EXHIBIT 99.1

valleylogoa31.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 25 PERCENT INCREASE IN SECOND QUARTER 2020 NET INCOME AND STRONG OPERATIONAL EFFICIENCY

NEW YORK, NY – July 23, 2020 -- Valley National Bancorp (NASDAQ:VLY), the holding company for Valley National Bank, today reported net income for the second quarter 2020 of $95.6 million, or $0.23 per diluted common share, as compared to the second quarter 2019 earnings of $76.5 million, or $0.22 per diluted common share, and net income of $87.3 million, or $0.21 per diluted common share, for the first quarter 2020.

Key financial highlights for the second quarter:

Loan Portfolio: Loans increased $1.9 billion to $32.3 billion at June 30, 2020 from
March 31, 2020
. The increase was largely due to approximately $2.2 billion of SBA Paycheck Protection Program (PPP) loans originated under the CARES Act to aid small- and medium-sized businesses in the second quarter. We also sold approximately $237 million of residential mortgage loans originated for sale rather than investment, resulting in total pre-tax gains of $8.3 million in the second quarter 2020, as compared to $196 million of residential mortgage loans sold in the linked quarter with total pre-tax gains of $4.6 million. See the "Loans" section below for more details.
Net Interest Income and Margin: Net interest income on a tax equivalent basis of $283.5 million for the second quarter 2020 increased $17.2 million as compared to the first quarter 2020. The increase was driven by several factors in the second quarter 2020 including, a 46 basis point decline in our funding costs largely resulting from the lower interest rate environment and a $2.0 billion increase in average loan balances mostly due to the PPP loan originations. Our net interest margin on a tax equivalent basis of 3.00 percent for the second quarter 2020 decreased by 7 basis points from 3.07 percent for the first quarter 2020. See the "Net Interest Income and Margin" section below for additional information.
Allowance and Provision for Credit Losses for Loans: Our allowance for credit losses for loans totaled $319.7 million and $293.4 million at June 30, 2020 and March 31, 2020, respectively. During the second quarter 2020, the provision for credit losses for loans was $41.1 million as compared to $33.9 million for the first quarter 2020 and a pre-CECL provision of $2.1 million for the second quarter 2019. The reserve build in the second quarter 2020 mainly reflects deterioration in Valley's view of the macroeconomic outlook since the end of the first quarter, higher specific reserves associated with our taxi medallion loan portfolio and additional qualitative management adjustments to reflect the potential for higher levels of credit stress related to COVID-19 impacted borrowers.
Credit Quality: Net loan charge-offs totaled $14.8 million for the second quarter 2020 as compared to $4.8 million for the first quarter 2020 primarily due to the partial charge-off of one

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Valley National Bancorp (NASDAQ: VLY)
2020 Second Quarter Earnings
July 23, 2020



impaired commercial loan relationship and lower collateral valuations related to non-performing taxi medallion loans. Non-accrual loans increased $4.7 million during the second quarter 2020 as compared to the first quarter 2020 and represented 0.65 percent and 0.68 percent of total loans at June 30, 2020 and March 31, 2020, respectively. See the "Credit Quality" Section below for more details.
Non-interest Income: Non-interest income increased $3.4 million to $44.8 million for the second quarter 2020 as compared to the first quarter 2020. The increase was largely due to a $3.8 million increase in net gains on sales of residential mortgage loans and a $2.7 million increase in BOLI income, partially offset by a $2.1 million decline in service charges mostly caused by waived fees related to COVID-19 customer relief efforts.
Non-interest Expense: Non-interest expense increased $1.5 million to $157.2 million for the second quarter 2020 as compared to the first quarter 2020 partly due to moderate increases in technology transformation consulting services, pension, cash incentive compensation and FDIC insurance assessment expenses. Merger related expenses totaled $366 thousand and $1.3 million for the second quarter 2020 and first quarter 2020, respectively. COVID-19 related expenses also totaled $2.2 million and $2.1 million for second quarter 2020 and first quarter 2020, respectively. During the second quarter 2020, these expenses consisted of certain PPP loan costs, such as advertising, additional remote work readiness costs, special cleaning and other COVID-19 safety related costs, while the first quarter 2020 expense was largely a special bonus for hourly employees.
Efficiency Ratio: Our efficiency ratio was 48.01 percent for the second quarter 2020 as compared to 50.75 percent and 57.19 percent for the first quarter 2020 and second quarter 2019, respectively. Our adjusted efficiency ratio was 46.84 percent for the second quarter 2020 as compared to 49.26 percent and 54.57 percent for the first quarter 2020 and second quarter 2019, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.
Performance Ratios: Annualized return on average assets (ROA), average shareholders’ equity (ROE) and average tangible shareholders' equity (ROTE) were 0.92 percent, 8.54 percent, and 12.66 percent for the second quarter 2020, respectively. Annualized ROA, ROE and ROTE, adjusted for non-core charges, was 0.92 percent, 8.57 percent, and 12.70 percent for the second quarter 2020, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.

Ira Robbins, CEO and President commented, "While the uncertain economic environment is less than ideal, I am very pleased with our second quarter earnings, especially on a pre-provision net revenue basis, and the quality of our balance sheet. Our second quarter net interest margin and income reflected this quality and our ability to significantly reduce the cost of our funding sources. As a result of the strong performance of our margin and laser-focus on managing operating expenses, the adjusted efficiency ratio was below 50 percent for the second consecutive quarter." Robbins continued, "During the quarter, we remained deeply committed to being a trusted partner and solution provider for our customers, originating over $2 billion in PPP loans, providing loan forbearances and waiving fees when appropriate for those significantly impacted by the COVID-19 pandemic. I’m extremely proud of Valley's tireless commitment, flexibility and drive to make a difference for our customers, employees and communities."

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Valley National Bancorp (NASDAQ: VLY)
2020 Second Quarter Earnings
July 23, 2020



Net Interest Income and Margin
Net interest income on a tax equivalent basis totaling $283.5 million for the second quarter 2020 increased $62.1 million as compared to the second quarter 2019 and increased $17.2 million as compared to the first quarter 2020. The increase as compared to the first quarter 2020 was largely driven by our ability to significantly reduce our deposit and other funding costs in the current low interest rate environment and a $2.0 billion increase in average loan balances largely resulting from PPP loan originations. Interest expense of $66.0 million for the second quarter 2020 decreased $32.5 million as compared to the first quarter 2020 largely due to the overall lower cost of funds, partially offset by the interest cost associated with higher average interest-bearing deposits without stated maturities and other borrowings. However, interest income on a tax equivalent basis decreased $15.3 million to $349.5 million for the second quarter 2020 as compared to the first quarter 2020. The decrease was mainly due to overall lower loan yields caused, in part, by normal repayments of higher yielding loans, variable rate loan resets and a $3.1 million decline in loan discount accretion in second quarter 2020 due to lower prepayments for certain loans.

Our net interest margin on a tax equivalent basis of 3.00 percent for the second quarter 2020 increased by 4 basis points from 2.96 percent in second quarter 2019 and decreased by 7 basis from 3.07 percent for the first quarter 2020. The yield on average interest earning assets decreased by 51 basis points on a linked quarter basis mostly due to the impact of the lower interest rate environment. The yield on average loans decreased by 42 basis points to 4.02 percent for the second quarter 2020 as compared to the first quarter 2020 largely due to the repayment of higher yielding loans, lower yielding variable and new loans, including the origination of $2.2 billion of PPP loans in second quarter 2020, and an increase in excess liquidity held in low yield overnight investments. The overall cost of average interest bearing liabilities decreased 54 basis points to 0.96 percent for the second quarter 2020 as compared to the linked first quarter 2020 due to the significantly lower interest rates paid on deposits and borrowings. During the first half of 2020, we also benefited from the prepayment of $635 million high cost FHLB advances in December 2019. Our cost of total average deposits was 0.60 percent for the second quarter 2020 as compared to 1.07 percent for the first quarter 2020.
Loans, Deposits and Other Borrowings
Loans. Loans increased $1.9 billion to approximately $32.3 billion at June 30, 2020 from March 31, 2020 largely due to approximately $2.2 billion of SBA PPP loan originations within the commercial and industrial loan category during the second quarter 2020. Commercial real estate loans increased $181.6 million, or 4.4 percent on an annualized basis, to $16.6 billion at June 30, 2020 as compared to March 31, 2020 mainly due to our strong loan commitment pipeline at March 31, 2020 and slower repayment activity in the second quarter. Residential mortgage and the consumer loan categories all experienced moderate declines in the second quarter due to the impact of COVID-19 and our normal mortgage banking sales activity. During the second quarter 2020, we originated $296 million of residential mortgage loans for sale rather than held for investment and sold approximately $237 million of these loans. Residential mortgage loans held for sale at fair value totaled $120.6 million and $58.9 million at June 30, 2020 and March 31, 2020, respectively.
Deposits. Total deposits increased $2.4 billion to approximately $31.4 billion at June 30, 2020 from March 31, 2020 largely due to increases of $2.0 billion and $666.6 million in non-interest bearing deposits and interest-bearing deposits without stated maturities, respectively. The increases were mostly driven by deposits from PPP loan customers, higher depositor balances due to the uncertain financial markets,

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Valley National Bancorp (NASDAQ: VLY)
2020 Second Quarter Earnings
July 23, 2020



as well as a partial shift to more liquid funds for maturing retail CD customers. As a result, time deposits decreased $294.3 million at June 30, 2020 as compared to March 31, 2020. Total brokered deposits (consisting of both time and money market deposit accounts) were $3.6 billion at June 30, 2020 as compared to $3.4 billion at March 31, 2020. Non-interest bearing deposits; savings, NOW and money market deposits; and time deposits represented approximately 29 percent, 45 percent and 26 percent of total deposits as of June 30, 2020, respectively.
Other Borrowings. Long-term borrowings increased $101.9 million to $2.9 billion at June 30, 2020 as compared to March 31, 2020 mainly due to our recent $115.0 million issuance of 5.25 percent fixed-to-floating rate subordinated notes with a stated maturity of June 15, 2030. Short-term borrowings decreased by $12.8 million to $2.1 billion at June 30, 2020 as compared to March 31, 2020.
Credit Quality
Non-Performing Assets (NPAs). Total NPAs, consisting of non-accrual loans, other real estate owned (OREO), other repossessed assets and non-accrual debt securities increased $3.7 million to $224.2 million at June 30, 2020 as compared to March 31, 2020 mainly due to a $4.7 million increase in non-accrual loans, partially offset by a decline in OREO during the second quarter 2020. The increase in non-accrual loans was partially due to one commercial real estate loan which moved to non-accrual status during the second quarter 2020, as well as a moderately higher level of non-accrual consumer loans at June 30, 2020. Non-accrual loans represented 0.65 percent of total loans at June 30, 2020 compared to 0.68 percent at March 31, 2020.
Non-performing Taxi Medallion Loan Portfolio. We continue to closely monitor our non-performing New York City and Chicago taxi medallion loans totaling $99.8 million and $7.0 million, respectively, within the commercial and industrial loan portfolio at June 30, 2020. At June 30, 2020, the non-accrual taxi medallion loans totaling $106.8 million had related reserves of $61.6 million within the allowance for loan losses.
Accruing Past Due Loans. Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) decreased $66.3 million to $93.1 million, or 0.29 percent of total loans, at June 30, 2020 as compared to $159.4 million, or 0.52 percent of total loans, at March 31, 2020 due to a decline in early stage delinquencies for all loan categories. Commercial real estate loans past due 30 to 59 days and 60 to 89 days decreased by $27.8 million and $14.4 million, respectively, as compared to March 31, 2020. The improved performance within the 30 to 59 day category was mainly due to restored customer payments delayed by business disruptions caused by COVID-19 related factors at the end of the first quarter 2020. Commercial real estate loans past due 60 to 90 days at June 30, 2020 declined primarily due to the normal renewal of a $13.8 million performing matured loan reported in this category at March 31, 2020.
Loan Forbearance. In response to the COVID-19 pandemic and its economic impact to certain customers, Valley implemented short-term loan modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that are insignificant, when requested by customers. Generally, the modification terms allow for a deferral of payments for up to 90 days, which Valley may extend for an additional 90 days, for a maximum of 180 days on a cumulative and successive basis. To date, Valley has granted over 10,000 loan forbearances totaling approximately $4.6 billion in support of our customers. Of these, approximately 5,000 loans totaling $1.9 billion have completed the contractual deferral period and returned to regularly scheduled payments.

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Valley National Bancorp (NASDAQ: VLY)
2020 Second Quarter Earnings
July 23, 2020



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 June 30, 2020, March 31, 2020, and June 30, 2019:
 
 
June 30, 2020
 
March 31, 2020
 
June 30, 2019
 
 
 
 
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
$
132,039

 
1.92
%
 
$
127,437

 
2.55
%
 
$
94,384

 
2.11
%
Commercial real estate loans:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
117,743

 
0.71
%
 
97,876

 
0.60
%
 
23,796

 
0.19
%
 
Construction
13,959

 
0.81
%
 
13,709

 
0.79
%
 
25,182

 
1.65
%
Total commercial real estate loans
131,702

 
0.72
%
 
111,585

 
0.62
%
 
48,978

 
0.34
%
Residential mortgage loans
29,630

 
0.67
%
 
29,456

 
0.66
%
 
5,219

 
0.13
%
Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
Home equity
4,766

 
1.01
%
 
4,463

 
0.93
%
 
505

 
0.10
%
 
Auto and other consumer
11,477

 
0.51
%
 
10,401

 
0.44
%
 
6,019

 
0.26
%
Total consumer loans
16,243

 
0.59
%
 
14,864

 
0.52
%
 
6,524

 
0.23
%
Allowance for loan losses
309,614

 
0.96
%
 
283,342

 
0.93
%
 
155,105

 
0.60
%
Allowance for unfunded credit commitments
10,109

 
 
 
10,019

 
 
 
2,974

 
 
Total allowance for credit losses for loans
$
319,723

 
 
 
$
293,361

 
 
 
$
158,079

 
 
Allowance for credit losses for
 
 
 
 
 
 
 
 
 
 
 
loans as a % loans
 
 
0.99
%
 
 
 
0.96
%
 
 
 
0.61
%
 
 
 
 
 
 
 
 
 
 
 
 
 
*
CECL was adopted January 1, 2020. Prior periods reflect the allowance for credit losses for loans under the incurred loss model.
Our loan portfolio, totaling $32.3 billion at June 30, 2020, had net loan charge-offs totaling $14.8 million for the second quarter 2020 as compared to $4.8 million and $3.0 million for the first quarter 2020 and second quarter 2019, respectively. The increase in net loan charge-offs was largely due to the partial charge-off of one commercial and industrial loan totaling $7.8 million for the second quarter 2020. Additionally, gross loan charge-offs related to taxi medallion loans totaled $3.2 million, $1.3 million and $2.3 million for the second quarter 2020, first quarter 2020 and second quarter 2019, respectively.
During the second quarter 2020, we recorded a $41.1 million provision for credit losses for loans as compared to $33.9 million and $2.1 million for the first quarter 2020 and the second quarter 2019, respectively. The second quarter 2020 provision mainly reflects the reserve build caused by deterioration in Valley's view of the macroeconomic outlook since the end of the first quarter, higher specific reserves associated with our taxi medallion loan portfolio and additional qualitative management adjustments to reflect the potential for higher levels of credit stress for COVID-19 impacted borrowers.
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 0.99 percent, 0.96 percent and 0.61 percent at June 30,

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Valley National Bancorp (NASDAQ: VLY)
2020 Second Quarter Earnings
July 23, 2020



2020, March 31, 2020 and June 30, 2019, respectively. At June 30, 2019, the allowance allocations for credit losses as a percentage of total loans increased for most loan categories as compared to March 31, 2020. However, the allocated reserves as a percentage of commercial and industrial loans declined by 0.63 percent due to $2.2 billion of SBA PPP loans with no related allowance at June 30, 2020. The allowance for credit losses for loans at June 30, 2020 as compared to June 30, 2019 increased largely due to the reserves related to PCD loans included in the Day 1 CECL adoption adjustment and the reserve build under CECL during the first six months of 2020 related to the impact of COVID-19 on lifetime expected credit losses.
Capital Adequacy
Valley's regulatory capital ratios continue to reflect its well capitalized position. Valley's total risk-based capital, common equity Tier 1 capital, Tier 1 capital and Tier 1 leverage capital ratios were 12.19 percent, 9.51 percent, 10.23 percent and 7.70 percent, respectively, at June 30, 2020.
For regulatory capital purposes, in connection with the Federal Reserve Board’s final interim rule as of April 3, 2020, 100 percent of the CECL Day 1 impact to shareholders' equity equaling $28.2 million after-tax will be deferred over a two-year period ending January 1, 2022, at which time it will be phased in on a pro-rata basis over a three-year period ending January 1, 2025. Additionally, 25 percent of the reserve build (i.e., provision for credit losses less net charge-offs) for the six months ended June 30, 2020 will be phased in over the same time frame.
Investor Conference Call
Valley will host a conference call with investors and the financial community at 11:00 AM Eastern Daylight Time, today to discuss the second quarter 2020 earnings. Those wishing to participate in the call may dial toll-free (866) 354-0432 Conference ID: 2150739. The teleconference will also be webcast live: https://edge.media-server.com/mmc/p/z4qssb75 [edge.media-server.com and archived on Valley's website through Friday, August 28, 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 $42 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 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 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, including the potential effects of the COVID-19 pandemic on our businesses and financial results and conditions. These statements may be identified by such forward-looking terminology as

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Valley National Bancorp (NASDAQ: VLY)
2020 Second Quarter Earnings
July 23, 2020



“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 impact of COVID-19 on the U.S. and the global economies, including business disruptions, reductions in employment and an increase in business failures, specifically the consequences among our commercial and consumer customers;
the impact of COVID-19 on our employees and our ability to provide services to our customers and respond to their needs as more cases of COVID-19 arise in various locations, including Florida and Alabama;
potential judgments, claims, damages, penalties, fines and reputational damage resulting from pending or future litigation and regulatory and government actions, including as a result of our participation in and execution of government programs related to the COVID-19 pandemic or as a result of our action, or failure to implement or effectively implement, federal, state and local laws, rules or executive orders requiring that we grant forbearances or not act to collect our loans;
the impact of forbearances or deferrals we are required or agree to as a result of customer requests and/or government actions, including, but not limited to our potential inability to recover fully deferred payments from the borrower or the collateral;
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;
a prolonged downturn 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;
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 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;
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;
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;

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Valley National Bancorp (NASDAQ: VLY)
2020 Second Quarter Earnings
July 23, 2020



unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, the COVID-19 pandemic 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, 2019 and in Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.
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

Six Months Ended
 
June 30,

March 31,

June 30,

June 30,
($ in thousands, except for share data)
2020

2020

2019

2020

2019
FINANCIAL DATA:
 
 
 
 
 
 
 
 
 
Net interest income - FTE (1)
$
283,540

 
$
266,383

 
$
221,392

 
$
549,923

 
$
441,317

Net interest income
$
282,559

 
$
265,339

 
$
220,234

 
$
547,898

 
$
438,882

Non-interest income
44,830

 
41,397

 
27,603

 
86,227

 
135,276

Total revenue
327,389

 
306,736

 
247,837

 
634,125

 
574,158

Non-interest expense
157,166

 
155,656

 
141,737

 
312,822

 
289,532

Pre-provision net revenue
170,223

 
151,080

 
106,100

 
321,303

 
284,626

Provision for credit losses
41,156

 
34,683

 
2,100

 
75,839

 
10,100

Income tax expense
33,466

 
29,129

 
27,532

 
62,595

 
84,728

Net income
95,601

 
87,268

 
76,468

 
182,869

 
189,798

Dividends on preferred stock
3,172


3,172


3,172


6,344


6,344

Net income available to common shareholders
$
92,429

 
$
84,096

 
$
73,296

 
$
176,525

 
$
183,454

Weighted average number of common shares outstanding:

 
 
 
 
 
 
 
 
Basic
403,790,242

 
403,519,088

 
331,748,552

 
403,654,665

 
331,675,313

Diluted
404,631,845

 
405,424,123

 
332,959,802

 
405,043,183

 
332,929,359

Per common share data:
 
 
 
 
 
 
 
 
 
Basic earnings
$
0.23

 
$
0.21

 
$
0.22

 
$
0.44

 
$
0.55

Diluted earnings
0.23

 
0.21

 
0.22

 
0.44

 
0.55

Cash dividends declared
0.11

 
0.11

 
0.11

 
0.22

 
0.22

Closing stock price - high
9.60

 
11.46

 
10.78

 
11.46

 
10.78

Closing stock price - low
6.29

 
6.37

 
9.75

 
6.29

 
9.00

CORE ADJUSTED FINANCIAL DATA: (2)
 
 
 
 
 
 
 
 
 
Net income available to common shareholders, as adjusted
$
92,721

 
$
85,061

 
$
75,614

 
$
177,782

 
$
147,378

Basic earnings per share, as adjusted
0.23


0.21


0.23


0.44


0.44

Diluted earnings per share, as adjusted
0.23


0.21


0.23


0.44


0.44

FINANCIAL RATIOS:
 
 
 
 
 
 
 
 
 
Net interest margin
2.99
%
 
3.06
%
 
2.95
%
 
3.02
%
 
2.95
%
Net interest margin - FTE (1)
3.00

 
3.07

 
2.96

 
3.04

 
2.97

Annualized return on average assets
0.92

 
0.92

 
0.94

 
0.92

 
1.17

Annualized return on avg. shareholders' equity
8.54

 
7.92

 
8.79

 
8.23

 
11.04

Annualized return on avg. tangible shareholders' equity (2)
12.66

 
11.84

 
13.16

 
12.26

 
16.65

Efficiency ratio (3)
48.01

 
50.75

 
57.19

 
49.33

 
50.43

CORE ADJUSTED FINANCIAL RATIOS: (2)
 
 
 
 
 
 
 
 
 
Annualized return on average assets, as adjusted
0.92
%
 
0.93
%
 
0.96
%
 
0.93
%
 
0.95
%
Annualized return on average shareholders' equity, as adjusted
8.57

 
8.01

 
9.05

 
8.29

 
8.94

Annualized return on average tangible shareholders' equity, as adjusted
12.70

 
11.97

 
13.56

 
12.34

 
13.49

Efficiency ratio, as adjusted
46.84

 
49.26

 
54.57

 
48.01

 
54.68


9



VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS



 
As Of
AVERAGE BALANCE SHEET ITEMS:
June 30,
 
March 31,
 
December 31,
 
September 30,
 
June 30,
(In thousands)
2020
 
2020
 
2019
 
2019
 
2019
Assets
$
41,503,514


$
38,097,364


$
32,707,144


$
39,800,441


$
32,502,744

Interest earning assets
37,778,387

 
34,674,075

 
29,877,384

 
36,226,232

 
29,721,015

Loans
32,041,200

 
29,999,428

 
25,552,415

 
31,020,314

 
25,404,396

Interest bearing liabilities
27,578,741

 
26,215,578

 
22,328,544

 
26,897,161

 
22,336,243

Deposits
30,837,963

 
28,811,932

 
24,699,238

 
29,824,948

 
24,740,767

Shareholders' equity
4,477,446

 
4,408,585


3,481,519


4,443,016


3,438,344

BALANCE SHEET ITEMS:
 
 
 
 
 
 
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
Assets
$
41,717,265

 
$
39,120,629

 
$
37,436,020

 
$
33,765,539

 
$
33,027,741

Total loans
32,314,611

 
30,428,067

 
29,699,208

 
26,567,159

 
25,802,162

Deposits
31,428,005

 
29,016,988

 
29,185,837

 
25,546,122

 
24,773,929

Shareholders' equity
4,474,488

 
4,420,998

 
4,384,188

 
3,558,075

 
3,504,118

 
 
 
 
 
 
 
 
 
 
LOANS:
 
 
 
 
 
 
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
6,884,689

 
$
4,998,731

 
$
4,825,997

 
$
4,695,608

 
$
4,615,765

Commercial real estate:
 
 
 
 
 
 
 
 
 
Commercial real estate
16,571,877

 
16,390,236

 
15,996,741

 
13,365,454

 
12,798,017

Construction
1,721,352

 
1,727,046

 
1,647,018

 
1,537,590

 
1,528,968

 Total commercial real estate
18,293,229

 
18,117,282

 
17,643,759

 
14,903,044

 
14,326,985

Residential mortgage
4,405,147

 
4,478,982

 
4,377,111

 
4,133,331

 
4,072,450

Consumer:
 
 
 
 
 
 
 
 
 
Home equity
471,115

 
481,751

 
487,272

 
489,808

 
501,646

Automobile
1,369,489

 
1,436,734

 
1,451,623

 
1,436,608

 
1,362,466

Other consumer
890,942

 
914,587

 
913,446

 
908,760

 
922,850

 Total consumer loans
2,731,546

 
2,833,072

 
2,852,341

 
2,835,176

 
2,786,962

Total loans
$
32,314,611

 
$
30,428,067

 
$
29,699,208

 
$
26,567,159

 
$
25,802,162

 
 
 
 
 
 
 
 
 
 
CAPITAL RATIOS:
 
 
 
 
 
 
 
 
 
Book value per common share
$
10.56

 
$
10.43

 
$
10.35

 
$
10.09

 
$
9.93

Tangible book value per common share (2)
6.96

 
6.82

 
6.73

 
6.62

 
6.45

Tangible common equity to tangible assets (2)
6.98
%
 
7.31
%
 
7.54
%
 
6.73
%
 
6.71
%
Tier 1 leverage capital
7.70

 
8.24

 
8.76

 
7.61

 
7.62

Common equity tier 1 capital
9.51

 
9.24

 
9.42

 
8.49

 
8.59

Tier 1 risk-based capital
10.23

 
9.95

 
10.15

 
9.30

 
9.43

Total risk-based capital
12.19

 
11.53

 
11.72

 
11.03

 
11.39





10



VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS



 
Three Months Ended
 
Six Months Ended
ALLOWANCE FOR CREDIT LOSSES
June 30,
 
March 31,
 
June 30,
 
June 30,
($ in thousands)
2020
 
2020
 
2019
 
2020
 
2019
Allowance for credit losses for loans
 
 
 
 
 
 
 
 
 
Beginning balance
$
293,361

 
$
164,604

 
$
158,961

 
$
164,604

 
$
156,295

Impact of the adoption of ASU 2016-13 (4)

 
37,989

 

 
37,989

 

Allowance for purchased credit deteriorated (PCD) loans

 
61,643

 

 
61,643

 

Beginning balance, adjusted
293,361

 
264,236

 
158,961

 
264,236

 
156,295

Loans charged-off (5):
 
 
 
 
 
 
 
 
 
Commercial and industrial
(14,024
)
 
(3,360
)
 
(3,073
)
 
(17,384
)
 
(7,355
)
Commercial real estate
(27
)
 
(44
)
 

 
(71
)
 

Residential mortgage
(5
)
 
(336
)
 

 
(341
)
 
(15
)
Total Consumer
(2,602
)
 
(2,565
)
 
(1,752
)
 
(5,167
)
 
(3,780
)
Total loans charged-off
(16,658
)
 
(6,305
)
 
(4,825
)
 
(22,963
)
 
(11,150
)
Charged-off loans recovered(5):
 
 
 
 
 
 
 
 
 
Commercial and industrial
799

 
569

 
1,195

 
1,368

 
1,678

Commercial real estate
31

 
73

 
22

 
104

 
43

Construction
20

 
20

 

 
40

 

Residential mortgage
545

 
50

 
9

 
595

 
10

Total Consumer
509

 
794

 
617

 
1,303

 
1,103

Total loans recovered
1,904

 
1,506

 
1,843

 
3,410

 
2,834

Net charge-offs
(14,754
)
 
(4,799
)
 
(2,982
)
 
(19,553
)
 
(8,316
)
Provision for credit losses for loans
41,116

 
33,924

 
2,100

 
75,040

 
10,100

Ending balance
$
319,723

 
$
293,361

 
$
158,079

 
$
319,723

 
$
158,079

Components of allowance for credit losses for loans:
 
 
 
 
 
 
 
 
 
Allowance for loan losses
$
309,614

 
$
283,342

 
$
155,105

 
$
309,614

 
$
155,105

Allowance for unfunded credit commitments
10,109

 
10,019

 
2,974

 
10,109

 
2,974

Allowance for credit losses for loans
$
319,723

 
$
293,361

 
$
158,079

 
$
319,723

 
$
158,079

Components of provision for credit losses for loans:
 
 
 
 
 
 
 
 
 
Provision for credit losses for loans
$
41,026

 
$
33,851

 
$
3,706

 
$
74,877

 
$
11,562

Provision for unfunded credit commitments (6)
90

 
73

 
(1,606
)
 
163

 
(1,462
)
Total provision for credit losses for loans
$
41,116

 
$
33,924

 
$
2,100

 
$
75,040

 
$
10,100

Annualized ratio of total net charge-offs to average loans
0.18
%
 
0.06
%
 
0.05
%
 
0.13
%
 
0.07
%
Allowance for credit losses for loans as a % of total loans
0.99

 
0.96

 
0.61

 
0.99

 
0.61


11



VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS



 
As of
ASSET QUALITY: (7)
June 30,

March 31,

December 31,

September 30,

June 30,
($ in thousands)
2020

2020

2019

2019

2019
Accruing past due loans:
 
 
 
 
 
 
 
 
 
30 to 59 days past due:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
6,206

 
$
9,780

 
$
11,700

 
$
5,702

 
$
14,119

Commercial real estate
13,912

 
41,664

 
2,560

 
20,851

 
6,202

Construction

 
7,119

 
1,486

 
11,523

 

Residential mortgage
35,263

 
38,965

 
17,143

 
12,945

 
19,131

Total Consumer
12,962

 
19,508

 
13,704

 
13,079

 
11,932

Total 30 to 59 days past due
68,343

 
117,036

 
46,593

 
64,100

 
51,384

60 to 89 days past due:
 
 
 
 
 
 
 
 
 
Commercial and industrial
4,178

 
7,624

 
2,227

 
3,158

 
4,135

Commercial real estate
1,543

 
15,963

 
4,026

 
735

 
354

Construction

 
49

 
1,343

 
7,129

 
1,342

Residential mortgage
4,169

 
9,307

 
4,192

 
4,417

 
3,635

Total Consumer
3,786

 
2,309

 
2,527

 
1,577

 
1,484

Total 60 to 89 days past due
13,676

 
35,252

 
14,315

 
17,016

 
10,950

90 or more days past due:
 
 
 
 
 
 
 
 
 
Commercial and industrial
5,220

 
4,049

 
3,986

 
4,133

 
3,298

Commercial real estate

 
161

 
579

 
1,125

 

Residential mortgage
3,812

 
1,798

 
2,042

 
1,347

 
1,054

Total Consumer
2,082

 
1,092

 
711

 
756

 
359

Total 90 or more days past due
11,114

 
7,100

 
7,318

 
7,361

 
4,711

Total accruing past due loans
$
93,133

 
$
159,388

 
$
68,226

 
$
88,477

 
$
67,045

Non-accrual loans:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
130,876

 
$
132,622

 
$
68,636

 
$
75,311

 
$
76,216

Commercial real estate
43,678

 
41,616

 
9,004

 
9,560

 
6,231

Construction
3,308

 
2,972

 
356

 
356

 

Residential mortgage
25,776

 
24,625

 
12,858

 
13,772

 
12,069

Total Consumer
6,947

 
4,095

 
2,204

 
2,050

 
1,999

Total non-accrual loans
210,585

 
205,930

 
93,058

 
101,049

 
96,515

Other real estate owned (OREO)
8,283

 
10,198

 
9,414

 
6,415

 
7,161

Other repossessed assets
3,920

 
3,842

 
1,276

 
2,568

 
2,358

Non-accrual debt securities
1,365

 
531

 
680

 
680

 
680

Total non-performing assets
$
224,153

 
$
220,501

 
$
104,428

 
$
110,712

 
$
106,714

Performing troubled debt restructured loans
$
53,936

 
$
48,024

 
$
73,012

 
$
79,364

 
$
74,385

Total non-accrual loans as a % of loans
0.65
%
 
0.68
%
 
0.31
%
 
0.38
%
 
0.37
%
Total accruing past due and non-accrual loans as a % of loans
0.94
%
 
1.20
%
 
0.54
%
 
0.71
%
 
0.63
%
Allowance for losses on loans as a % of non-accrual loans
147.03
%
 
137.59
%
 
173.83
%
 
160.17
%
 
160.71
%



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

Six Months Ended
 
June 30,

March 31,

June 30,

June 30,
($ in thousands, except for share data)
2020

2020

2019

2020

2019
Adjusted net income available to common shareholders:
 
 
 
 
 
 
 
 
 
Net income, as reported
$
95,601


$
87,268


$
76,468


$
182,869


$
189,798

Less: Gain on sale leaseback transactions (net of tax)(a)

 

 

 

 
(55,707
)
Add: Net impairment losses on securities (net of tax)

 

 
2,078

 

 
2,078

Add: Losses (gains) on securities transaction (net of tax)
29

 
29

 
(8
)
 
58

 
15

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

 

 

 

 
3,433

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

 

 

 

 
1,757

Add: Merger related expenses (net of tax)(d)
263

 
936

 
25

 
1,199

 
25

Add: Income tax expense (e)

 

 
223

 

 
12,323

Net income, as adjusted
$
95,893

 
$
88,233

 
$
78,786

 
$
184,126

 
$
153,722

Dividends on preferred stock
3,172

 
3,172

 
3,172

 
6,344

 
6,344

Net income available to common shareholders, as adjusted
$
92,721

 
$
85,061

 
$
75,614

 
$
177,782

 
$
147,378

__________
 
 
 
 
 
 
 
 
 
(a) The gain on sale leaseback transactions is included in gains on the sales of assets within other non-interest income.
 
 
(b) Severance expense is included in salary and employee benefits expense.
 
 
 
 
(c) Impairment is included in the amortization of tax credit investments.
 
 
 
 
(d) Merger related expenses are primarily within salary and employee benefits expense, professional and legal fees, and other expense.
(e) Income tax expense related to reserves for uncertain tax positions.
Adjusted per common share data:
 
 
 
 
 
 
 
 
 
Net income available to common shareholders, as adjusted
$
92,721

 
$
85,061

 
$
75,614

 
$
177,782

 
$
147,378

Average number of shares outstanding
403,790,242

 
403,519,088

 
331,748,552

 
403,654,665

 
331,675,313

Basic earnings, as adjusted
$
0.23

 
$
0.21

 
$
0.23

 
$
0.44

 
$
0.44

Average number of diluted shares outstanding
404,631,845

 
405,424,123

 
332,959,802

 
405,043,183

 
332,929,359

Diluted earnings, as adjusted
$
0.23

 
$
0.21

 
$
0.23

 
$
0.44

 
$
0.44

Adjusted annualized return on average tangible shareholders' equity:
 
 
 
 
 
 
 
 
 
Net income, as adjusted
$
95,893

 
$
88,233

 
$
78,786

 
$
184,126

 
$
153,722

Average shareholders' equity
4,477,446


4,408,585


3,481,519


4,443,016


3,438,344

Less: Average goodwill and other intangible assets
1,456,781


1,460,988


1,156,703


1,458,885


1,158,596

Average tangible shareholders' equity
$
3,020,665

 
$
2,947,597

 
$
2,324,816

 
$
2,984,131

 
$
2,279,748

Annualized return on average tangible shareholders' equity, as adjusted
12.70
%
 
11.97
%
 
13.56
%
 
12.34
%
 
13.49
%
Adjusted annualized return on average assets:
 
 
 
 
 
 
 
 
 
Net income, as adjusted
$
95,893

 
$
88,233

 
$
78,786

 
$
184,126

 
$
153,722

Average assets
$
41,503,514

 
$
38,097,364

 
$
32,707,144

 
$
39,800,441

 
$
32,502,744

Annualized return on average assets, as adjusted
0.92
%
 
0.93
%
 
0.96
%
 
0.93
%
 
0.95
%



13



VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS



 
Three Months Ended
 
Six Months Ended
 
June 30,
 
March 31,
 
June 30,
 
June 30,
($ in thousands)
2020
 
2020
 
2019
 
2020
 
2019
Adjusted annualized return on average shareholders' equity:


 


 


 
 
 
 
Net income, as adjusted
$
95,893

 
$
88,233

 
$
78,786

 
$
184,126

 
$
153,722

Average shareholders' equity
$
4,477,446

 
$
4,408,585

 
$
3,481,519

 
$
4,443,016

 
$
3,438,344

Annualized return on average shareholders' equity, as adjusted
8.57
%
 
8.01
%
 
9.05
%
 
8.29
%
 
8.94
%
Annualized return on average tangible shareholders' equity:
 
 
 
 
 
 
 
 
 
Net income, as reported
$
95,601

 
$
87,268

 
$
76,468

 
$
182,869

 
$
189,798

Average shareholders' equity
4,477,446

 
4,408,585

 
3,481,519

 
4,443,016

 
3,438,344

Less: Average goodwill and other intangible assets
1,456,781

 
1,460,988

 
1,156,703

 
1,458,885

 
1,158,596

Average tangible shareholders' equity
$
3,020,665

 
$
2,947,597

 
$
2,324,816

 
$
2,984,131

 
$
2,279,748

Annualized return on average tangible shareholders' equity
12.66
%
 
11.84
%
 
13.16
%
 
12.26
%
 
16.65
%
Adjusted efficiency ratio:
 
 
 
 
 
 
 
 
 
Non-interest expense, as reported
$
157,166

 
$
155,656

 
$
141,737

 
$
312,822

 
$
289,532

Less: Severance expense (pre-tax)

 

 

 

 
4,838

Less: Merger-related expenses (pre-tax)
366

 
1,302

 
35

 
1,668

 
35

Less: Amortization of tax credit investments (pre-tax)
3,416

 
3,228

 
4,863

 
6,644

 
12,036

Non-interest expense, as adjusted
$
153,384

 
$
151,126

 
$
136,839

 
$
304,510

 
$
272,623

Net interest income
282,559

 
265,339

 
220,234

 
547,898

 
438,882

Non-interest income, as reported
44,830

 
41,397

 
27,603

 
86,227

 
135,276

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

 

 
2,928

 

 
2,928

Add: Losses (gains) on securities transactions, net (pre-tax)
41

 
40

 
(11
)
 
81

 
21

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

 

 

 

 
78,505

Non-interest income, as adjusted
$
44,871

 
$
41,437

 
$
30,520

 
$
86,308

 
$
59,720

Gross operating income, as adjusted
$
327,430

 
$
306,776

 
$
250,754

 
$
634,206

 
$
498,602

Efficiency ratio, as adjusted
46.84
%
 
49.26
%
 
54.57
%
 
48.01
%
 
54.68
%
 
As of
 
June 30,
 
March 31,
 
December 31,
 
September 30,
 
June 30,
($ in thousands, except for share data)
2020
 
2020
 
2019
 
2019
 
2019
Tangible book value per common share:
 
 
 
 
 
 
 
 
 
Common shares outstanding
403,795,699

 
403,744,148

 
403,278,390

 
331,805,564

 
331,788,149

Shareholders' equity
$
4,474,488

 
$
4,420,998

 
$
4,384,188

 
$
3,558,075

 
$
3,504,118

Less: Preferred stock
209,691

 
209,691

 
209,691

 
209,691

 
209,691

Less: Goodwill and other intangible assets
1,453,330

 
1,458,095

 
1,460,397

 
1,152,815

 
1,155,250

Tangible common shareholders' equity
$
2,811,467

 
$
2,753,212

 
$
2,714,100

 
$
2,195,569

 
$
2,139,177

Tangible book value per common share
$
6.96

 
$
6.82

 
$
6.73

 
$
6.62

 
$
6.45

Tangible common equity to tangible assets:
 
 
 
 
 
 
 
 
Tangible common shareholders' equity
$
2,811,467

 
$
2,753,212

 
$
2,714,100

 
$
2,195,569

 
$
2,139,177

Total assets
41,717,265

 
39,120,629

 
37,436,020

 
33,765,539

 
33,027,741

Less: Goodwill and other intangible assets
1,453,330

 
1,458,095

 
1,460,397

 
1,152,815

 
1,155,250

Tangible assets
$
40,263,935

 
$
37,662,534

 
$
35,975,623

 
$
32,612,724

 
$
31,872,491

Tangible common equity to tangible assets
6.98
%
 
7.31
%
 
7.54
%
 
6.73
%
 
6.71
%
(3)
The efficiency ratio measures Valley's total non-interest expense as a percentage of net interest income plus total non-interest income.
(4)
The adjustment represents an increase in the allowance for credit losses for loans as a result of the adoption of ASU 2016-13 effective January 1, 2020.
(5)
Charge-offs and recoveries presented for periods prior to March 31, 2020 exclude loans formerly known as Purchased Credit-Impaired (PCI) loans.
(6)
Periods prior to March 31, 2020 represent allowance and provision for letters of credit only.

14



VALLEY NATIONAL BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS



(7)
Past due loans and non-accrual loans presented in periods prior to March 31, 2020 exclude PCI loans. PCI loans were accounted for on a pool basis and are were not subject to delinquency classification.
 
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)


 
June 30,
 
December 31,
 
2020
 
2019
 
 (Unaudited)
 
 
Assets
 
 
 
Cash and due from banks
$
388,753

 
$
256,264

Interest bearing deposits with banks
1,521,572

 
178,423

Investment securities:
 
 
 
Equity securities
54,379

 
41,410

Available for sale debt securities
1,689,388

 
1,566,801

Held to maturity debt securities (net of allowance for credit losses of $1,593 at June 30, 2020)
2,131,834

 
2,336,095

Total investment securities
3,875,601

 
3,944,306

Loans held for sale, at fair value
120,599

 
76,113

Loans
32,314,611

 
29,699,208

Less: Allowance for loan losses
(309,614
)
 
(161,759
)
Net loans
32,004,997

 
29,537,449

Premises and equipment, net
329,889

 
334,533

Lease right of use assets
273,811

 
285,129

Bank owned life insurance
535,383

 
540,169

Accrued interest receivable
122,807

 
105,637

Goodwill
1,375,409

 
1,373,625

Other intangible assets, net
77,921

 
86,772

Other assets
1,090,523

 
717,600

Total Assets
$
41,717,265

 
$
37,436,020

Liabilities
 
 
 
Deposits:
 
 
 
Non-interest bearing
$
8,989,818

 
$
6,710,408

Interest bearing:
 
 
 
Savings, NOW and money market
14,165,415

 
12,757,484

Time
8,272,772

 
9,717,945

Total deposits
31,428,005

 
29,185,837

Short-term borrowings
2,082,880

 
1,093,280

Long-term borrowings
2,907,535

 
2,122,426

Junior subordinated debentures issued to capital trusts
55,891

 
55,718

Lease liabilities
299,260

 
309,849

Accrued expenses and other liabilities
469,206

 
284,722

Total Liabilities
37,242,777

 
33,051,832

Shareholders’ Equity
 
 
 
Preferred stock, no par value; 50,000,000 authorized shares:
 
 
 
Series A (4,600,000 shares issued at June 30, 2020 and December 31, 2019)
111,590

 
111,590

Series B (4,000,000 shares issued at June 30, 2020 and December 31, 2019)
98,101

 
98,101

Common stock (no par value, authorized 650,000,000 shares; issued 403,823,728 shares at June 30, 2020 and 403,322,773 shares at December 31, 2019)
141,667

 
141,423

Surplus
3,628,792

 
3,622,208

Retained earnings
499,511

 
443,559

Accumulated other comprehensive loss
(4,938
)
 
(32,214
)
Treasury stock, at cost (28,029 common shares at June 30, 2020 and 44,383 common shares at December 31, 2019)
(235
)
 
(479
)
Total Shareholders’ Equity
4,474,488

 
4,384,188

Total Liabilities and Shareholders’ Equity
$
41,717,265

 
$
37,436,020


16




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


 
Three Months Ended
 
Six Months Ended
 
June 30,

March 31,

June 30,
 
June 30,
 
2020

2020

2019