Valley National Bancorp: 2Q26: Favorable NII and NIM Expansion With Additional Upside Likely Through YE26 and 2027; OW

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Valley National Bancorp: 2Q26: Favorable NII and NIM Expansion With Additional Upside Likely Through YE26 and 2027; OW

J P M O R G A N North America Equity Research

24 July 2026

Valley National Bancorp Overweight

VLY, VLY US

2Q26: Favorable NII and NIM Expansion With Price (23 Jul 26):$14.45

Additional Upside Likely Through YE26 and 2027; OW ▼Price Target (Dec-27):$17.00 Prior (Dec-27):$17.50

While Valley’s 2Q26 core EPS missed expectations by a penny, looking to the

outlook we were encouraged to see an improvement to the guidance ranges for both U.S. Mid and Small Cap Banks

loans and fee income. Moreover, it was encouraging to see other solid fundamental Anthony Elian, CFA AC

results during the quarter including NIM expanding by a few bps, continued NII (1-212) 622-5067

growth, and very strong growth in loans and deposits (including non-interest anthony.elian@jpmorgan.com

bearing deposits). On the NIM outlook, we see potential upside to the 3.30%+ 2026 Michael Pietrini

NIM exit guidance that was reiterated supported by continued tailwinds from (1-212) 622-0618

michael.pietrini@jpmorgan.com

funding mix improvement including the rotation out of higher-cost brokered and J.P. Morgan Securities LLC

wholesale funding into core deposits and continued benefits from fixed-rate asset

repricing. It was also encouraging to hear that further NIM expansion is expected

between now and YE27 with no material changes to the NII outlook whether there Quarterly Forecasts (FYE Dec)

are two cuts or two hikes to the fed funds rate. Additionally, on credit, although Adj. EPS ($)

there was some unfavorable migration in 2Q26, we view this as manageable per 2025A 2026E 2027E

Q1 0.18 0.29A 0.34

the company’s comments on yesterday’s earnings call. Finally, there is the Q2 0.23 0.30A 0.36