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VALLEY NATIONAL BANCORP (VLY)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 diluted EPS was $0.18, down from $0.20 in Q4 2024 and flat YoY; total revenue was $478.4M, while tax-equivalent NIM increased 4 bps sequentially to 2.96% .
  • Management guided 2025 toward the low end for loan growth (3–5%) and net interest income (9–12%), with expenses also trending toward the low end; end‑year NIM target remains around 3.10% .
  • Funding mix improved: core customer deposits rose ~$600M enabling ~$700M brokered run‑off; average deposit cost fell 29 bps; deposit beta since Sep‑2024 cuts is 53% .
  • Credit costs moderated: provision declined to $62.7M (lowest in last four quarters), net charge‑offs fell to $41.9M, and allowance coverage rose to 1.22% of loans; non‑accrual loans decreased sequentially .
  • Near‑term catalysts: continued NIM tailwind from lower deposit costs and fixed‑rate asset repricing, plus stabilization of CRE exposure (concentration ~353%) with stronger C&I and auto demand .

What Went Well and What Went Wrong

What Went Well

  • Funding base improved: “Core deposit growth has enabled us to further reduce our reliance on indirect deposits which benefited our revenue and net interest margin” — CEO Ira Robbins .
  • Deposit costs and mix: average deposit cost declined 29 bps; ~$600M core deposit growth drove ~$700M brokered repayment; deposit beta 53% since Fed cuts — CFO Travis Lan .
  • Credit moderation: provision ($62.7M) and net charge‑offs ($41.9M) declined meaningfully from Q4; “We anticipate further improvement throughout the remainder of the year” — CEO Ira Robbins .

What Went Wrong

  • Slight revenue/EPS miss vs consensus and sequential NII headwind: NII fell ~$2.9M due to two fewer days; diluted EPS $0.18 below consensus $0.19* .
  • Spread compression: competitive pressure in C&I tightened lending spreads; guide assumes some additional compression .
  • CRE still elevated (though improving): regulatory CRE concentration ~353%; allowance coverage increased to 1.22% as ACL built with C&I growth .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Total Revenue ($USD Thousands)$471,169 $474,179 $478,399
Net Interest Income ($USD Thousands)$410,498 $422,977 $420,105
Non-Interest Income ($USD Thousands)$60,671 $51,202 $58,294
Provision for Credit Losses ($USD Thousands)$75,024 $106,536 $62,661
Diluted EPS ($USD)$0.18 $0.20 $0.18
Net Interest Margin (FTE, %)2.86% 2.92% 2.96%
Efficiency Ratio (%)56.13% 57.21% 55.87%

Consensus vs Reported

MetricQ1 2024Q4 2024Q1 2025
EPS Consensus Mean ($)0.20075*0.13811*0.18993*
Diluted EPS (Company, $)0.18 0.13 (as adjusted), 0.20 reported 0.18
Revenue Consensus Mean ($USD)450,913,000*467,965,340*483,298,460*
Total Revenue (Company, $USD)454,963,000 474,179,000 478,399,000

Values with * retrieved from S&P Global.

Segment/Balance Mix

Category ($USD ‘000s unless %)Sep 30, 2024Dec 31, 2024Mar 31, 2025
Total Loans$49,355,319 $48,799,711 $48,657,128
C&I Loans$9,799,287 $9,931,400 $10,150,205
CRE – Non‑Owner Occupied$12,647,649 $12,344,355 $11,945,222
CRE – Multifamily$8,612,936 $8,299,250 $8,420,385
Construction$3,487,464 $3,114,733 $3,026,935
Auto Loans$1,823,738 $1,901,065 $2,041,227
Total Deposits$50,395,966 $50,075,857 $49,965,844
Noninterest Deposits ($)$11,153,754 $11,428,674 $11,628,578
Savings/NOW/MM ($)$25,069,405 $26,304,639 $26,413,258
Time Deposits ($)$14,172,807 $12,342,544 $11,924,008
CRE Concentration (regulatory, %)~474% (end‑2023) → 362% (Dec‑24) 362% ~353%

Key KPIs

KPIQ3 2024Q4 2024Q1 2025
Non‑Accrual Loans ($)$296,319 $359,498 $346,451
Accruing Past Due Loans ($)$174,696 $99,194 $51,697
ACL as % of Total Loans1.14% 1.17% 1.22%
Net Loan Charge‑Offs ($)$42,908 $98,308 $41,949
ROA (Annualized, %)0.63% 0.74% 0.69%
ROE (Annualized, %)5.70% 6.38% 5.69%
Tangible Book Value/Share ($)$9.06 $9.10 $9.21
Tier 1 Leverage Capital (%)8.40% 9.16% 9.41%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Loan GrowthFY 20253%–5% Low end of 3%–5% Lowered within range
Net Interest Income GrowthFY 20259%–12% Low end of 9%–12% Lowered within range
Adjusted Non‑Interest Income GrowthFY 20256%–10% midpoint Midpoint remains reasonable Maintained
Expense GrowthFY 2025Prior range Toward low end; tight control Lowered within range
Net Interest Margin (tax‑eq)YE 2025Target around ~3.10% Reiterated ~3.10% Maintained
Tax RateFY 2025No change No change Maintained
Credit Costs (NCOs, Provision)FY 2025 vs 2024~50% decline expected ~50% decline expected Maintained
Core Deposit GrowthFY 2025~6% expectation On track (Q1 annualized ~5.5%) Maintained
Brokered CDs Run‑OffNext 12 monthsNoted in prior deck~$6B majority maturing; refinance into core Operational plan
DividendQuarterly$0.11 declared Q4/Q1 $0.11 declared in Q1 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Funding mix & deposit costsQ3: early NIM expansion; indirect deposits stable . Q4: strong reduction in brokered; deposit cost down 31 bps Core deposits +$600M; ~$700M brokered run‑off; avg deposit cost −29 bps; beta 53% Positive mix; costs declining
CRE concentration & portfolio actionsQ3: transfer/sale of ~$800M CRE; concentration path down . Q4: concentration to 362% ~353%; originations to pick up; stabilization expected Improving, stabilizing
C&I and auto growthQ3: C&I +13.5% annualized; auto growth 9% annualized C&I; strong auto demand Sustained growth
Margin outlookQ3: NIM up to 2.86% . Q4: 2.92% 2.96%; YE target ~3.10% Upward trajectory
Credit costs & reservesQ3/Q4: elevated provisions; hurricane impacts; ACL rising Provision lowest in 4 quarters; ACL 1.22%; NCOs down Moderating
Macro/tariffsQ4: macro normalization Management sees limited tariff impact on CRE; customers resilient Watchful, limited exposure

Management Commentary

  • “We anticipate that additional core deposit growth will create a sustainable tailwind despite the volatility in the current operating environment” — Ira Robbins, CEO .
  • “Core customer deposits increased $600 million…our average cost of deposits declined by 29 basis points” — Travis Lan, CFO .
  • “There is no change to our full year expectations for a roughly 50% decline [in charge‑offs and provision] from 2024” — Ira Robbins .
  • “We believe our allowance coverage to total loans is at a comfortable level… Non‑accrual loans and early stage delinquencies also improved sequentially” — Ira Robbins .
  • “New originations…were about [680 bps], a combination of lower benchmark rates and compression in spreads” — Travis Lan .

Q&A Highlights

  • Deposit growth and brokered run‑off: Plan to continue paying down brokered CDs; ~$6B pool largely maturing in next 12 months; securities growth a toggle vs loan growth .
  • Spread compression: Competitive pressure in high‑quality C&I; guide assumes some additional compression; more from banks than private credit in C&I .
  • Loan growth trajectory: Q2 can be a growth quarter; pipeline >$2.7B approved/pre‑approved vs ~$2B last quarter end .
  • Credit updates: Q4 nonperformers addressed; Q1 C&I charge‑offs tied to fraud events; early‑stage delinquencies at very low levels; allowance outlook stable .
  • Expense outlook: Payroll taxes normalize in Q2 (+$4M); marketing/professional fees may rise, but overall operating leverage positive .

Estimates Context

  • EPS: Q1 2025 diluted EPS was $0.18 vs S&P Global consensus $0.18993 (slight miss); Q4 2024 EPS $0.13 (as adjusted) vs $0.13811 consensus (in line to slight miss); Q1 2024 $0.18 vs $0.20075 consensus (miss)* .
  • Revenue: Company total revenue $478.4M vs consensus $483.3M (slight miss); note SPGI may use a different revenue definition than company “total revenue,” causing SPGI “actuals” to differ from company‑reported totals* .
  • Implication: Modest near‑term estimate risk to EPS from spread compression and lower day count already flagged by management; NIM tailwinds and fee momentum (capital markets, deposit service pricing) support out‑quarter stabilization .

Values with * retrieved from S&P Global.

Additional Q1 2025 Press Releases

  • Earnings press release: First Quarter 2025 Results (financials and commentary) –.
  • Scheduling: Valley National Bancorp to Announce First Quarter 2025 Earnings (call logistics) .
  • Leadership: New Commercial Banking President (market expansion) .

Key Takeaways for Investors

  • Funding tailwind is durable: core deposit inflows, lower costs, and brokered runoff should continue to expand NIM toward ~3.10% by YE 2025 .
  • CRE exposure stabilizing: concentration improved to ~353% and management expects originations to pick up while maintaining discipline; watch for continued mix shift to C&I/auto .
  • Credit normalization underway: provision at lowest level in 4 quarters with strong early‑stage delinquency metrics; monitor idiosyncratic C&I fraud events but trend supportive .
  • Expense control provides operating leverage: adjusted non‑interest expense down 3% sequentially; some seasonal normalization in Q2, but full‑year guide toward low end .
  • Short‑term setup: modest EPS/revenue misses and spread compression are known; upside pivots on sustained deposit cost declines and pipeline conversion into loans .
  • Medium‑term thesis: diversified lending (C&I, auto), capital strength (Tier 1 leverage 9.41%), and tangible book growth underpin earnings momentum as rate tailwinds accrue .
  • Watch items: competitive intensity in C&I spreads, pace of CRE originations, and brokered CD runoff execution against core growth plan .