Regional banking company Valley National Bancorp (NASDAQ: VLY) met Wall Street’s revenue expectations in Q3 CY2025, with sales up 8.5% year on year to $511.1 million. Its non-GAAP profit of $0.28 per share was 9% above analysts’ consensus estimates.
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Valley National Bank (VLY) Q3 CY2025 Highlights:
- Net Interest Income: $446.2 million vs analyst estimates of $448.5 million (8.7% year-on-year growth, 0.5% miss)
- Net Interest Margin: 3.1% vs analyst estimates of 3.1% (in line)
- Revenue: $511.1 million vs analyst estimates of $510 million (8.5% year-on-year growth, in line)
- Efficiency Ratio: 53.4% vs analyst estimates of 55.2% (180.6 basis point beat)
- Adjusted EPS: $0.28 vs analyst estimates of $0.26 (9% beat)
- Tangible Book Value per Share: $9.57 vs analyst estimates of $9.51 (5.2% year-on-year growth, 0.7% beat)
- Market Capitalization: $5.67 billion
Ira Robbins, CEO, commented, “This quarter’s results reflect Valley’s strong momentum as our profitability improvement is catching up to the balance sheet strengthening that has occurred since the beginning of 2024. New additions to our leadership team have already begun to positively impact our business generation, talent base, and strategic operating model.”
Company Overview
Tracing its roots back to 1927 during the economic boom before the Great Depression, Valley National Bancorp (NASDAQGS:VLY) operates Valley National Bank, providing commercial, consumer, and wealth management banking services across several states.
Sales Growth
Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income. Luckily, Valley National Bank’s revenue grew at an impressive 9.5% compounded annual growth rate over the last five years. Its growth beat the average banking company and shows its offerings resonate with customers.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Valley National Bank’s recent performance shows its demand has slowed significantly as its revenue was flat over the last two years. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Valley National Bank grew its revenue by 8.5% year on year, and its $511.1 million of revenue was in line with Wall Street’s estimates.
Net interest income made up 88.1% of the company’s total revenue during the last five years, meaning Valley National Bank barely relies on non-interest income to drive its overall growth.
Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.
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Tangible Book Value Per Share (TBVPS)
Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.
This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights.
Valley National Bank’s TBVPS grew at a decent 5.9% annual clip over the last five years. The last two years show a similar trajectory as TBVPS grew by 5.1% annually from $8.67 to $9.57 per share.
Over the next 12 months, Consensus estimates call for Valley National Bank’s TBVPS to grow by 7.3% to $10.27, mediocre growth rate.
Key Takeaways from Valley National Bank’s Q3 Results
It was good to see Valley National Bank beat analysts’ EPS expectations this quarter. We were also happy its tangible book value per share narrowly outperformed Wall Street’s estimates. On the other hand, its net interest income slightly missed. Zooming out, we think this was a mixed quarter. The market seemed to be hoping for more, and the stock traded down 1.9% to $9.93 immediately after reporting.
Is Valley National Bank an attractive investment opportunity at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
