Exhibit 99.1
valleylogoa22.jpg

 
News Release




FOR IMMEDIATE RELEASE
Contact:
 
Michael D. Hagedorn
 
 
 
Senior Executive Vice President and
 
 
 
Chief Financial Officer
 
 
 
973-872-4885

VALLEY NATIONAL BANCORP REPORTS A HIGHER NET INTEREST MARGIN DRIVING ITS FOURTH QUARTER NET INCOME AND THE PREPAYMENT OF HIGH COST BORROWINGS

New York, NY – January 30, 2020 -- Valley National Bancorp (NASDAQ:VLY), the holding company for Valley National Bank, today reported net income for the fourth quarter 2019 of $38.1 million, or $0.10 per diluted common share, as compared to the fourth quarter 2018 earnings of $77.1 million, or $0.22 per diluted common share, and net income of $81.9 million, or $0.24 per diluted common share, for the third quarter 2019. During the fourth quarter 2019, Valley incurred non-core after tax charges of $52.5 million mostly due to prepayment penalties on FHLB borrowings, merger expenses and additional income tax expense related to reserves for uncertain tax positions. Excluding all non-core charges, our adjusted net income was $90.7 million, or $0.24 per diluted common share, for the fourth quarter 2019, $72.7 million, or $0.21 per diluted common share, for the fourth quarter 2018, and $83.1 million, or $0.24 per diluted common share, for the third quarter 2019. See further details below, including a reconciliation of our adjusted net income (a non-GAAP measure) in the "Consolidated Financial Highlights" tables.
Key financial highlights for the fourth quarter:
Acquisition of Oritani Financial Corp.: Effective December 1, 2019, Valley completed its acquisition of Oritani Financial Corp. ("Oritani") and its wholly-owned subsidiary, Oritani Bank. Oritani had approximately $4.3 billion in assets, $3.4 billion in net loans, $2.9 billion in deposits, after purchase accounting adjustments, and a branch network of 26 locations. The acquisition represents a significant addition to Valley's New Jersey franchise, and will meaningfully enhance its presence in the Bergen County market. The common shareholders of Oritani received 1.60 shares of Valley common stock for each Oritani share that they owned. The total consideration for the acquisition was approximately $835 million, and the transaction resulted in $289 million of goodwill and $21 million of core deposit intangible assets subject to amortization.
Net Interest Income: Net interest income on a tax equivalent basis of $239.6 million for the fourth quarter 2019 increased $17.9 million as compared to the third quarter 2019 largely due to strong organic loan growth over the last six month period, acquired loans, and interest-bearing liabilities repricing at lower market rates during the fourth quarter 2019.
Net Interest Margin: Our net interest margin on a tax equivalent basis increased 5 basis points to 2.96 percent in the fourth quarter 2019 as compared to 2.91 percent for the third quarter 2019. See the "Net Interest Income and Margin" section below for more details.
Loan Portfolio: Loans increased $3.1 billion to approximately $29.7 billion at December 31, 2019 from September 30, 2019 largely due to $3.4 billion in acquired loans from Oritani, partially

1



Valley National Bancorp (NASDAQ: VLY)
Fourth Quarter 2019 Earnings
January 30, 2020



offset by sales from the commercial real estate loan portfolio totaling approximately $800 million during the fourth quarter 2019. Excluding the acquired Oritani loans and loan portfolio sale activity, our organic loan growth was approximately 10 percent on an annualized basis for the fourth quarter 2019. See additional information under the "Loans, Deposits and Other Borrowings" section below.
Loss on Extinguishment of Debt: In December 2019, we prepaid $635.0 million of long-term FHLB advances with a combined weighted average interest rate of 3.93 percent. The prepaid borrowings had original contractual maturity dates ranging from November 2021 to June 2022. The debt prepayment was funded by cash proceeds from the sale of commercial real estate loans and overnight borrowings. The transaction was accounted for as an early debt extinguishment resulting in a loss, reported within non-interest expense, of $32.0 million for the fourth quarter 2019.
Credit Quality: Net loan charge-offs totaled $5.6 million for the fourth quarter 2019, as compared to $2.0 million for the third quarter 2019 and $1.0 million for the fourth quarter 2018. Non-accrual loans represented 0.31 percent of total loans at December 31, 2019.
Provision for Credit Losses: The provision for credit losses decreased $3.3 million to $5.4 million for the fourth quarter 2019 as compared to third quarter 2019 due, in part, to improvements in credit quality and lower net non-PCI loan activity during the fourth quarter.
Non-Interest Income: Non-interest income decreased $3.1 million to $38.1 million for the three months ended December 31, 2019 from $41.2 million for the third quarter 2019 mainly due to a $3.9 million decrease in swap fee income from commercial loan customer transactions.
Non-Interest Expense: Non-interest expense increased $50.3 million to $196.1 million for the fourth quarter 2019 as compared to the third quarter 2019 largely due to the $32.0 million loss on extinguishment of debt, $15.1 million of merger expenses (primarily consisting of change in control and severance expense) and incremental additions to operating expenses related to new infrastructure and the Oritani acquisition.
Efficiency Ratio: Our efficiency ratio was 70.90 percent for the fourth quarter 2019 as compared to 55.73 percent and 59.87 percent for the third quarter 2019 and fourth quarter 2018, respectively. Our adjusted efficiency ratio was 52.43 percent for the fourth quarter 2019 as compared to 53.48 percent and 56.68 percent for the third quarter 2019 and fourth quarter 2018, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measure.
Income Tax Expense: The effective tax rate was 49.2 percent for the fourth quarter 2019 as compared to 23.6 percent for the third quarter 2019. Based upon new information, Valley's income tax expense for the fourth quarter 2019 reflected an $18.7 million increase in its reserve for uncertain tax liability positions at December 31, 2019 related to renewable energy tax credits and other tax benefits previously recognized from the investments in the DC Solar funds plus interest. As a result, Valley believes it is fully reserved for the tax positions related to DC Solar at December 31, 2019. For the full year 2020, we currently estimate that our effective tax rate will range from 24 percent to 26 percent.

2



Valley National Bancorp (NASDAQ: VLY)
Fourth Quarter 2019 Earnings
January 30, 2020



Performance Ratios: Annualized return on average assets (ROA), shareholders’ equity (ROE) and tangible ROE were 0.43 percent, 4.01 percent, and 5.98 percent for the fourth quarter 2019, respectively. Annualized ROA, ROE and tangible ROE, adjusted for non-core charges, was 1.03 percent, 9.53 percent, and 14.23 percent for the fourth quarter 2019, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.
Ira Robbins, CEO and President commented, "Our fourth quarter 2019 earnings, adjusted for non-core charges, reflected the strength of Valley's balance sheet and our continuous focus on operating efficiency. Our margin expanded five basis points as compared to the third quarter 2019 largely due to our ability to manage our funding costs, while executing on strong organic lending efforts in our primary markets. During 2019, Valley and its employees made significant progress toward our long-term operating goals, however, there is more work to be done. As I look forward to 2020, I am excited to see our strategic vision for Valley unfold, including our relentless commitment to providing the best experience and products to the customers and communities we serve."

Mr. Robbins added, "In December, we completed our in-market acquisition of Oritani and welcomed their customers and knowledgeable staff to Valley. Prior to and after the merger, our dedicated employees have been hard at work to ensure the acquisition is a success. Due to these efforts, we expect the full systems integration of the Oritani operations to be completed in the latter part of the first quarter 2020."
Net Interest Income and Margin
Net interest income on a tax equivalent basis totaling $239.6 million for the fourth quarter 2019 increased $16.2 million and $17.9 million as compared to the fourth quarter 2018 and third quarter 2019, respectively. The increase compared to the third quarter 2019 was largely due to higher average loan balances and lower costs of interest-bearing liabilities, partly offset by low loan yields. Interest income on a tax equivalent basis increased $14.5 million to $344.8 million for the fourth quarter 2019 as compared to the third quarter 2019 mainly due to a $1.8 billion increase in average loans, partly offset by 6 basis point decrease in the yield on average loans. Interest expense of $105.2 million for the three months ended December 31, 2019 decreased $3.4 million from the third quarter 2019 largely due to lower interest rates on many of our interest-bearing deposit products and other borrowings, partly offset by additional interest expense from a $1.4 billion increase in average interest-bearing liabilities. The increase in average interest-bearing liabilities was largely driven by both brokered and retail time deposit gathering initiatives, as well as the Oritani acquisition.
The net interest margin on a tax equivalent basis of 2.96 percent for the fourth quarter 2019 decreased 14 basis points as compared to 3.10 percent for the fourth quarter 2018, and increased 5 basis points from 2.91 percent for the third quarter 2019. The yield on average interest earning assets decreased by 6 basis points on a linked quarter basis due to the lower yields on average loans and investment securities. The yield on average loans decreased to 4.51 percent for the fourth quarter 2019 from 4.57 percent for the third quarter 2019 mostly due to the high volume of new loan originations at current market rates and repayment of higher yielding loans. The decreased yield on average investment securities was partly caused by an increase in premium amortization on residential mortgage-backed securities, due to higher prepayments on such financial instruments. The overall cost of average interest-bearing liabilities decreased by 16 basis points to 1.74 percent for the fourth quarter 2019 as compared to the linked third quarter 2019 due to lower interest rates on certain deposits and borrowings repricing during the second

3



Valley National Bancorp (NASDAQ: VLY)
Fourth Quarter 2019 Earnings
January 30, 2020



half of 2019. Our prepayment of $635 million in higher cost long-term borrowings during December 2019 is expected to positively impact our average cost of funds for its first full period of extinguishment during the first quarter 2020. Our cost of total average deposits was 1.20 percent for the fourth quarter 2019 as compared to 1.27 percent for the three months ended September 30, 2019.
Loans, Deposits and Other Borrowings
Loans. Loans increased $3.1 billion to approximately $29.7 billion at December 31, 2019 from September 30, 2019. The increase was mainly due to $3.4 billion of loans acquired from Oritani on December 1, 2019. Our loan portfolio continued strong quarter over quarter organic growth mainly in total commercial real estate and commercial and industrial loans. The organic growth of commercial real estate loans during the fourth quarter was more than offset by our decision to sell approximately $800 million of performing loans with lower yields from the held for investment portfolio. During the fourth quarter 2019, Valley also originated $199.0 million of residential mortgage loans for sale rather than held for investment. Loans held for sale totaled $76.1 million and $41.6 million at December 31, 2019 and September 30, 2019, respectively.
Deposits. Total deposits increased $3.6 billion, or 14.2 percent, to approximately $29.2 billion at December 31, 2019 from September 30, 2019 mostly due to $2.9 billion of assumed deposits from Oritani, as well as an increase in time deposits from both brokered and retail deposit gathering efforts. During fourth quarter 2019, Valley continued to increase its use of brokered CDs partly due to their relatively favorable pricing as compared to other available funding sources with similar terms, including FHLB advances. Total brokered deposits (consisting of both time and money market deposit accounts) were $4.1 billion at December 31, 2019 as compared to $3.7 billion at September 30, 2019. Non-interest bearing deposits; savings, NOW, money market deposits; and time deposits represented approximately 23 percent, 44 percent and 33 percent of total deposits as of December 31, 2019, respectively.
Other Borrowings. Short-term borrowings decreased $732.1 million, or 40.1 percent, to approximately $1.1 billion at December 31, 2019 from September 30, 2019 mostly due to lower levels of short-term FHLB borrowings and federal funds purchased caused by the success of our current deposit gathering initiatives. Long-term borrowings also decreased $128.2 million, or 5.7 percent, to $2.1 billion at December 31, 2019 from September 30, 2019 largely due to the prepayment of $635.0 million of FHLB borrowings during December 2019, partially offset by long-term borrowings assumed in the Oritani acquisition.
Credit Quality
Non-Performing Assets. Our past due loans and non-accrual loans discussed further below exclude PCI loans. Under U.S. GAAP, the PCI loans (acquired at a discount that is due, in part, to credit quality) are accounted for on a pool basis and are not subject to delinquency classification in the same manner as loans originated by Valley. At December 31, 2019, our PCI loan portfolio totaled $6.6 billion, or 22.3 percent of our total loan portfolio and included all the loans acquired from Oritani during the fourth quarter 2019.
Total non-performing assets (NPAs), consisting of non-accrual loans, other real estate owned (OREO) and other repossessed assets totaled $104.4 million at December 31, 2019 compared to $110.7 million at September 30, 2019. The decrease in NPAs from September 30, 2019 was mostly due to a $6.7 million decrease in commercial and industrial non-accrual loans partially caused by charged off loans during the

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Valley National Bancorp (NASDAQ: VLY)
Fourth Quarter 2019 Earnings
January 30, 2020



fourth quarter 2019. Non-accrual loans represented 0.31 percent of total loans at December 31, 2019 as compared to 0.38 percent of total loans at September 30, 2019.
Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) decreased $20.3 million to $68.2 million, or 0.23 percent of total loans, at December 31, 2019 as compared to $88.5 million, or 0.33 percent of total loans, at September 30, 2019. Loans 30 to 59 days past due decreased $17.5 million primarily due to the renewal of a few large matured performing commercial real estate and construction loans during the fourth quarter 2019 that were previously included in this delinquency category at September 30, 2019.
During the fourth quarter 2019, we continued to closely monitor our NYC and Chicago taxi medallion loans totaling $107.5 million and $7.3 million, respectively, within the commercial and industrial loan portfolio at December 31, 2019. While most of the taxi medallion loans are currently performing, negative trends in the market valuations of the underlying taxi medallion collateral could impact the future performance and internal classification of this portfolio. At December 31, 2019, the medallion portfolio included impaired loans totaling $87.1 million with related reserves of $35.5 million within the allowance for loan losses as compared to impaired loans totaling $91.1 million with related reserves of $34.2 million at September 30, 2019. At December 31, 2019, the impaired medallion loans largely consisted of $63.3 million of non-accrual taxi cab medallion loans classified as doubtful, and $23.8 million performing troubled debt restructured (TDR) loans classified as substandard loans.

5



Valley National Bancorp (NASDAQ: VLY)
Fourth Quarter 2019 Earnings
January 30, 2020



The following table summarizes the allocation of the allowance for credit losses to specific loan categories and the allocation as a percentage of each loan category (including PCI loans) at December 31, 2019, September 30, 2019, and December 31, 2018:
 
 
December 31, 2019
 
September 30, 2019
 
December 31, 2018
 
 
 
 
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*
$
106,904

 
2.22
%
 
$
103,919

 
2.21
%
 
$
95,392

 
2.20
%
Commercial real estate loans:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
20,019

 
0.13
%
 
23,044

 
0.17
%
 
26,482

 
0.21
%
 
Construction
25,654

 
1.56
%
 
25,727

 
1.67
%
 
23,168

 
1.56
%
Total commercial real estate loans
45,673

 
0.26
%
 
48,771

 
0.33
%
 
49,650

 
0.36
%
Residential mortgage loans
5,060

 
0.12
%
 
5,302

 
0.13
%
 
5,041

 
0.12
%
Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
Home equity
459

 
0.09
%
 
487

 
0.10
%
 
598

 
0.12
%
 
Auto and other consumer
6,508

 
0.28
%
 
6,291

 
0.27
%
 
5,614

 
0.26
%
Total consumer loans
6,967

 
0.24
%
 
6,778

 
0.24
%
 
6,212

 
0.23
%
Total allowance for credit losses
$
164,604

 
0.55
%
 
$
164,770

 
0.62
%
 
$
156,295

 
0.62
%
Allowance for credit losses as a %
 
 
 
 
 
 
 
 
 
 
 
of non-PCI loans
 
 
0.71
%
 
 
 
0.72
%
 
 
 
0.75
%
 
 
 
 
 
 
 
 
 
 
 
* Includes the reserve for unfunded letters of credit.
 
 
 
 
 
 
 
 
 
 

Our loan portfolio, totaling $29.7 billion at December 31, 2019, had net loan charge-offs of $5.6 million for the fourth quarter 2019 as compared to $2.0 million and $1.0 million of net loan charge-offs for the third quarter 2019 and the fourth quarter 2018, respectively. The net loan charge-offs increased to $15.9 million for the year ended December 31, 2019 from $658 thousand for the year ended December 31, 2018. The higher level of loan charge-offs in 2019 was partly driven by taxi medallion loans charge-offs totaling $2.9 million and $6.5 million for the fourth quarter 2019 and the year ended December 31, 2019, respectively.
During the fourth quarter 2019, we recorded a provision for credit losses totaling $5.4 million as compared to $8.7 million for the third quarter 2019 and $7.9 million for the fourth quarter 2018. The lower provision in the fourth quarter 2019 was largely due to improved credit quality, including lower loan concentration risk, and the impact of net non-PCI loan activities, including loan sales from the commercial real estate portfolio.
The allowance for credit losses, comprised of our allowance for loan losses and reserve for unfunded letters of credit, as a percentage of total loans was 0.55 percent at December 31, 2019 and 0.62 percent at both September 30, 2019 and December 31, 2018. At December 31, 2019, our allowance allocations for losses as a percentage of total loans decreased as compared to September 30, 2019 mainly due to higher PCI loan balances resulting from the Oritani acquisition.

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Valley National Bancorp (NASDAQ: VLY)
Fourth Quarter 2019 Earnings
January 30, 2020



Capital Adequacy
Valley's regulatory capital ratios continue to reflect its well capitalized position. Valley's total risk-based capital, Tier 1 capital, Tier 1 leverage capital, and common equity Tier 1 capital ratios were 11.72 percent, 10.15 percent, 8.16 percent and 9.42 percent, respectively, at December 31, 2019.
Investor Conference Call
Valley will host a conference call with investors and the financial community at 11:00 AM Eastern Standard Time, today to discuss the fourth quarter 2019 earnings. Those wishing to participate in the call may dial toll-free (866) 354-0432 (Conference ID: 3997893). The teleconference will also be webcast live: https://edge.media-server.com/mmc/p/xgdfey4m and archived on Valley’s website through Monday, March 2, 2020. Investor presentation materials will be made available prior to the conference call at www.valley.com.
About Valley
As the principal subsidiary of Valley National Bancorp, Valley National Bank is a regional bank with approximately $37.5 billion in assets. Valley is committed to giving people and businesses the power to succeed. Valley operates many convenient branch locations across New Jersey, New York, Florida and Alabama, and is committed to providing exceptional 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 Service 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 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 “should,” “expect,” “believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “typically,” “usually,” “anticipate,” 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 inability to realize expected cost savings and synergies from the Oritani merger in amounts or in the timeframe anticipated;
costs or difficulties relating to Oritani integration matters might be greater than expected;
the inability to retain customers and qualified employees of Oritani;
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;
weakness or a decline in the economy, mainly in New Jersey, New York, Florida and Alabama, as well as an unexpected decline in commercial real estate values within our market areas;
the inability to grow customer deposits to keep pace with loan growth;

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Valley National Bancorp (NASDAQ: VLY)
Fourth Quarter 2019 Earnings
January 30, 2020



a material change in our expected allowance for credit losses due to the adoption of CECL (current expected credit loss) model effective January 1, 2020;
the need to supplement debt or equity capital to maintain or exceed internal capital thresholds;
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;
the loss of or decrease in lower-cost funding sources within our deposit base, including our inability to achieve deposit retention targets under Valley's branch transformation strategy;
cyber-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;
results of examinations by the OCC, the FRB, the 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;
damage verdicts or settlements or restrictions related to existing or potential litigations arising from claims of violations of laws or regulations brought as class actions, breach of fiduciary responsibility, negligence, fraud, contractual claims, environmental laws, patent or trademark infringement, employment related claims, and other matters;
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 or other external events;
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; and
the failure of other financial institutions with whom we have trading, clearing, counterparty and other financial relationships.
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, 2018.
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.

# # #

-Tables to Follow-

8


VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS



SELECTED FINANCIAL DATA
 
Three Months Ended
 
Years Ended
 
December 31,
 
September 30,
 
December 31,
 
December 31,
($ in thousands, except for share data)
2019

2019

2018

2019

2018
FINANCIAL DATA:
 
 
 
 
 
 
 
 
 
Net interest income
$
238,541

 
$
220,625

 
$
222,053

 
$
898,048

 
$
857,203

Net interest income - FTE (1)
239,615

 
221,747

 
223,414

 
902,679

 
862,922

Non-interest income
38,094

 
41,150

 
34,694

 
214,520

 
134,052

Non-interest expense
196,146

 
145,877

 
153,712

 
631,555

 
629,061

Income tax expense
36,967

 
25,307

 
18,074

 
147,002

 
68,265

Net income
38,104

 
81,891

 
77,102

 
309,793

 
261,428

Dividends on preferred stock
3,172

 
3,172

 
3,172

 
12,688

 
12,688

Net income available to common stockholders
$
34,932

 
$
78,719

 
$
73,930

 
$
297,105

 
$
248,740

Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
 
 
Basic
355,821,005

 
331,797,982

 
331,492,648

 
337,792,270

 
331,258,964

Diluted
358,864,876

 
333,405,196

 
332,856,385

 
340,117,808

 
332,693,718

Per common share data:
 
 
 
 
 
 
 
 
 
Basic earnings
$
0.10

 
$
0.24

 
$
0.22

 
$
0.88

 
$
0.75

Diluted earnings
0.10

 
0.24

 
0.22

 
0.87

 
0.75

Cash dividends declared
0.11

 
0.11

 
0.11

 
0.44

 
0.44

Closing stock price - high
12.07

 
11.21

 
11.51

 
12.07

 
13.28

Closing stock price - low
10.60

 
10.04

 
8.45

 
9.00

 
8.45

CORE ADJUSTED FINANCIAL DATA: (2)
 
 
 
 
 
 
 
 
 
Net income available to common shareholders, as adjusted
$
87,478

 
$
79,962

 
$
69,478

 
$
314,170

 
$
269,897

Basic earnings per share, as adjusted
0.25

 
0.24

 
0.21

 
0.93

 
0.81

Diluted earnings per share, as adjusted
0.24

 
0.24

 
0.21

 
0.92

 
0.81

FINANCIAL RATIOS:
 
 
 
 
 
 
 
 
`

Net interest margin
2.95
%
 
2.89
%
 
3.08
%
 
2.94
%
 
3.09
%
Net interest margin - FTE (1)
2.96

 
2.91

 
3.10

 
2.95

 
3.11

Annualized return on average assets
0.43

 
0.98

 
0.98

 
0.93

 
0.86

Annualized return on avg. shareholders' equity
4.01

 
9.26

 
9.23

 
8.71

 
7.91

Annualized return on avg. tangible shareholders' equity (2)
5.98

 
13.75

 
14.17

 
13.05

 
12.21

Efficiency ratio (3)
70.90

 
55.73

 
59.87

 
56.77

 
63.46

CORE ADJUSTED FINANCIAL RATIOS: (2)
 
 
 
 
 
 
 
 
 
Annualized return on average assets, as adjusted
1.03
%
 
1.00
%
 
0.93
%
 
0.98
%
 
0.93
%
Annualized return on average shareholders' equity, as adjusted
9.53

 
9.40

 
8.70

 
9.19

 
8.55

Annualized return on average tangible shareholders' equity, as adjusted
14.23

 
13.96

 
13.36

 
13.77

 
13.20

Efficiency ratio, as adjusted
52.43

 
53.48

 
56.68

 
53.78

 
57.90

AVERAGE BALANCE SHEET ITEMS:
 
 
 
 
 
 
 
 
 
Assets
$
35,315,682

 
$
33,419,137

 
$
31,328,729

 
$
33,442,738

 
$
30,229,276

Interest earning assets
32,337,660

 
30,494,569

 
28,806,620

 
30,575,530

 
27,702,911

Loans
27,968,383

 
26,136,745

 
24,530,919

 
26,235,253

 
23,340,330

Interest bearing liabilities
24,244,902

 
22,858,121

 
21,515,197

 
22,948,872

 
20,528,920

Deposits
26,833,714

 
24,836,349

 
23,702,885

 
25,292,397

 
22,418,142

Shareholders' equity
3,804,902

 
3,536,528

 
3,340,411

 
3,555,483

 
3,304,531



9


VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS




 
As of
BALANCE SHEET ITEMS:
December 31,

September 30,

June 30,

March 31,

December 31,
(In thousands)
2019

2019

2019

2019

2018
Assets
$
37,453,416

 
$
33,765,539

 
$
33,027,741

 
$
32,476,991

 
$
31,863,088

Total loans
29,699,208

 
26,567,159

 
25,802,162

 
25,423,118

 
25,035,469

Non-PCI loans
23,069,609

 
23,029,991

 
22,030,205

 
21,418,778

 
20,845,383

Deposits
29,185,837

 
25,546,122

 
24,773,929

 
24,907,496

 
24,452,974

Shareholders' equity
4,384,188

 
3,558,075

 
3,504,118

 
3,444,879

 
3,350,454

 
 
 
 
 
 
 
 
 
 
LOANS:
 
 
 
 
 
 
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
4,825,997

 
$
4,695,608

 
$
4,615,765

 
$
4,504,927

 
$
4,331,032

Commercial real estate:
 
 
 
 
 
 
 
 
 
Commercial real estate
15,996,741

 
13,365,454

 
12,798,017

 
12,665,425

 
12,407,275

Construction
1,647,018

 
1,537,590

 
1,528,968

 
1,454,199

 
1,488,132

Total commercial real estate
17,643,759

 
14,903,044

 
14,326,985

 
14,119,624

 
13,895,407

Residential mortgage
4,377,111

 
4,133,331

 
4,072,450

 
4,071,237

 
4,111,400

Consumer:
 
 
 
 
 
 
 
 
 
Home equity
487,272

 
489,808

 
501,646

 
513,066

 
517,089

Automobile
1,451,623

 
1,436,608

 
1,362,466

 
1,347,759

 
1,319,571

Other consumer
913,446

 
908,760

 
922,850

 
866,505

 
860,970

Total consumer loans
2,852,341

 
2,835,176

 
2,786,962

 
2,727,330

 
2,697,630

 Total loans
$
29,699,208

 
$
26,567,159

 
$
25,802,162

 
$
25,423,118

 
$
25,035,469

 
 
 
 
 
 
 
 
 
 
CAPITAL RATIOS:
 
 
 
 
 
 
 
 
 
Book value per common share
$
10.35

 
$
10.09

 
$
9.93

 
$
9.75

 
$
9.48

Tangible book value per common share (2)
6.73

 
6.62

 
6.45

 
6.26

 
5.97

Tangible common equity to tangible assets (2)
7.54
%
 
6.73
%
 
6.71
%
 
6.63
%
 
6.45
%
Tier 1 leverage capital
8.16

 
7.61

 
7.62

 
7.58

 
7.57

Common equity tier 1 capital
9.42

 
8.49

 
8.59

 
8.53

 
8.43

Tier 1 risk-based capital
10.15

 
9.30

 
9.43

 
9.38

 
9.30

Total risk-based capital
11.72

 
11.03

 
11.39

 
11.37

 
11.34





10


VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS




 
Three Months Ended
 
Years Ended
ALLOWANCE FOR CREDIT LOSSES:
December 31,
 
September 30,
 
December 31,
 
December 31,
($ in thousands)
2019
 
2019
 
2018
 
2019
 
2018
Beginning balance - Allowance for credit losses
$
164,770

 
$
158,079

 
$
149,475

 
$
156,295

 
$
124,452

Loans charged-off:
 
 
 
 
 
 
 
 
 
Commercial and industrial
(5,378
)
 
(527
)
 
(909
)
 
(13,260
)
 
(2,515
)
Commercial real estate

 
(158
)
 

 
(158
)
 
(348
)
Residential mortgage

 
(111
)
 
(56
)
 
(126
)
 
(223
)
Total Consumer
(2,700
)
 
(2,191
)
 
(1,194
)
 
(8,671
)
 
(4,977
)
Total loans charged-off
(8,078
)
 
(2,987
)
 
(2,159
)
 
(22,215
)
 
(8,063
)
Charged-off loans recovered:
 
 
 
 
 
 
 
 
 
Commercial and industrial
389

 
330

 
566

 
2,397

 
4,623

Commercial real estate
1,166

 
28

 
21

 
1,237

 
417

Residential mortgage
53

 
3

 
3

 
66

 
272

Total Consumer
886

 
617

 
530

 
2,606

 
2,093

Total loans recovered
2,494

 
978

 
1,120

 
6,306

 
7,405

Net charge-offs
(5,584
)
 
(2,009
)
 
(1,039
)
 
(15,909
)
 
(658
)
Provision for credit losses
5,418

 
8,700

 
7,859

 
24,218

 
32,501

Ending balance - Allowance for credit losses
$
164,604

 
$
164,770

 
$
156,295

 
$
164,604

 
$
156,295

Components of allowance for credit losses:
 
 
 
 
 
 
 
 
 
Allowance for loans
$
161,759

 
$
161,853

 
$
151,859

 
$
161,759

 
$
151,859

Allowance for unfunded letters of credit
2,845

 
2,917

 
4,436

 
2,845

 
4,436

Allowance for credit losses
$
164,604

 
$
164,770

 
$
156,295

 
$
164,604

 
$
156,295

Components of provision for credit losses:
 
 
 
 
 
 
 
 
 
Provision for loan losses
$
5,490

 
$
8,757

 
$
7,935

 
$
25,809

 
$
31,661

Provision for unfunded letters of credit
(72
)
 
(57
)
 
(76
)
 
(1,591
)
 
840

Provision for credit losses
$
5,418

 
$
8,700

 
$
7,859

 
$
24,218

 
$
32,501

 
 
 
 
 
 
 
 
 
 
Annualized ratio of total net charge-offs to average loans
0.08
%
 
0.03
%
 
0.02
%
 
0.06
%
 
0.00
%
Allowance for credit losses as a % of non-PCI loans
0.71
%
 
0.72
%
 
0.75
%
 
0.71
%
 
0.75
%
Allowance for credit losses as a % of total loans
0.55
%
 
0.62
%
 
0.62
%
 
0.55
%
 
0.62
%

11


VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS




 
As of
ASSET QUALITY: (4)
December 31,
 
September 30,
 
June 30,
 
March 31,
 
December 31,
($ in thousands)
2019
 
2019
 
2019
 
2019
 
2018
Accruing past due loans:
 
 
 
 
 
 
 
 
 
30 to 59 days past due:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
11,700

 
$
5,702

 
$
14,119

 
$
5,120

 
$
13,085

Commercial real estate
2,560

 
20,851

 
6,202

 
39,362

 
9,521

Construction
1,486

 
11,523

 

 
1,911

 
2,829

Residential mortgage
17,143

 
12,945

 
19,131

 
15,856

 
16,576

Total Consumer
13,704

 
13,079

 
11,932

 
6,647

 
9,740

Total 30 to 59 days past due
46,593

 
64,100

 
51,384

 
68,896

 
51,751

60 to 89 days past due:
 
 
 
 
 
 
 
 
 
Commercial and industrial
2,227

 
3,158

 
4,135

 
1,756

 
3,768

Commercial real estate
4,026

 
735

 
354

 
2,156

 
530

Construction
1,343

 
7,129

 
1,342

 

 

Residential mortgage
4,192

 
4,417

 
3,635

 
3,635

 
2,458

Total Consumer
2,527

 
1,577

 
1,484

 
990

 
1,386

Total 60 to 89 days past due
14,315

 
17,016

 
10,950

 
8,537

 
8,142

90 or more days past due:
 
 
 
 
 
 
 
 
 
Commercial and industrial
3,986

 
4,133

 
3,298

 
2,670

 
6,156

Commercial real estate
579

 
1,125

 

 

 
27

Construction

 

 

 

 

Residential mortgage
2,042

 
1,347

 
1,054

 
1,402

 
1,288

Total Consumer
711

 
756

 
359

 
523

 
341

Total 90 or more days past due
7,318

 
7,361

 
4,711

 
4,595

 
7,812

Total accruing past due loans
$
68,226

 
$
88,477

 
$
67,045

 
$
82,028

 
$
67,705

Non-accrual loans:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
68,636

 
$
75,311

 
$
76,216

 
$
76,270

 
$
70,096

Commercial real estate
9,004

 
9,560

 
6,231

 
2,663

 
2,372

Construction
356

 
356

 

 
378

 
356

Residential mortgage
12,858

 
13,772

 
12,069

 
11,921

 
12,917

Total Consumer
2,204

 
2,050

 
1,999

 
2,178

 
2,655

Total non-accrual loans
93,058

 
101,049

 
96,515

 
93,410

 
88,396

Other real estate owned (OREO)
9,414

 
6,415

 
7,161

 
7,317

 
9,491

Other repossessed assets
1,276

 
2,568

 
2,358

 
2,628

 
744

Non-accrual debt securities (5)
680

 
680

 
680

 

 

Total non-performing assets
$
104,428

 
$
110,712

 
$
106,714

 
$
103,355

 
$
98,631

Performing troubled debt restructured loans
$
73,012

 
$
79,364

 
$
74,385

 
$
73,081

 
$
77,216

Total non-accrual loans as a % of loans
0.31
%
 
0.38
%
 
0.37
%
 
0.37
%
 
0.35
%
Total accruing past due and non-accrual loans as a % of loans
0.54
%
 
0.71
%
 
0.63
%
 
0.69
%
 
0.62
%
Allowance for loan losses as a % of non-accrual loans
173.83
%
 
160.17
%
 
160.71
%
 
165.27
%
 
171.79
%
Non-performing purchased credit-impaired loans (6)
$
70,160

 
$
63,522

 
$
55,085

 
$
56,182

 
$
56,125




12


VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS



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)
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. Management believes these non-GAAP financial measures provide information useful to investors in understanding Valley's financial results. Specifically, Valley provides measures based on what it believes are its operating earnings on a consistent basis and excludes material non-core operating items which affect the GAAP reporting of results of operations. Management utilizes these measures for internal planning and forecasting purposes. Management believes that Valley's presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting Valley's business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and Valley strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

 
Three Months Ended
 
Years Ended
 
December 31,
 
September 30,
 
December 31,
 
December 31,
($ in thousands, except for share data)
2019
 
2019
 
2018
 
2019
 
2018
Adjusted net income available to common shareholders:
 
 
 
 
 
 
 
 
 
Net income, as reported
$
38,104

 
$
81,891

 
$
77,102

 
$
309,793

 
$
261,428

Less: Gain on the sale of Visa Class B shares (net of tax)(a)

 

 
(4,677
)
 

 
(4,677
)
Less: Gain on sale leaseback transactions (net of tax)(b)

 

 

 
(56,414
)
 

Add: Losses on extinguishment of debt (net of tax)
22,992

 

 

 
22,992

 

Add: Net impairment losses on securities (net of tax)

 

 

 
2,104

 

Add: Losses on securities transactions (net of tax)
26

 
67

 
1,047

 
108

 
1,677

Add: Severance expense (net of tax)(c)

 

 
1,907

 
3,477

 
1,907

Add: Tax credit investment impairment (net of tax)(d)

 

 

 
1,746

 

Add: Branch related asset impairment (net of tax)(e)

 

 

 

 
1,304

Add: Legal expenses (litigation reserve impact only, net of tax)

 

 

 

 
8,726

Add: Merger related expenses (net of tax)(f)
10,861

 
1,043

 
(455
)
 
11,929

 
12,494

Add: Income tax expense (benefit)(g)
18,667

 
133

 
(2,274
)
 
31,123

 
(274
)
Net income, as adjusted
$
90,650

 
$
83,134

 
$
72,650

 
$
326,858

 
$
282,585

Dividends on preferred stock
3,172

 
3,172

 
3,172

 
12,688

 
12,688

Net income available to common shareholders, as adjusted
$
87,478

 
$
79,962

 
$
69,478

 
$
314,170

 
$
269,897

_____________
 
 
 
 
 
 
 
 
 
(a) The gain from the sale of non-marketable securities is included in other non-interest income.
(b) The gain on sale leaseback transactions is included in gains on the sales of assets within other non-interest income.
(c) Severance expenses are included in salary and employee benefits expense.
(d) Impairment is included in the amortization of tax credit investments.
(e) Branch related asset impairment is included in net losses on sale of assets within non-interest income.
(f) Merger related expenses are primarily within salary and employee benefits expense, professional and legal fees, and other expense.
(g) Income tax expense related to reserves for uncertain tax positions in 2019, and the Tax Cuts and Jobs Act and a USAB acquisition charge in 2018.
 
 
 
 
 
 
 
 
 
 
Adjusted per common share data:
 
 
 
 
 
 
 
 
 
Net income available to common shareholders, as adjusted
$
87,478

 
$
79,962

 
$
69,478

 
$
314,170

 
$
269,897

Average number of shares outstanding
355,821,005

 
331,797,982

 
331,492,648

 
337,792,270

 
331,258,964

Basic earnings, as adjusted
$
0.25

 
$
0.24

 
$
0.21

 
$
0.93

 
$
0.81

Average number of diluted shares outstanding
358,864,876

 
333,405,196

 
332,856,385

 
340,117,808

 
332,693,718

Diluted earnings, as adjusted
$
0.24

 
$
0.24

 
$
0.21

 
$
0.92

 
$
0.81




13


VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS



 
Three Months Ended
 
Years Ended
 
December 31,
 
September 30,
 
December 31,
 
December 31,
($ in thousands)
2019
 
2019
 
2018
 
2019
 
2018
Adjusted annualized return on average tangible shareholders' equity:
 
 
 
 
 
 
 
 
 
Net income, as adjusted
$
90,650

 
$
83,134

 
$
72,650

 
$
326,858

 
$
282,585

Average shareholders' equity
3,804,902

 
3,536,528

 
3,340,411

 
3,555,483

 
3,304,531

Less: Average goodwill and other intangible assets
1,256,137

 
1,154,462

 
1,164,638

 
1,182,140

 
1,163,398

Average tangible shareholders' equity
$
2,548,765

 
$
2,382,066

 
$
2,175,773

 
$
2,373,343

 
$
2,141,133

Annualized return on average tangible shareholders' equity, as adjusted
14.23
%
 
13.96
%
 
13.36
%
 
13.77
%
 
13.20
%
Adjusted annualized return on average assets:
 
 
 
 
 
 
 
 
 
Net income, as adjusted
$
90,650

 
$
83,134

 
$
72,650

 
$
326,858

 
$
282,585

Average assets
$
35,315,682

 
$
33,419,137

 
$
31,328,729

 
$
33,442,738

 
$
30,229,276

Annualized return on average assets, as adjusted
1.03
%
 
1.00
%
 
0.93
%
 
0.98
%
 
0.93
%
Adjusted annualized return on average shareholders' equity:
 
 
 
 
 
 
 
 
 
Net income, as adjusted
$
90,650

 
$
83,134

 
$
72,650

 
$
326,858

 
$
282,585

Average shareholders' equity
$
3,804,902

 
$
3,536,528

 
$
3,340,411

 
$
3,555,483

 
$
3,304,531

Annualized return on average shareholders' equity, as adjusted
9.53
%
 
9.40
%
 
8.70
%
 
9.19
%
 
8.55
%

Annualized return on average tangible shareholders' equity:
 
 
 
 
 
 
 
 
 
Net income, as reported
$
38,104

 
$
81,891

 
$
77,102

 
$
309,793

 
$
261,428

Average shareholders' equity
3,804,902

 
3,536,528

 
3,340,411

 
3,555,483

 
3,304,531

Less: Average goodwill and other intangible assets
1,256,137

 
1,154,462

 
1,164,638

 
1,182,140

 
1,163,398

 Average tangible shareholders' equity
$
2,548,765

 
$
2,382,066

 
$
2,175,773

 
$
2,373,343

 
$
2,141,133

Annualized return on average tangible shareholders' equity
5.98
%
 
13.75
%
 
14.17
%
 
13.05
%
 
12.21
%
Adjusted efficiency ratio:
 
 
 
 
 
 
 
 
 
Non-interest expense
$
196,146

 
$
145,877

 
$
153,712

 
$
631,555

 
$
629,061

Less: Loss on extinguishment of debt (pre-tax)
31,995

 

 

 
31,995

 

Less: Severance expense (pre-tax)

 

 
2,662

 
4,838

 
2,662

Less: Legal expenses (litigation reserve impact only, pre-tax)

 

 

 

 
12,184

Less: Merger-related expenses (pre-tax)
15,110

 
1,434

 
(635
)
 
16,579

 
17,445

Less: Amortization of tax credit investments (pre-tax)
3,971

 
4,385

 
9,044

 
20,392

 
24,200

Non-interest expense, as adjusted
145,070

 
140,058

 
142,641

 
557,751

 
572,570

Net interest income
238,541

 
220,625

 
222,053

 
898,048

 
857,203

Non-interest income, as reported
38,094

 
41,150

 
34,694

 
214,520

 
134,052

Add: Net impairment losses on securities (pre-tax)

 

 

 
2,928

 

Add: Branch related asset impairment (pre-tax)

 

 

 

 
1,821

Add: Losses on securities transactions, net (pre-tax)
36

 
93

 
1,462

 
150

 
2,342

Less: Gain on the sale of Visa Class B shares (pre-tax)

 

 
6,530

 

 
6,530

Less: Gain on sale leaseback transaction (pre-tax)

 

 

 
78,505

 

Non-interest income, as adjusted
$
38,130

 
$
41,243

 
$
29,626

 
$
139,093

 
$
131,685

Gross operating income, as adjusted
$
276,671

 
$
261,868

 
$
251,679

 
$
1,037,141

 
$
988,888

Efficiency ratio, as adjusted
52.43
%
 
53.48
%
 
56.68
%
 
53.78
%
 
57.90
%

14


VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS



 
As Of
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
December 31,
($ in thousands, except for share data)
2019
 
2019
 
2019
 
2019
 
2018
Tangible book value per common share:
 
 
 
 
 
 
 
 
 
Common shares outstanding
403,278,390

 
331,805,564

 
331,788,149

 
331,732,636

 
331,431,217

Shareholders' equity
$
4,384,188

 
$
3,558,075

 
$
3,504,118

 
$
3,444,879

 
$
3,350,454

Less: Preferred Stock
209,691

 
209,691

 
209,691

 
209,691

 
209,691

Less: Goodwill and other intangible assets
1,460,397

 
1,152,815

 
1,155,250

 
1,158,245

 
1,161,655

Tangible common shareholders' equity
$
2,714,100

 
$
2,195,569

 
$
2,139,177

 
$
2,076,943

 
$
1,979,108

    Tangible book value per common share
$
6.73

 
$
6.62

 
$
6.45

 
$
6.26

 
$
5.97

Tangible common equity to tangible assets:
 
 
 
 
 
 
 
 
 
Tangible common shareholders' equity
$
2,714,100

 
$
2,195,569

 
$
2,139,177

 
$
2,076,943

 
$
1,979,108

Total assets
$
37,453,416

 
$
33,765,539

 
$
33,027,741

 
$
32,476,991

 
$
31,863,088

Less: Goodwill and other intangible assets
1,460,397

 
1,152,815

 
1,155,250

 
1,158,245

 
1,161,655

Tangible assets
$
35,993,019

 
$
32,612,724

 
$
31,872,491

 
$
31,318,746

 
$
30,701,433

    Tangible common equity to tangible assets
7.54
%
 
6.73
%
 
6.71
%
 
6.63
%
 
6.45
%
(3)
The efficiency ratio measures Valley's total non-interest expense as a percentage of net interest income plus total non-interest income.
(4)
Past due loans and non-accrual loans exclude purchased credit-impaired (PCI) loans. PCI loans are accounted for on a pool basis under U.S. GAAP and are not subject to delinquency classification in the same manner as loans originated by Valley.
(5)
Represents an other-than-temporarily impaired municipal bond security classified as available for sale presented at its carrying value at June 30, 2019, September 30, 2019, and December 31, 2019.
(6)
Represent PCI loans meeting Valley's definition of non-performing loan (i.e., non-accrual loans), but are not subject to such classification under U.S. GAAP because the loans are accounted for on a pooled basis and are excluded from the non-accrual loans in the table above.
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, 1455 Valley Road, Wayne, New Jersey, 07470, by telephone at (973) 305-3380, by fax at (973) 305-1364 or by e-mail at tzarkadas@valley.com.

15


VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except for share data)



 
December 31,
 
2019
 
2018
 
(Unaudited)
 
 
Assets
 
 
 
Cash and due from banks
$
256,264

 
$
251,541

Interest bearing deposits with banks
178,423

 
177,088

Investment securities:
 
 
 
Equity securities
41,410

 

Available for sale debt securities
1,566,801

 
1,749,544

Held to maturity (fair value of $2,358,720 at December 31, 2019 and $2,034,943 at December 31, 2018)
2,336,095

 
2,068,246

Total investment securities
3,944,306

 
3,817,790

Loans held for sale, at fair value
76,113

 
35,155

Loans
29,699,208

 
25,035,469

Less: Allowance for loan losses
(161,759
)
 
(151,859
)
Net loans
29,537,449

 
24,883,610

Premises and equipment, net
334,533

 
341,630

Lease right of use assets
285,129

 

Bank owned life insurance
540,169

 
439,602

Accrued interest receivable
105,637

 
95,296

Goodwill
1,373,625

 
1,084,665

Other intangible assets, net
86,772

 
76,990

Other assets
734,996

 
659,721

Total Assets
$
37,453,416

 
$
31,863,088

Liabilities
 
 
 
Deposits:
 
 
 
Non-interest bearing
$
6,710,408

 
$
6,175,495

Interest bearing:
 
 
 
Savings, NOW and money market
12,757,484

 
11,213,495

Time
9,717,945

 
7,063,984

Total deposits
29,185,837

 
24,452,974

Short-term borrowings
1,093,280

 
2,118,914

Long-term borrowings
2,122,426

 
1,654,268

Junior subordinated debentures issued to capital trusts
55,718

 
55,370

Lease Liabilities
309,849

 
3,125

Accrued expenses and other liabilities
302,118

 
227,983

Total Liabilities
33,069,228

 
28,512,634

Shareholders’ Equity
 
 
 
Preferred stock, no par value; 50,000,000 shares authorized:
 
 
 
Series A (4,600,000 shares issued at December 31, 2019 and December 31, 2018)
111,590

 
111,590

Series B (4,000,000 shares issued at December 31, 2019 and December 31, 2018)
98,101

 
98,101

Common stock (no par value, authorized 450,000,000 shares; issued 403,322,773 shares at December 31, 2019 and 331,634,951 shares at December 31, 2018)
141,423

 
116,240

Surplus
3,622,208

 
2,796,499

Retained earnings
443,559

 
299,642

Accumulated other comprehensive loss
(32,214
)
 
(69,431
)
Treasury stock, at cost (44,383 common shares at December 31, 2019 and 203,734 common shares at December 31, 2018)
(479
)
 
(2,187
)
Total Shareholders’ Equity
4,384,188

 
3,350,454

Total Liabilities and Shareholders’ Equity
$
37,453,416

 
$
31,863,088


16


VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands, except for share data)


 
Three Months Ended