Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Q3 2024 Earnings Presentation
31 slides from Valley National Bancorp's earnings presentation, Oct 24, 2024
Slide 1: 3Q24 Earnings Presentation
Exhibit 99.2 3Q24 Earnings Presentation October 24, 2024
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation 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 abo
Slide 3: 3Q 2024 Financial Highlights
3Q 2024 Financial Highlights GAAP Reported Non-GAAP Adjusted ! Net Income($mm) $97.9 $70.4 $141.3 Return on Average Assets 0.63% 0.46% 0.92% Annualized . a “ Efficiency Ratio (Non-GAAP) - = a Diluted Earnings Per Share $0.18 $0.13 $0.27 Pre-Provision Net Revenue ?($mm) $201.7 $175.4 $203.9 PPNR / Av
Slide 4: Continued Progress Towards Balance Sheet Goals
Continued Progress Towards Balance Sheet Goals CRE/TRBC! ACL / Loans oy Prior Est Prior Est. <4 — Tf ES -===-- ~1.10% ATH% ------ 442% ; A 120% “125% 408% ~h00% See sears 1.06% 0.93% 1 MSU2S; SISA *9IBOIRS. asia 12/31/23 6/30/24 9/30/24 12/31/24 12/31/25 7 : est. est. Loans / Deposits CET1/RWA 973%"
Slide 5: Quarterly Balance Sheet Highlights
Quarterly Balance Sheet Highlights = Continue to Enhance Regulatory Capital Ratios = Successful execution of a $150 million preferred stock offering at an attractive rate of 8.25%. " Transferred over $800 million of commercial real estate loans to held for sale at a modest 1% discount. = The expecte
Slide 6: Outlook & Expectations
Outlook & Expectations Petrie Gross Loans Low Single Digits Annualized Growth Down ~1% Reported inc. of Loan Sale Modest Growth ex-Loan Sale ACL / Loans ~1.20% at 12/31/24 The Company is providing this outlook only on a non-GAAP basis because not all of the information necessary for a quantitative r
Slide 7: Net Interest Income Commentary
Net Interest Income Commentary = Management Base Case Assumptions — Forward rate projections as of September 30* include 25bp Fed Fund cuts occurring in November and December — 50% downside beta on interest-bearing non-maturity deposits, 35% downside beta when assuming relatively stable non-interest
Slide 8: Driving Long-Term Value Despite Near-Term Headwinds
Driving Long-Term Value Despite Near-Term Headwinds Shareholder Value Creation vs. Peers = Cumulative Dividends Post-2017 m Reported TBV Growth Post-2017 ' 95% 75% % “ VLY Peer Median Commercial Loan Diversity by Geography Deposit Accounts (000s) mFL&Other @NYSNJ 50% 21% 12/3117 9/30/24 +108% 423% >
Slide 9: Controlling Deposit Costs
Controlling Deposit Costs Deposits by Product ($bn) $50.1 $50.4 oe _ 22% 29% 22% Lal 49% 50% 6/30/2024 9/30/2024 = Time mNon-interest Savings, NOW and money market Deposits by Customer Type ($bn) Avg. Fed Funds vs. Deposit Costs (%) $50.1 $50.4 1% 18% 82% 41.0 413 82% 5.50% 5.50% 5.50% 5.43% 4Q22 4Q
Slide 10: Diversified Deposit Base
Diversified Deposit Base Total Deposit Breakdown ($bn) Specialized Deposits $10.8 21% Traditional Fully FDIC-Insured Branch Deposits Indirect Customer $305 $91 61% 18% Traditional Branch Deposits 3 ($bn) New Jersey 168 5 ; New York ranches $4.6 $30.5bn 41 branches m / Florida $13 $78 16 branches 43
Slide 11: Continued Emphasis on C&I and Owner-Occ. CRE
Continued Emphasis on C&I and Owner-Occ. CRE Gross Loans ($bn) ' 9/30/2024 Loan Composition ! Non Owner-Occupied CRE 26% 01 ver 03 Owner-Occupied CRE 01 (0.8) er a 1% 50.3 él Aga Construction 20% % 6/30/24 Other CREGOwner-Oce, CEI Resi& CRE Transfer 9/30/24 Residential RE, Consumer Const. CRE Consum
Slide 12: CRE Detail as of 9/30/24
CRE Detail as of 9/30/24 Portfolio by Property Type Portfolio by Geography Retail pease Florida 1% 10% 28%, Office New York (ex. NYC) 1% 10% New Jersey Healthcare Manian 21% apsrenisnes $26.9bn =< Office ed Residential an Manhattan 31% (Multifamily) 6% Industrial 11% Other NYC Heallicare Boroughs Ot
Slide 13: Multifamily Portfolio Detail
Multifamily Portfolio Detail Multifamily Portfolio by Sub-Asset Class ($bn) CoO} 39 $8.2bn Geography Outstanding Avg.Size Wt. Avg. Wtd. Avg. ($bn) ($mm) Liv! DSCR? Other New York (ex. Manhattan) New Jersey Florida & Alabama Manhattan Total Non Co-Op Multifamily by Geography ($bn) Florida & Alabama 1
Slide 14: Granular & Diverse Office Portfolio
Granular & Diverse Office Portfolio Office Portfolio by Tenancy Multi Tenant w/ Anchor $0.3 Multi Tenant % $17 53% Healthcare Office $0.4 13% Single Tenant $0.8 25% ~20% of Office Portfolio is Owner-Occupied. Office Portfolio by Geography ($bn) Florida & Alabama $1 Manhattan 35% $03 9% New York (ex.
Slide 15: CRE maturity schedule
4Q24 1Q25 2Q25 3Q25 4Q25 2026 2027 2028 2029 2030 2031 and Beyond 15
Slide 16: Net Interest Income and Margin
Net Interest Income and Margin Net Interest Income ($mm) and Margin 2.N% 2.86% 2.84% Zaz 2.79% saa $412 $403 $399 | | 3Q23 4Q23 1Q24 2Q24 3Q24 Mam Net Interest Income ($mm) ==NIM Net Interest Income Commentary > Net interest income continued to expand 2% sequentially for the second quarter in a row
Slide 17: Non-Interest Income
Non-Interest Income Adjusted Non-Interest Income ($mm) ! 3Q24 Adjusted Non-Interest Income ($mm) ! 1 Reported 607 | Adjusted (14) 2Q24 Capital Tax Credit Deposit Card Other 3Q24 Markets Advisory Fees Income Traditional Fees Loan Servicing re Other po $16.4 28% Gain-on-Sale of Loans, net $2.2 3% $59.
Slide 18: Non-Interest Expense
Non-Interest Expense Non-Interest Expenses ($mm)! Efficiency Ratio Trend! 7: Reported w Adjusted — 269.5 59.6% 270.0 ae 56.7% 56.1% 2Q24 3Q24 3Q23 2Q24 3Q24 Adj. Ann. Non-Interest Expenses '/ Avg. Assets > Compensation costs remain well-controlled. 2.16% 2.20% > ~$3mm expense for full quarter of cov
Slide 19: Asset Quality Trends
Asset Quality Trends Non-Accrual Loans / Total Loans Accruing Past Due Loans / Total Loans ™30-59PD = 60-89PD m90+PD 0.35% 0.52% 0.58% 0.58% 0.60% 0.60% ; wees “was SORA =O ROMA 9/30/23 12/31/23 3/30/24 += 6/30/24 = 9/30/24 Implied Loss Given Default on CRE + Construction ! Years of Total Reserve Co
Slide 20: Significantly Improved Reserve Coverage
Significantly Improved Reserve Coverage ACL / Total Loans 1.14% 1.06% is 0.92% 0.93% OMS 9/30/23 12/31/23 3/30/24 6/30/24 9/30/24 Net Loan Charge-offs ($mm) Allowance for Loan Losses / Non-Accrual Loans mmm Net Charge-offs =——-NCOs/ Avg. Loans 0.29% 0.34% 14% 0.04% el Es 3Q23 4Q23 1Q24 2Q24 3Q24 171
Slide 21: Equity & Capitalization
Equity & Capitalization Book Value and Tangible Book Value per Share ! $12.64 $12.79 $12.81 $12.82 S306 $9.06 $8.79 $8.84 $8.87 - i | a 9/30/2023 12/31/2023 3/31/2024 6/30/2024 9/30/2024 Mmmm TBV pershare — Book Value per share Holding Company Equity Capitalization Level ! 6/30/24 10.83% 11.00% 11.0
Slide 22: Appendix
APPENDIX
Slide 23: Glossary of Defined Terms
Glossary of Defined Terms Term Definition Term Definition ACL Allowance for credit losses NOF Non-deliverable forward Bank Leumi Le-Israel Corporation acquired by Valley on NIM Net Interest Margin BEAK CSUR USA Anil 2002 4 — NI New Jersey 8 cél Commercial & industrial NY New York CAGR Compound annua
Slide 24: Consistent Relationship-Focus Supports Credit Strength
Consistent Relationship-Focus Supports Credit Strength Firm Type: Investor Profile: Source of Equity Capital: Ownership Structure: Timeframe and Size: Performance Longevity: Liquidity: Cash Stability: Underwriting: Enhancements: 9 Valley Local / regional sponsors and developers; often owner- operato
Slide 25: Key Pillars of Valley's Credit Risk Management
Key Pillars of Valley's Credit Risk Management Disciplined Approach to Customer Acquisition Strategic and Balanced Methodology v Deep institutional knowledge of real estate markets guides v Various Risk Acceptance Criteria approved by credit oversight target customers and Board Risk Committee v Risk
Slide 26: Historical Net Charge-Offs / Loans
Historical Net Charge-Offs / Loans Prudent risk management and rigorous underwriting standards continue to support Valley's strong and consistent credit quality metrics and limited historical losses. —VLY ——Peer Median 2Q24 2007Y 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y 2019
Slide 27: Minimal Exposure to Larger Office Properties
Minimal Exposure to Larger Office Properties Probability of Default Applied to Office Exposure by Building 50% 45% 40% w a z 25% 20% % of Valley Office Portfolio 15% 10% 5% 0% 3.0% Under 50 k 50k - 99k mmm Valley Office Exposure by Building Size (LHS) 5.0% 100k - 149k 1 Probability of Default (RHS)
Slide 28: Non-GAAP Reconciliations to GAAP Financial Measures
Non-GAAP Reconciliations to GAAP Financial Measures (Sin thousands, except for share data) Net income, as reported (GAAP) ‘Add: FDIC Special assessment (a) ‘Add: Losses on available for sale and held to maturity securities transactions, net (b) Add: Restructuring charge (c) Less: Net gains on sales
Slide 29: Non-GAAP Reconciliations to GAAP Financial Measures
Non-GAAP Reconciliations to GAAP Financial Measures (Sin thousands) Net income, as adjusted (Non-GAAP) Average shareholders’ equity Annualized return on average shareholders’ equity, as adjusted (Non-GAAP) Net income, as reported (GAAP) ‘Average shareholders’ equity Less: Average goodwill and other
Slide 30: Non-GAAP Reconciliations to GAAP Financial Measures
Non-GAAP Reconciliations to GAAP Financial Measures ‘Three Months Ended September 30, Tune 30, September 30, (Sin thousands) 2024 2024 2023 Pre-provision net revenue (GAAP) $201,698 $175,401 $203,949 ‘Add: FDIC Special assessment (pre-tax) - 1363 - ‘Add: Restructuring charge (pre-tax) - 334 (675) ‘A
Slide 31: © 2024 Valley Bank. All rights reserved. Please see www.valley.com for further details. ▪
© 2024 Valley Bank. All rights reserved. Please see www.valley.com for further details. ▪ ▪ ▪ ▪
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