Valley National Bancorp

Good morning, and welcome to Valley's third quarter 2022 earnings conference call. Presenting on behalf of Valley today are CEO Ira Robbins, President Tom Iadanza, 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 Forms 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 today. I have a few comments to make this morning, and then we ask Tom to provide insight on the quarter's loan and deposit results. Mike will then discuss the financial results in more detail. In the third quarter of 2022, Valley reported net income of $178 million, earnings per share of 34 cents, and an annualized ROA of 1.30%. Exclusive of non-core charges, adjusted net income, EPS, and ROA were $182 million, 35 cents and 1.32% respectively. These exceptional results reflect the benefits of our asset sensitive balance sheet and our consistently strong credit results. As you are aware, Valley has undergone a meaningful evolution over the last few years. By expanding in terms of both size and capability, we have uniquely positioned ourselves as one of the premier service oriented commercial banks in the entire country. From a size perspective, we sit in an incredibly strong position with only a handful of nationwide peers. Our customers have access to the robust suite of products and services they would find at a large bank, but with Valley's exceptional responsiveness and high touch approach. This combination has accelerated our brand awareness and enabled us to selectively add top level talent and desirable clients. This unique approach also positions us to capitalize on market disruption that may occur as a result of future economic volatility. While we remain selective with regards to how and when we grow, we believe that times of stress can create exceptional customer acquisition opportunities. As the pool of banks that look like Valley continue to shrink, we are prepared to maintain our momentum and maximize our competitive advantages. One of Valley's distinguishing characteristics is our positioning in some of the country's most attractive commercial markets, including Metro New York, Florida, and California. We believe these markets will weather economic downturns while providing unique opportunities for diversified loan and deposit growth. Our results this quarter reflect the benefits of our diversified business model and the economic strength of our targeted markets of operations. Before I turn the call over to Tom, I want to briefly update you on the guidance we have previously provided. On page 4 of the deck, we compare selected third quarter results to last quarter's guidance. While we are not formally adjusting our near-term guidance, we believe that the loan growth and net interest income is likely to exceed our prior expectations. Meanwhile, the guidance for our efficiency ratio and tax rates remain unchanged. With that, I would turn the call over to Tom and Mike to discuss this quarter's growth and financial results.

Thank you, Ira. Slide 5 illustrates the quarter's 15% annualized loan growth, which is below the mid-20% organic growth rate from the second quarter. While loan origination slowed during the third quarter, net growth is above the high end of our anticipated range as a result of two key factors. First, as interest rates have increased faster than anticipated, payoffs have slowed dramatically. Second, contributions from the residential and consumer portfolios exceeded expectations partially as a result of cross-sell to legacy Leumi customers. On the commercial side, our growth remains well diversified across asset classes and geographies. We have selectively tightened underwriting standards, which led to lower loan-to-values and higher debt service coverages on originations during the quarter. We also continue to see a significant amount of loan production to repeat customers. These borrowers are sophisticated and well-known to Valley and come back to us time and again to benefit from our responsiveness and strong execution. As Ira mentioned, we have continued to add talented commercial bankers across our footprint. This is consistent with our proven ability to enhance our franchise, particularly in times of disruption around us. These efforts should help us offset a broader slowdown in demand and be additive to our loan and deposit production in 2023 and beyond. Finally, on slide five, you can see the 113 basis point increase in average new origination yields to 5.21% during the quarter. As you would expect, origination yields increased each month as market rates moved higher. This is a positive indicator that we are able to pass through higher rates to our borrowers and we anticipate that origination yields will continue to ascend. Turning to slide six, you can see that deposits grew at an annualized rate of approximately 13% during the quarter. As we have previously discussed, we have devoted significant resources to diversifying our deposit gathering channels over the last few years. While certain of our funding sources have become more competitive, and we've been able to tap other customer segments and business lines to fund our loan growth. As an example, we have seen private banking customers take advantage of higher rates by redeploying deposits into the Treasury securities market. To offset this and support growth, we rolled out retail CD promotions over the summer, which generated over $1 billion of new deposits. These promotions were timed in advance of Fed hikes and have added duration at rates that are extremely attractive in retrospect. We continue to focus on the deposit side and acknowledge that each Fed hike brings more pricing and competition. We are tactically managing our business lines to ensure that we generate deposits in the most cost-effective manner to support our loan growth. With that, I will turn the call over to Mike Hagedorn to provide more insight on the quarter's financials.