NEW YORK, April 24, 2025 (GLOBE NEWSWIRE) -- Valley National Bancorp (NASDAQ: VLY), the holding company for Valley National Bank, today reported net income for the first quarter 2025 of $106.1 million, or $0.18 per diluted common share, as compared to the fourth quarter 2024 net income of $115.7 million, or $0.20 per diluted common share, and net income of $96.3 million, or $0.18 per diluted common share, for the first quarter 2024. Excluding all non-core income and charges, our adjusted net income (a non-GAAP measure) was $106.1 million, or $0.18 per diluted common share, for the first quarter 2025, $75.7 million, or $0.13 per diluted common share, for the fourth quarter 2024, and $99.4 million, or $0.19 per diluted common share, for the first quarter 2024. See further details below, including a reconciliation of our non-GAAP adjusted net income, in the "Consolidated Financial Highlights" tables.

Ira Robbins, CEO, commented, "The first quarter was highlighted by the continued improvement in our funding base. Core deposit growth has enabled us to further reduce our reliance on indirect deposits which benefited our revenue and net interest margin. We anticipate that additional core deposit growth will create a sustainable tailwind despite the volatility in the current operating environment.”

Mr. Robbins continued, “I am generally pleased with the quarter’s results from a credit perspective. The provision for loan losses for the first quarter was at the lowest point in the last four quarters, and we anticipate further improvement throughout the remainder of the year. Non-accrual loans and early stage delinquencies also improved sequentially, and we believe our allowance coverage to total loans is at a comfortable level as of March 31, 2025. We remain on track to achieve our profitability goals for the year as we continue to benefit from the net interest income and credit cost tailwinds that we have discussed previously.”

Key financial highlights for the first quarter 2025:

• Net Interest Income and Margin: Our net interest margin on a tax equivalent basis increased by 4 basis points to 2.96 percent in the first quarter 2025 as compared to 2.92 percent for the fourth quarter 2024. Net interest income on a tax equivalent basis of $421.4 million for the first quarter 2025 decreased $2.9 million compared to the fourth quarter 2024 and increased $26.5 million as compared to the first quarter 2024. The moderate decrease in net interest income from the fourth quarter 2024 was due to the impact of two less days during the first quarter 2025. See additional details in the "Net Interest Income and Margin" section below.
• Loan Portfolio: Total loans decreased $142.6 million, or 1.2 percent on an annualized basis, to $48.7 billion at March 31, 2025 from December 31, 2024 mostly due to normal repayment activity and selective originations within the commercial real estate (CRE) portfolio. As a result, our CRE loan concentration ratio (defined as total commercial real estate loans held for investment and held for sale, excluding owner occupied loans, as a percentage of total risk-based capital) declined to approximately 353 percent at March 31, 2025 from 362 percent at December 31, 2024. Partially offsetting the lower CRE loan balances, commercial and industrial (C&I) and automobile loans grew by $218.8 million and $140.2 million, respectively, at March 31, 2025 from December 31, 2024. Auto loan originations resulting from high quality consumer demand remained strong during the first quarter 2025. See the "Loans" section below for more details.
• Allowance and Provision for Credit Losses for Loans: The allowance for credit losses for loans totaled $594.1 million and $573.3 million at March 31, 2025 and December 31, 2024, respectively, representing 1.22 percent and 1.17 percent of total loans at each respective date. During the first quarter 2025, we recorded a provision for credit losses for loans of $62.7 million as compared to $107.0 million and $45.3 million for the fourth quarter 2024 and first quarter 2024, respectively. See the "Credit Quality" section below for more details.
• Credit Quality: Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) decreased $47.5 million to $51.7 million, or 0.11 percent of total loans, at March 31, 2025 as compared to $99.2 million, or 0.20 percent of total loans, at December 31, 2024. Non-accrual loans totaled $346.5 million, or 0.71 percent of total loans, at March 31, 2025 as compared to $359.5 million, or 0.74 percent of total loans, at December 31, 2024. Net loan charge-offs totaled $41.9 million for the first quarter 2025 as compared to $98.3 million and $23.6 million for the fourth quarter 2024 and first quarter 2024, respectively. See the "Credit Quality" section below for more details.
• Deposits: Non-interest bearing deposits increased $199.9 million to $11.6 billion at March 31, 2025 from December 31, 2024 largely due to higher inflows of commercial customer deposits during the first quarter 2025. Savings, NOW, and money market deposits increased $108.6 million to $26.4 billion at March 31, 2025 from December 31, 2024 mostly due to new deposits from our online savings deposit product offerings. Total actual deposit balances decreased $110.0 million to $50.0 billion at March 31, 2025 as compared to $50.1 billion at December 31, 2024 as the increases in our direct customer deposits were offset by a $726.5 million decrease in indirect customer deposits (consisting largely of brokered CDs) during the first quarter 2025. See the "Deposits" section below for more details.
• Non-Interest Income: Non-interest income increased $7.1 million to $58.3 million for the first quarter 2025 as compared to the fourth quarter 2024. The increase reflected net gains on sales of loans of $2.2 million for the first quarter 2025 as compared to net losses of $4.7 million for the fourth quarter 2024, which included $7.9 million of losses related to the sale of performing CRE loans.
• Non-Interest Expense: Non-interest expense decreased $2.0 million to $276.6 million for the first quarter 2025 as compared to the fourth quarter 2024 largely due to decreases of $6.1 million in professional and legal expenses; and $5.6 million in technology, furniture and equipment expense, partially offset by higher amortization of tax credit investments and the normal seasonal increases in salary and employee benefits expense related to payroll taxes during the first quarter 2025. The decreases in professional and technology-related expenses were mostly due to elevated fourth quarter 2024 expenses resulting from transformation and enhancement efforts in our bank operations.
• Income Tax Expense: Income tax expense was $33.1 million for the first quarter 2025 as compared to an income tax benefit of $26.7 million for the fourth quarter 2024, which reflected a $46.4 million total reduction in uncertain tax liability positions and related accrued interest due to statute of limitation expirations. Our effective tax rate was 23.8 percent for the first quarter 2025 compared to a negative 29.9 percent for the fourth quarter 2024.
• Efficiency Ratio: Our efficiency ratio was 55.87 percent for the first quarter 2025 as compared to 57.21 percent and 59.10 percent for the fourth quarter 2024 and first quarter 2024, 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 0.69 percent, 5.69 percent and 7.76 percent for the first quarter 2025, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.

Net Interest Income and Margin

Net interest income on a tax equivalent basis of $421.4 million for the first quarter 2025 decreased $2.9 million compared to the fourth quarter 2024 and increased $26.5 million as compared to the first quarter 2024. Interest income on a tax equivalent basis decreased $50.1 million to $786.0 million for the first quarter 2025 as compared to the fourth quarter 2024. The decrease was mostly driven by the impact of (i) two less days in the first quarter 2025, (ii) the bulk sale of certain performing CRE loans during the fourth quarter 2024, and (iii) downward repricing on adjustable rate loans. Total interest expense decreased $47.2 million to $364.6 million for the first quarter 2025 as compared to the fourth quarter 2024 mainly due to (i) the aforementioned reduction in day count, (ii) a $2.0 billion decrease in average time deposit balances (primarily related to the maturity and repayment of higher cost indirect customer CDs), and (iii) lower interest rates on many interest bearing deposit products in the first quarter 2025. See the "Deposits" and "Other Borrowings" sections below for more details.

Net interest margin on a tax equivalent basis of 2.96 percent for the first quarter 2025 increased by 4 basis points from 2.92 percent for the fourth quarter 2024 and increased 17 basis points from 2.79 percent for the first quarter 2024. The increase as compared to the fourth quarter 2024 was mostly due to the 29 basis point decline in our cost of total average deposits, largely offset by the lower yield on average interest earning assets. The yield on average interest earning assets decreased by 22 basis points to 5.53 percent on a linked quarter basis largely due to downward repricing of our adjustable rate loans and two less days in the first quarter 2025, partially offset by higher yielding investment purchases. The overall cost of average interest bearing liabilities decreased 31 basis points to 3.54 percent for the first quarter 2025 as compared to the fourth quarter 2024 largely due to a decrease in higher cost time deposits and lower interest rates on most deposit products. Our cost of total average deposits was 2.65 percent for the first quarter 2025 as compared to 2.94 percent and 3.16 percent for the fourth quarter 2024 and the first quarter 2024, respectively.

Loans, Deposits and Other Borrowings

Loans. Total loans decreased $142.6 million, or 1.2 percent on an annualized basis, to $48.7 billion at March 31, 2025 from December 31, 2024. Total CRE (including construction) loans decreased $530.4 million to $29.1 billion at March 31, 2025 from December 31, 2024. The decrease was largely driven by repayment activity and continued selective origination activity within the CRE portfolio. Additionally, construction loans decreased $87.8 million to $3.0 billion at March 31, 2025 from December 31, 2024 mainly due to the migration of completed projects to permanent financing within the multifamily loan category during the first quarter 2025 and a non-performing loan totaling $10.2 million, net of $638 thousand of charge-offs, transferred to loans held for sale at March 31, 2025, partially offset by new advances. As a result of the completed construction projects, multifamily loans increased $121.1 million to $8.4 billion at March 31, 2025 from December 31, 2024. C&I loans grew by $218.8 million, or 8.8 percent on an annualized basis, to $10.2 billion at March 31, 2025 from December 31, 2024 largely due to our continued strategic focus on growth within this category. Automobile loans increased by $140.2 million, or 29.5 percent on an annualized basis, to $2.0 billion at March 31, 2025 from December 31, 2024 mainly due to high quality consumer demand generated by our indirect auto dealer network and low prepayment activity within the portfolio.

Deposits. Actual ending balances for deposits decreased $110.0 million to $50.0 billion at March 31, 2025 from December 31, 2024 mainly due to a $418.5 million decrease in time deposits, partially offset by increases of $199.9 million and $108.6 million in non-interest bearing deposits and savings, NOW and money market deposits, respectively. The decrease in time deposit balances was mainly driven by a decline of approximately $661 million in indirect (i.e., brokered) customer CDs, partially offset by deposit inflows from new retail CD offerings during the first quarter 2025. The increase in non-interest bearing was mostly due to higher commercial customer deposit inflows late in the first quarter 2025. Savings, NOW and money market deposit balances increased at March 31, 2025 from December 31, 2024 largely due to new deposits from our online savings deposit product offerings, partially offset by lower governmental deposits account balances. Total indirect customer deposits (including both brokered money market and time deposits) totaled $6.3 billion and $7.0 billion in March 31, 2025 and December 31, 2024, respectively. Non-interest bearing deposits; savings, NOW and money market deposits; and time deposits represented approximately 23 percent, 53 percent and 24 percent of total deposits as of March 31, 2025, respectively, as compared to 23 percent, 52 percent and 25 percent of total deposits as of December 31, 2024, respectively.

Other Borrowings. Short-term borrowings, consisting of securities sold under agreements to repurchase, decreased $13.7 million to $59.0 million at March 31, 2025 from December 31, 2024. Long-term borrowings totaled $2.9 billion at March 31, 2025 and decreased $269.6 million as compared to December 31, 2024 due to the maturity and repayment of certain FHLB advances.

Credit Quality

Non-Performing Assets (NPAs). Total NPAs, consisting of non-accrual loans, other real estate owned (OREO) and other repossessed assets, decreased $17.1 million to $356.2 million at March 31, 2025 as compared to December 31, 2024. Non-accrual loans decreased $13.0 million to $346.5 million at March 31, 2025 as compared to $359.5 million at December 31, 2024 largely driven by partial charge-offs of two non-performing C&I loan relationships during the first quarter 2025, partially offset by a moderate increase in non-performing CRE loans at March 31, 2025. Non-accrual loans represented 0.71 percent of total loans at March 31, 2025 as compared to 0.74 percent of total loans at December 31, 2024. OREO decreased $4.4 million to $7.7 million at March 31, 2025 from December 31, 2024 mostly due to the sale of one CRE property, which resulted in a $2.9 million loss for the first quarter 2025.

Accruing Past Due Loans. Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) decreased $47.5 million to $51.7 million, or 0.11 percent of total loans, at March 31, 2025 as compared to $99.2 million, or 0.20 percent of total loans, at December 31, 2024.

Loans 30 to 59 days past due decreased $23.7 million to $33.4 million at March 31, 2025 as compared to December 31, 2024 largely due to a previously reported delinquent CRE loan totaling $15.4 million that was current to its contractual payments at March 31, 2025, as well as a general improvement in residential mortgage loan delinquencies in this category. Loans 60 to 89 days past due decreased $25.6 million to $10.5 million at March 31, 2025 as compared to December 31, 2024 mostly due to the renewal of an $18.6 million matured performing CRE loan reported in this delinquency category at December 31, 2024 and two CRE loans totaling $6.9 million that were reclassified to the non-accrual category during the first quarter 2025. Loans 90 days or more past due and still accruing interest increased $1.9 million to $7.8 million at March 31, 2025 as compared to December 31, 2024 mainly due to an increase in residential mortgage loans delinquencies. 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 March 31, 2025, December 31, 2024 and March 31, 2024:

Our loan portfolio, totaling $48.7 billion at March 31, 2025, had net loan charge-offs totaling $41.9 million for the first quarter 2025 as compared to $98.3 million and $23.6 million for the fourth quarter 2024 and the first quarter 2024, respectively. Gross loan charge-offs totaled $44.0 million for the first quarter 2025 and included $24.1 million of partial and full charge-offs related to two non-performing C&I loan relationships with combined specific reserves of $16.0 million at December 31, 2024.

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 1.22 percent at March 31, 2025, 1.17 percent at December 31, 2024, and 0.98 percent at March 31, 2024. For the first quarter 2025, the provision for credit losses for loans totaled $62.7 million as compared to $107.0 million and $45.3 million for the fourth quarter 2024 and first quarter 2024, respectively. The first quarter 2025 provision reflects, among other factors, the impact of loan charge-offs, increased quantitative reserves and continued growth in the C&I loan portfolio, partially offset by a decrease in specific reserves associated with collateral dependent loans at March 31, 2025.

Capital Adequacy

Valley's total risk-based capital, Tier 1 capital, common equity Tier 1 capital, and Tier 1 leverage capital ratios were 13.91 percent, 11.53 percent, 10.80 percent and 9.41 percent, respectively, at March 31, 2025 as compared to 13.87 percent, 11.55 percent, 10.82 percent and 9.16 percent, respectively, at December 31, 2024.

Investor Conference Call

Valley’s CEO, Ira Robbins, will host a conference call with investors and the financial community at 11:00 AM (ET) today to discuss Valley's first quarter 2025 earnings. Interested parties should preregister using this link: https://register.vevent.com/register 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, May 26, 2025. Investor presentation materials will be made available prior to the conference call at valley.com.

About Valley

As the principal subsidiary of Valley National Bancorp, Valley National Bank is a regional bank with approximately $62 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 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 market interest rates and monetary and fiscal policies of the U.S. federal government and its agencies in connection with prolonged inflationary pressures, which could have a material adverse effect on our clients, our business, our employees, and our ability to provide services to our customers;
• the impact of unfavorable macroeconomic conditions or downturns, including instability or volatility in financial markets resulting from the impact of tariffs, any retaliatory actions, related market uncertainty, or other factors; debt default or rating downgrade; unanticipated loan delinquencies; loss of collateral; decreased service revenues; increased business disruptions or failures; reductions in employment; and other potential negative effects on our business, employees or clients caused by factors outside of our control, such as legislation and policy changes under the new U.S. presidential administration, geopolitical instabilities or events, natural and other disasters, including severe weather events, health emergencies, acts of terrorism, or other external events;
• the impact of any potential instability within the U.S. financial sector or future bank failures, including the possibility of a run on deposits by a coordinated deposit base, and the impact of the actual or perceived soundness, or concerns about the creditworthiness, of other financial institutions, including any resulting disruption within the financial markets, increased expenses, including Federal Deposit Insurance Corporation insurance assessments, or adverse impact on our stock price, deposits or our ability to borrow or raise capital;
• the impact of negative public opinion regarding Valley or banks in general that damages our reputation and adversely impacts business and revenues;
• changes in the statutes, regulations, policies, or enforcement priorities of the federal bank regulatory agencies;
• the loss of or decrease in lower-cost funding sources within our deposit base;
• 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, trademark or other intellectual property infringement, misappropriation or other violation, employment related claims, and other matters;
• a prolonged downturn and contraction in the economy, as well as an unexpected decline in commercial real estate values collateralizing a significant portion of our loan portfolio;
• 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;
• the inability to grow customer deposits to keep pace with the level of loan growth;
• 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;
• the need to supplement debt or equity capital to maintain or exceed internal capital thresholds;
• changes in our business, strategy, market conditions or other factors that may negatively impact the estimated fair value of our goodwill and other intangible assets and result in future impairment charges;
• 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;
• increased competitive challenges, including our ability to stay current with rapid technological changes in the financial services industry;
• cyberattacks, ransomware attacks, computer viruses, malware or other cybersecurity incidents that may breach the security of our websites or other systems or networks to obtain unauthorized access to personal, confidential, proprietary or sensitive information, destroy data, disable or degrade service, or sabotage our systems or networks, and the increasing sophistication of such attacks;
• results of examinations by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Bank, 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;
• application of the OCC heightened regulatory standards for certain large insured national banks, and the expenses we will incur to develop policies, programs, and systems that comply with the enhanced standards applicable to us;
• 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;
• unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, pandemics or other public health crises, acts of terrorism or other external events;
• our ability to successfully execute our business plan and strategic initiatives; and
• unexpected significant declines in the loan portfolio due to the lack of economic expansion, increased competition, large prepayments, risk mitigation strategies, 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 Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2024.

We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations, except as required by law. 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.

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Quarterly Analysis of Average Assets, Liabilities and Shareholders' Equity and
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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.