Valley National Bancorp (VLY) risk factors, FY2024 10-K

Risks Related to the Operating Environment

1. 01Our financial results and condition may be adversely impacted by changing economic conditions
2. 02Our financial results and condition may be adversely impacted by banking failures or any future similar events
3. 03Risks Associated with Our Business Model
4. 04The loss of or decrease in lower-cost funding sources within our deposit base, including our inability to achieve deposit retention targets within our branch network, may adversely impact our net interest income and net income
5. 05Our deposit services for businesses in the state licensed cannabis industry could expose us to liabilities and regulatory compliance costs
6. 06We could incur future goodwill impairment
7. 07Failure to successfully implement our growth strategies could cause us to incur substantial costs and expenses which may not be recouped and adversely affect our future profitability
8. 08Our investments in certain tax-advantaged projects may not generate returns as anticipated and may have an adverse impact on our results of operations
9. 09We are subject to environmental liability risk associated with lending activities which could have a material adverse effect on our financial condition and results of operations
10. 10We may incur future losses in connection with repurchases and indemnification payments related to mortgages that we have sold into the secondary market
11. 11Interest rate swap fees within capital markets income are a significant component of our non-interest income and could fluctuate in future periods
12. 12We may not be able to attract, develop and retain skilled people
13. 13We are subject to risks relating to ESG matters that could adversely affect our reputation, business, financial condition and results of operations, as well as the price of our common and preferred stock
14. 14Climate change and severe weather could adversely impact our operations, business, and clients

Risks Related to Our Industry

1. 15Changes in interest rates could reduce our net interest income and earnings
2. 16We may not be able to detect money laundering and other illegal or improper activities fully or on a timely basis, which could expose us to additional liability and could have a material adverse effect on us
3. 17Higher charge-offs and weak credit conditions could require us to further increase our allowance for credit losses through a provision charge to earnings
4. 18An increase in our non-performing assets may reduce our interest income and increase our net loan charge-offs, provision for loan losses, and operating expenses
5. 19We may be required to consult with the Federal Reserve before declaring cash dividends on our common stock, which ultimately may delay, reduce, or eliminate such dividends and adversely affect the market price of our common stock

General Commercial, Operational, Financial and Regulatory Risks

1. 20We may be unable to adequately manage our liquidity risk, which could affect our ability to meet our obligations as they become due, capitalize on growth opportunities, pay regular dividends on our common stock and generate adequate earnings
2. 21idiosyncratic events, there is no guarantee that the U.S. government will invoke the systemic risk exception, create additional liquidity programs, or take any other action to stabilize the banking industry or provide liquidity
3. 22The CECL model for determining our allowance for credit losses could add volatility to our provision for credit losses and earnings
4. 23Our controls and procedures may fail or be circumvented, which may result in a material adverse effect on our business, results of operations and financial condition
5. 24We rely on our systems of controls and procedures, and if our system fails, our operations could be disrupted
6. 25Our business, financial condition and results of operations could be adversely affected by natural disasters, pandemics, acts of terrorism, and other catastrophic events
7. 26Our ability to make opportunistic acquisitions is subject to significant risks, including the risk that regulators will not provide the requisite approvals
8. 27Extensive regulation and supervision have a negative impact on our ability to compete in a cost-effective manner and may subject us to material compliance costs and penalties, and changes in regulation could adversely affect our business, financial condition and results of operations
9. 28We are subject to numerous laws designed to protect consumers, including the CRA and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions
10. 29Changes in accounting policies or accounting standards could cause us to change the manner in which we report our financial results and condition in adverse ways and could subject us to additional costs and expenses
11. 30Claims and litigation could result in significant expenses, losses and damage to our reputation

Technology Risks

1. 31Cybersecurity incidents and other disruptions to our information system could expose us to liability, losses and escalating operating costs
2. 32We are subject to complex and evolving laws, regulations, rules, standards and contractual obligations regarding data privacy and cybersecurity, which could increase the cost of doing business, compliance risks and potential liability
3. 33practices. Any concerns about our data privacy and cybersecurity practices, even if unfounded, could damage our reputation and adversely affect our business
4. 34Our adoption of artificial intelligence tools and adoption by our third-party vendors and service providers may increase the risk of errors, omissions, unfair treatment or fraudulent behavior by our employees, clients, or counterparties, or other third parties
5. 35We may be required to expend significant resources to comply with an uncertain legal and regulatory environment governing the use of AI, and we may have to change our product offerings or business practices, or prevent or limit our use of AI

Risks Related to an Investment in Our Securities

1. 36We may reduce or eliminate the cash dividend on our common stock, which could adversely affect the market price of our common stock
2. 37If our subsidiaries are unable to pay dividends or make distributions to us, we may be unable to make dividend payments to our preferred and common shareholders or interest payments on our long-term borrowings and junior subordinated debentures issued to capital trusts
3. 38Future acquisitions may dilute shareholder value, especially tangible book value per share
4. 39Future offerings of common stock, preferred stock, debt or other securities may adversely affect the market price of our stock and dilute the holdings of existing shareholders