Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Q4 2017 Earnings Presentation
14 slides from Valley National Bancorp's earnings presentation, Jan 25, 2018
Slide 1: 4Q 2017 Earnings Conference Call Presentation
© 2018 Valley National Bank®. Member FDIC. Equal Opportunity Lender. All Rights Reserved. 4Q 2017 Earnings Conference Call Presentation Exhibit 99.2
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: Highlights
Highlights 3 1Refer to the appendix regarding the reconciliation of certain non-GAAP financial measures. Reported Reported Adjusted1 Adjusted1 4Q17 3Q17 2017 2016 4Q17 3Q17 2017 2016 Return on Average Assets 0.44% 0.67% 0.69% 0.76% 0.83% 0.79% 0.82% 0.76% Efficiency Ratio 68.3% 69.4% 66.0% 66.0% 57.
Slide 4: Merger Closing & Integration
• Closed USAmeriBank acquisition on January 1, 2018 • Systems consolidation expected to occur in the first half of 2Q 2018 • Long track record of successful conversions • USAmeriBank timeline consistent with recent acquisitions Year Institution Name* Assets* ($mil) Days to Convert 2018 USAmeriBank 4
Slide 5: Deposit & Balance Sheet Funding
$8.8 $9.4 $5.1 $5.2 $3.4 $3.6 3Q 2017 4Q 2017 0.2% 2.1% 14.3% 0% 10% 20% 30% 40% 2017Florida New York New Jersey 5 $734mm Reduction in short-term borrowings to $749mm Deposit & Balance Sheet Funding Solid Deposit Growth1 ($ in billions) Deposit Beta by Region for Current Cycle (3Q15 – 4Q17)2 +$841mm
Slide 6: Loans & Loan Growth
$1.0 $1.1 $1.0 $1.3 3.75% 3.85% 3.79% 4.00% Q1 2017 Q2 2017 Q3 2017 Q4 2017 Origination Volume Yield on New Originations 6 Loans & Loan Growth Yield & Volume of Loan Originations ($ in billions) Diversified Loan Portfolio by Product & Region1 2017 loan growth up 6.4%, including sale of residential
Slide 7: Credit Quality
Taxi Medallion 9/30/17 12/31/17 Related Reserves as a % of Total Exposure 5.5% 7.7% Total Exposure $139 million $137 million 7 0.75 % $18.3 billion Total Loans Credit Quality Net Charge-offs and Non-accrual Loans Reflect Conservative Underwriting Standards Outstanding balance as of December 31, 2017
Slide 8: Net Interest Income
• Net interest margin1 (ex-swap fee income) has been stabilizing • Favorable balance sheet trends combined with promising new loan yield bode well for net interest income growth • Anticipate 6 basis points of positive impact to NIM from USAmeriBank in 1Q18 8 Net Interest Income $164.7 $171.1 $166.9
Slide 9: Noninterest Income Trends
• Transforming Residential Mortgage gain-on sale business from refinance driven to home purchase focused – More predictable origination volume vs. refinance activity • 4Q 2017 residential mortgage application volume was over $450 million • We believe we are on track to achieve > $1.5 billion in resi
Slide 10: Expense Management
$476.1 $485.0 $400 $500 $600 2016 2017 "Base" 2018E 2019E Resi. Mortgage Commissions USAB Noninterest Expense Tax Act Impact USAB Merger Expense LIFT Related Expense "Base" Noninterest Expense 10 Expense Management 61.2% 58.9% 2016 2017 2018 2019 Long-Term Goal Project LIFT Status & Timing1 ($ in mi
Slide 11: Tax Act Implications & Capital
$1,595 $1,590 $733 $733 $210 $210 3Q17 4Q17 • Common Equity Tier 1 Capital Ratio of 9.2% (flat with previous quarter) • Go-forward effective tax rate in range of 21%-23% • Expect to earn-back our capital charge (total $22.6 million) related to Tax Reform within 2 quarters • Over the next two years w
Slide 12: Non-GAAP Disclosure Reconciliations
Non-GAAP Disclosure Reconciliations 12 Three Months Ended Years Ended December 31, September 30, December 31, December 31, December 31, ($ in thousands, except for share data) 2017 2017 2016 2017 2016 Adjusted net income available to common shareholders: Net income, as reported $26,098 $39,649 $50,0
Slide 13: Non-GAAP Disclosure Reconciliations
Non-GAAP Disclosure Reconciliations 13 Three Months Ended Years Ended December 31, September 30, December 31, December 31, December 31, ($ in thousands) 2017 2017 2016 2017 2016 Adjusted annualized return on average assets: Net income, as adjusted $49,732 $46,602 $50,090 $192,495 $168,146 Average as
Slide 14: For More Information
For More Information Log onto our web site: www.valleynationalbank.com E-mail requests to: rkraemer@valleynationalbank.com Call Rick Kraemer, Investor Relations Officer, at: (973) 686-4817 Write to: Valley National Bank 1455 Valley Road Wayne, New Jersey 07470 Attn: Rick Kraemer, Investor Relations
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