Valley National Bancorp(US:VLY)2025-11-07 21:13Financial Position - As of September 30, 2025, the company reported total assets of approximately $63.0 billion, total net loans of $48.7 billion, total deposits of $51.2 billion, and total shareholders' equity of $7.7 billion[165]. - Total deposit balances increased by $450.5 million to $51.2 billion, primarily due to inflows from commercial and government deposits[167]. - Liquid assets totaled $5.7 billion, representing 9.9% of interest-earning assets, an increase from $5.4 billion or 9.3% at the end of the previous quarter[167]. - Total investment securities rose by $231.7 million to $7.7 billion, accounting for 12.3% of total assets, driven by purchases of residential mortgage-backed securities[167]. - The company's total risk-based capital ratio was 13.83% as of September 30, 2025, up from 13.67% at June 30, 2025[168]. - Shareholders' equity reached approximately $7.7 billion as of September 30, 2025, representing 12.2% of total assets, an increase of approximately $260.2 million during the nine months ended September 30, 2025[312]. Income and Earnings - Net income for the third quarter of 2025 was $163.4 million, or $0.28 per diluted common share, compared to $97.9 million, or $0.18 per diluted common share, for the same quarter in 2024, reflecting a $65.5 million increase[168]. - Net interest income increased by $35.7 million, driven by lower interest rates on deposit products and additional income from investment securities[172]. - Non-interest income rose by $4.2 million, with increases in net gains on loan sales and service charges, partially offset by lower litigation settlement income[172]. - Non-interest expense increased by $12.5 million, primarily due to higher salary and employee benefits, and professional fees[172]. - The effective tax rate for the third quarter 2025 was 22.2%, a slight decrease from 22.7% in the third quarter 2024, mainly due to larger investments in tax credits[218]. - The company reported a net income of $163.4 million (GAAP) for Q3 2025, compared to $97.9 million in Q3 2024, marking a 66.8% increase[187]. Loan and Credit Quality - The allowance for credit losses (ACL) for loans was $598.6 million, representing 1.21% of total loans, with an anticipated range of 1.20% to 1.25% through December 31, 2025[167]. - The net loan charge-offs for the third quarter of 2025 were $14.6 million, a decrease from $37.8 million in the previous quarter[167]. - Non-performing assets (NPAs) increased by $66.6 million, or 18.4%, to $427.3 million at September 30, 2025, primarily due to increases in non-accrual commercial real estate and construction loans[291]. - NPAs as a percentage of total loans rose to 0.86% at September 30, 2025, compared to 0.73% at June 30, 2025[291]. - The provision for credit losses for loans was $19.2 million in the third quarter of 2025, down from $37.8 million in the second quarter of 2025 and $75.0 million in the third quarter of 2024[311]. Asset and Liability Management - Average interest-earning assets rose to $58.6 billion in Q3 2025, up $971.5 million from Q3 2024, driven by a $1.5 billion increase in average taxable investments[190]. - Average interest-bearing liabilities increased to $42.7 billion in Q3 2025, up $20.7 million from Q3 2024, primarily due to a rise in average interest-bearing deposits[191]. - The bank's loans to deposits ratio was 96.3% as of September 30, 2025, down from 97.5% on December 31, 2024[262]. - Total liquid assets increased to $5,748,032 thousand as of September 30, 2025, compared to $5,505,586 thousand on December 31, 2024[263]. - The average balance of loans for Q3 2025 was $49.27 billion, with interest income of $733.21 million, yielding an average rate of 5.95%[196]. Market and Economic Conditions - The U.S. real GDP increased at an estimated annual rate of 3.8% in the third quarter of 2025, compared to 3.0% in the second quarter[170]. - The GDP growth forecast is 0.8% for Q4 2025, increasing to 2.0% by late 2027[307]. - The unemployment rate is projected at 4.4% for Q4 2025, with a range of 4.4% - 4.8% for the remainder of the forecast period[307]. - The inflation rate is expected to grow to 3.1% in Q4 2025, decreasing to near 2.0% by early 2027[307]. Capital Management - Valley exceeded all capital adequacy requirements as of September 30, 2025, maintaining a common equity Tier 1 capital ratio above the required 4.5%[314]. - Common Equity Tier 1 Capital for Valley was $5,472,775, representing a ratio of 11.00% as of September 30, 2025, compared to $5,230,632 and 10.82% at December 31, 2024[315]. - Cash dividends declared remained at $0.33 per common share for both the nine months ended September 30, 2025, and 2024, with the Board committed to shareholder value considerations[317]. - Valley's market risk is primarily composed of interest rate risk, with potential losses arising from changes in interest rates and other market factors[319].