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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) January 25, 2024
Valley National Bancorp
(Exact Name of Registrant as Specified in Charter)
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New Jersey | | 1-11277 | | 22-2477875 |
(State or Other Jurisdiction of Incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification Number) |
| | | | | | | | | | | | | | |
One Penn Plaza, | New York, | New York | | 10119 |
(Address of Principal Executive Offices) | | (Zip Code) |
Registrant’s telephone number, including area code (973)305-8800
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | |
Title of each class | Trading Symbols | Name of exchange on which registered |
Common Stock, no par value | VLY | The Nasdaq Stock Market LLC |
Non-Cumulative Perpetual Preferred Stock, Series A, no par value | VLYPP | The Nasdaq Stock Market LLC |
Non-Cumulative Perpetual Preferred Stock, Series B, no par value | VLYPO | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 2.02 | Results of Operations and Financial Condition. |
On January 25, 2024, Valley National Bancorp (“Valley”) issued a press release announcing fourth quarter 2023 results of operations. A copy of the press release is furnished herewith as Exhibit 99.1.
The information in this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such a filing.
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Item 7.01 | Regulation FD Disclosure. |
Valley is furnishing presentation materials attached hereto as Exhibit 99.2 pursuant to Item 7.01 of Form 8-K. Valley is not undertaking to update these presentation materials. The information in this Item 7.01, including Exhibit 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act, except as shall be expressly set forth by specific reference in such a filing. This report will not be deemed an admission as to the materiality of any information herein (including Exhibit 99.2).
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Item 9.01 | | Financial Statements and Exhibits. |
(d) | | Exhibits. |
Exhibit No. | | Description |
99.1 | | |
99.2 | | |
104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Dated: January 25, 2024 | | VALLEY NATIONAL BANCORP |
| | By: | /s/ Michael D. Hagedorn |
| | | Michael D. Hagedorn |
| | | Senior Executive Vice President and |
| | | Chief Financial Officer (Principal Financial Officer) |
| | | | | | | | | | | |
FOR IMMEDIATE RELEASE | Contact: | | Michael D. Hagedorn |
| | | Senior Executive Vice President and |
| | | Chief Financial Officer |
| | | 973-872-4885 |
VALLEY NATIONAL BANCORP REPORTS FOURTH QUARTER 2023 RESULTS
New York, NY – January 25, 2024 -- Valley National Bancorp (NASDAQ:VLY), the holding company for Valley National Bank, today reported net income for the fourth quarter 2023 of $71.6 million, or $0.13 per diluted common share, as compared to the fourth quarter 2022 net income of $177.6 million, or $0.34 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 items, our adjusted net income (a non-GAAP measure) was $116.3 million, or $0.22 per diluted common share, for the fourth quarter 2023, $182.9 million, or $0.35 per diluted common share, for the fourth quarter 2022, 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 adjusted net income in the "Consolidated Financial Highlights" tables.
Key Financial Highlights for the Fourth Quarter 2023:
•Loan Portfolio: Loan growth in most categories remained at modest levels during the fourth quarter 2023 due to the ongoing impact of elevated market interest rates and other factors. Total loans increased $112.8 million, or 1.0 percent on an annualized basis, to $50.2 billion at December 31, 2023 from September 30, 2023, mainly as a result of well-controlled organic loan growth in the commercial real estate and consumer loan categories. Annualized loan growth totaled 7.0 percent for the year ended December 31, 2023. See the "Loans" section below for more details.
•Allowance and Provision for Credit Losses for Loans: The allowance for credit losses for loans totaled $465.6 million and $462.3 million at December 31, 2023 and September 30, 2023, respectively, representing 0.93 percent and 0.92 percent of total loans at each respective date. During the fourth quarter 2023, the provision for credit losses for loans was $20.7 million as compared to $9.1 million and $7.3 million for the third quarter 2023 and fourth quarter 2022, respectively. See the "Credit Quality" section below for more details.
•Credit Quality: Net loan charge-offs totaled $17.5 million for the fourth quarter 2023 as compared to $5.5 million and $22.4 million for the third quarter 2023 and fourth quarter 2022, respectively. The loan charge-offs in the fourth quarter 2023 were primarily due to partial charge-offs of certain non-performing loan relationships in the commercial loan categories. Total accruing past due loans increased $12.1 million to $91.6 million, or 0.18 percent of total loans, at December 31, 2023 as compared to $79.5 million, or 0.16 percent of total loans, at September 30, 2023. Non-accrual loans represented 0.58 percent and 0.52 percent of total loans at December 31, 2023 and September 30, 2023, respectively. See the "Credit Quality" section below for more details.
•Deposits: Total deposits decreased $642.5 million to $49.2 billion at December 31, 2023 as compared to $49.9 billion at September 30, 2023. During the fourth quarter 2023, a $2.4 billion
Valley National Bancorp (NASDAQ: VLY)
Fourth Quarter 2023 Earnings
January 25, 2024
reduction in indirect customer time deposits was partially offset by $1.7 billion of direct customer deposit inflows across the franchise. See the "Deposits" section below for more details.
•Net Interest Income and Margin: Net interest income on a tax equivalent basis of $398.6 million for the fourth quarter 2023 decreased $15.1 million and $68.7 million as compared to the third quarter 2023 and fourth quarter 2022, respectively. Our net interest margin on a tax equivalent basis decreased by 9 basis points to 2.82 percent in the fourth quarter 2023 as compared to 2.91 percent for the third quarter 2023. The decline in both net interest income and margin as compared to the linked third quarter reflects the ongoing repricing of our interest bearing deposits, net of a 7 basis point increase in the yield of average interest earnings assets for the fourth quarter 2023. See the "Net Interest Income and Margin" section below for more details.
•Non-Interest Income: Non-interest income decreased $6.0 million to $52.7 million for the fourth quarter 2023 as compared to the third quarter 2023 mainly due to a $6.8 million decrease in net gains on sales of assets (primarily caused by the net gain on sale of non-branch offices during the third quarter 2023).
•Non-Interest Expense: Non-interest expense increased $73.3 million to $340.4 million for the fourth quarter 2023 as compared to the third quarter 2023 largely due to non-core charges of $50.3 million and $10.0 million related to the FDIC special assessment and the termination of certain technology contracts, respectively, during the fourth quarter 2023. Professional and legal fees increased $8.1 million as compared to the third quarter 2023 due, in part, to elevated consulting expenses related to our new core banking system implemented in early October 2023, as well as additional non-core legal reserves and settlement charges totaling a combined $3.5 million during the fourth quarter 2023.
•Income Tax Expense: Our effective tax rate was 19.6 percent for the fourth quarter 2023 as compared to 27.5 percent for the third quarter 2023. The decrease was mostly due to an increase in tax credits caused by additional tax credit investments during the fourth quarter 2023.
•Efficiency Ratio: Our efficiency ratio was 60.70 percent for the fourth quarter 2023 as compared to 56.72 percent and 49.30 percent for the third quarter 2023 and fourth quarter 2022, 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 0.47 percent, 4.31 percent, and 6.21 percent for the fourth quarter 2023, respectively. Annualized ROA, ROE, and tangible ROE, adjusted for non-core items, were 0.76 percent, 7.01 percent, and 10.10 percent for the fourth quarter 2023, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.
Valley National Bancorp (NASDAQ: VLY)
Fourth Quarter 2023 Earnings
January 25, 2024
In January 2024, we entered an agreement to sell our commercial premium finance lending business and a significant portion of its outstanding loan portfolio. This line of business represented $274.7 million, or 0.55 percent of our total loans outstanding at December 31, 2023. Actual loans to be sold as part of this transaction will be identified shortly before the close date. Loans retained from this line of business are expected to mostly run-off at their normal maturity dates over the next 12 months. The pending transaction is expected to close during the first quarter 2024 and is not anticipated to be material to our operations or financial statements.
Ira Robbins, CEO, commented, "The year of 2023 presented significant challenges for most of the banking industry and Valley. That said, I am pleased with our ability to respond to the challenges early in the year, and find opportunities to enhance our funding and capital position as the year progressed. This, along with our asset quality, is a testament to our dedicated associates and diversified business model."
Mr. Robbins continued, "As we look forward to 2024, we will continue our efforts to build the value of our franchise with a focus on our key strategic priorities, including further diversifying our loan portfolio, enhancing our core funding base, and lastly improving our non-interest income sources. We believe that these initiatives, and a continued emphasis on providing premier relationship banking services, will further differentiate Valley as a leading regional bank."
Net Interest Income and Margin
Net interest income on a tax equivalent basis totaling $398.6 million for the fourth quarter 2023 decreased $15.1 million and $68.7 million as compared to the third quarter 2023 and fourth quarter 2022, respectively. The decrease as compared to the third quarter 2023 was mainly due to increased interest rates on most interest bearing deposit products, partially offset by higher loan yields and a decline in average time deposit balances. As a result of the higher cost of deposits, total interest expense increased $20.3 million to $420.9 million for the fourth quarter 2023 as compared to the third quarter 2023. Interest income on a tax equivalent basis increased $5.2 million to $819.5 million for the fourth quarter 2023 as compared to the third quarter 2023. The increase in the fourth quarter 2023 was mostly due to higher yields on both new originations and adjustable rate loans in our portfolio, as well as higher yields on investments, partially offset by a decline in average interest bearing deposits with banks as overnight excess cash liquidity was reduced as compared to the third quarter 2023.
Net interest margin on a tax equivalent basis of 2.82 percent for the fourth quarter 2023 decreased 9 basis points and 75 basis points from 2.91 percent and 3.57 percent, respectively, for the third quarter 2023 and fourth quarter 2022. The decrease as compared to the third quarter 2023 was largely driven by higher interest rates on interest bearing deposits, partially offset by an increase in the yield on average interest earning assets. Our cost of total average deposits was 3.13 percent for the fourth quarter 2023 as compared to 2.94 percent for the third quarter 2023. The overall cost of average interest-bearing liabilities increased by 21 basis points to 4.13 percent for the fourth quarter 2023 as compared to the linked third quarter 2023 primarily driven by the continued rise in market interest rates on deposits. The yield on average interest earning assets increased by 7 basis points to 5.80 basis points on a linked quarter basis largely due to the increased yield of the loan portfolio. The yield on average loans increased to 6.10 percent for the fourth quarter 2023 from 6.03 percent for the third quarter 2023 mostly due to the higher level of market interest rates on new originations and adjustable rate loans.
Valley National Bancorp (NASDAQ: VLY)
Fourth Quarter 2023 Earnings
January 25, 2024
Loans, Deposits and Other Borrowings
Loans. Total loans modestly increased to approximately $112.8 million to $50.2 billion at December 31, 2023 from September 30, 2023 mainly due to well-controlled organic loan growth in the commercial real estate and consumer loan categories. Total commercial real estate (including construction) loans increased $95.7 million or 1.2 percent on an annualized basis during the fourth quarter 2023. Automobile loans increased by $34.4 million, or 8.7 percent on an annualized basis during the fourth quarter 2023 partly due to an uptick in demand for commercial vehicle financing. At December 31, 2023, the residential mortgage loan portfolio totaled $5.6 billion and remained relatively unchanged as compared to September 30, 2023. During the fourth quarter 2023, we sold $49.9 million of residential mortgage loans originated for sale as compared to $80.8 million in the third quarter 2023.
Deposits. Total deposits decreased $642.5 million to approximately $49.2 billion at December 31, 2023 from September 30, 2023 mainly due to a decline of $1.9 billion in time deposits, partially offset by a $1.4 billion increase in savings, NOW and money market deposits. The decrease in time deposits was largely due to maturities of indirect customer time deposits, which were partially offset by the origination of new direct time deposits. The increase in savings, NOW and money market deposits was mostly broad-based, reflecting strong customer inflows from both our physical branch and online delivery channels, as well as our niche deposit businesses. Non-interest bearing balances remained relatively stable as compared to September 30, 2023, as outflows slowed significantly during the fourth quarter 2023. Non-interest bearing deposits; savings, NOW, and money market deposits; and time deposits represented approximately 23 percent, 50 percent and 27 percent of total deposits as of December 31, 2023, respectively, as compared to 24 percent, 46 percent and 30 percent of total deposits as of September 30, 2023, respectively.
Other Borrowings. Short-term borrowings increased $828.0 million to approximately $917.8 million at December 31, 2023 as compared to September 30, 2023 mainly due to greater utilization of FHLB advances as part of our liquidity management strategies as of December 31, 2023 and a corresponding decline in indirect customer time deposits (see the "Deposits" section above). Long-term borrowings totaled $2.3 billion at December 31, 2023 and remained relatively unchanged as compared to September 30, 2023.
Credit Quality
Non-Performing Assets (NPAs). Total NPAs, consisting of non-accrual loans, other real estate owned (OREO) and other repossessed assets increased $33.1 million to $293.4 million at December 31, 2023 compared to $260.3 million at September 30, 2023 largely due to higher non-accrual loan balances within commercial loans categories. Non-accrual commercial real estate and commercial and industrial loans increased $16.4 million and $12.3 million, respectively, as compared to September 30, 2023. These increases were mostly driven by a few new non-performing loan relationships, partially offset by full repayments of two non-accrual commercial real estate loans totaling $12.7 million during the fourth quarter 2023. Non-accrual loans represented 0.58 percent of total loans at December 31, 2023 as compared to 0.52 percent of total loans at September 30, 2023. Within non-accrual commercial real estate loans at December 31, 2023, one loan totaling $9.1 million, net of partial charge-offs of $1.5 million during the fourth quarter 2023, was paid off in early January 2024.
Valley National Bancorp (NASDAQ: VLY)
Fourth Quarter 2023 Earnings
January 25, 2024
Accruing Past Due Loans. Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) increased $12.1 million to $91.6 million, or 0.18 percent of total loans, at December 31, 2023 as compared to $79.5 million, or 0.16 percent of total loans, at September 30, 2023. Loans 30 to 59 days past due increased $11.8 million to $59.2 million at December 31, 2023 as compared to September 30, 2023 largely due to higher residential mortgage delinquencies, partially offset by declines in commercial real estate and commercial and industrial loans within this early stage delinquency category. Loans 90 days or more past due totaled $13.1 million at December 31, 2023 as compared to $12.4 million at September 30, 2023. All loans 90 days or more past due and still accruing interest are well-secured and in the process of collection.
Allowance for Credit Losses for Loans and Unfunded Commitments. The following table summarizes the allocation of the allowance for credit losses to loan categories and the allocation as a percentage of each loan category at December 31, 2023, September 30, 2023, and December 31, 2022:
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| | December 31, 2023 | | September 30, 2023 | | December 31, 2022 |
| | | | Allocation | | | | Allocation | | | | Allocation |
| | | | as a % of | | | | as a % of | | | | as a % of |
| | Allowance | | Loan | | Allowance | | Loan | | Allowance | | Loan |
| | Allocation | | Category | | Allocation | | Category | | Allocation | | Category |
| | ($ in thousands) |
Loan Category: | | | | | | | | | | | |
Commercial and industrial loans | $ | 133,359 | | | 1.44 | % | | $ | 133,988 | | | 1.44 | % | | $ | 139,941 | | | 1.59 | % |
Commercial real estate loans: | | | | | | | | | | | |
| Commercial real estate | 194,820 | | | 0.69 | | | 191,562 | | | 0.68 | | | 200,421 | | | 0.78 | |
| Construction | 54,778 | | | 1.47 | | | 53,485 | | | 1.40 | | | 58,987 | | | 1.59 | |
Total commercial real estate loans | 249,598 | | | 0.78 | | | 245,047 | | | 0.77 | | | 259,408 | | | 0.88 | |
Residential mortgage loans | 42,957 | | | 0.77 | | | 44,621 | | | 0.80 | | | 39,020 | | | 0.73 | |
Consumer loans: | | | | | | | | | | | |
| Home equity | 3,429 | | | 0.61 | | | 3,689 | | | 0.67 | | | 4,333 | | | 0.86 | |
| Auto and other consumer | 16,737 | | | 0.58 | | | 14,830 | | | 0.52 | | | 15,953 | | | 0.57 | |
Total consumer loans | 20,166 | | | 0.59 | | | 18,519 | | | 0.55 | | | 20,286 | | | 0.61 | |
Allowance for loan losses | 446,080 | | | 0.89 | | | 442,175 | | | 0.88 | | | 458,655 | | | 0.98 | |
Allowance for unfunded credit commitments | 19,470 | | | | | 20,170 | | | | | 24,600 | | | |
Total allowance for credit losses for loans | $ | 465,550 | | | | | $ | 462,345 | | | | | $ | 483,255 | | | |
Allowance for credit losses for | | | | | | | | | | | |
loans as a % loans | | | 0.93 | % | | | | 0.92 | % | | | | 1.03 | % |
| | | | | | | | | | | | |
Our loan portfolio, totaling $50.2 billion at December 31, 2023, had net loan charge-offs totaling $17.5 million for the fourth quarter 2023 as compared to $5.5 million and $22.4 million for the third quarter 2023 and the fourth quarter 2022, respectively. Gross charge-offs totaled $22.6 million for the fourth quarter 2023 and largely consisted of partial loan charge-offs in the commercial loan categories, including approximately $4.7 million of gross loan charge-offs related to our premium finance lending business expected to be sold during the first quarter 2024.
Valley National Bancorp (NASDAQ: VLY)
Fourth Quarter 2023 Earnings
January 25, 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 0.93 percent at December 31, 2023, 0.92 percent at September 30, 2023 and 1.03 percent at December 31, 2022. During the fourth quarter 2023, the provision for credit losses for loans totaled $20.7 million as compared to $9.1 million for the third quarter 2023 and $7.3 million for the fourth quarter 2022. The provision for credit losses for the fourth quarter 2023 reflects, among other factors, an increase in quantitative reserves largely related to classified loans within the commercial portfolios and higher specific reserves associated with collateral dependent loans, partially offset by lower qualitative and economic forecast reserves at December 31, 2023.
Capital Adequacy
Valley's regulatory capital ratios continue to reflect its well-capitalized position. Valley's total risk-based capital, Tier 1 capital, common equity Tier 1 capital, and Tier 1 leverage capital ratios were 11.76 percent, 9.72 percent, 9.29 percent, and 8.16 percent, respectively, at December 31, 2023.
Investor Conference Call
Valley will host a conference call with investors and the financial community at 11:00 A.M. Eastern Standard Time, today to discuss the fourth quarter 2023 earnings and related matters. Interested parties should pre-register 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 February 29, 2024.
About Valley
As the principal subsidiary of Valley National Bancorp, Valley National Bank is a regional bank with approximately $61 billion in assets. Valley is committed to giving people and businesses the power to succeed. Valley operates many convenient branch locations and commercial banking offices across New Jersey, New York, Florida, Alabama, California, and Illinois, and is committed to providing the most convenient service, the latest innovations and an experienced and knowledgeable team dedicated to meeting customer needs. Helping communities grow and prosper is the heart of Valley’s corporate citizenship philosophy. To learn more about Valley, go to www.valley.com or call our Customer Care Center at 800-522-4100.
Forward Looking Statements
The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about our business, new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology as “intend,” “should,” “expect,” “believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “typically,” “usually,” “anticipate,” “may,” “estimate,” “outlook,” “project” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. Factors that
Valley National Bancorp (NASDAQ: VLY)
Fourth Quarter 2023 Earnings
January 25, 2024
may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:
•the impact of monetary and fiscal policies of the federal government and its agencies, including in response to higher inflation, which could have a material adverse effect on our clients, as well as our business, our employees, and our ability to provide services to our customers;
•the impact of a potential U.S. Government shutdown, default by the U.S. government on its debt obligations, or related credit-rating downgrades, on economic activity in the markets in which we operate and, in general, on levels of end market demand in the economy;
•the impact of unfavorable macroeconomic conditions or downturns, instability or volatility in financial markets, unanticipated loan delinquencies, loss of collateral, decreased service revenues, increased business disruptions or failures, reductions in employment, and other potential negative effects on our business, employees or clients caused by factors outside of our control, such as geopolitical instabilities or events (including the Israel-Hamas war); natural and other disasters (including severe weather events); health emergencies; acts of terrorism or other external events;
•risks associated with our acquisition of Bank Leumi Le-Israel Corporation (Bank Leumi USA), including (i) the inability to realize expected cost savings and synergies from the acquisition in the amounts or timeframe anticipated and (ii) greater than expected costs or difficulties relating to integration as part of Valley's new core banking system implemented in the fourth quarter 2023;
•the impact of potential instability within the U.S. financial sector in the aftermath of the banking failures in 2023, 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 FDIC insurance premiums, 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;
•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 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;
Valley National Bancorp (NASDAQ: VLY)
Fourth Quarter 2023 Earnings
January 25, 2024
•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;
•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; 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, 2022 and in Item 1A of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.
The financial results and disclosures reported in this release are preliminary. Final 2023 financial results and other disclosures will be reported in our Annual Report on Form 10-K for the year ended December 31, 2023, and may differ materially from the results and disclosures in this document due to, among other things, the completion of final review procedures, the occurrence of subsequent events, or the discovery of additional information.
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 | | Years Ended |
| December 31, | | September 30, | | December 31, | | December 31, |
($ in thousands, except for share data) | 2023 | | 2023 | | 2022 | | 2023 | | 2022 |
FINANCIAL DATA: | | | | | | | | | |
Net interest income - FTE (1) | $ | 398,581 | | | $ | 413,657 | | | $ | 467,233 | | | $ | 1,670,973 | | | $ | 1,660,468 | |
Net interest income | 397,275 | | | 412,418 | | | 465,819 | | | 1,665,478 | | | 1,655,640 | |
Non-interest income | 52,691 | | | 58,664 | | | 52,796 | | | 225,729 | | | 206,793 | |
Total revenue | 449,966 | | | 471,082 | | | 518,615 | | | 1,891,207 | | | 1,862,433 | |
Non-interest expense | 340,421 | | | 267,133 | | | 266,240 | | | 1,162,691 | | | 1,024,949 | |
Pre-provision net revenue | 109,545 | | | 203,949 | | | 252,375 | | | 728,516 | | | 837,484 | |
Provision for credit losses | 20,580 | | | 9,117 | | | 7,239 | | | 50,184 | | | 56,817 | |
Income tax expense | 17,411 | | | 53,486 | | | 67,545 | | | 179,821 | | | 211,816 | |
Net income | 71,554 | | | 141,346 | | | 177,591 | | | 498,511 | | | 568,851 | |
Dividends on preferred stock | 4,104 | | | 4,127 | | | 3,630 | | | 16,135 | | | 13,146 | |
Net income available to common stockholders | $ | 67,450 | | | $ | 137,219 | | | $ | 173,961 | | | $ | 482,376 | | | $ | 555,705 | |
Weighted average number of common shares outstanding: |
Basic | 507,683,229 | | | 507,650,668 | | | 506,359,704 | | | 507,532,365 | | | 485,434,918 | |
Diluted | 509,714,526 | | | 509,256,599 | | | 509,301,813 | | | 509,245,768 | | | 487,817,710 | |
Per common share data: | | | | | | | | | |
Basic earnings | $ | 0.13 | | | $ | 0.27 | | | $ | 0.34 | | | $ | 0.95 | | | $ | 1.14 | |
Diluted earnings | 0.13 | | | 0.27 | | | 0.34 | | | 0.95 | | | 1.14 | |
Cash dividends declared | 0.11 | | | 0.11 | | | 0.11 | | | 0.44 | | | 0.44 | |
Closing stock price - high | 11.10 | | | 10.30 | | | 12.92 | | | 12.59 | | | 15.02 | |
Closing stock price - low | 7.71 | | | 7.63 | | | 10.96 | | | 6.59 | | | 10.14 | |
FINANCIAL RATIOS: | | | | | | | | | |
Net interest margin | 2.81 | % | | 2.90 | % | | 3.56 | % | | 2.95 | % | | 3.44 | % |
Net interest margin - FTE (1) | 2.82 | | | 2.91 | | | 3.57 | | | 2.96 | | | 3.45 | |
Annualized return on average assets | 0.47 | | | 0.92 | | | 1.25 | | | 0.82 | | | 1.09 | |
Annualized return on avg. shareholders' equity | 4.31 | | | 8.56 | | | 11.23 | | | 7.60 | | | 9.50 | |
NON-GAAP FINANCIAL DATA AND RATIOS: (3) |
Basic earnings per share, as adjusted | $ | 0.22 | | | $ | 0.26 | | | $ | 0.35 | | | $ | 1.06 | | | $ | 1.31 | |
Diluted earnings per share, as adjusted | 0.22 | | | 0.26 | | | 0.35 | | | 1.06 | | | 1.31 | |
Annualized return on average assets, as adjusted | 0.76 | % | | 0.89 | % | | 1.29 | % | | 0.91 | % | | 1.25 | % |
Annualized return on average shareholders' equity, as adjusted | 7.01 | | 8.26 | | | 11.56 | | | 8.45 | | | 10.87 | |
Annualized return on avg. tangible shareholders' equity | 6.21 | % | | 12.39 | % | | 16.70 | % | | 11.05 | % | | 14.08 | % |
Annualized return on average tangible shareholders' equity, as adjusted | 10.10 | | 11.95 | | | 17.20 | | | 12.29 | | | 16.10 | |
Efficiency ratio | 60.70 | | 56.72 | | | 49.30 | | | 56.62 | | | 50.55 | |
| | | |
| | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
AVERAGE BALANCE SHEET ITEMS: | | | | | | | | | |
Assets | $ | 61,113,553 | | $ | 61,391,688 | | | $ | 56,913,215 | | | $ | 61,065,897 | | | $ | 52,182,310 | |
Interest earning assets | 56,469,468 | | 56,802,565 | | | 52,405,601 | | | 56,500,528 | | | 48,067,381 | |
Loans | 50,039,429 | | 50,019,414 | | | 46,086,363 | | | 49,351,861 | | | 41,930,353 | |
Interest bearing liabilities | 40,753,313 | | 40,829,078 | | | 33,596,874 | | | 40,042,506 | | | 30,190,267 | |
Deposits | 49,460,571 | | 49,848,446 | | | 46,234,857 | | | 48,491,669 | | | 42,451,465 | |
Shareholders' equity | 6,639,906 | | 6,605,786 | | | 6,327,970 | | | 6,558,768 | | | 5,985,236 | |
VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| As of |
BALANCE SHEET ITEMS: | December 31, | | September 30, | | June 30, | | March 31, | | December 31, |
(In thousands) | 2023 | | 2023 | | 2023 | | 2023 | | 2022 |
Assets | $ | 60,934,974 | | | $ | 61,183,352 | | | $ | 61,703,693 | | $ | 64,309,573 | | $ | 57,462,749 | |
Total loans | 50,210,295 | | | 50,097,519 | | | 49,877,248 | | 48,659,966 | | 46,917,200 | |
Deposits | 49,242,829 | | | 49,885,314 | | | 49,619,815 | | 47,590,916 | | 47,636,914 | |
Shareholders' equity | 6,701,391 | | | 6,627,299 | | | 6,575,184 | | 6,511,581 | | 6,400,802 | |
| | | | | | | | | |
LOANS: | | | | | | | | | |
(In thousands) | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Commercial and industrial | $ | 9,230,543 | | | $ | 9,274,630 | | | $ | 9,287,309 | | | $ | 9,043,946 | | | $ | 8,804,830 | |
Commercial real estate: | | | | | | | | | |
Commercial real estate | 28,243,239 | | | 28,041,050 | | 27,793,072 | | 27,051,111 | | 25,732,033 | |
Construction | 3,726,808 | | | 3,833,269 | | 3,815,761 | | 3,725,967 | | 3,700,835 | |
Total commercial real estate | 31,970,047 | | | 31,874,319 | | 31,608,833 | | 30,777,078 | | 29,432,868 | |
Residential mortgage | 5,569,010 | | | 5,562,665 | | 5,560,356 | | 5,486,280 | | 5,364,550 | |
Consumer: | | | | | | | | | |
Home equity | 559,152 | | | 548,918 | | 535,493 | | 516,592 | | 503,884 | |
Automobile | 1,620,389 | | | 1,585,987 | | 1,632,875 | | 1,717,141 | | 1,746,225 | |
Other consumer | 1,261,154 | | | 1,251,000 | | 1,252,382 | | 1,118,929 | | 1,064,843 | |
Total consumer loans | 3,440,695 | | | 3,385,905 | | 3,420,750 | | 3,352,662 | | 3,314,952 | |
Total loans | $ | 50,210,295 | | | $ | 50,097,519 | | $ | 49,877,248 | | $ | 48,659,966 | | $ | 46,917,200 | |
| | | | | | | | | |
CAPITAL RATIOS: | | | | | | | | | |
Book value per common share | $ | 12.79 | | | $ | 12.64 | | | $ | 12.54 | | | $ | 12.41 | | | $ | 12.23 | |
Tangible book value per common share (3) | 8.79 | | | 8.63 | | | 8.51 | | | 8.36 | | | 8.15 | |
Tangible common equity to tangible assets (3) | 7.58 | % | | 7.40 | % | | 7.24 | % | | 6.82 | % | | 7.45 | % |
Tier 1 leverage capital | 8.16 | | | 8.08 | | | 7.86 | | | 7.96 | | | 8.23 | |
Common equity tier 1 capital | 9.29 | | | 9.21 | | | 9.03 | | | 9.02 | | | 9.01 | |
Tier 1 risk-based capital | 9.72 | | | 9.64 | | | 9.47 | | | 9.46 | | | 9.46 | |
Total risk-based capital | 11.76 | | | 11.68 | | | 11.52 | | | 11.58 | | | 11.63 | |
VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| Three Months Ended | | Years Ended |
ALLOWANCE FOR CREDIT LOSSES: | December 31, | | September 30, | | December 31, | | December 31, |
($ in thousands) | 2023 | | 2023 | | 2022 | | 2023 | | 2022 |
Allowance for credit losses for loans | | | | | | | | | |
Beginning balance | $ | 462,345 | | | $ | 458,676 | | | $ | 498,408 | | | $ | 483,255 | | | $ | 375,702 | |
Impact of the adoption of ASU No. 2022-02 | — | | | — | | | — | | | (1,368) | | | — | |
Allowance for purchased credit deteriorated (PCD) loans, net (2) | — | | | — | | | — | | | — | | | 70,319 | |
Beginning balance, adjusted | 462,345 | | | 458,676 | | | 498,408 | | | 481,887 | | | 446,021 | |
Loans charged-off: | | | | | | | | | |
Commercial and industrial | (10,616) | | | (7,487) | | | (22,106) | | | (48,015) | | | (33,250) | |
Commercial real estate | (8,814) | | | (255) | | | (388) | | | (11,134) | | | (4,561) | |
Construction | (1,906) | | | — | | | — | | | (11,812) | | | — | |
Residential mortgage | (25) | | | (20) | | | (1) | | | (194) | | | (28) | |
Total consumer | (1,274) | | | (1,156) | | | (1,544) | | | (4,298) | | | (4,057) | |
Total loans charged-off | (22,635) | | | (8,918) | | | (24,039) | | | (75,453) | | | (41,896) | |
Charged-off loans recovered: | | | | | | | | | |
Commercial and industrial | 4,655 | | | 3,043 | | | 1,069 | | | 11,270 | | | 17,081 | |
Commercial real estate | 1 | | | 5 | | | 13 | | | 34 | | | 2,073 | |
| | | | | | | | | |
Residential mortgage | 15 | | | 30 | | | 17 | | | 201 | | | 711 | |
Total consumer | 473 | | | 362 | | | 498 | | | 1,986 | | | 2,929 | |
Total loans recovered | 5,144 | | | 3,440 | | | 1,597 | | | 13,491 | | | 22,794 | |
Total net charge-offs | (17,491) | | | (5,478) | | | (22,442) | | | (61,962) | | | (19,102) | |
Provision for credit losses for loans | 20,696 | | | 9,147 | | | 7,289 | | | 45,625 | | | 56,336 | |
Ending balance | $ | 465,550 | | | $ | 462,345 | | | $ | 483,255 | | | $ | 465,550 | | | $ | 483,255 | |
Components of allowance for credit losses for loans: | | | | | | | | | |
Allowance for loan losses | $ | 446,080 | | | $ | 442,175 | | | $ | 458,655 | | | $ | 446,080 | | | $ | 458,655 | |
Allowance for unfunded credit commitments | 19,470 | | | 20,170 | | | 24,600 | | | 19,470 | | | 24,600 | |
Allowance for credit losses for loans | $ | 465,550 | | | $ | 462,345 | | | $ | 483,255 | | | $ | 465,550 | | | $ | 483,255 | |
Components of provision for credit losses for loans: | | | | | | | | | |
Provision for credit losses for loans | $ | 21,396 | | | $ | 11,221 | | | $ | 5,353 | | | $ | 50,755 | | | $ | 48,236 | |
(Credit) provision for unfunded credit commitments | (700) | | | (2,074) | | | 1,936 | | | (5,130) | | | 8,100 | |
Total provision for credit losses for loans | $ | 20,696 | | | $ | 9,147 | | | $ | 7,289 | | | $ | 45,625 | | | $ | 56,336 | |
| | | | | | | | | |
Annualized ratio of total net charge-offs to average loans | 0.14 | % | | 0.04 | % | | 0.19 | % | | 0.13 | % | | 0.05 | % |
Allowance for credit losses as a % of total loans | 0.93 | % | | 0.92 | % | | 1.03 | % | | 0.93 | % | | 1.03 | % |
VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| As of |
ASSET QUALITY: | December 31, | | September 30, | | June 30, | | March 31, | | December 31, |
($ in thousands) | 2023 | | 2023 | | 2023 | | 2023 | | 2022 |
Accruing past due loans: | | | | | | | | | |
30 to 59 days past due: | | | | | | | | | |
Commercial and industrial | $ | 9,307 | | | $ | 10,687 | | | $ | 6,229 | | | $ | 20,716 | | | $ | 11,664 | |
Commercial real estate | 3,008 | | | 8,053 | | | 3,612 | | | 13,580 | | | 6,638 | |
| | | | | | | | | |
Residential mortgage | 26,345 | | | 13,159 | | | 15,565 | | | 12,599 | | | 16,146 | |
Total consumer | 20,554 | | | 15,509 | | | 8,431 | | | 7,845 | | | 9,087 | |
Total 30 to 59 days past due | 59,214 | | | 47,408 | | | 33,837 | | | 54,740 | | | 43,535 | |
60 to 89 days past due: | | | | | | | | | |
Commercial and industrial | 5,095 | | | 5,720 | | | 7,468 | | | 24,118 | | | 12,705 | |
Commercial real estate | 1,257 | | | 2,620 | | | — | | | — | | | 3,167 | |
| | | | | | | | | |
Residential mortgage | 8,200 | | | 9,710 | | | 1,348 | | | 2,133 | | | 3,315 | |
Total consumer | 4,715 | | | 1,720 | | | 4,126 | | | 1,519 | | | 1,579 | |
Total 60 to 89 days past due | 19,267 | | | 19,770 | | | 12,942 | | | 27,770 | | | 20,766 | |
90 or more days past due: | | | | | | | | | |
Commercial and industrial | 5,579 | | | 6,629 | | | 6,599 | | | 8,927 | | | 18,392 | |
Commercial real estate | — | | | — | | | 2,242 | | | — | | | 2,292 | |
Construction | 3,990 | | | 3,990 | | | 3,990 | | | 6,450 | | | 3,990 | |
Residential mortgage | 2,488 | | | 1,348 | | | 1,165 | | | 1,668 | | | 1,866 | |
Total consumer | 1,088 | | | 391 | | | 1,006 | | | 747 | | | 47 | |
Total 90 or more days past due | 13,145 | | | 12,358 | | | 15,002 | | | 17,792 | | | 26,587 | |
Total accruing past due loans | $ | 91,626 | | | $ | 79,536 | | | $ | 61,781 | | | $ | 100,302 | | | $ | 90,888 | |
Non-accrual loans: | | | | | | | | | |
Commercial and industrial | $ | 99,912 | | | $ | 87,655 | | | $ | 84,449 | | | $ | 78,606 | | | $ | 98,881 | |
Commercial real estate | 99,739 | | | 83,338 | | | 82,712 | | | 67,938 | | | 68,316 | |
Construction | 60,851 | | | 62,788 | | | 63,043 | | | 68,649 | | | 74,230 | |
Residential mortgage | 26,986 | | | 21,614 | | | 20,819 | | | 23,483 | | | 25,160 | |
Total consumer | 4,383 | | | 3,545 | | | 3,068 | | | 3,318 | | | 3,174 | |
Total non-accrual loans | 291,871 | | | 258,940 | | | 254,091 | | | 241,994 | | | 269,761 | |
Other real estate owned (OREO) | 71 | | | 71 | | | 824 | | | 1,189 | | | 286 | |
Other repossessed assets | 1,444 | | | 1,314 | | | 1,230 | | | 1,752 | | | 1,937 | |
| | | | | | | | | |
Total non-performing assets | $ | 293,386 | | | $ | 260,325 | | | $ | 256,145 | | | $ | 244,935 | | | $ | 271,984 | |
| | | | | | | | | |
Total non-accrual loans as a % of loans | 0.58 | % | | 0.52 | % | | 0.51 | % | | 0.50 | % | | 0.57 | % |
Total accruing past due and non-accrual loans as a % of loans | 0.76 | % | | 0.68 | % | | 0.63 | % | | 0.70 | % | | 0.77 | % |
Allowance for losses on loans as a % of non-accrual loans | 152.83 | % | | 170.76 | % | | 171.76 | % | | 180.54 | % | | 170.02 | % |
VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
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 $62.4 million in the second quarter 2022. |
(3) | Non-GAAP Reconciliations. This press release contains certain supplemental financial information, described in the Notes below, which has been determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP") that management uses in its analysis of Valley's performance. The Company believes that the non-GAAP financial measures provide useful supplemental information to both management and investors in understanding Valley’s underlying operational performance, business and performance trends, and may facilitate comparisons of our current and prior performance with the performance of others in the financial services industry. Management utilizes these measures for internal planning, forecasting and analysis purposes. Management believes that Valley’s presentation and discussion of this supplemental information, together with the accompanying reconciliations to the GAAP financial measures, also allows investors to view performance in a manner similar to management. These non-GAAP financial measures should not be considered in isolation or as a substitute for or superior to financial measures calculated in accordance with U.S. GAAP. These non-GAAP financial measures may also be calculated differently from similar measures disclosed by other companies. |
| |
Non-GAAP Reconciliations to GAAP Financial Measures | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| Three Months Ended | | Years Ended |
| December 31, | | September 30, | | December 31, | | December 31, |
($ in thousands, except for share data) | 2023 | | 2023 | | 2022 | | 2023 | | 2022 |
Adjusted net income available to common shareholders (non-GAAP): | | | | | | | | | |
Net income, as reported (GAAP) | $ | 71,554 | | | $ | 141,346 | | | $ | 177,591 | | | $ | 498,511 | | | $ | 568,851 | |
| | | | | | | | | |
Add: FDIC Special assessment (net of tax)(a) | 36,053 | | | — | | | — | | | 36,053 | | | — | |
Less: Net (gains) losses on available for sale and held to maturity securities transactions (net of tax)(b) | (629) | | | 318 | | | 5 | | | (288) | | | (69) | |
Add: Restructuring charge (net of tax)(c) | (386) | | | (484) | | | — | | | 7,145 | | | — | |
Add: Provision for credit losses for available for sale securities (d) | — | | | — | | | — | | | 5,000 | | | — | |
Add: Non-PCD provision for credit losses (net of tax)(e) | — | | | — | | | — | | | — | | | 29,282 | |
Add: Merger related expenses (net of tax)(f) | 7,168 | | | — | | | 5,285 | | | 10,130 | | | 52,388 | |
Less: Net gains on sales of office buildings (net of tax)(g) | — | | | (4,817) | | | — | | | (4,817) | | | — | |
Add: Litigation reserve (net of tax)(h) | 2,537 | | | — | | | — | | | 2,537 | | | — | |
Net income, as adjusted (non-GAAP) | $ | 116,297 | | | $ | 136,363 | | | $ | 182,881 | | | $ | 554,271 | | | $ | 650,452 | |
Dividends on preferred stock | 4,104 | | | 4,127 | | | 3,630 | | | 16,135 | | | 13,146 | |
Net income available to common shareholders, as adjusted (non-GAAP) | $ | 112,193 | | | $ | 132,236 | | | $ | 179,251 | | | $ | 538,136 | | | $ | 637,306 | |
_____________ | | | | | | | | | |
(a) Included in FDIC insurance assessment. |
(b) Included in gains (losses) on securities transactions, net. |
(c) Represents severance (credit adjustments) expense related to workforce reductions within salary and employee benefits expense. |
(d) Included in provision for credit losses for available for sale and held to maturity securities (tax disallowed). |
(e) Represents provision for credit losses for non-PCD assets and unfunded credit commitments acquired during the period. |
(f) Represents data processing termination costs within technology, furniture and equipment expense and severance within salary and employee benefits expense for the 2023 periods. The merger related expense for the 2022 periods were mainly salary and employee benefits expense. |
(g) Included in net (losses) gains on sale of assets within non-interest income. |
(h) Represents legal reserves and settlement charges included in professional and legal fees. |
| | | | | | | | | |
Adjusted per common share data (non-GAAP): | | | | | | | | | |
Net income available to common shareholders, as adjusted (non-GAAP) | $ | 112,193 | | | $ | 132,236 | | | $ | 179,251 | | | $ | 538,136 | | | $ | 637,306 | |
Average number of shares outstanding | 507,683,229 | | | 507,650,668 | | | 506,359,704 | | | 507,532,365 | | | 485,434,918 | |
Basic earnings, as adjusted (non-GAAP) | $ | 0.22 | | | $ | 0.26 | | | $ | 0.35 | | | $ | 1.06 | | | $ | 1.31 | |
Average number of diluted shares outstanding | 509,714,526 | | | 509,256,599 | | | 509,301,813 | | | 509,245,768 | | | 487,817,710 | |
Diluted earnings, as adjusted (non-GAAP) | $ | 0.22 | | | $ | 0.26 | | | $ | 0.35 | | | $ | 1.06 | | | $ | 1.31 | |
Adjusted annualized return on average tangible shareholders' equity (non-GAAP): | | | | | | | | | |
Net income, as adjusted (non-GAAP) | $ | 116,297 | | | $ | 136,363 | | | $ | 182,881 | | | $ | 554,271 | | | $ | 650,452 | |
Average shareholders' equity | 6,639,906 | | | 6,605,786 | | | 6,327,970 | | | 6,558,768 | | | 5,985,236 | |
Less: Average goodwill and other intangible assets | 2,033,656 | | | 2,042,486 | | | 2,074,367 | | | 2,047,172 | | | 1,944,503 | |
Average tangible shareholders' equity | $ | 4,606,250 | | | $ | 4,563,300 | | | $ | 4,253,603 | | | $ | 4,511,596 | | | $ | 4,040,733 | |
Annualized return on average tangible shareholders' equity, as adjusted (non-GAAP) | 10.10 | % | | 11.95 | % | | 17.20 | % | | 12.29 | % | | 16.10 | % |
VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS
Non-GAAP Reconciliations to GAAP Financial Measures (Continued) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| Three Months Ended | | Years Ended |
| December 31, | | September 30, | | December 31, | | December 31, |
($ in thousands) | 2023 | | 2023 | | 2022 | | 2023 | | 2022 |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Adjusted annualized return on average assets (non-GAAP): | | | | | | | | | |
Net income, as adjusted (non-GAAP) | $ | 116,297 | | | $ | 136,363 | | | $ | 182,881 | | | $ | 554,271 | | | $ | 650,452 | |
Average assets | 61,113,553 | | | 61,391,688 | | | 56,913,215 | | | 61,065,897 | | | 52,182,310 | |
Annualized return on average assets, as adjusted (non-GAAP) | 0.76 | % | | 0.89 | % | | 1.29 | % | | 0.91 | % | | 1.25 | % |
Adjusted annualized return on average shareholders' equity (non-GAAP): | | | | | | | | | |
Net income, as adjusted (non-GAAP) | $ | 116,297 | | | $ | 136,363 | | | $ | 182,881 | | | $ | 554,271 | | | $ | 650,452 | |
Average shareholders' equity | 6,639,906 | | | 6,605,786 | | | 6,327,970 | | | 6,558,768 | | | 5,985,236 | |
Annualized return on average shareholders' equity, as adjusted (non-GAAP) | 7.01 | % | | 8.26 | % | | 11.56 | % | | 8.45 | % | | 10.87 | % |
Annualized return on average tangible shareholders' equity (non-GAAP): | | | | | | | | | |
Net income, as reported (GAAP) | $ | 71,554 | | | $ | 141,346 | | | $ | 177,591 | | | $ | 498,511 | | | $ | 568,851 | |
Average shareholders' equity | 6,639,906 | | | 6,605,786 | | | 6,327,970 | | | 6,558,768 | | | 5,985,236 | |
Less: Average goodwill and other intangible assets | 2,033,656 | | | 2,042,486 | | | 2,074,367 | | | 2,047,172 | | | 1,944,503 | |
Average tangible shareholders' equity | $ | 4,606,250 | | | $ | 4,563,300 | | | $ | 4,253,603 | | | $ | 4,511,596 | | | $ | 4,040,733 | |
Annualized return on average tangible shareholders' equity (non-GAAP) | 6.21 | % | | 12.39 | % | | 16.70 | % | | 11.05 | % | | 14.08 | % |
Efficiency ratio (non-GAAP): | | | | | | | | | |
Non-interest expense, as reported (GAAP) | $ | 340,421 | | | $ | 267,133 | | | $ | 266,240 | | | $ | 1,162,691 | | | $ | 1,024,949 | |
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Less: FDIC Special assessment (pre-tax) | 50,297 | | | — | | | — | | | 50,297 | | | — | |
Less: Restructuring charge (pre-tax) | (538) | | | (675) | | | — | | | 9,969 | | | — | |
Less: Merger-related expenses (pre-tax) | 10,000 | | | — | | | 7,372 | | | 14,133 | | | 71,203 | |
Less: Amortization of tax credit investments (pre-tax) | 4,547 | | | 4,191 | | | 3,213 | | | 18,009 | | | 12,407 | |
Less: Litigation reserve (pre-tax) | 3,540 | | | — | | | — | | | 3,540 | | | — | |
Non-interest expense, as adjusted (non-GAAP) | 272,575 | | | 263,617 | | | 255,655 | | | 1,066,743 | | | 941,339 | |
Net interest income, as reported (GAAP) | 397,275 | | | 412,418 | | | 465,819 | | | 1,665,478 | | | 1,655,640 | |
Non-interest income, as reported (GAAP) | 52,691 | | | 58,664 | | | 52,796 | | | 225,729 | | | 206,793 | |
Less: Net (gains) losses on available for sale and held to maturity securities transactions, net (pre-tax) | (877) | | | 443 | | | 7 | | | (401) | | | (95) | |
Less: Net gains on sales of office buildings (pre-tax) | — | | | (6,721) | | | — | | | (6,721) | | | — | |
Non-interest income, as adjusted (non-GAAP) | $ | 51,814 | | | $ | 52,386 | | | $ | 52,803 | | | $ | 218,607 | | | $ | 206,698 | |
Gross operating income, as adjusted (non-GAAP) | $ | 449,089 | | | $ | 464,804 | | | $ | 518,622 | | | $ | 1,884,085 | | | $ | 1,862,338 | |
Efficiency ratio (non-GAAP) | 60.70 | % | | 56.72 | % | | 49.30 | % | | 56.62 | % | | 50.55 | % |
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| As of |
| December 31, | | September 30, | | June 30, | | March 31, | | December 31, |
($ in thousands, except for share data) | 2023 | | 2023 | | 2023 | | 2023 | | 2022 |
Tangible book value per common share (non-GAAP): | | | | | | | | | |
Common shares outstanding | 507,709,927 | | | 507,660,742 | | | 507,619,430 | | | 507,762,358 | | | 506,374,478 | |
Shareholders' equity (GAAP) | $ | 6,701,391 | | | $ | 6,627,299 | | | $ | 6,575,184 | | | $ | 6,511,581 | | | $ | 6,400,802 | |
Less: Preferred stock | 209,691 | | | 209,691 | | | 209,691 | | | 209,691 | | | 209,691 | |
Less: Goodwill and other intangible assets | 2,029,267 | | | 2,038,202 | | | 2,046,882 | | | 2,056,107 | | | 2,066,392 | |
Tangible common shareholders' equity (non-GAAP) | $ | 4,462,433 | | | $ | 4,379,406 | | | $ | 4,318,611 | | | $ | 4,245,783 | | | $ | 4,124,719 | |
Tangible book value per common share (non-GAAP) | $ | 8.79 | | | $ | 8.63 | | | $ | 8.51 | | | $ | 8.36 | | | $ | 8.15 | |
Tangible common equity to tangible assets (non-GAAP): | | | | | | | | | |
Tangible common shareholders' equity (non-GAAP) | $ | 4,462,433 | | | $ | 4,379,406 | | | $ | 4,318,611 | | | $ | 4,245,783 | | | $ | 4,124,719 | |
Total assets (GAAP) | $ | 60,934,974 | | | $ | 61,183,352 | | | $ | 61,703,693 | | | $ | 64,309,573 | | | $ | 57,462,749 | |
Less: Goodwill and other intangible assets | 2,029,267 | | | 2,038,202 | | | 2,046,882 | | | 2,056,107 | | | 2,066,392 | |
Tangible assets (non-GAAP) | $ | 58,905,707 | | | $ | 59,145,150 | | | $ | 59,656,811 | | | $ | 62,253,466 | | | $ | 55,396,357 | |
Tangible common equity to tangible assets (non-GAAP) | 7.58 | % | | 7.40 | % | | 7.24 | % | | 6.82 | % | | 7.45 | % |
VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for share data)
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| December 31, |
| 2023 | | 2022 |
| (Unaudited) | | |
Assets | | | |
Cash and due from banks | $ | 284,090 | | | $ | 444,325 | |
Interest bearing deposits with banks | 607,135 | | | 503,622 | |
Investment securities: | | | |
Equity securities | 64,464 | | | 48,731 | |
Trading debt securities | 3,973 | | | 13,438 | |
Available for sale debt securities | 1,296,576 | | | 1,261,397 | |
Held to maturity debt securities (net of allowance for credit losses of $1,205 at December 31, 2023 and $1,646 at December 31, 2022) | 3,739,208 | | | 3,827,338 | |
Total investment securities | 5,104,221 | | | 5,150,904 | |
Loans held for sale (includes fair value of $20,640 at December 31, 2023 and $18,118 at December 31, 2022 for loans originated for sale) | 30,640 | | | 18,118 | |
Loans | 50,210,295 | | | 46,917,200 | |
Less: Allowance for loan losses | (446,080) | | | (458,655) | |
Net loans | 49,764,215 | | | 46,458,545 | |
Premises and equipment, net | 381,081 | | | 358,556 | |
Lease right of use assets | 343,461 | | | 306,352 | |
Bank owned life insurance | 723,799 | | | 717,177 | |
Accrued interest receivable | 245,498 | | | 196,606 | |
Goodwill | 1,868,936 | | | 1,868,936 | |
Other intangible assets, net | 160,331 | | | 197,456 | |
Other assets | 1,421,567 | | | 1,242,152 | |
Total Assets | $ | 60,934,974 | | | $ | 57,462,749 | |
Liabilities | | | |
Deposits: | | | |
Non-interest bearing | $ | 11,539,483 | | | $ | 14,463,645 | |
Interest bearing: | | | |
Savings, NOW and money market | 24,526,622 | | | 23,616,812 | |
Time | 13,176,724 | | | 9,556,457 | |
Total deposits | 49,242,829 | | | 47,636,914 | |
Short-term borrowings | 917,834 | | | 138,729 | |
Long-term borrowings | 2,328,375 | | | 1,543,058 | |
Junior subordinated debentures issued to capital trusts | 57,108 | | | 56,760 | |
Lease liabilities | 403,781 | | | 358,884 | |
Accrued expenses and other liabilities | 1,283,656 | | | 1,327,602 | |
Total Liabilities | 54,233,583 | | | 51,061,947 | |
Shareholders’ Equity | | | |
Preferred stock, no par value; authorized 50,000,000 shares authorized: | | | |
Series A (4,600,000 shares issued at December 31, 2023 and December 31, 2022) | 111,590 | | | 111,590 | |
Series B (4,000,000 shares issued at December 31, 2023 and December 31, 2022) | 98,101 | | | 98,101 | |
Common stock (no par value, authorized 650,000,000 shares; issued 507,896,910 shares at December 31, 2023 and December 31, 2022) | 178,187 | | | 178,185 | |
Surplus | 4,989,989 | | | 4,980,231 | |
Retained earnings | 1,471,371 | | | 1,218,445 | |
Accumulated other comprehensive loss | (146,456) | | | (164,002) | |
Treasury stock, at cost (186,983 common shares at December 31, 2023 and 1,522,432 common shares at December 31, 2022) | (1,391) | | | (21,748) | |
Total Shareholders’ Equity | 6,701,391 | | | 6,400,802 | |
Total Liabilities and Shareholders’ Equity | $ | 60,934,974 | | | $ | 57,462,749 | |
VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands, except for share data)
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| Three Months Ended | | Years Ended |
| December 31, | | September 30, | | December 31, | | December 31, |
| 2023 | | 2023 | | 2022 | | 2023 | | 2022 |
Interest Income | | | | | | | | | |
Interest and fees on loans | $ | 762,894 | | | $ | 753,638 | | | $ | 599,015 | | | $ | 2,886,930 | | | $ | 1,828,477 | |
Interest and dividends on investment securities: | | | | | | | | | |
Taxable | 34,117 | | | 32,383 | | | 31,300 | | | 130,708 | | | 105,716 | |
Tax-exempt | 4,820 | | | 4,585 | | | 5,219 | | | 20,305 | | | 17,958 | |
Dividends | 6,138 | | | 5,299 | | | 3,978 | | | 24,139 | | | 11,468 | |
Interest on federal funds sold and other short-term investments | 10,215 | | | 17,113 | | | 7,038 | | | 76,809 | | | 13,064 | |
Total interest income | 818,184 | | | 813,018 | | | 646,550 | | | 3,138,891 | | | 1,976,683 | |
Interest Expense | | | | | | | | | |
Interest on deposits: | | | | | | | | | |
Savings, NOW and money market | 221,501 | | | 201,916 | | | 109,286 | | | 739,025 | | | 186,709 | |
Time | 165,351 | | | 164,336 | | | 48,417 | | | 535,749 | | | 69,691 | |
Interest on short-term borrowings | 5,524 | | | 5,189 | | | 7,404 | | | 94,869 | | | 17,453 | |
Interest on long-term borrowings and junior subordinated debentures | 28,533 | | | 29,159 | | | 15,624 | | | 103,770 | | | 47,190 | |
Total interest expense | 420,909 | | | 400,600 | | | 180,731 | | | 1,473,413 | | | 321,043 | |
Net Interest Income | 397,275 | | | 412,418 | | | 465,819 | | | 1,665,478 | | | 1,655,640 | |
(Credit) provision for credit losses for available for sale and held to maturity securities | (116) | | | (30) | | | (50) | | | 4,559 | | | 481 | |
Provision for credit losses for loans | 20,696 | | | 9,147 | | | 7,289 | | | 45,625 | | | 56,336 | |
Net Interest Income After Provision for Credit Losses | 376,695 | | | 403,301 | | | 458,580 | | | 1,615,294 | | | 1,598,823 | |
Non-Interest Income | | | | | | | | | |
Wealth management and trust fees | 11,978 | | | 11,417 | | | 10,720 | | | 44,158 | | | 34,709 | |
Insurance commissions | 3,221 | | | 2,336 | | | 2,903 | | | 11,116 | | | 11,975 | |
Capital Markets | 6,489 | | | 7,141 | | | 10,120 | | | 41,489 | | | 52,362 | |
Service charges on deposit accounts | 9,336 | | | 10,952 | | | 10,313 | | | 41,306 | | | 36,930 | |
Gains (losses) on securities transactions, net | 907 | | | (398) | | | (172) | | | 1,104 | | | (1,230) | |
Fees from loan servicing | 2,616 | | | 2,681 | | | 2,637 | | | 10,670 | | | 11,273 | |
Gains on sales of loans, net | 2,302 | | | 2,023 | | | 908 | | | 6,054 | | | 6,418 | |
(Losses) gains on sales of assets, net | (129) | | | 6,653 | | | 1,269 | | | 6,809 | | | 897 | |
Bank owned life insurance | 4,107 | | | 2,709 | | | 2,200 | | | 11,843 | | | 8,040 | |
Other | 11,864 | | | 13,150 | | | 11,898 | | | 51,180 | | | 45,419 | |
Total non-interest income | 52,691 | | | 58,664 | | | 52,796 | | | 225,729 | | | 206,793 | |
Non-Interest Expense | | | | | | | | | |
Salary and employee benefits expense | 131,719 | | | 137,292 | | | 129,634 | | | 563,591 | | | 526,737 | |
Net occupancy expense | 27,590 | | | 24,675 | | | 23,446 | | | 101,470 | | | 94,352 | |
Technology, furniture and equipment expense | 44,404 | | | 37,320 | | | 46,507 | | | 150,708 | | | 161,752 | |
FDIC insurance assessment | 60,627 | | | 7,946 | | | 6,827 | | | 88,154 | | | 22,836 | |
Amortization of other intangible assets | 9,696 | | | 9,741 | | | 10,900 | | | 39,768 | | | 37,825 | |
Professional and legal fees | 25,238 | | | 17,109 | | | 19,620 | | | 80,567 | | | 82,618 | |
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Amortization of tax credit investments | 4,547 | | | 4,191 | | | 3,213 | | | 18,009 | | | 12,407 | |
Other | 36,600 | | | 28,859 | | | 26,093 | | | 120,424 | | | 86,422 | |
Total non-interest expense | 340,421 | | | 267,133 | | | 266,240 | | | 1,162,691 | | | 1,024,949 | |
Income Before Income Taxes | 88,965 | | | 194,832 | | | 245,136 | | | 678,332 | | | 780,667 | |
Income tax expense | 17,411 | | | 53,486 | | | 67,545 | | | 179,821 | | | 211,816 | |
Net Income | 71,554 | | | 141,346 | | | 177,591 | | | 498,511 | | | 568,851 | |
Dividends on preferred stock | 4,104 | | | 4,127 | | | 3,630 | | | 16,135 | | | 13,146 | |
Net Income Available to Common Shareholders | $ | 67,450 | | | $ | 137,219 | | | $ | 173,961 | | | $ | 482,376 | | | $ | 555,705 | |
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VALLEY NATIONAL BANCORP
Quarterly Analysis of Average Assets, Liabilities and Shareholders' Equity and
Net Interest Income on a Tax Equivalent Basis
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| Three Months Ended |
| December 31, 2023 | | September 30, 2023 | | December 31, 2022 |
| Average | | | | Avg. | | Average | | | | Avg. | | Average | | | | Avg. |
($ in thousands) | Balance | | Interest | | Rate | | Balance | | Interest | | Rate | | Balance | | Interest | | Rate |
Assets | | | | | | | | | | | | | | | | | |
Interest earning assets: | | | | | | | | | | | | | | | | | |
Loans (1)(2) | $ | 50,039,429 | | | $ | 762,918 | | | 6.10 | % | | $ | 50,019,414 | | | $ | 753,662 | | | 6.03 | % | | $ | 46,086,363 | | | $ | 599,040 | | | 5.20 | % |
Taxable investments (3) | 4,950,773 | | | 40,255 | | | 3.25 | | | 4,915,778 | | | 37,682 | | | 3.07 | | | 4,934,084 | | | 35,278 | | | 2.86 | |
Tax-exempt investments (1)(3) | 593,577 | | | 6,101 | | | 4.11 | | | 620,439 | | | 5,800 | | | 3.74 | | | 623,322 | | | 6,608 | | | 4.24 | |
Interest bearing deposits with banks | 885,689 | | | 10,215 | | | 4.61 | | | 1,246,934 | | | 17,113 | | | 5.49 | | | 761,832 | | | 7,038 | | | 3.70 | |
Total interest earning assets | 56,469,468 | | | 819,489 | | | 5.80 | | | 56,802,565 | | | 814,257 | | | 5.73 | | | 52,405,601 | | | 647,964 | | | 4.95 | |
Other assets | 4,644,085 | | | | | | | 4,589,123 | | | | | | | 4,507,614 | | | | | |
Total assets | $ | 61,113,553 | | | | | | | $ | 61,391,688 | | | | | | | $ | 56,913,215 | | | | | |
Liabilities and shareholders' equity | | | | | | | | | | | | | | | | | |
Interest bearing liabilities: | | | | | | | | | | | | | | | | | |
Savings, NOW and money market deposits | $ | 23,991,093 | | | $ | 221,500 | | | 3.69 | % | | $ | 23,016,737 | | | $ | 201,916 | | | 3.51 | % | | $ | 23,476,111 | | | $ | 109,286 | | | 1.86 | % |
Time deposits | 13,934,683 | | | 165,351 | | | 4.75 | | | 14,880,311 | | | 164,336 | | | 4.42 | | | 7,641,769 | | | 48,417 | | | 2.53 | |
Short-term borrowings | 449,831 | | | 5,524 | | | 4.91 | | | 436,518 | | | 5,189 | | | 4.75 | | | 880,615 | | | 7,404 | | | 3.36 | |
Long-term borrowings (4) | 2,377,706 | | | 28,533 | | | 4.80 | | | 2,495,512 | | | 29,159 | | | 4.67 | | | 1,598,379 | | | 15,624 | | | 3.91 | |
Total interest bearing liabilities | 40,753,313 | | | 420,908 | | | 4.13 | | | 40,829,078 | | | 400,600 | | | 3.92 | | | 33,596,874 | | | 180,731 | | | 2.15 | |
Non-interest bearing deposits | 11,534,795 | | | | | | | 11,951,398 | | | | | | | 15,116,977 | | | | | |
Other liabilities | 2,185,539 | | | | | | | 2,005,426 | | | | | | | 1,871,394 | | | | | |
Shareholders' equity | 6,639,906 | | | | | | | 6,605,786 | | | | | | | 6,327,970 | | | | | |
Total liabilities and shareholders' equity | $ | 61,113,553 | | | | | | | $ | 61,391,688 | | | | | | | $ | 56,913,215 | | | | | |
Net interest income/interest rate spread (5) | | | $ | 398,581 | | | 1.67 | % | | | | $ | 413,657 | | | 1.81 | % | | | | $ | 467,233 | | | 2.80 | % |
Tax equivalent adjustment | | | (1,305) | | | | | | | (1,239) | | | | | | | (1,414) | | | |
Net interest income, as reported | | | $ | 397,276 | | | | | | | $ | 412,418 | | | | | | | $ | 465,819 | | | |
Net interest margin (6) | | | | | 2.81 | % | | | | | | 2.90 | % | | | | | | 3.56 | % |
Tax equivalent effect | | | | | 0.01 | | | | | | | 0.01 | | | | | | | 0.01 | |
Net interest margin on a fully tax equivalent basis (6) | | | | | 2.82 | % | | | | | | 2.91 | % | | | | | | 3.57 | % |
(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 financial 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.
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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. |
4 Q 2 3 E a r n i n g s P r e s e n t a t i o n J a n u a r y 2 5 , 2 0 2 4 Exhibit 99.2
Forward Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about our business, new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology as “intend,” “should,” “expect,” “believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “typically,” “usually,” “anticipate,” “may,” “estimate,” “outlook,” “project”, “imperatives” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to: the impact of monetary and fiscal policies of the federal government and its agencies, including in response to higher inflation, which could have a material adverse effect on our clients, as well as our business, our employees, and our ability to provide services to our customers;the impact of a potential U.S. Government shutdown, default by the U.S. government on its debt obligations, or related credit-rating downgrades, on economic activity in the markets in which we operate and, in general, on levels of end market demand in the economy;the impact of unfavorable macroeconomic conditions or downturns, instability or volatility in financial markets, unanticipated loan delinquencies, loss of collateral, decreased service revenues, increased business disruptions or failures, reductions in employment, and other potential negative effects on our business, employees or clients caused by factors outside of our control, such as geopolitical instabilities or events (including the Israel-Hamas war); natural and other disasters (including severe weather events); health emergencies; acts of terrorism or other external events; risks associated with our acquisition of Bank Leumi Le-Israel Corporation (Bank Leumi USA), including (i) the inability to realize expected cost savings and synergies from the acquisition in the amounts or timeframe anticipated and (ii) greater than expected costs or difficulties relating to integration as part of Valley's new core banking system implemented in the fourth quarter 2023; the impact of potential instability within the U.S. financial sector in the aftermath of the banking failures in 2023, 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 FDIC insurance premiums, 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;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 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;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;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; andunexpected 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, 2022 and in Item 1A of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.The financial results and disclosures reported in this release are preliminary. Final 2023 financial results and other disclosures will be reported in our Annual Report on Form 10-K for the year ended December 31, 2023, and may differ materially from the results and disclosures in this document due to, among other things, the completion of final review procedures, the occurrence of subsequent events, or the discovery of additional information.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.
3 Significant Strategic Progress Above-Average Tangible Book Value Growth ▪ Since 2018, growth in tangible book value plus dividends paid totals 90% 1, well above our proxy peer median of 53%. ▪ Continue to believe that tangible book value growth over time will drive shareholder value. Enhanced Funding Diversification Substantial Exposure to Compelling Growth Markets Northeast Branches $14.2 78% Southeast Branches, Specialty, Brokered & Other $3.9 22% Northeast Branches $22.4 45% Southeast Branches, Specialty, Brokered & Other $26.8 55% Deposits ($bn) at 12/31/17 $1.1 $12.1 12/31/14 12/31/23 Florida Loans ($bn) ▪ Florida’s diverse and dynamic economy continues to be supported by significant inflows of permanent population and wealth. ▪ These long-term demographic trends provide substantial growth opportunities and supplement our strong and stable northeast markets. ▪ Our Florida portfolio has grown at a 30% CAGR since 2014, or more than 2x our non- Florida loans, and now comprises 24% of loans, up from 8% in 2014. 1 Please refer to the Non-GAAP Disclosure Reconciliation in Appendix. Deposits ($bn) at 12/31/23
4 Strategic Imperatives for 2024 Grow Core Deposits ▪ Utilize enhanced treasury management capabilities to further penetrate commercial customers. ▪ Optimize delivery channels and streamline product set. ▪ Leverage existing specialty niches and explore new opportunities. Focus on C&I and Non-Investor CRE Loan Growth ▪ Further penetrate our commercially vibrant footprint. ▪ Restructured commercial banking organization and incentive programs to optimize alignment with strategic and financial goals. ▪ De-emphasize investor CRE and multifamily growth. Drive Sustainable Fee Revenue ▪ Continue to scale our wealth, insurance, and tax credit advisory businesses. ▪ Expand F/X and treasury management solutions.`
5 4Q23 3Q23 4Q22 4Q23 3Q23 4Q22 Net Income ($mm) $71.6 $141.3 $177.6 $116.3 $136.4 $182.9 Return on Average Assets Annualized 0.47% 0.92% 1.25% 0.76% 0.89% 1.29% Efficiency Ratio (Non-GAAP) -- -- -- 60.7% 56.7% 49.3% Diluted Earnings Per Share $0.13 $0.27 $0.34 $0.22 $0.26 $0.35 Pre-Provision Net Revenue 2 ($mm) $109.6 $203.9 $252.4 $176.5 $201.2 $263.0 PPNR / Average Assets 2 Annualized 0.72% 1.33% 1.77% 1.16% 1.31% 1.85% GAAP Reported Non-GAAP Adjusted 1 1 Please refer to the Non-GAAP Disclosure Reconciliation in Appendix. 2 Pre-provision net revenue (“PPNR”) equals net interest income plus total non-interest income less total non-interest expense. 4Q 2023 Financial Highlights Significant expansion of customer households and continued improvement in direct deposit flows. Capital ratios continue to improve. Solid asset quality across the loan portfolio. Undertaking specific and targeted efforts to improve deposit costs.
6 23.1 24.5 11.7 11.5 15.1 13.2 $49.9 $49.2 9/30/2023 12/31/2023 Time Non-Interest Savings, NOW and money market 23% 46% 24% 30% 0.15% 1.36% 1.96% 2.45% 2.94% 3.13% 0.25% 3.82% 4.69% 5.16% 5.43% 5.50% 4Q21 4Q22 1Q23 2Q23 3Q23 4Q23 Total Deposits Average Fed Funds (Upper) Direct Deposits Exhibit Strong Growth Trends Deposits by Product ($bn) 27% 50% Avg. Fed Funds vs. Deposit Costs (%) Cumulative Beta (Current Cycle) 1 1 Cumulative Beta is measured as the change in Valley’s quarterly average deposit costs since the quarter preceding the rate hike cycle (4Q21) as a percentage of the change in the average quarterly Fed Funds Upper Bound over the same period. Avg. Fed Funds (Upper) Total Cost of Deposits Cumulative Beta 4Q21 0.25% 0.15% -- 4Q22 3.82% 1.36% 34% 1Q23 4.69% 1.96% 41% 2Q23 5.16% 2.45% 47% 3Q23 5.43% 2.94% 54% 4Q23 5.50% 3.13% 57% 40.0 41.6 9.9 7.6 $49.9 $49.2 9/30/2023 12/31/2023 Direct Indirect Deposits by Customer Type ($bn) 80% 85% 15%20%
7 Customer Deposit Base Diversified by Geography and Source Traditional Branch Deposits $31.9 65% Specialized Deposits $9.7 20% Fully FDIC-Insured Indirect Customer $7.6 15% Nat'l Deposits, Cannabis & Online $3.7 International Corporate $0.8 Technology $1.4 Private Banking & Wealth $1.6 Other Commercial $2.2 $49.2bn $9.7bn New Jersey $17.5 New York $4.9 Florida $7.9 Alabama $1.6 $31.9bn Total Deposit Breakdown ($bn, as of 12/31/23) Specialized Deposits by Business Line ($bn, as of 12/31/23)Traditional Branch Deposits 3 ($bn, as of 12/31/23) Uninsured Deposit & Liquidity ($bn, as of 12/31/23) 1 Adjusted for collateralized government deposits in excess of FDIC $250k limit and intercompany deposits eliminated in consolidation. 2 “High Quality Available Liquidity” includes the following off balance sheet sources of potential liquidity: FHLB, unencumbered investment securities, FRBNY Discount Window Availability, and Uncommitted Fed Funds Lines. 3 Traditional Branch Deposits Include Commercial (inclusive of $1bn of HOA deposits), Consumer and Government. Totals may not sum due to rounding. $12.2 $0.9 $25.4 $26.3 Adjusted Uninsured Deposits Cash & Available Liquidity Cash on Balance Sheet High Quality Available Liquidity 2 Cash & Available Liquidity Stands at 2.2x of Adjusted Uninsured Deposits 1 128 branches 16 branches 42 branches 42 branches Adjusted Uninsured Deposits 1 25%
8 NJ $2.3 NY $0.5 FL $0.8 PA $0.7 Other $1.3 Highly Granular Deposits – 12/31/2023 Customer Type Deposits ($bn) % of Total Deposits Commercial $18.7 38% Consumer $17.4 35% Fully FDIC-Insured Indirect $7.6 11% Fully-Collateralized Government 1 $5.6 15% Top 10 Commercial Industries 2 Deposits ($bn) % of Total Deposits Real Estate / Rental / Leasing $3.6 7% Finance & Insurance $3.5 7% Professional, Scientific, Technical Services $2.2 4% Construction $1.7 3% Other Services $1.5 3% Retail Trade $0.9 2% Health Care & Social Assistance $0.9 2% Manufacturing $0.9 2% Wholesale Trade $0.8 2% Management of Companies and Enterprises $0.4 1% 1 Fully-collateralized to relevant state requirements. 2 Commercial industries determined by NAICS Sector / Industry. $5.6bn Fully-Collateralized Government Deposits by State 1
9 Multifamily 18% Non Owner-Occupied CRE 26% Healthcare CRE 4% Owner-Occupied CRE 9% C&I 18% Consumer 7% Residential R.E. 11% Construction 7% CRE 48% C&I 27%Other 25% New Loan Originations ($bn) 1 CRE includes multifamily, non-owner occupied CRE and healthcare CRE; C&I includes owner-occupied CRE and C&I; Other includes construction, residential RE and Consumer. 2 Cumulative Beta is measured as the change in Valley’s quarterly average loan yield since the quarter preceding the rate hike cycle (4Q21) as a percentage of the change in the average quarterly Fed Funds Upper Bound over the same period. Diversified Loan Portfolio Gross Loans ($bn) $46.9 $48.7 $49.9 $50.1 $50.2 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 12/31/2023 Loan Composition 1 YTD Annualized Growth: $2.6 $2.5 $2.5 $1.8 $2.2 6.20% 6.61% 7.35% 7.91% 7.83% 5.20% 5.48% 5.78% 6.03% 6.10% 4Q22 1Q23 2Q23 3Q23 4Q23 Origination Volume (Gross) New Origination Rate Avg. Portfolio Yield Cumulative Loan Beta (Current Cycle) 2 Avg. Fed Funds (Upper) Avg. Loan Yield Cumulative Beta 4Q21 0.25% 3.83% -- 4Q22 3.82% 5.20% 38% 1Q23 4.69% 5.48% 37% 2Q23 5.16% 5.78% 40% 3Q23 5.43% 6.03% 43% 4Q23 5.50% 6.10% 43% +14.9% +12.6% +9.0% +7.0%
10 CRE Detail as of 12/31/2023 Portfolio by Collateral Type Apartment & Residential 24% Co-Ops 7% Retail 17% Mixed Use 11% Office 10% Healthcare Office 2% Industrial 11% Healthcare 8%Specialty & Other 10% Portfolio by Geography Florida 25.1% New Jersey 21.0% Other 21.3% Other NYC Boroughs 14.9% Manhattan (Multifamily) 5.7% Manhattan (Other) 4.3% New York (ex. NYC) 7.7% Geography Outstanding ($bn) % of Total Wtd. Avg. LTV Wtd. Avg. DSCR Florida $7.1 25.1% 61% 1.79x New Jersey $5.9 21.0% 62% 1.69x Other NYC Boroughs $4.2 14.9% 54% 1.53x Manhattan $2.8 10.0% 38% (54% ex Co-Ops) 1.59x New York (ex. NYC) $2.2 7.7% 54% 1.74x Other $6.0 21.3% 63% 1.58x Total $28.0 100.0% 57% 1.67x $28.2bn $28.2bn Sums may be inconsistent due to rounding. ~$4bn of CRE Portfolio is Owner-Occupied.
11 Co-Op $2.0 Non Co-Op $6.8 Apartment & Residential 24% Co-Ops 7% Multifamily Portfolio Details CRE Portfolio $28.2bn Multifamily Portfolio by Sub-Asset Class ($bn) $8.8bn $421mm of exposure to fully rent regulated buildings Note: Co-Op LTV is approximately 13% Sums may be inconsistent due to rounding. Geography Outstanding ($bn) Avg. Size ($mm) % of Non Co-Op Wtd. Avg. LTV Wtd. Avg. DSCR Other $1.9bn $9mm 28% 65% 1.36x New York (ex. Manhattan) $1.8 $6mm 26% 63% 1.38x New Jersey $1.4 $3mm 21% 61% 1.54x Florida & Alabama $1.1 $3mm 16% 61% 1.69x Manhattan $0.6 $7mm 9% 58% 1.33x Total $6.8bn $5mm 100% 62% 1.43x
12 Florida & Alabama $1.2 37% New Jersey $0.9 27%Other $0.4 12% New York (ex. Manhattan) $0.5 15% Manhattan $0.3 9% Office 10% Healthcare Office 2% Granular & Diverse Office Portfolio CRE Portfolio $28.2bn Office Portfolio by Geography ($bn) $3.3bn Geography Outstanding ($bn) Avg. Size ($mm) % of Total Office Wtd. Avg. LTV Wtd. Avg. DSCR Florida & Alabama $1.2bn $2mm 37% 50% 1.77x New Jersey $0.9 $3mm 27% 56% 1.50x New York (ex. Manhattan) $0.5 $4mm 15% 51% 1.76x Manhattan $0.3 $6mm 9% 52% 1.34x Other $0.4 $7mm 12% 59% 1.69x Total $3.3bn $3mm 100% 53% 1.63x ~20% of Office Portfolio is Owner-Occupied. Sums may be inconsistent due to rounding.
13 Net Interest Income ($mm) and Margin Net Interest Margin $467 $437 $421 $414 $399 3.57% 3.16% 2.94% 2.91% 2.82% 4Q22 1Q23 2Q23 3Q23 4Q23 Net Interest Income ($mm) NIM All metrics are presented on a fully tax equivalent basis. Reduced Valley Direct (online) rate by 20bp on 1/16/2024 ($1.4bn) 75bp reduction to 1 Year CD Rate since 12/1/2023 ($3.9bn) Renewed Emphasis on customer profitability and granular review of deposit pricing Optimizing the roll-over of $5.6 billion of maturing liabilities during 1Q24 (current cost of 4.96%) Accelerating Efforts to Manage Funding Costs $5.6 $3.5 $2.7 $1.5 $2.4 4.96% 4.86% 4.70% 4.62% 4.01% 1Q24 2Q24 3Q24 4Q24 2025 and Beyond Maturing CDs and FHLB Balance ($bn) Rate (%)
14 $17.8 $18.5 $18.5 $10.1 $7.1 $6.5 $13.6 $13.8 $15.2 $0.9 $2.0 $2.3 $10.3 $11.0 $9.3 $6.3 $0.9 $52.8 $58.7 $52.7 4Q22 3Q23 4Q23 Other Non-Interest Income Capital Markets Wealth, Trust & Insurance Gain on Sale of Loans Deposit Service Charges Net non-core income Other $16.8 32% Wealth, Trust & Insurance $15.2 29% Capital Markets $6.5 12% Service Charges $9.3 18% Gain-on-Sale of Loans, net $2.3 4% Loan Servicing $2.6 5% 4Q23 Adjusted Non-Interest Income ($mm) 1 Diverse Fee Income Sources $52.7mm Non-Interest Income ($mm) 1 Please refer to the Non-GAAP Disclosure Reconciliation in Appendix. 1
15 263.6 272.6 3.5 67.8 267.1 340.4 3Q23 4Q23 Adjusted Reported 1 Please refer to the Non-GAAP Disclosure Reconciliation in Appendix. Sums may be inconsistent due to rounding. Non-Interest Expense Non-Interest Expenses ($mm) 1 Efficiency Ratio Trend 1 56.7% 60.7% 3Q23 4Q23 1.80% 1.72% 1.78% 4Q22 3Q23 4Q23 Adj. Non-Interest Expenses 1 / Avg. Assets
16 0.57% 0.50% 0.51% 0.52% 0.58% 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 Asset Quality Non-Accrual Loans / Total Loans Loan Loss Provision ($mm) Allowance for Credit Losses for Loans / Total Loans 0.99% 1.03% 1.03% 0.95% 0.92% 0.92% 0.93% 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 Net Loan Charge-offs ($mm) $22 $30 $9 $6 $17 0.19% 0.25% 0.07% 0.04% 0.14% 4Q22 1Q23 2Q23 3Q23 4Q23 Net Charge-offs (Recoveries) NCOs / Avg. Loans $7.3 $9.5 $6.3 $9.1 $20.7 4Q22 1Q23 2Q23 3Q23 4Q23 2023 NCOs / Avg. Loans: 0.13%
17 Equity & Capitalization $8.15 $8.36 $8.51 $8.63 $8.79 $12.23 $12.41 $12.54 $12.64 $12.79 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 TBV per share Book Value per share Book Value and Tangible Book Value per Share 1 Equity Capitalization Level 1 1 Please refer to the Non-GAAP Disclosure Reconciliation in Appendix. 7.45% 6.82% 7.24% 7.40% 7.58% 11.14% 10.12% 10.66% 10.83% 11.00% 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 Tangible Common Equity / Tangible Assets Equity / Assets Holding Company Capital Ratios 12/31/22 9/30/23 12/31/23 Tier 1 Leverage 8.23 8.08 8.16 Common Equity Tier 1 9.01 9.21 9.29 Tier 1 Risk-Based 9.46 9.64 9.72 Total Risk-Based 11.63 11.68 11.76 1
18 • 5.0% - 7.0% (increasing focus on C&I and non-investor CRE) (based on 12/31/2023 gross loans of $50.2 billion) 2024 Loan Growth • Year-over-year growth between 3.0% - 5.0% (from full-year 2023 net interest income of $1,665 million) Net Interest Income • Year-over-year growth between 5.0% - 7.0% (based on 2023 adjusted non-interest income of $219 million) Non-Interest Income • Year-over-year growth between 4.0% - 6.0% (based on 2023 adjusted expenses plus tax credit amortization: $1,085 million) Non-Interest Expense • Approximately 27%2024 Tax Rate 2024 Outlook & Expectations The Company is providing this outlook only on a non-GAAP basis because not all of the information necessary for a quantitative reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measure is available without unreasonable effort, primarily due to uncertainties relating to the occurrence or amount of these adjustments that may arise in the future. Based on past reported results, any such excluded items could be material, individually or in the aggregate, to the reported results.
A p p e n d i x
20 December 31, September 30, December 31, December 31, December 31, ($ in thousands, except for share data) 2023 2023 2022 2023 2022 Adjusted net income avai lable to common shareholders (Non-GAAP): Net income, as reported (GAAP) $71,554 $141,346 $177,591 $498,511 $568,851 Add: FDIC Special assessment (net of tax)(a) 36,053 — — 36,053 — Add: (Gains) losses on available for sale and held to maturity securities transactions (net of tax) (b) (629) 318 5 (288) (69) Add: Restructuring charge (net of tax) (c) (386) (484) — 7,145 Add: Provision for credit losses for available for sale securities (d) — — — 5,000 Add: Non-PCD provision for credit losses (net of tax) (e) — — — — 29,282 Add: Merger related expenses (net of tax) (f) 7,168 — 5,285 10,130 52,388 Add: Net gains on sales of office buildings (net of tax) (g) — (4,817) — (4,817) — Add: Litigation reserves (net of tax) (h) 2,537 — — 2,537 — Net income, as adjusted (Non-GAAP) $116,297 $136,363 $182,881 $554,271 $650,452 Dividends on preferred stock 4,104 4,127 3,630 16,135 13,146 Net income available to common shareholders, as adjusted (Non-GAAP) $112,193 $132,236 $179,251 $538,136 $637,306 (a) Included in FDIC insurance assessment. (b) Included in gains (losses) on securities transactions, net. (c) Represents severance (credit adjustments) expense related to workforce reductions within salary and employee benefits expense. (d) Included in provision for credit losses for available for sale and held to maturity securities (tax disallowed) (e) Represents provision for credit losses for non-PCD assets and unfunded credit commitments acquired during the period. (g) Included in net gains (losses) on sales of assets within non-interest income. (h) Represents legal reserves and settlement charges included in professional and legal fees. Adjusted per common share data (Non-GAAP): Net income available to common shareholders, as adjusted (Non-GAAP) $112,193 $132,236 $179,251 $538,136 $637,306 Average number of shares outstanding 507,683,229 507,650,668 506,359,704 507,532,365 485,434,918 Basic earnings, as adjusted (Non-GAAP) $0.22 $0.26 $0.35 $1.06 $1.31 Average number of diluted shares outstanding 509,714,526 509,256,599 509,301,813 509,245,768 487,817,710 Diluted earnings, as adjusted (Non-GAAP) $0.22 $0.26 $0.35 $1.06 $1.31 Adjusted annual ized return on average tangible shareholders' equi ty (Non-GAAP): Net income, as adjusted (Non-GAAP) $116,297 $136,363 $182,881 $554,271 $650,452 Average shareholders' equity 6,639,935 6,605,786 6,327,970 6,558,775 5,985,236 Less: Average goodwill and other intangible assets 2,033,656 2,042,486 2,074,367 2,047,172 1,944,503 Average tangible shareholders' equity 4,606,279 4,563,300 4,253,603 4,511,603 4,040,733 Annualized return on average tangible shareholders' equity, as adjusted (Non-GAAP) 10.10% 11.95% 17.20% 12.29% 16.10% Adjusted annual ized return on average assets (Non-GAAP): Net income, as adjusted (Non-GAAP) $116,297 $136,363 $182,881 $554,271 $650,452 Average assets $61,113,553 $61,391,688 $56,913,215 $61,065,897 $52,182,310 Annualized return on average assets, as adjusted (Non-GAAP) 0.76% 0.89% 1.29% 0.91% 1.25% Adjusted annual ized return on average shareholders' equi ty (Non-GAAP): Net income, as adjusted (Non-GAAP) $116,297 $136,363 $182,881 $554,271 $650,452 Average shareholders' equity 6,639,906 6,605,786 6,327,970 6,558,768 5,985,236 Annualized return on average shareholders' equity, as adjusted (Non-GAAP) 7.01% 8.26% 11.56% 8.45% 10.87% Three Months Ended Years Ended (f) Represents data processing termination costs within technology, furniture and equipment expense and severance within salary and employee benefits expense for the 2023 periods. The merger related expense for the 2022 periods were mainly salary and employee benefits expense. Non-GAAP Reconciliations to GAAP Financial Measures
21 December 31, September 30, December 31, December 31, December 31, ($ in thousands) 2023 2023 2022 2023 2022 Annual ized return on average tangible shareholders' equi ty (Non-GAAP): Net income, as reported (GAAP) $71,554 $141,346 $177,591 $498,511 $568,851 Average shareholders' equity 6,639,906 6,605,786 6,327,970 6,558,768 5,985,236 Less: Average goodwill and other intangible assets 2,033,656 2,042,486 2,074,367 2,047,172 1,944,503 Average tangible shareholders' equity 4,606,250 4,563,300 4,253,603 4,511,596 4,040,733 Annualized return on average tangible shareholders' equity (Non-GAAP): 6.21% 12.39% 16.70% 11.05% 14.08% Effic iency rat io (Non-GAAP): Non-interest expense, as reported (GAAP) $340,421 $267,133 $266,240 $1,162,691 $1,024,949 Less: FDIC Special assessment (pre-tax) 50,297 — — 50,297 — Less: Restructuring charge (pre-tax) (538) (675) — 9,969 — Less: Merger-related expenses (pre-tax) 10,000 — 7,372 14,133 71,203 Less: Amortization of tax credit investments (pre-tax) 4,547 4,191 3,213 18,009 12,407 Less: Litigation reserve (pre-tax) 3,540 — — 3,540 — Non-interest expense, as adjusted (Non-GAAP) $272,575 $263,617 $255,655 $1,066,743 $941,339 Net interest income, as reported (GAAP) 397,275 412,418 465,819 1,665,478 1,655,640 Non-interest income, as reported (GAAP) 52,691 58,664 52,796 225,729 206,793 Less: (Gains) losses on available for sale and held to maturity securities transactions, net (pre-tax) (877) 443 7 (401) (95) Less: Net gains on sales of office buildings (pre-tax) — (6,721) — (6,721) — Non-interest income, as adjusted (Non-GAAP) $51,814 $52,386 $52,803 218,607 $206,698 Gross operating income, as adjusted (Non-GAAP) 449,089 464,804 518,622 1,884,085 1,862,338 Efficiency ratio (Non-GAAP) 60.70% 56.72% 49.30% 56.62% 50.55% Annual ized pre-provision net revenue / average assets Net interest income, as reported (GAAP) $397,275 $412,418 $465,819 $1,665,478 $1,655,640 Non-interest income, as reported (GAAP) 52,691 58,664 52,796 225,729 206,793 Less: Non-interest expense, as reported (GAAP) 340,421 267,133 266,240 1,162,691 1,024,949 Pre-provision net revenue (GAAP) $109,545 $203,949 $252,375 $728,516 $837,484 Average assets $61,113,553 $61,391,688 $56,913,215 $61,065,897 $52,182,310 Annualized pre-provision net revenue / average assets (GAAP) 0.72% 1.33% 1.77% 1.19% 1.60% Annual ized pre-provision net revenue / average assets, as adjusted Pre-provision net revenue (GAAP) $109,545 $203,949 $252,375 $728,516 $837,484 Add: FDIC Special assessment (pre-tax) 50,297 — — 50,297 — Add: Restructuring charge (pre-tax) (538) (675) — 9,969 — Add: Merger-related expenses (pre-tax) 10,000 — 7,372 14,133 71,203 Add: Amortization of tax credit investments (pre-tax) 4,547 4,191 3,213 18,009 12,407 Add: Litigation reserve (pre-tax) 3,540 — — 3,540 — Less: (Gains) losses on available for sale and held to maturity securities transactions, net (pre-tax) (877) 443 7 (401) (95) Less: Net gains on sales of office buildings (pre-tax) — (6,721) — (6,721) — Pre-provision net revenue, as adjusted (Non-GAAP) 176,514 201,187 262,967 817,342 920,999 Average assets $61,113,553 $61,391,688 $56,913,215 $61,065,897 $52,182,310 Annualized pre-provision net revenue / average assets, as adjusted (Non-GAAP) 1.16% 1.31% 1.85% 1.34% 1.76% Years EndedThree Months Ended Non-GAAP Reconciliations to GAAP Financial Measures
22 December 31, September 30, June 30, March 31, December 31, December 31, ($ in thousands, except for share data) 2023 2023 2023 2023 2022 2021 Tangible book value per common share (Non-GAAP): Common shares outstanding 507,709,927 507,660,742 507,619,430 507,762,358 506,374,478 421,437,068 Shareholders' equity $6,701,391 $6,627,299 $6,575,184 $6,511,581 $6,400,802 $5,084,088 Less: Preferred Stock 209,691 209,691 209,691 209,691 209,691 209,691 Less: Goodwill and other intangible assets 2,029,267 2,038,202 2,046,882 2,056,107 2,066,392 1,529,394 Tangible common shareholders' equity (Non-GAAP) $4,462,433 $4,379,406 $4,318,611 $4,245,783 $4,124,719 $3,344,981 Tangible book value per common share (Non-GAAP): $8.79 $8.63 $8.51 $8.36 $8.15 $7.94 Book valuye per common share (GAAP) $12.79 $12.64 $12.54 $12.41 $12.23 $11.57 Tangible common equi ty to tangible assets (Non-GAAP): Tangible common shareholders' equity (Non-GAAP) $4,462,433 $4,379,406 $4,318,611 $4,245,783 $4,124,719 $3,344,981 Total assets 60,934,872 61,183,352 61,703,693 64,309,573 57,462,749 43,421,849 Less: Goodwill and other intangible assets 2,029,267 2,038,202 2,046,882 2,056,107 2,066,392 1,529,394 Tangible assets (Non-GAAP) 58,905,605 59,145,150 59,656,811 62,253,466 55,396,357 41,892,455 Tangible common equity to tangible assets (Non-GAAP) 7.58% 7.40% 7.24% 6.82% 7.45% 7.98% As of Non-GAAP Reconciliations to GAAP Financial Measures December 31, December 31, December 31, ($ in thousands, except for share data) 2020 2019 2018 Tangible book value per common share (Non-GAAP): Common shares outstanding 403,858,998 403,278,390 331,431,217 Shareholders' equity $4,592,120 $4,384,188 $3,350,454 Less: Preferred Stock 209,691 209,691 209,691 Less: Goodwill and other intangible assets 1,452,891 1,460,397 1,161,655 Tangible common shareholders' equity (Non-GAAP) $2,929,538 $2,714,100 $1,979,108 Tangible book value per common share (Non-GAAP): $7.25 $6.73 $5.79 Book valuye per common share (GAAP) $10.85 $10.35 $9.48 Tangible common equi ty to tangible assets (Non-GAAP): Tangible common shareholders' equity (Non-GAAP) $2,929,538 $2,714,100 $1,979,108 Total assets 40,693,576 37,436,020 31,863,088 Less: Goodwill and other intangible assets 1,452,891 1,460,397 1,161,655 Tangible assets (Non-GAAP) $39,240,685 $35,975,623 $30,701,433 Tangible common equity to tangible assets (Non-GAAP) 7.47% 7.54% 6.45% As of
23 ▪ Log onto our website: www.valley.com ▪ Email requests to: tlan@valley.com ▪ Call Travis Lan in Investor Relations, at: (973) 686-5007 ▪ Log onto our website above or www.sec.gov to obtain free copies of documents filed by Valley with the SEC For More Information
v3.23.4
Cover
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Jan. 25, 2024 |
Document Information [Line Items] |
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Document Type |
8-K
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Document Period End Date |
Jan. 25, 2024
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Entity Registrant Name |
Valley National Bancorp
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Entity Incorporation, State or Country Code |
NJ
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Entity File Number |
1-11277
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Entity Tax Identification Number |
22-2477875
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Entity Address, Address Line One |
One Penn Plaza,
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Entity Address, City or Town |
New York,
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Entity Address, State or Province |
NY
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Entity Address, Postal Zip Code |
10119
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City Area Code |
973
|
Local Phone Number |
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The Nasdaq Stock Market LLC | Common Stock, no par value |
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Common Stock, no par value
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VLY
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NASDAQ
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The Nasdaq Stock Market LLC | Non-Cumulative Perpetual Preferred Stock, Series A, no par value |
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Non-Cumulative Perpetual Preferred Stock, Series A, no par value
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VLYPP
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NASDAQ
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The Nasdaq Stock Market LLC | Non-Cumulative Perpetual Preferred Stock, Series B, no par value |
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Title of 12(b) Security |
Non-Cumulative Perpetual Preferred Stock, Series B, no par value
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VLYPO
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NASDAQ
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