Valley National Bancorp (NASDAQ:VLY), the holding company for Valley National Bank, today reported net income for the second quarter 2024 of $70.4 million, or $0.13 per diluted common share, as compared to the first quarter 2024 net income of $96.3 million, or $0.18 per diluted common share, and net income of $139.1 million, or $0.27 per diluted common share, for the second quarter 2023. Excluding all non-core income and charges, our adjusted net income (a non-GAAP measure) was $71.6 million, or $0.13 per diluted common share, for the second quarter 2024, $99.4 million, or $0.19 per diluted common share, for the first quarter 2024, and $147.1 million, or $0.28 per diluted common share, for the second quarter 2023. See further details below, including a reconciliation of our non-GAAP adjusted net income, in the "Consolidated Financial Highlights" tables.

Ira Robbins, CEO commented, "During the quarter we took steps to incrementally build balance sheet flexibility as we progress towards the goals that we have previously laid out. These efforts had the combined impact of enhancing regulatory capital and reducing our commercial real estate concentration as a percent of regulatory capital. As it relates to credit quality, our reported non-accrual and past due loans were generally stable at June 30, 2024. The allowance to loan coverage ratio trended higher, but in line with our expectations, reflecting, among other factors, our continuous monitoring and internal risk classification of commercial loans. The increase in the provision also resulted, in part, from specific reserves, a single commercial and industrial loan charge-off and a single commercial real estate loan charge-off. We continue to focus on accelerating commercial and industrial loan growth and core deposit growth as we further diversify and strengthen our balance sheet."

Mr. Robbins continued, "The sequential increase in net interest income was the result of both interest income growth and interest expense reduction relative to the first quarter 2024. We continue to work to optimize our funding base from a pricing and composition perspective. While fee income compressed during the second quarter, expenses remain well-controlled and we believe we are positioned for pre-provision earnings growth through the remainder of the year."

Key financial highlights for the second quarter 2024:

  • Net Interest Income and Margin: Net interest income on a tax equivalent basis of $403.0 million for the second quarter 2024 increased $8.1 million compared to the first quarter 2024 and decreased $18.3 million as compared to the second quarter 2023. The increase from the first quarter 2024 was mostly due to additional interest income from targeted growth within our available for sale securities portfolio, continued expansion of the yield on average loans and a four basis point decline in the cost of average interest bearing liabilities. Our net interest margin on a tax equivalent basis increased by 5 basis points to 2.84 percent in the second quarter 2024 as compared to 2.79 percent for the first quarter 2024. See the "Net Interest Income and Margin" section below for more details.
  • Loan Portfolio: Total loans increased $389.7 million, or 3.1 percent on an annualized basis, to $50.3 billion at June 30, 2024 from March 31, 2024 mainly as a result of our focus on new commercial and industrial loan production during the second quarter 2024. Strong indirect automobile loan originations from our dealer network, as well as modest organic commercial real estate loan volumes also contributed to the growth in total loans during the second quarter 2024. Loans held for sale decreased $41.9 million to $19.9 million at June 30, 2024 from March 31, 2024 mostly due to the previously disclosed sale of $34.1 million of construction loans at par during April 2024. See the "Loans" section below for more details.
  • Deposits: Total average deposits increased $807.2 million during the second quarter 2024 as compared to the first quarter 2024 driven by higher average balances across several deposit categories, including non-interest bearing deposits. Actual ending balances for deposits increased $1.0 billion to $50.1 billion at June 30, 2024 as compared to $49.1 billion at March 31, 2024 mainly due to higher levels of indirect customer certificates of deposit, partially offset by period-end balance fluctuations mostly within direct commercial customer deposit accounts. During the second quarter 2024, management entered into fair value swaps with a combined notional value of approximately $400 million that will effectively convert a portion of the fixed rate indirect time deposit portfolio to variable interest rates starting in the first quarter 2025. See the "Deposits" section below for more details.
  • Credit Risk Transfer: During June 2024, we completed a synthetic credit risk transfer transaction, consisting of a credit default swap, related to approximately $1.5 billion of our $1.8 billion automobile loan portfolio at June 30, 2024. While we have retained the auto loans on-balance sheet, the new credit protection significantly reduced the risk-weighted assets associated with these loans for regulatory capital purposes. As a result, Valley’s total risk-based capital, common equity Tier 1 capital and Tier 1 capital ratios benefited by approximately 20 basis points at June 30, 2024. Total transaction costs included $400 thousand of one-time charges and $1.1 million of premium expense recorded in other expense during the second quarter 2024. The premium expense associated with the credit protection is estimated to be approximately $6.0 million for the remainder of 2024. See the "Capital Adequacy" section below for more details.
  • Allowance and Provision for Credit Losses for Loans: The allowance for credit losses for loans totaled $532.5 million and $487.3 million at June 30, 2024 and March 31, 2024, respectively, representing 1.06 percent and 0.98 percent of total loans at each respective date. During the second quarter 2024, we recorded a provision for credit losses for loans of $82.1 million as compared to $45.3 million and $6.3 million for the first quarter 2024 and second quarter 2023, respectively. The increase in the second quarter 2024 provision was mainly due to higher quantitative reserves allocated to commercial real estate loans, commercial and industrial loan growth, and additional specific reserves and charge-offs associated with the revaluation of collateral dependent commercial loans at June 30, 2024.
  • Credit Quality: Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) decreased to 0.14 percent of total loans at June 30, 2024 as compared to 0.15 percent at March 31, 2024, while non-accrual loans increased to 0.60 percent of total loans at June 30, 2024 as compared to 0.58 percent at March 31, 2024. Net loan charge-offs totaled $36.8 million for the second quarter 2024 as compared to $23.6 million and $8.6 million for the first quarter 2024 and second quarter 2023, respectively. The loan charge-offs in the second quarter 2024 included partial charge-offs totaling a combined $31.6 million related to two commercial loan relationships. See the "Credit Quality" section below for more details.
  • Non-Interest Income: Non-interest income decreased $10.2 million to $51.2 million for the second quarter 2024 as compared to the first quarter 2024 mainly due to previously anticipated decreases in periodic revenue associated with our tax credit advisory subsidiary (within wealth management and trust fees) and net gains on sale of assets totaling $4.8 million and $3.7 million, respectively. Other income also decreased $5.5 million as compared to first quarter 2024 due, in part, to the decline in the valuation of certain equity method investments at June 30, 2024. These decreases were partially offset by increases in swap fees related to commercial loan transactions (within capital market fees), insurance commissions and bank owned life insurance income.
  • Non-Interest Expense: Non-interest expense decreased $2.8 million to $277.5 million for the second quarter 2024 as compared to the first quarter 2024 largely due to a lower FDIC insurance assessment expense. During the second quarter 2024 and first quarter 2024, we recorded additional estimated expenses of $1.4 million and $7.4 million, respectively, related to the FDIC special assessment. The decrease was partially offset by higher professional and legal expense and other expense during the second quarter 2024. Other expense increased $1.5 million from the first quarter 2024 partially due to costs related to the loan credit risk transfer transaction (described above).
  • Efficiency Ratio: Our efficiency ratio was 59.62 percent for the second quarter 2024 as compared to 59.10 percent and 55.59 percent for the first quarter 2024 and second quarter 2023, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.
  • Performance Ratios: Annualized return on average assets (ROA), shareholders’ equity (ROE) and tangible ROE were 0.46 percent, 4.17 percent and 5.95 percent for the second quarter 2024, respectively. Annualized ROA, ROE, and tangible ROE, adjusted for non-core income and charges, were 0.47 percent, 4.24 percent and 6.05 percent for the second quarter 2024, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.

Net Interest Income and Margin

Net interest income on a tax equivalent basis of $403.0 million for the second quarter 2024 increased $8.1 million compared to the first quarter 2024 and decreased $18.3 million as compared to the second quarter 2023. Interest income on a tax equivalent basis increased $4.8 million to $834.8 million for the second quarter 2024 as compared to the first quarter 2024 mostly due to additional interest income from targeted investment purchases within the available for sale securities portfolio, as well as higher average overnight interest bearing deposits with banks during the second quarter 2024. A higher yield on average loans also contributed to the increase in interest income, but was more than offset by the impact of lower average loan balances during the second quarter 2024 mostly caused by the sale of certain commercial loans in the first quarter 2024 and April 2024. Total interest expense decreased $3.3 million to $431.8 million for the second quarter 2024 as compared to the first quarter 2024 mainly due to greater utilization of long-term FHLB borrowings and indirect customer time deposits as liquidity funding sources and a reduction in higher cost short-term FHLB borrowings starting in March 2024. See the "Deposits" and "Other Borrowings" sections below for more details.

Net interest margin on a tax equivalent basis of 2.84 percent for the second quarter 2024 increased by 5 basis points from 2.79 percent for the first quarter 2024 and decreased 10 basis points from 2.94 percent for the second quarter 2023. The increase as compared to the first quarter 2024 was largely driven by the combination of a higher yield on average interest earning assets and a decline in the cost of average interest bearing liabilities. The yield on average interest earning assets increased by 2 basis points to 5.88 percent on a linked quarter basis largely due to higher yielding investment purchases and new loan originations during the second quarter 2024. The overall cost of average interest bearing liabilities decreased 4 basis points to 4.15 percent for the second quarter 2024 as compared to the first quarter 2024 primarily due to a reduction in both higher cost short-term FHLB borrowings and government banking non-maturity deposit account balances. Our cost of total average deposits was 3.18 percent for the second quarter 2024 as compared to 3.16 percent and 2.45 percent for the first quarter 2024 and the second quarter 2023, respectively.

Loans, Deposits and Other Borrowings

Loans. Total loans increased $389.7 million, or 3.1 percent on an annualized basis, to $50.3 billion at June 30, 2024 from March 31, 2024. Commercial and industrial loans grew by $376.2 million, or 16.5 percent on an annualized basis, to $9.5 billion at June 30, 2024 from March 31, 2024 largely due to our stronger focus on new loan production within this category. Total commercial real estate (including construction) loans increased $63.4 million, or only 0.8 percent on an annualized basis, to $31.8 billion at June 30, 2024 from March 31, 2024 as we remained highly selective on new originations and projects. Automobile loan balances increased by $62.3 million, or 14.7 percent on an annualized basis, to $1.8 billion at June 30, 2024 from March 31, 2024 mainly due to continued consumer demand generated by our indirect auto dealer network and low prepayment activity within the portfolio. Other consumer loans decreased $122.2 million, or 39.7 percent on an annualized basis, to $1.1 billion at June 30, 2024 from March 31, 2024 primarily due to the negative impact of high market interest rates on the demand and usage of collateralized personal lines of credit.

Deposits. Actual ending balances for deposits increased $1.0 billion to $50.1 billion at June 30, 2024 from March 31, 2024 mainly due to an increase of $1.5 billion in time deposits, partially offset by a decrease of $349.8 million in savings, NOW and money market deposits and a decrease of $155.6 million in non-interest bearing deposits. The increase in time deposits was mainly due to a $1.7 billion increase in indirect customer CDs. During the second quarter 2024, management entered into fair value swap transactions with a combined notional value of approximately $400 million that will effectively convert a portion of its fixed rate indirect CD portfolio to variable interest rates starting in the first quarter 2025 and expiring at various dates during the second quarters 2026 and 2027. Non-interest bearing deposit and savings, NOW and money market deposit balances declined at June 30, 2024 from March 31, 2024 partly due to period-end fluctuations within certain direct commercial customer deposit accounts. Non-interest bearing deposits; savings, NOW and money market deposits; and time deposits represented approximately 22 percent, 49 percent and 29 percent of total deposits as of June 30, 2024, respectively, as compared to 23 percent, 51 percent and 26 percent of total deposits as of March 31, 2024, respectively.

Other Borrowings. Short-term borrowings decreased $11.5 million to $63.8 million at June 30, 2024 as compared to March 31, 2024 mainly due to a moderate decline in securities sold under repurchase agreements. Long-term borrowings totaled $3.3 billion at June 30, 2024 and also remained relatively unchanged as compared to March 31, 2024.

Credit Quality

Non-Performing Assets (NPAs). Total NPAs, consisting of non-accrual loans, other real estate owned (OREO) and other repossessed assets, increased $24.2 million to $312.9 million at June 30, 2024 as compared to March 31, 2024. Non-accrual commercial real estate loans increased $23.0 million to $123.0 million at June 30, 2024 as compared to March 31, 2024 mainly due to two additional non-performing loan relationships totaling $24.1 million placed on non-accrual status during the second quarter 2024. Non-accrual loans represented 0.60 percent of total loans at June 30, 2024 as compared to 0.58 percent of total loans at March 31, 2024. OREO increased $8.0 million at June 30, 2024 from March 31, 2024 due to the foreclosure and transfer of two commercial real estate properties from the loan portfolio during the second quarter 2024.

Accruing Past Due Loans. Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) decreased $2.0 million to $72.4 million, or 0.14 percent of total loans, at June 30, 2024 as compared to $74.4 million, or 0.15 percent of total loans at March 31, 2024. Loans 30 to 59 days past due decreased $851 thousand to $46.0 million at June 30, 2024 as compared to March 31, 2024. Loans 60 to 89 days past due decreased $2.3 million to $11.9 million at June 30, 2024 as compared to March 31, 2024 mostly due to a commercial real estate loan relationship totaling $3.7 million at March 31, 2024 that migrated from this past due category to non-accrual loans during the second quarter 2024. Loans 90 days or more past due and still accruing interest increased $1.1 million to $14.5 million at June 30, 2024 as compared to March 31, 2024 largely due to one commercial real estate loan. All loans 90 days or more past due and still accruing interest are well-secured and in the process of collection.

Allowance for Credit Losses for Loans and Unfunded Commitments. The following table summarizes the allocation of the allowance for credit losses to loan categories and the allocation as a percentage of each loan category at June 30, 2024, March 31, 2024 and June 30, 2023:

  June 30, 2024   March 31, 2024   June 30, 2023
      Allocation       Allocation       Allocation
      as a % of       as a % of       as a % of
  Allowance   Loan   Allowance   Loan   Allowance   Loan
  Allocation   Category   Allocation   Category   Allocation   Category
  ($ in thousands)
Loan Category:                      
Commercial and industrial loans $ 149,243       1.57 %   $ 138,593       1.52 %   $ 128,245       1.38 %
Commercial real estate loans:                      
Commercial real estate   246,316       0.87       209,355       0.74       194,177       0.70  
Construction   54,777       1.54       56,492       1.59       45,518       1.19  
Total commercial real estate loans   301,093       0.95       265,847       0.84       239,695       0.76  
Residential mortgage loans   47,697       0.85       44,377       0.79       44,153       0.79  
Consumer loans:                      
Home equity   3,077       0.54       2,809       0.50       4,020       0.75  
Auto and other consumer   18,200       0.63       17,622       0.60       20,319       0.70  
Total consumer loans   21,277       0.62       20,431       0.58       24,339       0.71  
Allowance for loan losses   519,310       1.03       469,248       0.94       436,432       0.88  
Allowance for unfunded credit commitments   13,231           18,021           22,244      
Total allowance for credit losses for loans $ 532,541         $ 487,269         $ 458,676      
Allowance for credit losses for loans as a % total loans       1.06 %         0.98 %         0.92 %
                                   

Our loan portfolio, totaling $50.3 billion at June 30, 2024, had net loan charge-offs totaling $36.8 million for the second quarter 2024 as compared to $23.6 million and $8.6 million for the first quarter 2024 and the second quarter 2023, respectively. The loan charge-offs in the second quarter 2024 included partial charge-offs totaling $20.6 million and $11.0 million related to a single commercial real estate loan relationship and one commercial and industrial loan, respectively. The commercial and industrial loan had specific reserves totaling $8.0 million within the allowance for loan losses at March 31, 2024.

The allowance for credit losses for loans, comprised of our allowance for loan losses and unfunded credit commitments, as a percentage of total loans was 1.06 percent at June 30, 2024, 0.98 percent at March 31, 2024, and 0.92 percent at June 30, 2023. For the second quarter 2024, the provision for credit losses for loans totaled $82.1 million as compared to $45.3 million and $6.3 million for the first quarter 2024 and second quarter 2023, respectively. The increased provision for credit losses for the second quarter 2024 was mainly due to higher quantitative reserves allocated to commercial real estate loans, commercial and industrial loan growth, and additional specific reserves and charge-offs associated with the revaluation of collateral dependent commercial loans at June 30, 2024. The allowance for unfunded credit commitments declined to $13.2 million at June 30, 2024 mainly due to a continued decline in the level of our commercial real estate loan commitments pipeline.

Capital Adequacy

Valley's total risk-based capital, common equity Tier 1 capital, Tier 1 capital and Tier 1 leverage capital ratios were 12.18 percent, 9.55 percent, 9.99 percent and 8.19 percent, respectively, at June 30, 2024 as compared to 11.88 percent, 9.34 percent, 9.78 percent, 8.20 percent, respectively at March 31, 2024. The increases in the total risk-based capital, common equity Tier 1 capital, and Tier 1 capital ratios as compared to March 31, 2024 were largely due to the aforementioned credit risk transfer transaction related to a portion of the automobile loan portfolio executed in June 2024.

Investor Conference Call

Valley will host a conference call with investors and the financial community at 11:00 AM (ET) today to discuss the second quarter 2024 earnings and related matters. Interested parties should preregister using this link: https://register.vevent.com/register to receive the dial-in number and a personal PIN, which are required to access the conference call. The teleconference will also be webcast live: https://edge.media-server.com and archived on Valley’s website through Monday, September 2, 2024. Investor presentation materials will be made available prior to the conference call at www.valley.com.

About Valley

As the principal subsidiary of Valley National Bancorp, Valley National Bank is a regional bank with over $62 billion in assets. Valley is committed to giving people and businesses the power to succeed. Valley operates many convenient branch locations and commercial banking offices across New Jersey, New York, Florida, Alabama, California and Illinois, and is committed to providing the most convenient service, the latest innovations and an experienced and knowledgeable team dedicated to meeting customer needs. Helping communities grow and prosper is the heart of Valley’s corporate citizenship philosophy. To learn more about Valley, go to www.valley.com or call our Customer Care Center at 800-522-4100.

Forward Looking Statements

The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about our business, new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology as “intend,” “should,” “expect,” “believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “typically,” “usually,” “anticipate,” “may,” “estimate,” “outlook,” “project” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:

  • the impact of monetary and fiscal policies of the U.S. federal government and its agencies, including in connection with prolonged inflationary pressures, as well as the impact of the 2024 U.S presidential election, which could have a material adverse effect on our clients, as well as our business, our employees, and our ability to provide services to our customers;
  • the impact of unfavorable macroeconomic conditions or downturns, including an actual or threatened U.S. government shutdown, debt default or rating downgrade, instability or volatility in financial markets, unanticipated loan delinquencies, loss of collateral, decreased service revenues, increased business disruptions or failures, reductions in employment, and other potential negative effects on our business, employees or clients caused by factors outside of our control, such as geopolitical instabilities or events (including the Israel-Hamas war); natural and other disasters (including severe weather events); health emergencies; acts of terrorism; or other external events;
  • the impact of potential instability within the U.S. financial sector in the aftermath of the banking failures in 2023 and continued volatility thereafter, including the possibility of a run on deposits by a coordinated deposit base, and the impact of the actual or perceived soundness, or concerns about the creditworthiness of other financial institutions, including any resulting disruption within the financial markets, increased expenses, including Federal Deposit Insurance Corporation insurance assessments, or adverse impact on our stock price, deposits or our ability to borrow or raise capital;
  • the impact of negative public opinion regarding Valley or banks in general that damages our reputation and adversely impacts business and revenues;
  • changes in the statutes, regulations, policy, or enforcement priorities of the federal bank regulatory agencies;
  • the loss of or decrease in lower-cost funding sources within our deposit base;
  • damage verdicts or settlements or restrictions related to existing or potential class action litigation or individual litigation arising from claims of violations of laws or regulations, contractual claims, breach of fiduciary responsibility, negligence, fraud, environmental laws, patent, trademark or other intellectual property infringement, misappropriation or other violation, employment related claims, and other matters;
  • a prolonged downturn and contraction in the economy, as well as an unexpected decline in commercial real estate values collateralizing a significant portion of our loan portfolio;
  • higher or lower than expected income tax expense or tax rates, including increases or decreases resulting from changes in uncertain tax position liabilities, tax laws, regulations, and case law;
  • the inability to grow customer deposits to keep pace with loan growth;
  • a material change in our allowance for credit losses under CECL due to forecasted economic conditions and/or unexpected credit deterioration in our loan and investment portfolios;
  • the need to supplement debt or equity capital to maintain or exceed internal capital thresholds;
  • changes in our business, strategy, market conditions or other factors that may negatively impact the estimated fair value of our goodwill and other intangible assets and result in future impairment charges;
  • greater than expected technology related costs due to, among other factors, prolonged or failed implementations, additional project staffing and obsolescence caused by continuous and rapid market innovations;
  • cyberattacks, ransomware attacks, computer viruses, malware or other cybersecurity incidents that may breach the security of our websites or other systems or networks to obtain unauthorized access to personal, confidential, proprietary or sensitive information, destroy data, disable or degrade service, or sabotage our systems or networks;
  • results of examinations by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Bank, the Consumer Financial Protection Bureau (CFPB) and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for credit losses, write-down assets, reimburse customers, change the way we do business, or limit or eliminate certain other banking activities;
  • application of the OCC heightened regulatory standards for certain large insured national banks, and the expenses we will incur to develop policies, programs, and systems that comply with the enhanced standards applicable to us;
  • our inability or determination not to pay dividends at current levels, or at all, because of inadequate earnings, regulatory restrictions or limitations, changes in our capital requirements, or a decision to increase capital by retaining more earnings;
  • unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, pandemics or other public health crises, acts of terrorism or other external events;
  • our ability to successfully execute our business plan and strategic initiatives; and
  • unexpected significant declines in the loan portfolio due to the lack of economic expansion, increased competition, large prepayments, changes in regulatory lending guidance or other factors.

A detailed discussion of factors that could affect our results is included in our SEC filings, including Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2023.

We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations, except as required by law. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

-Tables to Follow-

VALLEY NATIONAL BANCORPCONSOLIDATED FINANCIAL HIGHLIGHTS

SELECTED FINANCIAL DATA

  Three Months Ended   Six Months Ended
($ in thousands, except for share data and stock price) June 30,   March 31,   June 30,   June 30,
  2024       2024       2023       2024       2023  
FINANCIAL DATA:                  
Net interest income - FTE (1) $ 402,984     $ 394,847     $ 421,275     $ 797,831     $ 858,733  
Net interest income   401,685       393,548       419,765     $ 795,233     $ 855,785  
Non-interest income   51,213       61,415       60,075       112,628       114,374  
Total revenue   452,898       454,963       479,840       907,861       970,159  
Non-interest expense   277,497       280,310       282,971       557,807       555,137  
Pre-provision net revenue   175,401       174,653       196,869       350,054       415,022  
Provision for credit losses   82,070       45,200       6,050       127,270       20,487  
Income tax expense   22,907       33,173       51,759       56,080       108,924  
Net income   70,424       96,280       139,060       166,704       285,611  
Dividends on preferred stock   4,108       4,119       4,030       8,227       7,904  
Net income available to common shareholders $ 66,316     $ 92,161     $ 135,030     $ 158,477     $ 277,707  
Weighted average number of common shares outstanding:                  
Basic   509,141,252       508,340,719       507,690,043       508,740,986       507,402,268  
Diluted   510,338,502       510,633,945       508,643,025       510,437,959       509,076,303  
Per common share data:                  
Basic earnings $ 0.13     $ 0.18     $ 0.27     $ 0.31     $ 0.55  
Diluted earnings   0.13       0.18       0.27       0.31       0.55  
Cash dividends declared   0.11       0.11       0.11       0.22       0.22  
Closing stock price - high   8.02       10.80       9.38       10.80       12.59  
Closing stock price - low   6.52       7.43       6.59       6.52       6.59  
FINANCIAL RATIOS:                  
Net interest margin   2.83 %     2.78 %     2.93 %     2.81 %     3.04 %
Net interest margin - FTE (1)   2.84       2.79       2.94       2.82       3.05  
Annualized return on average assets   0.46       0.63       0.90       0.54       0.94  
Annualized return on avg. shareholders' equity   4.17       5.73       8.50       4.95       8.80  
NON-GAAP FINANCIAL DATA AND RATIOS: (3)                  
Basic earnings per share, as adjusted $ 0.13     $ 0.19     $ 0.28     $ 0.32     $ 0.58  
Diluted earnings per share, as adjusted   0.13       0.19       0.28       0.32       0.58  
Annualized return on average assets, as adjusted   0.47 %     0.65 %     0.95 %     0.56 %     0.99 %
Annualized return on average shareholders' equity, as adjusted   4.24       5.91       8.99       5.08       9.29  
Annualized return on avg. tangible shareholders' equity   5.95 %     8.19 %     12.37 %     7.07 %     12.87 %
Annualized return on average tangible shareholders' equity, as adjusted   6.05       8.46       13.09       7.25       13.59  
Efficiency ratio   59.62       59.10       55.59       59.36       54.69  
                   
AVERAGE BALANCE SHEET ITEMS:                  
Assets $ 61,518,639     $ 61,256,868     $ 61,877,464     $ 61,387,754     $ 60,877,792  
Interest earning assets   56,772,950       56,618,797       57,351,808       56,695,874       56,362,794  
Loans   50,020,901       50,246,591       49,457,937       50,133,746       48,663,070  
Interest bearing liabilities   41,576,344       41,556,588       40,925,791       41,566,466       39,281,405  
Deposits   49,383,209       48,575,974       47,464,469       48,979,591       47,309,554  
Shareholders' equity   6,753,981       6,725,695       6,546,452       6,739,838       6,493,627  
                                       
  As Of
BALANCE SHEET ITEMS: June 30,   March 31,   December 31,   September 30,   June 30,
(In thousands)   2024       2024       2023       2023       2023  
Assets $ 62,058,974     $ 61,000,188     $ 60,934,974     $ 61,183,352     $ 61,703,693  
Total loans   50,311,702       49,922,042       50,210,295       50,097,519       49,877,248  
Deposits   50,112,177       49,077,946       49,242,829       49,885,314       49,619,815  
Shareholders' equity   6,737,737       6,727,139       6,701,391       6,627,299       6,575,184  
                   
LOANS:                  
(In thousands)                  
Commercial and industrial $ 9,479,147     $ 9,104,193     $ 9,230,543     $ 9,274,630     $ 9,287,309  
Commercial real estate:                  
Non owner-occupied   13,710,015       14,962,851       15,078,464       14,741,668       14,581,531  
Multifamily   8,976,264       8,818,263       8,860,219       8,863,529       8,796,008  
Owner occupied   5,536,844       4,367,839       4,304,556       4,435,853       4,415,533  
Construction   3,545,723       3,556,511       3,726,808       3,833,269       3,815,761  
Total commercial real estate   31,768,846       31,705,464       31,970,047       31,874,319       31,608,833  
Residential mortgage   5,627,113       5,618,355       5,569,010       5,562,665       5,560,356  
Consumer:                  
Home equity   566,467       564,083       559,152       548,918       535,493  
Automobile   1,762,852       1,700,508       1,620,389       1,585,987       1,632,875  
Other consumer   1,107,277       1,229,439       1,261,154       1,251,000       1,252,382  
Total consumer loans   3,436,596       3,494,030       3,440,695       3,385,905       3,420,750  
Total loans $ 50,311,702     $ 49,922,042     $ 50,210,295     $ 50,097,519     $ 49,877,248  
                   
CAPITAL RATIOS:                  
Book value per common share $ 12.82     $ 12.81     $ 12.79     $ 12.64     $ 12.54  
Tangible book value per common share (3)   8.87       8.84       8.79       8.63       8.51  
Tangible common equity to tangible assets (3)   7.52 %     7.62 %     7.58 %     7.40 %     7.24 %
Tier 1 leverage capital   8.19       8.20       8.16       8.08       7.86  
Common equity tier 1 capital   9.55       9.34       9.29       9.21       9.03  
Tier 1 risk-based capital   9.99       9.78       9.72       9.64       9.47  
Total risk-based capital   12.18       11.88       11.76       11.68       11.52  
                                       
  Three Months Ended   Six Months Ended
ALLOWANCE FOR CREDIT LOSSES: June 30,   March 31,   June 30,   June 30,
($ in thousands)   2024       2024       2023       2024       2023  
Allowance for credit losses for loans                  
Beginning balance $ 487,269     $ 465,550     $ 460,969     $ 465,550     $ 483,255  
Impact of the adoption of ASU No. 2022-02                           (1,368 )
Beginning balance, adjusted   487,269       465,550       460,969       465,550       481,887  
Loans charged-off:                  
Commercial and industrial   (14,721 )     (14,293 )     (3,865 )     (29,014 )     (29,912 )
Commercial real estate   (22,144 )     (1,204 )     (2,065 )     (23,348 )     (2,065 )
Construction   (212 )     (7,594 )     (4,208 )     (7,806 )     (9,906 )
Residential mortgage               (149 )           (149 )
Total consumer   (1,262 )     (1,809 )     (1,040 )     (3,071 )     (1,868 )
Total loans charged-off   (38,339 )     (24,900 )     (11,327 )     (63,239 )     (43,900 )
Charged-off loans recovered:                  
Commercial and industrial   742       682       2,173       1,424       3,572  
Commercial real estate   150       241       4       391       28  
Residential mortgage   5       25       135       30       156  
Total consumer   603       397       390       1,000       1,151  
Total loans recovered   1,500       1,345       2,702       2,845       4,907  
Total net charge-offs   (36,839 )     (23,555 )     (8,625 )     (60,394 )     (38,993 )
Provision for credit losses for loans   82,111       45,274       6,332       127,385       15,782  
Ending balance $ 532,541     $ 487,269     $ 458,676     $ 532,541     $ 458,676  
Components of allowance for credit losses for loans:                  
Allowance for loan losses $ 519,310     $ 469,248     $ 436,432     $ 519,310     $ 436,432  
Allowance for unfunded credit commitments   13,231       18,021       22,244       13,231       22,244  
Allowance for credit losses for loans $ 532,541     $ 487,269     $ 458,676     $ 532,541     $ 458,676  
Components of provision for credit losses for loans:                  
Provision for credit losses for loans $ 86,901     $ 46,723     $ 8,159     $ 133,624     $ 18,138  
Credit for unfunded credit commitments   (4,790 )     (1,449 )     (1,827 )     (6,239 )     (2,356 )
Total provision for credit losses for loans $ 82,111     $ 45,274     $ 6,332     $ 127,385     $ 15,782  
Annualized ratio of total net charge-offs to total average loans   0.29 %     0.19 %     0.07 %     0.24 %     0.16 %
Allowance for credit losses for loans as a % of total loans   1.06 %     0.98 %     0.92 %     1.06 %     0.92 %
                                       
  As Of
ASSET QUALITY: June 30,   March 31,   December 31,   September 30,   June 30,
($ in thousands)   2024       2024       2023       2023       2023  
Accruing past due loans:                  
30 to 59 days past due:                  
Commercial and industrial $ 5,086     $ 6,202     $ 9,307     $ 10,687     $ 6,229  
Commercial real estate   1,879       5,791       3,008       8,053       3,612  
Residential mortgage   17,389       20,819       26,345       13,159       15,565  
Total consumer   21,639       14,032       20,554       15,509       8,431  
Total 30 to 59 days past due   45,993       46,844       59,214       47,408       33,837  
60 to 89 days past due:                  
Commercial and industrial   1,621       2,665       5,095       5,720       7,468  
Commercial real estate         3,720       1,257       2,620        
Residential mortgage   6,632       5,970       8,200       9,710       1,348  
Total consumer   3,671       1,834       4,715       1,720       4,126  
Total 60 to 89 days past due   11,924       14,189       19,267       19,770       12,942  
90 or more days past due:                  
Commercial and industrial   2,739       5,750       5,579       6,629       6,599  
Commercial real estate   4,242                         2,242  
Construction   3,990       3,990       3,990       3,990       3,990  
Residential mortgage   2,609       2,884       2,488       1,348       1,165  
Total consumer   898       731       1,088       391       1,006  
Total 90 or more days past due   14,478       13,355       13,145       12,358       15,002  
Total accruing past due loans $ 72,395     $ 74,388     $ 91,626     $ 79,536     $ 61,781  
Non-accrual loans:                  
Commercial and industrial $ 102,942     $ 102,399     $ 99,912     $ 87,655     $ 84,449  
Commercial real estate   123,011       100,052       99,739       83,338       82,712  
Construction   45,380       51,842       60,851       62,788       63,043  
Residential mortgage   28,322       28,561       26,986       21,614       20,819  
Total consumer   3,624       4,438       4,383       3,545       3,068  
Total non-accrual loans   303,279       287,292       291,871       258,940       254,091  
Other real estate owned (OREO)   8,059       88       71       71       824  
Other repossessed assets   1,607       1,393       1,444       1,314       1,230  
Total non-performing assets $ 312,945     $ 288,773     $ 293,386     $ 260,325     $ 256,145  
Total non-accrual loans as a % of loans   0.60 %     0.58 %     0.58 %     0.52 %     0.51 %
Total accruing past due and non-accrual loans as a % of loans   0.75       0.72       0.76       0.68       0.63  
Allowance for losses on loans as a % of non-accrual loans   171.23       163.33       152.83       170.76       171.76  
                                       

NOTES TO SELECTED FINANCIAL DATA

(1)   Net interest income and net interest margin are presented on a tax equivalent basis using a 21 percent federal tax rate. Valley believes that this presentation provides comparability of net interest income and net interest margin arising from both taxable and tax-exempt sources and is consistent with industry practice and SEC rules.
(2)   Non-GAAP Reconciliations. This press release contains certain supplemental financial information, described in the Notes below, which has been determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP") that management uses in its analysis of Valley's performance. The Company believes that the non-GAAP financial measures provide useful supplemental information to both management and investors in understanding Valley’s underlying operational performance, business and performance trends, and may facilitate comparisons of our current and prior performance with the performance of others in the financial services industry. Management utilizes these measures for internal planning, forecasting and analysis purposes. Management believes that Valley’s presentation and discussion of this supplemental information, together with the accompanying reconciliations to the GAAP financial measures, also allows investors to view performance in a manner similar to management. These non-GAAP financial measures should not be considered in isolation or as a substitute for or superior to financial measures calculated in accordance with U.S. GAAP. These non-GAAP financial measures may also be calculated differently from similar measures disclosed by other companies.
     

Non-GAAP Reconciliations to GAAP Financial Measures
 
  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,   June 30,
($ in thousands, except for share data)   2024       2024       2023       2024       2023  
Adjusted net income available to common shareholders (non-GAAP):                  
Net income, as reported (GAAP) $ 70,424     $ 96,280     $ 139,060     $ 166,704     $ 285,611  
Add: FDIC Special assessment (a)   1,363       7,394             8,757        
Add: Losses on available for sale and held to maturity debt securities, net (b)   4       7       9       11       33  
Add: Restructuring charge (c)   334       620       11,182       954       11,182  
Less: Gain on sale of commercial premium finance lending division (d)         (3,629 )           (3,629 )      
Add: Provision for credit losses for available for sale securities (e)                           5,000  
Add: Merger related expenses (f)                           4,133  
Total non-GAAP adjustments to net income   1,701       4,392       11,191       6,093       20,348  
Income tax adjustments related to non-GAAP adjustments (g)   (482 )     (1,224 )     (3,170 )     (1,706 )     (4,348 )
Net income, as adjusted (non-GAAP) $ 71,643     $ 99,448     $ 147,081     $ 171,091     $ 301,611  
Dividends on preferred stock   4,108       4,119       4,030       8,227       7,904  
Net income available to common shareholders, as adjusted (non-GAAP) $ 67,535     $ 95,329     $ 143,051     $ 162,864     $ 293,707  
__________                  
(a) Included in the FDIC insurance expense.
(b) Included in gains on securities transactions, net.
(c) Represents severance expense related to workforce reductions within salary and employee benefits expense.
(d) Included in net (losses) gains on sale of assets.
(e) Included in provision for credit losses for available for sale and held to maturity securities (tax disallowed).
(f) Represents salary and employee benefits expense during the second quarter 2023.
(g) Calculated using the appropriate blended statutory tax rate for the applicable period.
 
Adjusted per common share data (non-GAAP):                  
Net income available to common shareholders, as adjusted (non-GAAP) $ 67,535     $ 95,329     $ 143,051     $ 162,864     $ 293,707  
Average number of shares outstanding   509,141,252       508,340,719       507,690,043       508,740,986       507,402,268  
Basic earnings, as adjusted (non-GAAP) $ 0.13     $ 0.19     $ 0.28     $ 0.32     $ 0.58  
Average number of diluted shares outstanding   510,338,502       510,633,945       508,643,025       510,437,959       509,076,303  
Diluted earnings, as adjusted (non-GAAP) $ 0.13     $ 0.19     $ 0.28     $ 0.32     $ 0.58  
Adjusted annualized return on average tangible shareholders' equity (non-GAAP):                  
Net income, as adjusted (non-GAAP) $ 71,643     $ 99,448     $ 147,081     $ 171,091     $ 301,611  
Average shareholders' equity $ 6,753,981     $ 6,725,695     $ 6,546,452       6,739,838       6,493,627  
Less: Average goodwill and other intangible assets   2,016,766       2,024,999       2,051,591       2,020,883       2,056,487  
Average tangible shareholders' equity $ 4,737,215     $ 4,700,696     $ 4,494,861     $ 4,718,955     $ 4,437,140  
Annualized return on average tangible shareholders' equity, as adjusted (non-GAAP)   6.05 %     8.46 %     13.09 %     7.25 %     13.59 %
Adjusted annualized return on average assets (non-GAAP):                  
Net income, as adjusted (non-GAAP) $ 71,643     $ 99,448     $ 147,081     $ 171,091     $ 301,611  
Average assets $ 61,518,639     $ 61,256,868     $ 61,877,464     $ 61,387,754     $ 60,877,792  
Annualized return on average assets, as adjusted (non-GAAP)   0.47 %     0.65 %     0.95 %     0.56 %     0.99 %
                                       

Non-GAAP Reconciliations to GAAP Financial Measures (Continued)
 
  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,   June 30,
($ in thousands, except for share data)   2024       2024       2023       2024       2023  
Adjusted annualized return on average shareholders' equity (non-GAAP):                  
Net income, as adjusted (non-GAAP) $ 71,643     $ 99,448     $ 147,081     $ 171,091     $ 301,611  
Average shareholders' equity $ 6,753,981     $ 6,725,695     $ 6,546,452     $ 6,739,838     $ 6,493,627  
Annualized return on average shareholders' equity, as adjusted (non-GAAP)   4.24 %     5.91 %     8.99 %     5.08 %     9.29 %
Annualized return on average tangible shareholders' equity (non-GAAP):                  
Net income, as reported (GAAP) $ 70,424     $ 96,280     $ 139,060     $ 166,704     $ 285,611  
Average shareholders' equity   6,753,981       6,725,695       6,546,452       6,739,838       6,493,627  
Less: Average goodwill and other intangible assets   2,016,766       2,024,999       2,051,591       2,020,883       2,056,487  
Average tangible shareholders' equity $ 4,737,215     $ 4,700,696     $ 4,494,861     $ 4,718,955     $ 4,437,140  
Annualized return on average tangible shareholders' equity (non-GAAP)   5.95 %     8.19 %     12.37 %     7.07 %     12.87 %
Efficiency ratio (non-GAAP):                  
Non-interest expense, as reported (GAAP) $ 277,497     $ 280,310     $ 282,971     $ 557,807     $ 555,137  
Less: FDIC Special assessment (pre-tax)   1,363       7,394             8,757        
Less: Restructuring charge (pre-tax)   334       620       11,182       954       11,182  
Less: Merger-related expenses (pre-tax)                           4,133  
Less: Amortization of tax credit investments (pre-tax)   5,791       5,562       5,018       11,353       9,271  
Non-interest expense, as adjusted (non-GAAP) $ 270,009     $ 266,734     $ 266,771     $ 536,743     $ 530,551  
Net interest income, as reported (GAAP)   401,685       393,548       419,765       795,233       855,785  
Non-interest income, as reported (GAAP)   51,213       61,415       60,075       112,628       114,374  
Add: Losses on available for sale and held to maturity securities transactions, net (pre-tax)   4       7       9       11       33  
Less: Gain on sale of premium finance division (pre-tax)         (3,629 )           (3,629 )      
Non-interest income, as adjusted (non-GAAP) $ 51,217     $ 57,793     $ 60,084     $ 109,010     $ 114,407  
Gross operating income, as adjusted (non-GAAP) $ 452,902     $ 451,341     $ 479,849     $ 904,243     $ 970,192  
Efficiency ratio (non-GAAP)   59.62 %     59.10 %     55.59 %     59.36 %     54.69 %
                                       
  As of
  June 30,   March 31,   December 31,   September 30,   June 30,
($ in thousands, except for share data)   2024       2024       2023       2023       2023  
Tangible book value per common share (non-GAAP):                  
Common shares outstanding   509,205,014       508,893,059       507,709,927       507,660,742       507,619,430  
Shareholders' equity (GAAP) $ 6,737,737     $ 6,727,139     $ 6,701,391     $ 6,627,299     $ 6,575,184  
Less: Preferred stock   209,691       209,691       209,691       209,691       209,691  
Less: Goodwill and other intangible assets   2,012,580       2,020,405       2,029,267       2,038,202       2,046,882  
Tangible common shareholders' equity (non-GAAP) $ 4,515,466     $ 4,497,043     $ 4,462,433     $ 4,379,406     $ 4,318,611  
Tangible book value per common share (non-GAAP) $ 8.87     $ 8.84     $ 8.79     $ 8.63     $ 8.51  
Tangible common equity to tangible assets (non-GAAP):                  
Tangible common shareholders' equity (non-GAAP) $ 4,515,466     $ 4,497,043     $ 4,462,433     $ 4,379,406     $ 4,318,611  
Total assets (GAAP)   62,058,974       61,000,188       60,934,974       61,183,352       61,703,693  
Less: Goodwill and other intangible assets   2,012,580       2,020,405       2,029,267       2,038,202       2,046,882  
Tangible assets (non-GAAP) $ 60,046,394     $ 58,979,783     $ 58,905,707     $ 59,145,150     $ 59,656,811  
Tangible common equity to tangible assets (non-GAAP)   7.52 %     7.62 %     7.58 %     7.40 %     7.24 %
                                       

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

  June 30,   December 31,
    2024       2023  
  (Unaudited)    
Assets      
Cash and due from banks $ 478,006     $ 284,090  
Interest bearing deposits with banks   531,067       607,135  
Investment securities:      
Equity securities   69,105       64,464  
Trading debt securities   3,979       3,973  
Available for sale debt securities   2,212,092       1,296,576  
Held to maturity debt securities (net of allowance for credit losses of $1,090 at June 30, 2024 and $1,205 at December 31, 2023)   3,650,364       3,739,208  
Total investment securities   5,935,540       5,104,221  
Loans held for sale (includes fair value of $11,137 at June 30, 2024 and $20,640 at December 31, 2023 for loans originated for sale)   19,887       30,640  
Loans   50,311,702       50,210,295  
Less: Allowance for loan losses   (519,310 )     (446,080 )
Net loans   49,792,392       49,764,215  
Premises and equipment, net   363,038       381,081  
Lease right of use assets   337,947       343,461  
Bank owned life insurance   725,879       723,799  
Accrued interest receivable   251,167       245,498  
Goodwill   1,868,936       1,868,936  
Other intangible assets, net   143,644       160,331  
Other assets   1,611,471       1,421,567  
Total Assets $ 62,058,974     $ 60,934,974  
Liabilities      
Deposits:      
Non-interest bearing $ 11,117,746     $ 11,539,483  
Interest bearing:      
Savings, NOW and money market   24,711,083       24,526,622  
Time   14,283,348       13,176,724  
Total deposits   50,112,177       49,242,829  
Short-term borrowings   63,770       917,834  
Long-term borrowings   3,264,530       2,328,375  
Junior subordinated debentures issued to capital trusts   57,282       57,108  
Lease liabilities   398,179       403,781  
Accrued expenses and other liabilities   1,425,299       1,283,656  
Total Liabilities   55,321,237       54,233,583  
Shareholders’ Equity      
Preferred stock, no par value; 50,000,000 authorized shares:      
Series A (4,600,000 shares issued at June 30, 2024 and December 31, 2023)   111,590       111,590  
Series B (4,000,000 shares issued at June 30, 2024 and December 31, 2023)   98,101       98,101  
Common stock (no par value, authorized 650,000,000 shares; issued 509,205,014 shares at June 30, 2024 and 507,896,910 shares at December 31, 2023)   178,645       178,187  
Surplus   4,995,638       4,989,989  
Retained earnings   1,516,376       1,471,371  
Accumulated other comprehensive loss   (162,613 )     (146,456 )
Treasury stock, at cost (186,983 common shares at December 31, 2023)         (1,391 )
Total Shareholders’ Equity   6,737,737       6,701,391  
Total Liabilities and Shareholders’ Equity $ 62,058,974     $ 60,934,974  
               

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

  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,   June 30,
    2024       2024       2023       2024       2023  
Interest Income                  
Interest and fees on loans $ 770,964     $ 771,553     $ 715,172     $ 1,542,517     $ 1,370,398  
Interest and dividends on investment securities:                  
Taxable   40,460       35,797       31,919       76,257       64,208  
Tax-exempt   4,799       4,796       5,575       9,595       10,900  
Dividends   6,341       6,828       7,517       13,169       12,702  
Interest on federal funds sold and other short-term investments   10,902       9,682       27,276       20,584       49,481  
Total interest income   833,466       828,656       787,459       1,662,122       1,507,689  
Interest Expense                  
Interest on deposits:                  
Savings, NOW and money market   231,597       232,506       164,842       464,103       315,608  
Time   160,442       151,065       125,764       311,507       206,062  
Interest on short-term borrowings   691       20,612       50,208       21,303       84,156  
Interest on long-term borrowings and junior subordinated debentures   39,051       30,925       26,880       69,976       46,078  
Total interest expense   431,781       435,108       367,694       866,889       651,904  
Net Interest Income   401,685       393,548       419,765       795,233       855,785  
(Credit) provision for credit losses for available for sale and held to maturity securities   (41 )     (74 )     (282 )     (115 )     4,705  
Provision for credit losses for loans   82,111       45,274       6,332       127,385       15,782  
Net Interest Income After Provision for Credit Losses   319,615       348,348       413,715       667,963       835,298  
Non-Interest Income                  
Wealth management and trust fees   13,136       17,930       11,176       31,066       20,763  
Insurance commissions   3,958       2,251       3,139       6,209       5,559  
Capital markets   7,779       5,670       16,967       13,449       27,859  
Service charges on deposit accounts   11,212       11,249       10,542       22,461       21,018  
Gains on securities transactions, net   3       49       217       52       595  
Fees from loan servicing   2,691       3,188       2,702       5,879       5,373  
Gains on sales of loans, net   884       1,618       1,240       2,502       1,729  
(Losses) gains on sales of assets, net   (2 )     3,694       161       3,692       285  
Bank owned life insurance   4,545       3,235       2,443       7,780       5,027  
Other   7,007       12,531       11,488       19,538       26,166  
Total non-interest income   51,213       61,415       60,075       112,628       114,374  
Non-Interest Expense                  
Salary and employee benefits expense   140,815       141,831       149,594       282,646       294,580  
Net occupancy expense   24,252       24,323       25,949       48,575       49,205  
Technology, furniture and equipment expense   35,203       35,462       32,476       70,665       68,984  
FDIC insurance assessment   14,446       18,236       10,426       32,682       19,581  
Amortization of other intangible assets   8,568       9,412       9,812       17,980       20,331  
Professional and legal fees   17,938       16,465       21,406       34,403       38,220  
Amortization of tax credit investments   5,791       5,562       5,018       11,353       9,271  
Other   30,484       29,019       28,290       59,503       54,965  
Total non-interest expense   277,497       280,310       282,971       557,807       555,137  
Income Before Income Taxes   93,331       129,453       190,819       222,784       394,535  
Income tax expense   22,907       33,173       51,759       56,080       108,924  
Net Income   70,424       96,280       139,060       166,704       285,611  
Dividends on preferred stock   4,108       4,119       4,030       8,227       7,904  
Net Income Available to Common Shareholders $ 66,316     $ 92,161     $ 135,030     $ 158,477     $ 277,707  
                                       

VALLEY NATIONAL BANCORPQuarterly Analysis of Average Assets, Liabilities and Shareholders' Equity andNet Interest Income on a Tax Equivalent Basis

  Three Months Ended
  June 30, 2024   March 31, 2024   June 30, 2023
  Average       Avg.   Average       Avg.   Average       Avg.
($ in thousands) Balance   Interest   Rate   Balance   Interest   Rate   Balance   Interest   Rate
Assets                                  
Interest earning assets:                              
Loans (1)(2) $ 50,020,901   $ 770,987     6.17 %   $ 50,246,591   $ 771,577     6.14 %   $ 49,457,937   $ 715,195     5.78 %
Taxable investments (3)   5,379,101     46,801     3.48       5,094,978     42,625     3.35       5,065,812     39,436     3.11  
Tax-exempt investments (1)(3)   575,272     6,075     4.22       579,842     6,071     4.19       629,342     7,062     4.49  
Interest bearing deposits with banks   797,676     10,902     5.47       697,386     9,682     5.55       2,198,717     27,276     4.96  
Total interest earning assets   56,772,950     834,765     5.88       56,618,797     829,955     5.86       57,351,808     788,969     5.50  
Other assets   4,745,689             4,638,071             4,525,656        
Total assets $ 61,518,639           $ 61,256,868           $ 61,877,464        
Liabilities and shareholders' equity                                  
Interest bearing liabilities:                                  
Savings, NOW and money market deposits $ 24,848,266   $ 231,597     3.73 %   $ 24,793,452   $ 232,506     3.75 %   $ 22,512,128   $ 164,843     2.93 %
Time deposits   13,311,381     160,442     4.82       12,599,395     151,065     4.80       12,195,479     125,764     4.12  
Short-term borrowings   97,502     691     2.83       1,537,879     20,612     5.36       3,878,457     50,207     5.18  
Long-term borrowings (4)   3,319,195     39,051     4.71       2,625,862     30,925     4.71       2,339,727     26,880     4.60  
Total interest bearing liabilities   41,576,344     431,781     4.15       41,556,588     435,108     4.19       40,925,791     367,694     3.59  
Non-interest bearing deposits   11,223,562             11,183,127             12,756,862        
Other liabilities   1,964,752             1,791,458             1,648,359        
Shareholders' equity   6,753,981             6,725,695             6,546,452        
Total liabilities and shareholders' equity $ 61,518,639           $ 61,256,868           $ 61,877,464        
                                   
Net interest income/interest rate spread (5)     $ 402,984     1.73 %       $ 394,847     1.67 %       $ 421,275     1.91 %
Tax equivalent adjustment       (1,299 )             (1,299 )             (1,510 )    
Net interest income, as reported     $ 401,685             $ 393,548             $ 419,765      
Net interest margin (6)         2.83             2.78             2.93  
Tax equivalent effect         0.01             0.01             0.01  
Net interest margin on a fully tax equivalent basis (6)         2.84 %           2.79 %           2.94 %
                                         

_______________(1) Interest income is presented on a tax equivalent basis using a 21 percent federal tax rate.(2) Loans are stated net of unearned income and include non-accrual loans.(3) The yield for securities that are classified as available for sale is based on the average historical amortized cost.(4) Includes junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of condition.(5) Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities and is presented on a fully tax equivalent basis.(6) Net interest income as a percentage of total average interest earning assets.

SHAREHOLDERS RELATIONSRequests for copies of reports and/or other inquiries should be directed to Tina Zarkadas, Assistant Vice President, Shareholder Relations Specialist, Valley National Bancorp, 70 Speedwell Avenue, Morristown, New Jersey, 07960, by telephone at (973) 305-3380, by fax at (973) 305-1364 or by e-mail at tzarkadas@valley.com.

Contact:    Michael D. HagedornSenior Executive Vice President andChief Financial Officer973-872-4885
     
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