Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Q2 2023 Earnings Presentation
19 slides from Valley National Bancorp's earnings presentation, Jul 27, 2023
Slide 1: 2Q23 Earnings Presentation
2Q23 Earnings Presentation July 27, 2023
Slide 2: Forward Looking Statements
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 o
Slide 3: 2Q 2023 Financial Highlights
3 2Q 2023 Financial Highlights GAAP Reported Non-GAAP Adjusted 1 2Q23 1Q23 2Q22 2Q23 1Q23 2Q22 Net Income ($mm) $139.1 $146.6 $96.4 $147.1 $154.5 $165.8 Return on Average Assets 0.90% 0.98% 0.72% 0.95% 1.03% 1.25% Annualized Efficiency Ratio (Non-GAAP) -- -- -- 55.6% 53.8% 50.8% Diluted Earnings Per
Slide 4: Total Deposits Remain Stable
4 Total Deposits Remain Stable Deposit Balance Trends ($bn) Avg. Fed Funds vs. Deposit Costs (%) 5.16% 4.69% 49.6 3.82% 47.6 2.39% 2.45% 1.96% 1.36% 11.1 14.9 30% 0.96% 23% 0.30% 0.59% 0.25% 0.19% 0.15% 0.14% 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 Total Deposits Average Fed Funds (Upper) 29% 13.6 25% 12
Slide 5: Customer Deposit Base Diversified by Geography and Source
5 Customer Deposit Base Diversified by Geography and Source Total Deposit Breakdown ($bn, as of 6/30/23) Uninsured Deposit & Liquidity ($bn, as of 6/30/23) Specialized Deposits Cash & Available Liquidity Stands at 2.2x of Adjusted $8.1 Uninsured Deposits 1 16% $26.1 Traditional Branch $49.6bn Adjust
Slide 6: Highly Granular Deposits – 6/30/2023
6 Highly Granular Deposits – 6/30/2023 Deposits % of Total Customer Type ($bn) Deposits 625,000 Commercial $18.2 37% Deposit Customers Consumer $16.5 33% $58,000 Fully FDIC-Insured Indirect $10.2 21% Average Account Size (Commercial & Consumer) Fully-Collateralized Government 1 $4.7 9% ~10 Year Depo
Slide 7: Diversified Loan Portfolio
7 Diversified Loan Portfolio Gross Loans ($bn) 6/30/2023 Loan Composition 1 2Q23 Annualized Growth: +10.0% Non Owner-Occupied CRE Healthcare CRE 25% 4% Owner-Occupied CRE 9% Multifamily CRE 17% 46% C&I $49.9 28% $48.7 Other 26% C&I 19% Construction 8% Residential R.E. Consumer 11% 7% 3/31/2023 6/30/
Slide 8: CRE Detail as of 6/30/2023
8 CRE Detail as of 6/30/2023 Portfolio by Collateral Type Portfolio by Geography Retail Florida 18% 25.3% Mixed Use 10% New York (ex. NYC) Apartment & 9.5% New Jersey Residential 19.9% 30% $27.8bn Office Manhattan $27.8bn 10% (Other) 4.2% Healthcare Manhattan Office (Multifamily) 2% 5.7% Industrial
Slide 9: Granular & Diverse Office Portfolio
9 Granular & Diverse Office Portfolio CRE Portfolio Office Portfolio by Geography Florida & Manhattan Alabama $0.2 $1.2 6% 37% $27.8bn Office $3.2bn 10% New York (ex. Manhattan) Healthcare $0.6 Office 19% 2% New Jersey $0.8 Other 25% $0.4 ~20% of Office Portfolio is Owner-Occupied. 13% Geography Out
Slide 10: Net Interest Margin
10 Net Interest Margin Net Interest Income ($mm) and Margin 3.57% 3.60% 3.43% $467 3.16% $455 2.94% $437 $420 $421 2Q22 3Q22 4Q22 1Q23 2Q23 Net Interest Income ($mm) NIM Excess liquidity weighed on net interest margin by an estimated 8bp in 2Q23 and 6bp in 1Q23. Competitive deposit pricing and non-i
Slide 11: Diverse Fee Income Sources
11 Diverse Fee Income Sources Non-Interest Income ($mm) 2Q23 Non-Interest Income Composition ($mm) $60.1 $58.5 Other $14.4 $54.3 24% Loan Servicing $10.5 $2.7 $10.1 $1.2 4% Wealth, Trust & $3.6 $10.5 Insurance $0.5 Gain-on-Sale of $14.3 $14.3 24% Loans, net $13.0 $1.2 $60.1mm $12.0 2% $10.9 $17.0 Se
Slide 12: Non-Interest Expense
12 Non-Interest Expense Non-Interest Expenses ($mm) 1 Expense Initiatives 283.0 We have conservatively identified annualized expense 272.2 16.2 reduction opportunities of approximately $40 million 8.4 to be phased in over the next 12 months. This will help to neutralize traditional expenses 263.8 26
Slide 13: Asset Quality
13 Asset Quality Allowance for Credit Losses for Loans / Total Loans Non-Accrual Loans / Total Loans 1.13% 1.10% 1.03% 0.95% 0.92% 0.72% 0.65% 0.57% 0.50% 0.51% 6/30/2022 9/30/2022 12/31/22 3/31/23 6/30/23 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 Net Loan Charge-offs ($mm) Loan Loss Provis
Slide 14: Equity & Capitalization
14 Equity & Capitalization Book Value and Tangible Book Value per Share 1 Equity Capitalization Level 1 Excess Liquidity Weighed on TCE / TA by Estimated 12bp $12.54 11.40% 11.22% 11.14% $12.23 $12.41 $11.98 10.66% $11.84 10.12% 7.46% 7.40% 7.45% 7.24% $8.51 $8.36 6.82% $8.15 $7.87 $7.71 6/30/2022 9
Slide 15: Appendix
Appendix
Slide 16: Non-GAAP Reconciliations to GAAP Financial Measures
16 Non-GAAP Reconciliations to GAAP Financial Measures Three Months E nded June 30, March 31, June 30, ($ in thousands, except for share data) 2023 2023 2022 Adj usted net i ncome avai l abl e to common sharehol ders (Non-GAAP): Net income, as reported (GAAP) $139,060 $146,551 $96,413 Add: Losses (g
Slide 17: Non-GAAP Reconciliations to GAAP Financial Measures
17 Non-GAAP Reconciliations to GAAP Financial Measures Three Months E nded June 30, March 31, June 30, ($ in thousands) 2023 2023 2022 Annual i zed return on average tangi bl e sharehol ders' equi ty (Non-GAAP): Net income, as reported (GAAP) $139,060 $146,551 $96,413 Average shareholders' equity 6,
Slide 18: Non-GAAP Reconciliations to GAAP Financial Measures
18 Non-GAAP Reconciliations to GAAP Financial Measures As of June 30, March 31, December 31, September 30, June 30, ($ in thousands, except for share data) 2023 2023 2022 2022 2022 Tangi bl e book val ue per common share (Non-GAAP): Common shares outstanding 507,619,430 507,762,358 506,374,478 506,3
Slide 19: For More Information
19 For More Information ▪ Log onto our website: www.valley.com ▪ Email requests to: [email protected] ▪ Call Travis Lan in Investor Relations, at: (973) 686-5007 ▪ Write to: Valley National Bank 1455 Valley Road Wayne, New Jersey 07470 Attn: Travis Lan, FSVP – Director, Corporate Finance & Business De
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