Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Q4 2022 Earnings Presentation
21 slides from Valley National Bancorp's earnings presentation, Jan 26, 2023
Slide 1: 4Q22 Earnings Presentation
4Q22 Earnings Presentation January 26, 2023
Slide 2: Forward Looking Statements
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 abo
Slide 3: Consistent Financial Improvement
3 Consistent Financial Improvement Earnings per Share Equity per Share Measures $1.31 $1.17 $7.94 $8.15 $7.25 $6.73 $0.96 $0.92 $1.12 $1.14 $10.35 $10.85 $11.57 $12.23 $0.87 $0.93 2019 2020 2021 2022 2019 2020 2021 2022 1 Dil. EPS (GAAP) Dil. EPS (non-GAAP) 1 Book Value (GAAP) Tangible Book Value (n
Slide 4: 2022 Highlights
4 2022 Highlights Balance Sheet Growth and Resilience ▪ Strong and Diverse Organic Loan and Deposit Growth Across Business Lines and Geographies ▪ Deposit Growth in Support of Loan Growth ▪ Significant Net Interest Margin Improvement Continued Credit Strength ▪ Non-Accrual Loans Declined to 0.57% of
Slide 5: 4Q 2022 Financial Highlights
5 4Q 2022 Financial Highlights GAAP Reported Non-GAAP Adjusted 1 4Q22 3Q22 4Q21 4Q22 3Q22 4Q21 Net Income ($mm) $177.6 $178.1 $115.0 $182.9 $181.5 $125.0 Return on Average Assets 1.25% 1.30% 1.08% 1.29% 1.32% 1.18% Annualized Return on Average Assets, ex. PPP 1 -- -- -- 1.28% 1.32% 1.08% Annualized
Slide 6: Slower Payoffs Continue to Enhance Loan Growth
6 Slower Payoffs Continue to Enhance Loan Growth Gross Loans ($bn) 12/31/2022 Loan Composition 1, 2 4Q22 Annualized: +15.3% Non Owner-Occupied Healthcare CRE CRE 5% 24% Owner-Occupied CRE 9% Multifamily CRE 17% 46% C&I 28% $46.9 Other $45.2 26% C&I 19% Construction 8% Residential R.E. Consumer 11% 7
Slide 7: Deposit Growth Supporting Loans
7 Deposit Growth Supporting Loans Deposit Balance Trends ($bn) Avg. Fed Funds vs. Deposit Costs (%) 3.82% 4Q22 Annualized: +20.5% 47.6 2.39% 45.3 20% 1.36% 0.96% 6.3 9.6 0.59% 0.25% 0.30% 0.19% 35.6 0.15% 0.14% 4Q21 1Q22 2Q22 3Q22 4Q22 12% 3.7 30% 15.4 Total Deposits Average Fed Funds (Upper) 14.5 1
Slide 8: Net Interest Margin
8 Net Interest Margin Reported GAAP Net Interest Income ($mm) and Margin Net Interest Income ($mm) and Margin Ex-PPP (non-GAAP) 1, 2 $454 $466 3.60% 3.57% $416 3.57% 3.43% $467 3.60% $455 $311 3.42% $420 $299 3.23% 3.10% 3.11% 3.16% 4Q21 1Q22 2Q22 3Q22 4Q22 NII ($mm) NIM Net Interest Income Analysis
Slide 9: Fee Income
9 Fee Income Non-Interest Income ($mm) 4Q22 Non-Interest Income Composition ($mm) Other $18.0 $56.2 34% $0.9 $52.8 $0.9 $13.0 Swap Fees $7.3 $13.6 14% Trust, $52.8mm Investment & $38.2 Gain-on-Sale of Insurance Loans, net $13.6 $10.7 26% $6.7 $0.9 $7.3 2% $6.5 Service Charges $10.3 Loan Servicing 19
Slide 10: Non-Interest Expense
10 Non-Interest Expense Non-Interest Expenses ($mm) Efficiency Ratio Trend 1 261.6 266.2 7.8 10.6 253.8 255.7 52.0% 49.4% 49.8% 49.3% 49.9% 49.4% 4Q21 3Q22 4Q22 4Q21 3Q22 4Q22 3Q22 4Q22 ex-PPP Adjusted Reported Operating Leverage 1 20% 16% 7% 3% Q/Q Growth Annualized 4-Year CAGR (4Q22 / 3Q22) (4Q22
Slide 11: Asset Quality
11 Asset Quality Allowance for Credit Losses for Loans / Total Loans Non-Accrual Loans / Total Loans 1.10% 1.13% 1.10% 1.07% 1.03% 0.70% 0.65% 0.72% 0.65% 0.57% 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/22 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 Net Charge-offs ($mm) Loan Loss Provi
Slide 12: Equity & Capitalization
12 Equity & Capitalization Book Value and Tangible Book Value per Share 1 Equity Capitalization Level 1 4Q22 TBV +14% Annualized $12.23 11.70% 11.70% $11.98 11.40% 11.22% 11.14% $11.84 $11.57 $11.60 7.98% 7.96% $8.15 7.46% 7.40% 7.44% $7.94 $7.93 $7.87 $7.71 12/31/2021 3/31/2022 6/30/2022 9/30/2022
Slide 13: 2023 Targets & Outlook
13 2023 Targets & Outlook 2023 Loan Growth • Between 7% - 9%. (based on 12/31/2022 gross loans of $46.9 billion) • Year-over-year growth of 16% - 18% Net Interest Income (from full-year 2022 net interest income of $1,656 million) • Year-over-year growth of 10.5% - 12.5% Non-Interest Expense (based o
Slide 14: Appendix
Appendix
Slide 15: CRE Detail as of 12/31/2022
15 CRE Detail as of 12/31/2022 Portfolio by Collateral Type Portfolio by Geography Apartment & Florida Residential 25.5% 29% New York (ex. NYC) Retail 9.9% New Jersey Specialty & 19% 20.0% Other 10% $25.7bn Manhattan $25.7bn (Other) 4.4% Manhattan Healthcare (Multifamily) 11% 6.3% Mixed Use 10% Othe
Slide 16: Non-GAAP Reconciliations to GAAP Financial Measures
16 Non-GAAP Reconciliations to GAAP Financial Measures Three Months Ended Years Ended December 31, September 30, December 31, December 31, December 31, December 31, December 31, ($ in thousands, except for share data) 2022 2022 2021 2022 2021 2020 2019 Adjusted net income available to common shareho
Slide 17: Non-GAAP Reconciliations to GAAP Financial Measures
17 Non-GAAP Reconciliations to GAAP Financial Measures Three Months Ended Years Ended December 31, September 30, December 31, December 31, December 31, December 31, December 31, ($ in thousands) 2022 2022 2021 2022 2021 2020 2019 Annualized return on average tangible shareholders' equity (Non-GAAP):
Slide 18: Non-GAAP Reconciliations to GAAP Financial Measures
18 Non-GAAP Reconciliations to GAAP Financial Measures Three Months Ended December 31, September 30, December 31, ($ in thousands) 2022 2022 2021 Annualized return on average assets, excluding Paycheck Protection Program ("PPP") (Non-GAAP): Net income, as reported (GAAP) $177,591 $178,119 $115,038 L
Slide 19: Non-GAAP Reconciliations to GAAP Financial Measures
19 Non-GAAP Reconciliations to GAAP Financial Measures Three Months Ended December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, ($ in thousands, except for share data) 2022 2022 2022 2022 2021 2021 2021 2021 2020 2020 2020 Net
Slide 20: Non-GAAP Reconciliations to GAAP Financial Measures
20 Non-GAAP Reconciliations to GAAP Financial Measures Years Ended, December 31, December 31, December 31, December 31, ($ in thousands, except for share data) 2022 2021 2020 2019 Net interest income, as reported (GAAP) $ 1,655,640 $ 1,209,901 $ 1,118,904 $ 898,048 Non-interest income, as reported (
Slide 21: For More Information
21 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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