Valley National Q3 Earnings Top on Y/Y Revenue Increase, Stock Up 4.2%

Core Insights - Valley National Bancorp (VLY) reported better-than-expected quarterly results, with adjusted earnings per share of 28 cents, surpassing the Zacks Consensus Estimate of 26 cents, and a year-over-year increase of 55.6% [1][10] Financial Performance - The third-quarter 2025 net income reached $163.4 million, a 66.9% increase from the previous year, driven by higher net interest income (NII) and non-interest income, despite higher expenses and lower loan balances [2][10] - Total revenues on a fully-taxable-equivalent (FTE) basis were $512.4 million, an 8.4% year-over-year increase, although slightly below the Zacks Consensus Estimate of $513.9 million [3] - NII on an FTE basis was $447.5 million, up 8.7% year over year, with a net interest margin of 3.05%, expanding by 19 basis points [3] - Non-interest income rose 6.9% year over year to $64.9 million, primarily due to increases in various fee income components [4] Expense Management - Non-interest expenses totaled $282 million, a 4.6% increase year over year, while adjusted non-interest expenses rose 3.5% to $272.8 million [4] - The adjusted efficiency ratio improved to 53.37%, down from 56.13% in the prior-year quarter, indicating enhanced profitability [5] Loan and Deposit Trends - As of September 30, 2025, total loans were $49.3 billion, showing a slight decline, while total deposits increased to $51.2 billion, up approximately 1% from the previous quarter [6] Credit Quality - Total non-performing assets increased to $427.3 million, a 40.1% rise year over year, with the allowance for credit losses as a percentage of total loans at 1.21%, up 7 basis points [7] - Provision for credit losses was $19.2 million, down 74.4% year over year [7] Profitability and Capital Ratios - Adjusted annualized return on average assets improved to 1.04%, up from 0.62% in the previous year, while adjusted annualized return on average shareholders' equity rose to 8.62%, up from 5.64% [8] - The tangible common equity to tangible assets ratio was 8.79%, an increase from 7.68% in the corresponding period of 2024, and the Tier 1 risk-based capital ratio improved to 11.72% from 10.29% [9]