VLY - Earnings call transcript Q3 2020 | Valley National Bancorp

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Valley National Bancorp's Third Quarter 2020 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference may be recorded. now today, hand Investor Travis would to conference Relations. I speaker your Lan, Instructions] like the to over [Operator Head of Please sir. go ahead

Travis Lan

Earnings Chief behalf and Call. Robbins; President Chief morning welcome Mike Valley's Tom Ira Quarter Good Hagedorn; Iadanza. Officer, and to and CEO, Presenting Officer, Valley of XXXX on Financial today Banking are Third Conference

valley.com. make documents Before for measures. we non-GAAP company When and our supporting can quarterly refer measures, found that our to website begin, earnings results. these I items which discussing at refer everyone would we results, exclude release earnings aware to of today’s like from our be to Please on non-GAAP reconciliations release reported certain

you that made refer call like statements to found Robbins. contain XX-K impact SEC this would relating complete I'll comments forward-looking encourages highlight pandemic. may the our I the National industry statements. of With Ira call and filings, to banking participants turn and remind XX-Q, to Bancorp, our of X-K, that, the the those Valley two to over during including for Additionally, and of Form forward-looking to COVID-XX slide earnings all discussion Valley a presentation on

Ira Robbins

million, We've adjusted customer health of These million reflected on and charge additional details This a pressures. the performance you uncertainty. on earnings quarterly In modest and $X.XX. entire and $XXX quarter and the Thank on interest debt all Valley's of these basis, of questions. XXXX, revenue you, global share opportunities. of with reported per fee an results Exclusive will a diverse balance provide will your to zero associated culture, perspective were third we the representing service call the prepayment, against and of earnings net quarter. adjusted Mike sheet and results level offer strong backdrop the welcome we highest net and open income responsiveness. $XXX general building call. corporate near the yield on I the earnings interest X% a my on Travis, our of morning, expense participants and This offset strong economic to update Valley's recent a before success a achieved growth environment focused income pre-provision strong by asset second are extraordinary developing rate pandemic and history. results increased the in which On reductions, continued from financial

as of in from the a This X.XX% revenue XXXX. average quarter up in percentage assets quarter's the X.XX% third adjusted X.XX% and quarter pre-provision was net of prior

has profitability As across margin our exceptionally banking net to and pressure the our industry is interest drive margin interest higher ability weighed preserve unique. on net profitability,

also leverage. We focus benefited from have on a operating positive

declined was XX% ratio of revenue our times. the which through to exceeded expense adjusted from third growth, XX.X% This achieved efficiency adjusted quarter XX.X% Our improvement by XXXX. in growth year-over-year X.X over

financial operating revenue ability our has And cost improved backdrop identify be significantly to the performance opportunities. and on challenging. savings While our on leverage incremental execute and will dependent remains future

our in we In to report addition are financial reduction significant loan active to pleased results, strong deferrals. a

on XX% billion on deferral active September to of of X.X% loans total than and the focus in base. active underwriting As market level We walk borrower significant our Metro had X% representing exposure you and of quarters. confident remain the lending the our In our compares an portfolio. XXth, our has Mike New this City York economy philosophy $X.X through July to a strong of will few we This minutes strength that in support conviction. metrics our May. loan less of and There been conservative deferral in recent in

improved the well. deferrals beyond during metrics as credit Our quarter

ratio provision million quarter, continues second coverage the XX% reserve our than $XX lower was approximately our to While grow.

ability our X% generate months. demonstrated reserve momentum to the tangible in Our value and grown capital. last dividend, positively Despite organic book have build by we significant a recent XX cash earnings has

has tangible have is environment In Our on the of to from challenging ratio harvested ago. economic We equity that remains we acknowledge uncertain. the common sheet. X.X% and low-hanging XXXX, funding year increased outlook X.X% fruit balance the the side operating a

funding explore offset will opportunities costs We additional continued yield to pressure. reduce asset and

to Our a have normalize to cost controls identify fee work strong some banking reduction opportunities key swap will but and in businesses focus Expense cases extremely year by may income and results remain solutions. and new forward. mortgage in the going been we this need leveraging technologies harder

our summary, team underwriting we we financial said, is outperform maintain ever know us to performance. that side, economic need will believe extremely are periods up work credit we am task. continue confident to conservative On to proud of philosophy results. That than in harder to our that positions we to of recent high I this that In the stress. the our

of some highlights. like additional turn I'd financial call Now to the Mike over to Hagedorn quarter's for the

Mike Hagedorn

Thank you, Ira.

X. slide to Turning

interest-bearing XX X.XX%. Valley's from interest reported interest increased see X% approximately to same our XX that basis, of a time, You in XXXX. X.XX% asset by improved our expense declined by points net earning basis basis of the and quarter liabilities X.X% second cost the points can sequential margin our yields to XX%. On declined At to

away pressures reduced and we and On impact mix from the cash towards have asset loans of with the yield securities. lower-yielding broader shifts side

portfolios cost to funding generate to pressures enabled yield reductions absorb in to ability both this point. asset our deposit Our has us and wholesale

current rates X of opportunity CDs While repricing well rates. next our identifies the to the expected amount significant slide has the above months mature in retail of captured offering been amount XX at

average the X%. billion maturing retail have over an of $X.X cost next at CDs of Specifically nearly quarters, we three

carried XXXX. we off funding X.X% of to paid $XX million wholesale mature Towards the a end and the set that cost was of quarter in

remaining may liabilities. cost to Going of forward we a other liquidity redeem utilize our portion high

and declined forward. slide our the interest-bearing have XX CD identified interest-bearing interest slide. XXX points deposit margin downward deposit bottom We liquidity additional As that outperform a illustrates ongoing balance continue quarter of we The prior the respectively. believe there's basis the PPP going trend of deposits third from CD to due of In will declined chart XXXX. net re-pricing on points, from deployment the costs the in that time non-maturity to by this perspective a of benefit funds. repricing to bearing our From the a non-maturity addition perspective, and prior to result costs significant we levers, believe since we and our quarter reduce left peers slightly interest in room deposits basis total utilization X

position with we lower-cost quarter generation balances X%. $XXX Earlier have of during accounts. approximately liquidity Excluding bolstered of from increasing nearly deposits our strong on XX, in of the ongoing the trend million growth balances. the Non-interest-bearing we interest-bearing sequential equivalents prepare balances quarter, transaction exclusive increasing cash X% remained In CD June uncertainty with discussed the recent PPP-related X% deposit decline the CDs continued this quarters, sheet. This of PPP. deposit and our XXXX, X.X%, the to over On billion rotation of current was year, run-off in approximately customer $X transaction into for than we more offset to held a environment. balance

the liquidity. $X billion. and to began some As has position to understanding September evolved this into had XX our utilize By the approximately impacts cash focus, economic of pandemic of come our we declined

pay and our we wholesale off As may liquidity in are remaining utilize portfolio we loan X asset that with yield our of mentioned, to industry. Slide experiencing other liabilities. details the along banks some pressure the

During declined XX loan the quarter, yields basis points.

second were origination XX effectively yields and can new quarter positive as see chart, However, in unchanged increased expanded you on Loan X.XX%. points. new the note, also from basis a on the origination originations spreads volume X% at

Our of roughly Total increased an PPP of $X.X their our level portfolio loans billion of billion the of PPP, include since quarter. widest end $XX.X new the Exclusive loan at second annualized currently basis approximately loan of on X% spreads quarter has the at end loans XXXX. are of the XXXX. since outstanding

to continue commercial core activity our consistent We see estate real in segments.

to lending is real rebound into saw Slide which collateral those estate in diversified balances X consumer portfolios and provides as commercial in activity, our of a well both terms which insight portfolio, helped geography. stabilize quarter in additional This well.

Metro there an specifically. focus Over has the Manhattan on and York few quarters, last been New external increased

see perspective. of metrics and is tied the bottom average portfolio We our Manhattan. CRE portfolio for XX% LTV to we weighted low believe table can the underwriting to portfolio credit would XX% X% non-multi-family navigate Manhattan. in in underwriting for positioned non-co-op The illustrates and environment our key our you properties As a for confident from of well in the highlight current are remain by only geography. I

were in ticked strength Moving primarily non-interest adoption time the loans. to in revenue slide growing XX, of over $XX products we driven linked-quarter focused the income revenue various up Swap originated from total customer the XX% remain XX.X% notional swap prior XX.X% increased diverse loan over from financial revenue. of on the income we of fees by sale quarter. million $XXX quarter We that over on to gains back-to-back and as swaps streams million our during Fee enhancing and offer.

expenses loan the by provides basis from linked-quarter, Residential an gain sequentially, million increased over both loans Slide of our on X.XX%. margin sale gain period, quarterly approximately sold on and while points improvement operating margin the sale income the to continue Our offerings. adjusted our XX% and sale the $XXX $XXX rate higher swap in interest efficiency borrowers demand protection continued XX reflecting the Net for expansion. mortgage million in XX provided residential increased our overview volumes exceeded gain-on-sale up to ratio.

Adjusted X% This with The of million of for expense $X.X de and quarters. adjusted on and to a million. are duration persist is the quarter. charges, both million extinguishment reported COVID-XX cleaning two to quarter. tax sanitation was totaled of basis amortization for above to for associated million the from efforts, Expenses from prior expenses $X.X the and million $X.X likely declined exclusive the in $X $X from enhanced minimis expenses up which the pandemic. debt or $XXX million increased ongoing Our prior merger prior related the each modestly approximately charge a

versus in to XX.X% Our adjusted second improve efficiency at continued the ratio quarter. in XX.X% coming

evolution on that since At year-over-year continue more of headwinds. and we mentioned, and remain XX% overview We as additional branch expense network specifically the we in Ira the next needs. evaluate an XX, a to revenue on over banks in growth our to count. have and across branches to to with branch revenue control additional average clients' efficiency As our positive reactive revenue recognize months, closures our adjusted opportunities improvement We our an provide channels. combat the slide size evaluate leverage our have many XXXX. only to basis, of significant pressures XX% a This resulted few Valley, are focused announced streamline XX in continue On industry. operating closing we build expenses. operating meet an generated We branch we has delivery efficiently branch anticipate we'll proactive that approach positioned to best consistently increase ensure

Turning the second million in credit of to slide our losses allowance asset for on XX loans to increased X.XX% approximately X.XX% $XX from quality, quarter.

of X.XX% of XXXX. net end XX. with represents than in reserved the charge-offs allowance million an line C&I doubled medallion the trouble prior included a as the reflects million COVID-XX. quarter's experienced additional nearly build onset $XX from approximately for and continue Our of The Charge-offs June was This valuations has had taxi quarter for fully the to million non-PPP provision decline. portfolio a in that charge-off of the of and reserve $X quarter. million loans more as There prior loan to loan was $XX $X

left, of is quarter. the allowance prior with net primarily compared our bottom ongoing as increase COVID. The the result can risk management's see allowance of buildup the you qualitative of assessment On to the the in associated

scenarios. third Moody's economic end have it since the did likelihood the not forecast baseline fully that became summer our scenario that While CECL the the clear support Moody's increased This for be quarter provision. response, improved, the away a a the baseline federal account at Moody's conservatively from adverse higher model more our prolonged that model bill of we would weightings stimulus shift shifted and the outlook resulted passed and in in In near-term. adverse economic recession more and the not towards

Despite the XXXX. more Our reflects a unemployment that we of quarter an of reweighting, are outlook than projections model slightly through result modest of the half our each scenarios in as second improved now GDP declines Moody's utilize. first the optimistic in the

C&I dependent X% expectations. largely to continue our We driven will degree Non-accrual economic outcomes provisioning future segment. quarter, declined that primarily that believe be the activity on in $XX a nearly in the loans by million track reduction the or

from X.XX% As of non-accruals declined a to loans, in X.XX% total the percentage second quarter.

consistent Slide our which as saw in a the third X.XX% ratios. to second significant the quarter. and growth value our the driven capital last months, power. past in book loans has in illustrates loans, value of also accruing the X% improvement by X.XX% earnings compared quarter our We our Tangible in tangible in improvement ongoing book XX due the in increased represented increased XX

our equity and the ratio our common ratio from the reflects the liquidity points utilization excess of our to basis basis. quarter. second quarter. ratios capital We call regulatory $X.X levels in for and significant billion also organic quarter. improvement believe some year-over-year back to strong some comments. that, earnings estimate our in levels ability turn capital our growth to in tangible confident total a our illustrate consistent our loans increase reduced Our over risk-based We during the I'll X.X% have XX a closing to basis, that With seen an ratios. X.XX% On increased the in we This capital PPP asset Ira that TCE by approximately improving our on remain in of the

Ira Robbins

Thanks, year-to-date a on extremely basis. the proud quarter of Valley's am Mike. results and I for

environment. and in margin diverse enabled rate has face the of preserve us to flexible challenging Our interest net a our sheet balance interest

like culture positive improvement the We Our operating testament and to a innovative year to our remainder look back With and the in and efficiency Thank success our and embodied operator We to I turn our you. remain of to credit is now over forward of continued the that, responsive leverage in underwriting call the portfolio. confident strength would team. the dramatic for loan begin Q&A. our by XXXX. into to the ratio the

Operator

Frank of from [Operator Instructions] comes Sandler. Our question Schiraldi Piper first

is now line Your open.

Frank Schiraldi

morning. Good

Ira Robbins

morning. Good

Frank Schiraldi

Mike operating Sounds leverage. talked of well, guys peers terms cost – mentioned you like mentioned certainly initiatives. as about like you bit seems And and of little branch I it positive Ira you mean in you're a ahead consolidation. well

think confident how Just efficiency in being below here. thoughts to environment. your you able tough going the can for wondering keep you deliver revenue leverage the ratio in future positive operating forward, the you example if are XX% given And

Ira Robbins

Frank. Thanks. for Thanks question, the

very think about about how I expense of think has the it's as forward to expenses become definitely way technology. We've culture how the and the as think think of a Valley for we how throughout we use about to organization base. us and entire overall been proactive innovating we that

technology. the didn't Here well that expense on need COVID presented as the it to to us changes model needed was change, that we tell based from really as customer behavior opportunities

So add? our are looking forward we're we ahead where think good we're Mike expense definitely something have want the at base. peers a as to you to and how of path

Mike Hagedorn

sight thing still for that in taken shown Investor managing lose operating and this Yes. our I our that the us advantage Page to our reprice NIM we X is tried The we've on maturity that XX-month as the opportunities well. we of only the relative defend of Presentation this the demonstrated costs to forward That's the term to don't full X.Xx would our to has have as under in funding leverage fact environment. say advantage that challenging of believe And schedule. we've industry, results on

Frank Schiraldi

then follow-up And I just on one capital. could if

it's sort at there. for your the what do of the future? to And maybe is on imagine, Just side. TCE on you how potential wondering, liquidity you the payoffs mentioned think levels at just to where ratio capital But the wholesale evolved. the do I Valley significant additional in you not this think I'd further on guys have and operate thoughts given for have capital levels sheet, wondering, if balance might you necessarily point, right

Ira Robbins

Yes.

we was given think number around had guidance an TCE think I us. for appropriate X.XX% TA I to previously

about I think as flexibility think really we and optionality that capital, the forward. we it's about the moving have

this focus of lot that organization capital to a where those and there's the really initiatives within is think initiatives having the appropriate we is at the I levels strategic support point. have

So many that are this really appropriate or I capital X.XX% optionality. may down you whatever focused. having that think as we're for and in being specific pinned levels that so opportunities be, capital number think opposed today we and really There is it's organization X.XX% the as telling at to about where

Mike Hagedorn

that I company strong. growing It's operating as the leverage cultural just add desire as as capital in very focus would just well in expenses. organic and is on for our our improvements

with we the of evidence PPP As TCE combined levels basis in estimate into points at at where you that both when our we're the you of those that, to look are XX last take which on XX what and quarters. CETX highest today, done has account at

progress. corner and a some made turned clearly significant we've So

Frank Schiraldi

Sure.

change it to is in changed change – past that But terms has real X.XX%. doesn't sound the significantly. mentioned no Ira Okay. of there's in a that guide you mean the like number – there's for I thinking

Ira Robbins

don't right now appropriate giving I for guide think you is us.

I years just we an basis think as versus tremendous. of that have originating the I But to a an think On we X.XX% maybe it ago. today. are you that It's were fact six is five, today top today point, absolute we on we're we And where organic the look of four, where capital that amount we'll are. of an consider PPNR we adjusted where unbelievable layer basis, move basis, highlighting Mike's on forward.

opportunities which we I think growth back So have organization historically that to supported we're hasn't the the amount Valley something it once again goes within just tremendous is doing of organic by the had.

Frank Schiraldi

Thank you. was That great. Okay.

Ira Robbins

Frank. Thanks,

Operator

you. Alexopoulos Our of from JPMorgan. next [Operator Steven Instructions] comes Thank question

Your now line open. is

Alex Lau

is is loan My This question growth. Alex Steve. morning. good on Hi, for first Lau on

by mean Thanks. the how is you this? commercial you the quarter at for and the estate growth. in looking for pipeline release this qualify into fourth estate? real And controlled commercial quarter you in what mentioned you to growth and loan had look explain also, this You Can real what

Tom Iadanza

is This what Alex. it's lot XX%, controlled mean Iadanza. since People Tom been that existing been customers. various we cycles. through economic is do with increased. pandemic and new it's business the a Thanks, XX-XX increased existing Historically, growth, to we probably XX% of By have customers

relationship-driven is business focus Our diversified granular. on very we're very

loan real average still million. estate is $X Our under

Our markets. the average to business. is Manhattan, on heavier We're suburbs. relationship-driven loan that by in we'll And C&I million. heavy we're $X focus still We're continue in not diverse under

standards underwriting conservative this. through Our all of be will maintained

stretch to We will not grow.

We $X.X from XX% did going Our range. pipelines in but the level stay billion $X.X billion It we're that modestly, pre-pandemic forward. now. billion at $X probably they'll down level that grow likely believe

Alex Lau

Thank Outside question the low time have environment you then Do XXs. a go this XX think points? in then you. a you you in And XX were do on can range basis you basis time around? your at last point NIM. interest of savings rate deposits, zero And deposits this the below

Mike Hagedorn

give and say number, in been ever this a won't quickly have benchmark I against that guidance the market but then I processes to company's up they've would the probably strongest the on are we set react ourselves the specific history.

confident fairly we're this react. sure constantly quickly we're of feel if and we're can make that to and that doing the for still that I And that that funding. source competitive poised market allow So overpaying will we're on not

Alex Lau

Thank you.

Operator

from And comes question Thank KBW. Collyn next you. our of Gilbert

now is open. line Your

Collyn Gilbert

Good morning Thanks. guys.

Mike Hagedorn

Collyn. morning, Good

Collyn Gilbert

you've just great Can that talk yields of you you've made that, along disclosures Tom, seem the on the out maybe interesting little loan from just a But is And of one be the given you the Mike, flat funding this significant pointed bit lines side. and have pricing XQ. or where that kind widening referenced around a if headway to points origination that of margin, over as about you think weigh up of some I obviously new I on perhaps and if are of you seen are? are that bit? ago. kind well spreads just yields loan your a a spreads But color yields of you've year in in and think some sort a kind you loan bottomed do loan know bottom there.

Tom Iadanza

it but time. if spreads. We'll value loans our They've done we use at all to those do they have that that. pain us floors implemented hard helped in we've we all in on they of today's customers It's a come continue seen Those It's the because bottom, and us responsiveness. of recognize performance. the Yes. market to can and XX% has that for to predict, also get

the this. we'll spreads So aggressively the loans up. And quality and leverage floors. continue continue the to to have level is of the good in deposits going fund bring the are to is news of We'll down. going And

hard high-quality of it'll for still on to kind we're seeing still return We today. continue, think front. have So both it It's it's and a quality competition the of lot loans predict. but competitive

Collyn Gilbert

Okay. get That's to in rest. and stick Thanks back my the will for queue the I guys. great. question

Operator

Thank from Steven you. And Markets. our RBC Capital next question of comes Duong

Your line open. is now

Steven Duong

guys. morning good Hey,

Mike Hagedorn

morning. Good

Steven Duong

York ticked on statistics your deferrals And the kind hotel Just ago? occupancy versus Is little that do any year latest you it primarily hospitality just on of area? and have that the up bit. a New around

Tom Iadanza

hotels in out about Yes. New million $XXX New primary we don't To mostly uptick much million have of context, really portfolio is it The put is in portfolio is the Jersey. coming York total have hotel We XX%, deferral. of on Florida, $XX and in. our which

XX% on any worse. have to seen portfolio, hotel and to in it not more borrower all we're don't expect this a same also on XX%. the That's experience all But we've loan values with want estate on in total. going the to portfolios to increase I We liquid, on the revenue not the estate PGs significant a New to going New there. in the and out resources pandemic, real to we those about into $XX We're quarter is that bit these PGs. was wherewithal to down and same decline restaurant million specific particular has And we than York, this in has point all. tied that were who are real The into out secured, the It's loan-to-value and less a have business. secured Jersey And experience little the highly though. deferrals. spread do it's pandemic get Florida. So seeing that sustain

Steven Duong

Mike the can And then Got going margin, back on you one. it. that. maybe just the this appreciate on handle I color

higher What was what's just a borrowings off? short-term behind the Your little little should this to off? quarter. cost rolling the with go -- higher and that? rolling And quarter borrowings in lower we $X.X then fourth Was long-term a it driver ticked this billion expect the

Mike Hagedorn

Sure.

are there. that's short-term impact you long-term an is some exactly borrowings as for maturities of The said sub-debt the So issuance side quarter. the the entire having

So would side. I think the funding on non-debt-related probably the I that's What fairly self-explanatory. say side, funding remaining

you to second IP range If especially and in as XXXX, the page first, and go morning, basis X advance points. as you of look proxy a at XX this the quarter FHLB those of third rates, and rates between and XX

And see things know proxy, greater can us of going there. we you offering One, today leverage book, FHLB is two which liquidity. are on a for with the still reprice. people good lot there's on is So rates to not CD maturing there's a seeking

account. So transition into CDs transaction as they mature, a their will

them there deposits It's overall. longer-term second, So the take are rates we even out the you availability for rates. put that. CD our given that, absolute to increased customers And of levels if seen have going not

much CD, And strong do And so rate. re-sign-up retention for a well. new there very as at has our when they it's been a lower

Steven Duong

Thank Mike. Appreciate. Got you, it.

Operator

And of our Matthew Incorporated. comes from Stephens question you. Thank next Breese

Your line is now open.

Matthew Breese

morning. Good

Mike Hagedorn

morning. Good

Matthew Breese

outlook But And the you think income guess I you in characterize that's the or outlook you then can quantify I to total -- was for quarter? Mike expand interpretation. margin margin maybe stable characterized outperform in perhaps remain think terms Hey. I could from the know here? you peers. Could terms it open you'll of you whether I PPP hoping of

Tom Iadanza

then Matt, I'll this is talk for will quarter about income Hey, again. margin the Tom. handle Mike and the the

that about $X.X was from is from million. income quarter third million is million interest fees. The of $XX.X from PPP $X.X

Mike Hagedorn

I peers. was And my have it prepared question the that on we remarks NIM, relative I advantage think understand your to around if related to

But already So the apple that the us to that and originations have The going encouraging market. are flattened like to mean things side. are about be whether our out as to say we've with yet discipline pie greater fact quarter seemingly determined compression on there's would think that seems loan an I it's on. that this in And be our with loans having the mentioned in advantage. I continues. floors second motherhood having that's that visited absolutely to new just NIM again and couple funding that environment then I Tom

opportunities see both I IP are And basis you originations then earlier, on As new lastly especially on points we can on spread side still on and the rates I originations lending the higher. the Page at mentioned XX new have dollars and the here X. would the say on

better So a seen better spread and a in loan market. we've this

Matthew Breese

in expenses environment? is of to then do then fourth like maybe cut And quarter. this for outlook, feel hoping the million I saves expense this of Understood. expense could kind about XX what -- tied terms have range you branches $XXX being that in are. you for appropriate was the if thinking quantify you And longer-term just the

Mike Hagedorn

Yes.

we achieved the that correct? that regulatory on approval approval. Regulatory close we branches So announced we've would XX and

Tom Iadanza

Yes, correct.

Mike Hagedorn

million. savings between the to be $X XXXX estimate $X year full cost We and million

Operator

KBW. have Thank follow-up you. [Operator And Gilbert Instructions] Collyn from question of a we do

Your line open, now is

Collyn Gilbert

Thanks.

Okay.

question the expense bit a on and granular follow-up it. on more a little Just getting

professional are line Just that -- curious of that will kind mortgage and stay specifically just going fee that initiatives, to for And is about looking also curious as trend just banking? I outlook technology or the of how line you then come elevated investments to these at and your technology down? guys does some on

Mike Hagedorn

release on specific kind the to more you but fees, a it. I related take expenses. I'll somewhat address me earnings color. on well little as maybe tack let question little the in different will of give Yes. professional a It is

we as quarter that $XXX need there's And million. you So the increase couple XQ X% were there XXXX, a to but adjusted the expenses in things in of third earlier said consider. that's a against

were benefit-related there's medical But and at employer to individuals medical to And our And $X.X this early delayed because things and plan our some get pandemic. a in we're think back expenses, see XXX(k) of that under First we our employee treatment expenses. doctors. in to due mostly that's and their the starting base going think plan. increase juncture covered the compensation million they're we're that pandemic in self-funded I for

compensation-related that's accrual also costs just a in foremost. our volumes. decline as modest think just incentive first And was loan then absolute I how deferred works. There So That's it and well increase. there a was lower due loan to

we As around right costs will of in those that's cycle as now and technology, those life consulting-related things we're just to projects. fees, expense not in do talked professional And reason because core we've improvements over the it it about we're of our doing relates of lot the system all increase. stands to have here where at capitalized time a

So they see then past more you -- get upfront. expense more gets going of being that get of capitalized. once into you'll expensed that And that

Collyn Gilbert

That's Okay. helpful.

Ira Robbins

follow-up a Mike's point. Just on

going sure we positive guide able I is where focus and we this to generating forward. we're And we -- real here where the maintaining are focus as on we continue that think I I be an that the on really did path expense reflects times we're organization think we is operating operating is base leverage. think the really supports today, important the to growth the that but think X.X And the of period that as making leverage.

banking, think, today. mortgage I where are function it's the interest of rates a obviously, On

that going that we diverse it's model that And favorable earlier there's to But we've growth remain really benefit really as rates it alluded that be be think to we'll created and Tom as think there. business think remain reflects something long able strong the I pipelines here. interest from. significant we to

Collyn Gilbert

Okay.

it guys. leave there. Okay. Great. Thanks I’ll

Ira Robbins

Hey, thanks.

Operator

like Robbins Thank and to session. back our closing any over And remarks. does question-and-answer you. call conclude I would the Ira gentlemen, this now to for ladies turn

Ira Robbins

us joining thank Thank you we forward continuing forward today again, the path and to for for you. look us. Once

Operator

this gentlemen, today's for conference participating. call. you Thank and Ladies concludes

You may now disconnect.

Valley National Bancorp (VLY) 22 Oct 202020 Q3 Earnings call transcript