Valley National Bancorp (VLY) Announces Q3 2023 Earnings
Valley National Bancorp (NASDAQ:VLY) reported Q3 2023 net income of $141.3 million, slightly higher than Q2 2023's $139.1 million.
Loan growth slowed due to higher market interest rates, with total loans increasing by $220.3 million to $50.1 billion.
Total deposits increased by $265.5 million to $49.9 billion, largely due to increases in direct customer interest-bearing deposits.
Net interest income decreased by $7.6 million compared to Q2 2023 due to the impact of rising market interest rates on interest-bearing deposits.
Valley National Bancorp (NASDAQ:VLY) announced its third-quarter 2023 results on October 26, 2023. The company reported a net income of $141.3 million, or $0.27 per diluted common share, a slight increase from the second quarter 2023 net income of $139.1 million, or $0.27 per diluted common share. However, it was lower than the net income of $178.1 million, or $0.34 per diluted common share, for the third quarter of 2022.
Financial Performance
Loan growth in most categories slowed as expected during the third quarter of 2023, largely due to the impact of higher market interest rates. Total loans increased by $220.3 million, or 1.8 percent on an annualized basis, to $50.1 billion. The allowance for credit losses for loans totaled $462.3 million, representing 0.92 percent of total loans.
Net loan charge-offs totaled $5.5 million for the third quarter 2023, compared to $8.6 million for the second quarter 2023. Total accruing past due loans increased $17.8 million to $79.5 million, or 0.16 percent of total loans.
Deposits and Income
Total deposits increased by $265.5 million to $49.9 billion, largely due to increases in direct customer interest-bearing deposits. Net interest income on a tax equivalent basis of $413.7 million for the third quarter 2023 decreased by $7.6 million compared to the second quarter 2023. The decline in both net interest income and margin reflects the impact of rising market interest rates on interest-bearing deposits.
CEO's Commentary
I am extremely proud of the strength, stability, and resiliency reflected in our balance sheet during the third quarter. Our asset quality remains exceptional, and slower loan growth during the quarter contributed to improved capital ratios. Higher customer deposit balances enabled an incremental reduction in indirect CDs, while we paid off short-term borrowings to normalize our overnight cash position which was elevated in the second quarter." - Ira Robbins, CEO of Valley National Bancorp
Robbins also highlighted the completion of their transformational core conversion in early October, which he believes will support sustainable growth and better efficiency going forward.
Outlook
Valley National Bancorp's total risk-based capital, common equity Tier 1 capital, Tier 1 capital, and Tier 1 leverage capital ratios were 11.68 percent, 9.21 percent, 9.64 percent, and 8.08 percent, respectively, at the end of the third quarter 2023. The company remains committed to providing the most convenient service, the latest innovations, and an experienced and knowledgeable team dedicated to meeting customer needs.
Explore the complete 8-K earnings release (here) from Valley National Bancorp for further details.
This article first appeared on GuruFocus.
