Q3 2024 Valley National Bancorp Earnings Call Transcript
Key Points
- Valley National Bancorp (VLY) reported a significant increase in net income to $98 million and diluted earnings per share of $0.18, compared to $70 million and $0.13 in the previous quarter.
- The company successfully reduced its commercial real estate (CRE) concentration ratio by 53 percentage points year-to-date, enhancing balance sheet metrics.
- Valley National Bancorp (VLY) plans to sell $800 million of performing CRE loans at a 1% discount, which is expected to improve regulatory capital ratios by 16 to 20 basis points.
- The company experienced strong growth in C&I loans, contributing to a rebound in pre-provision revenue and positioning for further profitability improvement.
- Valley National Bancorp (VLY) achieved a $300 million increase in total deposits, with a notable rise in non-interest-bearing deposit accounts.
- Provision for loan losses exceeded third-quarter guidance due to growth in C&I loans and potential impacts from Hurricane Helene.
- Net interest income is expected to decline in the fourth quarter due to the anticipated CRE loan sale.
- Higher net charge-offs are anticipated in the fourth quarter due to lingering credit issues and hurricane impacts.
- The company faces a slower pace of reserve build, with allowance coverage expected to reach 1.25% by the end of 2025.
- Valley National Bancorp (VLY) anticipates a decline in net interest income by approximately $5 million in the fourth quarter due to the CRE loan sale.
Good day and thank you for standing by. Welcome to the Third-Quarter 2024 Valley National Bancorp Earnings Conference Call. (Operator Instructions) 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.
Good morning and welcome to Valley's third quarter 2024 earnings conference call. Presenting on behalf of Valley today are CEO, Ira Robbins; President, Tom Iadanza; and Chief Financial Officer, Mike Hagedorn.
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
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