Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — IPO Roadshow (September 2022)
31 slides from Valley National Bancorp's IPO roadshow presentation, Sep 15, 2022
Slide 1: Subordinated Debt Offering Investor Presentation September 2022
Issuer Free Writing Prospectus Filed pursuant to Rule 433 Dated September 15, 2022 Registration No. 333-254696 S ubo r di na t e d D e bt O f fe r i ng In ve s t or P r es en t a t i o n S e p t e m b e r 2022
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: Disclaimer
Disclaimer This presentation shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the subordinated notes in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualificationunder the se
Slide 4: Preliminary Term Sheet
Preliminary Term Sheet 4 Issuer: Valley National Bancorp (Nasdaq: VLY) Security Offered: Fixed-to-Floating Rate Subordinated Notes Due 2032 1 Expected Ratings : BBB / BBB- / BBBH (Kroll Bond Rating Agency / S&P / DBRS) Format: SEC Registered Term: 10 Years Call Date: 5 Years The Company intends to u
Slide 5: Overview of Valley
Overview of Valley 5 Company Overview Strategic Pillars Ticker: VLY (Nasdaq) Relentless Strengthening Deepening Customer our Founded: 1927 Relationships Focus Communities 1 Bank Operations Headquarters : Wayne, NJ Diverse Market Presence: Val l ey operates over 240 retai l branches and commerci al b
Slide 6: Experienced Executive Leadership
Experienced Executive Leadership 6 Ira Robbins Tom Iadanza Chairman & Chief Executive Officer President Years at Valley: 26 / Years in Banking: 26 Years at Valley: 10 / Years in Banking: 42 Mr. Iadanza has been President of Valley since 2021. He is Mr. Robbins has been CEO of Valley since 2018 and r
Slide 7: Key Investor Highlights
Key Investor Highlights 7 Valley Focuses on Building Robust Relationships to Understand and Service the Diverse Financial Needs of its Commercial and Retail Clients Established business model with a 95-year track record of success Conservative operating philosophy Consi stent profitability since i n
Slide 8: Recent History
Recent History 8 Valley’s Conservative Organic Growth and Disciplined Acquisition Strategy Have Created a Relevant and Substantial Nationwide Commercial Bank Operating In the Country’s Most Desirable Markets 1 • Acqui si ti on of USAmeriBancorp, Inc. ($5.1bn assets ) sol i di fies l eading commerci
Slide 9: Positioned for Sustained Growth in Dynamic Markets
Positioned for Sustained Growth in Dynamic Markets 9 1 Key Demographic Metrics 2010-2022 Median Proj. HHI Population Household Growth Number of Change Income (HHI) (2022-27) Businesses Market Key Business Lines (000) (%) ($000) (%) New Jersey & C&I, Technology Banking, Domestic Private Banking, CRE,
Slide 10: Strategic Execution Drives Sustainable Growth
Strategic Execution Drives Sustainable Growth 10 Allowance for Credit Losses / Balanced Execution on Organic and Acquisitive Opportunities Total Assets ($bn) Loans (%) — 17% gross loan CAGR since 2018 $54 — 18% total deposit CAGR since 2018 1.13% $43 1.10% 1.09% $41 — Recent acquisitions of The West
Slide 11: Enhancing Profitability Through Execution
Enhancing Profitability Through Execution 11 Net Income ($mm) Substantial Acceleration of Earnings Power Reported GAAP Adjusted ¹ $492.1 — 145%+ increase in adjusted earnings since 2018 (Q2 2022 $401.7 $326.9 $282.6 annualized adjusted net income) equating to approximately $473.8 $165.8 $390.6 $400m
Slide 12: Consistent Balance of Organic and Acquired Growth
Consistent Balance of Organic and Acquired Growth 12 Gross Loans ($bn) Total CAGR: 17.1% 1 Organic CAGR: 8.5% $43.6 $34.2 $32.2 $29.7 $25.0 2018 2019 2020 2021 6/30/22 2 Loan Composition as of 6/30/2022 Non Owner-Occupied Healthcare CRE CRE 3% 25% Owner-Occupied CRE 9% CRE Multifamily 17% 45% C&I 28
Slide 13: CRE Detail as of 6/30/2022
CRE Detail as of 6/30/2022 13 Portfolio by Collateral Type Portfolio by Geography Apartment & Florida Residential 25.1% 29% New York (ex. NYC) New Jersey 10.2% Retail 20.0% 19% Specialty & Other 10% $23.5bn $23.5bn Manhattan (Other) 4.7% Manhattan Healthcare (Multifamily) 11% 5.9% Mixed Use 10% Othe
Slide 14: Asset Quality
Asset Quality 14 Allowance for Credit Losses for Loans / Total Loans Non-Accrual Loans / Total Loans 0.72% 1.13% 1.10% 1.09% 0.70% 0.62% 0.55% 0.58% 0.56% 0.35% 0.31% 2018 2019 2020 2021 6/30/22 2018 2019 2020 2021 6/30/22 Legacy VLY Combined / Reported Net Charge-offs ($mm) Loan Loss Provision ($mm
Slide 15: Track Record of Below-Peer Credit Losses
Track Record of Below-Peer Credit Losses 15 Prudent risk management and rigorous underwriting standards have helped Valley create a strong credit culture, which has allowed Valley to maintain strong credit metrics compared to peers 1 2 VLY Non-Covered NCOs / Avg. Loans Peer Median NCO / Avg. Loans 1
Slide 16: Enhanced Deposit Composition and Growth Profile
Enhanced Deposit Composition and Growth Profile 16 Deposit Balance Trends ($bn) Deposit Cost Trends (%) 43.9 Total CAGR: 18.2% ¹ 4.2 Organic CAGR: 8.7% 10% 35.6 31.9 3.7 16.1 37% 29.2 2.22% 6.7 24.5 11.7 1.60% 9.7 1.31% 1.27% 7.1 29% 9.2 54% 0.98% 6.7 1.23% 25% 6.2 23.6 0.53% 0.55% 20.3 0.85% 0.36%
Slide 17: Core Deposit Base Well-Diversified by Geography and Industry
Core Deposit Base Well-Diversified by Geography and Industry 17 Total Deposit Breakdown (as of 6/30/22) Valley has built a strong customer base on a national Specialized Deposits Traditional Deposits $11bn scale, through $33bn $44bn 24% 76% expansion into new business lines and geographic markets Tr
Slide 18: Significant Available Liquidity & Low-Risk Securities
Significant Available Liquidity & Low-Risk Securities 18 Liquidity Position & Sources (as of 6/30/22) HTM Securities Portfolio (as of 6/30/22) Liquid Cash Municipal 5% 11% FHLB Borrowing Resi MBS Capacity Obligations of 75% 28% States & Political 3% U.S. Gov. Agency FRB Discount Window 7% Availabili
Slide 19: Equity & Capital
Equity & Capital 19 TCE / TA¹ (%) Tier 1 Leverage (%) Denotes Pro Forma Denotes Pro Forma 7.98% 8.88% 7.54% 8.76% 7.47% 7.46% 7.44% 8.33% 8.30% 8.06% 6.45% 7.57% 2018 2019 2020 2021 6/30/22 6/30 PF² 2018 2019 2020 2021 6/30/22 6/30 PF² CET 1 and Tier 1 RBC (%) Total RBC (%) Denotes Pro Forma CET1 Ti
Slide 20: Investment in Our Community
Investment in Our Community 20 Social Policy Footprint Corporate Social Responsibility Commitment Residential Resi denti al mortgage l oans to l ow- to moderate- income Mortgages Community i ndi vi duals and geographi es Community 15% Development Lending Development 19% Investments Multi-fami l y l
Slide 21: Potential Environmental Lending Programs
Potential Environmental Lending Programs 21 Enhanci ng l endi ng to envi ronmental l y sustai nable compani es i n our operati ng markets Smal l Busi ness Envi ronmental Commerci al Lendi ng Offi cers Industry focus toward CRE and C&I l endi ng Increasi ng focus on l arger-scal e renewabl e energy p
Slide 22: Franchise Highlights
Franchise Highlights 22 • $54 bi l l i on commerci al bank operati ng over 240 ful l-servi ce branches and commerci al banki ng offi ces throughout northern New Jersey, New York City, Long Island, Florida, Alabama, California and Illinois • High-performing relationship-focused i nsti tuti on wi th s
Slide 23: Appendix
D> Valley Appendix
Slide 24: Historical Financial Highlights
Historical Financial Highlights 24 As of or for the 6mo As of or for the Years Ended December 31, Period Ended June 30, ($ in thousands, except for share data) 2022 2021 2020 2019 2018 2017 Summary of Operations Interest income—tax equivalent basis $ 795,503 $ 1,337,440 $ 1,387,690 $ 1,325,631 $ 1,1
Slide 25: Acquisition Track Record Supplements Consistent Organic Growth
Acquisition Track Record Supplements Consistent Organic Growth 25 1 Year Target State Assets Bank Leumi USA Strategic Rationale Added new busi ness l ines, enhanci ng bal ance sheet and 2022 Bank Leumi Le-Israel Corp. NY $8.6 billion revenue di versi ty to posi ti on Val l ey for sustai nable future
Slide 26: Fee Income
Fee Income 26 Non-Interest Income ($mm) 2Q22 Non-Interest Income Composition ($mm) Adjusted ¹ Reported GAAP Other $214.5 $18.0 31% $183.0 Trust, Investment & $155.0 Swap Fees Insurance $11.1 $58.5mm $13.0 $134.1 19% 22% $182.5 Loan Servicing Gain-on-Sale of Fees $154.5 Loans, net $2.7 $139.1 Service
Slide 27: Credit Ratings Profile
Credit Ratings Profile 27 Kroll Ratings 1 Entity Type Rating Outlook Valley National Bancorp Seni or Unsecured Debt BBB+ Stable Subordinated Debt BBB Stable Short-Term Debt K2 N/A Valley National Bank Seni or Unsecured Debt A- Stable Subordinated Debt BBB+ Stable Short-Term Deposit K2 N/A Short-Term
Slide 28: Historical Interest Coverage & Double Leverage
Historical Interest Coverage & Double Leverage 28 (Dollars in Millions) Six Months PF for $150M As of or for the period ended, Ended, Sub Debt Raise 12/31/2018 12/31/2019 12/31/2020 12/31/2021 6/30/2022 6/30/2022 Double Leverage Ratio Investment in Subsidiaries $3,610 $4,672 $4,999 $5,765 $6,930 $7,
Slide 29: Non-GAAP Reconciliations to GAAP Financial Measures
Non-GAAP Reconciliations to GAAP Financial Measures 29 Three Months Ended Years Ended June 30, December 31, December 31, December 31, December 31, ($ in thousands, except for share data) 2022 2021 2020 2019 2018 Adjusted net income available to common shareholders (Non-GAAP): Net income, as reported
Slide 30: Non-GAAP Reconciliations to GAAP Financial Measures
Non-GAAP Reconciliations to GAAP Financial Measures 30 Three Months Ended Years Ended June 30, December 31, December 31, December 31, December 31, ($ in thousands) 2022 2021 2020 2019 2018 Efficiency ratio (Non-GAAP): Non-interest expense, as reported (GAAP) $299,730 $691,542 $646,148 $631,555 $629,
Slide 31: Non-GAAP Reconciliations to GAAP Financial Measures
Non-GAAP Reconciliations to GAAP Financial Measures 31 As of, June 30, December 31, ($ in thousands, except for share data) 2022 2018 3.5 Year CAGR Organic Loans and Loan Growth (Non-GAAP) Total Loans, as reported (GAAP) $43,560,777 $25,035,469 17.1% Less: Fair Value of Total Loans Acquired from Ban
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