Valley Bank is utilizing its relationships across the finance and technology industries to find the best AI applications to improve its efficiency.

The $64.5 billion bank continues to roll out AI tools for customer-facing applications and internal processes such as underwriting, sales and fraud detection, Valley Bank executives said on today’s second-quarter earnings call.

“Valley Bank has several structural advantages that support our AI strategy, including Valley Ventures, our international and technology banking business, and our relationship with Bank Leumi,” Chief Executive Ira Robbins said on the call.

Valley Ventures, the bank’s venture capital arm, gives Valley “direct exposure to the startup ecosystem and access to emerging talent and technologies,” Robbins said.

The $235 billion Bank Leumi, based in Tel Aviv, Israel, also gives Valley Bank “additional visibility into leading practices in cyber, fraud and risk management,” Robbins said.

Valley Bank acquired Bank Leumi’s U.S. arm in a $1.2 billion deal in 2022. Bank Leumi holds a minority ownership stake in Valley Bank, reported at about 14% in 2022 by the SEC.

“We have a robust team of AI practitioners focused on sourcing use cases and aligning solutions from these relationships,” Robbins said.

Increased efficiency

AI implementation is a critical component for increasing efficiency in banking, Robbins said.

“From a macro perspective, we believe that banks effectively adopting AI have the potential to structurally shift their efficiency ratios lower by around 500 basis points,” Robbins said.

Valley Bank reported a Q2 efficiency ratio of 52.1%, improved from 55.2% in Q2 2025. The bank expects its efficiency ratio to be 50% or lower heading into next year, Chief Financial Officer Travis Lan said on the call.

Valley Bank has spent $3 million to $4 million this year on AI against $15 million in expense run rate savings, Lan said.

According to today’s earnings presentation, Valley Bank is using:

• Generative AI to support customer care agents in accessing policies and procedures;
• Machine-learning models to improve anti-money laundering and fraud alert efforts;
• An autonomous outbound voice agent for auto loan payment reminders and collections;
• AI-driven lead targeting and customer insights consolidation; and
• Agentic AI to automate parts of credit underwriting and loan servicing.

“Like with most AI use cases, the manual work can be automated, but it doesn’t change the oversight and approval and governance that’s around those AI efforts,” Lan said.

“It’s not occurring in a vacuum with no human oversight. It’s just shifting the roles and responsibilities.”

BY THE NUMBERS: The Morristown, N.J.-based bank reported in Q2:

• Net income of $170.9 million, up 28.3% year over year;
• Revenue of $560.7 million, up 13.3% YoY; and
• Technology, furniture and equipment expense of $33.2 million, up 8.4% YoY.

Shares of Valley Bank (NASDAQ: VLY) were down 1.07% from market open to $14.37 at 3:30 p.m. ET today. The bank has a market capitalization of $8 billion.

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