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VLY Stock Rallies 3.3% as Q4 Earnings Beat on Higher NII & Fee Income
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Key Takeaways
VLY reported Q4 adjusted EPS of 31 cents, beating estimates and rising sharply from the prior-year quarter.
Valley National revenues climbed 14.1% as net interest income and fee income surged, boosting profitability.
VLY saw loans & deposits growth, while credit quality was mixed with higher NPAs but sharply lower provisions.
Shares of Valley National Bancorp (VLY - Free Report) rallied 3.3% in yesterday’s trading session on better-than-expected quarterly results. Its fourth-quarter 2025 adjusted earnings per share of 31 cents surpassed the Zacks Consensus Estimate of 29 cents. The bottom line also compared favorably with 13 cents in the year-ago quarter.
Results were primarily aided by increased net interest income (NII) and non-interest income, along with lower provision. Higher loan and deposit balances were another tailwind. However, elevated expenses remained as the undermining factor.
Quarterly results excluded non-core income and charges. After considering these, net income was $195.4 million, which surged 68.9% from the year-ago quarter.
For 2025, adjusted earnings per share (EPS) of 99 cents beat the Zacks Consensus Estimate of 97 cents. The figure represented a rise of 59.7% from the previous year. Net income (GAAP basis) was $598 million, up 57.3% year over year.
Valley National’s Revenues Improve, Expenses Rise
Quarterly total revenues (fully-taxable-equivalent or FTE basis) were $542.5 million, up 14.1% year over year. The top line beat the Zacks Consensus Estimate of $524.7 million.
For 2025, total revenues (fully-taxable-equivalent or FTE basis) were $2.03 billion, up 9.3%. The top line surpassed the Zacks Consensus Estimate of $2.01 billion.
NII (FTE basis) was $466.1 million, up 9.9% year over year. The net interest margin (FTE basis) was 3.17%, which expanded 25 basis points (bps).
Non-interest income jumped 49.1% to $76.3 million. The rise was driven by an increase in almost all fee income components, except Insurance commissions, fees from loan servicing and higher net loss on sale of assets.
Non-interest expenses of $299.4 million increased 7.5% year over year. Meanwhile, adjusted non-interest expenses rose 5% to $289.5 million.
The adjusted efficiency ratio was 53.49%, down from 57.21% in the prior-year quarter. A decline in the efficiency ratio indicates an improvement in profitability.
VLY’s Loans & Deposits Rise
As of Dec. 31, 2025, total loans were $50.1 billion, up 1.8% from the previous quarter. Total deposits were $52.2 billion, up 2%.
Valley National’s Credit Quality: A Mixed Bag
As of Dec. 31, 2025, total non-performing assets were $439.8 million, up 17.8% year over year. Allowance for credit losses as a percentage of total loans was 1.19%, up 2 bps.
In the fourth quarter of 2025, VLY reported provision for credit losses of $20.1 million, which decreased 81.1% from the prior-year quarter.
VLY’s Profitability & Capital Ratios Improve
At the end of the fourth quarter, adjusted annualized return on average assets was 1.14%, up from 0.48% in the year-earlier quarter. Adjusted annualized return on average shareholders’ equity was 9.33%, up from 4.17%.
As of Dec. 31, 2025, the tangible common equity to tangible assets ratio was 8.82%, up from 8.40% in the corresponding period of 2024. Tier 1 risk-based capital ratio was 11.69%, up from 11.55%. Also, the common equity tier 1 capital ratio of 10.99% was up from 10.82% as of Dec. 31, 2024.
Valley National’s Share Repurchase Update
In the reported quarter, VLY repurchased 4.3 million shares at an average price of $10.93 under its ongoing stock buyback program.
Our Take on Valley National
VLY’s effort to strengthen fee income, higher NII, solid loans and deposit growth and strategic expansion initiatives are expected to support its financials. However, persistently rising costs and weak asset quality are major concerns. Additionally, the company’s meaningful exposure to commercial real estate loans poses a risk.
Valley National Bancorp Price, Consensus and EPS Surprise
Zions Bancorporation’s (ZION - Free Report) fourth-quarter 2025 adjusted EPS of $1.75 beat the Zacks Consensus Estimate of $1.57. Moreover, the bottom line surged 30.5% from the year-ago quarter.
Zions’ results were primarily aided by higher NII and non-interest income. Growth in loan and deposit balances further supported performance. However, a rise in non-interest expenses was a headwind.
Bank OZK’s (OZK - Free Report) fourth-quarter 2025 EPS of $1.53 missed the Zacks Consensus Estimate of $1.56. The bottom line also declined 1.9% year over year.
OZK’s results were primarily hurt by higher provisions for credit losses and a rise in operating expenses. Nevertheless, solid NII and non-interest income growth acted as tailwinds. Healthy year-over-year growth in loans and deposits was another positive.
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VLY Stock Rallies 3.3% as Q4 Earnings Beat on Higher NII & Fee Income
Key Takeaways
Shares of Valley National Bancorp (VLY - Free Report) rallied 3.3% in yesterday’s trading session on better-than-expected quarterly results. Its fourth-quarter 2025 adjusted earnings per share of 31 cents surpassed the Zacks Consensus Estimate of 29 cents. The bottom line also compared favorably with 13 cents in the year-ago quarter.
Results were primarily aided by increased net interest income (NII) and non-interest income, along with lower provision. Higher loan and deposit balances were another tailwind. However, elevated expenses remained as the undermining factor.
Quarterly results excluded non-core income and charges. After considering these, net income was $195.4 million, which surged 68.9% from the year-ago quarter.
For 2025, adjusted earnings per share (EPS) of 99 cents beat the Zacks Consensus Estimate of 97 cents. The figure represented a rise of 59.7% from the previous year. Net income (GAAP basis) was $598 million, up 57.3% year over year.
Valley National’s Revenues Improve, Expenses Rise
Quarterly total revenues (fully-taxable-equivalent or FTE basis) were $542.5 million, up 14.1% year over year. The top line beat the Zacks Consensus Estimate of $524.7 million.
For 2025, total revenues (fully-taxable-equivalent or FTE basis) were $2.03 billion, up 9.3%. The top line surpassed the Zacks Consensus Estimate of $2.01 billion.
NII (FTE basis) was $466.1 million, up 9.9% year over year. The net interest margin (FTE basis) was 3.17%, which expanded 25 basis points (bps).
Non-interest income jumped 49.1% to $76.3 million. The rise was driven by an increase in almost all fee income components, except Insurance commissions, fees from loan servicing and higher net loss on sale of assets.
Non-interest expenses of $299.4 million increased 7.5% year over year. Meanwhile, adjusted non-interest expenses rose 5% to $289.5 million.
The adjusted efficiency ratio was 53.49%, down from 57.21% in the prior-year quarter. A decline in the efficiency ratio indicates an improvement in profitability.
VLY’s Loans & Deposits Rise
As of Dec. 31, 2025, total loans were $50.1 billion, up 1.8% from the previous quarter. Total deposits were $52.2 billion, up 2%.
Valley National’s Credit Quality: A Mixed Bag
As of Dec. 31, 2025, total non-performing assets were $439.8 million, up 17.8% year over year. Allowance for credit losses as a percentage of total loans was 1.19%, up 2 bps.
In the fourth quarter of 2025, VLY reported provision for credit losses of $20.1 million, which decreased 81.1% from the prior-year quarter.
VLY’s Profitability & Capital Ratios Improve
At the end of the fourth quarter, adjusted annualized return on average assets was 1.14%, up from 0.48% in the year-earlier quarter. Adjusted annualized return on average shareholders’ equity was 9.33%, up from 4.17%.
As of Dec. 31, 2025, the tangible common equity to tangible assets ratio was 8.82%, up from 8.40% in the corresponding period of 2024. Tier 1 risk-based capital ratio was 11.69%, up from 11.55%. Also, the common equity tier 1 capital ratio of 10.99% was up from 10.82% as of Dec. 31, 2024.
Valley National’s Share Repurchase Update
In the reported quarter, VLY repurchased 4.3 million shares at an average price of $10.93 under its ongoing stock buyback program.
Our Take on Valley National
VLY’s effort to strengthen fee income, higher NII, solid loans and deposit growth and strategic expansion initiatives are expected to support its financials. However, persistently rising costs and weak asset quality are major concerns. Additionally, the company’s meaningful exposure to commercial real estate loans poses a risk.
Valley National Bancorp Price, Consensus and EPS Surprise
Valley National Bancorp price-consensus-eps-surprise-chart | Valley National Bancorp Quote
Valley National currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of VLY’s Peers
Zions Bancorporation’s (ZION - Free Report) fourth-quarter 2025 adjusted EPS of $1.75 beat the Zacks Consensus Estimate of $1.57. Moreover, the bottom line surged 30.5% from the year-ago quarter.
Zions’ results were primarily aided by higher NII and non-interest income. Growth in loan and deposit balances further supported performance. However, a rise in non-interest expenses was a headwind.
Bank OZK’s (OZK - Free Report) fourth-quarter 2025 EPS of $1.53 missed the Zacks Consensus Estimate of $1.56. The bottom line also declined 1.9% year over year.
OZK’s results were primarily hurt by higher provisions for credit losses and a rise in operating expenses. Nevertheless, solid NII and non-interest income growth acted as tailwinds. Healthy year-over-year growth in loans and deposits was another positive.