Valley National Bancorp (VLY) 8-K/A Consolidated Financial Statements

Exhibit 99.3

PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information is based on the historical financial statements of Valley National Bancorp (“Valley”) and Bank Leumi le-Israel Corporation, a New York corporation (“Bank Leumi USA”), after giving effect to the merger of Volcano Merger Sub Corporation, a New York corporation and subsidiary of Valley, with and into Bank Leumi USA (the “Merger”). The unaudited pro forma condensed combined balance sheet gives effect to the Merger as if the Merger had occurred on March 31, 2022. The unaudited pro forma condensed combined income statements for the three months ended March 31, 2022 and for the year ended December 31, 2021 give effect to the Merger as if the Merger had occurred at the beginning of the periods presented.

The unaudited pro forma adjustments are based upon currently available information and certain assumptions that Valley’s management believes are reasonable. Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the unaudited pro forma condensed combined financial information. The fair values are estimates as of the date hereof and actual amounts are still in the process of being finalized. Accordingly, the actual adjustments that will appear in Valley’s financial statements may differ from these pro forma adjustments, and those differences may be material.

The unaudited pro forma condensed combined financial information included herein is presented for informational purposes only and is not intended to present or be indicative of what the results of operations or financial position would have been had the events actually occurred on the dates indicated, nor is it meant to be indicative of future results of operations or financial position for any future period or as of any future date. The unaudited pro forma condensed combined financial information does not give effect to the potential impact of current financial conditions, or any anticipated revenue enhancements, cost savings or operating synergies that may result from the Merger.

VALLEY NATIONAL BANCORP

CONSOLIDATED PRO FORMA STATEMENTS OF FINANCIAL CONDITION (Unaudited)

(in thousands)

	March 31, 2022
	Valley Historical			Bank Leumi USA Historical			Transaction Accounting Adjustments				Unaudited Pro Forma
Assets
Cash and interest bearing deposits with banks	$	730,920		$	443,588		$	(113,374	)	A	$	1,061,134
Investment securities		4,134,748			1,378,855			(60,062	)	B		5,453,541
Loans held for sale, at fair value		77,632			—			—				77,632
Loans		35,364,405			6,001,052			(86,506	)	C		41,278,951
Less: Allowance for loan losses		(362,510	)		(60,365	)		(36,652	)	D		(459,527	)
Net loans		35,001,895			5,940,687			(123,158	)			40,819,424
Lease right of use assets		258,512			78,602			(34,570	)	E		302,544
Goodwill		1,468,354			4,550			366,397		F		1,839,301
Other intangible assets, net		74,884			—			187,460		G		262,344
Other assets		1,804,512			356,062			3,886		H		2,164,460
Total Assets	$	43,551,457		$	8,202,344		$	226,579			$	51,980,380
Liabilities
Deposits:
Non-interest bearing	$	11,947,001		$	4,498,838		$	—			$	16,445,839
Interest bearing		23,700,335			2,530,892			266		I		26,231,493
Total deposits		35,647,336			7,029,730			266				42,677,332
Borrowings		1,949,823			103,794			138		J		2,053,755
Lease liabilities		282,437			94,342			(14,561	)	K		362,218
Other liabilities		575,477			107,864			20,055		L		703,396
Total Liabilities		38,455,073			7,335,730			5,898				45,796,701
Shareholders’ Equity
Preferred equity		209,691			—			—				209,691
Common equity		4,886,693			866,614			220,681		M		5,973,988
Total Shareholders’ Equity		5,096,384			866,614			220,681				6,183,679
Total Liabilities and Shareholders’ Equity	$	43,551,457		$	8,202,344		$	226,579			$	51,980,380

See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements

VALLEY NATIONAL BANCORP

CONSOLIDATED PRO FORMA STATEMENTS OF INCOME (Unaudited)

(in thousands, except for share data)

	For the Three Months Ended March 31, 2022
	Valley Historical		Bank Leumi USA Historical		Transaction Accounting Adjustments				Unaudited Pro Forma
Interest Income
Interest and fees on loans	$	317,365	$	56,040	$	6,220		A	$	379,625
Interest and dividends on investment securities		22,632		8,516		1,509		B		32,657
Other interest income		461		185		—				646
Total interest income		340,458		64,741		7,729				412,928
Interest Expense
Interest on deposits		12,458		1,374		(20	)	C		13,812
Interest on borrowings		10,331		359		(35	)	D		10,655
Total interest expense		22,789		1,733		(55	)			24,467
Net Interest Income		317,669		63,008		7,784				388,461
Provision for credit losses		3,557		2,824		—		E		6,381
Net Interest Income After Provision for Credit Losses		314,112		60,184		7,784				382,080
Non-Interest Income
Trust, investment services and brokerage fees		5,131		7,088		—				12,219
Insurance commissions		1,859		—		—				1,859
Service charges on deposit accounts		6,212		3,907		—				10,119
Gains on sales of loans, net		986		—		—				986
Other		25,082		10,495		574		F		36,151
Total non-interest income		39,270		21,490		574				61,334
Non-Interest Expense
Salary and employee benefits expense		107,733		29,308		—				137,041
Net occupancy and equipment expense		36,806		7,868		(558	)	G		44,116
FDIC insurance assessment		4,158		625		—				4,783
Amortization of other intangible assets		4,437		—		8,036		H		12,473
Amortization of tax credit investments		2,896		—		—				2,896
Other		41,310		13,344		—				54,654
Total non-interest expense		197,340		51,145		7,478				255,963
Income Before Income Taxes		156,042		30,529		880				187,451
Income tax expense		39,314		9,546		247		I		49,107
Net Income	$	116,728	$	20,983	$	633			$	138,344
Dividends on preferred stock		3,172		—		—				3,172
Net income attributable to non-controlling interest		—		7		(7	)			—
Net Income Available to Common Shareholders	$	113,556	$	20,976	$	640			$	135,172
Earnings Per Common Share:
Basic	$	0.27	$	0.94					$	0.27
Diluted	$	0.27	$	0.91					$	0.27
Weighted Average Number of Common Shares Outstanding:
Basic		421,573,843		22,317,655		84,862,883		J		506,436,726
Diluted		423,506,550		22,993,845		85,921,715				509,428,265

See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements

VALLEY NATIONAL BANCORP

CONSOLIDATED PRO FORMA STATEMENTS OF INCOME (Unaudited)

(in thousands, except for share data)

	For the Year Ended December 31, 2021
	Valley Historical		Bank Leumi USA Historical		Transaction Accounting Adjustments				Unaudited Pro Forma
Interest Income
Interest and fees on loans	$	1,257,389	$	213,521	$	24,882		A	$	1,495,792
Interest and dividends on investment securities		75,099		36,204		(1,996	)	B		109,307
Other interest income		1,738		581		—				2,319
Total interest income		1,334,226		250,306		22,886				1,607,418
Interest Expense										—
Interest on deposits		67,973		6,597		(319	)	C		74,251
Interest on borrowings		56,352		1,948		(2,515	)	D		55,785
Total interest expense		124,325		8,545		(2,834	)			130,036
Net Interest Income		1,209,901		241,761		25,720				1,477,382
Provision for credit losses		32,633		6,222		42,408		E		81,263
Net Interest Income After Provision for Credit Losses		1,177,268		235,539		(16,688	)			1,396,119
Non-Interest Income
Trust, investment services and brokerage fees		14,910		28,156		—				43,066
Insurance commissions		7,810		—		—				7,810
Service charges on deposit accounts		21,424		15,286		—				36,710
Gains on sales of loans, net		26,669		—		—				26,669
Other		84,200		18,749		2,033		F		104,982
Total non-interest income		155,013		62,191		2,033				219,237
Non-Interest Expense										—
Salary and employee benefits expense		375,865		117,555		—				493,420
Net occupancy and equipment expense		132,098		31,132		(128	)	G		163,102
FDIC insurance assessment		14,183		2,638		—				16,821
Amortization of other intangible assets		21,827		—		31,812		H		53,639
Amortization of tax credit investments		10,910		—		—				10,910
Other		136,659		40,749		—				177,408
Total non-interest expense		691,542		192,074		31,684				915,300
Income Before Income Taxes		640,739		105,656		(46,339	)			700,056
Income tax expense		166,899		26,440		(12,975	)	I		180,364
Net Income		473,840		79,216		(33,364	)			519,692
Dividends on preferred stock		12,688		—		—				12,688
Net income attributable to non-controlling interest		—		36		(36	)			—
Net Income Available to Common Shareholders	$	461,152	$	79,180	$	(33,328	)		$	507,004
Earnings Per Common Share:
Basic	$	1.13	$	3.55					$	1.03
Diluted	$	1.12	$	3.44					$	1.02
Weighted Average Number of Common Shares Outstanding:
Basic		407,455,379		22,317,655		84,862,883		J		492,318,262
Diluted		410,018,328		22,993,845		85,808,995				495,827,323

See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The accompanying pro forma condensed combined financial statements and related notes were prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma condensed combined income statements for the three months ended March 31, 2022 combine the historical income statements of Valley and Bank Leumi USA, giving effect to the Merger as if it had been completed on January 1, 2022, and the unaudited pro forma condensed combined income statements for the year ended December 31, 2021 combine the historical income statements of Valley and Bank Leumi USA, giving effect to the Merger as if it had been completed on January 1, 2021. The accompanying unaudited pro forma condensed combined balance sheet as of March 31, 2022 combines the historical balance sheets of Valley and Bank Leumi USA, giving effect to the Merger as if it had been completed on March 31, 2022.

The accompanying unaudited pro forma condensed combined financial statements and related notes have been prepared to illustrate the effects of the Merger under the acquisition method of accounting with Valley treated as the acquirer. As of the effective time of such acquisition, the assets and liabilities of Bank Leumi USA were recorded by Valley at their respective fair values, and the excess of the merger consideration over the fair value of Bank Leumi USA’s net assets was allocated to goodwill. The unaudited pro forma condensed combined financial statements have been adjusted to include estimated transaction accounting adjustments, which reflect the application of the accounting required by generally accepted accounting principles in the United States, including the effects of the Merger as further described in Note 3.

2. PRELIMINARY PURCHASE PRICE ALLOCATION

The unaudited pro forma condensed combined financial statements reflect the adoption of updates to ASC 805, Business Combinations, which clarify the accounting for contract assets and liabilities assumed in a business combination.

The fair value of consideration transferred consisted of the following (in thousands, except for per share data):

Shares outstanding		22,318
Exchange ratio		3.8025
Price per share of Valley’s common stock *	$	13.02
Valley common shares issued		84,863
Consideration for common stock	$	1,104,915
Consideration for equity awards		12,914
Total equity consideration	$	1,117,829
Cash consideration		113,374
Total purchase price consideration	$	1,231,203

* Represents the closing price per share of Valley’s common stock on March 31, 2022, the last trading date before the completion of the Merger.

The merger consideration as shown in the table above is allocated to the tangible and intangible assets acquired and liabilities assumed of Bank Leumi USA based on their preliminary estimated fair values. Assets and liabilities presented are based on preliminary estimates for intangible assets and certain financial assets and financial liabilities. The fair value assessments are preliminary and are based upon available information and certain assumptions, which Valley believes are reasonable under the circumstances. Actual results may differ materially from the assumptions within the unaudited pro forma condensed combined financial statements. Such assumptions will be finalized as soon as practicable, but not later than one year from the acquisition date.

The following table sets forth a preliminary allocation of each of the merger consideration to the fair values of the identifiable tangible and intangible assets acquired and liabilities assumed by Valley using Bank Leumi USA’s unaudited consolidated balance sheet as of March 31, 2022 (in thousands):

Merger consideration	$	1,231,203
Assets
Cash and interest-bearing deposits with banks		443,588
Investment securities		1,312,555
Loans, net		5,855,533
Lease right of use assets		44,032
Other intangible assets, net		187,460
Other assets		354,312
Total assets		8,203,597
Liabilities
Deposits		7,029,996
Lease liabilities		79,781
Borrowings		103,932
Other liabilities		123,516
Total liabilities		7,337,225
Net assets acquired		860,256
Preliminary goodwill recognized	$	370,947

3. PRO FORMA ADJUSTMENTS

Pro Forma Transaction Accounting Adjustments to the Condensed Combined Balance Sheet as of March 31, 2022:

A.	Adjustments to cash and interest bearing deposits with banks as follows:
			(in thousands	)
	Estimated merger costs	$	(140,129	)
	Add: Estimated merger costs incurred over time *		140,129
	Less: Cash consideration paid		(113,374	)
	Total	$	(113,374	)
*	Estimated one-time merger-related transaction costs are largely comprised of change in control and severance
	expense, legal and professional fees and other expenses. Estimated merger costs are expected to be recognized
	over time and are therefore excluded from the pro forma financial statements.
B.	Net adjustments to investments securities as follows:
			(in thousands	)
	Adjustment to Bank Leumi USA securities classified as held-to maturity to reflect the estimated fair value	$	(66,301	)
	Reclassification of Bank Leumi USA mutual fund investments from other assets to investment securities		6,239
	Total	$	(60,062	)
C.	Net adjustments to loans as follows:
			(in thousands	)
	Record fair value of interest rate and credit mark for the acquired loan portfolio	$	(157,470	)
	Record the gross-up for purchased credit deteriorated (PCD) loans		59,013
	Derecognize Bank Leumi USA historical net unearned loan fees		11,951
	Total	$	(86,506	)
D.	Net adjustments to the allowance for credit losses as follows:
			(in thousands	)
	Derecognize Bank Leumi USA the historical allowance for credit losses	$	60,365
	Recognize the allowance for credit losses for PCD loans		(59,013	)
	Recognize the provision for credit losses for non-PCD loans		(38,004	)
	Total	$	(36,652	)
E.	Adjustment for remeasurement of lease assets at acquisition	$	(34,570	)
F.	Net adjustments to goodwill as follows:
			(in thousands	)
	Derecognize Bank Leumi USA historical goodwill	$	(4,550	)
	Recognize goodwill from the acquisition		370,947
	Total	$	366,397
G.	Record fair value core deposit intangibles and intangible asset (customer relationships) (in thousands)	$	187,460
H.	Net adjustments to other assets as follows:
			(in thousands	)
	Recognize a reduction to deferred tax assets related to the pro forma adjustments	$	10,125
	Reclassification of Bank Leumi USA mutual fund from other assets to investment securities	$	(6,239	)
	Total	$	3,886
I.	Adjustment to reflect the estimated fair value of Bank Leumi USA time deposits	$	266
J.	Adjustment to reflect the estimated fair value of Bank Leumi USA borrowings	$	138
K.	Net adjustment to lease liabilities:
			(in thousands	)
	Derecognize Bank Leumi USA deferred rent liabilities	$	(15,740	)
	Adjustment for remeasurement of Bank Leumi USA leases at acquisition		1,179
	Total	$	(14,561	)
L.	Net adjustments to other liabilities:	$	20,055
M.	Net adjustments to stockholders’ equity as follows:
			(in thousands	)
	Total pro forma purchase price consideration	$	1,117,829
	Elimination of common equity		(866,614	)
	Record CECL non-PCD impact to equity, net of tax		(30,534	)
	Total	$	220,681

Pro Forma Transaction Accounting Adjustments to the Condensed Combined Statement of Income for the three months ended March 31, 2022 and the year ended December 31, 2021:

		Three Months Ended March 31, 2022			Year Ended December 31, 2021
		(in thousands)
A.	Net adjustment to interest income for the net discount accretion on acquired loans	$	6,220		$	24,882
B.	Adjustment to interest and dividends on investment securities for net discount accretion and net premium amortization on acquired debt securities		1,509			(1,996	)
C.	Adjustment to interest expense on deposits to reflect amortization from the fair value adjustment on time deposits.		(20	)		(319	)
D.	Net adjustment to interest expense on borrowings to reflect amortization from fair value adjustment on borrowings		(35	)		(2,515	)
E.	Adjustment to provision for credit losses related to non-PCD acquired loans and unfunded credit commitments		—			42,408
F.	Adjustment to amortization of the fair value mark on unfunded credit commitments estimated over approximately 2 years.		574			2,033
G.	Adjustment to lease expense under ASC 842		(558	)		(128	)
H.	Adjustment to amortization of intangible assets:
	Adjustment to amortization for acquired core deposit intangible assets using an accelerated method over approximately 10 years	$	6,703		$	26,479
	Adjustment to amortization for acquired other intangible asset using an accelerated method over approximately 14 years.		1,333			5,333
	Total	$	8,036		$	31,812
I.	Adjustment to income tax expense to record the income tax effects of pro forma adjustments that are tax-effected and other items on a blended federal and state statutory rate of 28%.		247			(12,975	)
J.	Adjustments to eliminate historical weighted average shares of common stock outstanding and record shares issued by Valley calculated using the exchange ratio of 3.8025.		84,863			84,863