Mtg Takeaways: Top Pick w/ Structural Revenue Drivers & AI Efficiency Tailwinds

Research evidence excerpt

Mtg Takeaways: Top Pick w/ Structural Revenue Drivers & AI Efficiency Tailwinds

o this end, loan pipelines have expanded

meaningfully, reaching ~$4B as of 3/31, up ~50% over the past nine months. Within industry

verticals, healthcare remains a notable growth contributor across both C&I and owner-

occupied CRE, benefiting from Valley's specialty focus in skilled nursing and healthcare-

related lending (never lost a dollar on the Valley-originated healthcare loan). Another strong-

performing niche includes equipment finance, where balances total ~$850mm and remain

largely tied to small-ticket medical equipment financing. While Valley also has ~$450mm of

capital call loans (started about 2.5 years ago) that have contributed to recent C&I growth,

increased competition in the space suggests it is unlikely to be a primary near-term growth

driver. Overall, expanding pipelines, improving banker productivity, and continued momentum

in healthcare lending reinforce our confidence in Valley's ability to deliver toward the higher

end of its FY26 loan growth outlook.

5 Further supporting our confidence in Valley's loan growth outlook are recent senior

leadership additions and improving productivity from newly hired bankers. As part of

the organizational changes under the leadership of CEO Ira Robbins, Valley recruited Gino

Martocci as President of Commercial Banking – formerly Head of Commercial and Commercial

Real Estate Banking at M&T – in March 2025. As part of talent hires, Valley also added 15-20

middle-market bankers that are increasingly ramping productivity and contributing to

pipelines. Separately, small business lending remains significantly underpenetrated at just ~

$400mm of loans (vs. ~$2B of deposits), representing a sizable long-term growth opportunity.