Valley Ntl Q2 2026 Earnings Call Transcript

Valley Ntl (NASDAQ: VLY ) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This content is powered APIs. 30 per diluted share.

The company saw significant growth in customer deposits, particularly non-interest-bearing deposits, and a diversified increase in loans, especially in C&I and owner-occupied commercial real estate. Valley National is focusing on expanding fee income, with notable growth in capital markets and tax credit advisory services, and expects fee income growth to reach the higher end of their projected 2026 range. Strategic initiatives include leveraging technology and AI to improve efficiency and productivity, with an anticipated structural shift in efficiency ratios over time.

The company maintained a positive outlook for 2026, expecting continued earnings growth, and plans to balance organic growth with capital returns, including buybacks and dividends. Full Transcript OPERATOR Good day, and thank you for standing by. Welcome to Q2 2026 Valley Ntl 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'll need to press star 11 on your telephone. 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 turn the call over to Andrew Giannetti. Please go ahead. Andrew Giannetti, Investor Relations Good morning, and welcome to Valley Ntl's second quarter 2026 earnings conference call.

I am joined today by CEO Ira Robbins and CFO Travis Lan. com. Reconciliations of any non-GAAP measures mentioned on the call can be found in today's earnings release and presentation. Please also note slide 2 of our earnings presentation, and remember that comments made today may include forward-looking statements about Valley Ntl and the banking industry, and actual results may differ from those statements.

For more information on these forward-looking statements and associated risk factors, please refer to our SEC filings, including Forms 8-K, 10-Q, and 10-K. With that, I'll turn the call over to Ira Robbins. Ira Robbins, CEO Thank you, Andrew. Our second quarter results illustrate continued progress against our strategic growth priorities.

We delivered strong customer deposit growth, including meaningful growth in non-interest-bearing balances. We generated diverse loan growth concentrated in C&I and owner-occupied commercial real estate, and we continue to expand fee income in both absolute dollars and as a percentage of revenue. We remain focused on strengthening our value proposition by scaling our relationship-oriented, commercially focused model across our markets and business lines. While the quarter's growth was encouraging, our focus remains on the quality, durability, and strategic value of the relationships that we attract.

We believe continued execution against these priorities will support stronger returns over time. This execution translated into strong financial performance for the quarter. 29 per diluted share. 30 per diluted share.

64% of average assets reached its highest level since the fourth quarter of 2022. Deposit growth remains central to our strategy. We believe that our diversified commercial and consumer funding channels are increasingly critical as deposit competition intensifies across the industry. By expanding our commercial banking talent and driving greater adoption of our treasury platform, we expect to continue to win relationships based on service, capability, and value—not simply based on rates.

These efforts directly contributed to nearly $300 million of non-interest-bearing deposit growth during the quarter. On the asset side, our focus in C&I and owner-occupied commercial real estate continues to drive strong loan growth and greater portfolio diversification. C&I growth was broad based during the quarter with contributions from New York, Florida, Chicago, and our specialty healthcare and fund finance verticals. These efforts also support our non-interest-bearing deposit growth as we continue to target disciplined, well-funded commercial relationships that can contribute to our sustained profitability improvement.

Fee income was another area of strength. Sequential growth was driven by high-quality, sustainable businesses, including capital markets and tax credit advisory. Within capital markets, we continue to see a strong pipeline of value-led syndication opportunities, while swap activity has benefited from higher commercial real estate origination volumes. These fee-based capabilities are an important part of our commercial value proposition, and based on performance to date, we remain on track to achieve our 2026 growth objectives.

As we discussed a bit last quarter, technology and artificial intelligence are becoming increasingly important to our ability to further scale our franchise. From a macro perspective, we believe that banks that can effectively adopt AI have the potential to structurally shift their efficiency ratios lower by around 500 basis points. At Valley Ntl, we intend to be an industry leader, and we are excited about the progress that we