Valley National Bancorp Announces Third Quarter 2023 Results
NEW YORK, Oct. 26, 2023 (GLOBE NEWSWIRE) -- Valley National Bancorp (*NASDAQ:VLY*), the holding company for Valley National Bank, today reported net income for the third quarter 2023 of $141.3 million, or $0.27 per diluted common share, as compared to the second quarter 2023 net income of $139.1 million, or $0.27 per diluted common share, and net income of $178.1 million, or $0.34 per diluted common share, for the third quarter 2022. Excluding all non-core income and charges, our adjusted net income (a non-GAAP measure) was $136.4 million, or $0.26 per diluted common share, for the third quarter 2023, $147.1 million, or $0.28 per diluted common share, for the second quarter 2023, and $181.5 million, or $0.35 per diluted common share, for the third quarter 2022. See further details below, including a reconciliation of our non-GAAP adjusted net income, in the "Consolidated Financial Highlights" tables.
*Key financial highlights for the **third quarter** 2023:*
· *Loan Portfolio:* Loan growth in most categories slowed as expected during third quarter 2023 largely due to the impact of higher market interest rates. Total loans increased $220.3 million, or 1.8 percent on an annualized basis, to $50.1 billion at September 30, 2023 from June 30, 2023 mainly as a result of select new loan originations in the commercial real estate loan portfolio. Annualized loan growth for the nine months ended September 30, 2023 totaled 9.0 percent. See the "Loans" section below for more details.
· *Allowance and Provision for Credit Losses for Loans*: The allowance for credit losses for loans totaled $462.3 million and $458.7 million at September 30, 2023 and June 30, 2023, respectively, representing 0.92 percent of total loans at each respective date. For the third quarter 2023, the provision for credit losses for loans totaled $9.1 million as compared to $6.3 million and $1.8 million for the second quarter 2023 and third quarter 2022, respectively.
· *Credit Quality:* Net loan charge-offs totaled $5.5 million for the third quarter 2023 as compared to $8.6 million for the second quarter 2023 and net recoveries of loan charge-offs of $5.6 million for the third quarter 2022. Total accruing past due loans increased $17.8 million to $79.5 million, or 0.16 percent of total loans, at September 30, 2023 as compared to $61.8 million, or 0.12 percent of total loans, at June 30, 2023. Non-accrual loans represented 0.52 percent and 0.51 percent of total loans at September 30, 2023 and June 30, 2023, respectively. See the "Credit Quality" section below for more details.
· *Deposits: *Total deposits increased $265.5 million to $49.9 billion at September 30, 2023 as compared to $49.6 billion at June 30, 2023 largely due to increases in direct customer interest bearing deposits, partially offset by a net decrease of $338.5 million in indirect customer deposits driven by maturity of certain indirect CDs. See the "Deposits" section below for more details.
· *Net Interest Income and Margin: *Net interest income on a tax equivalent basis of $413.7 million for the third quarter 2023 decreased $7.6 million compared to the second quarter 2023 and decreased $41.7 million as compared to the third quarter 2022. Our net interest margin on a tax equivalent basis decreased by 3 basis points to 2.91 percent in the third quarter 2023 as compared to 2.94 percent for the second quarter 2023. The decline in both net interest income and margin as compared to the linked second quarter reflects the impact of rising market interest rates on interest bearing deposits, net of a 23 basis point increase in the yield of average interest earnings assets for the third quarter 2023. See the "Net Interest Income and Margin" section below for more details.
· *Non-Interest Income:* Non-interest income decreased $1.4 million to $58.7 million for the third quarter 2023 as compared to the second quarter 2023 mainly due to a $9.8 million decrease in capital market fees, largely offset by an increase of $6.5 million in net gains on sales of assets (mostly related to the sale of non-branch offices located in Wayne, New Jersey) and higher card fee income. The decrease in capital market fees was largely driven by the lower volume of interest rate swap transactions executed for new commercial loan customers during the third quarter 2023.
· *Non-Interest Expense: *Non-interest expense decreased $15.8 million to $267.1 million for the third quarter 2023 as compared to the second quarter 2023 largely due to $11.2 million of severance expense (non-core charges) recorded within salary and employee benefits expense in the second quarter 2023 and third quarter declines in both professional and legal fees and our FDIC insurance assessment. Technology, furniture and equipment expense increased $4.8 million for the third quarter 2023 largely due to higher data processing costs.
· *Efficiency Ratio: *Our efficiency ratio was 56.72 percent for the third quarter 2023 as compared to 55.59 percent and 49.76 percent for the second quarter 2023 and third quarter 2022, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.
· *Performance Ratios:* Annualized return on average assets (ROA), shareholders’ equity (ROE) and tangible ROE were 0.92 percent, 8.56 percent and 12.39 percent for the third quarter 2023, respectively. Annualized ROA, ROE, and tangible ROE, adjusted for non-core income and charges, were 0.89 percent, 8.26 percent and 11.95 percent for the third quarter 2023, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.Ira Robbins, CEO commented, "I am extremely proud of the strength, stability, and resiliency reflected in our balance sheet during the third quarter. Our asset quality remains exceptional, and slower loan growth during the quarter contributed to improved capital ratios. Higher customer deposit balances enabled an incremental reduction in indirect CDs, while we paid off short-term borrowings to normalize our overnight cash position which was elevated in the second quarter."
Mr. Robbins continued, "In early October we completed our transformational core conversion. This was an incredible accomplishment for our organization against a challenging backdrop. We now have the appropriate technology infrastructure to support sustainable growth and better efficiency going forward. In my tenure we have built our robust service capabilities and have a significant opportunity to leverage these new technologies."
*Net Interest Income and Margin*
Net interest income on a tax equivalent basis totaling $413.7 million for the third quarter 2023 decreased $7.6 million and $41.7 million as compared to the second quarter 2023 and third quarter 2022, respectively. The decrease as compared to the second quarter 2023 was mainly due to increased interest rates on most interest bearing deposit products, partially offset by higher loan yields and a reduction in average short-term borrowings. As a result of the higher cost of deposits, total interest expense increased $32.9 million to $400.6 million for the third quarter 2023 as compared to the second quarter 2023. Interest income on a tax equivalent basis increased $25.3 million to $814.3 million in the third quarter 2023 as compared to the second quarter 2023. The increase was mostly due to higher yields on both new originations and adjustable rate loans in our portfolio and a $561.5 million increase in average loan balances driven by organic new loan volumes over the last six months and a continuation of slower loan prepayments in the third quarter 2023.
Net interest margin on a tax equivalent basis of 2.91 percent for the third quarter 2023 decreased by 3 basis points and 69 basis points from 2.94 percent and 3.60 percent, respectively, for the second quarter 2023 and third quarter 2022. The decrease as compared to the second quarter 2023 was largely driven by higher interest rates on interest bearing deposits, partially offset by a 23 basis point increase in the yield on average interest earning assets. The yield on average loans increased by 25 basis points to 6.03 percent for the third quarter 2023 as compared to the second quarter 2023 largely due to higher interest rates on new originations and adjustable rate loans. Our cost of total average deposits was 2.94 percent for the third quarter 2023 as compared to 2.45 percent and 0.59 percent for the second quarter 2023 and the third quarter 2022, respectively. The overall cost of average interest bearing liabilities also increased 33 basis points to 3.92 percent for the third quarter 2023 as compared to the second quarter 2023 primarily driven by the continued rise in the market interest rates on deposits.
*Loans, Deposits and Other Borrowings*
*Loans*. Loans increased $220.3 million to approximately $50.1 billion at September 30, 2023 from June 30, 2023 mainly due to slower, but continued organic loan growth in the commercial real estate loan category and low levels of prepayment activity during the third quarter 2023. Total commercial real estate (including construction) increased $265.5 million, or 3.4 percent on an annualized basis during the third quarter 2023. Home equity loans also increased $13.4 million or 10.0 percent on an annualized basis during the third quarter 2023 due to higher utilization of lines of credit. Automobile loans decreased by $46.9 million, or 11.5 percent on an annualized basis during the third quarter 2023 largely due to continued low demand for vehicle financing because of the high interest rate environment. During the third quarter 2023, we sold $80.8 million of residential mortgage loans originated for sale as compared to $44.5 million in the second quarter 2023.
*Deposits. *Total deposits increased $265.5 million to $49.9 billion at September 30, 2023 from June 30, 2023 mainly due to increases of $833.5 million in savings, NOW and money market deposits and $194.8 million in time deposits, partially offset by a $762.8 million decrease in non-interest bearing deposits. The increase in savings, NOW and money market deposits was driven by increases in digital and national specialized deposits, as well as some shift in customer balances from non-interest bearing deposits during the third quarter 2023. The increase in time deposits was largely due to successful retail deposit campaigns, partially offset by the maturity of indirect time deposits. Non-interest bearing balances continued to be challenged by the high level of market interest rates which has caused some customers to pursue attractive investment alternatives, including our interest bearing products, or use cash in place of financing. Non-interest bearing deposits; savings, NOW and money market deposits; and time deposits represented approximately 24 percent, 46 percent and 30 percent of total deposits as of September 30, 2023, respectively, as compared to 25 percent, 45 percent and 30 percent of total deposits as of June 30, 2023, respectively.
*Other Borro**wings. *Short-term borrowings decreased $1.0 billion to $89.8 million at September 30, 2023 as compared to June 30, 2023 mainly due to maturities and repayment of FHLB advances and a decrease in our excess overnight cash positions as part of our liquidity management strategies during the third quarter 2023. Long-term borrowings totaled $2.3 billion at September 30, 2023 as compared to $2.4 billion at June 30, 2023. The decrease was largely due to the maturity and repayment of $125.0 million of 5.125 percent subordinated notes issued in September 2013 and due on September 27, 2023, which had already been fully disallowed from a regulatory capital perspective.
*Credit Quality*
*Non-Performing Assets (NPAs). *Total NPAs, consisting of non-accrual loans, other real estate owned (OREO) and other repossessed assets, increased $4.2 million to $260.3 million at September 30, 2023 as compared to June 30, 2023 mostly driven by an increase in non-accrual loans. Non-accrual commercial and industrial loans increased $3.2 million to $87.7 million at September 30, 2023 mainly due to one new non-performing loan relationship totaling $4.2 million at September 30, 2023. Non-accrual loans represented 0.52 percent of total loans at September 30, 2023 compared to 0.51 percent at June 30, 2023.
*Accruing Past Due Loans. *Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) increased $17.8 million to $79.5 million, or 0.16 percent of total loans, at September 30, 2023 as compared to $61.8 million, or 0.12 percent of total loans at June 30, 2023.
Loans 30 to 59 days past due increased $13.6 million to $47.4 million at September 30, 2023 as compared to June 30, 2023 mainly due to increases in commercial and (secured) consumer loans within this early stage delinquency category.
Loans 60 to 89 days past due increased $6.8 million to $19.8 million at September 30, 2023 as compared to June 30, 2023 largely due to higher residential mortgage delinquencies and a $2.3 million commercial real estate loan that migrated from the 30-59 days past due category reported at June 30, 2023.
Loans 90 days or more past due and still accruing interest decreased $2.6 million to $12.4 million at September 30, 2023 as compared to June 30, 2023. All loans 90 days or more past due and still accruing interest are well-secured and in the process of collection.
*Allowance for Credit Losses for Loans and Unfunded Commitments. *The following table summarizes the allocation of the allowance for credit losses to loan categories and the allocation as a percentage of each loan category at September 30, 2023, June 30, 2023 and September 30, 2022:
*September 30, 2023* *June 30, 2023* *September 30, 2022* *Allocation* *Allocation* *Allocation* *as a % of* *as a % of* *as a % of* *Allowance* *Loan* *Allowance* *Loan* *Allowance* *Loan* *Allocation* *Category* *Allocation* *Category* *Allocation* *Category* *($ in thousands)*
Loan Category:
Commercial and industrial loans $ 133,988 1.44 % $ 128,245 1.38 % $ 154,051 1.77 %
Commercial real estate loans:
Commercial real estate 191,562 0.68 194,177 0.70 217,124 0.89
Construction 53,485 1.40 45,518 1.19 50,656 1.42
Total commercial real estate loans 245,047 0.77 239,695 0.76 267,780 0.95
Residential mortgage loans 44,621 0.80 44,153 0.79 36,157 0.70
Consumer loans:
Home equity 3,689 0.67 4,020 0.75 4,083 0.87
Auto and other consumer 14,830 0.52 20,319 0.70 13,673 0.49
Total consumer loans 18,519 0.55 24,339 0.71 17,756 0.55
Allowance for loan losses 442,175 0.88 436,432 0.88 475,744 1.05
Allowance for unfunded credit commitments 20,170 22,244 22,664
Total allowance for credit losses for loans $ 462,345 $ 458,676 $ 498,408
Allowance for credit losses for loans as a % total loans 0.92 % 0.92 % 1.10 %
Our loan portfolio, totaling $50.1 billion at September 30, 2023, had net loan charge-offs totaling $5.5 million for the third quarter 2023 as compared to $8.6 million for the second quarter 2023 and net recoveries of loan charge-offs of $5.6 million for the third quarter 2022. Gross charge-offs totaled $8.9 million for the third quarter 2023 and included a $4.0 million partial charge-off of one commercial and industrial loan relationship.
The allowance for credit losses for loans, comprised of our allowance for loan losses and unfunded credit commitments, as a percentage of total loans was 0.92 percent at both September 30, 2023 and June 30, 2023, and 1.10 percent at September 30, 2022. During the third quarter 2023, the provision for credit losses for loans totaled $9.1 million as compared to $6.3 million and $1.8 million for the second quarter 2023 and third quarter 2022, respectively. The provision for credit losses for the third quarter 2023 reflects, among other factors, higher quantitative reserves related to classified loans within the commercial portfolios and specific reserves associated with collateral dependent loans, partially offset by a negative (credit) provision for unfunded credit commitments driven by a decline in these obligations at September 30, 2023. Our economic forecast related reserves at September 30, 2023 remained relatively unchanged from June 30, 2023.
*Capital Adequacy*
Valley's total risk-based capital, common equity Tier 1 capital, Tier 1 capital and Tier 1 leverage capital ratios were 11.68 percent, 9.21 percent, 9.64 percent and 8.08 percent, respectively, at September 30, 2023.
*Investor Conference Call *
Valley will host a conference call with investors and the financial community at 11:00 AM Eastern Daylight Savings Time, today to discuss the third quarter 2023 earnings and related matters. Interested parties should preregister using this link: https://register.vevent.com to receive the dial-in number and a personal PIN, which are required to access the conference call. The teleconference will also be webcast live: https://edge.media-server.com and archived on Valley’s website through Monday, November 27, 2023.
*About Valley*
As the principal subsidiary of Valley National Bancorp, Valley National Bank is a regional bank with $61 billion in assets. Valley is committed to giving people and businesses the power to succeed. Valley operates many convenient branch locations and commercial banking offices across New Jersey, New York, Florida, Alabama, California, and Illinois, and is committed to providing the most convenient service, the latest innovations and an experienced and knowledgeable team dedicated to meeting customer needs. Helping communities grow and prosper is the heart of Valley’s corporate citizenship philosophy. To learn more about Valley, go to www.valley.com or call our Customer Care Center at 800-522-4100.
*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 our business, new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology as “intend,” “should,” “expect,” “believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “would,” “could,” “typically,” “usually,” “anticipate,” “may,” “estimate,” “outlook,” “project,” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:
· the impact of Federal Reserve actions affecting the level of market interest rates and increases in business failures, specifically among our clients, as well as on our business, our employees and our ability to provide services to our customers;
· the impact of a potential U.S. Government shutdown on economic activity in the markets in which we operate and, in general, on levels of end market demand in the economy;
· the impact of possible future bank failures on the business environment in which we operate and resulting market volatility and reduced confidence in depository institutions, including impact on stock price, customer deposit withdrawals from Valley National Bank, or business disruptions or liquidity issues that have or may affect our customers;
· the impact of unfavorable macroeconomic conditions or downturns, instability or volatility in financial markets, unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by and factors outside of our control, such as geopolitical instabilities or events (including the recent conflict in Israel and Gaza); natural and other disasters (including severe weather events) and health emergencies, acts of terrorism or other external events;
· risks associated with our acquisition of Bank Leumi Le-Israel Corporation (Bank Leumi USA), including (i) the inability to realize expected cost savings and synergies from the acquisition in the amounts or timeframe anticipated and (ii) greater than expected costs or difficulties relating to integration matters;
· the loss of or decrease in lower-cost funding sources within our deposit base;
· the need to supplement debt or equity capital to maintain or exceed internal capital thresholds;
· the inability to attract new customer deposits to keep pace with loan growth strategies;
· a material change in our allowance for credit losses under CECL due to forecasted economic conditions and/or unexpected credit deterioration in our loan and investment portfolios;
· greater than expected technology related costs due to, among other factors, prolonged or failed implementations, additional project staffing and obsolescence caused by continuous and rapid market innovations;
· cyber-attacks, ransomware attacks, computer viruses or other malware that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage our systems;
· damage verdicts or settlements or restrictions related to existing or potential class action litigation or individual litigation arising from claims of violations of laws or regulations, contractual claims, breach of fiduciary responsibility, negligence, fraud, environmental laws, patent or trademark infringement, employment related claims, and other matters;
· changes to laws and regulations, including changes affecting oversight of the financial services industry; changes in the enforcement and interpretation of such laws and regulations; and changes in accounting and reporting standards;
· higher or lower than expected income tax expense or tax rates, including increases or decreases resulting from changes in uncertain tax position liabilities, tax laws, regulations and case law;
· results of examinations by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Bank (FRB), the Consumer Financial Protection Bureau (CFPB) and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for credit losses, write-down assets, reimburse customers, change the way we do business, or limit or eliminate certain other banking activities;
· our inability or determination not to pay dividends at current levels, or at all, because of inadequate earnings, regulatory restrictions or limitations, changes in our capital requirements or a decision to increase capital by retaining more earnings;
· a prolonged downturn in the economy, as well as an unexpected decline in commercial real estate values collateralizing a significant portion of our loan portfolio; and
· unexpected significant declines in the loan portfolio due to the lack of economic expansion, increased competition, large prepayments, changes in regulatory lending guidance or other factors.
A detailed discussion of factors that could affect our results is included in our SEC filings, including the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2022 and in Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023.
We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
Contact: Michael D. Hagedorn Senior Executive Vice President and Chief Financial Officer 973-872-4885
*VALLEY NATIONAL BANCORP*
*CONSOLIDATED FINANCIAL HIGHLIGHTS*
*GAAP Reconciliations to GAAP Financial Measures (Continued)*
*SELECTED FINANCIAL DATA* *Three Months Ended* *Nine Months Ended* *September 30,* *June 30,* *September 30,* *September 30,*
($ in thousands, except for share data and stock price) *2023* *2023* *2022* *2023* *2022*
*FINANCIAL DATA:*
Net interest income - FTE ^(1) $ 413,657 $ 421,275 $ 455,308 $ 1,272,390 $ 1,193,235
Net interest income $ 412,418 $ 419,765 $ 453,992 $ 1,268,203 $ 1,189,821
Non-interest income 58,664 60,075 56,194 173,038 153,997
Total revenue 471,082 479,840 510,186 1,441,241 1,343,818
Non-interest expense 267,133 282,971 261,639 822,270 758,709
Pre-provision net revenue 203,949 196,869 248,547 618,971 585,109
Provision for credit losses 9,117 6,050 2,023 29,604 49,578
Income tax expense 53,486 51,759 68,405 162,410 144,271
Net income 141,346 139,060 178,119 426,957 391,260
Dividends on preferred stock 4,127 4,030 3,172 12,031 9,516
Net income available to common shareholders $ 137,219 $ 135,030 $ 174,947 $ 414,926 $ 381,744
Weighted average number of common shares outstanding:
Basic 507,650,668 507,690,043 506,342,200 507,580,197 478,383,342
Diluted 509,256,599 508,643,025 508,690,997 509,204,051 480,625,357
Per common share data:
Basic earnings $ 0.27 $ 0.27 $ 0.35 $ 0.82 $ 0.80
Diluted earnings 0.27 0.27 0.34 0.81 0.79
Cash dividends declared 0.11 0.11 0.11 0.33 0.33
Closing stock price - high 10.30 9.38 12.95 12.59 15.02
Closing stock price - low 7.63 6.59 10.14 6.59 10.14
*FINANCIAL RATIOS:*
Net interest margin 2.90 % 2.93 % 3.59 % 2.99 % 3.40 %
Net interest margin - FTE ^(1) 2.91 2.94 3.60 3.00 3.41
Annualized return on average assets 0.92 0.90 1.30 0.93 1.03
Annualized return on avg. shareholders' equity 8.56 8.50 11.39 8.72 8.89
*NON-GAAP FINANCIAL DATA AND RATIOS:* ^(3)
Basic earnings per share, as adjusted $ 0.26 $ 0.28 $ 0.35 $ 0.84 $ 0.96
Diluted earnings per share, as adjusted 0.26 0.28 0.35 0.84 0.95
Annualized return on average assets, as adjusted 0.89 % 0.95 % 1.32 % 0.96 % 1.23 %
Annualized return on average shareholders' equity, as adjusted 8.26 8.99 11.60 8.94 10.62
Annualized return on avg. tangible shareholders' equity 12.39 % 12.37 % 17.21 % 12.71 % 13.20 %
Annualized return on average tangible shareholders' equity, as adjusted 11.95 13.09 17.54 13.04 15.77
Efficiency ratio 56.72 55.59 49.76 55.34 51.03
*AVERAGE BALANCE SHEET ITEMS:*
Assets $ 61,391,688 $ 61,877,464 $ 54,858,306 $ 61,050,973 $ 50,588,010
Interest earning assets 56,802,565 57,351,808 50,531,242 56,510,997 46,605,417
Loans 50,019,414 49,457,937 44,341,894 49,120,153 40,529,794
Interest bearing liabilities 40,829,078 40,925,791 31,228,739 39,802,966 29,042,253
Deposits 49,848,446 47,464,469 44,770,368 48,165,152 41,176,472
Shareholders' equity 6,605,786 6,546,452 6,256,767 6,531,424 5,869,736
*As Of*
*BALANCE SHEET ITEMS:* *September 30,* *June 30,* *March 31,* *December 31,* *September 30,*
(In thousands) *2023* *2023* *2023* *2022* *2022*
Assets $ 61,183,352 $ 61,703,693 $ 64,309,573 $ 57,462,749 $ 55,927,501
Total loans 50,097,519 49,877,248 48,659,966 46,917,200 45,185,764
Deposits 49,885,314 49,619,815 47,590,916 47,636,914 45,308,843
Shareholders' equity 6,627,299 6,575,184 6,511,581 6,400,802 6,273,829
*LOANS:*
(In thousands)
Commercial and industrial $ 9,274,630 $ 9,287,309 $ 9,043,946 $ 8,804,830 $ 8,701,377
Commercial real estate:
Commercial real estate 28,041,050 27,793,072 27,051,111 25,732,033 24,493,445
Construction 3,833,269 3,815,761 3,725,967 3,700,835 3,571,818
Total commercial real estate 31,874,319 31,608,833 30,777,078 29,432,868 28,065,263
Residential mortgage 5,562,665 5,560,356 5,486,280 5,364,550 5,177,128
Consumer:
Home equity 548,918 535,493 516,592 503,884 467,135
Automobile 1,585,987 1,632,875 1,717,141 1,746,225 1,711,086
Other consumer 1,251,000 1,252,382 1,118,929 1,064,843 1,063,775
Total consumer loans 3,385,905 3,420,750 3,352,662 3,314,952 3,241,996
Total loans $ 50,097,519 $ 49,877,248 $ 48,659,966 $ 46,917,200 $ 45,185,764
*CAPITAL RATIOS:*
Book value per common share $ 12.64 $ 12.54 $ 12.41 $ 12.23 $ 11.98
Tangible book value per common share ^(3) 8.63 8.51 8.36 8.15 7.87
Tangible common equity to tangible assets ^(3) 7.40 % 7.24 % 6.82 % 7.45 % 7.40 %
Tier 1 leverage capital 8.08 7.86 7.96 8.23 8.31
Common equity tier 1 capital 9.21 9.03 9.02 9.01 9.09
Tier 1 risk-based capital 9.64 9.47 9.46 9.46 9.56
Total risk-based capital 11.68 11.52 11.58 11.63 11.84
*Three Months Ended* *Nine Months Ended*
*ALLOWANCE FOR CREDIT LOSSES:* *September 30,* *June 30,* *September 30,* *September 30,*
($ in thousands) *2023* *2023* *2022* *2023* *2022*
*Allowance for credit losses for loans*
Beginning balance $ 458,676 $ 460,969 $ 490,963 $ 483,255 $ 375,702
Impact of the adoption of ASU No. 2022-02 — — — (1,368 ) —
Allowance for purchased credit deteriorated (PCD) loans, net ^(2) — — — — 70,319
Beginning balance, adjusted 458,676 460,969 490,963 481,887 446,021
Loans charged-off:
Commercial and industrial (7,487 ) (3,865 ) (5,033 ) (37,399 ) (11,144 )
Commercial real estate (255 ) (2,065 ) (4,000 ) (2,320 ) (4,173 )
Construction — (4,208 ) — (9,906 ) —
Residential mortgage (20 ) (149 ) — (169 ) (27 )
Total consumer (1,156 ) (1,040 ) (962 ) (3,024 ) (2,513 )
Total loans charged-off (8,918 ) (11,327 ) (9,995 ) (52,818 ) (17,857 )
Charged-off loans recovered:
Commercial and industrial 3,043 2,173 13,236 6,615 16,012
Commercial real estate 5 4 1,729 33 2,060
Residential mortgage 30 135 163 186 694
Total consumer 362 390 477 1,513 2,431
Total loans recovered 3,440 2,702 15,605 8,347 21,197
Total net (charge-offs) recoveries (5,478 ) (8,625 ) 5,610 (44,471 ) 3,340
Provision for credit losses for loans 9,147 6,332 1,835 24,929 49,047
Ending balance $ 462,345 $ 458,676 $ 498,408 $ 462,345 $ 498,408
*Components of allowance for credit losses for loans:*
Allowance for loan losses $ 442,175 $ 436,432 $ 475,744 $ 442,175 $ 475,744
Allowance for unfunded credit commitments 20,170 22,244 22,664 20,170 22,664
Allowance for credit losses for loans $ 462,345 $ 458,676 $ 498,408 $ 462,345 $ 498,408
*Components of provision for credit losses for loans:*
Provision for credit losses for loans $ 11,221 $ 8,159 $ 1,315 $ 29,359 $ 42,883
(Credit) provision for unfunded credit commitments (2,074 ) (1,827 ) 520 (4,430 ) 6,164
Total provision for credit losses for loans $ 9,147 $ 6,332 $ 1,835 $ 24,929 $ 49,047
Annualized ratio of total net charge-offs (recoveries) to total average loans 0.04 % 0.07 % (0.05) % 0.12 % (0.01) %
Allowance for credit losses for loans as a % of total loans 0.92 % 0.92 % 1.10 % 0.92 1.10
*As Of*
*ASSET QUALITY:* *September 30,* *June 30,* *March 31,* *December 31,* *September 30,*
($ in thousands) *2023* *2023* *2023* *2022* *2022*
Accruing past due loans:
30 to 59 days past due:
Commercial and industrial $ 10,687 $ 6,229 $ 20,716 $ 11,664 $ 19,526
Commercial real estate 8,053 3,612 13,580 6,638 6,196
Residential mortgage 13,159 15,565 12,599 16,146 13,045
Total consumer 15,509 8,431 7,845 9,087 6,196
Total 30 to 59 days past due 47,408 33,837 54,740 43,535 44,963
60 to 89 days past due:
Commercial and industrial 5,720 7,468 24,118 12,705 2,188
Commercial real estate 2,620 — — 3,167 383
Construction — — — — 12,969
Residential mortgage 9,710 1,348 2,133 3,315 5,947
Total consumer 1,720 4,126 1,519 1,579 1,174
Total 60 to 89 days past due 19,770 12,942 27,770 20,766 22,661
90 or more days past due:
Commercial and industrial 6,629 6,599 8,927 18,392 15,072
Commercial real estate — 2,242 — 2,292 15,082
Construction 3,990 3,990 6,450 3,990 —
Residential mortgage 1,348 1,165 1,668 1,866 550
Total consumer 391 1,006 747 47 421
Total 90 or more days past due 12,358 15,002 17,792 26,587 31,125
Total accruing past due loans $ 79,536 $ 61,781 $ 100,302 $ 90,888 $ 98,749
Non-accrual loans:
Commercial and industrial $ 87,655 $ 84,449 $ 78,606 $ 98,881 $ 135,187
Commercial real estate 83,338 82,712 67,938 68,316 67,319
Construction 62,788 63,043 68,649 74,230 61,098
Residential mortgage 21,614 20,819 23,483 25,160 26,564
Total consumer 3,545 3,068 3,318 3,174 3,227
Total non-accrual loans 258,940 254,091 241,994 269,761 293,395
Other real estate owned (OREO) 71 824 1,189 286 286
Other repossessed assets 1,314 1,230 1,752 1,937 1,122
Total non-performing assets $ 260,325 $ 256,145 $ 244,935 $ 271,984 $ 294,803
Total non-accrual loans as a % of loans 0.52 % 0.51 % 0.50 % 0.57 % 0.65 %
Total accruing past due and non-accrual loans as a % of loans 0.68 0.63 0.70 0.77 0.87
Allowance for losses on loans as a % of non-accrual loans 170.76 171.76 180.54 170.02 162.15
*NOTES TO SELECTED FINANCIAL DATA*
^(1) Net interest income and net interest margin are presented on a tax equivalent basis using a 21 percent federal tax rate. Valley believes that this presentation provides comparability of net interest income and net interest margin arising from both taxable and tax-exempt sources and is consistent with industry practice and SEC rules.
^(2) Represents the allowance for acquired PCD loans, net of PCD loan charge-offs totaling $62.4 million in the second quarter 2022.
^(3) *Non-GAAP Reconciliations. *This press release contains certain supplemental financial information, described in the Notes below, which has been determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP") that management uses in its analysis of Valley's performance. The Company believes that the non-GAAP financial measures provide useful supplemental information to both management and investors in understanding Valley’s underlying operational performance, business and performance trends, and may facilitate comparisons of our current and prior performance with the performance of others in the financial services industry. Management utilizes these measures for internal planning, forecasting and analysis purposes. Management believes that Valley’s presentation and discussion of this supplemental information, together with the accompanying reconciliations to the GAAP financial measures, also allows investors to view performance in a manner similar to management. These non-GAAP financial measures should not be considered in isolation or as a substitute for or superior to financial measures calculated in accordance with U.S. GAAP. These non-GAAP financial measures may also be calculated differently from similar measures disclosed by other companies.
*Non-GAAP Reconciliations to GAAP Financial Measures* *Three Months Ended* *Nine Months Ended* *September 30,* *June 30,* *September 30,* *September 30,*
($ in thousands, except for share data) *2023* *2023* *2022* *2023* *2022*
*Adjusted net income available to common shareholders (non-GAAP):*
Net income, as reported (GAAP) $ 141,346 $ 139,060 $ 178,119 $ 426,957 $ 391,260
Add: Losses (gains) on available for sale and held to maturity securities transactions (net of tax)^(a) 318 6 (24 ) 341 (74 )
Add: Restructuring charge (net of tax)^(b) (484 ) 8,015 — 7,531 —
Add: Provision for credit losses for available for sale securities ^(c) — — — 5,000 —
Add: Non-PCD provision for credit losses (net of tax)^(d) — — — — 29,282
Add: Merger related expenses (net of tax)^(e) — — 3,360 2,962 47,103
Add: Net gains on sales of office buildings (net of tax)^(f) (4,817 ) — — (4,817 ) —
Net income, as adjusted (non-GAAP) $ 136,363 $ 147,081 $ 181,455 $ 437,974 $ 467,571
Dividends on preferred stock 4,127 4,030 3,172 12,031 9,516
Net income available to common shareholders, as adjusted (non-GAAP) $ 132,236 $ 143,051 $ 178,283 $ 425,943 $ 458,055
^(a) Included in gains (losses) on securities transactions, net.
^(b) Represents severance expense related to workforce reductions within salary and employee benefits expense.
^(c) Included in provision for credit losses for available for sale and held to maturity securities (tax disallowed).
^(d) Represents provision for credit losses for non-PCD assets and unfunded credit commitments acquired during the period.
^(e) Included primarily within salary and employee benefits expense.
^(f) Included in net gains (losses) on sale of assets within non-interest income.
*Adjusted per common share data (non-GAAP):*
Net income available to common shareholders, as adjusted (non-GAAP) $ 132,236 $ 143,051 $ 178,283 $ 425,943 $ 458,055
Average number of shares outstanding 507,650,668 507,690,043 506,342,200 507,580,197 478,383,342
Basic earnings, as adjusted (non-GAAP) $ 0.26 $ 0.28 $ 0.35 $ 0.84 $ 0.96
Average number of diluted shares outstanding 509,256,599 508,643,025 508,690,997 509,204,051 480,625,357
Diluted earnings, as adjusted (non-GAAP) $ 0.26 $ 0.28 $ 0.35 $ 0.84 $ 0.95
*Adjusted annualized return on average tangible shareholders' equity (non-GAAP):*
Net income, as adjusted (non-GAAP) $ 136,363 $ 147,081 $ 181,455 $ 437,974 $ 467,571
Average shareholders' equity $ 6,605,786 $ 6,546,452 $ 6,256,767 6,531,424 5,869,736
Less: Average goodwill and other intangible assets 2,042,486 2,051,591 2,117,818 2,051,727 1,917,217
Average tangible shareholders' equity $ 4,563,300 $ 4,494,861 $ 4,138,949 $ 4,479,697 $ 3,952,519
Annualized return on average tangible shareholders' equity, as adjusted (non-GAAP) 11.95 % 13.09 % 17.54 % 13.04 % 15.77 %
*Adjusted annualized return on average assets (non-GAAP):*
Net income, as adjusted (non-GAAP) $ 136,363 $ 147,081 $ 181,455 $ 437,974 $ 467,571
Average assets $ 61,391,688 $ 61,877,464 $ 54,858,306 $ 61,050,973 $ 50,588,010
Annualized return on average assets, as adjusted (non-GAAP) 0.89 % 0.95 % 1.32 % 0.96 % 1.23 %
*Adjusted annualized return on average shareholders' equity (non-GAAP):*
Net income, as adjusted (non-GAAP) $ 136,363 $ 147,081 $ 181,455 $ 437,974 $ 467,571
Average shareholders' equity $ 6,605,786 $ 6,546,452 $ 6,256,767 $ 6,531,424 $ 5,869,736
Annualized return on average shareholders' equity, as adjusted (non-GAAP) 8.26 % 8.99 % 11.60 % 8.94 % 10.62 %
*Annualized return on average tangible shareholders' equity (non-GAAP):*
Net income, as reported (GAAP) $ 141,346 $ 139,060 $ 178,119 $ 426,957 $ 391,260
Average shareholders' equity $ 6,605,786 $ 6,546,452 $ 6,256,767 6,531,424 5,869,736
Less: Average goodwill and other intangible assets 2,042,486 2,051,591 2,117,818 2,051,727 1,917,217
Average tangible shareholders' equity $ 4,563,300 $ 4,494,861 $ 4,138,949 $ 4,479,697 $ 3,952,519
Annualized return on average tangible shareholders' equity (non-GAAP) 12.39 % 12.37 % 17.21 % 12.71 % 13.20 %
*Efficiency ratio (non-GAAP): *
Non-interest expense, as reported (GAAP) $ 267,133 $ 282,971 $ 261,639 $ 822,270 $ 758,709
Less: Restructuring charge (pre-tax) (675 ) 11,182 — 10,507 —
Less: Merger-related expenses (pre-tax) — — 4,707 4,133 63,831
Less: Amortization of tax credit investments (pre-tax) 4,191 5,018 3,105 13,462 9,194
Non-interest expense, as adjusted (non-GAAP) $ 263,617 $ 266,771 $ 253,827 $ 794,168 $ 685,684
Net interest income, as reported (GAAP) 412,418 419,765 453,992 1,268,203 1,189,821
Non-interest income, as reported (GAAP) 58,664 60,075 56,194 173,038 153,997
Add: Losses (gains) on available for sale and held to maturity securities transactions, net (pre-tax) 443 9 (33 ) 476 (102 )
Add: Net gains on sales of office buildings (pre-tax) (6,721 ) — — (6,721 ) —
Non-interest income, as adjusted (non-GAAP) $ 52,386 $ 60,084 $ 56,161 $ 166,793 $ 153,895
Gross operating income, as adjusted (non-GAAP) $ 464,804 $ 479,849 $ 510,153 $ 1,434,996 $ 1,343,716
Efficiency ratio (non-GAAP) 56.72 % 55.59 % 49.76 % 55.34 % 51.03 % *As of* *September 30,* *June 30,* *March 31,* *December 31,* *September 30,*
($ in thousands, except for share data) *2023* *2023* *2023* *2022* *2022*
*Tangible book value per common share (non-GAAP):*
Common shares outstanding 507,660,742 507,619,430 507,762,358 506,374,478 506,351,502
Shareholders' equity (GAAP) $ 6,627,299 $ 6,575,184 $ 6,511,581 $ 6,400,802 $ 6,273,829
Less: Preferred stock 209,691 209,691 209,691 209,691 209,691
Less: Goodwill and other intangible assets 2,038,202 2,046,882 2,056,107 2,066,392 2,079,731
Tangible common shareholders' equity (non-GAAP) $ 4,379,406 $ 4,318,611 $ 4,245,783 $ 4,124,719 $ 3,984,407
Tangible book value per common share (non-GAAP) $ 8.63 $ 8.51 $ 8.36 $ 8.15 $ 7.87
*Tangible common equity to tangible assets (non-GAAP):*
Tangible common shareholders' equity (non-GAAP) $ 4,379,406 $ 4,318,611 $ 4,245,783 $ 4,124,719 $ 3,984,407
Total assets (GAAP) $ 61,183,352 $ 61,703,693 $ 64,309,573 $ 57,462,749 $ 55,927,501
Less: Goodwill and other intangible assets 2,038,202 2,046,882 2,056,107 2,066,392 2,079,731
Tangible assets (non-GAAP) $ 59,145,150 $ 59,656,811 $ 62,253,466 $ 55,396,357 $ 53,847,770
Tangible common equity to tangible assets (non-GAAP) 7.40 % 7.24 % 6.82 % 7.45 % 7.40 %
*VALLEY NATIONAL BANCORP*
*CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION*
*(in thousands, except for share data) *
*September 30,* *December 31,* *2023* *2022* * (Unaudited)*
*Assets*
Cash and due from banks $ 444,857 $ 444,325
Interest bearing deposits with banks 698,966 503,622
Investment securities:
Equity securities 63,191 48,731
Trading debt securities 3,441 13,438
Available for sale debt securities 1,186,524 1,261,397
Held to maturity debt securities (net of allowance for credit losses of $1,321 at September 30, 2023 and $1,646 at December 31, 2022) 3,797,388 3,827,338
Total investment securities 5,050,544 5,150,904
Loans held for sale, at fair value 33,834 18,118
Loans 50,097,519 46,917,200
Less: Allowance for loan losses (442,175 ) (458,655 )
Net loans 49,655,344 46,458,545
Premises and equipment, net 387,981 358,556
Lease right of use assets 352,104 306,352
Bank owned life insurance 719,691 717,177
Accrued interest receivable 237,786 196,606
Goodwill 1,868,936 1,868,936
Other intangible assets, net 169,266 197,456
Other assets 1,564,043 1,242,152
*Total Assets* $ 61,183,352 $ 57,462,749
*Liabilities*
Deposits:
Non-interest bearing $ 11,671,504 $ 14,463,645
Interest bearing:
Savings, NOW and money market 23,110,840 23,616,812
Time 15,102,970 9,556,457
Total deposits 49,885,314 47,636,914
Short-term borrowings 89,802 138,729
Long-term borrowings 2,318,294 1,543,058
Junior subordinated debentures issued to capital trusts 57,021 56,760
Lease liabilities 413,021 358,884
Accrued expenses and other liabilities 1,792,601 1,327,602
*Total Liabilities* 54,556,053 51,061,947
*Shareholders’ Equity*
Preferred stock, no par value; 50,000,000 authorized shares:
Series A (4,600,000 shares issued at September 30, 2023 and December 31, 2022) 111,590 111,590
Series B (4,000,000 shares issued at September 30, 2023 and December 31, 2022) 98,101 98,101
Common stock (no par value, authorized 650,000,000 shares; issued 507,896,910 shares at September 30, 2023 and December 31, 2022) 178,187 178,185
Surplus 4,982,748 4,980,231
Retained earnings 1,460,284 1,218,445
Accumulated other comprehensive loss (201,892 ) (164,002 )
Treasury stock, at cost (236,168 common shares at September 30, 2023 and 1,522,432 common shares at December 31, 2022) (1,719 ) (21,748 )
*Total Shareholders’ Equity* 6,627,299 6,400,802
*Total Liabilities and Shareholders’ Equity* $ 61,183,352 $ 57,462,749
*VALLEY NATIONAL BANCORP*
*CONSOLIDATED STATEMENTS OF INCOME (Unaudited)*
*(in thousands, except for share data) *
*Three Months Ended* *Nine Months Ended* *September 30,* *June 30,* *September 30,* *September 30,* *2023* *2023* *2022* *2023* *2022*
*Interest Income*
Interest and fees on loans $ 753,638 $ 715,172 $ 496,520 $ 2,124,036 $ 1,229,462
Interest and dividends on investment securities:
Taxable 32,383 31,919 28,264 96,591 74,416
Tax-exempt 4,585 5,575 5,210 15,485 12,739
Dividends 5,299 7,517 2,738 18,001 7,490
Interest on federal funds sold and other short-term investments 17,113 27,276 3,996 66,594 6,026
Total interest income 813,018 787,459 536,728 2,320,707 1,330,133
*Interest Expense*
Interest on deposits:
Savings, NOW and money market 201,916 164,842 50,674 517,524 77,423
Time 164,336 125,764 15,174 370,398 21,274
Interest on short-term borrowings 5,189 50,208 5,160 89,345 10,049
Interest on long-term borrowings and junior subordinated debentures 29,159 26,880 11,728 75,237 31,566
Total interest expense 400,600 367,694 82,736 1,052,504 140,312
*Net Interest Income* 412,418 419,765 453,992 1,268,203 1,189,821
(Credit) provision for credit losses for available for sale and held to maturity securities (30 ) (282 ) 188 4,675 531
Provision for credit losses for loans 9,147 6,332 1,835 24,929 49,047
*Net Interest Income After Provision for Credit Losses* 403,301 413,715 451,969 1,238,599 1,140,243
*Non-Interest Income*
Wealth management and trust fees 11,417 11,176 9,281 32,180 23,989
Insurance commissions 2,336 3,139 3,750 7,895 9,072
Capital markets 7,141 16,967 13,171 35,000 42,242
Service charges on deposit accounts 10,952 10,542 10,338 31,970 26,617
(Losses) gains on securities transactions, net (398 ) 217 323 197 (1,058 )
Fees from loan servicing 2,681 2,702 3,138 8,054 8,636
Gains on sales of loans, net 2,023 1,240 922 3,752 5,510
Gains (losses) on sales of assets, net 6,653 161 (106 ) 6,938 (372 )
Bank owned life insurance 2,709 2,443 1,681 7,736 5,840
Other 13,150 11,488 13,696 39,316 33,521
Total non-interest income 58,664 60,075 56,194 173,038 153,997
*Non-Interest Expense*
Salary and employee benefits expense 137,292 149,594 134,572 431,872 397,103
Net occupancy expense 24,675 25,949 26,486 73,880 70,906
Technology, furniture and equipment expense 37,320 32,476 39,365 106,304 115,245
FDIC insurance assessment 7,946 10,426 6,500 27,527 16,009
Amortization of other intangible assets 9,741 9,812 11,088 30,072 26,925
Professional and legal fees 17,109 21,406 17,840 55,329 62,998
Amortization of tax credit investments 4,191 5,018 3,105 13,462 9,194
Other 28,859 28,290 22,683 83,824 60,329
Total non-interest expense 267,133 282,971 261,639 822,270 758,709
*Income Before Income Taxes* 194,832 190,819 246,524 589,367 535,531
Income tax expense 53,486 51,759 68,405 162,410 144,271
*Net Income* 141,346 139,060 178,119 426,957 391,260
Dividends on preferred stock 4,127 4,030 3,172 12,031 9,516
*Net Income Available to Common Shareholders* $ 137,219 $ 135,030 $ 174,947 $ 414,926 $ 381,744
*VALLEY NATIONAL BANCORP*
*Quarterly Analysis of Average Assets, Liabilities and Shareholders' Equity and*
*Net Interest Income on a Tax Equivalent Basis*
*Three Months Ended* *September 30, 2023* *June 30, 2023* *September 30, 2022* * Average* *Avg.* * Average* *Avg.* * Average* *Avg.*
($ in thousands) * Balance* *Interest* *Rate* * Balance* *Interest* *Rate* * Balance* *Interest* *Rate*
*Assets*
Interest earning assets:
Loans ^(1)(2) $ 50,019,414 $ 753,662 6.03 % $ 49,457,937 $ 715,195 5.78 % $ 44,341,894 $ 496,545 4.48 %
Taxable investments ^(3) 4,915,778 37,682 3.07 5,065,812 39,436 3.11 4,815,181 31,002 2.58
Tax-exempt investments ^(1)(3) 620,439 5,800 3.74 629,342 7,062 4.49 635,795 6,501 4.09
Interest bearing deposits with banks 1,246,934 17,113 5.49 2,198,717 27,276 4.96 738,372 3,996 2.16
Total interest earning assets 56,802,565 814,257 5.73 57,351,808 788,969 5.50 50,531,242 538,044 4.26
Other assets 4,589,123 4,525,656 4,327,064
Total assets $ 61,391,688 $ 61,877,464 $ 54,858,306
*Liabilities and shareholders' equity*
Interest bearing liabilities:
Savings, NOW and money market deposits $ 23,016,737 $ 201,916 3.51 % $ 22,512,128 $ 164,843 2.93 % $ 23,541,694 $ 50,674 0.86 %
Time deposits 14,880,311 164,336 4.42 12,195,479 125,764 4.12 5,192,896 15,174 1.17
Short-term borrowings 436,518 5,189 4.75 3,878,457 50,207 5.18 1,016,240 5,160 2.03
Long-term borrowings^ (4) 2,495,512 29,159 4.67 2,339,727 26,880 4.60 1,477,909 11,728 3.17
Total interest bearing liabilities 40,829,078 400,600 3.92 40,925,791 367,694 3.59 31,228,739 82,736 1.06
Non-interest bearing deposits 11,951,398 12,756,862 16,035,778
Other liabilities 2,005,426 1,648,359 1,337,022
Shareholders' equity 6,605,786 6,546,452 6,256,767
Total liabilities and shareholders' equity $ 61,391,688 $ 61,877,464 $ 54,858,306
Net interest income/interest rate spread ^(5) $ 413,657 1.81 % $ 421,275 1.91 % $ 455,308 3.20 %
Tax equivalent adjustment (1,239 ) (1,510 ) (1,316 )
Net interest income, as reported $ 412,418 $ 419,765 $ 453,992
Net interest margin ^(6) 2.90 2.93 3.59
Tax equivalent effect 0.01 0.01 0.01
Net interest margin on a fully tax equivalent basis ^(6) 2.91 % 2.94 % 3.60 %
^(1) Interest income is presented on a tax equivalent basis using a 21 percent federal tax rate.
^(2) Loans are stated net of unearned income and include non-accrual loans.
^(3) The yield for securities that are classified as available for sale is based on the average historical amortized cost.
^(4) Includes junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of condition.
^(5) Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities and is presented on a fully tax equivalent basis.
^(6) Net interest income as a percentage of total average interest earning assets.
*SHAREHOLDERS RELATIONS*
Requests for copies of reports and/or other inquiries should be directed to Tina Zarkadas, Assistant Vice President, Shareholder Relations Specialist, Valley National Bancorp, 70 Speedwell Avenue, Morristown, New Jersey, 07960, by telephone at (973) 305-3380, by fax at (973) 305-1364 or by e-mail at tzarkadas@valley.com.