Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Q4 2017 Earnings Presentation
24 slides from Valley National Bancorp's earnings presentation, Feb 7, 2018
Slide 1: 1Q18 Investor Presentation
1Q18 Investor Presentation Exhibit 99.1
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: The New Valley
The New Valley Human Capital • Recent CEO succession • 7 out of our 13 Executives are new to Valley within the past 2 years • One VLY, One Culture Technology • The Valley Roadmap is a 3 year (2017-2019) ~$50 million infrastructure plan aimed at improving the Bank’s process across all segments •
Slide 4: The New Valley: Leadership Team
Ira Robbins President & CEO Alan Eskow SEVP & CFO Dianne Grenz SEVP & CCBO Tom Iadanza SEVP & CLO Ron Janis SEVP & General Counsel Bob Bardusch EVP & COO Kevin Chittenden EVP & CRLO Bernadette Mueller EVP & ECRAO Andrea Onorato EVP & CAO Melissa Scofield EVP & CRO Yvonne Surowiec EVP & CHRO Joseph V
Slide 5: The New Valley: Technology Roadmap
▪ Delivering robust customer and employee experiences through frictionless interaction Modernize & Empower Customer Centric Digitally Powered Data Driven ▪ Enhancing customer touch points to drive improved customer capabilities ▪ Improving operating efficiency and agility by investing in continuous
Slide 6: The New Valley: Technology Roadmap Milestones
The New Valley: Technology Roadmap Milestones 6 2018 Cloud/Streamlined Loan Origination Innovation Culture & Fintech Enhanced Treasury & Branch Transformation New Website Salesforce, nCino, Encompass Instant Issue Debit 2017 New Web/Social Media Storefront Journey to Cloud Architectu
Slide 7: The New Valley: Cycle to Success
The New Valley: Cycle to Success 7 Updated 2020 Goals > 1.25% ROAA < 55% Eff. Ratio Updating Technology & Process Using Capital More Efficiently Enhancing Focus on Organic Growth Increasing Profitability Creating Greater Shareholder Returns Transform our digital brand through mobile, social media,
Slide 8: The New Valley: Balanced Approach to Integration
The New Valley: Balanced Approach to Integration A practical approach to platform consolidation Historically, Valley has integrated acquired platforms onto our own Valley will be able to offer all clients the best in treasury management solutions There are multiple benefits to Valley and our
Slide 9: 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 10: Strength in Diversification Leads to Stability & Growth
Strength in Diversification Leads to Stability & Growth *Metro NY Peer Median is defined by the following companies; NYCB, SBNY, BKU, ISBC, STL, PFS, DCOM, FFIC, LBAI, PGC, ORIT, NFBK, FLIC. The median is based on MRQ available information. 1 Includes the proforma impact of USAmeriBank as of Decembe
Slide 11: 2017 Highlights
2017 Highlights 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%
Slide 12: 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% 5% 10% 15% 20% 25% 30% 35% 40% 2017Florida New York New Jersey $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 – 4
Slide 13: Loans & Loan Growth
$1.0 $1.1 $1.0 $1.3 3.75% 3.85% 3.79% 4.00% Q1 2017 Q2 2017 Q3 2017 Q4 2017 Origination Volume Yield on New Originations Loans & Loan Growth Yield & Volume of Loan Originations ($ in billions) Diversified Loan Portfolio by Product & Region1 2017 loan growth up 6.4%, including sale of residential m
Slide 14: 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 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 0
Slide 15: Net Interest Margin Stability in 2017
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 Net Interest Income $164.7 $171.1 $166.9 $1
Slide 16: 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 17: 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 Expense Management 66.0% 66.0% 61.2% 58.9% 2016 Reported 2017 Reported 2016 2017 2018E 2019E Long-Term Goal
Slide 18: Tax Act Implications & Capital
$1,595 $1,590 $733 $733 $210 $210 3Q17 4Q17 Common Equity Tier 1 Capital Ratio of 9.2% at December 31, 2017 (flat with previous quarter) Estimated go-forward effective tax rate in range of 21%- 23% Expect to earn-back our capital charge (total $22.6 million) related to Tax Reform within 2 quar
Slide 19: Non-GAAP Disclosure Reconciliations
Non-GAAP Disclosure Reconciliations Three Months Ended Years Ended December 31, September 30, December 31, December 31, December 31, ($ 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 $168,146 Average asset
Slide 20: Non-GAAP Disclosure Reconciliations
Non-GAAP Disclosure Reconciliations Three Months Ended Years Ended December 31, September 30, December 31, December 31, December 31, ($ 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 $50,090
Slide 21: Appendix – Balance Sheet
Appendix – Balance Sheet 21 2017 2016 Assets Cash and due from banks 243,310$ 220,791$ Interest bearing deposits with banks 172,800 171,710 Investment securities: Held to maturity (fair value of $1,837,620 at December 31, 2017 and $1,924,597 at December 31, 2016) 1,842,691 1,925,572 Available for sa
Slide 22: Appendix – Income Statement
Appendix – Income Statement 22 2017 2016 2015 Interest Income Interest and fees on loans 742,739$ 685,911$ 633,199$ Interest and dividends on investment securities: Taxable 72,676 58,143 52,050 Tax-exempt 15,399 15,537 14,568 Dividends 9,812 6,206 6,557 Interest on federal funds sold and other short
Slide 23: Appendix – Asset Quality
Appendix – Asset Quality (1)Past due loans and non-accrual loans exclude purchased credit-impaired (PCI) loans. PCI loans are accounted for on a pooled basis under U.S. GAPP and are not subject to delinquency classifications in the same manner as loans originated by Valley. (2)Represent PCI loans me
Slide 24: 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 Rela
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