Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Q1 2021 Earnings Presentation
22 slides from Valley National Bancorp's earnings presentation, Apr 29, 2021
Slide 1: 1Q21 Earnings Presentation
1Q21 Earnings Presentation April 29, 2021
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: 1Q 2021 Highlights
3 1Q 2021 Highlights Reported Adjusted 1 1Q21 4Q20 1Q20 1Q21 4Q20 1Q20 Return on Average Assets 1.14% 1.02% 0.92% 1.14% 1.10% 0.93% Annualized Efficiency Ratio 49.5% 51.6% 50.8% 48.6% 47.0% 49.3% Pre-Provision Net Revenue 2 ($mm) $163.7 $162.3 $151.1 $166.5 $177.5 $155.7 PPNR / Average Assets 2 1.61
Slide 4: Net Interest Margin, Profitability & Operating Leverage
4 Net Interest Margin, Profitability & Operating Leverage Net Interest Income and Margin Pre-Provision Net Revenue ($mm) 1 Net interest margin stability & Reported Adjusted Year-over-year quarterly NII growth of 10% (FTE) 1.72% 1.61% 1.63% 1.63% $288.8 $293.6 1.59% 1.57% $283.5 $284.1 $177.5 $266.4
Slide 5: Impact of PPP ($mm)
5 Impact of PPP ($mm) PPP Loan Balance Net Interest Margin (FTE) End of Period Avg. Balance 2,365 2,358 3.05% 3.06% 2,277 2,247 3.03% 2,214 2,152 2,202 2.99% 1,452 3.00% 3.01% 3.06% 3.14% 2Q20 3Q20 4Q20 1Q21 Reported NIM NIM ex. PPP 2Q20 3Q20 4Q20 1Q21 Round 1 & 2 Forgiveness Update ($mm) 57% of PPP
Slide 6: Interest Rate Positioning
6 Interest Rate Positioning 12-Month Forward Maturity Schedule ($bn) $1.7 Continue to reduce non-maturity $1.5 deposit costs $1.3 $1.2 Selected opportunities to reprice maturing CDs and borrowings lower and mitigate asset yield headwinds $0.5 $0.5 $0.4 $0.2 $0.2 $0.1 Intend to selectively take advan
Slide 7: Deposits, Funding & Liquidity
7 Deposits, Funding & Liquidity 1Q21 Deposit Trends ($bn) Total Liabilities 3/31/2021 1 Non-interest $31.9 + 2.0% $32.6 bearing $10.1 21% 6.7 Time 5.5 17% Other 9.2 Noninterest 10.1 31% $0.5 Savings, NOW 29% Bearing $36.5BN Long-term & MMA borrowings $17.1 $2.2 50% Savings, Now & 17.1 16.0 52% Short
Slide 8: Technology Evolution & Digital Trends
8 Technology Evolution & Digital Trends Opportunity to drive increased digital product adoption across expanding client base Online Banking Net Promoter Scores (“NPS”) for % of Households Actively Using Online Banking Business and Retail customers exceed other NPS across the organization ~125k activ
Slide 9: Loans & Loan Growth
9 Loans & Loan Growth 1Q21 Loan Composition 1 1Q21 Annualized Loan Growth 1 Multifamily Residential R.E. 15% Auto 26% +$89mm 12% Owner- Non-Owner Occupied CRE 15% +$305mm Occupied CRE 10% Construction 9% +$41mm C&I (ex. PPP) 6% +$74mm Non Owner- $32.7bn Occupied CRE Owner-Occupied CRE 3% +$28mm C&I
Slide 10: Paycheck Protection Program
10 Paycheck Protection Program Rounds 1 & 2 Round 3 $2.3bn SBA-approved volume ~$860mm SBA-approved volume ~13,000 SBA-approved loans 7,500 + Loan applications $180k Average loan size $130k Average loan size $42k Median loan size ~4% Average processing fee ~3% Average processing fee Valley’s Net Pro
Slide 11: Fee Income
11 Fee Income Non-Interest Income ($mm) 1 1Q21 Non-Interest Income ($mm) 1 $47.5 Other 28% $41.4 $4.6 $16.0 Trust, $31.2 Investment & $14.2 $3.5 Insurance $10.9 $31.2mm 16% $6.2 Swap Fees Loan Servicing 20% Fees $22.6 $20.7 $21.5 9% Gain-on-Sale of Loans, net Service Charges 11% 16% 1Q20 4Q20 1Q21 O
Slide 12: Non-Interest Expense
12 Non-Interest Expense 5 Quarter Operating Expense Trends ($ in millions) Efficiency Ratio (%) 1 173.1 160.2 160.2 155.7 157.2 157.3 157.5 51.6 153.4 155.0 50.8 151.1 2 49.5 49.3 48.6 47.0 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 Reported Reported Reported Adjusted Adjusted Adjusted R
Slide 13: Asset Quality
13 Asset Quality Allowance for Credit Losses for Loans / Total Loans Non-Accrual Loans / Total Loans 1.17% 1.17% 1.11% 1.06% 0.99% 1.03% 1.09% 1.08% 0.96% 0.68% 0.65% 0.62% 0.59% 0.58% 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 ACL / Loans ex. PPP ACL by Loan Segment Net Charge-offs & Provisi
Slide 14: Equity & Capitalization
14 Equity & Capitalization Book Value and Tangible Book Value per Share 1 Equity Capitalization Level 8% year-over-year tangible book value growth $2.4BN PPP loans reduce TCE / TA by ~48 bp in 1Q21 $10.85 $10.97 $10.71 11.31% 11.28% 11.32% $10.43 $10.56 11.13% $7.39 10.75% $7.25 7.55% 7.47% $7.12 7.
Slide 15: Appendix
Appendix
Slide 16: CRE Detail as of 3/31/2021
16 CRE Detail as of 3/31/2021 Portfolio by Collateral Type Portfolio by Geography Apartment & Florida Residential 25.7% 27% New York (ex. NYC) Retail 10.8% 20% New Jersey Specialty & 23.9% Other 11% $16.9bn Manhattan $16.9bn (Other) 4.6% Healthcare Manhattan 9% (Multifamily) 6.8% Mixed Use Industria
Slide 17: Outstanding Loan Deferrals
17 Outstanding Loan Deferrals Active Deferrals / Total Loans 1Q21 Deferral Information as of 3/31/2021 11.6% Balance Active Active Deferral / ($MM) Deferral ($MM) 1Q21 Loan Balance 8.4% Commercial Loans & Leases $25,859 $250 1.0% Residential & Home Equity 1 $4,470 $31 0.7% Auto & Other Consumer $2,3
Slide 18: COVID-19 Exposed Loan Segments
18 COVID-19 Exposed Loan Segments Non-PPP Loan Balance (3/31/21) Deferrals / Loans Borrower Industry 1 ($MM) % of non-PPP Loans 3/31/21 12/31/20 9/30/20 7/10/20 5/6/20 Primary Exposure Doctor & Surgery $494 1.6% 2.6% 0.9% 4.9% 16.5% 29.9% Retail Trade 585 1.9% 2.7% 2.7% 3.5% 21.2% 32.4% Hotels & Hos
Slide 19: Non-GAAP Disclosure Reconciliation
19 Non-GAAP Disclosure Reconciliation Three Months E nded March 31, December 31, March 31, ($ in thousands, except for share data) 2021 2020 2020 Adj usted net i ncome avai l abl e to common sharehol ders: Net income, as reported $115,710 $105,363 $87,268 Add: Losses on extinguishment of debt (net o
Slide 20: Non-GAAP Disclosure Reconciliation
20 Non-GAAP Disclosure Reconciliation Three Months E nded March 31, December 31, March 31, ($ in thousands) 2021 2020 2020 Annual i zed return on average tangi bl e sharehol ders' equi ty: Net income, as reported $115,710 $105,363 $87,268 Average shareholders' equity 4,645,400 4,582,329 4,408,585 Le
Slide 21: Non-GAAP Disclosure Reconciliation
21 Non-GAAP Disclosure Reconciliation As of March 31, December 31, September 30, June 30, March 31, ($ in thousands, except for share data) 2021 2020 2020 2020 2020 Tangi bl e book val ue per common share: Common shares outstanding 405,797,538 403,858,998 403,878,744 403,795,699 403,744,148 Sharehol
Slide 22: For More Information
22 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, SVP – Director, Corporate Finance & Business Dev
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