Research Update: Valley National Bancorp Lowered To 'BBB-' On Funding Pressures; Outlook Stable

Valley National Bancorp's funding metrics have weakened more than we had expected and compare unfavorably to most rated U.S. banks', as much higher reliance on brokered deposits and wholesale funding indicate. Core customer deposit outflows and net interest margin pressures have also been relatively more meaningful in 2023, though we expect stabilization in the near term. We lowered our long-term issuer credit ratings on Valley National Bancorp to 'BBB-' from 'BBB' and on its main bank subsidiary, Valley National Bank, to 'BBB' from 'BBB+'. The stable outlook reflects the banks' strong asset quality metrics, solid earnings generation, adequate liquidity, and our view of appropriate peer comparisons. On Aug. 21, 2023, S&P Global Ratings lowered its long-term issuer credit ratings on

...- Valley National Bancorp's funding metrics have weakened more than we had expected and compare unfavorably to most rated U.S. banks', as much higher reliance on brokered deposits and wholesale funding indicate. - Core customer deposit outflows and net interest margin pressures have also been relatively more meaningful in 2023, though we expect stabilization in the near term. - We lowered our long-term issuer credit ratings on Valley National Bancorp to '###-' from '###' and on its main bank subsidiary, Valley National Bank, to '###' from '###+'. - The stable outlook reflects the banks' strong asset quality metrics, solid earnings generation, adequate liquidity, and our view of appropriate peer comparisons....

Research Update