VLY · Valley National Bancorp

Valley National Bancorp reported first quarter 2026 net income of $163.9 million, or $0.28 per diluted share, a decrease from the prior quarter's $195.4 million but a significant increase from $106.1 million in the prior year period. The sequential decline in net income was largely attributable to a decrease in non-interest income and an increase in non-interest expense, partially offset by higher net interest income. Adjusted net income, a non-GAAP measure excluding restructuring charges, litigation reserves, and other items, was $168.9 million, or $0.29 per diluted share.

Net interest income on a tax-equivalent basis increased $6.7 million from the prior quarter to $472.8 million, driven by a decline in the cost of total average deposits, which fell 18 basis points to 2.27%. The net interest margin remained stable at 3.17% on a tax-equivalent basis, as the benefit of lower deposit costs offset the impact of repricing adjustable-rate loans. The yield on average interest-earning assets declined 17 basis points to 5.39%.

Balance sheet trends were positive, with total deposits increasing $676.5 million to $52.9 billion, driven by growth in low-cost core deposits. This growth allowed the company to reduce higher-cost indirect (brokered) deposits by $278.5 million. Total loans increased $692.1 million, or 5.5% annualized, to $50.8 billion, primarily due to increases in commercial real estate (CRE) and commercial and industrial (C&I) loans. The CRE concentration ratio declined modestly to approximately 329% of total risk-based capital.

Credit quality metrics remained stable. Non-performing assets were essentially unchanged at $439.6 million. Non-accrual loans decreased slightly to 0.85% of total loans. Net charge-offs were $17.5 million, or 0.14% of average loans annualized, down from $22.6 million in the prior quarter. The allowance for credit losses was 1.18% of total loans. The efficiency ratio improved to 53.10% from 53.49% in the prior quarter. Management highlighted the company's strategic focus on growing low-cost core deposits, diversifying the loan portfolio, and leveraging artificial intelligence to enhance productivity and client experience.