Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Q4 2020 Earnings Presentation
21 slides from Valley National Bancorp's earnings presentation, Jan 28, 2021
Slide 1: 4Q20 Earnings Presentation
4 Q 2 0 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 8 , 2 0 2 1 Exhibit 99.2
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 o
Slide 3: Enhanced Financial Performance
3 1 Pre-provision net revenue equals net interest income plus total non-interest income less total non-interest expense; PPNR / Avg. Assets is presented on an annualized basis; Please refer to the Non-GAAP Disclosure Reconciliation on pages 18 – 20 2 Please refer to the Non-GAAP Disclosure Reconcili
Slide 4: 4Q20 3Q20 4Q19 4Q20 3Q20 4Q19 Return on Average Assets Annualized 1.02% 0.99% 0.43%
4 4Q20 3Q20 4Q19 4Q20 3Q20 4Q19 Return on Average Assets Annualized 1.02% 0.99% 0.43% 1.10% 1.01% 1.03% Efficiency Ratio 51.6% 48.2% 70.9% 47.0% 46.6% 52.4% Pre-Provision Net Revenue 2 ($mm) $162.3 $172.2 $80.5 $177.5 $177.4 $131.6 PPNR / Average Assets 2 Annualized 1.57% 1.67% 0.91% 1.72% 1.72% 1.4
Slide 5: Net Interest Margin, Profitability & Operating Leverage
5 $80.5 $172.2 $162.3 $131.6 $177.4 $177.5 0.91% 1.67% 1.57% 1.49% 1.72% 1.72% 4Q19 3Q20 4Q20 4Q19 3Q20 4Q20 PPNR PPNR / Avg. Assets Net Interest Income and Margin All metrics are represented on full tax equivalent basis Continued interest expense reductions helped insulate net interest margin from
Slide 6: Net Interest Income Analysis
6 Net Interest Income Analysis 2Q20 3Q20 4Q20 Net Interest Income (FTE) 285,340 284,119 288,833 PPP Impact (11,836) (14,772) (17,018) NII ex PPP 273,504 269,347 271,815 Earning Asset Analysis 2Q20 3Q20 4Q20 Avg. Earning Assets 37,776,834 37,767,710 37,806,500 PPP Impact (1,451,601) (2,247,326) (2,20
Slide 7: Interest Rate Positioning
7 Interest Rate Positioning 1 BCD refers to Brokered Time Deposits. Aggressively reduced non-maturity deposit costs in 2020 Opportunity remains to reprice maturing CDs and borrowings lower and mitigate asset yield headwinds Will selectively take advantage of lower- cost wholesale funding and extend
Slide 8: Deposits, Funding & Liquidity
8 12.8 16.0 6.7 9.2 9.7 6.7 4Q19 4Q20 Non-interest bearing $9.2 Savings, NOW & MMA $16.0 Time $6.7 Short-term borrowings $1.1 Long-term borrowings $2.3 Other $0.8 Avg. Deposit Balance ($MM) and Rate (%) Trends Year-over-Year Deposit Trends ($BN) Liquidity Position & Sources (as of 12/31/2020) Total
Slide 9: Loans & Loan Growth
9 $1.6 $1.4 $0.9 $1.0 $1.4 4.10% 3.90% 3.27% 3.26% 3.35% 4.51% 4.44% 4.02% 3.89% 3.86% 4Q19 1Q20 2Q20 3Q20 4Q20 Origination Volume (Gross) New Origination Rate Avg. Portfolio Rate New Loan Originations ($bn) / Yields (%) vs Portfolio Yields (%) 2 1 Loan classifications according to call report sched
Slide 10: Outstanding Loan Deferrals
10 Outstanding Loan Deferrals Totals may not sum due to rounding. Initial deferral period not to exceed 180 days. 1 Reflects residential mortgage loans held in portfolio. 2 See page 17 in Appendix for more information. 3 Borrower industry based on NAICS and SIC codes. 52% of active commercial deferr
Slide 11: Fee Income
11 $38.1 $49.3 $46.9 4Q19 3Q20 4Q20 4Q20 Adjusted Non-Interest Income ($MM) 1 Adjusted quarterly non-interest income increased 23% year-over-year For the year, swap fees totaled $59mm up from $33mm in 2019 Despite strong net interest income growth, adjusted non-interest income comprised 14.0% of rev
Slide 12: Operating Expense Trends
12 $157.3 $3.9 $9.7 $2.1 Adjusted Expenses Amortization of tax credits Debt Extinguishment Severance 5 Quarter Operating Expense Trends ($ in millions) 70.9 48.2 51.6 52.4 46.6 47.0 4Q19 Reported 3Q20 Reported 4Q20 Reported 4Q19 Adjusted 3Q20 Adjusted 4Q20 Adjusted Efficiency Ratio (%) 1 Continued f
Slide 13: Asset Quality
13 0.31% 0.68% 0.65% 0.59% 0.58% 4Q19 1Q20 2Q20 3Q20 4Q20 Asset Quality Non-Accrual Loans / Total Loans Net Charge-offs & Provision ($mm) $6 $5 $15 $15 $3 $5 $34 $41 $31 $19 0.08% 0.06% 0.18% 0.19% 0.04% 4Q19 1Q20 2Q20 3Q20 4Q20 Net Charge-offs Provision for Loans NCOs / Avg. Loans Allowance for Cre
Slide 14: Equity & Capitalization
14 Equity & Capitalization $6.73 $6.82 $6.96 $7.12 $7.25 $10.35 $10.43 $10.56 $10.71 $10.85 12/31/19 3/31/20 6/30/20 9/30/20 12/31/20 TBV per share Book Value per share Book Value and Tangible Book Value per Share 1 Equity Capitalization Level 1 Please refer to the Non-GAAP Disclosure Reconciliation
Slide 15: Appendix
A p p e n d i x
Slide 16: CRE Detail as of 12/31/2020
16 CRE Detail as of 12/31/2020 Portfolio by Collateral Type Apartment & Residential 28% Retail 20% Mixed Use 11% Office 11% Industrial 11% Healthcare 8% Specialty & Other 11% Portfolio by Geography Florida 25% New Jersey 25% Other 14% Other NYC Boroughs 14% Manhattan (Multifamily) 6% Manhattan (Othe
Slide 17: COVID-19 Exposed Loan Segments
17 COVID-19 Exposed Loan Segments Totals may not sum due to rounding. 1 Borrower industry based on NAICS and SIC codes. 2 Secondary categories: Nursing & Residential Care, Wholesale Trade, Manufacturing, Child Care & Education Exposure to primary COVID-19 exposed loan segments has remained stable at
Slide 18: Non-GAAP Disclosure Reconciliation
18 December 31, September 30, December 31, December 31, December 31, December 31, ($ in thousands, except for share data) 2020 2020 2019 2020 2019 2018 Adjusted net income avai lable to common shareholders: Net income, as reported $105,363 $102,374 $38,104 $390,606 $309,793 $261,428 Less: Gain on th
Slide 19: Non-GAAP Disclosure Reconciliation
19 December 31, September 30, December 31, December 31, December 31, December 31, ($ in thousands) 2020 2020 2019 2020 2019 2018 Annual ized return on average tangible shareholders' equi ty: Net income, as reported $105,363 $102,374 $38,104 $390,606 $309,793 $261,428 Average shareholders' equity 4,5
Slide 20: Non-GAAP Disclosure Reconciliation
20 Non-GAAP Disclosure Reconciliation December 31, September 30, June 30, March 31, December 31, December 31, ($ in thousands, except for share data) 2020 2020 2020 2020 2019 2018 Tangible book value per common share: Common shares outstanding 403,858,998 403,878,744 403,795,599 403,744,148 403,278,
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, SVP – Director, Corporate Finance & Business Development ▪ Log onto o
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