10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

☒ Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 2020

OR

☐ Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the transition period from                      to                     

Commission File Number 1-11277 

 Valley National Bancorp

(Exact name of registrant as specified in its charter)

New Jersey		22-2477875
(State or other jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)
One Penn Plaza
New York,	NY	10119
(Address of principal executive office)		(Zip code)

973-305-8800

(Registrant’s telephone number, including area code) 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbols	Name of exchange on which registered
Common Stock, no par value	VLY	The Nasdaq Stock Market LLC
Non-Cumulative Perpetual Preferred Stock, Series A, no par value	VLYPP	The Nasdaq Stock Market LLC
Non-Cumulative Perpetual Preferred Stock, Series B, no par value	VLYPO	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.)    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer	☒	Accelerated filer	☐	Smaller reporting company	☐
Non-accelerated filer	☐			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common Stock (no par value), of which 403,876,309 shares were outstanding as of November 4, 2020.

TABLE OF CONTENTS

		Page Number
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Consolidated Statements of Financial Condition as of September 30, 2020 and December 31, 2019	2
	Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2020 and 2019	3
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2020 and 2019	5
	Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months Ended September 30, 2020 and 2019	6
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019	8
	Notes to Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	51
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	90
Item 4.	Controls and Procedures	90
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	91
Item 1A.	Risk Factors	91
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	95
Item 6.	Exhibits	95
SIGNATURES		96

1

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except for share data)

	September 30, 2020		December 31, 2019
Assets	(Unaudited)
Cash and due from banks	$	276,120	$	256,264
Interest bearing deposits with banks	654,591		178,423
Investment securities:
Equity securities	29,026		41,410
Available for sale debt securities	1,526,564		1,566,801
Held to maturity debt securities (net of allowance for credit losses of $1,481 at September 30, 2020)	2,168,995		2,336,095
Total investment securities	3,724,585		3,944,306
Loans held for sale, at fair value	209,250		76,113
Loans	32,415,586		29,699,208
Less: Allowance for loan losses	(325,032)		(161,759)
Net loans	32,090,554		29,537,449
Premises and equipment, net	323,056		334,533
Lease right of use assets	265,599		285,129
Bank owned life insurance	533,768		540,169
Accrued interest receivable	136,058		105,637
Goodwill	1,375,409		1,373,625
Other intangible assets, net	73,873		86,772
Other assets	1,084,629		717,600
Total Assets	$	40,747,492	$	37,436,020
Liabilities
Deposits:
Non-interest bearing	$	8,756,924	$	6,710,408
Interest bearing:
Savings, NOW and money market	14,893,477		12,757,484
Time	7,537,581		9,717,945
Total deposits	31,187,982		29,185,837
Short-term borrowings	1,430,726		1,093,280
Long-term borrowings	2,852,569		2,122,426
Junior subordinated debentures issued to capital trusts	55,978		55,718
Lease liabilities	290,441		309,849
Accrued expenses and other liabilities	396,033		284,722
Total Liabilities	36,213,729		33,051,832
Shareholders’ Equity
Preferred stock, no par value; 50,000,000 authorized shares:
Series A (4,600,000 shares issued at September 30, 2020 and December 31, 2019)	111,590		111,590
Series B (4,000,000 shares issued at September 30, 2020 and December 31, 2019)	98,101		98,101
Common stock (no par value, authorized 650,000,000 shares; issued 403,880,132 shares at September 30, 2020 and 403,322,773 shares at December 31, 2019)	141,718		141,423
Surplus	3,633,321		3,622,208
Retained earnings	553,826		443,559
Accumulated other comprehensive loss	(4,783)		(32,214)
Treasury stock, at cost (1,388 common shares at September 30, 2020 and 44,383 common shares at December 31, 2019)	(10)		(479)
Total Shareholders’ Equity	4,533,763		4,384,188
Total Liabilities and Shareholders’ Equity	$	40,747,492	$	37,436,020

See accompanying notes to consolidated financial statements.

2

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except for share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Interest Income
Interest and fees on loans	$	315,788	$	298,384	$	970,739	$	883,595
Interest and dividends on investment securities:
Taxable	14,845		21,801		56,225		67,166
Tax-exempt	3,606		4,219		11,224		13,379
Dividends	2,684		3,171		9,177		9,140
Interest on federal funds sold and other short-term investments	420		1,686		2,296		3,947
Total interest income	337,343		329,261		1,049,661		977,227
Interest Expense
Interest on deposits:
Savings, NOW and money market	13,323		35,944		64,463		110,247
Time	19,028		42,848		91,699		121,350
Interest on short-term borrowings	2,588		12,953		9,275		40,362
Interest on long-term borrowings and junior subordinated debentures	19,318		16,891		53,240		45,761
Total interest expense	54,257		108,636		218,677		317,720
Net Interest Income	283,086		220,625		830,984		659,507
(Credit) provision for credit losses for held to maturity securities	(112)		—		688		—
Provision for credit losses for loans	31,020		8,700		106,059		18,800
Net Interest Income After Provision for Credit Losses	252,178		211,925		724,237		640,707
Non-Interest Income
Trust and investment services	3,068		3,296		9,307		9,296
Insurance commissions	1,816		2,748		5,426		7,922
Service charges on deposit accounts	3,952		5,904		13,189		17,634
Losses on securities transactions, net	(46)		(93)		(127)		(114)
Other-than-temporary impairment losses on securities	—		—		—		(2,928)
Fees from loan servicing	2,551		2,463		7,526		7,260
Gains on sales of loans, net	13,366		5,194		26,253		13,700
Gains (losses) on sales of assets, net	894		(159)		716		76,997
Bank owned life insurance	(1,304)		2,687		7,661		6,779
Other	24,975		19,110		65,548		39,880
Total non-interest income	49,272		41,150		135,499		176,426
Non-Interest Expense
Salary and employee benefits expense	83,626		77,271		247,886		236,559
Net occupancy and equipment expense	31,116		29,203		96,774		86,789
FDIC insurance assessment	4,847		5,098		14,858		16,150
Amortization of other intangible assets	6,377		4,694		18,528		13,175
Professional and legal fees	8,762		5,870		22,646		15,286
Loss on extinguishment of debt	2,353		—		2,353		—
Amortization of tax credit investments	2,759		4,385		9,403		16,421
Telecommunication expense	2,094		2,698		7,247		7,317
Other	18,251		16,658		53,312		43,712
Total non-interest expense	160,185		145,877		473,007		435,409
Income Before Income Taxes	141,265		107,198		386,729		381,724
Income tax expense	38,891		25,307		101,486		110,035
Net Income	102,374		81,891		285,243		271,689
Dividends on preferred stock	3,172		3,172		9,516		9,516
Net Income Available to Common Shareholders	$	99,202	$	78,719	$	275,727	$	262,173

3

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (continued)

(in thousands, except for share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Earnings Per Common Share:
Basic	$	0.25	$	0.24	$	0.68	$	0.79
Diluted	0.25		0.24		0.68		0.79
Cash Dividends Declared per Common Share	0.11		0.11		0.33		0.33
Weighted Average Number of Common Shares Outstanding:
Basic	403,833,469		331,797,982		403,714,701		331,716,652
Diluted	404,788,526		333,405,196		404,912,126		333,039,436

See accompanying notes to consolidated financial statements.

4

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(in thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net income	$	102,374	$	81,891	$	285,243	$	271,689
Other comprehensive income, net of tax:
Unrealized gains and losses on available for sale securities
Net (losses) gains arising during the period	(1,262)		8,135		27,819		42,890
Less reclassification adjustment for net losses included in net income	36		72		94		90
Total	(1,226)		8,207		27,913		42,980
Unrealized gains and losses on derivatives (cash flow hedges)
Net gains (losses) on derivatives arising during the period	83		76		(2,254)		(989)
Less reclassification adjustment for net losses included in net income	1,127		324		1,257		806
Total	1,210		400		(997)		(183)
Defined benefit pension plan
Amortization of actuarial net loss	171		56		515		166
Total other comprehensive income	155		8,663		27,431		42,963
Total comprehensive income	$	102,529	$	90,554	$	312,674	$	314,652

See accompanying notes to consolidated financial statements.

5

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

For the Nine Months Ended September 30, 2020

			Common Stock							Accumulated
	Preferred Stock		Shares	Amount		Surplus		Retained Earnings		Other Comprehensive Loss		Treasury Stock		Total Shareholders’ Equity
	(in thousands)
Balance - December 31, 2019	$	209,691	403,278	$	141,423	$	3,622,208	$	443,559	$	(32,214)	$	(479)	$	4,384,188
Adjustment due to the adoption of ASU No. 2016-13	—		—	—		—		(28,187)		—		—		(28,187)
Balance - January 1, 2020	209,691		403,278	141,423		3,622,208		415,372		(32,214)		(479)		4,356,001
Net income	—		—	—		—		87,268		—		—		87,268
Other comprehensive income, net of tax	—		—	—		—		—		25,648		—		25,648
Cash dividends declared:
Preferred stock, Series A, $0.39 per share	—		—	—		—		(1,797)		—		—		(1,797)
Preferred stock, Series B, $0.34 per share	—		—	—		—		(1,375)		—		—		(1,375)
Common stock, $0.11 per share	—		—	—		—		(44,979)		—		—		(44,979)
Effect of stock incentive plan, net	—		466	190		1,828		(2,065)		—		279		232
Balance - March 31, 2020	209,691		403,744	141,613		3,624,036		452,424		(6,566)		(200)		4,420,998
Net income	—		—	—		—		95,601		—		—		95,601
Other comprehensive income, net of tax	—		—	—		—		—		1,628		—		1,628
Cash dividends declared:
Preferred stock, Series A, $0.39 per share	—		—	—		—		(1,797)		—		—		(1,797)
Preferred stock, Series B, $0.34 per share	—		—	—		—		(1,375)		—		—		(1,375)
Common stock, $0.11 per share	—		—	—		—		(44,750)		—		—		(44,750)
Effect of stock incentive plan, net	—		52	54		4,756		(592)		—		(35)		4,183
Balance - June 30, 2020	209,691		403,796	141,667		3,628,792		499,511		(4,938)		(235)		4,474,488
Net income	—		—	—		—		102,374		—		—		102,374
Other comprehensive income, net of tax	—		—	—		—		—		155		—		155
Cash dividends declared:
Preferred stock, Series A, $0.39 per share	—		—	—		—		(1,797)		—		—		(1,797)
Preferred stock, Series B, $0.34 per share	—		—	—		—		(1,375)		—		—		(1,375)
Common stock, $0.11 per share	—		—	—		—		(44,770)		—		—		(44,770)
Effect of stock incentive plan, net	—		83	51		4,529		(117)		—		225		4,688
Balance - September 30, 2020	$	209,691	403,879	$	141,718	$	3,633,321	$	553,826	$	(4,783)	$	(10)	$	4,533,763

6

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) (continued)

For the Nine Months Ended September 30, 2019

			Common Stock							Accumulated
	Preferred Stock		Shares	Amount		Surplus		Retained Earnings		Other Comprehensive Loss		Treasury Stock		Total Shareholders’ Equity
	(in thousands)
Balance - December 31, 2018	$	209,691	331,431	$	116,240	$	2,796,499	$	299,642	$	(69,431)	$	(2,187)	$	3,350,454
Adjustment due to the adoption of ASU No. 2016-02	—		—	—		—		4,414		—		—		4,414
Adjustment due to the adoption of ASU No. 2017-08	—		—	—		—		(1,446)		—		—		(1,446)
Balance - January 1, 2019	209,691		331,431	116,240		2,796,499		302,610		(69,431)		(2,187)		3,353,422
Net income	—		—	—		—		113,330		—		—		113,330
Other comprehensive income, net of tax	—		—	—		—		—		16,174		—		16,174
Cash dividends declared:
Preferred stock, Series A, $0.39 per share	—		—	—		—		(1,797)		—		—		(1,797)
Preferred stock, Series B, $0.34 per share	—		—	—		—		(1,375)		—		—		(1,375)
Common stock, $0.11 per share	—		—	—		—		(36,686)		—		—		(36,686)
Effect of stock incentive plan, net	—		302	226		2,935		(99)		—		(1,251)		1,811
Balance - March 31, 2019	209,691		331,733	116,466		2,799,434		375,983		(53,257)		(3,438)		3,444,879
Net income	—		—	—		—		76,468		—		—		76,468
Other comprehensive income, net of tax	—		—	—		—		—		18,126		—		18,126
Cash dividends declared:
Preferred stock, Series A, $0.39 per share	—		—	—		—		(1,797)		—		—		(1,797)
Preferred stock, Series B, $0.34 per share	—		—	—		—		(1,375)		—		—		(1,375)
Common stock, $0.11 per share	—		—	—		—		(36,712)		—		—		(36,712)
Effect of stock incentive plan, net	—		55	105		4,625		(377)		—		176		4,529
Balance - June 30, 2019	209,691		331,788	116,571		2,804,059		412,190		(35,131)		(3,262)		3,504,118
Net income	—		—	—		—		81,891		—		—		81,891
Other comprehensive income, net of tax	—		—	—		—		—		8,663		—		8,663
Cash dividends declared:
Preferred stock, Series A, $0.39 per share	—		—	—		—		(1,797)		—		—		(1,797)
Preferred stock, Series B, $0.34 per share	—		—	—		—		(1,375)		—		—		(1,375)
Common stock, $0.11 per share	—		—	—		—		(36,732)		—		—		(36,732)
Effect of stock incentive plan, net	—		18	79		3,207		(157)		—		178		3,307
Balance - September 30, 2019	$	209,691	331,806	$	116,650	$	2,807,266	$	454,020	$	(26,468)	$	(3,084)	$	3,558,075

See accompanying notes to consolidated financial statements.

7

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)

	Nine Months Ended September 30,
	2020		2019
Cash flows from operating activities:
Net income	$	285,243	$	271,689
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	43,975		38,329
Stock-based compensation	12,001		11,504
Provision for credit losses	106,747		18,800
Net amortization of premiums and accretion of discounts on securities and borrowings	26,051		21,584
Amortization of other intangible assets	18,528		13,175
Losses on securities transactions, net	127		114
Proceeds from sales of loans held for sale	716,739		341,503
Gains on sales of loans, net	(26,253)		(13,700)
Net impairment losses on securities recognized in earnings	—		2,928
Originations of loans held for sale	(829,252)		(338,996)
Gains on sales of assets, net	(716)		(76,997)
Net change in:
Cash surrender value of bank owned life insurance	(7,661)		(6,779)
Accrued interest receivable	(30,421)		(1,986)
Other assets	(420,572)		(264,228)
Accrued expenses and other liabilities	85,944		92,542
Net cash (used in) provided by operating activities	(19,520)		109,482
Cash flows from investing activities:
Net loan originations and purchases	(2,686,137)		(1,846,329)
Equity securities:
Purchases	(7,616)		—
Sales	27,867		—
Held to maturity debt securities:
Purchases	(381,606)		(317,794)
Maturities, calls and principal repayments	532,151		281,961
Available for sale debt securities:
Purchases	(306,071)		(19,892)
Maturities, calls and principal repayments	374,321		188,619
Death benefit proceeds from bank owned life insurance	14,062		6,354
Proceeds from sales of real estate property and equipment	16,136		107,132
Proceeds from sales of loans held for investment	30,020		302,951
Purchases of real estate property and equipment	(20,715)		(15,753)
Net cash used in investing activities	(2,407,588)		(1,312,751)

8

VALLEY NATIONAL BANCORP CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (continued) (in thousands)
	Nine Months Ended September 30,
	2020		2019
Cash flows from financing activities:
Net change in deposits	2,002,145		1,093,148
Net change in short-term borrowings	337,446		(293,497)
Proceeds from issuance of long-term borrowings, net	838,388		850,000
Repayments of long-term borrowings	(108,446)		(255,000)
Cash dividends paid to preferred shareholders	(9,516)		(9,516)
Cash dividends paid to common shareholders	(133,536)		(110,037)
Purchase of common shares to treasury	(4,972)		(1,505)
Common stock issued, net	2,074		(351)
Other, net	(451)		(365)
Net cash provided by financing activities	2,923,132		1,272,877
Net change in cash and cash equivalents	496,024		69,608
Cash and cash equivalents at beginning of year	434,687		428,629
Cash and cash equivalents at end of period	$	930,711	$	498,237
Supplemental disclosures of cash flow information:
Cash payments for:
Interest on deposits and borrowings	$	229,987	$	312,663
Federal and state income taxes	108,302		106,296
Supplemental schedule of non-cash investing activities:
Transfer of loans to other real estate owned	$	3,716	$	1,453
Transfer of loans to loans held for sale	30,020		302,951
Lease right of use assets obtained in exchange for operating lease liabilities	10,141		306,471

See accompanying notes to consolidated financial statements.

9

VALLEY NATIONAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

The unaudited consolidated financial statements of Valley National Bancorp, a New Jersey corporation (Valley), include the accounts of its commercial bank subsidiary, Valley National Bank (the Bank), and all of Valley’s direct or indirect wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated. The accounting and reporting policies of Valley conform to U.S. generally accepted accounting principles (U.S. GAAP) and general practices within the financial services industry. In accordance with applicable accounting standards, Valley does not consolidate statutory trusts established for the sole purpose of issuing trust preferred securities and related trust common securities. Certain prior period amounts have been reclassified to conform to the current presentation.

In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly Valley’s financial position, results of operations, changes in shareholders' equity and cash flows at September 30, 2020 and for all periods presented have been made. The results of operations for the three and nine months ended on September 30, 2020 are not necessarily indicative of the results to be expected for the entire fiscal year or any subsequent interim period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP and industry practice have been condensed or omitted pursuant to rules and regulations of the SEC. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Valley’s Annual Report on Form 10-K for the year ended December 31, 2019.

Significant Estimates. In preparing the unaudited consolidated financial statements in conformity with U.S. GAAP, management has made estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statements of financial condition and results of operations for the periods indicated. Material estimates that require application of management’s most difficult, subjective or complex judgment and are particularly susceptible to change include: the allowance for credit losses, the evaluation of goodwill and other intangible assets for impairment, and income taxes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are deemed necessary. While management uses its best judgment, actual amounts or results could differ significantly from those estimates. The current economic environment has increased the degree of uncertainty inherent in these material estimates. Actual results may differ from those estimates. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date.

Impact of COVID-19. Valley's primary market areas within New Jersey, New York, Florida and Alabama have all experienced significant outbreaks and resurgences of the disease caused by the novel coronavirus (COVID-19) and disruptions from the pandemic. The COVID-19 pandemic and any preventative or protective actions that Valley or its customers have taken or may take in response resulted and may continue to result in extended periods of disruption to Valley, its customers, service providers, and third parties. The full extent and duration of the adverse impacts of COVID-19 on Valley's business, financial position, results of operations, and prospects are currently unknown, but could be significant. As of the date of this report, the banking and financial services industries have been deemed essential businesses in the jurisdictions in which Valley operates. However, Valley remains subject to various protocols and practices imposed to safeguard the health and wellness of customers and employees and to comply with applicable government directives, and the implementation and extent of any further restrictions on operations could have a material effect on Valley’s business. Valley cannot predict whether and to what extent governmental and nongovernmental authorities will continue to implement policy measures or further legislative relief to assist Valley and its customers and the failure to do so could have adverse effects on Valley's business.

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Note 2. Business Combinations

On December 1, 2019, Valley completed its acquisition of Oritani Financial Corp. (Oritani) and its wholly-owned subsidiary, Oritani Bank. Oritani had approximately $4.3 billion in assets, $3.4 billion in net loans and $2.9 billion in deposits, after purchase accounting adjustments, and a branch network of 26 locations. The acquisition represents a significant addition to Valley's New Jersey franchise, and meaningfully enhanced its presence in the Bergen County market. The common shareholders of Oritani received 1.60 shares of Valley common stock for each Oritani share that they owned prior to the merger. The total consideration for the acquisition was approximately $835.3 million, consisting of 71.1 million shares of Valley common stock and the outstanding Oritani stock-based awards.

Merger expenses totaled $106 thousand and $1.8 million for the three and nine months ended September 30, 2020, respectively, which primarily related to professional and legal, net occupancy and equipment, and other expenses included in non-interest expense on the consolidated statements of income.

During the first quarter 2020, Valley revised the estimated fair values of the acquired assets as of the Oritani acquisition date due to additional information obtained that existed as of December 1, 2019. The adjustments mostly related to the fair value of certain loans and deferred tax assets as of the acquisition date and resulted in a $1.8 million increase in goodwill (see Note 9 for amount of goodwill as allocated to Valley's business segments). If additional information (that existed as of the acquisition date) becomes available, the fair value estimates for acquired assets and assumed liabilities are subject to change for up to one year after the acquisition date.

Note 3. Earnings Per Common Share

The following table shows the calculation of both basic and diluted earnings per common share for the three and nine months ended September 30, 2020 and 2019:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands, except for share data)
Net income available to common shareholders	$	99,202	$	78,719	$	275,727	$	262,173
Basic weighted average number of common shares outstanding	403,833,469		331,797,982		403,714,701		331,716,652
Plus: Common stock equivalents	955,057		1,607,214		1,197,425		1,322,784
Diluted weighted average number of common shares outstanding	404,788,526		333,405,196		404,912,126		333,039,436
Earnings per common share:
Basic	$	0.25	$	0.24	$	0.68	$	0.79
Diluted	0.25		0.24		0.68		0.79

Common stock equivalents represent the dilutive effect of additional common shares issuable upon the assumed vesting or exercise, if applicable, of restricted stock units and common stock options to purchase Valley’s common shares. Common stock options with exercise prices that exceed the average market price per share of Valley’s common stock and restricted stock units during the periods presented may have an anti-dilutive effect on the diluted earnings per common share calculation and therefore are excluded from the diluted earnings per share calculation. Potential anti-dilutive weighted common shares equaled approximately 4.9 million shares and 2.2 million shares for the three and nine months ended September 30, 2020, respectively, and 265 thousand shares and 475 thousand shares for the three and nine months ended September 30, 2019, respectively.

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Note 4. Accumulated Other Comprehensive Loss

The following table presents the after-tax changes in the balances of each component of accumulated other comprehensive loss for the three and nine months ended September 30, 2020: 

	Components of Accumulated Other Comprehensive Loss						Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities		Unrealized Gains and Losses on Derivatives		Defined Benefit Pension Plan
	(in thousands)
Balance at June 30, 2020	$	34,961	$	(5,936)	$	(33,963)	$	(4,938)
Other comprehensive (loss) income before reclassification	(1,262)		83		—		(1,179)
Amounts reclassified from other comprehensive income	36		1,127		171		1,334
Other comprehensive (loss) income, net	(1,226)		1,210		171		155
Balance at September 30, 2020	$	33,735	$	(4,726)	$	(33,792)	$	(4,783)

	Components of Accumulated Other Comprehensive Loss						Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities		Unrealized Gains and Losses on Derivatives		Defined Benefit Pension Plan
	(in thousands)
Balance at December 31, 2019	$	5,822	$	(3,729)	$	(34,307)	$	(32,214)
Other comprehensive income (loss) before reclassification	27,819		(2,254)		—		25,565
Amounts reclassified from other comprehensive income	94		1,257		515		1,866
Other comprehensive income (loss), net	27,913		(997)		515		27,431
Balance at September 30, 2020	$	33,735	$	(4,726)	$	(33,792)	$	(4,783)

The following table presents amounts reclassified from each component of accumulated other comprehensive loss on a gross and net of tax basis for the three and nine months ended September 30, 2020 and 2019:

	Amounts Reclassified from Accumulated Other Comprehensive Loss
	Three Months Ended September 30,				Nine Months Ended September 30,
Components of Accumulated Other Comprehensive Loss	2020		2019		2020		2019		Income Statement Line Item
	(in thousands)
Unrealized losses on AFS securities before tax	$	(46)	$	(93)	$	(127)	$	(114)	Losses on securities transactions, net
Tax effect	10		21		33		24
Total net of tax	(36)		(72)		(94)		(90)
Unrealized losses on derivatives (cash flow hedges) before tax	(1,586)		(453)		(1,763)		(1,126)		Interest expense
Tax effect	459		129		506		320
Total net of tax	(1,127)		(324)		(1,257)		(806)
Defined benefit pension plan:
Amortization of actuarial net loss	(234)		(79)		(699)		(235)		*
Tax effect	63		23		184		69
Total net of tax	(171)		(56)		(515)		(166)
Total reclassifications, net of tax	$	(1,334)	$	(452)	$	(1,866)	$	(1,062)

* Amortization of net loss is included in the computation of net periodic pension cost recognized within other non-interest expense.

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Note 5. New Authoritative Accounting Guidance

New Accounting Guidance Adopted in 2020

Accounting Standards Update (ASU) No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" amends the accounting guidance on the impairment of financial instruments. The FASB issued an amendment to replace the incurred loss impairment methodology under prior accounting guidance with a new current expected credit loss (CECL) model. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Valley utilizes a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience for the remaining life of the loan. The measurement of expected credit loss under the CECL methodology is applicable to financial assets measured at amortized cost, including loans, held to maturity investments and purchased financial assets with credit deterioration (PCD) assets. It also applies to certain off-balance sheet credit exposures.

Valley adopted ASU No. 2016-13 on January 1, 2020 using the modified retrospective approach for all financial assets measured at amortized cost (except for PCD loans) and off-balance sheet credit exposures. Valley has established a governance structure to implement the CECL accounting guidance and has developed a methodology and set of models to be used. At adoption, Valley recorded a $100.4 million increase to its allowance for credit losses, including reserves of $92.5 million, $7.1 million and $793 thousand related to loans, unfunded credit commitments and held to maturity debt securities, respectively. Of the $92.5 million in loan reserves, $61.6 million represents PCD loan related reserves which were recognized through a gross-up that increases the amortized cost basis of loans with a corresponding increase to the allowance for credit losses, and therefore results in no impact to shareholders' equity. The remaining non-credit discount of $97.7 million related to PCD loans is accreted into interest income over the life of the loans at the effective interest rate effective January 1, 2020. The non-PCD loan related increase to the allowance for credit losses of $38.8 million, including the reserves for unfunded loan commitments and held to maturity debt securities, was offset in shareholders' equity and deferred tax assets.

For regulatory capital purposes, in connection with the Federal Reserve Board’s final interim rule as of April 3, 2020, 100 percent of the CECL Day 1 impact to shareholders' equity equaling $28.2 million after-tax will be deferred over a two-year period ending January 1, 2022, at which time it will be phased in on a pro-rata basis over a three-year period ending January 1, 2025. Additionally, 25 percent of the reserve build (i.e., provision for credit losses less net charge-offs) net of taxes will be phased in over the same time frame.

ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test guidance) to measure a goodwill impairment charge. Instead, an entity will be required to record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on Step 1 of the current guidance). In addition, ASU No. 2017-04 eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. However, an entity will be required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU No. 2017-04 was effective for Valley on January 1, 2020 and Valley applied this new guidance in its annual goodwill impairment test performed during the second quarter 2020.

New Accounting Guidance issued in 2020

ASU No. 2020-08, "Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs" provides clarification and affects the guidance previously issued by ASU No. 2017-08 “Receivables -Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” ASU No. 2020-08 clarifies that an entity should reevaluate whether a debt security with multiple call

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dates is within the scope of paragraph 310-20-35-33. For each reporting period, to the extent that the amortized cost basis of an individual callable debt security exceeds the amount repayable by the issuer at the next call date, the premium should be amortized to the next call date, unless the guidance to consider estimated prepayments is applied. ASU No. 2020-08 will be effective for Valley for the annual and interim periods beginning January 1, 2021 and early adoption is not permitted. This new guidance is not expected to have a significant impact on Valley’s consolidated financial statements.

ASU No. 2020-04, "Reference Rate Reform (Topic 848)" provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued, subject to meeting certain criteria. Under the new guidance, an entity can elect by accounting topic or industry subtopic to account for the modification of a contract affected by reference rate reform as a continuation of the existing contract, if certain conditions are met. In addition, the new guidance allows an entity to elect on a hedge-by-hedge basis to continue to apply hedge accounting for hedging relationships in which the critical terms change due to reference rate reform, if certain conditions are met. A one-time election to sell and/or transfer held-to-maturity debt securities that reference a rate affected by reference rate reform is also allowed. ASU No. 2020-04 became effective for all entities as of March 12, 2020 and will apply to all LIBOR reference rate modifications through December 31, 2022. Management is currently evaluating the impact of the ASU on Valley’s consolidated financial statements.

Note 6. Fair Value Measurement of Assets and Liabilities

ASC Topic 820, “Fair Value Measurements” establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

•Level 1    - Unadjusted exchange quoted prices in active markets for identical assets or liabilities, or identical liabilities traded as assets that the reporting entity has the ability to access at the measurement date.

•Level 2 - Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly (i.e., quoted prices on similar assets) for substantially the full term of the asset or liability.

•Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

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Assets and Liabilities Measured at Fair Value on a Recurring and Non-Recurring Basis

The following tables present the assets and liabilities that are measured at fair value on a recurring and nonrecurring basis by level within the fair value hierarchy as reported on the consolidated statements of financial condition at September 30, 2020 and December 31, 2019. The assets presented under “nonrecurring fair value measurements” in the tables below are not measured at fair value on an ongoing basis but are subject to fair value adjustments under certain circumstances (e.g., when an impairment loss is recognized). 

	September 30, 2020		Fair Value Measurements at Reporting Date Using:
			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Equity securities (1)	$	26,527	$	19,136	$	—	$	—
Available for sale:
U.S. Treasury securities	51,578		51,578		—		—
U.S. government agency securities	26,448		—		26,448		—
Obligations of states and political subdivisions	134,193		—		133,410		783
Residential mortgage-backed securities	1,233,436		—		1,233,436		—
Corporate and other debt securities	80,909		—		80,909		—
Total available for sale debt securities	1,526,564		51,578		1,474,203		783
Loans held for sale (2)	209,250		—		209,250		—
Other assets (3)	455,565		—		455,565		—
Total assets	$	2,217,906	$	70,714	$	2,139,018	$	783
Liabilities
Other liabilities (3)	$	190,049	$	—	$	190,049	$	—
Total liabilities	$	190,049	$	—	$	190,049	$	—
Non-recurring fair value measurements:
Collateral dependent loans	$	35,907	$	—	$	—	$	35,907
Loan servicing rights	14,000		—		—		14,000
Foreclosed assets	7,747		—		—		7,747
Total	$	57,654	$	—	$	—	$	57,654

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			Fair Value Measurements at Reporting Date Using:
	December 31, 2019		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Equity securities at fair value	$	41,410	$	41,410	$	—	$	—
Available for sale:
U.S. Treasury securities	50,943		50,943		—		—
U.S. government agency securities	29,243		—		29,243		—
Obligations of states and political subdivisions	170,051		—		169,371		680
Residential mortgage-backed securities	1,254,786		—		1,254,786		—
Trust preferred securities	—		—		—		—
Corporate and other debt securities	61,778		—		61,778		—
Total available for sale	1,566,801		50,943		1,515,178		680
Trading securities	—		—		—		—
Loans held for sale (2)	76,113		—		76,113		—
Other assets (3)	158,532		—		158,532		—
Total assets	$	1,842,856	$	92,353	$	1,749,823	$	680
Liabilities
Other liabilities (3)	$	43,926	$	—	$	43,926	$	—
Total liabilities	$	43,926	$	—	$	43,926	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans	$	39,075	$	—	$	—	$	39,075
Loan servicing rights	1,591		—		—		1,591
Foreclosed assets	10,807		—		—		10,807
Total	$	51,473	$	—	$	—	$	51,473

(1)Includes equity securities measured at net asset value (NAV) per share (or its equivalent) as a practical expedient totaling $7.4 million at September 30, 2020. These securities have not been classified in the fair value hierarchy.

(2)Represents residential mortgage loans originated for sale that are carried at fair value and had contractual unpaid principal balances totaling approximately $199.4 million and $74.5 million at September 30, 2020 and December 31, 2019, respectively.

(3)Derivative financial instruments are included in this category.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following valuation techniques were used for financial instruments measured at fair value on a recurring basis. All the valuation techniques described below apply to the unpaid principal balance, excluding any accrued interest or dividends at the measurement date. Interest income and expense are recorded within the consolidated statements of income depending on the nature of the instrument using the effective interest method based on acquired discount or premium.

Equity securities. The fair value of equity securities largely consists of a publicly traded mutual fund, a Community Reinvestment Act (CRA) investment fund that is carried at quoted prices in active markets and privately held CRA funds measured at NAV. 

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Available for sale securities. U.S. Treasury securities are reported at fair value utilizing Level 1 inputs. The majority of other investment securities are reported at fair value utilizing Level 2 inputs. The prices for these instruments are obtained through an independent pricing service or dealer market participants with whom Valley has historically transacted both purchases and sales of investment securities. Prices obtained from these sources include prices derived from market quotations and matrix pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. Management reviews the data and assumptions used in pricing the securities by its third-party provider to ensure the highest level of significant inputs are derived from market observable data. In addition, Valley reviews the volume and level of activity for all available for securities and attempts to identify transactions which may not be orderly or reflective of a significant level of activity and volume.

In calculating the fair value of one impaired special revenue bond (within obligations of states and political subdivisions in the table above) under Level 3, Valley prepared its best estimate of the present value of the cash flows to determine an internal price estimate. In determining the internal price, Valley utilized recent financial information and developments provided by the issuer, as well as other unobservable inputs which reflect Valley’s own assumptions about the inputs that market participants would use in pricing of the defaulted security. A quoted price received from an independent pricing service was weighted with the internal price estimate to determine the fair value of the instrument at September 30, 2020 and December 31, 2019.

Loans held for sale. Residential mortgage loans originated for sale are reported at fair value using Level 2 inputs. The fair values were calculated utilizing quoted prices for similar assets in active markets. The market prices represent a delivery price, which reflects the underlying price each institution would pay Valley for an immediate sale of an aggregate pool of mortgages. Non-performance risk did not materially impact the fair value of mortgage loans held for sale at September 30, 2020 and December 31, 2019 based on the short duration these assets were held, and the high credit quality of these loans.

Derivatives. Derivatives are reported at fair value utilizing Level 2 inputs. The fair values of Valley’s derivatives are determined using third-party prices that are based on discounted cash flow analysis using observed market inputs, such as the LIBOR and Overnight Index Swap rate curves. The fair value of mortgage banking derivatives, consisting of interest rate lock commitments to fund residential mortgage loans and forward commitments for the future delivery of such loans (including certain loans held for sale at September 30, 2020 and December 31, 2019), is determined based on the current market prices for similar instruments. The fair values of most of the derivatives incorporate credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, to account for potential nonperformance risk of Valley and its counterparties. The credit valuation adjustments were not significant to the overall valuation of Valley’s derivatives at September 30, 2020 and December 31, 2019.

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

The following valuation techniques were used for certain non-financial assets measured at fair value on a nonrecurring basis, including collateral dependent loans reported at the fair value of the underlying collateral, loan servicing rights and foreclosed assets, which are reported at fair value upon initial recognition or subsequent impairment as described below.

Collateral Dependent Loans. Collateral dependent loans are loans when foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and substantially all of the repayment is expected from the collateral. Collateral dependent loans are reported at the fair value of the underlying collateral. Collateral values are estimated using Level 3 inputs, consisting of individual third-party appraisals that may be adjusted based on certain discounting criteria. Certain real estate appraisals may be discounted based on specific market data by location and property type. At September 30, 2020, collateral dependent loans were individually re-measured and reported at fair value through direct loan charge-offs to the allowance for credit loan losses and/or a specific

17

valuation allowance allocation based on the fair value of the underlying collateral. At September 30, 2020, collateral dependent loans, primarily consisting of taxi medallion loans, with a total amortized cost of $99.3 million were reduced by specific valuation allowance allocations totaling $63.4 million to a reported total net carrying amount of $35.9 million.

Loan servicing rights. Fair values for each risk-stratified group of loan servicing rights are calculated using a fair value model from a third-party vendor that requires inputs that are both significant to the fair value measurement and unobservable (Level 3). The fair value model is based on various assumptions, including but not limited to, prepayment speeds, internal rate of return (discount rate), servicing cost, ancillary income, float rate, tax rate, and inflation. The prepayment speed and the discount rate are considered two of the most significant inputs in the model. At September 30, 2020, the fair value model used a blended prepayment speed (stated as constant prepayment rates) of 18.4 percent and a discount rate of 9.6 percent for the valuation of the loan servicing rights. A significant degree of judgment is involved in valuing the loan servicing rights using Level 3 inputs. The use of different assumptions could have a significant positive or negative effect on the fair value estimate. Impairment charges are recognized on loan servicing rights when the amortized cost of a risk-stratified group of loan servicing rights exceeds the estimated fair value. At September 30, 2020, certain loan servicing rights were re-measured at fair value totaling $14.0 million. See Note 9 for additional information.

Foreclosed assets. Certain foreclosed assets (consisting of other real estate owned and other repossessed assets included in other assets), upon initial recognition and transfer from loans, are re-measured and reported at fair value using Level 3 inputs, consisting of a third-party appraisal adjusted to the lower of cost or estimated fair value, less estimated cost to sell. When an asset is acquired, the excess of the loan balance over fair value, less estimated selling costs, is charged to the allowance for loan losses. If further declines in the estimated fair value of the asset occur, an asset is re-measured and reported at fair value through a write-down recorded in non-interest expense. There were no discount adjustments of the appraisals of foreclosed assets at September 30, 2020.

Other Fair Value Disclosures

ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.

The fair value estimates presented in the following table were based on pertinent market data and relevant information on the financial instruments available as of the valuation date. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire portfolio of financial instruments. Because no market exists for a portion of the financial instruments, fair value estimates may be based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For instance, Valley has certain fee-generating business lines (e.g., its mortgage servicing operation, trust and investment management departments) that were not considered in these estimates since these activities are not financial instruments. In addition, the tax implications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.

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The carrying amounts and estimated fair values of financial instruments not measured and not reported at fair value on the consolidated statements of financial condition at September 30, 2020 and December 31, 2019 were as follows: 

	Fair Value Hierarchy	September 30, 2020				December 31, 2019
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(in thousands)
Financial assets
Cash and due from banks	Level 1	$	276,120	$	276,120	$	256,264	$	256,264
Interest bearing deposits with banks	Level 1	654,591		654,591		178,423		178,423
Equity securities (1)	Level 3	2,499		2,499		—		—
Investment securities held to maturity:
U.S. Treasury securities	Level 1	138,224		146,429		138,352		144,113
U.S. government agency securities	Level 2	6,302		6,634		7,345		7,362
Obligations of states and political subdivisions	Level 2	464,051		479,824		500,705		513,607
Residential mortgage-backed securities	Level 2	1,491,808		1,528,703		1,620,119		1,629,572
Trust preferred securities	Level 2	37,341		30,000		37,324		31,382
Corporate and other debt securities	Level 2	32,750		33,381		32,250		32,684
Total investment securities held to maturity (2)		2,170,476		2,224,971		2,336,095		2,358,720
Net loans	Level 3	32,090,554		31,883,095		29,537,449		28,964,396
Accrued interest receivable	Level 1	136,058		136,058		105,637		105,637
Federal Reserve Bank and Federal Home Loan Bank stock (3)	Level 2	287,628		287,628		214,421		214,421
Financial liabilities
Deposits without stated maturities	Level 1	23,650,401		23,650,401		19,467,892		19,467,892
Deposits with stated maturities	Level 2	7,537,581		7,466,794		9,717,945		9,747,867
Short-term borrowings	Level 2	1,430,726		1,544,596		1,093,280		1,081,879
Long-term borrowings	Level 2	2,852,569		3,115,757		2,122,426		2,181,401
Junior subordinated debentures issued to capital trusts	Level 2	55,978		44,771		55,718		53,889
Accrued interest payable (4)	Level 1	21,756		21,756		33,066		33,066

(1)Represents equity securities without a readily determinable fair value measured at cost less impairment, if any.

(2)The carrying amount is presented gross without the allowance for credit losses.

(3)Included in other assets.

(4)Included in accrued expenses and other liabilities.

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Note 7. Investment Securities

Equity Securities

Equity securities carried at fair value totaled $29.0 million and $41.4 million at September 30, 2020 and December 31, 2019, respectively. At September 30, 2020, Valley's equity securities consisted of one publicly traded money market mutual fund, CRA investments both publicly traded and privately held and, to a lesser extent, equity securities without readily determinable fair values.

Available for Sale Debt Securities

The amortized cost, gross unrealized gains and losses and fair value of available for sale debt securities at September 30, 2020 and December 31, 2019 were as follows: 

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
September 30, 2020
U.S. Treasury securities	$	50,035	$	1,543	$	—	$	51,578
U.S. government agency securities	25,302		1,164		(18)		26,448
Obligations of states and political subdivisions:
Obligations of states and state agencies	58,807		1,151		(30)		59,928
Municipal bonds	73,063		1,276		(74)		74,265
Total obligations of states and political subdivisions	131,870		2,427		(104)		134,193
Residential mortgage-backed securities	1,193,052		41,326		(942)		1,233,436
Corporate and other debt securities	79,707		1,539		(337)		80,909
Total investment securities available for sale	$	1,479,966	$	47,999	$	(1,401)	$	1,526,564
December 31, 2019
U.S. Treasury securities	$	50,952	$	12	$	(21)	$	50,943
U.S. government agency securities	28,982		280		(19)		29,243
Obligations of states and political subdivisions:
Obligations of states and state agencies	78,116		540		(83)		78,573
Municipal bonds	90,662		902		(86)		91,478
Total obligations of states and political subdivisions	168,778		1,442		(169)		170,051
Residential mortgage-backed securities	1,248,814		11,234		(5,262)		1,254,786
Corporate and other debt securities	61,261		628		(111)		61,778
Total investment securities available for sale	$	1,558,787	$	13,596	$	(5,582)	$	1,566,801

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The age of unrealized losses and fair value of related securities available for sale at September 30, 2020 and December 31, 2019 were as follows: 

	Less than Twelve Months				More than Twelve Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
September 30, 2020
U.S. government agency securities	$	—	$	—	$	1,585	$	(18)	$	1,585	$	(18)
Obligations of states and political subdivisions:
Obligations of states and state agencies	1,319		(6)		1,023		(24)		2,342		(30)
Municipal bonds	6,767		(74)		—		—		6,767		(74)
Total obligations of states and political subdivisions	8,086		(80)		1,023		(24)		9,109		(104)
Residential mortgage-backed securities	111,973		(526)		33,346		(416)		145,319		(942)
Corporate and other debt securities	14,656		(337)		—		—		14,656		(337)
Total	$	134,715	$	(943)	$	35,954	$	(458)	$	170,669	$	(1,401)
December 31, 2019
U.S. Treasury securities	$	25,019	$	(21)	$	—	$	—	$	25,019	$	(21)
U.S. government agency securities	—		—		1,783		(19)		1,783		(19)
Obligations of states and political subdivisions:
Obligations of states and state agencies	18,540		(21)		8,755		(62)		27,295		(83)
Municipal bonds	—		—		13,177		(86)		13,177		(86)
Total obligations of states and political subdivisions	18,540		(21)		21,932		(148)		40,472		(169)
Residential mortgage-backed securities	240,412		(1,194)		282,798		(4,068)		523,210		(5,262)
Corporate and other debt securities	5,139		(111)		—		—		5,139		(111)
Total	$	289,110	$	(1,347)	$	306,513	$	(4,235)	$	595,623	$	(5,582)

Within the available for sale debt securities portfolio, the total number of security positions in an unrealized loss position was 64 and 182 at September 30, 2020 and December 31, 2019, respectively.

As of September 30, 2020, the fair value of available for sale debt securities that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law, was $868.9 million.

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The contractual maturities of available for sale debt securities at September 30, 2020 are set forth in the following table. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties. Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary.

	September 30, 2020
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	20,975	$	20,991
Due after one year through five years	92,873		95,436
Due after five years through ten years	107,004		108,746
Due after ten years	66,062		67,955
Residential mortgage-backed securities	1,193,052		1,233,436
Total investment securities available for sale	$	1,479,966	$	1,526,564

Actual maturities of available for sale debt securities may differ from those presented above since certain obligations provide the issuer the right to call or prepay the obligation prior to scheduled maturity without penalty.

The weighted average remaining expected life for residential mortgage-backed securities available for sale was 3.9 years at September 30, 2020.

Impairment Analysis of Available For Sale Debt Securities

Valley's available for sale debt securities portfolio includes corporate bonds and special revenue bonds, among other securities. These type of securities may pose a higher risk of future impairment charges by Valley as a result of the unpredictable nature of the U.S. economy and its potential negative effect on the future performance of the security issuers, including due to the economic effects of COVID-19.

Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses on a quarterly basis. In performing an assessment of whether any decline in fair value is due to a credit loss, Valley considers the extent to which the fair value is less than the amortized cost, changes in credit ratings, any adverse economic conditions, as well as all relevant information at the individual security level such as credit deterioration of the issuer or collateral underlying the security. In assessing the impairment, Valley compares the present value of cash flows expected to be collected with the amortized cost basis of the security. If it is determined that the decline in fair value was due to credit losses, an allowance for credit losses is recorded, limited to the amount the fair value is less than amortized cost basis. The non-credit related decrease in the fair value, such as a decline due to changes in market interest rates, is recorded in other comprehensive income, net of tax. Valley also assesses the intent to sell the securities (as well as the likelihood of a near-term recovery). If Valley intends to sell an available for sale debt security or it is more likely than not that Valley will be required to sell the security before recovery of its amortized cost basis, the debt security is written down to its fair value and the write down is charged to the debt security’s fair value at the reporting date with any incremental impairment reported in earnings.

The obligations of states and political subdivisions classified as available for sale include special revenue bonds which had an aggregate amortized cost and fair value of $70.6 million and $71.9 million, respectively, at September 30, 2020. The gross unrealized losses associated with the special revenue bonds as of September 30, 2020 were not material. Approximately 41 percent of the special revenue bonds were issued by the states of (or municipalities within) Utah and Illinois. As part of Valley’s pre-purchase analysis and on-going quarterly assessment of impairment of the obligations of states and political subdivisions, the Credit Risk Management Department conducts a financial analysis and risk rating assessment of each security issuer based on the issuer’s most recently issued financial statements and other publicly available information. These investments are a mix of municipal bonds with investment grade ratings or non-rated revenue bonds paying in accordance with their contractual terms. The vast majority of the bonds not rated by the rating agencies are state housing finance agency

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revenue bonds secured by Ginnie Mae securities that are commonly referred to as Tax Exempt Mortgage Securities (TEMS). Valley continues to monitor the special revenue bond portfolio as part of its quarterly impairment analysis.

Valley has evaluated available for sale debt securities that are in an unrealized loss position as of September 30, 2020 included in the table above and has determined that the declines in fair value are mainly attributable to market volatility, not credit quality or other factors. Based on a comparison of the present value of expected cash flows to the amortized cost, management recognized no impairment during the three and nine months ended September 30, 2020 and, as a result, there was no allowance for credit losses for available for sale debt securities at September 30, 2020.

During the nine months ended September 30, 2019, Valley recognized a $2.9 million other-than-temporary credit impairment charge on one special revenue bond classified as available for sale (within the obligations of states and state agencies in the tables above). The credit impairment was due to severe credit deterioration disclosed by the issuer in the second quarter 2019, as well as the issuer's default on its contractual payment. At September 30, 2020, the non-accruing impaired security had an adjusted amortized cost and fair value of $680 thousand and $783 thousand, respectively.

Valley discontinues the recognition of interest on debt securities if the securities meet both of the following criteria: (i) regularly scheduled interest payments have not been paid or have been deferred by the issuer, and (ii) full collection of all contractual principal and interest payments is not deemed to be the most likely outcome, resulting in the recognition of other-than-temporary impairment of the security.

Held to Maturity Debt Securities

The amortized cost, gross unrealized gains and losses and fair value of debt securities held to maturity at September 30, 2020 and December 31, 2019 were as follows: 

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
September 30, 2020
U.S. Treasury securities	$	138,224	$	8,205	$	—	$	146,429
U.S. government agency securities	6,302		332		—		6,634
Obligations of states and political subdivisions:
Obligations of states and state agencies	271,038		9,040		(176)		279,902
Municipal bonds	193,013		6,909		—		199,922
Total obligations of states and political subdivisions	464,051		15,949		(176)		479,824
Residential mortgage-backed securities	1,491,808		37,819		(924)		1,528,703
Trust preferred securities	37,341		52		(7,393)		30,000
Corporate and other debt securities	32,750		637		(6)		33,381
Total investment securities held to maturity	$	2,170,476	$	62,994	$	(8,499)	$	2,224,971
December 31, 2019
U.S. Treasury securities	$	138,352	$	5,761	$	—	$	144,113
U.S. government agency securities	7,345		58		(41)		7,362
Obligations of states and political subdivisions:
Obligations of states and state agencies	297,454		7,745		(529)		304,670
Municipal bonds	203,251		5,696		(10)		208,937
Total obligations of states and political subdivisions	500,705		13,441		(539)		513,607
Residential mortgage-backed securities	1,620,119		14,803		(5,350)		1,629,572
Trust preferred securities	37,324		39		(5,981)		31,382
Corporate and other debt securities	32,250		454		(20)		32,684
Total investment securities held to maturity	$	2,336,095	$	34,556	$	(11,931)	$	2,358,720

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The age of unrealized losses and fair value of related debt securities held to maturity at September 30, 2020 and December 31, 2019 were as follows: 

	Less than Twelve Months				More than Twelve Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
September 30, 2020
Obligations of states and political subdivisions:
Obligations of states and state agencies	$	5,493	$	(176)	$	—	$	—	$	5,493	$	(176)
Total obligations of states and political subdivisions	5,493		(176)		—		—		5,493		(176)
Residential mortgage-backed securities	237,070		(919)		2,677		(5)		239,747		(924)
Trust preferred securities	—		—		28,595		(7,393)		28,595		(7,393)
Corporate and other debt securities	7,494		(6)		—		—		7,494		(6)
Total	$	250,057	$	(1,101)	$	31,272	$	(7,398)	$	281,329	$	(8,499)
December 31, 2019
U.S. government agency securities	$	5,183	$	(41)	$	—	$	—	$	5,183	$	(41)
Obligations of states and political subdivisions:
Obligations of states and state agencies	11,178		(55)		32,397		(474)		43,575		(529)
Municipal bonds	—		—		798		(10)		798		(10)
Total obligations of states and political subdivisions	11,178		(55)		33,195		(484)		44,373		(539)
Residential mortgage-backed securities	307,885		(1,387)		254,915		(3,963)		562,800		(5,350)
Trust preferred securities	—		—		29,990		(5,981)		29,990		(5,981)
Corporate and other debt securities	—		—		4,980		(20)		4,980		(20)
Total	$	324,246	$	(1,483)	$	323,080	$	(10,448)	$	647,326	$	(11,931)

Within the held to maturity portfolio, the total number of security positions in an unrealized loss position was 20 and 82 at September 30, 2020 and December 31, 2019, respectively.

As of September 30, 2020, the fair value of debt securities held to maturity that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law, was $1.0 billion.

The contractual maturities of investments in debt securities held to maturity at September 30, 2020 are set forth in the table below. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties. Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary.  

	September 30, 2020
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	113,188	$	113,628
Due after one year through five years	201,101		213,801
Due after five years through ten years	162,911		168,821
Due after ten years	201,468		200,018
Residential mortgage-backed securities	1,491,808		1,528,703
Total investment securities held to maturity	$	2,170,476	$	2,224,971

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Actual maturities of debt securities may differ from those presented above since certain obligations provide the issuer the right to call or prepay the obligation prior to scheduled maturity without penalty.

The weighted-average remaining expected life for residential mortgage-backed securities held to maturity was 2.5 years at September 30, 2020.

Credit Quality Indicators

Valley monitors the credit quality of the held to maturity debt securities through the use of the most current credit ratings from external rating agencies. The following table summarizes the amortized cost of held to maturity debt securities by external credit rating at September 30, 2020 and December 31, 2019.

	AAA/AA/A Rated		BBB rated		Non-investment grade rated		Non-rated		Total
	(in thousands)
September 30, 2020
U.S. Treasury securities	$	138,224	$	—	$	—	$	—	$	138,224
U.S. government agency securities	6,302		—		—		—		6,302
Obligations of states and political subdivisions:
Obligations of states and state agencies	233,581		—		5,669		31,788		271,038
Municipal bonds	171,766		—		—		21,247		193,013
Total obligations of states and political subdivisions	405,347		—		5,669		53,035		464,051
Residential mortgage-backed securities	1,491,808		—		—		—		1,491,808
Trust preferred securities	—		—		—		37,341		37,341
Corporate and other debt securities	—		5,000		—		27,750		32,750
Total investment securities held to maturity	$	2,041,681	$	5,000	$	5,669	$	118,126	$	2,170,476
December 31, 2019
U.S. Treasury securities	$	138,352	$	—	$	—	$	—	$	138,352
U.S. government agency securities	7,345		—		—		—		7,345
Obligations of states and political subdivisions:
Obligations of states and state agencies	248,533		5,722		—		43,199		297,454
Municipal bonds	202,642		—		—		609		203,251
Total obligations of states and political subdivisions	451,175		5,722		—		43,808		500,705
Residential mortgage-backed securities	1,620,119		—		—		—		1,620,119
Trust preferred securities	—		—		—		37,324		37,324
Corporate and other debt securities	—		5,000		—		27,250		32,250
Total investment securities held to maturity	$	2,216,991	$	10,722	$	—	$	108,382	$	2,336,095

Obligations of states and political subdivisions include municipal bonds and revenue bonds issued by various municipal corporations. At September 30, 2020, most of the obligations of states and political subdivisions were rated investment grade and a large portion of the "non-rated" category included TEMS securities secured by Ginnie Mae securities. Trust preferred securities consist of non-rated single-issuer securities, issued by bank holding companies. Corporate bonds consist of debt primarily issued by banks.

Allowance for Credit Losses for Held to Maturity Debt Securities

Valley has a zero loss expectation for certain securities within the held to maturity portfolio, and therefore it is not required to estimate an allowance for credit losses related to these securities under the CECL standard. After an evaluation of qualitative factors, Valley identified the following securities types which it believes qualify for this exclusion: U.S. Treasury securities, U.S. agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and collateralized municipal bonds called TEMS.

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To measure the expected credit losses on held to maturity debt securities that have loss expectations, Valley estimates the expected credit losses using a discounted cash flow model developed by a third-party. Assumptions used in the model for pools of securities with common risk characteristics include the historical lifetime probability of default and severity of loss in the event of default, with the model incorporating several economic cycles of loss history data to calculate expected credit losses given default at the individual security level. The model is adjusted for a probability weighted multi-scenario economic forecast to estimate future credit losses. Valley uses a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience for the remaining life of the investment security. The economic forecast methodology and governance for debt securities is aligned with Valley's economic forecast used for the loan portfolio discussed in more detail in Note 8. Accrued interest receivable is excluded from the estimate of credit losses.

At September 30, 2020, held to maturity debt securities were carried net of allowance for credit losses totaling $1.5 million. Valley recorded a negative (credit) provision for credit losses of $112 thousand during the three months ended September 30, 2020 and a net provision for credit losses of $688 thousand for the nine months ended September 30, 2020. There were no net charge-offs of debt securities in the respective periods.

Note 8. Loans and Allowance for Credit Losses for Loans

The detail of the loan portfolio as of September 30, 2020 and December 31, 2019 was as follows: 

	September 30, 2020		December 31, 2019
	(in thousands)
Loans:
Commercial and industrial *	$	6,903,345	$	4,825,997
Commercial real estate:
Commercial real estate	16,815,587		15,996,741
Construction	1,720,775		1,647,018
Total commercial real estate loans	18,536,362		17,643,759
Residential mortgage	4,284,595		4,377,111
Consumer:
Home equity	457,083		487,272
Automobile	1,341,659		1,451,623
Other consumer	892,542		913,446
Total consumer loans	2,691,284		2,852,341
Total loans	$	32,415,586	$	29,699,208

*Includes $2.3 billion of loans originated under the Paycheck Protection Program (PPP), net of unearned fees totaling $54.4 million at September 30, 2020.

Total loans includes net unearned discounts and deferred loan fees of $116.2 million at September 30, 2020 and net unearned premiums and deferred loan costs of $12.6 million at December 31, 2019. Net unearned discounts and deferred loan fees at September 30, 2020 include the non-credit discount on PCD loans and net unearned fees related to PPP loans.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $117.9 million and $86.3 million at September 30, 2020 and December 31, 2019, respectively, and is presented separately in the consolidated statements of financial condition.

Valley transferred and sold approximately $30.0 million and $303.0 million of residential mortgage loans from the loan portfolio to loans held for sale during the nine months ended September 30, 2020 and 2019, respectively.

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Excluding the loan transfers, there were no other sales of loans from the held for investment portfolio during the nine months ended September 30, 2020 and 2019.

Credit Risk Management

For all of its loan types, Valley adheres to a credit policy designed to minimize credit risk while generating the maximum income given the level of risk appetite. Management reviews and approves these policies and procedures on a regular basis with subsequent approval by the Board of Directors annually. Credit authority relating to a significant dollar percentage of the overall portfolio is centralized and controlled by the Credit Risk Management Division and by the Credit Committee. A reporting system supplements the management review process by providing management with frequent reports concerning loan production, loan quality, internal loan classification, concentrations of credit, loan delinquencies, non-performing, and potential problem loans. Loan portfolio diversification is an important factor utilized by Valley to manage its risk across business sectors and through cyclical economic circumstances. See Valley’s Annual Report on Form 10-K for the year ended December 31, 2019 for further details.

Credit Quality

Loans are deemed to be past due when the contractually required principal and interest payments have not been received as they become due. Loans are placed on non-accrual status generally, when they become 90 days past due and the full and timely collection of principal and interest becomes uncertain. When a loan is placed on non-accrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current income. Cash collections from non-accrual loans are generally applied against principal, and no interest income is recognized on these loans until the principal balance has been determined to be fully collectible.

A loan in which the borrowers’ obligation has not been released in bankruptcy courts may be restored to an accruing basis when it becomes well secured and is in the process of collection, or all past due amounts become current under the loan agreement and collectability is no longer doubtful.

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The following table presents past due, current and non-accrual loans without an allowance for credit losses by loan portfolio class (including PCD loans) at September 30, 2020.

	Past Due and Non-Accrual Loans
	30-59  Days  Past Due Loans		60-89  Days  Past Due Loans		90 Days or More Past Due Loans		Non-Accrual Loans		Total Past Due Loans		Current Loans		Total Loans		Non-Accrual Loans Without Allowance for Credit Losses
	(in thousands)
September 30, 2020
Commercial and industrial	$	6,587	$	3,954	$	6,759	$	115,667	$	132,967	$	6,770,378	$	6,903,345	$	16,812
Commercial real estate:
Commercial real estate	26,038		610		1,538		41,627		69,813		16,745,774		16,815,587		35,798
Construction	142		—		—		2,497		2,639		1,718,136		1,720,775		2,405
Total commercial real estate loans	26,180		610		1,538		44,124		72,452		18,463,910		18,536,362		38,203
Residential mortgage	22,528		3,760		891		23,877		51,056		4,233,539		4,284,595		12,356
Consumer loans:
Home equity	1,281		299		—		6,969		8,549		448,534		457,083		70
Automobile	4,797		808		538		472		6,615		1,335,044		1,341,659		—
Other consumer	2,901		245		215		—		3,361		889,181		892,542		—
Total consumer loans	8,979		1,352		753		7,441		18,525		2,672,759		2,691,284		70
Total	$	64,274	$	9,676	$	9,941	$	191,109	$	275,000	$	32,140,586	$	32,415,586	$	67,441

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The following table presents past due, non-accrual and current loans by loan portfolio class at December 31, 2019. At December 31, 2019, purchased credit-impaired (PCI) loans were excluded from past due and non-accrual loans reported because they continued to earn interest income from the accretable yield at the pool level. The PCI loan pools are accounted for as PCD loans (on a loan level basis with a related allowance for credit losses) under the CECL standard adopted at January 1, 2020 and reported in the past due loans and non-accrual loans in the tables above at September 30, 2020.

	Past Due and Non-Accrual Loans
	30-59 Days Past Due Loans		60-89  Days Past Due Loans		90 Days or More Past Due Loans		Non-Accrual Loans		Total Past Due Loans		Current Non-PCI Loans		PCI Loans
	(in thousands)
December 31, 2019
Commercial and industrial	$	11,700	$	2,227	$	3,986	$	68,636	$	86,549	$	4,057,434	$	682,014
Commercial real estate:
Commercial real estate	2,560		4,026		579		9,004		16,169		10,886,724		5,093,848
Construction	1,486		1,343		—		356		3,185		1,492,532		151,301
Total commercial real estate loans	4,046		5,369		579		9,360		19,354		12,379,256		5,245,149
Residential mortgage	17,143		4,192		2,042		12,858		36,235		3,760,707		580,169
Consumer loans:
Home equity	1,051		80		—		1,646		2,777		373,243		111,252
Automobile	11,482		1,581		681		334		14,078		1,437,274		271
Other consumer	1,171		866		30		224		2,291		900,411		10,744
Total consumer loans	13,704		2,527		711		2,204		19,146		2,710,928		122,267
Total	$	46,593	$	14,315	$	7,318	$	93,058	$	161,284	$	22,908,325	$	6,629,599

Credit quality indicators. Valley utilizes an internal loan classification system as a means of reporting problem loans within commercial and industrial, commercial real estate, and construction loan portfolio classes. Under Valley’s internal risk rating system, loan relationships could be classified as "Pass," "Special Mention," "Substandard," "Doubtful," and "Loss." Substandard loans include loans that exhibit well-defined weakness and are characterized by the distinct possibility that Valley will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, based on currently existing facts, conditions and values, highly questionable and improbable. Loans classified as Loss are those considered uncollectible with insignificant value and are charged-off immediately to the allowance for loan losses, and, therefore, not presented in the table below. Loans that do not currently pose a sufficient risk to warrant classification in one of the aforementioned categories but pose weaknesses that deserve management’s close attention are deemed Special Mention. Loans rated as Pass do not currently pose any identified risk and can range from the highest to average quality, depending on the degree of potential risk. Risk ratings are updated any time the situation warrants.

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The following table presents the internal loan classification risk by loan portfolio class by origination year (including PCD loans) based on the most recent analysis performed at September 30, 2020:

	Term Loans
	Amortized Cost Basis by Origination Year
September 30, 2020	2020		2019		2018		2017		2016		Prior to 2016		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Commercial and industrial
Risk Rating:
Pass	$	2,656,655	$	609,142	$	523,833	$	246,684	$	185,298	$	804,896	$	1,613,011	$	417	$	6,639,936
Special Mention	724		10,634		11,786		10,236		11,310		14,895		44,412		68		104,065
Substandard	5,411		3,181		2,780		1,789		4,095		26,720		18,092		24		62,092
Doubtful	—		5,207		7		17,162		2,632		72,244		—		—		97,252
Total commercial and industrial	$	2,662,790	$	628,164	$	538,406	$	275,871	$	203,335	$	918,755	$	1,675,515	$	509	$	6,903,345
Commercial real estate
Risk Rating:
Pass	$	2,456,797	$	3,236,056	$	2,360,488	$	1,993,600	$	1,929,677	$	4,281,267	$	189,008	$	15,626	$	16,462,519
Special Mention	23,864		—		26,028		7,197		42,882		86,098		3,481		—		189,550
Substandard	17,539		9,450		24,168		22,014		10,329		78,322		—		—		161,822
Doubtful	—		—		—		787		—		909		—		—		1,696
Total commercial real estate	$	2,498,200	$	3,245,506	$	2,410,684	$	2,023,598	$	1,982,888	$	4,446,596	$	192,489	$	15,626	$	16,815,587
Construction
Risk Rating:
Pass	$	105,422	$	157,407	$	123,416	$	16,196	$	47,202	$	60,663	$	1,162,297	$	—	$	1,672,603
Special Mention	—		—		—		—		10,058		—		32,407		—		42,465
Substandard	—		31		246		2,628		2,422		380		—		—		5,707
Total construction	$	105,422	$	157,438	$	123,662	$	18,824	$	59,682	$	61,043	$	1,194,704	$	—	$	1,720,775

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For residential mortgages, automobile, home equity and other consumer loan portfolio classes, Valley also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the amortized cost in those loan classes (including PCD loans) based on payment activity by origination year as of September 30, 2020.

	Term Loans
	Amortized Cost Basis by Origination Year
September 30, 2020	2020		2019		2018		2017		2016		Prior to 2016		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Residential mortgage
Performing	$	560,875	$	807,219	$	778,367	$	645,289	$	407,412	$	1,019,903	$	52,783	$	—	$	4,271,848
90 days or more past due	—		1,459		2,947		2,849		3,895		1,597		—		—		12,747
Total residential mortgage	$	560,875	$	808,678	$	781,314	$	648,138	$	411,307	$	1,021,500	$	52,783	$	—	$	4,284,595
Consumer loans
Home equity
Performing	$	6,436	$	12,015	$	13,310	$	10,178	$	6,505	$	17,626	$	336,434	$	52,986	$	455,490
90 days or more past due	—		—		—		—		25		111		617		840		1,593
Total home equity	6,436		12,015		13,310		10,178		6,530		17,737		337,051		53,826		457,083
Automobile
Performing	292,584		479,860		303,799		175,359		62,193		26,843		—		—		1,340,638
90 days or more past due	40		304		270		246		16		145		—		—		1,021
Total automobile	292,624		480,164		304,069		175,605		62,209		26,988		—		—		1,341,659
Other Consumer
Performing	5,061		5,751		11,529		1,254		1,093		6,387		860,895		—		891,970
90 days or more past due	—		—		8		—		—		20		136		408		572
Total other consumer	5,061		5,751		11,537		1,254		1,093		6,407		861,031		408		892,542
Total Consumer	$	304,121	$	497,930	$	328,916	$	187,037	$	69,832	$	51,132	$	1,198,082	$	54,234	$	2,691,284

The following table presents the credit exposure by internally assigned risk rating by class of loans (excluding PCI loans) based on the most recent analysis performed at December 31, 2019: 

Credit exposure— by internally assigned risk rating			Special						Total Non-PCI
	Pass		Mention		Substandard		Doubtful		Loans
	(in thousands)
December 31, 2019
Commercial and industrial	$	3,982,453	$	33,718	$	66,511	$	61,301	$	4,143,983
Commercial real estate	10,781,587		77,884		42,560		862		10,902,893
Construction	1,487,877		7,486		354		—		1,495,717
Total	$	16,251,917	$	119,088	$	109,425	$	62,163	$	16,542,593

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For residential mortgages, automobile, home equity and other consumer loan portfolio classes (excluding PCI loans), Valley also evaluates credit quality based on the aging status of the loan, which is presented above, and by payment activity. The following table presents the recorded investment in those loan classes based on payment activity as of December 31, 2019:

Credit exposure— by payment activity	Performing Loans		Non-Performing Loans		Total Non-PCI Loans
	(in thousands)
December 31, 2019
Residential mortgage	$	3,784,084	$	12,858	$	3,796,942
Home equity	374,374		1,646		376,020
Automobile	1,451,018		334		1,451,352
Other consumer	902,478		224		902,702
Total	$	6,511,954	$	15,062	$	6,527,016

The following table summarizes information pertaining to loans that were identified as PCI loans by class based on individual loan payment activity as of December 31, 2019:  

Credit exposure— by payment activity	Performing Loans		Non-Performing Loans		Total Non-PCI Loans
	(in thousands)
December 31, 2019
Commercial and industrial	$	653,997	$	28,017	$	682,014
Commercial real estate	5,065,388		28,460		5,093,848
Construction	148,692		2,609		151,301
Residential mortgage	571,006		9,163		580,169
Consumer	120,356		1,911		122,267
Total	$	6,559,439	$	70,160	$	6,629,599

Troubled debt restructured loans. From time to time, Valley may extend, restructure, or otherwise modify the terms of existing loans, on a case-by-case basis, to remain competitive and retain certain customers, as well as assist other customers who may be experiencing financial difficulties. If the borrower is experiencing financial difficulties and a concession has been made at the time of such modification, the loan is classified as a troubled debt restructured loan (TDR). At the adoption of ASU 2016-13, Valley was not required to reassess whether modifications to individual PCI loans prior to January 1, 2020 met the TDR loan criteria.

The majority of the concessions made for TDRs involve lowering the monthly payments on loans through either a reduction in interest rate below a market rate, an extension of the term of the loan without a corresponding adjustment to the risk premium reflected in the interest rate, or a combination of these two methods. The concessions rarely result in the forgiveness of principal or accrued interest. In addition, Valley frequently obtains additional collateral or guarantor support when modifying such loans. If the borrower has demonstrated performance under the previous terms of the loan and Valley’s underwriting process shows the borrower has the capacity to continue to perform under the restructured terms, the loan will continue to accrue interest. Non-accruing restructured loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible.

Performing TDRs (not reported as non-accrual loans) totaled $58.1 million and $73.0 million as of September 30, 2020 and December 31, 2019, respectively. Non-performing TDRs totaled $96.8 million and $65.1 million as of September 30, 2020 and December 31, 2019, respectively.

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The following table presents the pre- and post-modification amortized cost of loans by loan class modified as TDRs (excluding PCI loans prior to the adoption of ASU 2016-13) during the three and nine months ended September 30, 2020 and 2019. Post-modification amounts are presented as of September 30, 2020 and 2019.

	Three Months Ended September 30,
	2020					2019
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Amortized Carrying Amount		Post-Modification Amortized Carrying Amount		Number of Contracts	Pre-Modification Amortized Carrying Amount		Post-Modification Amortized Carrying Amount
	($ in thousands)
Commercial and industrial	28	$	31,237	$	30,938	53	$	42,902	$	41,772
Commercial real estate	2	4,249		4,240		1	75		75
Residential mortgage	1	247		247		—	—		—
Consumer	1	72		72		1	19		19
Total	32	$	35,805	$	35,497	55	$	42,996	$	41,866

	Nine Months Ended September 30,
	2020					2019
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Amortized Carrying Amount		Post-Modification Amortized Carrying Amount		Number of Contracts	Pre-Modification Amortized Carrying Amount		Post-Modification Amortized Carrying Amount
	($ in thousands)
Commercial and industrial	33	$	40,537	$	38,204	104	$	78,601	$	72,183
Commercial real estate	4	8,996		9,000		3	4,740		4,699
Residential mortgage	1	247		247		1	155		154
Consumer	1	72		72		1	19		19
Total	39	$	49,852	$	47,523	109	$	83,515	$	77,055

The total TDRs presented in the above table had allocated reserves for loan losses of $18.7 million and $29.6 million at September 30, 2020 and 2019, respectively. There were $1.9 million and $5.6 million of partial charge-offs related to TDRs for the three and nine months ended September 30, 2020, respectively. There were no partial charge-offs related to TDR loan modifications during three months ended September 30, 2020 and $2.0 million of partial charge-offs related to TDRs for the nine months ended September 30, 2019, respectively. Valley did not extend any commitments to lend additional funds to borrowers whose loans have been modified as TDRs during the three and nine months ended September 30, 2020 and 2019.

Loans modified as TDRs (excluding PCI loan modifications prior to the adoption of ASU 2016-13) within the previous 12 months and for which there was a payment default (90 or more days past due) for the three and nine months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,
	2020			2019
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Amortized Cost		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial and industrial	30	$	17,496	1	$	604
Residential mortgage	—	—		1	154
Total	30	$	17,496	2	$	758

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	Nine Months Ended September 30,
	2020			2019
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Amortized Cost		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial and industrial	35	$	20,099	19	$	12,235
Commercial real estate	—	—		1	283
Residential mortgage	—	—		3	369
Consumer	1	18		1	18
Total	36	$	20,117	24	$	12,905

In response to the COVID-19 pandemic and its economic impact to certain customers, Valley implemented short-term loan modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that were insignificant, when requested by customers. These modifications complied with the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide temporary payment relief to those borrowers directly impacted by COVID-19 who were not more than 30 days past due as of December 31, 2019. Generally, the modification terms allow for a deferral of payments for up to 90 days, which Valley may extend for an additional 90 days, for a maximum of 180 days on a cumulative and successive basis. As of September 30, 2020, Valley had approximately 1,400 of these loans with total outstanding balances of $1.1 billion remaining in their payment deferral period under short-term modifications. Under the applicable guidance, none of these loans were considered TDRs as of September 30, 2020.

Loans in Process of Foreclosure. Other real estate owned (OREO) totaled $7.7 million and $9.4 million at September 30, 2020 and December 31, 2019, respectively. OREO included foreclosed residential real estate properties totaling $799 thousand and $2.1 million at September 30, 2020 and December 31, 2019, respectively. Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $2.0 million and $2.8 million at September 30, 2020 and December 31, 2019, respectively.

Allowance for Credit Losses for Loans

The allowance for credit losses for loans under the new CECL standard adopted on January 1, 2020, consisted of the allowance for loan losses and the allowance for unfunded credit commitments. Prior periods reflect the allowance for credit losses for loans under the incurred loss model.

The following table summarizes the allowance for credit losses for loans at September 30, 2020 and December 31, 2019: 

	September 30, 2020		December 31, 2019
	(in thousands)
Components of allowance for credit losses for loans:
Allowance for loan losses	$	325,032	$	161,759
Allowance for unfunded credit commitments	10,296		2,845
Total allowance for credit losses for loans	$	335,328	$	164,604

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The following table summarizes the provision for credit losses for loans for the periods indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Components of provision for credit losses for loans:
Provision for loan losses	$	30,833	$	8,757	$	105,709	$	20,319
Provision for unfunded credit commitments	187		(57)		350		(1,519)
Total provision for credit losses for loans	$	31,020	$	8,700	$	106,059	$	18,800

Allowance for Loan Losses

The allowance for loan losses is a valuation account that is deducted from loans' amortized cost basis to present the net amount expected to be collected on loans. Valley's methodology to establish the allowance for loan losses has two basic components: (1) a collective (pooled) reserve component for estimated lifetime expected credit losses for pools of loans that share similar risk characteristics and (2) an individual reserve component for loans that do not share common risk characteristics.

Reserves for loans that share common risk characteristics. In estimating the component of the allowance on a collective basis, Valley uses a transition matrix model which calculates an expected life of loan loss percentage for each loan pool by generating probability of default and loss given default metrics. The metrics are based on the migration of loans from performing to loss by credit quality rating or delinquency categories using historical life-of-loan analysis periods for each loan portfolio pool, and the severity of loss, based on the aggregate net lifetime losses incurred. The model's expected losses based on loss history are adjusted for qualitative factors. Among other things, these adjustments include and account for differences in: (i) lending policies and procedures, (ii) current business conditions and economic developments that affect the loan collectability, (iii) concentration risks by size, type, and geography, (iv) the potential volume and migration of loan forbearances to non-performing status, and (v) the effect of external factors such as legal and regulatory requirements on the level of estimated credit losses in the existing portfolio.

Valley utilizes a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience for the remaining life of the loan. The forecasts consist of a multi-scenario economic forecast model to estimate future credit losses that is governed by a cross-functional committee. The committee meets each quarter to determine which economic scenarios developed by Moody's will be incorporated into the model, as well as the relative probability weightings of the selected scenarios, based upon all readily available information. The model projects economic variables under each scenario based on detailed statistical analyses. Valley has identified and selected key variables that most closely correlated to its historical credit performance, which include: GDP, unemployment and the Case-Shiller Home Price Index.

Reserves for loans that that do not share common risk characteristics. Valley measures specific reserves for individual loans that do not share common risk characteristics with other loans, consisting of collateral dependent, TDR, and expected TDR loans, based on the amount of lifetime expected credit losses calculated on those loans and charge-offs of those amounts determined to be uncollectible. Factors considered by Valley in measuring the extent of expected credit loss include payment status, collateral value, borrower financial condition, guarantor support and the probability of collecting scheduled principal and interest payments when due. If repayment is based upon future expected cash flows, the present value of the expected future cash flows discounted at the loan’s original effective interest rate is compared to the carrying value of the loan, and any shortfall is recorded as the allowance for credit losses. The effective interest rate used to discount expected cash flows is adjusted to incorporate expected prepayments, if applicable.

When Valley determines that foreclosure is probable, collateral dependent loan balances are written down to the estimated current fair value (less estimated selling costs) of each loan’s underlying collateral resulting in an immediate charge-off to the allowance, excluding any consideration for personal guarantees that may be pursued in

35

the Bank’s collection process. Valley elected a practical expedient to use the estimated current fair value (less estimated selling costs) of the collateral to measure expected credit losses on collateral dependent loans when foreclosure is not probable.

The following table presents collateral dependent loans by class as of September 30, 2020:

	September 30, 2020
	(in thousands)
Commercial and industrial	$	115,877
Commercial real estate:
Commercial real estate	44,638
Construction	2,405
Total commercial real estate loans	47,043
Residential mortgage	28,856
Home equity	88
Total	$	191,864

Commercial and industrial loans are primarily collateralized by taxi medallions in the table above. Commercial real estate loans are collateralized by real estate and construction loans are generally secured by the real estate to be developed and may also be secured by additional real estate to mitigate the risk. Residential and home equity loans are collateralized by residential real estate.

Allowance for Unfunded Credit Commitments

The allowance for unfunded credit commitments generally consists of undisbursed non-cancellable lines of credit, new loan commitments and commercial letters of credit valued using a similar methodology as used for loans. Management's estimate of expected losses inherent in these off-balance sheet credit exposures also incorporates estimated usage factors over the commitment's contractual period or an expected pull-through rate for new loan commitments. The allowance for unfunded credit commitments totaling $10.3 million at September 30, 2020 is included in accrued expenses and other liabilities on the consolidated statements of financial condition.

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The following table details the activity in the allowance for loan losses by loan portfolio segment for the three and nine months ended September 30, 2020 and 2019: 

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
Three Months Ended September 30, 2020
Allowance for loan losses:
Beginning balance	$	132,039	$	131,702	$	29,630	$	16,243	$	309,614
Loans charged-off	(13,965)		(695)		(7)		(2,458)		(17,125)
Charged-off loans recovered	428		100		31		1,151		1,710
Net (charge-offs) recoveries	(13,537)		(595)		24		(1,307)		(15,415)
Provision for loan losses	11,907		13,543		(1,040)		6,423		30,833
Ending balance	$	130,409	$	144,650	$	28,614	$	21,359	$	325,032
Three Months Ended September 30, 2019
Allowance for losses:
Beginning balance	$	94,384	$	48,978	$	5,219	$	6,524	$	155,105
Loans charged-off	(527)		(158)		(111)		(2,191)		(2,987)
Charged-off loans recovered	330		28		3		617		978
Net charge-offs	(197)		(130)		(108)		(1,574)		(2,009)
Provision for loan losses	6,815		(77)		191		1,828		8,757
Ending balance	$	101,002	$	48,771	$	5,302	$	6,778	$	161,853

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
Nine Months Ended September 30, 2020
Allowance for loan losses:
Beginning balance	$	104,059	$	45,673	$	5,060	$	6,967	$	161,759
Impact of ASU 2016-13 adoption*	15,169		49,797		20,575		6,990		92,531
Loans charged-off	(31,349)		(766)		(348)		(7,624)		(40,087)
Charged-off loans recovered	1,796		244		626		2,454		5,120
Net (charge-offs) recoveries	(29,553)		(522)		278		(5,170)		(34,967)
Provision for loan losses	40,734		49,702		2,701		12,572		105,709
Ending balance	$	130,409	$	144,650	$	28,614	$	21,359	$	325,032
Nine Months Ended September 30, 2019
Allowance for losses:
Beginning balance	$	90,956	$	49,650	$	5,041	$	6,212	$	151,859
Loans charged-off	(7,882)		(158)		(126)		(5,971)		(14,137)
Charged-off loans recovered	2,008		71		13		1,720		3,812
Net charge-offs	(5,874)		(87)		(113)		(4,251)		(10,325)
Provision for loan losses	15,920		(792)		374		4,817		20,319
Ending balance	$	101,002	$	48,771	$	5,302	$	6,778	$	161,853

*    Includes a $61.6 million increase representing the estimated expected credit losses for PCD loans as a result of the adoption of CECL on January 1, 2020.

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The following table represents the allocation of the allowance for loan losses and the related loans by loan portfolio segment disaggregated based on the allowance measurement methodology at September 30, 2020 and December 31, 2019.

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
September 30, 2020
Allowance for loan losses:
Individually evaluated for credit losses	$	66,444	$	2,058	$	830	$	1,232	$	70,564
Collectively evaluated for credit losses	63,965		142,592		27,784		20,127		254,468
Total	$	130,409	$	144,650	$	28,614	$	21,359	$	325,032
Loans:
Individually evaluated for credit losses	$	136,696	$	70,145	$	35,551	$	4,019	$	246,411
Collectively evaluated for credit losses	6,766,649		18,466,217		4,249,044		2,687,265		32,169,175
Total	$	6,903,345	$	18,536,362	$	4,284,595	$	2,691,284	$	32,415,586
December 31, 2019
Allowance for loan losses:
Individually evaluated for credit losses	$	36,662	$	1,338	$	518	$	58	$	38,576
Collectively evaluated for credit losses	67,397		44,335		4,542		6,909		123,183
Total	$	104,059	$	45,673	$	5,060	$	6,967	$	161,759
Loans:
Individually evaluated for credit losses	$	100,860	$	51,242	$	10,689	$	853	$	163,644
Collectively evaluated for credit losses	4,043,123		12,347,368		3,786,253		2,729,221		22,905,965
Loans acquired with discounts related to credit quality	682,014		5,245,149		580,169		122,267		6,629,599
Total	$	4,825,997	$	17,643,759	$	4,377,111	$	2,852,341	$	29,699,208

Impaired loans. Impaired loans disclosures presented below as of December 31, 2019 represent requirements prior to the adoption of ASU No. 2016-13 on January 1, 2020. Impaired loans, consisting of non-accrual commercial and industrial loans, commercial real estate loans over $250 thousand and all loans which were modified in troubled debt restructurings, were individually evaluated for impairment. PCI loans were not classified as impaired loans because they are accounted for on a pool basis and were paying as expected.

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The following table presents information about impaired loans by loan portfolio class at December 31, 2019:

	Recorded Investment With No Related Allowance		Recorded Investment With Related Allowance		Total Recorded Investment		Unpaid Contractual Principal Balance		Related Allowance
	(in thousands)
December 31, 2019
Commercial and industrial	$	14,617	$	86,243	$	100,860	$	114,875	$	36,662
Commercial real estate:
Commercial real estate	26,046		24,842		50,888		51,258		1,338
Construction	354		—		354		354		—
Total commercial real estate loans	26,400		24,842		51,242		51,612		1,338
Residential mortgage	5,836		4,853		10,689		11,800		518
Consumer loans:
Home equity	366		487		853		956		58
Total consumer loans	366		487		853		956		58
Total	$	47,219	$	116,425	$	163,644	$	179,243	$	38,576

Purchased Credit-Impaired Loans

The table below includes disclosure requirements prior to the adoption of ASU No. 2016-13 on January 1, 2020, and presents the changes in the accretable yield for PCI loans during the three and nine months ended September 30, 2019:

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	(in thousands)
Balance, beginning of period	$	853,887	$	875,958
Accretion	(47,475)		(155,981)
Net (decrease) increase in expected cash flows	(58,268)		28,167
Balance, end of period	$	748,144	$	748,144

Note 9. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill as allocated to Valley's business segments, or reporting units thereof, for goodwill impairment analysis were:

	Business Segment / Reporting Unit*
	Wealth Management		Consumer Lending		Commercial Lending		Investment Management		Total
	(in thousands)
Balance at December 31, 2019	$	21,218	$	306,572	$	825,767	$	220,068	$	1,373,625
Goodwill from business combinations	—		121		1,654		9		1,784
Balance at September 30, 2020	$	21,218	$	306,693	$	827,421	$	220,077	$	1,375,409

*    Valley’s Wealth Management Division is comprised of trust, asset management and insurance services. This reporting unit is included in the Consumer Lending segment for financial reporting purposes.

During the nine months ended September 30, 2020, Valley recorded additional goodwill as set forth in the table above related to the Oritani acquisition, reflecting the effect of the combined adjustments to the fair value of certain loans and deferred tax assets as of the acquisition date. Certain estimates for acquired assets and assumed liabilities are subject to change for up to one year after the acquisition date. See Note 2 for further details.

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During the second quarter 2020, Valley performed the annual goodwill impairment test at its normal assessment date. There was no impairment of goodwill recognized during the three and nine months ended September 30, 2020 and 2019.

The following table summarizes other intangible assets as of September 30, 2020 and December 31, 2019: 

	Gross Intangible Assets		Accumulated Amortization		Valuation Allowance		Net Intangible Assets
	(in thousands)
September 30, 2020
Loan servicing rights	$	100,456	$	(77,404)	$	(1,013)	$	22,039
Core deposits	101,160		(50,472)		—		50,688
Other	3,945		(2,799)		—		1,146
Total other intangible assets	$	205,561	$	(130,675)	$	(1,013)	$	73,873
December 31, 2019
Loan servicing rights	$	94,827	$	(70,095)	$	(47)	$	24,685
Core deposits	101,160		(40,384)		—		60,776
Other	3,945		(2,634)		—		1,311
Total other intangible assets	$	199,932	$	(113,113)	$	(47)	$	86,772

Loan servicing rights are accounted for using the amortization method. Under this method, Valley amortizes the loan servicing assets over the period of the economic life of the assets arising from estimated net servicing revenues. On a quarterly basis, Valley stratifies its loan servicing assets into groupings based on risk characteristics and assesses each group for impairment based on fair value. Impairment charges on loan servicing rights are recognized in earnings when the book value of a stratified group of loan servicing rights exceeds its estimated fair value. Valley recorded net impairment charges on its loan servicing rights totaling $188 thousand and $966 thousand for the three and nine months ended September 30, 2020, respectively. Valley recorded net impairment charges on its loan servicing rights totaling $64 thousand and net recoveries of impairment charges on its loan servicing rights totaling $20 thousand for the three and nine months ended September 30, 2019, respectively. See the “Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis” section of Note 6 for additional information regarding the fair valuation.

Core deposits are amortized using an accelerated method and have a weighted average amortization period of 8.9 years. The line item labeled “Other” included in the table above primarily consists of customer lists and covenants not to compete, which are amortized over their expected lives generally using a straight-line method and have a weighted average amortization period of approximately 7.6 years. Valley evaluates core deposits and other intangibles for impairment when an indication of impairment exists. No impairment was recognized during the three and nine months ended September 30, 2020 and 2019.

The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2020 through 2024: 

	Loan Servicing Rights		Core Deposits		Other
	(in thousands)
2020	$	1,477	$	3,275	$	55
2021	4,980		11,607		206
2022	3,789		9,876		191
2023	2,869		8,146		131
2024	2,205		6,537		117

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Valley recognized amortization expense on other intangible assets, including net impairment (or recovery of impairment) charges on loan servicing rights, totaling approximately $6.4 million and $4.7 million for the three months ended September 30, 2020 and 2019, respectively, and $18.5 million and $13.2 million for the nine months ended September 30, 2020 and 2019, respectively.

Note 10. Borrowed Funds

Short-Term Borrowings

Short-term borrowings at September 30, 2020 and December 31, 2019 consisted of the following: 

	September 30, 2020		December 31, 2019
	(in thousands)
FHLB advances	$	1,275,000	$	940,000
Securities sold under agreements to repurchase	155,726		153,280
Total short-term borrowings	$	1,430,726	$	1,093,280

The contractual weighted average interest rate for short-term borrowings was 0.44 percent and 1.68 percent at September 30, 2020 and December 31, 2019, respectively. Short-term FHLB advances totaling $1.1 billion were hedged with cash flow interest rate swaps during the nine months ended September 30, 2020. See Note 12 for additional details.

Long-Term Borrowings

Long-term borrowings at September 30, 2020 and December 31, 2019 consisted of the following: 

	September 30, 2020		December 31, 2019
	(in thousands)
FHLB advances, net (1)	$	2,148,633	$	1,480,012
Subordinated debt, net (2)	403,936		292,414
Securities sold under agreements to repurchase	300,000		350,000
Total long-term borrowings	$	2,852,569	$	2,122,426

(1)	FHLB advances are presented net of unamortized prepayment penalties and other purchase accounting adjustments totaling $503 thousand and $2.8 million at September 30, 2020 and December 31, 2019, respectively.
(2)	Subordinated debt is presented net of unamortized debt issuance costs totaling $2.8 million and $1.2 million at September 30, 2020 and December 31, 2019, respectively.

FHLB advances. Long-term FHLB advances had a weighted average interest rate of 2.11 percent and 2.23 percent at September 30, 2020 and December 31, 2019, respectively. FHLB advances are secured by pledges of certain eligible collateral, including but not limited to, U.S. government and agency mortgage-backed securities and a blanket assignment of qualifying first lien mortgage loans, consisting of both residential mortgage and commercial real estate loans.

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The long-term FHLB advances at September 30, 2020 are scheduled for contractual balance repayments as follows: 

Year	Amount
	(in thousands)
2020	$	25,000
2021	994,768
2022	121,420
2023	428,163
2024	300,000
Thereafter	279,785
Total long-term FHLB advances	$	2,149,136

There are no FHLB advances with scheduled repayments in years 2020 and thereafter, reported in the table above, which are callable for early redemption by the FHLB during 2020.

Securities sold under agreements to repurchase (repos). Long-term repos had a weighted average interest rate of 3.33 percent and 1.94 percent at September 30, 2020 and December 31, 2019, respectively. Long-term repos outstanding as of September 30, 2020 have maturities in 2021.

In September 2020, Valley prepaid $50 million of long-term institutional repo borrowings with an interest rate of 3.70 percent and an original contractual maturity date in January 2022. The debt prepayment was funded by excess cash liquidity. The transaction was accounted for as an early debt extinguishment resulting in a loss, reported within non-interest expense, of $2.4 million for the third quarter 2020.

Subordinated debt. On June 5, 2020, Valley issued $115.0 million of 5.25 percent Fixed-to-Floating Rate subordinated notes due June 15, 2030 and callable in whole or in part on or after June 15, 2025 or upon the occurrence of certain events. Interest on the subordinated notes during the initial five year term through June 15, 2025 is payable semi-annually on June 15 and December 15. Thereafter, interest is expected to be set based on Three-Month Term SOFR plus 514 basis points and paid quarterly through maturity of the notes.

Valley also had the following subordinated debt outstanding at September 30, 2020:

•$100 million aggregate principal amount of 4.55 percent subordinated notes due June 30, 2025 with no call dates or prepayments allowed except upon the occurrence of certain events;

•$125 million aggregate principal amount of 5.125 percent subordinated notes due September 27, 2023 with no call dates or prepayments allowed except upon the occurrence of certain events;

•$60 million aggregate principal amount of 6.25 percent subordinated notes due April 1, 2026 that are callable on or after April 1, 2021 or anytime upon the occurrence of certain events.

See Note 11 in Valley’s Annual Report on Form 10-K for the year ended December 31, 2019 for further details.

Note 11. Stock–Based Compensation

Valley currently has one active employee stock plan, the 2016 Long-Term Stock Incentive Plan (the 2016 Stock Plan), adopted by Valley’s Board of Directors on January 29, 2016 and approved by its shareholders on April 28, 2016. The 2016 Stock Plan is administered by the Compensation and Human Resources Committee (the Committee) appointed by Valley's Board of Directors. The Committee can grant awards to officers and key employees of Valley. The primary purpose of the 2016 Stock Plan is to provide additional incentive to officers and key employees of Valley and its subsidiaries, whose substantial contributions are essential to the continued growth and success of Valley, and to attract and retain competent and dedicated officers and other key employees whose efforts will result in the continued and long-term growth of Valley’s business.

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Under the 2016 Stock Plan, Valley may award shares of common stock in the form of stock appreciation rights, both incentive and non-qualified stock options, restricted stock and restricted stock units (RSUs) to its employees and non-employee directors (for acting in their roles as board members). As of September 30, 2020, 3.1 million shares of common stock were available for issuance under the 2016 Stock Plan. The essential features of each award are described in the award agreement relating to that award. The grant, exercise, vesting, settlement or payment of an award may be based upon the fair value of Valley’s common stock on the last sale price reported for Valley’s common stock on such date or the last sale price reported preceding such date, except for performance-based awards with a market condition. The grant date fair values of performance-based awards that vest based on a market condition are determined by a third-party specialist using a Monte Carlo valuation model.

Restricted Stock Units (RSUs). Valley granted 26 thousand and 42 thousand of time-based RSUs during the three months ended September 30, 2020 and 2019, respectively, and 1.2 million and 868 thousand during the nine months ended September 30, 2020 and 2019, respectively. Generally, time-based RSUs vest ratably one-third each year over a three-year vesting period. The average grant date fair value of the RSUs granted during the nine months ended September 30, 2020 and 2019 was $10.41 per share and $10.43 per share, respectively.

Valley granted 589 thousand and 532 thousand of performance-based RSUs to certain executive officers for the nine months ended September 30, 2020 and 2019, respectively. The performance-based RSU awards include RSUs with vesting conditions based upon certain levels of growth in Valley's tangible book value per share plus dividends and RSUs with vesting conditions based upon Valley's total shareholder return as compared to its peer group. The RSUs “cliff” vest after three years based on the cumulative performance of Valley during that time period. The RSUs earn dividend equivalents (equal to cash dividends paid on Valley's common stock) over the applicable performance period. Dividend equivalents are accumulated and paid to the grantee at the vesting date or forfeited if the performance conditions are not met. The grant date fair value of the RSUs granted during the nine months ended September 30, 2020 and 2019 was $10.82 per share and $10.43 per share, respectively.

Valley recorded total stock-based compensation expense of $4.1 million and $3.2 million for the three months ended September 30, 2020 and 2019, respectively, and $12.3 million and $11.5 million for the nine months ended September 30, 2020 and 2019, respectively. The fair values of stock awards are expensed over the shorter of the vesting or required service period. As of September 30, 2020, the unrecognized amortization expense for all stock-based employee compensation totaled approximately $21.3 million and will be recognized over an average remaining vesting period of 1.84 years.

Note 12. Derivative Instruments and Hedging Activities

Valley enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

Cash Flow Hedges of Interest Rate Risk. Valley’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, Valley uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the payment of either fixed or variable-rate amounts in exchange for the receipt of variable or fixed-rate amounts from a counterparty, respectively.

During the nine months ended September 30, 2020, Valley entered into new interest rate swap agreements designated as cash flow hedges with a total notional amount of $1.1 billion. The swaps are intended to hedge the changes in cash flows associated with certain FHLB advances and brokered deposits. Valley is required to pay fixed-rates of interest ranging from 0.05 percent to 0.67 percent and receives variable rates of interest that reset quarterly based on three-month LIBOR. Expiration dates for the swaps range from April 2021 to August 2022.

Fair Value Hedges of Fixed Rate Assets and Liabilities. Valley is exposed to changes in the fair value of certain of its fixed rate assets or liabilities due to changes in benchmark interest rates based on one-month LIBOR. From time to time, Valley has used interest rate swaps to manage its exposure to changes in fair value. Interest rate swaps designated as fair value hedges involve the receipt of variable rate payments from a counterparty in exchange for

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Valley making fixed rate payments over the life of the agreements without the exchange of the underlying notional amount. For derivatives that are designated and qualify as fair value hedges, the gain or loss on the derivative as well as the loss or gain on the hedged item attributable to the hedged risk are recognized in earnings. Valley includes the gain or loss on the hedged items in the same income statement line item as the loss or gain on the related derivatives.

Non-designated Hedges. Derivatives not designated as hedges may be used to manage Valley’s exposure to interest rate movements or to provide service to customers but do not meet the requirements for hedge accounting under U.S. GAAP. Derivatives not designated as hedges are not entered into for speculative purposes.

Valley executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that Valley executes with a third party, such that Valley minimizes its net risk exposure resulting from such transactions. As these interest rate swaps do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings.

Valley sometimes enters into risk participation agreements with external lenders where the banks are sharing their risk of default on the interest rate swaps on participated loans. Valley either pays or receives a fee depending on the participation type. Risk participation agreements are credit derivatives not designated as hedges. Credit derivatives are not speculative and are not used to manage interest rate risk in assets or liabilities. Changes in the fair value in credit derivatives are recognized directly in earnings. At September 30, 2020, Valley had 23 credit swaps with an aggregate notional amount of $181.5 million related to risk participation agreements. 

At September 30, 2020, Valley had two “steepener” swaps, each with a current notional amount of $10.4 million where the receive rate on the swap mirrors the pay rate on the brokered deposits and the rates paid on these types of hybrid instruments are based on a formula derived from the spread between the long and short ends of the constant maturity swap (CMS) rate curve. Although these types of instruments do not meet the hedge accounting requirements, the change in fair value of both the bifurcated derivative and the stand alone swap tend to move in opposite directions with changes in the three-month LIBOR rate and therefore provide an effective economic hedge.

Valley regularly enters into mortgage banking derivatives which are non-designated hedges. These derivatives include interest rate lock commitments provided to customers to fund certain residential mortgage loans to be sold into the secondary market and forward commitments for the future delivery of such loans. Valley enters into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of future changes in interest rate on Valley's commitments to fund the loans as well as on its portfolio of mortgage loans held for sale.

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Amounts included in the consolidated statements of financial condition related to the fair value of Valley’s derivative financial instruments were as follows: 

	September 30, 2020						December 31, 2019
	Fair Value						Fair Value
	Other Assets		Other Liabilities		Notional Amount		Other Assets		Other Liabilities		Notional Amount
	(in thousands)
Derivatives designated as hedging instruments:
Cash flow hedge interest rate swaps	$	—	$	4,233	$	1,175,000	$	—	$	1,484	$	180,000
Fair value hedge interest rate swaps	—		59		7,079		—		229		7,281
Total derivatives designated as hedging instruments	$	—	$	4,292	$	1,182,079	$	—	$	1,713	$	187,281
Derivatives not designated as hedging instruments:
Interest rate swaps and embedded derivatives	$	455,404	$	182,741	$	8,306,557	$	158,382	$	42,020	$	4,113,106
Mortgage banking derivatives	161		3,016		521,418		150		193		142,760
Total derivatives not designated as hedging instruments	$	455,565	$	185,757	$	8,827,975	$	158,532	$	42,213	$	4,255,866

The Chicago Mercantile Exchange and London Clearing House variation margins are classified as a single-unit of account with the fair value of certain cash flow and non-designated derivative instruments. As a result, the fair value of the designated cash flow interest rate swaps assets and designated and non-designated interest rate swaps liabilities were offset by variation margins posted by (with) the applicable counterparties and reported in the table above on a net basis at September 30, 2020 and December 31, 2019.

Gains and (losses) included in the consolidated statements of income and other comprehensive income, on a pre-tax basis, related to interest rate derivatives designated as hedges of cash flows were as follows: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Amount of loss reclassified from accumulated other comprehensive loss to interest expense	$	(1,586)	$	(453)	$	(1,763)	$	(1,126)
Amount of gain (loss) recognized in other comprehensive income	95		108		3,158		(1,404)

The accumulated net after-tax losses related to effective cash flow hedges included in accumulated other comprehensive loss were $4.7 million and $3.7 million at September 30, 2020 and December 31, 2019, respectively.

Amounts reported in accumulated other comprehensive loss related to cash flow interest rate derivatives are reclassified to interest expense as interest payments are made on the hedged variable interest rate liabilities. Valley estimates that $3.8 million will be reclassified as an increase to interest expense over the next 12 months.

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Gains (losses) included in the consolidated statements of income related to interest rate derivatives designated as hedges of fair value were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Derivative - interest rate swaps:
Interest income	$	88	$	48	$	170	$	121
Hedged item - loans:
Interest income	$	(88)	$	(48)	$	(170)	$	(121)

The following table presents the hedged items related to interest rate derivatives designated as hedges of fair value and the cumulative basis fair value adjustment included in the net carrying amount of the hedged items at September 30, 2020 and December 31, 2019.

Line Item in the Statement of Financial Condition in Which the Hedged Item is Included	Carrying Amount of the Hedged Asset				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset
	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
	(in thousands)
Loans	$	7,138	$	7,510	$	59	$	229

The net losses (gains) included in the consolidated statements of income related to derivative instruments not designated as hedging instruments were as follows: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Non-designated hedge interest rate swaps and credit derivatives
Other non-interest expense	$	600	$	(468)	$	2,105	$	(1,225)

Other non-interest income included fee income related to non-designated hedge derivative interest rate swaps (not designated as hedging instruments) executed with commercial loan customers totaling $19.2 million and $13.9 million for the three months ended September 30, 2020 and 2019, respectively, and $48.1 million and $23.4 million for the nine months ended September 30, 2020 and 2019, respectively.

Credit Risk Related Contingent Features. By using derivatives, Valley is exposed to credit risk if counterparties to the derivative contracts do not perform as expected. Management attempts to minimize counterparty credit risk through credit approvals, limits, monitoring procedures and obtaining collateral where appropriate. Credit risk exposure associated with derivative contracts is managed at Valley in conjunction with Valley’s consolidated counterparty risk management process. Valley’s counterparties and the risk limits monitored by management are periodically reviewed and approved by the Board of Directors.

Valley has agreements with its derivative counterparties providing that if Valley defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then Valley could also be declared in default on its derivative counterparty agreements. Additionally, Valley has an agreement with several of its derivative counterparties that contains provisions that require Valley’s debt to maintain an investment grade credit rating from each of the major credit rating agencies from which it receives a credit rating. If Valley’s credit rating is reduced below investment grade, or such rating is withdrawn or suspended, then the counterparty could terminate the derivative positions and Valley would be required to settle its obligations under the agreements. As of September 30, 2020, Valley was in compliance with all of the provisions of its derivative counterparty

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agreements. As of September 30, 2020, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk related to these agreements, was $184.1 million. Valley has derivative counterparty agreements that require minimum collateral posting thresholds for certain counterparties.

Note 13. Balance Sheet Offsetting

Certain financial instruments, including interest rate swap derivatives 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 (i.e., the threshold for posting collateral is reduced to zero, subject to certain minimum transfer amounts). 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 eligible for offset in the consolidated statements of financial condition as of September 30, 2020 and December 31, 2019.

							Gross Amounts Not Offset
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments			Cash Collateral		Net Amount
	(in thousands)
September 30, 2020
Assets:
Interest rate swaps	$	455,404	$	—	$	455,404	$	—		$	—	$	455,404
Liabilities:
Interest rate swaps	$	187,033	$	—	$	187,033	$	—		$	(184,050)	$	2,983
Repurchase agreements	300,000		—		300,000		(300,000)		*	—		—
Total	$	487,033	$	—	$	487,033	$	(300,000)		$	(184,050)	$	2,983
December 31, 2019
Assets:
Interest rate swaps	$	158,382	$	—	$	158,382	$	(118)		$	—	$	158,264
Liabilities:
Interest rate swaps	$	43,733	$	—	$	43,733	$	(118)		$	(16,881)	$	26,734
Repurchase agreements	350,000		—		350,000		(350,000)		*	—		—
Total	$	393,733	$	—	$	393,733	$	(350,118)		$	(16,881)	$	26,734

*    Represents the fair value of non-cash pledged investment securities.

Note 14. Tax Credit Investments

Valley’s tax credit investments are primarily related to investments promoting qualified affordable housing projects, and other investments related to community development and renewable energy sources. Some of these tax-advantaged investments support Valley’s regulatory compliance with the Community Reinvestment Act (CRA). Valley’s investments in these entities generate a return primarily through the realization of federal income tax credits, and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. These tax credits and deductions are recognized as a reduction of income tax expense.

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Valley’s tax credit investments are carried in other assets on the consolidated statements of financial condition. Valley’s unfunded capital and other commitments related to the tax credit investments are carried in accrued expenses and other liabilities on the consolidated statements of financial condition. Valley recognizes amortization of tax credit investments, including impairment losses, within non-interest expense in the consolidated statements of income using the equity method of accounting. After initial measurement, the carrying amounts of tax credit investments with non-readily determinable fair values are increased to reflect Valley's share of income of the investee and are reduced to reflect its share of losses of the investee, dividends received and impairments, if applicable.

The following table presents the balances of Valley’s affordable housing tax credit investments, other tax credit investments, and related unfunded commitments at September 30, 2020 and December 31, 2019:

	September 30, 2020		December 31, 2019
	(in thousands)
Other Assets:
Affordable housing tax credit investments, net	$	21,647	$	25,049
Other tax credit investments, net	49,907		59,081
Total tax credit investments, net	$	71,554	$	84,130
Other Liabilities:
Unfunded affordable housing tax credit commitments	$	1,397	$	1,539
Unfunded other tax credit commitments	1,139		1,139
Total unfunded tax credit commitments	$	2,536	$	2,678

The following table presents other information relating to Valley’s affordable housing tax credit investments and other tax credit investments for the three and nine months ended September 30, 2020 and 2019: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits	$	1,352	$	1,666	$	3,979	$	5,087
Other tax credit investment credits and tax benefits	1,727		1,902		5,567		6,863
Total reduction in income tax expense	$	3,079	$	3,568	$	9,546	$	11,950
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses	$	642	$	530	$	1,733	$	1,796
Affordable housing tax credit investment impairment losses	585		857		1,668		2,381
Other tax credit investment losses	12		1,093		1,235		4,589
Other tax credit investment impairment losses	1,520		1,905		4,767		7,655
Total amortization of tax credit investments recorded in non-interest expense	$	2,759	$	4,385	$	9,403	$	16,421

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Note 15. Business Segments

Valley has four business segments that it monitors and reports on to manage Valley’s business operations. These segments are consumer lending, commercial lending, investment management, and corporate and other adjustments. Valley’s reportable segments have been determined based upon its internal structure of operations and lines of business. Each business segment is reviewed routinely for its asset growth, contribution to income before income taxes and return on average interest earning assets and impairment (if events or circumstances indicate a possible inability to realize the carrying amount). Expenses related to the branch network, all other components of retail banking, along with the back office departments of the Bank are allocated from the corporate and other adjustments segment to each of the other three business segments. Interest expense and internal transfer expense (for general corporate expenses) are allocated to each business segment utilizing a transfer pricing methodology, which involves the allocation of operating and funding costs based on each segment's respective mix of average earning assets and/or liabilities outstanding for the period. The financial reporting for each segment contains allocations and reporting in line with Valley’s operations, which may not necessarily be comparable to any other financial institution. The accounting for each segment includes internal accounting policies designed to measure consistent and reasonable financial reporting and may result in income and expense measurements that differ from amounts under U.S. GAAP. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.

The following tables represent the financial data for Valley’s four business segments for the three and nine months ended September 30, 2020 and 2019:

	Three Months Ended September 30, 2020
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	7,126,157		$	25,389,107		$	5,252,446		$	—	$	37,767,710
Interest income	$	63,956		$	251,920		$	22,513		$	(1,046)	$	337,343
Interest expense	9,048			33,330			6,728			5,151		54,257
Net interest income (loss)	54,908			218,590			15,785			(6,197)		283,086
Provision for credit losses	5,383			25,637			(112)			—		30,908
Net interest income (loss) after provision for credit losses	49,525			192,953			15,897			(6,197)		252,178
Non-interest income	23,531			20,421			(1,304)			6,624		49,272
Non-interest expense	19,877			25,633			(186)			114,861		160,185
Internal expense transfer	18,614			66,390			13,713			(98,717)		—
Income (loss) before income taxes	$	34,565		$	121,351		$	1,066		$	(15,717)	$	141,265
Return on average interest earning assets (pre-tax)	1.94		%	1.91		%	0.08		%	N/A		1.50		%

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	Three Months Ended September 30, 2019
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	6,858,216		$	19,278,529		$	4,357,824		$	—	$	30,494,569
Interest income	$	68,253		$	230,183		$	31,999		$	(1,174)	$	329,261
Interest expense	23,552			66,209			14,965			3,910		108,636
Net interest income (loss)	44,701			163,974			17,034			(5,084)		220,625
Provision for credit losses	2,003			6,697			—			—		8,700
Net interest income (loss) after provision for credit losses	42,698			157,277			17,034			(5,084)		211,925
Non-interest income	15,108			15,057			2,687			8,298		41,150
Non-interest expense	19,748			25,161			381			100,587		145,877
Internal expense transfer	19,758			55,544			12,559			(87,861)		—
Income (loss) before income taxes	$	18,300		$	91,629		$	6,781		$	(9,512)	$	107,198
Return on average interest earning assets (pre-tax)	1.07		%	1.90		%	0.62		%	N/A		1.41		%

	Nine Months Ended September 30, 2020
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	7,187,839		$	24,334,429		$	5,221,538		$	—	$	36,743,806
Interest income	$	199,018		$	771,947		$	81,905		$	(3,209)	$	1,049,661
Interest expense	40,217			136,156			29,216			13,088		218,677
Net interest income (loss)	158,801			635,791			52,689			(16,297)		830,984
Provision for credit losses	15,274			90,785			688			—		106,747
Net interest income (loss) after provision for credit losses	143,527			545,006			52,001			(16,297)		724,237
Non-interest income	55,383			52,192			7,661			20,263		135,499
Non-interest expense	60,188			73,041			843			338,935		473,007
Internal expense transfer	58,355			197,444			42,393			(298,192)		—
Income (loss) before income taxes	$	80,367		$	326,713		$	16,426		$	(36,777)	$	386,729
Return on average interest earning assets (pre-tax)	1.49		%	1.79		%	0.42		%	N/A		1.40		%

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	Nine Months Ended September 30, 2019
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	6,812,001		$	18,839,194		$	4,330,504		$	—	$	29,981,699
Interest income	$	203,897		$	679,833		$	97,189		$	(3,692)	$	977,227
Interest expense	69,504			192,221			44,185			11,810		317,720
Net interest income (loss)	134,393			487,612			53,004			(15,502)		659,507
Provision for credit losses	4,986			13,814			—			—		18,800
Net interest income (loss) after provision for credit losses	129,407			473,798			53,004			(15,502)		640,707
Non-interest income	41,927			29,527			7,365			97,607		176,426
Non-interest expense	56,845			76,729			684			301,151		435,409
Internal expense transfer	58,476			161,803			37,245			(257,524)		—
Income (loss) before income taxes	$	56,013		$	264,793		$	22,440		$	38,478	$	381,724
Return on average interest earning assets (pre-tax)	1.10		%	1.87		%	0.69		%	N/A		1.70		%

Item 2. Management’s Discussion and Analysis (MD&A) of Financial Condition and Results of Operations

The following MD&A should be read in conjunction with the consolidated financial statements and notes thereto appearing in Part 1, Item 1 of this report. The words "Valley," the "Company," "we," "our" and "us" refer to Valley National Bancorp and its wholly owned subsidiaries, unless we indicate otherwise. Additionally, Valley’s principal subsidiary, Valley National Bank, is commonly referred to as the “Bank” in this MD&A.

The MD&A contains supplemental financial information, described in the sections that follow, which has been determined by methods other than U.S. generally accepted accounting principles (U.S. GAAP) that management uses in its analysis of our performance. Management believes these non-GAAP financial measures provide information useful to investors in understanding our underlying operational performance, our business and performance trends and facilitate comparisons with the performance of others in the financial services industry. These non-GAAP financial measures should not be considered in isolation or as a substitute for or superior to financial measures calculated in accordance with U.S. GAAP. These non-GAAP financial measures may also be calculated differently from similar measures disclosed by other companies.

Cautionary Statement Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q, both in the MD&A and elsewhere, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations, including the potential effects of the COVID-19 pandemic on our businesses and financial results and conditions. These statements may be identified by such forward-looking terminology as “should,” “expect,” “believe,” “view,” “will,” “opportunity,” “allow,” “continues,” “would,” “could,” “typically,” “usually,” “anticipate,” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties and our actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include, but are not limited to:

•the impact of COVID-19 on the U.S. and global economies, including business disruptions, reductions in employment and an increase in business failures, specifically among our clients;

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•the impact of COVID-19 on our employees and our ability to provide services to our customers and respond to their needs as more cases of COVID-19 may arise in our primary markets;

•potential judgments, claims, damages, penalties, fines and reputational damage resulting from pending or future litigation and regulatory and government actions, including as a result of our participation in and execution of government programs related to the COVID-19 pandemic or as a result of our actions in response to, or failure to implement or effectively implement, federal, state and local laws, rules or executive orders requiring that we grant forbearances or not act to collect our loans;

•the impact of forbearances or deferrals we are required or agree to as a result of customer requests and/or government actions, including, but not limited to our potential inability to recover fully deferred payments from the borrower or the collateral;

•damage verdicts or settlements or restrictions related to existing or potential class action litigation or individual litigation arising from claims of violations of laws or regulations, contractual claims, breach of fiduciary responsibility, negligence, fraud, environmental laws, patent or trademark infringement, employment related claims, and other matters;

•a prolonged downturn in the economy, mainly in New Jersey, New York, Florida and Alabama, as well as an unexpected decline in commercial real estate values within our market areas;

•higher or lower than expected income tax expense or tax rates, including increases or decreases resulting from changes in uncertain tax position liabilities, tax laws, regulations and case law;

•the inability to grow customer deposits to keep pace with loan growth;

•a material change in our allowance for credit losses under CECL due to forecasted economic conditions and/or unexpected credit deterioration in our loan and investment portfolios;

•the need to supplement debt or equity capital to maintain or exceed internal capital thresholds;

•greater than expected technology related costs due to, among other factors, prolonged or failed implementations, additional project staffing and obsolescence caused by continuous and rapid market innovations;

•the loss of or decrease in lower-cost funding sources within our deposit base, including our inability to achieve deposit retention targets under Valley's branch transformation strategy;

•cyber-attacks, computer viruses or other malware that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage our systems;

•results of examinations by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Bank (FRB), the Consumer Financial Protection Bureau (CFPB) and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for credit losses, write-down assets, reimburse customers, change the way we do business, or limit or eliminate certain other banking activities;

•our inability or determination not to pay dividends at current levels, or at all, because of inadequate earnings, regulatory restrictions or limitations, changes in our capital requirements or a decision to increase capital by retaining more earnings;

•unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, the COVID-19 pandemic or other external events;

•unexpected significant declines in the loan portfolio due to the lack of economic expansion, increased competition, large prepayments, changes in regulatory lending guidance or other factors; and

•the failure of other financial institutions with whom we have trading, clearing, counterparty and other financial relationships.

A detailed discussion of factors that could affect our results is included in our SEC filings, including the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2019 and Part II, Item 1A of this report.

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Critical Accounting Policies and Estimates

We identified our policies on the allowance for credit losses, goodwill and other intangible assets, and income taxes to be critical accounting policies because management has to make subjective and/or complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions.

Determining the allowance for loan losses has historically been identified as a critical accounting estimate. On January 1, 2020, we adopted new accounting guidance which requires entities to estimate and recognize an allowance for lifetime expected credit losses for loans, unfunded credit commitments and held to maturity debt securities measured at amortized cost. Previously, an allowance for credit losses on loans was recognized based on probable incurred losses. See Notes 5, 7 and 8 to the consolidated financial statements for further discussion of our accounting policies and methodologies for establishing the allowance for credit losses.

The accounting estimates relating to the allowance for credit losses remains a "critical accounting estimate" for the following reasons:

•Changes in the provision for credit losses can materially affect our financial results;

•Estimates relating to the allowance for credit losses require us to project future borrower performance, delinquencies and charge-offs, along with, when applicable, collateral values, based on a reasonable and supportable forecast period utilizing forward-looking economic scenarios in order to estimate probability of default and loss given default;

•The allowance for credit losses is influenced by factors outside of our control such as industry and business trends, geopolitical events and the effects of laws and regulations as well as economic conditions such as trends in housing prices, interest rates, gross domestic product (GDP), inflation, energy prices and unemployment; and

•Judgment is required to determine whether the models used to generate the allowance for credit losses produce an estimate that is sufficient to encompass the current view of lifetime expected credit losses.

Our estimation process is subject to risks and uncertainties, including a reliance on historical loss and trend information that may not be representative of current conditions and indicative of future performance. Changes in such estimates could significantly impact our allowance and provision for credit losses. Accordingly, our actual credit loss experience may not be in line with our expectations.

As discussed further in the "Allowance for Credit Losses" section in this MD&A, we incorporated a multi-scenario economic forecast for estimating lifetime expected credit losses at September 30, 2020. As a result of the deterioration in economic conditions caused by the COVID-19 pandemic during the nine months ended September 30, 2020 and the related increase in economic uncertainty, we increased our probability weighting for the most severe economic scenario as compared to those at January 1, 2020. As a result, approximately 32 percent of the provision of credit losses for loans totaling $106.1 million for the nine months ended September 30, 2020 reflected the impact of the adverse economic forecast within Valley's lifetime expected credit loss estimate.

Details regarding our critical accounting policies for goodwill and other intangible assets, and income taxes are described in detail in Part II, Item 7 in Valley’s Annual Report on Form 10-K for the year ended December 31, 2019.

New Authoritative Accounting Guidance

See Note 5 to the consolidated financial statements for a description of new authoritative accounting guidance, including the respective dates of adoption and effects on results of operations and financial condition.

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Executive Summary

Company Overview. At September 30, 2020, Valley had consolidated total assets of approximately $40.7 billion, total net loans of $32.1 billion, total deposits of $31.2 billion and total shareholders’ equity of $4.5 billion. Our commercial bank operations include branch office locations in northern and central New Jersey, the New York City Boroughs of Manhattan, Brooklyn, Queens, and Long Island, Florida and Alabama. Of our current 236 branch network, 59 percent, 16 percent, 18 percent and 7 percent of the branches are in New Jersey, New York, Florida and Alabama, respectively. Despite targeted branch consolidation activity, we have significantly grown both in asset size and locations over the past several years primarily through bank acquisitions, including our acquisition of Oritani Financial Corp. (Oritani) on December 1, 2019. See Note 2 to the consolidated financial statements for more information regarding the Oritani acquisition.

Impact of COVID-19. The outbreak of the disease caused by the novel coronavirus (COVID-19) and the resulting pandemic have greatly disrupted consumer, business and government activity during the nine months ended September 30, 2020, including within the markets we serve. While the overall level of economic activity improved in the third quarter 2020 following the steep economic downturn in second quarter 2020, certain industries and businesses continue to be adversely impacted with a significant loss of their normal revenue streams and continue to experience business interruptions. Our outlook since the end of the second quarter indicates continued macroeconomic deterioration with higher levels of credit stress related to borrowers impacted by COVID-19 and lower valuations of collateral securing our non-performing taxi medallion loan portfolio. Uncertainties and disruptions resulting from the COVID-19 pandemic have slowed our traditional new commercial loan volumes and the loan balances for residential and many consumer loan products have seen moderate declines in the third quarter 2020, including the impact of a higher level of residential mortgage loans originated for sale due to our current interest rate risk management strategies. Any sustained economic downturn due to COVID-19 and other factors, or other long-term changes in consumer and business behaviors from COVID-19 may adversely impact the value of assets that serve as collateral for our loans.

The Paycheck Protection Program (PPP) provided for in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, as supplemented by the Paycheck Protection Program and Health Care Enhancement Act (Enhancement Act), was designed to aid small- and medium-sized businesses through federally guaranteed loans distributed through banks. These loans are intended to guarantee 8 to 24 weeks of payroll and other costs to help those businesses remain viable and allow their workers to pay their bills. Valley National Bank is a certified Small Business Administration (SBA) lender and facilitated approximately 13,000 SBA-approved PPP loans totaling $2.3 billion through the close of the program on August 8, 2020. While difficult to accurately predict, we expect the majority of these loans to be forgiven in accordance with rules, application and documentation requirements for this program.

We have reopened all bank branches in our network that were either temporarily closed or had reduced lobby services due to COVID-19, however we continue to act with an abundance of caution in order to safeguard the health and wellness of our customers and employees and may limit capacity in our branch locations and/or require scheduled appointments. We continue to closely monitor local conditions in the areas we serve and will take actions as circumstances warrant, which may necessitate certain branch or other office closures and reduced lobby services. Our business continuity plan continues to remain in effect with many of our non-customer facing employees continuing to work remotely as we monitor the level of the health crisis in our primary markets.

In response to the COVID-19 pandemic and its economic impact on certain customers and in accordance with provisions set forth by the CARES Act, Valley implemented short-term loan modifications, such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that are insignificant, when requested by customers. Generally, the modification terms allow for a deferral of payments for up to 90 days, which Valley may extend for an additional 90 days, for a maximum of 180 days on a cumulative and successive basis. As of September 30, 2020, Valley had approximately 1,400 loans with total unpaid principal balances of $1.1 billion remaining in their payment deferral period under short-term modification. The $1.1 billion of loans in deferral represented approximately 3.3 percent of our total loan portfolio at September 30, 2020, decreasing from approximately $2.7 billion, or 8.4 percent of total loans, near the start of the third quarter 2020.

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Significant uncertainties as to future economic conditions exist with significant economic stress on our customers. The severe adverse economic pressures, coupled with the implementation of an expected loss methodology for determining our provision for credit losses as required by CECL, have contributed to a sharply increased provision for credit losses for the nine months ended September 30, 2020, following our initial adoption of CECL on January 1, 2020. We continue to monitor the impact of COVID-19 closely, as well as any effects that may result from the CARES Act, Enhancement Act and other government stimulus or Federal Reserve actions. However, the extent to which the COVID-19 pandemic will impact our operations and financial results during the fourth quarter 2020 and during 2021 is highly uncertain. See the "Operating Environment" section and our risk factors under Part II, Item 1A below for more details.

Branch Transformation. As previously disclosed, Valley has embarked on a strategy to overhaul its retail network. Over one year ago, we established the foundation of what the transformation of our branch network would look like in coming years. At that time, we identified 74 branches that did not meet certain internal performance measures, including 20 branches that were closed and consolidated by the end of the first quarter 2019. For the remaining 54 branches, we implemented tailored action plans focused on improving profitability and deposit levels, as well as upgrades in staffing and training, within a defined timeline. During the first quarter 2020, we permanently closed an additional 9 branches located in New Jersey, including the consolidation of 6 acquired Oritani branches into nearby legacy Valley branches. We currently plan to permanently close 7 New Jersey branches and 2 Florida branches during fourth quarter 2020, and one additional New Jersey branch in first quarter 2021. For the remaining branch network, we continue to monitor the operating performance of each branch and implement tailored action plans focused on improving profitability and deposit levels for those branches that underperform.

Quarterly Results. Net income for the third quarter 2020 was $102.4 million, or $0.25 per diluted common share, compared to $81.9 million, or $0.24 per diluted common share, for the third quarter 2019. The $20.5 million increase in quarterly net income as compared to the same quarter one year ago was largely due to: (i) a $62.5 million increase in net interest income driven by organic and Oritani acquired loan growth over the last 12 months combined with our ability to significantly reduce our deposit and other funding costs in the current low interest rate environment, (ii) a $8.1 million increase in non-interest income mainly caused by strong commercial loan customer swap fees and additional gains on the sales of residential mortgage loans, partially offset by (iii) a $22.2 million increase in our provision for credit losses due to the adoption of CECL and the impact of the COVID-19 pandemic on the model results, (iv) a $14.3 million increase in non-interest expense due to the Oritani acquisition, higher cash incentive accruals, increased technology consulting expense, certain additional expenses due to COVID-19, and the charge incurred in third quarter 2020 on a debt extinguishment, and (v) a $13.6 million increase in income tax expense. See the “Net Interest Income”, “Non-Interest Income”, “Non-Interest Expense”, and “Income Taxes” sections below for more details on the items above impacting our third quarter 2020 results, as well as other items discussed elsewhere in this MD&A, for more details on the impact of the items above on our third quarter 2020 results.

Operating Environment. During third quarter 2020, real GDP increased over 33 percent with lower rates of COVID-19 transmission and a gradual resumption of many personal, business, and government activities following the steep decline in GDP during the second quarter. The unemployment rate also improved to 7.9 percent in September 2020 as compared to 11.1 percent in June 2020. Government policy measures, including the CARES Act improved the flow of credit to households and businesses with employment increasing sharply and prices for goods and services stabilized. In addition, the Federal Reserve maintained its low target range for the federal funds rate which was reduced earlier this year and began purchasing Treasury securities, as well as agency issued mortgage-backed securities. The federal funds rate target rate remains between zero and 0.25 percent and the 10-year U.S. Treasury note yield ended the third quarter at 0.69 percent, which was 99 basis points lower as compared with September 30, 2019.

The current economic environment is expected to mute our overall growth of our loan portfolio, however, the strength of our loan origination pipeline has remained fairly resilient in the early stages of the fourth quarter 2020. The low market interest rates for new loans will continue to put pressure on our loan yields and net margin, as well as influence our decision to originate most residential mortgage loans for sale versus portfolio investment. The COVID-19 pandemic and its recent resurgences across the U.S. are expected to impact the level of economic

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activity, employment and household and business confidence in the fourth quarter 2020 and beyond. A prolonged COVID-19 pandemic and economic recovery are likely to weigh on the Bank’s financial results, as highlighted in the remaining MD&A discussion below.

Loans. Loans increased $101.0 million to approximately $32.4 billion at September 30, 2020 from June 30, 2020 largely due to controlled growth in our commercial real estate loan portfolio and a $63 million increase in SBA PPP loans classified as commercial and industrial loans during the third quarter. Commercial real estate loans increased $243.7 million, or 5.9 percent on an annualized basis, to $16.8 billion at September 30, 2020 as compared to June 30, 2020 mainly due to our solid loan commitment pipeline at June 30, 2020 and slower repayment activity in the third quarter. The residential mortgage and most consumer loan categories experienced moderate declines in the third quarter due to the impact of COVID-19, including a higher level of residential mortgage loans originated for sale due to current interest rate risk management strategies. During the third quarter 2020, we originated $385.6 million of residential mortgage loans for sale rather than held for investment and sold approximately $301.2 million of these loans. Residential mortgage loans held for sale at fair value totaled $209.3 million and $120.6 million at September 30, 2020 and June 30, 2020, respectively. See further details on our loan activities under the “Loan Portfolio” section below.

Asset Quality. Total non-performing assets (NPAs), consisting of non-accrual loans, other real estate owned (OREO), other repossessed assets and non-accrual debt security decreased $20.5 million to $203.6 million at September 30, 2020 as compared to June 30, 2020. Non-accrual loans decreased $19.5 million to $191.1 million at September 30, 2020 as compared to June 30, 2020 mainly due to charge-offs within the commercial and industrial loan category, including charge-offs from our taxi medallion loan portfolio caused by a decline in collateral valuations at September 30, 2020. Non-accrual loans represented 0.59 percent of total loans at September 30, 2020, as compared to 0.65 percent at June 30, 2020.

Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) decreased $9.2 million to $83.9 million, or 0.26 percent of total loans, at September 30, 2020 as compared to $93.1 million, or 0.29 percent of total loans, at June 30, 2020 mainly due to declines in residential mortgage and consumer loans in all delinquency categories. This decrease was largely due to improved customer performance, including CARES Act qualifying forbearance loans that resumed their scheduled monthly payments during the third quarter 2020. Commercial real estate loans past due 30 to 59 days increased $12.1 million as compared to June 30, 2020 mainly due to three loan relationships included in this delinquency category at September 30, 2020. See further details in the "Non-performing Assets" section below.

Deposits and Other Borrowings. Average non-interest bearing deposits; savings, NOW and money market deposits; and time deposits represented approximately 28 percent, 46 percent and 26 percent of total deposits as of September 30, 2020, respectively. Overall, average deposits increased by $552.7 million to $31.4 billion for the third quarter 2020 as compared to the second quarter 2020. Our mix of the deposit categories of total average deposits for the third quarter 2020 as compared to the second quarter 2020 experienced a partial migration from time deposits to non-interest bearing and lower-cost transaction account types.

Actual ending balances for deposits decreased $240.0 million to approximately $31.2 billion at September 30, 2020 from June 30, 2020 largely due to decreases of $735.2 million and $232.9 million in time deposits and non-interest bearing deposits, respectively, which were mostly offset by an increase of $728.1 million in the money market, now and savings account category. The decrease in time deposits was driven by maturing high cost retail CDs and partial migration to more liquid deposit product categories, while the decline in non-interest bearing balances was partially caused by normal period end fluctuations and lower deposit balances with PPP loan customers. Total brokered deposits (consisting of both time and money market deposit accounts) were $3.3 billion at September 30, 2020 as compared to $3.6 billion at June 30, 2020. While we believe the current operating environment will likely continue to be favorable for Valley’s deposit gathering initiatives, we cannot guarantee that we will be able to maintain deposit levels at or near those reported at September 30, 2020. Additionally, the vast majority of the PPP loan customers that are Valley depositors are expected to continue to use PPP funds for qualifying payroll and other costs over an 8 to 24 week total period to obtain loan forgiveness. The resulting outflow of funds for such expenditures may contribute to lower levels of deposit balances in the fourth quarter 2020.

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Average short-term borrowings decreased $784.7 million to $1.5 billion for the third quarter 2020 as compared to the second quarter 2020 due to a decline in overnight borrowings, comprised mainly of federal funds purchased, and corresponding reductions in our excess liquidity levels which were prudently elevated by management in the first half of 2020 due to the COVID-19 pandemic. Average long-term borrowings (including junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of financial condition) increased by $73.7 million to $3.0 billion for the third quarter 2020 as compared to the second quarter 2020 mainly due to the $115 million subordinated note issuance in June 2020, which was outstanding for the entire third quarter.

Actual ending balances for short-term borrowings decreased by $652.2 million to $1.4 billion at September 30, 2020 from the second quarter 2020 due to the decline in overnight borrowings. Long-term borrowings decreased by $55.0 million to $2.9 billion at September 30, 2020 as compared to June 30, 2020 mainly due to the prepayment of a $50 million institutional repo borrowing with a stated interest rate of 3.7 percent. The prepayment resulted in a $2.4 million prepayment penalty charge recognized in non-interest expense during the third quarter 2020.

Selected Performance Indicators. The following table presents our annualized performance ratios for the periods indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Return on average assets	0.99	%	0.98	%	0.94	%	1.10	%
Return on average assets, as adjusted	1.01		1.00		0.95		0.96
Return on average shareholders’ equity	9.04		9.26		8.50		10.44
Return on average shareholders’ equity, as adjusted	9.20		9.40		8.59		9.10
Return on average tangible shareholders’ equity (ROATE)	13.30		13.75		12.61		15.65
ROATE, as adjusted	13.53		13.96		12.75		13.65

Adjusted return on average assets, adjusted return on average shareholders' equity, ROATE and adjusted ROATE included in the table above are non-GAAP measures. Management believes these measures provide information useful to management and investors in understanding our underlying operational performance, business and performance trends, and the measures facilitate comparisons of our prior performance with the performance of others in the financial services industry. These non-GAAP financial measures should not be considered in isolation or as a substitute for or superior to financial measures calculated in accordance with U.S. GAAP. These non-GAAP financial measures may also be calculated differently from similar measures disclosed by other companies. The non-GAAP measure reconciliations are presented below.

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Adjusted net income is computed as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Net income, as reported	$	102,374	$	81,891	$	285,243	$	271,689
Add: Loss on extinguishment of debt (net of tax)	1,691		—		1,691		—
Add: Net impairment losses on securities (net of tax)	—		—		—		2,078
Add: Losses on securities transactions (net of tax)	33		67		91		82
Add: Severance expense (net of tax) (1)	—		—		—		3,433
Add: Tax credit investment impairment (net of tax) (2)	—		—		—		1,757
Add: Merger related expenses (net of tax) (3)	76		1,043		1,275		1,068
Add: Income tax expense (4)	—		133		—		12,456
Less: Gain on sale-leaseback transaction (net of tax) (5)	—		—		—		(55,707)
Net income, as adjusted	$	104,174	$	83,134	$	288,300	$	236,856

(1)    Severance expense is included in salary and employee benefits expense.

(2)    Impairment is included in the amortization of tax credit investments.

(3)    Merger related expenses are primarily within salary and employee benefits expense, professional and legal fees, and other non-interest expenses.

(4)    Income tax expense related to reserves for uncertain tax positions.

(5)    The gain on sale leaseback transactions is included in net gains on the sales of assets within other non-interest income.

Adjusted annualized return on average assets is computed by dividing adjusted net income by average assets, as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
	($ in thousands)
Net income, as adjusted	$	104,174		$	83,134		$	288,300		$	236,856
Average assets	$	41,356,737		$	33,419,137		$	40,304,956		$	32,811,565
Annualized return on average assets, as adjusted	1.01		%	1.00		%	0.95		%	0.96		%

Adjusted annualized return on average shareholders' equity is computed by dividing adjusted net income by average shareholders' equity, as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
	($ in thousands)
Net income, as adjusted	$	104,174		$	83,134		$	288,300		$	236,856
Average shareholders' equity	$	4,530,671		$	3,536,528		$	4,472,447		$	3,471,432
Annualized return on average shareholders' equity, as adjusted	9.20		%	9.40		%	8.59		%	9.10		%

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ROATE and adjusted ROATE are computed by dividing net income and adjusted net income, respectively, by average shareholders’ equity less average goodwill and average other intangible assets, as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
	($ in thousands)
Net income	$	102,374		$	81,891		$	285,243		$	271,689
Net income, as adjusted	$	104,174		$	83,134		$	288,300		$	236,856
Average shareholders’ equity	$	4,530,671		$	3,536,528		$	4,472,447		$	3,471,432
Less: Average goodwill and other intangible assets	1,451,889			1,154,462			1,456,536			1,157,203
Average tangible shareholders’ equity	$	3,078,782		$	2,382,066		$	3,015,911		$	2,314,229
Annualized ROATE	13.30		%	13.75		%	12.61		%	15.65		%
Annualized ROATE, as adjusted	13.53		%	13.96		%	12.75		%	13.65		%

In addition to the items used to calculate net income, as adjusted, in the tables above, our net income is, from time to time, impacted by fluctuations in the level of net gains on sales of loans and swap fees recognized from commercial loan customer transactions. These amounts can vary widely from period to period due to, among other factors, the amount of residential mortgage loans originated for sale, bulk loan portfolio sales and commercial loan customer demand for certain products. See the “Non-Interest Income” section below for more details.

Net Interest Income

Net interest income consists of interest income and dividends earned on interest earning assets, less interest expense on interest bearing liabilities, and represents the main source of income for Valley.

Net interest income on a tax equivalent basis totaling $284.1 million for the third quarter 2020 increased $62.4 million as compared to the third quarter 2019 and increased $579 thousand as compared to the second quarter 2020. Our third quarter 2020 net interest income results benefited from the prudent management of the level of interest rates offered on our deposits products, as well as a shift in customer preference towards deposits without stated maturities. Interest expense of $54.3 million for the third quarter 2020 decreased $11.7 million as compared to the second quarter 2020 largely due to the maturity and run-off of higher cost time deposits, reduced interest rates on all deposit products and a reduction in average short-term borrowings within our funding mix during the third quarter. Interest income for the third quarter 2020 decreased by $11.1 million as compared to the second quarter 2020 driven by (i) a $6.0 million decrease in interest income from our loan portfolio largely caused by new and refinanced loan originations at lower current interest rates and a moderate decline in discount accretion related to purchased credit deteriorated loans, and (ii) a $5.1 million decrease in interest and dividends from investment securities due to normal repayments of higher yielding securities and the acceleration of premium amortization expense related to the increased prepayment of mortgage-backed securities.

Average interest earning assets increased $7.3 billion to $37.8 billion for the third quarter 2020 as compared to the third quarter 2019 primarily due to $3.8 billion of interest earning assets acquired from Oritani and organic loan growth over the 12-month period, including $2.3 billion of PPP loans. As compared to the second quarter 2020, average interest earning assets decreased by $10.7 million from $37.8 billion driven by lower excess liquidity held in overnight interest-bearing deposits with banks and normal repayments of investment securities, mostly offset by a $474.1 million increase in average loan balances during the third quarter 2020.

Average interest bearing liabilities increased $4.2 billion to $27.1 billion for the third quarter 2020 as compared to the third quarter 2019 mainly due to deposits and borrowings totaling a combined $3.4 billion assumed in the Oritani acquisition, organic growth of retail deposits and additional long-term borrowings caused by the funding of loan growth and our increased liquidity in response to COVID-19. As compared to the second quarter 2020, average interest bearing liabilities decreased by $516.0 million in the third quarter 2020 primarily due to a decline in overnight borrowings, partially offset by higher average deposit levels caused by general increases in customer

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balances, as well as funded PPP loans which were placed into customer deposit accounts. See additional information under "Deposits and Other Borrowings" in the Executive Summary section above.

Our net interest margin on a tax equivalent basis of 3.01 percent for the third quarter 2020 increased by 1 basis point and 10 basis points from 3.00 percent and 2.91 percent for the second quarter 2020 and third quarter 2019, respectively. The yield on average interest earning assets decreased by 12 basis points on a linked quarter basis, mostly due to the impact of the lower interest rate environment. The yield on average loans decreased by 13 basis points to 3.89 percent for the third quarter 2020 as compared to the second quarter 2020 largely due to the continued repayment of higher yield loans and the lower yield on new loans. The overall cost of average interest bearing liabilities decreased 16 basis points to 0.80 percent for the third quarter 2020 as compared to the linked second quarter 2020 primarily due to the lower rates offered on deposit products, maturing time deposits and a decrease in average short-term borrowings. Our cost of total average deposits was 0.41 percent for the third quarter 2020 as compared to 0.60 percent for the second quarter 2020.

As previously noted, the Federal Reserve has signaled that it expects to hold interest rates near zero for several years to support the economic recovery. While our net interest income and margin was positively impacted by the repricing of deposits which outpaced the decline in yield on interest earning assets during the third quarter 2020, we expect continued pressure on our margin as this positive spread could potentially narrow in future periods.

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The following table reflects the components of net interest income for the three months ended September 30, 2020, June 30, 2020 and September 30, 2019:

Quarterly Analysis of Average Assets, Liabilities and Shareholders’ Equity and

Net Interest Income on a Tax Equivalent Basis

	Three Months Ended
	September 30, 2020						June 30, 2020						September 30, 2019
	Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate
	($ in thousands)
Assets
Interest earning assets:
Loans (1)(2)	$	32,515,264	$	315,863	3.89	%	$	32,041,200	$	321,883	4.02	%	$	26,136,745	$	298,384	4.57	%
Taxable investments (3)	3,354,373		17,529		2.09		3,673,090		22,539		2.45		3,411,330		24,972		2.93
Tax-exempt investments (1)(3)	542,450		4,564		3.37		562,172		4,673		3.32		632,709		5,341		3.38
Interest bearing deposits with banks	1,355,623		420		0.12		1,501,925		411		0.11		313,785		1,686		2.15
Total interest earning assets	37,767,710		338,376		3.58		37,778,387		349,506		3.70		30,494,569		330,383		4.33
Allowance for loan losses	(309,382)						(284,184)						(157,176)
Cash and due from banks	291,803						424,625						267,331
Other assets	3,558,927						3,540,513						2,812,665
Unrealized gains on securities available for sale, net	47,679						44,173						1,748
Total assets	$	41,356,737					$	41,503,514					$	33,419,137
Liabilities and shareholders’ equity
Interest bearing liabilities:
Savings, NOW and money market deposits	$	14,542,470	$	13,323	0.37	%	$	13,788,951	$	16,627	0.48	%	$	11,065,959	$	35,944	1.30	%
Time deposits	8,027,346		19,028		0.95		8,585,782		29,857		1.39		7,383,202		42,848		2.32
Total interest bearing deposits	22,569,816		32,351		0.57		22,374,733		46,484		0.83		18,449,161		78,792		1.71
Short-term borrowings	1,533,246		2,588		0.68		2,317,992		1,980		0.34		2,265,528		12,953		2.29
Long-term borrowings (4)	2,959,728		19,318		2.61		2,886,016		17,502		2.43		2,143,432		16,891		3.15
Total interest bearing liabilities	27,062,790		54,257		0.80		27,578,741		65,966		0.96		22,858,121		108,636		1.90
Non-interest bearing deposits	8,820,877						8,463,230						6,387,188
Other liabilities	942,399						984,097						637,300
Shareholders’ equity	4,530,671						4,477,446						3,536,528
Total liabilities and shareholders’ equity	$	41,356,737					$	41,503,514					$	33,419,137
Net interest income/interest rate spread (5)			$	284,119	2.78	%			$	283,540	2.74	%			$	221,747	2.43	%
Tax equivalent adjustment			(1,033)						(981)						(1,122)
Net interest income, as reported			$	283,086					$	282,559					$	220,625
Net interest margin (6)					3.00	%					2.99	%					2.89	%
Tax equivalent effect					0.01	%					0.01	%					0.02	%
Net interest margin on a fully tax equivalent basis (6)					3.01	%					3.00	%					2.91	%

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The following table reflects the components of net interest income for the nine months ended September 30, 2020 and 2019:

	Nine Months Ended
	September 30, 2020						September 30, 2019
	Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate
	($ in thousands)
Assets
Interest earning assets:
Loans (1)(2)	$	31,522,268	$	970,814	4.11	%	$	25,651,195	$	883,595	4.59	%
Taxable investments (3)	3,527,823		65,402		2.47		3,418,614		76,306		2.98
Tax-exempt investments (1)(3)	563,459		14,207		3.36		660,162		16,936		3.42
Interest bearing deposits with banks	1,130,257		2,296		0.27		251,728		3,947		2.09
Total interest earning assets	36,743,807		1,052,719		3.82		29,981,699		980,784		4.36
Allowance for loan losses	(283,508)						(155,643)
Cash and due from banks	318,370						273,191
Other assets	3,492,846						2,734,304
Unrealized gains (losses) on securities available for sale, net	33,441						(21,986)
Total assets	$	40,304,956					$	32,811,565
Liabilities and shareholders’ equity
Interest bearing liabilities:
Savings, NOW and money market deposits	$	13,834,930	$	64,463	0.62	%	$	11,268,852	$	110,247	1.30	%
Time deposits	8,501,949		91,699		1.44		7,215,745		121,350		2.24
Total interest bearing deposits	22,336,879		156,162		0.93		18,484,597		231,597		1.67
Short-term borrowings	1,723,947		9,275		0.72		2,220,014		40,362		2.42
Long-term borrowings (4)	2,873,912		53,240		2.47		1,807,503		45,761		3.38
Total interest bearing liabilities	26,934,738		218,677		1.08		22,512,114		317,720		1.88
Non-interest bearing deposits	7,995,759						6,288,382
Other liabilities	902,012						539,637
Shareholders’ equity	4,472,447						3,471,432
Total liabilities and shareholders’ equity	$	40,304,956					$	32,811,565
Net interest income/interest rate spread (5)			$	834,042	2.74	%			$	663,064	2.48	%
Tax equivalent adjustment			(3,058)						(3,557)
Net interest income, as reported			$	830,984					$	659,507
Net interest margin (6)					3.02	%					2.93	%
Tax equivalent effect					0.01	%					0.02	%
Net interest margin on a fully tax equivalent basis (6)					3.03	%					2.95	%

(1)Interest income is presented on a tax equivalent basis using a 21 percent federal tax rate.

(2)Loans are stated net of unearned income and include non-accrual loans.

(3)The yield for securities that are classified as available for sale is based on the average historical amortized cost.

(4)Includes junior subordinated debentures issued to capital trusts which are presented separately on the consolidated

statements of financial condition.

(5)Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities and is presented on a fully tax equivalent basis.

(6)Net interest income as a percentage of total average interest earning assets.

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The following table demonstrates the relative impact on net interest income of changes in the volume of interest earning assets and interest bearing liabilities and changes in rates earned and paid by us on such assets and liabilities. Variances resulting from a combination of changes in volume and rates are allocated to the categories in proportion to the absolute dollar amounts of the change in each category.

Change in Net Interest Income on a Tax Equivalent Basis

	Three Months Ended September 30, 2020 Compared to September 30, 2019						Nine Months Ended September 30, 2020 Compared to September 30, 2019
	Change Due to Volume		Change Due to Rate		Total Change		Change Due to Volume		Change Due to Rate		Total Change
	(in thousands)
Interest Income:
Loans*	$	66,080	$	(48,601)	$	17,479	$	187,593	$	(100,374)	$	87,219
Taxable investments	(410)		(7,033)		(7,443)		2,372		(13,276)		(10,904)
Tax-exempt investments*	(759)		(18)		(777)		(2,443)		(286)		(2,729)
Interest bearing deposits with banks	1,489		(2,755)		(1,266)		4,178		(5,829)		(1,651)
Total increase (decrease) in interest income	66,400		(58,407)		7,993		191,700		(119,765)		71,935
Interest Expense:
Savings, NOW and money market deposits	8,825		(31,446)		(22,621)		21,120		(66,904)		(45,784)
Time deposits	3,454		(27,274)		(23,820)		19,055		(48,706)		(29,651)
Short-term borrowings	(3,259)		(7,106)		(10,365)		(7,489)		(23,598)		(31,087)
Long-term borrowings and junior subordinated debentures	5,671		(3,244)		2,427		22,020		(14,541)		7,479
Total increase (decrease) in interest expense	14,691		(69,070)		(54,379)		54,706		(153,749)		(99,043)
Total increase in net interest income	$	51,709	$	10,663	$	62,372	$	136,994	$	33,984	$	170,978

*Interest income is presented on a tax equivalent basis using 21 percent as the federal tax rate.

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Non-Interest Income

Non-interest income increased $8.1 million and decreased $40.9 million for the three and nine months ended September 30, 2020 as compared to the same periods of 2019. The following table presents the components of non-interest income for the three and nine months ended September 30, 2020 and 2019:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Trust and investment services	$	3,068	$	3,296	$	9,307	$	9,296
Insurance commissions	1,816		2,748		5,426		7,922
Service charges on deposit accounts	3,952		5,904		13,189		17,634
Losses on securities transactions, net	(46)		(93)		(127)		(114)
Net impairment losses on securities recognized in earnings	—		—		—		(2,928)
Fees from loan servicing	2,551		2,463		7,526		7,260
Gains on sales of loans, net	13,366		5,194		26,253		13,700
Gains (losses) on sales of assets, net	894		(159)		716		76,997
Bank owned life insurance	(1,304)		2,687		7,661		6,779
Other	24,975		19,110		65,548		39,880
Total non-interest income	$	49,272	$	41,150	$	135,499	$	176,426

Insurance commissions declined $932 thousand and $2.5 million for the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in 2019 mainly due to lower volumes of business generated by the Bank's insurance agency subsidiary.

Service charges on deposit accounts decreased by $2.0 million and $4.4 million for the three and nine months ended September 30, 2020, respectively, as compared to the same periods of 2019 mostly due to waived fees related to COVID-19 customer relief efforts during the second and third quarters of 2020.

The other-than-temporary impairment losses on securities for the nine months ended September 30, 2019 related to one special revenue bond in default of its contractual payments starting in the second quarter 2019.

Gains on sales of loans, net increased $8.2 million and $12.6 million for the three and nine months ended September 30, 2020, respectively, as compared to the corresponding periods in 2019. Our net gains on sales of loans for each period are comprised of both gains on sales of residential mortgages and the net change in the mark to market gains and losses on our loans originated for sale and carried at fair value at each period end. The net gains from the change in the fair value of loans held for sale totaled $4.3 million and $8.3 million for the three and nine months ended September 30, 2020, respectively, as compared to the $1.4 million increase and $4.4 million decrease for the three and nine months ended September 30, 2019, respectively. During the third quarter 2020, we sold approximately $301.2 million of residential mortgage loans as compared to $219.6 million during the third quarter 2019. See further discussions of our residential mortgage loan origination activity under the “Loan Portfolio” section of this MD&A below.

Net gains on sales of assets decreased $76.3 million for the nine months ended September 30, 2020 as compared to the same period of 2019 primarily due to a $78.5 million gain on the sale (and leaseback) of 26 locations recognized during the first quarter 2019.

Bank owned life insurance income decreased $4.0 million for the third quarter 2020 as compared to the same period in 2019 largely due to several periodic death benefits claims received in the second quarter 2020 and a related credit

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adjustment of $3.3 million to the mortality contingency reserves component of our BOLI assets recognized during the third quarter 2020 with a corresponding reduction in BOLI income.

Other non-interest income increased $5.9 million and $25.7 million for the three and nine months ended September 30, 2020, respectively, as compared to the same periods in 2019 primarily due to increased swap fee income related to derivative interest rate swaps executed with commercial loan customers. Swap fees totaled $19.2 million and $13.9 million for the three months ended September 30, 2020 and 2019, respectively, and $48.1 million and $23.4 million for the nine months ended September 30, 2020 and 2019, respectively.

Non-Interest Expense

Non-interest expense increased $14.3 million and $37.6 million for the three and nine months ended September 30, 2020 as compared to the same periods of 2019. The following table presents the components of non-interest expense for the three and nine months ended September 30, 2020 and 2019:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Salary and employee benefits expense	$	83,626	$	77,271	$	247,886	$	236,559
Net occupancy and equipment expense	31,116		29,203		96,774		86,789
FDIC insurance assessment	4,847		5,098		14,858		16,150
Amortization of other intangible assets	6,377		4,694		18,528		13,175
Professional and legal fees	8,762		5,870		22,646		15,286
Loss on extinguishment of debt	2,353		—		2,353		—
Amortization of tax credit investments	2,759		4,385		9,403		16,421
Telecommunications expense	2,094		2,698		7,247		7,317
Other	18,251		16,658		53,312		43,712
Total non-interest expense	$	160,185	$	145,877	$	473,007	$	435,409

Salary and employee benefits expense increased $6.4 million and $11.3 million for the three and nine months ended September 30, 2020, respectively, as compared to the same periods of 2019. The increases in both periods were largely due to additional salaries related to bank branch and other operational staff retained from the Oritani acquisition, as well as higher accrued cash incentive compensation and increased medical expenses. These additional expenses were partially offset by cost reductions from our ongoing branch transformation efforts and other operational improvements over the last 12 months. The increase for the nine months ended September 30, 2020 as compared to the same period in 2019 was also partly driven by a $1.8 million special bonus paid to hourly employees impacted by COVID-19 that was incurred in the first quarter 2020.

Net occupancy and equipment expense increased $1.9 million and $10.0 million for the three and nine months ended September 30, 2020, respectively, as compared to the same periods of 2019. These increases were mostly due to additional costs associated with branches and other facilities acquired from Oritani, which were partially offset by costs savings from branch closures over the last 12 months. During the three and nine months ended September 30, 2020, we incurred higher equipment and certain other COVID-19 related expenses which included additional cleaning services for facilities to maintain employee and customer safety. In addition, the increase for the nine months September 30, 2020 was driven by higher rental expenses resulting from a sale leaseback transaction completed near the end of the first quarter 2019 and higher depreciation expense related to computer equipment and new data centers placed into service in fourth quarter 2019.

Loss on extinguishment of debt totaling $2.4 million for the three and nine months ended September 30, 2020 related to the prepayment of $50 million of long-term institutional repo borrowings during September 2020. The

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debt prepayment was funded by excess cash liquidity. See Note 10 to the consolidated financial statements for additional information.

Amortization of other intangibles increased $1.7 million and $5.4 million for the three and nine months ended September 30, 2020, respectively, as compared to the same periods of 2019 largely due to higher amortization expense of loan servicing rights and core deposit intangible amortization acquired in the recent Oritani acquisition, as well as $966 thousand of net impairment of loan servicing rights for the nine months ended September 30, 2020. See Note 9 to the consolidated financial statements for additional information.

Professional and legal fees increased $2.9 million and $7.4 million for the three and nine months ended September 30, 2020, respectively, as compared to the same periods of 2019, largely due to higher costs from technology transformation consulting services, as well as remote work readiness costs largely incurred in the second quarter 2020 impacting the nine month period.

Amortization of tax credit investments decreased $1.6 million and $7.0 million for the three and nine months ended September 30, 2020, respectively, as compared to the same periods of 2019 largely due to a decline in impairment. The nine months ended September 30, 2019 included a $2.4 million impairment charge related to investments in three federal renewable energy tax credit funds sponsored by DC Solar. The remainder of the variances from the prior periods were mainly due to normal differences in the timing and amount of such investments and recognition of the related tax credits. Tax credit investments, while negatively impacting the level of our operating expenses and efficiency ratio, produce tax credits that reduce our income tax expense and effective tax rate. See Note 14 to the consolidated financial statements for more details on our tax credit investments.

Other non-interest expense increased $1.6 million and $9.6 million for the three and nine months ended September 30, 2020, respectively, as compared to the same periods of 2019. These increases were largely due to higher data processing costs, certain PPP loan costs, such as advertising, and other COVID-19 related costs, as well as incrementally higher operating expenses in several categories due to the expansion of our operations both organically and through the acquisition of Oritani in the fourth quarter 2019. Within the category, net gains on the sale of OREO properties decreased $782 thousand for the nine months ended September 30, 2020 as compared to the same period in 2019.

Efficiency Ratio

The efficiency ratio measures total non-interest expense as a percentage of net interest income plus total non-interest income. We believe this non-GAAP measure provides a meaningful comparison of our operational performance and facilitates investors’ assessments of business performance and trends in comparison to our peers in the banking industry. Our overall efficiency ratio, and its comparability to some of our peers, is negatively impacted by the amortization of tax credit investments, as well as infrequent charges within non-interest income and expense, such as the loss on extinguishment of debt and merger expenses.

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The following table presents our efficiency ratio and a reconciliation of the efficiency ratio adjusted for certain items during the three and nine months ended September 30, 2020 and 2019:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
	($ in thousands)
Total non-interest expense	$	160,185		$	145,877		$	473,007		$	435,409
Less: Loss on extinguishment of debt (pre-tax)	2,353			—			2,353			—
Less: Severance expense (pre-tax)	—			—			—			4,838
Less: Amortization of tax credit investments (pre-tax)	2,759			4,385			9,403			16,421
Less: Merger related expenses (pre-tax)	106			1,434			1,774			1,469
Total non-interest expense, adjusted	$	154,967		$	140,058		$	459,477		$	412,681
Net interest income	$	283,086		$	220,625		$	830,984		$	659,507
Total non-interest income	49,272			41,150			135,499			176,426
Less: Gain on sale-leaseback transaction (pre-tax)	—			—			—			78,505
Add: Losses on securities transactions, net (pre-tax)	46			93			127			114
Add: Net impairment losses on securities (pre-tax)	—			—			—			2,928
Total net interest income and non-interest income	$	332,404		$	261,868		$	966,610		$	760,470
Efficiency ratio	48.20		%	55.73		%	48.94		%	52.09		%
Efficiency ratio, adjusted	46.62		%	53.48		%	47.53		%	54.27		%

Income Taxes

Income tax expense totaled $38.9 million for the third quarter 2020 as compared to $33.5 million and $25.3 million for the second quarter 2020 and third quarter 2019, respectively. Our effective tax rate was 27.5 percent, 25.9 percent and 23.6 percent for the third quarter 2020, second quarter 2020 and third quarter 2019, respectively. The increase in the third quarter 2020 effective tax rate was mainly due to higher pre-tax income and the retroactive increase in New Jersey’s corporate business income tax surtax from 1.5 percent to 2.5 percent caused by a change in state tax laws which went into effect in the third quarter 2020. The change in the New Jersey surtax resulted in an additional $1.1 million, net of federal tax benefit, charge to income tax expense for the third quarter 2020.

The CARES Act did not have a material impact on our reported income tax expense for the nine months ended September 30, 2020.

U.S. GAAP requires that any change in judgment or change in measurement of a tax position taken in a prior annual period be recognized as a discrete event in the quarter in which it occurs, rather than being recognized as a change in effective tax rate for the current year. Our adherence to these tax guidelines may result in volatile effective income tax rates in future quarterly and annual periods. Factors that could impact management’s judgment include changes in income, tax laws and regulations, and tax planning strategies.

Business Segments

We have four business segments that we monitor and report on to manage our business operations. These segments are consumer lending, commercial lending, investment management, and corporate and other adjustments. Our reportable segments have been determined based upon Valley’s internal structure of operations and lines of business. Each business segment is reviewed routinely for its asset growth, contribution to income before income taxes and return on average interest earning assets and impairment (if events or circumstances indicate a possible inability to realize the carrying amount). Expenses related to the branch network, all other components of retail banking, along with the back office departments of the Bank are allocated from the corporate and other adjustments segment to each of the other three business segments. Interest expense and internal transfer expense (for general corporate expenses) are allocated to each business segment utilizing a transfer pricing methodology, which involves

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the allocation of operating and funding costs based on each segment's respective mix of average earning assets and/or liabilities outstanding for the period. The financial reporting for each segment contains allocations and reporting in line with our operations, which may not necessarily be comparable to any other financial institution. The accounting for each segment includes internal accounting policies designed to measure consistent and reasonable financial reporting and may result in income and expense measurements that differ from amounts under U.S. GAAP. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.

The following tables present the financial data for each business segment for the three months ended September 30, 2020 and 2019:

	Three Months Ended September 30, 2020
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	7,126,157		$	25,389,107		$	5,252,446		$	—	$	37,767,710
Income (loss) before income taxes	34,565			121,351			1,066			(15,717)		141,265
Annualized return on average interest earning assets (before tax)	1.94		%	1.91		%	0.08		%	N/A		1.50		%

	Three Months Ended September 30, 2019
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	6,858,216		$	19,278,529		$	4,357,824		$	—	$	30,494,569
Income (loss) before income taxes	18,300			91,629			6,781			(9,512)		107,198
Annualized return on average interest earning assets (before tax)	1.07		%	1.90		%	0.62		%	N/A		1.41		%

See Note 15 to the consolidated financial statements for additional information.

Consumer Lending

This segment, representing approximately 21.5 percent of our loan portfolio at September 30, 2020, is mainly comprised of residential mortgage loans and automobile loans, and to a lesser extent, home equity loans, secured personal lines of credit and other consumer loans (including credit card loans). The duration of the residential mortgage loan portfolio (which represented 13.2 percent of our loan portfolio at September 30, 2020) is subject to movements in the market level of interest rates and forecasted prepayment speeds. The weighted average life of the automobile loans (representing 4.1 percent of total loans at September 30, 2020) is relatively unaffected by movements in the market level of interest rates. However, the average life may be impacted by new loans as a result of the availability of credit within the automobile marketplace and consumer demand for purchasing new or used automobiles. The consumer lending segment also includes the Wealth Management and Insurance Services Division, comprised of trust, asset management, and insurance services.

Average interest earning assets in this segment increased $267.9 million to $7.1 billion for the three months ended September 30, 2020 as compared to the third quarter 2019. The increase was largely due to approximately $255 million of loans acquired from Oritani, loan growth from residential mortgage loan originations for investment over most of the last 12 month period, as well as solid demand for both automobile loans and collateralized personal lines of credit prior to the economic slowdown starting in the second quarter 2020 due to the COVID-19 pandemic.

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Income before income taxes generated by the consumer lending segment increased $16.3 million to $34.6 million for the third quarter 2020 as compared to the third quarter 2019 largely due to increases in both net interest income and non-interest income totaling $10.2 million and $8.4 million, respectively. The increase in net interest income was mainly driven by lower funding costs and the increase in average loans. The increase in non-interest income was mostly driven by an $8.2 million increase in the net gains on sales of loans caused by the higher level of residential mortgage sales during the third quarter 2020. The positive impact of the aforementioned items was partially offset by a $3.4 million increase in the provision for loan losses for the third quarter 2020 as compared to the third quarter 2019 mainly due to the impact of the adverse economic forecast caused by COVID-19 included in our estimate of lifetime expected credit losses for this segment. See further details in the "Allowance for Credit Losses" section of this MD&A.

The net interest margin on the consumer lending portfolio increased 47 basis points to 3.08 percent for the third quarter 2020 as compared to the third quarter 2019 mainly due to a 86 basis point decrease in the costs associated with our funding sources, partially offset by a 39 basis point decrease in the yield on average loans. The decrease in our funding costs was mainly due to deposits and borrowings continuing to reprice at lower interest rates and the prepayment of the $635 million high cost FHLB advances in December 2019. The 39 basis point decrease in loan yield was largely due to lower yielding new loan volumes. See the "Executive Summary" and the "Net Interest Income" sections above for more details on our net interest margin and funding sources.

Commercial Lending

The commercial lending segment is comprised of floating rate and adjustable rate commercial and industrial loans and construction loans, as well as fixed rate owner occupied and commercial real estate loans. Due to the portfolio’s interest rate characteristics, commercial lending is Valley’s business segment that is most sensitive to movements in market interest rates. Commercial and industrial loans totaled approximately $6.9 billion and represented 21.3 percent of the total loan portfolio at September 30, 2020. Commercial real estate loans and construction loans totaled $18.5 billion and represented 57.2 percent of the total loan portfolio at September 30, 2020.

Average interest earning assets in this segment increased approximately $6.1 billion to $25.4 billion for the three months ended September 30, 2020 as compared to the third quarter 2019. The increase was mostly due to strong organic loan growth within the commercial and industrial and commercial real estate loan portfolios over most of the last 12-month period, including $2.3 billion of PPP loans originated in the second and third quarters of 2020, as well as $3.4 billion of loans acquired from Oritani during the fourth quarter 2019.

For the three months ended September 30, 2020, income before income taxes for the commercial lending segment increased $29.7 million to $121.4 million as compared to the third quarter 2019 mainly due to increases in both net interest income and non-interest income. Net interest income increased $54.6 million to $218.6 million for the third quarter 2020 as compared to the same period in 2019 mostly driven by lower funding costs and the increase in average loans. Non-interest income increased $5.4 million to $20.4 million during the three months ended September 30, 2020 as compared to the third quarter 2019 mainly due to a $5.3 million increase in swap fee income related to derivative interest rate swaps executed with commercial loan customers. The positive impact of the aforementioned items was partially offset by a $18.9 million increase in the provision for credit losses caused by several factors, including the adverse economic forecast for lifetime expected credit losses, additional qualitative management adjustments to reflect the potential for higher levels of credit stress related to borrowers impacted by COVID-19, and the impact of lower valuations of collateral securing our non-performing taxi medallion loan portfolio. Internal transfer expense also increased $10.8 million for the third quarter 2020 as compared to the third quarter 2019 partly due to general increases related to acquired and organic growth in our business.

The net interest margin for this segment increased 3 basis points to 3.44 percent for the third quarter 2020 as compared to the third quarter 2019 largely due to a 84 basis point decrease in the cost of our funding sources, partially offset by a 81 basis point decrease in the yield on average loans.

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Investment Management

The investment management segment generates a large portion of our income through investments in various types of securities and interest-bearing deposits with other banks. These investments are mainly comprised of fixed rate securities and, depending on our liquid cash position, federal funds sold and interest-bearing deposits with banks (primarily the Federal Reserve Bank of New York) as part of our asset/liability management strategies. The fixed rate investments are one of Valley’s least sensitive assets to changes in market interest rates. However, a portion of the investment portfolio is invested in shorter-duration securities to maintain the overall asset sensitivity of our balance sheet. See the “Asset/Liability Management” section below for further analysis.

Average interest earning assets in this segment increased $894.6 million during the third quarter 2020 as compared to the third quarter 2019 primarily due to a $1.0 billion increase in average interest bearing deposits with banks. The increase in average overnight interest bearing deposits with banks was mostly caused by our prudent maintenance of higher excess liquidity levels due to the COVID-19 pandemic during third quarter 2020, as well as the normal timing of loan and investment activity, including sales of residential mortgage loans.

For the third quarter 2020, income before income taxes for the investment management segment decreased $5.7 million to $1.1 million as compared to the third quarter 2019 mostly due to decreases in non-interest income and net interest income totaling $4.0 million and $1.2 million, respectively. The decrease in non-interest income was primarily due to lower BOLI income due to a periodic adjustment to the BOLI assets recognized in the three months ended September 30, 2020. See further details in the "Non-Interest Income" sections of this MD&A.

The net interest margin for this segment decreased 37 basis points to 1.20 percent for the third quarter 2020 as compared to the same quarter 2019 largely due to a 123 basis point decrease in the yield on average investments, partially offset by a 86 basis point decrease in costs associated with our funding sources. The decrease in the yield on average investments as compared to the third quarter 2019 was largely driven by repayment and prepayment of higher yield residential mortgage-backed securities, acceleration of premium amortization expense related to the increased prepayment of mortgage-backed securities and purchases of lower yielding investment securities over the last 12 months.

Corporate and other adjustments

The amounts disclosed as “corporate and other adjustments” represent income and expense items not directly attributable to a specific segment, including net securities gains and losses not reported in the investment management segment above, interest expense related to subordinated notes, amortization and impairment of tax credit investments, as well as non-core items, including the loss on extinguishment of debt and merger expenses.

The corporate segment recognized a $15.7 million and $9.5 million pre-tax loss for the three months ended September 30, 2020 and 2019, respectively. Higher pre-tax loss for the third quarter 2020 was mainly due to a $14.3 million increase in non-interest expense, partially offset by a $10.9 million increase in internal transfer income. The increase in non-interest expense was largely driven by increases in salaries and employee benefits expenses, net occupancy and equipment expense, professional and legal fees, and a $2.4 million loss on extinguishment of debt recognized in the third quarter 2020. Non-interest income also decreased $1.7 million for the three months ended September 30, 2020 from the third quarter 2019. See further details in the "Non-Interest Income" and "Non-Interest Expense" sections of this MD&A.

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The following tables present the financial data for each business segment for the nine months ended September 30, 2020 and 2019:

	Nine Months Ended September 30, 2020
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	7,187,839		$	24,334,429		$	5,221,538		$	—	$	36,743,806
Income (loss) before income taxes	80,367			326,713			16,426			(36,777)		386,729
Annualized return on average interest earning assets (before tax)	1.49		%	1.79		%	0.42		%	N/A		1.40		%

	Nine Months Ended September 30, 2019
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	6,812,001		$	18,839,194		$	4,330,504		$	—	$	29,981,699
Income before income taxes	56,013			264,793			22,440			38,478		381,724
Annualized return on average interest earning assets (before tax)	1.10		%	1.87		%	0.69		%	N/A		1.70		%

Consumer Lending

Average interest earning assets in this segment increased $375.8 million to $7.2 billion for the nine months ended September 30, 2020 as compared to the same period in 2019. The increase was largely due to approximately $255 million of loans acquired from Oritani, loan growth from residential mortgage loan originations for investment over most of the last 12 month period, as well as solid demand for both automobile loans and collateralized personal lines of credit prior to the economic slowdown in the second quarter 2020 due to the COVID-19 pandemic.

Income before income taxes generated by the consumer lending segment increased $24.4 million to $80.4 million for the nine months ended September 30, 2020 as compared to the same period in 2019 largely due to increases of $24.4 million and $13.5 million in net interest income and non-interest income, respectively. The increase in net interest income was mainly driven by lower funding costs and the increase in average loans. The increase in non-interest income was largely attributable to higher net gains on sales of loans for the nine months ended September 30, 2020 as compared to the same period in 2019. The positive impact of the aforementioned items was partially offset by increases of $10.3 million and $3.3 million in the provision for loan losses and non-interest expense, respectively. The increase in the provision for loan losses for the nine months ended September 30, 2020 as compared to the same period of 2019 was mainly due to the adverse economic forecast caused by COVID-19 included in our estimate of lifetime expected credit losses for this segment as well as additional qualitative management adjustments to reflect the potential for higher levels of credit stress related to COVID-19 impacted borrowers. See further details in the "Allowance for Credit Losses" section of this MD&A.

The net interest margin on the consumer lending portfolio increased 31 basis points to 2.94 percent for the nine months ended September 30, 2020 as compared to the same period one year ago mainly due to a 61 basis point decrease in the costs associated with our funding sources, partially offset by a 30 basis point decrease in the yield on average loans. The decrease in our funding costs was mainly due to both deposits and borrowings continuing to reprice at lower interest rates and the prepayment of the $635 million high cost FHLB advances in December 2019. The 30 basis point decrease in loan yield was largely due to lower yielding new loan volumes.

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Commercial Lending

Average interest earning assets in this segment increased $5.5 billion to $24.3 billion for the nine months ended September 30, 2020 as compared to the same period in 2019. This increase was primarily due to organic loan growth over the last 12-month period, including PPP loans originations of $2.3 billion during the second and the third quarters 2020, and loans acquired from Oritani on December 1, 2019.

For the nine months ended September 30, 2020, income before income taxes for the commercial lending segment increased $61.9 million to $326.7 million as compared to the same period in 2019. Net interest income increased $148.2 million to $635.8 million for the nine months ended September 30, 2020 as compared to the same period in 2019 largely due to the higher average loan balances. Non-interest income also increased $22.7 million for the nine months ended September 30, 2020 as compared to the same period in 2019 primarily due to a $24.7 million increase in fee income related to derivative interest rate swaps executed with commercial loan customers. The positive impact of the aforementioned items was partially offset by a $77.0 million increase in the provision for credit losses to $90.8 million during the nine months ended September 30, 2020 as compared to $13.8 million for the same period in 2019. The increase in the provision for credit losses was mainly due to the adverse economic forecast for lifetime expected credit losses during the first half of 2020, higher specific reserves for tax medallion loans and qualitative adjustments for potential credit stress related to borrowers impacted by the COVID-19 pandemic. See the "Allowance for Credit Losses" section below for further details. Internal transfer expense increased $35.6 million to $197.4 million for the nine months ended September 30, 2020 as compared to the same period in 2019.

The net interest margin for this segment increased 3 basis points to 3.48 percent for the nine months ended September 30, 2020 as compared to the same period in 2019 due to a 61 basis point decrease in the cost of our funding sources, partially offset by a 58 basis point decrease in yield on average loans.

Investment Management

Average interest earning assets in this segment increased $891.0 million during the nine months ended September 30, 2020 as compared to the same period in 2019 largely due to increases of $878.5 million in average interest bearing deposits with banks and, to a much lesser extent, an increase in the investment securities portfolio. The increase in average overnight interest bearing deposits with banks was mainly due to our higher levels of excess liquidity levels that were maintained in the 2020 period in response to the uncertainties created by the COVID-19 pandemic.

For the nine months ended September 30, 2020, income before income taxes for the investment management segment decreased $6.0 million to $16.4 million as compared to the same period in 2019 mainly due to increases in internal transfer expense and provision for credit losses for debt securities held to maturity totaling $5.1 million and $688 thousand, respectively.

The net interest margin for this segment decreased 29 basis points to 1.34 percent for the nine months ended September 30, 2020 as compared to the same period in 2019 largely due to a 90 basis point decrease in the yield on average investments, partially offset by a 61 basis point decrease in costs associated with our funding sources. The decrease in the yield on average investments as compared to the same period of 2019 was mainly due to repayment and prepayment of higher yield residential mortgage-backed securities, increased premium amortization and lower yielding new investments purchased over the last 12 months, and low yielding excess liquidity held in overnight investments.

Corporate and other adjustments

The pre-tax net loss for the corporate segment totaled $36.8 million for the nine months ended September 30, 2020 as compared to the net income of $38.5 million for the same period in 2019. The negative change of $75.3 million was mainly due to a decrease in non-interest income coupled with an increase in non-interest expense. The non-interest income decreased $77.3 million to $20.3 million for the nine months ended September 30, 2020 as compared to the same period in 2019 primarily due to a $78.5 million gain on the sale (and leaseback) of several

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bank locations recognized during the nine months ended September 30, 2019. Non-interest expense increased $37.8 million to $338.9 million for the nine months ended September 30, 2020 as compared to the same period in 2019 largely due to increases in net occupancy and equipment expense, salaries and employee benefits expenses and professional and legal fees. See further details in the "Non-Interest Expense" section above. Internal transfer income increased $40.7 million to $298.2 million for the nine months ended September 30, 2020 as compared to the same period in 2019 largely due to general increases related to our growth.

ASSET/LIABILITY MANAGEMENT

Interest Rate Sensitivity

Our success is largely dependent upon our ability to manage interest rate risk. Interest rate risk can be defined as the exposure of our interest rate sensitive assets and liabilities to the movement in interest rates. Our Asset/Liability Management Committee is responsible for managing such risks and establishing policies that monitor and coordinate our sources and uses of funds. Asset/Liability management is a continuous process due to the constant change in interest rate risk factors. In assessing the appropriate interest rate risk levels for us, management weighs the potential benefit of each risk management activity within the desired parameters of liquidity, capital levels and management’s tolerance for exposure to income fluctuations. Many of the actions undertaken by management utilize fair value analysis and attempt to achieve consistent accounting and economic benefits for financial assets and their related funding sources. We have predominantly focused on managing our interest rate risk by attempting to match the inherent risk and cash flows of financial assets and liabilities. Specifically, management employs multiple risk management activities such as optimizing the level of new residential mortgage originations retained in our mortgage portfolio through increasing or decreasing loan sales in the secondary market, product pricing levels, the desired maturity levels for new originations, the composition levels of both our interest earning assets and interest bearing liabilities, as well as several other risk management activities.

We use a simulation model to analyze net interest income sensitivity to movements in interest rates. The simulation model projects net interest income based on various interest rate scenarios over a 12-month and 24-month period. The model is based on the actual maturity and re-pricing characteristics of rate sensitive assets and liabilities. The model incorporates certain assumptions which management believes to be reasonable regarding the impact of changing interest rates and the prepayment assumptions of certain assets and liabilities as of September 30, 2020. The model assumes immediate changes in interest rates without any proactive change in the composition or size of the balance sheet, or other future actions that management might undertake to mitigate this risk. In the model, the forecasted shape of the yield curve remains static as of September 30, 2020. The impact of interest rate derivatives, such as interest rate swaps, is also included in the model.

Our simulation model is based on market interest rates and prepayment speeds prevalent in the market as of September 30, 2020. Although the size of Valley’s balance sheet is forecasted to remain static as of September 30, 2020 in our model, the composition is adjusted to reflect new interest earning assets and funding originations coupled with rate spreads utilizing our actual originations during the third quarter 2020. The model also utilizes an immediate parallel shift in market interest rates at September 30, 2020.

The assumptions used in the net interest income simulation are inherently uncertain. Actual results may differ significantly from those presented in the table below due to the frequency and timing of changes in interest rates and changes in spreads between maturity and re-pricing categories. Overall, our net interest income is affected by changes in interest rates and cash flows from our loan and investment portfolios. We actively manage these cash flows in conjunction with our liability mix, duration and interest rates to optimize the net interest income, while structuring the balance sheet in response to actual or potential changes in interest rates. Additionally, our net interest income is impacted by the level of competition within our marketplace. Competition can negatively impact the level of interest rates attainable on loans and increase the cost of deposits, which may result in downward pressure on our net interest margin in future periods. Other factors, including, but not limited to, the slope of the yield curve and projected cash flows will impact our net interest income results and may increase or decrease the level of asset sensitivity of our balance sheet.

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Convexity is a measure of how the duration of a financial instrument changes as market interest rates change. Potential movements in the convexity of bonds held in our investment portfolio, as well as the duration of the loan portfolio may have a positive or negative impact on our net interest income in varying interest rate environments. As a result, the increase or decrease in forecasted net interest income may not have a linear relationship to the results reflected in the table below. Management cannot provide any assurance about the actual effect of changes in interest rates on our net interest income.

The following table reflects management’s expectations of the change in our net interest income over the next 12- month period in light of the aforementioned assumptions. While an instantaneous and severe shift in interest rates was used in this simulation model, we believe that any actual shift in interest rates would likely be more gradual and would therefore have a more modest impact than shown in the table below.

	Estimated Change in Future Net Interest Income
Changes in Interest Rates	Dollar Change		Percentage Change
(in basis points)	($ in thousands)
+200	$	53,334	4.82	%
+100	32,868		2.97
–100	(23,054)		(2.08)

As noted in the table above, a 100 basis point immediate increase in interest rates combined with a static balance

sheet where the size, mix, and proportions of assets and liabilities remain unchanged is projected to increase net interest income over the next 12 months by 2.97 percent. Management believes the interest rate sensitivity remains within an acceptable tolerance range at September 30, 2020. However, the level of net interest income sensitivity may increase or decrease in the future as a result of several factors, including potential changes in deposit and borrowings strategies, the slope of the yield curve and projected cash flows.

Liquidity

Bank Liquidity

Liquidity measures the ability to satisfy current and future cash flow needs as they become due. A bank’s liquidity reflects its ability to meet loan demand, to accommodate possible outflows in deposits and to take advantage of interest rate opportunities in the marketplace. Liquidity management is carefully performed and routinely reported by our Treasury Department to the Investment Committee established by the Board of Directors and also to the Asset and Liability Committee. Among other actions, Treasury reviews historical funding requirements, current liquidity position, sources and stability of funding, marketability of assets, options for attracting additional funds, and anticipated future funding needs, including the level of unfunded commitments. Our goal is to maintain sufficient liquidity to cover current and potential funding requirements.

The Bank has no required regulatory liquidity ratios to maintain; however, it adheres to an internal liquidity policy. The current policy maintains that we may not have a ratio of loans to deposits in excess of 110 percent or reliance on wholesale funding greater than 25 percent of total funding. The Bank was in compliance with the foregoing policies at September 30, 2020.

At September 30, 2020, our cash and cash equivalents totaled $930.7 million as compared to $1.9 billion and $434.7 million at June 30, 2020 and December 31, 2019, respectively. The decrease from June 30, 2020 was largely attributable to our managed reduction of elevated excess liquidity levels that were maintained in the first half of 2020 in response to the uncertainties created by COVID-19. We continue to closely monitor external events and adjust our mix and levels of various funding sources accordingly. See the "Deposits and Other Borrowings" section and Note 10 to the consolidated financial statements for more information.

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On the asset side of the balance sheet, the Bank has numerous sources of liquid funds in the form of cash and due from banks, interest bearing deposits with banks (including the Federal Reserve Bank of New York), investment securities held to maturity that are maturing within 90 days or would otherwise qualify as maturities if sold (i.e., 85 percent of original cost basis has been repaid), investment securities available for sale, loans held for sale, and from time to time, federal funds sold and receivables related to unsettled securities transactions. Total liquid assets were approximately $2.7 billion, representing 7.4 percent of earning assets at September 30, 2020 and $2.2 billion, representing 6.4 percent of earning assets at December 31, 2019. Of the $2.7 billion of liquid assets at September 30, 2020, approximately $868.9 million of various investment securities were pledged to counterparties to support our earning asset funding strategies. We anticipate the receipt of approximately $1.2 billion in principal payments from securities in the total investment portfolio over the next 12 months due to normally scheduled principal repayments and expected prepayments of certain securities, primarily residential mortgage-backed securities.

Additional liquidity is derived from scheduled loan payments of principal and interest, as well as prepayments received. Loan principal payments (including loans held for sale at September 30, 2020) are projected in accordance with their scheduled contractual terms to be approximately $9.6 billion over the next 12 months. As a contingency plan for any liquidity constraints, liquidity could also be derived from the sale of conforming residential mortgages from our loan portfolio or alleviated from the temporary curtailment of lending activities.

On the liability side of the balance sheet, we utilize multiple sources of funds to meet liquidity needs, including retail and commercial deposits, brokered and municipal deposits, and short-term and long-term borrowings. Our core deposit base, which generally excludes fully insured brokered deposits and both retail and brokered certificates of deposit over $250 thousand, represents the largest of these sources. Average core deposits totaled approximately $25.7 billion and $20.4 billion for the nine months ended September 30, 2020 and for the year ended December 31, 2019, respectively, representing 70.0 percent and 66.8 percent of average earning assets for the respective periods. The level of interest bearing deposits is affected by interest rates offered, which is often influenced by our need for funds and the need to match the maturities of assets and liabilities.

Additional funding may be provided through deposit gathering networks and in the form of federal funds purchased through our well established relationships with numerous banks. While these lending lines are uncommitted, management believes that the Bank could borrow approximately $1.4 billion from these banks on a collective basis. The Bank is also a member of the Federal Home Loan Bank of New York (FHLB) and has the ability to borrow from them in the form of FHLB advances secured by pledges of certain eligible collateral, including but not limited to U.S. government and agency mortgage-backed securities and a blanket assignment of qualifying first lien mortgage loans, consisting of both residential mortgage and commercial real estate loans. Additionally, Valley's collateral pledged to the FHLB may be used to obtain Municipal Letters of Credit (MULOC) to collateralize certain municipal deposits held by Valley. At September 30, 2020, Valley had $700 million of MULOCs outstanding for this purpose. Furthermore, we can obtain overnight borrowings from the FRB via the discount window as a contingency for additional liquidity. At September 30, 2020, our traditional borrowing capacity, excluding PPP loans, under the Federal Reserve's discount window was $1.6 billion.

We also have access to other short-term and long-term borrowing sources to support our asset base, such as repos (i.e., securities sold under agreements to repurchase). Short-term borrowings (consisting of FHLB advances, repos, and from time to time, federal funds purchased) increased approximately $337.4 million to $1.4 billion at September 30, 2020 as compared to December 31, 2019. The increase in short-term borrowings, mainly consisting of FHLB advances at September 30, 2020, was primarily driven by increase liquidity levels in response to the COVID-19 pandemic, as well as funding of PPP loan originations primarily in the second quarter 2020.

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The following table sets forth information regarding Valley’s short-term FHLB advances at the dates and for the year to date periods ended September 30, 2020 and December 31, 2019:

	September 30, 2020			December 31, 2019
	($ in thousands)
FHLB advances:
Average balance outstanding	$	1,322,226		$	1,681,844
Maximum outstanding at any month-end during the period	1,930,000			2,510,000
Balance outstanding at end of period	1,275,000			940,000
Weighted average interest rate during the period	0.37		%	1.88		%
Weighted average interest rate at the end of the period	0.46			1.85

Corporation Liquidity

Valley’s recurring cash requirements primarily consist of dividends to preferred and common shareholders and interest expense on subordinated notes and junior subordinated debentures issued to capital trusts. As part of our on-going asset/liability management strategies, Valley could also use cash to repurchase shares of its outstanding common stock under its share repurchase program or redeem its callable junior subordinated debentures. These cash needs are routinely satisfied by dividends collected from the Bank. Projected cash flows from the Bank are expected to be adequate to pay preferred and common dividends, if declared, and interest expense payable to subordinated note holders and capital trusts, given the current capital levels and current profitable operations of the Bank. In addition to dividends received from the Bank, Valley can satisfy its cash requirements by utilizing its own cash and potential new funds borrowed from outside sources or capital issuances. Valley also has the right to defer interest payments on the junior subordinated debentures, and therefore distributions on its trust preferred securities for consecutive quarterly periods up to five years, but not beyond the stated maturity dates, and subject to other conditions.

Valley's ability to maintain quarterly dividends to its preferred and common shareholders is heavily dependent on the ability of its principal subsidiary, the Bank, to pay dividends to Valley. However, we cannot accurately predict the extent of the economic decline due to COVID-19 or other factors that may result in inadequate earnings (primarily by the Bank), regulatory restrictions and limitations, changes in our capital requirements, or a decision to increase capital by retention of earnings, that may result in Valley's inability or determination by its Board not to pay dividends at current levels, or at all.

Investment Securities Portfolios

As of September 30, 2020, we had $29.0 million, $1.5 billion and $2.2 billion in equities, available for sale debt securities and held to maturity debt securities, respectively. Our equity securities portfolio is mainly comprised of a money market mutual fund and investments in public and private Community Reinvestment Act funds. Our held to maturity and available for sale debt securities portfolios were comprised of U.S. Treasury securities, U.S. government agency securities, tax-exempt and taxable issuances of states and political subdivisions (including special revenue bonds), residential mortgage-backed securities, single-issuer trust preferred securities principally issued by bank holding companies, and high quality corporate bonds issued by banks at September 30, 2020. There were no securities in the name of any one issuer exceeding 10 percent of shareholders’ equity, except for residential mortgage-backed securities issued by Ginnie Mae and Fannie Mae. Additionally, certain securities with limited marketability and/or restrictions, such as FHLB and FRB stocks, are carried at cost and are included in other assets. See Note 7 to the consolidated financial statements for additional information.

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Allowance for Credit Losses and Impairment Analysis

Effective January 1, 2020, Valley adopted ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", which requires an estimate of lifetime expected credit losses for held to maturity debt securities established as an allowance for credit losses and replaces the other-than-temporarily impaired model for available for sale debt securities.

Available for sale debt securities. The new guidance in ASC Topic 326-30 requires credit losses to be presented as an allowance, rather than as a write-down if management does not intend to sell an available for sale debt security before recovery of its amortized cost basis. Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. In assessing whether a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount the fair value is less than amortized cost basis. Declines in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market interest rates, are recorded through other comprehensive income, net of applicable taxes.

We have evaluated all available for sale debt securities that are in an unrealized loss position as of September 30, 2020 and determined that the declines in fair value are mainly attributable to changes in market volatility, due to factors such as interest rates and spread factors, but not attributable to credit quality or other factors. Based on a comparison of the present value of expected cash flows to the amortized cost, management recognized no impairment charges during the three and nine months ended September 30, 2020 and, as a result, there was no allowance for credit losses for available for sale debt securities at September 30, 2020.

Held to maturity debt securities. As discussed in Note 7 to the consolidated financial statements, Valley has a zero loss expectation for certain securities within the held to maturity portfolio, including, U.S. Treasury securities, U.S. agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and collateralized municipal bonds. To measure the expected credit losses on held to maturity debt securities that have loss expectations, Valley estimates the expected credit losses using a discounted cash flow model developed by a third party. Assumptions used in the model for pools of securities with common risk characteristics include the historical lifetime probability of default and severity of loss in the event of default, with the model incorporating several economic cycles of loss history data to calculate expected credit losses given default at the individual security level. At September 30, 2020, held to maturity debt securities were carried net of allowance for credit losses totaling $1.5 million. We recorded a negative (credit) provision of $112 thousand during the third quarter 2020 mostly due to modest improvement in expected default rates for certain securities as compared to June 30, 2020. The provision totaled $688 thousand for the nine months ended September 30, 2020 driven mainly by our negative economic forecast incorporated within the allowance model since the onset of the COVID-19 pandemic. There were no net charge-offs of debt securities in the respective periods.

The investment grades in the table below reflect the most current independent analysis performed by third parties of each security as of the date presented and not necessarily the investment grades at the date of our purchase of the securities. For many securities, the rating agencies may not have performed an independent analysis of the tranches owned by us, but rather an analysis of the entire investment pool. For this and other reasons, we believe the assigned investment grades may not accurately reflect the actual credit quality of each security and should not be viewed in isolation as a measure of the quality of our investment portfolio.

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The following table presents the held to maturity and available for sale investment securities portfolios by investment grades at September 30, 2020:

	September 30, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Held to maturity investment grades: *
AAA Rated	$	1,836,858	$	54,293	$	(924)	$	1,890,227
AA Rated	190,266		7,067		—		197,333
A Rated	14,557		441		—		14,998
BBB Rated	5,000		463		—		5,463
Non-investment grade	5,669		—		(176)		5,493
Not rated	118,126		730		(7,399)		111,457
Total investment securities held to maturity	$	2,170,476	$	62,994	$	(8,499)	$	2,224,971
Available for sale investment grades: *
AAA Rated	$	1,319,492	$	45,008	$	(960)	$	1,363,540
AA Rated	45,422		916		(24)		46,314
A Rated	14,264		416		—		14,680
BBB Rated	24,379		594		(6)		24,967
Non-investment grade	11,833		—		(179)		11,654
Not rated	64,576		1,065		(232)		65,409
Total investment securities available for sale	$	1,479,966	$	47,999	$	(1,401)	$	1,526,564

* Rated using external rating agencies. Ratings categories include the entire range. For example, “A rated” includes A+, A, and A-. Split rated securities with two ratings are categorized at the higher of the rating levels.

The investment securities held to maturity portfolio included $118.1 million of investments not rated by the rating agencies with aggregate unrealized losses of $7.4 million at September 30, 2020 related to four single-issuer bank trust preferred issuances with a combined amortized cost of $36.0 million.

See Note 7 to the consolidated financial statements for additional information regarding our available for sale and held to maturity securities.

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Loan Portfolio

The following table reflects the composition of the loan portfolio as of the dates presented:

	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
	($ in thousands)
Loans
Commercial and industrial	$	6,903,345		$	6,884,689		$	4,998,731		$	4,825,997		$	4,695,608
Commercial real estate:
Commercial real estate	16,815,587			16,571,877			16,390,236			15,996,741			13,365,454
Construction	1,720,775			1,721,352			1,727,046			1,647,018			1,537,590
Total commercial real estate	18,536,362			18,293,229			18,117,282			17,643,759			14,903,044
Residential mortgage	4,284,595			4,405,147			4,478,982			4,377,111			4,133,331
Consumer:
Home equity	457,083			471,115			481,751			487,272			489,808
Automobile	1,341,659			1,369,489			1,436,734			1,451,623			1,436,608
Other consumer	892,542			890,942			914,587			913,446			908,760
Total consumer loans	2,691,284			2,731,546			2,833,072			2,852,341			2,835,176
Total loans*	$	32,415,586		$	32,314,611		$	30,428,067		$	29,699,208		$	26,567,159
As a percent of total loans:
Commercial and industrial	21.3		%	21.3		%	16.5		%	16.2		%	17.7		%
Commercial real estate	57.2			56.6			59.5			59.5			56.1
Residential mortgage	13.2			13.6			14.6			14.7			15.5
Consumer loans	8.3			8.5			9.4			9.6			10.7
Total	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%

*     Includes net unearned discount and deferred loan fees of $116.2 million, $131.3 million, and $76.4 million at September 30, 2020, June 30, 2020, and March 31, 2020, respectively, and net unearned premiums and deferred loan fees of $12.6 million and $18.3 million at December 31, 2019 and September 30, 2019, respectively. Net unearned discounts and deferred loan fees at September 30, 2020, June 30, 2020, and March 31, 2020 include the non-credit discount on purchased credit deteriorated (PCD) loans, and $54.4 million and $62.1 million of net unearned fees related to PPP loans at September 30, 2020 and June 30, 2020, respectively.

Loans increased $101.0 million to approximately $32.4 billion at September 30, 2020 from June 30, 2020 largely due to controlled commercial real estate loan growth and a $63 million increase in PPP loans within the commercial and industrial loan category during the third quarter 2020. The residential mortgage and most consumer loan categories experienced moderate declines in loan balances in the third quarter largely due to loan principal repayment and refinance activity, as well as higher level of residential mortgage loans originated for sale due to current interest rate risk management strategies. Residential mortgage loans held for sale totaled $209.3 million and $120.6 million at September 30, 2020 and June 30, 2020, respectively. See additional information regarding our residential mortgage loan activities below.

Total commercial and industrial loans increased only $18.7 million from June 30, 2020 to approximately $6.9 billion at September 30, 2020 largely due to the $55.4 million of PPP loan originations in the third quarter. Excluding the PPP loans, commercial and industrial loans decreased $44.5 million, or 4 percent on an annualized basis, at September 30, 2020 compared to June 30, 2020 as the continued weak economic environment caused by the COVID-19 pandemic has weighed on loan demand particularly in the New Jersey and New York markets, and our existing small to middle market lending relationships have become more strategic with new capital expenditures. Commercial and industrial loans included PPP loans of approximately $2.3 billion and $2.2 billion at September 30, 2020 and June 30, 2020, respectively, net of unearned net deferred fees totaling $54.4 million and $62.1 million, respectively.

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Commercial real estate loans (excluding construction loans) increased $243.7 million, or 5.9 percent on an annualized basis, to $16.8 billion at September 30, 2020 from June 30, 2020 mainly due to strong underwriting within our loan commitment pipeline at June 30, 2020, including many pre-existing, longstanding borrowers, as well as slower repayment activity during the third quarter. However, construction loans decreased $577 thousand to $1.7 billion at September 30, 2020 from June 30, 2020 mainly due to run-off of completed existing projects, and to a lesser extent, migration of such completed projects to permanent financing during the third quarter 2020. Construction demand in our Florida markets, which have mostly reopened during the current COVID-19 pandemic, remains robust as compared to the Northeast and we intend to be strategically competitive for the strongest borrowers and projects.

Total residential mortgage loans decreased $120.6 million to approximately $4.3 billion at September 30, 2020 from June 30, 2020 largely due to loan principal repayment and refinance activity and higher level of residential mortgage loans originated for sale due to current interest rate risk management strategies. New and refinanced residential mortgage loan originations totaled approximately $540.2 million for the third quarter 2020, as compared to $494.2 million and $477.2 million for the second quarter 2020 and third quarter 2019, respectively. Of the total originations for the third quarter 2020, $385.6 million of residential mortgage loans were originated for sale rather than held for investment and sold approximately $301.2 million of these loans. We may continue to sell a large portion of our new fixed rate residential mortgage loan originations during the remainder of 2020 based upon normal management of the interest rate risk and mix of the interest earning assets on our balance sheet.

Home equity loans totaled $457.1 million at September 30, 2020, and moderately decreased $14.0 million from June 30, 2020. New home equity loan volumes and customer usage of existing home equity lines of credit continue to be modest, despite the favorable low interest rate environment caused by the COVID-19 pandemic.

Automobile loans decreased by $27.8 million to $1.3 billion at September 30, 2020 as compared to June 30, 2020. The third quarter annualized decline was 8.1 percent as our new indirect auto loan volumes did not keep pace with the normal portfolio repayment and refinance activity. However, the volume of indirect loans and application activity was higher during the third quarter 2020 as compared to the second quarter 2020. Our Florida dealership network remained relatively unchanged from the second quarter totaling $14.4 million in auto loan originations, representing approximately 11 percent of new loans, during the third quarter 2020, as compared to $14.3 million, representing approximately 20 percent of new loans, during the second quarter 2020.

Other consumer loans increased $1.6 million to $892.5 million at September 30, 2020 as compared to $890.9 million at June 30, 2020. The modest increase was mainly due to lower usage and demand within our collateralized personal lines of credit portfolio.

Most of our lending is in northern and central New Jersey, New York City, Long Island and Florida, except for smaller auto and residential mortgage loan portfolios derived from other neighboring states of New Jersey, which could present a geographic and credit risk due to the recent economic downturn within these regions caused by the COVID-19 pandemic and the uncertain path forward to restart the U.S. economy. To mitigate our geographic risks, we make efforts to maintain a diversified portfolio as to type of borrower and loan, to guard against a potential downward turn in any one economic sector.

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Non-performing Assets

Prior to our adoption of the CECL standard on January 1, 2020, our past due loans and non-accrual loans discussed further below excluded those loans which were classified as purchased credit impaired (PCI) loans. Under previous U.S. GAAP, the PCI loans (acquired at a discount that is due, in part, to credit quality) were accounted for on a pool basis and were not subject to delinquency classification in the same manner as loans originated by Valley. Under the CECL standard, Valley's former PCI loan pools are accounted for as purchased credit deteriorated (PCD) loans on a loan level basis and, if applicable, are reported in our past due and non-accrual loans at September 30, 2020, June 30, 2020 and March 31, 2020.

Non-performing assets include non-accrual loans, other real estate owned (OREO), other repossessed assets (which primarily consists of automobiles and taxi medallions) and non-accrual debt securities at September 30, 2020. Loans are generally placed on non-accrual status when they become past due in excess of 90 days as to payment of principal or interest. Exceptions to the non-accrual policy may be permitted if the loan is sufficiently collateralized and in the process of collection. OREO is acquired through foreclosure on loans secured by land or real estate. OREO and other repossessed assets are reported at the lower of cost or fair value, less estimated cost to sell. Our non-performing assets decreased $20.5 million to $203.6 million at September 30, 2020 as compared to June 30, 2020, mainly due to a $19.5 million decrease in non-accrual loans in the third quarter 2020. Non-performing assets as a percentage of total loans and non-performing assets totaled 0.62 percent and 0.69 percent at September 30, 2020 and June 30, 2020, respectively (as shown in the table below). For additional details, see the "Credit quality indicators" section in Note 8 to the consolidated financial statements.

Our lending strategy is based on underwriting standards designed to maintain high credit quality and we remain optimistic regarding the overall future performance of our loan portfolio. However, due to the potential for future credit deterioration caused by the uncertain economic recovery from the pandemic recession, lack of additional federal stimulus and a number of our borrowers that are performing under short-term forbearance agreements, management cannot provide assurance that our non-performing assets will not increase substantially from the levels reported at September 30, 2020.

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The following table sets forth by loan category accruing past due and non-performing assets at the dates indicated in conjunction with our asset quality ratios: 

	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
	($ in thousands)
Accruing past due loans: *
30 to 59 days past due:
Commercial and industrial	$	6,587		$	6,206		$	9,780		$	11,700		$	5,702
Commercial real estate	26,038			13,912			41,664			2,560			20,851
Construction	142			—			7,119			1,486			11,523
Residential mortgage	22,528			35,263			38,965			17,143			12,945
Total Consumer	8,979			12,962			19,508			13,704			13,079
Total 30 to 59 days past due	64,274			68,343			117,036			46,593			64,100
60 to 89 days past due:
Commercial and industrial	3,954			4,178			7,624			2,227			3,158
Commercial real estate	610			1,543			15,963			4,026			735
Construction	—			—			49			1,343			7,129
Residential mortgage	3,760			4,169			9,307			4,192			4,417
Total Consumer	1,352			3,786			2,309			2,527			1,577
Total 60 to 89 days past due	9,676			13,676			35,252			14,315			17,016
90 or more days past due:
Commercial and industrial	6,759			5,220			4,049			3,986			4,133
Commercial real estate	1,538			—			161			579			1,125
Residential mortgage	891			3,812			1,798			2,042			1,347
Total Consumer	753			2,082			1,092			711			756
Total 90 or more days past due	9,941			11,114			7,100			7,318			7,361
Total accruing past due loans	$	83,891		$	93,133		$	159,388		$	68,226		$	88,477
Non-accrual loans: *
Commercial and industrial	$	115,667		$	130,876		$	132,622		$	68,636		$	75,311
Commercial real estate	41,627			43,678			41,616			9,004			9,560
Construction	2,497			3,308			2,972			356			356
Residential mortgage	23,877			25,776			24,625			12,858			13,772
Total Consumer	7,441			6,947			4,095			2,204			2,050
Total non-accrual loans	191,109			210,585			205,930			93,058			101,049
Other real estate owned (OREO)	7,746			8,283			10,198			9,414			6,415
Other repossessed assets	3,988			3,920			3,842			1,276			2,568
Non-accrual debt securities	783			1,365			531			680			680
Total non-performing assets (NPAs)	$	203,626		$	224,153		$	220,501		$	104,428		$	110,712
Performing troubled debt restructured loans	$	58,090		$	53,936		$	48,024		$	73,012		$	79,364
Total non-accrual loans as a % of loans	0.59		%	0.65		%	0.68		%	0.31		%	0.38		%
Total NPAs as a % of loans and NPAs	0.62			0.69			0.72			0.35			0.41
Total accruing past due and non-accrual loans as a % of loans	0.85			0.94			1.20			0.54			0.71
Allowance for loan losses as a % of non-accrual loans	170.08			147.03			137.59			173.83			160.17

*     Past due loans and non-accrual loans presented at December 31, 2019 and September 30, 2019 exclude PCI loans. Prior to January 1, 2020, PCI loans were accounted for on a pool basis under U.S. GAAP and were not subject to delinquency classification.

Loans past due 30 to 59 days decreased $4.1 million to $64.3 million at September 30, 2020 as compared to June 30, 2020 largely due to improved performance in the residential mortgage and consumer loan categories, including CARES Act qualifying forbearance loans that resumed their scheduled monthly payments during the third quarter 2020. Commercial real estate loans increased by $12.1 million as compared to June 30, 2020 mainly due to three loan relationships with a combined total of $20.3 million reported in this delinquency category at September 30, 2020.

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While the three loan relationships are internally classified as substandard, management believes they are well secured and in the process of collection.

Loans past due 60 to 89 days decreased $4.0 million to $9.7 million at September 30, 2020 as compared to June 30, 2020 partly due to improved residential and consumer loan performance and collection effort results during the third quarter 2020.

Loans past due 90 days or more and still accruing interest decreased $1.2 million to $9.9 million at September 30, 2020 as compared to $11.1 million at June 30, 2020 mainly due to lower residential and consumer delinquencies, partially offset by higher commercial and industrial and commercial real estate delinquencies during the third quarter 2020. All of the loans past due 90 days or more and still accruing are considered to be well secured and in the process of collection.

Non-accrual loans decreased $19.5 million to $191.1 million at September 30, 2020 as compared to $210.6 million at June 30, 2020 largely due to a $15.2 million decrease in commercial and industrial loan category. The third quarter 2020 loan charge-offs were mostly comprised of the full charge-off of a $6.0 million loan relationship, as well as partial taxi medallion loan charge-offs totaling $6.1 million caused by lower estimated collateral valuations at September 30, 2020. Non-accrual loans represented 0.59 percent of total loans at September 30, 2020 compared to 0.65 percent at June 30, 2020.

During the third quarter 2020, we continued to closely monitor our New York City and Chicago taxi medallion loans totaling $93.1 million and $7.0 million, respectively, within the commercial and industrial loan portfolio at September 30, 2020. Due to continued negative trends in estimated fair valuations of the underlying taxi medallion collateral, a weak operating environment for ride services and uncertain borrower performance, the remainder of our previously accruing taxi medallion loans were placed on non-accrual status during the first quarter 2020. At September 30, 2020, non-accrual taxi medallion loans totaling $100.1 million had related reserves of $60.4 million within the allowance for loan losses as compared to $106.8 million with related reserves of $61.6 million at June 30, 2020.

Valley's historical taxi medallion lending criteria had been conservative regarding capping the loan amounts in relation to market valuations, as well as obtaining personal guarantees and other collateral in certain instances. However, the severe decline in the market valuation of taxi medallions has adversely affected the estimated fair valuation of these loans and, as a result, we increased the level of our allowance for loan losses at September 30, 2020. See the "Allowance for Credit Losses" section below for further details. Potential further declines in the market valuation of taxi medallions and the stressed operating environment within both New York City and Chicago due to the COVID-19 pandemic could also negatively impact the future performance of this portfolio. For example, a 25 percent decline in our current estimated market value of the taxi medallions would require additional allocated reserves of $14.2 million within the allowance for loan losses based upon the impaired taxi medallion loan balances at September 30, 2020.

OREO properties decreased $537 thousand to $7.7 million at September 30, 2020 from $8.3 million at June 30, 2020 due to normal sales activity in the third quarter. Sales of OREO properties resulted in net gains of $109 thousand and $540 thousand for the three and nine months ended September 30, 2020, respectively, as compared to net losses of $417 thousand and net gains of $1.3 million for the three and nine months ended September 30, 2019, respectively. The residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $2.0 million at September 30, 2020.

TDRs represent loan modifications for customers experiencing financial difficulties where a concession has been granted. Performing TDRs (i.e., TDRs not reported as loans 90 days or more past due and still accruing or as non-accrual loans) increased $4.2 million to $58.1 million at September 30, 2020 as compared to $53.9 million at June 30, 2020. Performing TDRs consisted of 81 loans at September 30, 2020. On an aggregate basis, the $58.1 million in performing TDRs at September 30, 2020 had a modified weighted average interest rate of approximately 4.81 percent as compared to a pre-modification weighted average interest rate of 4.10 percent.

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Loan Forbearance. In response to the COVID-19 pandemic and its economic impact to certain customers, Valley implemented short-term loan modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that are insignificant, when requested by customers. Generally, the modification terms allow for a deferral of payments for up to 90 days, which Valley may extend for an additional 90 days, for a maximum of 180 days on a cumulative and successive basis. As of September 30, 2020, Valley had approximately 1,400 loans with total outstanding balances of $1.1 billion remaining in their payment deferral period under short-term modifications.

Higher Risk COVID-19 Credit Exposures. Valley has identified certain borrower industries as being potentially exposed to the effects of economic shutdowns related to the COVID-19 pandemic. These industries include doctor and surgery centers, retail trade, hotels and hospitality, restaurants and food service, and entertainment and recreation. As of September 30, 2020, Valley had outstanding loans of approximately $2.2 billion to borrowers in these industries representing approximately 7.4 percent of total outstanding loans. Active deferrals in this category totaled $158 million, or 7.1 percent of total loans at September 30, 2020. A large majority of loans within the higher risk industries were pass-rated under Valley’s internal risk rating system as of September 30, 2020.

Allowance for Credit Losses for Loans

The allowance for credit losses for loans consists of the allowance for loan losses and the reserve for unfunded credit commitments. Effective January 1, 2020, we adopted the new CECL standard, which is based on lifetime expected credit losses rather than incurred losses. At adoption, Valley recorded a $99.6 million increase to its allowance for credit losses for loans, including reserves of $61.6 million related to PCD loans. See Note 5 to the consolidated financial statements for further details on the Day 1 CECL adoption.

Our methodology to establish the allowance for loan losses has two basic components: (1) a collective (pooled) reserve component for estimated expected credit losses for pools of loans that share similar risk characteristics and (2) an individual reserve component for loans that do not share risk characteristics, consisting of collateral dependent, TDR, and expected TDR loans. Valley also maintains a separate allowance for unfunded credit commitments mainly consisting of undisbursed non-cancellable lines of credit, new loan commitments and commercial letters of credit.

In estimating the component of the allowance on a collective basis we use a transition matrix model which calculates an expected life of loan loss percentage for each loan pool by generating probability of default and loss given default metrics. The metrics are based on the migration of loans from performing to loss by credit quality rating or delinquency categories using historical life-of-loan analysis periods for each loan portfolio pool and the severity of loss based on the aggregate net lifetime losses incurred. The model's expected losses based on loss history are adjusted for qualitative factors. Among other things, these adjustments include and account for differences in: (i) lending policies and procedures; (ii) current business conditions and economic developments that affect the loan collectability; (iii) concentration risks by size, type, and geography; (iv) the potential volume and migration of loan forbearances to non-performing status; and (v) the effect of external factors such as legal and regulatory requirements on the level of estimated credit losses in the existing portfolio.

Valley utilizes a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience for the remaining life of the loan. The forecasts consist of a multi-scenario economic forecast model to estimate future credit losses and is governed by a cross-functional committee. The committee meets each quarter to determine which economic scenarios developed by Moody's will be incorporated into the model, as well as the relative probability weightings of the selected scenarios, based upon all readily available information. The model projects economic variables under each scenario based on detailed statistical analyses. We have identified and selected key variables that most closely correlated to our historical credit performance, which include: GDP, unemployment and the Case-Shiller Home Price Index.

For the third quarter 2020, we continued to incorporate a probability weighted three-scenario economic forecast, including Moody's Baseline, S-3 and S-4 scenarios. During the third quarter 2020, Valley placed increased weightings on S-3 and S-4 alternative downside scenarios as compared to the second quarter due to many factors, including, but not limited to the uncertainty related to additional federal economic stimulus, the results of the presidential election, loan customers in deferral of payments, the timing of a COVID-19 vaccine and the severity of future COVID-19

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outbreaks and resulting business disruptions. The S-4 forecast is the most severe economic scenario and includes the following assumptions:

•Assumes that the COVID-19 crisis will persist and meaningfully impact the economy;

•National unemployment rate will remain elevated throughout 2020 to 2022, with a peak at 12.3 percent in the second quarter 2022;

•Federal funds interest rates will remain at or near zero for the foreseeable future; and

•A prolonged economic downturn until the fourth quarter 2021.

The allowance for credit losses for loans methodology and accounting policy are fully described in Note 8 to the consolidated financial statements.

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The table below summarizes the relationship among loans, loans charged-off, loan recoveries, the provision for credit losses and the allowance for credit losses for loans for the periods indicated.

	Three Months Ended									Nine Months Ended
	September 30, 2020			June 30, 2020			September 30, 2019			September 30, 2020			September 30, 2019
	($ in thousands)
Average loans outstanding	$	32,515,264		$	32,041,200		$	26,136,745		$	31,522,268		$	25,651,195
Beginning balance - Allowance for credit losses for loans	319,723			293,361			158,079			164,604			156,295
Impact of ASU No. 2016-13 adoption on January 1, 2020 (1)	—			—			—			37,989			—
Allowance for purchased credit deteriorated (PCD) loans (1)	—			—			—			61,643			—
Beginning balance, adjusted	319,723			293,361			158,079			264,236			156,295
Loans charged-off: (2)
Commercial and industrial	(13,965)			(14,024)			(527)			(31,349)			(7,882)
Commercial real estate	(695)			(27)			(158)			(766)			(158)
Residential mortgage	(7)			(5)			(111)			(348)			(126)
Total Consumer	(2,458)			(2,601)			(2,191)			(7,624)			(5,971)
Total charge-offs	(17,125)			(16,657)			(2,987)			(40,087)			(14,137)
Charged-off loans recovered:
Commercial and industrial	428			799			330			1,796			2,008
Commercial real estate	60			31			28			164			71
Construction	40			20			—			80			—
Residential mortgage	31			545			3			626			13
Total Consumer	1,151			509			617			2,454			1,720
Total recoveries	1,710			1,904			978			5,120			3,812
Net charge-offs	(15,415)			(14,753)			(2,009)			(34,967)			(10,325)
Provision charged for credit losses	31,020			41,115			8,700			106,059			18,800
Ending balance - Allowance for credit for losses	$	335,328		$	319,723		$	164,770		$	335,328		$	164,770
Components of allowance for credit losses for loans:
Allowance for loan losses	$	325,032		$	309,614		$	161,853		$	325,032		$	161,853
Allowance for unfunded credit commitments	10,296			10,109			2,917			10,296			2,917
Allowance for credit losses for loans	$	335,328		$	319,723		$	164,770		$	335,328		$	164,770
Components of provision for credit losses for loans:
Provision for credit losses for loans	$	30,833		$	41,025		$	8,757		$	105,709		$	20,319
Provision for unfunded credit commitments (3)	187			90			(57)			350			(1,519)
Total provision for credit losses for loans	$	31,020		$	41,115		$	8,700		$	106,059		$	18,800
Annualized ratio of net charge-offs to average loans outstanding	0.19		%	0.18		%	0.03		%	0.15		%	0.05		%

(1)    The adjustment represents an increase in the allowance for credit losses for loans as a result of the adoption of ASU 2016-13 effective January 1, 2020.

(2)     Charge-offs and recoveries presented for periods prior to January 1, 2020 exclude loans formerly accounting for as PCI loans.

(3)    Periods prior to January 1, 2020 represent the allowance and provision for unfunded letters of credit only.

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Net loan charge-offs totaled $15.4 million for the third quarter 2020 as compared to $14.8 million and $2.0 million for the second quarter 2020 and third quarter 2019, respectively. The increase in net loan charge-offs for the third quarter 2020 was mostly driven by the full charge-off of one commercial and industrial loan totaling $6.0 million, which was fully reserved for in our allowance for loan losses at June 30, 2020. The commercial and industrial loan category also included partial charge-offs of taxi medallion loans totaling $6.1 million for the third quarter 2020 as compared to $3.2 million for the second quarter 2020. There were no taxi medallion loan charge-offs during the third quarter 2019. The overall level of loan charge-offs (as presented in the above table) continues to trend within management's expectations for the credit quality of the loan portfolio.

The following table summarizes the allocation of the allowance for credit losses for loans to loan portfolio categories and the allocations as a percentage of each loan category:

	September 30, 2020				June 30, 2020				September 30, 2019
	Allowance Allocation *		Allocation as a % of Loan Category		Allowance Allocation*		Allocation as a % of Loan Category		Allowance Allocation*		Allocation as a % of Loan Category
	($ in thousands)
Loan Category:
Commercial and Industrial loans	$	130,409	1.89	%	$	132,039	1.92	%	$	101,002	2.15	%
Commercial real estate loans:
Commercial real estate	128,699		0.77	%	117,743		0.71	%	23,044		0.17	%
Construction	15,951		0.93	%	13,959		0.81	%	25,727		1.67	%
Total commercial real estate loans	144,650		0.78	%	131,702		0.72	%	48,771		0.33	%
Residential mortgage loans	28,614		0.67	%	29,630		0.67	%	5,302		0.13	%
Consumer loans:
Home equity	5,972		1.31	%	4,766		1.01	%	487		0.10	%
Auto and other consumer	15,387		0.69	%	11,477		0.51	%	6,291		0.27	%
Total consumer loans	21,359		0.79	%	16,243		0.59	%	6,778		0.24	%
Total allowance for loan losses	325,032		1.00	%	309,614		0.96	%	161,853		0.61	%
Allowance for unfunded credit commitments	10,296				10,109				2,917
Total allowance for credit losses for loans	$	335,328			$	319,723			$	164,770
Allowance for credit losses for loans as a % loans			1.03	%			0.99	%			0.62	%

* CECL was adopted January 1, 2020. Prior periods reflect the allowance for credit losses for loans under the incurred loss model.

The allowance for credit losses for loans, comprised of our allowance for loan losses and unfunded credit commitments, as a percentage of total loans was 1.03 percent, 0.99 percent and 0.62 percent at September 30, 2020, June 30, 2020 and September 30, 2019, respectively. During the third quarter 2020, we recorded a $31.0 million provision for credit losses as compared to $41.1 million and $8.7 million for the second quarter 2020 and the third quarter 2019, respectively. The reserve build in the third quarter 2020 reflects several factors, including deterioration in Valley's macroeconomic outlook since the end of the second quarter, additional qualitative management adjustments to reflect the potential for higher levels of credit stress related to borrowers impacted by the COVID-19 pandemic, and the impact of lower valuations of collateral securing our non-performing taxi medallion loan portfolio.

At September 30, 2020, the allowance allocations for credit losses as a percentage of total loans increased for most loan categories as compared to June 30, 2020. However, the allocated reserves as a percentage of commercial and industrial loans declined by 0.03 percent largely due to the aforementioned net loan charge-offs in the third quarter

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2020, as well as moderate growth within the PPP loan portfolio which had no related allowance at September 30, 2020 and June 30, 2020. The allowance for credit losses for loans as a percentage of non-PPP loans was 1.11 percent and 1.06 percent at September 30, 2020 and June 30, 2020, respectively.

Capital Adequacy

A significant measure of the strength of a financial institution is its shareholders’ equity. At September 30, 2020 and December 31, 2019, shareholders’ equity totaled approximately $4.5 billion and $4.4 billion, which represented 11.1 percent and 11.7 percent of total assets, respectively. During the nine months ended September 30, 2020, total shareholders’ equity increased by $149.6 million primarily due to (i) net income of $285.2 million, (ii) an increase in other comprehensive income of $27.4 million, and (iii) a $9.2 million increase attributable to the effect of our stock incentive plan. These positive changes were partially offset by (i) cash dividends declared on common and preferred stock totaling a combined $144.0 million and (ii) a $28.2 million net cumulative effect adjustment to retained earnings for the adoption of new accounting guidance as of January 1, 2020.

Valley and Valley National Bank are subject to the regulatory capital requirements administered by the FRB and the OCC. Quantitative measures established by regulation to ensure capital adequacy require Valley and Valley National Bank to maintain minimum amounts and ratios of common equity Tier 1 capital, total and Tier 1 capital to risk-weighted assets, and Tier 1 capital to average assets, as defined in the regulations.

We are required to maintain common equity Tier 1 capital to risk-weighted assets ratio of 4.5 percent, Tier 1 capital to risk-weighted assets ratio of 6.0 percent, ratio of total capital to risk-weighted assets of 8.0 percent, and minimum leverage ratio of 4.0 percent, plus a 2.5 percent capital conservation buffer added to the minimum requirements for capital adequacy purposes. As of September 30, 2020 and December 31, 2019, Valley and Valley National Bank exceeded all capital adequacy requirements (see table below).

For regulatory capital purposes, in connection with the Federal Reserve Board’s final interim rule as of April 3, 2020, 100 percent of the CECL Day 1 impact to shareholders' equity equaling $28.2 million after-tax will be deferred over a two-year period ending January 1, 2022, at which time it will be phased in on a pro-rata basis over a three-year period ending January 1, 2025. Additionally, 25 percent of the reserve build (i.e., provision for credit losses less net charge-offs) for the nine months ended September 30, 2020 will be phased in over the same time frame.

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The following table presents Valley’s and Valley National Bank’s actual capital positions and ratios under Basel III risk-based capital guidelines at September 30, 2020 and December 31, 2019:

	Actual				Minimum Capital Requirements				To Be Well Capitalized Under Prompt Corrective Action Provision
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	($ in thousands)
As of September 30, 2020
Total Risk-based Capital
Valley	$	3,733,338	12.37	%	$	3,169,791	10.50	%	N/A		N/A
Valley National Bank	3,772,443		12.50		3,168,912		10.50		$	3,018,011	10.00	%
Common Equity Tier 1 Capital
Valley	2,930,220		9.71		2,113,194		7.00		N/A		N/A
Valley National Bank	3,448,166		11.43		2,112,608		7.00		1,961,707		6.50
Tier 1 Risk-based Capital
Valley	3,145,061		10.42		2,566,022		8.50		N/A		N/A
Valley National Bank	3,448,166		11.43		2,565,310		8.50		2,414,409		8.00
Tier 1 Leverage Capital
Valley	3,145,061		7.89		1,593,845		4.00		N/A		N/A
Valley National Bank	3,448,166		8.66		1,593,506		4.00		1,991,882		5.00
As of December 31, 2019
Total Risk-based Capital
Valley	$	3,427,134	11.72	%	$	3,070,687	10.50	%	N/A		N/A
Valley National Bank	3,416,674		11.69		3,069,894		10.50		$	2,923,709	10.00	%
Common Equity Tier 1 Capital
Valley	2,754,524		9.42		2,047,125		7.00		N/A		N/A
Valley National Bank	3,152,070		10.78		2,046,596		7.00		1,900,411		6.50
Tier 1 Risk-based Capital
Valley	2,968,530		10.15		2,485,795		8.50		N/A		N/A
Valley National Bank	3,152,070		10.78		2,485,153		8.50		2,338,967		8.00
Tier 1 Leverage Capital
Valley	2,968,530		8.76		1,355,378		4.00		N/A		N/A
Valley National Bank	3,152,070		9.31		1,354,693		4.00		1,693,366		5.00

Tangible book value per common share is computed by dividing shareholders’ equity less preferred stock, goodwill and other intangible assets by common shares outstanding as follows: 

	September 30, 2020		December 31, 2019
	($ in thousands, except for share data)
Common shares outstanding	403,878,744		403,278,390
Shareholders’ equity	$	4,533,763	$	4,384,188
Less: Preferred stock	209,691		209,691
Less: Goodwill and other intangible assets	1,449,282		1,460,397
Tangible common shareholders’ equity	$	2,874,790	$	2,714,100
Tangible book value per common share	$	7.12	$	6.73
Book value per common share	$	10.71	$	10.35

Management believes the tangible book value per common share ratio provides information useful to management and investors in understanding our underlying operational performance, our business and performance trends and

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facilitates comparisons with the performance of others in the financial services industry. This non-GAAP financial measure should not be considered in isolation or as a substitute for or superior to financial measures calculated in accordance with U.S. GAAP. This non-GAAP financial measure may also be calculated differently from similar measures disclosed by other companies.

Typically, our primary source of capital growth is through retention of earnings. Our rate of earnings retention is derived by dividing undistributed earnings per common share by earnings (or net income available to common stockholders) per common share. Our retention ratio was approximately 51.5 percent for the nine months ended September 30, 2020 as compared to 49.4 percent for the year ended December 31, 2019.

Cash dividends declared amounted to $0.33 per common share for each of the nine months ended September 30, 2020 and 2019. The Board is committed to examining and weighing relevant facts and considerations, including its commitment to shareholder value, each time it makes a cash dividend decision. The Federal Reserve has cautioned all bank holding companies about distributing dividends which may reduce the level of capital or not allow capital to grow considering the increased capital levels as required under the Basel III rules. Prior to the date of this filing, Valley has received no objection or adverse guidance from the FRB or the OCC regarding the current level of its quarterly common stock dividend. However, the FRB recently reiterated its long-standing guidance that banking organizations should consult them before declaring dividends in excess of earnings for the corresponding quarter. The renewed guidance was largely due to the increased risk of the COVID-19 pandemic negatively impacting the future level of bank earnings. See the risk factors at Part II, Item 1A of this report for additional information.

Off-Balance Sheet Arrangements, Contractual Obligations and Other Matters

For a discussion of Valley’s off-balance sheet arrangements and contractual obligations see information included in Valley’s Annual Report on Form 10-K for the year ended December 31, 2019 in the MD&A section - “Contractual Obligations and Off-Balance Sheet Arrangements” and Notes 12 and 13 to the consolidated financial statements included in this report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk refers to potential losses arising from changes in interest rates, foreign exchange rates, equity prices, and commodity prices. Valley’s market risk is composed primarily of interest rate risk. See page 73 for a discussion of interest rate sensitivity.

Item 4. Controls and Procedures

(a) Disclosure controls and procedures. Valley maintains disclosure controls and procedures which, consistent with Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act), are defined to mean controls and other procedures that are designed to ensure that information required to be disclosed in the reports that Valley files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that such information is accumulated and communicated to Valley’s management, including Valley’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosure.

Valley’s CEO and CFO, with the assistance of other members of Valley’s management, have evaluated the effectiveness of Valley’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, Valley’s CEO and CFO have concluded that Valley’s disclosure controls and procedures were effective as of the end of the period covered by this report.

(b) Changes in internal controls over financial reporting. Beginning January 1, 2020, Valley adopted ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial

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Instruments”. Valley implemented changes to the policies, processes, and controls over the estimation of the allowance for credit losses to support the adoption of ASU No. 2016-13. Many controls under this new standard remained unchanged under prior GAAP. New controls were established over the review of economic forecasting projections obtained externally. Except as related to the adoption of ASU No. 2016-13, Valley’s CEO and CFO have also concluded that there have not been any changes in Valley’s internal control over financial reporting in the quarter ended September 30, 2020 that have materially affected, or are reasonably likely to materially affect, Valley’s internal control over financial reporting.

Valley has not experienced any material impact to Valley’s internal controls over financial reporting due to the fact that most of Valley’s employees responsible for financial reporting are working remotely during the COVID-19 pandemic. Valley is continually monitoring and assessing the impact of the COVID-19 pandemic on Valley’s internal controls over financial reporting to minimize the impact to their design and operating effectiveness.

Valley’s management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all errors and all fraud. A system of internal control, no matter how well conceived and operated, provides reasonable, not absolute, assurance that the objectives of the system of internal control are met. The design of a system of internal control reflects resource constraints and the benefits of controls must be considered relative to their costs. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Valley have been or will be detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns occur because of a simple error or mistake. Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of internal control is based in part upon certain assumptions about the likelihood of future events. There can be no assurance that any design will succeed in achieving its stated goals under all future conditions; over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with the policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II - OTHER INFORMATION 

Item 1. Legal Proceedings

In the normal course of business, we may be a party to various outstanding legal proceedings and claims. There have been no material changes in the legal proceedings, if any, previously disclosed under Part I, Item 3 of Valley’s Annual Report on Form 10-K for the year ended December 31, 2019.

Item 1A. Risk Factors

The section titled Risk Factors in Part I, Item 1A of our 2019 Annual Report on Form 10-K includes a discussion of the many risks and uncertainties we face, any one or more of which could have a material adverse effect on our business, results of operations, financial condition (including capital and liquidity). The information presented below provides an update to, and should be read in conjunction with, the risk factors and other information contained in our 2019 Annual Report on Form 10-K. Except as presented below, there have been no material changes to these risk factors.

We anticipate that the COVID-19 pandemic will continue to adversely affect us and our customers, counterparties, employees, and third-party service providers. The full extent and duration of the adverse impacts on our business, financial position, results of operations, and prospects are currently unknown and could be significant.

The spread of COVID-19 has created a global public-health crisis that has resulted in widespread volatility and deterioration in business, economic, and market conditions and household incomes, including in the states of New Jersey, New York, Florida and Alabama where we conduct nearly all of our business. The extent of the impact of the COVID-19 pandemic on our capital and liquidity, and on our business, results of operations, financial position and prospects generally will depend on a number of evolving factors, including:

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The duration, extent, and severity of the pandemic. COVID-19 has not yet been contained and could affect significantly more households and businesses. The duration and severity of the pandemic, including the degree of resurgence in the upcoming late fall and winter months and the timing of any vaccine, continue to be impossible to predict. There remains substantial uncertainty surrounding the pace of economic recovery and the return of business and consumer confidence.

The response of governmental and nongovernmental authorities. Many of their actions have been directed toward curtailing household and business activity to contain COVID-19 while simultaneously deploying fiscal- and monetary-policy measures to partially mitigate the adverse effects on individual households and businesses. These actions are not always coordinated or consistent across jurisdictions but, in general, have rapidly expanded in scope and intensity, contributing to substantial market volatility. We cannot predict whether and to what extent governmental and nongovernmental authorities will continue to implement policy measures to assist us and our customers and the failure to do so could have adverse effects on our business.

The effect on our customers, counterparties, employees, and third-party service providers. COVID-19 and its associated consequences and uncertainties, including increased unemployment rates, are affecting individuals, households, and businesses differently and unevenly and we anticipate will continue to do so. Many, however, have already changed their behavior in response to governmental mandates and advisories to sharply restrain commercial and social interactions and discretionary spending. As a result, our credit, operational, and other risks have generally increased and, for the foreseeable future, are expected to remain elevated or increase further.

The effect on economies and markets. Whether the actions of governmental and nongovernmental authorities will be successful in mitigating the adverse effects of COVID-19 in the future is unclear. National, regional, and local economies (including the local economies in the markets areas which we serve) and markets could suffer disruptions that are lasting. Governmental actions are meaningfully influencing the interest-rate environment and financial-market activity, which could adversely affect our results of operations and financial condition. We can provide no assurance that governmental or nongovernmental mitigation efforts will continue or be effective in the future.

During the first nine months of 2020, the most notable impacts to our results of operations were a higher provision expense for credit losses, which we expect to continue. Our provision expense was $106.1 million for the first nine months of 2020 as compared to $18.8 million for the same period in 2019. With recent increases in COVID-19 infection rates in our market areas, our forecast of macroeconomic conditions and operating results, including expected lifetime credit losses on our loan portfolio, remains subject to meaningful uncertainty.

Governments have taken unprecedented steps to partially mitigate the adverse effects of their containment measures. For example, on March 27, 2020, the CARES Act was enacted to inject more than $2 trillion of financial assistance into the U.S. economy. The FRB has taken decisive and sweeping actions as well. Since March 15, 2020, these have included a reduction in the target range for the federal funds rate to 0 to 0.25 percent, a program to purchase an indeterminate amount of Treasury securities and agency mortgage-backed securities, and numerous facilities to support the flow of credit to households and businesses.

While there is evidence that our actions and those of governments and others have assisted our customers, counterparties, and third-party service providers and advanced our business and the economy generally it is uncertain how much, if at all, these actions will be effective in the future. For example, while our short-term loan modifications granted to certain customers impacted by COVID-19 may better position them to resume their regular payments to us in the future and enhance our brand and customer loyalty, these modifications have and may continue to negatively impact our cash flows and results of operations, may produce a higher degree of requests for extensions and rewrites than we have anticipated, and may not be as successful as we expect in managing our credit risk. In addition, while the FRB’s monetary policy may benefit us to some degree by supporting economic activity among our customers, this policy and sudden shifts in it may inhibit our ability to grow or sustain net interest income and effectively manage interest rate risk.

In order to safeguard the health and wellness of our customers and employees, and to comply with applicable government directives, we have modified our business practices, including temporarily closure of certain offices, restricting employee travel and directing employees to work from home whenever possible, temporary closure of some branches and, in branches that remain open, offering only restricted drive-up service or lobby service by

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appointment, and have implemented our business continuity plans to the extent necessary. These measures, and further actions we may take as required by government authorities or that we otherwise determine are in the best interests of our customers and employees, could increase certain risks, including cybersecurity risks, impair our ability to perform critical functions and adversely impact our results of operations.

We are unable to estimate the near-term and ultimate impacts of COVID-19 on our business and operations at this time. The pandemic could cause us to experience higher credit losses in our lending portfolio, additional increases in our allowance for credit losses, impairment of our goodwill and other financial assets, diminished access to capital markets and other funding sources, further reduced demand for our products and services, and other negative impacts on our financial position, results of operations, and prospects. In addition, sustained adverse effects may impair our capital and liquidity positions, require us to take capital actions, prevent us from satisfying our minimum regulatory capital ratios and other supervisory requirements, result in downgrades in our credit ratings, and the reduction or elimination of our common stock dividend in future periods.

As a participating lender in the SBA Paycheck Protection Program, we are subject to additional risks of litigation from our customers or other parties regarding our processing of loans for the PPP and risks that the SBA may not fund some or all PPP loan guaranties, which could have a significant adverse impact on our business, financial position, results of operations, and prospects.

The CARES Act included a $349 billion loan program administered through the SBA referred to as the PPP. Under the PPP, small businesses and other entities and individuals can apply for loans from existing SBA lenders and other approved regulated lenders that enroll in the program, subject to numerous limitations and eligibility criteria. On April 16, 2020, the SBA notified lenders that the original $349.0 billion of funding under the PPP was exhausted, and on April 24, 2020, Congress allocated an additional $310.0 billion to the program. We participated as a lender in both rounds of the PPP. Due to the short timeframe between the passing of the CARES Act and the opening of the PPP, there was and continues to be some ambiguity in the laws, rules and guidance regarding the operation of the PPP, which exposes us to risks relating to noncompliance with the PPP. Since the opening of the PPP banks have been subject to class action litigation regarding the process and procedures that such banks used in processing applications for the PPP and their refusal to pay agent fees. Class action litigation has been filed against us, along with many other banks claiming the banks are obligated to pay agent fees. If these cases are not resolved in a manner favorable to us, it may result in significant financial liability and adversely affect our reputation. In addition, litigation can be costly, regardless of outcome. Any financial liability, litigation costs or reputational damage caused by PPP-related litigation could have a material adverse impact on our business, financial position, results of operations and prospects.

We may have a credit risk on PPP loans if a determination is made by the SBA that there is a deficiency in the manner in which the loan was originated, funded, or serviced by us, such as an issue with the eligibility of a borrower to receive a PPP loan, which may or may not be related to the ambiguity in the laws, rules and guidance regarding the operation of the PPP. In the event of a loss resulting from a default on a PPP loan and a determination by the SBA that there was a deficiency in the manner in which the PPP loan was originated, funded, or serviced by us, the SBA may deny its liability under the guaranty, reduce the amount of the guaranty, or, if it has already paid under the guaranty, seek recovery of any loss related to the deficiency from us, which could adversely impact our business, financial position, results of operations and prospects.

We may be required to consult with the Federal Reserve Bank (FRB) 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.

Holders of our common stock are only entitled to receive such cash dividends as our Board of Directors may declare out of funds legally available for such payments. Although we have historically declared cash dividends on our common stock, we are not required to do so. We may reduce or eliminate our common stock cash dividend in the future depending upon our results of operations, financial condition or other metrics which could be adversely impacted by the ultimate impact of the COVID-19 pandemic, which remains unknown.

In July 2020, the FRB updated its supervisory guidance to provide greater clarity regarding the situations in which bank holding companies, like Valley, may expect an expedited consultation in connection with the declaration of

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dividends that exceed quarterly earnings. To qualify, amongst other criteria, total commercial real estate loan concentrations cannot represent 300 percent or more of total capital and the outstanding balance of the commercial real estate loan portfolio cannot increase by 50 percent or more during the prior 36 months. Currently, we believe that Valley does not meet this standard for expedited consultation and approval of its dividend, should it be required, due to strong organic and acquired commercial real estate loan growth over the past three years. As a result, Valley could be subject to a lengthier and possibly more burdensome review process by the FRB when considering paying dividends that exceed quarterly earnings. The delay, reduction or elimination of our quarterly dividend could adversely affect the market price of our common stock. See additional information regarding our quarterly cash dividend and the current rate of earnings retention at the "Capital Adequacy" section of the MD&A.

We recently implemented new deposit services for businesses in the cannabis industry which could expose us to additional liabilities and regulatory compliance costs.

We recently implemented specialized deposit services intended for a limited number of state licensed medical-use (only) cannabis customers. Currently, we provide this new service to one customer; although we anticipate expanding this service to other customers in the future. Medical-use cannabis businesses are legal in numerous states and the District of Columbia, including our primary markets of New Jersey, New York, and Florida. However, such businesses are not legal at the federal level and cannabis remains a Schedule I drug under the Controlled Substances Act of 1970. In 2014, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) published guidelines for financial institutions servicing state legal cannabis businesses. We have implemented a comprehensive control framework that includes written policies and procedures related to the on-boarding of such businesses and the monitoring and maintenance of such business accounts that comports with the FinCEN guidance. Additionally, our policies call for due diligence review of the cannabis business before the business is on-boarded, including confirmation that the business is properly licensed and maintains the license in good standing in the applicable state. Throughout the relationship, our policies call for continued monitoring of the business, including site visits, to determine if the business continues to meet our requirements, including maintenance of required licenses and calls for undertaking periodic financial reviews of the business. The Bank’s program is limited to depository products and deposit transactions are monitored for compliance with the applicable state medical program rules and other regulations before approval and acceptance by the Bank’s BSA/AML department.

While we believe our policies and procedures will allow us to operate in compliance with the FinCEN guidelines, there can be no assurance that compliance with the FinCEN guidelines will protect us from federal prosecution or other regulatory sanctions. Federal prosecutors have significant discretion and there can be no assurance that the federal prosecutors will not choose to strictly enforce the federal laws governing cannabis. Any change in the federal government’s enforcement position, could potentially subject us to criminal prosecution and other regulatory sanctions. While we also believe our BSA/AML policies and programs for this new business are sufficient, the medical marijuana business is considered high-risk, thus increasing the risk of a regulatory action against our BSA/AML program that has adverse consequences, including but not limited to, preventing us from undertaking mergers, acquisitions and other expansion activities.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the quarter, we did not sell any equity securities not registered under the Securities Act of 1933, as amended. Purchases of equity securities by the issuer and affiliated purchasers during the three months ended September 30, 2020 were as follows:

ISSUER PURCHASES OF EQUITY SECURITIES 

Period	Total  Number of Shares  Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans (2)	Maximum Number of Shares that May Yet Be Purchased Under the Plans (2)
July 1, 2020 to July 31, 2020	99	$	7.09	—	4,112,465
August 1, 2020 to August 31, 2020	10,694	7.63		—	4,112,465
September 1, 2020 to September 30, 2020	672	6.60		—	4,112,465
Total	11,465	$	7.56	—

(1)Represents repurchases made in connection with the vesting of employee restricted stock awards.

(2)On January 17, 2007, Valley publicly announced its intention to repurchase up to 4.7 million outstanding common shares in the open market or in privately negotiated transactions. The repurchase plan has no stated expiration date. No repurchase plans or programs expired or terminated during the three months ended September 30, 2020.

Item 6. Exhibits

(3)	Articles of Incorporation and By-laws:
	(3.1)	Restated Certificate of Incorporation of the Registrant, incorporated herein by reference to Exhibit 3.1 to the Registrant's Form 10-Q Quarterly Report filed on August 7, 2020.
	(3.2)	By-laws of the Registrant, as amended and restated, incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K Current Report filed on October 24, 2018.
(10)		Material Contracts
	(10.1)	Valley National Bancorp 2016 Long-Term Stock Incentive Plan, as amended and restated on January 28, 2020.*
(31.1)	Certification pursuant to Securities Exchange Rule 13a-14(a)/15d-14(a) signed by Ira Robbins, Chairman of the Board, President and Chief Executive Officer of the Company.*
(31.2)	Certification pursuant to Securities Exchange Rule 13a-14(a)/15d-14(a) signed by Michael D. Hagedorn, Senior Executive Vice President and Chief Financial Officer of the Company.*
(32)	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Ira Robbins, Chairman of the Board, President and Chief Executive Officer of the Company, and Michael D. Hagedorn, Senior Executive Vice President and Chief Financial Officer of the Company.**
(101)	Interactive Data File (XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) **
(104)	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith.
**	Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	VALLEY NATIONAL BANCORP
	(Registrant)
Date:	/s/ Ira Robbins
November 6, 2020	Ira Robbins
	Chairman of the Board, President
	and Chief Executive Officer
	(Principal Executive Officer)
Date:	/s/ Michael D. Hagedorn
November 6, 2020	Michael D. Hagedorn
	Senior Executive Vice President and
	Chief Financial Officer
	(Principal Financial Officer)

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EX-10.1

EXHIBIT 10.1

VALLEY NATIONAL BANCORP

2016 LONG-TERM STOCK INCENTIVE PLAN

(Adopted by Directors January 29, 2016)

(Adopted by Shareholders April 28, 2016)

(Amended by Directors March 28, 2017)

(Amended by Directors January 30, 2019)

(Amended by Directors January 28, 2020)

1.    Purpose. The purpose of the Plan is to provide additional incentive to those officers and key employees of the Company and its Subsidiaries and members of the Board of Directors of the Company whose substantial contributions are essential to the continued growth and success of the Company’s business in order to strengthen their commitment to the Company and its Subsidiaries, to motivate such officers, employees and Directors to faithfully and diligently perform their assigned responsibilities and to attract and retain competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the Company. To accomplish such purposes, the Plan provides that the Company may grant Incentive Stock Options, Nonqualified Stock Options, Restricted Stock Awards, Restricted Stock Units and Stock Appreciation Rights to officers and employees and may grant Restricted Stock Awards and Restricted Stock Units to Directors.

2.    Definitions. For purposes of this Plan:

(a)    “Accelerated Restricted Stock” means Shares of Restricted Stock granted at any time by the Company which are (i) held by Grantees who at any time were named executive officers (as determined under Item 402 of Regulation S-K of the Exchange Act) and (ii) for which restrictions upon such Shares lapse for any reason in connection with any termination of employment. For purposes of clarity, Shares of Accelerated Restricted Stock upon which restrictions lapse in connection with a Change in Control will not be deemed Accelerated Restricted Stock even if a termination of employment occurs in connection with the Change in Control.

(b)    “Accelerated Restricted Stock Units” means Restricted Stock Units granted at any time by the Company which are (i) held by Grantees who at any time were named executive officers (as determined under Item 402 of Regulation S-K of the Exchange Act) and (ii) for which restrictions upon such Restricted Stock Units lapse for any reason in connection with any termination of employment. For purposes of clarity, Accelerated Restricted Stock Units upon which restrictions lapse in connection with a Change in Control will not be deemed Accelerated Restricted Stock Units even if a termination of employment occurs in connection with the Change in Control.

(c)    “Accelerated Stock Options” means any Option granted at any time by the Company which is (i) held by a Grantee who at any time was a named executive officer (as determined under Item 402 of Regulation S-K of the Exchange Act) and (ii) for which

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either (A) the exercisability (i.e. the vesting) of such Option is accelerated for any reason in connection with any termination of employment or (B) the exercise period of such Option is extended by the Committee under Section 6(g). For purposes of clarity, Options for which vesting accelerates pursuant to Section 6(h) in connection with a Change in Control will not be deemed Accelerated Stock Options even if a termination of employment occurs in connection with the Change in Control.

(d)    “Agreement” means the written agreement between the Company and an Optionee or Grantee evidencing the grant of an Option or Award and setting forth the terms and conditions thereof.

(e)    “Award” means a grant of Restricted Stock, Restricted Stock Units or Stock Appreciation Rights, or any combination of the foregoing.

(f)    “Bank” means Valley National Bank, a Subsidiary.

(g)    “Board” means the Board of Directors of the Company.

(h)    “Cause” means the willful failure by an Optionee or Grantee to perform his duties with the Company or with any Subsidiary or the willful engaging in conduct which is injurious to the Company or any Subsidiary, monetarily or otherwise.

(i)    “Change in Capitalization” means any increase, reduction, change or exchange of Shares for a different number or kind of shares or other securities of the Company by reason of a reclassification, recapitalization, merger, consolidation, reorganization, issuance of warrants or rights, extraordinary cash dividend, stock dividend, stock split or reverse stock split, combination or exchange of shares, repurchase of shares, change in corporate structure or otherwise.

(j)    “Change in Control” means any of the following events: (i) when any person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act), other than an affiliate of the Company or a Subsidiary or an employee benefit plan established or maintained by the Company, a Subsidiary or any of their respective affiliates, is or becomes the beneficial owner (as defined in Rule 13d-3 of the Exchange Act) directly or indirectly, of securities of the Company representing more than twenty-five percent (25%) of the combined voting power of the Company’s then outstanding securities (a “Control Person”), (ii) the consummation of (A) a transaction, other than a Non-Control Transaction, pursuant to which the Company is merged with or into, or is consolidated with, or becomes the subsidiary of another corporation, (B) a sale or disposition of all or substantially all of the Company’s assets or (C) a plan of liquidation or dissolution of the Company, or (iii) if during any period of two (2) consecutive years, individuals (the “Continuing Directors”) who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof or, following a Non-Control Transaction, a majority of the board of directors of the Surviving Corporation; provided that any individual whose election or nomination for election as a member of the Board (or, following a Non-Control Transaction, the board of directors of the Surviving

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Corporation) was approved by a vote of at least two-thirds of the Continuing Directors then in office shall be considered a Continuing Director. For purposes of this paragraph: (I) the Company will be deemed to have become a subsidiary of another corporation if any other corporation (which term shall include, in addition to a corporation, a limited liability company, partnership, trust, or other organization) owns, directly or indirectly, 50 percent or more of the total combined outstanding voting power of all classes of stock of the Company or any successor to the Company; (II) “Non-Control Transaction” means a transaction in which the Company is merged with or into, or is consolidated with, or becomes the subsidiary of another corporation pursuant to a definitive agreement providing that at least a majority of the directors of the Surviving Corporation immediately after the transaction are persons who were directors of the Company on the day before the first public announcement relating to the transaction; (III) “Surviving Corporation” means (A) in a transaction in which the Company becomes the subsidiary of another corporation, the ultimate parent entity of the Company or the Company’s successor, and (B) in any other transaction pursuant to which the Company is merged with or into another corporation, the surviving or resulting corporation in the merger or consolidation.

(k)    “Code” means the Internal Revenue Code of 1986, as amended.

(l)    “Committee” means the Compensation and Human Resources Committee of the Board or such other committee designated by the Board consisting solely of two (2) or more directors who are Non-Employee Directors (as defined in Rule 16b-3 of the Exchange Act as it may be amended from time to time) of the Company and, as necessary, outside directors as defined pursuant to Section 162(m) of the Code (as it may be amended from time to time) appointed by the Board to administer the Plan and to perform the functions set forth herein. Directors appointed by the Board to the Committee shall have the authority to act notwithstanding the failure to be so qualified. With respect to administration of the Plan as it relates to Awards granted to Directors, the term “Committee” when used in the Plan shall be deemed to mean the Board.

(m)    “Company” means Valley National Bancorp, a New Jersey corporation.

(n)    “Director” means a member of the Board who is not also serving as an employee of the Company or any Subsidiary.

(o)    “Eligible Employee” means any officer or other key employee of the Company or a Subsidiary designated by the Committee as eligible to receive Options or Awards subject to the conditions set forth herein. References to the term “Eligible Employee” in the Plan shall be read to include “Director” as the context may require.

(p)    “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(q)    “Fair Market Value” means the fair market value of the Shares as determined by the Committee in its sole discretion using a method that complies with Section 409A of the Code; provided, however, that (A) if the Shares are listed on the Nasdaq Market System

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or other national securities exchange, Fair Market Value on any date shall be the last sale price reported for the Shares on such exchange on such date or on the last date preceding such date on which a sale was reported, or (B) if the Shares are then traded in an over-the-counter market, Fair Market Value on any date shall be the mean of the high bid and low asked prices for the Shares in such over-the-counter market for such date or on the last date preceding such date on which high bid and low asked prices exist.

(r)    “Grantee” means a person to whom an Award has been granted under the Plan.

(s)    “Incentive Stock Option” means an Option within the meaning of Section 422 of the Code.

(t)    “Nonqualified Stock Option” means an Option which is not an Incentive Stock Option.

(u)    “Option” means an Incentive Stock Option, a Nonqualified Stock Option, or either or both of them.

(v)    “Optionee” means an Eligible Employee to whom an Option has been granted under the Plan.

(w)    “Parent” means any corporation in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock of one of the other corporations in such chain.

(x)    “Plan” means the Valley National Bancorp 2016 Long-Term Stock Incentive Plan as set forth in this instrument and as it may be amended from time to time.

(y)    “Prior Plan” means the Valley National Bancorp 2009 Long-Term Stock Incentive Plan (and together with the Valley National Bancorp 1999 Long-Term Stock Incentive Plan, the “Prior Plans”).

(z)    “Restricted Stock” means Shares issued or transferred to an Eligible Employee which are subject to restrictions as provided in Section 8 hereof.

(aa)    “Restricted Stock Unit” means a right to receive an amount equivalent to one Share payable in Common Stock or cash at the discretion of the Committee upon the satisfaction of terms and conditions as provided in Section 9 hereof, including without limitation the satisfaction of specified performance criteria. Restricted Stock Units represent an unfunded and unsecured obligation of the Company, except as otherwise provided by the Committee.

(ab)    “Retirement” means the retirement from active employment with the Company of an employee or officer, but only if such person meets the requirements contained below in: clause (i) or, clause (ii) or, if the Award is made after January 1, 2019, clause (iii).

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(i)        the person has a minimum combined total of Years of Service and age equal to eighty (80); and the person is age fifty-five (55) or older; and the person provides thirty (30) days prior written notice to the Company of the retirement; or

(ii)        the person has a minimum of five (5) Years of Service; and the person is age sixty-five (65) or older and the person provides thirty (30) days prior written notice to the Company of the retirement; or

(iii)       the person has a minimum of ten (10) Years of Service; and the person is age sixty (60) or older;  and the person provides thirty (30) days prior written notice to the Company of the retirement.

    “Years of Service” shall mean each twelve consecutive month period commencing on the Participant’s employment date, after which he or she remains employed by the Company or an affiliate. Partial years of service will not be considered. For the avoidance of doubt, Years of Service for an individual who becomes an Employee in connection with an asset or stock purchase, merger, or other corporate transaction involving his or her prior employer (an “Acquired Entity”) will not include the period of employment with the Acquired Entity.

An employee or officer who retires but fails to meet such requirements shall not be deemed to be within the definition of “Retirement” for any purpose under this Plan or any Award or Option granted thereunder; provided, however, after a Change in Control transaction, no prior notice of a Retirement shall be required for purposes of this Plan only.

For Directors, the term “Retirement” shall mean the date on which the Director ceases to be a member of the Board after both attaining age sixty five (65) and completing at least five (5) years of service on the Board.

(ac)    “Shares” means the common stock, no par value, of the Company (including any new, additional or different stock or securities resulting from a Change in Capitalization).

(ad)    “Stock Appreciation Right” means a right to receive all or some portion of the increase in the value of shares of Common Stock as provided in Section 7 hereof.

(ae)    “Subsidiary” means any corporation in an unbroken chain of corporations, beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

(af)    “Ten-Percent Shareholder” means an Eligible Employee, who, at the time an Incentive Stock Option is to be granted to him, owns (within the meaning of Section 422(b)(6) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, a Parent or a Subsidiary within the meaning of Section 422(b)(6) of the Code.

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3.    Administration.

(a)    Except as set forth in Section 3(b) below, the Plan shall be administered by the Committee which shall hold meetings at such times as may be necessary for the proper administration of the Plan. The Committee shall keep minutes of its meetings. A majority of the Committee shall constitute a quorum and a majority of a quorum may authorize any action. Each member of the Committee shall be a Non-Employee Director (as defined in Rule 16b-3 of the Exchange Act as it may be amended from time to time) and, as necessary, an outside director as defined pursuant to Section 162(m) of the Code as it may be amended from time to time. No failure to be so qualified shall invalidate any Option or Award or any action or inaction under the Plan.

Subject to the express terms and conditions set forth herein, the Committee shall have the power from time to time:

(1)    to determine those Eligible Employees to whom Options shall be granted under the Plan and the number of Incentive Stock Options and/or Nonqualified Options to be granted to each Eligible Employee and to prescribe the terms and conditions (which need not be identical) of each Option, including the purchase price per share of each Option;

(2)    to select those Eligible Employees to whom Awards shall be granted under the Plan and to determine the number of shares of Restricted Stock, Restricted Stock Units and/or Stock Appreciation Rights to be granted pursuant to each Award, the terms and conditions of each Award, including the restrictions or performance criteria relating to such shares, units or rights, the purchase price per share, if any, of Restricted Stock or Restricted Stock Units and whether Stock Appreciation Rights will be granted alone or in conjunction with an Option;

(3)    to construe and interpret the Plan and the Options and Awards granted thereunder and to establish, amend and revoke rules and regulations for the administration of the Plan, including, but not limited to, correcting any defect or supplying any omission, or reconciling any inconsistency in the Plan or in any Agreement, in the manner and to the extent it shall deem necessary or advisable to make the Plan fully effective, and all decisions and determinations by the Committee in the exercise of this power shall be final and binding upon the Company or a Subsidiary, the Optionees and the Grantees, as the case may be;

(4)    to determine the duration and purposes for leaves of absence which may be granted to an Optionee or Grantee without constituting a termination of employment or service for purposes of the Plan; and

(5)    generally, to exercise such powers and to perform such acts as are deemed necessary or advisable to promote the best interests of the Company with respect to the Plan.

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(b)    The Board shall serve to administer and interpret the Plan with respect to any grants of Awards made to Directors. Directors shall only be eligible to receive Restricted Stock Awards pursuant to Section 8 and/or Restricted Stock Units pursuant to Section 9. Any such Awards, and all duties, powers and authority given to the Committee in this Plan, including those provided for in this Section 3 and elsewhere in the Plan, in connection with Awards to Grantees shall be deemed to be given to the Board in its sole discretion in connection with Awards to Directors. The Board may request of the Committee, its Nominating and Corporate Governance Committee or any other Board committee composed entirely of independent Directors, its recommendation on the level of Awards for this purpose.

(c)    No member of the Committee or the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, the Options or the Awards, and all members of the Committee and the Board shall be fully indemnified by the Company with respect to any such action, determination or interpretation.

4.    Stock Subject to Plan.

(a)    The maximum number of Shares that may be issued or transferred pursuant to all Options and Awards under this Plan is 9,400,000, less one (1) Share for every one (1) Share granted under the Prior Plan after December 31, 2015. The maximum number of Shares that may be granted pursuant to Options and Stock Appreciation Rights to any one Eligible Employee in any calendar year is 1,000,000. The maximum grant date fair value of Shares that may be issued or transferred pursuant to Awards of Restricted Stock and Restricted Stock Units to any one Eligible Employee in any calendar year is $7,000,000. The maximum grant date fair value of Shares that may be issued or transferred pursuant to Awards of Restricted Stock and Restricted Stock Units to any one Director in any calendar year is $300,000. Subject to the foregoing aggregate limitations, the maximum number of Shares that may be granted pursuant to Incentive Stock Options shall be 9,400,000. In each case, upon a Change in Capitalization after the adoption of this Plan by the Board, the Shares shall be adjusted to the number and kind of Shares of stock or other securities existing after such Change in Capitalization in accordance with Section 11. Any Shares issued under the Plan may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares purchased in the open market or otherwise.

(b)    Whenever any outstanding Option or Award under this Plan (or any option or award under the Prior Plans that is outstanding after December 31, 2015) or any portion thereof expires or is cancelled, forfeited or otherwise terminated (excluding termination due to exercise of Options or Stock Appreciation Rights) for any reason, including failure to meet applicable performance goals, the Shares allocable to the expired, cancelled, forfeited or otherwise terminated portion of such Option or Award may again be the subject of Options and Awards under this Plan.

(c)    Whenever any Shares subject to an Award other than an Option or Stock Appreciation Right granted under this Plan (or any award other than an option or stock appreciation right under the Prior Plans that is outstanding after December 31, 2015) are tendered

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(either actually or by attestation) or withheld by the Company to satisfy tax withholding requirements, such Shares may again be the subject of Awards under this Plan. Notwithstanding anything to the contrary contained herein, the following Shares shall not again be subject to Awards under this Plan: (i) Shares tendered by the Participant or withheld by the Company in payment of the purchase price of an Option or, after December 31, 2015, an option under the Prior Plans, (ii) Shares tendered by the Participant or withheld by the Company to satisfy any tax withholding obligation with respect to Options or Stock Appreciation Rights or, after December 31, 2015, options or stock appreciation rights under the Prior Plans, (iii) Shares subject to a Stock Appreciation Right or, after December 31, 2015, a stock appreciation right under the Prior Plans that are not issued in connection with its stock settlement on exercise thereof, and (iv) Shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Options or, after December 31, 2015, options under the Prior Plans.

(d)    Shares subject to Awards granted under this Plan (or awards under the Prior Plans that are outstanding after December 31, 2015) settled in cash may again be the subject of Options and Awards under this Plan.

5.    Eligibility. Subject to the provisions of the Plan, the Committee shall have full and final authority to select those Eligible Employees who will receive Options and/or Awards but no person shall receive any Options or Awards unless he is an employee of the Company or a Subsidiary at the time the Option or Award is granted.

6.    Stock Options. The Committee may grant Options in accordance with the Plan, the terms and conditions of which shall be set forth in an Agreement. Each Option and Option Agreement shall be subject to the following conditions:

(a)    Purchase Price. The purchase price or the manner in which the purchase price is to be determined for Shares under each Option shall be set forth in the Agreement, provided that the purchase price per Share under each Incentive Stock Option shall not be less than 100% of the Fair Market Value of a Share at the time the Option is granted (110% in the case of an Incentive Stock Option granted to a Ten-Percent Shareholder) and under each Nonqualified Stock Option shall not be less than 100% of the Fair Market Value of a Share at the time the Option is granted.

(b)    Duration. Options granted hereunder shall be for such term as the Committee shall determine, provided that (i) no Incentive Stock Option shall be exercisable after the expiration of ten (10) years from the date it is granted (five (5) years in the case of an Incentive Stock Option granted to a Ten-Percent Shareholder) and (ii) no Nonqualified Stock Option shall be exercisable after the expiration of ten (10) years and one (1) day from the date it is granted. The Committee may, subsequent to the granting of any Option, extend the term thereof but in no event shall the term as so extended exceed the maximum term provided for in the preceding sentence. Any such extension shall only be made in accordance with Section 409A of the Code.

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(c)    Non-Transferability. No Option granted hereunder shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Optionee only by the Optionee or his guardian or legal representative. The terms of such Option shall be binding upon the beneficiaries, executors, administrators, heirs and successors of the Optionee.

(d)    Stock Options; Vesting. Subject to Section 6(h) hereof, each Option shall be exercisable in such installments (which need not be equal) and at such times as may be designated by the Committee and set forth in the Option Agreement. Unless otherwise provided in the Agreement, to the extent not exercised, installments shall accumulate and be exercisable, in whole or in part, at any time after becoming exercisable, but not later than the date the Option expires. Unless otherwise provided in the Option Agreement, upon the death or Retirement of an Optionee, all Options shall become immediately exercisable. Notwithstanding the foregoing, the Committee may accelerate the exercisability of any Option or portion thereof at any time.

(e)    Method of Exercise. The exercise of an Option shall be made only by a written notice delivered in person or by mail (including electronic mail) to the Secretary of the Company at the Company’s principal executive office, specifying the number of Shares to be purchased and accompanied by payment therefor, as well as for any required tax withholding, and otherwise in accordance with the Agreement pursuant to which the Option was granted. The purchase price and required tax withholding for any shares purchased pursuant to the exercise of an Option shall be paid in full upon such exercise (i) in cash, (ii) by check, (iii) by transferring Shares having a Fair Market Value on the day preceding the date of exercise of such option equal to the aggregate purchase price for the Shares being purchased to the Company and satisfying such other terms and conditions as may be imposed by the Committee, (iv) by having Shares that would otherwise have been delivered to the Participant upon exercise of an Option withheld by the Company or (v) such other method as approved by the Committee at the discretion of the Committee. If requested by the Committee, the Optionee shall deliver the Agreement evidencing the Option and the Agreement evidencing any related Stock Appreciation Right to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Optionee. Not less than 100 Shares may be purchased at any time upon the exercise of an Option unless the number of Shares so purchased constitutes the total number of Shares then purchasable under the Option.

(f)    Rights of Optionees. No Optionee shall be deemed for any purpose to be the owner of any Shares subject to any Option unless and until (i) the Option shall have been exercised pursuant to the terms thereof, (ii) the Company shall have issued and delivered the Shares to the Optionee, and (iii) the Optionee’s name shall have been entered as a shareholder of record on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Shares.

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(g)    Termination of Employment. In the event that an Optionee ceases to be employed by the Company or any Subsidiary, any outstanding Options held by such Optionee shall, unless the Option Agreement evidencing such Option provides otherwise, terminate as follows:

(1)    If the Optionee’s termination of employment is due to his death, the Option or portion thereof that is exercisable or becomes exercisable on the date of termination shall remain outstanding and be exercisable for a period of one (1) year following such termination of employment, and shall thereafter terminate; provided, however, that the Company shall have given written notice to the Optionee’s designated beneficiary for the Plan as permitted under Section 17(c) or, if there is no designated beneficiary for the Plan, then to the Optionee’s designated beneficiaries under the Company’s group term life insurance plan, within the six (6) months following the Optionee’s termination of employment. If the Company’s notice is given more than six (6) months after the date of the Optionee’s termination of employment, the Option shall be exercisable for six (6) months from the date of such notice, and shall thereafter terminate; provided, however, that in no event shall the Option be exercisable beyond two (2) years following the Optionee’s termination of employment. If no notice is given by the Company, the Option shall be exercisable for a period of two (2) years following such termination of employment, and shall thereafter terminate. The written notice to be given under this paragraph may be given by regular mail and shall identify the option including the number of Shares subject to the option, the current exercise price and remaining exercise period and such other appropriate information as the Company may determine, provided that any defect in the notice shall not affect the validity of the notice;

(2)    If the Optionee’s termination of employment is by the Company or a Subsidiary for Cause or is by the Optionee (other than due to the Optionee’s Retirement), the Option shall terminate on the date of the Optionee’s termination of employment;

(3)    If the termination of employment is due to the Optionee’s Retirement, the Option or portion thereof that is exercisable or becomes exercisable on the date of termination shall remain outstanding and be exercisable for the remaining term of the Option and thereafter shall be unaffected by the death of the Optionee. (An Optionee who exercises his or her Options more than 90 days after the termination of employment due to Retirement shall acknowledge that the Options so exercised will not be Incentive Stock Options.); and

(4)    If the Optionee’s termination of employment is for any other reason (including an Optionee’s ceasing to be employed by a Subsidiary as a result of the sale of such Subsidiary or an interest in such Subsidiary), the Option (to the extent exercisable at the time of the Optionee’s termination of employment) shall be exercisable for a period of ninety (90) days following such termination of employment, and shall thereafter terminate.

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Notwithstanding the foregoing, the Committee may provide, either at the time an Option is granted or thereafter, that the Option may be exercised after the periods provided for in this Section 6(g), but in no event beyond the term of the Option. To the extent that the exercise period is extended by the Committee after the Option is granted, such extension may only be made in accordance with Section 409A of the Code.

With respect to any Accelerated Stock Options, the following restrictions will apply unless otherwise provided in the Agreement:

    (i) in the case of a termination of employment for any reason other than death, disability (as determined in the judgment of the Committee) or Retirement, a minimum of 50% of any Shares obtained upon the exercise of an Accelerated Stock Option must be retained by the Grantee until the date 24 months after the date of such termination;

(ii) in the case of a termination of employment by reason of Retirement, a minimum of 50% of any Shares obtained upon the exercise of an Accelerated Stock Option must be retained by the Grantee until the date 18 months after the date of Retirement;

(iii) in the case of a termination of employment due to death or disability (as determined in the judgment of the Committee), there will be no retention requirement under this paragraph.

To effectuate the foregoing, the Shares subject to the retention requirements above obtained upon the exercise of an Accelerated Stock Option shall be issued in book entry form with a stop-transfer order restricting transfers for the applicable period.

(h)    Effect of Change in Control. In the event of a Change in Control, all Options outstanding on the date of such Change in Control shall become immediately and fully exercisable. The Committee shall have the authority to make Option Awards under Agreements which provide that the Option does not become immediately and fully exercisable upon a Change in Control. The Committee may do so by any means including by providing in an Agreement that such Option will become immediately and fully exercisable upon the termination by the Company of the employment of the Grantee following a Change in Control.

(i)    Substitution and Modification. Subject to the terms of the Plan, the Committee may modify outstanding Options or accept the surrender of outstanding Options (to the extent not exercised) and grant new Options in substitution for them. Notwithstanding the foregoing, no modification of an Option shall alter or impair any rights or obligations under the Option without the Optionee’s consent, except as provided for in this Plan or the Agreement. In addition, notwithstanding the foregoing, other than pursuant to Section 11, the Committee shall not without the approval of the Company’s shareholders (a) reduce the purchase price per Share of an Option after it is granted, (b) cancel an Option when the purchase price per Share exceeds the Fair Market Value of one Share in exchange for cash or another Award (other than in connection with a Change in Control),

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or (c) take any other action with respect to an Option that would be treated as a repricing under the rules and regulations of the national securities exchange on which the Shares are then listed.

7.    Stock Appreciation Rights. The Committee may, in its discretion, either alone or in connection with the grant of an Option, grant Stock Appreciation Rights in accordance with the Plan, the terms and conditions of which shall be set forth in an Agreement. If granted in relation to an Option, a Stock Appreciation Right shall cover the same shares covered by the Option (or such lesser number of shares as the Committee may determine) and shall, except as provided in this Section 7, be subject to the same terms and conditions as the related Option.

(a)    Time of Grant. A Stock Appreciation Right may be granted:

(i)    at any time if unrelated to an Option; or

(ii)    if related to an Option, either at the time of grant, or at any time thereafter during the term of the Option.

(b)    Stock Appreciation Rights Related to an Option.

(i)    Payment. A Stock Appreciation Right granted in relation to an Option shall entitle the holder thereof, upon exercise of the Stock Appreciation Right or any portion thereof, to receive payment of an amount computed pursuant to Section 7(b)(iii).

(ii)    Exercise. A Stock Appreciation Right granted in relation to an Option shall be exercisable at such time or times and only to the extent that the related Option is exercisable, and will not be transferable except to the extent the related Option may be transferable. A Stock Appreciation Right granted in relation to an Incentive Stock Option shall be exercisable only if the Fair Market Value of a Share on the date of exercise exceeds the purchase price specified in the related Incentive Stock Option.

(iii)    Amount Payable. Upon the exercise of a Stock Appreciation Right related to an Option, the Grantee shall be entitled to receive an amount determined by multiplying (A) the excess of the Fair Market Value of a Share on the date of exercise of such Stock Appreciation Right over the per Share purchase price under the related Option, by (B) the number of Shares as to which such Stock Appreciation Right is being exercised. Notwithstanding the foregoing, the Committee may limit in any manner the amount payable with respect to any Stock Appreciation Right by including such a limit in the Agreement evidencing the Stock Appreciation Right at the time it is granted.

(iv)    Treatment of Related Options and Stock Appreciation Rights Upon Exercise. Except as provided in Section 7(b)(v), (A) upon the exercise of a Stock Appreciation Right granted in relation to an Option, the Option shall be cancelled

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to the extent of the number of Shares as to which the Stock Appreciation Right is exercised and (B) upon the exercise of an Option granted in relation to a Stock Appreciation Right, the Stock Appreciation Right shall be cancelled to the extent of the number of Shares as to which the Option is exercised.

(v)    Simultaneous Exercise of Stock Appreciation Right and Option. The Committee may provide, either at the time a Stock Appreciation Right is granted in relation to a Nonqualified Stock Option or thereafter during the term of the Stock Appreciation Right, that upon exercise of such Option, the Stock Appreciation Right shall automatically be deemed to be exercised to the extent of the number of Shares as to which the Option is exercised. In such event, the Grantee shall be entitled to receive the amount described in Section 7(b)(iii) hereof (or some percentage of such amount if so provided in the Agreement evidencing the Stock Appreciation Right), in addition to the Shares acquired pursuant to the exercise of the Option. The inclusion in an Agreement evidencing a Stock Appreciation Right of a provision described in this Section 7(b)(v) may be in addition to and not in lieu of the right to exercise the Stock Appreciation Right as otherwise provided herein and in the Agreement.

(c)    Stock Appreciation Rights Unrelated to an Option. The Committee may grant to Eligible Employees Stock Appreciation Rights unrelated to Options. Stock Appreciation Rights unrelated to Options shall contain such terms and conditions as to exercisability, vesting and duration as the Committee shall determine, but in no event shall they have a term of greater than ten (10) years. Unless otherwise provided in the Agreement, upon the death or Retirement of a Grantee, all Stock Appreciation Rights shall become immediately and fully exercisable. Unless otherwise provided in the Agreement, upon the death of a Grantee, the Stock Appreciation Rights held by the Grantee that are exercisable or become exercisable upon death, shall be exercisable for a period of one (1) year following such termination of employment, and shall thereafter terminate. Unless otherwise provided in the Agreement, upon the Retirement of a Grantee, the Stock Appreciation Rights held by the Grantee that are exercisable or become exercisable upon such Retirement shall remain outstanding and be exercisable for the remaining term of the Stock Appreciation Right and thereafter shall be unaffected by the death of the Grantee, and shall thereafter terminate. The amount payable upon exercise of such Stock Appreciation Rights shall be determined in accordance with Section 7(b)(iii), except that “Fair Market Value of a Share on the date of the grant of the Stock Appreciation Right” shall be substituted for “purchase price under the related Option.”

(d)    Method of Exercise. Stock Appreciation Rights shall be exercised by a Grantee only by a written notice delivered in person or by mail to the Secretary of the Company at the Company’s principal executive office, specifying the number of Shares with respect to which the Stock Appreciation Right is being exercised. If requested by the Committee, the Grantee shall deliver the Agreement evidencing the Stock Appreciation Right being exercised and the Agreement evidencing any related Option to the Secretary of the

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Company who shall endorse thereon a notation of such exercise and return such Agreements to the Grantee.

(e)    Form of Payment. Payment of the amount determined under Sections 7(b)(iii) or 7(c), may be made solely in whole shares of Common Stock in a number determined at their Fair Market Value on the date of exercise of the Stock Appreciation Right or, alternatively, at the sole discretion of the Committee, solely in cash, or in a combination of cash and Shares as the Committee deems advisable. If the Committee decides to make full payment in Shares, and the amount payable results in a fractional Share, payment for the fractional Share will be made in cash. If the Committee decides to make payment in Shares, the Committee in its discretion has the right, if requested by the Grantee, to cancel Shares to be delivered to the Grantee having a Fair Market Value, on the day preceding the date of exercise, equal to the aggregate required tax withholding in connection with such exercise, and to apply the value of such Shares as payment for the Grantee’s aggregate required tax withholding arising upon exercise.

(f)    Substitution and Modification. Subject to the terms of the Plan, the Committee may modify outstanding Stock Appreciation Rights or accept the surrender of outstanding Stock Appreciation Rights (to the extent not exercised) and grant new Stock Appreciation Rights in substitution for them. Notwithstanding the foregoing, no modification of an Stock Appreciation Right shall alter or impair any rights or obligations under the Stock Appreciation Right without the Grantee’s consent, except as provided for in this Plan or the Agreement. In addition, notwithstanding the foregoing, other than pursuant to Section 11, the Committee shall not without the approval of the Company’s stockholders (a) reduce the purchase price per Share of a Stock Appreciation Right after it is granted, (b) cancel a Stock Appreciation Right when the purchase price per Share exceeds the Fair Market Value of one Share in exchange for cash or another Award (other than in connection with a Change in Control), or (c) take any other action with respect to a Stock Appreciation Right that would be treated as a repricing under the rules and regulations of the national securities exchange on which the Shares are then listed.

(g)    Effect of Change in Control. In the event of a Change in Control, all Stock Appreciation Rights shall become immediately and fully exercisable. The Committee shall have the authority to make Awards of Stock Appreciation Rights under Agreements which provide that the Award does not become immediately and fully exercisable upon a Change in Control. The Committee may do so by any means including by providing in an Agreement that such Awards will become immediately and fully exercisable upon the termination by the Company of the employment of the Grantee following a Change in Control.

8.    Restricted Stock. The Committee (or, with respect to Directors, the Board) may grant Awards of Restricted Stock which shall be evidenced by an Agreement between the Company and the Grantee. Each Agreement shall contain such restrictions, terms and conditions as the Committee may require. Awards of Restricted Stock shall be subject to the following terms and provisions:

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(a)    Rights of Grantee. Shares of Restricted Stock granted pursuant to an Award hereunder shall be issued in the name of the Grantee as soon as reasonably practicable after the Award is granted and the purchase price, if any, is paid by the Grantee, provided that the Grantee has executed an Agreement evidencing the Award and any other documents which the Committee, in its absolute discretion, may require as a condition to the issuance of such Shares. If a Grantee shall fail to execute the Agreement evidencing a Restricted Stock Award, or shall fail to pay the purchase price, if any, for the Restricted Stock, the Award shall be null and void. Shares of Restricted Stock shall be issued in book entry form in a restricted account with the Company’s transfer agent (or such other administrator as designated by the Committee) with appropriate restrictions and stop-transfer orders imposed thereon. Except as restricted by the terms of the Agreement, upon the issuance of the Shares, the Grantee shall have all of the rights of a shareholder with respect to such Shares, including the right to vote the shares and to receive, subject to Section 8(d), all dividends or other distributions paid or made with respect to the Shares.

(b)    Non-Transferability. Until any restrictions upon the Shares of Restricted Stock awarded to a Grantee shall have lapsed in the manner set forth in Section 8(c), such Shares shall not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated, nor shall they be delivered to the Grantee. Upon the termination of employment (or cessation of service) of the Grantee, all of such Shares with respect to which restrictions have not lapsed shall be forfeited and automatically transferred to and reacquired by the Company at no cost to the Company if no purchase price had been paid for such Shares. The Committee may also impose such other restrictions and conditions on the Shares as it deems appropriate.

(c)    Lapse of Restrictions.

(1)    Restrictions upon Shares of Restricted Stock awarded hereunder shall lapse at such time or times and on such terms, conditions and satisfaction of performance criteria as the Committee may determine; provided, however, that the restrictions upon such Shares shall lapse only if the Grantee on the date of such lapse is then and has continuously been an employee of the Company or a Subsidiary or a Director of the Company from the date the Award was granted, or unless the Committee sets a later date for the lapse of such restrictions. The Board may determine, in its discretion, to grant Restricted Stock Awards to Directors that vest in whole or in part immediately upon grant.

(2)    In the event of a Change in Control, all restrictions upon any Shares of Restricted Stock shall lapse immediately and all such Shares shall become fully vested in the Grantee thereof. The Committee shall have the authority to make Awards of Restricted Stock under Agreements which provide that restrictions do not immediately lapse upon a Change in Control. The Committee may do so by any means including by providing in an Agreement that such restrictions shall lapse

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upon the termination by the Company of the employment of the Grantee following a Change in Control.

(3)    In the event of termination of employment (or cessation of service) as a result of death or Retirement of a Grantee, all restrictions upon Shares of Restricted Stock awarded to such Grantee shall thereupon immediately lapse. The Committee shall have the authority to make Awards of Restricted Stock under Agreements which provide that restrictions do not immediately lapse upon the death or Retirement of the Grantee. The Committee may do so by any means including by providing in an Agreement that Shares of Restricted Stock not yet vested shall be forfeited to the Company automatically and immediately upon the Grantee’s ceasing to be employed by the Company (or ceasing to serve as a Director) for any reason whatsoever.

(4)    The Committee may also decide at any time in its absolute discretion and on such terms and conditions as it deems appropriate, to remove or modify the restrictions upon Shares of Restricted Stock awarded hereunder, unless the Committee sets a later date for the lapse of such restrictions.

(5)    With respect to any Shares of Accelerated Restricted Stock, the following restrictions will apply unless otherwise provided in the Agreement:

(i) in the case of a termination of employment for any reason other than death, disability (as determined in the judgment of the Committee) or Retirement, a minimum of 50% of any Shares of Accelerated Restricted Stock must be retained by the Grantee for a period of 24 months;

(ii) in the case of a termination of employment by reason of Retirement, a minimum of 50% of any Shares of Accelerated Restricted Stock must be retained by the Grantee for a period of 18 months;

(iii) in the case of a termination of employment due to death or disability (as determined in the judgment of the Committee), there will be no retention requirement under this paragraph 8(c)(5).

To effectuate the foregoing, the Shares of Accelerated Restricted Stock shall have the appropriate restriction or stop-transfer orders imposed by the Company’s transfer agent (or other administrator as designated by the Committee) effectuating the retention requirements above and restricting transfers for the applicable period.

(6)    Notwithstanding anything to the contrary in the Plan, the Committee shall have the authority to make Awards of Restricted Stock to a Grantee in Agreements under which restrictions on all or a portion of such Shares shall not immediately lapse and become fully vested upon a Change in Control of the Company or the death or Retirement of the Grantee.

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(d)    Treatment of Cash Dividends. At the time of an Award of Shares of Restricted Stock, the Committee may, in its discretion, determine to pay to the Grantee cash dividends, or a specified portion thereof, declared or paid on Shares of Restricted Stock by the Company. Any such cash dividends paid with respect to Shares of Restricted Stock shall be deferred until the earlier to occur of (i) the lapsing of the restrictions imposed upon such Shares, in which case such cash dividends shall be paid over to the Grantee, or (ii) the forfeiture of such Shares under Section 8(b) hereof, in which case such cash dividends shall be forfeited to the Company. In the Committee’s sole discretion, interest may be credited on the amount of any cash dividends held by the Company for the account of the Grantee from time to time at such rate per annum as the Committee, in its discretion, may determine. Payment of deferred cash dividends, together with any interest accrued thereon as aforesaid, shall be made upon the earlier to occur of the events specified in (i) and (ii) of the immediately preceding sentence, in the manner specified therein.

(e)    Delivery of Shares. When the restrictions imposed hereunder and in the Plan expire or have been cancelled with respect to one or more Shares of Restricted Stock, the Company shall notify the Grantee of same. The Company shall instruct its transfer agent (or other administrator designated by the Committee) to remove the restrictions or stop-transfer orders for those Shares of Restricted Stock no longer subject to restrictions. Notwithstanding the foregoing, if requested by a Director or a Grantee who is an Eligible Employee 20 calendar days or more in advance of the date of vesting of the Restricted Stock (provided that such date is not during a blackout period), the Committee shall cancel Shares of Restricted Stock to be delivered to the Grantee having a Fair Market Value, on the day preceding the date of vesting of the Restricted Stock, equal to (i) the aggregate required tax withholding in connection with such vesting, or (ii) a higher amount up to the aggregate amount of taxes that may be owed by the Eligible Employee or Director as a result of the vesting of the shares of Restricted Stock assuming the highest marginal rate of federal, state and local taxes that could be applicable to the Eligible Employee or Director in the calendar year of vesting, and to apply the value of such Shares of Restricted Stock as payment for the Grantee’s aggregate required tax withholding for the vesting of any Shares of Restricted Stock.

9.    Restricted Stock Units. The Committee (or, with respect to Directors, the Board) may grant Awards of Restricted Stock Units which shall be evidenced by an Agreement between the Company and the Grantee. Each Agreement shall contain such restrictions, terms and conditions as the Committee may require. Awards of Restricted Stock Units shall be subject to the following terms and provisions:

(a)    Rights of Grantee. Restricted Stock Units granted pursuant to an Award hereunder shall be issued in the name of the Grantee as soon as reasonably practicable after the Award is granted and the purchase price, if any, is paid by the Grantee, provided that the Grantee has executed an Agreement evidencing the Award and any other documents which the Committee, in its absolute discretion, may require as a condition to the issuance of such Restricted Stock Units. If a Grantee shall fail to execute the Agreement evidencing a Restricted Stock Unit Award or shall fail to pay the purchase price, if any, for the

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Restricted Stock Units, the Award shall be null and void. The Grantee shall not have any of the rights of a shareholder with respect to Restricted Stock Units, subject to Section 9(d).

(b)    Non-Transferability. Until any restrictions upon the Restricted Stock Units awarded to a Grantee shall have lapsed in the manner set forth in Section 9(c), such Restricted Stock Units shall not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated. Upon the termination of employment (or cessation of service) of the Grantee, all of such Restricted Stock Units with respect to which restrictions have not lapsed shall be forfeited at no cost to the Company if no purchase price had been paid for such Restricted Stock Units. The Committee may also impose such other restrictions and conditions on the Restricted Stock Units as it deems appropriate.

(c)    Lapse of Restrictions.

(1)    Restrictions upon Restricted Stock Units awarded hereunder shall lapse at such time or times and on such terms, conditions and satisfaction of performance criteria as the Committee may determine; provided, however, that the restrictions upon such Restricted Stock Units shall lapse only if the Grantee on the date of such lapse is then and has continuously been an employee of the Company or a Subsidiary or a Director of the Company from the date the Award was granted, or unless the Committee sets a later date for the lapse of such restrictions. The Board may determine, in its discretion, to grant Restricted Stock Unit Awards to Directors that vest in whole or in part immediately upon grant.

(2)    In the event of a Change in Control, all restrictions upon any Restricted Stock Units shall lapse immediately and all such Restricted Stock Units shall become fully vested in the Grantee thereof. The Committee shall have the authority to make Awards of Restricted Stock Units under Agreements which provide that restrictions do not immediately lapse upon a Change in Control. The Committee may do so by any means including by providing in an Agreement that such restrictions shall lapse upon the termination by the Company of the employment of the Grantee following a Change in Control.

(3)    In the event of termination of employment (or cessation of service as a Director) as a result of death or Retirement of a Grantee, all restrictions upon Restricted Stock Units awarded to such Grantee shall thereupon immediately lapse. The Committee shall have the authority to make Awards of Restricted Stock Units under Agreements which provide that restrictions do not immediately lapse upon the death or Retirement of the Grantee. The Committee may do so by any means including by providing in an Agreement that Restricted Stock Units not yet vested shall be forfeited to the Company automatically and immediately upon the Grantee’s ceasing to be employed by the Company (or ceasing to serve as a Director) for any reason whatsoever.

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(4)    The Committee may also decide at any time in its absolute discretion and on such terms and conditions as it deems appropriate, to remove or modify the restrictions upon Restricted Stock Units awarded hereunder, unless the Committee sets a later date for the lapse of such restrictions.

(5)    With respect to any Accelerated Restricted Stock Units, the following restrictions will apply unless otherwise provided in the Agreement:

(i) in the case of a termination of employment for any reason other than death, disability (as determined in the judgment of the Committee) or Retirement, a minimum of 50% of any Shares issued upon vesting of Accelerated Restricted Stock Units must be retained by the Grantee for a period of 24 months;

(ii) in the case of a termination of employment by reason of Retirement, a minimum of 50% of any Shares issued upon vesting of Accelerated Restricted Stock Units must be retained by the Grantee for a period of 18 months;

(iii) in the case of a termination of employment due to death or disability (as determined in the judgment of the Committee), there will be no retention requirement under this paragraph 9(c)(5).

To effectuate the foregoing, the Shares issued in book entry form upon vesting of Accelerated Restricted Stock Units shall have the appropriate restrictions or stop-transfer orders imposed by the Company’s transfer agent (or other administrator as designated by the Committee) effectuating the retention requirements above and restricting transfers for the applicable period.

(6)    Notwithstanding anything to the contrary in the Plan, the Committee shall have the authority to make Awards of Restricted Stock Units to a Grantee in Agreements under which restrictions on all or a portion of such Restricted Stock Units shall not immediately lapse and become fully vested upon a Change in Control of the Company or the death or Retirement of the Grantee.

(d)    Treatment of Cash Dividends. At the time of an Award of Restricted Stock Units, the Committee may, in its discretion, determine to provide the Grantee with the right to receive cash Dividend Equivalents with respect to the Restricted Stock Units subject to the Award, or a specified portion thereof. A “Dividend Equivalent” is an amount equal to the cash dividend payable per Share, if any, multiplied by the number of Shares then underlying the Award with respect to any cash dividends declared or paid by the Company while the Award is outstanding. Any such Dividend Equivalents shall be credited to the Grantee at the time the Company pays any cash dividend on its Shares. Until such time as the Dividend Equivalents vest or are forfeited, interest may be credited, in the Committee’s sole discretion, on the amount of such Dividend Equivalents held by the Company for the account of the Grantee from time to time at such rate per annum as the Committee, in its discretion, may determine. Any Dividend Equivalents credited to the Grantee, and any interest accrued thereon, shall vest at the same time as

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the underlying Restricted Stock Units, and payment of credited Dividend Equivalents, together with any interest accrued thereon, shall be made at the time when the underlying Restricted Stock Units convert to Shares. In the event any Restricted Stock Units are forfeited under Section 9(c) hereof, any Dividend Equivalents credited to Grantee with respect to such forfeited Restricted Stock Units and any interest accrued thereon shall be forfeited to the Company, and the Grantee shall have no rights and the Company shall have no liability as to such Dividend Equivalents or interest.

(e)    Form of Payment. When the restrictions imposed hereunder and in the Plan expire or have been cancelled with respect to one or more of the Restricted Stock Units granted under the Plan, the Company shall notify the Grantee of same. The Company shall then deliver to the Grantee (or such Grantee’s legal representative, beneficiary or heir), subject to any determination of the Committee in its sole discretion to settle the Restricted Stock Units in cash or in a combination of cash and Shares, Shares in book entry form, without any stop-transfer orders or restrictions (except those required by any federal or state securities laws), equivalent to the number of Restricted Stock Units for which restrictions have been cancelled or have expired. If the Committee determines to settle any Restricted Stock Units in cash, the Company shall deliver to the Grantee (or such Grantee’s legal representative, beneficiary or heir), cash in amount equal to the Fair Market Value of a Share on the date of vesting multiplied by the number of Restricted Stock Units then vesting and determined by the Committee to be paid in cash. Notwithstanding the foregoing, if requested by a Director or a Grantee who is an Eligible Employee 20 calendar days or more in advance of the date of vesting of the Restricted Stock Units (provided that such date is not during a blackout period), the Committee shall cancel Shares of Restricted Stock to be delivered to the Grantee having a Fair Market Value, on the day preceding the date of vesting of the Restricted Stock Units, equal to (i) the aggregate required tax withholding in connection with such vesting, or (ii) a higher amount up to the aggregate amount of taxes that may be owed by the Eligible Employee or Director as a result of the vesting of the shares of Restricted Stock Units assuming the highest marginal rate of federal, state and local taxes that could be applicable to the Eligible Employee or Director in the calendar year of vesting, and to apply the value of such Shares of Restricted Stock as payment for the Grantee’s aggregate required tax withholding for the vesting of any Restricted Stock Units.

(f)    Compliance with Section 409A of the Code. Restricted Stock Units are intended to comply with Section 409A of the Code and provisions of the Plan and Awards shall be interpreted in a manner intended to be consistent with Section 409A.

10.    Performance Goals

(a)    If, at the time of grant, the Committee intends a Restricted Stock Award or Restricted Stock Unit Award to qualify as “other performance based compensation” within the meaning of Code Section 162(m), the Committee must establish performance goals for the applicable Performance Period no later than 90 days after the Performance Period begins (or by such other date as may be required under Code Section 162(m)). Such

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performance goals must be based on one or more of the criteria described in Section 10(b). “Performance Period” means the period selected by the Committee during which performance is measured for purpose of determining the extent to which an award of Restricted Stock or Restricted Stock Units has been earned.

(b)    A performance goal described in Section 10(a) shall be based on one or more of the following criteria: earnings, earnings growth, earnings per share, stock price (including growth measures and total shareholder return), improvement of financial ratings, internal rate of return, market share, cash flow, operating income, operating margin, net profit after tax, earnings before or after deduction for all or any portion of interest, taxes, depreciation, or amortization, whether or not on a continuing operations or an aggregate or per share basis, gross profit, operating profit, cash generation, revenues, asset quality, return on equity, return on assets, return on operating assets, cost saving levels, efficiency ratio, net income, marketing-spending efficiency, core non-interest income, change in working capital, return on capital, book value or tangible book value, or shareholder return. The performance goals may be described in terms of objectives that are related to the individual Grantee or objectives that are Company-wide or related to a Subsidiary, division, department, region, branch, function or business unit and may, but need not be, measured on an absolute or cumulative basis or on the basis of percentage of improvement over time, measured in terms of Company performance (or performance of the applicable Subsidiary, division, department, region, branch, function or business unit) or measured relative to selected peer companies or a market index. Any performance goals that are financial metrics, may be determined in accordance with Generally Accepted Accounting Principles (“GAAP”), or may be adjusted when established to include or exclude any items otherwise includable or excludable under GAAP. For any Award not intended to meet the requirements of Code Section 162(m), the Committee may establish performance goals based on any other performance criteria it deems appropriate. The performance goals that are intended to comply with Section 162(m) are subject to approval by shareholders at the Company’s 2016 annual meeting, and once approved, if required by Code Section 162(m), should be re-approved by the Company’s shareholders no later than the 2021 annual shareholder meeting, and thereafter, once every five years. 

(c)    When the Committee determines whether a performance goal has been satisfied for any period, the Committee may include or exclude unusual, infrequently occurring or non-recurring charges, asset write downs, losses from discontinued operations, restatements and accounting changes and other unplanned special charges such as restructuring expenses, acquisitions, acquisition or disposition expenses, including expenses related to goodwill and other intangible assets, stock offerings, stock repurchases and loan loss provisions; provided that in the case of an Award intended to qualify for the exemption from the limitation on deductibility imposed by Code Section 162(m), such inclusion or exclusion shall be made in compliance with Code Section 162(m).

(d)    If the Committee determines that a performance goal has been satisfied and the satisfaction of such goal was intended to meet the requirements of Code Section 162(m),

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the Committee shall certify that the goal has been satisfied in accordance with the requirements set forth under Code Section 162(m).

11.    Adjustment Upon Changes in Capitalization.

(a)    In the event of a Change in Capitalization, the Committee shall conclusively determine the appropriate adjustments, if any, to the maximum number and class of shares of stock with respect to which Options or Awards may be granted under the Plan, the number and class of shares as to which Options or Awards have been granted under the Plan, and the purchase price therefor, if applicable.

(b)    Any such adjustment in the Shares or other securities subject to outstanding Incentive Stock Options (including any adjustments in the purchase price) shall be made in such manner as not to constitute a modification as defined by Section 424(h)(3) of the Code and only to the extent otherwise permitted by Sections 422 and 424 of the Code.

(c)    If, by reason of a Change in Capitalization, a Grantee of an Award shall be entitled to new, additional or different shares of stock or securities, such new additional or different shares shall thereupon be subject to all of the conditions, restrictions and performance criteria which were applicable to the Shares or units pursuant to the Award prior to such Change in Capitalization.

12.    Effect of Certain Transactions. In the event of (i) the liquidation or dissolution of the Company, (ii) a merger or consolidation in which the Company is not the surviving corporation or (iii) the sale or disposition of all or substantially all of the Company’s assets, provision shall be made in connection with such transaction for the assumption of the Plan and the Options or Awards theretofore granted under the Plan, or the substitution for such Options or Awards of new options or awards of the surviving corporation, with appropriate adjustment as to the number and kind of shares and the purchase price for shares thereunder. Notwithstanding the foregoing, any other provision in this Plan or in an Option or Award Agreement, in the event of a transaction listed above or a Change in Control, the Committee, with the approval of the Board, shall have the right and authority to cancel and terminate all outstanding Options and Awards by paying each holder of an Option or Award in cash the difference between the exercise price, if any, and the Fair Market Value of the Shares underlying the Option or Award on the date of the consummation of the transaction or Change in Control. If the Committee elects to exercise its authority hereunder it shall provide each holder of an Option with the right to exercise the option (regardless of any vesting period) immediately prior to the transaction or Change in Control and shall provide each holder of an Award the right to fully vest that Award immediately prior to the transaction or Change in Control. A decision to exercise its right and authority, the manner of exercising its right and authority and interpretations by the Committee under the foregoing provision shall be final and binding on the holders of all Options and Awards.

13.    Termination and Amendment of the Plan. The Plan shall terminate on the day preceding the tenth anniversary of the Effective Date, as defined in Section 18 below, and no Option or Award may be granted thereafter. The Board may sooner terminate or amend the Plan at any time, and from time to time; provided, however, that, except as provided in Sections 11 and 12

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hereof, no amendment shall be effective unless approved by the shareholders of the Company in accordance with applicable law and regulations at an annual or special meeting held within twelve months before or after the date of adoption of such amendment, where approval of such amendment is required under applicable laws, policies or regulations or applicable listing or other requirements of the national securities exchange upon which the Shares are then listed, including amendments that will:

(a)    increase the number of Shares as to which Options or Awards may be granted under the Plan;

(b)    change the class of persons eligible to participate in the Plan;

(c)    materially extend the term of the Plan; or

(d)    cause Options or Stock Appreciation Rights issued under the Plan to be repriced or otherwise modified in a manner contemplated under Section 6(i) and Section 7(f) of the Plan.

Except as provided in Sections 11 and 12 hereof, rights and obligations under any Option or Award granted before any amendment of the Plan shall not be altered or impaired by such amendment, except with the consent of the Optionee or Grantee, as the case may be.

14.    Non-Exclusivity of the Plan. The adoption of the Plan by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangement or as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options otherwise than under the Plan, and such arrangements may be either applicable generally or only in specific cases.

15.    Limitation of Liability. As illustrative of the limitations of liability of the Company, but not intended to be exhaustive thereof, nothing in the Plan shall be construed to:

(a)    give any person any right to be granted an Option or Award other than at the sole discretion of the Committee;

(b)    give any person any rights whatsoever with respect to Shares except as specifically provided in the Plan;

(c)    limit in any way the right of the Company to terminate the employment of any person at any time; or

(d)    be evidence of any agreement or understanding, expressed or implied, that the Company will employ any person in any particular position at any particular rate of compensation or for any particular period of time.

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16.    Regulations and Other Approvals; Governing Law.

(a)    This Plan and the rights of all persons claiming hereunder shall be construed and determined in accordance with the laws of the State of New Jersey without giving effect to the choice of law principles thereof, except to the extent that such law is preempted by federal law.

(b)    The obligation of the Company to sell or deliver Shares with respect to Options and Awards granted under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Committee.

(c)    The Plan is intended to comply with Rule 16b-3 promulgated under the Exchange Act and, with respect to the grant of Options and certain Awards, Section 162(m) of the Code (each as amended from time to time) and the Committee shall interpret and administer the provisions of the Plan or any Agreement in a manner consistent therewith to the extent necessary. Any provisions inconsistent with such Rule or Section shall be inoperative but shall not affect the validity of the Plan or any grants thereunder.

(d)    Except as otherwise provided in Section 13, the Board may make such changes as may be necessary or appropriate to comply with the rules and regulations of any government authority or to obtain for Eligible Employees granted Incentive Stock Options the tax benefits under the applicable provisions of the Code and regulations promulgated thereunder.

(e)    Each Option and Award is subject to the requirement that, if at any time the Committee determines, in its absolute discretion, that the listing, registration or qualification of Shares issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Option or the issuance of Shares, no Options shall be granted or payment made or Shares issued, in whole or in part, unless listing, registration, qualification, consent or approval has been effected or obtained free of any conditions unacceptable to the Committee.

(f)    In the event that the disposition of Shares acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act of 1933, as amended, and is not otherwise exempt from such registration, such Shares shall be restricted against transfer to the extent required by the Securities Act of 1933, as amended, or regulations thereunder, and the Committee may require any individual receiving Shares pursuant to the Plan, as a condition precedent to receipt of such Shares (including upon exercise of an Option), to represent to the Company in writing that the Shares acquired by such individual are acquired for investment only and not with a view to distribution.

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17.    Miscellaneous.

(a)    Multiple Agreements. The terms of each Option or Award may differ from other Options or Awards granted under the Plan at the same time, or at some other time. The Committee may also grant more than one Option or Award to a given Eligible Employee during the term of the Plan, either in addition to, or in substitution for, one or more Options or Awards previously granted to that Eligible Employee. The grant of multiple Options and/or Awards may be evidenced by a single Agreement or multiple Agreements, as determined by the Committee.

(b)    Withholding of Taxes. The Company shall have the right to deduct from any distribution of cash to any Optionee or Grantee who is an Eligible Employee an amount equal to the federal, state and local income taxes and other amounts required by law to be withheld with respect to any Option or Award. Notwithstanding anything to the contrary contained herein, if any such Optionee or Grantee is entitled to receive Shares upon exercise of an Option or pursuant to an Award, the Company shall have the right to require such Optionee or Grantee, prior to the delivery of such Shares, to pay to the Company the amount of any federal, state or local income taxes and other amounts which the Company is required by law to withhold. An Optionee or Grantee who is a Director or an Eligible Employee shall be permitted to satisfy (i) any amounts required to be withheld by the Company under applicable federal, state and local tax laws in effect from time to time, or (ii) a higher amount up to the aggregate amount of taxes that may be owed by the Eligible Employee or Director assuming the highest marginal rate of federal, state and local income taxes that could be applicable to the Eligible Employee or Director in the calendar year of vesting, by electing to have the Company withhold a portion of the Shares to be delivered for the payment of such taxes. The Agreement evidencing any Incentive Stock Options granted under this Plan shall provide that if the Optionee makes a disposition, within the meaning of Section 424(c) of the Code and regulations promulgated thereunder, of any Share or Shares issued to him or her pursuant to his or her exercise of the Incentive Stock Option within the two-year period commencing on the day after the date of grant of such Option or within the one-year period commencing on the day after the date of transfer of the Share or Shares to the Optionee pursuant to the exercise of such Option, he or she shall, within ten (10) days of such disposition, notify the Company thereof and immediately deliver to the Company any amount of federal income tax withholding required by law.

(c)    Designation of Beneficiary. Each Optionee and Grantee may, with the consent of the Committee, designate a person or persons to receive in the event of his/her death, any Option or Award or any amount payable pursuant thereto, to which he/she would then be entitled. Such designation will be made upon forms supplied by and delivered to the Company and may be revoked in writing. If an Optionee or Grantee fails effectively to designate a beneficiary, then the beneficiary or beneficiaries named by the Optionee or Grantee under the Company’s group term life insurance plan will be deemed to be the beneficiary.

-25-

rev 28 Jan 20

(d)    Recoupment. Notwithstanding anything to the contrary, an Agreement may provide that the Committee may cancel an Option or Award if the Optionee or Grantee has engaged in or engages in activity that is in conflict with or adverse to the interest of the Company while employed by or providing services to the Company or any Subsidiary, including fraud or conduct contributing to any financial restatements or irregularities. The Committee may also provide in an Agreement that in such event, the Optionee or Grantee will forfeit any compensation, gain or other value realized thereafter on the vesting, exercise or settlement of such Option or Award, the sale or other transfer of such Option or Award, or the sale of Shares acquired in respect of such Option or Award, and must promptly repay such amounts to the Company. The Committee may also provide in an Agreement that if the Optionee or Grantee receives any amount in excess of what should have been received under the terms of the Option or Award for any reason (including without limitation by reason of a financial restatement, mistake in calculations or other administrative error), then the Optionee or Grantee shall be required to promptly repay any such excess amount to the Company. Furthermore, to the extent required by applicable law (including, without limitation, Section 304 of the Sarbanes-Oxley Act and Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act) and/or the rules and regulations of any securities exchange or inter-dealer quotation service on which the Shares are listed or quoted, or if so required pursuant to a written policy adopted by the Company, Options and Awards shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements.

18.    Effective Date. The effective date of the Plan shall be the date of its approval by shareholders following its adoption by the Board (the “Effective Date”). This Plan shall be effective only upon the approval by the affirmative vote of a majority of the votes cast at a meeting of shareholders at which a quorum is present to be held within twelve (12) months of the Board’s adoption of the Plan. Awards may be granted under the Plan after its adoption by the Board but prior to the Effective Date provided that all such Awards shall be null and void if the Plan is not approved by the requisite shareholder vote at the 2016 annual meeting. From and after the Effective Date of the Plan, no further awards shall be granted under the Prior Plan, and the Prior Plan shall remain in effect only so long as options or awards granted thereunder shall remain outstanding.

-26-

rev 28 Jan 20

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Ira Robbins, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of Valley National Bancorp;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2020

/s/ Ira Robbins

Ira Robbins

Chairman of the Board, President and
Chief Executive Officer

EX-31.2

EXHIBIT 31.2

I, Michael D. Hagedorn, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of Valley National Bancorp;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2020

/s/ Michael D. Hagedorn

Michael D. Hagedorn

Senior Executive Vice President and
Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION OF CEO AND CFO PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Valley National Bancorp (the “Company”) for the period ended September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Ira Robbins, as Chief Executive Officer of the Company, and Michael D. Hagedorn, as Chief Financial Officer of the Company, each hereby certify, pursuant to 18 U.S.C. (section) 1350, as adopted pursuant to (section) 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Ira Robbins

Ira Robbins

Chairman of the Board, President and
Chief Executive Officer

November 6, 2020

/s/ Michael D. Hagedorn

Michael D. Hagedorn

Senior Executive Vice President and
Chief Financial Officer

November 6, 2020

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2020	Nov. 04, 2020
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	1-11277
Entity Registrant Name	Valley National Bancorp
Entity Incorporation, State or Country Code	NJ
Entity Tax Identification Number	22-2477875
Entity Address, Address Line One	One Penn Plaza
Entity Address, City or Town	New York,
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10119
City Area Code	973
Local Phone Number	305-8800
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		403,876,309
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Period Period Focus	Q3
Entity Central Index Key	0000714310
Current Fiscal Year End Date	--12-31
Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	VLY
Security Exchange Name	NASDAQ
Non-Cumulative Perpetual Preferred Stock, Series A
Entity Information [Line Items]
Title of 12(b) Security	Non-Cumulative Perpetual Preferred Stock, Series A, no par value
Trading Symbol	VLYPP
Security Exchange Name	NASDAQ
Non-Cumulative Perpetual Preferred Stock, Series B
Entity Information [Line Items]
Title of 12(b) Security	Non-Cumulative Perpetual Preferred Stock, Series B, no par value
Trading Symbol	VLYPO
Security Exchange Name	NASDAQ

XML

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Assets
Cash and due from banks	$ 276,120	$ 256,264
Interest bearing deposits with banks	654,591	178,423
Investment securities:
Equity securities	29,026	41,410
Available for sale debt securities	1,526,564	1,566,801
Held to maturity debt securities (net of allowance for credit losses of $1,481 at September 30, 2020)	2,168,995
Held to maturity debt securities (net of allowance for credit losses of $1,481 at September 30, 2020)	2,170,476	2,336,095
Total investment securities	3,724,585	3,944,306
Loans held for sale, at fair value	209,250	76,113
Total	32,415,586	29,699,208
Less: Allowance for loan losses	(325,032)	(161,759)
Net loans	32,090,554	29,537,449
Premises and equipment, net	323,056	334,533
Lease right of use assets	265,599	285,129
Bank owned life insurance	533,768	540,169
Accrued interest receivable	136,058	105,637
Goodwill	1,375,409	1,373,625
Other intangible assets, net	73,873	86,772
Other assets	1,084,629	717,600
Total Assets	40,747,492	37,436,020
Deposits:
Non-interest bearing	8,756,924	6,710,408
Interest bearing:
Savings, NOW and money market	14,893,477	12,757,484
Time	7,537,581	9,717,945
Total deposits	31,187,982	29,185,837
Short-term borrowings	1,430,726	1,093,280
Long-term borrowings	2,852,569	2,122,426
Junior subordinated debentures issued to capital trusts	55,978	55,718
Lease liabilities	290,441	309,849
Accrued expenses and other liabilities	396,033	284,722
Total Liabilities	36,213,729	33,051,832
Shareholders’ Equity
Common stock (no par value, authorized 650,000,000 shares; issued 403,880,132 shares at September 30, 2020 and 403,322,773 shares at December 31, 2019)	141,718	141,423
Surplus	3,633,321	3,622,208
Retained earnings	553,826	443,559
Accumulated other comprehensive loss	(4,783)	(32,214)
Treasury stock, at cost (1,388 common shares at September 30, 2020 and 44,383 common shares at December 31, 2019)	(10)	(479)
Total Shareholders’ Equity	4,533,763	4,384,188
Total Liabilities and Shareholders’ Equity	40,747,492	37,436,020
Series A
Shareholders’ Equity
Preferred stock, no par value; authorized 50,000,000 shares	111,590	111,590
Series B
Shareholders’ Equity
Preferred stock, no par value; authorized 50,000,000 shares	$ 98,101	$ 98,101

XML

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Allowance for credit losses	$ 1,481
Preferred stock, par value (usd per share)	$ 0	$ 0
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, par value (usd per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	650,000,000	650,000,000
Common stock, shares issued (in shares)	403,880,132	403,322,773
Treasury stock, shares (in shares)	1,388	44,383
Series A
Preferred stock, shares issued (in shares)	4,600,000	4,600,000
Series B
Preferred stock, shares issued (in shares)	4,000,000	4,000,000

XML

CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Interest Income
Interest and fees on loans	$ 315,788	$ 298,384	$ 970,739	$ 883,595
Interest and dividends on investment securities:
Taxable	14,845	21,801	56,225	67,166
Tax-exempt	3,606	4,219	11,224	13,379
Dividends	2,684	3,171	9,177	9,140
Interest on federal funds sold and other short-term investments	420	1,686	2,296	3,947
Total interest income	337,343	329,261	1,049,661	977,227
Interest on deposits:
Savings, NOW and money market	13,323	35,944	64,463	110,247
Time	19,028	42,848	91,699	121,350
Interest on short-term borrowings	2,588	12,953	9,275	40,362
Interest on long-term borrowings and junior subordinated debentures	19,318	16,891	53,240	45,761
Total interest expense	54,257	108,636	218,677	317,720
Net Interest Income	283,086	220,625	830,984	659,507
(Credit) provision for credit losses for held to maturity securities	(112)	0	688	0
Provision for credit losses for loans	31,020	8,700	106,059	18,800
Net Interest Income After Provision for Credit Losses	252,178	211,925	724,237	640,707
Non-Interest Income
Insurance commissions	1,816	2,748	5,426	7,922
Losses on securities transactions, net	(46)	(93)	(127)	(114)
Other-than-temporary impairment losses on securities	0	0	0	(2,928)
Fees from loan servicing	2,551	2,463	7,526	7,260
Gains on sales of loans, net	13,366	5,194	26,253	13,700
Gains (losses) on sales of assets, net	894	(159)	716	76,997
Bank owned life insurance	(1,304)	2,687	7,661	6,779
Other	24,975	19,110	65,548	39,880
Total non-interest income	49,272	41,150	135,499	176,426
Non-Interest Expense
Salary and employee benefits expense	83,626	77,271	247,886	236,559
Net occupancy and equipment expense	31,116	29,203	96,774	86,789
FDIC insurance assessment	4,847	5,098	14,858	16,150
Amortization of other intangible assets	6,377	4,694	18,528	13,175
Professional and legal fees	8,762	5,870	22,646	15,286
Loss on extinguishment of debt	2,353	0	2,353	0
Amortization of tax credit investments	2,759	4,385	9,403	16,421
Telecommunication expense	2,094	2,698	7,247	7,317
Other	18,251	16,658	53,312	43,712
Total non-interest expense	160,185	145,877	473,007	435,409
Income Before Income Taxes	141,265	107,198	386,729	381,724
Income tax expense	38,891	25,307	101,486	110,035
Net Income	102,374	81,891	285,243	271,689
Dividends on preferred stock	3,172	3,172	9,516	9,516
Net Income Available to Common Shareholders	$ 99,202	$ 78,719	$ 275,727	$ 262,173
Earnings Per Common Share:
Basic (usd per share)	$ 0.25	$ 0.24	$ 0.68	$ 0.79
Diluted (usd per share)	0.25	0.24	0.68	0.79
Cash Dividends Declared per Common Share (usd per share)	$ 0.11	$ 0.11	$ 0.33	$ 0.33
Weighted Average Number of Common Shares Outstanding:
Basic (in shares)	403,833,469	331,797,982	403,714,701	331,716,652
Diluted (in shares)	404,788,526	333,405,196	404,912,126	333,039,436
Trust and investment services
Non-Interest Income
Revenue from contracts with customer	$ 3,068	$ 3,296	$ 9,307	$ 9,296
Service charges on deposit accounts
Non-Interest Income
Revenue from contracts with customer	$ 3,952	$ 5,904	$ 13,189	$ 17,634

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 102,374	$ 81,891	$ 285,243	$ 271,689
Unrealized gains and losses on available for sale securities
Net (losses) gains arising during the period	(1,262)	8,135	27,819	42,890
Less reclassification adjustment for net losses included in net income	36	72	94	90
Total	(1,226)	8,207	27,913	42,980
Unrealized gains and losses on derivatives (cash flow hedges)
Net gains (losses) on derivatives arising during the period	83	76	(2,254)	(989)
Less reclassification adjustment for net losses included in net income	1,127	324	1,257	806
Total	1,210	400	(997)	(183)
Defined benefit pension plan
Amortization of actuarial net loss	171	56	515	166
Total other comprehensive income	155	8,663	27,431	42,963
Total comprehensive income	$ 102,529	$ 90,554	$ 312,674	$ 314,652

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Preferred Series A	Preferred Series B	Common Stock	Cumulative Effect, Period of Adoption, Adjustment	Cumulative Effect, Period of Adoption, Adjusted Balance	Preferred Stock	Preferred Stock Cumulative Effect, Period of Adoption, Adjusted Balance	Common Stock	Common Stock Cumulative Effect, Period of Adoption, Adjusted Balance	Surplus	Surplus Cumulative Effect, Period of Adoption, Adjusted Balance	Retained Earnings	Retained Earnings Preferred Series A	Retained Earnings Preferred Series B	Retained Earnings Common Stock	Retained Earnings Cumulative Effect, Period of Adoption, Adjustment	Retained Earnings Cumulative Effect, Period of Adoption, Adjusted Balance	Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss Cumulative Effect, Period of Adoption, Adjusted Balance	Treasury Stock	Treasury Stock Cumulative Effect, Period of Adoption, Adjusted Balance
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustment due to adoption of ASUs	$ 3,350,454					$ 3,353,422	$ 209,691	$ 209,691	$ 116,240	$ 116,240	$ 2,796,499	$ 2,796,499	$ 299,642					$ 302,610	$ (69,431)	$ (69,431)	$ (2,187)	$ (2,187)
Adjustment due to adoption of ASUs | ASU 2016-02					$ 4,414												$ 4,414
Adjustment due to adoption of ASUs | ASU 2017-08					(1,446)												(1,446)
Adjusted balance due to adoption of ASUs	3,350,454					3,353,422	209,691	209,691	116,240	116,240	2,796,499	2,796,499	299,642					302,610	(69,431)	(69,431)	(2,187)	(2,187)
Adjusted balance due to adoption of ASUs | ASU 2016-02					4,414												4,414
Adjusted balance due to adoption of ASUs | ASU 2017-08					(1,446)												(1,446)
Beginning balance at Dec. 31, 2018	3,350,454					3,353,422	209,691	209,691	$ 116,240	116,240	2,796,499	2,796,499	299,642					302,610	(69,431)	(69,431)	(2,187)	(2,187)
Beginning balance (ASU 2016-02) at Dec. 31, 2018					4,414												4,414
Beginning balance (ASU 2017-08) at Dec. 31, 2018					(1,446)												(1,446)
Beginning balance (in shares) at Dec. 31, 2018									331,431
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustment due to adoption of ASUs	3,444,879					3,353,422	209,691	209,691	$ 116,466	116,240	2,799,434	2,796,499	375,983					302,610	(53,257)	(69,431)	(3,438)	(2,187)
Adjustment due to adoption of ASUs | ASU 2016-02					4,414												4,414
Adjustment due to adoption of ASUs | ASU 2017-08					(1,446)												(1,446)
Adjusted balance due to adoption of ASUs	3,444,879					3,353,422	209,691	209,691	$ 116,466	116,240	2,799,434	2,796,499	375,983					302,610	(53,257)	(69,431)	(3,438)	(2,187)
Adjusted balance due to adoption of ASUs | ASU 2016-02					4,414												4,414
Adjusted balance due to adoption of ASUs | ASU 2017-08					(1,446)												(1,446)
Net income	113,330												113,330
Other comprehensive income, net of tax	16,174																		16,174
Cash dividends declared:
Cash dividends declared on preferred stock		$ (1,797)	$ (1,375)											$ (1,797)	$ (1,375)
Cash dividends declared on common stock				$ (36,686)												$ (36,686)
Effect of stock incentive plan, net (in shares)									302
Effect of stock incentive plan, net	1,811								$ 226		2,935		(99)								(1,251)
Ending balance at Mar. 31, 2019	3,444,879						209,691		$ 116,466		2,799,434		375,983						(53,257)		(3,438)
Ending balance (in shares) at Mar. 31, 2019									331,733
Beginning balance at Dec. 31, 2018	3,350,454					3,353,422	209,691	209,691	$ 116,240	116,240	2,796,499	2,796,499	299,642					302,610	(69,431)	(69,431)	(2,187)	(2,187)
Beginning balance (ASU 2016-02) at Dec. 31, 2018					4,414												4,414
Beginning balance (ASU 2017-08) at Dec. 31, 2018					(1,446)												(1,446)
Beginning balance (in shares) at Dec. 31, 2018									331,431
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustment due to adoption of ASUs	3,558,075					3,353,422	209,691	209,691	$ 116,650	116,240	2,807,266	2,796,499	454,020					302,610	(26,468)	(69,431)	(3,084)	(2,187)
Adjustment due to adoption of ASUs | ASU 2016-02					4,414												4,414
Adjustment due to adoption of ASUs | ASU 2017-08					(1,446)												(1,446)
Adjusted balance due to adoption of ASUs	3,558,075					3,353,422	209,691	209,691	116,650	116,240	2,807,266	2,796,499	454,020					302,610	(26,468)	(69,431)	(3,084)	(2,187)
Adjusted balance due to adoption of ASUs | ASU 2016-02					4,414												4,414
Adjusted balance due to adoption of ASUs | ASU 2017-08					(1,446)												(1,446)
Net income	271,689
Ending balance at Sep. 30, 2019	3,558,075						209,691		$ 116,650		2,807,266		454,020						(26,468)		(3,084)
Ending balance (in shares) at Sep. 30, 2019									331,806
Beginning balance at Dec. 31, 2018	3,350,454					3,353,422	209,691	209,691	$ 116,240	116,240	2,796,499	2,796,499	299,642					302,610	(69,431)	(69,431)	(2,187)	(2,187)
Beginning balance (ASU 2016-02) at Dec. 31, 2018					4,414												4,414
Beginning balance (ASU 2017-08) at Dec. 31, 2018					(1,446)												(1,446)
Beginning balance (in shares) at Dec. 31, 2018									331,431
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustment due to adoption of ASUs	3,350,454				(28,187)	3,353,422	209,691	209,691	$ 116,240	116,240	2,796,499	2,796,499	299,642				(28,187)	302,610	(69,431)	(69,431)	(2,187)	(2,187)
Adjustment due to adoption of ASUs | ASU 2016-02					4,414												4,414
Adjustment due to adoption of ASUs | ASU 2017-08					(1,446)												(1,446)
Adjusted balance due to adoption of ASUs	3,350,454				(28,187)	3,353,422	209,691	209,691	116,240	116,240	2,796,499	2,796,499	299,642				(28,187)	302,610	(69,431)	(69,431)	(2,187)	(2,187)
Adjusted balance due to adoption of ASUs | ASU 2016-02					4,414												4,414
Adjusted balance due to adoption of ASUs | ASU 2017-08					(1,446)												(1,446)
Ending balance at Dec. 31, 2019	$ 4,384,188				(28,187)	4,356,001	209,691	209,691	$ 141,423	141,423	3,622,208	3,622,208	443,559				(28,187)	415,372	(32,214)	(32,214)	(479)	(479)
Ending balance (in shares) at Dec. 31, 2019									403,278
Cash dividends declared:
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201613Member
Adjustment due to adoption of ASUs	$ 3,444,879						209,691		$ 116,466		2,799,434		375,983						(53,257)		(3,438)
Adjusted balance due to adoption of ASUs	3,444,879						209,691		116,466		2,799,434		375,983						(53,257)		(3,438)
Beginning balance at Mar. 31, 2019	3,444,879						209,691		$ 116,466		2,799,434		375,983						(53,257)		(3,438)
Beginning balance (in shares) at Mar. 31, 2019									331,733
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustment due to adoption of ASUs	3,504,118						209,691		$ 116,571		2,804,059		412,190						(35,131)		(3,262)
Adjusted balance due to adoption of ASUs	3,504,118						209,691		$ 116,571		2,804,059		412,190						(35,131)		(3,262)
Net income	76,468												76,468
Other comprehensive income, net of tax	18,126																		18,126
Cash dividends declared:
Cash dividends declared on preferred stock		(1,797)	(1,375)											(1,797)	(1,375)
Cash dividends declared on common stock				(36,712)												(36,712)
Effect of stock incentive plan, net (in shares)									55
Effect of stock incentive plan, net	4,529								$ 105		4,625		(377)								176
Ending balance at Jun. 30, 2019	3,504,118						209,691		$ 116,571		2,804,059		412,190						(35,131)		(3,262)
Ending balance (in shares) at Jun. 30, 2019									331,788
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustment due to adoption of ASUs	3,504,118						209,691		$ 116,571		2,804,059		412,190						(35,131)		(3,262)
Adjusted balance due to adoption of ASUs	3,504,118						209,691		116,571		2,804,059		412,190						(35,131)		(3,262)
Adjustment due to adoption of ASUs	3,558,075						209,691		116,650		2,807,266		454,020						(26,468)		(3,084)
Adjusted balance due to adoption of ASUs	3,558,075						209,691		$ 116,650		2,807,266		454,020						(26,468)		(3,084)
Net income	81,891												81,891
Other comprehensive income, net of tax	8,663																		8,663
Cash dividends declared:
Cash dividends declared on preferred stock		(1,797)	(1,375)											(1,797)	(1,375)
Cash dividends declared on common stock				(36,732)												(36,732)
Effect of stock incentive plan, net (in shares)									18
Effect of stock incentive plan, net	3,307								$ 79		3,207		(157)								178
Ending balance at Sep. 30, 2019	3,558,075						209,691		$ 116,650		2,807,266		454,020						(26,468)		(3,084)
Ending balance (in shares) at Sep. 30, 2019									331,806
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustment due to adoption of ASUs	3,558,075						209,691		$ 116,650		2,807,266		454,020						(26,468)		(3,084)
Adjusted balance due to adoption of ASUs	3,558,075						209,691		116,650		2,807,266		454,020						(26,468)		(3,084)
Adjustment due to adoption of ASUs	4,384,188				(28,187)	4,356,001	209,691	209,691	141,423	141,423	3,622,208	3,622,208	443,559				(28,187)	415,372	(32,214)	(32,214)	(479)	(479)
Adjusted balance due to adoption of ASUs	4,384,188				(28,187)	4,356,001	209,691	209,691	141,423	141,423	3,622,208	3,622,208	443,559				(28,187)	415,372	(32,214)	(32,214)	(479)	(479)
Beginning balance at Dec. 31, 2019	4,384,188				(28,187)	4,356,001	209,691	209,691	$ 141,423	141,423	3,622,208	3,622,208	443,559				(28,187)	415,372	(32,214)	(32,214)	(479)	(479)
Beginning balance (in shares) at Dec. 31, 2019									403,278
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustment due to adoption of ASUs	4,420,998				(28,187)	4,356,001	209,691	209,691	$ 141,613	141,423	3,624,036	3,622,208	452,424				(28,187)	415,372	(6,566)	(32,214)	(200)	(479)
Adjusted balance due to adoption of ASUs	4,420,998				(28,187)	4,356,001	209,691	209,691	$ 141,613	141,423	3,624,036	3,622,208	452,424				(28,187)	415,372	(6,566)	(32,214)	(200)	(479)
Net income	87,268												87,268
Other comprehensive income, net of tax	25,648																		25,648
Cash dividends declared:
Cash dividends declared on preferred stock		(1,797)	(1,375)											(1,797)	(1,375)
Cash dividends declared on common stock				(44,979)												(44,979)
Effect of stock incentive plan, net (in shares)									466
Effect of stock incentive plan, net	232								$ 190		1,828		(2,065)								279
Ending balance at Mar. 31, 2020	4,420,998						209,691		$ 141,613		3,624,036		452,424						(6,566)		(200)
Ending balance (in shares) at Mar. 31, 2020									403,744
Beginning balance at Dec. 31, 2019	4,384,188				(28,187)	4,356,001	209,691	209,691	$ 141,423	141,423	3,622,208	3,622,208	443,559				(28,187)	415,372	(32,214)	(32,214)	(479)	(479)
Beginning balance (in shares) at Dec. 31, 2019									403,278
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustment due to adoption of ASUs	4,384,188				(28,187)	4,356,001	209,691	209,691	$ 141,718	141,423	3,633,321	3,622,208	553,826				(28,187)	415,372	(4,783)	(32,214)	(10)	(479)
Adjusted balance due to adoption of ASUs	4,384,188				$ (28,187)	$ 4,356,001	209,691	$ 209,691	141,718	$ 141,423	3,633,321	$ 3,622,208	553,826				$ (28,187)	$ 415,372	(4,783)	$ (32,214)	(10)	$ (479)
Net income	285,243
Ending balance at Sep. 30, 2020	4,533,763						209,691		$ 141,718		3,633,321		553,826						(4,783)		(10)
Ending balance (in shares) at Sep. 30, 2020									403,879
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustment due to adoption of ASUs	4,420,998						209,691		$ 141,613		3,624,036		452,424						(6,566)		(200)
Adjusted balance due to adoption of ASUs	4,420,998						209,691		141,613		3,624,036		452,424						(6,566)		(200)
Beginning balance at Mar. 31, 2020	4,420,998						209,691		$ 141,613		3,624,036		452,424						(6,566)		(200)
Beginning balance (in shares) at Mar. 31, 2020									403,744
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustment due to adoption of ASUs	4,474,488						209,691		$ 141,667		3,628,792		499,511						(4,938)		(235)
Adjusted balance due to adoption of ASUs	4,474,488						209,691		$ 141,667		3,628,792		499,511						(4,938)		(235)
Net income	95,601												95,601
Other comprehensive income, net of tax	1,628																		1,628
Cash dividends declared:
Cash dividends declared on preferred stock		(1,797)	(1,375)											(1,797)	(1,375)
Cash dividends declared on common stock				(44,750)												(44,750)
Effect of stock incentive plan, net (in shares)									52
Effect of stock incentive plan, net	4,183								$ 54		4,756		(592)								(35)
Ending balance at Jun. 30, 2020	4,474,488						209,691		$ 141,667		3,628,792		499,511						(4,938)		(235)
Ending balance (in shares) at Jun. 30, 2020									403,796
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustment due to adoption of ASUs	4,474,488						209,691		$ 141,667		3,628,792		499,511						(4,938)		(235)
Adjusted balance due to adoption of ASUs	4,474,488						209,691		141,667		3,628,792		499,511						(4,938)		(235)
Adjustment due to adoption of ASUs	4,474,488						209,691		141,718		3,633,321		553,826						(4,783)		(10)
Adjusted balance due to adoption of ASUs	4,474,488						209,691		$ 141,718		3,633,321		553,826						(4,783)		(10)
Net income	102,374												102,374
Other comprehensive income, net of tax	155																		155
Cash dividends declared:
Cash dividends declared on preferred stock		$ (1,797)	$ (1,375)											$ (1,797)	$ (1,375)
Cash dividends declared on common stock				$ (44,770)												$ (44,770)
Effect of stock incentive plan, net (in shares)									83
Effect of stock incentive plan, net	4,688								$ 51		4,529		(117)								225
Ending balance at Sep. 30, 2020	4,533,763						209,691		$ 141,718		3,633,321		553,826						(4,783)		(10)
Ending balance (in shares) at Sep. 30, 2020									403,879
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adjustment due to adoption of ASUs	4,533,763						209,691		$ 141,718		3,633,321		553,826						(4,783)		(10)
Adjusted balance due to adoption of ASUs	$ 4,533,763						$ 209,691		$ 141,718		$ 3,633,321		$ 553,826						$ (4,783)		$ (10)

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019
Cash dividends declared (usd per share)	$ 0.11			$ 0.11
Preferred Series A
Cash dividends declared (usd per share)	0.39	$ 0.39	$ 0.39	0.39	$ 0.39	$ 0.39
Preferred Series B
Cash dividends declared (usd per share)	0.34	0.34	0.34	0.34	0.34	0.34
Common Stock
Cash dividends declared (usd per share)	$ 0.11	$ 0.11	$ 0.11	$ 0.11	$ 0.11	$ 0.11

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net income	$ 285,243	$ 271,689
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	43,975	38,329
Stock-based compensation	12,001	11,504
Provision for credit losses	106,747	18,800
Net amortization of premiums and accretion of discounts on securities and borrowings	26,051	21,584
Amortization of other intangible assets	18,528	13,175
Losses on securities transactions, net	127	114
Proceeds from sales of loans held for sale	716,739	341,503
Gains on sales of loans, net	(26,253)	(13,700)
Net impairment losses on securities recognized in earnings	0	2,928
Originations of loans held for sale	(829,252)	(338,996)
Gains on sales of assets, net	(716)	(76,997)
Net change in:
Cash surrender value of bank owned life insurance	(7,661)	(6,779)
Accrued interest receivable	(30,421)	(1,986)
Other assets	(420,572)	(264,228)
Accrued expenses and other liabilities	85,944	92,542
Net cash (used in) provided by operating activities	(19,520)	109,482
Cash flows from investing activities:
Net loan originations and purchases	(2,686,137)	(1,846,329)
Equity securities:
Purchases	(7,616)	0
Sales	27,867	0
Held to maturity debt securities:
Purchases	(381,606)	(317,794)
Maturities, calls and principal repayments	532,151	281,961
Available for sale debt securities:
Purchases	(306,071)	(19,892)
Maturities, calls and principal repayments	374,321	188,619
Death benefit proceeds from bank owned life insurance	14,062	6,354
Proceeds from sales of real estate property and equipment	16,136	107,132
Proceeds from sales of loans held for investment	30,020	302,951
Purchases of real estate property and equipment	(20,715)	(15,753)
Net cash used in investing activities	(2,407,588)	(1,312,751)
Cash flows from financing activities:
Net change in deposits	2,002,145	1,093,148
Net change in short-term borrowings	337,446	(293,497)
Proceeds from issuance of long-term borrowings, net	838,388	850,000
Repayments of long-term borrowings	(108,446)	(255,000)
Cash dividends paid to preferred shareholders	(9,516)	(9,516)
Cash dividends paid to common shareholders	(133,536)	(110,037)
Purchase of common shares to treasury	(4,972)	(1,505)
Common stock issued, net	2,074	(351)
Other, net	(451)	(365)
Net cash provided by financing activities	2,923,132	1,272,877
Net change in cash and cash equivalents	496,024	69,608
Cash and cash equivalents at beginning of year	434,687	428,629
Cash and cash equivalents at end of period	930,711	498,237
Cash payments for:
Interest on deposits and borrowings	229,987	312,663
Federal and state income taxes	108,302	106,296
Supplemental schedule of non-cash investing activities:
Transfer of loans to other real estate owned	3,716	1,453
Transfer of loans to loans held for sale	30,020	302,951
Lease right of use assets obtained in exchange for operating lease liabilities	$ 10,141	$ 306,471

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Basis of Presentation

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The unaudited consolidated financial statements of Valley National Bancorp, a New Jersey corporation (Valley), include the accounts of its commercial bank subsidiary, Valley National Bank (the Bank), and all of Valley’s direct or indirect wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated. The accounting and reporting policies of Valley conform to U.S. generally accepted accounting principles (U.S. GAAP) and general practices within the financial services industry. In accordance with applicable accounting standards, Valley does not consolidate statutory trusts established for the sole purpose of issuing trust preferred securities and related trust common securities. Certain prior period amounts have been reclassified to conform to the current presentation.

In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly Valley’s financial position, results of operations, changes in shareholders' equity and cash flows at September 30, 2020 and for all periods presented have been made. The results of operations for the three and nine months ended on September 30, 2020 are not necessarily indicative of the results to be expected for the entire fiscal year or any subsequent interim period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP and industry practice have been condensed or omitted pursuant to rules and regulations of the SEC. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Valley’s Annual Report on Form 10-K for the year ended December 31, 2019.

Significant Estimates. In preparing the unaudited consolidated financial statements in conformity with U.S. GAAP, management has made estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statements of financial condition and results of operations for the periods indicated. Material estimates that require application of management’s most difficult, subjective or complex judgment and are particularly susceptible to change include: the allowance for credit losses, the evaluation of goodwill and other intangible assets for impairment, and income taxes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are deemed necessary. While management uses its best judgment, actual amounts or results could differ significantly from those estimates. The current economic environment has increased the degree of uncertainty inherent in these material estimates. Actual results may differ from those estimates. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date.

Impact of COVID-19. Valley's primary market areas within New Jersey, New York, Florida and Alabama have all experienced significant outbreaks and resurgences of the disease caused by the novel coronavirus (COVID-19) and disruptions from the pandemic. The COVID-19 pandemic and any preventative or protective actions that Valley or its customers have taken or may take in response resulted and may continue to result in extended periods of disruption to Valley, its customers, service providers, and third parties. The full extent and duration of the adverse impacts of COVID-19 on Valley's business, financial position, results of operations, and prospects are currently unknown, but could be significant. As of the date of this report, the banking and financial services industries have been deemed essential businesses in the jurisdictions in which Valley operates. However, Valley remains subject to various protocols and practices imposed to safeguard the health and wellness of customers and employees and to comply with applicable government directives, and the implementation and extent of any further restrictions on operations could have a material effect on Valley’s business. Valley cannot predict whether and to what extent governmental and nongovernmental authorities will continue to implement policy measures or further legislative relief to assist Valley and its customers and the failure to do so could have adverse effects on Valley's business.

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Business Combinations

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Business Combinations

Business Combinations

On December 1, 2019, Valley completed its acquisition of Oritani Financial Corp. (Oritani) and its wholly-owned subsidiary, Oritani Bank. Oritani had approximately $4.3 billion in assets, $3.4 billion in net loans and $2.9 billion in deposits, after purchase accounting adjustments, and a branch network of 26 locations. The acquisition represents a significant addition to Valley's New Jersey franchise, and meaningfully enhanced its presence in the Bergen County market. The common shareholders of Oritani received 1.60 shares of Valley common stock for each Oritani share that they owned prior to the merger. The total consideration for the acquisition was approximately $835.3 million, consisting of 71.1 million shares of Valley common stock and the outstanding Oritani stock-based awards.

Merger expenses totaled $106 thousand and $1.8 million for the three and nine months ended September 30, 2020, respectively, which primarily related to professional and legal, net occupancy and equipment, and other expenses included in non-interest expense on the consolidated statements of income.

During the first quarter 2020, Valley revised the estimated fair values of the acquired assets as of the Oritani acquisition date due to additional information obtained that existed as of December 1, 2019. The adjustments mostly related to the fair value of certain loans and deferred tax assets as of the acquisition date and resulted in a $1.8 million increase in goodwill (see Note 9 for amount of goodwill as allocated to Valley's business segments). If additional information (that existed as of the acquisition date) becomes available, the fair value estimates for acquired assets and assumed liabilities are subject to change for up to one year after the acquisition date.

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

The following table shows the calculation of both basic and diluted earnings per common share for the three and nine months ended September 30, 2020 and 2019:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands, except for share data)
Net income available to common shareholders	$	99,202	$	78,719	$	275,727	$	262,173
Basic weighted average number of common shares outstanding	403,833,469		331,797,982		403,714,701		331,716,652
Plus: Common stock equivalents	955,057		1,607,214		1,197,425		1,322,784
Diluted weighted average number of common shares outstanding	404,788,526		333,405,196		404,912,126		333,039,436
Earnings per common share:
Basic	$	0.25	$	0.24	$	0.68	$	0.79
Diluted	0.25		0.24		0.68		0.79

Common stock equivalents represent the dilutive effect of additional common shares issuable upon the assumed vesting or exercise, if applicable, of restricted stock units and common stock options to purchase Valley’s common shares. Common stock options with exercise prices that exceed the average market price per share of Valley’s common stock and restricted stock units during the periods presented may have an anti-dilutive effect on the diluted earnings per common share calculation and therefore are excluded from the diluted earnings per share calculation. Potential anti-dilutive weighted common shares equaled approximately 4.9 million shares and 2.2 million shares for the three and nine months ended September 30, 2020, respectively, and 265 thousand shares and 475 thousand shares for the three and nine months ended September 30, 2019, respectively.

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Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The following table presents the after-tax changes in the balances of each component of accumulated other comprehensive loss for the three and nine months ended September 30, 2020: 

	Components of Accumulated Other Comprehensive Loss						Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities		Unrealized Gains and Losses on Derivatives		Defined Benefit Pension Plan
	(in thousands)
Balance at June 30, 2020	$	34,961	$	(5,936)	$	(33,963)	$	(4,938)
Other comprehensive (loss) income before reclassification	(1,262)		83		—		(1,179)
Amounts reclassified from other comprehensive income	36		1,127		171		1,334
Other comprehensive (loss) income, net	(1,226)		1,210		171		155
Balance at September 30, 2020	$	33,735	$	(4,726)	$	(33,792)	$	(4,783)

	Components of Accumulated Other Comprehensive Loss						Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities		Unrealized Gains and Losses on Derivatives		Defined Benefit Pension Plan
	(in thousands)
Balance at December 31, 2019	$	5,822	$	(3,729)	$	(34,307)	$	(32,214)
Other comprehensive income (loss) before reclassification	27,819		(2,254)		—		25,565
Amounts reclassified from other comprehensive income	94		1,257		515		1,866
Other comprehensive income (loss), net	27,913		(997)		515		27,431
Balance at September 30, 2020	$	33,735	$	(4,726)	$	(33,792)	$	(4,783)

The following table presents amounts reclassified from each component of accumulated other comprehensive loss on a gross and net of tax basis for the three and nine months ended September 30, 2020 and 2019:

	Amounts Reclassified from Accumulated Other Comprehensive Loss
	Three Months Ended September 30,				Nine Months Ended September 30,
Components of Accumulated Other Comprehensive Loss	2020		2019		2020		2019		Income Statement Line Item
	(in thousands)
Unrealized losses on AFS securities before tax	$	(46)	$	(93)	$	(127)	$	(114)	Losses on securities transactions, net
Tax effect	10		21		33		24
Total net of tax	(36)		(72)		(94)		(90)
Unrealized losses on derivatives (cash flow hedges) before tax	(1,586)		(453)		(1,763)		(1,126)		Interest expense
Tax effect	459		129		506		320
Total net of tax	(1,127)		(324)		(1,257)		(806)
Defined benefit pension plan:
Amortization of actuarial net loss	(234)		(79)		(699)		(235)		*
Tax effect	63		23		184		69
Total net of tax	(171)		(56)		(515)		(166)
Total reclassifications, net of tax	$	(1,334)	$	(452)	$	(1,866)	$	(1,062)

* Amortization of net loss is included in the computation of net periodic pension cost recognized within other non-interest expense.

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New Authoritative Accounting Guidance

9 Months Ended

Sep. 30, 2020

Accounting Changes and Error Corrections [Abstract]

New Authoritative Accounting Guidance

New Authoritative Accounting Guidance

New Accounting Guidance Adopted in 2020

Accounting Standards Update (ASU) No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" amends the accounting guidance on the impairment of financial instruments. The FASB issued an amendment to replace the incurred loss impairment methodology under prior accounting guidance with a new current expected credit loss (CECL) model. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Valley utilizes a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience for the remaining life of the loan. The measurement of expected credit loss under the CECL methodology is applicable to financial assets measured at amortized cost, including loans, held to maturity investments and purchased financial assets with credit deterioration (PCD) assets. It also applies to certain off-balance sheet credit exposures.

Valley adopted ASU No. 2016-13 on January 1, 2020 using the modified retrospective approach for all financial assets measured at amortized cost (except for PCD loans) and off-balance sheet credit exposures. Valley has established a governance structure to implement the CECL accounting guidance and has developed a methodology and set of models to be used. At adoption, Valley recorded a $100.4 million increase to its allowance for credit losses, including reserves of $92.5 million, $7.1 million and $793 thousand related to loans, unfunded credit commitments and held to maturity debt securities, respectively. Of the $92.5 million in loan reserves, $61.6 million represents PCD loan related reserves which were recognized through a gross-up that increases the amortized cost basis of loans with a corresponding increase to the allowance for credit losses, and therefore results in no impact to shareholders' equity. The remaining non-credit discount of $97.7 million related to PCD loans is accreted into interest income over the life of the loans at the effective interest rate effective January 1, 2020. The non-PCD loan related increase to the allowance for credit losses of $38.8 million, including the reserves for unfunded loan commitments and held to maturity debt securities, was offset in shareholders' equity and deferred tax assets.

For regulatory capital purposes, in connection with the Federal Reserve Board’s final interim rule as of April 3, 2020, 100 percent of the CECL Day 1 impact to shareholders' equity equaling $28.2 million after-tax will be deferred over a two-year period ending January 1, 2022, at which time it will be phased in on a pro-rata basis over a three-year period ending January 1, 2025. Additionally, 25 percent of the reserve build (i.e., provision for credit losses less net charge-offs) net of taxes will be phased in over the same time frame.

ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test guidance) to measure a goodwill impairment charge. Instead, an entity will be required to record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on Step 1 of the current guidance). In addition, ASU No. 2017-04 eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. However, an entity will be required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU No. 2017-04 was effective for Valley on January 1, 2020 and Valley applied this new guidance in its annual goodwill impairment test performed during the second quarter 2020.

New Accounting Guidance issued in 2020

ASU No. 2020-08, "Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs" provides clarification and affects the guidance previously issued by ASU No. 2017-08 “Receivables -Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” ASU No. 2020-08 clarifies that an entity should reevaluate whether a debt security with multiple call

dates is within the scope of paragraph 310-20-35-33. For each reporting period, to the extent that the amortized cost basis of an individual callable debt security exceeds the amount repayable by the issuer at the next call date, the premium should be amortized to the next call date, unless the guidance to consider estimated prepayments is applied. ASU No. 2020-08 will be effective for Valley for the annual and interim periods beginning January 1, 2021 and early adoption is not permitted. This new guidance is not expected to have a significant impact on Valley’s consolidated financial statements.

ASU No. 2020-04, "Reference Rate Reform (Topic 848)" provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued, subject to meeting certain criteria. Under the new guidance, an entity can elect by accounting topic or industry subtopic to account for the modification of a contract affected by reference rate reform as a continuation of the existing contract, if certain conditions are met. In addition, the new guidance allows an entity to elect on a hedge-by-hedge basis to continue to apply hedge accounting for hedging relationships in which the critical terms change due to reference rate reform, if certain conditions are met. A one-time election to sell and/or transfer held-to-maturity debt securities that reference a rate affected by reference rate reform is also allowed. ASU No. 2020-04 became effective for all entities as of March 12, 2020 and will apply to all LIBOR reference rate modifications through December 31, 2022. Management is currently evaluating the impact of the ASU on Valley’s consolidated financial statements.

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Fair Value Measurement of Assets and Liabilities

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurement of Assets and Liabilities

Fair Value Measurement of Assets and Liabilities

ASC Topic 820, “Fair Value Measurements” establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

•Level 1    - Unadjusted exchange quoted prices in active markets for identical assets or liabilities, or identical liabilities traded as assets that the reporting entity has the ability to access at the measurement date.

•Level 2 - Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly (i.e., quoted prices on similar assets) for substantially the full term of the asset or liability.

•Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Assets and Liabilities Measured at Fair Value on a Recurring and Non-Recurring Basis

The following tables present the assets and liabilities that are measured at fair value on a recurring and nonrecurring basis by level within the fair value hierarchy as reported on the consolidated statements of financial condition at September 30, 2020 and December 31, 2019. The assets presented under “nonrecurring fair value measurements” in the tables below are not measured at fair value on an ongoing basis but are subject to fair value adjustments under certain circumstances (e.g., when an impairment loss is recognized). 

	September 30, 2020		Fair Value Measurements at Reporting Date Using:
			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Equity securities (1)	$	26,527	$	19,136	$	—	$	—
Available for sale:
U.S. Treasury securities	51,578		51,578		—		—
U.S. government agency securities	26,448		—		26,448		—
Obligations of states and political subdivisions	134,193		—		133,410		783
Residential mortgage-backed securities	1,233,436		—		1,233,436		—
Corporate and other debt securities	80,909		—		80,909		—
Total available for sale debt securities	1,526,564		51,578		1,474,203		783
Loans held for sale (2)	209,250		—		209,250		—
Other assets (3)	455,565		—		455,565		—
Total assets	$	2,217,906	$	70,714	$	2,139,018	$	783
Liabilities
Other liabilities (3)	$	190,049	$	—	$	190,049	$	—
Total liabilities	$	190,049	$	—	$	190,049	$	—
Non-recurring fair value measurements:
Collateral dependent loans	$	35,907	$	—	$	—	$	35,907
Loan servicing rights	14,000		—		—		14,000
Foreclosed assets	7,747		—		—		7,747
Total	$	57,654	$	—	$	—	$	57,654

			Fair Value Measurements at Reporting Date Using:
	December 31, 2019		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Equity securities at fair value	$	41,410	$	41,410	$	—	$	—
Available for sale:
U.S. Treasury securities	50,943		50,943		—		—
U.S. government agency securities	29,243		—		29,243		—
Obligations of states and political subdivisions	170,051		—		169,371		680
Residential mortgage-backed securities	1,254,786		—		1,254,786		—
Trust preferred securities	—		—		—		—
Corporate and other debt securities	61,778		—		61,778		—
Total available for sale	1,566,801		50,943		1,515,178		680
Trading securities	—		—		—		—
Loans held for sale (2)	76,113		—		76,113		—
Other assets (3)	158,532		—		158,532		—
Total assets	$	1,842,856	$	92,353	$	1,749,823	$	680
Liabilities
Other liabilities (3)	$	43,926	$	—	$	43,926	$	—
Total liabilities	$	43,926	$	—	$	43,926	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans	$	39,075	$	—	$	—	$	39,075
Loan servicing rights	1,591		—		—		1,591
Foreclosed assets	10,807		—		—		10,807
Total	$	51,473	$	—	$	—	$	51,473

(1)Includes equity securities measured at net asset value (NAV) per share (or its equivalent) as a practical expedient totaling $7.4 million at September 30, 2020. These securities have not been classified in the fair value hierarchy.

(2)Represents residential mortgage loans originated for sale that are carried at fair value and had contractual unpaid principal balances totaling approximately $199.4 million and $74.5 million at September 30, 2020 and December 31, 2019, respectively.

(3)Derivative financial instruments are included in this category.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following valuation techniques were used for financial instruments measured at fair value on a recurring basis. All the valuation techniques described below apply to the unpaid principal balance, excluding any accrued interest or dividends at the measurement date. Interest income and expense are recorded within the consolidated statements of income depending on the nature of the instrument using the effective interest method based on acquired discount or premium.

Equity securities. The fair value of equity securities largely consists of a publicly traded mutual fund, a Community Reinvestment Act (CRA) investment fund that is carried at quoted prices in active markets and privately held CRA funds measured at NAV. 

Available for sale securities. U.S. Treasury securities are reported at fair value utilizing Level 1 inputs. The majority of other investment securities are reported at fair value utilizing Level 2 inputs. The prices for these instruments are obtained through an independent pricing service or dealer market participants with whom Valley has historically transacted both purchases and sales of investment securities. Prices obtained from these sources include prices derived from market quotations and matrix pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. Management reviews the data and assumptions used in pricing the securities by its third-party provider to ensure the highest level of significant inputs are derived from market observable data. In addition, Valley reviews the volume and level of activity for all available for securities and attempts to identify transactions which may not be orderly or reflective of a significant level of activity and volume.

In calculating the fair value of one impaired special revenue bond (within obligations of states and political subdivisions in the table above) under Level 3, Valley prepared its best estimate of the present value of the cash flows to determine an internal price estimate. In determining the internal price, Valley utilized recent financial information and developments provided by the issuer, as well as other unobservable inputs which reflect Valley’s own assumptions about the inputs that market participants would use in pricing of the defaulted security. A quoted price received from an independent pricing service was weighted with the internal price estimate to determine the fair value of the instrument at September 30, 2020 and December 31, 2019.

Loans held for sale. Residential mortgage loans originated for sale are reported at fair value using Level 2 inputs. The fair values were calculated utilizing quoted prices for similar assets in active markets. The market prices represent a delivery price, which reflects the underlying price each institution would pay Valley for an immediate sale of an aggregate pool of mortgages. Non-performance risk did not materially impact the fair value of mortgage loans held for sale at September 30, 2020 and December 31, 2019 based on the short duration these assets were held, and the high credit quality of these loans.

Derivatives. Derivatives are reported at fair value utilizing Level 2 inputs. The fair values of Valley’s derivatives are determined using third-party prices that are based on discounted cash flow analysis using observed market inputs, such as the LIBOR and Overnight Index Swap rate curves. The fair value of mortgage banking derivatives, consisting of interest rate lock commitments to fund residential mortgage loans and forward commitments for the future delivery of such loans (including certain loans held for sale at September 30, 2020 and December 31, 2019), is determined based on the current market prices for similar instruments. The fair values of most of the derivatives incorporate credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, to account for potential nonperformance risk of Valley and its counterparties. The credit valuation adjustments were not significant to the overall valuation of Valley’s derivatives at September 30, 2020 and December 31, 2019.

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

The following valuation techniques were used for certain non-financial assets measured at fair value on a nonrecurring basis, including collateral dependent loans reported at the fair value of the underlying collateral, loan servicing rights and foreclosed assets, which are reported at fair value upon initial recognition or subsequent impairment as described below.

Collateral Dependent Loans. Collateral dependent loans are loans when foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and substantially all of the repayment is expected from the collateral. Collateral dependent loans are reported at the fair value of the underlying collateral. Collateral values are estimated using Level 3 inputs, consisting of individual third-party appraisals that may be adjusted based on certain discounting criteria. Certain real estate appraisals may be discounted based on specific market data by location and property type. At September 30, 2020, collateral dependent loans were individually re-measured and reported at fair value through direct loan charge-offs to the allowance for credit loan losses and/or a specific

valuation allowance allocation based on the fair value of the underlying collateral. At September 30, 2020, collateral dependent loans, primarily consisting of taxi medallion loans, with a total amortized cost of $99.3 million were reduced by specific valuation allowance allocations totaling $63.4 million to a reported total net carrying amount of $35.9 million.

Loan servicing rights. Fair values for each risk-stratified group of loan servicing rights are calculated using a fair value model from a third-party vendor that requires inputs that are both significant to the fair value measurement and unobservable (Level 3). The fair value model is based on various assumptions, including but not limited to, prepayment speeds, internal rate of return (discount rate), servicing cost, ancillary income, float rate, tax rate, and inflation. The prepayment speed and the discount rate are considered two of the most significant inputs in the model. At September 30, 2020, the fair value model used a blended prepayment speed (stated as constant prepayment rates) of 18.4 percent and a discount rate of 9.6 percent for the valuation of the loan servicing rights. A significant degree of judgment is involved in valuing the loan servicing rights using Level 3 inputs. The use of different assumptions could have a significant positive or negative effect on the fair value estimate. Impairment charges are recognized on loan servicing rights when the amortized cost of a risk-stratified group of loan servicing rights exceeds the estimated fair value. At September 30, 2020, certain loan servicing rights were re-measured at fair value totaling $14.0 million. See Note 9 for additional information.

Foreclosed assets. Certain foreclosed assets (consisting of other real estate owned and other repossessed assets included in other assets), upon initial recognition and transfer from loans, are re-measured and reported at fair value using Level 3 inputs, consisting of a third-party appraisal adjusted to the lower of cost or estimated fair value, less estimated cost to sell. When an asset is acquired, the excess of the loan balance over fair value, less estimated selling costs, is charged to the allowance for loan losses. If further declines in the estimated fair value of the asset occur, an asset is re-measured and reported at fair value through a write-down recorded in non-interest expense. There were no discount adjustments of the appraisals of foreclosed assets at September 30, 2020.

Other Fair Value Disclosures

ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.

The fair value estimates presented in the following table were based on pertinent market data and relevant information on the financial instruments available as of the valuation date. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire portfolio of financial instruments. Because no market exists for a portion of the financial instruments, fair value estimates may be based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For instance, Valley has certain fee-generating business lines (e.g., its mortgage servicing operation, trust and investment management departments) that were not considered in these estimates since these activities are not financial instruments. In addition, the tax implications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.

The carrying amounts and estimated fair values of financial instruments not measured and not reported at fair value on the consolidated statements of financial condition at September 30, 2020 and December 31, 2019 were as follows: 

	Fair Value Hierarchy	September 30, 2020				December 31, 2019
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(in thousands)
Financial assets
Cash and due from banks	Level 1	$	276,120	$	276,120	$	256,264	$	256,264
Interest bearing deposits with banks	Level 1	654,591		654,591		178,423		178,423
Equity securities (1)	Level 3	2,499		2,499		—		—
Investment securities held to maturity:
U.S. Treasury securities	Level 1	138,224		146,429		138,352		144,113
U.S. government agency securities	Level 2	6,302		6,634		7,345		7,362
Obligations of states and political subdivisions	Level 2	464,051		479,824		500,705		513,607
Residential mortgage-backed securities	Level 2	1,491,808		1,528,703		1,620,119		1,629,572
Trust preferred securities	Level 2	37,341		30,000		37,324		31,382
Corporate and other debt securities	Level 2	32,750		33,381		32,250		32,684
Total investment securities held to maturity (2)		2,170,476		2,224,971		2,336,095		2,358,720
Net loans	Level 3	32,090,554		31,883,095		29,537,449		28,964,396
Accrued interest receivable	Level 1	136,058		136,058		105,637		105,637
Federal Reserve Bank and Federal Home Loan Bank stock (3)	Level 2	287,628		287,628		214,421		214,421
Financial liabilities
Deposits without stated maturities	Level 1	23,650,401		23,650,401		19,467,892		19,467,892
Deposits with stated maturities	Level 2	7,537,581		7,466,794		9,717,945		9,747,867
Short-term borrowings	Level 2	1,430,726		1,544,596		1,093,280		1,081,879
Long-term borrowings	Level 2	2,852,569		3,115,757		2,122,426		2,181,401
Junior subordinated debentures issued to capital trusts	Level 2	55,978		44,771		55,718		53,889
Accrued interest payable (4)	Level 1	21,756		21,756		33,066		33,066

(1)Represents equity securities without a readily determinable fair value measured at cost less impairment, if any.

(2)The carrying amount is presented gross without the allowance for credit losses.

(3)Included in other assets.

(4)Included in accrued expenses and other liabilities.

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Investment Securities

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

Equity Securities

Equity securities carried at fair value totaled $29.0 million and $41.4 million at September 30, 2020 and December 31, 2019, respectively. At September 30, 2020, Valley's equity securities consisted of one publicly traded money market mutual fund, CRA investments both publicly traded and privately held and, to a lesser extent, equity securities without readily determinable fair values.

Available for Sale Debt Securities

The amortized cost, gross unrealized gains and losses and fair value of available for sale debt securities at September 30, 2020 and December 31, 2019 were as follows: 

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
September 30, 2020
U.S. Treasury securities	$	50,035	$	1,543	$	—	$	51,578
U.S. government agency securities	25,302		1,164		(18)		26,448
Obligations of states and political subdivisions:
Obligations of states and state agencies	58,807		1,151		(30)		59,928
Municipal bonds	73,063		1,276		(74)		74,265
Total obligations of states and political subdivisions	131,870		2,427		(104)		134,193
Residential mortgage-backed securities	1,193,052		41,326		(942)		1,233,436
Corporate and other debt securities	79,707		1,539		(337)		80,909
Total investment securities available for sale	$	1,479,966	$	47,999	$	(1,401)	$	1,526,564
December 31, 2019
U.S. Treasury securities	$	50,952	$	12	$	(21)	$	50,943
U.S. government agency securities	28,982		280		(19)		29,243
Obligations of states and political subdivisions:
Obligations of states and state agencies	78,116		540		(83)		78,573
Municipal bonds	90,662		902		(86)		91,478
Total obligations of states and political subdivisions	168,778		1,442		(169)		170,051
Residential mortgage-backed securities	1,248,814		11,234		(5,262)		1,254,786
Corporate and other debt securities	61,261		628		(111)		61,778
Total investment securities available for sale	$	1,558,787	$	13,596	$	(5,582)	$	1,566,801

The age of unrealized losses and fair value of related securities available for sale at September 30, 2020 and December 31, 2019 were as follows: 

	Less than Twelve Months				More than Twelve Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
September 30, 2020
U.S. government agency securities	$	—	$	—	$	1,585	$	(18)	$	1,585	$	(18)
Obligations of states and political subdivisions:
Obligations of states and state agencies	1,319		(6)		1,023		(24)		2,342		(30)
Municipal bonds	6,767		(74)		—		—		6,767		(74)
Total obligations of states and political subdivisions	8,086		(80)		1,023		(24)		9,109		(104)
Residential mortgage-backed securities	111,973		(526)		33,346		(416)		145,319		(942)
Corporate and other debt securities	14,656		(337)		—		—		14,656		(337)
Total	$	134,715	$	(943)	$	35,954	$	(458)	$	170,669	$	(1,401)
December 31, 2019
U.S. Treasury securities	$	25,019	$	(21)	$	—	$	—	$	25,019	$	(21)
U.S. government agency securities	—		—		1,783		(19)		1,783		(19)
Obligations of states and political subdivisions:
Obligations of states and state agencies	18,540		(21)		8,755		(62)		27,295		(83)
Municipal bonds	—		—		13,177		(86)		13,177		(86)
Total obligations of states and political subdivisions	18,540		(21)		21,932		(148)		40,472		(169)
Residential mortgage-backed securities	240,412		(1,194)		282,798		(4,068)		523,210		(5,262)
Corporate and other debt securities	5,139		(111)		—		—		5,139		(111)
Total	$	289,110	$	(1,347)	$	306,513	$	(4,235)	$	595,623	$	(5,582)

Within the available for sale debt securities portfolio, the total number of security positions in an unrealized loss position was 64 and 182 at September 30, 2020 and December 31, 2019, respectively.

As of September 30, 2020, the fair value of available for sale debt securities that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law, was $868.9 million.

The contractual maturities of available for sale debt securities at September 30, 2020 are set forth in the following table. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties. Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary.

	September 30, 2020
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	20,975	$	20,991
Due after one year through five years	92,873		95,436
Due after five years through ten years	107,004		108,746
Due after ten years	66,062		67,955
Residential mortgage-backed securities	1,193,052		1,233,436
Total investment securities available for sale	$	1,479,966	$	1,526,564

Actual maturities of available for sale debt securities may differ from those presented above since certain obligations provide the issuer the right to call or prepay the obligation prior to scheduled maturity without penalty.

The weighted average remaining expected life for residential mortgage-backed securities available for sale was 3.9 years at September 30, 2020.

Impairment Analysis of Available For Sale Debt Securities

Valley's available for sale debt securities portfolio includes corporate bonds and special revenue bonds, among other securities. These type of securities may pose a higher risk of future impairment charges by Valley as a result of the unpredictable nature of the U.S. economy and its potential negative effect on the future performance of the security issuers, including due to the economic effects of COVID-19.

Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses on a quarterly basis. In performing an assessment of whether any decline in fair value is due to a credit loss, Valley considers the extent to which the fair value is less than the amortized cost, changes in credit ratings, any adverse economic conditions, as well as all relevant information at the individual security level such as credit deterioration of the issuer or collateral underlying the security. In assessing the impairment, Valley compares the present value of cash flows expected to be collected with the amortized cost basis of the security. If it is determined that the decline in fair value was due to credit losses, an allowance for credit losses is recorded, limited to the amount the fair value is less than amortized cost basis. The non-credit related decrease in the fair value, such as a decline due to changes in market interest rates, is recorded in other comprehensive income, net of tax. Valley also assesses the intent to sell the securities (as well as the likelihood of a near-term recovery). If Valley intends to sell an available for sale debt security or it is more likely than not that Valley will be required to sell the security before recovery of its amortized cost basis, the debt security is written down to its fair value and the write down is charged to the debt security’s fair value at the reporting date with any incremental impairment reported in earnings.

The obligations of states and political subdivisions classified as available for sale include special revenue bonds which had an aggregate amortized cost and fair value of $70.6 million and $71.9 million, respectively, at September 30, 2020. The gross unrealized losses associated with the special revenue bonds as of September 30, 2020 were not material. Approximately 41 percent of the special revenue bonds were issued by the states of (or municipalities within) Utah and Illinois. As part of Valley’s pre-purchase analysis and on-going quarterly assessment of impairment of the obligations of states and political subdivisions, the Credit Risk Management Department conducts a financial analysis and risk rating assessment of each security issuer based on the issuer’s most recently issued financial statements and other publicly available information. These investments are a mix of municipal bonds with investment grade ratings or non-rated revenue bonds paying in accordance with their contractual terms. The vast majority of the bonds not rated by the rating agencies are state housing finance agency

revenue bonds secured by Ginnie Mae securities that are commonly referred to as Tax Exempt Mortgage Securities (TEMS). Valley continues to monitor the special revenue bond portfolio as part of its quarterly impairment analysis.

Valley has evaluated available for sale debt securities that are in an unrealized loss position as of September 30, 2020 included in the table above and has determined that the declines in fair value are mainly attributable to market volatility, not credit quality or other factors. Based on a comparison of the present value of expected cash flows to the amortized cost, management recognized no impairment during the three and nine months ended September 30, 2020 and, as a result, there was no allowance for credit losses for available for sale debt securities at September 30, 2020.

During the nine months ended September 30, 2019, Valley recognized a $2.9 million other-than-temporary credit impairment charge on one special revenue bond classified as available for sale (within the obligations of states and state agencies in the tables above). The credit impairment was due to severe credit deterioration disclosed by the issuer in the second quarter 2019, as well as the issuer's default on its contractual payment. At September 30, 2020, the non-accruing impaired security had an adjusted amortized cost and fair value of $680 thousand and $783 thousand, respectively.

Valley discontinues the recognition of interest on debt securities if the securities meet both of the following criteria: (i) regularly scheduled interest payments have not been paid or have been deferred by the issuer, and (ii) full collection of all contractual principal and interest payments is not deemed to be the most likely outcome, resulting in the recognition of other-than-temporary impairment of the security.

Held to Maturity Debt Securities

The amortized cost, gross unrealized gains and losses and fair value of debt securities held to maturity at September 30, 2020 and December 31, 2019 were as follows: 

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
September 30, 2020
U.S. Treasury securities	$	138,224	$	8,205	$	—	$	146,429
U.S. government agency securities	6,302		332		—		6,634
Obligations of states and political subdivisions:
Obligations of states and state agencies	271,038		9,040		(176)		279,902
Municipal bonds	193,013		6,909		—		199,922
Total obligations of states and political subdivisions	464,051		15,949		(176)		479,824
Residential mortgage-backed securities	1,491,808		37,819		(924)		1,528,703
Trust preferred securities	37,341		52		(7,393)		30,000
Corporate and other debt securities	32,750		637		(6)		33,381
Total investment securities held to maturity	$	2,170,476	$	62,994	$	(8,499)	$	2,224,971
December 31, 2019
U.S. Treasury securities	$	138,352	$	5,761	$	—	$	144,113
U.S. government agency securities	7,345		58		(41)		7,362
Obligations of states and political subdivisions:
Obligations of states and state agencies	297,454		7,745		(529)		304,670
Municipal bonds	203,251		5,696		(10)		208,937
Total obligations of states and political subdivisions	500,705		13,441		(539)		513,607
Residential mortgage-backed securities	1,620,119		14,803		(5,350)		1,629,572
Trust preferred securities	37,324		39		(5,981)		31,382
Corporate and other debt securities	32,250		454		(20)		32,684
Total investment securities held to maturity	$	2,336,095	$	34,556	$	(11,931)	$	2,358,720

The age of unrealized losses and fair value of related debt securities held to maturity at September 30, 2020 and December 31, 2019 were as follows: 

	Less than Twelve Months				More than Twelve Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
September 30, 2020
Obligations of states and political subdivisions:
Obligations of states and state agencies	$	5,493	$	(176)	$	—	$	—	$	5,493	$	(176)
Total obligations of states and political subdivisions	5,493		(176)		—		—		5,493		(176)
Residential mortgage-backed securities	237,070		(919)		2,677		(5)		239,747		(924)
Trust preferred securities	—		—		28,595		(7,393)		28,595		(7,393)
Corporate and other debt securities	7,494		(6)		—		—		7,494		(6)
Total	$	250,057	$	(1,101)	$	31,272	$	(7,398)	$	281,329	$	(8,499)
December 31, 2019
U.S. government agency securities	$	5,183	$	(41)	$	—	$	—	$	5,183	$	(41)
Obligations of states and political subdivisions:
Obligations of states and state agencies	11,178		(55)		32,397		(474)		43,575		(529)
Municipal bonds	—		—		798		(10)		798		(10)
Total obligations of states and political subdivisions	11,178		(55)		33,195		(484)		44,373		(539)
Residential mortgage-backed securities	307,885		(1,387)		254,915		(3,963)		562,800		(5,350)
Trust preferred securities	—		—		29,990		(5,981)		29,990		(5,981)
Corporate and other debt securities	—		—		4,980		(20)		4,980		(20)
Total	$	324,246	$	(1,483)	$	323,080	$	(10,448)	$	647,326	$	(11,931)

Within the held to maturity portfolio, the total number of security positions in an unrealized loss position was 20 and 82 at September 30, 2020 and December 31, 2019, respectively.

As of September 30, 2020, the fair value of debt securities held to maturity that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law, was $1.0 billion.

The contractual maturities of investments in debt securities held to maturity at September 30, 2020 are set forth in the table below. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties. Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary.  

	September 30, 2020
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	113,188	$	113,628
Due after one year through five years	201,101		213,801
Due after five years through ten years	162,911		168,821
Due after ten years	201,468		200,018
Residential mortgage-backed securities	1,491,808		1,528,703
Total investment securities held to maturity	$	2,170,476	$	2,224,971

Actual maturities of debt securities may differ from those presented above since certain obligations provide the issuer the right to call or prepay the obligation prior to scheduled maturity without penalty.

The weighted-average remaining expected life for residential mortgage-backed securities held to maturity was 2.5 years at September 30, 2020.

Credit Quality Indicators

Valley monitors the credit quality of the held to maturity debt securities through the use of the most current credit ratings from external rating agencies. The following table summarizes the amortized cost of held to maturity debt securities by external credit rating at September 30, 2020 and December 31, 2019.

	AAA/AA/A Rated		BBB rated		Non-investment grade rated		Non-rated		Total
	(in thousands)
September 30, 2020
U.S. Treasury securities	$	138,224	$	—	$	—	$	—	$	138,224
U.S. government agency securities	6,302		—		—		—		6,302
Obligations of states and political subdivisions:
Obligations of states and state agencies	233,581		—		5,669		31,788		271,038
Municipal bonds	171,766		—		—		21,247		193,013
Total obligations of states and political subdivisions	405,347		—		5,669		53,035		464,051
Residential mortgage-backed securities	1,491,808		—		—		—		1,491,808
Trust preferred securities	—		—		—		37,341		37,341
Corporate and other debt securities	—		5,000		—		27,750		32,750
Total investment securities held to maturity	$	2,041,681	$	5,000	$	5,669	$	118,126	$	2,170,476
December 31, 2019
U.S. Treasury securities	$	138,352	$	—	$	—	$	—	$	138,352
U.S. government agency securities	7,345		—		—		—		7,345
Obligations of states and political subdivisions:
Obligations of states and state agencies	248,533		5,722		—		43,199		297,454
Municipal bonds	202,642		—		—		609		203,251
Total obligations of states and political subdivisions	451,175		5,722		—		43,808		500,705
Residential mortgage-backed securities	1,620,119		—		—		—		1,620,119
Trust preferred securities	—		—		—		37,324		37,324
Corporate and other debt securities	—		5,000		—		27,250		32,250
Total investment securities held to maturity	$	2,216,991	$	10,722	$	—	$	108,382	$	2,336,095

Obligations of states and political subdivisions include municipal bonds and revenue bonds issued by various municipal corporations. At September 30, 2020, most of the obligations of states and political subdivisions were rated investment grade and a large portion of the "non-rated" category included TEMS securities secured by Ginnie Mae securities. Trust preferred securities consist of non-rated single-issuer securities, issued by bank holding companies. Corporate bonds consist of debt primarily issued by banks.

Allowance for Credit Losses for Held to Maturity Debt Securities

Valley has a zero loss expectation for certain securities within the held to maturity portfolio, and therefore it is not required to estimate an allowance for credit losses related to these securities under the CECL standard. After an evaluation of qualitative factors, Valley identified the following securities types which it believes qualify for this exclusion: U.S. Treasury securities, U.S. agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and collateralized municipal bonds called TEMS.

To measure the expected credit losses on held to maturity debt securities that have loss expectations, Valley estimates the expected credit losses using a discounted cash flow model developed by a third-party. Assumptions used in the model for pools of securities with common risk characteristics include the historical lifetime probability of default and severity of loss in the event of default, with the model incorporating several economic cycles of loss history data to calculate expected credit losses given default at the individual security level. The model is adjusted for a probability weighted multi-scenario economic forecast to estimate future credit losses. Valley uses a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience for the remaining life of the investment security. The economic forecast methodology and governance for debt securities is aligned with Valley's economic forecast used for the loan portfolio discussed in more detail in Note 8. Accrued interest receivable is excluded from the estimate of credit losses.

At September 30, 2020, held to maturity debt securities were carried net of allowance for credit losses totaling $1.5 million. Valley recorded a negative (credit) provision for credit losses of $112 thousand during the three months ended September 30, 2020 and a net provision for credit losses of $688 thousand for the nine months ended September 30, 2020. There were no net charge-offs of debt securities in the respective periods.

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Loans and Allowance for Credit Losses for Loans

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Loans and Allowance for Credit Losses for Loans

Loans and Allowance for Credit Losses for Loans

The detail of the loan portfolio as of September 30, 2020 and December 31, 2019 was as follows: 

	September 30, 2020		December 31, 2019
	(in thousands)
Loans:
Commercial and industrial *	$	6,903,345	$	4,825,997
Commercial real estate:
Commercial real estate	16,815,587		15,996,741
Construction	1,720,775		1,647,018
Total commercial real estate loans	18,536,362		17,643,759
Residential mortgage	4,284,595		4,377,111
Consumer:
Home equity	457,083		487,272
Automobile	1,341,659		1,451,623
Other consumer	892,542		913,446
Total consumer loans	2,691,284		2,852,341
Total loans	$	32,415,586	$	29,699,208

*Includes $2.3 billion of loans originated under the Paycheck Protection Program (PPP), net of unearned fees totaling $54.4 million at September 30, 2020.

Total loans includes net unearned discounts and deferred loan fees of $116.2 million at September 30, 2020 and net unearned premiums and deferred loan costs of $12.6 million at December 31, 2019. Net unearned discounts and deferred loan fees at September 30, 2020 include the non-credit discount on PCD loans and net unearned fees related to PPP loans.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $117.9 million and $86.3 million at September 30, 2020 and December 31, 2019, respectively, and is presented separately in the consolidated statements of financial condition.

Valley transferred and sold approximately $30.0 million and $303.0 million of residential mortgage loans from the loan portfolio to loans held for sale during the nine months ended September 30, 2020 and 2019, respectively.

Excluding the loan transfers, there were no other sales of loans from the held for investment portfolio during the nine months ended September 30, 2020 and 2019.

Credit Risk Management

For all of its loan types, Valley adheres to a credit policy designed to minimize credit risk while generating the maximum income given the level of risk appetite. Management reviews and approves these policies and procedures on a regular basis with subsequent approval by the Board of Directors annually. Credit authority relating to a significant dollar percentage of the overall portfolio is centralized and controlled by the Credit Risk Management Division and by the Credit Committee. A reporting system supplements the management review process by providing management with frequent reports concerning loan production, loan quality, internal loan classification, concentrations of credit, loan delinquencies, non-performing, and potential problem loans. Loan portfolio diversification is an important factor utilized by Valley to manage its risk across business sectors and through cyclical economic circumstances. See Valley’s Annual Report on Form 10-K for the year ended December 31, 2019 for further details.

Credit Quality

Loans are deemed to be past due when the contractually required principal and interest payments have not been received as they become due. Loans are placed on non-accrual status generally, when they become 90 days past due and the full and timely collection of principal and interest becomes uncertain. When a loan is placed on non-accrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current income. Cash collections from non-accrual loans are generally applied against principal, and no interest income is recognized on these loans until the principal balance has been determined to be fully collectible.

A loan in which the borrowers’ obligation has not been released in bankruptcy courts may be restored to an accruing basis when it becomes well secured and is in the process of collection, or all past due amounts become current under the loan agreement and collectability is no longer doubtful.

The following table presents past due, current and non-accrual loans without an allowance for credit losses by loan portfolio class (including PCD loans) at September 30, 2020.

	Past Due and Non-Accrual Loans
	30-59  Days  Past Due Loans		60-89  Days  Past Due Loans		90 Days or More Past Due Loans		Non-Accrual Loans		Total Past Due Loans		Current Loans		Total Loans		Non-Accrual Loans Without Allowance for Credit Losses
	(in thousands)
September 30, 2020
Commercial and industrial	$	6,587	$	3,954	$	6,759	$	115,667	$	132,967	$	6,770,378	$	6,903,345	$	16,812
Commercial real estate:
Commercial real estate	26,038		610		1,538		41,627		69,813		16,745,774		16,815,587		35,798
Construction	142		—		—		2,497		2,639		1,718,136		1,720,775		2,405
Total commercial real estate loans	26,180		610		1,538		44,124		72,452		18,463,910		18,536,362		38,203
Residential mortgage	22,528		3,760		891		23,877		51,056		4,233,539		4,284,595		12,356
Consumer loans:
Home equity	1,281		299		—		6,969		8,549		448,534		457,083		70
Automobile	4,797		808		538		472		6,615		1,335,044		1,341,659		—
Other consumer	2,901		245		215		—		3,361		889,181		892,542		—
Total consumer loans	8,979		1,352		753		7,441		18,525		2,672,759		2,691,284		70
Total	$	64,274	$	9,676	$	9,941	$	191,109	$	275,000	$	32,140,586	$	32,415,586	$	67,441

The following table presents past due, non-accrual and current loans by loan portfolio class at December 31, 2019. At December 31, 2019, purchased credit-impaired (PCI) loans were excluded from past due and non-accrual loans reported because they continued to earn interest income from the accretable yield at the pool level. The PCI loan pools are accounted for as PCD loans (on a loan level basis with a related allowance for credit losses) under the CECL standard adopted at January 1, 2020 and reported in the past due loans and non-accrual loans in the tables above at September 30, 2020.

	Past Due and Non-Accrual Loans
	30-59 Days Past Due Loans		60-89  Days Past Due Loans		90 Days or More Past Due Loans		Non-Accrual Loans		Total Past Due Loans		Current Non-PCI Loans		PCI Loans
	(in thousands)
December 31, 2019
Commercial and industrial	$	11,700	$	2,227	$	3,986	$	68,636	$	86,549	$	4,057,434	$	682,014
Commercial real estate:
Commercial real estate	2,560		4,026		579		9,004		16,169		10,886,724		5,093,848
Construction	1,486		1,343		—		356		3,185		1,492,532		151,301
Total commercial real estate loans	4,046		5,369		579		9,360		19,354		12,379,256		5,245,149
Residential mortgage	17,143		4,192		2,042		12,858		36,235		3,760,707		580,169
Consumer loans:
Home equity	1,051		80		—		1,646		2,777		373,243		111,252
Automobile	11,482		1,581		681		334		14,078		1,437,274		271
Other consumer	1,171		866		30		224		2,291		900,411		10,744
Total consumer loans	13,704		2,527		711		2,204		19,146		2,710,928		122,267
Total	$	46,593	$	14,315	$	7,318	$	93,058	$	161,284	$	22,908,325	$	6,629,599

Credit quality indicators. Valley utilizes an internal loan classification system as a means of reporting problem loans within commercial and industrial, commercial real estate, and construction loan portfolio classes. Under Valley’s internal risk rating system, loan relationships could be classified as "Pass," "Special Mention," "Substandard," "Doubtful," and "Loss." Substandard loans include loans that exhibit well-defined weakness and are characterized by the distinct possibility that Valley will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, based on currently existing facts, conditions and values, highly questionable and improbable. Loans classified as Loss are those considered uncollectible with insignificant value and are charged-off immediately to the allowance for loan losses, and, therefore, not presented in the table below. Loans that do not currently pose a sufficient risk to warrant classification in one of the aforementioned categories but pose weaknesses that deserve management’s close attention are deemed Special Mention. Loans rated as Pass do not currently pose any identified risk and can range from the highest to average quality, depending on the degree of potential risk. Risk ratings are updated any time the situation warrants.

The following table presents the internal loan classification risk by loan portfolio class by origination year (including PCD loans) based on the most recent analysis performed at September 30, 2020:

	Term Loans
	Amortized Cost Basis by Origination Year
September 30, 2020	2020		2019		2018		2017		2016		Prior to 2016		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Commercial and industrial
Risk Rating:
Pass	$	2,656,655	$	609,142	$	523,833	$	246,684	$	185,298	$	804,896	$	1,613,011	$	417	$	6,639,936
Special Mention	724		10,634		11,786		10,236		11,310		14,895		44,412		68		104,065
Substandard	5,411		3,181		2,780		1,789		4,095		26,720		18,092		24		62,092
Doubtful	—		5,207		7		17,162		2,632		72,244		—		—		97,252
Total commercial and industrial	$	2,662,790	$	628,164	$	538,406	$	275,871	$	203,335	$	918,755	$	1,675,515	$	509	$	6,903,345
Commercial real estate
Risk Rating:
Pass	$	2,456,797	$	3,236,056	$	2,360,488	$	1,993,600	$	1,929,677	$	4,281,267	$	189,008	$	15,626	$	16,462,519
Special Mention	23,864		—		26,028		7,197		42,882		86,098		3,481		—		189,550
Substandard	17,539		9,450		24,168		22,014		10,329		78,322		—		—		161,822
Doubtful	—		—		—		787		—		909		—		—		1,696
Total commercial real estate	$	2,498,200	$	3,245,506	$	2,410,684	$	2,023,598	$	1,982,888	$	4,446,596	$	192,489	$	15,626	$	16,815,587
Construction
Risk Rating:
Pass	$	105,422	$	157,407	$	123,416	$	16,196	$	47,202	$	60,663	$	1,162,297	$	—	$	1,672,603
Special Mention	—		—		—		—		10,058		—		32,407		—		42,465
Substandard	—		31		246		2,628		2,422		380		—		—		5,707
Total construction	$	105,422	$	157,438	$	123,662	$	18,824	$	59,682	$	61,043	$	1,194,704	$	—	$	1,720,775

For residential mortgages, automobile, home equity and other consumer loan portfolio classes, Valley also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the amortized cost in those loan classes (including PCD loans) based on payment activity by origination year as of September 30, 2020.

	Term Loans
	Amortized Cost Basis by Origination Year
September 30, 2020	2020		2019		2018		2017		2016		Prior to 2016		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Residential mortgage
Performing	$	560,875	$	807,219	$	778,367	$	645,289	$	407,412	$	1,019,903	$	52,783	$	—	$	4,271,848
90 days or more past due	—		1,459		2,947		2,849		3,895		1,597		—		—		12,747
Total residential mortgage	$	560,875	$	808,678	$	781,314	$	648,138	$	411,307	$	1,021,500	$	52,783	$	—	$	4,284,595
Consumer loans
Home equity
Performing	$	6,436	$	12,015	$	13,310	$	10,178	$	6,505	$	17,626	$	336,434	$	52,986	$	455,490
90 days or more past due	—		—		—		—		25		111		617		840		1,593
Total home equity	6,436		12,015		13,310		10,178		6,530		17,737		337,051		53,826		457,083
Automobile
Performing	292,584		479,860		303,799		175,359		62,193		26,843		—		—		1,340,638
90 days or more past due	40		304		270		246		16		145		—		—		1,021
Total automobile	292,624		480,164		304,069		175,605		62,209		26,988		—		—		1,341,659
Other Consumer
Performing	5,061		5,751		11,529		1,254		1,093		6,387		860,895		—		891,970
90 days or more past due	—		—		8		—		—		20		136		408		572
Total other consumer	5,061		5,751		11,537		1,254		1,093		6,407		861,031		408		892,542
Total Consumer	$	304,121	$	497,930	$	328,916	$	187,037	$	69,832	$	51,132	$	1,198,082	$	54,234	$	2,691,284

The following table presents the credit exposure by internally assigned risk rating by class of loans (excluding PCI loans) based on the most recent analysis performed at December 31, 2019: 

Credit exposure— by internally assigned risk rating			Special						Total Non-PCI
	Pass		Mention		Substandard		Doubtful		Loans
	(in thousands)
December 31, 2019
Commercial and industrial	$	3,982,453	$	33,718	$	66,511	$	61,301	$	4,143,983
Commercial real estate	10,781,587		77,884		42,560		862		10,902,893
Construction	1,487,877		7,486		354		—		1,495,717
Total	$	16,251,917	$	119,088	$	109,425	$	62,163	$	16,542,593

For residential mortgages, automobile, home equity and other consumer loan portfolio classes (excluding PCI loans), Valley also evaluates credit quality based on the aging status of the loan, which is presented above, and by payment activity. The following table presents the recorded investment in those loan classes based on payment activity as of December 31, 2019:

Credit exposure— by payment activity	Performing Loans		Non-Performing Loans		Total Non-PCI Loans
	(in thousands)
December 31, 2019
Residential mortgage	$	3,784,084	$	12,858	$	3,796,942
Home equity	374,374		1,646		376,020
Automobile	1,451,018		334		1,451,352
Other consumer	902,478		224		902,702
Total	$	6,511,954	$	15,062	$	6,527,016

The following table summarizes information pertaining to loans that were identified as PCI loans by class based on individual loan payment activity as of December 31, 2019:  

Credit exposure— by payment activity	Performing Loans		Non-Performing Loans		Total Non-PCI Loans
	(in thousands)
December 31, 2019
Commercial and industrial	$	653,997	$	28,017	$	682,014
Commercial real estate	5,065,388		28,460		5,093,848
Construction	148,692		2,609		151,301
Residential mortgage	571,006		9,163		580,169
Consumer	120,356		1,911		122,267
Total	$	6,559,439	$	70,160	$	6,629,599

Troubled debt restructured loans. From time to time, Valley may extend, restructure, or otherwise modify the terms of existing loans, on a case-by-case basis, to remain competitive and retain certain customers, as well as assist other customers who may be experiencing financial difficulties. If the borrower is experiencing financial difficulties and a concession has been made at the time of such modification, the loan is classified as a troubled debt restructured loan (TDR). At the adoption of ASU 2016-13, Valley was not required to reassess whether modifications to individual PCI loans prior to January 1, 2020 met the TDR loan criteria.

The majority of the concessions made for TDRs involve lowering the monthly payments on loans through either a reduction in interest rate below a market rate, an extension of the term of the loan without a corresponding adjustment to the risk premium reflected in the interest rate, or a combination of these two methods. The concessions rarely result in the forgiveness of principal or accrued interest. In addition, Valley frequently obtains additional collateral or guarantor support when modifying such loans. If the borrower has demonstrated performance under the previous terms of the loan and Valley’s underwriting process shows the borrower has the capacity to continue to perform under the restructured terms, the loan will continue to accrue interest. Non-accruing restructured loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible.

Performing TDRs (not reported as non-accrual loans) totaled $58.1 million and $73.0 million as of September 30, 2020 and December 31, 2019, respectively. Non-performing TDRs totaled $96.8 million and $65.1 million as of September 30, 2020 and December 31, 2019, respectively.

The following table presents the pre- and post-modification amortized cost of loans by loan class modified as TDRs (excluding PCI loans prior to the adoption of ASU 2016-13) during the three and nine months ended September 30, 2020 and 2019. Post-modification amounts are presented as of September 30, 2020 and 2019.

	Three Months Ended September 30,
	2020					2019
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Amortized Carrying Amount		Post-Modification Amortized Carrying Amount		Number of Contracts	Pre-Modification Amortized Carrying Amount		Post-Modification Amortized Carrying Amount
	($ in thousands)
Commercial and industrial	28	$	31,237	$	30,938	53	$	42,902	$	41,772
Commercial real estate	2	4,249		4,240		1	75		75
Residential mortgage	1	247		247		—	—		—
Consumer	1	72		72		1	19		19
Total	32	$	35,805	$	35,497	55	$	42,996	$	41,866

	Nine Months Ended September 30,
	2020					2019
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Amortized Carrying Amount		Post-Modification Amortized Carrying Amount		Number of Contracts	Pre-Modification Amortized Carrying Amount		Post-Modification Amortized Carrying Amount
	($ in thousands)
Commercial and industrial	33	$	40,537	$	38,204	104	$	78,601	$	72,183
Commercial real estate	4	8,996		9,000		3	4,740		4,699
Residential mortgage	1	247		247		1	155		154
Consumer	1	72		72		1	19		19
Total	39	$	49,852	$	47,523	109	$	83,515	$	77,055

The total TDRs presented in the above table had allocated reserves for loan losses of $18.7 million and $29.6 million at September 30, 2020 and 2019, respectively. There were $1.9 million and $5.6 million of partial charge-offs related to TDRs for the three and nine months ended September 30, 2020, respectively. There were no partial charge-offs related to TDR loan modifications during three months ended September 30, 2020 and $2.0 million of partial charge-offs related to TDRs for the nine months ended September 30, 2019, respectively. Valley did not extend any commitments to lend additional funds to borrowers whose loans have been modified as TDRs during the three and nine months ended September 30, 2020 and 2019.

Loans modified as TDRs (excluding PCI loan modifications prior to the adoption of ASU 2016-13) within the previous 12 months and for which there was a payment default (90 or more days past due) for the three and nine months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,
	2020			2019
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Amortized Cost		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial and industrial	30	$	17,496	1	$	604
Residential mortgage	—	—		1	154
Total	30	$	17,496	2	$	758

	Nine Months Ended September 30,
	2020			2019
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Amortized Cost		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial and industrial	35	$	20,099	19	$	12,235
Commercial real estate	—	—		1	283
Residential mortgage	—	—		3	369
Consumer	1	18		1	18
Total	36	$	20,117	24	$	12,905

In response to the COVID-19 pandemic and its economic impact to certain customers, Valley implemented short-term loan modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that were insignificant, when requested by customers. These modifications complied with the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide temporary payment relief to those borrowers directly impacted by COVID-19 who were not more than 30 days past due as of December 31, 2019. Generally, the modification terms allow for a deferral of payments for up to 90 days, which Valley may extend for an additional 90 days, for a maximum of 180 days on a cumulative and successive basis. As of September 30, 2020, Valley had approximately 1,400 of these loans with total outstanding balances of $1.1 billion remaining in their payment deferral period under short-term modifications. Under the applicable guidance, none of these loans were considered TDRs as of September 30, 2020.

Loans in Process of Foreclosure. Other real estate owned (OREO) totaled $7.7 million and $9.4 million at September 30, 2020 and December 31, 2019, respectively. OREO included foreclosed residential real estate properties totaling $799 thousand and $2.1 million at September 30, 2020 and December 31, 2019, respectively. Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $2.0 million and $2.8 million at September 30, 2020 and December 31, 2019, respectively.

Allowance for Credit Losses for Loans

The allowance for credit losses for loans under the new CECL standard adopted on January 1, 2020, consisted of the allowance for loan losses and the allowance for unfunded credit commitments. Prior periods reflect the allowance for credit losses for loans under the incurred loss model.

The following table summarizes the allowance for credit losses for loans at September 30, 2020 and December 31, 2019: 

	September 30, 2020		December 31, 2019
	(in thousands)
Components of allowance for credit losses for loans:
Allowance for loan losses	$	325,032	$	161,759
Allowance for unfunded credit commitments	10,296		2,845
Total allowance for credit losses for loans	$	335,328	$	164,604

The following table summarizes the provision for credit losses for loans for the periods indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Components of provision for credit losses for loans:
Provision for loan losses	$	30,833	$	8,757	$	105,709	$	20,319
Provision for unfunded credit commitments	187		(57)		350		(1,519)
Total provision for credit losses for loans	$	31,020	$	8,700	$	106,059	$	18,800

Allowance for Loan Losses

The allowance for loan losses is a valuation account that is deducted from loans' amortized cost basis to present the net amount expected to be collected on loans. Valley's methodology to establish the allowance for loan losses has two basic components: (1) a collective (pooled) reserve component for estimated lifetime expected credit losses for pools of loans that share similar risk characteristics and (2) an individual reserve component for loans that do not share common risk characteristics.

Reserves for loans that share common risk characteristics. In estimating the component of the allowance on a collective basis, Valley uses a transition matrix model which calculates an expected life of loan loss percentage for each loan pool by generating probability of default and loss given default metrics. The metrics are based on the migration of loans from performing to loss by credit quality rating or delinquency categories using historical life-of-loan analysis periods for each loan portfolio pool, and the severity of loss, based on the aggregate net lifetime losses incurred. The model's expected losses based on loss history are adjusted for qualitative factors. Among other things, these adjustments include and account for differences in: (i) lending policies and procedures, (ii) current business conditions and economic developments that affect the loan collectability, (iii) concentration risks by size, type, and geography, (iv) the potential volume and migration of loan forbearances to non-performing status, and (v) the effect of external factors such as legal and regulatory requirements on the level of estimated credit losses in the existing portfolio.

Valley utilizes a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience for the remaining life of the loan. The forecasts consist of a multi-scenario economic forecast model to estimate future credit losses that is governed by a cross-functional committee. The committee meets each quarter to determine which economic scenarios developed by Moody's will be incorporated into the model, as well as the relative probability weightings of the selected scenarios, based upon all readily available information. The model projects economic variables under each scenario based on detailed statistical analyses. Valley has identified and selected key variables that most closely correlated to its historical credit performance, which include: GDP, unemployment and the Case-Shiller Home Price Index.

Reserves for loans that that do not share common risk characteristics. Valley measures specific reserves for individual loans that do not share common risk characteristics with other loans, consisting of collateral dependent, TDR, and expected TDR loans, based on the amount of lifetime expected credit losses calculated on those loans and charge-offs of those amounts determined to be uncollectible. Factors considered by Valley in measuring the extent of expected credit loss include payment status, collateral value, borrower financial condition, guarantor support and the probability of collecting scheduled principal and interest payments when due. If repayment is based upon future expected cash flows, the present value of the expected future cash flows discounted at the loan’s original effective interest rate is compared to the carrying value of the loan, and any shortfall is recorded as the allowance for credit losses. The effective interest rate used to discount expected cash flows is adjusted to incorporate expected prepayments, if applicable.

When Valley determines that foreclosure is probable, collateral dependent loan balances are written down to the estimated current fair value (less estimated selling costs) of each loan’s underlying collateral resulting in an immediate charge-off to the allowance, excluding any consideration for personal guarantees that may be pursued in

the Bank’s collection process. Valley elected a practical expedient to use the estimated current fair value (less estimated selling costs) of the collateral to measure expected credit losses on collateral dependent loans when foreclosure is not probable.

The following table presents collateral dependent loans by class as of September 30, 2020:

	September 30, 2020
	(in thousands)
Commercial and industrial	$	115,877
Commercial real estate:
Commercial real estate	44,638
Construction	2,405
Total commercial real estate loans	47,043
Residential mortgage	28,856
Home equity	88
Total	$	191,864

Commercial and industrial loans are primarily collateralized by taxi medallions in the table above. Commercial real estate loans are collateralized by real estate and construction loans are generally secured by the real estate to be developed and may also be secured by additional real estate to mitigate the risk. Residential and home equity loans are collateralized by residential real estate.

Allowance for Unfunded Credit Commitments

The allowance for unfunded credit commitments generally consists of undisbursed non-cancellable lines of credit, new loan commitments and commercial letters of credit valued using a similar methodology as used for loans. Management's estimate of expected losses inherent in these off-balance sheet credit exposures also incorporates estimated usage factors over the commitment's contractual period or an expected pull-through rate for new loan commitments. The allowance for unfunded credit commitments totaling $10.3 million at September 30, 2020 is included in accrued expenses and other liabilities on the consolidated statements of financial condition.

The following table details the activity in the allowance for loan losses by loan portfolio segment for the three and nine months ended September 30, 2020 and 2019: 

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
Three Months Ended September 30, 2020
Allowance for loan losses:
Beginning balance	$	132,039	$	131,702	$	29,630	$	16,243	$	309,614
Loans charged-off	(13,965)		(695)		(7)		(2,458)		(17,125)
Charged-off loans recovered	428		100		31		1,151		1,710
Net (charge-offs) recoveries	(13,537)		(595)		24		(1,307)		(15,415)
Provision for loan losses	11,907		13,543		(1,040)		6,423		30,833
Ending balance	$	130,409	$	144,650	$	28,614	$	21,359	$	325,032
Three Months Ended September 30, 2019
Allowance for losses:
Beginning balance	$	94,384	$	48,978	$	5,219	$	6,524	$	155,105
Loans charged-off	(527)		(158)		(111)		(2,191)		(2,987)
Charged-off loans recovered	330		28		3		617		978
Net charge-offs	(197)		(130)		(108)		(1,574)		(2,009)
Provision for loan losses	6,815		(77)		191		1,828		8,757
Ending balance	$	101,002	$	48,771	$	5,302	$	6,778	$	161,853

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
Nine Months Ended September 30, 2020
Allowance for loan losses:
Beginning balance	$	104,059	$	45,673	$	5,060	$	6,967	$	161,759
Impact of ASU 2016-13 adoption*	15,169		49,797		20,575		6,990		92,531
Loans charged-off	(31,349)		(766)		(348)		(7,624)		(40,087)
Charged-off loans recovered	1,796		244		626		2,454		5,120
Net (charge-offs) recoveries	(29,553)		(522)		278		(5,170)		(34,967)
Provision for loan losses	40,734		49,702		2,701		12,572		105,709
Ending balance	$	130,409	$	144,650	$	28,614	$	21,359	$	325,032
Nine Months Ended September 30, 2019
Allowance for losses:
Beginning balance	$	90,956	$	49,650	$	5,041	$	6,212	$	151,859
Loans charged-off	(7,882)		(158)		(126)		(5,971)		(14,137)
Charged-off loans recovered	2,008		71		13		1,720		3,812
Net charge-offs	(5,874)		(87)		(113)		(4,251)		(10,325)
Provision for loan losses	15,920		(792)		374		4,817		20,319
Ending balance	$	101,002	$	48,771	$	5,302	$	6,778	$	161,853

*    Includes a $61.6 million increase representing the estimated expected credit losses for PCD loans as a result of the adoption of CECL on January 1, 2020.

The following table represents the allocation of the allowance for loan losses and the related loans by loan portfolio segment disaggregated based on the allowance measurement methodology at September 30, 2020 and December 31, 2019.

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
September 30, 2020
Allowance for loan losses:
Individually evaluated for credit losses	$	66,444	$	2,058	$	830	$	1,232	$	70,564
Collectively evaluated for credit losses	63,965		142,592		27,784		20,127		254,468
Total	$	130,409	$	144,650	$	28,614	$	21,359	$	325,032
Loans:
Individually evaluated for credit losses	$	136,696	$	70,145	$	35,551	$	4,019	$	246,411
Collectively evaluated for credit losses	6,766,649		18,466,217		4,249,044		2,687,265		32,169,175
Total	$	6,903,345	$	18,536,362	$	4,284,595	$	2,691,284	$	32,415,586
December 31, 2019
Allowance for loan losses:
Individually evaluated for credit losses	$	36,662	$	1,338	$	518	$	58	$	38,576
Collectively evaluated for credit losses	67,397		44,335		4,542		6,909		123,183
Total	$	104,059	$	45,673	$	5,060	$	6,967	$	161,759
Loans:
Individually evaluated for credit losses	$	100,860	$	51,242	$	10,689	$	853	$	163,644
Collectively evaluated for credit losses	4,043,123		12,347,368		3,786,253		2,729,221		22,905,965
Loans acquired with discounts related to credit quality	682,014		5,245,149		580,169		122,267		6,629,599
Total	$	4,825,997	$	17,643,759	$	4,377,111	$	2,852,341	$	29,699,208

Impaired loans. Impaired loans disclosures presented below as of December 31, 2019 represent requirements prior to the adoption of ASU No. 2016-13 on January 1, 2020. Impaired loans, consisting of non-accrual commercial and industrial loans, commercial real estate loans over $250 thousand and all loans which were modified in troubled debt restructurings, were individually evaluated for impairment. PCI loans were not classified as impaired loans because they are accounted for on a pool basis and were paying as expected.

The following table presents information about impaired loans by loan portfolio class at December 31, 2019:

	Recorded Investment With No Related Allowance		Recorded Investment With Related Allowance		Total Recorded Investment		Unpaid Contractual Principal Balance		Related Allowance
	(in thousands)
December 31, 2019
Commercial and industrial	$	14,617	$	86,243	$	100,860	$	114,875	$	36,662
Commercial real estate:
Commercial real estate	26,046		24,842		50,888		51,258		1,338
Construction	354		—		354		354		—
Total commercial real estate loans	26,400		24,842		51,242		51,612		1,338
Residential mortgage	5,836		4,853		10,689		11,800		518
Consumer loans:
Home equity	366		487		853		956		58
Total consumer loans	366		487		853		956		58
Total	$	47,219	$	116,425	$	163,644	$	179,243	$	38,576

Purchased Credit-Impaired Loans

The table below includes disclosure requirements prior to the adoption of ASU No. 2016-13 on January 1, 2020, and presents the changes in the accretable yield for PCI loans during the three and nine months ended September 30, 2019:

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	(in thousands)
Balance, beginning of period	$	853,887	$	875,958
Accretion	(47,475)		(155,981)
Net (decrease) increase in expected cash flows	(58,268)		28,167
Balance, end of period	$	748,144	$	748,144

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill as allocated to Valley's business segments, or reporting units thereof, for goodwill impairment analysis were:

	Business Segment / Reporting Unit*
	Wealth Management		Consumer Lending		Commercial Lending		Investment Management		Total
	(in thousands)
Balance at December 31, 2019	$	21,218	$	306,572	$	825,767	$	220,068	$	1,373,625
Goodwill from business combinations	—		121		1,654		9		1,784
Balance at September 30, 2020	$	21,218	$	306,693	$	827,421	$	220,077	$	1,375,409

*    Valley’s Wealth Management Division is comprised of trust, asset management and insurance services. This reporting unit is included in the Consumer Lending segment for financial reporting purposes.

During the nine months ended September 30, 2020, Valley recorded additional goodwill as set forth in the table above related to the Oritani acquisition, reflecting the effect of the combined adjustments to the fair value of certain loans and deferred tax assets as of the acquisition date. Certain estimates for acquired assets and assumed liabilities are subject to change for up to one year after the acquisition date. See Note 2 for further details.

During the second quarter 2020, Valley performed the annual goodwill impairment test at its normal assessment date. There was no impairment of goodwill recognized during the three and nine months ended September 30, 2020 and 2019.

The following table summarizes other intangible assets as of September 30, 2020 and December 31, 2019: 

	Gross Intangible Assets		Accumulated Amortization		Valuation Allowance		Net Intangible Assets
	(in thousands)
September 30, 2020
Loan servicing rights	$	100,456	$	(77,404)	$	(1,013)	$	22,039
Core deposits	101,160		(50,472)		—		50,688
Other	3,945		(2,799)		—		1,146
Total other intangible assets	$	205,561	$	(130,675)	$	(1,013)	$	73,873
December 31, 2019
Loan servicing rights	$	94,827	$	(70,095)	$	(47)	$	24,685
Core deposits	101,160		(40,384)		—		60,776
Other	3,945		(2,634)		—		1,311
Total other intangible assets	$	199,932	$	(113,113)	$	(47)	$	86,772

Loan servicing rights are accounted for using the amortization method. Under this method, Valley amortizes the loan servicing assets over the period of the economic life of the assets arising from estimated net servicing revenues. On a quarterly basis, Valley stratifies its loan servicing assets into groupings based on risk characteristics and assesses each group for impairment based on fair value. Impairment charges on loan servicing rights are recognized in earnings when the book value of a stratified group of loan servicing rights exceeds its estimated fair value. Valley recorded net impairment charges on its loan servicing rights totaling $188 thousand and $966 thousand for the three and nine months ended September 30, 2020, respectively. Valley recorded net impairment charges on its loan servicing rights totaling $64 thousand and net recoveries of impairment charges on its loan servicing rights totaling $20 thousand for the three and nine months ended September 30, 2019, respectively. See the “Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis” section of Note 6 for additional information regarding the fair valuation.

Core deposits are amortized using an accelerated method and have a weighted average amortization period of 8.9 years. The line item labeled “Other” included in the table above primarily consists of customer lists and covenants not to compete, which are amortized over their expected lives generally using a straight-line method and have a weighted average amortization period of approximately 7.6 years. Valley evaluates core deposits and other intangibles for impairment when an indication of impairment exists. No impairment was recognized during the three and nine months ended September 30, 2020 and 2019.

The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2020 through 2024: 

	Loan Servicing Rights		Core Deposits		Other
	(in thousands)
2020	$	1,477	$	3,275	$	55
2021	4,980		11,607		206
2022	3,789		9,876		191
2023	2,869		8,146		131
2024	2,205		6,537		117

Valley recognized amortization expense on other intangible assets, including net impairment (or recovery of impairment) charges on loan servicing rights, totaling approximately $6.4 million and $4.7 million for the three months ended September 30, 2020 and 2019, respectively, and $18.5 million and $13.2 million for the nine months ended September 30, 2020 and 2019, respectively.

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Borrowed Funds

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Borrowed Funds

Borrowed Funds

Short-Term Borrowings

Short-term borrowings at September 30, 2020 and December 31, 2019 consisted of the following: 

	September 30, 2020		December 31, 2019
	(in thousands)
FHLB advances	$	1,275,000	$	940,000
Securities sold under agreements to repurchase	155,726		153,280
Total short-term borrowings	$	1,430,726	$	1,093,280

The contractual weighted average interest rate for short-term borrowings was 0.44 percent and 1.68 percent at September 30, 2020 and December 31, 2019, respectively. Short-term FHLB advances totaling $1.1 billion were hedged with cash flow interest rate swaps during the nine months ended September 30, 2020. See Note 12 for additional details.

Long-Term Borrowings

Long-term borrowings at September 30, 2020 and December 31, 2019 consisted of the following: 

	September 30, 2020		December 31, 2019
	(in thousands)
FHLB advances, net (1)	$	2,148,633	$	1,480,012
Subordinated debt, net (2)	403,936		292,414
Securities sold under agreements to repurchase	300,000		350,000
Total long-term borrowings	$	2,852,569	$	2,122,426

(1)	FHLB advances are presented net of unamortized prepayment penalties and other purchase accounting adjustments totaling $503 thousand and $2.8 million at September 30, 2020 and December 31, 2019, respectively.
(2)	Subordinated debt is presented net of unamortized debt issuance costs totaling $2.8 million and $1.2 million at September 30, 2020 and December 31, 2019, respectively.

FHLB advances. Long-term FHLB advances had a weighted average interest rate of 2.11 percent and 2.23 percent at September 30, 2020 and December 31, 2019, respectively. FHLB advances are secured by pledges of certain eligible collateral, including but not limited to, U.S. government and agency mortgage-backed securities and a blanket assignment of qualifying first lien mortgage loans, consisting of both residential mortgage and commercial real estate loans.

The long-term FHLB advances at September 30, 2020 are scheduled for contractual balance repayments as follows: 

Year	Amount
	(in thousands)
2020	$	25,000
2021	994,768
2022	121,420
2023	428,163
2024	300,000
Thereafter	279,785
Total long-term FHLB advances	$	2,149,136

There are no FHLB advances with scheduled repayments in years 2020 and thereafter, reported in the table above, which are callable for early redemption by the FHLB during 2020.

Securities sold under agreements to repurchase (repos). Long-term repos had a weighted average interest rate of 3.33 percent and 1.94 percent at September 30, 2020 and December 31, 2019, respectively. Long-term repos outstanding as of September 30, 2020 have maturities in 2021.

In September 2020, Valley prepaid $50 million of long-term institutional repo borrowings with an interest rate of 3.70 percent and an original contractual maturity date in January 2022. The debt prepayment was funded by excess cash liquidity. The transaction was accounted for as an early debt extinguishment resulting in a loss, reported within non-interest expense, of $2.4 million for the third quarter 2020.

Subordinated debt. On June 5, 2020, Valley issued $115.0 million of 5.25 percent Fixed-to-Floating Rate subordinated notes due June 15, 2030 and callable in whole or in part on or after June 15, 2025 or upon the occurrence of certain events. Interest on the subordinated notes during the initial five year term through June 15, 2025 is payable semi-annually on June 15 and December 15. Thereafter, interest is expected to be set based on Three-Month Term SOFR plus 514 basis points and paid quarterly through maturity of the notes.

Valley also had the following subordinated debt outstanding at September 30, 2020:

•$100 million aggregate principal amount of 4.55 percent subordinated notes due June 30, 2025 with no call dates or prepayments allowed except upon the occurrence of certain events;

•$125 million aggregate principal amount of 5.125 percent subordinated notes due September 27, 2023 with no call dates or prepayments allowed except upon the occurrence of certain events;

•$60 million aggregate principal amount of 6.25 percent subordinated notes due April 1, 2026 that are callable on or after April 1, 2021 or anytime upon the occurrence of certain events.

See Note 11 in Valley’s Annual Report on Form 10-K for the year ended December 31, 2019 for further details.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock–Based CompensationValley currently has one active employee stock plan, the 2016 Long-Term Stock Incentive Plan (the 2016 Stock Plan), adopted by Valley’s Board of Directors on January 29, 2016 and approved by its shareholders on April 28, 2016. The 2016 Stock Plan is administered by the Compensation and Human Resources Committee (the Committee) appointed by Valley's Board of Directors. The Committee can grant awards to officers and key employees of Valley. The primary purpose of the 2016 Stock Plan is to provide additional incentive to officers and key employees of Valley and its subsidiaries, whose substantial contributions are essential to the continued growth and success of Valley, and to attract and retain competent and dedicated officers and other key employees whose efforts will result in the continued and long-term growth of Valley’s business.

Under the 2016 Stock Plan, Valley may award shares of common stock in the form of stock appreciation rights, both incentive and non-qualified stock options, restricted stock and restricted stock units (RSUs) to its employees and non-employee directors (for acting in their roles as board members). As of September 30, 2020, 3.1 million shares of common stock were available for issuance under the 2016 Stock Plan. The essential features of each award are described in the award agreement relating to that award. The grant, exercise, vesting, settlement or payment of an award may be based upon the fair value of Valley’s common stock on the last sale price reported for Valley’s common stock on such date or the last sale price reported preceding such date, except for performance-based awards with a market condition. The grant date fair values of performance-based awards that vest based on a market condition are determined by a third-party specialist using a Monte Carlo valuation model.

Restricted Stock Units (RSUs). Valley granted 26 thousand and 42 thousand of time-based RSUs during the three months ended September 30, 2020 and 2019, respectively, and 1.2 million and 868 thousand during the nine months ended September 30, 2020 and 2019, respectively. Generally, time-based RSUs vest ratably one-third each year over a three-year vesting period. The average grant date fair value of the RSUs granted during the nine months ended September 30, 2020 and 2019 was $10.41 per share and $10.43 per share, respectively.

Valley granted 589 thousand and 532 thousand of performance-based RSUs to certain executive officers for the nine months ended September 30, 2020 and 2019, respectively. The performance-based RSU awards include RSUs with vesting conditions based upon certain levels of growth in Valley's tangible book value per share plus dividends and RSUs with vesting conditions based upon Valley's total shareholder return as compared to its peer group. The RSUs “cliff” vest after three years based on the cumulative performance of Valley during that time period. The RSUs earn dividend equivalents (equal to cash dividends paid on Valley's common stock) over the applicable performance period. Dividend equivalents are accumulated and paid to the grantee at the vesting date or forfeited if the performance conditions are not met. The grant date fair value of the RSUs granted during the nine months ended September 30, 2020 and 2019 was $10.82 per share and $10.43 per share, respectively.

Valley recorded total stock-based compensation expense of $4.1 million and $3.2 million for the three months ended September 30, 2020 and 2019, respectively, and $12.3 million and $11.5 million for the nine months ended September 30, 2020 and 2019, respectively. The fair values of stock awards are expensed over the shorter of the vesting or required service period. As of September 30, 2020, the unrecognized amortization expense for all stock-based employee compensation totaled approximately $21.3 million and will be recognized over an average remaining vesting period of 1.84 years.

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Derivative Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

Valley enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

Cash Flow Hedges of Interest Rate Risk. Valley’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, Valley uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the payment of either fixed or variable-rate amounts in exchange for the receipt of variable or fixed-rate amounts from a counterparty, respectively.

During the nine months ended September 30, 2020, Valley entered into new interest rate swap agreements designated as cash flow hedges with a total notional amount of $1.1 billion. The swaps are intended to hedge the changes in cash flows associated with certain FHLB advances and brokered deposits. Valley is required to pay fixed-rates of interest ranging from 0.05 percent to 0.67 percent and receives variable rates of interest that reset quarterly based on three-month LIBOR. Expiration dates for the swaps range from April 2021 to August 2022.

Fair Value Hedges of Fixed Rate Assets and Liabilities. Valley is exposed to changes in the fair value of certain of its fixed rate assets or liabilities due to changes in benchmark interest rates based on one-month LIBOR. From time to time, Valley has used interest rate swaps to manage its exposure to changes in fair value. Interest rate swaps designated as fair value hedges involve the receipt of variable rate payments from a counterparty in exchange for

Valley making fixed rate payments over the life of the agreements without the exchange of the underlying notional amount. For derivatives that are designated and qualify as fair value hedges, the gain or loss on the derivative as well as the loss or gain on the hedged item attributable to the hedged risk are recognized in earnings. Valley includes the gain or loss on the hedged items in the same income statement line item as the loss or gain on the related derivatives.

Non-designated Hedges. Derivatives not designated as hedges may be used to manage Valley’s exposure to interest rate movements or to provide service to customers but do not meet the requirements for hedge accounting under U.S. GAAP. Derivatives not designated as hedges are not entered into for speculative purposes.

Valley executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that Valley executes with a third party, such that Valley minimizes its net risk exposure resulting from such transactions. As these interest rate swaps do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings.

Valley sometimes enters into risk participation agreements with external lenders where the banks are sharing their risk of default on the interest rate swaps on participated loans. Valley either pays or receives a fee depending on the participation type. Risk participation agreements are credit derivatives not designated as hedges. Credit derivatives are not speculative and are not used to manage interest rate risk in assets or liabilities. Changes in the fair value in credit derivatives are recognized directly in earnings. At September 30, 2020, Valley had 23 credit swaps with an aggregate notional amount of $181.5 million related to risk participation agreements. 

At September 30, 2020, Valley had two “steepener” swaps, each with a current notional amount of $10.4 million where the receive rate on the swap mirrors the pay rate on the brokered deposits and the rates paid on these types of hybrid instruments are based on a formula derived from the spread between the long and short ends of the constant maturity swap (CMS) rate curve. Although these types of instruments do not meet the hedge accounting requirements, the change in fair value of both the bifurcated derivative and the stand alone swap tend to move in opposite directions with changes in the three-month LIBOR rate and therefore provide an effective economic hedge.

Valley regularly enters into mortgage banking derivatives which are non-designated hedges. These derivatives include interest rate lock commitments provided to customers to fund certain residential mortgage loans to be sold into the secondary market and forward commitments for the future delivery of such loans. Valley enters into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of future changes in interest rate on Valley's commitments to fund the loans as well as on its portfolio of mortgage loans held for sale.

Amounts included in the consolidated statements of financial condition related to the fair value of Valley’s derivative financial instruments were as follows: 

	September 30, 2020						December 31, 2019
	Fair Value						Fair Value
	Other Assets		Other Liabilities		Notional Amount		Other Assets		Other Liabilities		Notional Amount
	(in thousands)
Derivatives designated as hedging instruments:
Cash flow hedge interest rate swaps	$	—	$	4,233	$	1,175,000	$	—	$	1,484	$	180,000
Fair value hedge interest rate swaps	—		59		7,079		—		229		7,281
Total derivatives designated as hedging instruments	$	—	$	4,292	$	1,182,079	$	—	$	1,713	$	187,281
Derivatives not designated as hedging instruments:
Interest rate swaps and embedded derivatives	$	455,404	$	182,741	$	8,306,557	$	158,382	$	42,020	$	4,113,106
Mortgage banking derivatives	161		3,016		521,418		150		193		142,760
Total derivatives not designated as hedging instruments	$	455,565	$	185,757	$	8,827,975	$	158,532	$	42,213	$	4,255,866

The Chicago Mercantile Exchange and London Clearing House variation margins are classified as a single-unit of account with the fair value of certain cash flow and non-designated derivative instruments. As a result, the fair value of the designated cash flow interest rate swaps assets and designated and non-designated interest rate swaps liabilities were offset by variation margins posted by (with) the applicable counterparties and reported in the table above on a net basis at September 30, 2020 and December 31, 2019.

Gains and (losses) included in the consolidated statements of income and other comprehensive income, on a pre-tax basis, related to interest rate derivatives designated as hedges of cash flows were as follows: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Amount of loss reclassified from accumulated other comprehensive loss to interest expense	$	(1,586)	$	(453)	$	(1,763)	$	(1,126)
Amount of gain (loss) recognized in other comprehensive income	95		108		3,158		(1,404)

The accumulated net after-tax losses related to effective cash flow hedges included in accumulated other comprehensive loss were $4.7 million and $3.7 million at September 30, 2020 and December 31, 2019, respectively.

Amounts reported in accumulated other comprehensive loss related to cash flow interest rate derivatives are reclassified to interest expense as interest payments are made on the hedged variable interest rate liabilities. Valley estimates that $3.8 million will be reclassified as an increase to interest expense over the next 12 months.

Gains (losses) included in the consolidated statements of income related to interest rate derivatives designated as hedges of fair value were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Derivative - interest rate swaps:
Interest income	$	88	$	48	$	170	$	121
Hedged item - loans:
Interest income	$	(88)	$	(48)	$	(170)	$	(121)

The following table presents the hedged items related to interest rate derivatives designated as hedges of fair value and the cumulative basis fair value adjustment included in the net carrying amount of the hedged items at September 30, 2020 and December 31, 2019.

Line Item in the Statement of Financial Condition in Which the Hedged Item is Included	Carrying Amount of the Hedged Asset				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset
	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
	(in thousands)
Loans	$	7,138	$	7,510	$	59	$	229

The net losses (gains) included in the consolidated statements of income related to derivative instruments not designated as hedging instruments were as follows: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Non-designated hedge interest rate swaps and credit derivatives
Other non-interest expense	$	600	$	(468)	$	2,105	$	(1,225)

Other non-interest income included fee income related to non-designated hedge derivative interest rate swaps (not designated as hedging instruments) executed with commercial loan customers totaling $19.2 million and $13.9 million for the three months ended September 30, 2020 and 2019, respectively, and $48.1 million and $23.4 million for the nine months ended September 30, 2020 and 2019, respectively.

Credit Risk Related Contingent Features. By using derivatives, Valley is exposed to credit risk if counterparties to the derivative contracts do not perform as expected. Management attempts to minimize counterparty credit risk through credit approvals, limits, monitoring procedures and obtaining collateral where appropriate. Credit risk exposure associated with derivative contracts is managed at Valley in conjunction with Valley’s consolidated counterparty risk management process. Valley’s counterparties and the risk limits monitored by management are periodically reviewed and approved by the Board of Directors.

Valley has agreements with its derivative counterparties providing that if Valley defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then Valley could also be declared in default on its derivative counterparty agreements. Additionally, Valley has an agreement with several of its derivative counterparties that contains provisions that require Valley’s debt to maintain an investment grade credit rating from each of the major credit rating agencies from which it receives a credit rating. If Valley’s credit rating is reduced below investment grade, or such rating is withdrawn or suspended, then the counterparty could terminate the derivative positions and Valley would be required to settle its obligations under the agreements. As of September 30, 2020, Valley was in compliance with all of the provisions of its derivative counterparty

agreements. As of September 30, 2020, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk related to these agreements, was $184.1 million. Valley has derivative counterparty agreements that require minimum collateral posting thresholds for certain counterparties.

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Balance Sheet Offsetting

9 Months Ended

Sep. 30, 2020

Offsetting [Abstract]

Balance Sheet Offsetting

Balance Sheet Offsetting

Certain financial instruments, including interest rate swap derivatives 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 (i.e., the threshold for posting collateral is reduced to zero, subject to certain minimum transfer amounts). 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 eligible for offset in the consolidated statements of financial condition as of September 30, 2020 and December 31, 2019.

							Gross Amounts Not Offset
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments			Cash Collateral		Net Amount
	(in thousands)
September 30, 2020
Assets:
Interest rate swaps	$	455,404	$	—	$	455,404	$	—		$	—	$	455,404
Liabilities:
Interest rate swaps	$	187,033	$	—	$	187,033	$	—		$	(184,050)	$	2,983
Repurchase agreements	300,000		—		300,000		(300,000)		*	—		—
Total	$	487,033	$	—	$	487,033	$	(300,000)		$	(184,050)	$	2,983
December 31, 2019
Assets:
Interest rate swaps	$	158,382	$	—	$	158,382	$	(118)		$	—	$	158,264
Liabilities:
Interest rate swaps	$	43,733	$	—	$	43,733	$	(118)		$	(16,881)	$	26,734
Repurchase agreements	350,000		—		350,000		(350,000)		*	—		—
Total	$	393,733	$	—	$	393,733	$	(350,118)		$	(16,881)	$	26,734

*    Represents the fair value of non-cash pledged investment securities.

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Tax Credit Investments

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Tax Credit Investments

Tax Credit InvestmentsValley’s tax credit investments are primarily related to investments promoting qualified affordable housing projects, and other investments related to community development and renewable energy sources. Some of these tax-advantaged investments support Valley’s regulatory compliance with the Community Reinvestment Act (CRA). Valley’s investments in these entities generate a return primarily through the realization of federal income tax credits, and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. These tax credits and deductions are recognized as a reduction of income tax expense.

Valley’s tax credit investments are carried in other assets on the consolidated statements of financial condition. Valley’s unfunded capital and other commitments related to the tax credit investments are carried in accrued expenses and other liabilities on the consolidated statements of financial condition. Valley recognizes amortization of tax credit investments, including impairment losses, within non-interest expense in the consolidated statements of income using the equity method of accounting. After initial measurement, the carrying amounts of tax credit investments with non-readily determinable fair values are increased to reflect Valley's share of income of the investee and are reduced to reflect its share of losses of the investee, dividends received and impairments, if applicable.

The following table presents the balances of Valley’s affordable housing tax credit investments, other tax credit investments, and related unfunded commitments at September 30, 2020 and December 31, 2019:

	September 30, 2020		December 31, 2019
	(in thousands)
Other Assets:
Affordable housing tax credit investments, net	$	21,647	$	25,049
Other tax credit investments, net	49,907		59,081
Total tax credit investments, net	$	71,554	$	84,130
Other Liabilities:
Unfunded affordable housing tax credit commitments	$	1,397	$	1,539
Unfunded other tax credit commitments	1,139		1,139
Total unfunded tax credit commitments	$	2,536	$	2,678

The following table presents other information relating to Valley’s affordable housing tax credit investments and other tax credit investments for the three and nine months ended September 30, 2020 and 2019: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits	$	1,352	$	1,666	$	3,979	$	5,087
Other tax credit investment credits and tax benefits	1,727		1,902		5,567		6,863
Total reduction in income tax expense	$	3,079	$	3,568	$	9,546	$	11,950
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses	$	642	$	530	$	1,733	$	1,796
Affordable housing tax credit investment impairment losses	585		857		1,668		2,381
Other tax credit investment losses	12		1,093		1,235		4,589
Other tax credit investment impairment losses	1,520		1,905		4,767		7,655
Total amortization of tax credit investments recorded in non-interest expense	$	2,759	$	4,385	$	9,403	$	16,421

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Business Segments

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Business Segments

Business Segments

Valley has four business segments that it monitors and reports on to manage Valley’s business operations. These segments are consumer lending, commercial lending, investment management, and corporate and other adjustments. Valley’s reportable segments have been determined based upon its internal structure of operations and lines of business. Each business segment is reviewed routinely for its asset growth, contribution to income before income taxes and return on average interest earning assets and impairment (if events or circumstances indicate a possible inability to realize the carrying amount). Expenses related to the branch network, all other components of retail banking, along with the back office departments of the Bank are allocated from the corporate and other adjustments segment to each of the other three business segments. Interest expense and internal transfer expense (for general corporate expenses) are allocated to each business segment utilizing a transfer pricing methodology, which involves the allocation of operating and funding costs based on each segment's respective mix of average earning assets and/or liabilities outstanding for the period. The financial reporting for each segment contains allocations and reporting in line with Valley’s operations, which may not necessarily be comparable to any other financial institution. The accounting for each segment includes internal accounting policies designed to measure consistent and reasonable financial reporting and may result in income and expense measurements that differ from amounts under U.S. GAAP. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.

The following tables represent the financial data for Valley’s four business segments for the three and nine months ended September 30, 2020 and 2019:

	Three Months Ended September 30, 2020
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	7,126,157		$	25,389,107		$	5,252,446		$	—	$	37,767,710
Interest income	$	63,956		$	251,920		$	22,513		$	(1,046)	$	337,343
Interest expense	9,048			33,330			6,728			5,151		54,257
Net interest income (loss)	54,908			218,590			15,785			(6,197)		283,086
Provision for credit losses	5,383			25,637			(112)			—		30,908
Net interest income (loss) after provision for credit losses	49,525			192,953			15,897			(6,197)		252,178
Non-interest income	23,531			20,421			(1,304)			6,624		49,272
Non-interest expense	19,877			25,633			(186)			114,861		160,185
Internal expense transfer	18,614			66,390			13,713			(98,717)		—
Income (loss) before income taxes	$	34,565		$	121,351		$	1,066		$	(15,717)	$	141,265
Return on average interest earning assets (pre-tax)	1.94		%	1.91		%	0.08		%	N/A		1.50		%

	Three Months Ended September 30, 2019
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	6,858,216		$	19,278,529		$	4,357,824		$	—	$	30,494,569
Interest income	$	68,253		$	230,183		$	31,999		$	(1,174)	$	329,261
Interest expense	23,552			66,209			14,965			3,910		108,636
Net interest income (loss)	44,701			163,974			17,034			(5,084)		220,625
Provision for credit losses	2,003			6,697			—			—		8,700
Net interest income (loss) after provision for credit losses	42,698			157,277			17,034			(5,084)		211,925
Non-interest income	15,108			15,057			2,687			8,298		41,150
Non-interest expense	19,748			25,161			381			100,587		145,877
Internal expense transfer	19,758			55,544			12,559			(87,861)		—
Income (loss) before income taxes	$	18,300		$	91,629		$	6,781		$	(9,512)	$	107,198
Return on average interest earning assets (pre-tax)	1.07		%	1.90		%	0.62		%	N/A		1.41		%

	Nine Months Ended September 30, 2020
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	7,187,839		$	24,334,429		$	5,221,538		$	—	$	36,743,806
Interest income	$	199,018		$	771,947		$	81,905		$	(3,209)	$	1,049,661
Interest expense	40,217			136,156			29,216			13,088		218,677
Net interest income (loss)	158,801			635,791			52,689			(16,297)		830,984
Provision for credit losses	15,274			90,785			688			—		106,747
Net interest income (loss) after provision for credit losses	143,527			545,006			52,001			(16,297)		724,237
Non-interest income	55,383			52,192			7,661			20,263		135,499
Non-interest expense	60,188			73,041			843			338,935		473,007
Internal expense transfer	58,355			197,444			42,393			(298,192)		—
Income (loss) before income taxes	$	80,367		$	326,713		$	16,426		$	(36,777)	$	386,729
Return on average interest earning assets (pre-tax)	1.49		%	1.79		%	0.42		%	N/A		1.40		%

	Nine Months Ended September 30, 2019
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	6,812,001		$	18,839,194		$	4,330,504		$	—	$	29,981,699
Interest income	$	203,897		$	679,833		$	97,189		$	(3,692)	$	977,227
Interest expense	69,504			192,221			44,185			11,810		317,720
Net interest income (loss)	134,393			487,612			53,004			(15,502)		659,507
Provision for credit losses	4,986			13,814			—			—		18,800
Net interest income (loss) after provision for credit losses	129,407			473,798			53,004			(15,502)		640,707
Non-interest income	41,927			29,527			7,365			97,607		176,426
Non-interest expense	56,845			76,729			684			301,151		435,409
Internal expense transfer	58,476			161,803			37,245			(257,524)		—
Income (loss) before income taxes	$	56,013		$	264,793		$	22,440		$	38,478	$	381,724
Return on average interest earning assets (pre-tax)	1.10		%	1.87		%	0.69		%	N/A		1.70		%

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New Authoritative Accounting Guidance (Policies)

9 Months Ended

Sep. 30, 2020

Accounting Changes and Error Corrections [Abstract]

Basis of Presentation

The unaudited consolidated financial statements of Valley National Bancorp, a New Jersey corporation (Valley), include the accounts of its commercial bank subsidiary, Valley National Bank (the Bank), and all of Valley’s direct or indirect wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated. The accounting and reporting policies of Valley conform to U.S. generally accepted accounting principles (U.S. GAAP) and general practices within the financial services industry. In accordance with applicable accounting standards, Valley does not consolidate statutory trusts established for the sole purpose of issuing trust preferred securities and related trust common securities.

Reclassification

Certain prior period amounts have been reclassified to conform to the current presentation.

Significant Estimates

Significant Estimates. In preparing the unaudited consolidated financial statements in conformity with U.S. GAAP, management has made estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statements of financial condition and results of operations for the periods indicated. Material estimates that require application of management’s most difficult, subjective or complex judgment and are particularly susceptible to change include: the allowance for credit losses, the evaluation of goodwill and other intangible assets for impairment, and income taxes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are deemed necessary. While management uses its best judgment, actual amounts or results could differ significantly from those estimates. The current economic environment has increased the degree of uncertainty inherent in these material estimates. Actual results may differ from those estimates. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date.

New Accounting Guidance Adopted and Not Yet Adopted

New Accounting Guidance Adopted in 2020

Accounting Standards Update (ASU) No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" amends the accounting guidance on the impairment of financial instruments. The FASB issued an amendment to replace the incurred loss impairment methodology under prior accounting guidance with a new current expected credit loss (CECL) model. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Valley utilizes a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience for the remaining life of the loan. The measurement of expected credit loss under the CECL methodology is applicable to financial assets measured at amortized cost, including loans, held to maturity investments and purchased financial assets with credit deterioration (PCD) assets. It also applies to certain off-balance sheet credit exposures.

Valley adopted ASU No. 2016-13 on January 1, 2020 using the modified retrospective approach for all financial assets measured at amortized cost (except for PCD loans) and off-balance sheet credit exposures. Valley has established a governance structure to implement the CECL accounting guidance and has developed a methodology and set of models to be used. At adoption, Valley recorded a $100.4 million increase to its allowance for credit losses, including reserves of $92.5 million, $7.1 million and $793 thousand related to loans, unfunded credit commitments and held to maturity debt securities, respectively. Of the $92.5 million in loan reserves, $61.6 million represents PCD loan related reserves which were recognized through a gross-up that increases the amortized cost basis of loans with a corresponding increase to the allowance for credit losses, and therefore results in no impact to shareholders' equity. The remaining non-credit discount of $97.7 million related to PCD loans is accreted into interest income over the life of the loans at the effective interest rate effective January 1, 2020. The non-PCD loan related increase to the allowance for credit losses of $38.8 million, including the reserves for unfunded loan commitments and held to maturity debt securities, was offset in shareholders' equity and deferred tax assets.

For regulatory capital purposes, in connection with the Federal Reserve Board’s final interim rule as of April 3, 2020, 100 percent of the CECL Day 1 impact to shareholders' equity equaling $28.2 million after-tax will be deferred over a two-year period ending January 1, 2022, at which time it will be phased in on a pro-rata basis over a three-year period ending January 1, 2025. Additionally, 25 percent of the reserve build (i.e., provision for credit losses less net charge-offs) net of taxes will be phased in over the same time frame.

ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test guidance) to measure a goodwill impairment charge. Instead, an entity will be required to record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on Step 1 of the current guidance). In addition, ASU No. 2017-04 eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. However, an entity will be required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU No. 2017-04 was effective for Valley on January 1, 2020 and Valley applied this new guidance in its annual goodwill impairment test performed during the second quarter 2020.

New Accounting Guidance issued in 2020

ASU No. 2020-08, "Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs" provides clarification and affects the guidance previously issued by ASU No. 2017-08 “Receivables -Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” ASU No. 2020-08 clarifies that an entity should reevaluate whether a debt security with multiple call

dates is within the scope of paragraph 310-20-35-33. For each reporting period, to the extent that the amortized cost basis of an individual callable debt security exceeds the amount repayable by the issuer at the next call date, the premium should be amortized to the next call date, unless the guidance to consider estimated prepayments is applied. ASU No. 2020-08 will be effective for Valley for the annual and interim periods beginning January 1, 2021 and early adoption is not permitted. This new guidance is not expected to have a significant impact on Valley’s consolidated financial statements.

ASU No. 2020-04, "Reference Rate Reform (Topic 848)" provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued, subject to meeting certain criteria. Under the new guidance, an entity can elect by accounting topic or industry subtopic to account for the modification of a contract affected by reference rate reform as a continuation of the existing contract, if certain conditions are met. In addition, the new guidance allows an entity to elect on a hedge-by-hedge basis to continue to apply hedge accounting for hedging relationships in which the critical terms change due to reference rate reform, if certain conditions are met. A one-time election to sell and/or transfer held-to-maturity debt securities that reference a rate affected by reference rate reform is also allowed. ASU No. 2020-04 became effective for all entities as of March 12, 2020 and will apply to all LIBOR reference rate modifications through December 31, 2022. Management is currently evaluating the impact of the ASU on Valley’s consolidated financial statements.

Impairment Analysis of Available For Sale Debt Securities and Allowance for Credit Losses for Held to Maturity Debt Securities

Impairment Analysis of Available For Sale Debt Securities

Valley's available for sale debt securities portfolio includes corporate bonds and special revenue bonds, among other securities. These type of securities may pose a higher risk of future impairment charges by Valley as a result of the unpredictable nature of the U.S. economy and its potential negative effect on the future performance of the security issuers, including due to the economic effects of COVID-19.

Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses on a quarterly basis. In performing an assessment of whether any decline in fair value is due to a credit loss, Valley considers the extent to which the fair value is less than the amortized cost, changes in credit ratings, any adverse economic conditions, as well as all relevant information at the individual security level such as credit deterioration of the issuer or collateral underlying the security. In assessing the impairment, Valley compares the present value of cash flows expected to be collected with the amortized cost basis of the security. If it is determined that the decline in fair value was due to credit losses, an allowance for credit losses is recorded, limited to the amount the fair value is less than amortized cost basis. The non-credit related decrease in the fair value, such as a decline due to changes in market interest rates, is recorded in other comprehensive income, net of tax. Valley also assesses the intent to sell the securities (as well as the likelihood of a near-term recovery). If Valley intends to sell an available for sale debt security or it is more likely than not that Valley will be required to sell the security before recovery of its amortized cost basis, the debt security is written down to its fair value and the write down is charged to the debt security’s fair value at the reporting date with any incremental impairment reported in earnings.

The obligations of states and political subdivisions classified as available for sale include special revenue bonds which had an aggregate amortized cost and fair value of $70.6 million and $71.9 million, respectively, at September 30, 2020. The gross unrealized losses associated with the special revenue bonds as of September 30, 2020 were not material. Approximately 41 percent of the special revenue bonds were issued by the states of (or municipalities within) Utah and Illinois. As part of Valley’s pre-purchase analysis and on-going quarterly assessment of impairment of the obligations of states and political subdivisions, the Credit Risk Management Department conducts a financial analysis and risk rating assessment of each security issuer based on the issuer’s most recently issued financial statements and other publicly available information. These investments are a mix of municipal bonds with investment grade ratings or non-rated revenue bonds paying in accordance with their contractual terms. The vast majority of the bonds not rated by the rating agencies are state housing finance agency

revenue bonds secured by Ginnie Mae securities that are commonly referred to as Tax Exempt Mortgage Securities (TEMS). Valley continues to monitor the special revenue bond portfolio as part of its quarterly impairment analysis.

Valley has evaluated available for sale debt securities that are in an unrealized loss position as of September 30, 2020 included in the table above and has determined that the declines in fair value are mainly attributable to market volatility, not credit quality or other factors. Based on a comparison of the present value of expected cash flows to the amortized cost, management recognized no impairment during the three and nine months ended September 30, 2020 and, as a result, there was no allowance for credit losses for available for sale debt securities at September 30, 2020.

During the nine months ended September 30, 2019, Valley recognized a $2.9 million other-than-temporary credit impairment charge on one special revenue bond classified as available for sale (within the obligations of states and state agencies in the tables above). The credit impairment was due to severe credit deterioration disclosed by the issuer in the second quarter 2019, as well as the issuer's default on its contractual payment. At September 30, 2020, the non-accruing impaired security had an adjusted amortized cost and fair value of $680 thousand and $783 thousand, respectively.

Valley discontinues the recognition of interest on debt securities if the securities meet both of the following criteria: (i) regularly scheduled interest payments have not been paid or have been deferred by the issuer, and (ii) full collection of all contractual principal and interest payments is not deemed to be the most likely outcome, resulting in the recognition of other-than-temporary impairment of the security.

Allowance for Credit Losses for Held to Maturity Debt Securities

Valley has a zero loss expectation for certain securities within the held to maturity portfolio, and therefore it is not required to estimate an allowance for credit losses related to these securities under the CECL standard. After an evaluation of qualitative factors, Valley identified the following securities types which it believes qualify for this exclusion: U.S. Treasury securities, U.S. agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and collateralized municipal bonds called TEMS.

To measure the expected credit losses on held to maturity debt securities that have loss expectations, Valley estimates the expected credit losses using a discounted cash flow model developed by a third-party. Assumptions used in the model for pools of securities with common risk characteristics include the historical lifetime probability of default and severity of loss in the event of default, with the model incorporating several economic cycles of loss history data to calculate expected credit losses given default at the individual security level. The model is adjusted for a probability weighted multi-scenario economic forecast to estimate future credit losses. Valley uses a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience for the remaining life of the investment security. The economic forecast methodology and governance for debt securities is aligned with Valley's economic forecast used for the loan portfolio discussed in more detail in Note 8.

Allowance for Loan Losses

The allowance for loan losses is a valuation account that is deducted from loans' amortized cost basis to present the net amount expected to be collected on loans. Valley's methodology to establish the allowance for loan losses has two basic components: (1) a collective (pooled) reserve component for estimated lifetime expected credit losses for pools of loans that share similar risk characteristics and (2) an individual reserve component for loans that do not share common risk characteristics.

Reserves for loans that share common risk characteristics. In estimating the component of the allowance on a collective basis, Valley uses a transition matrix model which calculates an expected life of loan loss percentage for each loan pool by generating probability of default and loss given default metrics. The metrics are based on the migration of loans from performing to loss by credit quality rating or delinquency categories using historical life-of-loan analysis periods for each loan portfolio pool, and the severity of loss, based on the aggregate net lifetime losses incurred. The model's expected losses based on loss history are adjusted for qualitative factors. Among other things, these adjustments include and account for differences in: (i) lending policies and procedures, (ii) current business conditions and economic developments that affect the loan collectability, (iii) concentration risks by size, type, and geography, (iv) the potential volume and migration of loan forbearances to non-performing status, and (v) the effect of external factors such as legal and regulatory requirements on the level of estimated credit losses in the existing portfolio.

Valley utilizes a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience for the remaining life of the loan. The forecasts consist of a multi-scenario economic forecast model to estimate future credit losses that is governed by a cross-functional committee. The committee meets each quarter to determine which economic scenarios developed by Moody's will be incorporated into the model, as well as the relative probability weightings of the selected scenarios, based upon all readily available information. The model projects economic variables under each scenario based on detailed statistical analyses. Valley has identified and selected key variables that most closely correlated to its historical credit performance, which include: GDP, unemployment and the Case-Shiller Home Price Index.

Reserves for loans that that do not share common risk characteristics. Valley measures specific reserves for individual loans that do not share common risk characteristics with other loans, consisting of collateral dependent, TDR, and expected TDR loans, based on the amount of lifetime expected credit losses calculated on those loans and charge-offs of those amounts determined to be uncollectible. Factors considered by Valley in measuring the extent of expected credit loss include payment status, collateral value, borrower financial condition, guarantor support and the probability of collecting scheduled principal and interest payments when due. If repayment is based upon future expected cash flows, the present value of the expected future cash flows discounted at the loan’s original effective interest rate is compared to the carrying value of the loan, and any shortfall is recorded as the allowance for credit losses. The effective interest rate used to discount expected cash flows is adjusted to incorporate expected prepayments, if applicable.

When Valley determines that foreclosure is probable, collateral dependent loan balances are written down to the estimated current fair value (less estimated selling costs) of each loan’s underlying collateral resulting in an immediate charge-off to the allowance, excluding any consideration for personal guarantees that may be pursued in

the Bank’s collection process. Valley elected a practical expedient to use the estimated current fair value (less estimated selling costs) of the collateral to measure expected credit losses on collateral dependent loans when foreclosure is not probable.Allowance for Unfunded Credit CommitmentsThe allowance for unfunded credit commitments generally consists of undisbursed non-cancellable lines of credit, new loan commitments and commercial letters of credit valued using a similar methodology as used for loans. Management's estimate of expected losses inherent in these off-balance sheet credit exposures also incorporates estimated usage factors over the commitment's contractual period or an expected pull-through rate for new loan commitments. The allowance for unfunded credit commitments totaling $10.3 million at September 30, 2020 is included in accrued expenses and other liabilities on the consolidated statements of financial condition.

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table shows the calculation of both basic and diluted earnings per common share for the three and nine months ended September 30, 2020 and 2019:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands, except for share data)
Net income available to common shareholders	$	99,202	$	78,719	$	275,727	$	262,173
Basic weighted average number of common shares outstanding	403,833,469		331,797,982		403,714,701		331,716,652
Plus: Common stock equivalents	955,057		1,607,214		1,197,425		1,322,784
Diluted weighted average number of common shares outstanding	404,788,526		333,405,196		404,912,126		333,039,436
Earnings per common share:
Basic	$	0.25	$	0.24	$	0.68	$	0.79
Diluted	0.25		0.24		0.68		0.79

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Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Loss

The following table presents the after-tax changes in the balances of each component of accumulated other comprehensive loss for the three and nine months ended September 30, 2020: 

	Components of Accumulated Other Comprehensive Loss						Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities		Unrealized Gains and Losses on Derivatives		Defined Benefit Pension Plan
	(in thousands)
Balance at June 30, 2020	$	34,961	$	(5,936)	$	(33,963)	$	(4,938)
Other comprehensive (loss) income before reclassification	(1,262)		83		—		(1,179)
Amounts reclassified from other comprehensive income	36		1,127		171		1,334
Other comprehensive (loss) income, net	(1,226)		1,210		171		155
Balance at September 30, 2020	$	33,735	$	(4,726)	$	(33,792)	$	(4,783)

	Components of Accumulated Other Comprehensive Loss						Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities		Unrealized Gains and Losses on Derivatives		Defined Benefit Pension Plan
	(in thousands)
Balance at December 31, 2019	$	5,822	$	(3,729)	$	(34,307)	$	(32,214)
Other comprehensive income (loss) before reclassification	27,819		(2,254)		—		25,565
Amounts reclassified from other comprehensive income	94		1,257		515		1,866
Other comprehensive income (loss), net	27,913		(997)		515		27,431
Balance at September 30, 2020	$	33,735	$	(4,726)	$	(33,792)	$	(4,783)

Reclassification from Each Component of Accumulated Other Comprehensive Loss

The following table presents amounts reclassified from each component of accumulated other comprehensive loss on a gross and net of tax basis for the three and nine months ended September 30, 2020 and 2019:

	Amounts Reclassified from Accumulated Other Comprehensive Loss
	Three Months Ended September 30,				Nine Months Ended September 30,
Components of Accumulated Other Comprehensive Loss	2020		2019		2020		2019		Income Statement Line Item
	(in thousands)
Unrealized losses on AFS securities before tax	$	(46)	$	(93)	$	(127)	$	(114)	Losses on securities transactions, net
Tax effect	10		21		33		24
Total net of tax	(36)		(72)		(94)		(90)
Unrealized losses on derivatives (cash flow hedges) before tax	(1,586)		(453)		(1,763)		(1,126)		Interest expense
Tax effect	459		129		506		320
Total net of tax	(1,127)		(324)		(1,257)		(806)
Defined benefit pension plan:
Amortization of actuarial net loss	(234)		(79)		(699)		(235)		*
Tax effect	63		23		184		69
Total net of tax	(171)		(56)		(515)		(166)
Total reclassifications, net of tax	$	(1,334)	$	(452)	$	(1,866)	$	(1,062)

* Amortization of net loss is included in the computation of net periodic pension cost recognized within other non-interest expense.

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Fair Value Measurement of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring and Non-Recurring Basis

The following tables present the assets and liabilities that are measured at fair value on a recurring and nonrecurring basis by level within the fair value hierarchy as reported on the consolidated statements of financial condition at September 30, 2020 and December 31, 2019. The assets presented under “nonrecurring fair value measurements” in the tables below are not measured at fair value on an ongoing basis but are subject to fair value adjustments under certain circumstances (e.g., when an impairment loss is recognized). 

	September 30, 2020		Fair Value Measurements at Reporting Date Using:
			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Equity securities (1)	$	26,527	$	19,136	$	—	$	—
Available for sale:
U.S. Treasury securities	51,578		51,578		—		—
U.S. government agency securities	26,448		—		26,448		—
Obligations of states and political subdivisions	134,193		—		133,410		783
Residential mortgage-backed securities	1,233,436		—		1,233,436		—
Corporate and other debt securities	80,909		—		80,909		—
Total available for sale debt securities	1,526,564		51,578		1,474,203		783
Loans held for sale (2)	209,250		—		209,250		—
Other assets (3)	455,565		—		455,565		—
Total assets	$	2,217,906	$	70,714	$	2,139,018	$	783
Liabilities
Other liabilities (3)	$	190,049	$	—	$	190,049	$	—
Total liabilities	$	190,049	$	—	$	190,049	$	—
Non-recurring fair value measurements:
Collateral dependent loans	$	35,907	$	—	$	—	$	35,907
Loan servicing rights	14,000		—		—		14,000
Foreclosed assets	7,747		—		—		7,747
Total	$	57,654	$	—	$	—	$	57,654

			Fair Value Measurements at Reporting Date Using:
	December 31, 2019		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Equity securities at fair value	$	41,410	$	41,410	$	—	$	—
Available for sale:
U.S. Treasury securities	50,943		50,943		—		—
U.S. government agency securities	29,243		—		29,243		—
Obligations of states and political subdivisions	170,051		—		169,371		680
Residential mortgage-backed securities	1,254,786		—		1,254,786		—
Trust preferred securities	—		—		—		—
Corporate and other debt securities	61,778		—		61,778		—
Total available for sale	1,566,801		50,943		1,515,178		680
Trading securities	—		—		—		—
Loans held for sale (2)	76,113		—		76,113		—
Other assets (3)	158,532		—		158,532		—
Total assets	$	1,842,856	$	92,353	$	1,749,823	$	680
Liabilities
Other liabilities (3)	$	43,926	$	—	$	43,926	$	—
Total liabilities	$	43,926	$	—	$	43,926	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans	$	39,075	$	—	$	—	$	39,075
Loan servicing rights	1,591		—		—		1,591
Foreclosed assets	10,807		—		—		10,807
Total	$	51,473	$	—	$	—	$	51,473

(1)Includes equity securities measured at net asset value (NAV) per share (or its equivalent) as a practical expedient totaling $7.4 million at September 30, 2020. These securities have not been classified in the fair value hierarchy.

(2)Represents residential mortgage loans originated for sale that are carried at fair value and had contractual unpaid principal balances totaling approximately $199.4 million and $74.5 million at September 30, 2020 and December 31, 2019, respectively.

(3)Derivative financial instruments are included in this category.

Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments not measured and not reported at fair value on the consolidated statements of financial condition at September 30, 2020 and December 31, 2019 were as follows: 

	Fair Value Hierarchy	September 30, 2020				December 31, 2019
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(in thousands)
Financial assets
Cash and due from banks	Level 1	$	276,120	$	276,120	$	256,264	$	256,264
Interest bearing deposits with banks	Level 1	654,591		654,591		178,423		178,423
Equity securities (1)	Level 3	2,499		2,499		—		—
Investment securities held to maturity:
U.S. Treasury securities	Level 1	138,224		146,429		138,352		144,113
U.S. government agency securities	Level 2	6,302		6,634		7,345		7,362
Obligations of states and political subdivisions	Level 2	464,051		479,824		500,705		513,607
Residential mortgage-backed securities	Level 2	1,491,808		1,528,703		1,620,119		1,629,572
Trust preferred securities	Level 2	37,341		30,000		37,324		31,382
Corporate and other debt securities	Level 2	32,750		33,381		32,250		32,684
Total investment securities held to maturity (2)		2,170,476		2,224,971		2,336,095		2,358,720
Net loans	Level 3	32,090,554		31,883,095		29,537,449		28,964,396
Accrued interest receivable	Level 1	136,058		136,058		105,637		105,637
Federal Reserve Bank and Federal Home Loan Bank stock (3)	Level 2	287,628		287,628		214,421		214,421
Financial liabilities
Deposits without stated maturities	Level 1	23,650,401		23,650,401		19,467,892		19,467,892
Deposits with stated maturities	Level 2	7,537,581		7,466,794		9,717,945		9,747,867
Short-term borrowings	Level 2	1,430,726		1,544,596		1,093,280		1,081,879
Long-term borrowings	Level 2	2,852,569		3,115,757		2,122,426		2,181,401
Junior subordinated debentures issued to capital trusts	Level 2	55,978		44,771		55,718		53,889
Accrued interest payable (4)	Level 1	21,756		21,756		33,066		33,066

(1)Represents equity securities without a readily determinable fair value measured at cost less impairment, if any.

(2)The carrying amount is presented gross without the allowance for credit losses.

(3)Included in other assets.

(4)Included in accrued expenses and other liabilities.

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Investment Securities (Tables)

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Debt Securities Available for Sale

The amortized cost, gross unrealized gains and losses and fair value of available for sale debt securities at September 30, 2020 and December 31, 2019 were as follows: 

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
September 30, 2020
U.S. Treasury securities	$	50,035	$	1,543	$	—	$	51,578
U.S. government agency securities	25,302		1,164		(18)		26,448
Obligations of states and political subdivisions:
Obligations of states and state agencies	58,807		1,151		(30)		59,928
Municipal bonds	73,063		1,276		(74)		74,265
Total obligations of states and political subdivisions	131,870		2,427		(104)		134,193
Residential mortgage-backed securities	1,193,052		41,326		(942)		1,233,436
Corporate and other debt securities	79,707		1,539		(337)		80,909
Total investment securities available for sale	$	1,479,966	$	47,999	$	(1,401)	$	1,526,564
December 31, 2019
U.S. Treasury securities	$	50,952	$	12	$	(21)	$	50,943
U.S. government agency securities	28,982		280		(19)		29,243
Obligations of states and political subdivisions:
Obligations of states and state agencies	78,116		540		(83)		78,573
Municipal bonds	90,662		902		(86)		91,478
Total obligations of states and political subdivisions	168,778		1,442		(169)		170,051
Residential mortgage-backed securities	1,248,814		11,234		(5,262)		1,254,786
Corporate and other debt securities	61,261		628		(111)		61,778
Total investment securities available for sale	$	1,558,787	$	13,596	$	(5,582)	$	1,566,801

Age of Unrealized Losses and Fair Value of Related Debt Securities Available for Sale

The age of unrealized losses and fair value of related securities available for sale at September 30, 2020 and December 31, 2019 were as follows: 

	Less than Twelve Months				More than Twelve Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
September 30, 2020
U.S. government agency securities	$	—	$	—	$	1,585	$	(18)	$	1,585	$	(18)
Obligations of states and political subdivisions:
Obligations of states and state agencies	1,319		(6)		1,023		(24)		2,342		(30)
Municipal bonds	6,767		(74)		—		—		6,767		(74)
Total obligations of states and political subdivisions	8,086		(80)		1,023		(24)		9,109		(104)
Residential mortgage-backed securities	111,973		(526)		33,346		(416)		145,319		(942)
Corporate and other debt securities	14,656		(337)		—		—		14,656		(337)
Total	$	134,715	$	(943)	$	35,954	$	(458)	$	170,669	$	(1,401)
December 31, 2019
U.S. Treasury securities	$	25,019	$	(21)	$	—	$	—	$	25,019	$	(21)
U.S. government agency securities	—		—		1,783		(19)		1,783		(19)
Obligations of states and political subdivisions:
Obligations of states and state agencies	18,540		(21)		8,755		(62)		27,295		(83)
Municipal bonds	—		—		13,177		(86)		13,177		(86)
Total obligations of states and political subdivisions	18,540		(21)		21,932		(148)		40,472		(169)
Residential mortgage-backed securities	240,412		(1,194)		282,798		(4,068)		523,210		(5,262)
Corporate and other debt securities	5,139		(111)		—		—		5,139		(111)
Total	$	289,110	$	(1,347)	$	306,513	$	(4,235)	$	595,623	$	(5,582)

Contractual Maturities of Debt Securities Available for Sale

The contractual maturities of available for sale debt securities at September 30, 2020 are set forth in the following table. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties. Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary.

	September 30, 2020
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	20,975	$	20,991
Due after one year through five years	92,873		95,436
Due after five years through ten years	107,004		108,746
Due after ten years	66,062		67,955
Residential mortgage-backed securities	1,193,052		1,233,436
Total investment securities available for sale	$	1,479,966	$	1,526,564

Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Debt Securities Held to Maturity

The amortized cost, gross unrealized gains and losses and fair value of debt securities held to maturity at September 30, 2020 and December 31, 2019 were as follows: 

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
September 30, 2020
U.S. Treasury securities	$	138,224	$	8,205	$	—	$	146,429
U.S. government agency securities	6,302		332		—		6,634
Obligations of states and political subdivisions:
Obligations of states and state agencies	271,038		9,040		(176)		279,902
Municipal bonds	193,013		6,909		—		199,922
Total obligations of states and political subdivisions	464,051		15,949		(176)		479,824
Residential mortgage-backed securities	1,491,808		37,819		(924)		1,528,703
Trust preferred securities	37,341		52		(7,393)		30,000
Corporate and other debt securities	32,750		637		(6)		33,381
Total investment securities held to maturity	$	2,170,476	$	62,994	$	(8,499)	$	2,224,971
December 31, 2019
U.S. Treasury securities	$	138,352	$	5,761	$	—	$	144,113
U.S. government agency securities	7,345		58		(41)		7,362
Obligations of states and political subdivisions:
Obligations of states and state agencies	297,454		7,745		(529)		304,670
Municipal bonds	203,251		5,696		(10)		208,937
Total obligations of states and political subdivisions	500,705		13,441		(539)		513,607
Residential mortgage-backed securities	1,620,119		14,803		(5,350)		1,629,572
Trust preferred securities	37,324		39		(5,981)		31,382
Corporate and other debt securities	32,250		454		(20)		32,684
Total investment securities held to maturity	$	2,336,095	$	34,556	$	(11,931)	$	2,358,720

Age of Unrealized Losses and Fair Value of Related Debt Securities Held to Maturity

The age of unrealized losses and fair value of related debt securities held to maturity at September 30, 2020 and December 31, 2019 were as follows: 

	Less than Twelve Months				More than Twelve Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
September 30, 2020
Obligations of states and political subdivisions:
Obligations of states and state agencies	$	5,493	$	(176)	$	—	$	—	$	5,493	$	(176)
Total obligations of states and political subdivisions	5,493		(176)		—		—		5,493		(176)
Residential mortgage-backed securities	237,070		(919)		2,677		(5)		239,747		(924)
Trust preferred securities	—		—		28,595		(7,393)		28,595		(7,393)
Corporate and other debt securities	7,494		(6)		—		—		7,494		(6)
Total	$	250,057	$	(1,101)	$	31,272	$	(7,398)	$	281,329	$	(8,499)
December 31, 2019
U.S. government agency securities	$	5,183	$	(41)	$	—	$	—	$	5,183	$	(41)
Obligations of states and political subdivisions:
Obligations of states and state agencies	11,178		(55)		32,397		(474)		43,575		(529)
Municipal bonds	—		—		798		(10)		798		(10)
Total obligations of states and political subdivisions	11,178		(55)		33,195		(484)		44,373		(539)
Residential mortgage-backed securities	307,885		(1,387)		254,915		(3,963)		562,800		(5,350)
Trust preferred securities	—		—		29,990		(5,981)		29,990		(5,981)
Corporate and other debt securities	—		—		4,980		(20)		4,980		(20)
Total	$	324,246	$	(1,483)	$	323,080	$	(10,448)	$	647,326	$	(11,931)

Contractual Maturities of Debt Securities Held to Maturity

The contractual maturities of investments in debt securities held to maturity at September 30, 2020 are set forth in the table below. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties. Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary.  

	September 30, 2020
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	113,188	$	113,628
Due after one year through five years	201,101		213,801
Due after five years through ten years	162,911		168,821
Due after ten years	201,468		200,018
Residential mortgage-backed securities	1,491,808		1,528,703
Total investment securities held to maturity	$	2,170,476	$	2,224,971

Amortized Cost of Debt Securities Held to Maturity by External Credit Rating

The following table summarizes the amortized cost of held to maturity debt securities by external credit rating at September 30, 2020 and December 31, 2019.

	AAA/AA/A Rated		BBB rated		Non-investment grade rated		Non-rated		Total
	(in thousands)
September 30, 2020
U.S. Treasury securities	$	138,224	$	—	$	—	$	—	$	138,224
U.S. government agency securities	6,302		—		—		—		6,302
Obligations of states and political subdivisions:
Obligations of states and state agencies	233,581		—		5,669		31,788		271,038
Municipal bonds	171,766		—		—		21,247		193,013
Total obligations of states and political subdivisions	405,347		—		5,669		53,035		464,051
Residential mortgage-backed securities	1,491,808		—		—		—		1,491,808
Trust preferred securities	—		—		—		37,341		37,341
Corporate and other debt securities	—		5,000		—		27,750		32,750
Total investment securities held to maturity	$	2,041,681	$	5,000	$	5,669	$	118,126	$	2,170,476
December 31, 2019
U.S. Treasury securities	$	138,352	$	—	$	—	$	—	$	138,352
U.S. government agency securities	7,345		—		—		—		7,345
Obligations of states and political subdivisions:
Obligations of states and state agencies	248,533		5,722		—		43,199		297,454
Municipal bonds	202,642		—		—		609		203,251
Total obligations of states and political subdivisions	451,175		5,722		—		43,808		500,705
Residential mortgage-backed securities	1,620,119		—		—		—		1,620,119
Trust preferred securities	—		—		—		37,324		37,324
Corporate and other debt securities	—		5,000		—		27,250		32,250
Total investment securities held to maturity	$	2,216,991	$	10,722	$	—	$	108,382	$	2,336,095

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Loans and Allowance for Credit Losses for Loans (Tables)

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Schedule of Loan Portfolio

The detail of the loan portfolio as of September 30, 2020 and December 31, 2019 was as follows: 

	September 30, 2020		December 31, 2019
	(in thousands)
Loans:
Commercial and industrial *	$	6,903,345	$	4,825,997
Commercial real estate:
Commercial real estate	16,815,587		15,996,741
Construction	1,720,775		1,647,018
Total commercial real estate loans	18,536,362		17,643,759
Residential mortgage	4,284,595		4,377,111
Consumer:
Home equity	457,083		487,272
Automobile	1,341,659		1,451,623
Other consumer	892,542		913,446
Total consumer loans	2,691,284		2,852,341
Total loans	$	32,415,586	$	29,699,208

*Includes $2.3 billion of loans originated under the Paycheck Protection Program (PPP), net of unearned fees totaling $54.4 million at September 30, 2020.

Past Due, Non-Accrual and Current Loans by Loan Portfolio Class

The following table presents past due, current and non-accrual loans without an allowance for credit losses by loan portfolio class (including PCD loans) at September 30, 2020.

	Past Due and Non-Accrual Loans
	30-59  Days  Past Due Loans		60-89  Days  Past Due Loans		90 Days or More Past Due Loans		Non-Accrual Loans		Total Past Due Loans		Current Loans		Total Loans		Non-Accrual Loans Without Allowance for Credit Losses
	(in thousands)
September 30, 2020
Commercial and industrial	$	6,587	$	3,954	$	6,759	$	115,667	$	132,967	$	6,770,378	$	6,903,345	$	16,812
Commercial real estate:
Commercial real estate	26,038		610		1,538		41,627		69,813		16,745,774		16,815,587		35,798
Construction	142		—		—		2,497		2,639		1,718,136		1,720,775		2,405
Total commercial real estate loans	26,180		610		1,538		44,124		72,452		18,463,910		18,536,362		38,203
Residential mortgage	22,528		3,760		891		23,877		51,056		4,233,539		4,284,595		12,356
Consumer loans:
Home equity	1,281		299		—		6,969		8,549		448,534		457,083		70
Automobile	4,797		808		538		472		6,615		1,335,044		1,341,659		—
Other consumer	2,901		245		215		—		3,361		889,181		892,542		—
Total consumer loans	8,979		1,352		753		7,441		18,525		2,672,759		2,691,284		70
Total	$	64,274	$	9,676	$	9,941	$	191,109	$	275,000	$	32,140,586	$	32,415,586	$	67,441

The following table presents past due, non-accrual and current loans by loan portfolio class at December 31, 2019. At December 31, 2019, purchased credit-impaired (PCI) loans were excluded from past due and non-accrual loans reported because they continued to earn interest income from the accretable yield at the pool level. The PCI loan pools are accounted for as PCD loans (on a loan level basis with a related allowance for credit losses) under the CECL standard adopted at January 1, 2020 and reported in the past due loans and non-accrual loans in the tables above at September 30, 2020.

	Past Due and Non-Accrual Loans
	30-59 Days Past Due Loans		60-89  Days Past Due Loans		90 Days or More Past Due Loans		Non-Accrual Loans		Total Past Due Loans		Current Non-PCI Loans		PCI Loans
	(in thousands)
December 31, 2019
Commercial and industrial	$	11,700	$	2,227	$	3,986	$	68,636	$	86,549	$	4,057,434	$	682,014
Commercial real estate:
Commercial real estate	2,560		4,026		579		9,004		16,169		10,886,724		5,093,848
Construction	1,486		1,343		—		356		3,185		1,492,532		151,301
Total commercial real estate loans	4,046		5,369		579		9,360		19,354		12,379,256		5,245,149
Residential mortgage	17,143		4,192		2,042		12,858		36,235		3,760,707		580,169
Consumer loans:
Home equity	1,051		80		—		1,646		2,777		373,243		111,252
Automobile	11,482		1,581		681		334		14,078		1,437,274		271
Other consumer	1,171		866		30		224		2,291		900,411		10,744
Total consumer loans	13,704		2,527		711		2,204		19,146		2,710,928		122,267
Total	$	46,593	$	14,315	$	7,318	$	93,058	$	161,284	$	22,908,325	$	6,629,599

Risk Category of Loans

The following table presents the internal loan classification risk by loan portfolio class by origination year (including PCD loans) based on the most recent analysis performed at September 30, 2020:

	Term Loans
	Amortized Cost Basis by Origination Year
September 30, 2020	2020		2019		2018		2017		2016		Prior to 2016		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Commercial and industrial
Risk Rating:
Pass	$	2,656,655	$	609,142	$	523,833	$	246,684	$	185,298	$	804,896	$	1,613,011	$	417	$	6,639,936
Special Mention	724		10,634		11,786		10,236		11,310		14,895		44,412		68		104,065
Substandard	5,411		3,181		2,780		1,789		4,095		26,720		18,092		24		62,092
Doubtful	—		5,207		7		17,162		2,632		72,244		—		—		97,252
Total commercial and industrial	$	2,662,790	$	628,164	$	538,406	$	275,871	$	203,335	$	918,755	$	1,675,515	$	509	$	6,903,345
Commercial real estate
Risk Rating:
Pass	$	2,456,797	$	3,236,056	$	2,360,488	$	1,993,600	$	1,929,677	$	4,281,267	$	189,008	$	15,626	$	16,462,519
Special Mention	23,864		—		26,028		7,197		42,882		86,098		3,481		—		189,550
Substandard	17,539		9,450		24,168		22,014		10,329		78,322		—		—		161,822
Doubtful	—		—		—		787		—		909		—		—		1,696
Total commercial real estate	$	2,498,200	$	3,245,506	$	2,410,684	$	2,023,598	$	1,982,888	$	4,446,596	$	192,489	$	15,626	$	16,815,587
Construction
Risk Rating:
Pass	$	105,422	$	157,407	$	123,416	$	16,196	$	47,202	$	60,663	$	1,162,297	$	—	$	1,672,603
Special Mention	—		—		—		—		10,058		—		32,407		—		42,465
Substandard	—		31		246		2,628		2,422		380		—		—		5,707
Total construction	$	105,422	$	157,438	$	123,662	$	18,824	$	59,682	$	61,043	$	1,194,704	$	—	$	1,720,775

The following table presents the amortized cost in those loan classes (including PCD loans) based on payment activity by origination year as of September 30, 2020.

	Term Loans
	Amortized Cost Basis by Origination Year
September 30, 2020	2020		2019		2018		2017		2016		Prior to 2016		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Residential mortgage
Performing	$	560,875	$	807,219	$	778,367	$	645,289	$	407,412	$	1,019,903	$	52,783	$	—	$	4,271,848
90 days or more past due	—		1,459		2,947		2,849		3,895		1,597		—		—		12,747
Total residential mortgage	$	560,875	$	808,678	$	781,314	$	648,138	$	411,307	$	1,021,500	$	52,783	$	—	$	4,284,595
Consumer loans
Home equity
Performing	$	6,436	$	12,015	$	13,310	$	10,178	$	6,505	$	17,626	$	336,434	$	52,986	$	455,490
90 days or more past due	—		—		—		—		25		111		617		840		1,593
Total home equity	6,436		12,015		13,310		10,178		6,530		17,737		337,051		53,826		457,083
Automobile
Performing	292,584		479,860		303,799		175,359		62,193		26,843		—		—		1,340,638
90 days or more past due	40		304		270		246		16		145		—		—		1,021
Total automobile	292,624		480,164		304,069		175,605		62,209		26,988		—		—		1,341,659
Other Consumer
Performing	5,061		5,751		11,529		1,254		1,093		6,387		860,895		—		891,970
90 days or more past due	—		—		8		—		—		20		136		408		572
Total other consumer	5,061		5,751		11,537		1,254		1,093		6,407		861,031		408		892,542
Total Consumer	$	304,121	$	497,930	$	328,916	$	187,037	$	69,832	$	51,132	$	1,198,082	$	54,234	$	2,691,284

The following table presents the credit exposure by internally assigned risk rating by class of loans (excluding PCI loans) based on the most recent analysis performed at December 31, 2019: 

Credit exposure— by internally assigned risk rating			Special						Total Non-PCI
	Pass		Mention		Substandard		Doubtful		Loans
	(in thousands)
December 31, 2019
Commercial and industrial	$	3,982,453	$	33,718	$	66,511	$	61,301	$	4,143,983
Commercial real estate	10,781,587		77,884		42,560		862		10,902,893
Construction	1,487,877		7,486		354		—		1,495,717
Total	$	16,251,917	$	119,088	$	109,425	$	62,163	$	16,542,593

Schedule Of Recorded Investment In Loan Classes Based On Payment Activity

The following table presents the recorded investment in those loan classes based on payment activity as of December 31, 2019:

Credit exposure— by payment activity	Performing Loans		Non-Performing Loans		Total Non-PCI Loans
	(in thousands)
December 31, 2019
Residential mortgage	$	3,784,084	$	12,858	$	3,796,942
Home equity	374,374		1,646		376,020
Automobile	1,451,018		334		1,451,352
Other consumer	902,478		224		902,702
Total	$	6,511,954	$	15,062	$	6,527,016

The following table summarizes information pertaining to loans that were identified as PCI loans by class based on individual loan payment activity as of December 31, 2019:  

Credit exposure— by payment activity	Performing Loans		Non-Performing Loans		Total Non-PCI Loans
	(in thousands)
December 31, 2019
Commercial and industrial	$	653,997	$	28,017	$	682,014
Commercial real estate	5,065,388		28,460		5,093,848
Construction	148,692		2,609		151,301
Residential mortgage	571,006		9,163		580,169
Consumer	120,356		1,911		122,267
Total	$	6,559,439	$	70,160	$	6,629,599

Pre-Modification and Post-Modification Outstanding Recorded Investments and Non-PCI Loans that Subsequently Defaulted

The following table presents the pre- and post-modification amortized cost of loans by loan class modified as TDRs (excluding PCI loans prior to the adoption of ASU 2016-13) during the three and nine months ended September 30, 2020 and 2019. Post-modification amounts are presented as of September 30, 2020 and 2019.

	Three Months Ended September 30,
	2020					2019
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Amortized Carrying Amount		Post-Modification Amortized Carrying Amount		Number of Contracts	Pre-Modification Amortized Carrying Amount		Post-Modification Amortized Carrying Amount
	($ in thousands)
Commercial and industrial	28	$	31,237	$	30,938	53	$	42,902	$	41,772
Commercial real estate	2	4,249		4,240		1	75		75
Residential mortgage	1	247		247		—	—		—
Consumer	1	72		72		1	19		19
Total	32	$	35,805	$	35,497	55	$	42,996	$	41,866

	Nine Months Ended September 30,
	2020					2019
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Amortized Carrying Amount		Post-Modification Amortized Carrying Amount		Number of Contracts	Pre-Modification Amortized Carrying Amount		Post-Modification Amortized Carrying Amount
	($ in thousands)
Commercial and industrial	33	$	40,537	$	38,204	104	$	78,601	$	72,183
Commercial real estate	4	8,996		9,000		3	4,740		4,699
Residential mortgage	1	247		247		1	155		154
Consumer	1	72		72		1	19		19
Total	39	$	49,852	$	47,523	109	$	83,515	$	77,055

Loans modified as TDRs (excluding PCI loan modifications prior to the adoption of ASU 2016-13) within the previous 12 months and for which there was a payment default (90 or more days past due) for the three and nine months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,
	2020			2019
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Amortized Cost		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial and industrial	30	$	17,496	1	$	604
Residential mortgage	—	—		1	154
Total	30	$	17,496	2	$	758

	Nine Months Ended September 30,
	2020			2019
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Amortized Cost		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial and industrial	35	$	20,099	19	$	12,235
Commercial real estate	—	—		1	283
Residential mortgage	—	—		3	369
Consumer	1	18		1	18
Total	36	$	20,117	24	$	12,905

Summary of Allowance for Credit Losses

The following table summarizes the allowance for credit losses for loans at September 30, 2020 and December 31, 2019: 

	September 30, 2020		December 31, 2019
	(in thousands)
Components of allowance for credit losses for loans:
Allowance for loan losses	$	325,032	$	161,759
Allowance for unfunded credit commitments	10,296		2,845
Total allowance for credit losses for loans	$	335,328	$	164,604

Summary of Provision for Credit Losses

The following table summarizes the provision for credit losses for loans for the periods indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Components of provision for credit losses for loans:
Provision for loan losses	$	30,833	$	8,757	$	105,709	$	20,319
Provision for unfunded credit commitments	187		(57)		350		(1,519)
Total provision for credit losses for loans	$	31,020	$	8,700	$	106,059	$	18,800

Summary of Collateral Dependent Loans

The following table presents collateral dependent loans by class as of September 30, 2020:

	September 30, 2020
	(in thousands)
Commercial and industrial	$	115,877
Commercial real estate:
Commercial real estate	44,638
Construction	2,405
Total commercial real estate loans	47,043
Residential mortgage	28,856
Home equity	88
Total	$	191,864

Summary of Activity in Allowance for Loan Losses

The following table details the activity in the allowance for loan losses by loan portfolio segment for the three and nine months ended September 30, 2020 and 2019: 

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
Three Months Ended September 30, 2020
Allowance for loan losses:
Beginning balance	$	132,039	$	131,702	$	29,630	$	16,243	$	309,614
Loans charged-off	(13,965)		(695)		(7)		(2,458)		(17,125)
Charged-off loans recovered	428		100		31		1,151		1,710
Net (charge-offs) recoveries	(13,537)		(595)		24		(1,307)		(15,415)
Provision for loan losses	11,907		13,543		(1,040)		6,423		30,833
Ending balance	$	130,409	$	144,650	$	28,614	$	21,359	$	325,032
Three Months Ended September 30, 2019
Allowance for losses:
Beginning balance	$	94,384	$	48,978	$	5,219	$	6,524	$	155,105
Loans charged-off	(527)		(158)		(111)		(2,191)		(2,987)
Charged-off loans recovered	330		28		3		617		978
Net charge-offs	(197)		(130)		(108)		(1,574)		(2,009)
Provision for loan losses	6,815		(77)		191		1,828		8,757
Ending balance	$	101,002	$	48,771	$	5,302	$	6,778	$	161,853

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
Nine Months Ended September 30, 2020
Allowance for loan losses:
Beginning balance	$	104,059	$	45,673	$	5,060	$	6,967	$	161,759
Impact of ASU 2016-13 adoption*	15,169		49,797		20,575		6,990		92,531
Loans charged-off	(31,349)		(766)		(348)		(7,624)		(40,087)
Charged-off loans recovered	1,796		244		626		2,454		5,120
Net (charge-offs) recoveries	(29,553)		(522)		278		(5,170)		(34,967)
Provision for loan losses	40,734		49,702		2,701		12,572		105,709
Ending balance	$	130,409	$	144,650	$	28,614	$	21,359	$	325,032
Nine Months Ended September 30, 2019
Allowance for losses:
Beginning balance	$	90,956	$	49,650	$	5,041	$	6,212	$	151,859
Loans charged-off	(7,882)		(158)		(126)		(5,971)		(14,137)
Charged-off loans recovered	2,008		71		13		1,720		3,812
Net charge-offs	(5,874)		(87)		(113)		(4,251)		(10,325)
Provision for loan losses	15,920		(792)		374		4,817		20,319
Ending balance	$	101,002	$	48,771	$	5,302	$	6,778	$	161,853

*    Includes a $61.6 million increase representing the estimated expected credit losses for PCD loans as a result of the adoption of CECL on January 1, 2020.

Summary of Allocation of Allowance for Loan Losses and Related Loans by Loan Portfolio Segment Disaggregated Based on Allowance Measurement Methodology

The following table represents the allocation of the allowance for loan losses and the related loans by loan portfolio segment disaggregated based on the allowance measurement methodology at September 30, 2020 and December 31, 2019.

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
September 30, 2020
Allowance for loan losses:
Individually evaluated for credit losses	$	66,444	$	2,058	$	830	$	1,232	$	70,564
Collectively evaluated for credit losses	63,965		142,592		27,784		20,127		254,468
Total	$	130,409	$	144,650	$	28,614	$	21,359	$	325,032
Loans:
Individually evaluated for credit losses	$	136,696	$	70,145	$	35,551	$	4,019	$	246,411
Collectively evaluated for credit losses	6,766,649		18,466,217		4,249,044		2,687,265		32,169,175
Total	$	6,903,345	$	18,536,362	$	4,284,595	$	2,691,284	$	32,415,586
December 31, 2019
Allowance for loan losses:
Individually evaluated for credit losses	$	36,662	$	1,338	$	518	$	58	$	38,576
Collectively evaluated for credit losses	67,397		44,335		4,542		6,909		123,183
Total	$	104,059	$	45,673	$	5,060	$	6,967	$	161,759
Loans:
Individually evaluated for credit losses	$	100,860	$	51,242	$	10,689	$	853	$	163,644
Collectively evaluated for credit losses	4,043,123		12,347,368		3,786,253		2,729,221		22,905,965
Loans acquired with discounts related to credit quality	682,014		5,245,149		580,169		122,267		6,629,599
Total	$	4,825,997	$	17,643,759	$	4,377,111	$	2,852,341	$	29,699,208

Schedule of Impaired Loans by Portfolio Class

The following table presents information about impaired loans by loan portfolio class at December 31, 2019:

	Recorded Investment With No Related Allowance		Recorded Investment With Related Allowance		Total Recorded Investment		Unpaid Contractual Principal Balance		Related Allowance
	(in thousands)
December 31, 2019
Commercial and industrial	$	14,617	$	86,243	$	100,860	$	114,875	$	36,662
Commercial real estate:
Commercial real estate	26,046		24,842		50,888		51,258		1,338
Construction	354		—		354		354		—
Total commercial real estate loans	26,400		24,842		51,242		51,612		1,338
Residential mortgage	5,836		4,853		10,689		11,800		518
Consumer loans:
Home equity	366		487		853		956		58
Total consumer loans	366		487		853		956		58
Total	$	47,219	$	116,425	$	163,644	$	179,243	$	38,576

Schedule Of Accretable Yield For PCI Loans

The table below includes disclosure requirements prior to the adoption of ASU No. 2016-13 on January 1, 2020, and presents the changes in the accretable yield for PCI loans during the three and nine months ended September 30, 2019:

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	(in thousands)
Balance, beginning of period	$	853,887	$	875,958
Accretion	(47,475)		(155,981)
Net (decrease) increase in expected cash flows	(58,268)		28,167
Balance, end of period	$	748,144	$	748,144

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The changes in the carrying amount of goodwill as allocated to Valley's business segments, or reporting units thereof, for goodwill impairment analysis were:

	Business Segment / Reporting Unit*
	Wealth Management		Consumer Lending		Commercial Lending		Investment Management		Total
	(in thousands)
Balance at December 31, 2019	$	21,218	$	306,572	$	825,767	$	220,068	$	1,373,625
Goodwill from business combinations	—		121		1,654		9		1,784
Balance at September 30, 2020	$	21,218	$	306,693	$	827,421	$	220,077	$	1,375,409

*    Valley’s Wealth Management Division is comprised of trust, asset management and insurance services. This reporting unit is included in the Consumer Lending segment for financial reporting purposes.

Other Intangible Assets

The following table summarizes other intangible assets as of September 30, 2020 and December 31, 2019: 

	Gross Intangible Assets		Accumulated Amortization		Valuation Allowance		Net Intangible Assets
	(in thousands)
September 30, 2020
Loan servicing rights	$	100,456	$	(77,404)	$	(1,013)	$	22,039
Core deposits	101,160		(50,472)		—		50,688
Other	3,945		(2,799)		—		1,146
Total other intangible assets	$	205,561	$	(130,675)	$	(1,013)	$	73,873
December 31, 2019
Loan servicing rights	$	94,827	$	(70,095)	$	(47)	$	24,685
Core deposits	101,160		(40,384)		—		60,776
Other	3,945		(2,634)		—		1,311
Total other intangible assets	$	199,932	$	(113,113)	$	(47)	$	86,772

Estimated Future Amortization Expense

The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2020 through 2024: 

	Loan Servicing Rights		Core Deposits		Other
	(in thousands)
2020	$	1,477	$	3,275	$	55
2021	4,980		11,607		206
2022	3,789		9,876		191
2023	2,869		8,146		131
2024	2,205		6,537		117

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Borrowed Funds (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Schedule of Short-Term Borrowings

Short-term borrowings at September 30, 2020 and December 31, 2019 consisted of the following: 

	September 30, 2020		December 31, 2019
	(in thousands)
FHLB advances	$	1,275,000	$	940,000
Securities sold under agreements to repurchase	155,726		153,280
Total short-term borrowings	$	1,430,726	$	1,093,280

Schedule of Long-Term Borrowings

Long-term borrowings at September 30, 2020 and December 31, 2019 consisted of the following: 

	September 30, 2020		December 31, 2019
	(in thousands)
FHLB advances, net (1)	$	2,148,633	$	1,480,012
Subordinated debt, net (2)	403,936		292,414
Securities sold under agreements to repurchase	300,000		350,000
Total long-term borrowings	$	2,852,569	$	2,122,426

(1)	FHLB advances are presented net of unamortized prepayment penalties and other purchase accounting adjustments totaling $503 thousand and $2.8 million at September 30, 2020 and December 31, 2019, respectively.
(2)	Subordinated debt is presented net of unamortized debt issuance costs totaling $2.8 million and $1.2 million at September 30, 2020 and December 31, 2019, respectively.

Schedule of FHLB Repayment

The long-term FHLB advances at September 30, 2020 are scheduled for contractual balance repayments as follows: 

Year	Amount
	(in thousands)
2020	$	25,000
2021	994,768
2022	121,420
2023	428,163
2024	300,000
Thereafter	279,785
Total long-term FHLB advances	$	2,149,136

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Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Consolidated Statements of Financial Condition Related to Fair Value of Derivative Financial Instruments

Amounts included in the consolidated statements of financial condition related to the fair value of Valley’s derivative financial instruments were as follows: 

	September 30, 2020						December 31, 2019
	Fair Value						Fair Value
	Other Assets		Other Liabilities		Notional Amount		Other Assets		Other Liabilities		Notional Amount
	(in thousands)
Derivatives designated as hedging instruments:
Cash flow hedge interest rate swaps	$	—	$	4,233	$	1,175,000	$	—	$	1,484	$	180,000
Fair value hedge interest rate swaps	—		59		7,079		—		229		7,281
Total derivatives designated as hedging instruments	$	—	$	4,292	$	1,182,079	$	—	$	1,713	$	187,281
Derivatives not designated as hedging instruments:
Interest rate swaps and embedded derivatives	$	455,404	$	182,741	$	8,306,557	$	158,382	$	42,020	$	4,113,106
Mortgage banking derivatives	161		3,016		521,418		150		193		142,760
Total derivatives not designated as hedging instruments	$	455,565	$	185,757	$	8,827,975	$	158,532	$	42,213	$	4,255,866

(Losses) Gains Related to Interest Rate Derivatives Designated as Hedges of Cash Flows

Gains and (losses) included in the consolidated statements of income and other comprehensive income, on a pre-tax basis, related to interest rate derivatives designated as hedges of cash flows were as follows: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Amount of loss reclassified from accumulated other comprehensive loss to interest expense	$	(1,586)	$	(453)	$	(1,763)	$	(1,126)
Amount of gain (loss) recognized in other comprehensive income	95		108		3,158		(1,404)

Gains (Losses) Related to Interest Rate Derivatives Designated as Hedges of Fair Value

Gains (losses) included in the consolidated statements of income related to interest rate derivatives designated as hedges of fair value were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Derivative - interest rate swaps:
Interest income	$	88	$	48	$	170	$	121
Hedged item - loans:
Interest income	$	(88)	$	(48)	$	(170)	$	(121)

Interest Rate Derivatives Designated as Hedges

The following table presents the hedged items related to interest rate derivatives designated as hedges of fair value and the cumulative basis fair value adjustment included in the net carrying amount of the hedged items at September 30, 2020 and December 31, 2019.

Line Item in the Statement of Financial Condition in Which the Hedged Item is Included	Carrying Amount of the Hedged Asset				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset
	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
	(in thousands)
Loans	$	7,138	$	7,510	$	59	$	229

Net Gains (Losses) Related to Derivative Instruments Not Designated as Hedging Instruments

The net losses (gains) included in the consolidated statements of income related to derivative instruments not designated as hedging instruments were as follows: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Non-designated hedge interest rate swaps and credit derivatives
Other non-interest expense	$	600	$	(468)	$	2,105	$	(1,225)

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Balance Sheet Offsetting (Tables)

9 Months Ended

Sep. 30, 2020

Offsetting [Abstract]

Offsetting Assets

The table below presents information about Valley’s financial instruments eligible for offset in the consolidated statements of financial condition as of September 30, 2020 and December 31, 2019.

							Gross Amounts Not Offset
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments			Cash Collateral		Net Amount
	(in thousands)
September 30, 2020
Assets:
Interest rate swaps	$	455,404	$	—	$	455,404	$	—		$	—	$	455,404
Liabilities:
Interest rate swaps	$	187,033	$	—	$	187,033	$	—		$	(184,050)	$	2,983
Repurchase agreements	300,000		—		300,000		(300,000)		*	—		—
Total	$	487,033	$	—	$	487,033	$	(300,000)		$	(184,050)	$	2,983
December 31, 2019
Assets:
Interest rate swaps	$	158,382	$	—	$	158,382	$	(118)		$	—	$	158,264
Liabilities:
Interest rate swaps	$	43,733	$	—	$	43,733	$	(118)		$	(16,881)	$	26,734
Repurchase agreements	350,000		—		350,000		(350,000)		*	—		—
Total	$	393,733	$	—	$	393,733	$	(350,118)		$	(16,881)	$	26,734

*    Represents the fair value of non-cash pledged investment securities.

Offsetting Liabilities

The table below presents information about Valley’s financial instruments eligible for offset in the consolidated statements of financial condition as of September 30, 2020 and December 31, 2019.

							Gross Amounts Not Offset
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments			Cash Collateral		Net Amount
	(in thousands)
September 30, 2020
Assets:
Interest rate swaps	$	455,404	$	—	$	455,404	$	—		$	—	$	455,404
Liabilities:
Interest rate swaps	$	187,033	$	—	$	187,033	$	—		$	(184,050)	$	2,983
Repurchase agreements	300,000		—		300,000		(300,000)		*	—		—
Total	$	487,033	$	—	$	487,033	$	(300,000)		$	(184,050)	$	2,983
December 31, 2019
Assets:
Interest rate swaps	$	158,382	$	—	$	158,382	$	(118)		$	—	$	158,264
Liabilities:
Interest rate swaps	$	43,733	$	—	$	43,733	$	(118)		$	(16,881)	$	26,734
Repurchase agreements	350,000		—		350,000		(350,000)		*	—		—
Total	$	393,733	$	—	$	393,733	$	(350,118)		$	(16,881)	$	26,734

*    Represents the fair value of non-cash pledged investment securities.

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Tax Credit Investments (Tables)

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Affordable Housing Tax Credit Investments, Other Tax Credit Investments, and Related Unfunded Commitments

The following table presents the balances of Valley’s affordable housing tax credit investments, other tax credit investments, and related unfunded commitments at September 30, 2020 and December 31, 2019:

	September 30, 2020		December 31, 2019
	(in thousands)
Other Assets:
Affordable housing tax credit investments, net	$	21,647	$	25,049
Other tax credit investments, net	49,907		59,081
Total tax credit investments, net	$	71,554	$	84,130
Other Liabilities:
Unfunded affordable housing tax credit commitments	$	1,397	$	1,539
Unfunded other tax credit commitments	1,139		1,139
Total unfunded tax credit commitments	$	2,536	$	2,678

Affordable Housing Tax Credit Investments and Other Tax Credit Investments

The following table presents other information relating to Valley’s affordable housing tax credit investments and other tax credit investments for the three and nine months ended September 30, 2020 and 2019: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in thousands)
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits	$	1,352	$	1,666	$	3,979	$	5,087
Other tax credit investment credits and tax benefits	1,727		1,902		5,567		6,863
Total reduction in income tax expense	$	3,079	$	3,568	$	9,546	$	11,950
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses	$	642	$	530	$	1,733	$	1,796
Affordable housing tax credit investment impairment losses	585		857		1,668		2,381
Other tax credit investment losses	12		1,093		1,235		4,589
Other tax credit investment impairment losses	1,520		1,905		4,767		7,655
Total amortization of tax credit investments recorded in non-interest expense	$	2,759	$	4,385	$	9,403	$	16,421

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Business Segments (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Schedule of Financial Data for Business Segments

The following tables represent the financial data for Valley’s four business segments for the three and nine months ended September 30, 2020 and 2019:

	Three Months Ended September 30, 2020
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	7,126,157		$	25,389,107		$	5,252,446		$	—	$	37,767,710
Interest income	$	63,956		$	251,920		$	22,513		$	(1,046)	$	337,343
Interest expense	9,048			33,330			6,728			5,151		54,257
Net interest income (loss)	54,908			218,590			15,785			(6,197)		283,086
Provision for credit losses	5,383			25,637			(112)			—		30,908
Net interest income (loss) after provision for credit losses	49,525			192,953			15,897			(6,197)		252,178
Non-interest income	23,531			20,421			(1,304)			6,624		49,272
Non-interest expense	19,877			25,633			(186)			114,861		160,185
Internal expense transfer	18,614			66,390			13,713			(98,717)		—
Income (loss) before income taxes	$	34,565		$	121,351		$	1,066		$	(15,717)	$	141,265
Return on average interest earning assets (pre-tax)	1.94		%	1.91		%	0.08		%	N/A		1.50		%

	Three Months Ended September 30, 2019
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	6,858,216		$	19,278,529		$	4,357,824		$	—	$	30,494,569
Interest income	$	68,253		$	230,183		$	31,999		$	(1,174)	$	329,261
Interest expense	23,552			66,209			14,965			3,910		108,636
Net interest income (loss)	44,701			163,974			17,034			(5,084)		220,625
Provision for credit losses	2,003			6,697			—			—		8,700
Net interest income (loss) after provision for credit losses	42,698			157,277			17,034			(5,084)		211,925
Non-interest income	15,108			15,057			2,687			8,298		41,150
Non-interest expense	19,748			25,161			381			100,587		145,877
Internal expense transfer	19,758			55,544			12,559			(87,861)		—
Income (loss) before income taxes	$	18,300		$	91,629		$	6,781		$	(9,512)	$	107,198
Return on average interest earning assets (pre-tax)	1.07		%	1.90		%	0.62		%	N/A		1.41		%

	Nine Months Ended September 30, 2020
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	7,187,839		$	24,334,429		$	5,221,538		$	—	$	36,743,806
Interest income	$	199,018		$	771,947		$	81,905		$	(3,209)	$	1,049,661
Interest expense	40,217			136,156			29,216			13,088		218,677
Net interest income (loss)	158,801			635,791			52,689			(16,297)		830,984
Provision for credit losses	15,274			90,785			688			—		106,747
Net interest income (loss) after provision for credit losses	143,527			545,006			52,001			(16,297)		724,237
Non-interest income	55,383			52,192			7,661			20,263		135,499
Non-interest expense	60,188			73,041			843			338,935		473,007
Internal expense transfer	58,355			197,444			42,393			(298,192)		—
Income (loss) before income taxes	$	80,367		$	326,713		$	16,426		$	(36,777)	$	386,729
Return on average interest earning assets (pre-tax)	1.49		%	1.79		%	0.42		%	N/A		1.40		%

	Nine Months Ended September 30, 2019
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	6,812,001		$	18,839,194		$	4,330,504		$	—	$	29,981,699
Interest income	$	203,897		$	679,833		$	97,189		$	(3,692)	$	977,227
Interest expense	69,504			192,221			44,185			11,810		317,720
Net interest income (loss)	134,393			487,612			53,004			(15,502)		659,507
Provision for credit losses	4,986			13,814			—			—		18,800
Net interest income (loss) after provision for credit losses	129,407			473,798			53,004			(15,502)		640,707
Non-interest income	41,927			29,527			7,365			97,607		176,426
Non-interest expense	56,845			76,729			684			301,151		435,409
Internal expense transfer	58,476			161,803			37,245			(257,524)		—
Income (loss) before income taxes	$	56,013		$	264,793		$	22,440		$	38,478	$	381,724
Return on average interest earning assets (pre-tax)	1.10		%	1.87		%	0.69		%	N/A		1.70		%

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Business Combinations (Details) $ in Thousands, shares in Millions		3 Months Ended		9 Months Ended
	Dec. 01, 2019 USD ($) office shares	Sep. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Business Acquisition [Line Items]
Loans		$ 32,090,554		$ 32,090,554	$ 29,537,449
Oritani
Business Acquisition [Line Items]
Assets	$ 4,300,000
Loans	3,400,000
Deposits	$ 2,900,000
Number of branches | office	26
Conversion ratio for shares issued	1.60
Consideration transferred	$ 835,300
Shares issued in connection with acquisition (in shares) | shares	71.1
Merger expenses		$ 106		$ 1,800
Goodwill increase			$ 1,800

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Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Earnings Per Share Reconciliation
Net income available to common shareholders	$ 99,202	$ 78,719	$ 275,727	$ 262,173
Basic weighted average number of common shares outstanding (in shares)	403,833,469	331,797,982	403,714,701	331,716,652
Plus: Common stock equivalents (in shares)	955,057	1,607,214	1,197,425	1,322,784
Diluted weighted average number of common shares outstanding (in shares)	404,788,526	333,405,196	404,912,126	333,039,436
Earnings per common share:
Basic (usd per share)	$ 0.25	$ 0.24	$ 0.68	$ 0.79
Diluted (usd per share)	$ 0.25	$ 0.24	$ 0.68	$ 0.79
Anti-dilutive common stock options and warrants (in shares)	4,900,000	265,000	2,200,000	475,000

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Accumulated Other Comprehensive Loss - Components of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Accumulated Other Comprehensive Income (Loss)
Beginning balance	$ 4,474,488	$ 3,504,118	$ 4,384,188	$ 3,350,454
Other comprehensive (loss) income before reclassification	(1,179)		25,565
Amounts reclassified from other comprehensive income	1,334	452	1,866	1,062
Total other comprehensive income	155	8,663	27,431	42,963
Ending balance	4,533,763	3,558,075	4,533,763	3,558,075
Unrealized Gains and Losses on Available for Sale (AFS) Securities
Accumulated Other Comprehensive Income (Loss)
Beginning balance	34,961		5,822
Other comprehensive (loss) income before reclassification	(1,262)		27,819
Amounts reclassified from other comprehensive income	36		94
Total other comprehensive income	(1,226)		27,913
Ending balance	33,735		33,735
Unrealized Gains and Losses on Derivatives
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(5,936)		(3,729)
Other comprehensive (loss) income before reclassification	83		(2,254)
Amounts reclassified from other comprehensive income	1,127		1,257
Total other comprehensive income	1,210		(997)
Ending balance	(4,726)		(4,726)
Defined Benefit Pension Plan
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(33,963)		(34,307)
Other comprehensive (loss) income before reclassification	0		0
Amounts reclassified from other comprehensive income	171	56	515	166
Total other comprehensive income	171		515
Ending balance	(33,792)		(33,792)
Total Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(4,938)	(35,131)	(32,214)	(69,431)
Ending balance	$ (4,783)	$ (26,468)	$ (4,783)	$ (26,468)

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Accumulated Other Comprehensive Loss - Reclassifications from AOCI (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Reclassification Out Of Accumulated Other Comprehensive Loss
Losses on securities transactions, net	$ (46)			$ (93)			$ (127)	$ (114)
Tax effect	(38,891)			(25,307)			(101,486)	(110,035)
Total net of tax	102,374	$ 95,601	$ 87,268	81,891	$ 76,468	$ 113,330	285,243	271,689
Interest expense	(54,257)			(108,636)			(218,677)	(317,720)
Total reclassifications, net of tax	(1,334)			(452)			(1,866)	(1,062)
Unrealized losses on AFS securities before tax
Reclassification Out Of Accumulated Other Comprehensive Loss
Total reclassifications, net of tax	(36)						(94)
Unrealized losses on derivatives (cash flow hedges) before tax
Reclassification Out Of Accumulated Other Comprehensive Loss
Total reclassifications, net of tax	(1,127)						(1,257)
Defined benefit pension plan
Reclassification Out Of Accumulated Other Comprehensive Loss
Amortization of actuarial net loss	(234)			(79)			(699)	(235)
Tax effect	63			23			184	69
Total reclassifications, net of tax	(171)			(56)			(515)	(166)
Amounts Reclassified from Accumulated Other Comprehensive Loss
Reclassification Out Of Accumulated Other Comprehensive Loss
Interest expense	(1,586)			(453)			(1,763)	(1,126)
Amounts Reclassified from Accumulated Other Comprehensive Loss | Unrealized losses on AFS securities before tax
Reclassification Out Of Accumulated Other Comprehensive Loss
Losses on securities transactions, net	(46)			(93)			(127)	(114)
Tax effect	10			21			33	24
Total net of tax	(36)			(72)			(94)	(90)
Amounts Reclassified from Accumulated Other Comprehensive Loss | Unrealized losses on derivatives (cash flow hedges) before tax
Reclassification Out Of Accumulated Other Comprehensive Loss
Tax effect	459			129			506	320
Total net of tax	(1,127)			(324)			(1,257)	(806)
Interest expense	$ (1,586)			$ (453)			$ (1,763)	$ (1,126)

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New Authoritative Accounting Guidance (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Forecast period	2 years
Historical loss experience period	1 year
Allowance for loan losses	$ 325,032	$ 161,759	$ 309,614		$ 161,853	$ 155,105		$ 151,859
Allowance for unfunded credit commitments	10,296	2,845
Allowance for credit losses	1,481
Stockholders' equity	(4,533,763)	(4,384,188)	(4,474,488)	$ (4,420,998)	(3,558,075)	(3,504,118)	$ (3,444,879)	(3,350,454)
Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' equity	$ (553,826)	(443,559)	$ (499,511)	$ (452,424)	$ (454,020)	$ (412,190)	$ (375,983)	$ (299,642)
Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for credit losses		100,400
Allowance for loan losses		92,531
Allowance for unfunded credit commitments		7,100
Allowance for credit losses		793
PCD loans related reserves		61,600
Non-credit discount		97,700
Stockholders' equity		28,187
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' equity		28,187
Cumulative Effect, Period of Adoption, Adjustment | Non-PCD Loans
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for loan losses		$ 38,800

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Fair Value Measurement of Assets and Liabilities - Recurring and Non-Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Investment securities
Equity securities	$ 29,026	$ 41,410
Available for sale
Available for sale debt securities	1,526,564	1,566,801
Non-recurring fair value measurements:
Loan servicing rights	14,000
Unpaid principal balances of loans held for sale	199,400	74,500
U.S. Treasury securities
Available for sale
Available for sale debt securities	51,578	50,943
U.S. government agency securities
Available for sale
Available for sale debt securities	26,448	29,243
Obligations of states and political subdivisions
Available for sale
Available for sale debt securities	134,193	170,051
Residential mortgage-backed securities
Available for sale
Available for sale debt securities	1,233,436	1,254,786
Corporate and other debt securities
Available for sale
Available for sale debt securities	80,909	61,778
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements
Investment securities
Equity securities	19,136	41,410
Available for sale
Available for sale debt securities	51,578	50,943
Trading securities		0
Loans held for sale	0	0
Other assets	0	0
Total assets	70,714	92,353
Liabilities
Other liabilities	0	0
Total liabilities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | U.S. Treasury securities
Available for sale
Available for sale debt securities	51,578	50,943
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | U.S. government agency securities
Available for sale
Available for sale debt securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | Obligations of states and political subdivisions
Available for sale
Available for sale debt securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | Residential mortgage-backed securities
Available for sale
Available for sale debt securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | Trust preferred securities
Available for sale
Available for sale debt securities		0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | Corporate and other debt securities
Available for sale
Available for sale debt securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Non-recurring fair value measurements
Non-recurring fair value measurements:
Collateral dependent loans	0	0
Loan servicing rights	0	0
Foreclosed assets	0	0
Total	0	0
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements
Investment securities
Equity securities	0	0
Available for sale
Available for sale debt securities	1,474,203	1,515,178
Trading securities		0
Loans held for sale	209,250	76,113
Other assets	455,565	158,532
Total assets	2,139,018	1,749,823
Liabilities
Other liabilities	190,049	43,926
Total liabilities	190,049	43,926
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | U.S. Treasury securities
Available for sale
Available for sale debt securities	0	0
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | U.S. government agency securities
Available for sale
Available for sale debt securities	26,448	29,243
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | Obligations of states and political subdivisions
Available for sale
Available for sale debt securities	133,410	169,371
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | Residential mortgage-backed securities
Available for sale
Available for sale debt securities	1,233,436	1,254,786
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | Trust preferred securities
Available for sale
Available for sale debt securities		0
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | Corporate and other debt securities
Available for sale
Available for sale debt securities	80,909	61,778
Significant Other Observable Inputs (Level 2) | Non-recurring fair value measurements
Non-recurring fair value measurements:
Collateral dependent loans	0	0
Loan servicing rights	0	0
Foreclosed assets	0	0
Total	0	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements
Investment securities
Equity securities	0	0
Available for sale
Available for sale debt securities	783	680
Trading securities		0
Loans held for sale	0	0
Other assets	0	0
Total assets	783	680
Liabilities
Other liabilities	0	0
Total liabilities	0	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | U.S. Treasury securities
Available for sale
Available for sale debt securities	0	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | U.S. government agency securities
Available for sale
Available for sale debt securities	0	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | Obligations of states and political subdivisions
Available for sale
Available for sale debt securities	783	680
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | Residential mortgage-backed securities
Available for sale
Available for sale debt securities	0	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | Trust preferred securities
Available for sale
Available for sale debt securities		0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | Corporate and other debt securities
Available for sale
Available for sale debt securities	0	0
Significant Unobservable Inputs (Level 3) | Non-recurring fair value measurements
Non-recurring fair value measurements:
Collateral dependent loans	35,907	39,075
Loan servicing rights	14,000	1,591
Foreclosed assets	7,747	10,807
Total	57,654	51,473
NAV
Investment securities
Equity securities	7,400
Fair Value | Recurring fair value measurements
Investment securities
Equity securities	26,527	41,410
Available for sale
Available for sale debt securities	1,526,564	1,566,801
Trading securities		0
Loans held for sale	209,250	76,113
Other assets	455,565	158,532
Total assets	2,217,906	1,842,856
Liabilities
Other liabilities	190,049	43,926
Total liabilities	190,049	43,926
Fair Value | Recurring fair value measurements | U.S. Treasury securities
Available for sale
Available for sale debt securities	51,578	50,943
Fair Value | Recurring fair value measurements | U.S. government agency securities
Available for sale
Available for sale debt securities	26,448	29,243
Fair Value | Recurring fair value measurements | Obligations of states and political subdivisions
Available for sale
Available for sale debt securities	134,193	170,051
Fair Value | Recurring fair value measurements | Residential mortgage-backed securities
Available for sale
Available for sale debt securities	1,233,436	1,254,786
Fair Value | Recurring fair value measurements | Trust preferred securities
Available for sale
Available for sale debt securities		0
Fair Value | Recurring fair value measurements | Corporate and other debt securities
Available for sale
Available for sale debt securities	80,909	61,778
Fair Value | Non-recurring fair value measurements
Non-recurring fair value measurements:
Collateral dependent loans	35,907	39,075
Loan servicing rights	14,000	1,591
Foreclosed assets	7,747	10,807
Total	57,654	51,473
Fair Value | Significant Unobservable Inputs (Level 3)
Investment securities
Equity securities	$ 2,499	$ 0

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Fair Value Measurement of Assets and Liabilities - Additional Information (Details) $ in Millions	9 Months Ended
	Sep. 30, 2020 USD ($)
Fair Value Disclosures [Abstract]
Collateral dependent loans amortized cost	$ 99.3
Specific valuation allowance allocations	63.4
Reported net carrying amount of collateral dependent loans	$ 35.9
Valuation of loan servicing rights, prepayment rate	18.40%
Valuation of loan servicing rights, discount rate	9.60%
Loan servicing rights	$ 14.0

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Fair Value Measurement of Assets and Liabilities - Carrying Amounts and Estimated Fair Values (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest bearing deposits with banks	$ 654,591	$ 178,423
Equity securities	29,026	41,410
Total investment securities held to maturity	2,224,971	2,358,720
Accrued interest receivable	136,058	105,637
Deposits with stated maturities	7,537,581	9,717,945
NAV
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	7,400
Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investment securities held to maturity	2,170,476	2,336,095
Carrying Amount | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and due from banks	276,120	256,264
Interest bearing deposits with banks	654,591	178,423
Accrued interest receivable	136,058	105,637
Deposits without stated maturities	23,650,401	19,467,892
Short-term borrowings	1,430,726	1,093,280
Accrued interest payable	21,756	33,066
Carrying Amount | Level 1 | U.S. Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investment securities held to maturity	138,224	138,352
Carrying Amount | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Federal Reserve Bank and Federal Home Loan Bank stock	287,628	214,421
Deposits with stated maturities	7,537,581	9,717,945
Long-term borrowings	2,852,569	2,122,426
Junior subordinated debentures issued to capital trusts	55,978	55,718
Carrying Amount | Level 2 | U.S. government agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investment securities held to maturity	6,302	7,345
Carrying Amount | Level 2 | Obligations of states and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investment securities held to maturity	464,051	500,705
Carrying Amount | Level 2 | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investment securities held to maturity	1,491,808	1,620,119
Carrying Amount | Level 2 | Trust preferred securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investment securities held to maturity	37,341	37,324
Carrying Amount | Level 2 | Corporate and other debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investment securities held to maturity	32,750	32,250
Carrying Amount | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	2,499	0
Net loans	32,090,554	29,537,449
Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investment securities held to maturity	2,224,971	2,358,720
Fair Value | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and due from banks	276,120	256,264
Interest bearing deposits with banks	654,591	178,423
Accrued interest receivable	136,058	105,637
Deposits without stated maturities	23,650,401	19,467,892
Short-term borrowings	1,544,596	1,081,879
Accrued interest payable	21,756	33,066
Fair Value | Level 1 | U.S. Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investment securities held to maturity	146,429	144,113
Fair Value | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Federal Reserve Bank and Federal Home Loan Bank stock	287,628	214,421
Deposits with stated maturities	7,466,794	9,747,867
Long-term borrowings	3,115,757	2,181,401
Junior subordinated debentures issued to capital trusts	44,771	53,889
Fair Value | Level 2 | U.S. government agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investment securities held to maturity	6,634	7,362
Fair Value | Level 2 | Obligations of states and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investment securities held to maturity	479,824	513,607
Fair Value | Level 2 | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investment securities held to maturity	1,528,703	1,629,572
Fair Value | Level 2 | Trust preferred securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investment securities held to maturity	30,000	31,382
Fair Value | Level 2 | Corporate and other debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investment securities held to maturity	33,381	32,684
Fair Value | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	2,499	0
Net loans	$ 31,883,095	$ 28,964,396

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Investment Securities - Additional Information (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($) security position	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) security position	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($) security position
Investment Securities [Line Items]
Equity securities	$ 29,026,000		$ 29,026,000		$ 41,410,000
Number of security positions in the debt securities available for sale portfolio in an unrealized loss position (in security) | position	64		64		182
Fair value of debt securities available for sale pledged as collateral	$ 868,900,000		$ 868,900,000
Weighted-average remaining expected life of residential mortgage-backed securities available for sale, years			3 years 10 months 24 days
Amortized cost	1,479,966,000		$ 1,479,966,000		$ 1,558,787,000
Fair Value	1,526,564,000		1,526,564,000		$ 1,566,801,000
Impairment loss	0		0	$ 2,900,000
Allowance for credit losses	$ 0		$ 0
Number of security positions in the securities held to maturity portfolio in an unrealized loss position (in security) | security	20		20		82
Fair value of investments held to maturity pledged as collateral	$ 1,000,000,000.0		$ 1,000,000,000.0
Weighted-average remaining expected life of residential mortgage-backed securities held to maturity, years			2 years 6 months
Forecast period			2 years
Historical loss experience period			1 year
Allowance for credit losses	1,481,000		$ 1,481,000
Provision for credit losses	(112,000)	$ 0	688,000	$ 0
Charge-offs of debt securities	0		0
US States and Political Subdivisions Debt Securities, Special Revenue Bonds
Investment Securities [Line Items]
Amortized cost	70,600,000		70,600,000
Fair Value	71,900,000		$ 71,900,000
Investment percentage			41.00%
US States And Political Subdivisions Debt Securities, Special Revenue Bonds, Impaired Securities
Investment Securities [Line Items]
Amortized cost	680,000		$ 680,000
Fair Value	$ 783,000		$ 783,000

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Investment Securities - Amortized Cost, Debt Securities Available for Sale (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 1,479,966	$ 1,558,787
Gross Unrealized Gains	47,999	13,596
Gross Unrealized Losses	(1,401)	(5,582)
Fair Value	1,526,564	1,566,801
U.S. Treasury securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	50,035	50,952
Gross Unrealized Gains	1,543	12
Gross Unrealized Losses	0	(21)
Fair Value	51,578	50,943
U.S. government agency securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	25,302	28,982
Gross Unrealized Gains	1,164	280
Gross Unrealized Losses	(18)	(19)
Fair Value	26,448	29,243
Obligations of states and state agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	58,807	78,116
Gross Unrealized Gains	1,151	540
Gross Unrealized Losses	(30)	(83)
Fair Value	59,928	78,573
Municipal bonds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	73,063	90,662
Gross Unrealized Gains	1,276	902
Gross Unrealized Losses	(74)	(86)
Fair Value	74,265	91,478
Obligations of states and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	131,870	168,778
Gross Unrealized Gains	2,427	1,442
Gross Unrealized Losses	(104)	(169)
Fair Value	134,193	170,051
Residential mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	1,193,052	1,248,814
Gross Unrealized Gains	41,326	11,234
Gross Unrealized Losses	(942)	(5,262)
Fair Value	1,233,436	1,254,786
Corporate and other debt securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	79,707	61,261
Gross Unrealized Gains	1,539	628
Gross Unrealized Losses	(337)	(111)
Fair Value	$ 80,909	$ 61,778

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Investment Securities - Unrealized Losses and Fair Value Debt Securities Available for Sale (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Fair Value
Less than Twelve Months	$ 134,715	$ 289,110
More than Twelve Months	35,954	306,513
Total	170,669	595,623
Unrealized Losses
Less than Twelve Months	(943)	(1,347)
More than Twelve Months	(458)	(4,235)
Total	(1,401)	(5,582)
U.S. Treasury securities
Fair Value
Less than Twelve Months		25,019
More than Twelve Months		0
Total		25,019
Unrealized Losses
Less than Twelve Months		(21)
More than Twelve Months		0
Total		(21)
U.S. government agency securities
Fair Value
Less than Twelve Months	0	0
More than Twelve Months	1,585	1,783
Total	1,585	1,783
Unrealized Losses
Less than Twelve Months	0	0
More than Twelve Months	(18)	(19)
Total	(18)	(19)
Obligations of states and state agencies
Fair Value
Less than Twelve Months	1,319	18,540
More than Twelve Months	1,023	8,755
Total	2,342	27,295
Unrealized Losses
Less than Twelve Months	(6)	(21)
More than Twelve Months	(24)	(62)
Total	(30)	(83)
Municipal bonds
Fair Value
Less than Twelve Months	6,767	0
More than Twelve Months	0	13,177
Total	6,767	13,177
Unrealized Losses
Less than Twelve Months	(74)	0
More than Twelve Months	0	(86)
Total	(74)	(86)
Obligations of states and political subdivisions
Fair Value
Less than Twelve Months	8,086	18,540
More than Twelve Months	1,023	21,932
Total	9,109	40,472
Unrealized Losses
Less than Twelve Months	(80)	(21)
More than Twelve Months	(24)	(148)
Total	(104)	(169)
Residential mortgage-backed securities
Fair Value
Less than Twelve Months	111,973	240,412
More than Twelve Months	33,346	282,798
Total	145,319	523,210
Unrealized Losses
Less than Twelve Months	(526)	(1,194)
More than Twelve Months	(416)	(4,068)
Total	(942)	(5,262)
Corporate and other debt securities
Fair Value
Less than Twelve Months	14,656	5,139
More than Twelve Months	0	0
Total	14,656	5,139
Unrealized Losses
Less than Twelve Months	(337)	(111)
More than Twelve Months	0	0
Total	$ (337)	$ (111)

XML

Investment Securities - Contractual Maturities of Debt Securities Available for Sale (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Amortized Cost
Due in one year	$ 20,975
Due after one year through five years	92,873
Due after five years through ten years	107,004
Due after ten years	66,062
Residential mortgage-backed securities	1,193,052
Amortized Cost	1,479,966	$ 1,558,787
Fair Value
Due in one year	20,991
Due after one year through five years	95,436
Due after five years through ten years	108,746
Due after ten years	67,955
Residential mortgage-backed securities	1,233,436
Total investment securities available for sale	$ 1,526,564	$ 1,566,801

XML

Investment Securities - Amortized Cost, Debt Securities Held to Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 2,170,476	$ 2,336,095
Gross Unrealized Gains	62,994	34,556
Gross Unrealized Losses	(8,499)	(11,931)
Fair Value	2,224,971	2,358,720
U.S. Treasury securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	138,224	138,352
Gross Unrealized Gains	8,205	5,761
Gross Unrealized Losses	0	0
Fair Value	146,429	144,113
U.S. government agency securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	6,302	7,345
Gross Unrealized Gains	332	58
Gross Unrealized Losses	0	(41)
Fair Value	6,634	7,362
Obligations of states and state agencies
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	271,038	297,454
Gross Unrealized Gains	9,040	7,745
Gross Unrealized Losses	(176)	(529)
Fair Value	279,902	304,670
Municipal bonds
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	193,013	203,251
Gross Unrealized Gains	6,909	5,696
Gross Unrealized Losses	0	(10)
Fair Value	199,922	208,937
Obligations of states and political subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	464,051	500,705
Gross Unrealized Gains	15,949	13,441
Gross Unrealized Losses	(176)	(539)
Fair Value	479,824	513,607
Residential mortgage-backed securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	1,491,808	1,620,119
Gross Unrealized Gains	37,819	14,803
Gross Unrealized Losses	(924)	(5,350)
Fair Value	1,528,703	1,629,572
Trust preferred securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	37,341	37,324
Gross Unrealized Gains	52	39
Gross Unrealized Losses	(7,393)	(5,981)
Fair Value	30,000	31,382
Corporate and other debt securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	32,750	32,250
Gross Unrealized Gains	637	454
Gross Unrealized Losses	(6)	(20)
Fair Value	$ 33,381	$ 32,684

XML

Investment Securities - Unrealized Losses and Fair Value of Debt Securities Held to Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Fair Value
Less than Twelve Months	$ 250,057	$ 324,246
More than Twelve Months	31,272	323,080
Total	281,329	647,326
Unrealized Losses
Less than Twelve Months	(1,101)	(1,483)
More than Twelve Months	(7,398)	(10,448)
Total	(8,499)	(11,931)
U.S. government agency securities
Fair Value
Less than Twelve Months		5,183
More than Twelve Months		0
Total		5,183
Unrealized Losses
Less than Twelve Months		(41)
More than Twelve Months		0
Total		(41)
Obligations of states and state agencies
Fair Value
Less than Twelve Months	5,493	11,178
More than Twelve Months	0	32,397
Total	5,493	43,575
Unrealized Losses
Less than Twelve Months	(176)	(55)
More than Twelve Months	0	(474)
Total	(176)	(529)
Municipal bonds
Fair Value
Less than Twelve Months		0
More than Twelve Months		798
Total		798
Unrealized Losses
Less than Twelve Months		0
More than Twelve Months		(10)
Total		(10)
Obligations of states and political subdivisions
Fair Value
Less than Twelve Months	5,493	11,178
More than Twelve Months	0	33,195
Total	5,493	44,373
Unrealized Losses
Less than Twelve Months	(176)	(55)
More than Twelve Months	0	(484)
Total	(176)	(539)
Residential mortgage-backed securities
Fair Value
Less than Twelve Months	237,070	307,885
More than Twelve Months	2,677	254,915
Total	239,747	562,800
Unrealized Losses
Less than Twelve Months	(919)	(1,387)
More than Twelve Months	(5)	(3,963)
Total	(924)	(5,350)
Trust preferred securities
Fair Value
Less than Twelve Months	0	0
More than Twelve Months	28,595	29,990
Total	28,595	29,990
Unrealized Losses
Less than Twelve Months	0	0
More than Twelve Months	(7,393)	(5,981)
Total	(7,393)	(5,981)
Corporate and other debt securities
Fair Value
Less than Twelve Months	7,494	0
More than Twelve Months	0	4,980
Total	7,494	4,980
Unrealized Losses
Less than Twelve Months	(6)	0
More than Twelve Months	0	(20)
Total	$ (6)	$ (20)

XML

Investment Securities - Contractual Maturities of Debt Securities Held to Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Amortized Cost
Due in one year	$ 113,188
Due after one year through five years	201,101
Due after five years through ten years	162,911
Due after ten years	201,468
Residential mortgage-backed securities	1,491,808
Amortized Cost	2,170,476	$ 2,336,095
Fair Value
Due in one year	113,628
Due after one year through five years	213,801
Due after five years through ten years	168,821
Due after ten years	200,018
Residential mortgage-backed securities	1,528,703
Total investment securities held to maturity	$ 2,224,971	$ 2,358,720

XML

Investment Securities - Amortized Cost of Debt Securities Held to Maturity by External Credit Rating (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	$ 2,170,476	$ 2,336,095
U.S. Treasury securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	138,224	138,352
U.S. government agency securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	6,302	7,345
Obligations of states and state agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	271,038	297,454
Municipal bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	193,013	203,251
Obligations of states and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	464,051	500,705
Residential mortgage-backed securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	1,491,808	1,620,119
Trust preferred securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	37,341	37,324
Corporate and other debt securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	32,750	32,250
AAA/AA/A Rated
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	2,041,681	2,216,991
AAA/AA/A Rated | U.S. Treasury securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	138,224	138,352
AAA/AA/A Rated | U.S. government agency securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	6,302	7,345
AAA/AA/A Rated | Obligations of states and state agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	233,581	248,533
AAA/AA/A Rated | Municipal bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	171,766	202,642
AAA/AA/A Rated | Obligations of states and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	405,347	451,175
AAA/AA/A Rated | Residential mortgage-backed securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	1,491,808	1,620,119
AAA/AA/A Rated | Trust preferred securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
AAA/AA/A Rated | Corporate and other debt securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
BBB rated
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	5,000	10,722
BBB rated | U.S. Treasury securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
BBB rated | U.S. government agency securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
BBB rated | Obligations of states and state agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	5,722
BBB rated | Municipal bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
BBB rated | Obligations of states and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	5,722
BBB rated | Residential mortgage-backed securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
BBB rated | Trust preferred securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
BBB rated | Corporate and other debt securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	5,000	5,000
Non-investment grade rated
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	5,669	0
Non-investment grade rated | U.S. Treasury securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-investment grade rated | U.S. government agency securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-investment grade rated | Obligations of states and state agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	5,669	0
Non-investment grade rated | Municipal bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-investment grade rated | Obligations of states and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	5,669	0
Non-investment grade rated | Residential mortgage-backed securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-investment grade rated | Trust preferred securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-investment grade rated | Corporate and other debt securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-rated
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	118,126	108,382
Non-rated | U.S. Treasury securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-rated | U.S. government agency securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-rated | Obligations of states and state agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	31,788	43,199
Non-rated | Municipal bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	21,247	609
Non-rated | Obligations of states and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	53,035	43,808
Non-rated | Residential mortgage-backed securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-rated | Trust preferred securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	37,341	37,324
Non-rated | Corporate and other debt securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	$ 27,750	$ 27,250

XML

Loans and Allowance for Credit Losses for Loans - Loans Portfolio (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	$ 32,415,586	$ 29,699,208
Commercial and Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	6,903,345	4,825,997
Loans, PPP	2,300,000
Loans, deferred income, PPP	54,400
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	18,536,362	17,643,759
Commercial real estate | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	16,815,587	15,996,741
Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	1,720,775	1,647,018
Residential mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	4,284,595	4,377,111
Consumer loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	2,691,284	2,852,341
Consumer loans | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	457,083	487,272
Consumer loans | Automobile
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	1,341,659	1,451,623
Consumer loans | Other consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	$ 892,542	$ 913,446

XML

Loans and Allowance for Credit Losses for Loans - Additional Information (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($) component	Sep. 30, 2019	Sep. 30, 2020 USD ($) SecurityLoan component	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-covered loans net of unearned premiums and deferred loan fees	$ 116,200,000		$ 116,200,000		$ 12,600,000
Accrued interest	$ 117,900,000		117,900,000		86,300,000
Transfer of loans to loans held for sale			30,020,000	$ 302,951,000
Sales of loans			$ 0	$ 0
Days past due to place on non-accrual status	90 days	90 days	90 days	90 days
Number of consecutive months for performing restructured loans to be put on accrual status			6 years
TDRs not reported as non-accrual loans	$ 58,100,000		$ 58,100,000		73,000,000.0
Non-performing TDRs	96,800,000		96,800,000		65,100,000
Specific reserves for loan losses			18,700,000	$ 29,600,000
Loan charge-offs related to loans modified as TDRs	1,900,000		$ 5,600,000	2,000,000.0
Number of modified loans | SecurityLoan			1,400
Amount from modified loans			$ 1,100,000,000
Other real estate owned	$ 7,700,000		$ 7,700,000		9,400,000
Number of basic components | component	2		2
Forecast period			2 years
Historical loss experience period			1 year
Allowance for unfunded credit commitments	$ 10,296,000		$ 10,296,000		2,845,000
Residential real estate properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other real estate owned	799,000		799,000		2,100,000
In formal foreclosure proceedings
Accounts, Notes, Loans and Financing Receivable [Line Items]
Residential mortgage and consumer loans secured by residential real estate properties	$ 2,000,000.0		2,000,000.0		2,800,000
Residential mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Transfer of loans to loans held for sale			$ 30,000,000.0	$ 303,000,000.0
Commercial and Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired loans threshold					$ 250,000

XML

Loans and Allowance for Credit Losses for Loans - Past Due, Non-Accrual and Current Non-Covered Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Financing Receivable, Past Due [Line Items]
Non-Accrual Loans	$ 191,109	$ 93,058
Total Past Due Loans	275,000	161,284
Current Loans	32,140,586	22,908,325
Total Loans	32,415,586
Non-Accrual Loans Without Allowance for Credit Losses	67,441
PCI Loans		6,629,599
30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	64,274	46,593
60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	9,676	14,315
90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	9,941	7,318
Commercial and Industrial
Financing Receivable, Past Due [Line Items]
Non-Accrual Loans	115,667	68,636
Total Past Due Loans	132,967	86,549
Current Loans	6,770,378	4,057,434
Total Loans	6,903,345
Non-Accrual Loans Without Allowance for Credit Losses	16,812
PCI Loans		682,014
Commercial and Industrial | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	6,587	11,700
Commercial and Industrial | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	3,954	2,227
Commercial and Industrial | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	6,759	3,986
Commercial real estate
Financing Receivable, Past Due [Line Items]
Non-Accrual Loans	44,124	9,360
Total Past Due Loans	72,452	19,354
Current Loans	18,463,910	12,379,256
Total Loans	18,536,362
Non-Accrual Loans Without Allowance for Credit Losses	38,203
PCI Loans		5,245,149
Commercial real estate | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	26,180	4,046
Commercial real estate | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	610	5,369
Commercial real estate | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	1,538	579
Commercial real estate | Commercial real estate
Financing Receivable, Past Due [Line Items]
Non-Accrual Loans	41,627	9,004
Total Past Due Loans	69,813	16,169
Current Loans	16,745,774	10,886,724
Total Loans	16,815,587
Non-Accrual Loans Without Allowance for Credit Losses	35,798
PCI Loans		5,093,848
Commercial real estate | Commercial real estate | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	26,038	2,560
Commercial real estate | Commercial real estate | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	610	4,026
Commercial real estate | Commercial real estate | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	1,538	579
Commercial real estate | Construction
Financing Receivable, Past Due [Line Items]
Non-Accrual Loans	2,497	356
Total Past Due Loans	2,639	3,185
Current Loans	1,718,136	1,492,532
Total Loans	1,720,775
Non-Accrual Loans Without Allowance for Credit Losses	2,405
PCI Loans		151,301
Commercial real estate | Construction | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	142	1,486
Commercial real estate | Construction | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	0	1,343
Commercial real estate | Construction | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	0	0
Residential mortgage
Financing Receivable, Past Due [Line Items]
Non-Accrual Loans	23,877	12,858
Total Past Due Loans	51,056	36,235
Current Loans	4,233,539	3,760,707
Total Loans	4,284,595
Non-Accrual Loans Without Allowance for Credit Losses	12,356
PCI Loans		580,169
Residential mortgage | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	22,528	17,143
Residential mortgage | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	3,760	4,192
Residential mortgage | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	891	2,042
Consumer loans
Financing Receivable, Past Due [Line Items]
Non-Accrual Loans	7,441	2,204
Total Past Due Loans	18,525	19,146
Current Loans	2,672,759	2,710,928
Total Loans	2,691,284
Non-Accrual Loans Without Allowance for Credit Losses	70
PCI Loans		122,267
Consumer loans | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	8,979	13,704
Consumer loans | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	1,352	2,527
Consumer loans | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	753	711
Consumer loans | Home equity
Financing Receivable, Past Due [Line Items]
Non-Accrual Loans	6,969	1,646
Total Past Due Loans	8,549	2,777
Current Loans	448,534	373,243
Total Loans	457,083
Non-Accrual Loans Without Allowance for Credit Losses	70
PCI Loans		111,252
Consumer loans | Home equity | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	1,281	1,051
Consumer loans | Home equity | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	299	80
Consumer loans | Home equity | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	0	0
Consumer loans | Automobile
Financing Receivable, Past Due [Line Items]
Non-Accrual Loans	472	334
Total Past Due Loans	6,615	14,078
Current Loans	1,335,044	1,437,274
Total Loans	1,341,659
Non-Accrual Loans Without Allowance for Credit Losses	0
PCI Loans		271
Consumer loans | Automobile | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	4,797	11,482
Consumer loans | Automobile | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	808	1,581
Consumer loans | Automobile | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	538	681
Consumer loans | Other consumer
Financing Receivable, Past Due [Line Items]
Non-Accrual Loans	0	224
Total Past Due Loans	3,361	2,291
Current Loans	889,181	900,411
Total Loans	892,542
Non-Accrual Loans Without Allowance for Credit Losses	0
PCI Loans		10,744
Consumer loans | Other consumer | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	2,901	1,171
Consumer loans | Other consumer | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	245	866
Consumer loans | Other consumer | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Past Due Loans	$ 215	$ 30

XML

Loans and Allowance for Credit Losses for Loans - Internal Loan Classification Risk by Loan Portfolio Class by Origination Year (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Financing Receivable, Credit Quality Indicator [Line Items]
Total	$ 32,415,586	$ 29,699,208
Commercial and Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
2020	2,662,790
2019	628,164
2018	538,406
2017	275,871
2016	203,335
Prior to 2016	918,755
Revolving Loans Amortized Cost Basis	1,675,515
Revolving Loans Converted to Term Loans	509
Total	6,903,345	4,825,997
Commercial and Industrial | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
2020	2,656,655
2019	609,142
2018	523,833
2017	246,684
2016	185,298
Prior to 2016	804,896
Revolving Loans Amortized Cost Basis	1,613,011
Revolving Loans Converted to Term Loans	417
Total	6,639,936
Commercial and Industrial | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
2020	724
2019	10,634
2018	11,786
2017	10,236
2016	11,310
Prior to 2016	14,895
Revolving Loans Amortized Cost Basis	44,412
Revolving Loans Converted to Term Loans	68
Total	104,065
Commercial and Industrial | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
2020	5,411
2019	3,181
2018	2,780
2017	1,789
2016	4,095
Prior to 2016	26,720
Revolving Loans Amortized Cost Basis	18,092
Revolving Loans Converted to Term Loans	24
Total	62,092
Commercial and Industrial | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	5,207
2018	7
2017	17,162
2016	2,632
Prior to 2016	72,244
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans	0
Total	97,252
Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total	18,536,362	17,643,759
Commercial real estate | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
2020	2,498,200
2019	3,245,506
2018	2,410,684
2017	2,023,598
2016	1,982,888
Prior to 2016	4,446,596
Revolving Loans Amortized Cost Basis	192,489
Revolving Loans Converted to Term Loans	15,626
Total	16,815,587	15,996,741
Commercial real estate | Commercial real estate | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
2020	2,456,797
2019	3,236,056
2018	2,360,488
2017	1,993,600
2016	1,929,677
Prior to 2016	4,281,267
Revolving Loans Amortized Cost Basis	189,008
Revolving Loans Converted to Term Loans	15,626
Total	16,462,519
Commercial real estate | Commercial real estate | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
2020	23,864
2019	0
2018	26,028
2017	7,197
2016	42,882
Prior to 2016	86,098
Revolving Loans Amortized Cost Basis	3,481
Revolving Loans Converted to Term Loans	0
Total	189,550
Commercial real estate | Commercial real estate | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
2020	17,539
2019	9,450
2018	24,168
2017	22,014
2016	10,329
Prior to 2016	78,322
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans	0
Total	161,822
Commercial real estate | Commercial real estate | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	0
2018	0
2017	787
2016	0
Prior to 2016	909
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans	0
Total	1,696
Construction | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
2020	105,422
2019	157,438
2018	123,662
2017	18,824
2016	59,682
Prior to 2016	61,043
Revolving Loans Amortized Cost Basis	1,194,704
Revolving Loans Converted to Term Loans	0
Total	1,720,775	$ 1,647,018
Construction | Commercial real estate | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
2020	105,422
2019	157,407
2018	123,416
2017	16,196
2016	47,202
Prior to 2016	60,663
Revolving Loans Amortized Cost Basis	1,162,297
Revolving Loans Converted to Term Loans	0
Total	1,672,603
Construction | Commercial real estate | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	0
2018	0
2017	0
2016	10,058
Prior to 2016	0
Revolving Loans Amortized Cost Basis	32,407
Revolving Loans Converted to Term Loans	0
Total	42,465
Construction | Commercial real estate | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	31
2018	246
2017	2,628
2016	2,422
Prior to 2016	380
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans	0
Total	$ 5,707

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Loans and Allowance for Credit Losses for Loans - Amortized Cost In Those Loan Classes Based on Payment Activity by Origination Year (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Financing Receivable, Credit Quality Indicator [Line Items]
Total	$ 32,415,586	$ 29,699,208
Residential mortgage
Financing Receivable, Credit Quality Indicator [Line Items]
2020	560,875
2019	808,678
2018	781,314
2017	648,138
2016	411,307
Prior to 2016	1,021,500
Revolving Loans Amortized Cost Basis	52,783
Revolving Loans Converted to Term Loans	0
Total	4,284,595	4,377,111
Residential mortgage | Performing Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2020	560,875
2019	807,219
2018	778,367
2017	645,289
2016	407,412
Prior to 2016	1,019,903
Revolving Loans Amortized Cost Basis	52,783
Revolving Loans Converted to Term Loans	0
Total	4,271,848
Consumer loans
Financing Receivable, Credit Quality Indicator [Line Items]
2020	304,121
2019	497,930
2018	328,916
2017	187,037
2016	69,832
Prior to 2016	51,132
Revolving Loans Amortized Cost Basis	1,198,082
Revolving Loans Converted to Term Loans	54,234
Total	2,691,284	2,852,341
Consumer loans | Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
2020	6,436
2019	12,015
2018	13,310
2017	10,178
2016	6,530
Prior to 2016	17,737
Revolving Loans Amortized Cost Basis	337,051
Revolving Loans Converted to Term Loans	53,826
Total	457,083	487,272
Consumer loans | Home equity | Performing Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2020	6,436
2019	12,015
2018	13,310
2017	10,178
2016	6,505
Prior to 2016	17,626
Revolving Loans Amortized Cost Basis	336,434
Revolving Loans Converted to Term Loans	52,986
Total	455,490
Consumer loans | Automobile
Financing Receivable, Credit Quality Indicator [Line Items]
2020	292,624
2019	480,164
2018	304,069
2017	175,605
2016	62,209
Prior to 2016	26,988
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans	0
Total	1,341,659	1,451,623
Consumer loans | Automobile | Performing Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2020	292,584
2019	479,860
2018	303,799
2017	175,359
2016	62,193
Prior to 2016	26,843
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans	0
Total	1,340,638
Consumer loans | Other consumer
Financing Receivable, Credit Quality Indicator [Line Items]
2020	5,061
2019	5,751
2018	11,537
2017	1,254
2016	1,093
Prior to 2016	6,407
Revolving Loans Amortized Cost Basis	861,031
Revolving Loans Converted to Term Loans	408
Total	892,542	$ 913,446
Consumer loans | Other consumer | Performing Loans
Financing Receivable, Credit Quality Indicator [Line Items]
2020	5,061
2019	5,751
2018	11,529
2017	1,254
2016	1,093
Prior to 2016	6,387
Revolving Loans Amortized Cost Basis	860,895
Revolving Loans Converted to Term Loans	0
Total	891,970
90 Days or More Past Due Loans | Residential mortgage
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	1,459
2018	2,947
2017	2,849
2016	3,895
Prior to 2016	1,597
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans	0
Total	12,747
90 Days or More Past Due Loans | Consumer loans | Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	0
2018	0
2017	0
2016	25
Prior to 2016	111
Revolving Loans Amortized Cost Basis	617
Revolving Loans Converted to Term Loans	840
Total	1,593
90 Days or More Past Due Loans | Consumer loans | Automobile
Financing Receivable, Credit Quality Indicator [Line Items]
2020	40
2019	304
2018	270
2017	246
2016	16
Prior to 2016	145
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term Loans	0
Total	1,021
90 Days or More Past Due Loans | Consumer loans | Other consumer
Financing Receivable, Credit Quality Indicator [Line Items]
2020	0
2019	0
2018	8
2017	0
2016	0
Prior to 2016	20
Revolving Loans Amortized Cost Basis	136
Revolving Loans Converted to Term Loans	408
Total	$ 572

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Loans and Allowance for Credit Losses for Loans - Credit Exposure by Internally Assigned Risk Rating by Class of Loans (Excluding PCI Loans) (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	$ 16,542,593
Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	16,251,917
Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	119,088
Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	109,425
Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	62,163
Commercial and Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	4,143,983
Commercial and Industrial | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	3,982,453
Commercial and Industrial | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	33,718
Commercial and Industrial | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	66,511
Commercial and Industrial | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	61,301
Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	10,902,893
Commercial real estate | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	10,781,587
Commercial real estate | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	77,884
Commercial real estate | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	42,560
Commercial real estate | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	862
Commercial real estate | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	1,495,717
Commercial real estate | Construction | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	1,487,877
Commercial real estate | Construction | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	7,486
Commercial real estate | Construction | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	354
Commercial real estate | Construction | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Financing receivable recorded investment non-PCI loans	$ 0

XML

Loans and Allowance for Credit Losses for Loans - Recorded Investment Based on Payment Activity - Non-PCI Loans (Details) - Non-PCI Loans $ in Thousands	Dec. 31, 2019 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 6,527,016
Performing Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	6,511,954
Non-Performing Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	15,062
Residential mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	3,796,942
Residential mortgage | Performing Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	3,784,084
Residential mortgage | Non-Performing Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	12,858
Consumer | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	376,020
Consumer | Home equity | Performing Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	374,374
Consumer | Home equity | Non-Performing Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,646
Consumer | Automobile
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,451,352
Consumer | Automobile | Performing Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,451,018
Consumer | Automobile | Non-Performing Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	334
Consumer | Other consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	902,702
Consumer | Other consumer | Performing Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	902,478
Consumer | Other consumer | Non-Performing Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 224

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Loans and Allowance for Credit Losses for Loans - Recorded Investment Based on Payment Activity - PCI Loans (Details) - PCI Loans $ in Thousands	Dec. 31, 2019 USD ($)
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	$ 6,629,599
Commercial and Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	682,014
Commercial real estate | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	5,093,848
Commercial real estate | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	151,301
Residential mortgage
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	580,169
Consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	122,267
Performing Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	6,559,439
Performing Loans | Commercial and Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	653,997
Performing Loans | Commercial real estate | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	5,065,388
Performing Loans | Commercial real estate | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	148,692
Performing Loans | Residential mortgage
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	571,006
Performing Loans | Consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	120,356
Non-Performing Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	70,160
Non-Performing Loans | Commercial and Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	28,017
Non-Performing Loans | Commercial real estate | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	28,460
Non-Performing Loans | Commercial real estate | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	2,609
Non-Performing Loans | Residential mortgage
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	9,163
Non-Performing Loans | Consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	$ 1,911

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Loans and Allowance for Credit Losses for Loans - Pre-Modification and Post-Modification (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($) contract	Sep. 30, 2019 USD ($) contract	Sep. 30, 2020 USD ($) contract	Sep. 30, 2019 USD ($) contract
Troubled Debt Restructurings
Number of contracts, troubled restructurings (in contract) | contract	32	55	39	109
Pre-Modification Outstanding Recorded Investment	$ 35,805	$ 42,996	$ 49,852	$ 83,515
Post-Modification Outstanding Recorded Investment	$ 35,497	$ 41,866	$ 47,523	$ 77,055
Number of contracts, troubled debt restructurings subsequently defaulted (in contract) | contract	30	2	36	24
Amortized Cost	$ 17,496	$ 758	$ 20,117	$ 12,905
Commercial and Industrial
Troubled Debt Restructurings
Number of contracts, troubled restructurings (in contract) | contract	28	53	33	104
Pre-Modification Outstanding Recorded Investment	$ 31,237	$ 42,902	$ 40,537	$ 78,601
Post-Modification Outstanding Recorded Investment	$ 30,938	$ 41,772	$ 38,204	$ 72,183
Number of contracts, troubled debt restructurings subsequently defaulted (in contract) | contract	30	1	35	19
Amortized Cost	$ 17,496	$ 604	$ 20,099	$ 12,235
Commercial real estate
Troubled Debt Restructurings
Number of contracts, troubled debt restructurings subsequently defaulted (in contract) | contract			0	1
Amortized Cost			$ 0	$ 283
Commercial real estate | Commercial real estate
Troubled Debt Restructurings
Number of contracts, troubled restructurings (in contract) | contract	2	1	4	3
Pre-Modification Outstanding Recorded Investment	$ 4,249	$ 75	$ 8,996	$ 4,740
Post-Modification Outstanding Recorded Investment	$ 4,240	$ 75	$ 9,000	$ 4,699
Residential mortgage
Troubled Debt Restructurings
Number of contracts, troubled restructurings (in contract) | contract	1	0	1	1
Pre-Modification Outstanding Recorded Investment	$ 247	$ 0	$ 247	$ 155
Post-Modification Outstanding Recorded Investment	$ 247	$ 0	$ 247	$ 154
Number of contracts, troubled debt restructurings subsequently defaulted (in contract) | contract	0	1	0	3
Amortized Cost	$ 0	$ 154	$ 0	$ 369
Consumer
Troubled Debt Restructurings
Number of contracts, troubled restructurings (in contract) | contract	1	1	1	1
Pre-Modification Outstanding Recorded Investment	$ 72	$ 19	$ 72	$ 19
Post-Modification Outstanding Recorded Investment	$ 72	$ 19	$ 72	$ 19
Number of contracts, troubled debt restructurings subsequently defaulted (in contract) | contract			1	1
Amortized Cost			$ 18	$ 18

XML

Loans and Allowance for Credit Losses for Loans - Summary of Allowance for Credit Losses (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
Receivables [Abstract]
Allowance for loan losses	$ 325,032	$ 309,614	$ 161,759	$ 161,853	$ 155,105	$ 151,859
Allowance for unfunded credit commitments	10,296		2,845
Total allowance for credit losses	$ 335,328		$ 164,604

XML

Loans and Allowance for Credit Losses for Loans - Summary of Provision for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Receivables [Abstract]
Provision for loan losses	$ 30,833	$ 8,757	$ 105,709	$ 20,319
Provision for unfunded credit commitments	187	(57)	350	(1,519)
Total provision for credit losses for loans	$ 31,020	$ 8,700	$ 106,059	$ 18,800

XML

Loans and Allowance for Credit Losses for Loans - Summary of Collateral Dependent Loans (Details) - Collateral Pledged $ in Thousands	Sep. 30, 2020 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral dependent loans	$ 191,864
Commercial and Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral dependent loans	115,877
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral dependent loans	47,043
Commercial real estate | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral dependent loans	44,638
Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral dependent loans	2,405
Residential mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral dependent loans	28,856
Consumer | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral dependent loans	$ 88

XML

Loans and Allowance for Credit Losses for Loans - Summary of Activity in Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	$ 309,614	$ 155,105	$ 161,759	$ 151,859
Loans charged-off	(17,125)	(2,987)	(40,087)	(14,137)
Charged-off loans recovered	1,710	978	5,120	3,812
Net charge-offs	(15,415)	(2,009)	(34,967)	(10,325)
Provision for loan losses	30,833	8,757	105,709	20,319
Ending balance	325,032	161,853	325,032	161,853
Allowance for PCD loans reclassification			61,600
Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance			92,531
Commercial and Industrial
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	132,039	94,384	104,059	90,956
Loans charged-off	(13,965)	(527)	(31,349)	(7,882)
Charged-off loans recovered	428	330	1,796	2,008
Net charge-offs	(13,537)	(197)	(29,553)	(5,874)
Provision for loan losses	11,907	6,815	40,734	15,920
Ending balance	130,409	101,002	130,409	101,002
Commercial and Industrial | Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance			15,169
Commercial Real Estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	131,702	48,978	45,673	49,650
Loans charged-off	(695)	(158)	(766)	(158)
Charged-off loans recovered	100	28	244	71
Net charge-offs	(595)	(130)	(522)	(87)
Provision for loan losses	13,543	(77)	49,702	(792)
Ending balance	144,650	48,771	144,650	48,771
Commercial Real Estate | Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance			49,797
Residential Mortgage
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	29,630	5,219	5,060	5,041
Loans charged-off	(7)	(111)	(348)	(126)
Charged-off loans recovered	31	3	626	13
Net charge-offs	24	(108)	278	(113)
Provision for loan losses	(1,040)	191	2,701	374
Ending balance	28,614	5,302	28,614	5,302
Residential Mortgage | Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance			20,575
Consumer
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	16,243	6,524	6,967	6,212
Loans charged-off	(2,458)	(2,191)	(7,624)	(5,971)
Charged-off loans recovered	1,151	617	2,454	1,720
Net charge-offs	(1,307)	(1,574)	(5,170)	(4,251)
Provision for loan losses	6,423	1,828	12,572	4,817
Ending balance	$ 21,359	$ 6,778	21,359	$ 6,778
Consumer | Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance			$ 6,990

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Loans and Allowance for Credit Losses for Loans - Summary of Allocation of Allowance for Loan Losses and Related Loans by Loan Portfolio Segment Disaggregated Based on Allowance Measurement Methodology (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated for impairment	$ 70,564		$ 38,576
Collectively evaluated for impairment	254,468		123,183
Total	325,032	$ 309,614	161,759	$ 161,853	$ 155,105	$ 151,859
Individually evaluated for impairment	246,411		163,644
Collectively evaluated for impairment	32,169,175		22,905,965
Total	32,415,586		29,699,208
Loans acquired with discounts related to credit quality
Financing Receivable, Allowance for Credit Loss [Line Items]
Total			6,629,599
Commercial and Industrial
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated for impairment	66,444		36,662
Collectively evaluated for impairment	63,965		67,397
Total	130,409	132,039	104,059	101,002	94,384	90,956
Individually evaluated for impairment	136,696		100,860
Collectively evaluated for impairment	6,766,649		4,043,123
Total	6,903,345		4,825,997
Commercial and Industrial | Loans acquired with discounts related to credit quality
Financing Receivable, Allowance for Credit Loss [Line Items]
Total			682,014
Commercial Real Estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated for impairment	2,058		1,338
Collectively evaluated for impairment	142,592		44,335
Total	144,650	131,702	45,673	48,771	48,978	49,650
Individually evaluated for impairment	70,145		51,242
Collectively evaluated for impairment	18,466,217		12,347,368
Total	18,536,362		17,643,759
Commercial Real Estate | Loans acquired with discounts related to credit quality
Financing Receivable, Allowance for Credit Loss [Line Items]
Total			5,245,149
Residential Mortgage
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated for impairment	830		518
Collectively evaluated for impairment	27,784		4,542
Total	28,614	29,630	5,060	5,302	5,219	5,041
Individually evaluated for impairment	35,551		10,689
Collectively evaluated for impairment	4,249,044		3,786,253
Total	4,284,595		4,377,111
Residential Mortgage | Loans acquired with discounts related to credit quality
Financing Receivable, Allowance for Credit Loss [Line Items]
Total			580,169
Consumer
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated for impairment	1,232		58
Collectively evaluated for impairment	20,127		6,909
Total	21,359	$ 16,243	6,967	$ 6,778	$ 6,524	$ 6,212
Individually evaluated for impairment	4,019		853
Collectively evaluated for impairment	2,687,265		2,729,221
Total	$ 2,691,284		2,852,341
Consumer | Loans acquired with discounts related to credit quality
Financing Receivable, Allowance for Credit Loss [Line Items]
Total			$ 122,267

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Loans and Allowance for Credit Losses for Loans - Impaired Loans (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	$ 47,219
Recorded Investment With Related Allowance	116,425
Total Recorded Investment	163,644
Unpaid Contractual Principal Balance	179,243
Related Allowance	38,576
Commercial and Industrial
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	14,617
Recorded Investment With Related Allowance	86,243
Total Recorded Investment	100,860
Unpaid Contractual Principal Balance	114,875
Related Allowance	36,662
Commercial real estate
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	26,400
Recorded Investment With Related Allowance	24,842
Total Recorded Investment	51,242
Unpaid Contractual Principal Balance	51,612
Related Allowance	1,338
Commercial real estate | Commercial real estate
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	26,046
Recorded Investment With Related Allowance	24,842
Total Recorded Investment	50,888
Unpaid Contractual Principal Balance	51,258
Related Allowance	1,338
Commercial real estate | Construction
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	354
Recorded Investment With Related Allowance	0
Total Recorded Investment	354
Unpaid Contractual Principal Balance	354
Related Allowance	0
Residential mortgage
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	5,836
Recorded Investment With Related Allowance	4,853
Total Recorded Investment	10,689
Unpaid Contractual Principal Balance	11,800
Related Allowance	518
Consumer loans
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	366
Recorded Investment With Related Allowance	487
Total Recorded Investment	853
Unpaid Contractual Principal Balance	956
Related Allowance	58
Consumer loans | Home equity
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	366
Recorded Investment With Related Allowance	487
Total Recorded Investment	853
Unpaid Contractual Principal Balance	956
Related Allowance	$ 58

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Loans and Allowance for Credit Losses for Loans - Changes in Accretable Yield (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance, beginning of period	$ 853,887	$ 875,958
Accretion	(47,475)	(155,981)
Net (decrease) increase in expected cash flows	(58,268)	28,167
Balance, end of period	$ 748,144	$ 748,144

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Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 1,373,625
Goodwill from business combinations	1,784
Goodwill, ending balance	1,375,409
Consumer Lending
Goodwill [Roll Forward]
Goodwill, beginning balance	306,572
Goodwill from business combinations	121
Goodwill, ending balance	306,693
Commercial Lending
Goodwill [Roll Forward]
Goodwill, beginning balance	825,767
Goodwill from business combinations	1,654
Goodwill, ending balance	827,421
Investment Management
Goodwill [Roll Forward]
Goodwill, beginning balance	220,068
Goodwill from business combinations	9
Goodwill, ending balance	220,077
Wealth Management
Goodwill [Roll Forward]
Goodwill, beginning balance	21,218
Goodwill from business combinations	0
Goodwill, ending balance	$ 21,218

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Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Finite-Lived Intangible Assets [Line Items]
Goodwill impairment	$ 0	$ 0	$ 0	$ 0
Net impairment (net recovery)	188,000	64,000	966,000	20,000
Amortization of other intangible assets	6,377,000	4,694,000	$ 18,528,000	13,175,000
Core Deposits
Finite-Lived Intangible Assets [Line Items]
Weighted average amortization period, years			8 years 10 months 24 days
Other
Finite-Lived Intangible Assets [Line Items]
Weighted average amortization period, years			7 years 7 months 6 days
Core Deposits and Other
Finite-Lived Intangible Assets [Line Items]
Impairment of core deposits and other intangibles	$ 0	$ 0	$ 0	$ 0

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Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	$ 205,561	$ 199,932
Accumulated Amortization	(130,675)	(113,113)
Valuation Allowance	(1,013)	(47)
Net Intangible Assets	73,873	86,772
Loan servicing rights
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	100,456	94,827
Accumulated Amortization	(77,404)	(70,095)
Valuation Allowance	(1,013)	(47)
Net Intangible Assets	22,039	24,685
Core deposits
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	101,160	101,160
Accumulated Amortization	(50,472)	(40,384)
Valuation Allowance	0	0
Net Intangible Assets	50,688	60,776
Other
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	3,945	3,945
Accumulated Amortization	(2,799)	(2,634)
Valuation Allowance	0	0
Net Intangible Assets	$ 1,146	$ 1,311

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Goodwill and Other Intangible Assets - Future Amortization Expense (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Loan Servicing Rights
Finite-Lived Intangible Assets [Line Items]
2020	$ 1,477
2021	4,980
2022	3,789
2023	2,869
2024	2,205
Core Deposits
Finite-Lived Intangible Assets [Line Items]
2020	3,275
2021	11,607
2022	9,876
2023	8,146
2024	6,537
Other
Finite-Lived Intangible Assets [Line Items]
2020	55
2021	206
2022	191
2023	131
2024	$ 117

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Borrowed Funds - Schedule of Short-Term Borrowings (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Total short-term borrowings	$ 1,430,726	$ 1,093,280
Short-term borrowings
Debt Instrument [Line Items]
FHLB advances	1,275,000	940,000
Securities sold under agreements to repurchase	155,726	153,280
Total short-term borrowings	$ 1,430,726	$ 1,093,280

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Borrowed Funds - Additional Information (Detail) - USD ($)		1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 05, 2020	Sep. 30, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Debt Instrument [Line Items]
Weighted average interest rate for short-term borrowings		0.44%	0.44%		0.44%		1.68%
Loss on extinguishment of debt			$ (2,353,000)	$ 0	$ (2,353,000)	$ 0
Subordinated borrowing interest rate	5.25%
Federal Home Loan Bank Advances
Debt Instrument [Line Items]
Weighted average interest rate for long-term borrowings		2.11%	2.11%		2.11%		2.23%
Long-Term Borrowings
Debt Instrument [Line Items]
Weighted average interest rate for long-term borrowings		3.33%	3.33%		3.33%		1.94%
Subordinated Debt
Debt Instrument [Line Items]
Subordinated debt, net	$ 115,000,000.0
Subordinated debt initial term	5 years
Subordinated debt SOFR term	3 months
Subordinated Debt | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Subordinated debt basis points	5.14%
Federal Home Loan Bank Advances
Debt Instrument [Line Items]
Amount of hedged debt		$ 1,100,000,000	$ 1,100,000,000		$ 1,100,000,000
Subordinated Notes Due January 2022
Debt Instrument [Line Items]
Prepayment of long-term institutional repurchase borrowings		$ 50,000,000
Repurchase borrowings, interest rate		3.70%
Subordinated Notes Due July 2025
Debt Instrument [Line Items]
Subordinated borrowing interest rate					4.55%
Subordinated Notes Due July 2025 | Subordinated Debt
Debt Instrument [Line Items]
Subordinated debt, net		$ 100,000,000	100,000,000		$ 100,000,000
Subordinated Notes Due September 2023
Debt Instrument [Line Items]
Subordinated borrowing interest rate					5.125%
Subordinated Notes Due September 2023 | Subordinated Debt
Debt Instrument [Line Items]
Subordinated debt, net		125,000,000	125,000,000		$ 125,000,000
Subordinated Notes Due April 2026
Debt Instrument [Line Items]
Subordinated borrowing interest rate					6.25%
Subordinated Notes Due April 2026 | Subordinated Debt
Debt Instrument [Line Items]
Subordinated debt, net		$ 60,000,000	$ 60,000,000		$ 60,000,000

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Borrowed Funds - Schedule of Long-Term Borrowings (Detail) - Long-term borrowings - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
FHLB advances, net	$ 2,148,633	$ 1,480,012
Net subordinated note carrying value	403,936	292,414
Securities sold under agreements to repurchase	300,000	350,000
Total long-term borrowings	2,852,569	2,122,426
Unamortized prepayment penalties and other purchase accounting adjustments	503	2,800
Deferred issuance costs	$ 2,800	$ 1,200

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Borrowed Funds - Schedule of FHLB Repayment (Detail) - Long-term borrowings $ in Thousands	Sep. 30, 2020 USD ($)
Debt Instrument [Line Items]
2020	$ 25,000
2021	994,768
2022	121,420
2023	428,163
2024	300,000
Thereafter	279,785
Total long-term FHLB advances	$ 2,149,136

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Stock-Based Compensation (Details) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($) shares	Sep. 30, 2019 USD ($) shares	Sep. 30, 2020 USD ($) employee_stock_plan $ / shares shares	Sep. 30, 2019 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of active employee stock plans | employee_stock_plan			1
Number of shares available for grant (in shares)	3,100,000		3,100,000
Stock-based compensation expense (in USD) | $	$ 4.1	$ 3.2	$ 12.3	$ 11.5
Stock-based compensation amortization expense unrecognized (in USD) | $	$ 21.3		$ 21.3
Average remaining vesting period (in years)			1 year 10 months 2 days
Time-Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during the period (in shares)	26,000	42,000	1,200,000	868,000
Award vesting rights as a percentage			33.33%
Award vesting period (in years)			3 years
Average grant date fair value (usd per share) | $ / shares			$ 10.41	$ 10.43
Performance-Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during the period (in shares)			589,000	532,000
Award vesting period (in years)			3 years
Average grant date fair value (usd per share) | $ / shares			$ 10.82	$ 10.43

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Derivative Instruments and Hedging Activities - Additional Information (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($) swap	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) swap	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Derivative [Line Items]
Number of credit swaps | swap	23		23
Aggregate fair value of net liability position	$ 184,100,000		$ 184,100,000
Interest rate swaps
Derivative [Line Items]
Accumulated net after-tax losses related to effective cash flow hedges	4,700,000		4,700,000		$ 3,700,000
Estimated amount of interest rate derivatives to be reclassified to interest expense			3,800,000
Fair value hedge | Noninterest Income | Interest rate swaps
Derivative [Line Items]
Fee income related to derivative interest rate swaps executed with commercial loan customers	19,200,000	$ 13,900,000	48,100,000	$ 23,400,000
Derivatives designated as hedging instruments
Derivative [Line Items]
Notional amount	1,182,079,000		1,182,079,000		187,281,000
Derivatives designated as hedging instruments | Cash flow hedge
Derivative [Line Items]
Notional amount	1,100,000,000		1,100,000,000
Derivatives designated as hedging instruments | Fair value hedge | Interest rate swaps
Derivative [Line Items]
Notional amount	7,079,000		7,079,000		7,281,000
Derivatives not designated as hedging instruments
Derivative [Line Items]
Notional amount	8,827,975,000		8,827,975,000		4,255,866,000
Aggregate notional amount of derivative asset	181,500,000		181,500,000
Derivatives not designated as hedging instruments | Interest rate swaps
Derivative [Line Items]
Notional amount	$ 8,306,557,000		$ 8,306,557,000		$ 4,113,106,000
Derivatives not designated as hedging instruments | Fair value hedge | Interest rate swaps
Derivative [Line Items]
Number of instruments held | swap	2		2
Derivatives not designated as hedging instruments | Fair value hedge | Steepener swap, derivative one
Derivative [Line Items]
Notional amount	$ 10,400,000		$ 10,400,000
Derivatives not designated as hedging instruments | Fair value hedge | Steepener swap, derivative two
Derivative [Line Items]
Notional amount	$ 10,400,000		$ 10,400,000
Minimum | Derivatives designated as hedging instruments | Cash flow hedge
Derivative [Line Items]
Fixed interest rate	0.05%		0.05%
Maximum | Derivatives designated as hedging instruments | Cash flow hedge
Derivative [Line Items]
Fixed interest rate	0.67%		0.67%

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Derivative Instruments and Hedging Activities - Balance Sheet Disclosures (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Interest rate swaps
Derivative [Line Items]
Other Assets	$ 0	$ 0
Other Liabilities	187,033,000	43,733,000
Derivatives designated as hedging instruments
Derivative [Line Items]
Other Assets	0	0
Other Liabilities	4,292,000	1,713,000
Notional Amount	1,182,079,000	187,281,000
Derivatives designated as hedging instruments | Cash flow hedge interest rate swaps
Derivative [Line Items]
Notional Amount	1,100,000,000
Derivatives designated as hedging instruments | Cash flow hedge interest rate swaps | Interest rate swaps
Derivative [Line Items]
Other Assets	0	0
Other Liabilities	4,233,000	1,484,000
Notional Amount	1,175,000,000	180,000,000
Derivatives designated as hedging instruments | Fair value hedge interest rate swaps | Interest rate swaps
Derivative [Line Items]
Other Assets	0	0
Other Liabilities	59,000	229,000
Notional Amount	7,079,000	7,281,000
Derivatives not designated as hedging instruments
Derivative [Line Items]
Other Assets	455,565,000	158,532,000
Other Liabilities	185,757,000	42,213,000
Notional Amount	8,827,975,000	4,255,866,000
Derivatives not designated as hedging instruments | Interest rate swaps
Derivative [Line Items]
Other Assets	455,404,000	158,382,000
Other Liabilities	182,741,000	42,020,000
Notional Amount	8,306,557,000	4,113,106,000
Derivatives not designated as hedging instruments | Mortgage banking derivatives
Derivative [Line Items]
Other Assets	161,000	150,000
Other Liabilities	3,016,000	193,000
Notional Amount	$ 521,418,000	$ 142,760,000

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Derivative Instruments and Hedging Activities - Interest Rate Derivatives Designated as Cash Flow Hedges (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Amounts Related To Interest Rate Derivatives Included In Income Designated As Hedges Of Cash Flows [Line Items]
Amount of loss reclassified from accumulated other comprehensive loss to interest expense	$ (54,257)	$ (108,636)	$ (218,677)	$ (317,720)
Amount of gain (loss) recognized in other comprehensive income	95	108	3,158	(1,404)
Amounts Reclassified from Accumulated Other Comprehensive Loss
Amounts Related To Interest Rate Derivatives Included In Income Designated As Hedges Of Cash Flows [Line Items]
Amount of loss reclassified from accumulated other comprehensive loss to interest expense	$ (1,586)	$ (453)	$ (1,763)	$ (1,126)

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Derivative Instruments and Hedging Activities - Gains (Losses) on Interest Rate Derivatives Designated as Fair Value Hedges (Details) - Fair value hedge - Interest income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Interest rate swaps
Gain Loss On Fair Value Hedges Recognized In Earnings [Line Items]
Gain (loss) related to derivative interest rate swaps	$ 88	$ 48	$ 170	$ 121
Loans | Derivatives designated as hedging instruments
Gain Loss On Fair Value Hedges Recognized In Earnings [Line Items]
Gain (loss) related to hedged loans	$ (88)	$ (48)	$ (170)	$ (121)

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Derivative Instruments and Hedging Activities - Interest Rate Derivatives Designated as Hedges (Details) - Fair value hedge - Derivatives designated as hedging instruments - Interest rate swaps - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Derivative [Line Items]
Carrying Amount of the Hedged Asset	$ 7,138	$ 7,510
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset	$ 59	$ 229

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Derivative Instruments and Hedging Activities - Net Losses Related to Derivatives Not Designated as Hedges (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Non-designated hedge interest rate swaps and credit derivatives
Other non-interest expense	$ 600	$ (468)	$ 2,105	$ (1,225)

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Balance Sheet Offsetting (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Offsetting Liabilities
Gross Amounts Recognized	$ 487,033	$ 393,733
Gross Amounts Offset	0	0
Net Amounts Presented	487,033	393,733
Gross Amounts Not Offset, Financial Instruments	(300,000)	(350,118)
Gross Amounts Not Offset, Cash Collateral	(184,050)	(16,881)
Net Amount	2,983	26,734
Repurchase agreements
Offsetting Repurchase Agreement Liabilities
Gross Amounts Recognized	300,000	350,000
Gross Amounts Offset	0	0
Net Amounts Presented	300,000	350,000
Gross Amounts Not Offset, Financial Instruments	(300,000)	(350,000)
Gross Amounts Not Offset, Cash Collateral	0	0
Net Amount	0	0
Interest rate swaps
Offsetting Assets
Gross Amounts Recognized	455,404	158,382
Gross Amounts Offset	0	0
Net Amounts Presented	455,404	158,382
Gross Amounts Not Offset, Financial Instruments	0	(118)
Gross Amounts Not Offset, Cash Collateral	0	0
Net Amount	455,404	158,264
Offsetting Liabilities
Gross Amounts Recognized	187,033	43,733
Gross Amounts Offset	0	0
Net Amounts Presented	187,033	43,733
Gross Amounts Not Offset, Financial Instruments	0	(118)
Gross Amounts Not Offset, Cash Collateral	(184,050)	(16,881)
Net Amount	$ 2,983	$ 26,734

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Tax Credit Investments - Balance Sheet Disclosures (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Other Assets
Other Assets:
Affordable housing tax credit investments, net	$ 21,647	$ 25,049
Other tax credit investments, net	49,907	59,081
Total tax credit investments, net	71,554	84,130
Other Liabilities
Other Liabilities:
Unfunded affordable housing tax credit commitments	1,397	1,539
Unfunded other tax credit commitments	1,139	1,139
Total unfunded tax credit commitments	$ 2,536	$ 2,678

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Tax Credit Investments - Income Statement Disclosures (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits	$ 1,352	$ 1,666	$ 3,979	$ 5,087
Other tax credit investment credits and tax benefits	1,727	1,902	5,567	6,863
Total reduction in income tax expense	3,079	3,568	9,546	11,950
Non-Interest Expenses
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses	642	530	1,733	1,796
Affordable housing tax credit investment impairment losses	585	857	1,668	2,381
Other tax credit investment losses	12	1,093	1,235	4,589
Other tax credit investment impairment losses	1,520	1,905	4,767	7,655
Total amortization of tax credit investments recorded in non-interest expense	$ 2,759	$ 4,385	$ 9,403	$ 16,421

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Business Segments - Additional Information (Detail) - segment	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting [Abstract]
Number of business segments	4	4	4	4

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Business Segments - Schedule of Financial Data for Business Segments (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Average interest earning assets	$ 37,767,710	$ 30,494,569	$ 36,743,806	$ 29,981,699
Interest income	337,343	329,261	1,049,661	977,227
Interest expense	54,257	108,636	218,677	317,720
Net Interest Income	283,086	220,625	830,984	659,507
Provision for credit losses	30,908	8,700	106,747	18,800
Net Interest Income After Provision for Credit Losses	252,178	211,925	724,237	640,707
Non-interest income	49,272	41,150	135,499	176,426
Non-interest expense	160,185	145,877	473,007	435,409
Internal expense transfer	0	0	0	0
Income Before Income Taxes	$ 141,265	$ 107,198	$ 386,729	$ 381,724
Return on average interest earning assets (pre-tax)	1.50%	1.41%	1.40%	1.70%
Consumer Lending
Segment Reporting Information [Line Items]
Average interest earning assets	$ 7,126,157	$ 6,858,216	$ 7,187,839	$ 6,812,001
Interest income	63,956	68,253	199,018	203,897
Interest expense	9,048	23,552	40,217	69,504
Net Interest Income	54,908	44,701	158,801	134,393
Provision for credit losses	5,383	2,003	15,274	4,986
Net Interest Income After Provision for Credit Losses	49,525	42,698	143,527	129,407
Non-interest income	23,531	15,108	55,383	41,927
Non-interest expense	19,877	19,748	60,188	56,845
Internal expense transfer	18,614	19,758	58,355	58,476
Income Before Income Taxes	$ 34,565	$ 18,300	$ 80,367	$ 56,013
Return on average interest earning assets (pre-tax)	1.94%	1.07%	1.49%	1.10%
Commercial Lending
Segment Reporting Information [Line Items]
Average interest earning assets	$ 25,389,107	$ 19,278,529	$ 24,334,429	$ 18,839,194
Interest income	251,920	230,183	771,947	679,833
Interest expense	33,330	66,209	136,156	192,221
Net Interest Income	218,590	163,974	635,791	487,612
Provision for credit losses	25,637	6,697	90,785	13,814
Net Interest Income After Provision for Credit Losses	192,953	157,277	545,006	473,798
Non-interest income	20,421	15,057	52,192	29,527
Non-interest expense	25,633	25,161	73,041	76,729
Internal expense transfer	66,390	55,544	197,444	161,803
Income Before Income Taxes	$ 121,351	$ 91,629	$ 326,713	$ 264,793
Return on average interest earning assets (pre-tax)	1.91%	1.90%	1.79%	1.87%
Investment Management
Segment Reporting Information [Line Items]
Average interest earning assets	$ 5,252,446	$ 4,357,824	$ 5,221,538	$ 4,330,504
Interest income	22,513	31,999	81,905	97,189
Interest expense	6,728	14,965	29,216	44,185
Net Interest Income	15,785	17,034	52,689	53,004
Provision for credit losses	(112)	0	688	0
Net Interest Income After Provision for Credit Losses	15,897	17,034	52,001	53,004
Non-interest income	(1,304)	2,687	7,661	7,365
Non-interest expense	(186)	381	843	684
Internal expense transfer	13,713	12,559	42,393	37,245
Income Before Income Taxes	$ 1,066	$ 6,781	$ 16,426	$ 22,440
Return on average interest earning assets (pre-tax)	0.08%	0.62%	0.42%	0.69%
Corporate and Other Adjustments
Segment Reporting Information [Line Items]
Average interest earning assets	$ 0	$ 0	$ 0	$ 0
Interest income	(1,046)	(1,174)	(3,209)	(3,692)
Interest expense	5,151	3,910	13,088	11,810
Net Interest Income	(6,197)	(5,084)	(16,297)	(15,502)
Provision for credit losses	0	0	0	0
Net Interest Income After Provision for Credit Losses	(6,197)	(5,084)	(16,297)	(15,502)
Non-interest income	6,624	8,298	20,263	97,607
Non-interest expense	114,861	100,587	338,935	301,151
Internal expense transfer	(98,717)	(87,861)	(298,192)	(257,524)
Income Before Income Taxes	$ (15,717)	$ (9,512)	$ (36,777)	$ 38,478