VLY - Valley National Bank: Q1 Results Should Calm Fears
2024-04-28 03:35:24 ET
Summary
- Valley Bank shares have underperformed due to fears about commercial real estate and a mixed first quarter report.
- Despite concerns, the company's deposits remained stable and it did not have to significantly increase rates to retain them.
- Valley Bank is pulling back on lending and focusing on strengthening its balance sheet by building reserves and increasing its tier one common equity ratio.
Shares of Valley National Bancorp ( VLY ) have been a significant underperformer, losing 14% over the past year on commercial real estate fears (CRE). The company then reported a mixed first quarter, adding to fears. Back in January , I recommended investors buy Valley. This has been a poor call with shares losing over one quarter of their value in the wake of pressures at New York Community Bancorp ( NYCB ), which has significantly harmed sentiment towards banks with meaningful NYC real estate exposure. These concerns have far exceeded my expectations, given what I viewed as strong reserve policies from VLY. I am reducing my price target but still rating VLY a buy....
Valley National Bank: Q1 Results Should Calm Fears