Spotlight On: Mark Biedermann, SVP & Division Head, PA, Valley National Bank

Spotlight On: Mark Biedermann, SVP & Division Head, PA, Valley National Bank

2023-04-28T15:15:06-04:00April 5th, 2023|Banking & Finance, Economy, Philadelphia, Spotlight On|

3 min read April 2023 — In an interview with Invest: Mark Biedermann, senior vice president and division head of Pennsylvania at Valley Bank, talked about the expected increase in regulatory scrutiny within the banking sector, the importance of undertaking risk management as companies grow, and diversity as a core strength of Philadelphia making it an attractive place to do business in, especially the healthcare sector.

What have been some of the key highlights for Valley Bank over the last year?

Valley Bank continues to expand both corporately and within the Philadelphia market. The Philadelphia regional office has now expanded to six commercial lenders. Over the past two years, Valley has acquired two organizations, The Westchester Bank and Bank Leumi USA, which provided us with a larger footprint nationally as we now have offices in Chicago and California. 

What are some opportunities that you see for the banking sector in the Philadelphia market?

The opportunities that exist are across the board with commercial and industrial companies and with commercial real estate developers; Valley has not substantially tightened its lending structures. We continue to actively pursue broad-based opportunities and it really speaks to our relationship approach to all types of lending, whether it be commercial and industrial or commercial real estate. We want to work with companies that offer full-fledged relationships in terms of loans and deposits. I expect that other organizations, particularly given the market challenges, may tighten up to some degree but that has not impacted Valley due to our diversified balance sheet and strong market position. 

Are there any regulations or legislation that you are keeping an eye on?

There is always a natural reaction to federal regulations and there are different layers. We are a national bank so our ultimate regulator in terms of credit quality is the Office of the Comptroller of the Currency (OCC), but then there is also the Federal Reserve and FDIC. Valley operates in a regulated industry, and we take that very seriously at all levels of the bank in terms of training, implementation, and tracking. But I do expect regulatory scrutiny to increase as a reaction to some of the recent events, and that’s just natural progression. Our risk and compliance cultures remain best-in-class. 

Also, in Valley’s 95-plus year history, we have never had a losing quarter, including the Great Depression, and that speaks to the culture of managing risk and having the right structure in place throughout the organization.

What are some characteristics of Philadelphia that make it a great market to do business in?

The Philadelphia market is relatively diverse and tends not to suffer the same economic swings as other key markets in the country largely due to steady employment. The economic benefit of our educational institutions, both undergrad, postgrad, and private schools, is significant as well. Additionally, we also have a large healthcare infrastructure that has attracted a lot of bioscience research and pharmaceutical companies to this area. This diversity has provided a great economic underpinning. Our graduates tend to stay and provide intellectual leadership for all sorts of businesses across our local economy. There is also a corporate and industrial culture in this area going back to the 1800s. This area was a hub of economic activity within the United States, so many of those vestiges remain here and have created wealth. 

From a commercial and industrial perspective, we are coming out of the post-pandemic growth environment. In 2022, supply chain issues were prevalent throughout the economy with numerous business leaders and owners managing through the tight supply chain. It has eased off somewhat now but has been replaced by potential economic storm clouds. There’s a lot of analysis going into capital investment to figure out where to get the best return to compete. Admittedly, a lot of business owners still continue to struggle with a tight labor market. Lastly, local companies with an international client base tend to do better than those with a pure domestic client base. 

What is your outlook for the banking sector in general and Valley Bank in particular in the coming two to three years?

Our outlook is driven by the strategic plan of our executive management team and our board, which focuses on continued organic growth and growth through strategic acquisitions. We have now reached $57 billion in assets. The outlook is very bright for Valley as we continue to service our existing clients as well as potential clients in new markets we are entering. In the banking sector, steady and controlled growth is rewarded and as such you can better manage that growth and potential risks that come with it. If it’s budgeted and thoroughly analyzed, in this industry you get certain economies of scale and drive more revenues through your planned overhead. That is where you get the velocity of your income that tends to fall to the bottom line as you absorb more overhead through growing revenue streams. 

As for the banking sector overall, there will be certain organizations that will struggle through this cycle both on a credit quality standpoint and funding basis. The recent gyrations that we had were actually based more on funding and liquidity than on credit quality, so going forward the issues for the industry may lie with the confluence of these two events: funding and credit quality. To compare Valley to that potential confluence, we have a very broad-based deposit generation machine that spans from Florida to New York vis-a-vis our retail network and our client base without any real concentrations based on our diversified client base. We have never chased a rate, which means being disciplined in getting the spread on your loans where you can actually make a real profit. You have to watch both your deposit and loan exposures, which we do daily here at Valley. That way we understand exactly where we are and where we need to be with the clients.

For more information, visit: 

https://www.valley.com/pa

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