Earnings call transcript: Valley National Bancorp sees growth in Q2 2025

Valley National Bancorp reported its Q2 2025 earnings, highlighting a net income of $133 million, translating to $0.22 per diluted share. The adjusted net income stood at $134 million or $0.23 per share. The company experienced sequential growth driven by robust net interest income and noninterest income, alongside a reduction in loan loss provisions. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculations, with the company maintaining an impressive 52-year streak of consistent dividend payments. Despite the positive earnings report, the stock saw a slight decrease in premarket trading, dropping 1.9% to $10.35.

Key Takeaways

• Net income for Q2 2025 reached $133 million.
• Adjusted net income was slightly higher at $134 million.
• The company added 105,000 new deposit accounts over the past year.
• Efficiency ratio improved to 55.2%.
• Premarket stock price fell 1.9% to $10.35.

Company Performance

Valley National Bancorp demonstrated solid performance in Q2 2025, with notable growth in net interest income and noninterest income. Trading at a P/E ratio of 13.76, the company has shown consistent improvement in its Net Interest Margin (NIM) over the past five quarters. The strategic focus on expanding its specialty verticals, such as technology banking and healthcare lending, has contributed to its growth trajectory, reflected in a substantial 34% price appreciation over the past six months. For deeper insights into Valley National’s financials and growth potential, InvestingPro subscribers have access to over 30 additional financial metrics and expert analysis.

Financial Highlights

• Revenue: Not specified in the call
• Net income: $133 million
• Adjusted net income: $134 million
• Earnings per share: $0.22 (adjusted EPS:$0.23)
• Efficiency ratio improved to 55.2%
• 8% core deposit growth

Market Reaction

Despite the positive earnings report, Valley National Bancorp’s stock experienced a decline in premarket trading, dropping by 1.9% to $10.35. This movement could be attributed to investor concerns over potential headwinds in the broader market or sector. The stock remains near its 52-week high of $11.16, having rebounded significantly from its low of $7.48. InvestingPro data reveals analyst price targets ranging from $11 to $14, suggesting potential upside opportunities.

Outlook & Guidance

Looking ahead, Valley National Bancorp has set a full-year loan growth target of approximately 3%. The company expects net interest income to grow by 8-10% and noninterest income by 6-10%. It is also targeting a 1% return on assets (ROA) by year-end and aims to achieve a 12-12.5% return on tangible common equity (ROTCE) by next year.

Executive Commentary

CEO Ira Robbins emphasized the company’s strong position in the technology and healthcare sectors, stating, "We think we’ll definitely get our fair share of the technology market." He also highlighted the company’s historical success in healthcare lending, noting, "We have never taken a loss on any Valley-originated healthcare C&I loans over this 20-year period."

Risks and Challenges

• Potential macroeconomic pressures could impact loan growth.
• Competition in the technology banking sector remains intense.
• Changes in interest rates may affect net interest income.
• Regulatory changes could pose compliance challenges.
• Market volatility may influence investor sentiment and stock performance.

Valley National Bancorp remains focused on its strategic initiatives and continues to strengthen its position in key markets, despite facing potential challenges in the broader economic landscape.

Full transcript - Valley National Bancorp (VLY) Q2 2025:

Conference Operator: Good day and thank you for standing by. Welcome to the Q2 2025 Valley National Bancorp Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Travis Lan. Please go ahead.

Travis Lan, Financial Executive, Valley National Bancorp: Good morning and welcome to Valley’s second quarter 2025 earnings conference call. I am joined today by CEO Ira Robbins and Chief Credit Officer Mark Sager. Before we begin, I would like to make everyone aware that our quarterly earnings release and supporting documents can be found on our company website at valley.com. When discussing our results, we refer to non-GAAP measures which exclude certain items from reported results. Please refer to today’s earnings release for reconciliations of these non-GAAP measures. Additionally, I would like to highlight slide 2 of our earnings presentation and remind you that comments made during this call may contain forward-looking statements relating to Valley National Bancorp and the banking industry.

Valley encourages all participants to refer to our SEC filings, including those found on Forms 8-K, 10-Q, and 10-K, for a complete discussion of forward-looking statements and the factors that could cause actual results to differ from those statements. With that, I’ll turn the call over to Ira Robbins.

Ira Robbins, CEO, Valley National Bancorp: Thank you, Travis. During the second quarter of 2025, we reported net income of $133 million, or $0.22 per diluted share, and adjusted net income of $134 million, or $0.23 per share. This compares to $106 million, $0.18 on both a reported and adjusted basis a quarter ago. The sequential growth in adjusted earnings reflects solid momentum in both net interest income and noninterest income and a lower loan loss provision. Our profitability ratios, including return on average assets and return on tangible shareholders’ equity, continue to trend higher and are on track to meet the full year guidance that we outlined this past January. Beyond the numbers, I am extremely proud of the consistency of our execution across the strategic imperatives that define Valley’s long-term value proposition.

This quarter’s presentation supplements our traditional financial information with specific qualitative detail on the underlying initiatives that have contributed to this progress, and this morning I would like to take some time to provide additional detail around those imperatives. First, deposit growth and funding transformation. Over the past 12 months, we have added over 105,000 new deposit accounts, which has contributed to approximately 8% core deposit growth. As a result, our reliance on indirect deposits has declined from 18% down to 13%. This has been achieved alongside a 51 basis point reduction in our average cost of deposits for the second quarter of 2025 as compared to the same period of 2024. Since 2017, we have increased commercial deposit accounts at an average annual rate of 11% per year. These results are not coincidental.

They are the product of deliberate investments in three: talent and technology, targeted market penetration, and the expansion of our specialty verticals. Our ability to attract and retain relationship-based deposits in a competitive environment is a valuable differentiator, and we remain laser focused on sustaining this momentum. Second, commercial loan diversification. Since 2017, we have grown our C&I portfolio at a 19% compound annual rate, including nearly 15% growth over the last 12 months. This success reflects disciplined, relationship-driven growth in the most dynamic commercial markets in the country. Our geographic footprint, combined with certain specialty nationwide verticals like healthcare and fund finance, gives us the flexibility to be selective and the scale to be impactful. We have specifically targeted these nationwide business lines given their attractive risk-adjusted return profiles.

Valley has been active in the healthcare C&I space for nearly 20 years and we have never, I repeat, never taken a loss on any Valley-originated healthcare C&I loans over this 20-year period. While we have historically been active in the capital call space, our efforts have increased as we continue to leverage our technology banking business. Similar to our healthcare experience, we have never taken a loss on a capital call loan. Third, building durable, high-quality fee income, noninterest income has grown at a 12% annual rate since 2017, more than double the pace of our peers. Importantly, the composition of that income has improved dramatically. Volatile gain on residential loan sale revenue represented just 3% of total noninterest income in the second quarter of 2025, down from 20% in 2017. We’re focusing our growth efforts on our capital markets, treasury management, and tax credit advisory offerings.

These are scalable, client-centric businesses that deepen relationships and enhance our earnings resilience. Taken together, these strategic imperatives continue to transform Valley into a more diversified, efficient, and valuable institution. We operate in markets that offer extraordinary growth potential and we build a platform that is increasingly well positioned to take advantage of these opportunities. Our balance sheet is well positioned, our profitability metrics are improving, and our near-term priorities remain aligned with our long-term vision. While these strategic initiatives have significantly transformed Valley’s value proposition, I’m pleased we have achieved this success without denigrating Valley’s financial performance. As reflected on slide 7, we have grown cumulative tangible book value with dividends over 105% during my tenure as CEO. This is approximately 15% greater than the peer median.

That said, we recognize that there remains a meaningful disconnect between the quality of our franchise and the valuation of our shares, but we believe that continued execution of our strategy will close that gap over time. With that, I will turn the call back to Travis to discuss the quarter’s financial highlights. After Travis concludes his remarks, Mark, Travis, and I will be available for your questions.

Travis Lan, Financial Executive, Valley National Bancorp: Thank you, Ira. Before we dive into the quarter’s results, I’d like to provide an update on our full year 2025 guidance. We continue to expect approximately 3% loan growth for the year, consistent with our prior update. Given that loan growth is trending toward the lower end of our original guidance, we are refining our net interest income growth estimate to a range of 8% to 10%. Our outlook for noninterest income remains unchanged at 6% to 10% growth, supported largely by the areas that Ira just mentioned. We are lowering our noninterest expense growth guidance to a range of 2% to 4%, reflecting our ongoing focus on cost discipline and operating leverage. From a credit standpoint, we are tightening our net charge-off expectations to $100 million to $125 million for the year and are refining our provision estimate to approximately $150 million for the full year.

In aggregate, these modest directional adjustments are expected to result in full year earnings per share that remains broadly in line with current consensus estimates. Turning to Slide 8, we delivered another strong quarter with $600 million of core customer deposit growth. This was driven by a combination of continued growth in commercial noninterest bearing deposits and promotional CD offerings. From a pricing perspective, we were able to largely mitigate competitive pressures through disciplined management of our back book. Our cumulative total deposit beta during the recent rate decrease cycle stands at 51%, which has supported consistent net interest margin expansion over the last five quarters. Slide 10 further highlights the transformation of our deposit base. Since 2017, commercial deposits have nearly quadrupled and our delivery channels have become significantly more efficient.

A key driver of this transformation has been the success of our differentiated specialty verticals, which now contribute over $12 billion of deposits to our franchise. These verticals include international and technology, our online delivery channel, and our private banking business, among others. As we continue to leverage these verticals and align our product offerings with client needs, we anticipate sustained deposit momentum. Turning to Slide 11, gross loans increased at an annual pace of 6%, led by strong growth in C&I and indirect auto lending. C&I loan growth was particularly robust, fueled by activity in our fund finance and healthcare verticals as well as contributions from our teams in Florida, New Jersey, and Chicago. Fund finance and healthcare collectively contributed roughly 60% of the quarter’s net growth in C&I.

While we expect C&I growth to moderate somewhat, we remain confident in our ability to selectively attract high quality relationships to the bank. CRE runoff slowed this quarter as a result of higher origination activity with respect to our targeted relationship-driven clients. As of June 30, 2025, our CRE concentration ratio has declined to 349% from 474% at the end of 2023, surpassing our year-end target ahead of schedule. Slide 12 reinforces the consistency of our C&I growth since 2017, which reflects both our disciplined team building and our ability to capitalize on market disruption. Our national specialty platforms, including fund finance and healthcare, continue to provide valuable diversification. In early 2024, we added a seasoned syndications team, enhancing our ability to structure and lead larger transactions for upmarket clients. These capabilities, combined with our expanded treasury and capital markets offerings, continue to provide attractive growth opportunities for Valley.

Slide 14 shows a 3% sequential increase in net interest income, driven by continued net interest margin expansion and growth in average earning assets. This marks our fifth consecutive quarter of NIM improvement, supported by our asset repricing tailwind and disciplined deposit cost management. The interest rate backdrop, combined with additional asset repricing opportunities, remains supportive of further NIM expansion throughout the year. We also delivered strong noninterest income growth this quarter. Capital markets activity picked up meaningfully with increased swap volumes tied to CRE originations and growth in both FX and syndication fees. Deposit service charges also rose significantly, reflecting additional penetration of our treasury platform and enhanced pricing. Slide 16 illustrates the long-term trajectory of our fee income. Since 2017, we’ve grown fee income at a 12% CAGR, more than double the peer median, and as Ira Robbins mentioned, we’ve improved the quality of that income.

Our capital markets, treasury, and tax credit advisory businesses are now core contributors to a more stable revenue stream. Turning to Slide 17, adjusted noninterest expenses grew modestly primarily due to merit-based salary increases which took effect late in the first quarter and higher incentive accruals during the second quarter. Professional expenses also normalized from unusually low levels in the first quarter. Despite these modest headwinds, our efficiency ratio improved to 55.2%, the best level since the first quarter of 2023, driven by strong revenue growth and continued cost discipline. Slide 18 illustrates our asset quality and reserve trends. Nonaccrual loans remained generally stable during the quarter while accruing past dues increased to 40 basis points of total loans. Roughly two-thirds of this increase was related to a pair of C&I loans which are no longer past due.

Net loan charge-offs and loan loss provision both declined from the first quarter in line with our expectations. We continue to anticipate further credit normalization and a decline in both provision and charge-offs throughout the remainder of the year. Similar to this quarter’s results, we anticipate general stability in our allowance coverage ratio going forward, all else equal. Turning to Slide 19, tangible book value increased as a result of retained earnings and a favorable OCI impact associated with our available for sale securities portfolio. While our total risk-based capital ratio declined due to the redemption of $115 million of subordinated debt, other regulatory capital ratios improved. We remain extremely well capitalized relative to our risk profile and have ample flexibility to support our strategic objectives. With that, I will turn the call back to the operator to begin Q&A. Thank you.

Conference Operator: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile our Q&A roster. Our first question is going to come from the line of Christopher Edward McGratty with Keefe, Bruyette & Woods. Your line is open. Please go ahead.

Ira Robbins, CEO, Valley National Bancorp: The question, Travis, maybe start with you. You talked about the margin continuing to expand. Can you speak to the ability to maintain deposit pricing given competitive nature and the growth outlook?

Travis Lan, Financial Executive, Valley National Bancorp: I think you had talked previously about.

Ira Robbins, CEO, Valley National Bancorp: Maybe getting over time to like a.

Travis Lan, Financial Executive, Valley National Bancorp: Three and a quarter. Any changes to the way you’re.

Ira Robbins, CEO, Valley National Bancorp: Thinking about the cadence of margins?

Travis Lan, Financial Executive, Valley National Bancorp: Thanks. No, I don’t think there is, Chris. I mean, I think we still anticipate the margin will increase as the year goes on and then into 2026 as well. I’d say that benefit or that increase is driven by a combination of asset repricing tailwinds and general stability. On the deposit side, I think we’ve noticed that the deposit competition for new deposits, new-to-bank deposits, has maybe picked up recently. That said, we still have the structural opportunity with our $6 billion of brokered deposits to reprice those lower over time. Some of that is structural, where we have, as an example, in the third quarter, $1.2 billion of brokered that has an average cost of 5.10%, so we’ve been replacing that into brokered. There’s still a pickup, but we think there’s an opportunity to replace it more with core.

This quarter, we added over $1 billion of new deposits at a blended rate of 2.77%. That gives you a sense, I think, for some of the opportunity that we have there on the funding side.

Ira Robbins, CEO, Valley National Bancorp: Okay, you said at $377 or $477.

Travis Lan, Financial Executive, Valley National Bancorp: Sorry, I missed that. New deposits were over $1 billion at a blended rate of 2.77%.

Ira Robbins, CEO, Valley National Bancorp: 2.77.

Travis Lan, Financial Executive, Valley National Bancorp: Okay, great.

Ira Robbins, CEO, Valley National Bancorp: The charge off guide, I.

Travis Lan, Financial Executive, Valley National Bancorp: Think it implies a decent step down in the charge-offs in the back half of the year.

Ira Robbins, CEO, Valley National Bancorp: I may be interested in comments about Valley National Bancorp.

Travis Lan, Financial Executive, Valley National Bancorp: New nonaccrual formation in the quarter, a little bit of the tweak in.

Ira Robbins, CEO, Valley National Bancorp: The reserve, and then your comments about.

Travis Lan, Financial Executive, Valley National Bancorp: Stability and visibility into credit. Thanks.

Mark Sager, Chief Credit Officer, Valley National Bancorp: Yeah, I think if we point to stabilization on nonaccruals that we saw this quarter, and also, you know, want to point out for the first quarter we had flat criticized level of assets. That’s after two years of some migration. It’s consistent with what we were seeing in the fourth quarter and first quarter where we saw the growth in criticized really diminish materially. We point to the stabilization that we’re seeing within the real estate market as the primary driver. In a world where the economic outlook continues to be consistent with what we’re seeing today, we would expect that that trend continues on the criticized. The guidance we had given was an expectation for charge-offs and reserve levels to provision levels to be higher at the beginning of the year. That’s consistent now with our guidance that we’re showing through the end of the year.

Travis Lan, Financial Executive, Valley National Bancorp: Great, thank you.

Conference Operator: Thank you. One moment as we move on to our next question. Our next question is going to come from the line of David Charles Smith with Truist Securities. Your line is open. Please go ahead.

Travis Lan, Financial Executive, Valley National Bancorp: Good morning.

Ira Robbins, CEO, Valley National Bancorp: There’s been a lot of activity in.

Travis Lan, Financial Executive, Valley National Bancorp: The broader technology and software sector in.

Ira Robbins, CEO, Valley National Bancorp: Recent months, both for the industry itself.

Travis Lan, Financial Executive, Valley National Bancorp: As well as seemingly in banks interested in banking the space with more intensity, I was curious if you could speak to the competitive landscape there and how you’re adapting Valley for this environment.

Ira Robbins, CEO, Valley National Bancorp: It’s a great question, David. We had actually looked to get into the business five to six years ago from an organic perspective. We went through a strategic initiative looking at not just what the relationship managers needed to do and what that target client was, but really the infrastructure that was required from a treasury management solution, the credit piece that comes with it, and it was really a significant build is what we had identified at that time. We were fortunate enough with the Blues acquisition back in 2022 to be able to acquire a really experienced team that has a lot of connectivity to the Israeli market right now. I think they have well over 50% of the market share of anything from Israel coming to the United States really goes through Valley. A real strong connectivity there, but really an infrastructure that we can leverage.

What you’re seeing now is the ability to expand that into the domestic space. The infrastructure is already there. The incremental knowledge that’s really needed to bank that space already exists within the organization. We’re really excited about the continued focus that we’re seeing and the growth in that market, and we think we’ll definitely get our fair share.

Travis Lan, Financial Executive, Valley National Bancorp: Thanks. Just staying on the topic of markets, I know the New York metro area and rent regulated multifamily isn’t as big a part of your portfolio as it once was. Any thoughts you have about the developments in the mayoral race and how.

Ira Robbins, CEO, Valley National Bancorp: That could affect your portfolio here?

Mark Sager, Chief Credit Officer, Valley National Bancorp: This is Mark Sager. We don’t want to preempt the voters of New York on who will actually be the mayor, but based on our forward looking, we do think that potential pressure would continue only to be on the rent stabilized. We’ve mentioned in the past, very small part of our portfolio, $600 million in total, very granular portfolio for us, $6 million average loan size, and our average yield on that portfolio is 4.87%. We don’t have concerns. We feel we’re adequately provisioned on that portfolio. We’ll point out what we’ve mentioned in other calls. We’ve always underwritten in that space to in-place leases in NOI coverage, so an inability to increase in the future, we don’t believe will have a material impact on our portfolio.

Ira Robbins, CEO, Valley National Bancorp: All right, that’s helpful.

Travis Lan, Financial Executive, Valley National Bancorp: Thank you.

Conference Operator: Thank you. One moment for our next question. Our next question is going to come from the line of Manan Gosalia with Morgan Stanley. Your line is open. Please go ahead.

Ira Robbins, CEO, Valley National Bancorp: Hey, good morning all.

Mark Sager, Chief Credit Officer, Valley National Bancorp: Morning.

Ira Robbins, CEO, Valley National Bancorp: I wanted to start on the loan growth this quarter. Apologies if you’ve already covered some of this, but the C&I loan growth was particularly strong this quarter. Can you talk about what you’re seeing and hearing from borrowers? How much of this growth is coming from the environment improving versus the actions you guys have taken? I would love to say that it’s all the actions that we’ve taken and the infrastructure that we’ve built. I think client sentiment definitely has an impact upon that as well. I think we’ve done a really good job in providing the right treasury solutions that we need, providing the right credit appetite, and just the internal relationships that are required to really grow in some of the segments that we’ve expanded into, fund finance as well as healthcare.

That said, from what we see with our clients, there still seems to be real positivity in how they’re individually thinking about the market. The C&I pipeline, I believe, is at 30% higher than where it was last quarter. We’re continuing to see real strong growth coming out of that segment today. I know there was a lot of noise regarding tariffs previously. I think we really bank a unique client that really is that small to mid-sized business that has the agility to really capitalize on what happens with tariffs and some of the uncertainty. When we look at an environment like we’re staring at today where there’s increased volatility and increased uncertainty, we think the types of clients that really look to Valley for their financing needs are the ones that are going to be the ones that are the beneficiaries of this environment.

Travis Lan, Financial Executive, Valley National Bancorp: I would just add on to that, Manan. Specific to this quarter, you know we grew C&I a little bit over $700 million. About 30% of that growth came from each fund finance and healthcare C&I. 60% in total was related to those two specialty areas. The additional 40% was primarily tied to activity in Florida, Chicago, and New Jersey.

Ira Robbins, CEO, Valley National Bancorp: Got it. Really helpful. Maybe pivoting over to credit, any more color on what drove the increase in the past dues this quarter and what gives you the confidence in the credit outlook that you laid out in the slide deck?

Mark Sager, Chief Credit Officer, Valley National Bancorp: No, absolutely. Again I think we mentioned, but the increase in delinquencies was driven by three credits. Two of those credits at approximately $100 million are already cleared. We had a $39 million property sell and paid off in full. The $60 million credit has been brought current for the July payment. We were in the midst of negotiating a modification for that customer. The other remaining delinquency is a matured loan where the borrower hasn’t agreed with our extension terms but has received an alternative financing opportunity. We expect this quarter for that to be resolved. I would also point again to stabilized criticized level and nonaccrual levels. We do think that these were just unique situations on the delinquency.

Ira Robbins, CEO, Valley National Bancorp: Got it. Thank you.

Conference Operator: Thank you. One moment for our next question. Our next question is going to come from the line of Matthew M. Breese with Stephens Inc. Your line is open. Please go ahead.

Travis Lan, Financial Executive, Valley National Bancorp: Good morning everybody. I wanted to touch on deposits first. You know the 8% quarter over quarter growth in CDs, what was the blended price on those? Ira, I appreciate your comments, you know, quality of deposit improvements. I guess I’m thinking about this in the context of deposit cost being high to begin with and up quarter to quarter. I guess my question is with all the new hires and investments, you’re growing C&I, which is better for deposits? I just fear there’d be more opportunity to reduce deposits. Maybe you could help me out there. Yeah, Matt, this is Travis. I think just to start with, there is a lot of kind of noise within the deposit numbers. The growth in CDs was a combination of two things.

The first is we did have some promotional CDs out there that we always expect to have at least one promotion in the market at a given time. There was about $400 million of retail CD growth in that number. Within brokered deposits in total, which were up $100 million, we reduced brokered ICS one-way buy, which now falls into money market and savings, and replaced that with brokered CDs. When you look at our deposits quarter over quarter and see the reduction in now money market and savings, the reality is the customer balances were stable to slightly higher. We did see that runoff in ICS one-way that was replaced with brokered CDs. I think there is also some degree of mismatch between the timing of loan growth. This quarter’s loan growth was extremely strong, particularly on the C&I side.

I think the core deposit growth was strong as well, although it couldn’t keep pace with the loan growth that we saw. Through the rest of the year, we anticipate loan growth will kind of pull back to about 1% on a quarterly basis. I think we have good deposit tailwinds to fully fund that on a core basis. You get a continuation of the repricing dynamic on the brokered side. To reiterate what I said in the first response in the Q&A session, we originated net new deposits this quarter of $1.8 billion at that 2.77% rate for customers. Again, we have $1 billion to have brokered in the third quarter here. That’s going to roll off at a price of 5.10%. I think we have a combination of tailwinds on the deposit side.

They reflect both just the interest rate environment and repricing those lower and the structural benefits of continuing to grow deposits on a core basis. We are in a unique period here coming out of the inverted curve where you do feel like the margin’s at a good inflection point to the upside. We have asset repricing tailwinds on both the asset and liability side. That is pretty unique. Just some color there.

Ira Robbins, CEO, Valley National Bancorp: I think, Matt, just from the strategic, I mean, from my mind, I think the puts and pulls in each individual quarter are definitely important and make a difference what that NIM looks like. My mind really goes to some of the more strategic initiatives that we’ve done in the different verticals that we’ve gone into and the ability to really have some pricing power within those individual verticals as we continue to expand some of those relationships. I think about the number of accounts and the growth that we’ve seen. If you go back to when I’ve taken over as CEO, we’ve grown commercial accounts 11% consistently on an annualized basis. We’ve been able to grow consumer accounts I think 2% to 3% on a consistent annualized basis. I think those are things that really drive long term strategic value.

The capabilities that we have within our treasury platform really begin to get differentiated versus some of our peers. I think there really is the foundational strategic elements that support a lot of the tailwinds that we’re describing today when it comes to the deposit initiatives. I do believe over a longer term basis that this cost will come down to more peer like numbers. That said, considering we are operating in a very challenging New York market from a deposit perspective and versus some of our peers that may be operating in the Midwest or some other geographies, I do believe there is more pricing difficulty or competitiveness in our markets. We have a right to win for these deposits and we do believe that that right is really showing up in the number of accounts that we continue to add every single year.

Travis Lan, Financial Executive, Valley National Bancorp: Got it. Okay.

Ira Robbins, CEO, Valley National Bancorp: I guess I had two.

Travis Lan, Financial Executive, Valley National Bancorp: Others, if you’ll indulge me. The first one is just Ira, you had mentioned your opening comments. A disconnect between fundamentals and valuation. Could you talk about a potential buyback? I mean, how much flexibility do you have capital wise to do that? Understanding the CRE concentration is still a bit elevated.

Ira Robbins, CEO, Valley National Bancorp: I think we have a lot more flexibility today than we’ve ever had in my time being at Valley, whether that’s been CEO or really working in the finance area. I think that in itself is a wonderful ability to have some flexibility that we haven’t had before. That said, I think there are organic growth opportunities for us. It becomes a balance of whether we’re generating accretion through the buyback versus more sustainable long term value creation through some of the organic initiatives. I think that really becomes more of the balance than where that CRE ratio is. We feel very, very comfortable with where the CRE ratio is and with where the trajectory is. I don’t really think that’s an impediment at this point. It really is more on the organic side.

I think we talked about a year ago or the beginning of the year of some of those performance metrics that we wanted to get to 1% by the end of the year. We talk long term about where that 15% ROTCE number should look for us. We do see a pretty clear path to get to those numbers and I think those are really driving initiatives for us.

Travis Lan, Financial Executive, Valley National Bancorp: Yeah, that’s my follow up. 1% ROA by the end of the year, that’s intact. What does that look like in 2026, and when you get to that 15% ROTCE? That’s all I had. Thank you.

Ira Robbins, CEO, Valley National Bancorp: I think those are what we’re focused on.

Travis Lan, Financial Executive, Valley National Bancorp: Right.

Ira Robbins, CEO, Valley National Bancorp: Because I think there is in my mind a disconnect with where that multiple is, and obviously there’s an overhang on the stock still with where that CRE ratio is, which is fine. I think it’s important for us to continue to make sure that we’re driving performance that supports more peer-like multiples. For us, it’s getting to that 1% at the end of the year, which, when you look at the trajectory of where the NIM is and the guidance we’re giving on where the reserve goes or where the provision goes, those don’t take a lot of math to really get to those overall numbers. When you then extrapolate that and continue it forward, we’re running between $12 million to $17 million a quarter in incremental net interest income growth.

As Travis alluded to earlier, those are tailwinds that we don’t think are going to disappear for some time. It’s not too difficult to easily forecast by a certain part of next year, 12% to 12.5% ROTCE. Getting closer to that 15% in 2027 is really where we think we’re going to end up. There is a real clear, comfortable glide path towards that.

Travis Lan, Financial Executive, Valley National Bancorp: Thank you.

Conference Operator: Thank you. As a reminder to ask a question, please press star 11 on your telephone. Our next question is going to come from the line of Jarrod Shaw with Barclays. Your line is open. Please go ahead.

Travis Lan, Financial Executive, Valley National Bancorp: Hi, this is Jonathan Rau for Jared. Good morning. Hey, how are you? Good, doing good. Could you maybe just talk a little bit about the competitive environment in New Jersey and if there’s been any shift in sentiment among New Jersey based customers versus New York just given the mayor race there, any impact on sentiment or demand?

Ira Robbins, CEO, Valley National Bancorp: I think it’s a great question. Right, because we have borrowers that play in both spaces. I think there’s a bit more of.

Travis Lan, Financial Executive, Valley National Bancorp: A wait and see as to where.

Ira Robbins, CEO, Valley National Bancorp: They’re going to allocate some of their capital and where they want to begin to invest into. That said, I think the families that we tend to bank are really more long-term generational families and for them there may be going to be a buying opportunity or an investment opportunity in New York based on what happens with the mayoral race. These are families that have much more longer-term views of what New York City is, and I think we probably share in that sentiment. From a long-term perspective, we are still optimistic about New York.

Travis Lan, Financial Executive, Valley National Bancorp: I would just add that this quarter I did call out New Jersey as having strong C&I growth. The reality is as the quarter went on, the pipeline in New York grew and right now New York’s C&I pipeline stands pretty strong heading into the third quarter. Combination of activity in the boroughs and Long Island appears to be percolating. I don’t think Mark Sager responded to the question on the mayoral rates specific to rent regulated multifamily. The reality is the commercial environment in New York I think remains pretty robust. Okay, perfect. Thanks for that color there. I’m looking further ahead to 2026 loan growth. How much of a headwind is the CRE runoff still going to be just in terms of dollars or just % for the year? As we head into 2026, I don’t anticipate CRE will be a headwind from a dollar perspective.

Our CRE balances stabilize as we get towards the end of 2025 here and would anticipate low single digit growth in CRE in 2026 as we think about it today. I guess with taking that into account with the C&I growth, you’ve seen any indication on what total loan growth could be for 2026, is it like a mid to high single digit number too? We haven’t provided any 2026 guidance yet. As we talked about the 3% loan growth guide, keep in mind that will include a couple of quarters of CRE runoff. If you were to neutralize that and plug that in for 2026, I think you probably get to something that’s closer to 5% total loan growth. Again, we have not yet provided any 2026 guidance. Okay. Thanks for the color. That’s all from me.

Conference Operator: Thank you. I’m showing no further questions at this time. I would like to hand the conference back to Ira Robbins for closing remarks.

Ira Robbins, CEO, Valley National Bancorp: Thank you, Michelle. More importantly, thank you to all of you for joining us today. We appreciate the interaction and look forward to talking to you next quarter.

Conference Operator: This concludes today’s conference call. Thank you for participating and you may now disconnect. Everyone, have a great day.

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