Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Q4 2023 Earnings Presentation
23 slides from Valley National Bancorp's earnings presentation, Jan 25, 2024
Slide 1: 4Q23 Earnings Presentation
4Q23 Earnings Presentation January 25, 2023
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: Significant Strategic Progress
3 Significant Strategic Progress Above-Average Tangible Book Value Growth ▪ Since 2018, growth in tangible book value plus dividends paid totals 90% 1, well above our proxy peer median of 53%. ▪ Continue to believe that tangible book value growth over time will drive shareholder value. Enhanced Fund
Slide 4: Strategic Imperatives for 2024
4 Strategic Imperatives for 2024 Grow Core Deposits ▪ Utilize enhanced treasury management capabilities to further penetrate commercial customers. ▪ Optimize delivery channels and streamline product set. ▪ Leverage existing specialty niches and explore new opportunities. Focus on C&I and Non-Investo
Slide 5: 4Q 2023 Financial Highlights
5 4Q 2023 Financial Highlights GAAP Reported Non-GAAP Adjusted 1 4Q23 3Q23 4Q22 4Q23 3Q23 4Q22 Net Income ($mm) $71.6 $141.3 $177.6 $116.3 $136.4 $182.9 Return on Average Assets 0.47% 0.92% 1.25% 0.76% 0.89% 1.29% Annualized Efficiency Ratio (Non-GAAP) -- -- -- 60.7% 56.7% 49.3% Diluted Earnings Per
Slide 6: Direct Deposits Exhibit Strong Growth Trends
6 Direct Deposits Exhibit Strong Growth Trends Deposits by Product ($bn) Avg. Fed Funds vs. Deposit Costs (%) $49.9 5.43% 5.50% $49.2 5.16% 4.69% 3.82% 15.1 13.2 27% 30% 3.13% 2.94% 2.45% 1.96% 11.7 11.5 24% 23% 1.36% 0.25% 23.1 24.5 46% 50% 0.15% 4Q21 4Q22 1Q23 2Q23 3Q23 4Q23 9/30/2023 12/31/2023 T
Slide 7: Customer Deposit Base Diversified by Geography and Source
7 Customer Deposit Base Diversified by Geography and Source Total Deposit Breakdown ($bn, as of 12/31/23) Uninsured Deposit & Liquidity ($bn, as of 12/31/23) Cash & Available Liquidity Stands at 2.2x of Adjusted Specialized Deposits Uninsured Deposits 1 $9.7 20% $26.3 Traditional Branch $49.2bn Adju
Slide 8: Highly Granular Deposits – 12/31/2023
8 Highly Granular Deposits – 12/31/2023 Deposits % of Total Deposits % of Total Customer Type Top 10 Commercial Industries 2 ($bn) Deposits ($bn) Deposits Commercial $18.7 38% Real Estate / Rental / Leasing $3.6 7% Consumer $17.4 35% Finance & Insurance $3.5 7% Fully FDIC-Insured Indirect $7.6 11% F
Slide 9: Diversified Loan Portfolio
9 Diversified Loan Portfolio Gross Loans ($bn) 12/31/2023 Loan Composition 1 YTD Non Owner-Occupied CRE Annualized +14.9% +12.6% +9.0% +7.0% 26% Healthcare CRE Growth: 4% Owner-Occupied CRE Multifamily CRE 9% 18% 48% C&I $50.2 27% $49.9 $50.1 Other $48.7 25% $46.9 C&I Construction 18% 7% Residential
Slide 10: CRE Detail as of 12/31/2023
10 CRE Detail as of 12/31/2023 Portfolio by Collateral Type Portfolio by Geography Retail Florida 17% Mixed Use 25.1% 11% Co-Ops 7% New York (ex. NYC) 7.7% New Jersey Office 21.0% 10% Manhattan Apartment & $28.2bn (Other) $28.2bn Residential Healthcare 4.3% 24% Office Manhattan 2% (Multifamily) 5.7%
Slide 11: Multifamily Portfolio Details
11 Multifamily Portfolio Details CRE Portfolio Multifamily Portfolio by Sub-Asset Class ($bn) Co-Ops 7% Co-Op Apartment & $28.2bn Non Co-Op $8.8bn $2.0 Residential $6.8 24% $421mm of exposure to fully rent regulated buildings Geography Outstanding Avg. Size % of Wtd. Avg. Wtd. Avg. ($bn) ($mm) Non C
Slide 12: Granular & Diverse Office Portfolio
12 Granular & Diverse Office Portfolio CRE Portfolio Office Portfolio by Geography ($bn) Florida & Alabama Manhattan $1.2 $0.3 37% 9% $28.2bn Office $3.3bn 10% New York (ex. Manhattan) Healthcare $0.5 Office 15% 2% New Jersey $0.9 Other 27% $0.4 ~20% of Office Portfolio is Owner-Occupied. 12% Geogra
Slide 13: Net Interest Margin
13 Net Interest Margin Net Interest Income ($mm) and Margin Accelerating Efforts to Manage Funding Costs 3.57% Reduced Valley Direct (online) rate by 20bp on 1/16/2024 ($1.4bn) 3.16% 75bp reduction to 1 Year CD Rate since 12/1/2023 $467 ($3.9bn) 2.94% 2.91% $437 2.82% Renewed Emphasis on customer pr
Slide 14: Diverse Fee Income Sources
14 Diverse Fee Income Sources Non-Interest Income ($mm) 4Q23 Adjusted Non-Interest Income ($mm) 1 $58.7 Other $16.8 32% $52.8 $6.3 $52.7 $0.9 Loan Servicing $2.6 5% $10.3 $9.3 $11.0 $0.9 $2.3 $2.0 Gain-on-Sale of Loans, net $52.7mm Wealth, Trust & $13.6 $2.3 Insurance $13.8 $15.2 4% $15.2 29% $10.1
Slide 15: Non-Interest Expense
15 Non-Interest Expense Non-Interest Expenses ($mm) 1 Efficiency Ratio Trend 1 340.4 67.8 267.1 3.5 60.7% 56.7% 263.6 272.6 3Q23 4Q23 3Q23 4Q23 Adjusted Reported Adj. Non-Interest Expenses 1 / Avg. Assets 1.80% 1.72% 1.78% 4Q22 3Q23 4Q23 1 Please refer to the Non-GAAP Disclosure Reconciliation in Ap
Slide 16: Asset Quality
16 Asset Quality Allowance for Credit Losses for Loans / Total Loans Non-Accrual Loans / Total Loans 1.03% 0.95% 0.92% 0.92% 0.93% 0.57% 0.50% 0.51% 0.52% 0.58% 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 Net Loan Charge-offs ($mm) Loan Loss Provision ($mm) 20
Slide 17: Equity & Capitalization
17 Equity & Capitalization Book Value and Tangible Book Value per Share 1 Equity Capitalization Level 1 $12.79 11.14% $12.54 $12.64 10.83% 11.00% $12.41 10.66% $12.23 $8.79 10.12% $8.63 7.58% $8.51 7.45% 7.24% 7.40% $8.36 6.82% $8.15 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 12/31/2022 3/3
Slide 18: 2024 Outlook & Expectations
18 2024 Outlook & Expectations 2024 Loan Growth • 5.0% - 7.0% (increasing focus on C&I and non-investor CRE) (based on 12/31/2023 gross loans of $50.2 billion) • Year-over-year growth between 3.0% - 5.0% Net Interest Income (from full-year 2023 net interest income of $1,665 million) • Year-over-year
Slide 19: Appendix
Appendix
Slide 20: Non-GAAP Reconciliations to GAAP Financial Measures
20 Non-GAAP Reconciliations to GAAP Financial Measures Three Months E nded Years E nded December 31, September 30, December 31, December 31, December 31, ($ in thousands, except for share data) 2023 2023 2022 2023 2022 Adj usted net i ncome avai l abl e to common sharehol ders (Non-GAAP): Net income
Slide 21: Non-GAAP Reconciliations to GAAP Financial Measures
21 Non-GAAP Reconciliations to GAAP Financial Measures Three Months E nded Years E nded December 31, September 30, December 31, December 31, December 31, ($ in thousands) 2023 2023 2022 2023 2022 Annual i zed return on average tangi bl e sharehol ders' equi ty (Non-GAAP): Net income, as reported (GA
Slide 22: Non-GAAP Reconciliations to GAAP Financial Measures
22 Non-GAAP Reconciliations to GAAP Financial Measures As of December 31, September 30, June 30, March 31, December 31, December 31, ($ in thousands, except for share data) 2023 2023 2023 2023 2022 2021 Tangi bl e book val ue per common share (Non-GAAP): Common shares outstanding 507,709,927 507,660
Slide 23: For More Information
23 For More Information ▪ Log onto our website: www.valley.com ▪ Email requests to: tlan@valley.com ▪ Call Travis Lan in Investor Relations, at: (973) 686-5007 ▪ Log onto our website above or www.sec.gov to obtain free copies of documents filed by Valley with the SEC
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