GlobeNewswire Inc | Jan 27, 2022 07:30AM EST

January 27, 2022

NEW YORK, Jan. 27, 2022 (GLOBE NEWSWIRE) -- Valley National Bancorp (NASDAQ:VLY), the holding company for Valley National Bank, today reported net income for the fourth quarter 2021 of $115.0 million, or $0.27 per diluted common share, as compared to the fourth quarter 2020 earnings of $105.4 million, or $0.25 per diluted common share, and net income of $122.6 million, or $0.29 per diluted common share, for the third quarter 2021. Our fourth quarter 2021 core earnings included provision expense of $6.2 million ($0.01 per common share) recorded for purchased non-credit deteriorated (non-PCD) loans and unfunded credit commitments acquired during the quarter. Excluding all non-core charges, our adjusted net income (a non-GAAP measure) was $120.5 million, or $0.28 per diluted common share, for the fourth quarter 2021, $113.4 million, or $0.27 per diluted common share, for the fourth quarter 2020, and $124.7 million, or $0.30 per diluted common share, for the third quarter 2021. See further details below, including a reconciliation of our adjusted net income in the "Consolidated Financial Highlights" tables.

Key financial highlights for the fourth quarter:

-- Acquisition of The Westchester Bank Holding Corp.: On December 1, 2021, Valley completed its acquisition of The Westchester Bank Holding Corporation (Westchester) and its wholly-owned subsidiary, The Westchester Bank. Westchester had approximately $1.4 billion in assets, $915 million in loans, $1.2 billion in deposits, after purchase accounting adjustments, and a branch network of seven locations in Westchester County, New York. The common shareholders of Westchester received 229.645 shares of Valley common stock for each Westchester share that they owned. The total consideration for the acquisition was $211.1 million and the transaction resulted in $63.5 million of goodwill and $8.1 million of core deposit intangible assets subject to amortization. -- Loan Portfolio: Total loans increased $1.5 billion to $34.2 billion at December31, 2021 from September30, 2021 largely due to $915 million in acquired loans from Westchester and strong organic loan growth, partially offset by a $438 million decline in SBA Paycheck Protection Program (PPP) loans. Excluding the Westchester and PPP loans, our non-PPP loan portfolio increased approximately $1.1 billion, or 13 percent on an annualized basis, during the fourth quarter 2021. See the "Loans, Deposits and Other Borrowings" section below for additional information. -- Net Interest Income and Margin: Net interest income on a tax equivalent basis of $316.0 million for the fourth quarter 2021 increased $14.3 million and $27.2 million as compared to the third quarter 2021 and fourth quarter 2020, respectively. Our net interest margin on a tax equivalent basis increased 8 basis points to 3.23 percent in the fourth quarter 2021 as compared to 3.15 percent for the third quarter 2021. The increases were largely due to higher loan yields partially driven by increased PPP and other periodic loan fees, and both acquired and organic loan growth. Our costs of average interest bearing liabilities also decreased 5 basis points from the third quarter 2021 due to repricing of deposits, continued run-off of maturing higher cost time deposits and repayments of borrowings. See the "Net Interest Income and Margin" section below for more details. -- Allowance and Provision for Credit Losses for Loans: The allowance for credit losses for loans totaled $375.7 million and $356.9 million at December31, 2021 and September30, 2021, respectively, representing 1.10 percent and 1.09 percent of total loans at each respective date. During the fourth quarter 2021, the provision for credit losses for loans was $11.6 million as compared to $3.5 million and $19.0 million for the third quarter 2021 and fourth quarter 2020, respectively. The increased fourth quarter 2021 provision as compared to the third quarter 2021 was largely due to the $6.2 million of provision related to the non-PCD loans and unfunded credit commitments acquired from Westchester. -- Credit Quality: We recorded net recoveries of loan charge-offs totaling $624 thousand for the fourth quarter 2021, as compared to net loan charge-offs of $293 thousand and $3.0 million for the third quarter 2021 and fourth quarter 2020, respectively. Non-accrual loans represented 0.70 percent and 0.77 percent of total loans at December31, 2021 and September30, 2021, respectively. See the "Credit Quality" Section below for more details. -- Non-Interest Income: Non-interest income decreased $4.2 million to $38.2 million for the fourth quarter 2021 from $42.4 million for the third quarter 2021 primarily due to a $4.5 million decrease in swap fee income derived from certain new commercial loan transactions. -- Non-Interest Expense: Non-interest expense increased $9.6 million to $184.5 million for the fourth quarter 2021 as compared to the third quarter 2021 mainly due to $7.6 million of merger expenses (primarily consisting of change in control and severance expense related to the Westchester acquisition), higher cash incentive compensation expense and incremental additions to operating expenses related to new infrastructure and the Westchester acquisition, partially offset by a $2.3 million decrease in professional and legal fees. -- Efficiency Ratio: Our efficiency ratio was 52.19 percent for the fourth quarter 2021 as compared to 50.93 percent and 51.61 percent for the third quarter 2021 and fourth quarter 2020, respectively. Our adjusted efficiency ratio was 49.44 percent for the fourth quarter 2021 as compared to 49.16 percent and 46.99 percent for the third quarter 2021 and fourth quarter 2020, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures. -- Performance Ratios: Annualized return on average assets (ROA), shareholders equity (ROE) and tangible ROE were 1.08 percent, 9.38 percent, and 13.44 percent for the fourth quarter 2021, respectively. Annualized ROA, ROE and tangible ROE, adjusted for non-core charges, were 1.14 percent, 9.83 percent, and 14.08 percent for the fourth quarter 2021, respectively. See the "Consolidated Financial Highlights" tables below for additional information regarding our non-GAAP measures.

Ira Robbins, CEO commented, "Valleys strong fourth quarter 2021 core results demonstrate the significant earnings power of our evolving franchise. In 2021, we generated net income of approximately $474 million, which represents a 21 percent increase from the prior year. We continue to build out low-cost funding channels in support of our strong and diverse organic loan production which was robust throughout the year. These efforts resulted in strong net interest margin performance and an adjusted efficiency ratio below 49 percent for the second consecutive year." Mr. Robbins continued, "In December 2021, we also completed the Westchester acquisition and welcomed their customers and knowledgeable staff to Valley. Prior to and after the merger, our dedicated employees have been hard at work to ensure the acquisition is a complete success. Due to these efforts, we expect the full systems integration of the Westchester operations to be completed in the latter part of the first quarter 2022."

Mr. Robbins added, "2021 was an exciting and transformative year for our organization. We identified a pair of value-enhancing bank partners which we believe will accelerate our future organic growth capabilities and further diversify our business offerings. We simultaneously invested in our fee income capabilities through the acquisition of Dudley Ventures. These partnerships complement the significant progress that we have made to innovate with new products, services, and technologies to add value for our clients and stakeholders. I am extremely excited about the growth opportunities that exist for Valley as we remain well-positioned for success in the ever-changing banking landscape."

Net Interest Income and Margin

Net interest income on a tax equivalent basis totaling $316.0 million for the fourth quarter 2021 increased $14.3 million and $27.2 million as compared to the third quarter 2021 and fourth quarter 2020, respectively. Interest income on a tax equivalent basis increased $11.2 million to $340.7 million for the fourth quarter 2021 as compared to the third quarter 2021 due to (i) increases of $639.7 million and $248.7 million in average loans and investment securities, respectively, (ii) a $2.4 million increase in periodic non-PPP loan fees and interest recovery income, and (iii) an $877 thousand increase in PPP loan related interest and fees caused by loan forgiveness in the fourth quarter 2021. Interest expense of $24.7 million for the fourth quarter 2021 decreased $3.1 million as compared to the third quarter 2021 as we continue to reduce our cost of funding from both deposits and the repayment of other borrowings, primarily FHLB advances.

The net interest margin on a tax equivalent basis of 3.23 percent for the fourth quarter 2021 increased 8 basis points as compared to 3.15 percent for the third quarter 2021, and increased 17 basis points from 3.06 percent for the fourth quarter 2020. The yield on average interest earning assets increased by 4 basis points on a linked quarter basis mostly due to the higher yield on average loans. The yield on average loans increased to 3.83 percent for the fourth quarter 2021 from 3.79 percent for the third quarter 2021 largely due to the increases in non-PPP loan fees, interest recovery income, and PPP interest and fees combined with a $493 million decline in average PPP loans during the fourth quarter 2021. The overall cost of average interest-bearing liabilities decreased by 5 basis points to 0.39 percent for the fourth quarter 2021 as compared to the linked third quarter 2021 due to the continued customer shift to lower cost deposits, as well as lower average short and long-term borrowings caused by normal repayments funded by excess liquidity. Our cost of total average deposits was 0.15 percent for the fourth quarter 2021 as compared to 0.18 percent for the third quarter 2021.

Loans, Deposits and Other Borrowings

Loans. Loans increased $1.5 billion to $34.2 billion at December31, 2021 from September30, 2021 largely due to a combination of $915 million in acquired loans from Westchester and strong organic loan growth, partially offset by a decline in PPP loans. The PPP loans included within the commercial and industrial loan category decreased $438.1 million to $436.0 million (net of $12.1 million in unearned fees) at December31, 2021 from September30, 2021 mainly driven by SBA loan forgiveness activity. Excluding the Westchester acquired loans and PPP loans, commercial and industrial, residential mortgage, commercial real estate loans increased 30 percent, 17 percent, and 10 percent on an annualized basis, respectively, during the fourth quarter 2021. New and refinanced loan originations also included approximately $229 million of residential mortgage loans originated for sale rather than investment. Loans held for sale totaled $139.5 million and $157.1 million at December31, 2021 and September30, 2021. Net gains on sales of residential loans were $6.7 million and $6.4 million in the fourth quarter 2021 and third quarter 2021, respectively.

Deposits. Total deposits increased $2.0 billion, or 5.9 percent, to approximately $35.6 billion at December31, 2021 from September30, 2021 driven by $1.2 billion of assumed deposits from Westchester and continued organic non-maturity deposit growth from both commercial and retail customers. Time deposits decreased $273.2 million to $3.7 billion at December 31, 2021 from September30, 2021 largely due to normal run-off of maturing retail CDs with some continued migration to the more liquid deposit product categories. Total brokered deposits (mainly consisting of money market deposit accounts) were $1.4 billion at December31, 2021 as compared to $1.7 billion at September30, 2021. Non-interest bearing deposits; savings, NOW, money market deposits; and time deposits represented approximately 33 percent, 57 percent and 10 percent of total deposits as of December31, 2021, respectively.

Other Borrowings. Short-term borrowings decreased $127.6 million to approximately $655.7 million at December31, 2021 as compared to September30, 2021 largely due to the maturity and repayment of an FHLB advance during the fourth quarter 2021. Long-term borrowings of $1.4 billion remained relatively unchanged at December31, 2021 as compared to September30, 2021.

Credit Quality

Non-Performing Assets (NPAs). Total NPAs, consisting of non-accrual loans, other real estate owned (OREO), other repossessed assets and non-accrual debt securities decreased $12.3 million to $245.4 million at December31, 2021 compared to $257.7 million at September30, 2021. The decrease in NPAs was mostly due to a $12.3 million decline in non-accrual commercial real estate loans mainly caused by the full repayment of three non-performing loans totaling $11.4 million during the fourth quarter 2021. Non-accrual loans represented 0.70 percent of total loans at December31, 2021 as compared to 0.77 percent of total loans at September30, 2021.

Non-performing Taxi Medallion Loan Portfolio. We continue to closely monitor our non-performing New York City and Chicago taxi medallion loans totaling $85.4 million and $576 thousand, respectively, within the commercial and industrial loan portfolio at December31, 2021. At December31, 2021, all taxi medallion loans were on non-accrual status and had related reserves of $58.5 million, or 68.0 percent of such loans, within the allowance for loan losses.

Accruing Past Due Loans. Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) increased $650 thousand to $55.9 million, or 0.16 percent of total loans, at December31, 2021 as compared to $55.2 million, or 0.17 percent of total loans, at September30, 2021. Commercial and industrial and residential mortgage loans 60 to 89 days past due increased $6.9 million and $2.3 million, respectively, at December31, 2021 as compared to September30, 2021. Partially offsetting these increases, commercial real estate loans 60 to 89 days past due decreased $5.9 million mostly due to the payoff of one performing matured loan previously included in this delinquency category at September30, 2021. Loans 90 or more days past due also decreased $2.6 million largely due to lower delinquencies reported in the commercial loan categories at December31, 2021.

Forbearance. In response to the COVID-19 pandemic and its economic impact to certain customers, Valley implemented short-term loan modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that are insignificant, when requested by customers. Generally, the modification terms allow for a deferral of payments for up to 90 days, which Valley may extend for an additional 90 days. Any extensions beyond this period were done in accordance with applicable regulatory guidance. As of December31, 2021, Valley had approximately $33 million of outstanding loans remaining in their payment deferral period under short-term modifications as compared to $99 million of loans in deferral at September30, 2021.

Allowance for Credit Losses for Loans and Unfunded Commitments. The following table summarizes the allocation of the allowance for credit losses to loan categories and the allocation as a percentage of each loan category at December31, 2021, September30, 2021, and December31, 2020:

December 31, 2021 September 30, 2021 December 31, 2020 Allocation Allocation Allocation as a % of as a % of as a % of Allowance Loan Allowance Loan Allowance Loan Allocation Category Allocation Category Allocation Category ($ in thousands)Loan Category: Commercial andindustrial $ 103,090 1.76 % $ 103,877 1.84 % $ 131,070 1.91 %loansCommercial real estate loans: Commercial 193,258 1.02 % 178,206 0.99 % 146,009 0.87 % real estate Construction 24,232 1.31 % 21,515 1.19 % 18,104 1.04 %Totalcommercial real 217,490 1.05 % 199,721 1.01 % 164,113 0.89 %estate loansResidential 25,120 0.55 % 24,732 0.57 % 28,873 0.69 %mortgage loansConsumer loans: Home equity 3,889 0.97 % 4,110 1.02 % 4,675 1.08 % Auto and other 9,613 0.37 % 10,087 0.40 % 11,512 0.51 % consumerTotal consumer 13,502 0.45 % 14,197 0.49 % 16,187 0.60 %loansAllowance for 359,202 1.05 % 342,527 1.05 % 340,243 1.06 %loan lossesAllowance forunfunded credit 16,500 14,400 11,111 commitmentsTotal allowancefor credit $ 375,702 $ 356,927 $ 351,354 losses forloansAllowance forcredit losses forloans as a % 1.10 % 1.09 % 1.09 %loans

Our loan portfolio, totaling $34.2 billion at December31, 2021, had net recoveries of loan charge-offs totaling $624 thousand for the fourth quarter 2021 as compared to net loan charge-offs of $293 thousand and $3.0 million for the third quarter 2021 and the fourth quarter 2020, respectively.

During the fourth quarter 2021, we recorded a provision for credit losses for loans totaling $11.6 million as compared to $3.5 million for the third quarter 2021 and $19.0 million for the fourth quarter 2020. The increase in the fourth quarter 2021 provision as compared to the third quarter 2021 was largely due to a $6.2 million provision recorded for non-PCD loans and unfunded credit commitments acquired from Westchester.

The allowance for credit losses for loans, comprised of our allowance for loan losses and unfunded credit commitments, as a percentage of total loans was 1.10 percent, 1.09 percent and 1.09 percent at December31, 2021, September30, 2021 and December31, 2020, respectively. The allowance for credit losses at December31, 2021 was impacted by (i) the total provision for credit losses for loans during the fourth quarter 2021, (ii) a $6.5 million allowance for credit losses for loans recorded for PCD loans acquired from Westchester at the acquisition date, and (iii) the net recoveries of loan charge-offs during the fourth quarter 2021.

Capital Adequacy

Valley's regulatory capital ratios continue to reflect its well capitalized position. Valley's total risk-based capital, Tier 1 capital, common equity Tier 1 capital and Tier 1 leverage capital ratios were 13.10 percent, 10.69 percent, 10.06 percent and 8.88 percent, respectively, at December31, 2021.

Investor Conference Call

Valley will host a conference call with investors and the financial community at 11:00 AM Eastern Standard Time, today to discuss the fourth quarter 2021 earnings. Those wishing to participate in the call may dial toll-free (866) 354-0432 (Conference ID: 2858424). The teleconference will also be webcast live: https://edge.media-server.com/mmc/p/x7tpu9r2 and archived on Valleys website through Monday, February 28, 2022.Investor presentation materials will be made available prior to the conference call at www.valley.com.

About Valley

As the principal subsidiary of Valley National Bancorp, Valley National Bank is a regional bank with approximately $43 billion in assets. Valley is committed to giving people and businesses the power to succeed. Valley operates many convenient branch locations across New Jersey, New York, Florida and Alabama, and is committed to providing the most convenient service, the latest innovations and an experienced and knowledgeable team dedicated to meeting customer needs. Helping communities grow and prosper is the heart of Valleys corporate citizenship philosophy. To learn more about Valley, go to www.valley.com or call our Customer Care Center at 800-522-4100.

Forward Looking Statements

The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about managements confidence and strategies and managements expectations about our business, new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology as should, expect, believe, view, opportunity, allow, continues, reflects, typically, usually, anticipate, or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:

-- the inability to realize expected cost savings and synergies from the Westchester and Bank Leumi USA (Bank Leumi) acquisitions in amounts or in the timeframe anticipated; -- costs or difficulties relating to Westchester and Bank Leumi integration matters might be greater than expected; -- the inability to retain customers and qualified employees of Westchester and Bank Leumi; -- changes in estimates of non-recurring charges related to the Westchester and Bank Leumi acquisitions; -- the continued impact of COVID-19 on theU.S.and global economies, including business disruptions, reductions in employment and an increase in business failures, specifically among our clients; -- the continued impact of COVID-19 on our employees and our ability to provide services to our customers and respond to their needs as more cases of COVID-19 may arise in our primary markets; -- the impact of forbearances or deferrals we are required or agree to as a result of customer requests and/or government actions, including, but not limited to our potential inability to recover fully deferred payments from the borrower or the collateral; -- the risks related to the discontinuation of the London Interbank Offered Rate and other reference rates, including increased expenses and litigation and the effectiveness of hedging strategies; -- damage verdicts or settlements or restrictions related to existing or potential class action litigation or individual litigation arising from claims of violations of laws or regulations, contractual claims, breach of fiduciary responsibility, negligence, fraud, environmental laws, patent or trademark infringement, employment related claims, and other matters; -- a prolonged downturn in the economy, mainly in New Jersey, New York, Florida and Alabama, as well as an unexpected decline in commercial real estate values within our market areas; -- higher or lower than expected income tax expense or tax rates, including increases or decreases resulting from changes in uncertain tax position liabilities, tax laws, regulations and case law; -- the inability to grow customer deposits to keep pace with loan growth; -- a material change in our allowance for credit losses under CECL due to forecasted economic conditions and/or unexpected credit deterioration in our loan and investment portfolios; -- the need to supplement debt or equity capital to maintain or exceed internal capital thresholds; -- greater than expected technology related costs due to, among other factors, prolonged or failed implementations, additional project staffing and obsolescence caused by continuous and rapid market innovations; -- the loss of or decrease in lower-cost funding sources within our deposit base, including our inability to achieve deposit retention targets under Valley's branch transformation strategy; -- cyber-attacks, ransomware attacks, computer viruses or other malware that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage our systems; -- results of examinations by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Bank (FRB), the Consumer Financial Protection Bureau (CFPB) and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for credit losses, write-down assets, reimburse customers, change the way we do business, or limit or eliminate certain other banking activities; -- our inability or determination not to pay dividends at current levels, or at all, because of inadequate earnings, regulatory restrictions or limitations, changes in our capital requirements or a decision to increase capital by retaining more earnings; -- unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, the COVID-19 pandemic or other external events; and -- unexpected significant declines in the loan portfolio due to the lack of economic expansion, increased competition, large prepayments, changes in regulatory lending guidance or other factors.

A detailed discussion of factors that could affect our results is included in our SEC filings, including the Risk Factors section of our Annual Report on Form 10-K for the year ended December31, 2020 and in Item 1A of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021.

Final 2021 financial results and other disclosures will be reported in our Annual Report on Form 10-K for the year ended December 31, 2021, and may differ materially from the results and disclosures in this document due to, among other things, the completion of final review procedures, the occurrence of subsequent events, or the discovery of additional information.

We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

-Tables to Follow-

VALLEY NATIONAL BANCORPCONSOLIDATED FINANCIAL HIGHLIGHTS

SELECTED FINANCIAL DATA

Three Months Ended Years Ended December 31, September 30, December 31, December 31,($ inthousands, 2021 2021 2020 2021 2020 except forshare data)FINANCIAL DATA:Net interestincome - FTE $ 316,000 $ 301,744 $ 288,833 $ 1,213,115 $ 1,122,875 ^(1)Net interest 315,301 301,026 287,920 1,209,901 1,118,904 incomeNon-interest 38,223 42,431 47,533 155,013 183,032 incomeTotal revenue 353,524 343,457 335,453 1,364,914 1,301,936 Non-interest 184,514 174,922 173,141 691,542 646,148 expensePre-provision 169,010 168,535 162,312 673,372 655,788 net revenueProvision for 11,699 3,531 18,975 32,633 125,722 credit lossesIncome tax 42,273 42,424 37,974 166,899 139,460 expenseNet income 115,038 122,580 105,363 473,840 390,606 Dividends onpreferred 3,172 3,172 3,172 12,688 12,688 stockNet incomeavailable to $ 111,866 $ 119,408 $ 102,191 $ 461,152 $ 377,918 commonstockholders

Weightedaverage number ofcommon sharesoutstanding:Basic 411,775,590 406,824,160 403,872,459 407,445,379 403,754,356 Diluted 414,472,820 409,238,001 405,799,507 410,018,328 405,046,207 Per common share data:Basic $ 0.27 $ 0.29 $ 0.25 $ 1.13 $ 0.94 earningsDiluted 0.27 0.29 0.25 1.12 0.93 earningsCashdividends 0.11 0.11 0.11 0.44 0.44 declaredClosing stock 14.82 13.61 10.09 14.82 11.46 price - highClosing stock 13.04 11.80 6.90 9.74 6.29 price - lowCORE ADJUSTEDFINANCIAL DATA: ^(2)Net incomeavailable tocommon $ 117,366 $ 121,555 $ 110,266 $ 474,989 $ 389,050 shareholders,as adjustedBasicearnings per 0.29 0.30 0.27 1.17 0.96 share, asadjustedDilutedearnings per 0.28 0.30 0.27 1.16 0.96 share, asadjustedFINANCIAL RATIOS:Net interest 3.22 % 3.14 % 3.05 % 3.16 % 3.02 %marginNet interestmargin - FTE 3.23 3.15 3.06 3.17 3.03 ^(1)Annualizedreturn on 1.08 1.18 1.02 1.14 0.96 averageassetsAnnualizedreturn onavg. 9.38 10.23 9.20 9.98 8.68 shareholders'equityAnnualizedreturn onavg. tangible 13.44 14.64 13.45 14.40 12.82 shareholders'equity ^(2)Efficiency 52.19 50.93 51.61 50.67 49.63 ratio ^(3)CORE ADJUSTEDFINANCIAL RATIOS: ^(2)Annualizedreturn onaverage 1.14 % 1.20 % 1.10 % 1.18 % 0.99 %assets, asadjustedAnnualizedreturn onaverage 9.83 10.41 9.90 10.27 8.93 shareholders'equity, asadjustedAnnualizedreturn onaveragetangible 14.08 14.90 14.48 14.82 13.19 shareholders'equity, asadjustedEfficiencyratio, as 49.44 49.16 46.99 48.46 47.39 adjusted Three Months Ended Years Ended December 31, September 30, December 31, December 31,($ inthousands, 2021 2021 2020 2021 2020 except forshare data)AVERAGEBALANCE SHEET ITEMS:Assets $ 42,473,828 $ 41,543,930 $ 41,308,943 $ 41,475,682 $ 40,557,326 Interestearning 39,193,014 38,332,874 37,806,500 38,227,815 37,010,933 assetsLoans 33,338,128 32,698,382 32,570,902 32,816,985 31,785,859 Interestbearing 25,582,956 25,354,160 26,708,223 25,586,867 26,877,800 liabilitiesDeposits 34,746,786 33,599,820 31,755,838 33,239,432 30,690,382 Shareholders' 4,905,343 4,794,843 4,582,329 4,747,745 4,500,067 equity

As ofBALANCE SHEET December 31, September 30, June 30, March 31, December 31,ITEMS:(In 2021 2021 2021 2021 2020 thousands)Assets $ 43,446,443 $ 41,278,007 $ 41,274,228 $ 41,178,011 $ 40,686,076 Total loans 34,153,657 32,606,814 32,457,454 32,686,416 32,217,112 Deposits 35,632,412 33,632,605 33,194,774 32,585,209 31,935,602 Shareholders' 5,084,066 4,822,498 4,737,807 4,659,670 4,592,120 equity LOANS: (In thousands)Commercialand industrialloans:Commercialand $ 5,411,601 $ 4,761,227 $ 4,733,771 $ 4,784,017 $ 4,709,569 industrialCommercialand 435,950 874,033 1,350,684 2,364,627 2,152,139 industrialPPP loansTotalcommercial 5,847,551 5,635,260 6,084,455 7,148,644 6,861,708 andindustrialCommercial real estate:Commercial 18,935,486 17,912,070 17,512,142 16,923,627 16,724,998 real estateConstruction 1,854,580 1,804,580 1,752,838 1,786,331 1,745,825 Totalcommercial 20,790,066 19,716,650 19,264,980 18,709,958 18,470,823 real estateResidential 4,545,064 4,332,422 4,226,975 4,060,492 4,183,743 mortgageConsumer: Home equity 400,779 402,658 410,856 409,576 431,553 Automobile 1,570,036 1,563,698 1,531,262 1,444,883 1,355,955 Other 1,000,161 956,126 938,926 912,863 913,330 consumerTotalconsumer 2,970,976 2,922,482 2,881,044 2,767,322 2,700,838 loansTotal loans $ 34,153,657 $ 32,606,814 $ 32,457,454 $ 32,686,416 $ 32,217,112 CAPITAL RATIOS:Book valueper common $ 11.57 $ 11.32 $ 11.15 $ 10.97 $ 10.85 shareTangible bookvalue per 7.94 7.78 7.59 7.39 7.25 common share^(2)Tangiblecommon equity 7.98 % 7.95 % 7.73 % 7.55 % 7.47 %to tangibleassets ^(2)Tier 1leverage 8.88 8.63 8.49 8.37 8.06 capitalCommon equitytier 1 10.06 10.06 10.04 10.08 9.94 capitalTier 1risk-based 10.69 10.73 10.73 10.79 10.66 capitalTotalrisk-based 13.10 13.24 13.36 12.76 12.64 capital

Three Months Ended Years EndedALLOWANCE FOR December September DecemberCREDIT 31, 30, 31, December 31,LOSSES:($ in 2021 2021 2020 2021 2020 thousands)Allowance forcredit losses for loansBeginning $ 356,927 $ 353,724 $ 335,328 $ 351,354 $ 164,604 balanceImpact of theadoption of ? ? ? ? 37,989 ASU 2016-13 ^(4)Allowance forpurchasedcredit 6,542 ? ? 6,542 61,643 deteriorated(PCD) loansBeginningbalance, 363,469 353,724 335,328 357,896 264,236 adjustedLoans charged-off:Commercialand (2,224 ) (1,248 ) (3,281 ) (21,507 ) (34,630 )industrialCommercial ? ? (1 ) (382 ) (767 )real estateResidential (1 ) ? (250 ) (140 ) (598 )mortgageTotal (914 ) (771 ) (1,670 ) (4,303 ) (9,294 )consumerTotal loans (3,139 ) (2,019 ) (5,202 ) (26,332 ) (45,289 )charged-offCharged-offloans recovered:Commercialand 1,153 514 160 3,934 1,956 industrialCommercial 1,794 29 890 2,553 1,054 real estateConstruction ? ? 372 4 452 Residential 100 228 44 676 670 mortgageTotal 716 955 734 4,075 3,188 consumerTotal loans 3,763 1,726 2,200 11,242 7,320 recoveredNetrecoveries 624 (293 ) (3,002 ) (15,090 ) (37,969 )(charge-offs)Provision forcredit losses 11,609 3,496 19,028 32,896 125,087 for loansEnding $ 375,702 $ 356,927 $ 351,354 $ 375,702 $ 351,354 balanceComponents ofallowance for credit lossesfor loans:Allowance for $ 359,202 $ 342,527 $ 340,243 $ 359,202 $ 340,243 loan lossesAllowance forunfunded 16,500 14,400 11,111 16,500 11,111 creditcommitmentsAllowance forcredit losses $ 375,702 $ 356,927 $ 351,354 $ 375,702 $ 351,354 for loansComponents ofprovision for credit lossesfor loans:Provision forcredit losses $ 9,509 $ 3,496 $ 18,213 $ 27,507 $ 123,922 for loansProvision forunfunded 2,100 ? 815 5,389 1,165 creditcommitmentsTotalprovision for $ 11,609 $ 3,496 $ 19,028 $ 32,896 $ 125,087 credit lossesfor loans Annualizedratio oftotal net(recoveries) (0.01)% 0.00 % 0.04 % 0.05 % 0.12 %charge-offsto averageloansAllowance forcredit losses 1.10 % 1.09 % 1.09 % 1.10 % 1.09 %as a % oftotal loans

As ofASSET QUALITY: December September June 30, March 31, December 31, 30, 31,($ in 2021 2021 2021 2021 2020 thousands)Accruing past due loans:30 to 59 days past due:Commercial and $ 6,717 $ 2,677 $ 3,867 $ 3,763 $ 6,393 industrialCommercial 14,421 22,956 40,524 11,655 35,030 real estateConstruction 1,941 ? ? ? 315 Residential 10,999 9,293 8,479 16,004 17,717 mortgageTotal consumer 6,811 5,463 6,242 5,480 10,257 Total 30 to 59 40,889 40,389 59,112 36,902 69,712 days past due60 to 89 days past due:Commercial and 7,870 985 1,361 1,768 2,252 industrialCommercial ? 5,897 11,451 5,455 1,326 real estateResidential 3,314 974 1,608 2,233 10,351 mortgageTotal consumer 1,020 1,617 985 1,021 1,823 Total 60 to 89 12,204 9,473 15,405 10,477 15,752 days past due90 or more days past due:Commercial and 1,273 2,083 2,351 2,515 9,107 industrialCommercial 32 1,942 1,948 ? 993 real estateResidential 677 1,002 956 2,472 3,170 mortgageTotal consumer 789 325 463 417 271 Total 90 ormore days past 2,771 5,352 5,718 5,404 13,541 dueTotal accruing $ 55,864 $ 55,214 $ 80,235 $ 52,783 $ 99,005 past due loans

Non-accrual loans:Commercial and $ 99,918 $ 100,614 $ 102,594 $ 108,988 $ 106,693 industrialCommercial 83,592 95,843 58,893 54,004 46,879 real estateConstruction 17,641 17,653 17,660 71 84 Residential 35,207 33,648 35,941 33,655 25,817 mortgageTotal consumer 3,858 4,073 4,924 7,292 5,809 Totalnon-accrual 240,216 251,831 220,012 204,010 185,282 loansOther realestate owned 2,259 3,967 4,523 4,521 5,118 (OREO)Otherrepossessed 2,931 1,896 2,060 1,857 3,342 assetsNon-accrualdebt ? ? ? 129 815 securitiesTotalnon-performing $ 245,406 $ 257,694 $ 226,595 $ 210,517 $ 194,557 assetsPerformingtroubled debt $ 71,330 $ 64,832 $ 64,080 $ 67,102 $ 57,367 restructuredloansTotalnon-accrual 0.70 % 0.77 % 0.68 % 0.62 % 0.58 %loans as a %of loansTotal accruingpast due andnon-accrual 0.87 % 0.94 % 0.93 % 0.79 % 0.88 %loans as a %of loansAllowance forlosses onloans as a % 149.53 % 136.01 % 154.23 % 168.07 % 183.64 %of non-accrualloans

VALLEY NATIONAL BANCORPCONSOLIDATED FINANCIAL HIGHLIGHTS

NOTES TO SELECTED FINANCIAL DATA

Net interest income and net interest margin are presented on a tax equivalent basis using a 21 percent federal tax rate. Valley believes that(1 ) this presentation provides comparability of net interest income and net interest margin arising from both taxable and tax-exempt sources and is consistent with industry practice and SEC rules. This press release contains certain supplemental financial information, described in the Notes below, which has been determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP") that management uses in its analysis of Valley's performance. Management believes these non-GAAP financial measures provide information useful to investors in understanding Valley's financial results. Specifically, Valley provides measures based on what it believes are its operating earnings on a consistent basis and excludes material non-core operating items which affect the GAAP reporting of results of operations. Management utilizes these measures for internal planning and forecasting purposes.(2 ) Management believes that Valley's presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting Valley's business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and Valley strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

Three Months Ended Years Ended December 31, September 30, December 31, December 31,($ inthousands, 2021 2021 2020 2021 2020 except forshare data)Adjusted netincomeavailable to commonshareholders:Net income, as $ 115,038 $ 122,580 $ 105,363 $ 473,840 $ 390,606 reportedAdd: Losses onextinguishment ? ? 6,958 6,024 8,649 of debt (netof tax)Add: Losses(gains) onavailable forsale and heldto maturity 9 (565 ) (468 ) (390 ) (377 )securitiestransactions(net of tax)^(a)Add: Severanceexpense (net ? ? 1,489 ? 1,489 of tax)^(b)Add: Mergerrelated 5,491 1,207 96 6,698 1,371 expenses (netof tax)^(c)Add:Litigation ? 1,505 ? 1,505 ? reserve (netof tax)^(d)Net income, as $ 120,538 $ 124,727 $ 113,438 $ 487,677 $ 401,738 adjustedDividends onpreferred 3,172 3,172 3,172 12,688 12,688 stockNet incomeavailable tocommon $ 117,366 $ 121,555 $ 110,266 $ 474,989 $ 389,050 shareholders,as adjusted_____________ (a) Included in gains on securities transactions, net.(b) Severance expenses are included in salary and employee benefits expense.(c) Merger related expenses are primarily within salary and employee benefitsexpense, professional and legal fees, and other expense.(d) Litigation reserve included in professional and legal fees. Adjusted percommon share data:Net incomeavailable tocommon $ 117,366 $ 121,555 $ 110,266 $ 474,989 $ 389,050 shareholders,as adjustedAverage numberof shares 411,775,590 406,824,160 403,872,459 407,445,379 403,754,356 outstandingBasicearnings, as $ 0.29 $ 0.30 $ 0.27 $ 1.17 $ 0.96 adjustedAverage numberof diluted 414,472,820 409,238,001 405,799,507 410,018,328 405,046,207 sharesoutstandingDilutedearnings, as $ 0.28 $ 0.30 $ 0.27 $ 1.16 $ 0.96 adjusted

Three Months Ended Years Ended December 31, September 30, December 31, December 31,($ in 2021 2021 2020 2021 2020 thousands)Adjustedannualizedreturn onaverage tangibleshareholders'equity:Net income, $ 120,538 $ 124,727 $ 113,438 $ 487,677 $ 401,738 as adjustedAverageshareholders' 4,905,343 4,794,843 4,582,329 4,747,745 4,500,067 equityLess: Averagegoodwill andother 1,481,951 1,446,760 1,447,838 1,457,519 1,454,349 intangibleassetsAveragetangible $ 3,423,392 $ 3,348,083 $ 3,134,491 $ 3,290,226 $ 3,045,718 shareholders'equityAnnualizedreturn onaveragetangible 14.08 % 14.90 % 14.48 % 14.82 % 13.19 %shareholders'equity, asadjustedAdjustedannualizedreturn on averageassets:Net income, $ 120,538 $ 124,727 $ 113,438 $ 487,677 $ 401,738 as adjustedAverage $ 42,473,828 $ 41,543,930 $ 41,308,943 $ 41,475,682 $ 40,557,326 assetsAnnualizedreturn onaverage 1.14 % 1.20 % 1.10 % 1.18 % 0.99 %assets, asadjustedAdjustedannualizedreturn on averageshareholders'equity:Net income, $ 120,538 $ 124,727 $ 113,438 $ 487,677 $ 401,738 as adjustedAverageshareholders' $ 4,905,343 $ 4,794,843 $ 4,582,329 $ 4,747,745 $ 4,500,067 equityAnnualizedreturn onaverage 9.83 % 10.41 % 9.90 % 10.27 % 8.93 %shareholders'equity, asadjusted

Annualizedreturn onaverage tangibleshareholders'equity:Net income, as $ 115,038 $ 122,580 $ 105,363 $ 473,840 $ 390,606 reportedAverageshareholders' 4,905,343 4,794,843 4,582,329 4,747,745 4,500,067 equityLess: Averagegoodwill andother 1,481,951 1,446,760 1,447,838 1,457,519 1,454,349 intangibleassetsAveragetangible $ 3,423,392 $ 3,348,083 $ 3,134,491 $ 3,290,226 $ 3,045,718 shareholders'equityAnnualizedreturn onaverage 13.44 % 14.64 % 13.45 % 14.40 % 12.82 %tangibleshareholders'equityAdjustedefficiency ratio:Non-interest $ 184,514 $ 174,922 $ 173,141 $ 691,542 $ 646,148 expenseLess: Loss onextinguishment ? ? 9,683 8,406 12,036 of debt(pre-tax)Less:Severance ? ? 2,072 ? 2,072 expense(pre-tax)Less:Merger-related 7,613 1,287 133 8,900 1,907 expenses(pre-tax)Less:Amortizationof tax credit 2,115 3,079 3,932 10,910 13,335 investments(pre-tax)Less:Litigation ? 2,100 ? 2,100 ? reserve(pre-tax)Non-interestexpense, as 174,786 168,456 157,321 661,226 616,798 adjustedNet interest 315,301 301,026 287,920 1,209,901 1,118,904 incomeNon-interestincome, as 38,223 42,431 47,533 155,013 183,032 reportedAdd: Losses(gains) onavailable forsale and held 12 (788 ) (651 ) (545 ) (524 )to maturitysecuritiestransactions,net (pre-tax)Non-interestincome, as $ 38,235 $ 41,643 $ 46,882 $ 154,468 $ 182,508 adjustedGrossoperating $ 353,536 $ 342,669 $ 334,802 $ 1,364,369 $ 1,301,412 income, asadjustedEfficiencyratio, as 49.44 % 49.16 % 46.99 % 48.46 % 47.39 %adjusted

As Of December 31, September 30, June 30, March 31, December 31,($ inthousands, 2021 2021 2021 2021 2020 except forshare data)Tangible bookvalue per common share:Common shares 421,437,068 407,313,664 406,083,790 405,797,538 403,858,998 outstandingShareholders' $ 5,084,066 $ 4,822,498 $ 4,737,807 $ 4,659,670 $ 4,592,120 equityLess: Preferred 209,691 209,691 209,691 209,691 209,691 StockLess: Goodwilland other 1,529,394 1,444,967 1,447,965 1,450,414 1,452,891 intangibleassetsTangible commonshareholders' $ 3,344,981 $ 3,167,840 $ 3,080,151 $ 2,999,565 $ 2,929,538 equityTangible bookvalue per $ 7.94 $ 7.78 $ 7.59 $ 7.39 $ 7.25 common shareTangible commonequity to tangibleassets:Tangible commonshareholders' $ 3,344,981 $ 3,167,840 $ 3,080,151 $ 2,999,565 $ 2,929,538 equityTotal assets $ 43,446,443 $ 41,278,007 $ 41,274,228 $ 41,178,011 $ 40,686,076 Less: Goodwilland other 1,529,394 1,444,967 1,447,965 1,450,414 1,452,891 intangibleassetsTangible assets $ 41,917,049 $ 39,833,040 $ 39,826,263 $ 39,727,597 $ 39,233,185 Tangible commonequity to 7.98 % 7.95 % 7.73 % 7.55 % 7.47 %tangible assets

(3 ) The efficiency ratio measures Valley's total non-interest expense as a percentage of net interest income plus total non-interest income. The adjustment represents an increase in the allowance for credit losses(4 ) for loans as a result of the adoption of ASU 2016-13 effective January 1, 2020.

SHAREHOLDERS RELATIONSRequests for copies of reports and/or other inquiries should be directed toTina Zarkadas, Assistant Vice President, Shareholder Relations Specialist,Valley National Bancorp, 1455 Valley Road, Wayne, New Jersey, 07470, bytelephone at (973) 305-3380, by fax at (973) 305-1364 or by e-mail attzarkadas@valley.com.

VALLEY NATIONAL BANCORPCONSOLIDATED STATEMENTS OF FINANCIAL CONDITION(in thousands, except for share data)

December 31, 2021 2020 (Unaudited) Assets Cash and due from banks $ 205,156 $ 257,845 Interest bearing deposits with banks 1,844,764 1,071,360 Investment securities: Equity securities 36,473 29,378 Trading debt securities 38,130 ? Available for sale debt securities 1,128,809 1,339,473 Held to maturity debt securities (net ofallowance for credit losses of $1,165 at 2,667,532 2,171,583 December 31, 2021 and $1,428 at December 31,2020)Total investment securities 3,870,944 3,540,434 Loans held for sale, at fair value 139,516 301,427 Loans 34,153,657 32,217,112 Less: Allowance for loan losses (359,202 ) (340,243 )Net loans 33,794,455 31,876,869 Premises and equipment, net 326,306 319,797 Lease right of use assets 259,117 252,053 Bank owned life insurance 566,770 535,209 Accrued interest receivable 96,882 106,230 Goodwill 1,459,008 1,382,442 Other intangible assets, net 70,386 70,449 Other assets 813,139 971,961 Total Assets $ 43,446,443 $ 40,686,076 Liabilities Deposits: Non-interest bearing $ 11,675,748 $ 9,205,266 Interest bearing: Savings, NOW and money market 20,269,620 16,015,658 Time 3,687,044 6,714,678 Total deposits 35,632,412 31,935,602 Short-term borrowings 655,726 1,147,958 Long-term borrowings 1,423,676 2,295,665 Junior subordinated debentures issued to 56,413 56,065 capital trustsLease liabilities 283,106 276,675 Accrued expenses and other liabilities 311,044 381,991 Total Liabilities 38,362,377 36,093,956 Shareholders? Equity Preferred stock, no par value; 50,000,000 shares authorized:Series A (4,600,000 shares issued at December 111,590 111,590 31, 2021 and December 31, 2020)Series B (4,000,000 shares issued at December 98,101 98,101 31, 2021 and December 31, 2020)Common stock (no par value, authorized650,000,000 shares; issued 423,034,027 shares 148,482 141,746 at December 31, 2021 and 403,881,488 shares atDecember 31, 2020)Surplus 3,883,035 3,637,468 Retained earnings 883,645 611,158 Accumulated other comprehensive loss (17,932 ) (7,718 )Treasury stock, at cost (1,596,959 commonshares at December 31, 2021 and 22,490 common (22,855 ) (225 )shares at December 31, 2020)Total Shareholders? Equity 5,084,066 4,592,120 Total Liabilities and Shareholders? Equity $ 43,446,443 $ 40,686,076

VALLEY NATIONAL BANCORPCONSOLIDATED STATEMENTS OF INCOME (Unaudited)(in thousands, except for share data)

Three Months Ended Years Ended December 31, September 30, December 31, December 31, 2021 2021 2020 2021 2020 Interest Income Interest and fees $ 319,141 $ 309,753 $ 313,968 $ 1,257,389 $ 1,284,707 on loansInterest anddividends on investmentsecurities:Taxable 15,852 14,292 14,024 56,026 70,249 Tax-exempt 2,535 2,609 3,339 11,716 14,563 Dividends 1,814 1,505 2,467 7,357 11,644 Interest onfederal fundssold and other 637 642 260 1,738 2,556 short-terminvestmentsTotal interest 339,979 328,801 334,058 1,334,226 1,383,719 incomeInterest Expense Interest on deposits:Savings, NOW and 9,983 10,605 11,706 42,879 76,169 money marketTime 3,328 4,394 14,368 25,094 106,067 Interest onshort-term 984 1,464 2,097 5,374 11,372 borrowingsInterest onlong-termborrowings and 10,383 11,312 17,967 50,978 71,207 juniorsubordinateddebenturesTotal interest 24,678 27,775 46,138 124,325 264,815 expenseNet Interest 315,301 301,026 287,920 1,209,901 1,118,904 IncomeProvision(credit) forcredit losses for 90 35 (53 ) (263 ) 635 held to maturitysecuritiesProvision forcredit losses for 11,609 3,496 19,028 32,896 125,087 loansNet InterestIncome After 303,602 297,495 268,945 1,177,268 993,182 Provision forCredit LossesNon-Interest IncomeTrust andinvestment 4,499 3,550 3,108 14,910 12,415 servicesInsurance 2,005 1,610 1,972 7,810 7,398 commissionsService chargeson deposit 5,810 5,428 5,068 21,424 18,257 accountsGains onsecurities 495 787 651 1,758 524 transactions, netFees from loan 2,671 2,894 2,826 11,651 10,352 servicingGains on sales of 6,653 6,442 15,998 26,669 42,251 loans, netGains (losses) onsales of assets, 521 344 (2,607 ) 901 (1,891 )netBank owned life 1,993 2,018 2,422 8,817 10,083 insuranceOther 13,576 19,358 18,095 61,073 83,643 Totalnon-interest 38,223 42,431 47,533 155,013 183,032 incomeNon-Interest ExpenseSalary andemployee benefits 102,675 93,992 85,335 375,865 333,221 expenseNet occupancy and 34,986 32,402 32,228 132,098 129,002 equipment expenseFDIC insurance 3,889 3,644 4,091 14,183 18,949 assessmentAmortization ofother intangible 5,074 5,298 6,117 21,827 24,645 assetsProfessional and 11,182 13,492 9,702 38,432 32,348 legal feesLoss onextinguishment of ? ? 9,683 8,406 12,036 debtAmortization oftax credit 2,115 3,079 3,932 10,910 13,335 investmentsTelecommunication 2,902 2,615 3,490 11,409 10,737 expenseOther 21,691 20,400 18,563 78,412 71,875 Totalnon-interest 184,514 174,922 173,141 691,542 646,148 expenseIncome Before 157,311 165,004 143,337 640,739 530,066 Income TaxesIncome tax 42,273 42,424 37,974 166,899 139,460 expenseNet Income 115,038 122,580 105,363 473,840 390,606 Dividends on 3,172 3,172 3,172 12,688 12,688 preferred stockNet IncomeAvailable to $ 111,866 $ 119,408 $ 102,191 $ 461,152 $ 377,918 CommonShareholders Three Months Ended Years Ended December 31, September 30, December 31, December 31, 2021 2021 2020 2021 2020 Earnings Per Common Share:Basic $ 0.27 $ 0.29 $ 0.25 $ 1.13 $ 0.94 Diluted 0.27 0.29 0.25 1.12 0.93 Cash DividendsDeclared per 0.11 0.11 0.11 0.44 0.44 Common ShareWeighted AverageNumber of Common SharesOutstanding:Basic 411,775,590 406,824,160 403,872,459 407,445,379 403,754,356 Diluted 414,472,820 409,238,001 405,799,507 410,018,328 405,046,207

VALLEY NATIONAL BANCORPQuarterly Analysis of Average Assets, Liabilities and Shareholders' Equity andNet Interest Income on a Tax Equivalent Basis

Three Months Ended December 31, 2021 September 30, 2021 December 31, 2020 Average Avg. Average Avg. Average Avg.($ in thousands) Balance Interest Rate Balance Interest Rate Balance Interest RateAssets Interest earning assets:Loans ^(1)(2) $ 33,338,128 $ 319,165 3.83 % $ 32,698,382 $ 309,778 3.79 % $ 32,570,902 $ 313,993 3.86 %Taxable investments 3,563,329 17,667 1.98 3,302,803 15,797 1.91 3,204,974 16,491 2.06 ^(3)Tax-exempt 418,049 3,209 3.07 429,941 3,302 3.07 506,748 4,227 3.34 investments ^(1)(3)Interest bearing 1,873,508 636 0.14 1,901,748 642 0.14 1,523,876 260 0.07 deposits with banksTotal interest 39,193,014 340,677 3.48 38,332,874 329,519 3.44 37,806,500 334,971 3.54 earning assetsOther assets 3,280,814 3,211,056 3,502,443 Total assets $ 42,473,828 $ 41,543,930 $ 41,308,943 Liabilities andshareholders' equityInterest bearing liabilities:Savings, NOW andmoney market $ 19,685,730 $ 9,983 0.20 % $ 18,771,619 $ 10,605 0.23 % $ 15,606,081 $ 11,706 0.30 %depositsTime deposits 3,744,792 3,328 0.36 4,126,253 4,394 0.43 7,005,804 14,368 0.82 Short-term 670,433 983 0.59 860,474 1,464 0.68 1,316,706 2,097 0.64 borrowingsLong-term 1,482,001 10,383 2.80 1,595,814 11,312 2.84 2,779,632 17,967 2.59 borrowings^ (4)Total interest 25,582,956 24,677 0.39 25,354,160 27,775 0.44 26,708,223 46,138 0.69 bearing liabilitiesNon-interest 11,316,264 10,701,948 9,143,953 bearing depositsOther liabilities 669,265 692,979 874,438 Shareholders' 4,905,343 4,794,843 4,582,329 equityTotal liabilitiesand shareholders' $ 42,473,828 $ 41,543,930 $ 41,308,943 equityNet interest income/interest rate $ 316,000 3.09 % $ 301,744 3.00 % $ 288,833 2.85 %spread ^(5)Tax equivalent (699 ) (718 ) (913 ) adjustmentNet interest $ 315,301 $ 301,026 $ 287,920 income, as reportedNet interest margin 3.22 % 3.14 % 3.05 %^(6)Tax equivalent 0.01 0.01 0.01 effectNet interest marginon a fully tax 3.23 % 3.15 % 3.06 %equivalent basis ^(6)

____________ (1) Interest income is presented on a tax equivalent basis using a 21 percent federal tax rate. (2) Loans are stated net of unearned income and include non-accrual loans. (3) The yield for securities that are classified as available for sale is based on the average historical amortized cost. (4) Includes junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of condition. Interest rate spread represents the difference between the average yield on(5) interest earning assets and the average cost of interest bearing liabilities and is presented on a fully tax equivalent basis. (6) Net interest income as a percentage of total average interest earning assets.

Contact: Michael D. Hagedorn Senior Executive Vice President and Chief Financial Officer 973-872-4885