Business Segments

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Business Segments

Business SegmentsValley 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, 2021 and 2020:

	Three Months Ended September 30, 2021
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	7,373,897		$	25,324,485		$	5,634,492		$	—	$	38,332,874
Interest income	$	58,887		$	250,866		$	19,766		$	(718)	$	328,801
Interest expense	4,032			13,795			3,228			6,720		27,775
Net interest income (loss)	54,855			237,071			16,538			(7,438)		301,026
Provision (credit) for credit losses	(4,614)			8,110			35			—		3,531
Net interest income (loss) after provision for credit losses	59,469			228,961			16,503			(7,438)		297,495
Non-interest income	11,845			11,611			2,018			16,957		42,431
Non-interest expense	13,520			27,504			(150)			134,048		174,922
Internal transfer expense (income)	20,662			71,141			15,825			(107,628)		—
Income (loss) before income taxes	$	37,132		$	141,927		$	2,846		$	(16,901)	$	165,004
Return on average interest earning assets (pre-tax)	2.01		%	2.24		%	0.20		%	N/A		1.72		%

	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 (credit) 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 transfer expense (income)	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		%

	Nine Months Ended September 30, 2021
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments		Total
	($ in thousands)
Average interest earning assets	$	7,176,086		$	25,465,276		$	5,261,185		$	—	$	37,902,547
Interest income	$	179,151		$	759,097		$	58,514		$	(2,515)	$	994,247
Interest expense	15,639			55,497			11,466			17,045		99,647
Net interest income (loss)	163,512			703,600			47,048			(19,560)		894,600
(Credit) provision for credit losses	(6,538)			27,825			(353)			—		20,934
Net interest income (loss) after provision for credit losses	170,050			675,775			47,401			(19,560)		873,666
Non-interest income	47,445			29,144			6,824			33,377		116,790
Non-interest expense	53,161			80,276			1,370			372,221		507,028
Internal transfer expense (income)	60,026			212,931			43,706			(316,663)		—
Income (loss) before income taxes	$	104,308		$	411,712		$	9,149		$	(41,741)	$	483,428
Return on average interest earning assets (pre-tax)	1.94		%	2.16		%	0.23		%	N/A		1.70		%

	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 transfer expense (income)	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		%