Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Q1 2023 Earnings Presentation
22 slides from Valley National Bancorp's earnings presentation, Apr 27, 2023
Slide 1: 1Q23 Earnings Presentation
1 Q 2 3 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 7 , 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: Overview of 1Q 2023
3 Overview of 1Q 2023 Balance Sheet Strength Supported by Diversification ▪ Total Deposits Remained Stable Supported by Diverse Sources and Granular Relationships ▪ Excess Loan Growth Reflects Consistent Origination Activity and Modest Payoffs ▪ Substantial Excess Liquidity Available From On- and Of
Slide 4: 1Q 2023 Financial Highlights
4 1Q23 4Q22 1Q22 1Q23 4Q22 1Q22 Net Income ($mm) $146.6 $177.6 $116.7 $154.5 $182.9 $120.3 Return on Average Assets Annualized 0.98% 1.25% 1.07% 1.03% 1.29% 1.10% Efficiency Ratio (Non-GAAP) -- -- -- 53.8% 49.3% 53.2% Diluted Earnings Per Share $0.28 $0.34 $0.27 $0.30 $0.35 $0.28 Pre-Provision Net R
Slide 5: Total Deposits Remain Stable
5 29% 57% 34% 10% 0.15% 0.14% 0.19% 0.59% 1.36% 1.96% 0.25% 0.30% 0.96% 2.39% 3.82% 4.69% 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 Total Deposits Average Fed Funds (Upper) Avg. Fed Funds (Upper) Total Cost of Deposits Cumulative Beta 4Q21 0.25% 0.15% -- 1Q22 0.30% 0.14% -- 2Q22 0.96% 0.19% 5% 3Q22 2.39% 0.59%
Slide 6: Customer Deposit Base Diversified by Geography and Source
6 Customer Deposit Base Diversified by Geography and Source Traditional Branch Deposits $32.0 67% Specialized Deposits $8.5 18% Fully FDIC-Insured Indirect Customer $7.1 15% Nat'l Deposits, Cannabis & Digital $2.5 International Corporate $0.9 Technology $1.3 Private Banking & Wealth $1.6 Other Comme
Slide 7: Highly Granular Deposits
7 NJ $2.2 NY $0.5 FL $0.9 PA $0.6 Other $0.4 $58,000 Average Account Size (Commercial & Consumer) Highly Granular Deposits – 3/31/2023 Customer Type Deposits ($bn) % of Total Deposits Commercial $19.6 41% Consumer $16.3 34% Fully FDIC-Insured Indirect $7.1 15% Fully-Collateralized Government 1 $4.6
Slide 8: Slower Payoffs Continue to Enhance Loan Growth
8 Multifamily 17% Non Owner-Occupied CRE 24% Healthcare CRE 5% Owner-Occupied CRE 9% C&I 19% Consumer 7% Residential R.E. 11% Construction 8% CRE 46% C&I 28% Other 26% New Loan Originations ($bn) 1 Loan classifications according to Call Report schedule which may not correspond to classifications out
Slide 9: CRE Detail as of 3/31/2023
9 CRE Detail as of 3/31/2023 Portfolio by Collateral Type Apartment & Residential 29% Retail 19% Mixed Use 10% Office 10% Healthcare Office 1% Industrial 11% Healthcare 10% Specialty & Other 10% Portfolio by Geography Florida 25.2% New Jersey 20.0% Other 21.5% Other NYC Boroughs 13.3% Manhattan (Mul
Slide 10: Granular & Diverse Office Portfolio
10 Office 10% Healthcare Office 1% Granular & Diverse Office Portfolio CRE Portfolio $27.0bn Office Portfolio by Geography Florida & Alabama $1.1 36% New Jersey $0.8 26%Other $0.5 17% New York (ex. Manhattan) $0.5 15% Manhattan $0.2 6% $3.1bn Geography Outstanding ($bn) Avg. Size ($mm) % of Total Of
Slide 11: Track Record of Below-Peer Net Charge-Offs
11 1 Excludes FDIC transaction covered loan charge-offs for the following periods: $1.5mm in 2014, $0.1mm in 2013, $4.0mm in 2012, and $14.4mm in 2011. 2 Peers include major exchange traded banks and thrifts with assets $40 billion to $80 billion as of 12/31/2022. Excludes merger targets. Source: S&
Slide 12: Net Interest Income and Margin
12 Net Interest Income ($mm) and Margin Net Interest Margin $318 $420 $455 $467 $437 3.16% 3.43% 3.60% 3.57% 3.16% 1Q22 2Q22 3Q22 4Q22 1Q23 Net Interest Income ($mm) NIM All metrics are represented on a fully tax equivalent basis 1Q23 day count and excess liquidity weighed on net interest income by
Slide 13: Diverse Fee Income Sources
13 $10.7 $17.8 $20.4 $14.4 $10.1 $10.9 $7.0 $13.6 $12.0 $1.0 $0.9 $0.5 $6.2 $10.3 $10.5 $39.3 $52.8 $54.3 1Q22 4Q22 1Q23 Other Non-Interest Income Capital Markets Wealth, Trust & Insurance Gain on Sale of Loans Deposit Service Charges Other $17.8 33% Wealth, Trust & Insurance $12.0 22% Capital Marke
Slide 14: Seasonal Non-Interest Expense Growth
14 255.7 263.8 10.6 8.4 266.2 272.2 4Q22 1Q23 Adjusted Reported 1 Please refer to the Non-GAAP Disclosure Reconciliation in Appendix. Sums may be inconsistent due to rounding. Seasonal Non-Interest Expense Growth Non-Interest Expenses ($mm) 1 Efficiency Ratio Trend 1 53.2% 49.3% 53.8% 1Q22 4Q22 1Q23
Slide 15: Asset Quality
15 0.65% 0.72% 0.65% 0.57% 0.50% 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 Asset Quality Non-Accrual Loans / Total Loans Loan Loss Provision ($mm) Allowance for Credit Losses for Loans / Total Loans 0.99% 1.03% 1.07% 1.13% 1.10% 1.03% 0.95% 3/31/2022 6/30/2022 9/30/2022 12/31/22 3/31/23 Net
Slide 16: Small, High-Quality Securities Portfolio
16 Resi MBS 49% Corporate & Other 14%U.S. Treasury 23% U.S. Gov't Agency 2% Obligations of States & Political 1% Municipals 11% Resi MBS 75% TRUPs 1% Corporate & Other 2% U.S. Treasury 2% U.S. Gov't Agency 8% Obligations of States & Political 2% Municipals 10% Small, High-Quality Securities Portfoli
Slide 17: Equity & Capitalization
17 Equity & Capitalization $7.93 $7.71 $7.87 $8.15 $8.36 $11.60 $11.84 $11.98 $12.23 $12.41 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 TBV per share Book Value per share Book Value and Tangible Book Value per Share 1 Equity Capitalization Level 1 1 Please refer to the Non-GAAP Disclosure Rec
Slide 18: Appendix
A p p e n d i x
Slide 19: Non-GAAP Reconciliations to GAAP Financial Measures
19 Non-GAAP Reconciliations to GAAP Financial Measures March 31, December 31, March 31, ($ in thousands, except for share data) 2023 2022 2022 Adjusted net income available to common shareholders (Non-GAAP): Net income, as reported (GAAP) $146,551 $177,591 $116,728 Add: Losses (gains) on available f
Slide 20: Non-GAAP Reconciliations (Return on Tangible Equity, Efficiency Ratio)
20 March 31, December 31, March 31, ($ in thousands) 2023 2022 2022 Annualized return on average tangible shareholders' equity (Non-GAAP): Net income, as reported (GAAP) $146,551 $177,591 $116,728 Average shareholders' equity 6,440,215 6,327,970 5,104,709 Less: Average goodwill and other intangible
Slide 21: Non-GAAP Reconciliations to GAAP Financial Measures
21 Non-GAAP Reconciliations to GAAP Financial Measures March 31, December 31, September 30, June 30, March 31, ($ in thousands, except for share data) 2023 2022 2022 2022 2022 Tangible book value per common share (Non-GAAP): Common shares outstanding 507,762,358 506,374,478 506,351,502 506,328,526 4
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, FSVP – Director, Corporate Finance & Business Development ▪ Log onto
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