Valley National Bancorp

Good day and thank you for standing by. Welcome to the Valley National Bank second quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone and you will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. 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. Please go ahead.

Good morning, and welcome to Valley's second quarter 2023 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. discussing our results we refer to non-gap measures which exclude certain items from reported results please refer to today's earnings release for reconciliations of these non-gap 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 10 Q and 10 K for a complete discussion of forward-looking statements and the factors that could cause actual results to differ from those statements. With that, I'll turn the call over to Ira Robinson.

Thank you, Travis. In the second quarter of 2023, Valley reported net income of $139 million and earnings per share of 27 cents. Exclusive of non-core items, adjusted net income and EPS were 147 million and 28 cents respectively. The quarterly results were highlighted by strong and stable asset quality metrics, consistent loan activity, improved deposit generation, and solid non-interest income growth. The interest rate environment continues to create cyclical pressures for traditional spread banks like Valley. We have conservatively positioned our balance sheet in a neutral manner, which is both prudent and generates largely stable net interest income in varying interest rate environments. The current inverted curve pressures this approach, yet over the long run, we believe it is appropriate. We firmly believe franchise value is not created by taking straight positions, but rather by increasing clients and diversifying the balance sheet. The current cyclical pressure with the inverted curve will ultimately normalize, and the recent client growth realized by Valley will generate significant value. Outside of the cyclical variables impacting profitability, The banking environment has recently undergone structural changes related to the movement of money. These changing trends will have long-term implications to the banking environment. Our investment in technology over the last few years, both from a client and internal operating perspective, coupled with the diversity of our balance sheet, will mitigate some of these structural changes and ultimately position Valley to capitalize on the evolutionary changes in which clients interact with their financial institutions. During my tenure, we have focused on consistent tangible book value growth as a key driver of long-term shareholder value. While recent market disruption has overshadowed these efforts, I am extremely proud of the near 50% increase in tangible book value over the last five years. In fact, when adjusting for the common cash dividend paid, we have generated over 90% growth in tangible book value since March of 2018. As the market returns to valuing banks on fundamentals, our consistent tangible book value growth will continue to be differentiating as we move forward. In an effort to offset certain cyclical revenue headwinds, we began to implement a cost saving exercise in late June. We remain focused on sustainable long-term growth that acknowledge that we need to flexibly respond to near-term pressures. Our identified saves will primarily come from lower headcounts more efficient third-party consulting and service usage, and specific technology saves. These opportunities are expected to generate more than $40 million of annual pre-tax savings and will be realized over the next four quarters. Culturally, we are reinvigorating the attention to detail, which drove our efficiency improvement from the high 60% range in the beginning of my tenure to the low 50% range in late 2022. Consistent with our history, we will continue to position ourselves to capitalize on the dislocation around us. We anticipate that there will be significant growth opportunities as the environment stabilizes and the yield curve ultimately normalizes. Valley is a strong and vibrant institution operating in great markets. I remain extremely confident in our ability to execute, and I am incredibly excited for what the future holds for our company. With that, I will turn it over to Tom and Mike to discuss the quarter's growth and financial results.