Valley National Bancorp · NASDAQ:VLY
Valley National Bancorp — Q2 2024 Earnings Presentation
31 slides from Valley National Bancorp's earnings presentation, Jul 25, 2024
Slide 1: 2Q24 Earnings Presentation
Exhibit 99.2 \ 2Q2A4 Earnings Presentation July 25, 2024
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: 2Q 2024 Financial Highlights
2Q 2024 Financial Highlights GAAP Reported Non-GAAP Adjusted ! Net Income($mm) $70.4 $96.3 $139.1 Return on Average Assets 0.46% 0.63% 0.90% Annualized ‘ = / Efficiency Ratio (Non-GAAP) - = a Diluted Earnings Per Share $0.13 $0.18 $0.27 Pre-Provision Net Revenue ?($mm) $175.4 $1747 $196.9 PPNR / Ave
Slide 4: Meaningful Progress Towards Balance Sheet Goals
— = Near-Term Expectation (12/31/24) — = Intermediate-Term Expectation (12/31/25) Meaningful Progress Towards Balance Sheet Goals CRE/TRBC! ACL / Loans (2823, SIBU2 680A IR0I2A, “RIB U2E 12/323 3/31/24 6/30/24 9/30/24 12/31/24 Loans / Deposits CET1/RWA ~9.B% 102.0% 100.4% 9.29% 9.34% 9.55% 12/31/23
Slide 5: Quarterly Balance Sheet Highlights
Quarterly Balance Sheet Highlights " Enhanced Regulatory Capital Ratios = Modest traditional risk-weighted asset growth as commercial real estate originations remain well-controlled. = Meaningful expansion in regulatory capital ratios reflects the execution of a risk transfer trade on $1.5 billion o
Slide 6: Outlook & Expectations for the Remainder of 2024
Outlook & Expectations for the Remainder of 2024 Metric Gross Loans Low Single Digits Annualized Growth Net Interest Income 1.5% - 3.0% Quarterly Growth Non-Interest Income $55 - $60mm Quarterly Non-Interest Expense ~1% Quarterly Growth TexRte 28H 26H Net Charge-Offs / Avg. Loans Generally Consisten
Slide 7: Net Interest Income Commentary
Net Interest Income Commentary = Management Base Case Assumptions — Forward rate projections as of June 30¢* include 2 Fed Fund cuts occurring in September and December — 50% downside beta on interest-bearing non-maturity deposits, 35% downside beta when assuming relatively stable non-interest depos
Slide 8: Driving Long-Term Value Despite Near-Term Headwinds
Driving Long-Term Value Despite Near-Term Headwinds Shareholder Value Creation vs. Peers = Cumulative Dividends Post-2017 m Reported TBV Growth Post-2017 ' 93% 70% Peer Median VLY Commercial Loan Diversity by Geography Deposit Accounts (000s) mFL&Other @NYSNJ 21% 12/3117 6/30/24 134 nar 440 65 12/31
Slide 9: Controlling Deposit Costs
Controlling Deposit Costs Deposits by Product ($bn) Avg. Fed Funds vs. Deposit Costs (%) $49.1 $50.1 23% 22% 51% 49% 3/31/2024 6/30/2024 Time mNon-Interest Savings, NOW and money market Deposits by Customer Type ($bn) 5.43% 5.50% 5.50% 5.50% 4.69% 3.82% 2.94% 3.13% 3.16% 3.18% 2.45% 1.96% 1.36% il 4
Slide 10: Diversified Deposit Base
Diversified Deposit Base Total Deposit Breakdown ($bn) Specialized Deposits $9.9 20% Traditional Fully FDIC-Insured Branch Deposits Indirect Customer $30.9 $93 62% 18% Traditional Branch Deposits 3 ($bn) New Jersey $169 New York 129 branches $4.6 $30.9bn 4l branches Alsbama Florida $14 $80 16 branch
Slide 11: Continued Emphasis on C&I and Owner-Occ. CRE
Continued Emphasis on C&I and Owner-Occ. CRE Gross Loans ($bn) ' 6/30/2024 Loan Composition ? Non Owner-Occupied CRE 27% 0.4 (0.0) Owner-Occupied CRE Multifamily 11% (a) 12 18% 50.3 49.9 csi Construction 19% 7™% 3/324 Other CRE& Owner-Occ. CEI Resi& 6/30/24 Residential RE, Consumer Const. CRE Consum
Slide 12: CRE Detail as of 6/30/24
CRE Detail as of 6/30/24 Portfolio by Property Type Retail Mixed Use 17% 10% Co-Ops ah Office 10% Healthcare $28.2bn =a) omnes Apartment & Residential 2am vide Hesiat Specialty & Other 11% $5.5bn of CRE Portfolio (19%) is Owner-Occupied. Wed. Avg. LTV! Property Type Wtd. Avg. DSCR? Apartment & Resi
Slide 13: Multifamily Portfolio Detail
Multifamily Portfolio Detail Multifamily Portfolio by Sub-Asset Class ($bn) Co-0 ee $8.6bn Geography Outstanding Avg.Size Wt. Avg. Wtd. Avg. ($bn) ($mm) Liv! DSCR? Other New York (ex. Manhattan) New Jersey Florida & Alabama Manhattan Total Non Co-Op Multifamily by Geography ($bn) Florida & Alabama N
Slide 14: Granular & Diverse Office
Granular & Diverse Office Office Portfolio by Tenancy Multi Tenant w/ Anchor $0.3 Multi Tenant 9% $18 55% Healthcare Office $0.4 12% Single Tenant $0.8 24% ~20% of Office Portfolio is Owner-Occupied. Geography Outstanding ($bn) Portfolio Office Portfolio by Geography ($bn) Florida & Alabama $l Manha
Slide 15: Maturity Schedule 3Q24 through 2031 and Beyond
3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 2026 2027 2028 2029 2030 2031 and Beyond 15
Slide 16: Net Interest Income and Margin
Net Interest Income and Margin Net Interest Income ($mm) and Margin Net Interest Income Commentary 2.94% 2.91% ; 2.82% pa 2.84% $421 sak | . | | 2Q23 3Q23 4Q23 1Q24 2Q24 lm Net Interest Income ($mm) — =—==NIM 2 Net interest income has troughed and expanded 2% sequentially as interest income grew and
Slide 17: Non-Interest Income
Non-Interest Income Non-Interest Income ($mm) ! 2Q24 Adjusted Non-Interest Income ($mm)! (3.2) (48) 14a 57.8 1Q24 Equity Tax Credit Other Investment Advisory Traditional Fees Valuation Loan Servicing 922 7 Other oe 6 Gain-on-Sale of Loans, net $0.9 2% Seg ero $51.2mm Wealth, Trust & cae Insurance $1
Slide 18: Non-Interest Expense
Non-Interest Expense Non-Interest Expenses ($mm) ! 7: Reported m Adjusted 266.8 270.0 2Q23 1Q24 2Q24 Adj. Ann. Non-Interest Expenses '/ Avg. Assets Efficiency Ratio Trend! 2.1% 2.15% 2Q23 1Q24 2Q24 mm VLY Peer Median > 2 9 9 55.6% 59.1% 59.6% 2Q23 1924 2Q24 Compensation costs were well-controlled. $
Slide 19: Stable and Consistent Asset Quality
Stable and Consistent Asset Quality Non-Accrual Loans / Total Loans 0.51% 0.52% 0.58% 0.60% 6/30/23 9/30/23 12/31/23 3/30/24 6/30/24 Implied Loss Given Default on CRE + Construction ! m Peer Median VLY vs. Peers: | 0.3x Recent 24.0% 16.9% 6.8% 5.2% 8.6% = = | 2001-2024Q1 2019-2024Q1 2008-2012 Accrui
Slide 20: Significantly Improved Reserve Coverage
Significantly Improved Reserve Coverage ACL / Total Loans ACL / Non-Accrual and Past Due Loans ~110% 1.06% 0.93% Ch 12/31/23 3/30/24 6/30/24 9/30/24 12/31/24 est. est. Net Loan Charge-offs ($mm) mmm Net Charge-offs =——NCOs/ Avg. Loans 0.29% 0.19% ~0.25% - 0.35% $24 $i7 09 % 4Q23 1924 2Q24 — 3Q2Hest.
Slide 21: Equity & Capitalization
Equity & Capitalization Book Value and Tangible Book Value per Share ! Equity Capitalization Level ' 12.79 $12.81 $12.82 § 10.66% 10.83% ‘11.00% 1.03% 10.86% Be ean |e a Sh oe nS 84 $8.87 Se 7.58% 7.62% - 724% 7.40% fo 7.52% ; Al | 7 l | i 6/30/2023 9/30/2023 12/31/2023 3/31/2024 6/30/2024 6/30/2023
Slide 22: APPENDIX
APPENDIX
Slide 23: Glossary of Defined Terms
Glossary of Defined Terms Term Definition Term Definition ACL ‘Allowance for credit losses NAICS North American Industry Classification System per the Bank Leumi Le-Israel poration ire Vall n United States Census Bureau Bank leuniUSA jolt 2622 sel Somorebenaesiiven By Valley NDF Non-deliverable forw
Slide 24: Consistent Relationship-Focus Supports Credit Strength
Consistent Relationship-Focus Supports Credit Strength Firm Type: Investor Profile: Source of Equity Capital: Ownership Structure: Timeframe and Size: Performance Longevity: Liquidity: Cash Stability: Underwriting: Enhancements: 9D Valley Local / regional sponsors and developers; often owner- operat
Slide 25: Key Pillars of Valley's Credit Risk Management
Key Pillars of Valley's Credit Risk Management Disciplined Approach to Customer Acquisition Strategic and Balanced Methodology v Deep institutional knowledge of real estate markets guides v Various Risk Acceptance Criteria approved by credit oversight target customers and Board Risk Committee v Risk
Slide 26: Historical Net Charge-Offs / Loans
Historical Net Charge-Offs / Loans Prudent risk management and rigorous underwriting standards continue to support Valley's strong and consistent credit quality metrics and limited historical losses. —VLY ——Peer Median 2007Y 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y 2019Y 202
Slide 27: Minimal Exposure to Larger Office Properties
Minimal Exposure to Larger Office Properties Probability of Default Applied to Office Exposure by Building mmm Valley Office Exposure by Building Size (LHS) Probability of Default (RHS) ' 50% 45% 22.0% 40% I% aus 17.0% 16.0% 30% 14.0% 25% 12.5% 20% 10.0% 10.0% % of Valley Office Portfolio 15% 6.0% 1
Slide 28: Non-GAAP Reconciliations to GAAP Financial Measures
Non-GAAP Reconciliations to GAAP Financial Measures ‘Three Months Ended June 30, March 31, June 30, (Sin thousands, except for share data) 2026 2024 2023 Net income, as reported (GAAP) $70,424 $96,280 $139,060 ‘Add: FDIC Special assessment (a) 1363 7,394 - ‘Add: Losses (gains) on available for sale
Slide 29: Non-GAAP Reconciliations to GAAP Financial Measures
Non-GAAP Reconciliations to GAAP Financial Measures (Sin thousands) Net income, as reported (GAAP) ‘Average shareholders’ equity Less: Average goodwill and other intangible assets Average tangible shareholders’ equity Annualized return on average tangible shareholders’ equity (Non-GAAP: Efficiency r
Slide 30: Non-GAAP Reconciliations to GAAP Financial Measures
Non-GAAP Reconciliations to GAAP Financial Measures Three Months Ended June 30, March 31, June 30, (in thousands) 2024 2024 2023 Non-interest expense, as adjusted (Non-GAAP) $270,009 $266,734 $266,771 Average assets $61,518,639 $61257154 $61877,464 Annualized non-interest expenses / average assets,
Slide 31: © 2024 Valley Bank. All rights reserved. Please see www.valleybank.com for further details. ▪
© 2024 Valley Bank. All rights reserved. Please see www.valleybank.com for further details. ▪ ▪ ▪ ▪
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