VLYPP - Valley National Bancorp (VLY) Q4 2023 Earnings Call Transcript
2024-01-25 18:53:09 ET
Valley National Bancorp (VLY)
Q4 2023 Earnings Conference Call
January 25, 2024, 11:00 AM ET
Company Participants
Travis Lan - Head, IR
Ira Robbins - CEO
Thomas Iadanza - President
Michael Hagedorn - CFO
Conference Call Participants
Frank Schiraldi - Piper Sandler
Steve Moss - Raymond James
Michael Perito - KBW
Jon Arfstrom - RBC Capital Markets
Steven Alexopoulos - JPMorgan
Nick Cucharale - Hovde Group
Manan Gosalia - Morgan Stanley
Matthew Breese - Stephens
Presentation
Operator
Thank you for standing by, and welcome to the Q4 2023 Valley National Bancorp Earnings Conference Call. [Operator Instructions] Please be advised that today's call is being recorded.
I would like to turn the call over to your host, Mr. Travis Lan. Please begin.
Travis Lan
Good morning, and welcome to Valley's fourth quarter 2023 earnings conference call. Presenting on behalf of Valley today are CEO, Ira Robbins; President, Tom Iadanza; and Chief Financial Officer, Mike Hagedorn.
Before we begin. I would like to make everyone aware that our quarterly earnings release and supporting documents can be found on our company website at valley.com. When discussing our results, we refer to non-GAAP measures, which exclude certain items from reported results. Please refer to today's earnings release for reconciliations of these non-GAAP measures.
Additionally, I would like to highlight Slide 2 of our earnings presentation and remind you that comments made during this call may contain forward-looking statements relating to Valley National Bancorp and the banking industry. Valley encourages all participants to refer to our SEC filings, including those found on Forms 8-K, 10-Q and 10-K for a complete discussion of forward-looking statements and the factors that could cause actual results to differ from those statements.
With that, I will turn the call over to Ira Robbins.
Ira Robbins
Thank you, Travis.
In the fourth quarter of 2023, Valley reported net income of $72 million and earnings per share of $0.13 exclusive of non-core items, including the one-time special FDIC assessment tied to the year's bank failures. Adjusted net income and EPS were $116 million and $0.22 respectively. While I'm pleased with the quarter's balance sheet trends, I'm disappointed with the earnings and profitability metrics, which I will discuss shortly.
On the positive side, we made progress enhancing C&I growth while curtailing commercial real-estate originations. This enabled us to both accrete organic capital and reduce funding needs. On the deposit side, we added a remarkable 14,000 net-new consumer households and 8,000 net-new commercial deposit relationships during the year. This represents 4.5% growth in consumer households and 10.5% growth in commercial relationships from the same-period a year-ago.
The ongoing addition of new deposit clients is critical as it directly relates to Valley's franchise value and our future earnings potential. Our new customer growth was broad-based across all of our geographies and I might add was undertaken, against the backdrop of a difficult external environment when mid-sized banks like Valley were too often front-page news.
During the quarter, our new relationships, helped to generate strong customer deposit inflows, which enabled us to significantly reduce our reliance on broker deposits. While customer deposit inflows were exceptional, the organization wide focus on ensuring a successful core conversion in October likely led us to take our eyes off the ball relative to deposit pricing. There is no doubt that this negatively impacted net interest income during the quarter and in a few minutes, Mike will illustrate some of the subsequent efforts that we've undertaken to manage these deposit costs going forward....
Valley National Bancorp (VLY) Q4 2023 Earnings Call Transcript