Quick Take on 2Q26 Earnings Result: Loan Growth Offsetting Higher Deposit Costs

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Quick Take on 2Q26 Earnings Result: Loan Growth Offsetting Higher Deposit Costs

Update

July 24, 2026 01:30 AM GMT

Morgan Stanley & Co. LLCMValley National Bancorp | North America Manan Gosalia

Equity Analyst

Quick Take on 2Q26 Earnings Manan.Gosalia@morganstanley.comBrian Wilczynski, CFA +1 212 761-4092

Brian.Wilczynski@morganstanley.com +1 212 761-1084

Result: Loan Growth Offsetting

Valley National Bancorp (VLY.O, VLY US)

Midcap Banks | United States of AmericaHigher Deposit Costs

Stock Rating Equal-weight

Industry View Attractive

Price target $16.00

AlphaSignals Earnings Reaction Shr price, close (Jul 23, 2026) $14.45

Mkt cap, curr (mm) $8,010

Unchanged In-line Largely unchanged 52-Week Range $15.20-8.95

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

An in-line quarter versus expectations with loan growth

surprising positively helping to offset higher deposit costs.

Leaving estimates broadly unchanged coming out of earnings.

On the Quarter: Operating EPS of 30c was relatively in line with MS / Consensus

of 31c each. Net interest income was in line with expectations, with stronger loan

growth offseting weaker net interest margin. Credit quality was strong with

criticized and classified loans down Q/Q, and fee income beat expectations.

Looking Ahead: We Remain Near the Low End of Valley's 'Up 11% - 13%' NII

Guidance assuming that deposit competition intensifies further in 2H.

• On the net interest margin side: We are modeling a 3.23% exit NIM for 2026.

° After increasing by 1bp Q/Q in 2Q, we model total deposit costs up

another 4bps in the second half of 2026 driven by higher for longer

rates and intensifying deposit competition across the group.