Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Summary of Income Tax Expense

Income tax expense for the years ended December 31, 2022, 2021 and 2020 consisted of the following:

	2022		2021		2020
	(in thousands)
Current expense:
Federal	$	132,060	$	92,823	$	96,057
State	72,271		47,249		48,463
	204,331		140,072		144,520
Deferred expense (benefit):
Federal	7,263		19,709		(3,109)
State	222		7,118		(1,951)
	7,485		26,827		(5,060)
Total income tax expense	$	211,816	$	166,899	$	139,460

Summary of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that gave rise to the significant portions of the deferred tax assets and liabilities as of December 31, 2022 and 2021 were as follows:

	2022		2021
	(in thousands)
Deferred tax assets:
Allowance for credit losses	$	133,459	$	102,704
Employee benefits	39,917		22,587
Investment securities	48,598		—
Net operating loss carryforwards	13,904		15,859
Purchase accounting	66,487		8,971
Other	12,995		11,689
Total deferred tax assets	315,360		161,810
Deferred tax liabilities:
Pension plans	30,474		30,119
Depreciation	16,625		10,343
Investment securities	—		3,728
Other investments	8,838		12,069
Core deposit intangibles	36,189		11,888
Other	27,235		14,133
Total deferred tax liabilities	119,361		82,280
Valuation Allowance	1,642		916
Net deferred tax asset (included in other assets)	$	194,357	$	78,614

Summary of Income Tax Reconciliation

Reconciliation between the reported income tax expense and the amount computed by multiplying consolidated income before taxes by the statutory federal income tax rate of 21 percent for the years ended December 31, 2022, 2021, and 2020 were as follows: 

	2022		2021		2020
	(in thousands)
Federal income tax at expected statutory rate	$	163,940	$	134,556	$	111,314
Increase (decrease) due to:
State income tax expense, net of federal tax effect	57,276		42,950		36,744
Tax-exempt interest, net of interest incurred to carry tax-exempt securities	(2,696)		(2,298)		(2,786)
Bank owned life insurance	(1,597)		(1,759)		(2,026)
Tax credits from securities and other investments	(12,872)		(9,942)		(10,071)
Non-deductible FDIC insurance premiums	4,796		2,457		3,283
Other, net	2,969		935		3,002
Income tax expense	$	211,816	$	166,899	$	139,460

Summary of Reconciliation of Gross Unrecognized Tax Benefits

A reconciliation of Valley’s reserve for uncertain tax liability positions for 2022, 2021 and 2020 is presented in the table below:

	2022		2021		2020
	(in thousands)
Beginning balance	$	30,359	$	31,918	$	31,918
Settlements with taxing authorities	—		(1,559)		—
Ending balance	$	30,359	$	30,359	$	31,918