Valley National Bancorp

Good day, and thank you for standing by. Welcome to Q2 2022 Valley National Bancorp Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 1 1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Travis Land. You may begin.

Good morning and welcome to Valley's second quarter 2022 earnings conference call. Presenting on behalf of Valley today are CEO Ira Robbins, President Tom Iabanza, and Chief Financial Officer Mike Hagedorn. Before we begin, I would like to make everyone aware that our quarterly earnings release and supporting documents can be found on our company website at valley.com. When discussing our results, we refer to non-GAAP measures which exclude certain items from reported results. Please refer to today's earnings release for reconciliations of these non-GAAP measures. Additionally, I would like to highlight slide two of our earnings presentation and remind you that comments made during this call may contain forward-looking statements relating to Valley National Bank Corp. and the banking industry. Valley encourages all participants to refer to our SEC filings, including those found on Form 8K, 10Q, and 10K, for a complete discussion of forward-looking statements. With that, I'll turn the call over to Ira Robbins.

Thank you, Travis, and welcome to those of you on the call. I have a few comments to make this morning, and then we'll ask Tom to provide insight on the exceptional growth results that were achieved on both sides of the balance sheet this quarter. Mike will then discuss the financial results in more detail. In the second quarter of 2022, Valley reported net income of $96 million, earnings per share of 18 cents, and an annualized ROA of 0.72%, exclusive of non-core charges, including the provision expense mainly associated with Bank Leonie's non-PCD loans, adjusted net income, EPS, and ROA were $166 million, 32 cents, and 1.25% respectively. These exceptional results reflect significant organic loan and deposit growth and our ability to manage deposit betas in a generally supportive interest rate environment. With the Bank Leonie transaction behind us, and integration efforts well underway, I want to take a moment to put values recent transformation into context. Beginning on slide four of our deck, we compare this quarter's key financial metrics against the fourth quarter of 2019. This comparison highlights the tangible progress that has been made in the last two and a half years as we have executed on our strategic and tactical initiatives. From a big picture perspective, We have driven sustainable balance sheet growth, diversified and enhanced our funding base, established new non-interest revenue channels, and benefited from disciplined and strategic M&A. We have grown organic loans and deposits by just below 10% on an annualized basis over the last two and a half years. While COVID weighed on the 2020 results, these growth rates have accelerated more recently. We have achieved this growth by providing exceptional service and advice to our existing clients and proactively identifying growth opportunities in specific markets and business segments. Once these opportunities have been identified, we've dedicated the appropriate resources from a talent, product, and technology perspective to ensure that we capture the available growth. As growth has accelerated, we have been careful to preserve the stringent underwriting standards that have supported our longstanding track record of below peer credit losses. While we haven't materially altered our underwriting standards, our allowance for credit losses as a percentage of loans remains well above the day one reserve that was established upon the adoption of CECL. Meanwhile, neither our earnings nor our capital have benefited from the reserve release that have recently been common across the industry. Still, We have preserved our tangible common equity to tangible asset ratio at 7.5% without a diluted capital raise while supporting the strong growth. Turning to slide five, you can see that our growth has also been extremely profitable. Quarterly, adjusted net income has increased approximately $75 million between the fourth quarter of 2019 and the second quarter of 2022. We are a much more profitable organization today as a result of strong growth in both spread-based and non-interest income. Our adjusted ROA during the quarter of 1.25% represents a nearly 25 basis point increase since the fourth quarter of 2019. We recognize that our future operating performance will drive the trajectory of our valuation. That said, We provide this snapshot as proof of our ability to execute in challenging times. Over the last two and a half years, our tangible common equity and annualized earnings power have increased approximately $1.2 billion and $300 million respectively. On a per share basis, tangible book value and adjusted earnings per share have increased 15% and 33%. We are proud of this performance and confident that our ability to execute will drive success in the next phase of our evolution. Finally, while our preference is not to revisit our stated guidance on a quarterly basis, we have attempted to be as transparent as possible given the backdrop of an extremely volatile economic and industry environment. With a full quarter of post-Layomi results, we thought it would be most helpful to provide combined guidance for the remainder of the year. Using the second quarter's loan balance as a starting point, we now anticipate between 8% and 10% annualized loan growth for the second half of 2022. We anticipate preserving our loan to deposit ratio around 100%, give or take. Based on these dynamics and the June 30th forward rate curve, we would anticipate generating aggregate net interest income of around $900 million in the second half of the year. Finally, we expect to achieve an efficiency ratio of below 50% in the second half of 2022 as well. With that, I will turn the call over to Tom and Mike to discuss the quarter's growth and financial results.