Valley National Bancorp

Good day and thank you for standing by. Welcome to the Q2 2025 Valley National Bancorp 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 this session, you will need to press star 11 on your telephone. You will then hear an automated message advising you 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 2025 earnings conference call. I'm joined today by CEO Ira Robbins and Chief Credit Officer Mark Sager. 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 8-K, 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 Robbins.

Thank you, Travis. During the second quarter of 2025, we reported net income of $133 million, or $0.22 per diluted share, and adjusted net income of $134 million, or $0.23 per share. This compares to $106.18 million on both the reported and adjusted basis a quarter ago. The sequential growth in adjusted earnings reflects solid momentum in both net interest income and non-interest income and a lower loan loss provision. Our profitability ratios, including return on average assets and return on tangible shareholders' equity, continue to trend higher and are on track to meet the full-year guidance that we outlined this past January. Beyond the numbers, I am extremely proud of the consistency of our execution across the strategic imperatives that defined Valley's long-term value proposition. This quarter's presentation supplements our traditional financial information with specific qualitative detail on the underlying initiatives that have contributed to this progress. And this morning, I would like to take some time to provide additional detail around those imperatives. Deposit growth and funding transformation. Over the past 12 months, we have added over 105,000 new deposit accounts, which has contributed to approximately 8% core deposit growth. As a result, our reliance on indirect deposits has declined from 18% down to 13%. This has been achieved alongside a 51 basis point reduction in our average cost of deposits for the second quarter of 2025 as compared to the same period of 2024. Since 2017, we have increased commercial deposit accounts at an average annual rate of 11% per year. These results are not coincidental. They're the product of deliberate investments in three channels, talent and technology, targeted market penetration, and the expansion of our specialty verticals. Our ability to attract and retain relationship-based deposits in a competitive environment is a valuable differentiator, and we remain laser-focused on sustaining this momentum. Second, commercial loan diversification. Since 2017, we have grown our CNI portfolio at a 19% compound annual rate. including nearly 15% growth over the last 12 months. This success reflects disciplined, relationship-driven growth in the most dynamic commercial markets in the country. Our geographic footprint, combined with certain specially nationwide verticals like healthcare and fund finance, gives us the flexibility to be selective and the scale to be impactful. We have specifically targeted these nationwide business lines given their attractive risk-adjusted return profiles. Valley has been active in the healthcare CNI space for nearly 20 years, and we have never, I repeat never, taken a loss on any Valley-originated healthcare CNI loans over this 20-year period. While we have historically been active in the capital cost space, our efforts have increased as we continue to leverage our technology banking business. Similar to our healthcare experience, we have never taken a loss on a capital call loan. Third, building durable, high-quality fee income. Non-interest income has grown at a 12% annual rate since 2017, more than double the pace of our peers. And importantly, the composition of that income has improved dramatically. Volatile gain on residential loan sale revenue represented just 3% of total non-interest income in the second quarter of 2025, down from 20% in 2017. We're focusing our growth efforts on our capital markets, treasury management, and tax credit advisory offerings. These are scalable, client-centric businesses that deepen relationships and enhance our earnings resilience. Taken together, These strategic imperatives continue to transform Valley into a more diversified, efficient, and valuable institution. We operate in markets that offer extraordinary growth potential, and we build a platform that is increasingly well positioned to take advantage of these opportunities. Our balance sheet is well positioned, our profitability metrics are improving, and our near-term priorities remain aligned with our long-term vision. And while these strategic initiatives have significantly transformed Valley's value proposition, I'm pleased we have achieved this success without denigrating Valley's financial performance. As reflected on slide seven, we have grown cumulative tangible book value with dividends over 105% during my tenure as CEO. This is approximately 15% greater than the peer medium. That said, We recognize that there remains a meaningful disconnect between the quality of our franchise and the valuation of our shares. But we believe that continued execution of our strategy will close that gap over time. With that, I would turn the call back to Travis to discuss the quarter's financial highlights. After Travis concludes his remarks, Mark, Travis, and I will be available for your questions.