Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Q1 2020 Earnings Presentation
19 slides from Valley National Bancorp's earnings presentation, Apr 30, 2020
Slide 1: 1Q20 Earnings Presentation
1Q20 Earnings Presentation April 30, 2020
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 n
Slide 3: Comprehensive COVID-19 Response
3 Comprehensive COVID-19 Response • Business Continuity Plan, daily Pandemic Planning Team meetings, weekly company-wide Town Hall meetings • Employees mandated to work from home if possible; ~93% of our non-branch employees are working remotely • 36% (85) of our branches are closed, all other branc
Slide 4: Paycheck Protection Program – Phase 1
4 Paycheck Protection Program – Phase 1 $1.6bn SBA-approved volume 500+ Valley employees dedicated to assisting our customers take advantage of Paycheck Protection Program ~87% of SBA-approved borrowers had an existing Valley relationship; however this is an opportunity to prove Valley’s strength to
Slide 5: Forbearance Information (as of April 26, 2020)
5 Forbearance Information (as of April 26, 2020) Forbearance Summary Commercial Insight: % Pass-Rated (ex. Taxi) Deferrals approved on ~10% of 3/31 loan balances Loans (#) Balance ($) Deferred Payments ($) Outstanding Loans Balance 97% 98% 95% 96% 96% (#) ($mm) 94% Total Requests 7,542 $4,000 Approv
Slide 6: 1Q 2020 Highlights
6 1Q 2020 Highlights Reported Adjusted 1 1Q20 4Q19 1Q19 1Q20 4Q19 1Q19 Return on Average Assets 0.92% 0.43% 1.40% 0.93% 1.03% 0.93% Efficiency Ratio 50.7% 70.9% 45.3% 49.3% 52.4% 54.8% Pre-Provision Net Revenue ($mm) $151.1 $80.5 $178.5 $155.7 $131.6 $112.1 PPNR / Avg. Assets 1.59% 0.91% 2.21% 1.63%
Slide 7: Revenue
7 Revenue Net Interest Income and Margin Adjusted Non-Interest Income ($mm) 1 Year-over-year NII growth of 21% (FTE) $41.4 $38.1 Swap Fees $266.4 14.2 Gain-on-Sale of $29.2 10.0 Loans, net $239.6 4.1 Service Charges $219.9 5.2 4.6 3.07% 4.6 Loan Servicing 6.0 5.7 2.98% 2.96% Fees 5.9 2.5 2.7 Trust,
Slide 8: Interest Rate Positioning
8 Interest Rate Positioning 1 12-Month Forward Cumulative Cash Flow Gap ($bn) 12-Month Forward Maturity Schedule ($bn) 2Q20 3Q20 4Q20 1Q21 Maturing CD Rates 2.10% 1.92% 1.87% 1.49% $7.0 $(1.0) $(1.7) $(1.7) $(1.6) Maturing Borrowing Rates 0.60% 0.80% 0.85% 1.11% $(1.5) $6.0 Maturing BCD Rates 1.71%
Slide 9: Non-Interest Expense
9 Non-Interest Expense 5 Quarter Operating Expense Trends ($ in millions) Efficiency Ratio (%) 1 196.1 Includes merger related charges and debt extinguishment 70.9 2020 Goal: 51.0% 155.7 147.8 145.9 2 141.7 54.8 151.1 52.4 50.7 49.3 140.1 145.1 135.8 136.8 45.3 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 4Q19 1Q2
Slide 10: Loans & Loan Growth
10 Loans & Loan Growth 1Q20 Loan Composition 1 Year-to-Date Loan Growth (Ann.) 1 Residential R.E. Multifamily Construction +$80mm 19.4% 15% 17% Non-Owner Occupied CRE +$301mm 15.9% Owner- C&I +$173mm 14.3% Occupied CRE +$102mm Res. Mortgage 9.3% 11% Non Owner- $30.4bn Owner-Occupied CRE +$62mm 7.8%
Slide 11: COVID-19 Exposed Loan Segments
11 COVID-19 Exposed Loan Segments Outstandings Pass-Rated Approved Deferrals as of 4/26/20 Borrower Industry ($mm) % of Loans ($mm) % of Industry ($mm) % of Industry Primary Exposure Doctor & Surgery $566 1.9% $510 90.1% $147 26.0% Retail Trade 531 1.7% 517 97.4% 151 28.4% Hotels & Hospitality 475 1
Slide 12: Deposits, Funding & Liquidity
12 Deposits, Funding & Liquidity Quarterly Deposit Trends ($bn) Total Liabilities 3/31/2020 Non-interest $29.2 $29.1 bearing $7.0 Brokered ($897mm) Savings, NOW 9.7 8.6 Retail ($254mm) & MMA Other $13.5 $0.6 Noninterest Bearing $34.7bn 6.7 7.0 +$241mm Long-term borrowings $2.9 1 13.5 Savings, Now &
Slide 13: CECL Implementation
13 CECL Implementation Total Allowance for Credit Losses for Loans ($mm) Valley implemented CECL on January 1, 2020. $350 Day 1 Adjustments Day 2 Adjustments Valley utilizes a multi-scenario model based on $34 $293 Moody’s economic forecasts to estimate future $300 credit losses. $62 $264 ( $5 ) $25
Slide 14: Asset Quality
14 Asset Quality Net Charge-offs & Provision ($mm) Non-Accrual Loans / Loans 40 0.08% 35 0.08% PCD Loan 0.68% 30 $34 Re-Classification 25 0.05% 0.06% 0.25% 20 15 0.03% 10 $5 $6 $5 0.43% $3 $9 0.37% 0.37% 0.38% 0.31% 5 $8 $2 $2 $5 0 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Net Charge-offs Pr
Slide 15: Equity
15 Equity Tangible Book Value per Share 1 Tangible Common Equity / Tangible Assets 1 9% year-over-year growth +68bp year-over-year $6.82 7.54% $6.73 7.31% $6.62 $6.45 6.71% 6.73% $6.26 6.63% 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Year-over-Year 1Q19 4Q19 1Q20 Change Tier 1 Leverage 7.58%
Slide 16: Non-GAAP Disclosure Reconciliation
16 Non-GAAP Disclosure Reconciliation Three Months Ended March 31, December 31, March 31, ($ in thousands, except for share data) 2020 2019 2019 Adjusted net income available to common shareholders: Net income, as reported $87,268 $38,104 $113,330 Less: Gain on sale leaseback transactions (net of ta
Slide 17: Non-GAAP Disclosure Reconciliation
17 Non-GAAP Disclosure Reconciliation Three Months Ended March 31, December 31, March 31, ($ in thousands) 2020 2019 2019 Annualized return on average tangible shareholders' equity: Net income, as reported $87,268 $38,104 $113,330 Average shareholders' equity 4,408,585 3,804,902 3,394,688 Less: Aver
Slide 18: Non-GAAP Disclosure Reconciliation
18 Non-GAAP Disclosure Reconciliation As of March 31, December 31, September 30, June 30, March 31, ($ in thousands, except for share data) 2020 2019 2019 2019 2019 Tangible book value per common share: Common shares outstanding 403,744,148 403,278,390 331,805,564 331,788,149 331,732,636 Shareholder
Slide 19: For More Information
For More Information 19 ▪ 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, SVP – Director, Corporate Finance & Business Dev
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