Balance Sheet Offsetting

Certain financial instruments, including derivatives (consisting of interest rate caps and swaps) and repurchase agreements (accounted for as secured long-term borrowings), may be eligible for offset in the consolidated balance sheet and/or subject to master netting arrangements or similar agreements. Valley is party to master netting arrangements with its financial institution counterparties; however, Valley does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral, usually in the form of cash or marketable investment securities, is posted by the counterparty with net liability positions in accordance with contract thresholds. Master repurchase agreements which include “right of set-off” provisions generally have a legally enforceable right to offset recognized amounts. In such cases, the collateral would be used to settle the fair value of the repurchase agreement should Valley be in default. The table below presents information about Valley’s financial instruments that are eligible for offset in the consolidated statements of financial condition as of September 30, 2017 and December 31, 2016.



							Gross Amounts Not Offset
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments			Cash Collateral				Net Amount
	(in thousands)
September 30, 2017
Assets:
Interest rate caps and swaps	$	26,513	$	—	$	26,513	$	(3,509	)	$	—			$	23,004
Liabilities:
Interest rate caps and swaps	$	23,734	$	—	$	23,734	$	(3,509	)	$	(10,187	)	⁽¹⁾	$	10,038
Repurchase agreements	200,000		—		200,000		—			(200,000		)	⁽²⁾	—
Total	$	223,734	$	—	$	223,734	$	(3,509	)	$	(210,187	)		$	10,038
December 31, 2016
Assets:
Interest rate caps and swaps	$	26,087	$	—	$	26,087	$	(5,268	)	$	—			$	20,819
Liabilities:
Interest rate caps and swaps	$	41,911	$	—	$	41,911	$	(5,268	)	$	(36,643	)	⁽¹⁾	$	—
Repurchase agreements	165,000		—		165,000		—			(165,000		)	⁽²⁾	—
Total	$	206,911	$	—	$	206,911	$	(5,268	)	$	(201,643	)		$	—


(1)	Represents the amount of collateral posted with derivatives counterparties that offsets net liabilities. Actual cash collateral posted with all counterparties totaled $57.7 million and $52.4 million at September 30, 2017 and December 31, 2016, respectively.


(2)	Represents the fair value of non-cash pledged investment securities.