Valley National Bancorp Reports Second Quarter 2022 Earnings With Strong Organic Loan Growth, Net Interest Income and Margin
Valley National Bancorp (NASDAQ: VLY) reported Q2 2022 net income of $96.4 million, or $0.18 per diluted share, down from $120.5 million in Q2 2021. The results included $95.5 million in merger-related expenses from the acquisition of Bank Leumi USA, which added $8.1 billion in assets. Adjusted net income without these charges was $165.8 million, or $0.32 per diluted share. Loan portfolio increased by $8.2 billion to $43.6 billion. Net interest income surged to $419.6 million, largely due to organic growth and rising interest rates, though non-interest expenses rose significantly due to merger costs.
- Adjusted net income rose to $165.8 million, or $0.32 per diluted share, compared to $126.6 million in Q2 2021.
- Loan portfolio grew by $8.2 billion to $43.6 billion, with strong organic growth.
- Net interest income increased to $419.6 million, a rise of $101.2 million from Q1 2022.
- Net interest margin improved to 3.43%, up 27 basis points from Q1 2022.
- Net income of $96.4 million declined from $120.5 million in Q2 2021.
- Merger-related expenses totaled $95.5 million, impacting overall profitability.
- Non-interest expenses increased by $102.4 million, mostly due to merger costs.
NEW YORK, July 28, 2022 (GLOBE NEWSWIRE) -- Valley National Bancorp (NASDAQ:VLY), the holding company for Valley National Bank, today reported net income for the second quarter 2022 of
Our second quarter 2022 results reflect the impact of the April 1, 2022 acquisition of Bank Leumi USA and include
Key financial highlights for the second quarter:
- Acquisition of Bank Leumi Le-Israel Corporation. On April 1, 2022, Valley completed its acquisition of Bank Leumi Le-Israel Corporation, the U.S. subsidiary of Bank Leumi Le-Israel B.M., and parent company of Bank Leumi USA, and collectively referred to as "Bank Leumi USA". At the acquisition date, Bank Leumi USA had approximately
$8.1 billion in assets,$5.9 billion of loans and$7.0 billion of deposits, after purchase accounting adjustments. Valley issued approximately 85 million shares of common stock and paid$113.4 million in cash in the transaction. The consideration for the acquisition totaled approximately$1.2 billion , inclusive of the value of stock options. The transaction resulted in$403.2 million of goodwill and$153.4 million of core deposit and other intangible assets subject to amortization. - Loan Portfolio: Total loans increased
$8.2 billion to$43.6 billion at June 30, 2022 from March 31, 2022 primarily due to$5.9 billion of loans acquired from Bank Leumi and strong organic loan growth. Excluding acquired loans from Bank Leumi USA, our loan portfolio increased 26 percent on an annualized basis during the second quarter 2022 as a result of strong commercial loan volumes and a continued uptick in new residential mortgage loans originated for investment rather than sale. We sold approximately$125 million of residential mortgage loans resulting in total pre-tax gains of$3.6 million in the second quarter 2022. See the "Loans, Deposits and Other Borrowings" section below for more details. - Net Interest Income and Margin: Net interest income on a tax equivalent basis of
$419.6 million for the second quarter 2022 increased$101.2 million and$117.8 million as compared to the first quarter 2022 and second quarter 2021, respectively, reflecting our acquisition of Bank Leumi USA, continued organic loan growth and a well-positioned balance sheet in the current rising interest rate environment. Our net interest margin on a tax equivalent basis continued to be strong and increased by 27 basis points to 3.43 percent in the second quarter 2022 as compared to 3.16 percent for the first quarter 2022. See the "Net Interest Income and Margin" section below for more details. - Allowance and Provision for Credit Losses for Loans: The allowance for credit losses for loans totaled
$491.0 million and$379.3 million at June 30, 2022 and March 31, 2022, respectively, representing 1.13 percent and 1.07 percent of total loans at each respective date. During the second quarter 2022, the provision for credit losses for loans totaled$43.7 million as compared to$3.5 million and$8.8 million for the first quarter 2022 and second quarter 2021, respectively. The second quarter 2022 provision included a$41.0 million related to non-PCD loans and unfunded credit commitments acquired from Bank Leumi USA. - Credit Quality: Total accruing past due loans decreased
$19.3 million to$73.5 million , or 0.17 percent of total loans, at June 30, 2022 as compared to$92.8 million , or 0.26 percent of total loans, at March 31, 2022. Non-accrual loans represented 0.72 percent and 0.65 percent of total loans at June 30, 2022 and March 31, 2022, respectively. See the "Credit Quality" section below for more details. - Non-Interest Income: Non-interest income increased
$19.3 million to$58.5 million for the second quarter 2022 as compared to the first quarter 2022 mainly driven by increases in several categories including wealth management and trust fees, service charges on deposit accounts and other income totaling$4.4 million ,$3.9 million and$6.0 million , respectively. These increases were primarily due to the acquisition of Bank Leumi USA. Net gains on sales of residential mortgage loans also increased$2.6 million to$3.6 million for the second quarter 2022 as compared with the first quarter 2022. - Non-Interest Expense: Non-interest expense increased
$102.4 million to$299.7 million for the second quarter 2022 as compared to the first quarter 2022. The increase was largely due to$54.5 million of merger expenses incurred during the second quarter 2022 and our expanded banking operations resulting from the Bank Leumi USA acquisition. Merger expenses were mainly reported within salary and employee benefits, professional and legal fees, and other expense (largely consisting of technology related costs) totaling$28.0 million ,$11.2 million and$15.3 million , respectively. Amortization of intangible assets increased$7.0 million as compared to first quarter 2022 mostly due to additional core deposit and other intangible assets resulting from the Bank Leumi USA acquisition. - Efficiency Ratio: Our efficiency ratio was 50.78 percent for the second quarter 2022 as compared to 53.18 percent and 46.64 percent for the first quarter 2022 and second quarter 2021, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.
- Performance Ratios: Annualized return on average assets (ROA), shareholders’ equity (ROE) and tangible ROE were 0.72 percent, 6.18 percent, and 9.33 percent for the second quarter 2022, respectively. Annualized ROA, ROE, and tangible ROE, adjusted for non-core charges, were 1.25 percent, 10.63 percent and 16.05 percent for the second quarter 2022, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.
Ira Robbins, CEO commented, "Our exceptional commercial loan growth and the acquisition of Bank Leumi USA combined with a supportive interest rate environment propelled our strong core operating results during the quarter. Our net interest margin on a tax equivalent basis increased 27 basis points as compared to the first quarter 2022 reflecting the expected benefit of higher interest rates on our asset sensitive balance sheet and our ability to manage overall funding costs with modest deposit betas during the quarter. On an organic basis, Valley continues to grow existing relationships and attract new clients by offering premier advisory expertise and service across our diverse business lines. Our underwriting criteria remain consistent with the Valley legacy that has driven solid credit metrics across various economic environments.”
Mr. Robbins continued, “We are thrilled with the early returns on the Bank Leumi USA acquisition during the second quarter 2022. Commercial loan growth and synergies from the merged Leumi and Valley banker teams have been strong, and differentiated deposit niches have further enhanced our core funding capabilities. As we continue to integrate this recent acquisition and leverage our combined infrastructure, Valley is poised to remain one of the premier full-service commercial banks in the country.”
Net Interest Income and Margin
Net interest income on a tax equivalent basis totaling
Our net interest margin on a tax equivalent basis of 3.43 percent for the second quarter 2022 increased by 27 basis points and 25 basis points from 3.16 percent and 3.18 percent for the first quarter 2022 and second quarter 2021, respectively. The yield on average interest earning assets increased by 33 basis points on a linked quarter basis mostly due to the aforementioned higher yields on new and adjustable rate loans in the second quarter 2022 as compared to the first quarter 2022. The yield on average loans increased by 24 basis points to 3.91 percent for the second quarter 2022 as compared to the first quarter 2022 largely due to the higher level of market interest rates. The yields on average taxable and non-taxable investments also increased 39 basis points and 67 basis points, respectively, from the first quarter 2022 largely due to interest income, including discount accretion, on investment securities acquired from Bank Leumi USA. The overall cost of average interest bearing liabilities increased 12 basis points to 0.47 percent for the second quarter 2022 as compared to the first quarter 2022. The increase was mainly due to moderately higher pricing of non-maturity deposits combined with greater utilization of brokered deposits and short-term borrowings in our loan funding mix during the second quarter 2022. Our cost of total average deposits only increased to 0.19 percent for the second quarter 2022 from 0.14 percent for the first quarter 2022.
Loans, Deposits and Other Borrowings
Loans. Loans increased
Deposits. Total deposits increased
Other Borrowings. Short-term borrowings increased
Credit Quality
Non-Performing Assets (NPAs). Total NPAs, consisting of non-accrual loans, other real estate owned (OREO) and other repossessed assets increased
Non-performing Taxi Medallion Loan Portfolio. We continue to closely monitor our non-performing taxi medallion loans totaling
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, 2022, March 31, 2022 and June 30, 2021:
| June 30, 2022 | March 31, 2022 | June 30, 2021 | ||||||||||||||||
| Allocation | Allocation | Allocation | ||||||||||||||||
| as a % of | as a % of | as a % of | ||||||||||||||||
| Allowance | Loan | Allowance | Loan | Allowance | Loan | |||||||||||||
| Allocation | Category | Allocation | Category | Allocation | Category | |||||||||||||
| ($ in thousands) | ||||||||||||||||||
| Loan Category: | ||||||||||||||||||
| Commercial and industrial loans | $ | 144,539 | 1.70 | % | $ | 101,203 | 1.75 | % | $ | 109,689 | 1.80 | % | ||||||
| Commercial real estate loans: | ||||||||||||||||||
| Commercial real estate | 227,457 | 0.97 | 189,927 | 0.96 | % | 168,220 | 0.96 | |||||||||||
| Construction | 49,770 | 1.47 | 30,022 | 1.38 | % | 20,919 | 1.19 | |||||||||||
| Total commercial real estate loans | 277,227 | 1.03 | 219,949 | 1.00 | % | 189,139 | 0.98 | |||||||||||
| Residential mortgage loans | 29,889 | 0.60 | 28,189 | 0.60 | % | 25,303 | 0.60 | |||||||||||
| Consumer loans: | ||||||||||||||||||
| Home equity | 3,907 | 0.91 | 3,656 | 0.93 | % | 4,602 | 1.12 | |||||||||||
| Auto and other consumer | 13,257 | 0.49 | 9,513 | 0.37 | % | 10,591 | 0.43 | |||||||||||
| Total consumer loans | 17,164 | 0.55 | 13,169 | 0.45 | % | 15,193 | 0.53 | |||||||||||
| Allowance for loan losses | 468,819 | 1.08 | 362,510 | 1.03 | % | 339,324 | 1.05 | |||||||||||
| Allowance for unfunded credit commitments | 22,144 | 16,742 | 14,400 | |||||||||||||||
| Total allowance for credit losses for loans | $ | 490,963 | $ | 379,252 | $ | 353,724 | ||||||||||||
| Allowance for credit losses for | ||||||||||||||||||
| loans as a % total loans | 1.13 | % | 1.07 | % | 1.09 | % | ||||||||||||
Our loan portfolio, totaling
During the second quarter 2022, the provision for credit losses for loans totaled
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 1.13 percent at June 30, 2022 as compared to 1.07 percent and 1.09 percent at March 31, 2022 and June 30, 2021, respectively. The allowance for credit losses increased
Capital Adequacy
Valley's total risk-based capital, common equity Tier 1 capital, Tier 1 capital and Tier 1 leverage capital ratios were 11.53 percent, 9.06 percent, 9.54 percent, and 8.33 percent, respectively, at June 30, 2022.
Investor Conference Call
Valley will host a conference call with investors and the financial community at 11:00 AM Eastern Daylight Savings Time, today to discuss the second quarter 2022 earnings and related matters.
Those wishing to participate should preregister using this link: https://register.vevent.com/register/BIab2b17746c8a4a81a1ef7f9715060746 to receive the dial-in number and a personal PIN, which are required to access the conference call. Investor presentation materials will be made available prior to the conference call at www.valley.com.
About Valley
As the principal subsidiary of Valley National Bancorp, Valley National Bank is a regional bank with approximately
Forward Looking Statements
The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about our business, new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology as “should,” “expect,” “believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “typically,” “usually,” “anticipate,” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:
- the inability to realize expected cost savings and synergies from the Bank Leumi USA acquisition in amounts or in the timeframe anticipated;
- greater than expected costs or difficulties relating to Bank Leumi USA integration matters;
- the inability to retain customers and qualified employees of Bank Leumi USA;
- greater than expected non-recurring charges related to the Bank Leumi USA acquisition;
- the continued impact of COVID-19 on the U.S. and global economies, including business disruptions, reductions in employment, supply chain interruptions and an increase in business failures, specifically among our clients;
- the continued impact of COVID-19 on our employees and our ability to provide services to our customers and respond to their needs as more cases and new variants of COVID-19 may arise in our primary markets;
- continued deterioration in general business and economic conditions or turbulence in domestic or global financial markets;
- the impact of forbearances or deferrals we are required or agree to as a result of customer requests and/or government actions, including, but not limited to our potential inability to recover fully deferred payments from the borrower or the collateral;
- the risks related to the discontinuation of the London Interbank Offered Rate and other reference rates, including increased expenses and litigation and the effectiveness of hedging strategies;
- damage verdicts or settlements or restrictions related to existing or potential class action litigation or individual litigation arising from claims of violations of laws or regulations, contractual claims, breach of fiduciary responsibility, negligence, fraud, environmental laws, patent or trademark infringement, employment related claims, and other matters;
- a prolonged downturn in the economy, mainly in New Jersey, New York, Florida, Alabama, California, and Illinois, as well as an unexpected decline in commercial real estate values within our market areas;
- higher or lower than expected income tax expense or tax rates, including increases or decreases resulting from changes in uncertain tax position liabilities, tax laws, regulations and case law;
- the inability to grow customer deposits to keep pace with loan growth;
- a material change in our allowance for credit losses under CECL due to forecasted economic conditions and/or unexpected credit deterioration in our loan and investment portfolios;
- the need to supplement debt or equity capital to maintain or exceed internal capital thresholds;
- greater than expected technology related costs due to, among other factors, prolonged or failed implementations, additional project staffing and obsolescence caused by continuous and rapid market innovations;
- the loss of or decrease in lower-cost funding sources within our deposit base, including our inability to achieve deposit retention targets under Valley's branch transformation strategy;
- cyber-attacks, ransomware attacks, computer viruses or other malware that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage our systems;
- results of examinations by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Bank (FRB), the Consumer Financial Protection Bureau (CFPB) and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for credit losses, write-down assets, reimburse customers, change the way we do business, or limit or eliminate certain other banking activities;
- our inability or determination not to pay dividends at current levels, or at all, because of inadequate earnings, regulatory restrictions or limitations, changes in our capital requirements or a decision to increase capital by retaining more earnings;
- unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, the COVID-19 pandemic or other external events; and
- unexpected significant declines in the loan portfolio due to the lack of economic expansion, increased competition, large prepayments, changes in regulatory lending guidance or other factors.
A detailed discussion of factors that could affect our results is included in our SEC filings, including the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2021.
We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
| Contact: | Michael D. Hagedorn | |
| Senior Executive Vice President and | ||
| Chief Financial Officer | ||
| 973-872-4885 |
-Tables to Follow-
VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
SELECTED FINANCIAL DATA
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | ||||||||||||||||
| ($ in thousands, except for share data) | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| FINANCIAL DATA: | |||||||||||||||||||
| Net interest income - FTE(1) | $ | 419,565 | $ | 318,363 | $ | 301,787 | $ | 737,927 | $ | 595,371 | |||||||||
| Net interest income | $ | 418,160 | $ | 317,669 | $ | 300,907 | $ | 735,829 | $ | 593,574 | |||||||||
| Non-interest income | 58,533 | 39,270 | 43,126 | 97,803 | 74,359 | ||||||||||||||
| Total revenue | 476,693 | 356,939 | 344,033 | 833,632 | 667,933 | ||||||||||||||
| Non-interest expense | 299,730 | 197,340 | 171,893 | 497,070 | 332,106 | ||||||||||||||
| Pre-provision net revenue | 176,963 | 159,599 | 172,140 | 336,562 | 335,827 | ||||||||||||||
| Provision for credit losses | 43,998 | 3,557 | 8,747 | 47,555 | 17,403 | ||||||||||||||
| Income tax expense | 36,552 | 39,314 | 42,881 | 75,866 | 82,202 | ||||||||||||||
| Net income | 96,413 | 116,728 | 120,512 | 213,141 | 236,222 | ||||||||||||||
| Dividends on preferred stock | 3,172 | 3,172 | 3,172 | 6,344 | 6,344 | ||||||||||||||
| Net income available to common shareholders | $ | 93,241 | $ | 113,556 | $ | 117,340 | $ | 206,797 | $ | 229,878 | |||||||||
| Weighted average number of common shares outstanding: | |||||||||||||||||||
| Basic | 506,302,464 | 421,573,843 | 405,963,209 | 464,172,210 | 405,560,146 | ||||||||||||||
| Diluted | 508,479,206 | 423,506,550 | 408,660,778 | 466,320,683 | 408,152,458 | ||||||||||||||
| Per common share data: | |||||||||||||||||||
| Basic earnings | $ | 0.18 | $ | 0.27 | $ | 0.29 | $ | 0.45 | $ | 0.57 | |||||||||
| Diluted earnings | 0.18 | 0.27 | 0.29 | 0.44 | 0.56 | ||||||||||||||
| Cash dividends declared | 0.11 | 0.11 | 0.11 | 0.22 | 0.22 | ||||||||||||||
| Closing stock price - high | 13.04 | 15.02 | 14.63 | 15.02 | 14.63 | ||||||||||||||
| Closing stock price - low | 10.34 | 12.91 | 12.91 | 10.34 | 9.74 | ||||||||||||||
| FINANCIAL RATIOS: | |||||||||||||||||||
| Net interest margin | 3.42 | % | 3.15 | % | 3.18 | % | 3.30 | % | 3.15 | % | |||||||||
| Net interest margin - FTE(1) | 3.43 | 3.16 | 3.18 | 3.31 | 3.16 | ||||||||||||||
| Annualized return on average assets | 0.72 | 1.07 | 1.17 | 0.88 | 1.15 | ||||||||||||||
| Annualized return on avg. shareholders' equity | 6.18 | 9.15 | 10.24 | 7.51 | 10.10 | ||||||||||||||
| NON-GAAP FINANCIAL DATA AND RATIOS:(3) | |||||||||||||||||||
| Basic earnings per share, as adjusted | $ | 0.32 | $ | 0.28 | $ | 0.30 | $ | 0.60 | $ | 0.58 | |||||||||
| Diluted earnings per share, as adjusted | 0.32 | 0.28 | 0.30 | 0.60 | 0.58 | ||||||||||||||
| Annualized return on average assets, as adjusted | 1.25 | 1.10 | 1.23 | 1.18 | 1.18 | ||||||||||||||
| Annualized return on average shareholders' equity, as adjusted | 10.63 | % | 9.43 | % | 10.76 | % | 10.09 | % | 10.37 | % | |||||||||
| Annualized return on avg. tangible shareholders' equity | 9.33 | 13.09 | 14.79 | 11.07 | 14.64 | ||||||||||||||
| Annualized return on average tangible shareholders' equity, as adjusted | 16.05 | 13.49 | 15.54 | 14.87 | 15.03 | ||||||||||||||
| Efficiency ratio | 50.78 | 53.18 | 46.64 | 51.81 | 47.59 | ||||||||||||||
| AVERAGE BALANCE SHEET ITEMS: | |||||||||||||||||||
| Assets | $ | 53,211,422 | $ | 43,570,251 | $ | 41,161,459 | $ | 48,417,469 | $ | 40,967,174 | |||||||||
| Interest earning assets | 48,891,230 | 40,283,048 | 37,907,414 | 44,609,968 | 37,648,256 | ||||||||||||||
| Loans | 42,517,287 | 34,623,402 | 32,635,298 | 38,592,151 | 32,609,034 | ||||||||||||||
| Interest bearing liabilities | 29,694,271 | 26,147,915 | 25,469,526 | 27,930,890 | 25,710,515 | ||||||||||||||
| Deposits | 42,896,381 | 35,763,683 | 32,723,175 | 39,349,737 | 32,281,683 | ||||||||||||||
| Shareholders' equity | 6,238,985 | 5,104,709 | 4,708,797 | 5,673,014 | 4,677,273 | ||||||||||||||
| As Of | |||||||||||||||||||
| BALANCE SHEET ITEMS: | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||
| (In thousands) | 2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||
| Assets | $ | 54,438,807 | $ | 43,551,457 | $ | 43,446,443 | $ | 41,278,007 | $ | 41,274,228 | |||||||||
| Total loans | 43,560,777 | 35,364,405 | 34,153,657 | 32,606,814 | 32,457,454 | ||||||||||||||
| Deposits | 43,881,051 | 35,647,336 | 35,632,412 | 33,632,605 | 33,194,774 | ||||||||||||||
| Shareholders' equity | 6,204,913 | 5,096,384 | 5,084,066 | 4,822,498 | 4,737,807 | ||||||||||||||
| LOANS: | |||||||||||||||||||
| (In thousands) | |||||||||||||||||||
| Commercial and industrial loans: | |||||||||||||||||||
| Commercial and industrial | $ | 8,378,454 | $ | 5,587,781 | $ | 5,411,601 | $ | 4,761,227 | $ | 4,733,771 | |||||||||
| Commercial and industrial PPP loans | 136,004 | 203,609 | 435,950 | 874,033 | 1,350,684 | ||||||||||||||
| Total commercial and industrial | 8,514,458 | 5,791,390 | 5,847,551 | 5,635,260 | 6,084,455 | ||||||||||||||
| Commercial real estate: | |||||||||||||||||||
| Commercial real estate | 23,535,086 | 19,763,202 | 18,935,486 | 17,912,070 | 17,512,142 | ||||||||||||||
| Construction | 3,374,373 | 2,174,542 | 1,854,580 | 1,804,580 | 1,752,838 | ||||||||||||||
| Total commercial real estate | 26,909,459 | 21,937,744 | 20,790,066 | 19,716,650 | 19,264,980 | ||||||||||||||
| Residential mortgage | 5,005,069 | 4,691,935 | 4,545,064 | 4,332,422 | 4,226,975 | ||||||||||||||
| Consumer: | |||||||||||||||||||
| Home equity | 431,455 | 393,538 | 400,779 | 402,658 | 410,856 | ||||||||||||||
| Automobile | 1,673,482 | 1,552,928 | 1,570,036 | 1,563,698 | 1,531,262 | ||||||||||||||
| Other consumer | 1,026,854 | 996,870 | 1,000,161 | 956,126 | 938,926 | ||||||||||||||
| Total consumer loans | 3,131,791 | 2,943,336 | 2,970,976 | 2,922,482 | 2,881,044 | ||||||||||||||
| Total loans | $ | 43,560,777 | $ | 35,364,405 | $ | 34,153,657 | $ | 32,606,814 | $ | 32,457,454 | |||||||||
| CAPITAL RATIOS: | |||||||||||||||||||
| Book value per common share | $ | 11.84 | $ | 11.60 | $ | 11.57 | $ | 11.32 | $ | 11.15 | |||||||||
| Tangible book value per common share (2) | 7.71 | 7.93 | 7.94 | 7.78 | 7.59 | ||||||||||||||
| Tangible common equity to tangible assets (2) | 7.46 | % | 7.96 | % | 7.98 | % | 7.95 | % | 7.73 | % | |||||||||
| Tier 1 leverage capital | 8.33 | 8.70 | 8.88 | 8.63 | 8.49 | ||||||||||||||
| Common equity tier 1 capital | 9.06 | 9.67 | 10.06 | 10.06 | 10.04 | ||||||||||||||
| Tier 1 risk-based capital | 9.54 | 10.27 | 10.69 | 10.73 | 10.73 | ||||||||||||||
| Total risk-based capital | 11.53 | 12.65 | 13.10 | 13.24 | 13.36 | ||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| ALLOWANCE FOR CREDIT LOSSES: | June 30, | March 31, | June 30, | June 30, | |||||||||||||||
| ($ in thousands) | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Allowance for credit losses for loans | |||||||||||||||||||
| Beginning balance | $ | 379,252 | $ | 375,702 | $ | 354,313 | $ | 375,702 | $ | 351,354 | |||||||||
| Allowance for purchased credit deteriorated (PCD) loans, net (2) | 70,319 | — | — | 70,319 | — | ||||||||||||||
| Loans charged-off: | |||||||||||||||||||
| Commercial and industrial | (4,540 | ) | (1,571 | ) | (10,893 | ) | (6,111 | ) | (18,035 | ) | |||||||||
| Commercial real estate | — | (173 | ) | — | (173 | ) | (382 | ) | |||||||||||
| Residential mortgage | (1 | ) | (26 | ) | (1 | ) | (27 | ) | (139 | ) | |||||||||
| Total consumer | (726 | ) | (825 | ) | (1,480 | ) | (1,551 | ) | (2,618 | ) | |||||||||
| Total loans charged-off | (5,267 | ) | (2,595 | ) | (12,374 | ) | (7,862 | ) | (21,174 | ) | |||||||||
| Charged-off loans recovered: | |||||||||||||||||||
| Commercial and industrial | 1,952 | 824 | 678 | 2,776 | 2,267 | ||||||||||||||
| Commercial real estate | 224 | 107 | 665 | 331 | 730 | ||||||||||||||
| Construction | — | — | — | — | 4 | ||||||||||||||
| Residential mortgage | 74 | 457 | 191 | 531 | 348 | ||||||||||||||
| Total consumer | 697 | 1,257 | 1,474 | 1,954 | 2,404 | ||||||||||||||
| Total loans recovered | 2,947 | 2,645 | 3,008 | 5,592 | 5,753 | ||||||||||||||
| Net (charge-offs) recoveries | (2,320 | ) | 50 | (9,366 | ) | (2,270 | ) | (15,421 | ) | ||||||||||
| Provision for credit losses for loans | 43,712 | 3,500 | 8,777 | 47,212 | 17,791 | ||||||||||||||
| Ending balance | $ | 490,963 | $ | 379,252 | $ | 353,724 | $ | 490,963 | $ | 353,724 | |||||||||
| Components of allowance for credit losses for loans: | |||||||||||||||||||
| Allowance for loan losses | $ | 468,819 | $ | 362,510 | $ | 339,324 | $ | 468,819 | $ | 339,324 | |||||||||
| Allowance for unfunded credit commitments | 22,144 | 16,742 | 14,400 | 22,144 | 14,400 | ||||||||||||||
| Allowance for credit losses for loans | $ | 490,963 | $ | 379,252 | $ | 353,724 | $ | 490,963 | $ | 353,724 | |||||||||
| Components of provision for credit losses for loans: | |||||||||||||||||||
| Provision for credit losses for loans | $ | 38,310 | $ | 3,258 | $ | 5,810 | $ | 41,568 | $ | 14,502 | |||||||||
| Provision for unfunded credit commitments | 5,402 | 242 | 2,967 | 5,644 | 3,289 | ||||||||||||||
| Total provision for credit losses for loans | $ | 43,712 | $ | 3,500 | $ | 8,777 | $ | 47,212 | $ | 17,791 | |||||||||
| Annualized ratio of total net charge-offs (recoveries) to average loans | 0.02 | % | 0.00 | % | 0.11 | % | 0.01 | % | 0.09 | % | |||||||||
| Allowance for credit losses for loans as a % of total loans | 1.13 | 1.07 | 1.09 | 1.13 | 1.09 | ||||||||||||||
| As of | |||||||||||||||||||
| ASSET QUALITY: | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||
| ($ in thousands) | 2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||
| Accruing past due loans: | |||||||||||||||||||
| 30 to 59 days past due: | |||||||||||||||||||
| Commercial and industrial | $ | 7,143 | $ | 6,723 | $ | 6,717 | $ | 2,677 | $ | 3,867 | |||||||||
| Commercial real estate | 10,516 | 30,807 | 14,421 | 22,956 | 40,524 | ||||||||||||||
| Construction | 9,108 | 1,708 | 1,941 | — | — | ||||||||||||||
| Residential mortgage | 12,326 | 9,266 | 10,999 | 9,293 | 8,479 | ||||||||||||||
| Total consumer | 6,009 | 5,862 | 6,811 | 5,463 | 6,242 | ||||||||||||||
| Total 30 to 59 days past due | 45,102 | 54,366 | 40,889 | 40,389 | 59,112 | ||||||||||||||
| 60 to 89 days past due: | |||||||||||||||||||
| Commercial and industrial | 3,870 | 14,461 | 7,870 | 985 | 1,361 | ||||||||||||||
| Commercial real estate | 630 | 6,314 | — | 5,897 | 11,451 | ||||||||||||||
| Construction | 3,862 | 3,125 | — | — | — | ||||||||||||||
| Residential mortgage | 2,410 | 2,560 | 3,314 | 974 | 1,608 | ||||||||||||||
| Total consumer | 702 | 554 | 1,020 | 1,617 | 985 | ||||||||||||||
| Total 60 to 89 days past due | 11,474 | 27,014 | 12,204 | 9,473 | 15,405 | ||||||||||||||
| 90 or more days past due: | |||||||||||||||||||
| Commercial and industrial | 15,470 | 9,261 | 1,273 | 2,083 | 2,351 | ||||||||||||||
| Commercial real estate | — | — | 32 | 1,942 | 1,948 | ||||||||||||||
| Residential mortgage | 1,188 | 1,746 | 677 | 1,002 | 956 | ||||||||||||||
| Total consumer | 267 | 400 | 789 | 325 | 463 | ||||||||||||||
| Total 90 or more days past due | 16,925 | 11,407 | 2,771 | 5,352 | 5,718 | ||||||||||||||
| Total accruing past due loans | $ | 73,501 | $ | 92,787 | $ | 55,864 | $ | 55,214 | $ | 80,235 | |||||||||
| Non-accrual loans: | |||||||||||||||||||
| Commercial and industrial | $ | 148,404 | $ | 96,631 | $ | 99,918 | $ | 100,614 | $ | 102,594 | |||||||||
| Commercial real estate | 85,807 | 79,180 | 83,592 | 95,843 | 58,893 | ||||||||||||||
| Construction | 49,780 | 17,618 | 17,641 | 17,653 | 17,660 | ||||||||||||||
| Residential mortgage | 25,847 | 33,275 | 35,207 | 33,648 | 35,941 | ||||||||||||||
| Total consumer | 3,279 | 3,754 | 3,858 | 4,073 | 4,924 | ||||||||||||||
| Total non-accrual loans | 313,117 | 230,458 | 240,216 | 251,831 | 220,012 | ||||||||||||||
| Other real estate owned (OREO) | 422 | 1,024 | 2,259 | 3,967 | 4,523 | ||||||||||||||
| Other repossessed assets | 1,200 | 1,176 | 2,931 | 1,896 | 2,060 | ||||||||||||||
| Total non-performing assets | $ | 314,739 | $ | 232,658 | $ | 245,406 | $ | 257,694 | $ | 226,595 | |||||||||
| Performing troubled debt restructured loans | $ | 67,274 | $ | 56,538 | $ | 71,330 | $ | 64,832 | $ | 64,080 | |||||||||
| Total non-accrual loans as a % of loans | 0.72 | % | 0.65 | % | 0.70 | % | 0.77 | % | 0.68 | % | |||||||||
| Total accruing past due and non-accrual loans as a % of loans | 0.89 | % | 0.91 | % | 0.87 | % | 0.94 | % | 0.93 | % | |||||||||
| Allowance for losses on loans as a % of non-accrual loans | 149.73 | % | 157.30 | % | 149.53 | % | 136.01 | % | 154.23 | % | |||||||||
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 | ) | Represents the allowance for acquired PCD loans, net of PCD loan charge-offs totaling |
| (3 | ) | 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) | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Adjusted net income available to common shareholders (non-GAAP): | |||||||||||||||||||
| Net income, as reported (GAAP) | $ | 96,413 | $ | 116,728 | $ | 120,512 | $ | 213,141 | $ | 236,222 | |||||||||
| Add: Loss on extinguishment of debt (net of tax) | — | — | 6,024 | — | 6,024 | ||||||||||||||
| Add: Losses on available for sale and held to maturity securities transactions (net of tax)(a) | (56 | ) | 6 | 81 | (50 | ) | 166 | ||||||||||||
| Add: Provision for credit losses, (net of tax) (b) | 29,282 | — | — | 29,282 | — | ||||||||||||||
| Add: Merger related expenses (net of tax)(c) | 40,164 | 3,579 | — | 43,743 | — | ||||||||||||||
| Net income, as adjusted (non-GAAP) | $ | 165,803 | $ | 120,313 | $ | 126,617 | $ | 286,116 | $ | 242,412 | |||||||||
| Dividends on preferred stock | 3,172 | 3,172 | 3,172 | 6,344 | 6,344 | ||||||||||||||
| Net income available to common shareholders, as adjusted (non-GAAP) | $ | 162,631 | $ | 117,141 | $ | 123,445 | $ | 279,772 | $ | 236,068 | |||||||||
| __________ | |||||||||||||||||||
| (a) Included in (losses) gains on securities transactions, net. | |||||||||||||||||||
| (b) Represents provision for credit losses for non-PCD loans and unfunded credit commitments acquired from Bank Leumi USA. | |||||||||||||||||||
| (c) Merger related expenses are primarily within salary and employee benefits expense, other expense, and professional and legal fees. | |||||||||||||||||||
| Adjusted per common share data (non-GAAP): | |||||||||||||||||||
| Net income available to common shareholders, as adjusted (non-GAAP) | $ | 162,631 | $ | 117,141 | $ | 123,445 | $ | 279,772 | $ | 236,068 | |||||||||
| Average number of shares outstanding | 506,302,464 | 421,573,843 | 405,963,209 | 464,172,210 | 405,560,146 | ||||||||||||||
| Basic earnings, as adjusted (non-GAAP) | $ | 0.32 | $ | 0.28 | $ | 0.30 | $ | 0.60 | $ | 0.58 | |||||||||
| Average number of diluted shares outstanding | 508,479,206 | 423,506,550 | 408,660,778 | 466,320,683 | 408,152,458 | ||||||||||||||
| Diluted earnings, as adjusted (non-GAAP) | $ | 0.32 | $ | 0.28 | $ | 0.30 | $ | 0.60 | $ | 0.58 | |||||||||
| Adjusted annualized return on average tangible shareholders' equity (non-GAAP): | |||||||||||||||||||
| Net income, as adjusted (non-GAAP) | $ | 165,803 | $ | 120,313 | $ | 126,617 | $ | 286,116 | $ | 242,412 | |||||||||
| Average shareholders' equity | $ | 6,238,985 | $ | 5,104,709 | $ | 4,708,797 | 5,673,014 | 4,677,273 | |||||||||||
| Less: Average goodwill and other intangible assets | 2,105,585 | 1,538,356 | 1,449,388 | 1,823,538 | 1,450,562 | ||||||||||||||
| Average tangible shareholders' equity | $ | 4,133,400 | $ | 3,566,353 | $ | 3,259,409 | $ | 3,849,476 | $ | 3,226,711 | |||||||||
| Annualized return on average tangible shareholders' equity, as adjusted (non-GAAP) | 16.05 | % | 13.49 | % | 15.54 | % | 14.87 | % | 15.03 | % | |||||||||
| Adjusted annualized return on average assets (non-GAAP): | |||||||||||||||||||
| Net income, as adjusted (non-GAAP) | $ | 165,803 | $ | 120,313 | $ | 126,617 | $ | 286,116 | $ | 242,412 | |||||||||
| Average assets | $ | 53,211,422 | $ | 43,570,251 | $ | 41,161,459 | $ | 48,417,469 | $ | 40,967,174 | |||||||||
| Annualized return on average assets, as adjusted (non-GAAP) | 1.25 | % | 1.10 | % | 1.23 | % | 1.18 | % | 1.18 | % | |||||||||
Non-GAAP Reconciliations to GAAP Financial Measures (Continued)
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | ||||||||||||||||
| ($ in thousands) | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Adjusted annualized return on average shareholders' equity (non-GAAP): | |||||||||||||||||||
| Net income, as adjusted (non-GAAP) | $ | 165,803 | $ | 120,313 | $ | 126,617 | $ | 286,116 | $ | 242,412 | |||||||||
| Average shareholders' equity | $ | 6,238,985 | $ | 5,104,709 | $ | 4,708,797 | $ | 5,673,014 | $ | 4,677,273 | |||||||||
| Annualized return on average shareholders' equity, as adjusted (non-GAAP) | 10.63 | % | 9.43 | % | 10.76 | % | 10.09 | % | 10.37 | % | |||||||||
| Annualized return on average tangible shareholders' equity (non-GAAP): | |||||||||||||||||||
| Net income, as reported (GAAP) | $ | 96,413 | $ | 116,728 | $ | 120,512 | $ | 213,141 | $ | 236,222 | |||||||||
| Average shareholders' equity | $ | 6,238,985 | $ | 5,104,709 | $ | 4,708,797 | 5,673,014 | 4,677,273 | |||||||||||
| Less: Average goodwill and other intangible assets | 2,105,585 | 1,538,356 | 1,449,388 | 1,823,538 | 1,450,562 | ||||||||||||||
| Average tangible shareholders' equity | $ | 4,133,400 | $ | 3,566,353 | $ | 3,259,409 | $ | 3,849,476 | $ | 3,226,711 | |||||||||
| Annualized return on average tangible shareholders' equity (non-GAAP) | 9.33 | % | 13.09 | % | 14.79 | % | 11.07 | % | 14.64 | % | |||||||||
| Efficiency ratio (non-GAAP): | |||||||||||||||||||
| Non-interest expense, as reported (GAAP) | $ | 299,730 | $ | 197,340 | $ | 171,893 | $ | 497,070 | $ | 332,106 | |||||||||
| Less: Loss on extinguishment of debt (pre-tax) | — | — | 8,406 | — | 8,406 | ||||||||||||||
| Less: Merger-related expenses (pre-tax) | 54,496 | 4,628 | — | 59,124 | — | ||||||||||||||
| Less: Amortization of tax credit investments (pre-tax) | 3,193 | 2,896 | 2,972 | 6,089 | 5,716 | ||||||||||||||
| Non-interest expense, as adjusted (non-GAAP) | $ | 242,041 | $ | 189,816 | $ | 160,515 | $ | 431,857 | $ | 317,984 | |||||||||
| Net interest income, as reported (GAAP) | 418,160 | 317,669 | 300,907 | 735,829 | 593,574 | ||||||||||||||
| Non-interest income, as reported (GAAP) | 58,533 | 39,270 | 43,126 | 97,803 | 74,359 | ||||||||||||||
| Add: Losses on available for sale and held to maturity securities transactions, net (pre-tax) | (78 | ) | 9 | 113 | (69 | ) | 231 | ||||||||||||
| Non-interest income, as adjusted (non-GAAP) | $ | 58,455 | $ | 39,279 | $ | 43,239 | $ | 97,734 | $ | 74,590 | |||||||||
| Gross operating income, as adjusted (non-GAAP) | $ | 476,615 | $ | 356,948 | $ | 344,146 | $ | 833,563 | $ | 668,164 | |||||||||
| Efficiency ratio (non-GAAP) | 50.78 | % | 53.18 | % | 46.64 | % | 51.81 | % | 47.59 | % | |||||||||
| As of | |||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
| ($ in thousands, except for share data) | 2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||
| Tangible book value per common share (non-GAAP): | |||||||||||||||||||
| Common shares outstanding | 506,328,526 | 421,437,068 | 421,437,068 | 407,313,664 | 406,083,790 | ||||||||||||||
| Shareholders' equity (GAAP) | $ | 6,204,913 | $ | 5,096,384 | $ | 5,084,066 | $ | 4,822,498 | $ | 4,737,807 | |||||||||
| Less: Preferred stock | 209,691 | 209,691 | 209,691 | 209,691 | 209,691 | ||||||||||||||
| Less: Goodwill and other intangible assets | 2,090,147 | 1,543,238 | 1,529,394 | 1,444,967 | 1,447,965 | ||||||||||||||
| Tangible common shareholders' equity (non-GAAP) | $ | 3,905,075 | $ | 3,343,455 | $ | 3,344,981 | $ | 3,167,840 | $ | 3,080,151 | |||||||||
| Tangible book value per common share (non-GAAP) | $ | 7.71 | $ | 7.93 | $ | 7.94 | $ | 7.78 | $ | 7.59 | |||||||||
| Tangible common equity to tangible assets (non-GAAP): | |||||||||||||||||||
| Tangible common shareholders' equity (non-GAAP) | $ | 3,905,075 | $ | 3,343,455 | $ | 3,344,981 | $ | 3,167,840 | $ | 3,080,151 | |||||||||
| Total assets (GAAP) | $ | 54,438,807 | $ | 43,551,457 | $ | 43,446,443 | $ | 41,278,007 | $ | 41,274,228 | |||||||||
| Less: Goodwill and other intangible assets | 2,090,147 | 1,543,238 | 1,529,394 | 1,444,967 | 1,447,965 | ||||||||||||||
| Tangible assets (non-GAAP) | $ | 52,348,660 | $ | 42,008,219 | $ | 41,917,049 | $ | 39,833,040 | $ | 39,826,263 | |||||||||
| Tangible common equity to tangible assets (non-GAAP) | 7.46 | % | 7.96 | % | 7.98 | % | 7.95 | % | 7.73 | % | |||||||||
| 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, 1455 Valley Road, Wayne, New Jersey, 07470, by telephone at (973) 305-3380, by fax at (973) 305-1364 or by e-mail at tzarkadas@valley.com. |
VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for share data)
| June 30, | December 31, | ||||||
| 2022 | 2021 | ||||||
| (Unaudited) | |||||||
| Assets | |||||||
| Cash and due from banks | $ | 481,414 | $ | 205,156 | |||
| Interest bearing deposits with banks | 906,898 | 1,844,764 | |||||
| Investment securities: | |||||||
| Equity securities | 41,716 | 36,473 | |||||
| Trading debt securities | — | 38,130 | |||||
| Available for sale debt securities | 1,382,551 | 1,128,809 | |||||
| Held to maturity debt securities (net of allowance for credit losses of | 3,718,469 | 2,667,532 | |||||
| Total investment securities | 5,142,736 | 3,870,944 | |||||
| Loans held for sale, at fair value | 18,348 | 139,516 | |||||
| Loans | 43,560,777 | 34,153,657 | |||||
| Less: Allowance for loan losses | (468,819 | ) | (359,202 | ) | |||
| Net loans | 43,091,958 | 33,794,455 | |||||
| Premises and equipment, net | 360,819 | 326,306 | |||||
| Lease right of use assets | 315,820 | 259,117 | |||||
| Bank owned life insurance | 714,762 | 566,770 | |||||
| Accrued interest receivable | 134,682 | 96,882 | |||||
| Goodwill | 1,871,505 | 1,459,008 | |||||
| Other intangible assets, net | 218,642 | 70,386 | |||||
| Other assets | 1,181,223 | 813,139 | |||||
| Total Assets | $ | 54,438,807 | $ | 43,446,443 | |||
| Liabilities | |||||||
| Deposits: | |||||||
| Non-interest bearing | $ | 16,139,559 | $ | 11,675,748 | |||
| Interest bearing: | |||||||
| Savings, NOW and money market | 23,547,951 | 20,269,620 | |||||
| Time | 4,193,541 | 3,687,044 | |||||
| Total deposits | 43,881,051 | 35,632,412 | |||||
| Short-term borrowings | 1,522,804 | 655,726 | |||||
| Long-term borrowings | 1,403,805 | 1,423,676 | |||||
| Junior subordinated debentures issued to capital trusts | 56,587 | 56,413 | |||||
| Lease liabilities | 368,920 | 283,106 | |||||
| Accrued expenses and other liabilities | 1,000,727 | 311,044 | |||||
| Total Liabilities | 48,233,894 | 38,362,377 | |||||
| Shareholders’ Equity | |||||||
| Preferred stock, no par value; 50,000,000 authorized shares: | |||||||
| Series A (4,600,000 shares issued at June 30, 2022 and December 31, 2021) | 111,590 | 111,590 | |||||
| Series B (4,000,000 shares issued at June 30, 2022 and December 31, 2021) | 98,101 | 98,101 | |||||
| Common stock (no par value, authorized 650,000,000 shares; issued 507,896,910 and 423,034,027 at June 30, 2022 and December 31, 2021) | 178,185 | 148,482 | |||||
| Surplus | 4,965,488 | 3,883,035 | |||||
| Retained earnings | 982,146 | 883,645 | |||||
| Accumulated other comprehensive loss | (108,337 | ) | (17,932 | ) | |||
| Treasury stock, at cost (1,568,384 shares at June 30, 2022 and 1,596,959 common shares at December 31, 2021) | (22,260 | ) | (22,855 | ) | |||
| Total Shareholders’ Equity | 6,204,913 | 5,084,066 | |||||
| Total Liabilities and Shareholders’ Equity | $ | 54,438,807 | $ | 43,446,443 | |||
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, | ||||||||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
| Interest Income | |||||||||||||||||||
| Interest and fees on loans | $ | 415,577 | $ | 317,365 | $ | 315,314 | $ | 732,942 | $ | 628,495 | |||||||||
| Interest and dividends on investment securities: | |||||||||||||||||||
| Taxable | 27,534 | 18,439 | 12,716 | 45,973 | 25,882 | ||||||||||||||
| Tax-exempt | 5,191 | 2,517 | 3,216 | 7,708 | 6,572 | ||||||||||||||
| Dividends | 3,076 | 1,676 | 2,167 | 4,752 | 4,038 | ||||||||||||||
| Interest on federal funds sold and other short-term investments | 1,569 | 461 | 235 | 2,030 | 459 | ||||||||||||||
| Total interest income | 452,947 | 340,458 | 333,648 | 793,405 | 665,446 | ||||||||||||||
| Interest Expense | |||||||||||||||||||
| Interest on deposits: | |||||||||||||||||||
| Savings, NOW and money market | 17,122 | 9,627 | 11,166 | 26,749 | 22,291 | ||||||||||||||
| Time | 3,269 | 2,831 | 6,279 | 6,100 | 17,372 | ||||||||||||||
| Interest on short-term borrowings | 4,083 | 806 | 1,168 | 4,889 | 2,926 | ||||||||||||||
| Interest on long-term borrowings and junior subordinated debentures | 10,313 | 9,525 | 14,128 | 19,838 | 29,283 | ||||||||||||||
| Total interest expense | 34,787 | 22,789 | 32,741 | 57,576 | 71,872 | ||||||||||||||
| Net Interest Income | 418,160 | 317,669 | 300,907 | 735,829 | 593,574 | ||||||||||||||
| Provision (credit) for credit losses for held to maturity securities | 286 | 57 | (30 | ) | 343 | (388 | ) | ||||||||||||
| Provision for credit losses for loans | 43,712 | 3,500 | 8,777 | 47,212 | 17,791 | ||||||||||||||
| Net Interest Income After Provision for Credit Losses | 374,162 | 314,112 | 292,160 | 688,274 | 576,171 | ||||||||||||||
| Non-Interest Income | |||||||||||||||||||
| Wealth management and trust fees | 9,577 | 5,131 | 3,532 | 14,708 | 6,861 | ||||||||||||||
| Insurance commissions | 3,463 | 1,859 | 2,637 | 5,322 | 4,195 | ||||||||||||||
| Service charges on deposit accounts | 10,067 | 6,212 | 5,083 | 16,279 | 10,186 | ||||||||||||||
| (Losses) gains on securities transactions, net | (309 | ) | (1,072 | ) | 375 | (1,381 | ) | 476 | |||||||||||
| Fees from loan servicing | 2,717 | 2,781 | 3,187 | 5,498 | 6,086 | ||||||||||||||
| Gains on sales of loans, net | 3,602 | 986 | 10,061 | 4,588 | 13,574 | ||||||||||||||
| Bank owned life insurance | 2,113 | 2,046 | 2,475 | 4,159 | 4,806 | ||||||||||||||
| Other | 27,303 | 21,327 | 15,776 | 48,630 | 28,175 | ||||||||||||||
| Total non-interest income | 58,533 | 39,270 | 43,126 | 97,803 | 74,359 | ||||||||||||||
| Non-Interest Expense | |||||||||||||||||||
| Salary and employee benefits expense | 154,798 | 107,733 | 91,095 | 262,531 | 179,198 | ||||||||||||||
| Net occupancy and equipment expense | 41,986 | 36,806 | 32,451 | 78,792 | 64,710 | ||||||||||||||
| FDIC insurance assessment | 5,351 | 4,158 | 3,374 | 9,509 | 6,650 | ||||||||||||||
| Amortization of other intangible assets | 11,400 | 4,437 | 5,449 | 15,837 | 11,455 | ||||||||||||||
| Professional and legal fees | 30,409 | 14,749 | 7,486 | 45,158 | 13,758 | ||||||||||||||
| Loss on extinguishment of debt | — | — | 8,406 | — | 8,406 | ||||||||||||||
| Amortization of tax credit investments | 3,193 | 2,896 | 2,972 | 6,089 | 5,716 | ||||||||||||||
| Telecommunication expense | 3,083 | 3,271 | 2,732 | 6,354 | 5,892 | ||||||||||||||
| Other | 49,510 | 23,290 | 17,928 | 72,800 | 36,321 | ||||||||||||||
| Total non-interest expense | 299,730 | 197,340 | 171,893 | 497,070 | 332,106 | ||||||||||||||
| Income Before Income Taxes | 132,965 | 156,042 | 163,393 | 289,007 | 318,424 | ||||||||||||||
| Income tax expense | 36,552 | 39,314 | 42,881 | 75,866 | 82,202 | ||||||||||||||
| Net Income | 96,413 | 116,728 | 120,512 | 213,141 | 236,222 | ||||||||||||||
| Dividends on preferred stock | 3,172 | 3,172 | 3,172 | 6,344 | 6,344 | ||||||||||||||
| Net Income Available to Common Shareholders | $ | 93,241 | $ | 113,556 | $ | 117,340 | $ | 206,797 | $ | 229,878 | |||||||||
| Three Months Ended | Six Months Ended | |||||||||||||
| June 30, | March 31, | June 30, | June 30, | |||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||
| Earnings Per Common Share: | ||||||||||||||
| Basic | $ | 0.18 | $ | 0.27 | $ | 0.29 | $ | 0.45 | $ | 0.57 | ||||
| Diluted | 0.18 | 0.27 | 0.29 | 0.44 | 0.56 | |||||||||
| Cash Dividends Declared per Common Share | 0.11 | 0.11 | 0.11 | 0.22 | 0.22 | |||||||||
| Weighted Average Number of Common Shares Outstanding: | ||||||||||||||
| Basic | 506,302,464 | 421,573,843 | 405,963,209 | 464,172,210 | 405,560,146 | |||||||||
| Diluted | 508,479,206 | 423,506,550 | 408,660,778 | 466,320,683 | 408,152,458 | |||||||||
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, 2022 | March 31, 2022 | June 30, 2021 | |||||||||||||||||||||||||||
| Average | Avg. | Average | Avg. | Average | Avg. | ||||||||||||||||||||||||
| ($ in thousands) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Interest earning assets: | |||||||||||||||||||||||||||||
| Loans (1)(2) | $ | 42,517,287 | $ | 415,602 | 3.91 | % | $ | 34,623,402 | $ | 317,390 | 3.67 | % | $ | 32,635,298 | $ | 315,339 | 3.87 | % | |||||||||||
| Taxable investments (3) | 4,912,994 | 30,610 | 2.49 | 3,838,468 | 20,115 | 2.10 | 3,159,842 | 14,883 | 1.88 | ||||||||||||||||||||
| Tax-exempt investments (1)(3) | 684,471 | 6,571 | 3.84 | 401,742 | 3,186 | 3.17 | 498,971 | 4,071 | 3.26 | ||||||||||||||||||||
| Interest bearing deposits with banks | 776,478 | 1,569 | 0.81 | 1,419,436 | 461 | 0.13 | 1,613,303 | 235 | 0.06 | ||||||||||||||||||||
| Total interest earning assets | 48,891,230 | 454,352 | 3.72 | 40,283,048 | 341,152 | 3.39 | 37,907,414 | 334,528 | 3.53 | ||||||||||||||||||||
| Other assets | 4,320,192 | 3,287,203 | 3,254,045 | ||||||||||||||||||||||||||
| Total assets | $ | 53,211,422 | $ | 43,570,251 | $ | 41,161,459 | |||||||||||||||||||||||
| Liabilities and shareholders' equity | |||||||||||||||||||||||||||||
| Interest bearing liabilities: | |||||||||||||||||||||||||||||
| Savings, NOW and money market deposits | $ | 23,027,347 | $ | 17,122 | 0.30 | % | $ | 20,522,629 | $ | 9,627 | 0.19 | % | $ | 17,784,985 | $ | 11,166 | 0.25 | % | |||||||||||
| Time deposits | 3,601,088 | 3,269 | 0.36 | 3,554,520 | 2,831 | 0.32 | 4,609,778 | 6,279 | 0.54 | ||||||||||||||||||||
| Short-term borrowings | 1,603,198 | 4,083 | 1.02 | 594,297 | 806 | 0.54 | 873,927 | 1,168 | 0.53 | ||||||||||||||||||||
| Long-term borrowings (4) | 1,462,638 | 10,313 | 2.82 | 1,476,469 | 9,525 | 2.58 | 2,200,836 | 14,128 | 2.57 | ||||||||||||||||||||
| Total interest bearing liabilities | 29,694,271 | 34,787 | 0.47 | 26,147,915 | 22,789 | 0.35 | 25,469,526 | 32,741 | 0.51 | ||||||||||||||||||||
| Non-interest bearing deposits | 16,267,946 | 11,686,534 | 10,328,412 | ||||||||||||||||||||||||||
| Other liabilities | 1,010,220 | 631,093 | 654,724 | ||||||||||||||||||||||||||
| Shareholders' equity | 6,238,985 | 5,104,709 | 4,708,797 | ||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 53,211,422 | $ | 43,570,251 | $ | 41,161,459 | |||||||||||||||||||||||
| Net interest income/interest rate spread (5) | $ | 419,565 | 3.25 | % | $ | 318,363 | 3.04 | % | $ | 301,787 | 3.02 | % | |||||||||||||||||
| Tax equivalent adjustment | (1,405 | ) | (694 | ) | (880 | ) | |||||||||||||||||||||||
| Net interest income, as reported | $ | 418,160 | $ | 317,669 | $ | 300,907 | |||||||||||||||||||||||
| Net interest margin (6) | 3.42 | 3.15 | 3.18 | ||||||||||||||||||||||||||
| Tax equivalent effect | 0.01 | 0.01 | 0.00 | ||||||||||||||||||||||||||
| Net interest margin on a fully tax equivalent basis (6) | 3.43 | % | 3.16 | % | 3.18 | % | |||||||||||||||||||||||
(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.
FAQ
What was Valley National Bancorp's net income for Q2 2022?
How did the acquisition of Bank Leumi USA impact Valley National Bancorp's financials?
What is Valley National Bancorp's net interest margin for Q2 2022?
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