third quarter 2026
Filed Oct 22, 2026Valley National Bancorp reported third quarter 2026 net income of $206.3 million, or $0.36 per diluted common share, with net interest margin on a tax equivalent basis of 3.28 percent and an efficiency ratio of 49.38 percent.
Net income, net interest income, margin and fee income increased from both the linked and prior-year quarters, while non-interest expense declined sequentially and the efficiency ratio fell below 50 percent. Credit costs and non-accrual loans increased, however.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenue, three months ended September 30, 2026GAAP | $584.2M | – | – |
| Net interest income, three months ended September 30, 2026GAAP | $505.5M | – | – |
| Net interest income - FTE, three months ended September 30, 2026other | $506.8M | increased $18.4 million | increased $59.3 million |
| Net interest margin, three months ended September 30, 2026GAAP | 3.27 % | – | – |
| Net interest margin - FTE, three months ended September 30, 2026other | 3.28 percent | increased 8 basis points | increased 23 basis points |
| Non-interest income, three months ended September 30, 2026GAAP | $78.7M | increased $5.0 million | – |
| Non-interest expense, three months ended September 30, 2026GAAP | $310.0M | decreased $1.2 million | – |
| Pre-provision net revenue, three months ended September 30, 2026GAAP | $274.2M | – | – |
| Provision for credit losses, three months ended September 30, 2026GAAP | $30.64M | – | – |
| Provision for credit losses for loans, three months ended September 30, 2026GAAP | $30.66M | – | – |
| Income tax expense, three months ended September 30, 2026GAAP | $37.25M | – | – |
| Effective tax rate, third quarter 2026GAAP | 15.3 percent | – | – |
| Net income, three months ended September 30, 2026GAAP | $206.3M | – | – |
| Adjusted net income, three months ended September 30, 2026non-GAAP | $206.4M | – | – |
| Diluted earnings per common share, three months ended September 30, 2026GAAP | $0.36 per diluted common share | – | – |
| Diluted earnings per share, as adjusted, three months ended September 30, 2026non-GAAP | $ 0.36 | – | – |
| Efficiency ratio, three months ended September 30, 2026non-GAAP | 49.38 percent | – | – |
| Annualized return on average assets, three months ended September 30, 2026GAAP | 1.24 percent | – | – |
| Annualized return on average shareholders' equity, three months ended September 30, 2026GAAP | 10.36 percent | – | – |
| Annualized return on average tangible common shareholders' equity, three months ended September 30, 2026non-GAAP | 14.24 percent | – | – |
| Total loans, September 30, 2026other | $53.2B | increased $722.7 million, or 5.5 percent on an annualized basis | – |
| Total deposits, September 30, 2026other | $55.2B | increased $1.1 billion | – |
| Allowance for credit losses for loans, September 30, 2026other | $600.5M | – | – |
| Allowance for credit losses for loans as a percentage of total loans, September 30, 2026other | 1.13 percent | – | – |
| Net loan charge-offs, three months ended September 30, 2026other | $37.1M | – | – |
| Non-accrual loans, September 30, 2026other | $511.4 million, or 0.96 percent of total loans | – | – |
| Total non-performing assets, September 30, 2026other | $513.8M | increased $46.0 million | – |
| Total accruing past due loans, September 30, 2026other | $154.5 million, or 0.29 percent of total loans | decreased $25.7 million | – |
| Common equity tier 1 capital ratio, September 30, 2026other | 10.71 percent | – | – |
| Tier 1 leverage capital ratio, September 30, 2026other | 9.54 percent | – | – |
| Total risk-based capital ratio, September 30, 2026other | 13.70 percent | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- During the third quarter 2026, we repurchased 2.5 million shares of our common stock at an average price of $13.86 under our current stock repurchase plan.
- Cash dividends declared were $ 0.11 per common share for the three months ended September 30, 2026.
- Dividends on preferred stock were $ 7,335 (in thousands) for the three months ended September 30, 2026.
What drove it
- Net interest income on a tax equivalent basis increased due to upward repricing of adjustable interest rate loans, higher yields on new loan originations, an increase in average loans and one additional day during the third quarter 2026.
- C&I loans increased $363.0 million to $12.3 billion, primarily driven by new originations from relationship-driven small to midsize clients.
- Total CRE loans increased $343.5 million to $30.7 billion, driven by new owner occupied CRE loan originations and an uptick in construction loan advances.
- Deposits increased primarily through commercial-customer inflows to savings, NOW and money market deposits and higher indirect customer CD balances and targeted retail CD offerings.
- Non-interest income increased largely because other income rose $6.4 million, primarily from recovery income from legal settlements and net valuation gains on certain fintech investments, while wealth management and trust fees increased $4.5 million.
- Non-interest expense declined largely due to a $4.4 million decline in professional and legal fees from lower business transformation-related consulting fees.
- The lower effective tax rate reflected the availability and purchase of additional tax credits in excess of amounts previously anticipated during the third quarter 2026.
Concerns
- Net loan charge-offs totaled $37.1 million, compared with $22.0 million in the second quarter 2026 and $14.6 million in the third quarter 2025.
- Non-accrual loans increased to $511.4 million, or 0.96 percent of total loans, from $462.6 million, or 0.88 percent of total loans, at June 30, 2026.
- The increase in non-accrual loans included a $30.1 million construction loan placed on non-accrual status and higher levels of non-accrual C&I loans.
- Provision for credit losses for loans was $30.7 million, compared with $29.2 million in the second quarter 2026 and $19.2 million in the third quarter 2025.
- The allowance for credit losses for loans as a percentage of total loans declined to 1.13 percent from 1.16 percent at June 30, 2026.
- Non-interest bearing deposits declined $102.8 million from June 30, 2026.
- The pending Providence and Bluevine acquisitions are subject to standard regulatory approvals and other customary closing conditions, and Valley recorded $3.1 million of merger related expenses during the third quarter 2026.
What to watch
- Net interest margin on a tax equivalent basis was 3.28 percent in the third quarter 2026, versus 3.20 percent in the second quarter 2026, while the overall cost of average interest bearing liabilities increased to 3.16 percent from 3.10 percent.
- Loan growth in C&I and CRE, alongside continued targeted runoff in non-owner occupied loans.
- Deposit growth and mix, including savings, NOW and money market deposits, time deposits and non-interest bearing deposits.
- Migration of CRE and C&I credits, including the $30.1 million construction loan placed on non-accrual status.
- Provisioning, net charge-offs and the allowance for credit losses for loans relative to total loans.
- Progress toward the expected early 2027 closings of the Providence and Bluevine acquisitions.
Balance sheet and cash flow
- Total assets were $ 67,470,879 (in thousands) at September 30, 2026, compared with $ 66,318,308 (in thousands) at June 30, 2026.
- Cash and due from banks were $ 339,682 (in thousands) at September 30, 2026.
- Interest bearing deposits with banks were $ 785,320 (in thousands) at September 30, 2026.
- Short-term borrowings were $50.3 million at September 30, 2026, down $383.2 million from June 30, 2026, mainly due to maturity and repayment of $375 million of short-term FHLB advances.
- Long-term borrowings totaled $2.6 billion at September 30, 2026 and remained relatively unchanged as compared to June 30, 2026.
- Shareholders' equity was $ 7,896,552 (in thousands) at September 30, 2026, compared with $ 7,917,144 (in thousands) at June 30, 2026.
- Tangible common equity to tangible assets was 8.53 % at September 30, 2026, compared with 8.71 % at June 30, 2026.
Analysis
Valley reported record quarterly net income of $206.3 million, or $0.36 per diluted common share, compared with $170.9 million, or $0.29 per diluted common share, in the second quarter 2026 and $163.4 million, or $0.28 per diluted common share, in the third quarter 2025. Total revenue was $ 584,151 (in thousands), while pre-provision net revenue was $ 274,193 (in thousands). The adjusted net income result was $206.4 million, or $0.36 per diluted common share.
Core spread results improved. Tax-equivalent net interest income was $506.8 million, increasing $18.4 million sequentially and $59.3 million from the third quarter 2025. Tax-equivalent net interest margin expanded to 3.28 percent from 3.20 percent in the second quarter 2026 and 3.05 percent in the third quarter 2025. Management attributed the linked-quarter improvement to adjustable-rate loan repricing, higher yields on new originations, average loan growth and one additional day, partly offset by higher average time deposits and higher costs on certain non-maturity deposits.
Balance-sheet growth was led by relationship-oriented lending and deposits. Total loans rose $722.7 million to $53.2 billion, with C&I loans up $363.0 million to $12.3 billion and total CRE loans up $343.5 million to $30.7 billion. Deposits increased $1.1 billion to $55.2 billion, led by savings, NOW and money market deposits and time deposits. The cost of total average deposits was 2.33 percent, compared with 2.28 percent in the second quarter 2026 and 2.69 percent in the third quarter 2025.
Expense discipline and tax credits supported profitability. Non-interest expense declined $1.2 million sequentially to $310.0 million, and the non-GAAP efficiency ratio improved to 49.38 percent from 52.11 percent. Non-interest income increased $5.0 million sequentially to $78.7 million, supported by legal-settlement recovery income, fintech investment valuation gains and higher tax credit advisory fees. The effective tax rate declined to 15.3 percent from 22.5 percent, which Valley attributed to additional available and purchased tax credits.
Credit metrics require attention despite improvement in accruing delinquencies. Net loan charge-offs rose to $37.1 million, provision for credit losses for loans was $30.7 million, and non-accrual loans increased to $511.4 million, or 0.96 percent of total loans. Total accruing past due loans declined $25.7 million to $154.5 million, but the decline partly reflected migration of CRE loans to non-accrual status. Capital ratios remained substantial, and the company repurchased 2.5 million shares at an average price of $13.86 while pursuing the pending Providence and Bluevine acquisitions expected to close in early 2027.
Management, verbatim
Our third quarter results demonstrate the continued improvement in Valley's profitability. Strong revenue growth and disciplined expense management drove record quarterly net income for Valley and an efficiency ratio below 50 percent.
Ira Robbins, CEO
We remain on track to achieve, and likely exceed, our previously stated return on average tangible common equity goal of 15 percent by the end of 2027.
Ira Robbins, CEO
Together, these transactions will strengthen our core deposit franchise, broaden our growth opportunities and support sustainable long-term value creation for shareholders.
Ira Robbins, CEO
Not in the filing
stated, not guessed- Forward revenue, margin, expense, tax-rate, earnings-per-share and capital guidance were not provided.
- Prior-period outlook was not provided.
- Gross margin was not reported.
- Operating income was not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Segment revenue was not reported.
- A common-stock dividend payment amount or future common-stock dividend declaration was not reported beyond cash dividends declared of $ 0.11 per common share for the three months ended September 30, 2026.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.