Valley National Bancorp(VLY) - 2024 Q4 - Annual Report

Financial Overview - As of December 31, 2024, Valley National Bancorp had consolidated total assets of $62.5 billion, total net loans of$48.2 billion, total deposits of $50.1 billion, and total shareholders' equity of$7.4 billion[17]. - Valley ranked 10th in competitive ranking and market share based on deposits reported by 150 FDIC-insured financial institutions in the New York, Northern New Jersey, and Long Island deposit markets as of June 30, 2024[23]. - The total loan portfolio as of December 31, 2024, was $48.8 billion, with commercial and industrial loans making up a significant portion[43]. Loan Portfolio Composition - Commercial and industrial loans totaled approximately$9.9 billion, representing 20.4% of the total loan portfolio at December 31, 2024[29]. - Commercial real estate and construction loans totaled $29.6 billion, representing 60.7$5.6 billion, representing 11.5% of the total loan portfolio as of December 31, 2024[37]. - Other consumer loans amounted to $3.6 billion, accounting for 7.4$48.8 billion, consisted of commercial real estate, residential mortgage, and home equity loans[41]. Credit Risk Management - The company adheres to a credit policy designed to minimize credit risk while maximizing income, with centralized credit authority for significant portfolio percentages[49]. - The allowance for credit losses (ACL) is based on expected credit losses under the CECL methodology, which includes a collective reserve for estimated lifetime expected credit losses and an individual reserve for collateral dependent loans[61]. - Less than 1.0% of commercial loans originated by third parties were past due 30 days or more, representing 1.1% of total commercial loan portfolio delinquencies[65]. - 3.4% of residential mortgage loans originated by third parties were past due 30 days or more, which represented 25.8% of total residential mortgage portfolio delinquencies[65]. Employee and Operational Insights - Valley employed 3,732 full and part-time employees as of December 31, 2024, with a voluntary turnover rate of 13.5%[66]. - In 2024, Valley hired 669 employees, and the average tenure of employees was 7.1 years[66]. - Valley operates 229 branch offices and has an extensive ATM network to provide convenient access to its services[26]. Regulatory Compliance and Challenges - Valley is required to maintain a Common Equity Tier 1 (CET1) capital ratio of at least 7.0%, Tier 1 capital ratio of at least 8.5%, and total capital ratio of at least 10.5% under Basel III regulations[89]. - Valley's capital ratios were impacted by a phased-in deferral amount of $47.3 million, which reduced risk-based capital ratios by approximately 9 basis points as of December 31, 2024[93]. - Valley is subject to extensive regulation and supervision, with potential changes in regulatory policies expected under the new U.S. presidential administration, which could materially affect its business[81]. - The Bank's dividend payments are subject to regulatory limitations, allowing dividends only up to the sum of net profits for the year and retained net profits from the previous two years[104]. Strategic Initiatives - The company aims to reduce its commercial real estate loan concentration ratio from 362$10 billion[98]. Consumer Protection and Privacy Regulations - The final rule from the CFPB regarding overdraft credit requires compliance with consumer protections, effective October 1, 2025[117]. - The California Consumer Privacy Act (CCPA) grants California residents expanded privacy rights, including the right to access and delete personal information[131]. - Non-compliance with evolving data privacy and cybersecurity laws could lead to investigations and enforcement actions against the company[136].