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Valley National Bancorp (VLY)
NASDAQ:VLY
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Valley National Bancorp
(NASDAQ:VLY)
Rating:69Neutral
Price Target:―
Positive Factors
Capital Levels
Capital levels got a significant boost to a CET1 ratio of 10.8%, reducing part of any bear thesis.
Financial Metrics
The substantial discount and improved financial metrics present an opportunity, leading to an upgrade of VLY shares to Overweight.
Profitability
The catalyst is greatly improved profitability expected to reach a 1% ROA.
Negative Factors
Credit Trends
A continued uptick in credit and elevated LLP expense likely weighs on the overall share price reaction.
Peer Comparison
VLY shares trade at a deep discount to peers on a P/TBV basis, reflecting a below peer ROTE outlook.
Valuation
Near-term credit trends continue to be elevated, which likely weighs on the near-term valuation multiple.
Valley National Bancorp (VLY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.87B
Dividend Yield5.1%
Average Volume (3M)9.24M
Price to Earnings (P/E)12.7
Beta (1Y)1.08
Revenue Growth1.60%
EPS Growth-18.84%
CountryUS
Employees3,732
SectorFinancial
Sector Strength81
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.18
Shares Outstanding560,341,250
10 Day Avg. Volume8,717,193
30 Day Avg. Volume9,235,377
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.66
Price to Sales (P/S)0.00
P/FCF Ratio9.16
Enterprise Value/Market Cap1.00
Enterprise Value/Revenue0.42
Enterprise Value/Gross Profit1.54
Enterprise Value/Ebitda2.64
Forecast
1Y Price Target
$10.22Price Target Upside17.61% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Valley National Bancorp Business Overview & Revenue Model
Company DescriptionValley National Bancorp (VLY) is a regional bank holding company headquartered in Wayne, New Jersey. It operates through its principal subsidiary, Valley National Bank, which offers a range of commercial, retail, insurance, and wealth management financial services products. The bank serves a diverse client base that includes commercial and retail customers across several states, emphasizing community banking services and personalized financial solutions.
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 shows mixed financial performance. Revenue growth is inconsistent, and profitability metrics have declined. Improved debt-to-equity ratio reflects reduced leverage, but declining ROE is concerning. Cash flow metrics suggest potential liquidity challenges, highlighting the need for better cash management.Income Statement
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.65
Positive
Balance Sheet
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.70
Positive
Cash Flow
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.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.84B | 1.82B | 1.86B | 1.37B | 1.30B | Gross Profit |
| 1.84B | 1.82B | 1.86B | 1.37B | 1.30B | EBIT |
| 434.79M | 689.20M | 1.10B | 640.74M | 530.07M | EBITDA |
| 0.00 | 0.00 | 728.87M | 685.20M | 612.33M | Net Income Common Stockholders |
| 380.27M | 498.51M | 568.85M | 473.84M | 390.61M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.78B | 891.23M | 2.21B | 3.18B | 2.67B | Total Assets |
| 62.49B | 60.93B | 57.46B | 43.45B | 40.69B | Total Debt |
| 3.62B | 3.71B | 2.10B | 2.42B | 3.78B | Net Debt |
| 1.73B | 2.82B | 1.15B | 369.00M | 2.45B | Total Liabilities |
| 55.06B | 54.23B | 51.06B | 38.36B | 36.09B | Stockholders Equity |
| 7.44B | 6.70B | 6.40B | 5.08B | 4.59B |
| Cash Flow | Free Cash Flow | |||
| 548.54M | 378.19M | 1.36B | -225.80M | 126.92M | Operating Cash Flow |
| 535.53M | 378.19M | 1.43B | 837.14M | 151.53M | Investing Cash Flow |
| -709.28M | -3.35B | -6.79B | -1.08B | -2.04B | Financing Cash Flow |
| 1.16B | 2.91B | 4.26B | 964.35M | 2.78B |
Valley National Bancorp Technical Analysis
Negative
8.69
Price Trends
8.68
Positive
9.07
Negative
9.03
Negative
Market Momentum
0.08
Positive
45.92
Neutral
23.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLY, the sentiment is Negative. The current price of 8.69 is below the 20-day moving average (MA) of 8.87, above the 50-day MA of 8.68, and below the 200-day MA of 9.03, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 45.92 is Neutral, neither overbought nor oversold. The STOCH value of 23.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 2 New Risks
1.
Our adoption of artificial intelligence tools and adoption by our third-party vendors and service providers may increase the risk of errors, omissions, unfair treatment or fraudulent behavior by our employees, clients, or counterparties, or other third parties. Q4, 2024
2.
We may be required to expend significant resources to comply with an uncertain legal and regulatory environment governing the use of AI, and we may have to change our product offerings or business practices, or prevent or limit our use of AI. Q4, 2024
Valley National Bancorp Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $5.26B | 7.59 | 12.85% | 3.70% | 13.85% | 2.43% | |
73 Outperform | $4.82B | 22.71 | 6.63% | 3.23% | 8.10% | 6.95% | |
69 Neutral | $4.87B | 12.66 | 5.48% | 5.10% | 1.60% | -18.84% | |
68 Neutral | $5.28B | 13.79 | 7.30% | 4.10% | 6.39% | 2.93% | |
67 Neutral | $4.97B | 9.99 | 9.73% | 6.08% | -0.21% | 1.69% | |
67 Neutral | $5.11B | 22.12 | 14.60% | 2.08% | 16.01% | 15.70% | |
64 Neutral | $12.66B | 9.79 | 7.67% | 17015.07% | 12.23% | -6.06% |
* Financial Sector Average
Performance Comparison
VLY
Valley National Bancorp
8.69
1.72
24.68%
OZK
Bank OZK
44.73
0.16
0.36%
COLB
Columbia Banking System
23.66
5.56
30.72%
FFIN
First Financial Bankshares
34.47
5.48
18.90%
GBCI
Glacier Bancorp
41.15
4.23
11.46%
UBSI
United Bankshares
36.13
4.81
15.36%
Valley National Bancorp Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 0.70%|
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.