Valley National Bancorp

Conservative underwriting that consistently results in low net charge-offs Stable deposit franchise Track record of earnings stability Risks associated with expansion into Florida Franchise that is geographically concentrated Significant commercial real estate exposure Capital, funding, and liquidity ratios that are marginally weaker than peers' The negative outlook on Valley National Bancorp reflects its high exposure to commercial real estate (CRE) loans--both as a percentage of loans and of capital--and the possibility of increased strategic, credit, and operational risks stemming from its planned growth in Florida. We view Florida as having more volatility and different competitive and economic dynamics than Valley's traditional market of northern New Jersey and metro New York City and Long Island. Moreover, Valley has increased its use

...Outlook: Negative The negative outlook on Valley National Bancorp reflects its high exposure to commercial real estate (CRE) loans--both as a percentage of loans and of capital--and the possibility of increased strategic, credit, and operational risks stemming from its planned growth in Florida. We view Florida as having more volatility and different competitive and economic dynamics than Valley's traditional market of northern New Jersey and metro New York City and Long Island. Moreover, Valley has increased its use of wholesale funding sources, and it has lower-than-peers capital ratios, which give it less of a cushion to absorb unexpected problems that could arise from its CRE or Florida exposures. We could lower our ratings on Valley if:...

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