VLY Valley National Bancorp

 Valley National Bancorp (NASDAQ:VLY), the holding company for Valley National Bank, today reported net income for the fourth quarter 2023 of $71.6 million, or $0.13 per diluted common share, as compared to the fourth quarter 2022 net income of $177.6 million, or $0.34 per diluted common share, and net income of $141.3 million, or $0.27 per diluted common share, for the third quarter 2023. Excluding all non-core items, our adjusted net income (a non-GAAP measure) was $116.3 million, or $0.22 per diluted common share, for the fourth quarter 2023, $182.9 million, or $0.35 per diluted common share, for the fourth quarter 2022, and $136.4 million, or $0.26 per diluted common share, for the third quarter 2023. See further details below, including a reconciliation of our adjusted net income in the "Consolidated Financial Highlights" tables.

Key Financial Highlights for the Fourth Quarter 2023:

• Loan Portfolio: Loan growth in most categories remained at modest levels during the fourth quarter 2023 due to the ongoing impact of elevated market interest rates and other factors. Total loans increased $112.8 million, or 1.0 percent on an annualized basis, to $50.2 billion at December 31, 2023 from September 30, 2023, mainly as a result of well-controlled organic loan growth in the commercial real estate and consumer loan categories. Annualized loan growth totaled 7.0 percent for the year ended December 31, 2023. See the "Loans" section below for more details.
• Allowance and Provision for Credit Losses for Loans: The allowance for credit losses for loans totaled $465.6 million and $462.3 million at December 31, 2023 and September 30, 2023, respectively, representing 0.93 percent and 0.92 percent of total loans at each respective date. During the fourth quarter 2023, the provision for credit losses for loans was $20.7 million as compared to $9.1 million and $7.3 million for the third quarter 2023 and fourth quarter 2022, respectively. See the "Credit Quality" section below for more details.
• Credit Quality: Net loan charge-offs totaled $17.5 million for the fourth quarter 2023 as compared to $5.5 million and $22.4 million for the third quarter 2023 and fourth quarter 2022, respectively. The loan charge-offs in the fourth quarter 2023 were primarily due to partial charge-offs of certain non-performing loan relationships in the commercial loan categories. Total accruing past due loans increased $12.1 million to $91.6 million, or 0.18 percent of total loans, at December 31, 2023 as compared to $79.5 million, or 0.16 percent of total loans, at September 30, 2023. Non-accrual loans represented 0.58 percent and 0.52 percent of total loans at December 31, 2023 and September 30, 2023, respectively. See the "Credit Quality" section below for more details.
• Deposits: Total deposits decreased $642.5 million to $49.2 billion at December 31, 2023 as compared to $49.9 billion at September 30, 2023. During the fourth quarter 2023, a $2.4 billion reduction in indirect customer time deposits was partially offset by $1.7 billion of direct customer deposit inflows across the franchise. See the "Deposits" section below for more details.
• Net Interest Income and Margin: Net interest income on a tax equivalent basis of $398.6 million for the fourth quarter 2023 decreased $15.1 million and $68.7 million as compared to the third quarter 2023 and fourth quarter 2022, respectively. Our net interest margin on a tax equivalent basis decreased by 9 basis points to 2.82 percent in the fourth quarter 2023 as compared to 2.91 percent for the third quarter 2023. The decline in both net interest income and margin as compared to the linked third quarter reflects the ongoing repricing of our interest bearing deposits, net of a 7 basis point increase in the yield of average interest earnings assets for the fourth quarter 2023. See the "Net Interest Income and Margin" section below for more details.
• Non-Interest Income: Non-interest income decreased $6.0 million to $52.7 million for the fourth quarter 2023 as compared to the third quarter 2023 mainly due to a $6.8 million decrease in net gains on sales of assets (primarily caused by the net gain on sale of non-branch offices during the third quarter 2023).
• Non-Interest Expense: Non-interest expense increased $73.3 million to $340.4 million for the fourth quarter 2023 as compared to the third quarter 2023 largely due to non-core charges of $50.3 million and $10.0 million related to the FDIC special assessment and the termination of certain technology contracts, respectively, during the fourth quarter 2023. Professional and legal fees increased $8.1 million as compared to the third quarter 2023 due, in part, to elevated consulting expenses related to our new core banking system implemented in early October 2023, as well as additional non-core legal reserves and settlement charges totaling a combined $3.5 million during the fourth quarter 2023.
• Income Tax Expense: Our effective tax rate was 19.6 percent for the fourth quarter 2023 as compared to 27.5 percent for the third quarter 2023. The decrease was mostly due to an increase in tax credits caused by additional tax credit investments during the fourth quarter 2023.
• Efficiency Ratio: Our efficiency ratio was 60.70 percent for the fourth quarter 2023 as compared to 56.72 percent and 49.30 percent for the third quarter 2023 and fourth quarter 2022, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.
• Performance Ratios: Annualized return on average assets (ROA), shareholders’ equity (ROE), and tangible ROE were 0.47 percent, 4.31 percent, and 6.21 percent for the fourth quarter 2023, respectively. Annualized ROA, ROE, and tangible ROE, adjusted for non-core items, were 0.76 percent, 7.01 percent, and 10.10 percent for the fourth quarter 2023, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.

In January 2024, we entered an agreement to sell our commercial premium finance lending business and a significant portion of its outstanding loan portfolio. This line of business represented $274.7 million, or 0.55 percent of our total loans outstanding at December 31, 2023. Actual loans to be sold as part of this transaction will be identified shortly before the close date. Loans retained from this line of business are expected to mostly run-off at their normal maturity dates over the next 12 months. The pending transaction is expected to close during the first quarter 2024 and is not anticipated to be material to our operations or financial statements.

Ira Robbins, CEO, commented, "The year of 2023 presented significant challenges for most of the banking industry and Valley. That said, I am pleased with our ability to respond to the challenges early in the year, and find opportunities to enhance our funding and capital position as the year progressed. This, along with our asset quality, is a testament to our dedicated associates and diversified business model."

Mr. Robbins continued, "As we look forward to 2024, we will continue our efforts to build the value of our franchise with a focus on our key strategic priorities, including further diversifying our loan portfolio, enhancing our core funding base, and lastly improving our non-interest income sources. We believe that these initiatives, and a continued emphasis on providing premier relationship banking services, will further differentiate Valley as a leading regional bank."

Net Interest Income and Margin

Net interest income on a tax equivalent basis totaling $398.6 million for the fourth quarter 2023 decreased $15.1 million and $68.7 million as compared to the third quarter 2023 and fourth quarter 2022, respectively. The decrease as compared to the third quarter 2023 was mainly due to increased interest rates on most interest bearing deposit products, partially offset by higher loan yields and a decline in average time deposit balances. As a result of the higher cost of deposits, total interest expense increased $20.3 million to $420.9 million for the fourth quarter 2023 as compared to the third quarter 2023. Interest income on a tax equivalent basis increased $5.2 million to $819.5 million for the fourth quarter 2023 as compared to the third quarter 2023. The increase in the fourth quarter 2023 was mostly due to higher yields on both new originations and adjustable rate loans in our portfolio, as well as higher yields on investments, partially offset by a decline in average interest bearing deposits with banks as overnight excess cash liquidity was reduced as compared to the third quarter 2023.

Net interest margin on a tax equivalent basis of 2.82 percent for the fourth quarter 2023 decreased 9 basis points and 75 basis points from 2.91 percent and 3.57 percent, respectively, for the third quarter 2023 and fourth quarter 2022. The decrease as compared to the third quarter 2023 was largely driven by higher interest rates on interest bearing deposits, partially offset by an increase in the yield on average interest earning assets. Our cost of total average deposits was 3.13 percent for the fourth quarter 2023 as compared to 2.94 percent for the third quarter 2023. The overall cost of average interest-bearing liabilities increased by 21 basis points to 4.13 percent for the fourth quarter 2023 as compared to the linked third quarter 2023 primarily driven by the continued rise in market interest rates on deposits. The yield on average interest earning assets increased by 7 basis points to 5.80 basis points on a linked quarter basis largely due to the increased yield of the loan portfolio. The yield on average loans increased to 6.10 percent for the fourth quarter 2023 from 6.03 percent for the third quarter 2023 mostly due to the higher level of market interest rates on new originations and adjustable rate loans.

Loans, Deposits and Other Borrowings

Loans. Total loans modestly increased to approximately $112.8 million to $50.2 billion at December 31, 2023 from September 30, 2023 mainly due to well-controlled organic loan growth in the commercial real estate and consumer loan categories. Total commercial real estate (including construction) loans increased $95.7 million or 1.2 percent on an annualized basis during the fourth quarter 2023. Automobile loans increased by $34.4 million, or 8.7 percent on an annualized basis during the fourth quarter 2023 partly due to an uptick in demand for commercial vehicle financing. At December 31, 2023, the residential mortgage loan portfolio totaled $5.6 billion and remained relatively unchanged as compared to September 30, 2023. During the fourth quarter 2023, we sold $49.9 million of residential mortgage loans originated for sale as compared to $80.8 million in the third quarter 2023.

Deposits. Total deposits decreased $642.5 million to approximately $49.2 billion at December 31, 2023 from September 30, 2023 mainly due to a decline of $1.9 billion in time deposits, partially offset by a $1.4 billion increase in savings, NOW and money market deposits. The decrease in time deposits was largely due to maturities of indirect customer time deposits, which were partially offset by the origination of new direct time deposits. The increase in savings, NOW and money market deposits was mostly broad-based, reflecting strong customer inflows from both our physical branch and online delivery channels, as well as our niche deposit businesses. Non-interest bearing balances remained relatively stable as compared to September 30, 2023, as outflows slowed significantly during the fourth quarter 2023. Non-interest bearing deposits; savings, NOW, and money market deposits; and time deposits represented approximately 23 percent, 50 percent and 27 percent of total deposits as of December 31, 2023, respectively, as compared to 24 percent, 46 percent and 30 percent of total deposits as of September 30, 2023, respectively.

Other Borrowings. Short-term borrowings increased $828.0 million to approximately $917.8 million at December 31, 2023 as compared to September 30, 2023 mainly due to greater utilization of FHLB advances as part of our liquidity management strategies as of December 31, 2023 and a corresponding decline in indirect customer time deposits (see the "Deposits" section above). Long-term borrowings totaled $2.3 billion at December 31, 2023 and remained relatively unchanged as compared to September 30, 2023.

Credit Quality

Non-Performing Assets (NPAs). Total NPAs, consisting of non-accrual loans, other real estate owned (OREO) and other repossessed assets increased $33.1 million to $293.4 million at December 31, 2023 compared to $260.3 million at September 30, 2023 largely due to higher non-accrual loan balances within commercial loans categories. Non-accrual commercial real estate and commercial and industrial loans increased $16.4 million and $12.3 million, respectively, as compared to September 30, 2023. These increases were mostly driven by a few new non-performing loan relationships, partially offset by full repayments of two non-accrual commercial real estate loans totaling $12.7 million during the fourth quarter 2023. Non-accrual loans represented 0.58 percent of total loans at December 31, 2023 as compared to 0.52 percent of total loans at September 30, 2023. Within non-accrual commercial real estate loans at December 31, 2023, one loan totaling $9.1 million, net of partial charge-offs of $1.5 million during the fourth quarter 2023, was paid off in early January 2024.

Accruing Past Due Loans. Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) increased $12.1 million to $91.6 million, or 0.18 percent of total loans, at December 31, 2023 as compared to $79.5 million, or 0.16 percent of total loans, at September 30, 2023. Loans 30 to 59 days past due increased $11.8 million to $59.2 million at December 31, 2023 as compared to September 30, 2023 largely due to higher residential mortgage delinquencies, partially offset by declines in commercial real estate and commercial and industrial loans within this early stage delinquency category. Loans 90 days or more past due totaled $13.1 million at December 31, 2023 as compared to $12.4 million at September 30, 2023. All loans 90 days or more past due and still accruing interest are well-secured and in the process of collection.

Allowance for Credit Losses for Loans and Unfunded Commitments. The following table summarizes the allocation of the allowance for credit losses to loan categories and the allocation as a percentage of each loan category at December 31, 2023, September 30, 2023, and December 31, 2022:

		December 31, 2023						September 30, 2023						December 31, 2022
					Allocation						Allocation						Allocation
					as a % of						as a % of						as a % of
		Allowance			Loan			Allowance			Loan			Allowance			Loan
		Allocation			Category			Allocation			Category			Allocation			Category
		($ in thousands)
Loan Category:
Commercial and industrial loans		$	133,359		1.44	%		$	133,988		1.44	%		$	139,941		1.59	%
Commercial real estate loans:
	Commercial real estate		194,820		0.69				191,562		0.68				200,421		0.78
	Construction		54,778		1.47				53,485		1.40				58,987		1.59
Total commercial real estate loans			249,598		0.78				245,047		0.77				259,408		0.88
Residential mortgage loans			42,957		0.77				44,621		0.80				39,020		0.73
Consumer loans:
	Home equity		3,429		0.61				3,689		0.67				4,333		0.86
	Auto and other consumer		16,737		0.58				14,830		0.52				15,953		0.57
Total consumer loans			20,166		0.59				18,519		0.55				20,286		0.61
Allowance for loan losses			446,080		0.89				442,175		0.88				458,655		0.98
Allowance for unfunded credit commitments			19,470						20,170						24,600
Total allowance for credit losses for loans		$	465,550					$	462,345					$	483,255
Allowance for credit losses for
loans as a % loans					0.93	%					0.92	%					1.03	%

Our loan portfolio, totaling $50.2 billion at December 31, 2023, had net loan charge-offs totaling $17.5 million for the fourth quarter 2023 as compared to $5.5 million and $22.4 million for the third quarter 2023 and the fourth quarter 2022, respectively. Gross charge-offs totaled $22.6 million for the fourth quarter 2023 and largely consisted of partial loan charge-offs in the commercial loan categories, including approximately $4.7 million of gross loan charge-offs related to our premium finance lending business expected to be sold during the first quarter 2024.

The allowance for credit losses for loans, comprised of our allowance for loan losses and unfunded credit commitments, as a percentage of total loans was 0.93 percent at December 31, 2023, 0.92 percent at September 30, 2023 and 1.03 percent at December 31, 2022. During the fourth quarter 2023, the provision for credit losses for loans totaled $20.7 million as compared to $9.1 million for the third quarter 2023 and $7.3 million for the fourth quarter 2022. The provision for credit losses for the fourth quarter 2023 reflects, among other factors, an increase in quantitative reserves largely related to classified loans within the commercial portfolios and higher specific reserves associated with collateral dependent loans, partially offset by lower qualitative and economic forecast reserves at December 31, 2023.

Capital Adequacy

Valley's regulatory capital ratios continue to reflect its well-capitalized position. Valley's total risk-based capital, Tier 1 capital, common equity Tier 1 capital, and Tier 1 leverage capital ratios were 11.76 percent, 9.72 percent, 9.29 percent, and 8.16 percent, respectively, at December 31, 2023.

Investor Conference Call

Valley will host a conference call with investors and the financial community at 11:00 A.M. Eastern Standard Time, today to discuss the fourth quarter 2023 earnings and related matters. Interested parties should pre-register using this link: https://register.vevent.com/register to receive the dial-in number and a personal PIN, which are required to access the conference call. The teleconference will also be webcast live: https://edge.media-server.com/ and archived on Valley’s website through February 29, 2024.

About Valley

As the principal subsidiary of Valley National Bancorp, Valley National Bank is a regional bank with approximately $61 billion in assets. Valley is committed to giving people and businesses the power to succeed. Valley operates many convenient branch locations and commercial banking offices across New Jersey, New York, Florida, Alabama, California, and Illinois, and is committed to providing the most convenient service, the latest innovations and an experienced and knowledgeable team dedicated to meeting customer needs. Helping communities grow and prosper is the heart of Valley’s corporate citizenship philosophy. To learn more about Valley, go to www.valley.com or call our Customer Care Center at 800-522-4100.

Forward Looking Statements

The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about our business, new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology as “intend,” “should,” “expect,” “believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “typically,” “usually,” “anticipate,” “may,” “estimate,” “outlook,” “project” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:

• the impact of monetary and fiscal policies of the federal government and its agencies, including in response to higher inflation, which could have a material adverse effect on our clients, as well as our business, our employees, and our ability to provide services to our customers;
• the impact of a potential U.S. Government shutdown, default by the U.S. government on its debt obligations, or related credit-rating downgrades, on economic activity in the markets in which we operate and, in general, on levels of end market demand in the economy;
• the impact of unfavorable macroeconomic conditions or downturns, instability or volatility in financial markets, unanticipated loan delinquencies, loss of collateral, decreased service revenues, increased business disruptions or failures, reductions in employment, and other potential negative effects on our business, employees or clients caused by factors outside of our control, such as geopolitical instabilities or events (including the Israel-Hamas war); natural and other disasters (including severe weather events); health emergencies; acts of terrorism or other external events;
• risks associated with our acquisition of Bank Leumi Le-Israel Corporation (Bank Leumi USA), including (i) the inability to realize expected cost savings and synergies from the acquisition in the amounts or timeframe anticipated and (ii) greater than expected costs or difficulties relating to integration as part of Valley's new core banking system implemented in the fourth quarter 2023;
• the impact of potential instability within the U.S. financial sector in the aftermath of the banking failures in 2023, including the possibility of a run on deposits by a coordinated deposit base, and the impact of the actual or perceived soundness, or concerns about the creditworthiness of other financial institutions, including any resulting disruption within the financial markets, increased expenses, including FDIC insurance premiums, or adverse impact on our stock price, deposits or our ability to borrow or raise capital;
• the impact of negative public opinion regarding Valley or banks in general that damages our reputation and adversely impacts business and revenues;
• the loss of or decrease in lower-cost funding sources within our deposit base;
• damage verdicts or settlements or restrictions related to existing or potential class action litigation or individual litigation arising from claims of violations of laws or regulations, contractual claims, breach of fiduciary responsibility, negligence, fraud, environmental laws, patent, trademark or other intellectual property infringement, misappropriation or other violation, employment related claims, and other matters;
• a prolonged downturn in the economy, as well as an unexpected decline in commercial real estate values collateralizing a significant portion of our loan portfolio;
• higher or lower than expected income tax expense or tax rates, including increases or decreases resulting from changes in uncertain tax position liabilities, tax laws, regulations and case law;
• the inability to grow customer deposits to keep pace with loan growth;
• a material change in our allowance for credit losses under CECL due to forecasted economic conditions and/or unexpected credit deterioration in our loan and investment portfolios;
• the need to supplement debt or equity capital to maintain or exceed internal capital thresholds;
• greater than expected technology related costs due to, among other factors, prolonged or failed implementations, additional project staffing and obsolescence caused by continuous and rapid market innovations;
• cyberattacks, ransomware attacks, computer viruses, malware or other cybersecurity incidents that may breach the security of our websites or other systems or networks to obtain unauthorized access to personal, confidential, proprietary or sensitive information, destroy data, disable or degrade service, or sabotage our systems or networks;
• results of examinations by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Bank, the Consumer Financial Protection Bureau (CFPB) and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for credit losses, write-down assets, reimburse customers, change the way we do business, or limit or eliminate certain other banking activities;
• our inability or determination not to pay dividends at current levels, or at all, because of inadequate earnings, regulatory restrictions or limitations, changes in our capital requirements or a decision to increase capital by retaining more earnings;
• unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, pandemics or other public health crises, acts of terrorism or other external events; and
• unexpected significant declines in the loan portfolio due to the lack of economic expansion, increased competition, large prepayments, changes in regulatory lending guidance or other factors.

A detailed discussion of factors that could affect our results is included in our SEC filings, including the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2022 and in Item 1A of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.

The financial results and disclosures reported in this release are preliminary. Final 2023 financial results and other disclosures will be reported in our Annual Report on Form 10-K for the year ended December 31, 2023, and may differ materially from the results and disclosures in this document due to, among other things, the completion of final review procedures, the occurrence of subsequent events, or the discovery of additional information.

We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations, except as required by law. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

-Tables to Follow-

SELECTED FINANCIAL DATA

	Three Months Ended												Years Ended
	December 31,				September 30,				December 31,				December 31,
($ in thousands, except for share data)		2023				2023				2022				2023				2022
FINANCIAL DATA:
Net interest income - FTE (1)	$	398,581			$	413,657			$	467,233			$	1,670,973			$	1,660,468
Net interest income		397,275				412,418				465,819				1,665,478				1,655,640
Non-interest income		52,691				58,664				52,796				225,729				206,793
Total revenue		449,966				471,082				518,615				1,891,207				1,862,433
Non-interest expense		340,421				267,133				266,240				1,162,691				1,024,949
Pre-provision net revenue		109,545				203,949				252,375				728,516				837,484
Provision for credit losses		20,580				9,117				7,239				50,184				56,817
Income tax expense		17,411				53,486				67,545				179,821				211,816
Net income		71,554				141,346				177,591				498,511				568,851
Dividends on preferred stock		4,104				4,127				3,630				16,135				13,146
Net income available to common stockholders	$	67,450			$	137,219			$	173,961			$	482,376			$	555,705
Weighted average number of common shares outstanding:
Basic		507,683,229				507,650,668				506,359,704				507,532,365				485,434,918
Diluted		509,714,526				509,256,599				509,301,813				509,245,768				487,817,710
Per common share data:
Basic earnings	$	0.13			$	0.27			$	0.34			$	0.95			$	1.14
Diluted earnings		0.13				0.27				0.34				0.95				1.14
Cash dividends declared		0.11				0.11				0.11				0.44				0.44
Closing stock price - high		11.10				10.30				12.92				12.59				15.02
Closing stock price - low		7.71				7.63				10.96				6.59				10.14
FINANCIAL RATIOS:
Net interest margin		2.81	%			2.90	%			3.56	%			2.95	%			3.44	%
Net interest margin - FTE (1)		2.82				2.91				3.57				2.96				3.45
Annualized return on average assets		0.47				0.92				1.25				0.82				1.09
Annualized return on avg. shareholders' equity		4.31				8.56				11.23				7.60				9.50
NON-GAAP FINANCIAL DATA AND RATIOS: (3)
Basic earnings per share, as adjusted	$	0.22			$	0.26			$	0.35			$	1.06			$	1.31
Diluted earnings per share, as adjusted		0.22				0.26				0.35				1.06				1.31
Annualized return on average assets, as adjusted		0.76	%			0.89	%			1.29	%			0.91	%			1.25	%
Annualized return on average shareholders' equity, as adjusted		7.01				8.26				11.56				8.45				10.87
Annualized return on avg. tangible shareholders' equity		6.21	%			12.39	%			16.70	%			11.05	%			14.08	%
Annualized return on average tangible shareholders' equity, as adjusted		10.10				11.95				17.20				12.29				16.10
Efficiency ratio		60.70				56.72				49.30				56.62				50.55
AVERAGE BALANCE SHEET ITEMS:
Assets	$	61,113,553			$	61,391,688			$	56,913,215			$	61,065,897			$	52,182,310
Interest earning assets		56,469,468				56,802,565				52,405,601				56,500,528				48,067,381
Loans		50,039,429				50,019,414				46,086,363				49,351,861				41,930,353
Interest bearing liabilities		40,753,313				40,829,078				33,596,874				40,042,506				30,190,267
Deposits		49,460,571				49,848,446				46,234,857				48,491,669				42,451,465
Shareholders' equity		6,639,906				6,605,786				6,327,970				6,558,768				5,985,236

	As of
BALANCE SHEET ITEMS:	December 31,				September 30,				June 30,				March 31,				December 31,
(In thousands)		2023				2023				2023				2023				2022
Assets	$	60,934,974			$	61,183,352			$	61,703,693			$	64,309,573			$	57,462,749
Total loans		50,210,295				50,097,519				49,877,248				48,659,966				46,917,200
Deposits		49,242,829				49,885,314				49,619,815				47,590,916				47,636,914
Shareholders' equity		6,701,391				6,627,299				6,575,184				6,511,581				6,400,802
LOANS:
(In thousands)
Commercial and industrial	$	9,230,543			$	9,274,630			$	9,287,309			$	9,043,946			$	8,804,830
Commercial real estate:
Commercial real estate		28,243,239				28,041,050				27,793,072				27,051,111				25,732,033
Construction		3,726,808				3,833,269				3,815,761				3,725,967				3,700,835
Total commercial real estate		31,970,047				31,874,319				31,608,833				30,777,078				29,432,868
Residential mortgage		5,569,010				5,562,665				5,560,356				5,486,280				5,364,550
Consumer:
Home equity		559,152				548,918				535,493				516,592				503,884
Automobile		1,620,389				1,585,987				1,632,875				1,717,141				1,746,225
Other consumer		1,261,154				1,251,000				1,252,382				1,118,929				1,064,843
Total consumer loans		3,440,695				3,385,905				3,420,750				3,352,662				3,314,952
Total loans	$	50,210,295			$	50,097,519			$	49,877,248			$	48,659,966			$	46,917,200
CAPITAL RATIOS:
Book value per common share	$	12.79			$	12.64			$	12.54			$	12.41			$	12.23
Tangible book value per common share (3)		8.79				8.63				8.51				8.36				8.15
Tangible common equity to tangible assets (3)		7.58	%			7.40	%			7.24	%			6.82	%			7.45	%
Tier 1 leverage capital		8.16				8.08				7.86				7.96				8.23
Common equity tier 1 capital		9.29				9.21				9.03				9.02				9.01
Tier 1 risk-based capital		9.72				9.64				9.47				9.46				9.46
Total risk-based capital		11.76				11.68				11.52				11.58				11.63

                                                                                                                                                                                                                                                                                                                                                                                                                             

	Three Months Ended												Years Ended
ALLOWANCE FOR CREDIT LOSSES:	December 31,				September 30,				December 31,				December 31,
($ in thousands)		2023				2023				2022				2023				2022
Allowance for credit losses for loans
Beginning balance	$	462,345			$	458,676			$	498,408			$	483,255			$	375,702
Impact of the adoption of ASU No. 2022-02		—				—				—				(1,368	)			—
Allowance for purchased credit deteriorated (PCD) loans, net (2)		—				—				—				—				70,319
Beginning balance, adjusted		462,345				458,676				498,408				481,887				446,021
Loans charged-off:
Commercial and industrial		(10,616	)			(7,487	)			(22,106	)			(48,015	)			(33,250	)
Commercial real estate		(8,814	)			(255	)			(388	)			(11,134	)			(4,561	)
Construction		(1,906	)			—				—				(11,812	)			—
Residential mortgage		(25	)			(20	)			(1	)			(194	)			(28	)
Total consumer		(1,274	)			(1,156	)			(1,544	)			(4,298	)			(4,057	)
Total loans charged-off		(22,635	)			(8,918	)			(24,039	)			(75,453	)			(41,896	)
Charged-off loans recovered:
Commercial and industrial		4,655				3,043				1,069				11,270				17,081
Commercial real estate		1				5				13				34				2,073
Residential mortgage		15				30				17				201				711
Total consumer		473				362				498				1,986				2,929
Total loans recovered		5,144				3,440				1,597				13,491				22,794
Total net charge-offs		(17,491	)			(5,478	)			(22,442	)			(61,962	)			(19,102	)
Provision for credit losses for loans		20,696				9,147				7,289				45,625				56,336
Ending balance	$	465,550			$	462,345			$	483,255			$	465,550			$	483,255
Components of allowance for credit losses for loans:
Allowance for loan losses	$	446,080			$	442,175			$	458,655			$	446,080			$	458,655
Allowance for unfunded credit commitments		19,470				20,170				24,600				19,470				24,600
Allowance for credit losses for loans	$	465,550			$	462,345			$	483,255			$	465,550			$	483,255
Components of provision for credit losses for loans:
Provision for credit losses for loans	$	21,396			$	11,221			$	5,353			$	50,755			$	48,236
(Credit) provision for unfunded credit commitments		(700	)			(2,074	)			1,936				(5,130	)			8,100
Total provision for credit losses for loans	$	20,696			$	9,147			$	7,289			$	45,625			$	56,336
Annualized ratio of total net charge-offs to average loans		0.14	%			0.04	%			0.19	%			0.13	%			0.05	%
Allowance for credit losses as a % of total loans		0.93	%			0.92	%			1.03	%			0.93	%			1.03	%

	As of
ASSET QUALITY:	December 31,				September 30,				June 30,				March 31,				December 31,
($ in thousands)		2023				2023				2023				2023				2022
Accruing past due loans:
30 to 59 days past due:
Commercial and industrial	$	9,307			$	10,687			$	6,229			$	20,716			$	11,664
Commercial real estate		3,008				8,053				3,612				13,580				6,638
Residential mortgage		26,345				13,159				15,565				12,599				16,146
Total consumer		20,554				15,509				8,431				7,845				9,087
Total 30 to 59 days past due		59,214				47,408				33,837				54,740				43,535
60 to 89 days past due:
Commercial and industrial		5,095				5,720				7,468				24,118				12,705
Commercial real estate		1,257				2,620				—				—				3,167
Residential mortgage		8,200				9,710				1,348				2,133				3,315
Total consumer		4,715				1,720				4,126				1,519				1,579
Total 60 to 89 days past due		19,267				19,770				12,942				27,770				20,766
90 or more days past due:
Commercial and industrial		5,579				6,629				6,599				8,927				18,392
Commercial real estate		—				—				2,242				—				2,292
Construction		3,990				3,990				3,990				6,450				3,990
Residential mortgage		2,488				1,348				1,165				1,668				1,866
Total consumer		1,088				391				1,006				747				47
Total 90 or more days past due		13,145				12,358				15,002				17,792				26,587
Total accruing past due loans	$	91,626			$	79,536			$	61,781			$	100,302			$	90,888
Non-accrual loans:
Commercial and industrial	$	99,912			$	87,655			$	84,449			$	78,606			$	98,881
Commercial real estate		99,739				83,338				82,712				67,938				68,316
Construction		60,851				62,788				63,043				68,649				74,230
Residential mortgage		26,986				21,614				20,819				23,483				25,160
Total consumer		4,383				3,545				3,068				3,318				3,174
Total non-accrual loans		291,871				258,940				254,091				241,994				269,761
Other real estate owned (OREO)		71				71				824				1,189				286
Other repossessed assets		1,444				1,314				1,230				1,752				1,937
Total non-performing assets	$	293,386			$	260,325			$	256,145			$	244,935			$	271,984
Total non-accrual loans as a % of loans		0.58	%			0.52	%			0.51	%			0.50	%			0.57	%
Total accruing past due and non-accrual loans as a % of loans		0.76	%			0.68	%			0.63	%			0.70	%			0.77	%
Allowance for losses on loans as a % of non-accrual loans		152.83	%			170.76	%			171.76	%			180.54	%			170.02	%

NOTES TO SELECTED FINANCIAL DATA

(1	)	Net interest income and net interest margin are presented on a tax equivalent basis using a 21 percent federal tax rate. Valley believes that this presentation provides comparability of net interest income and net interest margin arising from both taxable and tax-exempt sources and is consistent with industry practice and SEC rules.
(2	)	Represents the allowance for acquired PCD loans, net of PCD loan charge-offs totaling $62.4 million in the second quarter 2022.
(3	)	Non-GAAP Reconciliations. This press release contains certain supplemental financial information, described in the Notes below, which has been determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP") that management uses in its analysis of Valley's performance. The Company believes that the non-GAAP financial measures provide useful supplemental information to both management and investors in understanding Valley’s underlying operational performance, business and performance trends, and may facilitate comparisons of our current and prior performance with the performance of others in the financial services industry. Management utilizes these measures for internal planning, forecasting and analysis purposes. Management believes that Valley’s presentation and discussion of this supplemental information, together with the accompanying reconciliations to the GAAP financial measures, also allows investors to view performance in a manner similar to management. These non-GAAP financial measures should not be considered in isolation or as a substitute for or superior to financial measures calculated in accordance with U.S. GAAP. These non-GAAP financial measures may also be calculated differently from similar measures disclosed by other companies.

Non-GAAP Reconciliations to GAAP Financial Measures

	Three Months Ended												Years Ended
	December 31,				September 30,				December 31,				December 31,
($ in thousands, except for share data)		2023				2023				2022				2023				2022
Adjusted net income available to common shareholders (non-GAAP):
Net income, as reported (GAAP)	$	71,554			$	141,346			$	177,591			$	498,511			$	568,851
Add: FDIC Special assessment (net of tax)(a)		36,053				—				—				36,053				—
Less: Net (gains) losses on available for sale and held to maturity securities transactions (net of tax)(b)		(629	)			318				5				(288	)			(69	)
Add: Restructuring charge (net of tax)(c)		(386	)			(484	)			—				7,145				—
Add: Provision for credit losses for available for sale securities (d)		—				—				—				5,000				—
Add: Non-PCD provision for credit losses (net of tax)(e)		—				—				—				—				29,282
Add: Merger related expenses (net of tax)(f)		7,168				—				5,285				10,130				52,388
Less: Net gains on sales of office buildings (net of tax)(g)		—				(4,817	)			—				(4,817	)			—
Add: Litigation reserve (net of tax)(h)		2,537				—				—				2,537				—
Net income, as adjusted (non-GAAP)	$	116,297			$	136,363			$	182,881			$	554,271			$	650,452
Dividends on preferred stock		4,104				4,127				3,630				16,135				13,146
Net income available to common shareholders, as adjusted (non-GAAP)	$	112,193			$	132,236			$	179,251			$	538,136			$	637,306
_____________
(a) Included in FDIC insurance assessment.
(b) Included in gains (losses) on securities transactions, net.
(c) Represents severance (credit adjustments) expense related to workforce reductions within salary and employee benefits expense.
(d) Included in provision for credit losses for available for sale and held to maturity securities (tax disallowed).
(e) Represents provision for credit losses for non-PCD assets and unfunded credit commitments acquired during the period.
(f) Represents data processing termination costs within technology, furniture and equipment expense and severance within salary and employee benefits expense for the 2023 periods. The merger related expense for the 2022 periods were mainly salary and employee benefits expense.
(g) Included in net (losses) gains on sale of assets within non-interest income.
(h) Represents legal reserves and settlement charges included in professional and legal fees.
Adjusted per common share data (non-GAAP):
Net income available to common shareholders, as adjusted (non-GAAP)	$	112,193			$	132,236			$	179,251			$	538,136			$	637,306
Average number of shares outstanding		507,683,229				507,650,668				506,359,704				507,532,365				485,434,918
Basic earnings, as adjusted (non-GAAP)	$	0.22			$	0.26			$	0.35			$	1.06			$	1.31
Average number of diluted shares outstanding		509,714,526				509,256,599				509,301,813				509,245,768				487,817,710
Diluted earnings, as adjusted (non-GAAP)	$	0.22			$	0.26			$	0.35			$	1.06			$	1.31
Adjusted annualized return on average tangible shareholders' equity (non-GAAP):
Net income, as adjusted (non-GAAP)	$	116,297			$	136,363			$	182,881			$	554,271			$	650,452
Average shareholders' equity		6,639,906				6,605,786				6,327,970				6,558,768				5,985,236
Less: Average goodwill and other intangible assets		2,033,656				2,042,486				2,074,367				2,047,172				1,944,503
Average tangible shareholders' equity	$	4,606,250			$	4,563,300			$	4,253,603			$	4,511,596			$	4,040,733
Annualized return on average tangible shareholders' equity, as adjusted (non-GAAP)		10.10	%			11.95	%			17.20	%			12.29	%			16.10	%

Non-GAAP Reconciliations to GAAP Financial Measures (Continued)

	Three Months Ended												Years Ended
	December 31,				September 30,				December 31,				December 31,
($ in thousands)		2023				2023				2022				2023				2022
Adjusted annualized return on average assets (non-GAAP):
Net income, as adjusted (non-GAAP)	$	116,297			$	136,363			$	182,881			$	554,271			$	650,452
Average assets		61,113,553				61,391,688				56,913,215				61,065,897				52,182,310
Annualized return on average assets, as adjusted (non-GAAP)		0.76	%			0.89	%			1.29	%			0.91	%			1.25	%
Adjusted annualized return on average shareholders' equity (non-GAAP):
Net income, as adjusted (non-GAAP)	$	116,297			$	136,363			$	182,881			$	554,271			$	650,452
Average shareholders' equity		6,639,906				6,605,786				6,327,970				6,558,768				5,985,236
Annualized return on average shareholders' equity, as adjusted (non-GAAP)		7.01	%			8.26	%			11.56	%			8.45	%			10.87	%
Annualized return on average tangible shareholders' equity (non-GAAP):
Net income, as reported (GAAP)	$	71,554			$	141,346			$	177,591			$	498,511			$	568,851
Average shareholders' equity		6,639,906				6,605,786				6,327,970				6,558,768				5,985,236
Less: Average goodwill and other intangible assets		2,033,656				2,042,486				2,074,367				2,047,172				1,944,503
Average tangible shareholders' equity	$	4,606,250			$	4,563,300			$	4,253,603			$	4,511,596			$	4,040,733
Annualized return on average tangible shareholders' equity (non-GAAP)		6.21	%			12.39	%			16.70	%			11.05	%			14.08	%
Efficiency ratio (non-GAAP):
Non-interest expense, as reported (GAAP)	$	340,421			$	267,133			$	266,240			$	1,162,691			$	1,024,949
Less: FDIC Special assessment (pre-tax)		50,297				—				—				50,297				—
Less: Restructuring charge (pre-tax)		(538	)			(675	)			—				9,969				—
Less: Merger-related expenses (pre-tax)		10,000				—				7,372				14,133				71,203
Less: Amortization of tax credit investments (pre-tax)		4,547				4,191				3,213				18,009				12,407
Less: Litigation reserve (pre-tax)		3,540				—				—				3,540				—
Non-interest expense, as adjusted (non-GAAP)		272,575				263,617				255,655				1,066,743				941,339
Net interest income, as reported (GAAP)		397,275				412,418				465,819				1,665,478				1,655,640
Non-interest income, as reported (GAAP)		52,691				58,664				52,796				225,729				206,793
Less: Net (gains) losses on available for sale and held to maturity securities transactions, net (pre-tax)		(877	)			443				7				(401	)			(95	)
Less: Net gains on sales of office buildings (pre-tax)		—				(6,721	)			—				(6,721	)			—
Non-interest income, as adjusted (non-GAAP)	$	51,814			$	52,386			$	52,803			$	218,607			$	206,698
Gross operating income, as adjusted (non-GAAP)	$	449,089			$	464,804			$	518,622			$	1,884,085			$	1,862,338
Efficiency ratio (non-GAAP)		60.70	%			56.72	%			49.30	%			56.62	%			50.55	%

	As of
	December 31,				September 30,				June 30,				March 31,				December 31,
($ in thousands, except for share data)		2023				2023				2023				2023				2022
Tangible book value per common share (non-GAAP):
Common shares outstanding		507,709,927				507,660,742				507,619,430				507,762,358				506,374,478
Shareholders' equity (GAAP)	$	6,701,391			$	6,627,299			$	6,575,184			$	6,511,581			$	6,400,802
Less: Preferred stock		209,691				209,691				209,691				209,691				209,691
Less: Goodwill and other intangible assets		2,029,267				2,038,202				2,046,882				2,056,107				2,066,392
Tangible common shareholders' equity (non-GAAP)	$	4,462,433			$	4,379,406			$	4,318,611			$	4,245,783			$	4,124,719
Tangible book value per common share (non-GAAP)	$	8.79			$	8.63			$	8.51			$	8.36			$	8.15
Tangible common equity to tangible assets (non-GAAP):
Tangible common shareholders' equity (non-GAAP)	$	4,462,433			$	4,379,406			$	4,318,611			$	4,245,783			$	4,124,719
Total assets (GAAP)	$	60,934,974			$	61,183,352			$	61,703,693			$	64,309,573			$	57,462,749
Less: Goodwill and other intangible assets		2,029,267				2,038,202				2,046,882				2,056,107				2,066,392
Tangible assets (non-GAAP)	$	58,905,707			$	59,145,150			$	59,656,811			$	62,253,466			$	55,396,357
Tangible common equity to tangible assets (non-GAAP)		7.58	%			7.40	%			7.24	%			6.82	%			7.45	%

	December 31,
		2023				2022
	(Unaudited)
Assets
Cash and due from banks	$	284,090			$	444,325
Interest bearing deposits with banks		607,135				503,622
Investment securities:
Equity securities		64,464				48,731
Trading debt securities		3,973				13,438
Available for sale debt securities		1,296,576				1,261,397
Held to maturity debt securities (net of allowance for credit losses of $1,205 at December 31, 2023 and $1,646 at December 31, 2022)		3,739,208				3,827,338
Total investment securities		5,104,221				5,150,904
Loans held for sale (includes fair value of $20,640 at December 31, 2023 and $18,118 at December 31, 2022 for loans originated for sale)		30,640				18,118
Loans		50,210,295				46,917,200
Less: Allowance for loan losses		(446,080	)			(458,655	)
Net loans		49,764,215				46,458,545
Premises and equipment, net		381,081				358,556
Lease right of use assets		343,461				306,352
Bank owned life insurance		723,799				717,177
Accrued interest receivable		245,498				196,606
Goodwill		1,868,936				1,868,936
Other intangible assets, net		160,331				197,456
Other assets		1,421,567				1,242,152
Total Assets	$	60,934,974			$	57,462,749
Liabilities
Deposits:
Non-interest bearing	$	11,539,483			$	14,463,645
Interest bearing:
Savings, NOW and money market		24,526,622				23,616,812
Time		13,176,724				9,556,457
Total deposits		49,242,829				47,636,914
Short-term borrowings		917,834				138,729
Long-term borrowings		2,328,375				1,543,058
Junior subordinated debentures issued to capital trusts		57,108				56,760
Lease liabilities		403,781				358,884
Accrued expenses and other liabilities		1,283,656				1,327,602
Total Liabilities		54,233,583				51,061,947
Shareholders’ Equity
Preferred stock, no par value; authorized 50,000,000 shares authorized:
Series A (4,600,000 shares issued at December 31, 2023 and December 31, 2022)		111,590				111,590
Series B (4,000,000 shares issued at December 31, 2023 and December 31, 2022)		98,101				98,101
Common stock (no par value, authorized 650,000,000 shares; issued 507,896,910 shares at December 31, 2023 and December 31, 2022)		178,187				178,185
Surplus		4,989,989				4,980,231
Retained earnings		1,471,371				1,218,445
Accumulated other comprehensive loss		(146,456	)			(164,002	)
Treasury stock, at cost (186,983 common shares at December 31, 2023 and 1,522,432 common shares at December 31, 2022)		(1,391	)			(21,748	)
Total Shareholders’ Equity		6,701,391				6,400,802
Total Liabilities and Shareholders’ Equity	$	60,934,974			$	57,462,749

	Three Months Ended												Years Ended
	December 31,				September 30,				December 31,				December 31,
		2023				2023				2022				2023			2022
Interest Income
Interest and fees on loans	$	762,894			$	753,638			$	599,015			$	2,886,930		$	1,828,477
Interest and dividends on investment securities:
Taxable		34,117				32,383				31,300				130,708			105,716
Tax-exempt		4,820				4,585				5,219				20,305			17,958
Dividends		6,138				5,299				3,978				24,139			11,468
Interest on federal funds sold and other short-term investments		10,215				17,113				7,038				76,809			13,064
Total interest income		818,184				813,018				646,550				3,138,891			1,976,683
Interest Expense
Interest on deposits:
Savings, NOW and money market		221,501				201,916				109,286				739,025			186,709
Time		165,351				164,336				48,417				535,749			69,691
Interest on short-term borrowings		5,524				5,189				7,404				94,869			17,453
Interest on long-term borrowings and junior subordinated debentures		28,533				29,159				15,624				103,770			47,190
Total interest expense		420,909				400,600				180,731				1,473,413			321,043
Net Interest Income		397,275				412,418				465,819				1,665,478			1,655,640
(Credit) provision for credit losses for available for sale and held to maturity securities		(116	)			(30	)			(50	)			4,559			481
Provision for credit losses for loans		20,696				9,147				7,289				45,625			56,336
Net Interest Income After Provision for Credit Losses		376,695				403,301				458,580				1,615,294			1,598,823
Non-Interest Income
Wealth management and trust fees		11,978				11,417				10,720				44,158			34,709
Insurance commissions		3,221				2,336				2,903				11,116			11,975
Capital Markets		6,489				7,141				10,120				41,489			52,362
Service charges on deposit accounts		9,336				10,952				10,313				41,306			36,930
Gains (losses) on securities transactions, net		907				(398	)			(172	)			1,104			(1,230	)
Fees from loan servicing		2,616				2,681				2,637				10,670			11,273
Gains on sales of loans, net		2,302				2,023				908				6,054			6,418
(Losses) gains on sales of assets, net		(129	)			6,653				1,269				6,809			897
Bank owned life insurance		4,107				2,709				2,200				11,843			8,040
Other		11,864				13,150				11,898				51,180			45,419
Total non-interest income		52,691				58,664				52,796				225,729			206,793
Non-Interest Expense
Salary and employee benefits expense		131,719				137,292				129,634				563,591			526,737
Net occupancy expense		27,590				24,675				23,446				101,470			94,352
Technology, furniture and equipment expense		44,404				37,320				46,507				150,708			161,752
FDIC insurance assessment		60,627				7,946				6,827				88,154			22,836
Amortization of other intangible assets		9,696				9,741				10,900				39,768			37,825
Professional and legal fees		25,238				17,109				19,620				80,567			82,618
Amortization of tax credit investments		4,547				4,191				3,213				18,009			12,407
Other		36,600				28,859				26,093				120,424			86,422
Total non-interest expense		340,421				267,133				266,240				1,162,691			1,024,949
Income Before Income Taxes		88,965				194,832				245,136				678,332			780,667
Income tax expense		17,411				53,486				67,545				179,821			211,816
Net Income		71,554				141,346				177,591				498,511			568,851
Dividends on preferred stock		4,104				4,127				3,630				16,135			13,146
Net Income Available to Common Shareholders	$	67,450			$	137,219			$	173,961			$	482,376		$	555,705

	Three Months Ended
	December 31, 2023										September 30, 2023										December 31, 2022
	Average							Avg.			Average							Avg.			Average							Avg.
($ in thousands)	Balance			Interest				Rate			Balance			Interest				Rate			Balance			Interest				Rate
Assets
Interest earning assets:
Loans (1)(2)	$	50,039,429		$	762,918			6.10	%		$	50,019,414		$	753,662			6.03	%		$	46,086,363		$	599,040			5.20	%
Taxable investments (3)		4,950,773			40,255			3.25				4,915,778			37,682			3.07				4,934,084			35,278			2.86
Tax-exempt investments (1)(3)		593,577			6,101			4.11				620,439			5,800			3.74				623,322			6,608			4.24
Interest bearing deposits with banks		885,689			10,215			4.61				1,246,934			17,113			5.49				761,832			7,038			3.70
Total interest earning assets		56,469,468			819,489			5.80				56,802,565			814,257			5.73				52,405,601			647,964			4.95
Other assets		4,644,085										4,589,123										4,507,614
Total assets	$	61,113,553									$	61,391,688									$	56,913,215
Liabilities and shareholders' equity
Interest bearing liabilities:
Savings, NOW and money market deposits	$	23,991,093		$	221,500			3.69	%		$	23,016,737		$	201,916			3.51	%		$	23,476,111		$	109,286			1.86	%
Time deposits		13,934,683			165,351			4.75				14,880,311			164,336			4.42				7,641,769			48,417			2.53
Short-term borrowings		449,831			5,524			4.91				436,518			5,189			4.75				880,615			7,404			3.36
Long-term borrowings (4)		2,377,706			28,533			4.80				2,495,512			29,159			4.67				1,598,379			15,624			3.91
Total interest bearing liabilities		40,753,313			420,908			4.13				40,829,078			400,600			3.92				33,596,874			180,731			2.15
Non-interest bearing deposits		11,534,795										11,951,398										15,116,977
Other liabilities		2,185,539										2,005,426										1,871,394
Shareholders' equity		6,639,906										6,605,786										6,327,970
Total liabilities and shareholders' equity	$	61,113,553									$	61,391,688									$	56,913,215
Net interest income/interest rate spread (5)				$	398,581			1.67	%					$	413,657			1.81	%					$	467,233			2.80	%
Tax equivalent adjustment					(1,305	)									(1,239	)									(1,414	)
Net interest income, as reported				$	397,276									$	412,418									$	465,819
Net interest margin (6)								2.81	%									2.90	%									3.56	%
Tax equivalent effect								0.01										0.01										0.01
Net interest margin on a fully tax equivalent basis (6)								2.82	%									2.91	%									3.57	%

(1)         Interest income is presented on a tax equivalent basis using a 21 percent federal tax rate.(2)      Loans are stated net of unearned income and include non-accrual loans.(3)      The yield for securities that are classified as available for sale is based on the average historical amortized cost.(4)      Includes junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of financial condition.(5)      Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities and is presented on a fully tax equivalent basis.(6)      Net interest income as a percentage of total average interest earning assets.

SHAREHOLDERS RELATIONSRequests for copies of reports and/or other inquiries should be directed to Tina Zarkadas, Assistant Vice President, Shareholder Relations Specialist, Valley National Bancorp, 70 Speedwell Avenue, Morristown, New Jersey, 07960, by telephone at (973) 305-3380, by fax at (973) 305-1364 or by e-mail at tzarkadas@valley.com.

Contact:		Michael D. Hagedorn
		Senior Executive Vice President and
		Chief Financial Officer
		973-872-4885