Q2 2025 Valley National Bancorp Earnings Call

Unknown Executive: Thank you for standing by.

Unknown Executive: Welcome to the Q2 2025 Valley National Bancorp Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded.

Travis Lan: I would now like to hand the conference over to your speaker today, Travis Lan. Please go ahead.

Good day, and thank you for standing by. Welcome to the Q2 2025 Valley, National Bank Court earnings conference call at this time. All participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session to ask a question during this session. You will need to press star 1, 1 on your telephone. You will then hear an automated message. Advising you, your hand is raised to a child your question, please press star 1 1 again, please be advised. That today's conference is being recorded, I would now like to hand the conference over to your speaker today. Travis Lan, please go ahead.

Travis Lan: Good morning and welcome to Valley's second quarter 2025 earnings conference call. I'm joined today by CEO Ira Robbins and Chief Credit Officer Mark Saeger. Before we begin, I would like to make everyone aware that our quarterly earnings release and supporting documents can be found on our company website at Valley.com. When discussing our results, we refer to non-GAAP measures, which exclude certain items from reported results. Please refer to today's earnings release for reconciliations of these non-GAAP measures.

Travis Lan: Additionally, I would like to highlight slide two of our earnings presentation and remind you that comments made during this call may contain forward-looking statements relating to Valley National Bank Corp and the banking industry. Valley encourages all participants to refer to our SEC filings, including those found on forms 8K, 10Q, and 10K, for a complete discussion of forward-looking statements and the factors that could cause actual results to differ from those statements.

Speaker Change: Good morning and welcome to Valley second quarter 2025 earnings conference call. I am joined today by CEO, Ira Robbins and chief credit officer, Mark Zager before we begin. I would like to make everyone aware that our quarterly earnings release and supporting documents can be found on our company website. At valley.com. When discussing our results, we refer to non-gaap measures which exclude certain items from reported results. Please refer to today's earnings release for reconciliations of these non-gaap measures. Additionally, I would like to highlight slide 2 of our earnings presentation and remind you that comments made. During this call, may contain forward-looking statements relating to Valley, National Bank Corp. And the banking industry, Valley encourages, all participants to refer to our SEC filings including those

IRA Robbins: With that, I'll turn the call over to Ira Robbins. Thank you, Travis. During the second quarter of 2025, we reported net income of $133 million or $0.22 per diluted share and adjusted net income of $134 million or $0.23 per share. This compares to $106,018 on both a reported and adjusted basis a quarter ago. The sequential growth in adjusted earnings reflects solid momentum in both net interest income and non-interest income, and a lower loan loss provision. Our profitability ratios, including return on average assets and return on tangible shareholder's equity, continue to trend higher and are on track to meet the full year guidance that we outlined this past January.

Speaker Change: Found some forms 8K, 10q and 10K for complete discussion of forward-looking statements and the factors that could cause actual results to differ from those statements with that. I'll turn the call over to Ira Robbins.

IRA Robbins: Thank you, Travis.

IRA Robbins: During the second quarter of 2025.

IRA Robbins: We reported net income of 133, million or 22 cents per diluted share and adjusted net income of 134 million or 23 cents per share.

IRA Robbins: This compares to 106 million and 18 cents on both a reported and adjusted basis a quarter ago.

IRA Robbins: The sequential growth in adjusted earnings, reflects solid momentum in both net. Interest income and non-interest income and a lower loan loss provision.

IRA Robbins: Our profitability, ratios including return on average assets.

IRA Robbins: Beyond the numbers, I am extremely proud of the consistency of our execution across the strategic imperatives that define Valley's long-term value proposition. This quarter's presentation supplements our traditional financial information with specific qualitative detail on the underlying initiatives that have contributed to this progress.

IRA Robbins: That we outlined this past January.

IRA Robbins: And this morning, I would like to take some time to provide additional detail around those imperatives. First, deposit growth and funding transformation. Over the past 12 months, we have added over 105,000 new deposit accounts, which has contributed to approximately 8% core deposit growth. As a result, our reliance on indirect deposits has declined from 18% down to 13%. This has been achieved alongside a 51 basis point reduction in our average cost of deposits for the second quarter of 2025, as compared to the same period of 2024. Since 2017, we have increased commercial deposit accounts at an average annual rate of 11% per year.

IRA Robbins: Beyond the numbers, I am extremely proud of the consistency of our execution, across the Strategic imperatives, that defined values long-term value proposition. This quarter's presentation supplements are traditional financial information with specific, qualitative detail on the underlying initiatives that have contributed to this progress.

IRA Robbins: And this morning, I would like to take some time to provide additional detail around those imperatives.

IRA Robbins: First deposit growth and funding transformation.

IRA Robbins: Over the past 12 months, we have added over 105,000 new deposit accounts which has contributed to approximately 8% core deposit growth.

IRA Robbins: As a result. Our Reliance on indirect deposits has declined from 18% down to 13%.

IRA Robbins: This has been achieved alongside a 51 basis point reduction in our average cost of deposits for the second quarter of 2025 as compared to the same period of 2024.

IRA Robbins: These results are not coincidental. They're the product of deliberate investments in three channels. Talent and Technology. Targeted Market Penetration. and the expansion of our specialty verticals. Our ability to attract and retain relationship based deposits in a competitive environment is a valuable differentiator, and we remain laser focused on sustaining this momentum.

IRA Robbins: Since 2017, we have increased commercial deposit Accounts at an average annual rate of 11% per year.

IRA Robbins: These results are not coincidental.

IRA Robbins: They're the product of deliberate investments in 3 channels.

IRA Robbins: Talent and Technology.

IRA Robbins: Targeted Market, penetration.

IRA Robbins: And the expansion of our specialty verticals.

Our ability to attract and retain relationship-based deposits. In the competitive. Environment is a valuable differentiator,

IRA Robbins: And we remain laser focused on sustaining this momentum.

IRA Robbins: Second, commercial loan diversification. Since 2017, we have grown our C&I portfolio at a 19% compound annual rate. including nearly 15% growth over the last 12 months. This success reflects disciplined, relationship-driven growth in the most dynamic commercial markets in the country. Our geographic footprint, combined with certain specially nationwide verticals like health care and fund finance, gives us the flexibility to be selective and the scale to be impactful. We have specifically targeted these nationwide business lines, given their attractive risk-adjusted return profile. Valley has been active in the healthcare C&I space for nearly 20 years, and we have never, I repeat, never taken a loss on any Valley-originated healthcare C&I loans over this 20-year period.

IRA Robbins: Second commercial loan diversification.

IRA Robbins: since 2017, we have grown, our cni portfolio at a 19% compound, annual rate

IRA Robbins: Including nearly 15% growth over the last 12 months.

IRA Robbins: This success reflects disciplined relationship driven growth in the most dynamic commercial markets in the country.

IRA Robbins: Our Geographic footprint combined with certain specialty Nationwide. Verticals like healthcare and fund Finance gives us the flexibility to be selective and the scale to be impactful.

IRA Robbins: We have specifically targeted these Nationwide business lines, given their attractive risk-adjusted, return profiles.

Valley has been active in the healthcare cni space for nearly 20 years.

IRA Robbins: While we have historically been active in the capital cost space, our efforts have increased as we continue to leverage our technology banking business. Similar to our healthcare experience, we have never taken a loss on a capital call loan.

IRA Robbins: And we have never I repeat never taken a loss on any Valley. Originated Healthcare cni loans over this 20-year period while we have historically been active in the capital call space. Our efforts have increased as we continue to leverage our technology banking business.

IRA Robbins: Similar to our Healthcare experience. We have never taken a loss on a capital call loan.

IRA Robbins: Third, building durable, high-quality fee income. Non-interest income has grown at a 12% annual rate since 2017, more than double the pace of our peers. And importantly, the composition of that income has improved dramatically. volatile gain on residential loan sale revenue represented just 3% of total non-interest income in the second quarter of 2025. down from 20% in 2017. We're focusing our growth efforts on our capital markets. Treasury Management, and Tax Credit Advisory Office. These are scalable, client centric businesses that deepen relationships and enhance our earnings resilience. Taken together, these strategic imperatives continue to transform Valley into a more diversified, efficient, and valuable institution.

Third building, durable high-quality the income.

IRA Robbins: Not interest income has grown at a 12% annual rate since 2017, more than double the pace of our peers.

IRA Robbins: And importantly, the composition of that income has improved dramatically.

IRA Robbins: Volatile gain on residential loan, sale Revenue represented. Just 3% of total non-interest income in the second quarter of 2025.

IRA Robbins: Down from 20% in 2017.

IRA Robbins: We're focusing. Our growth efforts on our Capital markets.

IRA Robbins: Treasury management and tax credit advisory offerings.

IRA Robbins: These are scalable.

IRA Robbins: Client Centric businesses that deepen relationships and enhance our earnings resilience.

IRA Robbins: We operate in markets that offer extraordinary growth potential, and we build a platform that is increasingly well positioned to take advantage of these opportunities. Our balance sheet is well positioned, our profitability metrics are improving, and our near-term priorities remain aligned with our long-term vision. And while these strategic initiatives have significantly transformed Valley's value proposition, I'm pleased we have achieved this success without denigrating Valley's financial performance. As reflected on slide seven, we have grown cumulative tangible book value with dividends over 105% during my tenure as CEO. This is approximately 15% greater than the peer medium.

IRA Robbins: Taken together. These strategic imperatives continue to transform Valley into a more Diversified efficient and valuable Institution.

IRA Robbins: We operate a markets that offer extraordinary growth potential and we build a platform that is increasingly well positioned to take advantage of these opportunities.

IRA Robbins: Our balance sheet is well positioned.

IRA Robbins: Our profitability metrics are improving and our near-term. Priorities remained aligned with our long-term vision.

IRA Robbins: And while these strategic initiatives had significantly, transformed values value proposition, I'm pleased, we have achieved this success without denigrating values financial performance.

IRA Robbins: As reflected on slide 7, we have grown cumulative tangible Book value with dividends over 105% during my tenure as CEO.

IRA Robbins: That said, we recognize that there remains a meaningful disconnect between the quality of our franchise and the valuation of our shares. But we believe that continued execution of our strategy will close that gap over time.

Travis Lan: With that, I will turn the call back to Travis to discuss the quarter's financial highlights.

But we believe that continued execution of our strategy will close that Gap over time.

IRA Robbins: After Travis concludes his remarks, Mark, Travis, and I will be available for your questions. Thank you, Ira.

Travis Lan: With that, I will turn the call back to Travis to discuss the quarters financial highlights.

Speaker Change: After Travis, concludes his remarks, Mark Travis and I will be available for your questions.

Travis Lan: Before we dive into the quarter's results, I'd like to provide an update on our full year 2025 guidance. We continue to expect approximately 3% loan growth for the year, consistent with our prior update. Given that loan growth is trending toward the lower end of our original guidance, we are refining our net interest income growth estimate to a range of 8% to 10%. Our outlook for non-interest income remains unchanged at 6% to 10% growth, supported largely by the areas that Ira just mentioned. We are lowering our non-interest expense growth guidance to a range of 2% to 4%, reflecting our ongoing focus on cost discipline and operating leverage.

Speaker Change: Orders results. I'd like to provide an update on our full year 2025 guidance.

Speaker Change: We continue to expect the 3% loan growth for the year consistent with our prior update.

Speaker Change: Give the loan growth is trending towards the lower end of our original guidance. We are refining our net interest income growth estimate to a range of 8% to 10% our outlook for non-interest. Income remains unchanged at 6% to 10%. Growth supported largely by the areas that Ira just mentioned.

Travis Lan: From a credit standpoint, we are tightening our net charge-off expectations to $100 million to $125 million for the year and are refining our provision estimate to approximately $150 million for the full year. In aggregate, these modest directional adjustments are expected to result in full year earnings per share that remains broadly in line with current consensus estimates.

Speaker Change: We are lowering our non-interest expense growth. Guidance to a range of 2% to 4% reflecting our ongoing focus on cost discipline and operating Leverage

Speaker Change: From a credit standpoint, we are tightening our net charge off expectations to a 100 million to 125 million for the year. And our refining, our provision estimate to approximately 150 million for the full year.

Travis Lan: Turning to slide eight, we delivered another strong quarter with $600 million of core customer deposit growth. This was driven by a combination of continued growth in commercial non-interest bearing deposits and promotional CD offering. From a pricing perspective, we were able to largely mitigate competitive pressures through disciplined management of our back. Our cumulative total deposit data during the recent rate decrease cycle stands at 51%, which has supported consistent net interest margin expansion over the last five quarters.

Speaker Change: In aggregate, these modest directional adjustments are expected to result in full year earnings per share. That remains broadly in line with current consensus estimates.

Turning to slide 8, we delivered another strong quarter with million dollars of poor customer deposit growth. This was driven by a combination of continued growth and Commercial non-interest bearing deposits, and promotional CD offerings.

Travis Lan: Slide 10 further highlights the transformation of our deposit base since 2017. Commercial deposits have nearly quadrupled and our delivery channels have become significantly more efficient. A key driver of this transformation has been the success of our differentiated specialty verticals, which now contribute over $12 billion of deposits to our franchise. These verticals include International & Technology, our online delivery channel, and our private banking business, among others. As we continue to leverage these verticals and align our product offerings with client needs, we anticipate sustained deposit momentum.

Speaker Change: From a pricing perspective, we were able to largely mitigate competitive pressures through disciplined management of our bakbuk our cumulative, total deposit data during the recent rate, decrease cycle stands at 51%, which is supported consistent. Net interest margin expansion over the last 5. Quarters.

Slide 10 further highlights the transformation of our deposit base. Since 2017, commercial deposits, have nearly quadrupled and our delivery channels have become significantly more efficient.

Speaker Change: A key driver of this transformation has been the ex success of our differentiated specialty verticals. Which now contribute over 12 billion dollars of deposits to our franchise, these verticals include International and Technology, our online delivery Channel and our private banking business among others.

Speaker Change: As we continue to leverage these verticals and align our product offerings with client needs. We anticipate sustained deposit, momentum.

Travis Lan: Turning to slide 11, gross loans increased at an annual pace of 6%, led by strong growth in C&I and indirect auto lending. CNI loan growth was particularly robust, fueled by activity in our fund finance and health care verticals, as well as contributions from our teams in Florida, New Jersey, and Chicago. Fund finance and healthcare collectively contributed roughly 60% of the quarter's net growth in C&I. While we expect C&I growth to moderate somewhat, we remain confident in our ability to selectively attract high quality relationships to the bank. Pre-run-offs slowed this quarter as a result of high origination activity with respect to our targeted relationship-driven clients.

Speaker Change: Turning to slide. 11 grows loans increased at an annual pace of 6%. Led by strong growth in cni and indirect Auto Lending.

Speaker Change: Cni loan growth was particularly robust fueled by activity in our fund finance and Healthcare verticals as well as contributions from our teams in Florida, New Jersey and Chicago.

Fund finance and Healthcare. Collectively. Contributed roughly 60% of the quarter's net growth in cni.

Speaker Change: While we expect cni growth to moderate somewhat. We remain confident in our ability to selectively attract high-quality relationships to the bank.

Travis Lan: As of June 30, 2025, our creek concentration ratio has declined to 349% from 474% at the end of 2023, surpassing our year end target ahead of schedule.

Speaker Change: Crew runoffs load this quarter as a result of higher origination activity. With respect to our targeted relationship driven clients

As of June 30th, 2025, our Creed concentration ratio has declined to 349% from 474%. At the end of 2023 surpassing, our year-end Target ahead of schedule.

Travis Lan: Slide 12 reinforces the consistency of our C&I growth since 2017, which reflects both our disciplined team building and our ability to capitalize on market disruption. Our national specialty platforms, including fund finance and healthcare, continue to provide valuable diversification. In early 2024, we added a seasoned syndications team, enhancing our ability to structure and lead larger transactions for upmarket clients. These capabilities, combined with our expanded treasury and capital markets offerings, continue to provide attractive growth opportunities for Valley.

Speaker Change: Slide 12 reinforces the consistency of our cni growth since 2017, which reflects both our discipline team building, and our ability to capitalize on Market, disruption our National Specialty platforms, including fund, finance and Healthcare continue to provide valuable diversification

Speaker Change: In early 2024, we added a season syndications team enhancing our ability to structure and Lead larger transactions for upmarket clients. These capabilities combined with our expanded Treasury and capital markets offerings continue to provide attractive growth opportunities for Valley.

Travis Lan: Slide 14 shows a 3% sequential increase in net interest income driven by continued net interest margin expansion and growth in average earning assets. This marks our fifth consecutive quarter of NIM improvement, supported by our asset repricing tailwind and disciplined deposit cost management. The interest rate backdrop combined with additional asset repricing opportunities remain supportive of further NIM expansion throughout the year.

Speaker Change: Slide 14 shows a 3%. Sequential increase in net interest income driven by continued net. Interest margin expansion and growth in average earning assets.

This marks our fifth consecutive quarter of nim Improvement supported by our asset repricing tailwind and disciplined deposit cost management.

Travis Lan: We also delivered strong non-interest income growth this quarter. Capital markets activity picked up meaningfully with increased swap volumes tied to career originations and growth in both FX and syndication. Deposit service charges also rose significantly, reflecting additional penetration of our treasury platform and enhanced pricing.

Speaker Change: The interest rate backdrop combined with additional asset repricing opportunities, remained supportive of further, Nim expansion throughout the year.

Speaker Change: We also delivered strong, non-interest income growth, this quarter Capital markets activity. Picked up meaningfully with increased swap volumes tied to Career origination and growth in both FX and syndication fees.

Speaker Change: Deposit service charges also Rose significantly reflecting additional penetration of our treasury platform and enhanced pricing.

Travis Lan: Slide 16 illustrates the long-term trajectory of our fee income. Since 2017, we've grown fee income at a 12% CAGR, more than double the peer median. And as Ira mentioned, we've improved the quality of that income. Our capital markets, treasury, and tax credit advisory businesses are now core contributors to a more stable revenue stream.

Speaker Change: Slide 16 illustrates the long-term trajectory of our fee income since 2017, we've grown fee income at a 12% Kerr more than double the peer median.

Improve the quality of that income.

Speaker Change: Our Capital markets Treasury and tax credit. Advisory businesses are now core contributors to a more stable Revenue stream.

Travis Lan: Turning to slide 17, adjusted non-interest expenses grew modestly, primarily due to merit-based salary increases, which took effect late in the first quarter and higher incentive accruals during the second quarter. Professional expenses also normalized from unusually low levels in the first quarter. Despite these modest headwinds, our efficiency ratio improved to 55.2%, the best level since the first quarter of 2023, driven by strong revenue growth and continued cost distribution.

Speaker Change: Turning to slide 17 adjusted non-interest expenses, grew modestly, primarily due to merit-based salary increases which took effect late in the first quarter and higher incentive approvals during the second quarter.

Professional expenses. Also normalized from unusually low levels in the first quarter despite these modest headwinds, our efficiency ratio improved to 505.2%. The best level. Since the first quarter of 2023 driven by strong Revenue growth and continued cost discipline.

Travis Lan: Slide 18 illustrates our asset quality and reserve trends. Non-accrual loans remain generally stable during the quarter, while accruing past dues increase to 40 basis points of total loans. Roughly two thirds of this increase was related to a pair of CRE loans, which are no longer past due. Net Loan Charge Offs and Loan Loss Provision both declined from the first quarter in line with our expectations. We continue to anticipate further credit normalization and a decline in both provision and charge offs throughout the remainder of the year. Similar to this quarter's results, we anticipate general stability in our allowance coverage ratio going forward.

Slide 18, illustrates our asset quality and Reserve Trends. Non-accrual loans remain generally stable during the quarter while a past dues increase to 40 basis points of total loans, roughly 2/3 of this increase was related to a pair of C loans, which are no longer passed through net loan, charge offs and Loan loss provision both declined from the first quarter in line with our expectations

Unknown Executive: All else equal.

Speaker Change: We continue to anticipate further credit normalization, and a decline in both provision and charge offs throughout the remainder of the Year, similar to this quarter's results. We anticipate General stability in our allowance coverage ratio going forward. All else SQL

Travis Lan: Turning to slide 19, tangible book value increased as a result of retained earnings and a favorable OCI impact associated with our available-for-sale securities portfolio. While our total risk-based capital ratio declined due to the redemption of $115 million of subordinated debt, other regulatory capital ratios improved. We remain extremely well capitalized relative to our risk profile and have ample flexibility to support our strategic objectives.

Speaker Change: Turning to slide 19 tangible Book value increased as a result of retained earnings and a favorable oci impact associated with our available for sale Securities portfolio.

Speaker Change: While our total risk-based Capital ratio decline, due to the Redemption of 115 million of subordinated debt other regulatory Capital ratios improved.

Unknown Executive: With that, I will turn the call back to the operator to begin Q&A. Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile our Q&A roster.

We remain extremely well. Capitalized relative to our risk profile and have ample flexibility to support. Our strategic objectives with that. I will turn the call back to the operator to begin Q&A. Thank you.

Speaker Change: Thank you, Desu. A reminder to ask a question. Please press star, 1, 1 1 on your telephone, and wait for your name, to be announced to withdraw your question. Please, press star, 1 1 1, again please, stand by while we compile our Q&A roster,

Christopher McGratty: Our first question is going to come from the line of Chris McGrady with. KBW, your line is open, please go ahead. Travis, maybe to start with you, you talked about the margin continuing to expand. Can you speak to the ability to maintain deposit pricing given competitive nature and the growth outlook? I think you had talked previously about maybe getting overtime to like a three and a quarter. Any changes to the way you're thinking about the cadence of margins? No, I don't think there is, Chris. I mean, I think we still anticipate the margin will increase as the year goes on and then into 2026 as well.

Speaker Change: Our first question is going to come from the line of Christmas McGrady with KBW. Your line is open, please go ahead.

The question. Um, Travis maybe start with you, you talked about the margin continuing to to expand. Can you speak to um,

Speaker Change: The ability to maintain deposit pricing given competitive nature and the growth Outlook, I think you had talked previously about maybe getting over time to like a 3 and a quarter. Any

Speaker Change: Any changes to the way you're thinking about the Cadence of margins. Thanks.

Travis Lan: I'd say that benefit or that increase is driven by a combination of asset repricing tailwinds and general stability on the deposit side. I think we've noticed that the deposit competition for new deposits, new-to-bank deposits has maybe picked up recently. That said, we still have the structural opportunity with our $6.5 billion of brokered deposits to reprice those lower over time. Some of that structural where we have, as an example, in the third quarter, $1.2 billion of brokered that has an average cost of $5.10. So we've been replacing that into brokered. There's still a pickup. We think there's an opportunity to replace it more with core.

Christopher McGratty: This quarter, we added over $1 billion of new deposits at a blended rate of $2.77. So that gives you a sense, I think, for some of the opportunity that we have there on the funding side. Okay, yeah, you said it 377 or 477? Sorry, I missed. New deposits were over a billion dollars at a blended rate of 2.77%. 2.77%. Okay, great.

Speaker Change: No, I don't think there is Chris. I mean, I think we still anticipate, the margin will will increase as the year goes on and then into 2026 as well. Um, I'd say that benefit or that increase is driven by a combination of acid, re-pricing tailwind and general stability. On the deposit side, I think we've noticed that the deposit competition for new deposits, new to bank, deposits has maybe picked up recently. Um that said we still have the structural opportunity with our 6 and a half billion dollars of brokerage deposits to reprice those lower over time. Uh some of that structural where we have as an example in the third quarter of billion 2 of broker that that has an average cost of 510. Um so we even replacing that into into brokerage there's still a pickup but we think there's an opportunity to replace it more with core. Um this quarter we added over a billion dollars of new deposits that a blended rate of 277. Um so that gives you a sense. I think for some of the opportunity that we have there on the funding side,

Speaker Change: Okay, yeah you said at 377 or 477, sorry, I missed that.

Speaker Change: New deposits were over a billion dollars, added Blended rate of 2.77%.

Travis Lan: And then the charge-off guide, I think it implies a decent step down in the charge-offs in the back half of the year. I may be interested in comments about new non-accrual formation in the quarter, a little bit of the tweak in the reserve, and then your comments about stability and visibility in the credit. Thanks. Yeah, I think if we point to stabilization on non-accruals that we saw this quarter, and also, you know, want to want to point out, for the first quarter, we had flat criticized level of assets. That's after two years of some migration.

Speaker Change: 277. Okay, great. And then, um, the charge off guide the, uh, I think it implies a decent step down in in the charge offs in the back half of the year, maybe interested in comments about new non acral formation in the quarter, a little bit of The Tweak in the reserve and then your comments about stability and visibility in the credit, thanks.

Travis Lan: It's consistent with what we were seeing in fourth quarter and first quarter, where we saw the growth and criticized really diminished materially. We point to the stabilization that we're seeing within the real estate market as the primary driver. And In a world where the economic outlook continues to be consistent with what we're seeing today, we would expect that that trend continues on the criticized, and the guidance we had given was an expectation for charge-offs and reserve levels to provision levels to be higher at the beginning of the year. And that's consistent now with our guidance that we're showing through the end of the Great, thank you.

Speaker Change: Yeah, I think if we we point to stabilization on non-accruals, uh, that we saw this quarter and also, you know, wanting wanting to point out, uh, for the first quarter. Uh, we had flat, uh, criticized level of assets. That's after 2 years of some migration. It's consistent with what we were seeing in fourth quarter and first quarter, uh, where we saw the growth and criticized, uh, really diminished, uh, materially. Uh, we point to the stabilization that we're seeing within the real estate market as the primary driver and

Speaker Change: Guidance we had given was an expectation for uh charge offs and Reserve levels uh to provision levels to be higher at the beginning of the year. Uh and that's consistent. Now with our guidance that we're showing through the end of the year

Speaker Change: Great. Thank you.

Unknown Executive: Thank you, and one moment as we move on to our next question.

David Smith: Our next question is going to come from the line of David Smith with Chua Securities. Your line is open. Please go ahead. Good morning. You know, there's been a lot of activity in, you know, the broader technology and software sector in recent months, you know, both for the industry itself, as well as seemingly in banks interested in banking the space.

Thank you and 1 moment as we move on to our next question.

Speaker Change: Our next question is going to come from the line of David Smith which was Securities. Your line is open, please go ahead.

Speaker Change: Good morning. Um, morning.

Speaker Change: You know, there there's been a lot of activity in, you know, the broader technology and software sector in recent months. Um you know, both for the industry itself as well as seemingly in, in Banks, interested in in banking the space,

IRA Robbins: I was curious if you could speak to the competitive landscape there and how you're adapting Valley for this environment. It's a great question, David. You know, we had actually looked to get into the business five to six years ago from an organic perspective. And we went through a strategic initiative looking at, you know, not just what the relationship managers needed to do and what that target client was, but really the infrastructure that was required from a treasury service solution, the credit piece that comes with it. And it was really a significant build is what we had identified at that time.

Speaker Change: Uh, you know, with more intensity. I was curious if you could speak to the uh, the competitive landscape there. And you know how, how you're adapting Valley uh for this environment.

It's it's a great question, David. You know, we had actually looked to get into the business uh, 5 to 6 years ago uh, from an organic perspective and we went through a strategic initiative looking at, you know, not just what the relationship managers needed to do and what that Target client was, but really the infrastructure that was required from a treasury service solution. The credit piece that comes with it.

IRA Robbins: We were fortunate enough with the Blues acquisition back in 2022 to be able to acquire a really experienced team that has a lot of connectivity to the Israeli market. Right now, I think they have well over 50% of the market share of anything from Israel coming to the United States really, really goes through Valley. So a real strong kind of connectivity there, but really an infrastructure that we can leverage. So what you're seeing now is the ability to expand that into the domestic space. So the infrastructure is already there. The incremental knowledge that's really needed to bank that space already exists within the organization.

IRA Robbins: So we're really excited about the continued focus that we're seeing and the growth in that market. And we think we'll definitely get our fair share.

Mark Saeger: Thanks, and then just stay on the topic of markets. I know, you know, the New York metro area and rent regulated multifamily isn't as big a part of your portfolio as it once was. But any thoughts you have about the developments in the mayoral race and how that could could affect your portfolio here?

And it was really a significant build. Uh, is is what we had. Uh, I had identified at that time, we were fortunate enough with the blues acquisition back in 2022, to be able to acquire a really experienced team. Uh, that has a lot of connectivity to the Israeli Market. Uh, right now, I think they have well over 50% of the market share of anything from Israel, coming to the United States, really, really goes through Valley. Uh, so, uh, a real strong kind of, uh, connectivity there but really in infrastructure that we can leverage. Uh, so what you're seeing now is the ability to expand that into the domestic space. Uh, so the infrastructure is already there uh the incremental knowledge, that's really needed to bank that space uh already exists within the organization. So we're really excited about the continued Focus that we're seeing uh and the growth in that market and we think will definitely get our fair share.

Speaker Change: Thanks. And then just staying on the topic of markets. I know, you know, the New York metro area and rent regulated multi family isn't as big a part of your portfolio as it once was. But um any thoughts you have about the developments in the Mayoral race and how that could could affect your portfolio here?

Mark Saeger: So this is Mark Saeger. Yeah, we we don't want to preempt the voters of New York on who will actually be the mayor. But based on our forward looking, we do think that potential pressure would continue only to be on the rent stabilized. We've mentioned in the past very small part of our portfolio, 600 million in total, very granular portfolio for us, 6 million average loan size. And our average yield on that portfolio is 4.87. So we don't have concerns, we feel we're adequately provisioned on that portfolio. We'll point out what we've mentioned in other calls, we've always underwritten in that space to in place leases in NOI coverage.

Speaker Change: Uh so this is Mark Sagar. Uh yeah. We we don't want to preempt the voters of New York on who will actually be the mayor. But based on our forward-looking uh, we do think uh, that potential pressure would continue only to be on the rent stabilized. Uh, We've mentioned in the past very small part of our portfolio. Uh, 600 million in total very granular portfolio for us.

Mark Saeger: So an inability to increase in the future, we don't believe will have a material impact on our portfolio. All right, that's helpful. Thank you.

Speaker Change: Uh, 6 million average loan size and our average yield on that portfolio is 4.87. So we don't have concerns. We feel, we're adequately uh provisioned on that portfolio. We'll point out what we've mentioned in other calls. We've always underwritten in that space to in place, uh, leases uh, in noi coverage. Uh, so an inability, uh, to increase in the future. We don't believe we'll have a, a material impact on our portfolio.

All right, that's helpful. Thank you.

Unknown Executive: And one moment for our next question.

Speaker Change: Thank you. Thank you. And 1 moment for our next question.

Manan Gosalia: Our next question is going to come from the line of Manan Gosalia with Morgan Stanley. Your line is open. Please go ahead. Hey, good morning, all. Morning. I wanted to start on the loan growth this quarter. Apologies if you've already covered some of this, but the C&I loan growth was particularly strong this quarter.

She's going to come from the line of Manana and Galia with Morgan Stanley, your line is open. Please go ahead.

Speaker Change: Hey, good morning. All

Speaker Change: Morning.

IRA Robbins: Can you talk about what you're seeing and hearing from borrowers, how much of this growth is coming from the environment improving versus the actions you guys have taken? I would love to say that it's all the actions that we've taken and the infrastructure that we've built, but I think client sentiment definitely has an impact upon that as well. I think we've done a really good job in providing the right treasury solutions that we need, providing the right credit appetite, and just the internal relationships that are required to really grow in some of those segments that we've expanded into fund banking as well as healthcare.

Speaker Change: Um, I wanted to start on, uh, on the loan growth, this quarter. Um, apologies. If if you've already covered some of this but um, the cni loan growth was was particularly strong this quarter. Uh can you talk about? You know what you're seeing and hearing from borrowers? Um you know how much of this growth is coming from the environment, improving versus the actions you guys have taken.

IRA Robbins: That said, I think from what we see with our clients, there still seems to be real positivity in how they're individually thinking about the market. The C&I pipeline, I believe, is at 30% higher than where it was last quarter, so we're continuing to see real strong growth coming out of that segment today. I know there was a lot of noise regarding tariffs previously. I think we really bank a unique client that really is that small to mid-sized business that has the agility to really capitalize on what happens with tariffs and some of the uncertainty. When we look at an environment like we're staring at today where there's increased volatility and increased uncertainty, we think the types of clients that really look to Valley for their financing needs are the ones that are going to be the ones that are the beneficiaries of this environment.

Speaker Change: Certainty. So when we look at at at an environment, like we're staring at today where there's

Travis Lan: I would just add on to that specific to this quarter, you know, we grew CNI a little bit over 700 million, about 30% of that growth came from each fund finance and healthcare CNI. So 60% in total was related to those two specialty areas. The additional 40% was primarily tied to activity in Florida, Chicago and New Jersey. Got it. Really helpful.

Speaker Change: increased volatility and increased uncertainty, we think the types of clients that really look to value for their financing needs are the ones that are going to, uh, be the ones that are the beneficiaries of this environment.

Speaker Change: I would just add on to that. But on a specific to this quarter uh you know we grew cni a little bit over 700 million about 30% of that growth came from each fund finance and Healthcare cni. So 60% in total is related to those 2 specialty areas. Um, the additional 40% was primarily tied to activity in Florida, Chicago and New Jersey.

Travis Lan: And then maybe pivoting over to credit, any more color on what drove the increase in the past years, this quarter, and what gives you the confidence in the credit outlook that you laid out in the slide deck? Oh, absolutely. Again, I think we mentioned, but the increase in delinquencies was driven by three credits. Two of those credits at approximately $100 million are already cleared. We had one $39 million property sell and paid off in full. The $60 million credit has been brought current. For the July payment, we were in the midst of negotiating a modification for that customer.

Speaker Change: Got it really helpful. Um, and then maybe pivoting over to credit, um, any uh, more color on what drove the increase in the past use, um, this quarter and, uh, what gives you the confidence in, uh, the credit Outlook that you laid out in the slide deck.

Travis Lan: And the other remaining delinquency is a matured loan where the borrower hasn't agreed with our extension terms, but has received a alternative financing opportunity. And we expect this quarter for that to be resolved. that I would also point again, yeah, stabilized, criticized level and not a cruel level. So we do think that these were just unique situations on the link. Got it. Thank you.

Speaker Change: No, absolutely. Uh, again I I think we mentioned, but the increase in delinquencies was driven by uh, 3 credits, uh, 2 of those credits, uh, at approximately, uh, 100 million are already cleared. We had 1 uh, 39 million property, uh, so sell and paid off in full. Uh, the 60 million dollar credit uh, has been brought current, uh, for the July payment. We were in the midst of uh, negotiating a modification uh, for that customer and the other uh remain.

Speaker Change: Aning, uh, delinquency is a matured loan, uh, where the borrower uh, has an agreed with our extension terms, um, but uh, has received a alternative financing opportunity and we expect this quarter uh for that to be resolved.

Speaker Change: Then I would also Point again to yeah, stabilized, uh, criticized level and non-accrual levels. So we do think that these were just uh, unique situations on the delinquency.

Speaker Change: Got it. Thank you.

Matthew Breese: Thank you and one moment for our next question. Our next question is going to come from the line of Matthew Breese with Stephen Zink. Your line is open. Please go ahead. Good morning, everybody. I wanted to touch on deposits first. You know, the 8% quarter recorder growth in CDs, what was the blended price on those? And then, Ira, I appreciate your comments on, you know, quality of deposit improvements, but I guess I'm thinking about this in the context of deposit costs being high to begin with and up quarter to quarter. And so I guess my question is, with all the new hires and investments, you're growing C&I, which is, you know, better for deposits.

Speaker Change: Thank you. And 1 moment for our next question.

Speaker Change: Our next question is going to come from the line of Matthew Breeze with Steven zinc, your line is open, please go ahead.

Matthew Breeze: Good morning, everybody.

Speaker Change: I wanted to touch on deposits for.

80% quarter over quarter growth in CDs, what was the Blended price on those?

Matthew Breese: I guess I just fear there'd be more opportunity to reduce deposits.

Travis Lan: Maybe you could help me out Yeah, Matt, this is Travis. I think just to start with, there is a lot of kind of noise within the deposit numbers. So the growth in CDs was a combination of two things. The first is, you know, we did have some promotional CDs out there that we always expect to have at least one promotion in the market at a given time. So there was about $400 million of retail CD growth in that number. Then there was within brokered deposits in total, which were up $100 million. We reduced brokered ICS one-way by, which falls into now money market and savings, and replaced that with brokered CDs.

Speaker Change: And then our, I appreciate your comments, um, you know, with quality of deposit improvements. But I guess I'm thinking about this in the context of of deposit costs being high to begin with and, and up quarter of the quarter. And so I guess my question is with all the new hires and Investments you're growing cni which is, you know, better for deposits. I guess I just fear they'd be more opportunity to reduce deposits.

Speaker Change: Maybe you could help me out there.

Travis Lan: So when you look at our deposits quarter over quarter and see the reduction in now money market and savings, the reality is the customer balances were stable to slightly higher. But we did see that runoff in ICS one-way that was replaced with brokered CDs. I think there is also some degree of mismatch between the timing of loan growth, right? This quarter's loan growth was extremely strong, particularly on the CNI side. And I think the core deposit growth was strong as well, although it couldn't keep pace with the loan growth that we saw. Through the rest of the year, we anticipate loan growth will kind of pull back to about 1% on a quarterly basis.

Speaker Change: Yeah, Matt this is Travis, I think just to start with. Um, there is a lot of kind of Noise Within the deposit numbers. So the growth in CDs was a combination of of 2 things. The first is, you know, we did have some promotional CDs out there that we we always expect to have at least 1 Promotion in the market uh, at a given time. So there was about 400 million of retail CD growth in that number. Then there was within broker uh deposits in total, which were up a 100 million um we reduced uh brokered IC 1 Way by which was a a falls into now, money market and savings and replace that with brokered CDs. So when you look at our deposits quarter of a quarter and see the reduction in now, money market and savings. The reality is the customer balances were stable to slightly higher, um, but we did see that runoff in ICS 1 way that was replaced with brokerage CDs. Um, I think there is also some degree of mismatch between the timing of loan growth, right? This quarter's loan growth was extremely strong, particularly on the cni side. Um,

Travis Lan: And I think we have good deposit tailwind to fully fund that on a core basis. And then you get kind of a continuation of the repricing dynamic on the brokered side. To reiterate what I said in the first response in the Q&A session, we originated net new deposits this quarter of $1.8 billion at that 2.77 rate for customers. And again, we have $1.2 billion of brokered in the third quarter here that's going to roll off at a price of $5.10. So I think we have a combination of tailwinds on the deposit side that reflect both just the interest rate environment and repricing those lower and the structural benefits of continuing to grow deposits on a core basis.

Speaker Change: And I think the core deposit growth was strong as well, although it couldn't, you know, keep Pace with with the loan growth that we saw through the rest of the year. And we anticipate loan growth to kind of pull back to about 1% on a quarterly basis. Um, and I think we have good deposit, Tailwind to, to fully fund that on a core basis. And then you get kind of the continuation of the repricing dynamic on The Brokerage side, uh, to reiterate, what I I said in the first response in the Q&A session, um, you know, we grew and we

Travis Lan: And we're in a unique period here coming out of the inverted curve where you do feel like the margins at a good inflection point to the upside. We have asset repricing tailwinds on both the asset and liability side, and that's pretty unique. So just some color there.

IRA Robbins: And I think, Matt, just from the strategic, I mean, from my mind, I think the puts and pulls in each individual quarter are definitely important and make a difference for what that NIM looks like, you know, but my mind really goes to some of the more strategic initiatives that we've done and the different verticals that we've gone into, and the ability to really have some pricing power within those individual verticals as we continue to expand some of those relationships. I think about the number of accounts and the growth that we've seen, I mean, if you go back to when I've taken over as CEO, you know, we've grown, commercial accounts 11% consistently on an annualized basis.

Speaker Change: Um, so just just some some color there.

IRA Robbins: We've been able to grow consumer accounts, I think, 2% to 3% on a consistent annualized basis. So I think those are things that really drive long-term strategic value. The capabilities that we have within our treasury platform really begin to get differentiated versus some of our peers. So I think, you know, there really is the foundational strategic elements that support a lot of the tailwinds that we're describing today when it comes to the deposit initiatives. And I do believe over a longer-term basis that this cost will come down to more peer-like numbers. That said, you know, considering we are operating in a very challenging New York market from a deposit perspective versus some of our peers that may be operating in the Midwest or some other geographies, I do believe there is more pricing difficulty or competitiveness in our markets.

And I think Matt just from the Strategic, I mean, uh, from my mind, I think the the puts and pools in each individual quarter are definitely important and make a difference for what that Nim looks like. You know, but my mind really goes to some of the more strategic initiatives that we've done in the different verticals that we've gotten into, uh, and the ability to really have some pricing power within those individual verticals as we continue to expand some of those, uh, relationships. I think about the number of accounts and, and the growth that we've seen, I mean, if you go back to, when I take over SEO, you know, we've grown commercial accounts 11% consistently on an, on an annualized basis. We've been able to grow consumer accounts, I think 2 to 2 to 3% on a, on a consistent annualized basis. So I, I think those are things that really Drive long-term, strategic value, the capabilities that we have within our treasury platform. Really begin to get differentiated versus some of our peers. Uh, so I think, you know, there really is the foundational, uh, strategic elements that support, uh, a lot of the, the Tailwinds that we're describing today, when it comes to the deposit initiatives,

IRA Robbins: But, you know, we have a right to win for these deposits, and we do believe that that right is really showing up in the number of accounts that we continue to add every single year.

And I do believe over a longer term basis that this cost will come down to more per like numbers that said, you know, considering we are operating in a very challenging, New York Market, uh, from a deposit of perspective and versus some of our peers that may be operating in, uh, the Midwest or or some other, uh, geographies. I do believe there is more pricing, uh, uh, uh, difficulty or competitiveness and, and our markets. Uh, but, you know, we have a right to

Speaker Change: For these deposits. And, uh, we, we do believe that that right is really showing up in the number of accounts that we continue to add every single year.

IRA Robbins: Got it. Okay. And then I guess I had two others, if you'll indulge me. The first one is just, Ira, you had you had mentioned your opening comments. Disconnect Between Fundamentals and Valuation. Could you talk about a potential buyback? I mean, how much flexibility do you have capital wise to do that understanding the CRE concentration is still a bit elevated? I think we have a lot more flexibility today than we've ever had in my time being at Valley, whether that's been CEO or really working in the finance area. So I think that in itself, I think, is a wonderful ability to have some flexibility that we haven't had before.

Speaker Change: Got it. Okay. And

IRA Robbins: that's 2 others. If you'll indulge me the first 1 is just Ira. You had you had mentioned your opening comments.

Speaker Change: Disconnect between fundamentals and valuation.

Could you talk about a potential buyback? I mean, how much flexibility do you have Capital wise to do that. Understanding the security concentration is still a bit elevated.

IRA Robbins: You know, that said, I think there are organic growth opportunities for us. So it really becomes a balance of whether we're generating accretion through the buyback versus more sustainable long-term value creation through some of the organic initiatives that we've done. So I think that really becomes more of the balance than really where that CRE ratio is. We feel very, very comfortable with where the CRE ratio is, with where the trajectory is. So I don't really think that's an impediment at this point. It really is more on the organic side. You know, I think we talked about a year ago, or at the beginning of the year, of some of those performance metrics that we wanted to get to, right, 1% by the end of the year.

IRA Robbins: We talked long-term about where that 15% ROTC number should look for us. We do see a pretty clear path to get to those numbers. And I think those are really driving initiatives for us. Yeah, and that's that's my follow up, you know, 1% ROA by the year that's intact. What does that look like in 2026 and when do you get to that 15% RONC? That's all I had. I think those are, you know, what we're focused on, right? Because I think, you know, there is, in my mind, a disconnect with where that multiple is. And obviously, there's an overhang on the stock still with where that CRE ratio is, which is fine.

Speaker Change: I think we have a lot more flexibility today than we've ever had, as my time being at Valley whether that's been CEO or, or really working in the finance area. So, I think that in itself I think is is a wonderful ability to have some flexibility that we haven't had before. You know that said, I think there are organic growth opportunities for us, so really it becomes a balance of of whether we're uh generating accretion through the buyback versus more sustainable long-term value creation through some of the organic initiatives that we've done. So I think that really becomes more of the balance than than, really where that creat ratio is, we feel very, very comfortable with where the creat ratio is with where the trajectory is. So I don't really think that's an impediment at this point. Uh, it really is more on the organic side. You know, I think we talked uh about a year ago uh or at the beginning of the year of of some of those performance metrics that we wanted to get to write 1% by the end of the year, we talked long term about where that 15% ratty number should look for us. Uh, we do

Speaker Change: A pretty clear path to get to those numbers. Uh, and I think those are really driving initiatives for us.

Speaker Change: Yeah, and that that's my follow-up. You know, 1% Roa advising a year that's intact.

What does that look like in 2026 and when you get to that 15% Roxy. That's all I had. Thank you.

IRA Robbins: You know, I think it's important for us to continue to make sure that we're driving performance that supports more peer-like multiples. You know, for us, it's getting to that 1% at the end of the year, which when you look at the trajectory of where the NIM is and the guidance we're giving on where the reserve goes, assuming where the provision goes, I mean, those don't take a lot of math to really get to those overall numbers, when you then extrapolate that and continue it forward, you know, we're running between $12 to $17 million a quarter in incremental net interest income growth, as Travis alluded to earlier.

I think those those are, you know, what we're focused on, right? Because I think, uh, you know, there is in my mind, a disconnect with where that multiple is. And obviously, there's an overhang on the stock still, with where that creat ratio is, uh, which is fine. Uh, you know, I think it's important for us to continue to make sure that we're driving performance that supports more pure like multiples. Uh you know for us it's getting to that 1% at the end of the year which when you look at the trajectory of where the Nim is, and the guidance we're giving on where the, where the reserve goes or assuming. Where the provision goes. I mean,

IRA Robbins: Those are tailwinds that we don't think are going to disappear for some time. I mean, it's not too difficult to easily forecast by, you know, a certain part of next year, 12% to 12.5% ROTC, and then getting close to that 15% and 27% is really where we think we're going to end up, and there is a real clear, comfortable glide path towards that. Thank you.

Speaker Change: Those don't take a lot of math, to really get to those overall numbers. Uh, when you then extrapolate that and continue with forward. You know, we're running between 12 to 17 million dollars. A quarter in incremental, net interest, income growth, uh, as Travis alluded to earlier. Those are Tailwinds that we don't think are going to disappear for some for some time.

Speaker Change: It's not too difficult to easily forecast uh by you know, a certain part of next year 12 to 12 and a half percent Rosy and then getting closer to that, 15% and 27 is really where we think we're going to end up. Uh, and there is a real clear uh, comfortable gPad towards that.

Speaker Change: Thank you.

Unknown Executive: And as a reminder, to ask a question, please press star 11 on your telephone.

Jared Shaw: Our next question is going to come from the line of Jared Shaw with Barclays. Your line is open. Please go ahead.

Speaker Change: Thank you. And as a reminder to ask a question. Please press star, 1, 1 on your telephone.

Speaker Change: Our next question is going to come from the line of Jared, Shaw with Barclays. Your line is open, please go ahead.

John Rowe: Hi, this is John Rowe. I'm for Jared. Hey, how are you? Okay, good.

Speaker Change: Hi. This is John Rowan for Jared.

Speaker Change: Good morning. Hey, how are you?

IRA Robbins: Could you maybe just talk a little bit about the competitive environment in New Jersey? And if there's been any shift in sentiment among New Jersey based customers versus New York, given the mayor race there, any impact on sentiment or demand? I think it's a great question, right, because we have borrowers that play in both spaces. I think there's a little bit more of a wait and see as to where they're going to allocate some of their capital and to where they want to begin to invest into. You know, that said, I think the families that we tend to bank are really more long-term generational families.

Speaker Change: And if there's been any shift in sentiment among these New Jersey based customers versus New York, just give them the the mayor race there. Any, any impact on sentiment or demand?

IRA Robbins: And for them, you know, there's maybe going to be a buying opportunity or an investment opportunity in New York based on what happens with the mayoral race. So these are families that have much, much more longer term views of what New York City is. And I think we probably share in that sentiment from a long-term perspective, we are still optimistic about New York.

IRA Robbins: I would just add that this quarter, I did call out New Jersey as having a strong C&I growth. The reality is, as the quarter went on, the pipeline in New York grew, and right now, you know, New York's C&I pipeline stands pretty strong heading into the third quarter. Combination of activity in the boroughs in Long Island, you know, appears to be percolating. So, you know, I don't think, you know, we, Mark responded to the question on the mayoral race specific to rent-regulated multi-family, but the reality is the commercial environment in New York, I think, remains pretty robust.

I think it's a great question, right? Because we have uh, borrowers that play in both spaces. I think there is a little more of a wait and see as to where they're going to allocate some of their Capital into where they want to begin to invest into. Um, you know, that said I think the the families that we tend to bank are really more long-term generational families and for them, you know, they're they be going to be a buying opportunity or or an investment opportunity in New York based on what happens with the Mayoral race. Uh, so these are families that have much, much more longer term views than what New York City is. And I think we probably share in that sentiment from a long-term perspective, we are still optimistic about New York.

I would just add that this quarter, I didn't call out in New Jersey is having a strong cni growth. The reality is, is the quarter went on the pipeline in New York grew and and right now, you know, New York CI pipeline stands pretty strong heading into the third quarter, um, combination of activity in the Burrows in Long Island, you know, appears to be percolating. So, you know, I don't think, you know, we Mark responded to the question on the Mayoral race specific to rent regulated multi family. But the reality is the commercial environment in New York, I think remains pretty robust

Unknown Executive: Okay, perfect. Thanks for that color there.

Travis Lan: And then just I'm looking further ahead to like 2026 loan growth, how much of a headwind is the CRE runoff still going to be? It's just in terms of dollars or I'll just be a signage for the air. Yeah, as we head into 2026, I don't anticipate Cree will be a headwind from a dollar perspective. I mean, I would think that our Cree balance is stabilized as we get towards the end of 2025 here, and would anticipate a low single digit growth in Cree in 2026, as we think about it today. I guess with taking that into account with the T&I growth, any indication on what total loan growth could be for 2026 is like a high single digit number of two.

Speaker Change: Okay. Perfect. Thanks for that color there.

Um, and then just, I'm looking further ahead, but like 2026 loan growth, how much of a headwind is the CRA runoff still going to be. Um, it's just in terms of dollars or

Speaker Change: Just percentage for the year.

Speaker Change: Yeah, as we head into 2026, I don't anticipate Cree will be a headwind from a dollar perspective. I mean, I would think that our Cree balance is stabilized as we get towards the end of 2025 here and would anticipate kind of low single digit growth in Cree in 2026 as we think about it today.

Travis Lan: We haven't provided any 2026 guidance yet, as we talked about the 3% loan growth guide for 2025. I mean, keep in mind that that will include, you know, a couple of quarters of CRE runoff, if you were to neutralize that and, you know, kind of plug that in for 2026, I think you'd probably get to something that's, you know, closer to 5% total loan growth. But again, we have not yet provided any 2026 guidance.

Speaker Change: I guess uh with taking that into account with the TNI growth, we've seen um any indication on what total loan growth could be for 2026 is like a mid to high single digit number of 2.

Speaker Change: We we haven't provided any 2026 guidance yet, um, as we talked about the 3% loan growth guide for 2025. I mean, keep in mind, that that will include, you know, a couple of quarters of free runoff if you were to neutralize that. Um, and, you know, kind of plug that in for 26, I think you probably get to something that's, you know, closer to 5% total loan growth. But again, we have not yet provided any 26 guidance.

Unknown Executive: Okay. That's all for me.

Speaker Change: Okay, thanks. Thanks for the call. That's all for me.

IRA Robbins: Thank you and I'm showing no further questions at this time and I would like to hand the conference back to Ira Robbins for closing remarks. Thank you, Ms. Schall, and more importantly, thank you to all of you for joining us today. We appreciate the interaction and look forward to talking to you next quarter. This concludes today's conference call. Thank you for participating and you may now disconnect. Everyone have a great day. Thanks for watching!

Speaker Change: Thank you. And I'm showing no further questions at this time, and I would like to hand the conference back to Ira Robbins for closing remarks.

IRA Robbins: Thank you Mitchell and more importantly thank you to all of you for joining us today. We appreciate the interaction and look forward to talking to you next quarter.

Speaker Change: Includes today's conference.

Speaker Change: Participating in you may now disconnect everyone have a great day.