Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Q2 2021 Earnings Presentation
20 slides from Valley National Bancorp's earnings presentation, Jul 22, 2021
Slide 1: 2Q21 Earnings Presentation
2Q21 Earnings Presentation July 22, 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: 2Q 2021 Highlights
3 2Q 2021 Highlights Reported Adjusted 1 2Q21 1Q21 2Q20 2Q21 1Q21 2Q20 Net Income ($mm) $120.5 $115.7 $95.6 $126.6 $115.8 $95.9 Return on Average Assets 1.17% 1.14% 0.92% 1.23% 1.14% 0.93% Annualized Efficiency Ratio 50.0% 49.5% 48.0% 46.6% 48.6% 46.8% Pre-Provision Net Revenue 2 ($mm) $172.1 $163.7
Slide 4: Overview of The Westchester Bank Acquisition
4 Overview of The Westchester Bank Acquisition Transaction Rationale Westchester ▪ High-Quality Partner With a Track Record of Strong Asset Quality ▪ Expansion of Physical Footprint into Dynamic and Contiguous Westchester County Market ▪ Experienced Leadership Team Focused on Servicing Commercial Cl
Slide 5: Net Interest Margin, Profitability & Operating Leverage
5 Net Interest Margin, Profitability & Operating Leverage Net Interest Income and Margin Pre-Provision Net Revenue ($mm) 1 Resilient Net Interest Margin and Consistent Net Reported Adjusted 1.67% 1.78% Interest Income Growth 1.68% 1.64% 1.61% 1.63% $301.8 $183.6 $293.6 $288.8 $172.1 $174.0 $283.5 $2
Slide 6: Impact of PPP ($mm)
6 Impact of PPP ($mm) PPP Loan Balance Net Interest Margin (FTE) End of Period Avg. Balance 2,365 2,277 2,247 2,250 3.06% 3.07% 2,235 3.03% 2,152 1,986 3.05% 3.01% 3.06% 3.14% 3.18% 1,351 3Q20 4Q20 1Q21 2Q21 Reported NIM NIM ex. PPP 3Q20 4Q20 1Q21 2Q21 Forgiveness Update ($mm) Over 75% of Round 1 an
Slide 7: Interest Rate Positioning
7 Interest Rate Positioning 12-Month Forward Maturity Schedule ($bn) $2.2 Redeemed $60mm of legacy subordinated debt at 6.25% cost and prepaid $248mm of FHLB advances at a 1.82% effective cost ($8.4mm prepayment penalty) during the 2nd quarter of 2021 $1.2 $0.9 $0.7 Continue to drive non-maturity de
Slide 8: Deposits, Funding & Liquidity
8 Deposits, Funding & Liquidity 2Q21 Deposit Trends ($bn) Total Liabilities 6/30/2021 1 Non-interest $31.4 $32.6 $33.2 bearing 4.3 13% $10.5 5.5 26% 8.3 10.1 10.5 32% Other 29% 9.0 $0.5 Long-term $36.5BN Savings, NOW borrowings & MMA 17.1 18.4 55% 45% 14.2 $1.9 $18.4 Short-term borrowings 2Q20 1Q21
Slide 9: Loans & Loan Growth
9 Loans & Loan Growth 2Q21 Loan Composition 1 2Q21 YTD Annualized Loan Growth 1 Multifamily Residential R.E. 16% Auto 26% +$175mm 13% Owner- Non-Owner Occupied CRE 18% +$766mm Occupied CRE Other Consumer 6% +$26mm 10% Owner-Occupied CRE 3% +$56mm Non Owner- $32.5bn Res. Mortgage 2% +$43mm Occupied C
Slide 10: Fee Income
10 Fee Income Non-Interest Income ($mm) 2Q21 Non-Interest Income ($mm) Other $44.8 26% $43.1 $8.3 $10.1 Trust, $31.2 Investment & Insurance $14.7 $3.5 $7.6 14% $6.2 $43.1mm Loan Servicing Swap Fees Fees 18% 7% $25.4 $21.8 $21.5 Service Charges Gain-on-Sale of 12% Loans, net 2Q20 1Q21 2Q21 23% Other
Slide 11: Non-Interest Expense
11 Non-Interest Expense 5 Quarter Operating Expense Trends ($ in millions) Efficiency Ratio (%) 1 173.1 171.9 160.2 160.2 157.2 160.5 157.3 157.5 153.4 155.0 50.0 49.5 48.6 48.0 46.8 46.6 2Q20 1Q21 2Q21 2Q20 1Q21 2Q21 2Q20 3Q20 4Q20 1Q21 2Q21 Reported Reported Reported Adjusted Adjusted Adjusted Rep
Slide 12: Asset Quality
12 Asset Quality Allowance for Credit Losses for Loans / Total Loans Non-Accrual Loans / Total Loans 1.17% 1.17% 1.14% 1.11% 1.06% 1.09% 1.08% 1.09% 1.03% 0.65% 0.62% 0.68% 0.99% 0.59% 0.58% 2Q20 3Q20 4Q20 1Q21 2Q21 2Q20 3Q20 4Q20 1Q21 2Q21 ACL / Loans ex. PPP ACL by Loan Segment Net Charge-offs & P
Slide 13: Equity & Capitalization
13 Equity & Capitalization Book Value and Tangible Book Value per Share 1 Equity Capitalization Level 9% year-over-year tangible book value growth $1.3BN PPP loans reduce TCE / TA by ~28 bp in 2Q21 $11.15 11.48% $10.97 11.29% 11.32% $10.85 11.13% $10.71 $7.59 10.75% 7.73% $10.56 $7.39 7.47% 7.55% 7.
Slide 14: Appendix
Appendix
Slide 15: CRE Detail as of 6/30/2021
15 CRE Detail as of 6/30/2021 Portfolio by Collateral Type Portfolio by Geography Apartment & Florida Residential 25.9% 26% Retail New York (ex. NYC) 20% 10.5% New Jersey Specialty & 23.4% Other 11% $17.5bn Manhattan $17.5bn (Other) 4.6% Healthcare Manhattan 9% (Multifamily) 6.7% Mixed Use 12% Indus
Slide 16: Outstanding Loan Deferrals
16 Outstanding Loan Deferrals 2Q21 Deferral Information as of 6/30/2021 Balance Active Active Deferral / ($MM) Deferral ($MM) 2Q21 Loan Balance Commercial Loans & Leases $25,349 $106 0.4% Residential & Home Equity 1 $4,638 $35 0.7% Auto & Other Consumer $2,470 $1 NM Total $32,457 $142 0.4% Active De
Slide 17: Non-GAAP Disclosure Reconciliation
17 Non-GAAP Disclosure Reconciliation Three Months Ended June 30, March 31, June 30, ($ in thousands, except for share data) 2021 2021 2020 Adjusted net income available to common shareholders: Net income, as reported $120,512 $115,710 $95,601 Add: Losses on extinguishment of debt (net of tax) 6,024
Slide 18: Non-GAAP Disclosure Reconciliation
18 Non-GAAP Disclosure Reconciliation Three Months Ended June 30, March 31, June 30, ($ in thousands) 2021 2021 2020 Annualized return on average tangible shareholders' equity: Net income, as reported $120,512 $115,710 $95,601 Average shareholders' equity 4,708,789 4,645,400 4,477,446 Less: Average
Slide 19: Non-GAAP Disclosure Reconciliation
19 Non-GAAP Disclosure Reconciliation As of June 30, March 31, December 31, September 30, June 30, ($ in thousands, except for share data) 2021 2021 2020 2020 2020 Tangible book value per common share: Common shares outstanding 406,083,790 405,797,538 403,858,998 403,878,744 403,795,699 Shareholders
Slide 20: For More Information
20 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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