NASDAQ$VLY

Valley National Bancorp · Q3 2021 earnings

Q3 2021 earnings · · Investor relations

Briefing

Valley National's Q3 2021 net income increased by 20 percent, driven by solid net interest margin and non-PPP loan growth.

Valley National Bancorp reported a strong third quarter with a 20% increase in net income compared to the same period last year. The company's net interest margin remained solid, and non-PPP loan growth contributed to the positive results. The pending acquisitions of Bank Leumi and The Westchester Bank Holding Corporation, along with the recent acquisition of Dudley Ventures, are expected to further enhance Valley's capabilities and market reach.

  • Net income for the third quarter 2021 was $122.6 million, or $0.29 per diluted common share, compared to $102.4 million, or $0.25 per diluted common share, for the third quarter 2020.
  • Non-PPP loan portfolio increased $626.0 million, or 8.0 percent on an annualized basis.
  • Net interest income on a tax equivalent basis was $301.7 million, an increase of $17.6 million from the third quarter 2020.
  • The company announced acquisitions of Bank Leumi Le-Israel Corporation and Dudley Ventures to expand commercial banking and tax credit investment businesses.

Headline financials

Total Revenue

$343M

Previous: $332M+3.3%
EPS (adj)

$0.30

Previous: $0.25+20.0%
Net interest margin (FTE)

3.1%

Previous: 3.0%+4.7%
Efficiency ratio

50.9%

Previous: 48.2%+5.7%
Annualized return on avg. tangible common shareholders' equity

14.6%

No prior period
Capital Expenditures

-$19.8M

Previous: -$20.7M+4.4%
Free Cash Flow

$103M

Previous: $81.7M+25.9%
Net Income

$123M

Previous: $102M+19.7%
Operating Income

$267M

Previous: $229M+16.4%
Gross Profit

$340M

Previous: $301M+12.8%
Cash & Equivalents

$1.5B

Previous: $931M+61.2%
Total Assets

$41.3B

Previous: $40.7B+1.3%
Stock-Based Comp

$5.16M

Previous: $3.8M+35.8%

Revenue & EPS history

Valley National · Revenue · Quarterly

$343M

Q3 2021+3.3%vs Q3 2020
Beat estimate in 10 of 16 quarters(63%)
ActualEstimate

Revenue by segment

Valley National · $45.2B total across 4 segments · Q3 2022

  • Total commercial real estate
    $28.1B
  • Commercial and industrial loans
    $8.7B+2709.1%
  • Residential mortgage
    $5.18B
  • Total consumer loans
    $3.24B

Forward guidance

Valley National Bancorp is strategically positioned for future growth and enhanced performance. The company's forward guidance reflects optimism based on several positive factors and awareness of potential challenges.

Tailwinds

  • Pending acquisitions of Bank Leumi and The Westchester Bank Holding Corporation will expand capabilities, cross-sell services, and broaden market reach.
  • Recent acquisition of Dudley Ventures will enhance tax credit investment business and community impact.
  • Continued strength and quality of the balance sheet.
  • Disciplined loan pricing and effective management of net interest margin in a challenging market rate environment.
  • Linked quarter non-PPP loan growth of 8 percent, well-diversified in the third quarter.

Headwinds

  • Failure to obtain shareholder or regulatory approval for the acquisitions of Westchester and Bank Leumi.
  • Inability to realize expected cost savings and synergies from the Westchester and Bank Leumi acquisitions.
  • Costs or difficulties relating to Westchester and Bank Leumi integration matters might be greater than expected.
  • The continued impact of COVID-19 on the U.S. and global economies.
  • 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.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2021

Historical avgQ3 2021

-0.2%

Avg return

Earnings day

+0.2%

Avg return

5 days after

+1.6%

Avg return

30 days after

50%

34 / 68 earnings

Positive

+9.3%

Q1 2023

Best reaction

-8.3%

Q1 2013

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+3.9%+2.8%+2.2%
Q4 2025+3.0%+7.1%+2.8%
Q3 2025+4.3%+10.5%+6.3%
Q1 2025+1.2%+0.5%+0.8%
Q4 2024-0.2%+4.1%-2.7%
Q3 2024+1.6%+5.0%+15.8%
Q2 2024+5.1%+4.7%+13.5%
Q1 2024-6.6%-10.6%-6.1%
Q4 2023-4.3%-3.4%-21.9%
Q3 2023+0.1%+0.4%+13.2%
Q2 2023-1.4%-3.8%-15.0%
Q1 2023+9.3%-14.9%-11.0%
Q4 2022+3.0%+7.0%+5.5%
Q3 2022+3.0%+2.8%+8.4%
Q2 2022+4.1%+4.1%+8.0%
Q1 2022-2.0%-1.8%+4.5%
Q4 2021-5.7%-4.3%-3.4%
Q3 2021-1.2%+3.9%+3.6%
Q2 2021-0.9%-1.4%+1.1%
Q1 2021-1.6%+2.1%+2.4%
Q4 2020-1.7%+0.8%+17.9%
Q3 2020+5.8%-1.0%+20.4%
Q2 2020+3.5%-0.8%-0.4%
Q1 2020-4.6%-8.0%-3.9%
Q4 2019-3.4%+0.0%-14.7%
Q3 2019+0.3%+2.9%+2.1%
Q2 2019+1.2%+1.8%-7.8%
Q1 2019+0.3%+1.3%-1.5%
Q4 2018-2.5%-1.1%+2.0%
Q3 2018+0.3%+5.1%+4.8%
Q2 2018-6.1%-7.8%-5.1%
Q1 2018+3.2%+1.7%+3.9%
Q4 2017+4.7%+2.9%+5.8%
Q3 2017-2.4%-3.7%-5.4%
Q2 2017-5.9%-4.2%-9.1%
Q1 2017+0.4%-0.7%-5.0%
Q4 2016+6.8%+5.7%+9.0%
Q3 2016+1.4%+0.9%+16.7%
Q2 2016-0.8%-1.0%+4.6%
Q1 2016-6.7%
Q4 2015+0.7%
Q3 2015+5.8%
Q2 2015-1.8%
Q1 2015-2.0%
Q4 2014-1.2%
Q3 2014-0.3%
Q2 2014-0.6%
Q1 2014-6.9%
Q4 2013-1.8%
Q3 2013-4.1%
Q2 2013+3.8%
Q1 2013-8.3%
Q4 2012-0.2%
Q3 2012-0.4%
Q2 2012-0.3%
Q1 2012+0.1%
Q4 2011+0.5%
Q4 2008+0.5%
Q3 2011+3.8%
Q2 2011-2.7%
Q1 2010+0.4%
Q1 2011+0.3%
Q4 2010-1.6%
Q3 2010-2.9%
Q3 2009-2.9%
Q4 2009+0.1%
Q2 2010+0.1%
Q2 2009+0.1%

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