Valley National Bancorp

However, most loans are in those three large economic areas, and commercial real estate (CRE) and construction loans totaled about half of total loans (excluding owner-occupied CRE) as of Sept. 30, 2024. Moreover, we view office loans, which were about 6.5% of total loans, somewhat cautiously. Also, criticized loans have increased in recent quarters, and loan loss reserves remain lower than most rated banks despite recent improvement. We expect Valley to remain profitable, continue to gradually increase its capital ratios, and experience only modest loan deterioration over the next two years. We also expect the proportion of CRE loans to gradually decline due to faster growth in certain other loan categories. However, the negative outlook primarily reflects our view that--although

...Valley National Bancorp. (Valley) has historically had strong loan performance; however, loan concentrations are meaningful. Valley's loan performance has generally been better than peers' for many years. We think that's due to the bank's conservative lending policies and long-standing customer relationships in northern New Jersey, metropolitan New York City, and Florida. However, most loans are in those three large economic areas, and commercial real estate (CRE) and construction loans totaled about half of total loans (excluding owner-occupied CRE) as of Sept. 30, 2024. Moreover, we view office loans, which were about 6.5% of total loans, somewhat cautiously. Also, criticized loans have increased in recent quarters, and loan loss reserves remain lower than most rated banks despite recent improvement....

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