Valley National Bancorp(US:VLY)2024-11-12 21:35Financial Position - As of September 30, 2024, the company reported total assets of approximately $62.1 billion, total net loans of $48.8 billion, total deposits of $50.4 billion, and total shareholders' equity of $7.0 billion[189]. - Total shareholders' equity increased by $234.6 million to $7.0 billion at September 30, 2024, primarily due to net proceeds from the issuance of Series C preferred stock and net income for the third quarter[196]. - Total deposits increased by $283.8 million to $50.4 billion at September 30, 2024, compared to $50.1 billion at June 30, 2024, primarily due to higher direct commercial customer money market and non-interest bearing deposits[202]. - Average assets for the three months ended September 30, 2024, increased to $62,242,022 thousand from $61,391,688 thousand in the same period of 2023[227]. - Average shareholders' equity for the three months ended September 30, 2024, was $6,862,555 thousand, up from $6,605,786 thousand in the same period of 2023[230]. Loan Portfolio - The concentration of commercial real estate loans was 61.6% of total loans at September 30, 2024, down from 63.2% at June 30, 2024, with a strategic goal to reduce this ratio to approximately 400% by December 31, 2024[195]. - Total loans decreased by $956.4 million, or 7.6%, to $49.4 billion at September 30, 2024, primarily due to the transfer of $823.1 million of commercial real estate loans to loans held for sale[340]. - Commercial and industrial loans increased by $320.1 million to $9.8 billion at September 30, 2024, driven by a strategic initiative to expand new loan production[341]. - Residential mortgage loans totaled $5.7 billion at September 30, 2024, with new and refinanced originations of $179.3 million in Q3 2024[344]. - The company expects low single-digit annualized loan growth for Q4 2024 compared to total loans of $49.4 billion at September 30, 2024[349]. Credit Quality - The allowance for credit losses (ACL) for loans increased to $564.7 million, representing 1.14% of total loans at September 30, 2024, with projections to rise to approximately 1.20% and 1.25% by December 31, 2024, and 2025, respectively[199]. - Non-performing assets (NPAs) as a percentage of total loans decreased to 0.61% at September 30, 2024, compared to 0.62% at June 30, 2024[200]. - The allowance for loan losses as a percentage of non-accrual loans increased to 185.05% at September 30, 2024, compared to 171.23% at June 30, 2024[361]. - Loans 30 to 59 days past due increased by $69.1 million to $115.1 million at September 30, 2024, primarily due to a $74.5 million increase in commercial real estate loans[354]. - Non-accrual loans decreased by $7.0 million to $296.3 million at September 30, 2024, with significant decreases in construction and commercial real estate loans[357]. Income and Expenses - Net income for Q3 2024 was $97.9 million, or $0.18 per diluted common share, down from $141.3 million, or $0.27 per diluted common share in Q3 2023, reflecting a $43.5 million decrease[204]. - Total non-interest income for Q3 2024 was reported at $60,671 thousand, up from $58,664 thousand in Q3 2023[232]. - Total non-interest expense for Q3 2024 was $269,471 thousand, slightly up from $267,133 thousand in Q3 2023, while adjusted non-interest expense remained stable at $263,618 thousand[232]. - The provision for credit losses increased by $65.9 million, mainly due to higher reserves for commercial real estate loans and the impact of Hurricane Helene[204]. - Income tax expense totaled $28.8 million for the third quarter 2024, with an effective tax rate of 22.7%[265]. Capital Management - The company has a strategic goal to increase common equity Tier 1 capital to 9.8% and 10% by December 31, 2024, and 2025, respectively, with expected benefits from the recent common stock issuance[198]. - The company issued 49,197,860 shares of common stock at a public offering price of $9.35 per share, resulting in net proceeds of $448.9 million for general corporate purposes and investments in regulatory capital[193]. - The total allowance for credit losses for loans was $564.7 million as of September 30, 2024, compared to $532.5 million at June 30, 2024[375]. - The company allocated $8.0 million in qualitative reserves related to the estimated impact of Hurricane Helene[375]. - The total commercial real estate loans allowance allocation was $309.0 million, with a percentage of 1.02% as of September 30, 2024[374]. Market Conditions - The Federal Reserve cut the federal funds target rate by 0.50% in September 2024, followed by an additional 0.25% cut on November 7, 2024, bringing the current range to 4.50% to 4.75%[208]. - The rate of inflation declined to 2.4% in Q3 2024, down from 3.0% in Q2 2024, indicating a moderation in price pressures[207]. - The Moody's Baseline forecast predicts GDP expansion of approximately 2.0% in Q4 2024 and unemployment at 4.1% in Q3 2024[366]. - The Federal Reserve lowered the federal funds rate by 50 basis points to a range of 4.75 - 5.00% with potential for an additional cut of 0.50% in Q4 2024[366].