Document Contents

<ACCESSION-NUMBER>0000714310-19-000177
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>106
<PERIOD>20190930
<FILING-DATE>20191107
<DATE-OF-FILING-DATE-CHANGE>20191107
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<CONFORMED-NAME>VALLEY NATIONAL BANCORP
<CIK>0000714310
<ASSIGNED-SIC>6021
<IRS-NUMBER>222477875
<STATE-OF-INCORPORATION>NJ
<FISCAL-YEAR-END>1231
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<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-11277
<FILM-NUMBER>191201251
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>ONE PENN PLAZA
<CITY>NEW YORK
<STATE>NY
<ZIP>10119
<PHONE>(973) 305-8800
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<STREET1>ONE PENN PLAZA
<CITY>NEW YORK
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SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



☒	Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 2019



☐	Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number 1-11277

Valley National Bancorp

(Exact name of registrant as specified in its charter)



New Jersey		22-2477875
(State or other jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

One Penn Plaza
New York,	NY	10119
(Address of principal executive office)		(Zip code)

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbols	Name of exchange on which registered
Common Stock, no par value	VLY	The Nasdaq Stock Market LLC
Non-Cumulative Perpetual Preferred Stock, Series A, no par value	VLYPP	The Nasdaq Stock Market LLC
Non-Cumulative Perpetual Preferred Stock, Series B, no par value	VLYPO	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act (check one):



Large accelerated filer	☒	Accelerated filer	☐	Smaller reporting company	☐

Non-accelerated filer	☐			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common Stock (no par value), of which 331,800,601 shares were outstanding as of November 7, 2019.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except for share data)



	September 30, 2019			December 31, 2018
Assets	(Unaudited)
Cash and due from banks	$	312,396		$	251,541
Interest bearing deposits with banks	185,841			177,088
Investment securities:
Held to maturity (fair value of $2,121,203 at September 30, 2019 and $2,034,943 at December 31, 2018)	2,093,757			2,068,246
Available for sale	1,628,062			1,749,544
Total investment securities	3,721,819			3,817,790
Loans held for sale, at fair value	41,621			35,155
Loans	26,567,159			25,035,469
Less: Allowance for loan losses	(161,853		)	(151,859		)
Net loans	26,405,306			24,883,610
Premises and equipment, net	309,730			341,630
Lease right of use assets	286,960			—
Bank owned life insurance	440,026			439,602
Accrued interest receivable	97,282			95,296
Goodwill	1,084,665			1,084,665
Other intangible assets, net	68,150			76,990
Other assets	811,743			659,721
Total Assets	$	33,765,539		$	31,863,088
Liabilities
Deposits:
Non-interest bearing	$	6,379,271		$	6,175,495
Interest bearing:
Savings, NOW and money market	11,294,679			11,213,495
Time	7,872,172			7,063,984
Total deposits	25,546,122			24,452,974
Short-term borrowings	1,825,417			2,118,914
Long-term borrowings	2,250,633			1,654,268
Junior subordinated debentures issued to capital trusts	55,631			55,370
Lease liabilities	311,145			3,125
Accrued expenses and other liabilities	218,516			227,983
Total Liabilities	30,207,464			28,512,634
Shareholders’ Equity
Preferred stock, no par value; 50,000,000 authorized shares:
Series A (4,600,000 shares issued at September 30, 2019 and December 31, 2018)	111,590			111,590
Series B (4,000,000 shares issued at September 30, 2019 and December 31, 2018)	98,101			98,101
Common stock (no par value, authorized 450,000,000 shares; issued 332,101,525 shares at September 30, 2019 and 331,634,951 shares at December 31, 2018)	116,650			116,240
Surplus	2,807,266			2,796,499
Retained earnings	454,020			299,642
Accumulated other comprehensive loss	(26,468		)	(69,431		)
Treasury stock, at cost (295,961 common shares at September 30, 2019 and 203,734 common shares at December 31, 2018)	(3,084		)	(2,187		)
Total Shareholders’ Equity	3,558,075			3,350,454
Total Liabilities and Shareholders’ Equity	$	33,765,539		$	31,863,088

See accompanying notes to consolidated financial statements.

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except for share data)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Interest Income
Interest and fees on loans	$	298,384		$	265,870		$	883,595		$	751,146
Interest and dividends on investment securities:
Taxable	21,801			21,362			67,166			64,907
Tax-exempt	4,219			5,023			13,379			16,383
Dividends	3,171			3,981			9,140			9,648
Interest on federal funds sold and other short-term investments	1,686			805			3,947			2,570
Total interest income	329,261			297,041			977,227			844,654
Interest Expense
Interest on deposits:
Savings, NOW and money market	35,944			28,775			110,247			75,848
Time	42,848			20,109			121,350			51,360
Interest on short-term borrowings	12,953			15,193			40,362			31,838
Interest on long-term borrowings and junior subordinated debentures	16,891			16,164			45,761			50,458
Total interest expense	108,636			80,241			317,720			209,504
Net Interest Income	220,625			216,800			659,507			635,150
Provision for credit losses	8,700			6,552			18,800			24,642
Net Interest Income After Provision for Credit Losses	211,925			210,248			640,707			610,508
Non-Interest Income
Trust and investment services	3,296			3,143			9,296			9,635
Insurance commissions	2,748			3,646			7,922			11,493
Service charges on deposit accounts	5,904			6,597			17,634			20,529
Losses on securities transactions, net	(93		)	(79		)	(114		)	(880		)
Other-than-temporary impairment losses on securities	—			—			(2,928		)	—
Portion recognized in other comprehensive income (before taxes)	—			—			—			—
Net impairment losses on securities recognized in earnings	—			—			(2,928		)	—
Fees from loan servicing	2,463			2,573			7,260			6,841
Gains on sales of loans, net	5,194			3,748			13,700			18,143
(Losses) gains on sales of assets, net	(159		)	(1,899		)	76,997			(2,121		)
Bank owned life insurance	2,687			2,545			6,779			6,960
Other	19,110			8,764			39,880			28,758
Total non-interest income	41,150			29,038			176,426			99,358
Non-Interest Expense
Salary and employee benefits expense	77,271			80,778			236,559			253,014
Net occupancy and equipment expense	29,203			26,295			86,789			81,120
FDIC insurance assessment	5,098			7,421			16,150			20,963
Amortization of other intangible assets	4,694			4,697			13,175			13,607
Professional and legal fees	5,870			6,638			15,286			29,022
Amortization of tax credit investments	4,385			5,412			16,421			15,156
Telecommunication expense	2,698			3,327			7,317			9,936
Other	16,658			17,113			43,712			52,531
Total non-interest expense	145,877			151,681			435,409			475,349
Income Before Income Taxes	107,198			87,605			381,724			234,517
Income tax expense	25,307			18,046			110,035			50,191
Net Income	81,891			69,559			271,689			184,326
Dividends on preferred stock	3,172			3,172			9,516			9,516
Net Income Available to Common Shareholders	$	78,719		$	66,387		$	262,173		$	174,810

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF INCOME (continued)

(in thousands, except for share data)



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Earnings Per Common Share:
Basic	$	0.24	$	0.20	$	0.79	$	0.53
Diluted	0.24		0.20		0.79		0.53
Cash Dividends Declared per Common Share	0.11		0.11		0.33		0.33
Weighted Average Number of Common Shares Outstanding:
Basic	331,797,982		331,486,500		331,716,652		331,180,213
Diluted	333,405,196		333,000,242		333,039,436		332,694,080

See accompanying notes to consolidated financial statements.

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)



	Three Months Ended September 30,					Nine Months Ended September 30,
	2019		2018			2019			2018
Net income	$	81,891	$	69,559		$	271,689		$	184,326
Other comprehensive income, net of tax:
Unrealized gains and losses on available for sale securities
Net gains (losses) arising during the period	8,135		(8,683		)	42,890			(36,129		)
Less reclassification adjustment for net losses included in net income	72		57			90			631
Total	8,207		(8,626		)	42,980			(35,498		)
Unrealized gains and losses on derivatives (cash flow hedges)
Net gains (losses) on derivatives arising during the period	76		221			(989		)	2,636
Less reclassification adjustment for net losses included in net income	324		472			806			2,127
Total	400		693			(183		)	4,763
Defined benefit pension plan
Amortization of net loss	56		113			166			337
Total other comprehensive income (loss)	8,663		(7,820		)	42,963			(30,398		)
Total comprehensive income	$	90,554	$	61,739		$	314,652		$	153,928

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

For the Nine Months Ended September 30, 2019



			Common Stock								Accumulated
	Preferred Stock		Shares	Amount		Surplus		Retained Earnings			Other Comprehensive Loss			Treasury Stock			Total Shareholders’ Equity
	($ in thousands)
Balance - December 31, 2018	$	209,691	331,431	$	116,240	$	2,796,499	$	299,642		$	(69,431	)	$	(2,187	)	$	3,350,454
Adjustment due to the adoption of ASU No. 2016-02	—		—	—		—		4,414			—			—			4,414
Adjustment due to the adoption of ASU No. 2017-08	—		—	—		—		(1,446		)	—			—			(1,446		)
Balance - January 1, 2019	209,691		331,431	116,240		2,796,499		302,610			(69,431		)	(2,187		)	3,353,422
Net income	—		—	—		—		113,330			—			—			113,330
Other comprehensive income, net of tax	—		—	—		—		—			16,174			—			16,174
Cash dividends declared:
Preferred stock, Series A, $0.39 per share	—		—	—		—		(1,797		)	—			—			(1,797		)
Preferred stock, Series B, $0.34 per share	—		—	—		—		(1,375		)	—			—			(1,375		)
Common stock, $0.11 per share	—		—	—		—		(36,686		)	—			—			(36,686		)
Effect of stock incentive plan, net	—		302	226		2,935		(99		)	—			(1,251		)	1,811
Balance - March 31, 2019	209,691		331,733	116,466		2,799,434		375,983			(53,257		)	(3,438		)	3,444,879
Net income	—		—	—		—		76,468			—			—			76,468
Other comprehensive income, net of tax	—		—	—		—		—			18,126			—			18,126
Cash dividends declared:
Preferred stock, Series A, $0.39 per share	—		—	—		—		(1,797		)	—			—			(1,797		)
Preferred stock, Series B, $0.34 per share	—		—	—		—		(1,375		)	—			—			(1,375		)
Common stock, $0.11 per share	—		—	—		—		(36,712		)	—			—			(36,712		)
Effect of stock incentive plan, net	—		55	105		4,625		(377		)	—			176			4,529
Balance - June 30, 2019	209,691		331,788	116,571		2,804,059		412,190			(35,131		)	(3,262		)	3,504,118
Net income	—		—	—		—		81,891			—			—			81,891
Other comprehensive income, net of tax	—</



		Page Number
PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)
	Consolidated Statements of Financial Condition as of September 30, 2019 and December 31, 2018	2
	Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2019 and 2018	3
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2019 and 2018	5
	Consolidated Statements of Changes in Shareholders' Equity for the Nine Months Ended September 30, 2019 and 2018	6
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018	8
	Notes to Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	49

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	83

Item 4.	Controls and Procedures	84

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	84

Item 1A.	Risk Factors	84

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	85

Item 6.	Exhibits	85

SIGNATURES		86

Section 1: 10-Q (10-Q)