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Investing.com -- Valley National Bancorp (NASDAQ:VLY) reported second quarter adjusted earnings that slightly beat analyst expectations, but shares fell 2.3% as investors appeared unimpressed despite the bank’s improved profitability metrics.
The holding company for Valley National Bank posted adjusted earnings of $0.23 per share for the second quarter, edging past the analyst estimate of $0.22. Revenue came in at $495.01 million, marginally above the consensus estimate of $494.21 million and higher than the same period last year. The bank’s net interest margin improved to 3.01%, up 5 basis points from the previous quarter and 17 basis points YoY.
Total (EPA:TTEF) loans increased $734.3 million, or 6.0% on an annualized basis, to $49.4 billion, driven primarily by growth in commercial and industrial loans, which expanded by $719.8 million. The bank’s credit quality showed improvement with provision for credit losses declining to $37.8 million compared to $62.7 million in the first quarter and $82.1 million in the second quarter of 2024.
"I am pleased by the continued balance sheet strength and commercial loan growth exhibited during the second quarter," said Ira Robbins, CEO. "Our profitability metrics are trending positively, consistent with our expectations for improvement throughout the year. We remain focused on growing low-cost deposits, which we expect will support our aspirations in 2025 and beyond."
Deposits increased $759.4 million to $50.7 billion, with non-interest bearing deposits rising by $118.2 million to $11.7 billion. The bank’s efficiency ratio improved to 55.20% from 55.87% in the first quarter and 59.62% in the year-ago period.
Valley National’s allowance for credit losses stood at 1.20% of total loans at quarter-end, down slightly from 1.22% at the end of the first quarter but higher than the 1.06% reported a year earlier. Non-accrual loans totaled $354.4 million, representing 0.72% of total loans, compared to 0.71% in the previous quarter.
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