Valley National Bancorp's Net Income Soars 67% on Lower Credit Provisions

TL;DR

**VLYPN is crushing it, with net income up 67% thanks to way lower credit losses – time to buy!**

AI Summary

Valley National Bancorp (VLYPN) reported a significant increase in net income for the three and nine months ended September 30, 2025. Net income for the three months ended September 30, 2025, rose to $163.355 million, a substantial 66.9% increase from $97.856 million in the same period of 2024. For the nine months ended September 30, 2025, net income reached $402.580 million, up 52.2% from $264.560 million in 2024. Total interest income decreased to $826.923 million for the three months, down from $860.549 million, and to $2.417 billion for the nine months, down from $2.523 billion. However, total interest expense saw a larger decrease, falling to $380.699 million from $450.051 million for the three months, and to $1.118 billion from $1.317 billion for the nine months, leading to a net interest income increase of 8.7% to $446.224 million for the quarter and 7.7% to $1.299 billion for the nine months. The provision for credit losses for loans significantly decreased to $19.171 million for the quarter, down from $75.038 million, and to $119.641 million for the nine months, down from $202.423 million. Total assets increased to $63.019 billion as of September 30, 2025, from $62.492 billion at December 31, 2024, while total deposits grew to $51.176 billion from $50.076 billion over the same period. The company's strategic outlook includes continued evaluation of the OBBBA's provisions, though no material impact is expected.

Why It Matters

This strong performance by Valley National Bancorp, driven by a significant reduction in credit loss provisions and improved net interest income, signals a more stable financial outlook for the bank. For investors, the substantial increase in net income and earnings per common share (up to $0.28 from $0.18 for the quarter) could indicate a healthier return on investment and potential for future dividend stability. Employees might see increased job security and potential for growth within a more profitable organization. Customers could benefit from a more robust and stable banking partner, potentially leading to better service or competitive offerings. In the broader market, VLYPN's results could reflect a broader trend of improving credit quality within the banking sector, offering a positive signal amidst economic uncertainties.

Risk Assessment

Risk Level: low — The risk level is low due to a substantial decrease in the provision for credit losses for loans, which fell from $75.038 million in Q3 2024 to $19.171 million in Q3 2025, indicating improved asset quality. Additionally, the accumulated other comprehensive loss decreased from $(155.334) million at December 31, 2024, to $(98.802) million at September 30, 2025, reflecting a recovery in unrealized gains on available-for-sale securities.

Analyst Insight

Investors should consider increasing their exposure to VLYPN, given the significant improvement in net income and the substantial reduction in credit loss provisions. The positive trend in earnings per common share from $0.18 to $0.28 for the quarter suggests a strong operational turnaround and potential for continued growth.

Financial Highlights

debt To Equity

N/A

revenue

$826.923M

operating Margin

N/A

total Assets

$63.019B

total Debt

$3.435B

net Income

$163.355M

eps

$0.28

gross Margin

N/A

cash Position

$376.216M

revenue Growth

-3.9%

Revenue Breakdown

Key Numbers

• $163.355M — Net Income (Increased by 66.9% for the three months ended September 30, 2025, compared to $97.856 million in 2024.)
• $402.580M — Net Income (Increased by 52.2% for the nine months ended September 30, 2025, compared to $264.560 million in 2024.)
• $19.171M — Provision for credit losses for loans (Decreased significantly from $75.038 million in Q3 2024 for the three months ended September 30, 2025.)
• $119.641M — Provision for credit losses for loans (Decreased from $202.423 million in 2024 for the nine months ended September 30, 2025.)
• $446.224M — Net Interest Income (Increased by 8.7% for the three months ended September 30, 2025, from $410.498 million in 2024.)
• $1.299B — Net Interest Income (Increased by 7.7% for the nine months ended September 30, 2025, from $1.206 billion in 2024.)
• $0.28 — Basic Earnings Per Common Share (Increased from $0.18 for the three months ended September 30, 2025.)
• $63.019B — Total Assets (Increased from $62.492 billion at December 31, 2024, to September 30, 2025.)
• $51.176B — Total Deposits (Increased from $50.076 billion at December 31, 2024, to September 30, 2025.)
• $(98.802)M — Accumulated Other Comprehensive Loss (Improved from $(155.334) million at December 31, 2024.)

Key Players & Entities

• Valley National Bancorp (company) — Registrant
• VLYPN (company) — Ticker for Non-Cumulative Perpetual Preferred Stock, Series C
• SEC (regulator) — U.S. Securities and Exchange Commission
• Nasdaq Stock Market LLC (company) — Exchange where VLY, VLYPP, VLYPO, VLYPN are registered
• One Penn Plaza, New York, NY 10119 (location) — Principal executive office address
• OBBBA (other) — New federal legislation, The One Big Beautiful Bill Act
• Valley National Bank (company) — Valley's principal subsidiary
• Board of Governors of the Federal Reserve System (regulator) — Federal Reserve
• Federal Deposit Insurance Corporation (regulator) — FDIC
• U.S. Department of the Treasury (regulator) — U.S. Treasury

FAQ

Risk Factors

• Impact of New Federal Legislation (OBBBA) [low — regulatory]: New federal legislation, OBBBA, enacted on July 4, 2025, extends or reinstates certain provisions of the 2017 Tax Cut. While Valley National Bancorp is evaluating its provisions, no material impact is currently expected.
• Allowance for Credit Losses [medium — financial]: The allowance for credit losses for loans significantly decreased to $19.171 million for the three months ended September 30, 2025, down from $75.038 million in the same period of 2024. This reduction suggests improved credit quality or a more optimistic outlook on loan portfolio performance.
• Net Loan Portfolio Performance [medium — financial]: Net loans increased to $48.688 billion as of September 30, 2025, from $48.241 billion at December 31, 2024. The provision for credit losses decreased substantially, indicating a potentially stronger credit environment or effective risk management.
• Interest Rate Sensitivity [medium — market]: While total interest income decreased, the larger decrease in interest expense led to an increase in net interest income. This highlights the bank's sensitivity to interest rate movements and its ability to manage its cost of funds.
• Intangible Assets and Goodwill [low — operational]: Goodwill remains stable at $1.869 billion, while other intangible assets, net, decreased to $107.658 million from $128.661 million. Management's evaluation of these assets for impairment is a key estimate susceptible to change.

Industry Context

The banking industry continues to navigate a complex environment influenced by interest rate fluctuations, evolving regulatory landscapes, and credit market conditions. Banks are focused on managing net interest margins, controlling operating expenses, and maintaining strong capital adequacy. Digital transformation and customer experience remain key competitive differentiators.

Regulatory Implications

The enactment of the OBBBA legislation presents a potential area for future regulatory shifts, although Valley National Bancorp currently anticipates no material impact. Banks must remain vigilant in adapting to new tax provisions and any associated compliance requirements.

What Investors Should Do

1. Monitor Net Interest Income Trends
2. Analyze Provision for Credit Losses
3. Evaluate Impact of OBBBA
4. Assess Asset Growth and Deposit Stability

Key Dates

• 2025-09-30: Quarterly Financial Reporting — Reported significant net income growth and improved net interest income, reflecting strong operational performance and effective cost management.
• 2025-07-04: Enactment of OBBBA Legislation — New federal legislation that Valley is evaluating, though no material impact is currently anticipated, indicating potential future regulatory shifts.
• 2024-12-31: Previous Fiscal Year End — Provides a baseline for year-over-year comparisons of assets, liabilities, and equity, showing modest growth in total assets and deposits.

Glossary

Net Interest Income

The difference between the interest income generated by a bank and the interest it pays out to its depositors and lenders. (A key indicator of a bank's profitability from its core lending and borrowing activities. VLYPN saw an 8.7% increase for the quarter.)

Provision for Credit Losses

An expense set aside by a financial institution to cover potential losses from loans that may default. (A significant decrease in this provision (from $75.038M to $19.171M for the quarter) suggests improved credit quality or a more favorable economic outlook for VLYPN's loan portfolio.)

Accumulated Other Comprehensive Loss

A component of shareholders' equity that includes unrealized gains and losses on certain investments and foreign currency translations that have not yet been realized. (VLYPN's improvement from $(155.334) million to $(98.802) million indicates a positive shift in the valuation of these specific assets or liabilities.)

Goodwill

An intangible asset that arises when a company acquires another company for a price greater than the fair value of its net assets. (VLYPN's stable goodwill of $1.869 billion suggests no significant impairment charges or new acquisitions impacting this asset category.)

OBBBA

New federal legislation enacted on July 4, 2025, extending or reinstating certain provisions of the 2017 Tax Cut. (Represents a potential regulatory change that VLYPN is monitoring, though currently not expected to have a material impact.)

Year-Over-Year Comparison

Valley National Bancorp has reported a robust increase in net income for the first nine months of 2025, up 52.2% year-over-year, driven by a significant reduction in the provision for credit losses and an 8.7% rise in net interest income for the quarter. Total assets and deposits have seen modest growth, indicating a stable operational base. While interest income has slightly declined, the bank's ability to decrease interest expenses more substantially has bolstered profitability. The accumulated other comprehensive loss has also improved, reflecting positive valuation adjustments in certain equity or debt instruments.

Filing Documents

• vly-20250930.htm (10-Q) — 4560KB
• vly-09302025ex311.htm (EX-31.1) — 9KB
• vly-09302025ex312.htm (EX-31.2) — 8KB
• vly-09302025ex32.htm (EX-32) — 6KB
• 0000714310-25-000157.txt ( ) — 20973KB
• vly-20250930.xsd (EX-101.SCH) — 73KB
• vly-20250930_cal.xml (EX-101.CAL) — 164KB
• vly-20250930_def.xml (EX-101.DEF) — 583KB
• vly-20250930_lab.xml (EX-101.LAB) — 974KB
• vly-20250930_pre.xml (EX-101.PRE) — 821KB
• vly-20250930_htm.xml (XML) — 5104KB

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) Consolidated Statements of Financial Condition as of September 30, 2025 and December 31, 2024 3 Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2025 and 2024 4 Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2025 and 2024 5 Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024 6 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 10

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 49

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 90

Controls and Procedures

Item 4. Controls and Procedures 90

OTHER INFORMATION

PART II OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 91

Risk Factors

Item 1A. Risk Factors 91

Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities 91

Other Information

Item 5. Other Information 91

Exhibits

Item 6. Exhibits 92

SIGNATURES

SIGNATURES 93 1 Glossary of Defined Terms The following terms may be used throughout this Report, including the consolidated financial statements and related notes. Term Definition ACL Allowance for credit losses AFS Available for sale ASC Accounting Standards Codification ASU Accounting Standards Update Bank Valley National Bank (Valley's principal subsidiary) Basel III Capital rules under a global regulatory framework developed by the Basel Committee on Banking Supervision Board Board of Directors of Valley National Bancorp CD Certificate of deposit CECL Current expected credit loss model CODM Chief Operating Decision Maker CRA Community Reinvestment Act CRE loan concentration ratio Total commercial real estate loans held for investment and held for sale, excluding owner occupied loans, as a percentage of total risk-based capital Exchange Act Securities Exchange Act of 1934, as amended Fannie Mae Federal National Mortgage Association FDIC Federal Deposit Insurance Corporation Federal Reserve Board of Governors of the Federal Reserve System FRB Federal Reserve Bank FHLB Federal Home Loan Bank FOMC Federal Open Market Committee Freddie Mac Federal Home Loan Mortgage Corporation GAAP U. S. Generally Accepted Accounting Principles GDP Gross domestic product Ginnie Mae Government National Mortgage Association HTM Held to Maturity Moody's Moody's Investor Services NAV Net asset value NPA Non-performing asset OBBBA The One Big Beautiful Bill Act OCC Office of the Comptroller of the Currency OREO Other real estate owned OTC Over-the-counter ROATE Return on average tangible shareholders' equity RSU Restricted stock unit SEC U.S. Securities and Exchange Commission SOFR Secured Overnight Financing Rate U.S. Treasury United States Department of the Treasury Valley May refer to Valley National Bancorp individually, Valley National Bancorp and its consolidated subsidiaries, or certain of Valley National Bancorp's subsidiarie

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements VALLEY NATIONAL BANCORP CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (in thousands, except for share data) September 30, 2025 December 31, 2024 Assets (Unaudited) Cash and due from banks $ 376,216 $ 411,412 Interest bearing deposits with banks 994,224 1,478,713 Investment securities: Equity securities 78,296 71,513 Available for sale debt securities 4,117,121 3,369,724 Held to maturity debt securities (net of allowance for credit losses of $ 637 at September 30, 2025 and $ 647 at December 31, 2024) 3,540,819 3,531,573 Total investment securities 7,736,236 6,972,810 Loans held for sale (includes fair value of $ 5,405 at September 30, 2025 and $ 16,931 at December 31, 2024 for loans originated for sale) 18,092 25,681 Loans 49,272,823 48,799,711 Less: Allowance for loan losses ( 585,000 ) ( 558,850 ) Net loans 48,687,823 48,240,861 Premises and equipment, net 331,134 350,796 Lease right of use assets 318,373 328,475 Bank owned life insurance 739,684 731,574 Accrued interest receivable 242,861 239,941 Goodwill 1,868,936 1,868,936 Other intangible assets, net 107,658 128,661 Other assets 1,597,377 1,713,831 Total Assets $ 63,018,614 $ 62,491,691 Liabilities Deposits: Non-interest bearing $ 11,659,725 $ 11,428,674 Interest bearing: Savings, NOW and money market 27,245,966 26,304,639 Time 12,270,067 12,342,544 Total deposits 51,175,758 50,075,857 Short-term borrowings 51,052 72,718 Long-term borrowings 2,905,898 3,174,155 Junior subordinated debentures issued to capital trusts 57,716 57,455 Lease liabilities 377,854 388,303 Accrued expenses and other liabilities 754,962 1,288,076 Total Liabilities 55,323,240 55,056,564 Shareholders' Equity Preferred stock, no par value; 50,000,000 authorized shares: Series A ( 4,600,000 shares issued at September 30, 2025 and December 31, 2024) 111,590 111,590 Series B ( 4,000,000 shares issued at September 30, 2025 and December 31, 2024) 98,101 98,101 Series C

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. Basis of Presentation The unaudited consolidated financial state ments of Valley include the accounts of the Bank and all other entities in which Valley has a controlling financial interest. All intercompany transactions and balances have been eliminated. The accounting and reporting policies of Valley conform to GAAP and general practices within the financial services industry. In accordance with GAAP, Valley does not consolidate statutory trusts established for the sole purpose of issuing trust preferred securities and related trust common securities. Certain prior period amounts have been reclassified to conform to the current presentation. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly Valley's financial position, results of operations, changes in shareholders' equity and cash flows at September 30, 2025 and for all periods presented have been made. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the entire fiscal year or any subsequent interim period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP and industry practice have been condensed or omitted pursuant to rules and regulations of the SEC. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Valley's Annual Report. Significant Estimates. In preparing the unaudited consolidated financial statements in conformit y with GAAP, management has made estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statements of financial condition and results of operations for the periods indicated. Material estimates that require application of management's most difficult

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