• Valley National Bancorp Reports Fourth Quarter Earnings, Increased Net Interest Income and 15 Percent Annualized Loan Growth

    ソース: Nasdaq GlobeNewswire / 26 1 2023 06:00:35   America/Chicago

    NEW YORK, Jan. 26, 2023 (GLOBE NEWSWIRE) -- Valley National Bancorp (NASDAQ:VLY), the holding company for Valley National Bank, today reported net income for the fourth quarter 2022 of $177.6 million, or $0.34 per diluted common share, as compared to the fourth quarter 2021 net income of $115.0 million, or $0.27 per diluted common share, and net income of $178.1 million, or $0.34 per diluted common share, for the third quarter 2022. Excluding all non-core charges, our adjusted net income (a non-GAAP measure) was $182.9 million, or $0.35 per diluted common share, for the fourth quarter 2022, $125.0 million, or $0.29 per diluted common share, for the fourth quarter 2021, and $181.5 million, or $0.35 per diluted common share, for the third quarter 2022. See further details below, including a reconciliation of our adjusted net income in the "Consolidated Financial Highlights" tables.

    Key financial highlights for the fourth quarter:

    • Loan Portfolio: Total loans increased $1.7 billion, or 15 percent on an annualized basis, to $46.9 billion at December 31, 2022 from September 30, 2022 mainly due to strong organic commercial real estate loan growth, as well as new residential mortgage loan volumes largely originated for investment rather than sale. See the "Loans, Deposits and Other Borrowings" section below for details.
    • Net Interest Income and Margin: Net interest income on a tax equivalent basis of $467.2 million for the fourth quarter 2022 increased $11.9 million and $151.2 million as compared to the third quarter 2022 and fourth quarter 2021, respectively, reflecting a well-positioned balance sheet and continued organic loan growth in the current rising interest rate environment. Our net interest margin on a tax equivalent basis remained relatively stable and totaled 3.57 percent for the fourth quarter 2022 as compared to 3.60 percent for the third quarter 2022. See the "Net Interest Income and Margin" section below for more details.
    • Allowance and Provision for Credit Losses for Loans: The allowance for credit losses for loans totaled $483.3 million and $498.4 million at December 31, 2022 and September 30, 2022, respectively, representing 1.03 percent and 1.10 percent of total loans at each respective date. During the fourth quarter 2022, the provision for credit losses for loans was $7.3 million as compared to $1.8 million and $11.6 million for the third quarter 2022 and fourth quarter 2021, respectively.
    • Credit Quality: Net loan charge-offs totaled $22.4 million for the fourth quarter 2022, largely due to the partial charge-off of a single non-performing loan, as compared to net recoveries of loan charge-offs of $5.6 million and $624 thousand for the third quarter 2022 and fourth quarter 2021, respectively. Non-accrual loans represented 0.57 percent and 0.65 percent of total loans at December 31, 2022 and September 30, 2022, respectively. See the "Credit Quality" Section below for more details.
    • Non-Interest Income: Non-interest income decreased $3.4 million to $52.8 million for the fourth quarter 2022 from $56.2 million for the third quarter 2022 due, in part, to a $3.4 million decrease in swap fee income derived from certain new commercial loan transactions. The swap fees presented in other income totaled $7.3 million and $10.7 million for the fourth quarter 2022 and third quarter 2022, respectively.
    • Non-Interest Expense: Non-interest expense increased $4.6 million to $266.2 million for the fourth quarter 2022 as compared to the third quarter 2022 mainly due to higher technology-related merger expenses and increased professional and legal fees, partially offset by lower salaries and employee benefits expense. Merger expenses largely relating to the acquisition of Bank Leumi Le-Israel Corporation (Bank Leumi USA) on April 1, 2022 totaled $7.4 million for the fourth quarter 2022 as compared to $4.7 million for the third quarter 2022.
    • Efficiency Ratio: Our efficiency ratio was 49.30 percent for the fourth quarter 2022 as compared to 49.76 percent and 49.44 percent for the third quarter 2022 and fourth quarter 2021, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.
    • Performance Ratios: Annualized return on average assets (ROA), shareholders’ equity (ROE) and tangible ROE were 1.25 percent, 11.23 percent, and 16.70 percent for the fourth quarter 2022, respectively. Annualized ROA, ROE and tangible ROE, adjusted for non-core charges, were 1.29 percent, 11.56 percent, and 17.20 percent for the fourth quarter 2022, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.

    Ira Robbins, CEO, commented, “I am extremely proud of the earnings that Valley generated for both the fourth quarter and the full year 2022. The continuation of this excellent performance is a testament to the dedication of our exceptional bankers and associates. Loan growth remained elevated during the fourth quarter as originations were again aided by a reduction in loan payoffs. Entering 2023, we continue to face pressure with regard to deposit pricing expectations and growth opportunities. While we are pleased with the stability of our core relationship-based funding franchise, we have used other funding alternatives to support our robust loan growth. To ensure the right balance, we have devoted resources to our differentiated deposit niches which we expect will continue to add value to our franchise over time.”

    Mr. Robbins continued, “Our long-standing focus on relationship-based commercial banking has been enhanced in recent years by new capabilities which will help us navigate the challenging and rapidly changing banking environment that we face today. We continue to execute on our strategic initiatives from a position of strength, and are well-positioned to withstand the pressures around us.”

    Net Interest Income and Margin

    Net interest income on a tax equivalent basis totaling $467.2 million for the fourth quarter 2022 increased $11.9 million and $151.2 million as compared to the third quarter 2022 and fourth quarter 2021, respectively. Interest income on a tax equivalent basis increased $109.9 million to $648.0 million for the fourth quarter 2022 as compared to the third quarter 2022. The increase was mostly due to higher average loan balances driven by our organic loan growth and increased yields on both new originations and adjustable rate loans in our portfolio. Interest expense of $180.7 million for the fourth quarter 2022 increased $98.0 million as compared to the third quarter 2022 largely due to higher interest rates on both non-maturity and new time deposits, as well as a $2.4 billion increase in average time deposits.

    Net interest margin on a tax equivalent basis of 3.57 percent for the fourth quarter 2022 decreased 3 basis points as compared to 3.60 percent for the third quarter 2022, and increased 34 basis points from 3.23 percent for the fourth quarter 2021. The yield on average interest earning assets increased by 69 basis points on a linked quarter basis mostly due to the aforementioned higher yields on new and adjustable rate loans in the fourth quarter 2022 as compared to third quarter 2022. The yield on average loans increased to 5.20 percent for the fourth quarter 2022 from 4.48 percent for the third quarter 2022 largely due to the higher level of market interest rates. The overall cost of average interest-bearing liabilities increased by 109 basis points to 2.15 percent for the fourth quarter 2022 as compared to the linked third quarter 2022 primarily due to higher interest rates on both non-maturity and new time deposits. Our cost of total average deposits was 1.36 percent for the fourth quarter 2022 as compared to 0.59 percent for the third quarter 2022. The increased cost of funds was mainly due to higher interest rates on most of our interest bearing deposit products combined with greater utilization of brokered and retail CDs in our funding mix during the fourth quarter 2022.

    Loans, Deposits and Other Borrowings

    Loans. Loans increased $1.7 billion to $46.9 billion at December 31, 2022 from September 30, 2022. The increase was primarily due to continued strong quarter-over-quarter organic loan growth in commercial real estate and residential mortgage loan categories. Commercial real estate (including construction) and residential mortgage loans increased $1.4 billion and $187.4 million, respectively, or 19 percent and 14 percent, respectively, on an annualized basis during the fourth quarter 2022. Residential mortgage loans increased during the fourth quarter 2022 almost entirely due to new loan activity in the purchased home market and higher levels of such loans originated for investment rather than sale. Loans held for sale totaled $18.1 million and $6.1 million at December 31, 2022 and September 30, 2022. SBA Paycheck Protection Program (PPP) loans within the commercial and industrial loan category totaled $33.6 million at December 31, 2022 compared to $85.8 million at September 30, 2022.

    Deposits. Total deposits increased $2.3 billion to approximately $47.6 billion at December 31, 2022 from September 30, 2022 driven by continued growth in our retail and brokered CD portfolios, partially offset by a $957.0 million decrease in non-interest bearing deposits. Time deposits increased $3.2 billion to $9.6 billion at December 31, 2022 from September 30, 2022 mainly as a result of our increased use of brokered CDs in our funding mix, successful strategic retail CD campaigns and, to a lesser extent, customer migration from non-interest bearing deposit products. Total brokered deposits, consisting of money market and time deposit accounts, were $5.9 billion at December 31, 2022 as compared to $3.7 billion at September 30, 2022. Non-interest bearing deposits; savings, NOW, money market deposits; and time deposits represented approximately 30 percent, 50 percent and 20 percent of total deposits as of December 31, 2022, respectively.

    Other Borrowings. Short-term borrowings decreased $780.6 million to approximately $138.7 million at December 31, 2022 as compared to September 30, 2022 largely due to the maturity and repayment of FHLB advances during the fourth quarter 2022 and our increased utilization of brokered deposits as a favorable funding alternative during the fourth quarter 2022. Long-term borrowings of $1.5 billion remained relatively unchanged at December 31, 2022 as compared to September 30, 2022.

    Credit Quality

    Non-Performing Assets (NPAs). Total NPAs, consisting of non-accrual loans, other real estate owned (OREO) and other repossessed assets decreased $22.8 million to $272.0 million at December 31, 2022 compared to $294.8 million at September 30, 2022. The decrease in NPAs was largely due to a $36.3 million decline in non-accrual commercial and industrial loans. The decrease in non-accrual commercial and industrial loans was mainly driven by a $20.9 million partial loan charge-off of one non-performing loan participation (that had related allowance reserves totaling $30.0 million at September 30, 2022), as well as several taxi medallion loan repayments during the fourth quarter 2022. Non-accrual construction loans increased $13.1 million at December 31, 2022 primarily due to the migration of one loan relationship previously reported in the 60 to 89 days past due delinquency category at September 30, 2022. Non-accrual loans represented 0.57 percent of total loans at December 31, 2022 as compared to 0.65 percent of total loans at September 30, 2022.

    Non-Performing Taxi Medallion Loan Portfolio. Our non-performing taxi medallion loans within the non-accrual commercial and industrial loan category decreased $9.8 million to $66.5 million at December 31, 2022 from September 30, 2022 mostly due to repayments of loans during the fourth quarter 2022. At December 31, 2022, all taxi medallion loans were on non-accrual status and had related reserves of $42.2 million, or 63.5 percent of such loans, 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 $7.9 million to $90.9 million, or 0.19 percent of total loans, at December 31, 2022 as compared to $98.7 million, or 0.22 percent of total loans, at September 30, 2022. The decline was due, in part, to the migration of construction loans 60 to 89 days past due and commercial real estate loans 90 or more days past due reported at September 30, 2022 to non-accrual loans at December 31, 2022.

    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 December 31, 2022, September 30, 2022, and December 31, 2021:

      December 31, 2022 September 30, 2022 December 31, 2021
        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$139,941 1.59% $154,051 1.77% $103,090 1.76%
    Commercial real estate loans:           
     Commercial real estate 200,421 0.78   217,124 0.89   193,258 1.02 
     Construction 58,987 1.59   50,656 1.42   24,232 1.31 
    Total commercial real estate loans 259,408 0.88   267,780 0.95   217,490 1.05 
    Residential mortgage loans 39,020 0.73   36,157 0.70   25,120 0.55 
    Consumer loans:           
     Home equity 4,333 0.86   4,083 0.87   3,889 0.97 
     Auto and other consumer 15,953 0.57   13,673 0.49   9,613 0.37 
    Total consumer loans 20,286 0.61   17,756 0.55   13,502 0.45 
    Allowance for loan losses 458,655 0.98   475,744 1.05   359,202 1.05 
    Allowance for unfunded credit commitments 24,600    22,664    16,500  
    Total allowance for credit losses for loans$483,255   $498,408   $375,702  
    Allowance for credit losses for           
    loans as a % loans  1.03%   1.10%   1.10%

    Our loan portfolio, totaling $46.9 billion at December 31, 2022, had net loan charge-offs totaling $22.4 million for the fourth quarter 2022 as compared to net recoveries of loan charge-offs of $5.6 million and $624 thousand for the third quarter 2022 and the fourth quarter 2021, respectively. The fourth quarter 2022 net loan charge-offs primarily related to the partial loan charge-off of one non-accrual commercial and industrial loan participation (with related allowance reserves totaling $30.0 million at September 30, 2022).

    The allowance for credit losses for loans, comprised of our allowance for loan losses and unfunded credit commitments, as a percentage of total loans was 1.03 percent at December 31, 2022 and 1.10 percent at both September 30, 2022 and December 31, 2021, respectively. During the fourth quarter 2022, we recorded a provision for credit losses for loans totaling $7.3 million as compared to $1.8 million for the third quarter 2022 and $11.6 million for the fourth quarter 2021. Overall, the decrease in allowance for credit losses for loans as a percentage of total loans reflects a decline in expected quantitative loss experience, partially offset by the increased economic forecast reserve component of our CECL model at December 31, 2022, as well as the impact of the fourth quarter 2022 loan charge-offs with prior allocated reserves.

    Capital Adequacy

    Valley's regulatory capital ratios continue to reflect its well-capitalized position. Valley's total risk-based capital, Tier 1 capital, common equity Tier 1 capital and Tier 1 leverage capital ratios were 11.63 percent, 9.46 percent, 9.01 percent and 8.23 percent, respectively, at December 31, 2022.

    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 2022 earnings and related matters. Interested parties should pre-register using this link:
    https://register.vevent.com/register/BI22eba3029b664ac6b1b045edc4925c39 to receive the dial-in number and a personal PIN, which are required to access the conference call. The teleconference will also be webcast live: https://edge.media-server.com/mmc/p/3t4hz9nw and archived on Valley’s website through Monday, February 27, 2023. Investor presentation materials will be made available prior to the conference call at www.valley.com and archived on Valley’s website through Monday, February 27, 2023.

    About Valley

    As the principal subsidiary of Valley National Bancorp, Valley National Bank is a regional bank with over $57 billion in assets. Valley is committed to giving people and businesses the power to succeed. Valley operates many convenient branch locations and commercial banking offices across New Jersey, New York, Florida, Alabama, California, and Illinois, and is committed to providing the most convenient service, the latest innovations and an experienced and knowledgeable team dedicated to meeting customer needs. Helping communities grow and prosper is the heart of Valley’s corporate citizenship philosophy. To learn more about Valley, go to www.valley.com or call our Customer Care Center at 800-522-4100.

    Forward Looking Statements

    The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about our business, new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology as “intend,” “should,” “expect,” “believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “would,” “could,” “typically,” “usually,” “anticipate,” “may,” “estimate,” “outlook,” “project,” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:

    • the impact of unfavorable macroeconomic conditions or downturns, instability or volatility in financial markets and other events and factors outside of our control, such as U.S. and global recession concerns, geopolitical concerns including the conflict between Russia and Ukraine, inflationary pressures, labor market volatility, supply chain issues, and the COVID-19 pandemic or other public health crisis;
    • risks associated with our acquisition of Bank Leumi USA, including the inability to realize expected cost savings and synergies from the acquisition in the amounts or timeframe anticipated, greater than expected costs or difficulties relating to integration matters, any inability to retain customers and qualified employees of Bank Leumi USA, and the potential for greater than expected non-recurring charges related to the acquisition;
    • the impact of COVID-19 and any future resurgences on the U.S. and global economies, including business disruptions, reductions in employment, supply chain interruptions, inflation, Federal Reserve actions impacting the level of market interest rates and increases in business failures, specifically among our clients, as well as on our business, our employees and our ability to provide services to our customers;
    • the impact of 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;
    • the risks related to the replacement of the London Interbank Offered Rate with Secured Overnight Financing Rate and other reference rates, including increased expenses and litigation and the effectiveness of hedging strategies;
    • 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, Alabama, California, and Illinois, 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, ransomware attacks, computer viruses or other malware that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage our systems;
    • results of examinations by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Bank (FRB), the Consumer Financial Protection Bureau (CFPB) and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for credit losses, write-down assets, reimburse customers, change the way we do business, or limit or eliminate certain other banking activities;
    • our inability or determination not to pay dividends at current levels, or at all, because of inadequate earnings, regulatory restrictions or limitations, changes in our capital requirements or a decision to increase capital by retaining more earnings;
    • unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, pandemics or other public health crises, acts of terrorism or other external events; and
    • unexpected significant declines in the loan portfolio due to the lack of economic expansion, increased competition, large prepayments, changes in regulatory lending guidance or other factors.

    A detailed discussion of factors that could affect our results is included in our SEC filings, including the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2021.

    The financial results and disclosures reported in this release are preliminary. Final 2022 financial results and other disclosures will be reported in our Annual Report on Form 10-K for the year ended December 31, 2022, and may differ materially from the results and disclosures in this document due to, among other things, the completion of final review procedures, the occurrence of subsequent events, or the discovery of additional information.

    We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations, except as required by law. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

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

    -Tables to Follow-


    VALLEY NATIONAL BANCORP
    CONSOLIDATED FINANCIAL HIGHLIGHTS

    SELECTED FINANCIAL DATA

    ($ in thousands, except for share data)Three Months Ended Years Ended
    December 31, September 30, December 31, December 31,
     2022   2022   2021   2022   2021 
    FINANCIAL DATA:         
    Net interest income - FTE (1)$467,233  $455,308  $316,000  $1,660,468  $1,213,115 
    Net interest income 465,819   453,992   315,301   1,655,640   1,209,901 
    Non-interest income 52,796   56,194   38,223   206,793   155,013 
    Total revenue 518,615   510,186   353,524   1,862,433   1,364,914 
    Non-interest expense 266,240   261,639   184,514   1,024,949   691,542 
    Pre-provision net revenue 252,375   248,547   169,010   837,484   673,372 
    Provision for credit losses 7,239   2,023   11,699   56,817   32,633 
    Income tax expense 67,545   68,405   42,273   211,816   166,899 
    Net income 177,591   178,119   115,038   568,851   473,840 
    Dividends on preferred stock 3,630   3,172   3,172   13,146   12,688 
    Net income available to common stockholders$173,961  $174,947  $111,866  $555,705  $461,152 
     
    Weighted average number of common shares outstanding:
    Basic 506,359,704   506,342,200   411,775,590   485,434,918   407,445,379 
    Diluted 509,301,813   508,690,997   414,472,820   487,817,710   410,018,328 
    Per common share data:         
    Basic earnings$0.34  $0.35  $0.27  $1.14  $1.13 
    Diluted earnings 0.34   0.34   0.27   1.14   1.12 
    Cash dividends declared 0.11   0.11   0.11   0.44   0.44 
    Closing stock price - high 12.92   12.95   14.82   15.02   14.82 
    Closing stock price - low 10.96   10.14   13.04   10.14   9.74 
                        
    FINANCIAL RATIOS:         
    Net interest margin 3.56%  3.59%  3.22%  3.44%  3.16%
    Net interest margin - FTE (1) 3.57   3.60   3.23   3.45   3.17 
    Annualized return on average assets 1.25   1.30   1.08   1.09   1.14 
    Annualized return on avg. shareholders' equity 11.23   11.39   9.38   9.50   9.98 
                        
    NON-GAAP FINANCIAL DATA AND RATIOS: (3)
    Basic earnings per share, as adjusted$0.35  $0.35  $0.30  $1.31  $1.18 
    Diluted earnings per share, as adjusted 0.35   0.35   0.29   1.31   1.17 
    Annualized return on average assets, as adjusted 1.29%  1.32%  1.18%  1.25%  1.19%
    Annualized return on average shareholders' equity, as adjusted 11.56   11.60   10.19   10.87   10.37 
    Annualized return on avg. tangible shareholders' equity 16.70%  17.21%  13.44%  14.08%  14.40%
    Annualized return on average tangible shareholders' equity, as adjusted 17.20   17.54   14.61   16.10   14.96 
    Efficiency ratio 49.30   49.76   49.44   50.55   48.46 
              
    AVERAGE BALANCE SHEET ITEMS:         
    Assets$56,913,215  $54,858,306  $42,473,828  $52,182,310  $41,475,682 
    Interest earning assets 52,405,601   50,531,242   39,193,014   48,067,381   38,227,815 
    Loans 46,086,363   44,341,894   33,338,128   41,930,353   32,816,985 
    Interest bearing liabilities 33,596,874   31,228,739   25,582,956   30,190,267   25,586,867 
    Deposits 46,234,857   44,770,368   34,746,786   42,451,465   33,239,432 
    Shareholders' equity 6,327,970   6,256,767   4,905,343   5,985,236   4,747,745 


     As of
    BALANCE SHEET ITEMS:December 31, September 30, June 30, March 31, December 31,
    (In thousands) 2022   2022   2022   2022   2021 
    Assets$57,462,749  $55,927,501  $54,438,807  $43,551,457  $43,446,443 
    Total loans 46,917,200   45,185,764   43,560,777   35,364,405   34,153,657 
    Deposits 47,636,914   45,308,843   43,881,051   35,647,336   35,632,412 
    Shareholders' equity 6,400,802   6,273,829   6,204,913   5,096,384   5,084,066 
              
    LOANS:         
    (In thousands)         
    Commercial and industrial loans:         
    Commercial and industrial$8,771,250  $8,615,557  $8,378,454  $5,587,781  $5,411,601 
    Commercial and industrial PPP loans 33,580   85,820   136,004   203,609   435,950 
    Total commercial and industrial 8,804,830   8,701,377   8,514,458   5,791,390   5,847,551 
    Commercial real estate:         
    Commercial real estate 25,732,033   24,493,445   23,535,086   19,763,202   18,935,486 
    Construction 3,700,835   3,571,818   3,374,373   2,174,542   1,854,580 
    Total commercial real estate 29,432,868   28,065,263   26,909,459   21,937,744   20,790,066 
    Residential mortgage 5,364,550   5,177,128   5,005,069   4,691,935   4,545,064 
    Consumer:         
    Home equity 503,884   467,135   431,455   393,538   400,779 
    Automobile 1,746,225   1,711,086   1,673,482   1,552,928   1,570,036 
    Other consumer 1,064,843   1,063,775   1,026,854   996,870   1,000,161 
    Total consumer loans 3,314,952   3,241,996   3,131,791   2,943,336   2,970,976 
    Total loans$46,917,200  $45,185,764  $43,560,777  $35,364,405  $34,153,657 
              
    CAPITAL RATIOS:         
    Book value per common share$12.23  $11.98  $11.84  $11.60  $11.57 
    Tangible book value per common share (3) 8.15   7.87   7.71   7.93   7.94 
    Tangible common equity to tangible assets (3) 7.45%  7.40%  7.46%  7.96%  7.98%
    Tier 1 leverage capital 8.23   8.31   8.33   8.70   8.88 
    Common equity tier 1 capital 9.01   9.09   9.06   9.67   10.06 
    Tier 1 risk-based capital 9.46   9.56   9.54   10.27   10.69 
    Total risk-based capital 11.63   11.84   11.53   12.65   13.10 


     Three Months Ended Years Ended
    ALLOWANCE FOR CREDIT LOSSES:December 31, September 30, December 31, December 31,
    ($ in thousands) 2022   2022   2021   2022   2021 
    Allowance for credit losses for loans         
    Beginning balance$498,408  $490,963  $356,927  $375,702  $351,354 
    Allowance for purchased credit deteriorated (PCD) loans, net (2) —   —   6,542   70,319   6,542 
    Beginning balance, adjusted 498,408   490,963   363,469   446,021   357,896 
    Loans charged-off:         
    Commercial and industrial (22,106)  (5,033)  (2,224)  (33,250)  (21,507)
    Commercial real estate (388)  (4,000)  —   (4,561)  (382)
    Residential mortgage (1)  —   (1)  (28)  (140)
    Total consumer (1,544)  (962)  (914)  (4,057)  (4,303)
    Total loans charged-off (24,039)  (9,995)  (3,139)  (41,896)  (26,332)
    Charged-off loans recovered:         
    Commercial and industrial 1,069   13,236   1,153   17,081   3,934 
    Commercial real estate 13   1,729   1,794   2,073   2,553 
    Construction —   —   —   —   4 
    Residential mortgage 17   163   100   711   676 
    Total consumer 498   477   716   2,929   4,075 
    Total loans recovered 1,597   15,605   3,763   22,794   11,242 
    Net (charge-offs) recoveries (22,442)  5,610   624   (19,102)  (15,090)
    Provision for credit losses for loans 7,289   1,835   11,609   56,336   32,896 
    Ending balance$483,255  $498,408  $375,702  $483,255  $375,702 
    Components of allowance for credit losses for loans:         
    Allowance for loan losses$458,655  $475,744  $359,202  $458,655  $359,202 
    Allowance for unfunded credit commitments 24,600   22,664   16,500   24,600   16,500 
    Allowance for credit losses for loans$483,255  $498,408  $375,702  $483,255  $375,702 
    Components of provision for credit losses for loans:         
    Provision for credit losses for loans$5,353  $1,315  $9,509  $48,236  $27,507 
    Provision for unfunded credit commitments 1,936   520   2,100   8,100   5,389 
    Total provision for credit losses for loans$7,289  $1,835  $11,609  $56,336  $32,896 
              
    Annualized ratio of total net charge-offs (recoveries) to average loans 0.19% (0.05)% (0.01)%  0.05%  0.05%
    Allowance for credit losses as a % of total loans 1.03%  1.10%  1.10%  1.03%  1.10%


     As of
    ASSET QUALITY:December 31, September 30, June 30, March 31, December 31,
    ($ in thousands) 2022   2022   2022   2022   2021 
    Accruing past due loans:         
    30 to 59 days past due:         
    Commercial and industrial$11,664  $19,526  $7,143  $6,723  $6,717 
    Commercial real estate 6,638   6,196   10,516   30,807   14,421 
    Construction —   —   9,108   1,708   1,941 
    Residential mortgage 16,146   13,045   12,326   9,266   10,999 
    Total consumer 9,087   6,196   6,009   5,862   6,811 
    Total 30 to 59 days past due 43,535   44,963   45,102   54,366   40,889 
    60 to 89 days past due:         
    Commercial and industrial 12,705   2,188   3,870   14,461   7,870 
    Commercial real estate 3,167   383   630   6,314   — 
    Construction —   12,969   3,862   3,125   — 
    Residential mortgage 3,315   5,947   2,410   2,560   3,314 
    Total consumer 1,579   1,174   702   554   1,020 
    Total 60 to 89 days past due 20,766   22,661   11,474   27,014   12,204 
    90 or more days past due:         
    Commercial and industrial 18,392   15,072   15,470   9,261   1,273 
    Commercial real estate 2,292   15,082   —   —   32 
    Construction 3,990   —   —   —   — 
    Residential mortgage 1,866   550   1,188   1,746   677 
    Total consumer 47   421   267   400   789 
    Total 90 or more days past due 26,587   31,125   16,925   11,407   2,771 
    Total accruing past due loans$90,888  $98,749  $73,501  $92,787  $55,864 
    Non-accrual loans:         
    Commercial and industrial$98,881  $135,187  $148,404  $96,631  $99,918 
    Commercial real estate 68,316   67,319   85,807   79,180   83,592 
    Construction 74,230   61,098   49,780   17,618   17,641 
    Residential mortgage 25,160   26,564   25,847   33,275   35,207 
    Total consumer 3,174   3,227   3,279   3,754   3,858 
    Total non-accrual loans 269,761   293,395   313,117   230,458   240,216 
    Other real estate owned (OREO) 286   286   422   1,024   2,259 
    Other repossessed assets 1,937   1,122   1,200   1,176   2,931 
    Total non-performing assets$271,984  $294,803  $314,739  $232,658  $245,406 
    Performing troubled debt restructured loans$77,530  $69,748  $67,274  $56,538  $71,330 
    Total non-accrual loans as a % of loans 0.57%  0.65%  0.72%  0.65%  0.70%
    Total accruing past due and non-accrual loans as a % of loans 0.77%  0.87%  0.89%  0.91%  0.87%
    Allowance for losses on loans as a % of non-accrual loans 170.02%  162.15%  149.73%  157.30%  149.53%

    NOTES TO SELECTED FINANCIAL DATA

    (1)Net interest income and net interest margin are presented on a tax equivalent basis using a 21 percent federal tax rate. Valley believes that this presentation provides comparability of net interest income and net interest margin arising from both taxable and tax-exempt sources and is consistent with industry practice and SEC rules.
    (2)Represents the allowance for acquired PCD loans, net of PCD loan charge-offs totaling $62.4 million in the second quarter 2022.
    (3)Non-GAAP Reconciliations. This press release contains certain supplemental financial information, described in the Notes below, which has been determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP") that management uses in its analysis of Valley's performance. The Company believes that the non-GAAP financial measures provide useful supplemental information to both management and investors in understanding Valley’s underlying operational performance, business and performance trends, and may facilitate comparisons of our current and prior performance with the performance of others in the financial services industry. Management utilizes these measures for internal planning, forecasting and analysis purposes. Management believes that Valley’s presentation and discussion of this supplemental information, together with the accompanying reconciliations to the GAAP financial measures, also allows investors to view performance in a manner similar to management. These non-GAAP financial measures should not be considered in isolation or as a substitute for or superior to financial measures calculated in accordance with U.S. GAAP. These non-GAAP financial measures may also be calculated differently from similar measures disclosed by other companies.


    Non-GAAP Reconciliations to GAAP Financial Measures

    ($ in thousands, except for share data)Three Months Ended Years Ended
    December 31, September 30, December 31, December 31,
     2022   2022   2021   2022   2021 
    Adjusted net income available to common shareholders (non-GAAP):         
    Net income, as reported (GAAP)$177,591  $178,119  $115,038  $568,851  $473,840 
    Add: Losses on extinguishment of debt (net of tax) —   —   —   —   6,024 
    Add: Losses (gains) on available for sale and held to maturity securities transactions (net of tax)(a) 5   (24)  9   (69)  (390)
    Add: Provision for credit losses (net of tax)(b) —   —   4,471   29,282   4,471 
    Add: Merger related expenses (net of tax)(c)  5,285   3,360   5,491   52,388   6,698 
    Add: Litigation reserve (net of tax)(d) —   —   —   —   1,505 
    Net income, as adjusted (non-GAAP)$182,881  $181,455  $125,009  $650,452  $492,148 
    Dividends on preferred stock 3,630   3,172   3,172   13,146   12,688 
    Net income available to common shareholders, as adjusted (non-GAAP)$179,251  $178,283  $121,837  $637,306  $479,460 
    _____________         
    (a) Included in (losses) gains on securities transactions, net.
    (b) Primarily represents provision for credit losses for non-PCD loans and unfunded credit commitments acquired in bank acquisitions.
    (c) Merger related expenses are primarily within salary and employee benefits expense, technology, furniture and equipment expense and professional and legal fees for the year ended December 31, 2022.
    (d) Included in professional and legal fees.
              
    Adjusted per common share data (non-GAAP):         
    Net income available to common shareholders, as adjusted (non-GAAP)$179,251  $178,283  $121,837  $637,306  $479,460 
    Average number of shares outstanding 506,359,704   506,342,200   411,775,590   485,434,918   407,445,379 
    Basic earnings, as adjusted (non-GAAP)$0.35  $0.35  $0.30  $1.31  $1.18 
    Average number of diluted shares outstanding 509,301,813   508,690,997   414,472,820   487,817,710   410,018,328 
    Diluted earnings, as adjusted (non-GAAP)$0.35  $0.35  $0.29  $1.31  $1.17 
    Adjusted annualized return on average tangible shareholders' equity (non-GAAP):         
    Net income, as adjusted (non-GAAP)$182,881  $181,455  $125,009  $650,452  $492,148 
    Average shareholders' equity 6,327,970   6,256,767   4,905,343   5,985,236   4,747,745 
    Less: Average goodwill and other intangible assets 2,074,367   2,117,818   1,481,951   1,944,503   1,457,519 
    Average tangible shareholders' equity$4,253,603  $4,138,949  $3,423,392  $4,040,733  $3,290,226 
    Annualized return on average tangible shareholders' equity, as adjusted (non-GAAP) 17.20%  17.54%  14.61%  16.10%  14.96%
    Adjusted annualized return on average assets (non-GAAP):         
    Net income, as adjusted (non-GAAP)$182,881  $181,455  $125,009  $650,452  $492,148 
    Average assets$56,913,215  $54,858,306  $42,473,828  $52,182,310  $41,475,682 
    Annualized return on average assets, as adjusted (non-GAAP) 1.29%  1.32%  1.18%  1.25%  1.19%


    Non-GAAP Reconciliations to GAAP Financial Measures (Continued)

     Three Months Ended Years Ended
     December 31, September 30, December 31, December 31,
    ($ in thousands) 2022   2022   2021   2022   2021 
    Adjusted annualized return on average shareholders' equity (non-GAAP):         
    Net income, as adjusted (non-GAAP)$182,881  $181,455  $125,009  $650,452  $492,148 
    Average shareholders' equity$6,327,970  $6,256,767  $4,905,343  $5,985,236  $4,747,745 
    Annualized return on average shareholders' equity, as adjusted (non-GAAP) 11.56%  11.60%  10.19%  10.87%  10.37%
    Annualized return on average tangible shareholders' equity (non-GAAP):         
    Net income, as reported (GAAP)$177,591  $178,119  $115,038  $568,851  $473,840 
    Average shareholders' equity 6,327,970   6,256,767   4,905,343   5,985,236   4,747,745 
    Less: Average goodwill and other intangible assets 2,074,367   2,117,818   1,481,951   1,944,503   1,457,519 
    Average tangible shareholders' equity$4,253,603  $4,138,949  $3,423,392  $4,040,733  $3,290,226 
    Annualized return on average tangible shareholders' equity (non-GAAP) 16.70%  17.21%  13.44%  14.08%  14.40%
    Efficiency ratio (non-GAAP):         
    Non-interest expense, as reported (GAAP)$266,240  $261,639  $184,514  $1,024,949  $691,542 
    Less: Loss on extinguishment of debt (pre-tax) —   —   —   —   8,406 
    Less: Merger-related expenses (pre-tax) 7,372   4,707   7,613   71,203   8,900 
    Less: Amortization of tax credit investments (pre-tax) 3,213   3,105   2,115   12,407   10,910 
    Less: Litigation reserve (pre-tax) —   —   —   —   2,100 
    Non-interest expense, as adjusted (non-GAAP) 255,655   253,827   174,786   941,339   661,226 
    Net interest income, as reported (GAAP) 465,819   453,992   315,301   1,655,640   1,209,901 
    Non-interest income, as reported (GAAP) 52,796   56,194   38,223   206,793   155,013 
    Add: Losses (gains) on available for sale and held to maturity securities transactions, net (pre-tax) 7   (33)  12   (95)  (545)
    Non-interest income, as adjusted (non-GAAP)$52,803  $56,161  $38,235  $206,698  $154,468 
    Gross operating income, as adjusted (non-GAAP)$518,622  $510,153  $353,536  $1,862,338  $1,364,369 
    Efficiency ratio (non-GAAP) 49.30%  49.76%  49.44%  50.55%  48.46%


    ($ in thousands, except for share data)As Of
    December 31, September 30, June 30, March 31, December 31,
     2022   2022   2022   2022   2021 
    Tangible book value per common share (non-GAAP):         
    Common shares outstanding 506,374,478   506,351,502   506,328,526   421,437,068   421,437,068 
    Shareholders' equity (GAAP)$6,400,802  $6,273,829  $6,204,913  $5,096,384  $5,084,066 
    Less: Preferred stock 209,691   209,691   209,691   209,691   209,691 
    Less: Goodwill and other intangible assets 2,066,392   2,079,731   2,090,147   1,543,238   1,529,394 
    Tangible common shareholders' equity (non-GAAP)$4,124,719  $3,984,407  $3,905,075  $3,343,455  $3,344,981 
    Tangible book value per common share (non-GAAP)$8.15  $7.87  $7.71  $7.93  $7.94 
    Tangible common equity to tangible assets (non-GAAP):         
    Tangible common shareholders' equity (non-GAAP)$4,124,719  $3,984,407  $3,905,075  $3,343,455  $3,344,981 
    Total assets (GAAP)$57,462,749  $55,927,501  $54,438,807  $43,551,457  $43,446,443 
    Less: Goodwill and other intangible assets 2,066,392   2,079,731   2,090,147   1,543,238   1,529,394 
    Tangible assets (non-GAAP)$55,396,357  $53,847,770  $52,348,660  $42,008,219  $41,917,049 
    Tangible common equity to tangible assets (non-GAAP) 7.45%  7.40%  7.46%  7.96%  7.98%


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

     December 31,
      2022   2021 
     (Unaudited)  
    Assets   
    Cash and due from banks$444,325  $205,156 
    Interest bearing deposits with banks 503,622   1,844,764 
    Investment securities:   
    Equity securities 48,731   36,473 
    Trading debt securities 13,438   38,130 
    Available for sale debt securities 1,261,397   1,128,809 
    Held to maturity debt securities (net of allowance for credit losses of $1,646 at December 31, 2022 and $1,165 at December 31, 2021) 3,827,338   2,667,532 
              Total investment securities 5,150,904   3,870,944 
    Loans held for sale, at fair value 18,118   139,516 
    Loans 46,917,200   34,153,657 
    Less: Allowance for loan losses (458,655)  (359,202)
               Net loans 46,458,545   33,794,455 
    Premises and equipment, net 358,556   326,306 
    Lease right of use assets 306,352   259,117 
    Bank owned life insurance 717,177   566,770 
    Accrued interest receivable 196,606   96,882 
    Goodwill 1,868,936   1,459,008 
    Other intangible assets, net 197,456   70,386 
    Other assets 1,242,152   813,139 
                    Total Assets$57,462,749  $43,446,443 
    Liabilities   
    Deposits:   
    Non-interest bearing$14,463,645  $11,675,748 
    Interest bearing:   
         Savings, NOW and money market 23,616,812   20,269,620 
         Time 9,556,457   3,687,044 
               Total deposits 47,636,914   35,632,412 
    Short-term borrowings 138,729   655,726 
    Long-term borrowings 1,543,058   1,423,676 
    Junior subordinated debentures issued to capital trusts 56,760   56,413 
    Lease liabilities 358,884   283,106 
    Accrued expenses and other liabilities 1,327,602   311,044 
               Total Liabilities 51,061,947   38,362,377 
    Shareholders’ Equity   
    Preferred stock, no par value; 50,000,000 shares authorized:   
    Series A (4,600,000 shares issued at December 31, 2022 and December 31, 2021) 111,590   111,590 
    Series B (4,000,000 shares issued at December 31, 2022 and December 31, 2021) 98,101   98,101 
    Common stock (no par value, authorized 650,000,000 shares; issued 507,896,910 shares at December 31, 2022 and 423,034,027 shares at December 31, 2021) 178,185   148,482 
    Surplus 4,980,231   3,883,035 
    Retained earnings 1,218,445   883,645 
    Accumulated other comprehensive loss (164,002)  (17,932)
    Treasury stock, at cost (1,522,432 common shares at December 31, 2022 and 1,596,959 common shares at December 31, 2021) (21,748)  (22,855)
               Total Shareholders’ Equity 6,400,802   5,084,066 
               Total Liabilities and Shareholders’ Equity$57,462,749  $43,446,443 


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

     Three Months Ended Years Ended
     December 31, September 30, December 31, December 31,
      2022   2022   2021   2022   2021 
    Interest Income         
    Interest and fees on loans$599,015  $496,520  $319,141  $1,828,477  $1,257,389 
    Interest and dividends on investment securities:         
    Taxable 31,300   28,264   15,852   105,716   56,026 
    Tax-exempt 5,219   5,210   2,535   17,958   11,716 
    Dividends 3,978   2,738   1,814   11,468   7,357 
    Interest on federal funds sold and other short-term investments 7,038   3,996   637   13,064   1,738 
    Total interest income 646,550   536,728   339,979   1,976,683   1,334,226 
    Interest Expense         
    Interest on deposits:         
    Savings, NOW and money market 109,286   50,674   9,983   186,709   42,879 
    Time 48,417   15,174   3,328   69,691   25,094 
    Interest on short-term borrowings 7,404   5,160   984   17,453   5,374 
    Interest on long-term borrowings and junior subordinated debentures 15,624   11,728   10,383   47,190   50,978 
    Total interest expense 180,731   82,736   24,678   321,043   124,325 
    Net Interest Income 465,819   453,992   315,301   1,655,640   1,209,901 
    Provision (credit) for credit losses for held to maturity securities (50)  188   90   481   (263)
    Provision for credit losses for loans 7,289   1,835   11,609   56,336   32,896 
    Net Interest Income After Provision for Credit Losses 458,580   451,969   303,602   1,598,823   1,177,268 
    Non-Interest Income         
    Wealth management and trust fees 10,720   9,281   4,499   34,709   14,910 
    Insurance commissions 2,903   3,750   2,005   11,975   7,810 
    Service charges on deposit accounts 10,313   10,338   5,810   36,930   21,424 
    (Losses) gains on securities transactions, net (172)  323   495   (1,230)  1,758 
    Fees from loan servicing 2,637   3,138   2,671   11,273   11,651 
    Gains on sales of loans, net 908   922   6,653   6,418   26,669 
    Bank owned life insurance 2,200   1,681   1,993   8,040   8,817 
    Other 23,287   26,761   14,097   98,678   61,974 
    Total non-interest income 52,796   56,194   38,223   206,793   155,013 
    Non-Interest Expense         
    Salary and employee benefits expense 129,634   134,572   102,675   526,737   375,865 
    Net occupancy expense 23,446   26,486   20,184   94,352   79,355 
    Technology, furniture and equipment expense 46,507   39,365   24,265   161,752   89,221 
    FDIC insurance assessment 6,827   6,500   3,889   22,836   14,183 
    Amortization of other intangible assets 10,900   11,088   5,074   37,825   21,827 
    Professional and legal fees 19,620   17,840   11,182   82,618   38,432 
    Loss on extinguishment of debt —   —   —   —   8,406 
    Amortization of tax credit investments 3,213   3,105   2,115   12,407   10,910 
    Other 26,093   22,683   15,130   86,422   53,343 
    Total non-interest expense 266,240   261,639   184,514   1,024,949   691,542 
    Income Before Income Taxes 245,136   246,524   157,311   780,667   640,739 
    Income tax expense 67,545   68,405   42,273   211,816   166,899 
    Net Income 177,591   178,119   115,038   568,851   473,840 
    Dividends on preferred stock 3,630   3,172   3,172   13,146   12,688 
    Net Income Available to Common Shareholders$173,961  $174,947  $111,866  $555,705  $461,152 
    Earnings Per Common Share:         
    Basic$0.34  $0.35  $0.27  $1.14  $1.13 
    Diluted 0.34   0.34   0.27   1.14   1.12 
    Cash Dividends Declared per Common Share 0.11   0.11   0.11   0.44   0.44 
    Weighted Average Number of Common Shares Outstanding:         
    Basic 506,359,704   506,342,200   411,775,590   485,434,918   407,445,379 
    Diluted 509,301,813   508,690,997   414,472,820   487,817,710   410,018,328 


    VALLEY NATIONAL BANCORP
    Quarterly Analysis of Average Assets, Liabilities and Shareholders' Equity and
    Net Interest Income on a Tax Equivalent Basis

     Three Months Ended
     December 31, 2022 September 30, 2022 December 31, 2021
      Average   Avg.  Average   Avg.  Average   Avg.
    ($ in thousands) Balance  Interest Rate  Balance  Interest Rate  Balance  Interest Rate
    Assets                 
    Interest earning assets:                 
    Loans (1)(2)$46,086,363 $599,040  5.20% $44,341,894 $496,545  4.48% $33,338,128 $319,165  3.83%
    Taxable investments (3) 4,934,084  35,278  2.86   4,815,181  31,002  2.58   3,563,329  17,667  1.98 
    Tax-exempt investments (1)(3) 623,322  6,608  4.24   635,795  6,501  4.09   418,049  3,209  3.07 
    Interest bearing deposits with banks 761,832  7,038  3.70   738,372  3,996  2.16   1,873,508  636  0.14 
    Total interest earning assets 52,405,601  647,964  4.95   50,531,242  538,044  4.26   39,193,014  340,677  3.48 
    Other assets 4,507,614      4,327,064      3,280,814    
    Total assets$56,913,215     $54,858,306     $42,473,828    
    Liabilities and shareholders' equity                 
    Interest bearing liabilities:                 
    Savings, NOW and money market deposits$23,476,111 $109,286  1.86% $23,541,694 $50,674  0.86% $19,685,730 $9,983  0.20%
    Time deposits 7,641,769  48,417  2.53   5,192,896  15,174  1.17   3,744,792  3,328  0.36 
    Short-term borrowings 880,615  7,404  3.36   1,016,240  5,160  2.03   670,433  983  0.59 
    Long-term borrowings (4) 1,598,379  15,624  3.91   1,477,909  11,728  3.17   1,482,001  10,383  2.80 
    Total interest bearing liabilities 33,596,874  180,731  2.15   31,228,739  82,736  1.06   25,582,956  24,677  0.39 
    Non-interest bearing deposits 15,116,977      16,035,778      11,316,264    
    Other liabilities 1,871,394      1,337,022      669,265    
    Shareholders' equity 6,327,970      6,256,767      4,905,343    
    Total liabilities and shareholders' equity$56,913,215     $54,858,306     $42,473,828    
    Net interest income/interest rate spread (5)  $467,233  2.80%   $455,308  3.20%   $316,000  3.09%
    Tax equivalent adjustment   (1,414)      (1,316)      (699)  
    Net interest income, as reported  $465,819      $453,992      $315,301   
    Net interest margin (6)    3.56%     3.59%     3.22%
    Tax equivalent effect    0.01      0.01      0.01 
    Net interest margin on a fully tax equivalent basis (6)    3.57%     3.60%     3.23%

    __________

    (1)Interest income is presented on a tax equivalent basis using a 21 percent federal tax rate.
    (2)Loans are stated net of unearned income and include non-accrual loans.
    (3)The yield for securities that are classified as available for sale is based on the average historical amortized cost.
    (4)Includes junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of condition.
    (5)Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities and is presented on a fully tax equivalent basis.
    (6)Net interest income as a percentage of total average interest earning assets.

     

    SHAREHOLDERS RELATIONS
    Requests for copies of reports and/or other inquiries should be directed to Tina Zarkadas, Assistant Vice President, Shareholder Relations Specialist, Valley National Bancorp, 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.

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