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VLY Stock Rallies 3.9% as Q1 Earnings Beat on Higher NII & Fee Income
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Key Takeaways
VLY shares rise after Q1 EPS of 29 cents beats estimates, driven by higher NII and fee income.
Valley National posts 12.9% y/y revenue growth as NII and non-interest income both climb.
VLY sees loan and deposit growth, but rising expenses and higher non-performing assets remain concerning.
Shares of Valley National Bancorp (VLY - Free Report) rallied 3.9% in yesterday’s trading session on better-than-expected quarterly results. Its first-quarter 2026 adjusted earnings per share of 29 cents surpassed the Zacks Consensus Estimate of 27 cents. The bottom line also compared favorably with earnings of 18 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 other tailwinds. However, elevated expenses remained an undermining factor.
After considering non-recurring items, net income available to common shareholders (GAAP basis) was $156.7 million, which jumped 58.1% from the year-ago quarter.
Valley National’s Revenues Improve, Expenses Rise
Total revenues (fully-taxable-equivalent or FTE basis) were $541.6 million, up 12.9% year over year. The top line beat the Zacks Consensus Estimate of $532.6 million.
NII (FTE basis) was $472.8 million, up 12.2% year over year. The net interest margin (FTE basis) was 3.17%, which expanded 21 basis points (bps).
Non-interest income jumped 18.1% year over year to $68.8 million. The rise was driven by an increase in almost all fee income components, except for insurance commissions, net gains on securities transactions and other income.
Non-interest expenses of $309.9 million increased 12% year over year. The rise was due to an increase in almost all cost components, except for FDIC insurance assessment costs and costs related to amortization of other intangible assets.
The adjusted efficiency ratio was 53.10%, down from 55.87% in the prior-year quarter. A decline in the efficiency ratio indicates an improvement in profitability.
VLY’s Loans & Deposits Rise
As of March 31, 2026, total loans were $50.8 billion, up 1.4% from the previous quarter. Total deposits were $52.9 billion, up 1.3% sequentially.
Valley National’s Credit Quality: A Mixed Bag
As of March 31, 2026, total non-performing assets were $439.6 million, up 23.4% year over year.
However, allowance for credit losses as a percentage of total loans was 1.18%, down 4 bps year over year. In the first quarter of 2026, VLY reported provision for credit losses of $21.2 million, which decreased 66.1% from the prior-year quarter.
VLY’s Profitability & Capital Ratios Improve
At the end of the first quarter, adjusted annualized return on average assets was 1.05%, up from 0.69% in the year-earlier quarter. Adjusted annualized return on average shareholders’ equity was 8.60%, up from 5.69%.
As of March 31, 2026, the tangible common equity to tangible assets ratio was 8.82%, up from 8.61% in the corresponding period of 2025. Tier 1 risk-based capital ratio was 11.60%, up from 11.53%. Also, the common equity tier 1 capital ratio of 10.91% was up from 10.80% as of March 31, 2025.
Valley National’s Share Repurchase Update
In the reported quarter, VLY repurchased 4 million shares at an average price of $12.95 under its ongoing stock buyback program.
Our Take on VLY
Valley National’s effort to strengthen fee income, higher NII, solid loans and deposit growth, and expansion initiatives are expected to support its financials. However, persistently rising costs and weak asset quality are major concerns.
Valley National Bancorp Price, Consensus and EPS Surprise
Zions Bancorporation’s (ZION - Free Report) reported first-quarter 2026 earnings of $1.56 per share, which beat the Zacks Consensus Estimate of $1.43. The bottom line rose 38% from the year-ago quarter.
ZION’s results were primarily aided by higher NII and growth in fee-based income. Higher loan and deposit balances, along with a provision benefit, provided additional support. However, a rise in non-interest expenses was a headwind.
M&T Bank Corporation (MTB - Free Report) reported first-quarter 2026 net operating earnings per share of $4.18, which beat the Zacks Consensus Estimate of $4.02. The bottom line compared favorably with earnings of $3.38 per share in the year-ago quarter.
MTB’s results were aided by higher NII and a rise in non-interest income, along with modest loan growth. However, a decline in deposits, higher provisions for credit losses, and elevated expenses acted as headwinds for MTB.
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VLY Stock Rallies 3.9% as Q1 Earnings Beat on Higher NII & Fee Income
Key Takeaways
Shares of Valley National Bancorp (VLY - Free Report) rallied 3.9% in yesterday’s trading session on better-than-expected quarterly results. Its first-quarter 2026 adjusted earnings per share of 29 cents surpassed the Zacks Consensus Estimate of 27 cents. The bottom line also compared favorably with earnings of 18 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 other tailwinds. However, elevated expenses remained an undermining factor.
After considering non-recurring items, net income available to common shareholders (GAAP basis) was $156.7 million, which jumped 58.1% from the year-ago quarter.
Valley National’s Revenues Improve, Expenses Rise
Total revenues (fully-taxable-equivalent or FTE basis) were $541.6 million, up 12.9% year over year. The top line beat the Zacks Consensus Estimate of $532.6 million.
NII (FTE basis) was $472.8 million, up 12.2% year over year. The net interest margin (FTE basis) was 3.17%, which expanded 21 basis points (bps).
Non-interest income jumped 18.1% year over year to $68.8 million. The rise was driven by an increase in almost all fee income components, except for insurance commissions, net gains on securities transactions and other income.
Non-interest expenses of $309.9 million increased 12% year over year. The rise was due to an increase in almost all cost components, except for FDIC insurance assessment costs and costs related to amortization of other intangible assets.
The adjusted efficiency ratio was 53.10%, down from 55.87% in the prior-year quarter. A decline in the efficiency ratio indicates an improvement in profitability.
VLY’s Loans & Deposits Rise
As of March 31, 2026, total loans were $50.8 billion, up 1.4% from the previous quarter. Total deposits were $52.9 billion, up 1.3% sequentially.
Valley National’s Credit Quality: A Mixed Bag
As of March 31, 2026, total non-performing assets were $439.6 million, up 23.4% year over year.
However, allowance for credit losses as a percentage of total loans was 1.18%, down 4 bps year over year. In the first quarter of 2026, VLY reported provision for credit losses of $21.2 million, which decreased 66.1% from the prior-year quarter.
VLY’s Profitability & Capital Ratios Improve
At the end of the first quarter, adjusted annualized return on average assets was 1.05%, up from 0.69% in the year-earlier quarter. Adjusted annualized return on average shareholders’ equity was 8.60%, up from 5.69%.
As of March 31, 2026, the tangible common equity to tangible assets ratio was 8.82%, up from 8.61% in the corresponding period of 2025. Tier 1 risk-based capital ratio was 11.60%, up from 11.53%. Also, the common equity tier 1 capital ratio of 10.91% was up from 10.80% as of March 31, 2025.
Valley National’s Share Repurchase Update
In the reported quarter, VLY repurchased 4 million shares at an average price of $12.95 under its ongoing stock buyback program.
Our Take on VLY
Valley National’s effort to strengthen fee income, higher NII, solid loans and deposit growth, and expansion initiatives are expected to support its financials. However, persistently rising costs and weak asset quality are major concerns.
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) reported first-quarter 2026 earnings of $1.56 per share, which beat the Zacks Consensus Estimate of $1.43. The bottom line rose 38% from the year-ago quarter.
ZION’s results were primarily aided by higher NII and growth in fee-based income. Higher loan and deposit balances, along with a provision benefit, provided additional support. However, a rise in non-interest expenses was a headwind.
M&T Bank Corporation (MTB - Free Report) reported first-quarter 2026 net operating earnings per share of $4.18, which beat the Zacks Consensus Estimate of $4.02. The bottom line compared favorably with earnings of $3.38 per share in the year-ago quarter.
MTB’s results were aided by higher NII and a rise in non-interest income, along with modest loan growth. However, a decline in deposits, higher provisions for credit losses, and elevated expenses acted as headwinds for MTB.