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
2 Q 2 1 E a r n i n g s P r e s e n t a t i o n J u l y 2 2 , 2 0 2 1 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: 2Q 2021 Highlights
3 2Q21 1Q21 2Q20 2Q21 1Q21 2Q20 Net Income ($mm) $120.5 $115.7 $95.6 $126.6 $115.8 $95.9 Return on Average Assets Annualized 1.17% 1.14% 0.92% 1.23% 1.14% 0.93% Efficiency Ratio 50.0% 49.5% 48.0% 46.6% 48.6% 46.8% Pre-Provision Net Revenue 2 ($mm) $172.1 $163.7 $170.2 $183.6 $166.5 $174.0 PPNR / Ave
Slide 4: Overview of The Westchester Bank Acquisition
4 Overview of The Westchester Bank Acquisition Westchester Valley Westchester Total Assets: Gross Loans: Total Deposits: Net Income (MRQ, annualized): ROAA (MRQ, annualized): Net Interest Margin (MRQ, annualized): Efficiency Ratio (MRQ): NPAs / Assets: Tang. Common Equity / Tang. Assets: $1,313mm $9
Slide 5: Net Interest Margin, Profitability & Operating Leverage
5 6% 11% 7% 5% Qtr / Qtr Growth (2Q21 / 1Q21) 3-Year CAGR (2Q21 / 2Q18) Revenue Expenses 6% 11% 2% 4% Qtr / Qtr Growth (2Q21 / 1Q21) 3-Year CAGR (2Q21 / 2Q18) $170.2 $163.7 $172.1 $174.0 $166.5 $183.6 1.64% 1.61% 1.67% 1.68% 1.63% 1.78% 2Q20 1Q21 2Q21 2Q20 1Q21 2Q21 PPNR PPNR / Avg. Assets Net Inter
Slide 6: Net Interest Income Analysis and PPP Impact
6 130 619 1,057 130 749 1,806 4Q20 1Q21 2Q21 Quarterly Forgiveness Cumulative Impact of PPP ($mm) 2,277 2,152 2,365 1,351 2,247 2,250 2,235 1,986 3Q20 4Q20 1Q21 2Q21 End of Period Avg. Balance 3.01% 3.06% 3.14% 3.18% 3.03% 3.06% 3.05% 3.07% 3Q20 4Q20 1Q21 2Q21 Reported NIM NIM ex. PPP Net Interest M
Slide 7: Interest Rate Positioning
7 Interest Rate Positioning 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 Continue to drive non-maturity deposit costs lower Selected opportunities to reprice maturing
Slide 8: Deposits, Funding & Liquidity
8 14.2 17.1 18.4 9.0 10.1 10.5 8.3 5.5 4.3 2Q20 1Q21 2Q21 Savings & Interest Checking Non-Interest Time Non-interest bearing $10.5 Savings, NOW & MMA $18.4 Time $4.3 Short-term borrowings $0.9 Long-term borrowings $1.9 Other $0.5 Avg. Deposit Balance ($MM) and Rate (%) Trends 2Q21 Deposit Trends ($b
Slide 9: Loans & Loan Growth
9 Residential R.E. 13% Multifamily 16% Owner- Occupied CRE 10% C&I 15% C&I (PPP) 4% Consumer 9% Construction 5% Non Owner- Occupied CRE 28% $0.9 $1.0 $1.4 $1.6 $2.6 3.27% 3.26% 3.35% 3.32% 3.32% 4.02% 3.89% 3.86% 3.85% 3.87% 2Q20 3Q20 4Q20 1Q21 2Q21 Origination Volume (Gross) New Origination Rate Av
Slide 10: Non-Interest Income
10 2Q21 Non-Interest Income ($mm) 2Q21 rebound in swap and gain on sale income as expected, supplemented by higher insurance commissions and other fees Fee income rebounded to 12.5% of revenues from 9.6% in 1Q21 despite strong growth in net interest income Fee Income Other 26% Trust, Investment & In
Slide 11: Operating Expenses and Efficiency Ratio
11 157.2 160.2 173.1 160.2 171.9 153.4 155.0 157.3 157.5 160.5 2Q20 3Q20 4Q20 1Q21 2Q21 Reported Expenses Adjusted 5 Quarter Operating Expense Trends ($ in millions) Efficiency Ratio (%) 1 Reported expenses include $8.4mm of losses on debt extinguishment and $3.0mm of tax credit amortization Adjuste
Slide 12: Asset Quality
12 0.65% 0.59% 0.58% 0.62% 0.68% 2Q20 3Q20 4Q20 1Q21 2Q21 Asset Quality Non-Accrual Loans / Total Loans Net Charge-offs & Provision ($mm) $15 $15 $3 $6 $9 $41 $31 $19 $9 $9 0.18% 0.19% 0.04% 0.07% 0.11% 2Q20 3Q20 4Q20 1Q21 2Q21 Net Charge-offs Provision for Loans NCOs / Avg. Loans Allowance for Cred
Slide 13: Equity & Capitalization
13 Equity & Capitalization $6.96 $7.12 $7.25 $7.39 $7.59 $10.56 $10.71 $10.85 $10.97 $11.15 6/30/20 9/30/20 12/31/20 3/31/21 6/30/2021 TBV per share Book Value per share Book Value and Tangible Book Value per Share 1 Equity Capitalization Level 1 Please refer to the Non-GAAP Disclosure Reconciliatio
Slide 14: Appendix
A p p e n d i x
Slide 15: CRE Detail as of 6/30/2021
15 CRE Detail as of 6/30/2021 Portfolio by Collateral Type Apartment & Residential 26% Retail 20% Mixed Use 12% Office 11% Industrial 11% Healthcare 9% Specialty & Other 11% Portfolio by Geography Florida 25.9% New Jersey 23.4% Other 15.1% Other NYC Boroughs 13.8% Manhattan (Multifamily) 6.7% Manhat
Slide 16: Outstanding Loan Deferrals
16 2Q21 Balance Active Active Deferral / ($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 $142 0.4% Deferral Information as of 6/30/2021 Outstanding Loan Deferrals Totals ma
Slide 17: Adjusted Net Income Reconciliation
17 June 30, March 31, June 30, ($ in thousands, except for share data) 2021 2021 2020 Adjusted net income available to common shareholders: Net income, as reported $120,512 $115,710 $95,601 Add: Losses on extinguishment of debt (net of tax) 6,024 — — Add: Losses on available for sale and held to mat
Slide 18: Return on Tangible Equity and Adjusted Efficiency Ratio
18 June 30, March 31, June 30, ($ in thousands) 2021 2021 2020 Annualized return on average tangible shareholders' equity: Net income, as reported $120,512 $115,710 $95,601 Average shareholders' equity 4,708,789 4,645,400 4,477,446 Less: Average goodwill and other intangible assets 1,449,388 1,451,7
Slide 19: Non-GAAP Disclosure Reconciliation
19 Non-GAAP Disclosure Reconciliation June 30, March 31, December 31, September 30, June 30, ($ 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' equi
Slide 20: For More Information
20 ▪ Log onto our website: www.valley.com ▪ Email requests to: tlan@valley.com ▪ 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 Development ▪ Log onto o
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