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Valley National Bancorp’s VLY fourth-quarter 2024 adjusted earnings per share (EPS) of 13 cents missed the Zacks Consensus Estimate of 15 cents. Further, the bottom line plunged 40.9% on a year-over-year basis.
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A substantial rise in provisions on year-over-year basis, lower non-interest income, higher adjusted expenses and a sequential decline in loans and deposit balance affected the results. Nonetheless, a rise in net interest income (NII) supported the results.
Results excluded non-core income and charges. After considering these, net income was $115.7 million, up 61.7% from the year-ago quarter.
For 2024, adjusted earnings of 62 cents per share missed the consensus estimate of 64 cents and declined 41.5% year over year. Net income available to common shareholders (GAAP basis) was $358.9 million or 69 cents per share, down from $482.4 million or 95 cents per share in 2023.
Valley National’s Revenues Rise, Adjusted Expenses Up
Quarterly total revenues were $474.2 million, up 5.4% year over year. The top line beat the Zacks Consensus Estimate of $469.5 million.
For 2024, total revenues fell 2% to $1.85 billion. Nonetheless, the top line met the consensus estimate.
NII (fully-taxable-equivalent or FTE basis) was $424.3 million, up 6.4%. Net interest margin (FTE basis) was 2.92%, up 10 basis points (bps).
Non-interest income declined 2.8% to $51.2 million. The fall was due to lower net gains on securities transactions, and net losses on sales of loans alongside a decrease in bank owned life insurance and other income.
Non-interest expenses of $278.6 million declined 18.2%. Meanwhile, adjusted non-interest expenses rose 1.2% to $275.8 million.
The adjusted efficiency ratio was 57.21%, down from 60.70% in the prior-year quarter. A decline in the efficiency ratio indicates an improvement in profitability.
VLY’s Loans & Deposits
As of Dec. 31, 2024, total loans were $48.8 billion, down 1.1% sequentially. The fall was mainly due to repayment activity within commercial real estate (CRE) non-owner occupied and multifamily loan categories during the quarter.
Further, on Dec. 3, 2024, Valley National sold the abovementioned CRE loans at a nominal discount of roughly 1% to Brookfield Asset Management BAM for about $823 million. Out of these loans sold to BAM, nearly $151 million and $76 million of CRE loans and residential mortgage loans, respectively, were not identified as loans held for sale on Sept. 30, 2024.
As of Dec. 31, 2024, total deposits amounted to $50.1 billion, down marginally from the prior quarter.