Financial Performance - The company’s net income for the second quarter of 2025 was $133.2 million, or $0.22 per diluted common share, compared to $70.4 million, or $0.13 per diluted common share, for the same quarter in 2024, marking a $62.7 million increase[170]. - Net income for Q2 2025 was reported at $133.2 million, compared to $70.4 million in Q2 2024[186]. - Adjusted net income for Q2 2025 was $134.4 million, up from $71.6 million in Q2 2024, representing an increase of 87.7%[187]. - The company reported a net income of $239.2 million for the period[320]. Assets and Liabilities - As of June 30, 2025, the company reported total assets of approximately $62.7 billion, total net loans of $48.8 billion, total deposits of $50.7 billion, and total shareholders' equity of $7.6 billion[167]. - Total average deposits increased by $767.8 million to $49.9 billion in Q2 2025 compared to Q1 2025[178]. - Actual ending balances for deposits increased by $759.4 million to $50.7 billion at June 30, 2025[179]. - Total liquid assets amounted to $5,355,785 thousand as of June 30, 2025, compared to $5,505,586 thousand at December 31, 2024, representing a decrease in cash liquidity[269]. Loan Portfolio - Total loans charged-off amounted to $42.071 million for the second quarter of 2025, with commercial and industrial loans contributing $25.189 million and commercial real estate loans contributing $14.623 million[315]. - As of June 30, 2025, the total loan portfolio increased by $734.3 million, or 6.0%, to $49.4 billion from March 31, 2025, primarily due to organic growth in commercial and industrial loans[287]. - Commercial and industrial loans grew by $719.8 million, or 28.4% on an annualized basis, reaching $10.9 billion at June 30, 2025, driven by a strategic focus on organic growth[288]. - Residential mortgage loans increased by $73.6 million to $5.7 billion at June 30, 2025, with new loan originations totaling $204.1 million for the second quarter 2025[291]. Credit Quality - The allowance for credit losses for loans was $594.0 million, or 1.20% of total loans, with expectations to remain between 1.20% and 1.25% through December 31, 2025[169]. - Non-accrual loans totaled $354.4 million, or 0.72% of total loans, with total accruing past due loans increasing to $199.2 million, or 0.40% of total loans[169]. - Non-performing assets (NPAs) increased by $4.6 million to $360.8 million at June 30, 2025, with NPAs as a percentage of total loans remaining unchanged at 0.73%[296]. - The allowance for loan losses as a percentage of non-accrual loans was 163.53% at June 30, 2025[306]. Income and Expenses - Net interest income increased by $30.7 million, primarily due to lower interest rates on deposit products in Q2 2025[173]. - Non-interest income rose by $11.4 million, driven by higher service charges, capital markets income, and bank-owned life insurance income[173]. - Non-interest expense totaled $284.1 million for the three months ended June 30, 2025, an increase of $6.6 million from $277.5 million in the same period in 2024[214]. - Salary and employee benefits expense increased by $4.6 million for the three months ended June 30, 2025, compared to the same period in 2024, mainly due to annual salary merit increases[213]. Capital and Ratios - The total risk-based capital ratio was 13.67% at June 30, 2025, down from 13.91% at March 31, 2025, due to the early redemption of subordinated notes[170]. - The common equity Tier 1 capital to risk-weighted assets ratio was maintained above the required 4.5% as of June 30, 2025[322]. - Valley's total risk-based capital ratio decreased to 13.67% as of June 30, 2025, down from 13.87% at December 31, 2024, due to the early redemption of $115 million of subordinated notes[323]. - Valley's Tier 1 Risk-based Capital was $5,723,767, with a ratio of 11.57% as of June 30, 2025, compared to $5,584,699 and 11.55% at December 31, 2024[323]. Market Conditions - Real GDP increased at an estimated annual rate of 3.0% in the second quarter of 2025, with inflation rising to 2.7% compared to 2.4% in the first quarter[172]. - Moody's Baseline forecast at June 30, 2025 included a GDP expansion of 0.6 percent in Q3 2025 and an unemployment rate of 4.3 percent[313]. - The inflation rate is projected to grow from 2.7 percent in June 30, 2025, declining to near 2.0 percent in early 2027[313]. Strategic Focus - The company continues to diversify its loan portfolio by reducing new originations of certain types of commercial real estate lending[294]. - The company anticipates total loan growth for 2025 to be approximately 3%, reflecting competitive pressures and customer demand[294]. - The company anticipates net interest income growth of approximately 8% to 10% for the full year 2025, down from previous guidance of 9% to 12%[196].
Valley National Bancorp Series C Pfd(VLYPN) - 2025 Q2 - Quarterly Report