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Valley National Bancorp (VLY)
NASDAQ:VLY

Valley National Bancorp (VLY) AI Stock Analysis

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Valley National Bancorp

(NASDAQ:VLY)

66Neutral
Valley National Bancorp's stock score of 66 reflects a balanced view of its financial performance and valuation. While there are concerns over declining profitability and liquidity challenges, the company's improved financial leverage, strong deposit growth, and attractive dividend yield provide positive factors. Technical indicators suggest some caution, and strategic leadership changes are expected to support future growth.
Positive Factors
Capital Levels
Capital levels got a significant boost to a 2024 year-end CET1 ratio of 10.8%, reducing part of any bear thesis.
Profitability
Significantly better profitability profile to be driven by continued NIM expansion and reduced credit costs.
Valuation
The substantial discount and improved financial metrics present an opportunity, leading to an upgrade of VLY shares to Overweight.
Negative Factors
Credit Trends
A continued uptick in credit and elevated LLP expense likely weighs on the overall share price reaction.
ROTE Outlook
There is a long road ahead for the company to narrow the gap between its ROTE outlook and that of peers.
Valuation Multiple
Near-term credit trends continue to be elevated, which likely weighs on the near-term valuation multiple.

Valley National Bancorp (VLY) vs. S&P 500 (SPY)

Valley National Bancorp Business Overview & Revenue Model

Company DescriptionValley National Bancorp operates as the holding company for Valley National Bank that provides various commercial, retail, insurance, and wealth management financial services products. It operates through Commercial Lending, Consumer Lending, and Investment Management segments. The company offers non-interest bearing, savings, NOW, money market, and time deposit accounts, commercial and industrial, commercial real estate, residential mortgage, and automobile loans; loans secured by the cash surrender value of life insurance; home equity loans and lines of credit; and secured and unsecured other consumer loans. It also invests in various securities and interest-bearing deposits with other banks; and provides international banking services, such as standby and documentary letters of credit, and related products, as well as foreign exchange transactions, documentary collections, foreign wire transfers services, and transaction accounts for non-resident aliens. In addition, the company offers investment services for individuals and small to medium sized businesses; and trusts and custom -tailored investment strategies for various retirement plans. Further, it provides trust services, such as living and testamentary trusts, investment management, custodial and escrow services, and estate administration to individuals; tax credit advisory services; property and casualty, life, health, and title insurance agency services; and health care equipment lending and other commercial equipment leasing services, as well as owns real estate related investments. Additionally, the company offers online, mobile, and telephone banking services; and overdraft, drive-in and night deposit, automated teller machine, remote deposit capture, and safe deposit facility services. As of December 31,2021, it operated 232 branch offices in New Jersey, New York, Florida, and Alabama. The company was incorporated in 1927 and is headquartered in New York, New York.
How the Company Makes MoneyValley National Bancorp generates revenue primarily through interest income from its loan portfolio, which includes commercial real estate loans, residential mortgages, and consumer loans. Additionally, the bank earns money from non-interest income sources such as service charges on deposit accounts, fees from loan servicing, and income from its wealth management and insurance services. The company also benefits from strategic partnerships and acquisitions that enhance its product offerings and geographic reach, contributing to its overall earnings.

Valley National Bancorp Financial Statement Overview

Summary
Valley National Bancorp demonstrates a mixed financial performance. While revenue growth has been inconsistent and profitability metrics have declined, the balance sheet shows improved financial leverage. However, challenges remain with declining ROE and potential liquidity issues, suggesting a need for improved cash management.
Income Statement
65
Positive
Valley National Bancorp's revenue growth has been modest with a significant increase from 2021 to 2022, but a slight decline in 2023 and 2024. The gross profit margin remains strong as it equals total revenue, indicating cost efficiency. However, the net profit margin has decreased from 2023 to 2024, indicating potential profitability challenges. The absence of EBIT and EBITDA margins in 2024 provides limited insight into operational profitability.
Balance Sheet
70
Positive
The company's debt-to-equity ratio has improved significantly from 2023 to 2024, reflecting reduced leverage and potentially lower financial risk. Return on equity has decreased, suggesting lower profitability relative to shareholder equity. The equity ratio indicates a stable financial structure with adequate equity backing, but the declining ROE is a concern.
Cash Flow
60
Neutral
Operating cash flow in 2024 has decreased compared to previous years, signaling reduced cash-generating ability. The free cash flow has declined as well, impacting financial flexibility. The operating cash flow to net income ratio suggests a decrease in cash efficiency relative to net income. Overall, the cash flow position highlights potential liquidity challenges.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.84B1.82B1.86B1.37B1.30B
Gross Profit
1.85B1.82B1.86B1.37B1.30B
EBIT
-1.62B689.20M1.10B640.74M530.07M
EBITDA
0.000.00728.87M685.20M612.33M
Net Income Common Stockholders
380.27M498.51M568.85M473.84M390.61M
Balance SheetCash, Cash Equivalents and Short-Term Investments
3.78B891.23M2.21B3.18B2.67B
Total Assets
62.49B60.93B57.46B43.45B40.69B
Total Debt
461.02M3.71B2.10B2.42B3.78B
Net Debt
49.61M2.82B1.15B369.00M2.45B
Total Liabilities
55.06B54.23B51.06B38.36B36.09B
Stockholders Equity
7.44B6.70B6.40B5.08B4.59B
Cash FlowFree Cash Flow
305.67M378.19M1.36B-225.80M126.92M
Operating Cash Flow
305.67M378.19M1.43B837.14M151.53M
Investing Cash Flow
-559.20M-3.35B-6.79B-1.08B-2.04B
Financing Cash Flow
337.35M2.91B4.26B964.35M2.78B

Valley National Bancorp Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price8.71
Price Trends
50DMA
8.75
Negative
100DMA
9.18
Negative
200DMA
8.94
Negative
Market Momentum
MACD
-0.02
Negative
RSI
53.81
Neutral
STOCH
80.52
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLY, the sentiment is Neutral. The current price of 8.71 is above the 20-day moving average (MA) of 8.32, below the 50-day MA of 8.75, and below the 200-day MA of 8.94, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 53.81 is Neutral, neither overbought nor oversold. The STOCH value of 80.52 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VLY.

Valley National Bancorp Risk Analysis

Valley National Bancorp disclosed 38 risk factors in its most recent earnings report. Valley National Bancorp reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Valley National Bancorp Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
OZOZK
76
Outperform
$4.31B6.1812.85%3.80%13.85%2.51%
73
Outperform
$4.38B22.986.63%3.24%8.10%6.95%
68
Neutral
$4.69B9.489.73%6.42%-0.21%1.69%
68
Neutral
$4.92B12.717.33%4.30%6.39%2.93%
67
Neutral
$4.79B20.7414.60%2.13%16.01%15.70%
VLVLY
66
Neutral
$4.82B12.535.48%5.12%1.60%-18.84%
63
Neutral
$12.46B9.568.14%17044.64%12.63%-4.25%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
VLY
Valley National Bancorp
8.71
1.60
22.50%
OZK
Bank OZK
43.22
-1.20
-2.70%
COLB
Columbia Banking System
22.99
4.37
23.47%
FFIN
First Financial Bankshares
33.77
3.82
12.75%
GBCI
Glacier Bancorp
41.06
4.24
11.52%
UBSI
United Bankshares
34.47
2.04
6.29%

Valley National Bancorp Earnings Call Summary

Earnings Call Date:Apr 24, 2025
(Q1-2025)
|
% Change Since: 0.93%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive and negative aspects. While Valley National Bancorp demonstrated strong deposit growth, effective cost management, and stability in net income, challenges persist in the form of lower loan growth, spread compression, and a decline in the CRE portfolio. The company's ability to manage non-interest expenses and maintain a strong tangible book value is offset by concerns over interest margin pressures and competitive challenges.
Q1-2025 Updates
Positive Updates
Net Income and Earnings Per Share Stability
Net income on both reported and adjusted basis was approximately $106 million or $0.18 per diluted share, showing revenue stability and lower operating expenses.
Strong Deposit Growth
Core customer deposits increased by $600 million, enabling the repayment of $700 million of higher-cost brokered balances.
Improved Cost Management
Average cost of deposits declined by 29 basis points, demonstrating effective cost management.
Continued C&I and Auto Lending Growth
Achieved 9% annualized growth in C&I loans and strong results in prime indirect auto lending.
Tangible Book Value Increase
Tangible book value inclusive of dividends has doubled over the last seven years.
Positive Adjusted Non-Interest Income Trend
Adjusted non-interest expenses were 3% lower than the fourth quarter, showing effective cost control.
Negative Updates
Lower Loan Growth and Net Interest Income
Both loan growth and net interest income are expected at the lower end of the projected range for 2025 due to increased competition and spread compression.
Commercial Real Estate (CRE) Portfolio Decline
Regulatory CRE portfolio declined by $350 million, with a concentration ratio decrease to 353% from 362% a quarter ago.
Charge-offs and Loan Loss Provisions
Net loan charge-offs and loan loss provision declined but remain elevated compared to historical levels.
Spread Compression in Loan Originations
Commercial loan originations faced spread compression, with new originations slightly lower than the targeted 7% level.
Company Guidance
During the Q1 2025 earnings call for Valley National Bancorp, the company provided guidance that anticipates both loan growth and net interest income to be at the lower end of the expected range for 2025. Despite economic uncertainties, including tariff disruptions and rising inflation expectations, the bank remains optimistic about its ability to achieve profitability growth throughout the year. The bank reported a net income of approximately $106 million or $0.18 per diluted share, reflecting stability in revenue, reduced operating expenses, and a smaller loan loss provision. Core customer deposits increased by $600 million, contributing to a 29-basis-point decline in the average cost of deposits. The bank foresees no meaningful changes to expectations for annual fee income or tax rate and anticipates a 50% decline in charges and provisions from 2024 levels. Furthermore, non-interest expenses are expected to be at the lower end of the guidance range, supporting positive operating leverage and profitability improvements. Valley National is also focused on organic customer acquisition, particularly in commercial and consumer sectors, and anticipates continued growth in its lending lines to support low single-digit loan growth for the year.

Valley National Bancorp Corporate Events

Financial Disclosures
Valley National Bancorp Reports Q1 2025 Financial Results
Neutral
Apr 24, 2025

Valley National Bancorp reported its first quarter 2025 financial results, showing a net income of $106.1 million, a decrease from the previous quarter but an increase from the same quarter last year. The company highlighted improvements in its funding base and credit quality, with growth in core deposits and a reduction in non-accrual loans. Despite a decrease in total loans, there was growth in commercial and industrial and automobile loans. The company also reported a decrease in non-interest expenses and an increase in non-interest income, contributing to a favorable efficiency ratio.

Spark’s Take on VLY Stock

According to Spark, TipRanks’ AI Analyst, VLY is a Neutral.

Valley National Bancorp’s overall stock score reflects mixed financial performance with inconsistent revenue growth and declining profitability metrics. Positive factors include strategic guidance from a strong earnings call, attractive valuation metrics, and recent leadership changes aimed at bolstering strategic execution. However, technical indicators suggest a bearish trend, and liquidity challenges remain a concern. The stock offers potential for growth if profitability and cash flow can be improved.

To see Spark’s full report on VLY stock, click here.

Executive/Board Changes
Valley National Bancorp Appoints Eyal Efrat as Director
Neutral
Mar 13, 2025

On March 12, 2025, Valley National Bancorp appointed Eyal Efrat as a director to serve until the next annual meeting of shareholders. Mr. Efrat, an independent director, will join the Risk Committee and Cyber and Technology Sub-Committee. He brings over 25 years of experience in the Israeli financial sector, having held significant roles at Bank Leumi and Harel Insurance Investments and Financial Services Ltd. This appointment follows the resignation of Avner Mendelson, the previous designee of Bank Leumi, under the Investor Rights Agreement.

Executive/Board ChangesBusiness Operations and Strategy
Valley National Bancorp Announces Leadership Changes
Positive
Mar 3, 2025

On March 3, 2025, Valley National Bancorp announced significant leadership changes, including the departure of Joseph V. Chillura as President of Commercial Banking, effective June 30, 2025, and the appointment of Gino Martocci as his successor, effective March 31, 2025. Martocci brings over 30 years of experience and will oversee Valley’s commercial banking operations, aiming to expand its market presence. Additionally, Travis Lan was promoted to Senior Executive Vice President, Chief Financial Officer, effective immediately, recognizing his contributions to the bank’s strategic growth since joining in 2020. These appointments are part of Valley’s strategy to strengthen its leadership team and execute strategic priorities.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.