Oct 22, 2026 earnings call — Funding, deposits and pending acquisitions
Core deposits grew $1.1 billion this quarter, led by commercial non-maturity accounts.
Revenue $0.6B (est $0.6B) · EPS $0.36 (est $0.33)
Key quotes
"The combined acquisitions of Providence and Bluevine are expected to add over $3.5 billion of low cost core deposits to Valley."
"Building on our investments in data and core infrastructure, we are already deploying AI in several areas, including customer care, fraud and AML reviews, auto loan collections, and most recently, agentic credit underwriting and loan servicing."
"CET1 has grown to 10.7% of risk-weighted assets, our loan to deposit ratio has improved to 96%, and most profitability metrics have returned to 2022 levels."
Analyst Q&A 10
construction loan and deposit timing
Q (Feddie Strickland · Hovde Group): Analyst asked for details on the construction loan, what gives comfort and the likely workout timeline. He also asked if criticized and classified loans can keep falling with higher rates and when Bluevine deposits will transfer.
A: Management said the loan is a land loan that is current on interest, has had pay-downs and that valuation and buyer interest give confidence they will exit without issue. They expect the criticized and classified trend to keep improving due to forward-looking work on rate resets and maturities. On Bluevine, they expect an April 1st deposit onboarding after an expected January 1st close, with economics effectively break even until deposits transition.
"So we are confident that we exit this loan without issue." — Mark Saeger
pipeline and expense plans
Q (Ben Gerlinger · Citi): Analyst asked how the loan pipeline looks for next year and if growth can continue, especially for CRE and C&I. He also asked whether expenses will be reinvested or come down as assets grow and with integration noise.
A: Management said the pipeline has rebuilt toward the $5 billion mark and currently tilts toward C&I and owner-occupied CRE. They expect to contemplate a 4%-6% loan growth guide for 2027 and think rates will reduce origination but slow paydowns, partially offsetting each other. On expenses, they will invest to grow the franchise while seeking offsets through process improvement, AI and technology to preserve efficiency.
"The pipeline right now has increased back towards the $5 billion mark that we were at as of March 31st." — Travis Lan (CFO)
net interest income drivers
Q (Mike · JPMorgan): Analyst asked if NII needs to ramp in 4Q to reach the high end of the 11%-13% outlook and what will drive that.
A: Management said yes, the recent rise in belly and longer-term rates helped results and supports the fourth quarter outlook. They noted exit margin for September was 3.33% and they expect another 5-7 basis points of margin expansion in the fourth quarter. The expansion comes from repricing asset yields higher while preserving funding cost.
"We'll guide to another kind of 5 basis points, call it 5-7 basis points of expansion here in the fourth quarter." — Travis Lan (CFO)
ROATCE timing
Q (Speaker 7): Analyst asked whether the 15% ROATCE target might be reached earlier, given recent results at 14.2%.
A: Management said this quarter gives credibility to the 15% target and they think they can pull it toward the middle of the year and exceed it by the end of next year on a standalone Valley basis. They noted potential transactions could add about 200 basis points to terminal return, with roughly half of that by the end of next year because of timing.
"I think we can pull that towards the middle of the year, and I think we can exceed it by the end of next year." — Travis Lan (CFO)
allowance and tax outlook
Q (David Smith · Truist): Analyst asked how to think about ACL/reserve ratio going forward given improving credit but faster C&I growth. He also asked about the implied tax rate and tax credit amortization level for 4Q.
A: Management said the ACL outlook is driven largely by the trajectory of criticized and classified loans; those have fallen meaningfully and that supported ACL reductions. They said ACL reduction is being partially offset by faster C&I growth, which carries a higher allowance, so they guide to a fairly stable ACL as those effects balance. On tax, they expect tax credit amortization in 4Q to be in line with 3Q at about $20 million and a tax rate around 20%-21%, noting the low tax rate this quarter was linked to a $4 million q/q increase in tax credit amortization.
"Going forward, we continue to guide to something that looks fairly stable on the ACL, as we anticipate continued criticizing classified improvement, and then balancing that with our continued focus on C&I growth, which to your point, carries a higher allowance." — Travis Lan (CFO)
deposits and brokered balances
Q (Brooks Dutton · Jefferies): Analyst asked where organic deposits are expected to go if loan growth stays 4%-6% and what will happen with the $5.3 billion of broker deposits.
A: Management said their 2027 starting point is to target core deposit growth in excess of loans. They noted the announced acquisitions should add $3.5 billion of core deposits against about $1 billion of loans, and combined with organic progress that should bring loans to deposits into the low nineties by the end of next year.
"So, we're targeting core deposit growth in excess of loans for sure." — Travis Lan (CFO)
Bluevine deposits, margin, buybacks
Q (Matthew Breese · Stephens): Analyst asked the current Bluevine deposit balances and where they might be at close, how the bank will deploy those deposits (pay down brokered, invest securities), the NIM outlook when combined with Providence, and what buybacks might look like.
A: Management said Bluevine deposits were $2.3 billion as of 9/30, up $200 million in the quarter, and they expect roughly $200 million per quarter so deposits could be $2.7 billion-$2.8 billion by April 1st. They plan to optimize funding by using incoming deposits to pay down about $1.5 billion of brokered deposits and address $400 million of FHLB maturities in Q1 2027, investing any excess into securities. They expect standalone Valley margin improvement of more than 15 basis points through Q4 2026, the acquisition to add about 15 basis points, putting them certainly above 350 by Q4 2027; buybacks remain discretionary with priority on funding organic loan growth and no pressure to hit a CRE ratio by a specific date.
"The update as of 9/30 is they're $2.3 billion, so up $200 million during the quarter." — Travis Lan (CFO)
Bluevine rate sensitivity and AI
Q (John Rao · Barclays): Analyst asked whether Bluevine customers will be rate sensitive after transition and what AI will do to long-term expenses and revenue. He also asked about 4Q deposit seasonality.
A: Management said Bluevine clients are materially less rate sensitive because they choose the platform for ease of use and mobile functionality, so they expect to maintain low betas and accelerate deposit growth when blended with Valley. On AI, they estimate the opportunity is roughly 65% on expense reduction and 35% on revenue uplift, and AI is already embedded and driving operating leverage. They added there is no significant point-to-point seasonality in deposits, though municipal inflows often ease into year-end.
"I think it's one of the driving factors as to why we wanted to really do something with Bluevine is that those clients are really less rate sensitive than what we've seen of any other client segment." — Ira Robbins (CEO)
treasury management penetration
Q (Ryan Kenny · Morgan Stanley): Analyst asked for progress on treasury management penetration, what percent of commercial borrowers use it, and whether C&I loan growth still converts into deposits similarly as it has before.
A: Management said they converted the core system about three years ago and penetration of treasury management has built to about 60% of C&I customers, which supported recent growth. They noted they repriced the product higher over time and don't expect another reprice, but see further penetration opportunity. For new C&I loans there is a typical three-six month lag to reach modeled deposit levels and they continue to see consistent pull-through.
"As we sit today, that penetration is built up towards 60% of our C&I customers use the treasury management platform." — Travis Lan (CFO)
repricing and expansion markets
Q (Chris O'Connell · KBW): Analyst asked how much replacement yields have risen for fixed-rate loans and the securities book after recent rate moves, and asked about biggest opportunities in expansion markets for loans and deposits.
A: Management said reorigination rates are coming in 150-200 basis points higher than runoff on the fixed-rate loan portfolio, and on the securities side new purchases are roughly 100 basis points higher than runoff (mid-fives versus mid-fours). On expansion markets, Providence brings SMB and consumer deposit strength, Chicago has a strong middle-market C&I franchise, and they expect deposit growth in new markets to be relationship-driven with treasury bankers supporting each market.
"Reorigination rates are coming in 150-200 basis points higher than where the runoff is on the fixed rate loan portfolio." — Travis Lan (CFO)