Valley National Bancorp

Valley reported second-quarter net income of approximately $171 million, or $0.29 per diluted share, and adjusted net income of approximately $173 million, or $0.30 per diluted share. Net interest income on a tax-equivalent basis was $488 million, up approximately $16 million from Q1 and $55 million year over year, while tax-equivalent NIM expanded 3 bps sequentially to 3.2% and was up 19 bps from Q2 2025. Noninterest income rose to $73.7 million, and reported noninterest expense was $311 million; the efficiency ratio improved to 52.1% from 53.1% in Q1 and 55.2% a year ago. On credit, net charge-offs were $22 million, provision for credit losses was $29 million, and the allowance for credit losses fell to 1.16% of loans. For the quarter, direct customer deposits grew $1.1 billion and loans grew $1.6 billion. Management said it now expects 2026 gross loan growth at or somewhat above the high end of its range, fee income toward the high end of its 6% to 9% range, unchanged deposit growth and NII outlook from last quarter, and NIM exiting low to mid-3.30s.

Ira Robbins emphasized that the quarter showed continued execution on Valley’s strategy: more core deposits, more relationship-based lending, and more fee income. He framed the bank’s model as commercially focused and relationship-oriented, with deposit gathering, C&I growth, and fee-based products all intended to deepen client ties rather than chase rate-sensitive balances. He was upbeat on AI as a scaling and efficiency lever, saying the bank already has real ROI from AI-related efforts and sees it contributing to productivity, risk management, client experience, and longer-term returns.

Travis Lan highlighted strong first-half momentum and said the bank is maintaining a strong 2026 outlook. He cited $1.1 billion of deposit growth, $1.6 billion of loan growth, $488 million of tax-equivalent NII, 3.2% NIM, and a 52.1% efficiency ratio, while noting capital returns of about $81 million through dividends and repurchases. He also pointed to a CET1 ratio of 10.7%, a CRE concentration ratio that fell to approximately 317% from 329%, and a deposit cost base that remained meaningfully below 2.67% a year ago.

Analysts focused on fee income durability, credit trends, deposit competition, loan/deposit timing, and the impact of AI on efficiency and ROE. Management said some capital markets swap income may have been slightly elevated by around $1 million to $2 million, but otherwise saw continued growth in deposit service charges, syndications, tax credit advisory, and insurance. On credit, they said criticized and classified assets improved because problem CRE assets are leasing up and paying off, and that the bank is not using agentic AI in core underwriting yet, though it is exploring it. On funding, management said the deposit gap should close over the next two quarters as C&I-related deposits catch up with loans and brokered balances run off, supporting margin.