Valley National Bancorp

Conservative underwriting that consistently results in low net charge-offs Good franchise in its legacy New Jersey/Metropolitan New York market Track record of core profitability through the economic cycle Significant commercial real estate exposure Capital, funding, and liquidity measures that are weaker than peers' Lack of meaningful revenue diversity The stable outlook reflects S&P Global Ratings' view that Valley National Bancorp will continue to generate solid core earnings while maintaining strong asset-quality measures and adequate capital for at least the next two years. We expect the company will maintain its current strategy, with a focus on strong asset quality, in its legacy New Jersey and New York markets while continuing to establish itself in its Florida market. If, however, the company's

...Lack of meaningful revenue diversity Outlook: Stable The stable outlook reflects S&P Global Ratings' view that Valley National Bancorp will continue to generate solid core earnings while maintaining strong asset-quality measures and adequate capital for at least the next two years. We expect the company will maintain its current strategy, with a focus on strong asset quality, in its legacy New Jersey and New York markets while continuing to establish itself in its Florida market. If, however, the company's asset quality deteriorates meaningfully, its large exposure to commercial real estate (CRE) loans increases as a percentage of total loans or total capital beyond what its recent acquisition of Oritani Financial Corp. generates, or its capital or core funding measures decline, we could lower the ratings. We see the potential for an upgrade on Valley as less likely over the next two years. However, if over time Valley successfully diversifies its business and loan mix, improves its core...

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