Financial Performance - The company's net income for Q1 2025 was $106.1 million, or $0.18 per diluted common share, compared to $96.3 million, or $0.18 per diluted common share, for Q1 2024, reflecting a $9.8 million increase[167]. - Net income for the first quarter of 2025 was reported at $106.1 million, an increase from $96.3 million in the same period of 2024[185]. - Adjusted net income for Q1 2025 was $106,066,000, an increase from $99,448,000 in Q1 2024, resulting in an annualized return on average shareholders' equity of 5.69% compared to 5.91% in the prior year[188]. - Income before income taxes for the Consumer Banking segment increased by $25.7 million to $37.3 million for Q1 2025, mainly due to higher net interest income and a lower provision for loan losses[225]. - Income before income taxes for Commercial Banking decreased by $45.1 million to $104.2 million for Q1 2025, attributed to lower net interest income and a higher provision for credit losses[230]. Asset and Loan Management - As of March 31, 2025, the company reported total assets of approximately $61.9 billion, total net loans of $48.1 billion, total deposits of $50.0 billion, and total shareholders' equity of $7.5 billion[164]. - Total accruing past due loans decreased to $51.7 million, or 0.11% of total loans, from $99.2 million, or 0.20% at the end of 2024, showing improved credit quality[166]. - Total loans decreased by $142.6 million, or 1.2%, to $48.7 billion at March 31, 2025, primarily due to normal repayment activity and selective originations in the commercial real estate loan portfolio[267]. - Commercial and industrial loans increased by $218.8 million, or 8.8% on an annualized basis, to $10.2 billion at March 31, 2025, reflecting a strategic focus on growth in this category[269]. - Residential mortgage loans totaled $5.6 billion at March 31, 2025, with new originations of $132.8 million for the first quarter 2025, down from $182.0 million in the fourth quarter 2024[272]. Credit Quality and Losses - The allowance for credit losses for loans increased to $594.1 million, or 1.22% of total loans, from $573.3 million, or 1.17% at the end of 2024, with expectations to reach approximately 1.25% by December 31, 2025[166]. - Provision for credit losses rose by $17.5 million, attributed to higher reserves for commercial real estate loans and significant growth in commercial and industrial loans[173]. - Total net loan charge-offs for Q1 2025 were $41.9 million, a decrease from $98.3 million in Q4 2024 and $23.6 million in Q1 2024[296]. - The provision for credit losses for loans was $62.7 million in Q1 2025, compared to $107.0 million in Q4 2024 and $45.3 million in Q1 2024[298]. - Non-performing assets (NPAs) decreased by $17.1 million to $356.2 million at March 31, 2025, compared to December 31, 2024, primarily due to lower non-accrual commercial and industrial loans and a decrease in OREO[278]. Capital and Liquidity - The company's total risk-based capital ratio was 13.91% as of March 31, 2025, compared to 13.87% at the end of 2024, indicating a stable capital position[166]. - Valley exceeded all capital adequacy requirements as of March 31, 2025, maintaining a common equity Tier 1 capital ratio above the required 4.5%[302]. - As of March 31, 2025, Valley's total risk-based capital was $6,775,675 thousand, representing a ratio of 13.91%, exceeding the minimum requirement of 10.50%[303]. - The bank's loans to deposits ratio was 97.4% as of March 31, 2025, compared to 97.5% at the end of 2024, indicating stable liquidity management[246]. - Total liquid assets amounted to $5.14 billion as of March 31, 2025, representing 9.1% of interest-earning assets, down from 9.6% as of December 31, 2024[247]. Interest Income and Expenses - Net interest income increased by $26.6 million, primarily due to lower interest rates on deposit products and additional income from investment securities[173]. - Net interest margin on a tax-equivalent basis for Q1 2025 was 2.96%, up 4 basis points from Q4 2024 and 17 basis points from Q1 2024[194]. - Average interest-earning assets increased by $272.9 million to $56.9 billion in Q1 2025 compared to Q1 2024, primarily due to a $2.0 billion increase in average taxable investments[192]. - Non-interest expense decreased by $3.7 million, mainly from reductions in technology and equipment expenses, offset by higher amortization of tax credit investments[173]. - The interest rate spread for the three months ended March 31, 2025, was 1.99%, an increase from 1.67% in the same period of 2024[207]. Economic Environment - The U.S. GDP contracted at an estimated annual rate of 0.3% in Q1 2025, down from a 2.5% increase in Q4 2024, influenced by increased imports and reduced government spending[169]. - The Federal Reserve lowered the target range for the federal funds rate to 4.25% - 4.50% and indicated potential rate cuts in 2025, reflecting ongoing economic uncertainty[170]. - The expected GDP expansion is projected at 1.7% in the second quarter of 2025, with unemployment expected to be around 4.0%[294]. - Inflation was recorded at 2.4% as of March 31, 2025, driven by elevated shelter inflation, and is expected to reach 2.7% by the end of 2025[294].
Valley National Bancorp Series C Pfd(VLYPN) - 2025 Q1 - Quarterly Report