pressured.

Credit quality metrics warrant attention - net charge-offs increased to $42.9 million, with two large CRE relationships requiring $30.1 million in charge-offs. The allowance for credit losses increased to 1.14% of total loans, while hurricane exposure adds uncertainty.

The deteriorating credit metrics require close monitoring. Non-performing assets of $305.1 million and rising past due loans at 0.35% of total loans indicate increasing stress, particularly in the commercial real estate portfolio. The $75 million provision for credit losses remains elevated, reflecting:

- Growing CRE portfolio risks requiring higher reserves
- Impact from Hurricanes Helene and Milton in Florida markets
- Two significant CRE relationship charge-offs totaling $30.1 million

The strategic reduction in CRE exposure through loan sales is prudent but suggests management concerns about this segment's outlook.

NEW YORK, Oct. 24, 2024 (GLOBE NEWSWIRE) -- Valley National Bancorp (NASDAQ:VLY), the holding company for Valley National Bank, today reported net income for the third quarter 2024 of $97.9 million, or $0.18 per diluted common share, as compared to the second quarter 2024 net income of $70.4 million, or $0.13 per diluted common share, and net income of $141.3 million, or $0.27 per diluted common share, for the third quarter 2023. Excluding all non-core income and charges, our adjusted net income (a non-GAAP measure) was $96.8 million, or $0.18 per diluted common share, for the third quarter 2024, $71.6 million, or $0.13 per diluted common share, for the second quarter 2024, and $136.4 million, or $0.26 per diluted common share, for the third 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, "The third quarter’s financial results highlight the significant progress that we continue to make towards achieving our strategic balance sheet goals. On October 23, 2024, we entered into an agreement to sell performing commercial real estate loans expected to total over $800 million at a very modest discount of approximately 1 percent to a single investor. This economically compelling transaction is expected to close in the fourth quarter 2024 and reflects the strength and desirability of our commercial real estate portfolio. We have executed on a variety of strategic transactions this year that have notably strengthened our balance sheet and enhanced our financial flexibility.”

Mr. Robbins continued, "This quarter’s results also indicated the early stages of normalized profitability which we expect will accelerate as we enter 2025. Net interest income and non-interest income both improved meaningfully from the second quarter 2024, and our operating expenses were well-controlled and effectively unchanged on a year-over-year basis. While recent weather events weighed on the sequential provision improvement that we anticipated, our pre-provision earnings continued to improve during the third quarter and could set the stage for more stable results in the near future. And most importantly, our thoughts are with those affected by the recent hurricanes in our Florida markets and the other areas in the southeast. We are strongly committed to supporting our associates, clients and communities throughout the rebuilding and recovery process.”

Key financial highlights for the third quarter 2024:

  • Net Interest Income and Margin: Net interest income on a tax equivalent basis of $411.8 million for the third quarter 2024 increased $8.8 million compared to the second quarter 2024 and decreased $1.8 million as compared to the third quarter 2023. Our net interest margin on a tax equivalent basis also increased by 2 basis points to 2.86 percent in the third quarter 2024 as compared to 2.84 percent for the second quarter 2024. The increases from the second quarter 2024 were mostly due to continued yield expansion on average loans and additional interest income and higher yields from targeted growth within our available for sale securities portfolio. See the "Net Interest Income and Margin" section below for more details.
  • Loan Portfolio: Total loans decreased $956.4 million, or 7.6 percent on an annualized basis, to $49.4 billion at September 30, 2024 from June 30, 2024 mostly due to the transfer of performing commercial real estate loans totaling $823.1 million, net of unearned fees, to loans held for sale at September 30, 2024 and normal repayment activity mainly within the commercial real estate non-owner occupied and multi-family loans, as we continue to actively reduce these loan categories. Our commercial and industrial loans grew $320.1 million, or 13.5 percent on an annualized basis, to $9.8 billion at September 30, 2024 from June 30, 2024 due to solid organic growth during the third quarter 2024. Residential mortgage and total consumer loans also increased modestly during the third quarter 2024. See the "Loans" section below for more details.
  • Deposits: Actual ending balances for deposits increased $283.8 million to $50.4 billion at September 30, 2024 as compared to $50.1 billion at June 30, 2024 mainly due to higher period-end direct commercial customer money market and non-interest bearing deposits, partially offset by a decline in time deposits. See the "Deposits" section below for more details.
  • Allowance and Provision for Credit Losses for Loans: The allowance for credit losses for loans totaled $564.7 million and $532.5 million at September 30, 2024 and June 30, 2024, respectively, representing 1.14 percent and 1.06 percent of total loans at each respective date. During the third quarter 2024, we recorded a provision for credit losses for loans of $75.0 million as compared to $82.1 million and $9.1 million for the second quarter 2024 and third quarter 2023, respectively. The third quarter 2024 provision reflects, among other factors, increased quantitative reserves allocated to commercial real estate loans, significant commercial and industrial loan growth and $8.0 million of qualitative reserves related to the estimated impact of Hurricane Helene, which hit Florida in late September 2024.
  • Credit Quality: Non-accrual loans totaled $296.3 million, or 0.60 percent of total loans at September 30, 2024 as compared to $303.3 million, or 0.60 percent of total loans at June 30, 2024. Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) increased to 0.35 percent of total loans at September 30, 2024 as compared to 0.14 percent at June 30, 2024 largely due to two well-secured commercial real estate loans at various stages of expected collection within the early stage delinquency categories. Net loan charge-offs totaled $42.9 million for the third quarter 2024 as compared to $36.8 million and $5.5 million for the second quarter 2024 and third quarter 2023, respectively. The loan charge-offs in the third quarter 2024 included partial charge-offs totaling a combined $30.1 million related to two commercial real estate loan relationships. See the "Credit Quality" section below for more details.
  • Non-Interest Income: Non-interest income increased $9.5 million to $60.7 million for the third quarter 2024 as compared to the second quarter 2024 mainly due to increases in other income; wealth management and trust fees; and service charges on deposits totaling $11.2 million, $2.0 million, and $1.6 million, respectively. The increases in the aforementioned categories were partially offset by a $5.8 million mark to market loss (recorded within net losses on sales of loans) associated with the performing commercial real estate loans transferred to loans held for sale at September 30, 2024, as well as lower swap fees related to commercial loan transactions (within capital market fees) and insurance commissions. The increase in other income was mostly the result of income from litigation settlements totaling $7.3 million for the third quarter 2024.
  • Non-Interest Expense: Non-interest expense decreased $8.0 million to $269.5 million for the third quarter 2024 as compared to the second quarter 2024 largely due to a $6.2 million decrease in technology, furniture and equipment expense and a $3.8 million decrease in professional and legal expenses, partially offset by higher net occupancy expense during the third quarter 2024.
  • Efficiency Ratio: Our efficiency ratio was 56.13 percent for the third quarter 2024 as compared to 59.62 percent and 56.72 percent for the second quarter 2024 and third 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 0.63 percent, 5.70 percent and 8.06 percent for the third quarter 2024, respectively. Annualized ROA, ROE, and tangible ROE, adjusted for non-core income and charges, were 0.62 percent, 5.64 percent and 7.97 percent for the third 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 $411.8 million for the third quarter 2024 increased $8.8 million compared to the second quarter 2024 and decreased $1.8 million as compared to the third quarter 2023. Interest income on a tax equivalent basis increased $27.1 million to $861.9 million for the third quarter 2024 as compared to the second quarter 2024. The increase was mostly due to higher yields on both new loan originations and adjustable rate loans, as well as higher yields and additional interest income from targeted purchases of taxable investments within the available for sale securities portfolio during the second and third quarter 2024. Total interest expense increased $18.3 million to $450.1 million for the third quarter 2024 as compared to the second quarter 2024 mainly due to an increase in average time deposit balances coupled with higher costs on most interest bearing deposit products. See the "Deposits" and "Other Borrowings" sections below for more details.

Net interest margin on a tax equivalent basis of 2.86 percent for the third quarter 2024 increased by 2 basis points from 2.84 percent for the second quarter 2024 and decreased 5 basis points from 2.91 percent for the third quarter 2023. The increase as compared to the second quarter 2024 was largely driven by the higher yield on average interest earning assets largely offset by an increase in the cost of average interest bearing liabilities. The yield on average interest earning assets increased by 10 basis points to 5.98 percent on a linked quarter basis largely due to higher yielding investment purchases and new loan originations during the second and third quarter 2024. The overall cost of average interest bearing liabilities increased 7 basis points to 4.22 percent for the third quarter 2024 as compared to the second quarter 2024 largely due to higher interest rates on deposits. Our cost of total average deposits was 3.25 percent for the third quarter 2024 as compared to 3.18 percent and 2.94 percent for the second quarter 2024 and the third quarter 2023, respectively.

Loans, Deposits and Other Borrowings

Loans. Total loans decreased $956.4 million, or 7.6 percent on an annualized basis, to $49.4 billion at September 30, 2024 from June 30, 2024. Commercial and industrial loans grew by $320.1 million , or 13.5 percent on an annualized basis, to $9.8 billion at September 30, 2024 from June 30, 2024 largely due to our continued strategic focus on the expansion of new loan production within this category. Total commercial real estate (including construction) loans decreased $1.4 billion to $30.4 billion at September 30, 2024 from June 30, 2024. This decline was primarily driven by the transfer of $823.1 million of commercial real estate loans, net of unearned loan fees, from the loans held for investment portfolio to loans held for sale as of September 30, 2024. In addition, we remained highly selective on new originations and projects in an effort to reduce commercial real estate loan concentrations, mainly within the non-owner occupied and multifamily loan categories. Automobile loan balances increased by $60.9 million, or 13.8 percent on an annualized basis, to $1.8 billion at September 30, 2024 from June 30, 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 $42.4 million, or 15.3 percent on an annualized basis, to $1.1 billion at September 30, 2024 from June 30, 2024 primarily due to the negative impact of the high level of market interest rates on the demand and usage of collateralized personal lines of credit.

Deposits. Actual ending balances for deposits increased $283.8 million to $50.4 billion at September 30, 2024 from June 30, 2024 mainly due to an increase of $358.3 million in savings, NOW and money market deposits and an increase of $36.0 million in non-interest bearing deposits, partially offset by a decrease of $110.5 million in time deposits. Non-interest bearing deposit and savings, NOW and money market deposit balances increased at September 30, 2024 from June 30, 2024 mostly due to increases in national specialized deposits and higher direct commercial customer deposit accounts. Total indirect customer deposits (including both brokered money market and time deposits) totaled $9.1 billion in both September 30, 2024 and June 30, 2024. Non-interest bearing deposits; savings, NOW and money market deposits; and time deposits represented approximately 22 percent, 50 percent and 28 percent of total deposits as of September 30, 2024, respectively, as compared to 22 percent, 49 percent and 29 percent of total deposits as of June 30, 2024, respectively.

Other Borrowings. Short-term borrowings, consisting of securities sold under agreements to repurchase, decreased $5.5 million to $58.3 million at September 30, 2024 from June 30, 2024. Long-term borrowings totaled $3.3 billion at September 30, 2024 and also remained relatively unchanged as compared to June 30, 2024.

Credit Quality

Hurricanes Helene and Milton. In the early stages of the fourth quarter 2024, the credit quality of our Florida loan portfolio has remained resilient in the aftermath of Hurricane Helene, which hit Florida in late September 2024, and Hurricane Milton, which made landfall on October 9, 2024. At this time, there have been relatively few loan concessions (mostly in the form of loan payment deferrals up to 90 days) for distressed borrowers impacted by the hurricanes. However, we continue to assess the impact of the hurricanes on our Florida client base and, where appropriate, we will work constructively with individual borrowers.

Non-Performing Assets (NPAs). Total NPAs, consisting of non-accrual loans, other real estate owned (OREO) and other repossessed assets, decreased $7.8 million to $305.1 million at September 30, 2024 as compared to June 30, 2024. Non-accrual loans decreased $7.0 million to $296.3 million at September 30, 2024 as compared to $303.3 million at June 30, 2024. Non-accrual construction and commercial real estate loans decreased $20.7 million and $9.3 million to $24.7 million and $113.8 million, respectively, at September 30, 2024 as compared to June 30, 2024 mainly due to loan payoffs during the third quarter 2024. The decreases in these loan categories were partially offset by two new non-accrual commercial and industrial loans totaling $19.0 million, as well as moderate increases in non-accrual residential mortgage and consumer loans at September 30, 2024. OREO decreased $887 thousand at September 30, 2024 from June 30, 2024 mostly due to the sale of one commercial property, which resulted in the recognition of an immaterial loss for the third quarter 2024.

Accruing Past Due Loans. Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) increased $102.3 million to $174.7 million, or 0.35 percent of total loans, at September 30, 2024 as compared to $72.4 million, or 0.14 percent of total loans at June 30, 2024. Loans 30 to 59 days past due increased $69.1 million to $115.1 million at September 30, 2024 as compared to June 30, 2024 mainly due to a $74.5 million increase in commercial real estate loans, partially offset by a $7.0 million decline in consumer loan delinquencies. The increase in commercial real estate loans 30 to 59 days past due was mostly due to one new delinquent loan totaling $40.9 million, which is expected to be fully repaid, subject to the borrower's pending sale of certain collateral, as well as a few other new loan delinquencies. Loans 60 to 89 days past due increased $42.9 million to $54.8 million at September 30, 2024 as compared to June 30, 2024 mostly due to one well-secured commercial real estate loan totaling $43.9 million currently in the process of loan modification. Loans 90 days or more past due and still accruing interest decreased $9.7 million to $4.8 million at September 30, 2024 as compared to June 30, 2024 largely due to one $4.0 million construction loan that was fully repaid and one $4.2 million commercial real estate loan that migrated from this past due category to non-accrual loans during the third quarter 2024. 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 September 30, 2024, June 30, 2024 and September 30, 2023:

  September 30, 2024 June 30, 2024 September 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$166,365 1.70% $149,243 1.57% $133,988 1.44%
Commercial real estate loans:           
 Commercial real estate 249,608 0.93   246,316 0.87   191,562 0.68 
 Construction 59,420 1.70   54,777 1.54   53,485 1.40 
Total commercial real estate loans 309,028 1.02   301,093 0.95   245,047 0.77 
Residential mortgage loans 51,545 0.91   47,697 0.85   44,621 0.80 
Consumer loans:           
 Home equity 3,303 0.57   3,077 0.54   3,689 0.67 
 Auto and other consumer 18,086 0.63   18,200 0.63   14,830 0.52 
Total consumer loans 21,389 0.62   21,277 0.62   18,519 0.55 
Allowance for loan losses 548,327 1.11   519,310 1.03   442,175 0.88 
Allowance for unfunded credit commitments 16,344    13,231    20,170  
Total allowance for credit losses for loans$564,671   $532,541   $462,345  
Allowance for credit losses for loans as a % total loans  1.14%   1.06%   0.92%
               

Our loan portfolio, totaling $49.4 billion at September 30, 2024, had net loan charge-offs totaling $42.9 million for the third quarter 2024 as compared to $36.8 million and $5.5 million for the second quarter 2024 and the third quarter 2023, respectively. Total gross loan charge-offs in the third quarter 2024 included partial charge-offs totaling $30.1 million related to two non-performing commercial real estate loan relationships that had combined specific reserves of $25.9 million within the allowance for loan losses at June 30, 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 1.14 percent at September 30, 2024, 1.06 percent at June 30, 2024, and 0.92 percent at September 30, 2023. For the third quarter 2024, the provision for credit losses for loans totaled $75.0 million as compared to $82.1 million and $9.1 million for the second quarter 2024 and third quarter 2023, respectively. The provision for credit losses remained somewhat elevated for the third quarter 2024 largely due to higher quantitative reserves allocated to commercial real estate loans, commercial and industrial loan growth and $8.0 million of qualitative reserves related to the estimated impact of Hurricane Helene.

The allowance for unfunded credit commitments increased to $16.3 million at September 30, 2024 from $13.2 million at June 30, 2024 mainly due to increases in both non-cancellable construction commitments and commercial and industrial standby letters of credit.

As previously noted, we are currently evaluating the impact of Hurricane Milton, and we also continue to evaluate any further impact of Hurricane Helene, on our loan portfolio. While not anticipated based on information currently available, Hurricane Milton and unexpected losses from Hurricane Helene could result in a significant increase to the current hurricane related reserves within the allowance, loan charge-offs and our provision for the fourth quarter 2024.

Capital Adequacy

Valley's total risk-based capital, common equity Tier 1 capital, Tier 1 capital and Tier 1 leverage capital ratios were 12.56 percent, 9.57 percent, 10.29 percent and 8.40 percent, respectively, at September 30, 2024 as compared to 12.18 percent, 9.55 percent, 9.99 percent and 8.19 percent, respectively, at June 30, 2024. The increases in the total risk-based capital, Tier 1 capital and Tier 1 leverage ratios as compared to June 30, 2024 were largely due to Valley's issuance of 6.0 million shares of its 8.250 percent Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series C on August 5, 2024. Net proceeds to Valley after deducting underwriting discounts, commissions and offering expenses were approximately $144.7 million.

Investor Conference Call

Valley will host a conference call with investors and the financial community at 11:00 AM (ET) today to discuss the third 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, December 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,” “would,” “could,” “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 market interest rates and monetary and fiscal policies of the U.S. federal government and its agencies in connection with the prolonged inflationary pressures, which could have a material adverse effect on our clients, 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 the outcome of the 2024 U.S. presidential election, geopolitical instabilities or events (including the Israel-Hamas war and the escalation and regional expansion thereof); natural and other disasters (including severe weather events, such as Hurricanes Helene and Milton); 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, risk mitigation strategies, 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 Nine Months Ended
 September 30, June 30, September 30, September 30,
($ in thousands, except for share data and stock price)2024
 2024
 2023
 2024
 2023
FINANCIAL DATA:         
Net interest income - FTE(1)$411,812  $402,984  $413,657  $1,209,643  $1,272,390 
Net interest income$410,498  $401,685  $412,418  $1,205,731  $1,268,203 
Non-interest income 60,671   51,213   58,664   173,299   173,038 
Total revenue 471,169   452,898   471,082   1,379,030   1,441,241 
Non-interest expense 269,471   277,497   267,133   827,278   822,270 
Pre-provision net revenue 201,698   175,401   203,949   551,752   618,971 
Provision for credit losses 75,024   82,070   9,117   202,294   29,604 
Income tax expense 28,818   22,907   53,486   84,898   162,410 
Net income 97,856   70,424   141,346   264,560   426,957 
Dividends on preferred stock 6,117   4,108   4,127   14,344   12,031 
Net income available to common shareholders$91,739  $66,316  $137,219  $250,216  $414,926 
Weighted average number of common shares outstanding:         
Basic 509,227,538   509,141,252   507,650,668   508,904,353   507,580,197 
Diluted 511,342,932   510,338,502   509,256,599   510,713,205   509,204,051 
Per common share data:         
Basic earnings$0.18  $0.13  $0.27  $0.49  $0.82 
Diluted earnings 0.18   0.13   0.27   0.49   0.81 
Cash dividends declared 0.11   0.11   0.11   0.33   0.33 
Closing stock price - high 9.34   8.02   10.30   10.80   12.59 
Closing stock price - low 6.58   6.52   7.63   6.52   6.59 
FINANCIAL RATIOS:         
Net interest margin 2.85%  2.83%  2.90%  2.82%  2.99%
Net interest margin - FTE(1) 2.86   2.84   2.91   2.83   3.00 
Annualized return on average assets 0.63   0.46   0.92   0.57   0.93 
Annualized return on avg. shareholders' equity 5.70   4.17   8.56   5.20   8.72 
NON-GAAP FINANCIAL DATA AND RATIOS:(2)         
Basic earnings per share, as adjusted$0.18  $0.13  $0.26  $0.50  $0.84 
Diluted earnings per share, as adjusted 0.18   0.13   0.26   0.50   0.84 
Annualized return on average assets, as adjusted 0.62%  0.47%  0.89%  0.58%  0.96%
Annualized return on average shareholders' equity, as adjusted 5.64   4.24   8.26   5.27   8.94 
Annualized return on avg. tangible shareholders' equity 8.06   5.95   12.39   7.40   12.71 
Annualized return on average tangible shareholders' equity, as adjusted 7.97   6.05   11.95   7.50   13.04 
Efficiency ratio 56.13   59.62   56.72   58.26   55.34 
          
AVERAGE BALANCE SHEET ITEMS:         
Assets$62,242,022  $61,518,639  $61,391,688  $61,674,588  $61,050,973 
Interest earning assets 57,651,650   56,772,950   56,802,565   57,016,790   56,510,997 
Loans 50,126,963   50,020,901   50,019,414   50,131,468   49,120,153 
Interest bearing liabilities 42,656,956   41,576,344   40,829,078   41,932,616   39,802,966 
Deposits 50,409,234   49,383,209   49,848,446   49,459,617   48,165,152 
Shareholders' equity 6,862,555   6,753,981   6,605,786   6,781,022   6,531,424 
                    


 As Of
BALANCE SHEET ITEMS:September 30, June 30, March 31, December September 30,
(In thousands)2024
 2024
 2024
 2023
 2023
Assets$62,092,332  $62,058,974  $61,000,188  $60,934,974  $61,183,352 
Total loans 49,355,319   50,311,702   49,922,042   50,210,295   50,097,519 
Deposits 50,395,966   50,112,177   49,077,946   49,242,829   49,885,314 
Shareholders' equity 6,972,380   6,737,737   6,727,139   6,701,391   6,627,299 
          
LOANS:         
(In thousands)         
Commercial and industrial$9,799,287  $9,479,147  $9,104,193  $9,230,543  $9,274,630 
Commercial real estate:         
Non-owner occupied 12,647,649   13,710,015   14,962,851   15,078,464   14,741,668 
Multifamily 8,612,936   8,976,264   8,818,263   8,860,219   8,863,529 
Owner occupied 5,654,147   5,536,844   4,367,839   4,304,556   4,435,853 
Construction 3,487,464   3,545,723   3,556,511   3,726,808   3,833,269 
Total commercial real estate 30,402,196   31,768,846   31,705,464   31,970,047   31,874,319 
Residential mortgage 5,684,079   5,627,113   5,618,355   5,569,010   5,562,665 
Consumer:         
Home equity 581,181   566,467   564,083   559,152   548,918 
Automobile 1,823,738   1,762,852   1,700,508   1,620,389   1,585,987 
Other consumer 1,064,838   1,107,277   1,229,439   1,261,154   1,251,000 
Total consumer loans 3,469,757   3,436,596   3,494,030   3,440,695   3,385,905 
Total loans$49,355,319  $50,311,702  $49,922,042  $50,210,295  $50,097,519 
          
CAPITAL RATIOS:         
Book value per common share$13.00  $12.82  $12.81  $12.79  $12.64 
Tangible book value per common share(2) 9.06   8.87   8.84   8.79   8.63 
Tangible common equity to tangible assets(2) 7.68%  7.52%  7.62%  7.58%  7.40%
Tier 1 leverage capital 8.40   8.19   8.20   8.16   8.08 
Common equity tier 1 capital 9.57   9.55   9.34   9.29   9.21 
Tier 1 risk-based capital 10.29   9.99   9.78   9.72   9.64 
Total risk-based capital 12.56   12.18   11.88   11.76   11.68 
                    


 Three Months Ended Nine Months Ended
ALLOWANCE FOR CREDIT LOSSES:September 30, June 30, September 30, September 30,
($ in thousands)2024
 2024
 2023
 2024
 2023
Allowance for credit losses for loans         
Beginning balance$532,541  $487,269  $458,676  $465,550  $483,255 
Impact of the adoption of ASU No. 2022-02             (1,368)
Beginning balance, adjusted 532,541   487,269   458,676   465,550   481,887 
Loans charged-off:         
Commercial and industrial (7,501)  (14,721)  (7,487)  (36,515)  (37,399)
Commercial real estate (33,292)  (22,144)  (255)  (56,640)  (2,320)
Construction (4,831)  (212)     (12,637)  (9,906)
Residential mortgage       (20)     (169)
Total consumer (2,597)  (1,262)  (1,156)  (5,668)  (3,024)
Total loans charged-off (48,221)  (38,339)  (8,918)  (111,460)  (52,818)
Charged-off loans recovered:         
Commercial and industrial 3,162   742   3,043   4,586   6,615 
Commercial real estate 66   150   5   457   33 
Construction 1,535         1,535    
Residential mortgage 29   5   30   59   186 
Total consumer 521   603   362   1,521   1,513 
Total loans recovered 5,313   1,500   3,440   8,158   8,347 
Total net charge-offs (42,908)  (36,839)  (5,478)  (103,302)  (44,471)
Provision for credit losses for loans 75,038   82,111   9,147   202,423   24,929 
Ending balance$564,671  $532,541  $462,345  $564,671  $462,345 
Components of allowance for credit losses for loans:         
Allowance for loan losses$548,327  $519,310  $442,175  $548,327  $442,175 
Allowance for unfunded credit commitments 16,344   13,231   20,170   16,344   20,170 
Allowance for credit losses for loans$564,671  $532,541  $462,345  $564,671  $462,345 
Components of provision for credit losses for loans:         
Provision for credit losses for loans$71,925  $86,901  $11,221  $205,549  $29,359 
Provision (credit) for unfunded credit commitments 3,113   (4,790)  (2,074)  (3,126)  (4,430)
Total provision for credit losses for loans$75,038  $82,111  $9,147  $202,423  $24,929 
Annualized ratio of total net charge-offs to total average loans 0.34%  0.29%  0.04%  0.27%  0.12%
Allowance for credit losses for loans as a % of total loans 1.14%  1.06%  0.92%  1.14%  0.92%
                    


 As Of
ASSET QUALITY:September 30, June 30, March 31, December 31, September 30,
($ in thousands)2024
 2024
 2024
 2023
 2023
Accruing past due loans:         
30 to 59 days past due:         
Commercial and industrial$4,537  $5,086  $6,202  $9,307  $10,687 
Commercial real estate 76,370   1,879   5,791   3,008   8,053 
Residential mortgage 19,549   17,389   20,819   26,345   13,159 
Total consumer 14,672   21,639   14,032   20,554   15,509 
Total 30 to 59 days past due 115,128   45,993   46,844   59,214   47,408 
60 to 89 days past due:         
Commercial and industrial 1,238   1,621   2,665   5,095   5,720 
Commercial real estate 43,926      3,720   1,257   2,620 
Residential mortgage 6,892   6,632   5,970   8,200   9,710 
Total consumer 2,732   3,671   1,834   4,715   1,720 
Total 60 to 89 days past due 54,788   11,924   14,189   19,267   19,770 
90 or more days past due:         
Commercial and industrial 1,786   2,739   5,750   5,579   6,629 
Commercial real estate    4,242          
Construction    3,990   3,990   3,990   3,990 
Residential mortgage 1,931   2,609   2,884   2,488   1,348 
Total consumer 1,063   898   731   1,088   391 
Total 90 or more days past due 4,780   14,478   13,355   13,145   12,358 
Total accruing past due loans$174,696  $72,395  $74,388  $91,626  $79,536 
Non-accrual loans:         
Commercial and industrial$120,575  $102,942  $102,399  $99,912  $87,655 
Commercial real estate 113,752   123,011   100,052   99,739   83,338 
Construction 24,657   45,380   51,842   60,851   62,788 
Residential mortgage 33,075   28,322   28,561   26,986   21,614 
Total consumer 4,260   3,624   4,438   4,383   3,545 
Total non-accrual loans 296,319   303,279   287,292   291,871   258,940 
Other real estate owned (OREO) 7,172   8,059   88   71   71 
Other repossessed assets 1,611   1,607   1,393   1,444   1,314 
Total non-performing assets$305,102  $312,945  $288,773  $293,386  $260,325 
Total non-accrual loans as a % of loans 0.60%  0.60%  0.58%  0.58%  0.52%
Total accruing past due and non-accrual loans as a % of loans 0.95   0.75   0.72   0.76   0.68 
Allowance for losses on loans as a % of non-accrual loans 185.05   171.23   163.33   152.83   170.76 
                    

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 Nine Months Ended
 September 30, June 30, September 30, September 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)$97,856  $70,424  $141,346  $264,560  $426,957 
Add: FDIC Special assessment (a)    1,363      8,757    
Add: Losses on available for sale and held to maturity debt securities, net (b) 1   4   443   12   476 
Add: Restructuring charge (c)    334   (675)  954   10,507 
Add: Mark to market loss on commercial real estate loans transferred to loans held for sale (d) 5,794         5,794    
Add: Provision for credit losses for available for sale securities (e)             5,000 
Add: Merger related expenses (f)             4,133 
Less: Litigation settlements (g) (7,334)        (7,334)   
Less: Gain on sale of commercial premium finance lending division (h)          (3,629)   
Less: Net gains on sales of office buildings (h)       (6,721)     (6,721)
Total non-GAAP adjustments to net income (1,539)  1,701   (6,953)  4,554   13,395 
Income tax adjustments related to non-GAAP adjustments (i) 437   (482)  1,970   (1,269)  (2,378)
Net income, as adjusted (non-GAAP)$96,754  $71,643  $136,363  $267,845  $437,974 
Dividends on preferred stock 6,117   4,108   4,127   14,344   12,031 
Net income available to common shareholders, as adjusted (non-GAAP)$90,637  $67,535  $132,236  $253,501  $425,943 
__________         
(a) Included in the FDIC insurance expense.
(b) Included in gains (losses) on securities transactions, net.
(c) Represents severance expense related to workforce reductions within salary and employee benefits expense.
(d) Included in (losses) gains on sales of loans, net.
(e) Included in provision for credit losses for available for sale and held to maturity securities (tax disallowed).
(f) Included in salary and employee benefits expense during the first quarter 2023.
(g) Represents recoveries from legal settlements included in other income.
(h) Included in gains (losses) on sales of assets, net within non-interest income.
(i) 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)$90,637  $67,535  $132,236  $253,501  $425,943 
Average number of shares outstanding 509,227,538   509,141,252   507,650,668   508,904,353   507,580,197 
Basic earnings, as adjusted (non-GAAP)$0.18  $0.13  $0.26  $0.50  $0.84 
Average number of diluted shares outstanding 511,342,932   510,338,502   509,256,599   510,713,205   509,204,051 
Diluted earnings, as adjusted (non-GAAP)$0.18  $0.13  $0.26  $0.50  $0.84 
Adjusted annualized return on average tangible shareholders' equity (non-GAAP):         
Net income, as adjusted (non-GAAP)$96,754  $71,643  $136,363  $267,845  $437,974 
Average shareholders' equity$6,862,555  $6,753,981  $6,605,786  $6,781,022  $6,531,424 
Less: Average goodwill and other intangible assets 2,008,692   2,016,766   2,042,486   2,016,790   2,051,727 
Average tangible shareholders' equity$4,853,863  $4,737,215  $4,563,300  $4,764,232  $4,479,697 
Annualized return on average tangible shareholders' equity, as adjusted (non-GAAP) 7.97%  6.05%  11.95%  7.50%  13.04%
                    

 


Non-GAAP Reconciliations to GAAP Financial Measures (Continued)
 
 Three Months Ended Nine Months Ended
 September 30, June 30, September 30, September 30,
($ in thousands, except for share data)2024
 2024
 2023
 2024
 2023
Adjusted annualized return on average assets (non-GAAP):         
Net income, as adjusted (non-GAAP)$96,754  $71,643  $136,363  $267,845  $437,974 
Average assets$62,242,022  $61,518,639  $61,391,688  $61,674,588  $61,050,973 
Annualized return on average assets, as adjusted (non-GAAP) 0.62%  0.47%  0.89%  0.58%  0.96%
Adjusted annualized return on average shareholders' equity (non-GAAP):         
Net income, as adjusted (non-GAAP)$96,754  $71,643  $136,363  $267,845  $437,974 
Average shareholders' equity$6,862,555  $6,753,981  $6,605,786  $6,781,022  $6,531,424 
Annualized return on average shareholders' equity, as adjusted (non-GAAP) 5.64%  4.24%  8.26%  5.27%  8.94%
Annualized return on average tangible shareholders' equity (non-GAAP):         
Net income, as reported (GAAP)$97,856  $70,424  $141,346  $264,560  $426,957 
Average shareholders' equity$6,862,555  $6,753,981  $6,605,786  $6,781,022  $6,531,424 
Less: Average goodwill and other intangible assets 2,008,692   2,016,766   2,042,486   2,016,790   2,051,727 
Average tangible shareholders' equity$4,853,863  $4,737,215  $4,563,300  $4,764,232  $4,479,697 
Annualized return on average tangible shareholders' equity (non-GAAP) 8.06%  5.95%  12.39%  7.40%  12.71%
Efficiency ratio (non-GAAP):         
Non-interest expense, as reported (GAAP)$269,471  $277,497  $267,133  $827,278  $822,270 
Less: FDIC Special assessment (pre-tax)    1,363      8,757    
Less: Restructuring charge (pre-tax)    334   (675)  954   10,507 
Less: Merger-related expenses (pre-tax)             4,133 
Less: Amortization of tax credit investments (pre-tax) 5,853   5,791   4,191   17,206   13,462 
Non-interest expense, as adjusted (non-GAAP)$263,618  $270,009  $263,617  $800,361  $794,168 
Net interest income, as reported (GAAP) 410,498   401,685   412,418   1,205,731   1,268,203 
Non-interest income, as reported (GAAP) 60,671   51,213   58,664   173,299   173,038 
Add: Losses on available for sale and held to maturity securities transactions, net (pre-tax) 1   4   443   12   476 
Add: Mark-to-market loss on commercial real estate loans transferred to loans held for sale (pre-tax) 5,794         5,794    
Less: Litigation settlements (pre-tax) (7,334)        (7,334)   
Less: Gain on sale of premium finance division (pre-tax)          (3,629)   
Less: Net gains on sales of office buildings (pre-tax)       (6,721)     (6,721)
Non-interest income, as adjusted (non-GAAP)$59,132  $51,217  $52,386  $168,142  $166,793 
Gross operating income, as adjusted (non-GAAP)$469,630  $452,902  $464,804  $1,373,873  $1,434,996 
Efficiency ratio (non-GAAP) 56.13%  59.62%  56.72%  58.26%  55.34%
                    


 As of
 September 30, June 30, March 31, December 31, September 30,
($ in thousands, except for share data)2024
 2024
 2024
 2023
 2023
Tangible book value per common share (non-GAAP):         
Common shares outstanding 509,252,936   509,205,014   508,893,059   507,709,927   507,660,742 
Shareholders' equity (GAAP)$6,972,380  $6,737,737  $6,727,139  $6,701,391  $6,627,299 
Less: Preferred stock 354,345   209,691   209,691   209,691   209,691 
Less: Goodwill and other intangible assets 2,004,414   2,012,580   2,020,405   2,029,267   2,038,202 
Tangible common shareholders' equity (non-GAAP)$4,613,621  $4,515,466  $4,497,043  $4,462,433  $4,379,406 
Tangible book value per common share (non-GAAP)$9.06  $8.87  $8.84  $8.79  $8.63 
Tangible common equity to tangible assets (non-GAAP):         
Tangible common shareholders' equity (non-GAAP)$4,613,621  $4,515,466  $4,497,043  $4,462,433  $4,379,406 
Total assets (GAAP) 62,092,332   62,058,974   61,000,188   60,934,974   61,183,352 
Less: Goodwill and other intangible assets 2,004,414   2,012,580   2,020,405   2,029,267   2,038,202 
Tangible assets (non-GAAP)$60,087,918  $60,046,394  $58,979,783  $58,905,707  $59,145,150 
Tangible common equity to tangible assets (non-GAAP) 7.68%  7.52%  7.62%  7.58%  7.40%
                    

VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for share data)

 September 30, December 31,
 2024 2023
 (Unaudited)  
Assets   
Cash and due from banks$511,945  $284,090 
Interest bearing deposits with banks 527,960   607,135 
Investment securities:   
Equity securities 73,071   64,464 
Trading debt securities 3,996   3,973 
Available for sale debt securities 2,602,260   1,296,576 
Held to maturity debt securities (net of allowance for credit losses of $1,076 at September 30, 2024 and $1,205 at December 31, 2023) 3,573,960   3,739,208 
Total investment securities 6,253,287   5,104,221 
Loans held for sale (includes fair value of $17,153 at September 30, 2024 and $20,640 at December 31, 2023 for loans originated for sale) 843,201   30,640 
Loans 49,355,319   50,210,295 
Less: Allowance for loan losses (548,327)  (446,080)
Net loans 48,806,992   49,764,215 
Premises and equipment, net 356,649   381,081 
Lease right of use assets 335,032   343,461 
Bank owned life insurance 730,081   723,799 
Accrued interest receivable 250,131   245,498 
Goodwill 1,868,936   1,868,936 
Other intangible assets, net 135,478   160,331 
Other assets 1,472,640   1,421,567 
Total Assets$62,092,332  $60,934,974 
Liabilities   
Deposits:   
Non-interest bearing$11,153,754  $11,539,483 
Interest bearing:   
Savings, NOW and money market 25,069,405   24,526,622 
Time 14,172,807   13,176,724 
Total deposits 50,395,966   49,242,829 
Short-term borrowings 58,268   917,834 
Long-term borrowings 3,274,340   2,328,375 
Junior subordinated debentures issued to capital trusts 57,368   57,108 
Lease liabilities 394,971   403,781 
Accrued expenses and other liabilities 939,039   1,283,656 
Total Liabilities 55,119,952   54,233,583 
Shareholders’ Equity   
Preferred stock, no par value; 50,000,000 authorized shares:   
Series A (4,600,000 shares issued at September 30, 2024 and December 31, 2023) 111,590   111,590 
Series B (4,000,000 shares issued at September 30, 2024 and December 31, 2023) 98,101   98,101 
Series C (6,000,000 shares issued at September 30, 2024) 144,654    
Common stock (no par value, authorized 650,000,000 shares; issued 509,252,936 shares at September 30, 2024 and 507,896,910 shares at December 31, 2023) 178,661   178,187 
Surplus 5,002,718   4,989,989 
Retained earnings 1,551,428   1,471,371 
Accumulated other comprehensive loss (114,772)  (146,456)
Treasury stock, at cost (186,983 common shares at December 31, 2023)    (1,391)
Total Shareholders’ Equity 6,972,380   6,701,391 
Total Liabilities and Shareholders’ Equity$62,092,332  $60,934,974 
        

VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands, except for share data)

 Three Months Ended Nine Months Ended
 September 30, June 30, September 30, September 30,
 2024 2024 2023 2024 2023
Interest Income         
Interest and fees on loans$786,680  $770,964  $753,638  $2,329,197  $2,124,036
Interest and dividends on investment securities:         
Taxable 49,700   40,460   32,383   125,957   96,591
Tax-exempt 4,855   4,799   4,585   14,450   15,485
Dividends 5,929   6,341   5,299   19,098   18,001
Interest on federal funds sold and other short-term investments 13,385   10,902   17,113   33,969   66,594
Total interest income 860,549   833,466   813,018   2,522,671   2,320,707
Interest Expense         
Interest on deposits:         
Savings, NOW and money market 235,371   231,597   201,916   699,474   517,524
Time 174,741   160,442   164,336   486,248   370,398
Interest on short-term borrowings 451   691   5,189   21,754   89,345
Interest on long-term borrowings and junior subordinated debentures 39,488   39,051   29,159   109,464   75,237
Total interest expense 450,051   431,781   400,600   1,316,940   1,052,504
Net Interest Income 410,498   401,685   412,418   1,205,731   1,268,203
(Credit) provision for credit losses for available for sale and held to maturity securities (14)  (41)  (30)  (129)  4,675
Provision for credit losses for loans 75,038   82,111   9,147   202,423   24,929
Net Interest Income After Provision for Credit Losses 335,474   319,615   403,301   1,003,437   1,238,599
Non-Interest Income         
Wealth management and trust fees 15,125   13,136   11,417   46,191   32,180
Insurance commissions 2,880   3,958   2,336   9,089   7,895
Capital markets 6,347   7,779   7,141   19,796   35,000
Service charges on deposit accounts 12,826   11,212   10,952   35,287   31,970
Gains (losses) on securities transactions, net 47   3   (398)  99   197
Fees from loan servicing 3,443   2,691   2,681   9,322   8,054
(Losses) gains on sales of loans, net (3,644)  884   2,023   (1,142)  3,752
Gains (losses) on sales of assets, net 55   (2)  6,653   3,747   6,938
Bank owned life insurance 5,387   4,545   2,709   13,167   7,736
Other 18,205   7,007   13,150   37,743   39,316
Total non-interest income 60,671   51,213   58,664   173,299   173,038
Non-Interest Expense         
Salary and employee benefits expense 138,832   140,815   137,292   421,478   431,872
Net occupancy expense 26,973   24,252   24,675   75,548   73,880
Technology, furniture and equipment expense 28,962   35,203   37,320   99,627   106,304
FDIC insurance assessment 14,792   14,446   7,946   47,474   27,527
Amortization of other intangible assets 8,692   8,568   9,741   26,672   30,072
Professional and legal fees 14,118   17,938   17,109   48,521   55,329
Amortization of tax credit investments 5,853   5,791   4,191   17,206   13,462
Other 31,249   30,484   28,859   90,752   83,824
Total non-interest expense 269,471   277,497   267,133   827,278   822,270
Income Before Income Taxes 126,674   93,331   194,832   349,458   589,367
Income tax expense 28,818   22,907   53,486   84,898   162,410
Net Income 97,856   70,424   141,346   264,560   426,957
Dividends on preferred stock 6,117   4,108   4,127   14,344   12,031
Net Income Available to Common Shareholders$91,739  $66,316  $137,219  $250,216  $414,926
                   

VALLEY NATIONAL BANCORP
Quarterly Analysis of Average Assets, Liabilities and Shareholders' Equity and
Net Interest Income on a Tax Equivalent Basis

 Three Months Ended
 September 30, 2024 June 30, 2024 September 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)$50,126,963 $786,704  6.28% $50,020,901 $770,987  6.17% $50,019,414 $753,662  6.03%
Taxable investments (3) 5,977,211  55,629  3.72   5,379,101  46,801  3.48   4,915,778  37,682  3.07 
Tax-exempt investments (1)(3) 573,059  6,145  4.29   575,272  6,075  4.22   620,439  5,800  3.74 
Interest bearing deposits with banks 974,417  13,385  5.49   797,676  10,902  5.47   1,246,934  17,113  5.49 
Total interest earning assets 57,651,650  861,863  5.98   56,772,950  834,765  5.88   56,802,565  814,257  5.73 
Other assets 4,590,372      4,745,689      4,589,123    
Total assets$62,242,022     $61,518,639     $61,391,688    
Liabilities and shareholders' equity                 
Interest bearing liabilities:                 
Savings, NOW and money market deposits$25,017,504 $235,371  3.76% $24,848,266 $231,597  3.73% $23,016,737 $201,916  3.51%
Time deposits 14,233,209  174,741  4.91   13,311,381  160,442  4.82   14,880,311  164,336  4.42 
Short-term borrowings 81,251  451  2.22   97,502  691  2.83   436,518  5,189  4.75 
Long-term borrowings (4) 3,324,992  39,488  4.75   3,319,195  39,051  4.71   2,495,512  29,159  4.67 
Total interest bearing liabilities 42,656,956  450,051  4.22   41,576,344  431,781  4.15   40,829,078  400,600  3.92 
Non-interest bearing deposits 11,158,521      11,223,562      11,951,398    
Other liabilities 1,563,990      1,964,752      2,005,426    
Shareholders' equity 6,862,555      6,753,981      6,605,786    
Total liabilities and shareholders' equity$62,242,022     $61,518,639     $61,391,688    
                  
Net interest income/interest rate spread (5)  $411,812  1.76%   $402,984  1.73%   $413,657  1.81%
Tax equivalent adjustment   (1,314)      (1,299)      (1,239)  
Net interest income, as reported  $410,498      $401,685      $412,418   
Net interest margin (6)    2.85      2.83      2.90 
Tax equivalent effect    0.01      0.01      0.01 
Net interest margin on a fully tax equivalent basis (6)    2.86%     2.84%     2.91%

_________

(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

FAQ

What was Valley National Bancorp's (VLY) earnings per share in Q3 2024?

Valley National Bancorp reported earnings of $0.18 per diluted share in Q3 2024.

How much did Valley National Bancorp's (VLY) deposits increase in Q3 2024?

Valley National Bancorp's deposits increased by $283.8 million to $50.4 billion in Q3 2024.

What was Valley National Bancorp's (VLY) net interest margin in Q3 2024?

Valley National Bancorp's net interest margin was 2.86% in Q3 2024, up from 2.84% in Q2 2024.

How much in commercial real estate loans is Valley National Bancorp (VLY) planning to sell?

Valley National Bancorp announced plans to sell over $800 million in performing commercial real estate loans at approximately 1% discount.

Valley National Bancorp

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Banks - Regional
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