Jon Rau

Jon Rau from Barclays asked about specific commercial real estate (CRE) borrower segments that might be struggling to find alternative capital sources, particularly rent-regulated multifamily properties. He also inquired about the expectation for professional fees to remain elevated into 2026 and the reasons behind the increase, and sought confirmation that no loss is expected on a specific land loan undergoing refinance.

Answer

Chief Credit Officer Mark Saeger noted positive trends in the office market but identified rent-stabilized multifamily in New York as a stagnant segment, though it represents a small, non-growth part of Valley National Bancorp's portfolio. CEO Ira Robbins explained that elevated professional fees are due to temporary consultant engagements for operating model and organizational design, offset by savings elsewhere, and are expected to continue into the first half of 2026. Chief Credit Officer Mark Saeger confirmed that no loss is anticipated on the land loan due to adequate value.

Jon Rau inquired if any specific Commercial Real Estate (CRE) borrower segments, such as rent-regulated multifamily, are experiencing greater difficulty in finding alternative capital sources. He also asked about the expectation for professional fees to remain elevated into 2026 and the drivers behind the recent increase, and sought confirmation of no loss on the land loan being refinanced.

Answer

Mark Saeger, Chief Credit Officer, noted positive trends in the office market but stagnation in rent-stabilized multifamily in New York, which is a small, non-growth portfolio for Valley. Ira Robbins, CEO, stated that professional fees are expected to remain at current levels into the first half of 2026, driven by consultants assisting with efficiency and organizational design, with these costs offset by savings elsewhere. Mark Saeger, Chief Credit Officer, confirmed no loss is anticipated on the land loan due to adequate value.

Jon Rau, on behalf of Jared Shaw at Barclays, asked about the competitive environment in New Jersey and any shift in customer sentiment versus New York due to the mayoral race. He also inquired about the expected CRE runoff headwind in 2026 and the potential for total loan growth that year.

Answer

Chairman & CEO Ira Robbins noted a 'wait and see' approach from clients active in both NJ and NY, but long-term investors may see opportunity in New York. SEVP & CFO Travis Lan added that the NY C&I pipeline remains robust. For 2026, Lan anticipates CRE balances will stabilize by year-end 2025 and will not be a headwind, potentially growing in the low single digits. While not providing formal guidance, he suggested that neutralizing the 2025 CRE runoff could lead to total loan growth closer to 5% in 2026.

Jon Rau, on behalf of Jared Shaw at Barclays, asked about the competitive environment in New Jersey and any shifts in customer sentiment between New Jersey and New York, given the NYC mayoral race. He also inquired about the 2026 loan growth outlook, particularly the expected headwind from CRE runoff.

Answer

Chairman & CEO Ira Robbins noted that clients are taking a 'wait and see' approach but that long-term generational clients see potential investment opportunities in New York. SEVP & CFO Travis Lan added that the New York C&I pipeline is currently strong. Regarding 2026, Travis Lan stated he does not expect CRE to be a headwind and anticipates balances will stabilize by year-end 2025, potentially leading to total loan growth closer to 5% in 2026, though no official guidance has been provided.

Jon Rau, on behalf of Jared Shaw at Barclays, asked about the competitive dynamics and customer sentiment in New Jersey versus New York, especially considering the NYC mayoral race. He also inquired about the outlook for CRE loan runoff and total loan growth into 2026.

Answer

Chairman & CEO Ira Robbins noted that while some clients are in a 'wait and see' mode, long-term investors see potential opportunities in New York. SEVP & CFO Travis Lan added that the NYC C&I pipeline strengthened during the quarter. For 2026, Lan anticipates CRE balances will stabilize and return to low-single-digit growth, which could push total loan growth toward 5%, although official 2026 guidance has not been issued.

Jon Rau, on behalf of Jared Shaw from Barclays, inquired about the competitive dynamics in New Jersey versus New York and any shifts in customer sentiment. He also asked for the 2026 loan growth outlook, particularly regarding the expected impact from CRE runoff.

Answer

Chairman & CEO Ira Robbins noted that clients are taking a 'wait and see' approach but that long-term investors may see opportunities in New York. SEVP & CFO Travis Lan added that the New York C&I pipeline remains strong. For 2026, Lan anticipates CRE balances will stabilize by year-end 2025 and will not be a headwind, projecting low single-digit growth. He suggested that neutralizing the 2025 CRE runoff could imply a total loan growth rate closer to 5% for 2026, though no official guidance was provided.

Jon Rau, on behalf of Jared Shaw at Barclays, asked about the competitive dynamics in New Jersey versus New York and if the NYC mayoral race was affecting customer sentiment. He also inquired about the outlook for CRE runoff and total loan growth into 2026.

Answer

Chairman & CEO Ira Robbins noted a 'wait-and-see' approach from some clients regarding capital allocation but stressed that their long-term generational clients see potential opportunities in New York. SEVP & CFO Travis Lan added that the New York C&I pipeline remains strong. For 2026, Lan stated he does not anticipate CRE being a headwind to growth and that balances should stabilize by year-end 2025. While no formal guidance was given, he suggested that neutralizing the CRE runoff could result in total loan growth closer to 5% in 2026.

Jon Rau of Barclays, on for Jared Shaw, asked for an update on a large office NPL, recent tech investments for bankers, and flexibility in the hiring timeline.

Answer

EVP & Chief Credit Officer Anne Fortner clarified the NPL involves two properties from one relationship, with a recent charge-off on one and adequate reserves on the other. CEO Kevin Blair listed numerous tech investments (nCino, treasury tools) and stated they would hire talent when available, not strictly adhering to a planned number if the right opportunity arises.