Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Q4 2022 Earnings Presentation
21 slides from Valley National Bancorp's earnings presentation, Jan 26, 2023
Slide 1: 4Q22 Earnings Presentation
4 Q 2 2 E a r n i n g s P r e s e n t a t i o n J a n u a r y 2 6 , 2 0 2 3 Exhibit 99.2
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: Consistent Financial Improvement
3 $10.35 $10.85 $11.57 $12.23 $6.73 $7.25 $7.94 $8.15 2019 2020 2021 2022 Equity per Share Measures Book Value (GAAP) Tangible Book Value (non-GAAP) 1 Please refer to the Non-GAAP Disclosure Reconciliation in Appendix. Consistent Financial Improvement 0.93% 0.96% 1.14% 1.09% 0.98% 0.99% 1.19% 1.25%
Slide 4: 2022 Highlights
4 2022 Highlights Balance Sheet Growth and Resilience ▪ Strong and Diverse Organic Loan and Deposit Growth Across Business Lines and Geographies ▪ Preservation of Sub-100% Loan / Deposit Ratio ▪ Significant Net Interest Margin Improvement Continued Credit Strength ▪ Non-Accrual Loans Declined to 0.5
Slide 5: 4Q 2022 Financial Highlights
5 4Q22 3Q22 4Q21 4Q22 3Q22 4Q21 Net Income ($mm) $177.6 $178.1 $115.0 $182.9 $181.5 $125.0 Return on Average Assets Annualized 1.25% 1.30% 1.08% 1.29% 1.32% 1.18% Return on Average Assets, ex. PPP 1 Annualized -- -- -- 1.28% 1.32% 1.08% Efficiency Ratio (Non-GAAP) -- -- -- 49.3% 49.8% 49.4% Diluted
Slide 6: Slower Payoffs Continue to Enhance Loan Growth
6 Multifamily 17% Non Owner-Occupied CRE 24% Healthcare CRE 5% Owner-Occupied CRE 9% C&I 19% Consumer 7% Residential R.E. 11% Construction 8% CRE 46% C&I 28% Other 26% New Loan Originations ($bn) 1 Loan classifications according to call report schedule which may not correspond to classifications out
Slide 7: Deposit Growth Supporting Loans
7 Deposit Growth Supporting Loans Deposit Balance Trends ($bn) 20.3 23.6 23.6 11.7 15.4 14.5 3.7 6.3 9.6 35.6 45.3 47.6 12/31/2021 09/30/2022 12/31/2022 Savings & Interest Checking Non-Interest Time 12% 32% 56% 20% 30% 50% Avg. Fed Funds vs. Deposit Costs (%) 0.15% 0.14% 0.19% 0.59% 1.36% 0.25% 0.30
Slide 8: Net Interest Income Analysis
8 Net Interest Income Analysis 4Q21 1Q22 2Q22 3Q22 4Q22 Net Interest Income (FTE) 316 318 420 455 467 PPP Impact 1 (17) (7) (4) (2) (1) NII ex PPP 299 311 415 454 466 Earning Asset Analysis 4Q21 1Q22 2Q22 3Q22 4Q22 Avg. Earning Assets 39,193 40,283 48,891 50,531 52,405 PPP Impact 1 (642) (298) (228)
Slide 9: Non-Interest Income
9 $20.7 $31.5 $31.0 $4.3 $10.7 $7.3 $6.5 $13.0 $13.6 $6.7 $0.9 $0.9 $38.2 $56.2 $52.8 4Q21 3Q22 4Q22 Other Non-Interest Income Swap Income Trust, Investment & Insurance Gain on Sale of Loans Other $18.0 34% Trust, Investment & Insurance $13.6 26% Loan Servicing Fees $2.6 5% Service Charges $10.3 19%
Slide 10: Non-Interest Expense
10 253.8 255.7 7.8 10.6 261.6 266.2 3Q22 4Q22 Adjusted Reported 1 Please refer to the Non-GAAP Disclosure Reconciliation in Appendix. Sums may be inconsistent due to rounding. Non-Interest Expense Non-Interest Expenses ($mm) Efficiency Ratio Trend 1 49.4% 49.8% 49.3% 52.0% 49.9% 49.4% 4Q21 3Q22 4Q22
Slide 11: Asset Quality
11 0.70% 0.65% 0.72% 0.65% 0.57% 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 Asset Quality Non-Accrual Loans / Total Loans Loan Loss Provision ($mm) Allowance for Credit Losses for Loans / Total Loans 0.99% 1.03% 1.10% 1.07% 1.13% 1.10% 1.03% 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/22
Slide 12: Equity & Capitalization
12 Equity & Capitalization $7.94 $7.93 $7.71 $7.87 $8.15 $11.57 $11.60 $11.84 $11.98 $12.23 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 TBV per share Book Value per share Book Value and Tangible Book Value per Share 1 Equity Capitalization Level 1 1 Please refer to the Non-GAAP Disclosure Re
Slide 13: 2023 Targets & Outlook
13 • Between 7% - 9%. (based on 12/31/2022 gross loans of $46.9 billion) 2023 Loan Growth • Year-over-year growth of 16% - 18% (from full-year 2022 net interest income of $1,656 million) Net Interest Income • Year-over-year growth of 10.5% - 12.5% (based on 2022 reported expenses less merger charges
Slide 14: Appendix
A p p e n d i x
Slide 15: CRE Detail as of 12/31/2022
15 CRE Detail as of 12/31/2022 Portfolio by Collateral Type Apartment & Residential 29% Retail 19% Mixed Use 10% Office 10% Industrial 11% Healthcare 11% Specialty & Other 10% Portfolio by Geography Florida 25.5% New Jersey 20.0% Other 20.2% Other NYC Boroughs 13.7% Manhattan (Multifamily) 6.3% Manh
Slide 16: Non-GAAP reconciliation: adjusted net income
16 December 31, September 30, December 31, December 31, December 31, December 31, December 31, ($ in thousands, except for share data) 2022 2022 2021 2022 2021 2020 2019 Adjusted net income available to common shareholders (Non-GAAP): Net income, as reported (GAAP) $177,591 $178,119 $115,038 $568,85
Slide 17: Non-GAAP reconciliation: return on tangible equity, efficiency ratio
17 December 31, September 30, December 31, December 31, December 31, December 31, December 31, ($ in thousands) 2022 2022 2021 2022 2021 2020 2019 Annualized return on average tangible shareholders' equity (Non-GAAP): Net income, as reported (GAAP) $177,591 $178,119 $115,038 $568,851 $473,840 $390,6
Slide 18: Non-GAAP reconciliation: return on average assets excluding PPP
18 December 31, September 30, December 31, ($ in thousands) 2022 2022 2021 Annualized return on average assets, excluding Paycheck Protection Program ("PPP") (Non-GAAP): Net income, as reported (GAAP) $177,591 $178,119 $115,038 Less: Interest and fees on PPP loans (net of tax) 564 1,100 12,549 Net i
Slide 19: Non-GAAP Reconciliations to GAAP Financial Measures
19 Non-GAAP Reconciliations to GAAP Financial Measures December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, December 31, September 30, June 30, ($ in thousands, except for share data) 2022 2022 2022 2022 2021 2021 2021 2021 2020 2020 2020 Net interest income, a
Slide 20: Tangible book value per common share reconciliation
20 December 31, September 30, June 30, March 31, December 31, December 31, December 31, ($ in thousands, except for share data) 2022 2022 2022 2022 2021 2020 2019 Tangible book value per common share (Non-GAAP): Common shares outstanding 506,374,478 506,351,502 506,328,526 421,437,068 421,437,068 40
Slide 21: For More Information
21 ▪ 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, FSVP – Director, Corporate Finance & Business Development ▪ Log onto
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