A regional bank holding company headquartered in New Jersey, Valley National Bancorp runs consumer and commercial banking, plus wealth management and insurance, across New Jersey, New York, Florida, and Alabama. Its commercial side lends to businesses while its consumer side offers mortgages, auto loans, and home equity products. As the largest commercial bank based in New Jersey, it competes with bigger banks and fintech firms through a relationship-driven service model.
Valley's loan book grew at a 12.9% annualized pace in Q2 2026, its fastest rate since the Bank Leumi USA acquisition, as the strategic pivot to C&I lending accelerated.
Valley's balance sheet returned to growth. rose 13.3% to $560.7 million and climbed 32% to $0.29, driven by a $54.6 million increase in and a $1.6 billion sequential loan increase. The bank is now growing faster than it is shrinking its CRE concentration, a shift that changes the story from defense to offense.
Key takeaways
rose 28% to $170.9 million, as climbed $54.6 million and the fell $8.6 million.
Total loans grew $1.6 billion sequentially to $52.5 billion, a 12.9% annualized pace, led by an $857.2 million increase in commercial and industrial loans and a $560.6 million rise in owner-occupied CRE loans.
The on a tax-equivalent basis expanded 19 to 3.20%, as lower deposit costs and higher loan and securities balances more than offset lower yields on adjustable-rate loans.
Section summaries
Management's Discussion and Analysis
Valley's Q2 2026 net income rose 28% YoY to $171M on higher net interest income, strong loan growth, and lower credit provisions.
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increased $37.7 million to $170.9 million, driven by a $54.6 million rise in and an $8.6 million decline in the .
Non-interest income rose $11.1 million , with capital markets income up $3.2 million and service charges on deposit accounts up $4.0 million, reflecting higher swap fees and treasury management fees.
The for loans declined to 1.16% of total loans from 1.20% a year ago, while fell to $22.0 million from $37.8 million, mainly due to lower C&I charge-offs.
Non- increased $27.0 million , primarily from higher professional and legal fees tied to business transformation, severance costs, and increased tax credit .
What changed
The return to loan growth flagged as a possibility in Q1 2026 accelerated sharply: the 12.9% annualized pace in Q2 far exceeded the 5.5% rate in Q1 and management's full-year 4-6% , driven by C&I and owner-occupied CRE.
The expanded to 3.20%, building on the 3.17% reported in Q1 2026 and moving further above the 3.01% level that had held for two quarters in 2025, as deposit costs continued to decline.
The declined to 1.16% of total loans, moving further away from management's ~1.25% target rather than toward it, as fell and the credit outlook improved.
The DC Solar uncertain tax position, flagged as outstanding for more than four years in every prior filing, is not mentioned in this quarter's disclosures, suggesting no resolution or charge has occurred.
What to watch
Whether the 12.9% annualized loan growth rate is sustainable or represents a pull-forward from future quarters, and whether management revises its full-year 4-6% loan growth upward.
Whether the can hold above 3.20% as the loan mix continues to shift toward lower-yielding C&I and owner-occupied CRE loans, and as deposit costs approach a floor.
Whether the continues to decline as a percentage of total loans, and whether the divergence from the ~1.25% target signals a permanent shift in management's credit outlook or merely a timing difference.
Whether the $9.6 million increase in professional and legal fees for business transformation represents a one-time cost or the start of a sustained increase in non-.
Total loans grew $1.6 billion (12.9% annualized) sequentially to $52.5 billion, led by commercial and industrial loans (up $857.2 million) and owner-occupied CRE loans (up $560.6 million).
on a tax-equivalent basis expanded 19 to 3.20%, as lower deposit costs and higher loan and securities balances more than offset lower yields on adjustable-rate loans.
Non-interest income rose $11.1 million , with capital markets income up $3.2 million and service charges on deposit accounts up $4.0 million, reflecting higher swap fees and treasury management fees.
Non- increased $27.0 million , primarily due to higher professional and legal fees (+$9.6 million) for business transformation, severance costs, and increased tax credit .
The for loans declined to 1.16% of total loans from 1.20% a year ago, while fell to $22.0 million from $37.8 million, mainly due to lower C&I charge-offs.
Quantitative and Qualitative Disclosures About Market Risk
Market risk refers to potential losses arising from changes in interest rates, foreign exchange rates, equity prices, and commodity prices. Valley’s market risk is composed primarily of interest rate risk. See page 73 for a discussion of interest rate risk.
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Market risk refers to potential losses arising from changes in interest rates, foreign exchange rates, equity prices, and commodity prices. Valley’s market risk is composed primarily of interest rate risk. See page 73 for a discussion of interest rate risk.
We are a party to various claims and legal actions in the ordinary course of our business. In the opinion of management, the ultimate resolution of such claims and legal actions, either individually or in the aggregate, will not have a material adverse effect on Valley’s financi…
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We are a party to various claims and legal actions in the ordinary course of our business. In the opinion of management, the ultimate resolution of such claims and legal actions, either individually or in the aggregate, will not have a material adverse effect on Valley’s financial condition, results of operations, or liquidity.
There have been no material changes in the risk factors previously disclosed in the section titled “Risk Factors” in Part I, Item 1A of Valley’s Annual Report.
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There have been no material changes in the risk factors previously disclosed in the section titled “Risk Factors” in Part I, Item 1A of Valley’s Annual Report.