We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
What Lies Ahead for Valley National After Solid 2025 Revenue Growth?
Read MoreHide Full Article
Key Takeaways
VLY's 2025 revenues climbed to $2.03B, lifted by strong NII and fee income growth.
Valley National saw NIM rebound in 2025 on lower funding costs and deposit growth.
VLY projects 11-13% NII growth in 2026, with 4-6% loan growth and margin expansion.
Valley National Bancorp (VLY - Free Report) reported a 9.3% year-over-year increase in 2025 total revenues to $2.03 billion. The growth was primarily driven by a substantial increase in net interest income (NII), supported by higher average loan balances and a notable expansion in the net interest margin (NIM) (on a tax-equivalent or TE basis). Additionally, improved fee-based income contributed meaningfully to the overall top-line performance.
VLY’s peers reflected a similar trend. BankUnited, Inc. (BKU - Free Report) reported net revenues of $1.09 billion in 2025, up 7.9% year over year, while Hilltop Holdings Inc. (HTH - Free Report) posted a 7.8% rise in net revenues to $1.28 billion. The revenue growth for both companies was driven by NII and improved non-interest income.
Key Drivers Behind VLY’s Revenue Growth in 2025
For VLY, NII has remained the primary revenue growth driver. In 2025, its NII (TE) increased 8.2% year over year to $1.77 billion, supported by lower deposit costs and higher interest income from growth in average loans and taxable investments. A favorable shift toward higher-yielding earning assets further bolstered NII. Over the five-year period ended 2025, Valley National recorded solid NII growth, witnessing a 9.5% CAGR.
VLY’s net revenue also benefited from improved margin performance. After declining in 2023 and 2024, NIM (TE) rebounded resoundingly in 2025, expanding 20 basis points year over year to 3.05%. This was driven by disciplined liability management, lower funding costs and growth in non-interest-bearing deposits.
Similarly, Hilltop Holdings experienced margin pressure in 2024, but its NIM expanded by 17 basis points in 2025 to 3.00%.
In addition to NII, VLY’s non-interest income contributed significantly to revenue growth. In 2025, non-interest income increased 16.8% year over year to $262.1 million, driven by higher fee income from capital markets, wealth management services and deposit-related activities. This growth strengthened total revenues and supported a more diversified and stable revenue mix.
Overall, Valley National delivered steady revenue growth in 2025. Its net revenues witnessed a compound annual growth rate (CAGR) of 9.2% over the last five years (2020-2025). Similarly, BKU recorded a net revenue CAGR of 4.3% over the five years ended 2025, while HTH posted a negative net revenue CAGR of 9.5% during the same period.
Valley National’s Revenue Prospects in 2026
Valley National is well-positioned for steady revenue growth, supported by improving margins, disciplined deposit management, and continued loan expansion. Lower funding costs, favorable repricing and growth in fee-based businesses are expected to support both NII and non-interest income.
For 2026, management expects solid revenue growth. Gross loan growth is expected to be in the range of 4-6% and commercial and industrial loans are anticipated to increase approximately 10%. Deposits are also expected to rise 5-7%, providing stable, low-cost funding. Assuming two rate cuts, NII is projected to rise 11-13%, with 15-20 basis points of NIM expansion by the fourth quarter of 2026, supported by favorable repricing and balance-sheet growth. Non-interest income is also expected to increase 6-9%, aided by steady deposit service charges and normalization in capital markets activity.
VLY shares have surged 20.1% in the past three months, compared with the industry’s growth of 16%.
View the Zacks #1 Rank List
Image: Bigstock
What Lies Ahead for Valley National After Solid 2025 Revenue Growth?
Key Takeaways
Valley National Bancorp (VLY - Free Report) reported a 9.3% year-over-year increase in 2025 total revenues to $2.03 billion. The growth was primarily driven by a substantial increase in net interest income (NII), supported by higher average loan balances and a notable expansion in the net interest margin (NIM) (on a tax-equivalent or TE basis). Additionally, improved fee-based income contributed meaningfully to the overall top-line performance.
VLY’s peers reflected a similar trend. BankUnited, Inc. (BKU - Free Report) reported net revenues of $1.09 billion in 2025, up 7.9% year over year, while Hilltop Holdings Inc. (HTH - Free Report) posted a 7.8% rise in net revenues to $1.28 billion. The revenue growth for both companies was driven by NII and improved non-interest income.
Key Drivers Behind VLY’s Revenue Growth in 2025
For VLY, NII has remained the primary revenue growth driver. In 2025, its NII (TE) increased 8.2% year over year to $1.77 billion, supported by lower deposit costs and higher interest income from growth in average loans and taxable investments. A favorable shift toward higher-yielding earning assets further bolstered NII. Over the five-year period ended 2025, Valley National recorded solid NII growth, witnessing a 9.5% CAGR.
VLY’s net revenue also benefited from improved margin performance. After declining in 2023 and 2024, NIM (TE) rebounded resoundingly in 2025, expanding 20 basis points year over year to 3.05%. This was driven by disciplined liability management, lower funding costs and growth in non-interest-bearing deposits.
Similarly, Hilltop Holdings experienced margin pressure in 2024, but its NIM expanded by 17 basis points in 2025 to 3.00%.
In addition to NII, VLY’s non-interest income contributed significantly to revenue growth. In 2025, non-interest income increased 16.8% year over year to $262.1 million, driven by higher fee income from capital markets, wealth management services and deposit-related activities. This growth strengthened total revenues and supported a more diversified and stable revenue mix.
Overall, Valley National delivered steady revenue growth in 2025. Its net revenues witnessed a compound annual growth rate (CAGR) of 9.2% over the last five years (2020-2025). Similarly, BKU recorded a net revenue CAGR of 4.3% over the five years ended 2025, while HTH posted a negative net revenue CAGR of 9.5% during the same period.
Valley National’s Revenue Prospects in 2026
Valley National is well-positioned for steady revenue growth, supported by improving margins, disciplined deposit management, and continued loan expansion. Lower funding costs, favorable repricing and growth in fee-based businesses are expected to support both NII and non-interest income.
For 2026, management expects solid revenue growth. Gross loan growth is expected to be in the range of 4-6% and commercial and industrial loans are anticipated to increase approximately 10%. Deposits are also expected to rise 5-7%, providing stable, low-cost funding. Assuming two rate cuts, NII is projected to rise 11-13%, with 15-20 basis points of NIM expansion by the fourth quarter of 2026, supported by favorable repricing and balance-sheet growth. Non-interest income is also expected to increase 6-9%, aided by steady deposit service charges and normalization in capital markets activity.
VLY shares have surged 20.1% in the past three months, compared with the industry’s growth of 16%.
Image Source: Zacks Investment Research
Currently, VLY carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.