Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Q1 2021 Earnings Presentation
22 slides from Valley National Bancorp's earnings presentation, Apr 29, 2021
Slide 1: 1Q21 Earnings Presentation
1 Q 2 1 E a r n i n g s P r e s e n t a t i o n A p r i l 2 9 , 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: 1Q 2021 Highlights
3 1Q21 4Q20 1Q20 1Q21 4Q20 1Q20 Return on Average Assets Annualized 1.14% 1.02% 0.92% 1.14% 1.10% 0.93% Efficiency Ratio 49.5% 51.6% 50.8% 48.6% 47.0% 49.3% Pre-Provision Net Revenue 2 ($mm) $163.7 $162.3 $151.1 $166.5 $177.5 $155.7 PPNR / Average Assets 2 Annualized 1.61% 1.57% 1.59% 1.63% 1.72% 1.
Slide 4: Net Interest Margin, Profitability & Operating Leverage
4 6% 11% 14% 3% (3%) 6% 1-Year Growth (1Q21 / 1Q20) 3-Year CAGR (1Q21 / 1Q18) 5-Year CAGR (1Q21 / 1Q16) Reported Revenue Reported Expenses $151.1 $162.3 $163.7 $155.7 $177.5 $166.5 1.59% 1.57% 1.61% 1.63% 1.72% 1.63% 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 PPNR PPNR / Avg. Assets Net Interest Income and Margi
Slide 5: Net Interest Income Analysis
5 Net Interest Income Analysis 2Q20 3Q20 4Q20 1Q21 Net Interest Income (FTE) 283.5 284.1 288.8 293.6 PPP Impact (11.8) (14.8) (17.0) (25.7) NII ex PPP 271.7 269.3 271.8 267.9 Earning Asset Analysis 2Q20 3Q20 4Q20 1Q21 Avg. Earning Assets 37,777 37,768 37,807 37,386 PPP Impact (1,452) (2,247) (2,202)
Slide 6: Interest Rate Positioning
6 Interest Rate Positioning Continue to reduce non-maturity deposit costs Selected opportunities to reprice maturing CDs and borrowings lower and mitigate asset yield headwinds Intend to selectively take advantage of lower-cost wholesale funding and extend liability duration 12-Month Forward Maturit
Slide 7: Deposits, Funding & Liquidity
7 16.0 17.1 9.2 10.1 6.7 5.5 4Q20 1Q21 Non-interest bearing $10.1 Savings, NOW & MMA $17.1 Time $5.5 Short-term borrowings $1.1 Long-term borrowings $2.2 Other $0.5 Avg. Deposit Balance ($MM) and Rate (%) Trends 1Q21 Deposit Trends ($bn) Total Liabilities 3/31/2021 Deposits, Funding & Liquidity $36.
Slide 8: Technology Evolution & Digital Trends
8 Opportunity to drive increased digital product adoption across expanding client base % of Households Actively Using Online Banking Online Banking Net Promoter Scores (“NPS”) for Business and Retail customers exceed other NPS across the organization Enhanced back-end infrastructure to support evolv
Slide 9: Loans & Loan Growth
9 $1.4 $0.9 $1.0 $1.4 $1.6 3.90% 3.27% 3.26% 3.35% 3.32% 4.44% 4.02% 3.89% 3.86% 3.85% 1Q20 2Q20 3Q20 4Q20 1Q21 Origination Volume (Gross) New Origination Rate Avg. Portfolio Rate New Loan Originations ($bn) / Yields (%) vs Portfolio Yields (%) 2 1 Loan classifications according to call report sched
Slide 10: Paycheck Protection Program
10 Paycheck Protection Program Information as of 4/19/2021 Totals may not sum due to rounding Rounds 1 & 2 $2.3bn SBA-approved volume ~13,000 SBA-approved loans $180k Average loan size $42k Median loan size ~3% Average processing fee Valley’s Net Promoter Score (“NPS”) was above 80 for PPP service ~
Slide 11: 1Q21 Non-Interest Income
11 1Q21 Non-Interest Income ($mm) 1 Lower gain on sale revenue and swap income weighed on adjusted non-interest income during the quarter Expect both line items to recover in future quarters Other non-interest product offerings include: Insurance, Wealth Management, Trust, and Municipal Investment S
Slide 12: Quarter Operating Expense Trends
12 5 Quarter Operating Expense Trends ($ in millions) Efficiency Ratio (%) 1 Adjusted expenses consistent with 4Q20 levels Adjusted efficiency ratio increased as a result of non-interest income pressure Over $700k of seasonal snow removal expenses 1Refer to the appendix on pages 19 – 21 regarding no
Slide 13: Asset Quality
13 0.68% 0.65% 0.59% 0.58% 0.62% 1Q20 2Q20 3Q20 4Q20 1Q21 Asset Quality Non-Accrual Loans / Total Loans Net Charge-offs & Provision ($mm) $5 $15 $15 $3 $6 $34 $41 $31 $19 $9 0.06% 0.18% 0.19% 0.04% 0.07% 1Q20 2Q20 3Q20 4Q20 1Q21 Net Charge-offs Provision for Loans NCOs / Avg. Loans Allowance for Cre
Slide 14: Equity & Capitalization
14 Equity & Capitalization $6.82 $6.96 $7.12 $7.25 $7.39 $10.43 $10.56 $10.71 $10.85 $10.97 3/31/20 6/30/20 9/30/20 12/31/20 3/31/21 TBV per share Book Value per share Book Value and Tangible Book Value per Share 1 Equity Capitalization Level 1 Please refer to the Non-GAAP Disclosure Reconciliation
Slide 15: Appendix
A p p e n d i x
Slide 16: CRE Detail as of 3/31/2021
16 CRE Detail as of 3/31/2021 Portfolio by Collateral Type Apartment & Residential 27% Retail 20% Mixed Use 11% Office 11% Industrial 11% Healthcare 9% Specialty & Other 11% Portfolio by Geography Florida 25.7% New Jersey 23.9% Other 14.5% Other NYC Boroughs 13.7% Manhattan (Multifamily) 6.8% Manhat
Slide 17: Outstanding Loan Deferrals
17 Outstanding Loan Deferrals Totals may not sum due to rounding. Initial deferral period not to exceed 180 days. 1 Reflects residential mortgage loans held in portfolio. 2 See page 18 for more information. 3 Borrower industry based on NAICS and SIC codes. ~60% of active commercial deferrals are cur
Slide 18: COVID-19 Exposed Loan Segments
18 COVID-19 Exposed Loan Segments Totals may not sum due to rounding. 1 Borrower industry based on NAICS and SIC codes. 2 Secondary categories: Nursing & Residential Care, Wholesale Trade, Manufacturing, Child Care & Education Exposure to primary COVID-19 exposed loan segments has remained stable at
Slide 19: March 31, December 31, March 31, ($ in thousands, except for share data) 2021
19 March 31, December 31, March 31, ($ in thousands, except for share data) 2021 2020 2020 Adjusted net income avai lable to common shareholders: Net income, as reported $115,710 $105,363 $87,268 Add: Losses on extinguishment of debt (net of tax) — 6,958 — Add: Losses (gains) on securities transacti
Slide 20: March 31, December 31, March 31, ($ in thousands) 2021 20 2020 Annual ized
20 March 31, December 31, March 31, ($ in thousands) 2021 2020 2020 Annual ized return on average tangible shareholders' equi ty: Net income, as reported $115,710 $105,363 $87,268 Average shareholders' equity 4,645,400 4,582,329 4,408,585 Less: Average goodwill and other intangible assets 1,451,750
Slide 21: March 31, December 31, September 30, June 30, March 31, ($ in thousands, except
21 March 31, December 31, September 30, June 30, March 31, ($ in thousands, except for share data) 2021 2020 2020 2020 2020 Tangible book value per common share: Common shares outstanding 405,797,538 403,858,998 403,878,744 403,795,699 403,744,148 Shareholders' equity $4,659,670 $4,592,120 $4,533,76
Slide 22: For More Information
22 ▪ 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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