Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Q2 2020 Earnings Presentation
19 slides from Valley National Bancorp's earnings presentation, Jul 23, 2020
Slide 1: 2Q20 Earnings Presentation
2Q20 Earnings Presentation July 23, 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: 2Q 2020 Highlights
3 2Q 2020 Highlights Reported Adjusted 1 2Q20 1Q20 2Q19 2Q20 1Q20 2Q19 Return on Average Assets 0.92% 0.92% 0.94% 0.92% 0.93% 0.96% Efficiency Ratio 48.0% 50.7% 57.2% 46.8% 49.3% 54.6% Pre-Provision Net Revenue 2 ($mm) $170.2 $151.1 $106.1 $174.0 $155.7 $113.9 PPNR / Average Assets 2 1.64% 1.59% 1.3
Slide 4: Outstanding Loan Deferrals
4 Outstanding Loan Deferrals 2Q20 Deferral Information as of 7/10/20 ($MM) Balance Previously Deferred & Active Active Deferral / ($MM) Actively Paying or Current Deferral 2Q20 Loans Commercial Loans & Leases $25,178 $1,775 $2,176 9% 1 Residential & Home Equity $4,876 $35 $489 10% Auto & Other Consu
Slide 5: Net Interest Margin, Profitability & Operating Leverage
5 Net Interest Margin, Profitability & Operating Leverage Net Interest Income and Margin Pre-Provision Net Revenue ($mm) 1 Year-over-year NII growth of 28% (FTE) Reported Adjusted 1.64% 1.63% 1.68% 1.59% 1.30% 1.39% $283.5 $170.2 $174.0 $151.1 $155.7 $266.4 $106.1 $113.9 $239.6 $221.4 $221.7 3.07% 3
Slide 6: Interest Rate Positioning
6 Interest Rate Positioning 1 12-Month Forward Cumulative Cash Flow Gap ($bn) 12-Month Forward Maturity Schedule ($bn) 3Q20 4Q20 1Q21 2Q21 Maturing CD Rates 1.38% 1.41% 1.58% 0.99% $6.0 $- Cumulative Cash Flow Gap Maturing Borrowing Rates 0.65% 1.06% 1.10% 2.24% $(0.5) Maturing BCD Rates 0.59% 0.69%
Slide 7: Deposits, Funding & Liquidity
7 Deposits, Funding & Liquidity Quarterly Deposit Trends ($BN) Total Liabilities 6/30/2020 Non-interest $31.4 $29.1 bearing $9.0 8.3 Time (-$294MM) 8.6 Savings, NOW Other & MMA Noninterest Bearing $0.8 $14.2 9.0 +$2.0BN $37.2BN 7.0 Long-term ($1.6BN from PPP) borrowings $3.0 1 13.5 14.2 Savings, Now
Slide 8: Loans & Loan Growth
8 Loans & Loan Growth 2Q20 Loan Composition 1 Year-to-Date Loan Growth (Ann.) 1 Residential R.E. Multifamily Non-Owner Occupied CRE 12.7% +$481mm 14% 16% Construction 9.0% +$74mm Owner- Occupied CRE Owner-Occupied CRE 4.7% +$76mm 10% +$28mm Res. Mortgage 1.3% Non Owner- $32.3bn +$19mm Occupied CRE M
Slide 9: Paycheck Protection Program – Phases & Volume
9 Paycheck Protection Program – Phases 1 & 2 500+ Valley employees dedicated to assisting our customers $2.3bn SBA-approved volume take advantage of Paycheck Protection Program ~80% of SBA-approved borrowers had an existing Valley relationship ~30% of PPP loans were provided to minority-owned busine
Slide 10: COVID-19 Exposed Loan Segments
10 COVID-19 Exposed Loan Segments Non-PPP Loan Balance (6/30/20) Pass-Rated (6/30/20) Active Deferrals as of 7/10/20 Approved Deferrals as of 4/26/20 Borrower Industry 1 ($MM) % of non-PPP Loans ($MM) % of Industry ($MM) % of Industry ($MM) % of Industry Primary Exposure Doctor & Surgery $531 1.8% $
Slide 11: CRE Detail
11 CRE Detail CRE by Collateral Type (as of 6/30/2020) Commercial Real Estate Apartment & Our CRE portfolio is primarily comprised of loans Residential on non owner-occupied investment properties 31% made to sophisticated high net worth borrowers supported by diverse collateral and cash flow sources
Slide 12: Fee Income
12 Fee Income Adjusted Non-Interest Income ($MM) 1 2Q20 Adjusted Non-Interest Income ($MM) 1 BOLI 13% Other Trust, 13% Investment & Insurance 10% Loan Servicing Fees 5% $44.9 $44.9MM $41.4 Service Charges $30.5 8% Swap Fees 33% Gain-on-Sale of Loans, net 2Q19 1Q20 2Q20 18% Adjusted non-interest inco
Slide 13: Non-Interest Expense
13 Non-Interest Expense 5 Quarter Operating Expense Trends ($ in millions) Efficiency Ratio (%) 1 196.1 Includes merger related charges and debt extinguishment 2020 Goal: 51.0% 155.7 157.2 145.9 2 57.2 141.7 153.4 54.6 151.1 50.7 145.1 48.0 49.3 140.1 46.8 136.8 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 1Q20 2Q
Slide 14: Asset Quality
14 Asset Quality Allowance for Credit Losses for Loans / Total Loans Non-Accrual Loans / Total Loans 1.06% 0.68% 0.65% 0.25% 0.22% 0.96% 0.99% 0.61% 0.62% 0.55% 0.37% 0.38% 0.43% 0.43% 0.31% 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 ACL / Loans ex. PPP Non-PCD PCD Net Charge-offs & Provision
Slide 15: Equity & Capitalization
15 Equity & Capitalization Book Value and Tangible Book Value per Share 1 Equity Capitalization Level 8% year-over-year tangible book value growth $2.2BN PPP loans reduce TCE / TA by ~41 bp in 2Q20 $10.43 $10.56 11.71% $10.35 $9.93 $10.09 11.30% $6.96 $6.82 10.61% 10.73% 10.54% $6.73 7.54% $6.62 7.3
Slide 16: Non-GAAP Disclosure Reconciliation
16 Non-GAAP Disclosure Reconciliation Three Months Ended June 30, March 31, June 30, ($ in thousands, except for share data) 2020 2020 2019 Adjusted net income available to common shareholders: Net income, as reported $95,601 $87,268 $76,468 Less: Gain on sale leaseback transactions (net of tax)(a)
Slide 17: Non-GAAP Disclosure Reconciliation
17 Non-GAAP Disclosure Reconciliation Three Months Ended June 30, March 31, June 30, ($ in thousands) 2020 2020 2019 Annualized return on average tangible shareholders' equity: Net income, as reported $95,601 $87,268 $76,468 Average shareholders' equity 4,477,278 4,408,585 3,481,519 Less: Average go
Slide 18: Non-GAAP Disclosure Reconciliation
18 Non-GAAP Disclosure Reconciliation As of June 30, March 31, December 31, September 30, June 30, ($ in thousands, except for share data) 2020 2020 2019 2019 2019 Tangible book value per common share: Common shares outstanding 403,795,599 403,744,148 403,278,390 331,805,564 331,788,149 Shareholders
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, SVP – Director, Corporate Finance & Business Dev
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