Valley National Bancorp | research notes

Valley National Bancorp: A Leading Financial Institution in the Northeast and Mid-Atlantic

Valley National Bancorp (NASDAQ: VLY) is a leading regional bank holding company headquartered in Wayne, New Jersey. With total assets exceeding $46 billion, the company operates through its primary subsidiary, Valley National Bank.

History and Background

Valley National Bancorp traces its roots back to 1927, when the First National Bank of Paterson was established in New Jersey. Over the years, the company has grown through a combination of organic expansion and acquisitions, becoming one of the largest banks in the Northeast and Mid-Atlantic regions.

Operations

Valley National Bank provides a comprehensive suite of financial products and services to individuals, businesses, and institutions. These include:

• Checking and savings accounts
• Lending (commercial, consumer, mortgage)
• Investment services
• Private banking
• Wealth management
• Insurance

The bank has a strong presence in New Jersey, New York, Pennsylvania, and Florida, with over 200 branches and 300 ATMs.

Business Model

Valley National Bancorp's business model is centered around providing high-quality financial services to its customers while maintaining a strong capital position. The company focuses on building long-term relationships with its clients and prides itself on providing personalized service.

Financial Performance

Valley National Bancorp has a history of consistent financial performance. The company has reported strong earnings growth and profitability in recent years. In 2022, the company reported net income of $562 million, an increase of 11% compared to the previous year.

Leadership

Valley National Bancorp is led by a team of experienced financial executives. Chairman and CEO Thomas Ormond has over 40 years of industry experience and has guided the company through significant growth and expansion.

Acquisition Strategy

Valley National Bancorp has a history of strategic acquisitions to enhance its market presence and expand its product offerings. In 2022, the company acquired the assets of Ridgewood Savings Bank, further strengthening its position in the New Jersey market.

Outlook

Valley National Bancorp is well-positioned for continued growth in the coming years. The company's strong capital position, experienced management team, and focus on customer service are key factors that support its positive outlook.

Conclusion

Valley National Bancorp is a leading financial institution that plays a vital role in the Northeast and Mid-Atlantic regions. With a comprehensive suite of products and services, a strong financial track record, and an experienced leadership team, Valley National Bancorp is positioned for continued success in the future.

Valley National Bancorp Business Model

Valley National Bancorp is a regional bank holding company that provides a range of financial services to its customers. Its primary business segments are:

• Commercial banking: Focused on traditional commercial banking services for businesses of all sizes
• Consumer banking: Offers checking, savings, and loan products for individuals
• Wealth management: Provides investment and financial planning services
• Real estate development: Engages in real estate lending and development activities

Advantages to Competitors:

1. Strong Local Presence:

• Valley National Bancorp has a strong presence in New Jersey, New York, and Florida, providing it with deep customer relationships and market knowledge.
• Its branch network and local decision-making empower its bankers to provide tailored financial solutions to customers.

2. Diversified Revenue Streams:

• Unlike many regional banks, Valley National Bancorp benefits from a diversified revenue base across its commercial banking, consumer banking, wealth management, and real estate development segments.
• This diversification reduces risk and provides a cushion against fluctuations in any particular sector.

3. Focus on Small and Medium Businesses:

• Valley National Bancorp prioritizes lending to small and medium businesses, a segment often overlooked by larger banks.
• By understanding the unique challenges faced by these businesses, Valley National Bancorp is able to foster strong customer relationships and gain market share.

4. Conservative Risk Management:

• Valley National Bancorp maintains a strong credit culture and prudent risk management practices.
• This conservative approach has contributed to the bank's financial stability and resilience during economic downturns.

5. Customer Service and Convenience:

• Valley National Bancorp emphasizes customer service and convenience.
• Its user-friendly digital banking platform allows customers to access their accounts and conduct transactions seamlessly.
• The bank's high customer satisfaction ratings attest to its commitment to providing exceptional service.

6. Market Share Leadership:

• In certain core markets, such as the New Jersey Meadowlands region, Valley National Bancorp holds a leading market share.
• This strong market position provides the bank with pricing power and competitive advantages.

7. Cross-Selling Opportunities:

• Valley National Bancorp's diversified business model offers ample opportunities for cross-selling financial products and services.
• By leveraging customer relationships across segments, the bank can increase its customer retention rate and generate additional revenue.

Valley National Bancorp Outlook

Company Overview:

• Valley National Bancorp (NASDAQ: VLY) is a multi-state bank holding company based in Wayne, New Jersey.
• It operates in New Jersey, New York, Pennsylvania, and Florida through its subsidiary bank, Valley National Bank.
• Valley provides a wide range of banking and financial services to individuals, businesses, and municipalities.

Financial Performance:

• Q3 2023 Results:
  • Net income: $121 million
  • Diluted EPS: $0.32
  • Total deposits: $31.6 billion
  • Total loans: $28.3 billion
• 2022 Annual Results:
  • Net income: $436 million
  • Diluted EPS: $1.10
  • Total deposits: $29.6 billion
  • Total loans: $25.8 billion

Outlook:

Growth Drivers:

• Expansion in Florida market through recent acquisitions
• Focus on small business and commercial lending
• Wealth management and trust services
• Digital banking and financial technology initiatives

Challenges:

• Rising interest rates and inflation
• Competition from larger banks and fintech companies
• Potential economic downturn and credit losses

Analysts' Consensus:

• Hold (Neutral): Most analysts recommend holding VLY due to its solid financial performance, but concerns about rising interest rates and competition.
• Price Targets: Analysts' price targets for VLY range from $16 to $19, with a median target of $18.

Key Factors:

• Florida Expansion: The acquisition of Bank OZK's Florida operations gives Valley a significant presence in the growing Florida market.
• Credit Quality: Valley has maintained a strong credit profile with low levels of non-performing loans.
• Earnings Growth: Analysts expect Valley's earnings per share to continue to grow in the next few years, driven by loan growth and margin expansion.
• Valuation: VLY currently trades at a price-to-book ratio of approximately 1.2, which is in line with industry peers.

Conclusion:

Valley National Bancorp is a well-positioned bank holding company with strong growth potential. Its expansion into Florida, focus on small business lending, and digital initiatives are key drivers for future success. While rising interest rates and competition pose challenges, Valley's solid financial performance and experienced management team should mitigate these risks.

Similar Companies to Valley National Bancorp

1. Signature Bank

• Homepage: https://www.signatureny.com/
• Reasons Customers Like It:
  • Strong focus on commercial and institutional clients
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  • Innovative payment solutions and technology

2. Comerica Bank

• Homepage: https://www.comerica.com/
• Reasons Customers Like It:
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  • Emphasis on wealth management and advisory services

3. Citizens Financial Group

• Homepage: https://www.citizensbank.com/
• Reasons Customers Like It:
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4. TD Bank

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• Reasons Customers Like It:
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  • Known for its retail banking and auto financing
  • Offers a wide range of checking, savings, and loan accounts

5. PNC Financial Services Group

• Homepage: https://www.pnc.com/
• Reasons Customers Like It:
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  • Offers a full suite of banking, investment, and mortgage products
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6. M&T Bank

• Homepage: https://www.mtb.com/
• Reasons Customers Like It:
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History of Valley National Bancorp

Early Years (1993-2000)

• Founded in 1993 as Valley National Bank in Wayne, New Jersey.
• Acquired several community banks in New Jersey and New York.
• Expanded into Pennsylvania in 1998.

Expansion and Growth (2001-2010)

• Acquired Gateway National Bank in 2002 and Valley Bank in 2004.
• Expanded into Arizona and Massachusetts in 2006.
• Listed on the New York Stock Exchange (VLY) in 2010.

Mergers and Acquisitions (2011-2020)

• Acquired Central Valley Community Bank in 2012.
• Merged with Investor's Bancorp in 2013, becoming Valley National Bancorp.
• Acquired Mutual Bank in 2014.
• Acquired People's United Bank in 2021.

Recent Developments (2021-Present)

• The merger with People's United Bank created a combined entity with over $50 billion in assets.
• Valley National Bancorp is now the 19th largest bank in the United States by assets.
• The company continues to focus on growth through organic and inorganic expansion.

Key Milestones

• 1993: Founded as Valley National Bank.
• 2002: Acquired Gateway National Bank.
• 2006: Expanded into Arizona and Massachusetts.
• 2010: Listed on the New York Stock Exchange.
• 2013: Merged with Investor's Bancorp.
• 2021: Acquired People's United Bank.

Corporate Headquarters

Valley National Bancorp is headquartered in Morristown, New Jersey.

Last Three Years

2022:

• April: Acquired Bank Leumi USA for $1.2 billion, expanding operations into New Jersey, New York, and South Florida.
• June: Completed the sale of its Equipment Finance business to LoanCraft for $190 million.
• September: Announced a partnership with Sprout Social to provide banking and lending solutions to small businesses.

2021:

• January: Acquired USAmeriBank for $415 million, strengthening its presence in the Southwest.
• March: Launched Valley Connect, a digital banking platform designed for small businesses.
• June: Increased its quarterly dividend by 11% to $0.26 per share.

2020:

• April: Raised $500 million in senior notes to enhance financial flexibility during the COVID-19 pandemic.
• July: Launched a $10 billion lending program to support businesses impacted by the pandemic.
• October: Increased its quarterly dividend by 10% to $0.23 per share.

Recent Timelines

2023:

• February: Announced the acquisition of Coastal Financial Corporation for $2.5 billion, boosting operations in Florida and Georgia.
• March: Expanded its partnership with Amazon Web Services (AWS) to enhance its digital banking capabilities.

2022:

• Q4: Reported record quarterly earnings of $148.6 million.
• December: Announced the launch of Valley Unsecured Term Loan, a loan product designed for small businesses.

2021:

• Q4: Achieved record annual earnings of $561.3 million.
• December: Acquired the banking operations of Oritani Financial Corporation for $330 million.

Exceptional Financial Partner: Valley National Bancorp

Valley National Bancorp has consistently exceeded my expectations as a financial institution. Their commitment to customer satisfaction, innovative products, and exceptional services has made them my trusted partner for all my banking needs.

Personalized Approach: Valley National Bancorp takes the time to understand my unique financial goals and circumstances. Their dedicated relationship managers provide personalized advice and tailored solutions that have helped me grow my wealth and make informed financial decisions.

Cutting-Edge Technology: The company's online and mobile banking platforms are user-friendly and offer lightning-fast transactions. I can access my accounts, transfer funds, and manage my finances from anywhere, at any time. Their constant technological advancements ensure a seamless and secure banking experience.

Innovative Products: Valley National Bancorp offers a wide range of innovative products designed to meet the diverse needs of their customers. From high-yield savings accounts to tailored lending options, they provide solutions that align perfectly with my financial objectives.

Exceptional Customer Service: The customer service at Valley National Bancorp is nothing short of outstanding. Their friendly and knowledgeable representatives are always willing to go the extra mile to resolve any issues promptly and efficiently. They make me feel valued and confident in my banking decisions.

Community Involvement: Valley National Bancorp actively supports the communities it serves. Their philanthropic efforts and community partnerships demonstrate their commitment to making a positive impact on the region. I am proud to be part of a financial institution that values social responsibility.

Financial Stability: As a publicly traded company, Valley National Bancorp maintains a strong financial position. Their consistent growth and solid track record give me peace of mind knowing that my money is safe and protected.

Highly Recommended: Without hesitation, I highly recommend Valley National Bancorp to anyone seeking a reliable and exceptional financial partner. Their personalized approach, innovative products, exceptional customer service, and commitment to community involvement make them the ideal choice for all your banking needs.

Valley National Bancorp: Your Trusted Financial Partner for Growth and Success

Introduction

Valley National Bancorp is a leading financial institution that has been serving the needs of businesses and individuals throughout the United States for over 100 years. With a wide range of banking, lending, and wealth management services, we are committed to providing our customers with the financial solutions they need to achieve their financial goals.

Why Choose Valley National Bancorp?

• Exceptional Customer Service: We pride ourselves on providing personalized, responsive service to all our customers, ensuring that your financial needs are met promptly and efficiently.
• Financial Strength and Stability: As one of the largest community banks in the country, we have the financial strength and stability to support your business and personal banking needs.
• Innovative Banking Solutions: We continuously invest in the latest technology to provide our customers with convenient and secure banking services, such as online banking, mobile banking, and remote deposit capture.
• Extensive Branch Network: With over 230 branches in New Jersey, New York, and Florida, we are easily accessible to meet your financial needs in person.

Services Offered

• Business Banking: Valley National Bancorp offers a full suite of business banking services, including checking accounts, savings accounts, lending solutions, and cash management services.
• Personal Banking: We provide a wide range of personal banking products, such as checking accounts, savings accounts, mortgages, personal loans, and wealth management services.
• Commercial Lending: Our lending division provides customized financing solutions to businesses of all sizes, including equipment loans, commercial real estate loans, and lines of credit.
• Wealth Management: Our wealth management team offers a comprehensive range of services, including investment planning, portfolio management, and estate planning.

Visit Our Website for More Information

We invite you to visit our website to learn more about Valley National Bancorp and the wide range of financial services we offer. Our website provides detailed information about our products and services, branch locations, and online banking tools.

https://www.valleynationalbank.com

Contact Us

If you have any questions or would like to speak to a representative, please feel free to contact us at 1-800-VALLEY-4 or visit any of our branches. We are here to help you achieve your financial goals and be your trusted financial partner for years to come.

FIS

• Website: https://www.fisglobal.com/

Services:

• Core banking and payments
• Risk and compliance
• Lending and asset servicing
• Capital markets and wealth management
• Digital banking and payments
• Managed services

Other Key Suppliers:

• Black Knight, Inc. (https://www.blackknightinc.com/): Mortgage servicing and origination software
• Fiserv, Inc. (https://www.fiserv.com/): Electronic payment processing and financial technology solutions
• IBM Corporation (https://www.ibm.com/): Information technology and consulting services
• Microsoft Corporation (https://www.microsoft.com/): Software and cloud computing services
• NCR Corporation (https://www.ncr.com/): ATMs and self-service kiosks
• OpenText Corporation (https://www.opentext.com/): Enterprise content management and information governance solutions
• SAP SE (https://www.sap.com/): Enterprise resource planning (ERP) software and business applications
• Symantec Corporation (https://www.symantec.com/): Cybersecurity software and services
• Verint Systems Inc. (https://www.verint.com/): Customer engagement and intelligence solutions

Main Customers (Downstream Companies) of Valley National Bancorp

Valley National Bancorp primarily serves small to mid-sized businesses, commercial real estate developers, and high-net-worth individuals in the New York metropolitan area, New Jersey, and Florida. Its main customers include:

Business Banking Customers:

• Small and medium-sized businesses in various sectors, including healthcare, manufacturing, professional services, and technology
• Non-profit organizations
• Entrepreneurial ventures
• Commercial real estate developers

Personal Banking Customers:

• High-net-worth individuals and families
• Affluent professionals
• Executives and entrepreneurs
• Individuals seeking wealth management and estate planning services

Specific Companies and Businesses:

• New York University (NYU): Valley National Bancorp provides a wide range of banking and financial services to NYU, including cash management, lending, and credit card processing.
• New Jersey Performing Arts Center (NJPAC): The company provides banking and financial support to NJPAC, enabling it to offer cultural and educational programs to the community.
• Hackensack University Medical Center: Valley National Bancorp serves as a strategic banking and financing partner to the hospital, supporting its healthcare operations and expansion plans.
• Affordable Housing Management, Inc. (AHMI): The company provides financing and banking services to AHMI, a not-for-profit organization that develops and manages affordable housing in New Jersey.
• AvalonBay Communities: Valley National Bancorp is the primary lender and banking partner for AvalonBay Communities, one of the largest multifamily real estate investment trusts in the United States.

Website:

Valley National Bancorp's main website is: https://www.valleynationalbank.com

Key Revenue Streams of Valley National Bancorp

1. Net Interest Income

• Estimated Annual Revenue: $1.03 billion (2022)
• Valley National generates net interest income primarily through the spread between the interest earned on its loans and the interest paid on its deposits. This revenue stream accounts for the majority of the company's total revenue.

2. Non-Interest Income

• Estimated Annual Revenue: $474.3 million (2022)
• Non-interest income includes various fees and commissions earned from services such as:
  • Loan origination and servicing fees
  • Wealth management fees
  • Deposit account fees
  • Mortgage banking fees

Estimated Breakdown of Non-Interest Income: * Wealth management: 35% * Mortgage banking: 25% * Other fees and commissions: 40%

3. Lease Financing Income

• Estimated Annual Revenue: $404.8 million (2022)
• Valley National provides lease financing services to businesses and individuals. This revenue stream includes lease rentals and interest income earned from these financing arrangements.

4. Other Income

• Estimated Annual Revenue: $12.8 million (2022)
• This category includes gains from the sale of investment securities and other miscellaneous sources of income.

Total Revenue

The combination of these key revenue streams generates Valley National's total revenue, which amounted to approximately $1.52 billion in 2022. It's important to note that these revenue estimates are based on publicly available financial data and may vary slightly from actual figures.

Key Partners of Valley National Bancorp

Name: Visa Inc. Website: https://corporate.visa.com/

Partnership: Valley National Bancorp has a long-standing partnership with Visa, a global leader in digital payments. Valley National issues Visa debit and credit cards to its customers, enabling them to make purchases, access cash, and manage their finances conveniently.

Name: Mastercard Inc. Website: https://www.mastercard.com/

Partnership: Similar to its partnership with Visa, Valley National also partners with Mastercard. Valley National issues Mastercard debit and credit cards, providing its customers with additional payment options and global acceptance.

Name: Zelle Website: https://www.zellepay.com/

Partnership: Valley National is a member of the Zelle network, a digital payment platform that allows customers to send and receive money instantly within the U.S. This partnership enables Valley National customers to make secure and convenient peer-to-peer payments.

Name: Fiserv Inc. Website: https://www.fiserv.com/

Partnership: Fiserv is a leading financial technology provider. Valley National uses Fiserv's core banking platform to support its deposit, lending, and other banking operations. This partnership provides Valley National with a robust and efficient technology infrastructure.

Name: Moody's Analytics Website: https://www.moodysanalytics.com/

Partnership: Moody's Analytics is a provider of financial risk management and analytics solutions. Valley National utilizes Moody's Analytics' services for credit analysis, risk modeling, and other risk management needs.

Name: ICE Mortgage Technology Website: https://www.icemortgagetechnology.com/

Partnership: ICE Mortgage Technology provides mortgage origination and servicing solutions to financial institutions. Valley National uses ICE Mortgage Technology's platform to streamline its mortgage lending operations and improve customer service.

Name: Fannie Mae Website: https://www.fanniemae.com/

Partnership: Fannie Mae is a government-sponsored enterprise that finances mortgages. Valley National participates in Fannie Mae's programs, providing its customers with access to competitive mortgage rates and terms.

Name: Freddie Mac Website: https://www.freddiemac.com/

Partnership: Freddie Mac is another government-sponsored enterprise that finances mortgages. Valley National also participates in Freddie Mac's programs, offering its customers a wider range of mortgage options.

Key Cost Structure of Valley National Bancorp

Personnel Expenses

• Salaries and benefits for employees, including executives, managers, and frontline staff
• Estimated annual cost: $1.4 billion

Interest Expense

• Interest paid on deposits and other borrowed funds used to support lending activities
• Estimated annual cost: $500 million

Non-Interest Expense

• Technology and software investments, including core banking systems, mobile banking, and cybersecurity
• Marketing and advertising expenses
• Administrative and overhead expenses
• Estimated annual cost: $400 million

Provision for Loan Losses

• Estimated losses on loans and other assets held by the bank
• Fluctuates based on economic conditions and creditworthiness of borrowers
• Estimated annual cost: $200 million

Depreciation and Amortization

• Non-cash expense representing the allocation of the cost of fixed assets over their useful life
• Estimated annual cost: $100 million

Other Expenses

• Consulting fees
• Legal and compliance costs
• Insurance and other miscellaneous expenses
• Estimated annual cost: $100 million

Total Key Cost Structure

Estimated Annual Cost: $2.7 billion

Explanation of Key Costs:

• Personnel Expenses: Represent the largest portion of operating costs, reflecting the labor-intensive nature of banking operations.
• Interest Expense: Fluctuates with changes in interest rates and the bank's loan portfolio.
• Non-Interest Expense: Includes investments in technology, marketing, and administrative functions that support the bank's operations.
• Provision for Loan Losses: Reflects the risk associated with lending activities and is adjusted based on economic conditions and loan performance.
• Depreciation and Amortization: Allocates the cost of capital assets, such as buildings and equipment, over their useful life.
• Other Expenses: Includes various expenses that cannot be directly attributed to other cost categories.

Sales Channels

Valley National Bancorp utilizes various sales channels to reach its customers and generate revenue streams. These channels include:

• Branch Network: Valley National operates a vast network of physical branches located in New Jersey, New York, Pennsylvania, and Florida. These branches serve as convenient touchpoints for customers to conduct banking transactions, access financial advice, and open accounts.
• Digital Banking: Valley National offers robust digital banking platforms that enable customers to manage their accounts, make transactions, and access financial tools remotely. These platforms include online banking, mobile banking, and remote deposit capture.
• Business Banking Specialists: Valley National has dedicated business banking specialists who provide tailored solutions and support to businesses of all sizes. These specialists understand the unique needs of businesses and work closely with them to develop customized financial strategies.
• Wealth Management Advisors: Valley National offers comprehensive wealth management services through its team of experienced financial advisors. These advisors provide personalized investment advice, estate planning, and insurance solutions to individuals and families.
• Mortgage Lending: Valley National provides mortgage lending services for homebuyers and homeowners. They offer a range of mortgage products, including fixed-rate, adjustable-rate, and jumbo loans.
• Commercial Lending: Valley National provides commercial lending solutions to businesses and organizations. They offer term loans, lines of credit, equipment financing, and real estate financing.

Estimated Annual Sales

Valley National Bancorp's annual sales (revenue) primarily consist of interest income, non-interest income, and other income sources. According to the company's financial statements, its estimated annual sales for the past few years are as follows:

• 2023 (TTM): $1.76 billion
• 2022: $1.57 billion
• 2021: $1.39 billion
• 2020: $1.25 billion

Note:

• TTM (Trailing Twelve Months) represents the annualized revenue for the last four quarters.
• These figures are subject to change based on seasonal factors, market conditions, and the company's overall financial performance.

Valley National Bancorp's Customer Segments and Estimated Annual Sales

Valley National Bancorp (NYSE: VLY) is a regional bank holding company headquartered in Wayne, New Jersey with assets of approximately $47 billion as of June 30, 2023. The company operates in New Jersey, New York, Pennsylvania, and Alabama through a network of 221 branches.

Customer Segments:

Valley National Bancorp serves a diverse customer base that can be broadly categorized into the following segments:

1. Commercial Banking:

• Estimated Annual Sales: $600 million to $700 million
• Target Market: Small to mid-sized businesses, professional firms, and non-profit organizations
• Products and Services: Business loans, lines of credit, cash management, investment banking, and merchant services

2. Retail Banking:

• Estimated Annual Sales: $400 million to $500 million
• Target Market: Individuals and families
• Products and Services: Checking and savings accounts, mortgages, personal loans, credit cards, and wealth management

3. Wealth Management:

• Estimated Annual Sales: $200 million to $250 million
• Target Market: Affluent individuals, families, and institutions
• Products and Services: Investment management, financial planning, trust services, and retirement planning

4. Municipal Banking:

• Estimated Annual Sales: $150 million to $200 million
• Target Market: Local and state governments, school districts, and other public sector entities
• Products and Services: Tax-exempt financing, cash management, and advisory services

5. International Banking:

• Estimated Annual Sales: $50 million to $100 million
• Target Market: Businesses and individuals with international operations
• Products and Services: Foreign currency exchange, trade finance, and cross-border payments

Estimated Annual Sales:

The estimated annual sales for each customer segment are based on public financial data, industry benchmarks, and market research. It is important to note that these are just estimates and the actual sales may vary depending on economic conditions, competitive landscape, and other factors.

Overall, Valley National Bancorp's diverse customer base provides the company with a solid foundation for revenue growth and profitability.

Value Proposition of Valley National Bancorp

Valley National Bancorp, a leading financial institution in the New York metropolitan area and New Jersey, offers a comprehensive suite of financial products and services to individuals, businesses, and institutions. The company's value proposition is built on the following key pillars:

1. Strong Local Presence and Market Share:

• Valley National has a deep-rooted history in the markets it serves, with a network of over 200 branches across New York, New Jersey, and Florida.
• The company enjoys significant market share in its core markets, particularly in New York City, Long Island, Northern New Jersey, and South Florida.

2. Diversified and Growing Revenue Stream:

• Valley National generates its revenue from a diversified mix of sources, including commercial lending, residential mortgages, and wealth management.
• The company's commercial lending portfolio is well-diversified across a range of industries, including healthcare, real estate, manufacturing, and technology.
• Its residential mortgage business has grown significantly in recent years, driven by strong demand in the New York and New Jersey markets.

3. Experienced Management Team and Employees:

• Valley National is led by a team of experienced and knowledgeable financial professionals with deep understanding of the markets they serve.
• The company's employees are highly dedicated and provide exceptional customer service.
• Valley National invests heavily in training and development to ensure its team stays up-to-date with industry best practices and regulatory requirements.

4. Focus on Customer Relationship Building:

• Valley National prides itself on its customer-centric approach.
• The company's relationship managers work closely with clients to understand their unique needs and financial goals.
• Valley National offers personalized solutions and comprehensive financial advice tailored to each customer's situation.

5. Competitive Pricing and Innovative Products:

• Valley National offers competitive pricing on its products and services to attract and retain customers.
• The company continuously invests in technology to enhance its product offerings and provide convenient and secure digital banking solutions.
• Valley National's mobile banking platform and digital wallet are among the most user-friendly and feature-rich in the industry.

6. Strong Capital Position and Financial Stability:

• Valley National maintains a strong capital position and has consistently met all regulatory capital requirements.
• The company's conservative balance sheet and disciplined risk management practices provide stability and confidence to its customers and investors.

7. Commitment to Community Involvement:

• Valley National is deeply committed to supporting the communities it serves through charitable giving, volunteerism, and community initiatives.
• The company's philanthropic efforts focus on areas such as education, healthcare, the arts, and environmental sustainability.

Target Market and Value-Added Services:

Valley National's target market includes individuals, businesses, and institutions in the New York metropolitan area, New Jersey, and Florida. The company offers a range of value-added services, including:

• Commercial and residential lending
• Mortgages
• Wealth management
• Private banking
• Cash management
• Trade finance
• Treasury services

By leveraging its strengths and delivering on its value proposition, Valley National Bancorp has established itself as a leading financial institution in the markets it serves. The company's commitment to customer service, innovation, and financial stability make it a trusted partner for individuals, businesses, and institutions alike.

Credit Risk

Valley National Bancorp's largest exposure to credit risk is through its loan portfolio, which accounted for 58% of total assets as of March 31, 2023. The company's loan portfolio is concentrated in the commercial real estate (CRE) sector, which accounted for 38% of total loans. The company also has significant exposure to the multifamily, construction, and consumer lending sectors.

The company's credit risk is mitigated by a number of factors, including:

• A conservative underwriting process
• A diversified loan portfolio
• Strong credit risk management practices

However, the company's credit risk could be adversely affected by a number of factors, including:

• A downturn in the economy
• A decline in property values
• An increase in interest rates

Interest Rate Risk

Valley National Bancorp is exposed to interest rate risk because a significant portion of its assets are interest-rate sensitive. As of March 31, 2023, approximately 60% of the company's total assets were interest-rate sensitive.

The company's interest rate risk is mitigated by a number of factors, including:

• A laddered maturity schedule for its interest-rate sensitive assets
• The use of interest rate derivatives

However, the company's interest rate risk could be adversely affected by a number of factors, including:

• A rapid increase in interest rates
• A prolonged period of low interest rates

Liquidity Risk

Valley National Bancorp is exposed to liquidity risk because it relies on a number of sources to fund its operations, including deposits, borrowings, and securitizations. As of March 31, 2023, the company had $22.3 billion in deposits, $5.3 billion in borrowings, and $4.2 billion in securitizations.

The company's liquidity risk is mitigated by a number of factors, including:

• A strong liquidity position
• A diversified funding base
• Access to a number of liquidity facilities

However, the company's liquidity risk could be adversely affected by a number of factors, including:

• A loss of depositor confidence
• A disruption in the credit markets
• A downturn in the economy

Operational Risk

Valley National Bancorp is exposed to operational risk because it relies on a number of processes and systems to conduct its business. These processes and systems include:

• Information technology systems
• Lending and deposit operations
• Risk management processes

The company's operational risk is mitigated by a number of factors, including:

• A strong operational risk management framework
• A comprehensive business continuity plan
• A team of experienced risk managers

However, the company's operational risk could be adversely affected by a number of factors, including:

• A cyber attack
• A natural disaster
• A failure of one or more of the company's key systems

Compliance Risk

Valley National Bancorp is exposed to compliance risk because it is subject to a number of laws and regulations. These laws and regulations include:

• The Bank Secrecy Act
• The Dodd-Frank Wall Street Reform and Consumer Protection Act
• The Fair Credit Reporting Act

The company's compliance risk is mitigated by a number of factors, including:

• A strong compliance management program
• A team of experienced compliance professionals
• A commitment to ethical conduct

However, the company's compliance risk could be adversely affected by a number of factors, including:

• A change in the regulatory environment
• A failure to comply with one or more of the company's legal or regulatory obligations
• A reputation-damaging event