false2023Q3000071431012/31http://fasb.org/us-gaap/2023#AccountingStandardsUpdate202202Member1.20 thousand00007143102023-01-012023-09-300000714310us-gaap:CommonStockMember2023-01-012023-09-300000714310vly:NonCumulativePerpetualPreferredStockSeriesAMember2023-01-012023-09-300000714310vly:NonCumulativePerpetualPreferredStockSeriesBMember2023-01-012023-09-3000007143102023-11-08xbrli:shares00007143102023-09-30iso4217:USD00007143102022-12-31iso4217:USDxbrli:shares0000714310us-gaap:SeriesAPreferredStockMember2023-09-300000714310us-gaap:SeriesAPreferredStockMember2022-12-310000714310us-gaap:SeriesBPreferredStockMember2023-09-300000714310us-gaap:SeriesBPreferredStockMember2022-12-3100007143102023-07-012023-09-3000007143102022-07-012022-09-3000007143102022-01-012022-09-300000714310us-gaap:InvestmentAdvisoryManagementAndAdministrativeServiceMember2023-07-012023-09-300000714310us-gaap:InvestmentAdvisoryManagementAndAdministrativeServiceMember2022-07-012022-09-300000714310us-gaap:InvestmentAdvisoryManagementAndAdministrativeServiceMember2023-01-012023-09-300000714310us-gaap:InvestmentAdvisoryManagementAndAdministrativeServiceMember2022-01-012022-09-300000714310us-gaap:DepositAccountMember2023-07-012023-09-300000714310us-gaap:DepositAccountMember2022-07-012022-09-300000714310us-gaap:DepositAccountMember2023-01-012023-09-300000714310us-gaap:DepositAccountMember2022-01-012022-09-300000714310us-gaap:PreferredStockMember2022-12-310000714310us-gaap:CommonStockMember2022-12-310000714310us-gaap:AdditionalPaidInCapitalMember2022-12-310000714310us-gaap:RetainedEarningsMember2022-12-310000714310us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310000714310us-gaap:TreasuryStockCommonMember2022-12-3100007143102022-01-012022-12-310000714310srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2022-12-310000714310srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2022-12-310000714310srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:PreferredStockMember2022-12-310000714310us-gaap:CommonStockMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2022-12-310000714310srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:AdditionalPaidInCapitalMember2022-12-310000714310srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:RetainedEarningsMember2022-12-310000714310us-gaap:AccumulatedOtherComprehensiveIncomeMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2022-12-310000714310srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:TreasuryStockCommonMember2022-12-310000714310srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2022-12-310000714310us-gaap:RetainedEarningsMember2023-01-012023-03-3100007143102023-01-012023-03-310000714310us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310000714310us-gaap:SeriesAPreferredStockMember2023-01-012023-03-310000714310us-gaap:SeriesAPreferredStockMemberus-gaap:RetainedEarningsMember2023-01-012023-03-310000714310us-gaap:SeriesBPreferredStockMember2023-01-012023-03-310000714310us-gaap:RetainedEarningsMemberus-gaap:SeriesBPreferredStockMember2023-01-012023-03-310000714310us-gaap:CommonStockMember2023-01-012023-03-310000714310us-gaap:CommonStockMemberus-gaap:RetainedEarningsMember2023-01-012023-03-310000714310us-gaap:CommonStockMember2023-01-012023-03-310000714310us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310000714310us-gaap:TreasuryStockCommonMember2023-01-012023-03-310000714310us-gaap:PreferredStockMember2023-03-310000714310us-gaap:CommonStockMember2023-03-310000714310us-gaap:AdditionalPaidInCapitalMember2023-03-310000714310us-gaap:RetainedEarningsMember2023-03-310000714310us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310000714310us-gaap:TreasuryStockCommonMember2023-03-3100007143102023-03-310000714310us-gaap:RetainedEarningsMember2023-04-012023-06-3000007143102023-04-012023-06-300000714310us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300000714310us-gaap:SeriesAPreferredStockMember2023-04-012023-06-300000714310us-gaap:SeriesAPreferredStockMemberus-gaap:RetainedEarningsMember2023-04-012023-06-300000714310us-gaap:SeriesBPreferredStockMember2023-04-012023-06-300000714310us-gaap:RetainedEarningsMemberus-gaap:SeriesBPreferredStockMember2023-04-012023-06-300000714310us-gaap:CommonStockMember2023-04-012023-06-300000714310us-gaap:CommonStockMemberus-gaap:RetainedEarningsMember2023-04-012023-06-300000714310us-gaap:CommonStockMember2023-04-012023-06-300000714310us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300000714310us-gaap:TreasuryStockCommonMember2023-04-012023-06-300000714310us-gaap:PreferredStockMember2023-06-300000714310us-gaap:CommonStockMember2023-06-300000714310us-gaap:AdditionalPaidInCapitalMember2023-06-300000714310us-gaap:RetainedEarningsMember2023-06-300000714310us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300000714310us-gaap:TreasuryStockCommonMember2023-06-3000007143102023-06-300000714310us-gaap:RetainedEarningsMember2023-07-012023-09-300000714310us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300000714310us-gaap:SeriesAPreferredStockMember2023-07-012023-09-300000714310us-gaap:SeriesAPreferredStockMemberus-gaap:RetainedEarningsMember2023-07-012023-09-300000714310us-gaap:SeriesBPreferredStockMember2023-07-012023-09-300000714310us-gaap:RetainedEarningsMemberus-gaap:SeriesBPreferredStockMember2023-07-012023-09-300000714310us-gaap:CommonStockMember2023-07-012023-09-300000714310us-gaap:CommonStockMemberus-gaap:RetainedEarningsMember2023-07-012023-09-300000714310us-gaap:CommonStockMember2023-07-012023-09-300000714310us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300000714310us-gaap:TreasuryStockCommonMember2023-07-012023-09-300000714310us-gaap:PreferredStockMember2023-09-300000714310us-gaap:CommonStockMember2023-09-300000714310us-gaap:AdditionalPaidInCapitalMember2023-09-300000714310us-gaap:RetainedEarningsMember2023-09-300000714310us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300000714310us-gaap:TreasuryStockCommonMember2023-09-300000714310us-gaap:PreferredStockMember2021-12-310000714310us-gaap:CommonStockMember2021-12-310000714310us-gaap:AdditionalPaidInCapitalMember2021-12-310000714310us-gaap:RetainedEarningsMember2021-12-310000714310us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000714310us-gaap:TreasuryStockCommonMember2021-12-3100007143102021-12-310000714310us-gaap:RetainedEarningsMember2022-01-012022-03-3100007143102022-01-012022-03-310000714310us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310000714310us-gaap:SeriesAPreferredStockMember2022-01-012022-03-310000714310us-gaap:SeriesAPreferredStockMemberus-gaap:RetainedEarningsMember2022-01-012022-03-310000714310us-gaap:SeriesBPreferredStockMember2022-01-012022-03-310000714310us-gaap:RetainedEarningsMemberus-gaap:SeriesBPreferredStockMember2022-01-012022-03-310000714310us-gaap:CommonStockMember2022-01-012022-03-310000714310us-gaap:CommonStockMemberus-gaap:RetainedEarningsMember2022-01-012022-03-310000714310us-gaap:CommonStockMember2022-01-012022-03-310000714310us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310000714310us-gaap:TreasuryStockCommonMember2022-01-012022-03-310000714310us-gaap:PreferredStockMember2022-03-310000714310us-gaap:CommonStockMember2022-03-310000714310us-gaap:AdditionalPaidInCapitalMember2022-03-310000714310us-gaap:RetainedEarningsMember2022-03-310000714310us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310000714310us-gaap:TreasuryStockCommonMember2022-03-3100007143102022-03-310000714310us-gaap:RetainedEarningsMember2022-04-012022-06-3000007143102022-04-012022-06-300000714310us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300000714310us-gaap:SeriesAPreferredStockMember2022-04-012022-06-300000714310us-gaap:SeriesAPreferredStockMemberus-gaap:RetainedEarningsMember2022-04-012022-06-300000714310us-gaap:SeriesBPreferredStockMember2022-04-012022-06-300000714310us-gaap:RetainedEarningsMemberus-gaap:SeriesBPreferredStockMember2022-04-012022-06-300000714310us-gaap:CommonStockMember2022-04-012022-06-300000714310us-gaap:CommonStockMemberus-gaap:RetainedEarningsMember2022-04-012022-06-300000714310us-gaap:CommonStockMember2022-04-012022-06-300000714310us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300000714310us-gaap:TreasuryStockCommonMember2022-04-012022-06-300000714310us-gaap:PreferredStockMember2022-06-300000714310us-gaap:CommonStockMember2022-06-300000714310us-gaap:AdditionalPaidInCapitalMember2022-06-300000714310us-gaap:RetainedEarningsMember2022-06-300000714310us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300000714310us-gaap:TreasuryStockCommonMember2022-06-3000007143102022-06-300000714310us-gaap:RetainedEarningsMember2022-07-012022-09-300000714310us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300000714310us-gaap:SeriesAPreferredStockMember2022-07-012022-09-300000714310us-gaap:SeriesAPreferredStockMemberus-gaap:RetainedEarningsMember2022-07-012022-09-300000714310us-gaap:SeriesBPreferredStockMember2022-07-012022-09-300000714310us-gaap:RetainedEarningsMemberus-gaap:SeriesBPreferredStockMember2022-07-012022-09-300000714310us-gaap:CommonStockMember2022-07-012022-09-300000714310us-gaap:CommonStockMemberus-gaap:RetainedEarningsMember2022-07-012022-09-300000714310us-gaap:CommonStockMember2022-07-012022-09-300000714310us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300000714310us-gaap:TreasuryStockCommonMember2022-07-012022-09-300000714310us-gaap:PreferredStockMember2022-09-300000714310us-gaap:CommonStockMember2022-09-300000714310us-gaap:AdditionalPaidInCapitalMember2022-09-300000714310us-gaap:RetainedEarningsMember2022-09-300000714310us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300000714310us-gaap:TreasuryStockCommonMember2022-09-3000007143102022-09-300000714310vly:BankLeumiLeIsraelCorporationMember2022-04-012022-04-010000714310vly:BankLeumiLeIsraelCorporationMember2022-04-01xbrli:pure0000714310vly:BankLeumiLeIsraelCorporationMember2022-07-012022-09-300000714310vly:BankLeumiLeIsraelCorporationMember2022-01-012022-09-300000714310vly:BankLeumiUSAMember2022-04-010000714310vly:BankLeumiUSAMember2022-04-012022-04-010000714310us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-06-300000714310us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-06-300000714310us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-06-300000714310us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-07-012023-09-300000714310us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-07-012023-09-300000714310us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-07-012023-09-300000714310us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-09-300000714310us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-09-300000714310us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-09-300000714310us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-12-310000714310us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-12-310000714310us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-12-310000714310us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-01-012023-09-300000714310us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-01-012023-09-300000714310us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-01-012023-09-300000714310us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-07-012023-09-300000714310us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-07-012022-09-300000714310us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-01-012023-09-300000714310us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-01-012022-09-300000714310us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300000714310us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300000714310us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300000714310us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300000714310us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300000714310us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300000714310us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300000714310us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300000714310us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300000714310us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300000714310us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300000714310us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300000714310srt:RevisionOfPriorPeriodAccountingStandardsUpdateAdjustmentMember2022-12-310000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel12And3Member2023-09-300000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-09-300000714310us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2023-09-300000714310us-gaap:FairValueMeasuredAtNetAssetValuePerShareMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-09-300000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-09-300000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:USTreasurySecuritiesMember2023-09-300000714310us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-09-300000714310us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-09-300000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel3Member2023-09-300000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-09-300000714310us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-09-300000714310us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-09-300000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2023-09-300000714310us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-09-300000714310us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300000714310us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300000714310us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2023-09-300000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2023-09-300000714310us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2023-09-300000714310us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2023-09-300000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel3Member2023-09-300000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:CorporateDebtSecuritiesMember2023-09-300000714310us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-09-300000714310us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-09-300000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:CorporateDebtSecuritiesMember2023-09-300000714310us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-09-300000714310us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMember2023-09-300000714310us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMember2023-09-300000714310us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2023-09-300000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel12And3Member2022-12-310000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-12-310000714310us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-12-310000714310us-gaap:FairValueMeasuredAtNetAssetValuePerShareMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:USTreasurySecuritiesMember2022-12-310000714310us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2022-12-310000714310us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2022-12-310000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel3Member2022-12-310000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310000714310us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310000714310us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2022-12-310000714310us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310000714310us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000714310us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310000714310us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-12-310000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2022-12-310000714310us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2022-12-310000714310us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2022-12-310000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel3Member2022-12-310000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:CorporateDebtSecuritiesMember2022-12-310000714310us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-12-310000714310us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-12-310000714310us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:CorporateDebtSecuritiesMember2022-12-310000714310us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310000714310us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMember2022-12-310000714310us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMember2022-12-310000714310us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2022-12-310000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel1Member2023-09-300000714310us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-09-300000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel1Member2022-12-310000714310us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel3Member2023-09-300000714310us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel3Member2023-09-300000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel3Member2022-12-310000714310us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel3Member2022-12-310000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMember2023-09-300000714310us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:USTreasurySecuritiesMember2023-09-300000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMember2022-12-310000714310us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:USTreasurySecuritiesMember2022-12-310000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-09-300000714310us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-09-300000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310000714310us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310000714310us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2023-09-300000714310us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-09-300000714310us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2022-12-310000714310us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberus-gaap:ResidentialMortgageBackedSecuritiesMember2023-09-300000714310us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2023-09-300000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberus-gaap:ResidentialMortgageBackedSecuritiesMember2022-12-310000714310us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2022-12-310000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberus-gaap:OtherDebtSecuritiesMember2023-09-300000714310us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:OtherDebtSecuritiesMember2023-09-300000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberus-gaap:OtherDebtSecuritiesMember2022-12-310000714310us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:OtherDebtSecuritiesMember2022-12-310000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMember2023-09-300000714310us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:CorporateDebtSecuritiesMember2023-09-300000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMember2022-12-310000714310us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:CorporateDebtSecuritiesMember2022-12-310000714310us-gaap:CarryingReportedAmountFairValueDisclosureMember2023-09-300000714310us-gaap:EstimateOfFairValueFairValueDisclosureMember2023-09-300000714310us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-310000714310us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2023-09-300000714310us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-09-300000714310us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2022-12-310000714310us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310000714310us-gaap:USTreasurySecuritiesMember2023-09-300000714310us-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-09-300000714310us-gaap:StateAndLocalJurisdictionMember2023-09-300000714310us-gaap:MunicipalBondsMember2023-09-300000714310us-gaap:USStatesAndPoliticalSubdivisionsMember2023-09-300000714310us-gaap:ResidentialMortgageBackedSecuritiesMember2023-09-300000714310us-gaap:CorporateDebtSecuritiesMember2023-09-300000714310us-gaap:USTreasurySecuritiesMember2022-12-310000714310us-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310000714310us-gaap:StateAndLocalJurisdictionMember2022-12-310000714310us-gaap:MunicipalBondsMember2022-12-310000714310us-gaap:USStatesAndPoliticalSubdivisionsMember2022-12-310000714310us-gaap:ResidentialMortgageBackedSecuritiesMember2022-12-310000714310us-gaap:CorporateDebtSecuritiesMember2022-12-31vly:position0000714310us-gaap:OtherDebtSecuritiesMember2023-09-300000714310us-gaap:OtherDebtSecuritiesMember2022-12-310000714310vly:AAAToAAToARatingMemberus-gaap:USTreasurySecuritiesMember2023-09-300000714310us-gaap:USTreasurySecuritiesMembervly:BBBRatingMember2023-09-300000714310us-gaap:ExternalCreditRatingNonInvestmentGradeMemberus-gaap:USTreasurySecuritiesMember2023-09-300000714310vly:NonRatedMemberus-gaap:USTreasurySecuritiesMember2023-09-300000714310vly:AAAToAAToARatingMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-09-300000714310us-gaap:USGovernmentAgenciesDebtSecuritiesMembervly:BBBRatingMember2023-09-300000714310us-gaap:ExternalCreditRatingNonInvestmentGradeMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-09-300000714310vly:NonRatedMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-09-300000714310us-gaap:StateAndLocalJurisdictionMembervly:AAAToAAToARatingMember2023-09-300000714310us-gaap:StateAndLocalJurisdictionMembervly:BBBRatingMember2023-09-300000714310us-gaap:StateAndLocalJurisdictionMemberus-gaap:ExternalCreditRatingNonInvestmentGradeMember2023-09-300000714310us-gaap:StateAndLocalJurisdictionMembervly:NonRatedMember2023-09-300000714310vly:AAAToAAToARatingMemberus-gaap:MunicipalBondsMember2023-09-300000714310us-gaap:MunicipalBondsMembervly:BBBRatingMember2023-09-300000714310us-gaap:ExternalCreditRatingNonInvestmentGradeMemberus-gaap:MunicipalBondsMember2023-09-300000714310vly:NonRatedMemberus-gaap:MunicipalBondsMember2023-09-300000714310us-gaap:USStatesAndPoliticalSubdivisionsMembervly:AAAToAAToARatingMember2023-09-300000714310us-gaap:USStatesAndPoliticalSubdivisionsMembervly:BBBRatingMember2023-09-300000714310us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:ExternalCreditRatingNonInvestmentGradeMember2023-09-300000714310us-gaap:USStatesAndPoliticalSubdivisionsMembervly:NonRatedMember2023-09-300000714310vly:AAAToAAToARatingMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2023-09-300000714310us-gaap:ResidentialMortgageBackedSecuritiesMembervly:BBBRatingMember2023-09-300000714310us-gaap:ExternalCreditRatingNonInvestmentGradeMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2023-09-300000714310vly:NonRatedMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2023-09-300000714310vly:AAAToAAToARatingMemberus-gaap:OtherDebtSecuritiesMember2023-09-300000714310vly:BBBRatingMemberus-gaap:OtherDebtSecuritiesMember2023-09-300000714310us-gaap:ExternalCreditRatingNonInvestmentGradeMemberus-gaap:OtherDebtSecuritiesMember2023-09-300000714310vly:NonRatedMemberus-gaap:OtherDebtSecuritiesMember2023-09-300000714310vly:AAAToAAToARatingMemberus-gaap:CorporateDebtSecuritiesMember2023-09-300000714310vly:BBBRatingMemberus-gaap:CorporateDebtSecuritiesMember2023-09-300000714310us-gaap:ExternalCreditRatingNonInvestmentGradeMemberus-gaap:CorporateDebtSecuritiesMember2023-09-300000714310vly:NonRatedMemberus-gaap:CorporateDebtSecuritiesMember2023-09-300000714310vly:AAAToAAToARatingMember2023-09-300000714310vly:BBBRatingMember2023-09-300000714310us-gaap:ExternalCreditRatingNonInvestmentGradeMember2023-09-300000714310vly:NonRatedMember2023-09-300000714310vly:AAAToAAToARatingMemberus-gaap:USTreasurySecuritiesMember2022-12-310000714310us-gaap:USTreasurySecuritiesMembervly:BBBRatingMember2022-12-310000714310us-gaap:ExternalCreditRatingNonInvestmentGradeMemberus-gaap:USTreasurySecuritiesMember2022-12-310000714310vly:NonRatedMemberus-gaap:USTreasurySecuritiesMember2022-12-310000714310vly:AAAToAAToARatingMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310000714310us-gaap:USGovernmentAgenciesDebtSecuritiesMembervly:BBBRatingMember2022-12-310000714310us-gaap:ExternalCreditRatingNonInvestmentGradeMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310000714310vly:NonRatedMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310000714310us-gaap:StateAndLocalJurisdictionMembervly:AAAToAAToARatingMember2022-12-310000714310us-gaap:StateAndLocalJurisdictionMembervly:BBBRatingMember2022-12-310000714310us-gaap:StateAndLocalJurisdictionMemberus-gaap:ExternalCreditRatingNonInvestmentGradeMember2022-12-310000714310us-gaap:StateAndLocalJurisdictionMembervly:NonRatedMember2022-12-310000714310vly:AAAToAAToARatingMemberus-gaap:MunicipalBondsMember2022-12-310000714310us-gaap:MunicipalBondsMembervly:BBBRatingMember2022-12-310000714310us-gaap:ExternalCreditRatingNonInvestmentGradeMemberus-gaap:MunicipalBondsMember2022-12-310000714310vly:NonRatedMemberus-gaap:MunicipalBondsMember2022-12-310000714310us-gaap:USStatesAndPoliticalSubdivisionsMembervly:AAAToAAToARatingMember2022-12-310000714310us-gaap:USStatesAndPoliticalSubdivisionsMembervly:BBBRatingMember2022-12-310000714310us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:ExternalCreditRatingNonInvestmentGradeMember2022-12-310000714310us-gaap:USStatesAndPoliticalSubdivisionsMembervly:NonRatedMember2022-12-310000714310vly:AAAToAAToARatingMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2022-12-310000714310us-gaap:ResidentialMortgageBackedSecuritiesMembervly:BBBRatingMember2022-12-310000714310us-gaap:ExternalCreditRatingNonInvestmentGradeMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2022-12-310000714310vly:NonRatedMemberus-gaap:ResidentialMortgageBackedSecuritiesMember2022-12-310000714310vly:AAAToAAToARatingMemberus-gaap:OtherDebtSecuritiesMember2022-12-310000714310vly:BBBRatingMemberus-gaap:OtherDebtSecuritiesMember2022-12-310000714310us-gaap:ExternalCreditRatingNonInvestmentGradeMemberus-gaap:OtherDebtSecuritiesMember2022-12-310000714310vly:NonRatedMemberus-gaap:OtherDebtSecuritiesMember2022-12-310000714310vly:AAAToAAToARatingMemberus-gaap:CorporateDebtSecuritiesMember2022-12-310000714310vly:BBBRatingMemberus-gaap:CorporateDebtSecuritiesMember2022-12-310000714310us-gaap:ExternalCreditRatingNonInvestmentGradeMemberus-gaap:CorporateDebtSecuritiesMember2022-12-310000714310vly:NonRatedMemberus-gaap:CorporateDebtSecuritiesMember2022-12-310000714310vly:AAAToAAToARatingMember2022-12-310000714310vly:BBBRatingMember2022-12-310000714310us-gaap:ExternalCreditRatingNonInvestmentGradeMember2022-12-310000714310vly:NonRatedMember2022-12-3100007143102021-06-300000714310us-gaap:CommercialPortfolioSegmentMember2023-09-300000714310us-gaap:CommercialPortfolioSegmentMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMember2023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMember2022-12-310000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2023-09-300000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMember2023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMember2022-12-310000714310us-gaap:ResidentialPortfolioSegmentMember2023-09-300000714310us-gaap:ResidentialPortfolioSegmentMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:AutomobileLoanMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:AutomobileLoanMember2022-12-310000714310vly:OtherConsumerLoanMemberus-gaap:ConsumerPortfolioSegmentMember2023-09-300000714310vly:OtherConsumerLoanMemberus-gaap:ConsumerPortfolioSegmentMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMember2022-12-310000714310us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2023-09-300000714310us-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:CommercialPortfolioSegmentMember2023-09-300000714310us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-09-300000714310us-gaap:FinancialAssetPastDueMemberus-gaap:CommercialPortfolioSegmentMember2023-09-300000714310us-gaap:FinancialAssetNotPastDueMemberus-gaap:CommercialPortfolioSegmentMember2023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:RealEstateLoanMember2023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-09-300000714310us-gaap:FinancialAssetPastDueMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMember2023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:RealEstateLoanMember2023-09-300000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2023-09-300000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-09-300000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-09-300000714310us-gaap:FinancialAssetPastDueMemberus-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2023-09-300000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-09-300000714310us-gaap:FinancialAssetPastDueMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2023-09-300000714310us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2023-09-300000714310us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-09-300000714310us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-09-300000714310us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2023-09-300000714310us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:HomeEquityLoanMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:HomeEquityLoanMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:HomeEquityLoanMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:HomeEquityLoanMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:HomeEquityLoanMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:AutomobileLoanMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:AutomobileLoanMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:AutomobileLoanMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:AutomobileLoanMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:AutomobileLoanMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMembervly:OtherConsumerLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMembervly:OtherConsumerLoanMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMembervly:OtherConsumerLoanMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMembervly:OtherConsumerLoanMemberus-gaap:FinancialAssetPastDueMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMembervly:OtherConsumerLoanMemberus-gaap:FinancialAssetNotPastDueMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2023-09-300000714310us-gaap:FinancingReceivables30To59DaysPastDueMember2023-09-300000714310us-gaap:FinancingReceivables60To89DaysPastDueMember2023-09-300000714310us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-09-300000714310us-gaap:FinancialAssetPastDueMember2023-09-300000714310us-gaap:FinancialAssetNotPastDueMember2023-09-300000714310us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-12-310000714310us-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310000714310us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000714310us-gaap:FinancialAssetPastDueMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310000714310us-gaap:FinancialAssetNotPastDueMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:RealEstateLoanMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000714310us-gaap:FinancialAssetPastDueMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:RealEstateLoanMember2022-12-310000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-12-310000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000714310us-gaap:FinancialAssetPastDueMemberus-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-12-310000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000714310us-gaap:FinancialAssetPastDueMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2022-12-310000714310us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-12-310000714310us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310000714310us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000714310us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2022-12-310000714310us-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:HomeEquityLoanMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:HomeEquityLoanMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:HomeEquityLoanMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:HomeEquityLoanMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:HomeEquityLoanMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMemberus-gaap:AutomobileLoanMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:AutomobileLoanMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:AutomobileLoanMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMemberus-gaap:AutomobileLoanMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:AutomobileLoanMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMembervly:OtherConsumerLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMembervly:OtherConsumerLoanMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMembervly:OtherConsumerLoanMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMembervly:OtherConsumerLoanMemberus-gaap:FinancialAssetPastDueMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMembervly:OtherConsumerLoanMemberus-gaap:FinancialAssetNotPastDueMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2022-12-310000714310us-gaap:FinancingReceivables30To59DaysPastDueMember2022-12-310000714310us-gaap:FinancingReceivables60To89DaysPastDueMember2022-12-310000714310us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000714310us-gaap:FinancialAssetPastDueMember2022-12-310000714310us-gaap:FinancialAssetNotPastDueMember2022-12-310000714310us-gaap:PassMemberus-gaap:CommercialPortfolioSegmentMember2023-09-300000714310us-gaap:SpecialMentionMemberus-gaap:CommercialPortfolioSegmentMember2023-09-300000714310us-gaap:SubstandardMemberus-gaap:CommercialPortfolioSegmentMember2023-09-300000714310us-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMember2023-09-300000714310us-gaap:UnlikelyToBeCollectedFinancingReceivableMemberus-gaap:CommercialPortfolioSegmentMember2023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:PassMemberus-gaap:RealEstateLoanMember2023-09-300000714310us-gaap:SpecialMentionMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMember2023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:SubstandardMemberus-gaap:RealEstateLoanMember2023-09-300000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:PassMember2023-09-300000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:SubstandardMember2023-09-300000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:DoubtfulMember2023-09-300000714310vly:CommercialAndIndustrialAndCommercialRealEstateMember2023-01-012023-09-300000714310us-gaap:PassMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310000714310us-gaap:SpecialMentionMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310000714310us-gaap:SubstandardMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310000714310us-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:PassMemberus-gaap:RealEstateLoanMember2022-12-310000714310us-gaap:SpecialMentionMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:SubstandardMemberus-gaap:RealEstateLoanMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:DoubtfulMemberus-gaap:RealEstateLoanMember2022-12-310000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:PassMember2022-12-310000714310us-gaap:SpecialMentionMemberus-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-12-310000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:SubstandardMember2022-12-310000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:DoubtfulMember2022-12-310000714310us-gaap:PerformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMember2023-09-300000714310us-gaap:NonperformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-09-300000714310us-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2023-09-300000714310us-gaap:NonperformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:HomeEquityLoanMember2023-09-300000714310us-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:AutomobileLoanMember2023-09-300000714310us-gaap:NonperformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:AutomobileLoanMember2023-09-300000714310us-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMembervly:OtherConsumerLoanMember2023-09-300000714310us-gaap:NonperformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMembervly:OtherConsumerLoanMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-09-300000714310vly:ResidentialMortgageAndConsumerMember2023-01-012023-09-300000714310us-gaap:PerformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMember2022-12-310000714310us-gaap:NonperformingFinancingReceivableMemberus-gaap:ResidentialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000714310us-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:HomeEquityLoanMember2022-12-310000714310us-gaap:NonperformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:HomeEquityLoanMember2022-12-310000714310us-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:AutomobileLoanMember2022-12-310000714310us-gaap:NonperformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:AutomobileLoanMember2022-12-310000714310us-gaap:PerformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMembervly:OtherConsumerLoanMember2022-12-310000714310us-gaap:NonperformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMembervly:OtherConsumerLoanMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000714310us-gaap:CommercialPortfolioSegmentMemberus-gaap:ContractualInterestRateReductionMember2023-07-012023-09-300000714310us-gaap:CommercialPortfolioSegmentMemberus-gaap:ExtendedMaturityMember2023-07-012023-09-300000714310us-gaap:ExtendedMaturityAndInterestRateReductionMemberus-gaap:CommercialPortfolioSegmentMember2023-07-012023-09-300000714310us-gaap:CommercialPortfolioSegmentMember2023-07-012023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:ContractualInterestRateReductionMember2023-07-012023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:ExtendedMaturityMember2023-07-012023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:ExtendedMaturityAndInterestRateReductionMember2023-07-012023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMember2023-07-012023-09-300000714310vly:HomeEquityPortfolioSegmentMemberus-gaap:ContractualInterestRateReductionMember2023-07-012023-09-300000714310vly:HomeEquityPortfolioSegmentMemberus-gaap:ExtendedMaturityMember2023-07-012023-09-300000714310vly:HomeEquityPortfolioSegmentMemberus-gaap:ExtendedMaturityAndInterestRateReductionMember2023-07-012023-09-300000714310vly:HomeEquityPortfolioSegmentMember2023-07-012023-09-300000714310us-gaap:ContractualInterestRateReductionMember2023-07-012023-09-300000714310us-gaap:ExtendedMaturityMember2023-07-012023-09-300000714310us-gaap:ExtendedMaturityAndInterestRateReductionMember2023-07-012023-09-300000714310us-gaap:CommercialPortfolioSegmentMemberus-gaap:ContractualInterestRateReductionMember2023-01-012023-09-300000714310us-gaap:CommercialPortfolioSegmentMemberus-gaap:ExtendedMaturityMember2023-01-012023-09-300000714310us-gaap:ExtendedMaturityAndInterestRateReductionMemberus-gaap:CommercialPortfolioSegmentMember2023-01-012023-09-300000714310us-gaap:CommercialPortfolioSegmentMember2023-01-012023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:ContractualInterestRateReductionMember2023-01-012023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:ExtendedMaturityMember2023-01-012023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:ExtendedMaturityAndInterestRateReductionMember2023-01-012023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMember2023-01-012023-09-300000714310us-gaap:ResidentialPortfolioSegmentMemberus-gaap:ContractualInterestRateReductionMember2023-01-012023-09-300000714310us-gaap:ResidentialPortfolioSegmentMemberus-gaap:ExtendedMaturityMember2023-01-012023-09-300000714310us-gaap:ResidentialPortfolioSegmentMemberus-gaap:ExtendedMaturityAndInterestRateReductionMember2023-01-012023-09-300000714310us-gaap:ResidentialPortfolioSegmentMember2023-01-012023-09-300000714310vly:HomeEquityPortfolioSegmentMemberus-gaap:ContractualInterestRateReductionMember2023-01-012023-09-300000714310vly:HomeEquityPortfolioSegmentMemberus-gaap:ExtendedMaturityMember2023-01-012023-09-300000714310vly:HomeEquityPortfolioSegmentMemberus-gaap:ExtendedMaturityAndInterestRateReductionMember2023-01-012023-09-300000714310vly:HomeEquityPortfolioSegmentMember2023-01-012023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:ContractualInterestRateReductionMember2023-01-012023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:ExtendedMaturityMember2023-01-012023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:ExtendedMaturityAndInterestRateReductionMember2023-01-012023-09-300000714310us-gaap:ConsumerPortfolioSegmentMember2023-01-012023-09-300000714310us-gaap:ContractualInterestRateReductionMember2023-01-012023-09-300000714310us-gaap:ExtendedMaturityMember2023-01-012023-09-300000714310us-gaap:ExtendedMaturityAndInterestRateReductionMember2023-01-012023-09-300000714310us-gaap:ExtendedMaturityMemberus-gaap:CommercialPortfolioSegmentMember2023-01-012023-09-300000714310us-gaap:ExtendedMaturityMembersrt:MaximumMemberus-gaap:CommercialPortfolioSegmentMember2023-07-012023-09-300000714310srt:MinimumMemberus-gaap:ExtendedMaturityMemberus-gaap:CommercialPortfolioSegmentMember2023-01-012023-09-300000714310us-gaap:ExtendedMaturityAndInterestRateReductionMemberus-gaap:CommercialPortfolioSegmentMember2023-01-012023-09-300000714310us-gaap:ExtendedMaturityAndInterestRateReductionMembersrt:MaximumMemberus-gaap:CommercialPortfolioSegmentMember2023-07-012023-09-300000714310srt:MinimumMemberus-gaap:ExtendedMaturityAndInterestRateReductionMemberus-gaap:CommercialPortfolioSegmentMember2023-01-012023-09-300000714310srt:MinimumMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2023-01-012023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMembersrt:MaximumMember2023-01-012023-09-300000714310us-gaap:CommercialPortfolioSegmentMember2022-07-012022-09-30vly:contract0000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMember2022-07-012022-09-300000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-07-012022-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMember2022-07-012022-09-300000714310us-gaap:ResidentialPortfolioSegmentMember2022-07-012022-09-300000714310us-gaap:CommercialPortfolioSegmentMember2022-01-012022-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMember2022-01-012022-09-300000714310us-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-01-012022-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMember2022-01-012022-09-300000714310us-gaap:ResidentialPortfolioSegmentMember2022-01-012022-09-300000714310us-gaap:ConsumerPortfolioSegmentMember2022-01-012022-09-300000714310us-gaap:ResidentialMortgageMember2023-09-300000714310us-gaap:ResidentialMortgageMember2022-12-310000714310vly:InFormalForeclosureProceedingsMember2023-09-300000714310vly:InFormalForeclosureProceedingsMember2022-12-310000714310us-gaap:CommercialPortfolioSegmentMemberus-gaap:CollateralPledgedMember2023-09-300000714310us-gaap:CommercialPortfolioSegmentMemberus-gaap:CollateralPledgedMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:CollateralPledgedMember2023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:CollateralPledgedMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:CollateralPledgedMember2023-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:CollateralPledgedMember2022-12-310000714310us-gaap:ResidentialPortfolioSegmentMemberus-gaap:CollateralPledgedMember2023-09-300000714310us-gaap:ResidentialPortfolioSegmentMemberus-gaap:CollateralPledgedMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:CollateralPledgedMemberus-gaap:HomeEquityLoanMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:CollateralPledgedMemberus-gaap:HomeEquityLoanMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:CollateralPledgedMember2023-09-300000714310us-gaap:ConsumerPortfolioSegmentMemberus-gaap:CollateralPledgedMember2022-12-310000714310us-gaap:CollateralPledgedMember2023-09-300000714310us-gaap:CollateralPledgedMember2022-12-310000714310us-gaap:CommercialPortfolioSegmentMember2023-06-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMember2023-06-300000714310us-gaap:ResidentialPortfolioSegmentMember2023-06-300000714310us-gaap:ConsumerPortfolioSegmentMember2023-06-300000714310us-gaap:ResidentialPortfolioSegmentMember2023-07-012023-09-300000714310us-gaap:ConsumerPortfolioSegmentMember2023-07-012023-09-300000714310us-gaap:CommercialPortfolioSegmentMember2022-06-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMember2022-06-300000714310us-gaap:ResidentialPortfolioSegmentMember2022-06-300000714310us-gaap:ConsumerPortfolioSegmentMember2022-06-300000714310us-gaap:ConsumerPortfolioSegmentMember2022-07-012022-09-300000714310us-gaap:CommercialPortfolioSegmentMember2022-09-300000714310us-gaap:CommercialRealEstatePortfolioSegmentMember2022-09-300000714310us-gaap:ResidentialPortfolioSegmentMember2022-09-300000714310us-gaap:ConsumerPortfolioSegmentMember2022-09-300000714310srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2022-12-310000714310us-gaap:ResidentialPortfolioSegmentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2022-12-310000714310srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:CommercialPortfolioSegmentMember2022-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2022-12-310000714310us-gaap:ResidentialPortfolioSegmentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2022-12-310000714310us-gaap:ConsumerPortfolioSegmentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2022-12-310000714310us-gaap:CommercialPortfolioSegmentMember2021-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMember2021-12-310000714310us-gaap:ResidentialPortfolioSegmentMember2021-12-310000714310us-gaap:ConsumerPortfolioSegmentMember2021-12-310000714310us-gaap:CommercialPortfolioSegmentMember2021-01-012021-12-310000714310us-gaap:CommercialRealEstatePortfolioSegmentMember2021-01-012021-12-310000714310us-gaap:ResidentialPortfolioSegmentMember2021-01-012021-12-310000714310us-gaap:ConsumerPortfolioSegmentMember2021-01-012021-12-3100007143102021-01-012021-12-310000714310us-gaap:FinancialAssetAcquiredWithCreditDeteriorationMember2022-04-012022-06-300000714310vly:InvestmentManagementMember2022-06-300000714310vly:ConsumerLendingMember2022-04-012022-06-300000714310vly:CommercialLendingMember2022-04-012022-06-300000714310srt:ScenarioPreviouslyReportedMembervly:WealthManagementMembervly:ConsumerLendingMember2022-12-310000714310srt:ScenarioPreviouslyReportedMembervly:ConsumerLendingMember2022-12-310000714310srt:ScenarioPreviouslyReportedMembervly:CommercialLendingMember2022-12-310000714310srt:ScenarioPreviouslyReportedMember2022-12-310000714310vly:WealthManagementMembersrt:RestatementAdjustmentMembervly:ConsumerLendingMember2022-12-310000714310srt:RestatementAdjustmentMembervly:ConsumerLendingMember2022-12-310000714310vly:CommercialLendingMembersrt:RestatementAdjustmentMember2022-12-310000714310srt:RestatementAdjustmentMember2022-12-310000714310vly:WealthManagementMembervly:ConsumerLendingMember2022-12-310000714310vly:ConsumerLendingMember2022-12-310000714310vly:CommercialLendingMember2022-12-310000714310vly:WealthManagementMembervly:ConsumerLendingMember2023-09-300000714310vly:ConsumerLendingMember2023-09-300000714310vly:CommercialLendingMember2023-09-300000714310vly:LoanServicingRightsMember2023-09-300000714310us-gaap:CoreDepositsMember2023-09-300000714310us-gaap:OtherIntangibleAssetsMember2023-09-300000714310vly:LoanServicingRightsMember2022-12-310000714310us-gaap:CoreDepositsMember2022-12-310000714310us-gaap:OtherIntangibleAssetsMember2022-12-310000714310us-gaap:CoreDepositsMember2023-01-012023-09-300000714310us-gaap:OtherIntangibleAssetsMember2023-01-012023-09-300000714310vly:CoreDepositsandOtherIntangibleAssetsMember2022-01-012022-09-300000714310vly:CoreDepositsandOtherIntangibleAssetsMember2023-07-012023-09-300000714310vly:CoreDepositsandOtherIntangibleAssetsMember2023-01-012023-09-300000714310vly:CoreDepositsandOtherIntangibleAssetsMember2022-07-012022-09-300000714310us-gaap:ShortTermDebtMember2023-09-300000714310us-gaap:ShortTermDebtMember2022-12-310000714310us-gaap:LongTermDebtMember2023-09-300000714310us-gaap:LongTermDebtMember2022-12-310000714310us-gaap:FederalHomeLoanBankAdvancesMember2023-09-300000714310us-gaap:FederalHomeLoanBankAdvancesMember2022-12-310000714310vly:SubordinatedNotesDueSeptember2023Member2023-09-272023-09-270000714310vly:SubordinatedNotesDueSeptember2023Member2022-01-012022-12-3100007143102023-04-250000714310srt:ExecutiveOfficerMembervly:PerformanceBasedRestrictedStockUnitsMember2023-07-012023-09-300000714310srt:ExecutiveOfficerMembervly:PerformanceBasedRestrictedStockUnitsMember2022-07-012022-09-300000714310srt:ExecutiveOfficerMembervly:PerformanceBasedRestrictedStockUnitsMember2023-01-012023-09-300000714310srt:ExecutiveOfficerMembervly:PerformanceBasedRestrictedStockUnitsMember2022-01-012022-09-300000714310vly:TimeBasedRestrictedStockUnitsMember2023-07-012023-09-300000714310vly:TimeBasedRestrictedStockUnitsMember2022-07-012022-09-300000714310vly:TimeBasedRestrictedStockUnitsMember2023-01-012023-09-300000714310vly:TimeBasedRestrictedStockUnitsMember2022-01-012022-09-300000714310vly:PerformanceBasedRestrictedStockUnitsMember2023-07-012023-09-300000714310vly:PerformanceBasedRestrictedStockUnitsMember2022-07-012022-09-300000714310vly:PerformanceBasedRestrictedStockUnitsMember2023-01-012023-09-300000714310vly:PerformanceBasedRestrictedStockUnitsMember2022-01-012022-09-300000714310us-gaap:InterestRateSwapMember2023-06-30vly:swap0000714310us-gaap:InterestRateSwapMember2023-01-012023-06-300000714310us-gaap:NondesignatedMemberus-gaap:InterestRateSwapMember2023-09-300000714310vly:RiskParticipationAgreementMemberus-gaap:NondesignatedMemberus-gaap:InterestRateSwapMember2023-09-300000714310us-gaap:FairValueHedgingMemberus-gaap:NondesignatedMemberus-gaap:InterestRateSwapMember2023-09-300000714310us-gaap:OtherAssetsMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateContractMember2023-09-300000714310us-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherLiabilitiesMemberus-gaap:InterestRateContractMember2023-09-300000714310us-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateContractMember2023-09-300000714310us-gaap:OtherAssetsMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateContractMember2022-12-310000714310us-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherLiabilitiesMemberus-gaap:InterestRateContractMember2022-12-310000714310us-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateContractMember2022-12-310000714310us-gaap:OtherAssetsMemberus-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2023-09-300000714310us-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMember2023-09-300000714310us-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2023-09-300000714310us-gaap:OtherAssetsMemberus-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2022-12-310000714310us-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMember2022-12-310000714310us-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2022-12-310000714310us-gaap:OtherAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-09-300000714310us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherLiabilitiesMember2023-09-300000714310us-gaap:DesignatedAsHedgingInstrumentMember2023-09-300000714310us-gaap:OtherAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-12-310000714310us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherLiabilitiesMember2022-12-310000714310us-gaap:DesignatedAsHedgingInstrumentMember2022-12-310000714310us-gaap:OtherAssetsMemberus-gaap:NondesignatedMemberus-gaap:InterestRateSwapMember2023-09-300000714310us-gaap:OtherLiabilitiesMemberus-gaap:NondesignatedMemberus-gaap:InterestRateSwapMember2023-09-300000714310us-gaap:OtherAssetsMemberus-gaap:NondesignatedMemberus-gaap:InterestRateSwapMember2022-12-310000714310us-gaap:OtherLiabilitiesMemberus-gaap:NondesignatedMemberus-gaap:InterestRateSwapMember2022-12-310000714310us-gaap:NondesignatedMemberus-gaap:InterestRateSwapMember2022-12-310000714310us-gaap:OtherAssetsMemberus-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2023-09-300000714310us-gaap:OtherLiabilitiesMemberus-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2023-09-300000714310us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2023-09-300000714310us-gaap:OtherAssetsMemberus-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2022-12-310000714310us-gaap:OtherLiabilitiesMemberus-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2022-12-310000714310us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2022-12-310000714310us-gaap:OtherAssetsMemberus-gaap:NondesignatedMembervly:MortgageBankingDerivativesMember2023-09-300000714310us-gaap:OtherLiabilitiesMemberus-gaap:NondesignatedMembervly:MortgageBankingDerivativesMember2023-09-300000714310us-gaap:NondesignatedMembervly:MortgageBankingDerivativesMember2023-09-300000714310us-gaap:OtherAssetsMemberus-gaap:NondesignatedMembervly:MortgageBankingDerivativesMember2022-12-310000714310us-gaap:OtherLiabilitiesMemberus-gaap:NondesignatedMembervly:MortgageBankingDerivativesMember2022-12-310000714310us-gaap:NondesignatedMembervly:MortgageBankingDerivativesMember2022-12-310000714310us-gaap:OtherAssetsMemberus-gaap:NondesignatedMember2023-09-300000714310us-gaap:OtherLiabilitiesMemberus-gaap:NondesignatedMember2023-09-300000714310us-gaap:NondesignatedMember2023-09-300000714310us-gaap:OtherAssetsMemberus-gaap:NondesignatedMember2022-12-310000714310us-gaap:OtherLiabilitiesMemberus-gaap:NondesignatedMember2022-12-310000714310us-gaap:NondesignatedMember2022-12-310000714310us-gaap:InterestRateSwapMember2023-09-300000714310us-gaap:InterestRateSwapMember2022-12-310000714310us-gaap:InterestIncomeMemberus-gaap:InterestRateSwapMember2023-09-300000714310us-gaap:FairValueHedgingMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2023-07-012023-09-300000714310us-gaap:FairValueHedgingMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2022-07-012022-09-300000714310us-gaap:FairValueHedgingMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2023-01-012023-09-300000714310us-gaap:FairValueHedgingMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2022-01-012022-09-300000714310us-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateContractMember2023-07-012023-09-300000714310us-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateContractMember2022-07-012022-09-300000714310us-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateContractMember2023-01-012023-09-300000714310us-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateContractMember2022-01-012022-09-300000714310us-gaap:FairValueHedgingMemberus-gaap:InterestRateSwapMembervly:NoninterestIncomeMember2023-07-012023-09-300000714310us-gaap:FairValueHedgingMemberus-gaap:InterestRateSwapMembervly:NoninterestIncomeMember2022-07-012022-09-300000714310us-gaap:FairValueHedgingMemberus-gaap:InterestRateSwapMembervly:NoninterestIncomeMember2023-01-012023-09-300000714310us-gaap:FairValueHedgingMemberus-gaap:InterestRateSwapMembervly:NoninterestIncomeMember2022-01-012022-09-300000714310us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2023-09-300000714310us-gaap:InterestRateContractMember2023-09-300000714310us-gaap:InterestRateContractMember2022-12-310000714310us-gaap:OtherAssetsMember2023-09-300000714310us-gaap:OtherAssetsMember2022-12-310000714310vly:AccruedExpensesAndOtherLiabilitiesMember2023-09-300000714310vly:AccruedExpensesAndOtherLiabilitiesMember2022-12-310000714310vly:NonInterestExpensesMember2023-07-012023-09-300000714310vly:NonInterestExpensesMember2022-07-012022-09-300000714310vly:NonInterestExpensesMember2023-01-012023-09-300000714310vly:NonInterestExpensesMember2022-01-012022-09-300000714310us-gaap:OperatingSegmentsMembervly:CustomerLendingMember2023-07-012023-09-300000714310us-gaap:OperatingSegmentsMembervly:CommercialLendingMember2023-07-012023-09-300000714310vly:TreasuryAndCorporateOtherMemberus-gaap:CorporateNonSegmentMember2023-07-012023-09-300000714310us-gaap:OperatingSegmentsMembervly:CustomerLendingMember2022-07-012022-09-300000714310us-gaap:OperatingSegmentsMembervly:CommercialLendingMember2022-07-012022-09-300000714310vly:TreasuryAndCorporateOtherMemberus-gaap:CorporateNonSegmentMember2022-07-012022-09-300000714310us-gaap:OperatingSegmentsMembervly:CustomerLendingMember2023-01-012023-09-300000714310us-gaap:OperatingSegmentsMembervly:CommercialLendingMember2023-01-012023-09-300000714310vly:TreasuryAndCorporateOtherMemberus-gaap:CorporateNonSegmentMember2023-01-012023-09-300000714310us-gaap:OperatingSegmentsMembervly:CustomerLendingMember2022-01-012022-09-300000714310us-gaap:OperatingSegmentsMembervly:CommercialLendingMember2022-01-012022-09-300000714310us-gaap:OperatingSegmentsMembervly:TreasuryAndCorporateOtherMember2022-01-012022-09-30

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, 2023
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 Jersey22-2477875
(State or other jurisdiction of
Incorporation or Organization)		(I.R.S. Employer
Identification Number)
One Penn Plaza
New York,NY10119
(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 classTrading SymbolsName of exchange on which registered
Common Stock, no par valueVLYThe Nasdaq Stock Market LLC
Non-Cumulative Perpetual Preferred Stock, Series A, no par valueVLYPPThe Nasdaq Stock Market LLC
Non-Cumulative Perpetual Preferred Stock, Series B, no par valueVLYPOThe 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 for 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:
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 507,684,079 shares were outstanding as of November 8, 2023.


TABLE OF CONTENTS
 
  Page
Number
PART I
Item 1.
Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2023 and 2022
Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2023 and 2022
Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months Ended September 30, 2023 and 2022
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022
Item 2.
Item 3.
Item 4.
PART II
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.

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,
2023		December 31,
2022
Assets(Unaudited)
Cash and due from banks$444,857 $444,325 
Interest bearing deposits with banks698,966 503,622 
Investment securities:
Equity securities63,191 48,731 
Trading debt securities3,441 13,438 
Available for sale debt securities1,186,524 1,261,397 
Held to maturity debt securities (net of allowance for credit losses of $1,321 at September 30, 2023 and $1,646 at December 31, 2022)
3,797,388 3,827,338 
Total investment securities5,050,544 5,150,904 
Loans held for sale, at fair value33,834 18,118 
Loans50,097,519 46,917,200 
Less: Allowance for loan losses(442,175)(458,655)
Net loans49,655,344 46,458,545 
Premises and equipment, net387,981 358,556 
Lease right of use assets352,104 306,352 
Bank owned life insurance719,691 717,177 
Accrued interest receivable237,786 196,606 
Goodwill1,868,936 1,868,936 
Other intangible assets, net169,266 197,456 
Other assets1,564,043 1,242,152 
Total Assets$61,183,352 $57,462,749 
Liabilities
Deposits:
Non-interest bearing$11,671,504 $14,463,645 
Interest bearing:
Savings, NOW and money market23,110,840 23,616,812 
Time15,102,970 9,556,457 
Total deposits49,885,314 47,636,914 
Short-term borrowings89,802 138,729 
Long-term borrowings2,318,294 1,543,058 
Junior subordinated debentures issued to capital trusts57,021 56,760 
Lease liabilities413,021 358,884 
Accrued expenses and other liabilities1,792,601 1,327,602 
Total Liabilities54,556,053 51,061,947 
Shareholders’ Equity
Preferred stock, no par value; 50,000,000 authorized shares:
Series A (4,600,000 shares issued at September 30, 2023 and December 31, 2022)
111,590 111,590 
Series B (4,000,000 shares issued at September 30, 2023 and December 31, 2022)
98,101 98,101 
Common stock (no par value, authorized 650,000,000 shares; issued 507,896,910 shares at September 30, 2023 and December 31, 2022)
178,187 178,185 
Surplus4,982,748 4,980,231 
Retained earnings1,460,284 1,218,445 
Accumulated other comprehensive loss(201,892)(164,002)
Treasury stock, at cost (236,168 common shares at September 30, 2023 and 1,522,432 common shares at December 31, 2022)
(1,719)(21,748)
Total Shareholders’ Equity6,627,299 6,400,802 
Total Liabilities and Shareholders’ Equity$61,183,352 $57,462,749 
See accompanying notes to consolidated financial statements.
2


VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands, except for per share data)
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2023202220232022
Interest Income
Interest and fees on loans$753,638 $496,520 $2,124,036 $1,229,462 
Interest and dividends on investment securities:
Taxable32,383 28,264 96,591 74,416 
Tax-exempt4,585 5,210 15,485 12,739 
Dividends5,299 2,738 18,001 7,490 
Interest on federal funds sold and other short-term investments17,113 3,996 66,594 6,026 
Total interest income813,018 536,728 2,320,707 1,330,133 
Interest Expense
Interest on deposits:
Savings, NOW and money market201,916 50,674 517,524 77,423 
Time164,336 15,174 370,398 21,274 
Interest on short-term borrowings5,189 5,160 89,345 10,049 
Interest on long-term borrowings and junior subordinated debentures29,159 11,728 75,237 31,566 
Total interest expense400,600 82,736 1,052,504 140,312 
Net Interest Income412,418 453,992 1,268,203 1,189,821 
(Credit) provision for credit losses for available for sale and held to maturity securities(30)188 4,675 531 
Provision for credit losses for loans9,147 1,835 24,929 49,047 
Net Interest Income After Provision for Credit Losses403,301 451,969 1,238,599 1,140,243 
Non-Interest Income
Wealth management and trust fees11,417 9,281 32,180 23,989 
Insurance commissions2,336 3,750 7,895 9,072 
Capital markets7,141 13,171 35,000 42,242 
Service charges on deposit accounts10,952 10,338 31,970 26,617 
(Losses) gains on securities transactions, net(398)323 197 (1,058)
Fees from loan servicing2,681 3,138 8,054 8,636 
Gains on sales of loans, net2,023 922 3,752 5,510 
Gains (losses) on sales of assets, net6,653 (106)6,938 (372)
Bank owned life insurance2,709 1,681 7,736 5,840 
Other13,150 13,696 39,316 33,521 
Total non-interest income58,664 56,194 173,038 153,997 
Non-Interest Expense
Salary and employee benefits expense137,292 134,572 431,872 397,103 
Net occupancy expense24,675 26,486 73,880 70,906 
Technology, furniture and equipment expense37,320 39,365 106,304 115,245 
FDIC insurance assessment7,946 6,500 27,527 16,009 
Amortization of other intangible assets9,741 11,088 30,072 26,925 
Professional and legal fees17,109 17,840 55,329 62,998 
Amortization of tax credit investments4,191 3,105 13,462 9,194 
Other28,859 22,683 83,824 60,329 
Total non-interest expense267,133 261,639 822,270 758,709 
Income Before Income Taxes194,832 246,524 589,367 535,531 
Income tax expense53,486 68,405 162,410 144,271 
Net Income141,346 178,119 426,957 391,260 
Dividends on preferred stock 4,127 3,172 12,031 9,516 
Net Income Available to Common Shareholders$137,219 $174,947 $414,926 $381,744 
Earnings Per Common Share:
Basic$0.27 $0.35 $0.82 $0.80 
Diluted0.27 0.34 0.81 0.79 
See accompanying notes to consolidated financial statements.
3


VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(in thousands)
 
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2023202220232022
Net income$141,346 $178,119 $426,957 $391,260 
Other comprehensive loss, net of tax:
Unrealized gains and losses on available for sale securities
Net losses arising during the period(37,115)(57,242)(37,996)(148,403)
Less reclassification adjustment for net losses (gains) included in net income5 (12)5 (22)
Total(37,110)(57,254)(37,991)(148,425)
Unrealized gains and losses on derivatives (cash flow hedges)
Net (losses) gains on derivatives arising during the period— (85)(775)110 
Less reclassification adjustment for net (gains) losses included in net income(43)(13)852 293 
Total(43)(98)77 403 
Defined benefit pension and postretirement benefit plans
Amortization of actuarial net loss8 132 24 397 
Total other comprehensive loss(37,145)(57,220)(37,890)(147,625)
Total comprehensive income$104,201 $120,899 $389,067 $243,635 
See accompanying notes to consolidated financial statements.

4


VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
(in thousands)

For the Nine Months Ended September 30, 2023
Common StockAccumulated
Preferred StockSharesAmountSurplusRetained
Earnings		Other
Comprehensive
Loss		Treasury
Stock		Total
Shareholders’
Equity
 
Balance - December 31, 2022$209,691 506,374 $178,185 $4,980,231 $1,218,445 $(164,002)$(21,748)$6,400,802 
Adjustment due to the adoption of ASU 2022-02— — — — 990 — — 990 
Balance - January 1, 2023209,691 506,374 178,185 4,980,231 1,219,435 (164,002)(21,748)6,401,792 
Net income— — — — 146,551 — — 146,551 
Other comprehensive income, net of tax— — — — — 20,355 — 20,355 
Cash dividends declared:
Preferred stock, Series A, $0.39 per share
— — — — (1,797)— — (1,797)
Preferred stock, Series B, $0.52 per share
— — — — (2,077)— — (2,077)
Common stock, $0.11 per share
— — — — (56,488)— — (56,488)
Effect of stock incentive plan, net
— 1,061 1 (12,569)(3,994)— 16,057 (505)
Common stock issued— 327 — — (650)— 4,400 3,750 
Balance - March 31, 2023$209,691 507,762 $178,186 $4,967,662 $1,300,980 $(143,647)$(1,291)$6,511,581 
Net income— — — — 139,060 — — 139,060 
Other comprehensive loss, net of tax— — — — — (21,100)— (21,100)
Cash dividends declared:
Preferred stock, Series A, $0.39 per share
— — — — (1,797)— — (1,797)
Preferred stock, Series B, $0.56 per share
— — — — (2,233)— — (2,233)
Common stock, $0.11 per share
— — — — (56,474)— — (56,474)
Effect of stock incentive plan, net
— 157 1 6,845 (2)— 1,395 8,239 
Common stock repurchased—(300)————(2,092)(2,092)
Balance - June 30, 2023
$209,691 507,619 $178,187 $4,974,507 $1,379,534 $(164,747)$(1,988)$6,575,184 
Net income— — — — 141,346 — — 141,346 
Other comprehensive loss, net of tax— — — — — (37,145)— (37,145)
Cash dividends declared:
Preferred stock, Series A, $0.39 per share
— — — — (1,797)— — (1,797)
Preferred stock, Series B, $0.58 per share
— — — — (2,330)— — (2,330)
Common stock, $0.11 per share
— — — — (56,459)— — (56,459)
Effect of stock incentive plan, net
— 42 — 8,241 (10)— 269 8,500 
Balance - September 30, 2023$209,691 507,661 $178,187 $4,982,748 $1,460,284 $(201,892)$(1,719)$6,627,299 
See accompanying notes to consolidated financial statements.
5


VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) (continued)
(in thousands)
For the Nine Months Ended September 30, 2022
Common StockAccumulated
Preferred StockSharesAmountSurplusRetained
Earnings		Other
Comprehensive
Loss		Treasury
Stock		Total
Shareholders’
Equity
 
Balance - December 31, 2021$209,691 421,437 $148,482 $3,883,035 $883,645 $(17,932)$(22,855)$5,084,066 
Net income— — — — 116,728 — — 116,728 
Other comprehensive loss, net of tax— — — — — (38,166)— (38,166)
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
— — — — (46,803)— — (46,803)
Effect of stock incentive plan, net— 972 — (10,799)(5,173)— 13,220 (2,752)
Common stock repurchased— (1,015)— — — — (13,517)(13,517)
Balance - March 31, 2022
$209,691 421,394 $148,482 $3,872,236 $945,225 $(56,098)$(23,152)$5,096,384 
Net income— — — — 96,413 — — 96,413 
Other comprehensive loss, net of tax— — — — — (52,239)— (52,239)
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
— — — — (56,211)— — (56,211)
Effect of stock incentive plan, net— 72 1 5,125 (109)— 892 5,909 
Common stock issued— 84,863 29,702 1,088,127 — — — 1,117,829 
Balance - June 30, 2022
$209,691 506,329 $178,185 $4,965,488 $982,146 $(108,337)$(22,260)$6,204,913 
Net income— — — — 178,119 — — 178,119 
Other comprehensive loss, net of tax— — — — — (57,220)— (57,220)
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
— — — — (56,242)— — (56,242)
Effect of stock incentive plan, net— 23 — 7,244 (13)— 200 7,431 
Balance - September 30, 2022
$209,691 506,352 $178,185 $4,972,732 $1,100,838 $(165,557)$(22,060)$6,273,829 

See accompanying notes to consolidated financial statements.
6


VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands)

 Nine Months Ended
September 30,
 20232022
Cash flows from operating activities:
Net income$426,957 $391,260 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization32,134 29,487 
Stock-based compensation25,365 20,978 
Provision for credit losses29,604 49,578 
Net accretion of discounts and amortization of premium on securities and borrowings(28)10,603 
Amortization of other intangible assets30,072 26,925 
Losses (Gains) on available for sale and held to maturity debt securities, net476 (102)
Proceeds from sales of loans held for sale154,720 378,216 
Gains on sales of loans, net(3,752)(5,510)
Originations of loans held for sale(158,566)(244,441)
(Gains) losses on sales of assets, net(6,938)372 
Net change in:
Fair value of borrowings hedged by derivative transactions(916)(30,585)
Trading debt securities9,997 34,030 
Lease right of use assets(45,767)(6,233)
Cash surrender value of bank owned life insurance(7,736)(5,840)
Accrued interest receivable(41,180)(36,807)
Other assets(308,879)(371,940)
Accrued expenses and other liabilities521,214 990,607 
Net cash provided by operating activities656,777 1,230,598 
Cash flows from investing activities:
Net loan originations and purchases(3,235,439)(5,114,908)
Equity securities:
Purchases(12,745)(4,148)
Sales1,113 1,725 
Held to maturity debt securities:
Purchases(235,667)(666,188)
Sales— — 
Maturities, calls and principal repayments262,734 410,760 
Available for sale debt securities:
Purchases(59,380)(49,618)
Sales17,910 12,846 
Maturities, calls and principal repayments63,060 192,868 
Death benefit proceeds from bank owned life insurance5,218 4,680 
Proceeds from sales of real estate property and equipment18,403 7,400 
Proceeds from sales of loans held for investment— — 
Purchases of real estate property and equipment(71,571)(50,511)
Cash distribution from tax credit investments— — 
Cash and cash equivalent acquired in acquisitions, net— 321,540 
Net cash used in investing activities$(3,246,364)$(4,933,554)
See accompanying notes to consolidated financial statements.
7


VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (continued)
(in thousands)
 Nine Months Ended
September 30,
 20232022
Cash flows from financing activities:
Net change in deposits$2,248,400 $2,646,434 
Net change in short-term borrowings(48,927)159,763 
Proceeds from issuance of long-term borrowings, net1,250,000 147,508 
Repayments of long-term borrowings(475,000)— 
Cash dividends paid to preferred shareholders(12,031)(9,516)
Cash dividends paid to common shareholders(169,488)(148,345)
Purchase of common shares to treasury(11,274)(24,013)
Common stock issued, net3,799 106 
Other, net(16)(553)
Net cash provided by financing activities2,785,463 2,771,384 
Net change in cash and cash equivalents195,876 (931,572)
Cash and cash equivalents at beginning of year947,947 2,049,920 
Cash and cash equivalents at end of period$1,143,823 $1,118,348 
Supplemental disclosures of cash flow information:
Cash payments for:
Interest on deposits and borrowings$942,237 $129,504 
Federal and state income taxes172,835 122,170 
Supplemental schedule of non-cash investing activities:
Transfer of loans to other real estate owned$974 $— 
Transfer of loans to loans held for sale10,000 — 
Lease right of use assets obtained in exchange for operating lease liabilities81,727 32,604 
Acquisitions:
Non-cash assets acquired:
Equity securities $— $6,239 
Investment securities available for sale— 505,928 
Investment securities held to maturity— 806,627 
Loans, net— 5,844,070 
Premises and equipment, net— 38,827 
Lease right of use assets— 49,434 
Bank owned life insurance— 126,861 
Accrued interest receivable— 25,717 
Goodwill— 407,522 
Other intangible assets, net— 159,587 
Other assets— 158,352 
Total non-cash assets acquired$— $8,129,164 
Liabilities assumed:
Deposits$— $7,029,997 
Short-term borrowings— 103,794 
Lease liabilities— 79,844 
Accrued expenses and other liabilities— 119,240 
Total liabilities assumed$— $7,332,875 
Non-cash net assets acquired— 796,289 
Net cash and cash equivalents acquired in acquisition$— $321,540 
Common stock issued in acquisition$— $1,117,829 
See accompanying notes to consolidated financial statements.
8


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 Valley National Bank (the Bank) and all other entities in which Valley has a controlling financial interest. 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, 2023 and for all periods presented have been made. The results of operations for the three and nine months ended September 30, 2023 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 U.S. Securities and Exchange Commission. 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, 2022.
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.
Correction of an Immaterial Error. During the third quarter 2023, the carrying amounts of goodwill allocated to Valley's reporting units at December 31, 2022 were adjusted for the correction of an immaterial error related to the reallocation of goodwill resulting from Valley’s change in operating segments during the second quarter 2022. Note 9 – Goodwill and Other Intangible Assets has been revised to correct these errors. These errors had no impact on the reported amount of total goodwill. Management has determined that the errors were not material to prior periods and they had no impact on Valley’s financial position, results of operations, changes in shareholders' equity and cash flows at September 30, 2023 and for all periods presented.
Note 2. Business Combinations
Acquisitions
Bank Leumi Le-Israel Corporation. On April 1, 2022, Valley completed its acquisition of Bank Leumi Le-Israel Corporation, the U.S. subsidiary of Bank Leumi Le-Israel B.M., and parent company of Bank Leumi USA, collectively referred to as "Bank Leumi USA." Bank Leumi USA maintained its headquarters in New York City with commercial banking offices in Chicago, Los Angeles, Palo Alto, and Aventura, Florida. The common shareholders of Bank Leumi USA received 3.8025 shares of Valley common stock and $5.08 in cash for each Bank
9


Leumi USA common share that they owned. As a result, Valley issued approximately 85 million shares of common stock and paid $113.4 million in cash in the transaction. Based on Valley’s closing stock price on March 31, 2022, the transaction was valued at $1.2 billion, inclusive of the value of options. As a result of the acquisition, Bank Leumi Le-Israel B.M. owned approximately 14 percent of Valley's common stock as of April 1, 2022.
Merger expenses, primarily consisting of salary and employee benefit expense, totaled $4.1 million for the nine months ended September 30, 2023. There were no merger expenses for the three months ended September 30, 2023. Merger expenses totaled $4.7 million and $63.8 million for the three and nine months ended September 30, 2022, respectively, and largely consisted of salary and employee benefit expense, professional and legal fees and technology related costs within non-interest expense on the consolidated statements of income.
The following table sets forth assets acquired and liabilities assumed in the Bank Leumi USA acquisition, at their estimated fair values as of the closing date of the transaction:
April 1, 2022
(in thousands)
Assets acquired:
Cash and cash equivalents$443,588 
Equity securities6,239 
Available for sale debt securities505,928 
Held to maturity debt securities 806,627 
Loans5,914,389 
Allowance for loan losses (70,319)
Loans, net5,844,070 
Premises and equipment38,827 
Lease right of use assets49,273 
Bank owned life insurance126,861 
Accrued interest receivable 25,717 
Goodwill400,582 
Other intangible assets153,380 
Other assets160,921 
Total assets acquired$8,562,013 
Liabilities assumed:
Deposits:
Non-interest bearing$4,511,537 
Interest bearing:
Savings, NOW and money market2,224,834 
Time293,626 
Total deposits7,029,997 
Short-term borrowings103,794 
Lease liabilities79,683 
Accrued expense and other liabilities117,269 
Total liabilities assumed$7,330,743 
Common stock issued in acquisition1,117,829 
Cash paid in acquisition113,441 

10


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, 2023 and 2022:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2023202220232022
 (in thousands, except for share and per share data)
Net income available to common shareholders$137,219 $174,947 $414,926 $381,744 
Basic weighted average number of common shares outstanding
507,650,668 506,342,200 507,580,197 478,383,342 
Plus: Common stock equivalents1,605,931 2,348,797 1,623,854 2,242,015 
Diluted weighted average number of common shares outstanding
509,256,599 508,690,997 509,204,051 480,625,357 
Earnings per common share:
Basic$0.27 $0.35 $0.82 $0.80 
Diluted0.27 0.34 0.81 0.79 
Common stock equivalents represent the dilutive effect of additional common shares issuable upon the assumed vesting or exercise, if applicable, of restricted stock units and common stock options to purchase Valley’s common shares. Common stock options with exercise prices that exceed the average market price per share of Valley’s common stock during the periods presented may have an anti-dilutive effect on the diluted earnings per common share calculation and therefore are excluded from the diluted earnings per share calculation along with restricted stock units. Potential anti-dilutive weighted common shares totaled approximately 2.8 million and 1.8 million for the three months ended September 30, 2023 and 2022, respectively, and 2.6 million and 1.1 million for the nine months ended September 30, 2023 and 2022, respectively.
Note 4. Accumulated Other Comprehensive Loss
The following tables present the after-tax changes in the balances of each component of accumulated other comprehensive (loss) income for the three and nine months ended September 30, 2023:
 Components of Accumulated Other Comprehensive LossTotal
Accumulated
Other
Comprehensive
Loss
Unrealized Gains
and Losses on
Available for Sale
(AFS) Securities		Unrealized Gains
and Losses on
Derivatives		Defined Benefit
Pension and Postretirement Benefit Plans
 (in thousands)
Balance - June 30, 2023$(128,699)$2,353 $(38,401)$(164,747)
Other comprehensive loss before reclassification (37,115)— — (37,115)
Amounts reclassified from other comprehensive loss (income)5 (43)8 (30)
Other comprehensive (loss) income, net(37,110)(43)8 (37,145)
Balance - September 30, 2023$(165,809)$2,310 $(38,393)$(201,892)
11


 Components of Accumulated Other Comprehensive LossTotal
Accumulated
Other
Comprehensive
Loss
 Unrealized Gains
and Losses on
Available for Sale
(AFS) Securities		Unrealized Gains
and Losses on
Derivatives		Defined Benefit
Pension and Postretirement Benefit Plans
 (in thousands)
Balance - December 31, 2022$(127,818)$2,233 $(38,417)$(164,002)
Other comprehensive loss before reclassification (37,996)(775)— (38,771)
Amounts reclassified from other comprehensive loss5 852 24 881 
Other comprehensive (loss) income, net(37,991)77 24 (37,890)
Balance - September 30, 2023$(165,809)$2,310 $(38,393)$(201,892)
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, 2023 and 2022:
Amounts Reclassified from
Accumulated Other Comprehensive Loss
Three Months Ended
September 30,		Nine Months Ended
September 30,
Components of Accumulated Other Comprehensive Loss2023202220232022Income Statement Line Item
 (in thousands) 
Unrealized (losses) gains on AFS securities before tax$(6)$16 $(6)$30 Gains (losses) on securities transactions, net
Tax effect1 (4)1 (8)
Total net of tax(5)12 (5)22 
Unrealized gains (losses) on derivatives (cash flow hedges) before tax63 21 (1,193)(405)Interest income, interest expense
Tax effect(20)(8)341 112 
Total net of tax43 13 (852)(293)
Defined benefit pension and postretirement benefit plans:
Amortization of actuarial net loss(11)(183)(33)(550)*
Tax effect3 51 9 153 
Total net of tax(8)(132)(24)(397)
Total reclassifications, net of tax$30 $(107)$(881)$(668)
*Amortization of actuarial net loss is included in the computation of net periodic pension cost recognized within other non-interest expense.
Note 5. New Authoritative Accounting Guidance
New Accounting Guidance Adopted in 2023
Accounting Standards Update (ASU) No. 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging –Portfolio Layer Method,” expands and clarifies the current guidance on accounting for fair value hedge basis adjustments under the portfolio layer method for both single-layer and multiple-layer hedges. This method allows entities to designate multiple hedging relationships with a single closed portfolio, and therefore a larger portion of the interest rate risk associated with such a portfolio is eligible to be hedged. ASU No. 2022-01 also clarifies that no assets may be added to a closed portfolio once it is designated in a portfolio layer method hedge. Valley adopted ASU No. 2022-01 on January 1, 2023 and the guidance did not have a significant impact on Valley's consolidated financial statements.
ASU No. 2022-02, “Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures,” eliminates the troubled debt restructuring (TDR) accounting model for creditors, such as Valley, that
12


have adopted Topic 326, “Financial Instruments – Credit Losses.” ASU No. 2022-02 requires all loan modifications to be accounted for under the general loan modification guidance in Subtopic 310-20. On a prospective basis, entities are subject to new disclosure requirements covering modifications of receivables to borrowers experiencing financial difficulty. Public business entities within the scope of the Topic 326 disclosure requirements are also required to prospectively disclose current-period gross write-off information by vintage. Entities can elect to adopt the guidance on TDRs using either a prospective or modified retrospective transition method. Valley adopted ASU No. 2022-02 on January 1, 2023 and elected to apply the modified retrospective transition method. The adoption of ASU No. 2022-02 resulted in a $1.4 million decrease in the allowance for loan losses, and a $990 thousand increase to retained earnings, net of taxes. See Note 8 for required disclosures.
New Accounting Guidance Issued in 2023
ASU No. 2023-02, “Investments –Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method,” is intended to improve the accounting and disclosures for investments in certain tax credit structures. ASU No. 2023-02 allows the option to apply the proportional amortization method to account for investments made primarily for the purpose of receiving income tax credits and other income tax benefits when certain requirements are met. ASU No. 2023-02 will be effective on January 1, 2024 and it can be early adopted in any interim period. The new guidance can also be applied either on a modified retrospective or a retrospective basis, with any adjustments resulting from adoption recognized in earnings on the date of adoption. Valley is currently evaluating the impact of ASU No. 2023-02, but it is not expected to have a significant impact on Valley's consolidated financial statements.
Note 6. Fair Value Measurement of Assets and Liabilities
ASC Topic 820, “Fair Value Measurement,” 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 non-recurring basis by level within the fair value hierarchy as reported on the consolidated statements of financial condition at September 30, 2023 and December 31, 2022. The assets presented under “non-recurring 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). 
13


 September 30,
2023		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$23,198 $23,198 $— $— 
Equity securities at net asset value (NAV)
12,043 — — — 
Trading debt securities3,441 3,441 — — 
Available for sale debt securities:
U.S. Treasury securities275,748 275,748 — — 
U.S. government agency securities22,571 — 22,571 — 
Obligations of states and political subdivisions171,472 — 171,472 — 
Residential mortgage-backed securities553,427 — 553,427 — 
Corporate and other debt securities163,306 — 163,306 — 
Total available for sale debt securities1,186,524 275,748 910,776 — 
Loans held for sale (1)
23,834 — 23,834 — 
Other assets (2)
704,668 — 704,668 — 
Total assets$1,953,708 $302,387 $1,639,278 $— 
Liabilities
Other liabilities (2)
$735,278 $— $735,278 $— 
Total liabilities$735,278 $— $735,278 $— 
Non-recurring fair value measurements:
Non-performing loans held for sale$10,000 $— $10,000 $— 
Collateral dependent loans 80,956 — — 80,956 
Foreclosed assets 1,314 — — 1,314 
Total$92,270 $— $10,000 $82,270 
14


  Fair Value Measurements at Reporting Date Using:
 December 31,
2022		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 $23,494 $23,494 $— $— 
Equity securities at net asset value (NAV)
10,099 — — — 
Trading debt securities13,438 3,282 10,156 — 
Available for sale debt securities:
U.S. Treasury securities279,498 279,498 — — 
U.S. government agency securities26,964 — 26,964 — 
Obligations of states and political subdivisions146,811 — 146,811 — 
Residential mortgage-backed securities629,818 — 629,818 — 
Corporate and other debt securities178,306 — 178,306 — 
Total available for sale debt securities1,261,397 279,498 981,899 — 
Loans held for sale (1)
18,118 — 18,118 — 
Other assets (2)
467,127 — 467,127 — 
Total assets$1,793,673 $306,274 $1,477,300 $— 
Liabilities
Other liabilities (2)
$607,237 $— $607,237 $— 
Total liabilities$607,237 $— $607,237 $— 
Non-recurring fair value measurements:
Collateral dependent loans $92,923 $— $— $92,923 
Foreclosed assets 1,937 — — 1,937 
Total$94,860 $— $— $94,860 
(1)Represents residential mortgage loans held for sale that are carried at fair value and had contractual unpaid principal balances totaling $23.9 million and $17.9 million at September 30, 2023 and December 31, 2022, respectively.
(2)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 equity securities consisted of two publicly traded mutual funds, Community Reinvestment Act (CRA) investments and several other equity investments we have made in companies that develop new financial technologies and in partnerships that invest in such companies. These investments are reported at fair value utilizing Level 1 inputs.
15


Equity securities at NAV. Valley also has privately held CRA funds at fair value measured at NAV using the most recently available financial information from the investee. Investments measured at NAV (or its equivalent) as a practical expedient are excluded from fair value hierarchy levels in the tables above.
Trading debt securities. The fair value of trading debt securities, consisting of U.S. Treasury securities are reported at fair value utilizing Level 1 inputs at September 30, 2023. At December 31, 2022, trading debt securities consisted of U.S. Treasury securities and municipal bonds reported at fair value utilizing Level 1 and Level 2 inputs, respectively. The prices for municipal bond investments were derived from market quotations and matrix pricing obtained through an independent pricing service. 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.
Available for sale debt 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 sale debt securities and attempts to identify transactions which may not be orderly or reflective of a significant level of activity and volume.
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, 2023 and December 31, 2022 based on the short duration these assets were held, and the 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 Secured Overnight Financing Rate (SOFR) curve. 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, 2023 and December 31, 2022), is determined based on the current market prices for similar instruments. The fair value 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, 2023 and December 31, 2022.
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 non-recurring basis, including collateral dependent loans reported at the fair value of the underlying collateral and foreclosed assets, which are reported at fair value upon initial recognition or subsequent impairment as described below.
Non-performing loans held for sale. During the nine months ended September 30, 2023, Valley transferred a non-performing construction loan totaling $10.0 million, net of charge-offs, to loans held for sale. The transfer at the loan's fair value resulted in a $4.2 million charge-off to the allowance of loan losses. The fair value of the loan was determined using Level 2 inputs, including bids from a third party broker engaged to solicit interest from potential purchasers. The broker coordinated loan level due diligence with interested parties and established a formal bidding
16


process in which each participant was required to provide an indicative non-binding bid. Fair value was determined based on a non-binding sale agreement selected by Valley during the bidding process.
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, 2023, collateral dependent loans were individually re-measured and reported at fair value through direct loan charge-offs to the allowance for loan losses based on the fair value of the underlying collateral. At September 30, 2023, collateral dependent loans with a total amortized cost of $144.5 million, including our taxi medallion loan portfolio, were reduced by specific allowance for loan losses allocations totaling $63.5 million to a reported total net carrying amount of $80.9 million.
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 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 adjustments to the appraisals of foreclosed assets at September 30, 2023 and December 31, 2022.
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 operations, 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.
17


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, 2023 and December 31, 2022 were as follows: 
 Fair Value
Hierarchy		September 30, 2023December 31, 2022
 Carrying
Amount		Fair ValueCarrying
Amount		Fair Value
 (in thousands)
Financial assets
Cash and due from banksLevel 1$444,857 $444,857 $444,325 $444,325 
Interest bearing deposits with banksLevel 1698,966 698,966 503,622 503,622 
Equity securities (1)
Level 327,950 27,950 15,138 15,138 
Held to maturity debt securities:
U.S. Treasury securitiesLevel 166,408 65,655 66,911 65,889 
U.S. government agency securitiesLevel 2306,339 243,911 260,392 212,712 
Obligations of states and political subdivisionsLevel 2437,641 390,554 480,298 453,195 
Residential mortgage-backed securitiesLevel 22,875,630 2,352,616 2,909,106 2,495,797 
Trust preferred securitiesLevel 237,057 30,081 37,043 31,106 
Corporate and other debt securitiesLevel 275,634 68,263 75,234 70,771 
Total held to maturity debt securities (2)
3,798,709 3,151,080 3,828,984 3,329,470 
Net loansLevel 349,655,344 48,091,691 46,458,545 44,910,049 
Accrued interest receivableLevel 1237,786 237,786 196,606 196,606 
Federal Reserve Bank and Federal Home Loan Bank stock (3)
Level 2282,289 282,289 238,056 238,056 
Financial liabilities
Deposits without stated maturitiesLevel 134,782,344 34,782,344 38,080,457 38,080,457 
Deposits with stated maturitiesLevel 215,102,970 15,015,377 9,556,457 9,443,253 
Short-term borrowingsLevel 289,802 63,678 138,729 138,729 
Long-term borrowingsLevel 22,318,294 2,239,132 1,543,058 1,395,991 
Junior subordinated debentures issued to capital trusts
Level 257,021 53,898 56,760 50,923 
Accrued interest payable (4)
Level 1155,884 155,884 45,617 45,617 
(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.
Note 7. Investment Securities
Equity Securities
Equity securities totaled $63.2 million and $48.7 million at September 30, 2023 and December 31, 2022, respectively. See Note 6 for further details on equity securities.
Trading Debt Securities
The fair value of trading debt securities totaled $3.4 million and $13.4 million at September 30, 2023 and December 31, 2022, respectively. Net trading gains and losses were included in net gains and losses on securities transactions within non-interest income. We recorded net trading gains of $45 thousand and $673 thousand for the
18


three and nine months ended September 30, 2023, respectively. We recorded net trading gains of $290 thousand and net trading losses of $1.2 million for the three and nine months ended September 30, 2022, respectively.
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, 2023 and December 31, 2022 were as follows: 
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
 (in thousands)
September 30, 2023
U.S. Treasury securities$312,348 $— $(36,600)$275,748 
U.S. government agency securities26,002 19 (3,450)22,571 
Obligations of states and political subdivisions:
Obligations of states and state agencies49,810 — (1,006)48,804 
Municipal bonds170,002 — (47,334)122,668 
Total obligations of states and political subdivisions219,812 — (48,340)171,472 
Residential mortgage-backed securities665,150 8 (111,731)553,427 
Corporate and other debt securities192,181 — (28,875)163,306 
Total $1,415,493 $27 $(228,996)$1,186,524 
December 31, 2022
U.S. Treasury securities$308,137 $— $(28,639)$279,498 
U.S. government agency securities29,494 47 (2,577)26,964 
Obligations of states and political subdivisions:
Obligations of states and state agencies10,899 — (493)10,406 
Municipal bonds171,586 — (35,181)136,405 
Total obligations of states and political subdivisions182,485 — (35,674)146,811 
Residential mortgage-backed securities719,868 64 (90,114)629,818 
Corporate and other debt securities197,927 — (19,621)178,306 
Total$1,437,911 $111 $(176,625)$1,261,397 

Accrued interest on investments, which is excluded from the amortized cost of available for sale debt securities, totaled $5.2 million and $5.6 million at September 30, 2023 and December 31, 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.
19


The age of unrealized losses and fair value of the related available for sale debt securities at September 30, 2023 and December 31, 2022 were as follows: 
 Less than 12 MonthsMore than 12 MonthsTotal
 Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
 (in thousands)
September 30, 2023
U.S. Treasury securities$— $— $275,748 $(36,600)$275,748 $(36,600)
U.S. government agency securities— — 21,216 (3,450)21,216 (3,450)
Obligations of states and political subdivisions:
Obligations of states and state agencies
— — 8,189 (1,006)8,189 (1,006)
Municipal bonds1,012 (17)121,656 (47,317)122,668 (47,334)
Total obligations of states and political subdivisions
1,012 (17)129,845 (48,323)130,857 (48,340)
Residential mortgage-backed securities1,985 (19)550,953 (111,712)552,938 (111,731)
Corporate and other debt securities11,863 (1,137)151,443 (27,738)163,306 (28,875)
Total$14,860 $(1,173)$1,129,205 $(227,823)$1,144,065 $(228,996)
December 31, 2022
U.S. Treasury securities$279,498 $(28,639)$— $— $279,498 $(28,639)
U.S. government agency securities22,831 (2,538)1,116 (39)23,947 (2,577)
Obligations of states and political subdivisions:
Obligations of states and state agencies
2,943 (54)7,462 (439)10,405 (493)
Municipal bonds112,029 (26,044)24,127 (9,137)136,156 (35,181)
Total obligations of states and political subdivisions
114,972 (26,098)31,589 (9,576)146,561 (35,674)
Residential mortgage-backed securities311,836 (27,152)314,834 (62,962)626,670 (90,114)
Corporate and other debt securities144,924 (12,581)33,382 (7,040)178,306 (19,621)
Total$874,061 $(97,008)$380,921 $(79,617)$1,254,982 $(176,625)
Within the available for sale debt securities portfolio, the total number of security positions in an unrealized loss position was 720 and 730 at September 30, 2023 and December 31, 2022, respectively.
As of September 30, 2023, 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 $803.0 million.
The contractual maturities of available for sale debt securities at September 30, 2023 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.
20


 September 30, 2023
 Amortized
Cost		Fair
Value
 (in thousands)
Due in one year$1,574 $1,557 
Due after one year through five years288,843 270,859 
Due after five years through ten years173,478 144,436 
Due after ten years286,448 216,245 
Residential mortgage-backed securities665,150 553,427 
Total $1,415,493 $1,186,524 
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 7.84 years at September 30, 2023.
Impairment Analysis of Available For Sale Debt Securities
Valley's available for sale debt securities portfolio includes corporate bonds and revenue bonds, among other securities. These types of securities may pose a higher risk of future impairment charges by Valley as a result of the changes in market interest rates, unpredictable nature of the U.S. economy and their potential negative effect on the future performance of the security issuers.
Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses on a quarterly basis. Based on a comparison of the present value of expected cash flows to the amortized cost, Valley recognized a credit related impairment of one corporate bond issued by Signature Bank resulting in a provision for credit losses and full charge-off of the bond totaling $5.0 million during the three months ended March 31, 2023. Valley also evaluated available for sale debt securities that are in an unrealized loss position as of September 30, 2023 included in the table above and has determined that the declines in fair value are mainly attributable to interest rates, credit spreads, market volatility and liquidity conditions, not credit quality or other factors. There was no impairment recognized during the three months ended September 30, 2023 and 2022, and the nine months ended September 30, 2022.
The following table details the activity in the allowance for credit losses for the nine months ended September 30, 2023.
Nine Months Ended September 30, 2023
(in thousands)
Beginning balance$— 
Provision for credit losses5,000 
Charge-offs(5,000)
Ending balance$— 
Valley does not intend to sell any of its available for sale debt securities in an unrealized loss position prior to recovery of their amortized cost basis, and it is more likely than not that Valley will not be required to sell any of its securities prior to recovery of their amortized cost basis. None of the available for sale debt securities were past due as of September 30, 2023 and there was no allowance for credit losses for available for sale debt securities at September 30, 2023, December 31, 2022 and September 30, 2022.
21


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, 2023 and December 31, 2022 were as follows: 
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair ValueAllowance for Credit LossesNet Carrying Value
 (in thousands)
September 30, 2023
U.S. Treasury securities$66,408 $— $(753)$65,655 $— $66,408 
U.S. government agency securities306,339 — (62,428)243,911 — 306,339 
Obligations of states and political subdivisions:
Obligations of states and state agencies86,968 5 (7,810)79,163 415 86,553 
Municipal bonds350,673 5 (39,287)311,391 57 350,616 
Total obligations of states and political subdivisions437,641 10 (47,097)390,554 472 437,169 
Residential mortgage-backed securities2,875,630 28 (523,042)2,352,616 — 2,875,630 
Trust preferred securities37,057 — (6,976)30,081 552 36,505 
Corporate and other debt securities75,634 — (7,371)68,263 297 75,337 
Total $3,798,709 $38 $(647,667)$3,151,080 $1,321 $3,797,388 
December 31, 2022
U.S. Treasury securities$66,911 $— $(1,022)$65,889 $— $66,911 
U.S. government agency securities260,392 — (47,680)212,712 — 260,392 
Obligations of states and political subdivisions:
Obligations of states and state agencies99,238 305 (3,869)95,674 252 98,986 
Municipal bonds381,060 76 (23,615)357,521 41 381,019 
Total obligations of states and political subdivisions480,298 381 (27,484)453,195 293 480,005 
Residential mortgage-backed securities2,909,106 1,723 (415,032)2,495,797 — 2,909,106 
Trust preferred securities37,043 1 (5,938)31,106 888 36,155 
Corporate and other debt securities75,234 — (4,463)70,771 465 74,769 
Total $3,828,984 $2,105 $(501,619)$3,329,470 $1,646 $3,827,338 
Accrued interest on investments, which is excluded from the amortized cost of held to maturity debt securities, totaled $13.0 million and $13.5 million at September 30, 2023 and December 31, 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition. Held to maturity debt securities are carried net of an allowance for credit losses.
22


The age of unrealized losses and fair value of related debt securities held to maturity at September 30, 2023 and December 31, 2022 were as follows: 
 Less than 12 MonthsMore than 12 MonthsTotal
 Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses
 (in thousands)
September 30, 2023
U.S. Treasury securities$— $— $65,655 $(753)$65,655 $(753)
U.S. government agency securities44,630 (104)198,137 (62,324)242,767 (62,428)
Obligations of states and political subdivisions:
Obligations of states and state agencies
28,861 (1,449)47,812 (6,361)76,673 (7,810)
Municipal bonds52,881 (1,260)200,811 (38,027)253,692 (39,287)
Total obligations of states and political subdivisions
81,742 (2,709)248,623 (44,388)330,365 (47,097)
Residential mortgage-backed securities
258,643 (6,081)2,065,357 (516,961)2,324,000 (523,042)
Trust preferred securities— — 29,081 (6,976)29,081 (6,976)
Corporate and other debt securities12,333 (917)55,930 (6,454)68,263 (7,371)
Total$397,348 $(9,811)$2,662,783 $(637,856)$3,060,131 $(647,667)
December 31, 2022
U.S. Treasury securities$65,889 $(1,022)$— $— $65,889 $(1,022)
U.S. government agency securities209,863 (47,508)1,673 (172)211,536 (47,680)
Obligations of states and political subdivisions:
Obligations of states and state agencies62,443 (2,020)18,231 (1,849)80,674 (3,869)
Municipal bonds251,970 (20,457)15,534 (3,158)267,504 (23,615)
Total obligations of states and political subdivisions
314,413 (22,477)33,765 (5,007)348,178 (27,484)
Residential mortgage-backed securities
962,690 (109,532)1,413,590 (305,500)2,376,280 (415,032)
Trust preferred securities— — 30,105 (5,938)30,105 (5,938)
Corporate and other debt securities
57,245 (2,989)13,525 (1,474)70,770 (4,463)
Total$1,610,100 $(183,528)$1,492,658 $(318,091)$3,102,758 $(501,619)

Within the held to maturity portfolio, the total number of security positions in an unrealized loss position was 842 and 802 at September 30, 2023 and December 31, 2022, respectively.
As of September 30, 2023, 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 $2.4 billion.






23


The contractual maturities of investments in debt securities held to maturity at September 30, 2023 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, 2023
 Amortized
Cost		Fair
Value
 (in thousands)
Due in one year$72,211 $71,920 
Due after one year through five years114,349 109,797 
Due after five years through ten years116,099 105,165 
Due after ten years620,420 511,582 
Residential mortgage-backed securities2,875,630 2,352,616 
Total$3,798,709 $3,151,080 
Actual maturities of held to maturity 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 9.84 years at September 30, 2023.
24


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, 2023 and December 31, 2022.
AAA/AA/A RatedBBB ratedNon-investment grade ratedNon-ratedTotal
 (in thousands)
September 30, 2023
U.S. Treasury securities$66,408 $— $— $— $66,408 
U.S. government agency securities306,339 — — — 306,339 
Obligations of states and political subdivisions:
Obligations of states and state agencies64,595 — 5,351 17,022 86,968 
Municipal bonds301,098 — — 49,575 350,673 
Total obligations of states and political subdivisions
365,693 — 5,351 66,597 437,641 
Residential mortgage-backed securities2,875,630 — — — 2,875,630 
Trust preferred securities— — — 37,057 37,057 
Corporate and other debt securities— 6,000 — 69,634 75,634 
Total $3,614,070 $6,000 $5,351 $173,288 $3,798,709 
December 31, 2022
U.S. Treasury securities$66,911 $— $— $— $66,911 
U.S. government agency securities260,392 — — — 260,392 
Obligations of states and political subdivisions:
Obligations of states and state agencies74,943 — 5,497 18,798 99,238 
Municipal bonds333,488 — — 47,572 381,060 
Total obligations of states and political subdivisions
408,431 — 5,497 66,370 480,298 
Residential mortgage-backed securities2,909,106 — — — 2,909,106 
Trust preferred securities— — — 37,043 37,043 
Corporate and other debt securities2,000 6,000 — 67,234 75,234 
Total$3,646,840 $6,000 $5,497 $170,647 $3,828,984 
Obligations of states and political subdivisions include municipal bonds and revenue bonds issued by various municipal corporations. At September 30, 2023, most of the obligations of states and political subdivisions were rated investment grade and a large portion of the "non-rated" category included tax exempt mortgage securities (TEMS) secured by Ginnie Mae securities. Trust preferred securities consist of non-rated single-issuer securities, issued by bank holding companies. Corporate and other debt securities in the non-rated category mostly consist of high quality foreign issued bonds.
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 Current Expected Credit Losses (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. government agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and TEMS collateralized municipal bonds.

25


The following table details the activity in the allowance for credit losses for the three and nine months ended September 30, 2023 and 2022: 
Three months ended September 30,Nine months ended September 30,
2023202220232022
(in thousands)
Beginning balance$1,351 $1,508 $1,646 $1,165 
(Credit) provision for credit losses(30)188 (325)531 
Ending balance$1,321 $1,696 $1,321 $1,696 
Note 8. Loans and Allowance for Credit Losses for Loans
The detail of the loan portfolio as of September 30, 2023 and December 31, 2022 was as follows: 
 September 30, 2023December 31, 2022
 (in thousands)
Loans:
Commercial and industrial$9,274,630 $8,804,830 
Commercial real estate:
Commercial real estate28,041,050 25,732,033 
Construction3,833,269 3,700,835 
Total commercial real estate loans31,874,319 29,432,868 
Residential mortgage5,562,665 5,364,550 
Consumer:
Home equity548,918 503,884 
Automobile1,585,987 1,746,225 
Other consumer1,251,000 1,064,843 
Total consumer loans3,385,905 3,314,952 
Total loans$50,097,519 $46,917,200 
Total loans include net unearned discounts and deferred loan fees of $110.9 million and $120.5 million at September 30, 2023 and December 31, 2022, respectively.
Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $214.5 million and $175.9 million at September 30, 2023 and December 31, 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.
During the nine months ended September 30, 2023, Valley transferred a non-performing construction loan totaling $10.0 million, net of $4.2 million charge-offs from the held for investment loan portfolio to loans held for sale. See Note 6 for further details. There were no sales of loans from the held for investment portfolio during the three and nine months ended September 30, 2023 and 2022.
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,
26


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. Additionally, Valley does not accept crypto assets as loan collateral for any of its loan portfolio classes. See Valley’s Annual Report on Form 10-K for the year ended December 31, 2022 for further details.
Credit Quality
The following table presents past due, current and non-accrual loans without an allowance for loan losses by loan portfolio class at September 30, 2023 and December 31, 2022:
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 Loan Losses
 (in thousands)
September 30, 2023
Commercial and industrial
$10,687 $5,720 $6,629 $87,655 $110,691 $9,163,939 $9,274,630 $6,463 
Commercial real estate:
Commercial real estate
8,053 2,620 — 83,338 94,011 27,947,039 28,041,050 77,491 
Construction— — 3,990 62,788 66,778 3,766,491 3,833,269 15,222 
Total commercial real estate loans8,053 2,620 3,990 146,126 160,789 31,713,530 31,874,319 92,713 
Residential mortgage13,159 9,710 1,348 21,614 45,831 5,516,834 5,562,665 18,589 
Consumer loans:
Home equity506 200 — 2,646 3,352 545,566 548,918 — 
Automobile6,615 979 296 233 8,123 1,577,864 1,585,987 — 
Other consumer8,388 541 95 666 9,690 1,241,310 1,251,000 589 
Total consumer loans15,509 1,720 391 3,545 21,165 3,364,740 3,385,905 589 
Total$47,408 $19,770 $12,358 $258,940 $338,476 $49,759,043 $50,097,519 $118,354 

27


 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 LoansNon-Accrual Loans Without Allowance for Loan Losses
(in thousands)
December 31, 2022
Commercial and industrial$11,664 $12,705 $18,392 $98,881 $141,642 $8,663,188 $8,804,830 $5,659 
Commercial real estate:
Commercial real estate6,638 3,167 2,292 68,316 80,413 25,651,620 25,732,033 66,066 
Construction— — 3,990 74,230 78,220 3,622,615 3,700,835 16,120 
Total commercial real estate loans6,638 3,167 6,282 142,546 158,633 29,274,235 29,432,868 82,186 
Residential mortgage16,146 3,315 1,866 25,160 46,487 5,318,063 5,364,550 14,224 
Consumer loans:
Home equity955 254 — 2,810 4,019 499,865 503,884 117 
Automobile5,974 630 1 271 6,876 1,739,349 1,746,225 — 
Other consumer2,158 695 46 93 2,992 1,061,851 1,064,843 — 
Total consumer loans9,087 1,579 47 3,174 13,887 3,301,065 3,314,952 117 
Total$43,535 $20,766 $26,587 $269,761 $360,649 $46,556,551 $46,917,200 $102,186 

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. Pass rated loans 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.
28


The following table presents the internal loan classification risk by loan portfolio class by origination year based on the most recent analysis performed at September 30, 2023 and December 31, 2022, as well as the gross loan charge-offs by year of origination for the nine months ended September 30, 2023:
 Term Loans  
Amortized Cost Basis by Origination Year
September 30, 202320232022202120202019Prior to 2019Revolving Loans Amortized Cost BasisRevolving Loans Converted to Term LoansTotal
 (in thousands)
Commercial and industrial
Risk Rating:
Pass$1,172,255 $1,108,255 $907,778 $472,436 $233,174 $523,141 $4,428,488 $674 $8,846,201 
Special Mention27,426 81,421 5,947 2,049 3,746 5,801 164,997 1,459 292,846 
Substandard6,098 1,036 2,515 1,088 2,466 6,777 42,057 — 62,037 
Doubtful2,947 561 2,080 (22)2,664 62,732 2,579 — 73,541 
Loss— — — — — 5 — — 5 
Total commercial and industrial$1,208,726 $1,191,273 $918,320 $475,551 $242,050 $598,456 $4,638,121 $2,133 $9,274,630 
Commercial real estate
Risk Rating:
Pass$3,661,803 $6,673,482 $4,764,617 $2,904,614 $2,431,372 $5,668,988 $596,861 $3,211 $26,704,948 
Special Mention102,870 56,307 203,422 134,938 63,402 272,530 6,822 — 840,291 
Substandard49,652 23,334 37,706 51,880 70,853 255,189 7,197 — 495,811 
Total commercial real estate$3,814,325 $6,753,123 $5,005,745 $3,091,432 $2,565,627 $6,196,707 $610,880 $3,211 $28,041,050 
Construction
Risk Rating:
Pass$525,933 $616,804 $290,092 $19,544 $18,695 $16,755 $2,288,668 $— $3,776,491 
Substandard8,306 12,969 7,405 — — 17,668 3,501 — 49,849 
Doubtful— 6,929 — — — — — — 6,929 
Total construction$534,239 $636,702 $297,497 $19,544 $18,695 $34,423 $2,292,169 $— $3,833,269 
Gross loan charge-offs $— $7,464 $26,038 $6,559 $4,475 $5,000 $38 $51 $49,625 


29


 Term Loans  
Amortized Cost Basis by Origination Year
December 31, 202220222021202020192018Prior to 2018Revolving Loans Amortized Cost BasisRevolving Loans Converted to Term LoansTotal
 (in thousands)
Commercial and industrial
Risk Rating:
Pass$1,600,747 $1,089,386 $590,406 $322,564 $250,031 $386,085 $4,307,163 $144 $8,546,526 
Special Mention31,557 3,367 19,492 4,732 4,369 3,558 51,021 7 118,103 
Substandard288 1,734 4,121 1,412 4,256 4,879 31,698 — 48,388 
Doubtful886 20,844 — 2,692 — 64,158 3,233 — 91,813 
Total commercial and industrial$1,633,478 $1,115,331 $614,019 $331,400 $258,656 $458,680 $4,393,115 $151 $8,804,830 
Commercial real estate
Risk Rating:
Pass$6,815,115 $5,168,127 $3,246,885 $2,672,223 $1,536,327 $5,027,128 $452,461 $3,504 $24,921,770 
Special Mention93,286 48,007 60,169 45,447 62,111 125,414 8,188 — 442,622 
Substandard15,088 34,475 32,630 34,622 59,337 183,341 7,986 — 367,479 
Doubtful— — — — — 162 — — 162 
Total commercial real estate$6,923,489 $5,250,609 $3,339,684 $2,752,292 $1,657,775 $5,336,045 $468,635 $3,504 $25,732,033 
Construction
Risk Rating:
Pass$942,380 $512,046 $61,131 $22,845 $8,676 $20,599 $2,040,866 $— $3,608,543 
Special Mention— — — — — — 14,268 — 14,268 
Substandard12,969 12,601 — 974 — 17,599 20,138 — 64,281 
Doubtful— — — — — 13,743 — — 13,743 
Total construction$955,349 $524,647 $61,131 $23,819 $8,676 $51,941 $2,075,272 $— $3,700,835 
30


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 and by payment activity. The following table presents the amortized cost in those loan classes based on payment activity, by origination year as of September 30, 2023 and December 31, 2022, as well as the gross loan charge-offs by year of origination for the nine months ended September 30, 2023:
 Term Loans  
Amortized Cost Basis by Origination Year
September 30, 202320232022202120202019Prior to 2019Revolving Loans Amortized Cost BasisRevolving Loans Converted to Term LoansTotal
 (in thousands)
Residential mortgage
Performing$427,681 $1,308,323 $1,522,152 $547,398 $441,864 $1,236,520 $72,547 $— $5,556,485 
90 days or more past due— — 968 3 2,011 3,198 — — 6,180 
Total residential mortgage $427,681 $1,308,323 $1,523,120 $547,401 $443,875 $1,239,718 $72,547 $— $5,562,665 
Consumer loans
Home equity
Performing$28,808 $44,166 $11,447 $4,111 $4,425 $16,141 $400,726 $38,373 $548,197 
90 days or more past due— — — — — 41 370 310 721 
Total home equity28,808 44,166 11,447 4,111 4,425 16,182 401,096 38,683 548,918 
Automobile
Performing306,205 584,045 396,302 141,124 104,149 53,739 — 1,585,564 
90 days or more past due25 89 92 25 150 42 — — 423 
Total automobile306,230 584,134 396,394 141,149 104,299 53,781 — — 1,585,987 
Other consumer
Performing30,659 21,337 4,152 8,333 8,693 23,085 1,154,094 — 1,250,353 
90 days or more past due— 13 — — — 38 596 — 647 
Total other consumer30,659 21,350 4,152 8,333 8,693 23,123 1,154,690 — 1,251,000 
Total consumer$365,697 $649,650 $411,993 $153,593 $117,417 $93,086 $1,555,786 $38,683 $3,385,905 
Gross loan charge-offs $97 $557 $314 $143 $610 $1,348 $124 $— $3,193 

31


 Term Loans  
Amortized Cost Basis by Origination Year
December 31, 202220222021202020192018Prior to 2018Revolving Loans Amortized Cost BasisRevolving Loans Converted to Term LoansTotal
 (in thousands)
Residential mortgage
Performing$1,302,279 $1,502,622 $571,390 $500,197 $338,062 $1,073,995 $66,706 $— $5,355,251 
90 days or more past due— 197 217 1,835 2,876 4,174 — — 9,299 
Total residential mortgage $1,302,279 $1,502,819 $571,607 $502,032 $340,938 $1,078,169 $66,706 $— $5,364,550 
Consumer loans
Home equity
Performing$47,084 $12,432 $4,592 $5,024 $5,581 $13,007 $376,608 $38,570 $502,898 
90 days or more past due— — — — — — 276 710 986 
Total home equity47,084 12,432 4,592 5,024 5,581 13,007 376,884 39,280 503,884 
Automobile
Performing724,557 525,017 204,578 166,103 80,012 45,415 — — 1,745,682 
90 days or more past due38 116 36 180 101 72 — — 543 
Total automobile724,595 525,133 204,614 166,283 80,113 45,487 — — 1,746,225 
Other consumer
Performing24,140 10,144 8,206 7,435 7,406 15,736 991,737 — 1,064,804 
90 days or more past due— — — — — 38 1 — 39 
Total other consumer24,140 10,144 8,206 7,435 7,406 15,774 991,738 — 1,064,843 
Total consumer$795,819 $547,709 $217,412 $178,742 $93,100 $74,268 $1,368,622 $39,280 $3,314,952 

Loan modifications to borrowers experiencing financial difficulty. 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. Prior to 2023, a loan was classified as a troubled debt restructuring (TDR) loan if the borrower was experiencing financial difficulties and a concession has been made at the time of such modification.
Effective January 1, 2023, Valley adopted ASU No. 2022-02 which eliminated the accounting guidance for TDR loans while enhancing disclosure requirements for certain loan modifications by creditors when a borrower is experiencing financial difficulty. Valley adopted ASU No. 2022-02 using the modified retrospective transition method. At the date of adoption, Valley was no longer required to utilize a loan-level discounted cash flow approach for determining the allowance for certain modified loans previously classified as TDR loans. As a result, Valley elected to utilize its collective reserve methodology for pools of loans that share common risk characteristic for determining the reserves for the modified loans formerly classified as TDR loans. This change resulted in the recognition of a cumulative-effect adjustment which decreased the allowance for loan losses with an offsetting entry to retained earnings, net of deferred taxes, at January 1, 2023.


32


The following table shows the amortized cost basis of loans to borrowers experiencing financial difficulty at September 30, 2023 that were modified during the three and nine months ended September 30, 2023, disaggregated by class of financing receivable and type of modification. Each of the types of modifications was less than one percent of their respective loan categories.
Three Months Ended
September 30, 2023
Interest rate reductionTerm extensionTerm extension and interest rate reductionTotal
 ($ in thousands)
Commercial and industrial$920 $17,670 $56 $18,646 
Commercial real estate— 38,345 — 38,345 
Home equity— 31 — 31 
Total$920 $56,046 $56 $57,022 
Nine Months Ended
September 30, 2023
Interest rate reductionTerm extensionTerm extension and interest rate reductionTotal
($ in thousands)
Commercial and industrial$920 $56,322 $2,281 $59,523 
Commercial real estate— 76,394 3,739 80,133 
Residential mortgage— 768 — 768 
Home equity— 31 — 31 
Consumer— 48 — 48 
Total$920 $133,563 $6,020 $140,503 
The following table describes the types of modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2023:
Types of Modifications
Commercial and industrial
12 month term extensions; two reductions in interest rate from 1.84 percent and 1.83 percent to 1.00 percent, respectively, and two 12 month term extensions combined with a reduction in interest rate from 9.50 percent to 6.50 percent
Commercial real estate
6 to 36 month term extensions and one term extension combined with a reduction in interest rate from 8.75 percent to 6.00 percent
Residential mortgage
12 month term extensions
Home equity
120 month term extension
Consumer
60 month term extensions
Valley closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of modification efforts. All loans to borrowers experiencing financial difficulty that have been modified during the three and nine months ended September 30, 2023 were current to their contractual payments as of September 30, 2023.
Valley did not extend any commitments to lend additional funds to borrowers experiencing financial difficulty whose loans had been modified during the three and nine months ended September 30, 2023.


33


Troubled debt restructured loans. The following tables present the pre- and post-modification amortized cost of TDR loans by loan class during the three and nine months ended September 30, 2022. Post-modification amounts are presented as of September 30, 2022 using the allowance methodology for TDRs prior to the adoption of ASU 2022-02.
Three Months Ended
September 30, 2022
Troubled Debt RestructuringsNumber
of
Contracts		Pre-Modification
Outstanding Recorded Investment		Post-Modification
Outstanding Recorded Investment
 ($ in thousands)
Commercial and industrial65 $54,586 $54,747 
Commercial real estate:
Commercial real estate1 2,187 2,187 
Construction2 11,025 7,811 
Total commercial real estate3 13,212 9,998 
Residential mortgage1 44 44 
Total69 $67,842 $64,789 
Nine Months Ended
September 30, 2022
Troubled Debt RestructuringsNumber
of
Contracts		Pre-Modification
Outstanding Recorded Investment		Post-Modification
Outstanding Recorded Investment
 ($ in thousands)
Commercial and industrial79 $109,779 $105,495 
Commercial real estate:
Commercial real estate4 16,259 15,660 
Construction2 11,025 7,811 
Total commercial real estate6 27,284 23,471 
Residential mortgage9 5,135 5,116 
Consumer1 125 123 
Total95 $142,323 $134,205 
The total TDRs presented in the tables above had allocated allowance for loan losses of $71.5 million at September 30, 2022. There were $3.8 million and $5.4 million in charge-offs related to TDRs for the three and nine months ended September 30, 2022. 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, 2022.
Performing TDRs (not reported as non-accrual loans) and non-performing TDRs totaled $69.7 million and $155.7 million as of September 30, 2022.
34


Loans modified as TDRs 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, 2022 were as follows:
 Three Months Ended
September 30, 2022		Nine Months Ended September 30, 2022
Troubled Debt Restructurings Subsequently DefaultedNumber of
Contracts		Recorded
Investment		Number of
Contracts		Recorded
Investment
 ($ in thousands)
Commercial and industrial1 $42,771 1 $42,771 
Commercial real estate2 5,207 2 5,207 
Residential mortgage1 1,071 1 1,071 
Total4 $49,049 4 $49,049 
Loans in process of foreclosure. Other real estate owned (OREO) was not material at September 30, 2023 and December 31, 2022. There were no foreclosed residential real estate properties included in OREO at September 30, 2023 and December 31, 2022. Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $970 thousand and $2.6 million at September 30, 2023 and December 31, 2022, respectively.
Collateral dependent loans. Loans are collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. When Valley determines that foreclosure is probable, the collateral dependent loan balances are written down to the estimated current fair value (less estimated selling costs) 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.
The following table presents collateral dependent loans by class as of September 30, 2023 and December 31, 2022:
 September 30,
2023		December 31,
2022
 (in thousands)
Collateral dependent loans:
Commercial and industrial *$89,898 $94,433 
Commercial real estate132,508 130,199 
Total commercial real estate loans132,508 130,199 
Residential mortgage20,598 33,865 
Home equity— 195 
Consumer589 — 
Total $243,593 $258,692 
* Commercial and industrial loans presented in the table above are primarily collateralized by taxi medallions.
35


Allowance for Credit Losses for Loans
The allowance for credit losses (ACL) for loans consists of the allowance for loan losses and the allowance for unfunded credit commitments. The ACL for loans decreased $20.9 million at September 30, 2023 as compared to December 31, 2022.
The following table summarizes the ACL for loans at September 30, 2023 and December 31, 2022: 
September 30,
2023		December 31,
2022
 (in thousands)
Components of allowance for credit losses for loans:
Allowance for loan losses$442,175 $458,655 
Allowance for unfunded credit commitments20,170 24,600 
Total allowance for credit losses for loans$462,345 $483,255 
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,
 2023202220232022
 (in thousands)
Components of provision for credit losses for loans:
Provision for loan losses$11,221 $1,315 $29,359 $42,883 
(Credit) provision for unfunded credit commitments(2,074)520 (4,430)6,164 
Total provision for credit losses for loans$9,147 $1,835 $24,929 $49,047 
36


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, 2023 and 2022: 
Commercial
and Industrial		Commercial
Real Estate		Residential
Mortgage		ConsumerTotal
 (in thousands)
Three Months Ended
September 30, 2023
Allowance for loan losses:
Beginning balance$128,245 $239,695 $44,153 $24,339 $436,432 
Loans charged-off(7,487)(255)(20)(1,156)(8,918)
Charged-off loans recovered 3,043 5 30 362 3,440 
Net (charge-offs) recoveries(4,444)(250)10 (794)(5,478)
Provision (credit) for loan losses10,187 5,602 458 (5,026)11,221 
Ending balance$133,988 $245,047 $44,621 $18,519 $442,175 
Three Months Ended
September 30, 2022
Allowance for loan losses:
Beginning balance$144,539 $277,227 $29,889 $17,164 $468,819 
Loans charged-off (5,033)(4,000)— (962)(9,995)
Charged-off loans recovered 13,236 1,729 163 477 15,605 
Net (charge-offs) recoveries8,203 (2,271)163 (485)5,610 
Provision (credit) for loan losses1,309 (7,176)6,105 1,077 1,315 
Ending balance$154,051 $267,780 $36,157 $17,756 $475,744 
Nine Months Ended
September 30, 2023
Allowance for loan losses:
Beginning balance$139,941 $259,408 $39,020 $20,286 $458,655 
Impact of the adoption of ASU No. 2022-02
(739)(589)(12)(28)(1,368)
Beginning balance, adjusted$139,202 $258,819 $39,008 $20,258 $457,287 
Loans charged-off(37,399)(12,226)(169)(3,024)(52,818)
Charged-off loans recovered 6,615 33 186 1,513 8,347 
Net (charge-offs) recoveries(30,784)(12,193)17 (1,511)(44,471)
Provision (credit) for loan losses25,570 (1,579)5,596 (228)29,359 
Ending balance$133,988 $245,047 $44,621 $18,519 $442,175 
Nine Months Ended
September 30, 2022
Allowance for loan losses:
Beginning balance$103,090 $217,490 $25,120 $13,502 $359,202 
Allowance for PCD loans *33,452 36,618 206 43 70,319 
Loans charged-off (11,144)(4,173)(27)(2,513)(17,857)
Charged-off loans recovered 16,012 2,060 694 2,431 21,197 
Net (charge-offs) recoveries4,868 (2,113)667 (82)3,340 
Provision for loan losses12,641 15,785 10,164 4,293 42,883 
Ending balance$154,051 $267,780 $36,157 $17,756 $475,744 
*    Represents the allowance for acquired PCD loans, net of PCD loan charge-offs totaling $62.4 million in the second quarter 2022.
37


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, 2023 and December 31, 2022.
Commercial and IndustrialCommercial
Real Estate		Residential
Mortgage		ConsumerTotal
 (in thousands)
September 30, 2023
Allowance for loan losses:
Individually evaluated for credit losses$54,363 $9,099 $32 $— $63,494 
Collectively evaluated for credit losses79,625 235,948 44,589 18,519 378,681 
Total$133,988 $245,047 $44,621 $18,519 $442,175 
Loans:
Individually evaluated for credit losses$89,898 $132,508 $20,598 $589 $243,593 
Collectively evaluated for credit losses9,184,732 31,741,811 5,542,067 3,385,316 49,853,926 
Total$9,274,630 $31,874,319 $5,562,665 $3,385,905 $50,097,519 
December 31, 2022
Allowance for loan losses:
Individually evaluated for credit losses$68,745 $13,174 $337 $4,338 $86,594 
Collectively evaluated for credit losses71,196 246,234 38,683 15,948 372,061 
Total$139,941 $259,408 $39,020 $20,286 $458,655 
Loans:
Individually evaluated for credit losses$117,644 $213,522 $28,869 $14,058 $374,093 
Collectively evaluated for credit losses8,687,186 29,219,346 5,335,681 3,300,894 46,543,107 
Total$8,804,830 $29,432,868 $5,364,550 $3,314,952 $46,917,200 
Note 9. Goodwill and Other Intangible Assets
The carrying amounts of goodwill allocated to Valley's reporting units at December 31, 2022, as reflected in the table below, were adjusted for the correction of an immaterial error related to the reallocation of goodwill resulting from a change in operating segments during the second quarter 2022. As a result of the segment change in the second quarter 2022, the goodwill balance of $220.5 million from the former Investment Management reporting unit was allocated to the Consumer Banking (formerly Consumer Lending) and Commercial Banking (formerly Commercial Lending) reporting units, on a relative fair value basis, in the amounts of $41.3 million and $179.2 million, respectively.
The following table summarizes the effects of the adjustment on the amounts previously reported in the goodwill allocation table and the corrected (or “as adjusted”) amounts presented herein for each period presented.
 Reporting Unit *
 Wealth
Management		Consumer
Banking		Commercial
Banking		Total
 (in thousands)
December 31, 2022, as reported$49,767 $284,873 $1,534,296 $1,868,936 
Adjustment28,375 64,773 (93,148)— 
December 31, 2022, as adjusted$78,142 $349,646 $1,441,148 $1,868,936 
September 30, 2023$78,142 $349,646 $1,441,148 $1,868,936 
*    The Wealth Management and Consumer Banking reporting units are both components of the overall Consumer Banking operating segment, which is further described in Note 16.

38


During the second quarter 2023, Valley performed the annual goodwill impairment test at its normal assessment date. The results of the 2023 annual impairment test resulted in no impairment of goodwill. During the nine months ended September 30, 2023, there were no triggering events that would more likely than not reduce the fair value of any reporting unit below its carrying amount. There was no impairment of goodwill recognized during the three and nine months ended September 30, 2022, and the correction of the error in allocation of goodwill to reporting units described above had no impact on this conclusion.
The following table summarizes other intangible assets as of September 30, 2023 and December 31, 2022: 
Gross
Intangible
Assets		Accumulated
Amortization		Net
Intangible
Assets
 (in thousands)
September 30, 2023
Loan servicing rights$121,825 $(99,513)$22,312 
Core deposits215,620 (106,201)109,419 
Other50,393 (12,858)37,535 
Total other intangible assets$387,838 $(218,572)$169,266 
December 31, 2022
Loan servicing rights$119,943 $(96,136)$23,807 
Core deposits223,670 (92,486)131,184 
Other51,299 (8,834)42,465 
Total other intangible assets$394,912 $(197,456)$197,456 
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. There was no net impairment recognized during the three and nine months ended September 30, 2023 and 2022.
Core deposits are amortized using an accelerated method over a period of 10.0 years. The line item labeled “Other” included in the table above primarily consists of customer lists, certain financial asset servicing contracts 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 13.4 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, 2023 and 2022.
The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2023 through 2027: 
YearLoan Servicing
Rights		Core
Deposits		Other
 (in thousands)
2023$793 $6,982 $1,591 
20242,918 24,897 5,951 
20252,562 21,048 5,380 
20262,235 17,223 4,805 
20271,940 13,544 4,205 
39


Valley recognized amortization expense on other intangible assets totaling approximately $9.7 million and $11.1 million for the three months ended September 30, 2023 and 2022, respectively, and $30.1 million and $26.9 million for the nine months ended September 30, 2023 and 2022, respectively.
Note 10. Deposits
Included in time deposits are certificates of deposit over $250 thousand totaling $2.4 billion and $1.8 billion at September 30, 2023 and December 31, 2022, respectively. Interest expense on time deposits of $250 thousand or more totaled $5.4 million and $1.3 million for the three months ended September 30, 2023 and 2022, respectively, and $12.9 million and $1.8 million for the nine months ended September 30, 2023 and 2022, respectively.
The scheduled maturities of time deposits as of September 30, 2023 were as follows: 
YearAmount
 (in thousands)
2023$4,425,230 
202410,297,950 
2025127,039 
2026167,730 
202738,829 
Thereafter46,192 
Total time deposits$15,102,970 
Note 11. Borrowed Funds
Short-Term Borrowings
Short-term borrowings at September 30, 2023 and December 31, 2022 consisted of the following:
September 30, 2023December 31, 2022
 (in thousands)
FHLB advances$— $24,035 
Securities sold under agreements to repurchase89,802 114,694 
Total short-term borrowings$89,802 $138,729 
The weighted average interest rate for short-term FHLB advances was 1.60 percent at December 31, 2022.
Long-Term Borrowings
Long-term borrowings at September 30, 2023 and December 31, 2022 consisted of the following:
September 30, 2023December 31, 2022
 (in thousands)
FHLB advances, net (1)
$1,688,260 $788,419 
Subordinated debt, net (2)
630,034 754,639 
Total long-term borrowings$2,318,294 $1,543,058 
(1)
FHLB advances are presented net of unamortized premiums totaling $260 thousand and $419 thousand at September 30, 2023 and December 31, 2022, respectively.
(2)
Subordinated debt is presented net of unamortized debt issuance costs totaling $5.6 million and $6.9 million at September 30, 2023 and December 31, 2022, respectively.
40


FHLB Advances. Long-term FHLB advances had a weighted average interest rate of 3.75 percent and 1.88 percent at September 30, 2023 and December 31, 2022, 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, 2023 are scheduled for contractual balance repayments as follows:
YearAmount
 (in thousands)
2024$165,000 
2025273,000 
2026350,000 
2027675,000 
Thereafter225,000 
Total long-term FHLB advances$1,688,000 
None of the FHLB advances reported in the table above are callable for early redemption by the FHLB during the next 12 months.
Subordinated debt. On September 27, 2023, Valley repaid $125.0 million of 5.125 percent matured subordinated notes issued in September 2013. There were no new issuances of the subordinated debt during the nine months ended September 30, 2023. See Note 10 in Valley’s Annual Report on Form 10-K for the year ended December 31, 2022 for details on the remaining outstanding subordinated debt at September 30, 2023.
Note 12. Stock–Based Compensation
On April 25, 2023, Valley's shareholders approved the Valley National Bancorp 2023 Incentive Compensation Plan (the 2023 Plan). The purpose of the 2023 Plan is to provide additional long-term incentives to employees, directors and officers whose contributions are essential to the continued growth and success of Valley. Upon shareholder approval of the 2023 Plan, Valley ceased granting awards under the Valley National Bancorp 2021 Incentive Compensation Plan (the 2021 Plan). Under the 2023 Plan, Valley may issue awards to its officers, employees and non-employee directors in amounts up to 14.5 million shares of common stock, less one share for every share granted after December 31, 2022 under the 2021 Plan.
Restricted stock units are awarded as performance-based RSUs and time-based RSUs. The performance-based RSU awards are granted to certain officers and include RSUs subject to vesting conditions based upon certain levels of growth in Valley's tangible book value per share, plus dividends; and RSUs subject to vesting conditions based upon Valley's total shareholder return as compared to its peer group.
41


The table below summarizes RSU awards granted and average grant date fair values for the three and nine months ended September 30, 2023 and 2022:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
(in thousands, except per share data)
Award shares granted:
Performance-based RSUs — — 723 619 
Time-based RSUs111 234 1,842 2,338 
Average grant date fair value per share:
Performance-based RSUs $— $— $12.80 $14.72 
Time-based RSUs$9.26 $11.47 $11.41 $13.31 
Stock award fair values are expensed over the shorter of the vesting or required service period. Valley recorded total stock-based compensation expense of $8.6 million and $7.6 million for the three months ended September 30, 2023 and 2022, respectively, and $25.4 million and $21.0 million for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, the unrecognized amortization expense for all stock-based employee compensation totaled approximately $41.0 million. This expense will be recognized over an average remaining vesting period of approximately 1.9 years. See Note 12 in Valley’s Annual Report on Form 10-K for the year ended December 31, 2022 for details on the stock-based compensation awards.
Note 13. 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 and currency 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 second quarter 2023, Valley terminated six interest rate swaps with a total notional amount of $600 million. The terminated swaps, originally maturing between November 2024 to November 2026, were used to hedge the changes in cash flows associated with certain variable rate loans. The transaction resulted in a pre-tax gain totaling $3.6 million reported in accumulated other comprehensive loss within shareholders' equity that will be amortized to interest income over the life of the previously hedged loans.
Fair Value Hedges of Fixed Rate Assets and Liabilities. Valley is exposed to changes in the fair value of fixed-rate subordinated debt due to changes in interest rates. Valley uses interest rate swaps to manage its exposure to changes in fair value on fixed rate debt instruments attributable to changes in the designated benchmark interest rate. 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.
Non-designated Hedges. Derivatives not designated as hedges may be used to manage Valley’s exposure to interest rate movements or to provide a 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.
42


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, 2023, Valley had 37 credit swaps with an aggregate notional amount of $497.9 million related to risk participation agreements.
At September 30, 2023, 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 Term SOFR rate (modified from the three-month LIBOR rate effective July 1, 2023) 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.
Valley enters into foreign currency forward and option contracts, primarily to accommodate our customers, that are not designated as hedging instruments. Upon the origination of certain foreign currency denominated transactions (including foreign currency holdings and non-U.S. dollar denominated loans) with a client, we enter into a respective hedging contract with a third party financial institution to mitigate the economic impact of foreign currency exchange rate fluctuation.
43


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, 2023December 31, 2022
 Fair ValueFair Value
Other AssetsOther LiabilitiesNotional AmountOther AssetsOther LiabilitiesNotional Amount
 (in thousands)
Derivatives designated as hedging instruments:
Cash flow hedge interest rate swaps
$— $— $— $3,971 $4 $600,000 
Fair value hedge interest rate swaps — 32,361 300,000 — 29,794 300,000 
Total derivatives designated as hedging instruments$— $32,361 $300,000 $3,971 $29,798 $900,000 
Derivatives not designated as hedging instruments:
Interest rate swaps and other contracts*
$697,043 $696,955 $15,926,996 $449,280 $564,678 $14,753,330 
Foreign currency derivatives7,242 5,658 1,328,862 13,709 12,604 1,273,735 
Mortgage banking derivatives383 304 68,635 167 157 31,299 
Total derivatives not designated as hedging instruments
$704,668 $702,917 $17,324,493 $463,156 $577,439 $16,058,364 
* Other derivative contracts include risk participation agreements.
Beginning in the second quarter 2023, certain cash flow hedges and other non-designated derivative hedging instruments previously cleared through the Chicago Mercantile Exchange and London Clearing House were no longer subject to the variation margin netting under the single-unit of account. At December 31, 2022, fair value of these non-designated derivative instruments were reported net of variation margin as settlements using a single-unit of account.
Gains (losses) included in the consolidated statements of income and other comprehensive loss, 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,
 2023202220232022
 (in thousands)
Amount of gain (loss) reclassified from accumulated other comprehensive loss to interest income and expense$63 $21 $(1,193)$(405)
Amount of (loss) gain recognized in other comprehensive loss— (6)(1,093)435 
The accumulated after-tax gains related to effective cash flow hedges included in accumulated other comprehensive loss were $2.3 million and $2.2 million at September 30, 2023 and December 31, 2022, respectively.
Amounts reported in accumulated other comprehensive loss related to cash flow interest rate derivatives are reclassified to interest income and expense as interest payments are received and paid on the hedged variable interest rate assets and liabilities. Valley estimates that $1.2 million (before tax) will be reclassified as an increase to interest income over the next 12 months.
(Losses) gains included in the consolidated statements of income related to interest rate derivatives designated as hedges of fair value were as follows: 
44


Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
 (in thousands)
Derivative - interest rate swap:
Interest expense$(52)$(989)$850 $(383)
Hedged item - subordinated debt
Interest expense$61 $325 $(759)$802 
The changes in the fair value of the hedged item designated as a qualifying hedge are captured as an adjustment to the carrying amount of the hedged item (basis adjustment). The following table presents the hedged item related to interest rate derivatives designated as fair value hedges and the cumulative basis fair value adjustment included in the net carrying amount of the hedged item at September 30, 2023 and December 31, 2022, respectively.
Line Item in the Statement of Financial Position in Which the Hedged Item is IncludedNet Carrying Amount of the Hedged Liability *Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability
(in thousands)
September 30, 2023
Long-term borrowings$268,441 $(29,373)
December 31, 2022
Long-term borrowings$267,076 $(30,132)

*    Net carrying amount includes unamortized debt issuance costs of $2.2 million and $2.8 million at September 30, 2023 and December 31, 2022, respectively.
The net (gains) losses included in the consolidated statements of income related to derivative instruments not designated as hedging instruments were as follows: 
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2023202220232022
 (in thousands)
Non-designated hedge interest rate swaps and credit derivatives
Other non-interest expense$(455)$463 $(615)$(1,191)
Capital markets income reported in non-interest income included fee income related to non-designated hedge derivative interest rate swaps executed with commercial loan customers and foreign exchange contracts (not designated as hedging instruments) with a combined total of $5.7 million and $12.2 million for the three months ended September 30, 2023 and 2022, respectively, and $29.7 million and $39.8 million for the nine months ended September 30, 2023 and 2022, respectively.
Collateral Requirements and 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
45


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 counterparties could terminate the derivative positions and Valley would be required to settle its obligations under the agreements. As of September 30, 2023, Valley was in compliance with all of the provisions of its derivative counterparty agreements. The aggregate fair value of all derivative financial instruments with credit risk-related contingent features was in a net asset position at September 30, 2023. Valley has derivative counterparty agreements that require minimum collateral posting thresholds for certain counterparties.
Note 14. Balance Sheet Offsetting
Certain financial instruments, including certain over-the-counter (OTC) derivatives (mostly interest rate swaps) and repurchase agreements (accounted for as secured long-term borrowings), may be eligible for offset in the consolidated statements of financial condition and/or subject to master netting arrangements or similar agreements. OTC derivatives include interest rate swaps executed and settled bilaterally with counterparties without the use of an organized exchange or central clearing house (presented in the table below). The credit risk associated with bilateral OTC derivatives is managed through obtaining collateral and enforceable master netting agreements.
Valley is party to master netting arrangements with its financial institution counterparties; however, Valley does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral, usually in the form of cash or marketable investment securities, is posted by the counterparty with net liability positions in accordance with contract thresholds. Master repurchase agreements which include “right of set-off” provisions generally have a legally enforceable right to offset recognized amounts. In such cases, the collateral would be used to settle the fair value of the swap or repurchase agreement should Valley be in default. The total amount of collateral held or pledged cannot exceed the net derivative fair values with the counterparty.
The table below presents information about Valley’s financial instruments eligible for offset in the consolidated statements of financial condition as of September 30, 2023 and December 31, 2022.
    Gross Amounts Not Offset 
 Gross Amounts
Recognized		Gross Amounts
Offset		Net Amounts
Presented		Financial
Instruments		Cash
Collateral *		Net
Amount
 (in thousands)
September 30, 2023
Assets
Interest rate swaps and other contracts$697,043 $— $697,043 $1,590 $(612,770)$85,863 
Liabilities
Interest rate swaps and other contracts$729,316 $— $729,316 $(1,590)$— $727,726 
December 31, 2022
Assets
Interest rate swaps and other contracts$453,251 $— $453,251 $12,766 $(342,480)$123,537 
Liabilities
Interest rate swaps and other contracts$594,476 $— $594,476 $(12,766)$(432)$581,278 
*    Cash collateral received from or pledged to our counterparties in relation to market value exposures of OTC derivative contacts in an asset/liability position.
46


Note 15. 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 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, 2023 and December 31, 2022:
September 30,
2023		December 31,
2022
(in thousands)
Other Assets:
Affordable housing tax credit investments, net$23,586 $24,198 
Other tax credit investments, net77,458 56,551 
Total tax credit investments, net
$101,044 $80,749 
Other Liabilities:
Unfunded affordable housing tax credit commitments$1,327 $1,338 
    Total unfunded tax credit commitments$1,327 $1,338 
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, 2023 and 2022: 
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
(in thousands)
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits$1,485 $1,184 $4,404 $3,542 
Other tax credit investment credits and tax benefits3,176 2,557 9,827 7,647 
Total reduction in income tax expense
$4,661 $3,741 $14,231 $11,189 
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses$523 $598 $2,398 $1,666 
Affordable housing tax credit investment impairment losses
954 266 1,850 891 
Other tax credit investment losses374 308 1,099 1,003 
Other tax credit investment impairment losses2,340 1,933 8,115 5,634 
Total amortization of tax credit investments recorded in non-interest expense$4,191 $3,105 $13,462 $9,194 

47


Note 16. Operating Segments
Valley manages its business operations under operating segments consisting of Consumer Banking and Commercial Banking. Activities not assigned to the operating segments are included in Treasury and Corporate Other. Each operating 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). Valley regularly assesses its strategic plans, operations and reporting structures to identify its operating segments and no changes to the operating segments were determined necessary during the three and nine months ended September 30, 2023.
The Consumer Banking segment is mainly comprised of residential mortgages and automobile loans, and to a lesser extent, secured personal lines of credit, home equity loans and other consumer loans. The duration of the residential mortgage loan portfolio is subject to movements in the market level of interest rates and forecasted prepayment speeds. The average weighted life of the automobile loans within the portfolio 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. Consumer Banking also includes the Wealth Management and Insurance Services Division, comprised of trust, asset management, brokerage, insurance and tax credit advisory services.
The Commercial Banking 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 Banking is Valley’s operating segment that is most sensitive to movements in market interest rates.
Treasury and Corporate Other largely consists of the Treasury managed held to maturity debt securities and available for sale debt securities portfolios mainly utilized in the liquidity management needs of our lending segments and income and expense items resulting from support functions not directly attributable to a specific segment. Interest income is generated through investments in various types of securities (mainly comprised of fixed rate securities) and interest-bearing deposits with other banks (primarily the Federal Reserve Bank of New York). Expenses related to the branch network, all other components of retail banking, along with the back office departments of the Bank are allocated from Treasury and Corporate Other to the Consumer and Commercial Banking segments. Interest expense and internal transfer expense (for general corporate expenses) are allocated to each operating segment utilizing a transfer pricing methodology, which involves the allocation of operating and funding costs based on each segment's respective mix of average interest earning assets and or liabilities outstanding for the period.
The accounting for each operating segment and Treasury and Corporate Other 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. 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. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.
48


The following tables represent the financial data for Valley’s operating segments and Treasury and Corporate Other for the three and nine months ended September 30, 2023 and 2022:
 Three Months Ended September 30, 2023
 Consumer
Banking		Commercial
Banking		Treasury and Corporate OtherTotal
 ($ in thousands)
Average interest earning assets
$8,941,112 $41,078,302 $6,783,151$56,802,565 
Interest income$94,280 $659,360 $59,378$813,018 
Interest expense60,950 279,415 60,235400,600 
Net interest income33,330 379,945 (857)412,418 
(Credit) provision for credit losses(4,568)13,715 (30)9,117 
Net interest income after provision for credit losses37,898 366,230 (827)403,301 
Non-interest income22,591 11,208 24,86558,664 
Non-interest expense19,944 33,141 214,048267,133 
Internal transfer expense (income)28,273 127,249 (155,522)— 
Income (loss) before income taxes$12,272 $217,048 $(34,488)$194,832 
Return on average interest earning assets (pre-tax)
0.55 %2.11 %(2.03)%1.37 %
 Three Months Ended September 30, 2022
 Consumer
Banking		Commercial
Banking		Treasury and Corporate OtherTotal
 ($ in thousands)
Average interest earning assets
$8,307,993 $36,033,901 $6,189,348$50,531,242 
Interest income$70,590 $425,930 $40,208$536,728 
Interest expense12,288 53,294 17,15482,736 
Net interest income58,302 372,636 23,054453,992 
Provision (credit) for credit losses7,182 (5,347)1882,023 
Net interest income after provision for credit losses51,120 377,983 22,866451,969 
Non-interest income19,637 23,510 13,04756,194 
Non-interest expense24,352 31,759 205,528261,639 
Internal transfer expense (income)26,268 113,932 (140,200)— 
Income (loss) before income taxes$20,137 $255,802 $(29,415)$246,524 
Return on average interest earning assets (pre-tax)
0.97 %2.84 %(1.90)%1.95 %
49


 Nine Months Ended September 30, 2023
 Consumer
Banking		Commercial
Banking		Treasury and Corporate OtherTotal
 ($ in thousands)
Average interest earning assets
$8,871,992 $40,248,161 $7,390,844$56,510,997 
Interest income$270,198 $1,853,839 $196,670$2,320,707 
Interest expense159,154 722,009 171,3411,052,504 
Net interest income111,044 1,131,830 25,3291,268,203 
Provision for credit losses5,368 19,561 4,67529,604 
Net interest income after provision for credit losses105,676 1,112,269 20,6541,238,599 
Non-interest income62,410 41,316 69,312173,038 
Non-interest expense61,416 104,229 656,625822,270 
Internal transfer expense (income)81,174 361,239 (442,413)— 
Income (loss) before income taxes$25,496 $688,117 $(124,246)$589,367 
Return on average interest earning assets (pre-tax)
0.38 %2.28 %(2.24)%1.39 %
 Nine Months Ended September 30, 2022
 Consumer
Banking		Commercial
Banking		Treasury and Corporate OtherTotal
 ($ in thousands)
Average interest earning assets
$7,978,732 $32,551,062 $6,075,623$46,605,417 
Interest income$193,186 $1,036,276 $100,671$1,330,133 
Interest expense20,218 84,356 35,738140,312 
Net interest income172,968 951,920 64,9331,189,821 
Provision for credit losses14,457 34,590 53149,578 
Net interest income after provision for credit losses158,511 917,330 64,4021,140,243 
Non-interest income50,540 54,815 48,642153,997 
Non-interest expense59,711 81,292 617,706758,709 
Internal transfer expense (income)92,544 371,213 (463,757)— 
Income (loss) before income taxes$56,796 $519,640 $(40,905)$535,531 
Return on average interest earning assets (pre-tax)
0.95 %2.13 %(0.90)%1.53 %
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 I, Item 1 of this report. The words "Valley," the "Company," "we," "our" and "us" refer to Valley National Bancorp and its 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.
50


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 our business, new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology as “intend,” “should,” “expect,” “believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “would,” “could,” “typically,” “usually,” “anticipate,” “may,” “estimate,” “outlook,” “project,” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. 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 Federal Reserve actions affecting the level of market interest rates and increases in business failures, specifically among our clients, as well as on our business, our employees and our ability to provide services to our customers;
•the impact of a potential U.S. Government shutdown on economic activity in the markets in which we operate and, in general, on levels of end market demand in the economy;
•the impact of possible future bank failures on the business environment in which we operate and resulting market volatility and reduced confidence in depository institutions, including impact on stock price, customer deposit withdrawals from Valley National Bank, or business disruptions or liquidity issues that have or may affect our customers;
•the impact of unfavorable macroeconomic conditions or downturns, instability or volatility in financial markets, unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by and factors outside of our control, such as geopolitical instabilities or events (including the Israel-Hamas war); natural and other disasters (including severe weather events) and health emergencies, acts of terrorism or other external events;
•risks associated with our acquisition of Bank Leumi Le-Israel Corporation (Bank Leumi USA), including (i) the inability to realize expected cost savings and synergies from the acquisition in the amounts or timeframe anticipated and (ii) greater than expected costs or difficulties relating to integration matters;
•the loss of or decrease in lower-cost funding sources within our deposit base;
•the need to supplement debt or equity capital to maintain or exceed internal capital thresholds;
•the inability to attract new customer deposits to keep pace with loan growth strategies;
•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;
•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;
•cyber-attacks, ransomware 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;
•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;
51


•changes to laws and regulations, including changes affecting oversight of the financial services industry; changes in the enforcement and interpretation of such laws and regulations; and changes in accounting and reporting standards;
•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;
•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;
•a prolonged downturn in the economy, as well as an unexpected decline in commercial real estate values collateralizing a significant portion of our loan portfolio; and
•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.
A detailed discussion of factors that could affect our results is included in our SEC filings, including the “Risk Factors” section in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, and in Part II, Item 1A of this Form 10-Q.
We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
Critical Accounting Estimates
Valley’s accounting policies are fundamental to understanding management’s discussion and analysis of its financial condition and results of operations. In preparing the consolidated financial statements, management has made estimates, judgments and assumptions in accordance with these policies 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. At September 30, 2023, 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. Management has reviewed the application of these policies and estimates with the Audit Committee of Valley’s Board of Directors. Our critical accounting policies and estimates are described in detail in Part II, Item 7 in Valley’s Annual Report on Form 10-K for the year ended December 31, 2022, and there have been no material changes in such policies and estimates since the date of such report.
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.
Executive Summary
Company Overview. At September 30, 2023, Valley had consolidated total assets of approximately $61.2 billion, total net loans of $49.7 billion, total deposits of $49.9 billion and total shareholders’ equity of $6.6 billion. Valley
52


operates many convenient branch office locations and commercial banking offices in northern and central New Jersey, the New York City Boroughs of Manhattan, Brooklyn and Queens, Long Island, Westchester County, New York, Florida, California, Alabama and Illinois. Of our current 230 branch network, 55 percent, 18 percent, and 18 percent of the branches are in New Jersey, New York and Florida, respectively, with the remaining 9 percent of the branches in Alabama, California, and Illinois combined. We have grown significantly both in asset size and locations over the past several years through organic efforts and bank acquisitions, including our acquisition of Bank Leumi USA on April 1, 2022.
As originally planned, Valley completed its conversion of the legacy Valley and Bank Leumi USA operating systems to a single core operating system in October 2023.
Industry Developments. The combination of rapidly rising interest rates, increased competition and economic uncertainty continues to weigh on the banking industry. We have consistently operated the Bank with a focus on diversification to maintain stability through various economic cycles. During the third quarter 2023, we continued to position our balance sheet to mitigate potential risks from the market uncertainty affecting the banking industry in general and Valley, its clients and communities in particular.
•Total assets decreased $520.3 million, or 0.8 percent, to $61.2 billion at September 30, 2023 from June 30, 2023 largely driven by lower excess cash liquidity maintained overnight on our balance sheet. Our liquid assets totaled $2.6 billion at September 30, 2023, representing 4.6 percent of interest earning assets. We continue to maintain significant access to readily available, diverse funding sources to fulfill both short-term and long-term funding needs. See the "Bank Liquidity" section for additional information.
•Total deposits increased $265.5 million to $49.9 billion at September 30, 2023 as compared to $49.6 billion at June 30, 2023, largely due to increases in direct customer interest bearing deposits, partially offset by a net decrease of $338.5 million in indirect customer deposits driven by maturity of certain brokered CDs. See the "Deposits and Other Borrowings" section for more details.
•Capital remained strong with ratios of both Valley and the Bank exceeding all capital adequacy requirements at September 30, 2023. Total shareholders' equity increased $52.1 million to $6.6 billion at September 30, 2023 as compared to June 30, 2023. See the "Capital Adequacy" section for additional details.
•Total loans increased $220.3 million, or 1.8 percent on an annualized basis to $50.1 billion at September 30, 2023 from June 30, 2023 mainly due to select organic commercial real estate loan growth during the third quarter 2023. See the "Loan Portfolio" section for more information.
•Asset quality continued to reflect our disciplined underwriting and lending practices during the third quarter 2023. Non-performing assets (NPAs) as a percentage of total loans and NPAs totaled 0.52 percent and 0.51 percent at September 30, 2023 and June 30, 2023, respectively. See the "Non-Performing Assets" section for additional information.
•Total investment securities were $5.1 billion, or 8.3 percent of total assets, at September 30, 2023 and remained relatively unchanged as compared to June 30, 2023. See the "Investment Securities Portfolio" section for more details.
Quarterly Results. Net income for the third quarter 2023 was $141.3 million, or $0.27 per diluted common share, as compared to $178.1 million, or $0.34 per diluted common share, for the third quarter 2022. The $36.8 million decrease in quarterly net income as compared to the same quarter one year ago was mainly due to the following changes:
•a $41.6 million decrease in net interest income as higher yields on both new loan originations and adjustable-rate loans were more than offset by an increase in the cost of deposits;
•a $7.1 million increase in our provision for credit losses; and
53


•a $5.5 million increase in non-interest expense was due, in part, to a higher salary and employee benefits expense, an FDIC insurance assessment and charges for collateral liabilities related to derivative transactions;
Which were partially offset by:
•a $2.5 million increase in non-interest income that was primarily driven by net gains on sales of assets and higher wealth management and trust fees, partially offset by lower capital markets income; and
•a $14.9 million decrease in income tax expense mostly due to lower pre-tax income in the third quarter 2023.
See the "Net Interest Income," "Non-Interest Income," "Non-Interest Expense" and "Income Taxes" sections below for more details on the impact of the items above on our third quarter 2023 results.
U.S. Economic Conditions. During the third quarter 2023, real gross domestic product (GDP) increased at an annual rate of 5.4 percent as compared to an increase of 2.1 percent during the second quarter 2023. The 5.4 percent increase in real GDP reflected accelerated economic growth fueled by continued robust consumer spending, private inventory investment, nonresidential fixed investment and government spending. Inflation moderately cooled, but remained at 3.7 percent in the third quarter 2023.
During each of May and July 2023, the Federal Reserve raised the target range for the federal funds rate by an additional 25 basis points, which resulted in a current target range of 5.25 to 5.50 percent. The Federal Reserve paused rate increases in August, September and November 2023 largely to observe the full impact of its significant rate hikes since the beginning of 2022.
The 10-year U.S. Treasury note yield ended the third quarter 2023 at 4.59 percent, or 78 basis points higher as compared to the second quarter 2023, and the 2-year U.S. Treasury note yield ended the third quarter 2023 at 5.03 percent, or 16 basis points higher as compared to the second quarter 2023.
U.S. commercial banks saw commercial and industrial loans remain relatively unchanged with minimal growth from June 30, 2023, to September 30, 2023. Overall, commercial real estate lending continued to be stressed, particularly affecting regional and midsize banks that may be overexposed to office space lending. In light of higher uncertainty, inflated property prices, and concerns about debt repayments, most banks have become more selective in their new commercial real estate originations. Additionally, the combination of high interest rates and tight inventories have kept residential real estate sales and both refinanced and purchased residential mortgage loan activity low during the third quarter 2023.
Despite strong economic growth during the third quarter 2023 the following factors have added a higher level of uncertainty to the future path of the U.S. economy and created a challenging operating environment for the banking sector including elevated inflation, the potential for additional fallout from the recent banking crisis, including bank regulatory actions, the inverted yield curve and potential further increases in market interest rates. In addition, geopolitical tensions in the Middle East which could threaten a spike in oil prices and a possibility of the government shutdown, among other factors, have added a higher level of uncertainty to the future path of the U.S. economy and created a challenging banking environment. Should these economic conditions further deteriorate, causing business activity, spending and investment to decline, it may adversely impact our financial results, as highlighted in this MD&A.
Deposits and Other Borrowings
Overall, average deposits increased by $2.4 billion to $49.8 billion for the third quarter 2023 as compared to the second quarter 2023, mostly due to a $2.7 billion increase in average time deposits, partially offset by a decrease in average non-interest bearing deposits. The increase in time deposits was mainly driven by successful retail CD generation and increased utilization of fully insured indirect customer (i.e., brokered) deposits. The decline in average non-interest bearing deposits was largely due to a shift in customer balances to our interest bearing deposit products in a rising interest rate environment, outflows due to attractive investment alternatives to deposits in the
54


marketplace, and customer use of cash reserves in place of financing. Average non-interest-bearing deposits; savings, NOW and money market deposits; and time deposits represented approximately 24 percent, 46 percent and 30 percent of total deposits as of September 30, 2023, respectively.
Actual ending balances for deposits increased $265.5 million to $49.9 billion at September 30, 2023 from June 30, 2023 mainly due to increases of $833.5 million in savings, NOW and money market deposits and $194.8 million in time deposits, partially offset by a $762.8 million decrease in non-interest bearing deposits. The increase in savings, NOW and money market deposits was largely driven by increases in digital and national specialized deposits, as well as some shift in customer balances from non-interest bearing deposits during the third quarter 2023. The increase in time deposits was largely due to successful retail deposit campaigns, partially offset by the maturity of indirect customer deposits. Non-interest bearing balances continued to be challenged by the high level of market interest rates and the aforementioned changes in customer behavior at September 30, 2023. Non-interest bearing deposits; savings, NOW and money market deposits; and time deposits represented approximately 24 percent, 46 percent and 30 percent of total deposits as of September 30, 2023, respectively, as compared to 25 percent, 45 percent and 30 percent of total deposits as of June 30, 2023, respectively.
The following table lists, by maturity, uninsured certificates of deposit at September 30, 2023:
 (in thousands)
Less than three months$545,661 
Three to six months842,290 
Six to twelve months921,329 
More than twelve months128,929 
Total$2,438,209 
Total estimated uninsured deposits, excluding collateralized government deposits and intercompany deposits (i.e., deposits eliminated in consolidation), totaled approximately $11.7 billion, or 23 percent of total deposits, at September 30, 2023 as compared to $12.1 billion, or 24 percent of total deposits, at June 30, 2023.
While our diversified commercial and consumer deposit base has remained relatively stable during the early stages of the fourth quarter 2023, deposit gathering initiatives could remain challenging due to market competition, attractive investment alternatives, such as U.S. Treasury securities, and other factors. As a result, we cannot guarantee that we will be able to maintain deposit levels at or near those reported at September 30, 2023.
55


The following table presents average short-term and long-term borrowings for the periods indicated:
Three Months EndedNine Months Ended
September 30, 2023June 30, 2023September 30, 2022September 30, 2023September 30, 2022
(in thousands)
Average short-term borrowings:
FHLB advances$349,728 $3,656,593 $438,267 $2,165,507 $565,222 
Securities sold under repurchase agreements82,442 99,327 140,777 93,709 144,019 
Federal funds purchased4,348 122,537 437,196 105,019 363,550 
Total $436,518 $3,878,457 $1,016,240 $2,364,235 $1,072,791 
Average long-term borrowings:
FHLB advances$1,688,285 $1,523,500 $788,651 $1,365,258 $788,802 
Subordinated debt750,249 759,334 632,627 754,835 626,997 
Junior subordinated debentures issued to capital trusts56,978 56,893 56,631 56,892 56,545 
Total$2,495,512 $2,339,727 $1,477,909 $2,176,985 $1,472,344 
Average short-term borrowings decreased $3.4 billion during the third quarter 2023 as compared to the second quarter 2023 mostly due to the maturity and repayment of several FHLB advances as we trimmed our elevated excess liquidity position during the third quarter. Average long-term borrowings (including junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of financial condition) moderately increased $155.8 million as compared to the second quarter 2023 mostly due to new FHLB advances issued in the second quarter 2023.
Actual ending balances for short-term borrowings decreased $1.0 billion to $89.8 million at September 30, 2023 as compared to June 30, 2023 mainly due to the aforementioned maturities of FHLB advances and the decrease in our excess overnight cash positions as part of our liquidity management strategies during the third quarter 2023. Long-term borrowings totaled $2.3 billion at September 30, 2023 as compared to $2.4 billion at June 30, 2023. The decrease was largely due to the maturity and repayment of $125.0 million of 5.125 percent subordinated notes issued in September 2013 and due on September 27, 2023, which had already been fully disallowed from a regulatory capital perspective.
Non-GAAP Financial Measures
The table below presents selected performance indicators, their comparative non-GAAP measures and the (non-GAAP) efficiency ratio for the periods indicated. Valley believes that the non-GAAP financial measures provide useful supplemental information to both management and investors in understanding its underlying operational performance, business, and performance trends, and may facilitate comparisons of current and prior performance with the performance of others in the financial services industry. Management utilizes these measures for internal planning, forecasting and analysis purposes. Management believes that Valley’s presentation and discussion of this supplemental information, together with the accompanying reconciliations to the GAAP financial measures, also allows investors to view performance in a manner similar to management. These non-GAAP financial measures should not be considered in isolation, 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.
56


The following table presents our annualized performance ratios:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2023202220232022
Selected Performance Indicators($ in thousands)
GAAP measures:
Net income, as reported$141,346 $178,119 $426,957 $391,260 
Return on average assets0.92 %1.30 %0.93 %1.03 %
Return on average shareholders’ equity8.56 11.39 8.72 8.89 
Non-GAAP measures:
Net income, as adjusted$136,363 $181,455 $437,974 $467,571 
Return on average assets, as adjusted 0.89 %1.32 %0.96 %1.23 %
Return on average shareholders' equity, as adjusted 8.26 11.60 8.94 10.62 
Return on average tangible shareholders' equity (ROATE)12.39 17.21 12.71 13.20 
ROATE, as adjusted11.95 17.54 13.04 15.77 
Efficiency ratio56.72 49.76 55.34 51.03 
September 30,
2023		December 31,
2022
Common Equity Per Share Data:
Book value per common share (GAAP)$12.64 $12.23 
Tangible book value per common share (non-GAAP)8.63 8.15 
Adjusted net income is computed as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
(in thousands)
Net income, as reported (GAAP)$141,346 $178,119 $426,957 $391,260 
Add: Losses (gains) on available for sale and held to maturity debt securities, net (net of tax) (a)
318 (24)341 (74)
Add: Restructuring charge (net of tax) (b)
(484)— 7,531 — 
Add: Provision for credit losses for available for sale securities (c)
— — 5,000 — 
Add: Non-PCD provision for credit losses, (net of tax) (d)
— — — 29,282 
Add: Merger related expenses (net of tax) (e)
— 3,360 2,962 47,103 
Add: Add: Net gains on sales of office buildings (net of tax) (f)
(4,817)— (4,817)— 
Net income, as adjusted (non-GAAP)$136,363 $181,455 $437,974 $467,571 
(a) Included in gains (losses) on securities transactions, net.
(b) Represents severance expense related to workforce reductions within salary and employee benefits expense.
(c) Included in provision for credit losses for available for sale and held to maturity securities (tax disallowed).
(d) Represents provision for credit losses for non-PCD assets and unfunded credit commitments acquired during the period.
(e) Included primarily within salary and employee benefits expense.
(f) Included in gains (losses) on sale of assets, net within non-interest income.
In addition to the items used to calculate net income, as adjusted, in the table 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
57


loan customer transactions reported in capital markets fees. These amounts can vary widely from period to period due to, among other factors, the amount of residential mortgage loans originated for sale, loan portfolio sales, brokerage fees, and commercial loan customer demand for certain products. See the “Non-Interest Income” section below for more details.
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,
2023202220232022
($ in thousands)
Net income, as adjusted (non-GAAP)$136,363$181,455$437,974$467,571
Average assets$61,391,688$54,858,306$61,050,973$50,588,010
Annualized return on average assets, as adjusted (non-GAAP)0.89 %1.32 %0.96 %1.23 %
Adjusted annualized return on average shareholders' equity is computed by dividing adjusted net income by average shareholders' equity, as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
($ in thousands)
Net income, as adjusted (non-GAAP)$136,363$181,455$437,974$467,571
Average shareholders' equity$6,605,786$6,256,767$6,531,424$5,869,736
Annualized return on average shareholders' equity, as adjusted (non-GAAP)8.26 %11.60 %8.94 %10.62 %
ROATE and adjusted ROATE are computed by dividing net income and adjusted net income, respectively, by average shareholders’ equity less average goodwill and average other intangible assets, as follows:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2023202220232022
 ($ in thousands)
Net income, as reported (GAAP)$141,346$178,119$426,957$391,260
Net income, as adjusted (non-GAAP)136,363181,455437,974467,571
Average shareholders’ equity (GAAP)$6,605,786$6,256,767$6,531,424$5,869,736
Less: Average goodwill and other intangible assets2,042,4862,117,8182,051,7271,917,217
Average tangible shareholders’ equity (non-GAAP)$4,563,300$4,138,949$4,479,697$3,952,519
Annualized ROATE (non-GAAP)12.39 %17.21 %12.71 %13.20 %
Annualized ROATE, as adjusted (non-GAAP)11.95 %17.54 %13.04 %15.77 %
58


The efficiency ratio is computed as follows:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2023202220232022
 ($ in thousands)
Total non-interest expense, as reported (GAAP)$267,133 $261,639 $822,270 $758,709 
Less: Restructuring charge (pre-tax) (a)
(675)— 10,507 — 
Less: Amortization of tax credit investments (pre-tax)4,191 3,105 13,462 9,194 
Less: Merger related expenses (pre-tax) (b)
— 4,707 4,133 63,831 
Total non-interest expense, as adjusted (non-GAAP)$263,617 $253,827 $794,168 $685,684 
Net interest income, as reported (GAAP)$412,418 $453,992 $1,268,203 $1,189,821 
Total non-interest income, as reported (GAAP)58,664 56,194 173,038 153,997 
Add: Losses (gains) on available for sale and held to maturity debt securities, net (pre-tax) (c)
443 (33)476 (102)
Less: Net gains on sales of office buildings (pre-tax)(d)
(6,721)— (6,721)— 
Total net interest income and non-interest income, as adjusted (non-GAAP)$464,804 $510,153 $1,434,996 $1,343,716 
Efficiency ratio (non-GAAP)56.72 %49.76 %55.34 %51.03 %
(a)    Represents severance expense related to workforce reductions within salary and employee benefits expense.
(b)    Included primarily within salary and employee benefits expense.
(c)    Included in gains (losses) on securities transactions, net.
(d)    Included in gains (losses) on sales of assets, net.

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,
2023		December 31,
2022
 ($ in thousands, except for share data)
Common shares outstanding507,660,742 506,374,478 
Shareholders’ equity (GAAP)$6,627,299 $6,400,802 
Less: Preferred stock209,691 209,691 
Less: Goodwill and other intangible assets2,038,202 2,066,392 
Tangible common shareholders’ equity (non-GAAP)$4,379,406 $4,124,719 
Book value per common share (GAAP)$12.64 $12.23 
Tangible book value per common share (non-GAAP)$8.63 $8.15 
Net Interest Income
Net interest income on a tax equivalent basis totaling $413.7 million for the third quarter 2023 decreased $7.6 million and $41.7 million as compared to the second quarter 2023 and third quarter 2022, respectively. The decrease as compared to the second quarter 2023 was mainly due to increased interest rates on most interest bearing deposit products, partially offset by higher loan yields and a reduction in average short-term borrowings. As a result of the higher cost of deposits, total interest expense increased $32.9 million to $400.6 million for the third quarter 2023 as compared to the second quarter 2023. Interest income on a tax equivalent basis increased $25.3 million to $814.3 million in the third quarter 2023 as compared to the second quarter 2023. The increase was mostly due to higher yields on both new originations and adjustable rate loans in our portfolio and a $561.5 million increase in average
59


loan balances driven by organic new loan volumes over the last six months and a continuation of slower loan prepayments in the third quarter 2023.
Average interest earning assets increased $6.3 billion to $56.8 billion for the third quarter 2023 as compared to the third quarter 2022 mainly due to a $5.7 billion increase in average loan balances and a $508.6 million increase in average interest bearing cash balances largely due to higher excess cash held overnight as part of our prudent liquidity management navigating the fallout from the bank failures in the first half of 2023. Compared to the second quarter 2023, average interest earning assets decreased by $549.2 million during the third quarter 2023. The decrease was primarily driven by a $951.8 million decline in average overnight interest bearing cash held as compared to the prior linked quarter, partially offset by a $561.5 million increase in average loan balances mainly due to continued growth in the commercial real estate loan portfolio.
Average interest bearing liabilities increased $9.6 billion to $40.8 billion for the third quarter 2023 as compared to the third quarter 2022 mainly due to increases of $9.2 billion and $1.0 billion in average time deposits and long-term borrowings, respectively, partially offset by a decrease of $579.7 million in average short-term borrowings. The increases in average time deposits and long-term borrowings were largely due to the enhanced liquidity management efforts during the first nine months of 2023, including increased usage of fully FDIC-insured indirect customer CD and successful retail CD initiatives. As compared to the second quarter 2023, average interest bearing liabilities decreased by $96.7 million for the third quarter 2023 primarily due to the lower utilization of short-term FHLB advances, largely offset by higher average interest bearing deposit levels largely driven by successful retail CD generation and increased balances within our specialized national and digital products in savings, NOW and money market deposits. See additional information under "Deposits and Other Borrowings" in the Executive Summary section above.
Net interest margin on a tax equivalent basis of 2.91 percent for the third quarter 2023 decreased by 3 basis points and 69 basis points from 2.94 percent and 3.60 percent for the second quarter 2023 and third quarter 2022, respectively. The decrease as compared to the second quarter 2023 was largely driven by higher interest rates on interest bearing deposits, partially offset by a 23 basis point increase in the yield on average interest earning assets. The yield on average loans increased by 25 basis points to 6.03 percent for the third quarter 2023 as compared to the second quarter 2023 largely due to higher interest rates on new originations and adjustable rate loans. Our cost of total average deposits was 2.94 percent for the third quarter 2023 as compared to 2.45 percent and 0.59 percent for the second quarter 2023 and the third quarter 2022, respectively. The overall cost of average interest bearing liabilities also increased 33 basis points to 3.92 percent for the third quarter 2023 as compared to the second quarter 2023 primarily driven by the continued rise in the market interest rates on deposits.
We anticipate our net interest income for the fourth quarter 2023 to be relatively unchanged from the third quarter 2023. While we are optimistic regarding the signs of stabilization in our net interest income during the third quarter 2023 as compared to the first six months of 2023, we cannot provide any assurances with respect to the future impact of the market interest rate environment, and its uncertain trajectory on the cost of our funding sources or that our net interest income or margin will remain at the levels reported for the third quarter 2023.


60


The following table reflects the components of net interest income for the three months ended September 30, 2023, June 30, 2023 and September 30, 2022:

Quarterly Analysis of Average Assets, Liabilities and Shareholders’ Equity and
Net Interest Income on a Tax Equivalent Basis
 Three Months Ended
 September 30, 2023June 30, 2023September 30, 2022
 Average
Balance		InterestAverage
Rate		Average
Balance		InterestAverage
Rate		Average
Balance		InterestAverage
Rate
 ($ in thousands)
Assets
Interest earning assets:
Loans (1)(2)
$50,019,414 $753,662 6.03 %$49,457,937 $715,195 5.78 %$44,341,894 $496,545 4.48 %
Taxable investments (3)
4,915,778 37,682 3.07 5,065,812 39,436 3.11 4,815,181 31,002 2.58 
Tax-exempt investments (1)(3)
620,439 5,800 3.74 629,342 7,062 4.49 635,795 6,501 4.09 
Interest bearing deposits with banks1,246,934 17,113 5.49 2,198,717 27,276 4.96 738,372 3,996 2.16 
Total interest earning assets56,802,565 814,257 5.73 57,351,808 788,969 5.50 50,531,242 538,044 4.26 
Allowance for credit losses(447,045)(446,098)(486,747)
Cash and due from banks410,715 415,075 426,796 
Other assets4,802,711 4,709,061 4,499,739 
Unrealized gains on securities available for sale, net(177,258)(152,382)(112,724)
Total assets$61,391,688 $61,877,464 $54,858,306 
Liabilities and shareholders’ equity
Interest bearing liabilities:
Savings, NOW and money market deposits$23,016,737 $201,916 3.51 %$22,512,128 $164,843 2.93 %$23,541,694 $50,674 0.86 %
Time deposits14,880,311 164,336 4.42 12,195,479 125,764 4.12 5,192,896 15,174 1.17 
Total interest bearing deposits37,897,048 366,252 3.87 34,707,607 290,607 3.35 28,734,590 65,848 0.92 
Short-term borrowings436,518 5,189 4.75 3,878,457 50,207 5.18 1,016,240 5,160 2.03 
Long-term borrowings (4)
2,495,512 29,159 4.67 2,339,727 26,880 4.60 1,477,909 11,728 3.17 
Total interest bearing liabilities40,829,078 400,600 3.92 40,925,791 367,694 3.59 31,228,739 82,736 1.06 
Non-interest bearing deposits11,951,398 12,756,862 16,035,778 
Other liabilities2,005,426 1,648,359 1,337,022 
Shareholders’ equity6,605,786 6,546,452 6,256,767 
Total liabilities and shareholders’ equity$61,391,688 $61,877,464 $54,858,306 
Net interest income/interest rate spread (5)
$413,657 1.81 %$421,275 1.91 %$455,308 3.20 %
Tax equivalent adjustment(1,239)(1,510)(1,316)
Net interest income, as reported$412,418 $419,765 $453,992 
Net interest margin (6)
2.90 %2.93 %3.59 %
Tax equivalent effect0.01 0.01 0.01 
Net interest margin on a fully tax equivalent basis (6)
2.91 %2.94 %3.60 %

61


The following table reflects the components of net interest income for the nine months ended September 30, 2023 and 2022:
Nine Months Ended
September 30, 2023September 30, 2022
Average BalanceInterestAverage RateAverage BalanceInterestAverage Rate
($ in thousands)
Assets
Interest earning assets:
Loans (1)(2)
$49,120,153 $2,124,108 5.77 %$40,529,794 $1,229,536 4.04 %
Taxable investments (3)
5,004,480 114,592 3.05 4,525,323 81,906 2.41 
Tax-exempt investments (1)(3)
624,299 19,600 4.19 574,699 16,079 3.73 
Interest bearing deposits with banks1,762,065 66,594 5.04 975,601 6,026 0.82 
Total interest earning assets56,510,997 2,324,894 5.49 46,605,417 1,333,547 3.82 
Allowance for credit losses(453,254)(428,078)
Cash and due from banks423,473 378,819 
Other assets4,738,418 4,078,903 
Unrealized gains on securities available for sale, net(168,661)(47,051)
Total assets$61,050,973 $50,588,010 
Liabilities and shareholders’ equity
Interest bearing liabilities:
Savings, NOW and money market deposits$22,971,446 $517,524 3.00 %$22,374,949 $77,423 0.46 %
Time deposits12,290,300 370,398 4.02 4,122,169 21,274 0.69 
Total interest bearing deposits35,261,746 887,922 3.36 26,497,118 98,697 0.50 
Short-term borrowings2,364,235 89,345 5.04 1,072,791 10,049 1.25 
Long-term borrowings (4)
2,176,985 75,237 4.61 1,472,344 31,566 2.86 
Total interest bearing liabilities39,802,966 1,052,504 3.53 29,042,253 140,312 0.64 
Non-interest bearing deposits12,903,406 14,679,354 
Other liabilities1,813,177 996,667 
Shareholders’ equity6,531,424 5,869,736 
Total liabilities and shareholders’ equity$61,050,973 $50,588,010 
Net interest income/interest rate spread (5)
$1,272,390 1.96 %$1,193,235 3.18 %
Tax equivalent adjustment(4,187)(3,414)
Net interest income, as reported$1,268,203 $1,189,821 
Net interest margin (6)
2.99 %3.40 %
Tax equivalent effect0.01 0.01 
Net interest margin on a fully tax equivalent basis (6)
3.00 %3.41 %
_____________

(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.

62


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, 2023
Compared to September 30, 2022		Nine Months Ended September 30, 2023 Compared to September 30, 2022
 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*$69,517 $187,600 $257,117 $297,470 $597,102 $894,572 
Taxable investments660 6,020 6,680 9,329 23,357 32,686 
Tax-exempt investments*(154)(547)(701)1,458 2,063 3,521 
Interest bearing deposits with banks4,061 9,056 13,117 8,241 52,327 60,568 
Total increase in interest income
74,084 202,129 276,213 316,498 674,849 991,347 
Interest Expense:
Savings, NOW and money market deposits(1,155)152,397 151,242 2,119 437,982 440,101 
Time deposits59,906 89,256 149,162 101,420 247,704 349,124 
Short-term borrowings(4,122)4,151 29 22,523 56,773 79,296 
Long-term borrowings and junior subordinated debentures10,338 7,093 17,431 19,164 24,507 43,671 
Total increase in interest expense
64,967 252,897 317,864 145,226 766,966 912,192 
Total increase (decrease) in net interest income$9,117 $(50,768)$(41,651)$171,272 $(92,117)$79,155 
*Interest income is presented on a tax equivalent basis using 21 percent as the federal tax rate.

63


Non-Interest Income
Non-interest income increased $2.5 million and $19.0 million for the three and nine months ended September 30, 2023, respectively, as compared to the same periods of 2022. The following table presents the components of non-interest income for the three and nine months ended September 30, 2023 and 2022:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2023202220232022
 (in thousands)
Wealth management and trust fees$11,417 $9,281 $32,180 $23,989 
Insurance commissions2,336 3,750 7,895 9,072 
Capital markets7,141 13,171 35,000 42,242 
Service charges on deposit accounts10,952 10,338 31,970 26,617 
(Losses) gains on securities transactions, net(398)323 197 (1,058)
Fees from loan servicing2,681 3,138 8,054 8,636 
Gains on sales of loans, net2,023 922 3,752 5,510 
Gains (losses) on sales of assets, net6,653 (106)6,938 (372)
Bank owned life insurance2,709 1,681 7,736 5,840 
Other13,150 13,696 39,316 33,521 
Total non-interest income$58,664 $56,194 $173,038 $153,997 
Wealth management and trust fees income increased $2.1 million and $8.2 million for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022. The increases in both periods were mainly driven by higher brokerage fees related to our broker dealer subsidiary, Valley Financial Management, Inc., acquired on April 1, 2022 in connection with the acquisition of Bank Leumi USA and to a lesser extent by higher revenues generated by our advisory firm, Dudley Ventures, LLC, which specializes in the investment and management of tax credit investments. Brokerage fees totaled $5.1 million and $14.8 million for the three and nine months ended September 30, 2023, respectively, and $3.9 million and $8.3 million for the same periods in 2022, respectively.
Capital markets income decreased $6.0 million and $7.2 million for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022 mainly due to a decline in the volume of interest rate swap transactions executed for commercial loan customers.
Service charges on deposit accounts increased $5.4 million for the nine months ended September 30, 2023 compared to the same period in 2022 largely due to the additional deposit accounts acquired from Bank Leumi USA on April 1, 2022.
Net gains (losses) on sales of assets increased $6.8 million and $7.3 million for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022 largely due to the sale of non-branch offices located in Wayne, New Jersey in the third quarter 2023.
Net gains on sales of loans increased $1.1 million and decreased $1.8 million for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022. The decrease for the nine months ended September 30, 2023 was mostly due to lower loan sale volumes as we continued to retain a higher percentage of new loan volumes during the first nine months of 2023. During the nine months ended September 30, 2023, we sold $152.6 million of residential mortgage loans as compared to $375.0 million for same period in 2022. Our ability to generate net gains on sales of loans could continue to be challenged by a number of factors, including higher market interest rates, lower customer demand for conforming loan products and our decision to originate certain residential mortgage loans for investment in our loan portfolio rather than sale.
64


Other non-interest income increased $5.8 million for the nine months ended September 30, 2023 as compared to the same period in 2022. The increase for the nine months ended September 30, 2023 was mostly due to incremental increases in several operating non-interest income categories caused by the acquisition of Bank Leumi USA and organic growth of our business operations over the last 12 months.
Non-Interest Expense
Non-interest expense increased $5.5 million and $63.6 million for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022. The following table presents the components of non-interest expense for the three and nine months ended September 30, 2023 and 2022:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2023202220232022
 (in thousands)
Salary and employee benefits expense$137,292 $134,572 $431,872 $397,103 
Net occupancy expense24,675 26,486 73,880 70,906 
Technology, furniture and equipment expense37,320 39,365 106,304 115,245 
FDIC insurance assessment7,946 6,500 27,527 16,009 
Amortization of other intangible assets9,741 11,088 30,072 26,925 
Professional and legal fees17,109 17,840 55,329 62,998 
Amortization of tax credit investments4,191 3,105 13,462 9,194 
Other28,859 22,683 83,824 60,329 
Total non-interest expense$267,133 $261,639 $822,270 $758,709 
Salary and employee benefits expense increased $2.7 million and $34.8 million for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022. As compared to third quarter 2022, the increase was largely due to higher salary expense and insurance costs, partially offset by a decrease in commission expense mainly related to our home mortgage consultant teams. The increase for the nine months ended September 30, 2023 was primarily driven by (i) higher headcount from the Bank Leumi USA acquisition and organic growth in our operations, (ii) $10.5 million of restructuring charges, consisting of severance expense related to recent workforce reductions, and (iii) inflationary pressures on our overall labor costs. These increases were partially offset by lower cash incentive compensation expense and merger related costs. Merger related costs totaled $4.1 million and $29.3 million for the nine months ended September 30, 2023 and 2022, respectively.
Net occupancy expense decreased $1.8 million and increased $3.0 million for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022. As compared to third quarter 2022, the decrease was mainly due to a $1.5 million decline in merger expenses, as well as lower repair and maintenance costs. The increase for the nine months ended September 30, 2023 was primarily driven by higher lease expense.
Technology, furniture and equipment expense decreased $2.0 million and $8.9 million for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022. The decrease for the nine months ended September 30, 2023 was largely a decline in merger related expense, partially offset by higher data processing expense. Within this category, merger related costs totaled $1.8 million and $17.1 million for the three and nine months ended September 30, 2022, respectively.
FDIC insurance assessment expense increased $11.5 million for the nine months ended September 30, 2023 as compared to the same period of 2022 mainly due to growth in our balance sheet, as well as a two basis point increase in the initial base rate effective for 2023.
Amortization of other intangible assets increased $3.1 million for the nine months ended September 30, 2023 as compared to the same period in 2022 mostly due to higher amortization expense of core deposits and other
65


intangible assets resulting from the Bank Leumi USA acquisition. See Note 9 to the consolidated financial statements for additional information.
Professional and legal fees decreased $7.7 million for the nine months ended September 30, 2023 as compared to the same period in 2022 mainly due to lower consulting and legal expenses. Within the category, merger related expenses (related to the Bank Leumi USA acquisition) totaled $11.5 million for the nine months ended September 30, 2022.
Other non-interest expense increased $6.2 million and $23.5 million for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022, primarily due to general increases in several categories caused by our acquired and organic growth in operations, higher charitable contributions, and increased charges related to collateral liabilities in connection with derivative transactions.
We continuously monitor and closely manage our non-interest expense in an effort to optimize our operating efficiency. We began the implementation of a new cost saving initiative in late June 2023. The identified cost savings are expected to primarily come from workforce reductions, more efficient third-party consulting and service usage, and certain technology cost reductions (including those resulting from the completion of our core operating system conversion in October 2023). Benefits began to be realized in the third quarter of 2023, with the initiative expected to generate more than $40 million of annual pre-tax cost savings by mid-2024.
Income Taxes
Income tax expense totaled $53.5 million for the third quarter 2023 as compared to $51.8 million and $68.4 million for the second quarter 2023 and third quarter 2022, respectively. Our effective tax rate was 27.5 percent, 27.1 percent and 27.7 percent for the third quarter 2023, second quarter 2023 and third quarter 2022, respectively. The increase in the effective tax rate from the second quarter 2023 was primarily due to the release of certain state valuation allowances in the second quarter 2023.
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.
Operating Segments
Valley manages its business operations under operating segments consisting of Consumer Banking and Commercial Banking. Activities not assigned to the operating segments are included in Treasury and Corporate Other. Each operating 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). Valley regularly assesses its strategic plans, operations and reporting structures to identify its operating segments and no changes to the operating segments were determined necessary during the nine months ended September 30, 2023.
The accounting for each operating segment and Treasury and Corporate Other 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. The financial reporting for each segment contains allocations and reporting in line with Valley’s operations, which may not necessarily be comparable to those of any other financial institution. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.


66


The following tables present the financial data for Valley's operating segments and Treasury and Corporate Other for the three months ended September 30, 2023 and 2022:
 Three Months Ended September 30, 2023
 Consumer
Banking		Commercial
Banking		Treasury and Corporate OtherTotal
 ($ in thousands)
Average interest earning assets$8,941,112$41,078,302$6,783,151$56,802,565
Income (loss) before income taxes12,272217,048(34,488)194,832
Annualized return on average interest earning assets (before tax)
0.55 %2.11 %(2.03)%1.37 %
 Three Months Ended September 30, 2022
 Consumer
Banking		Commercial
Banking		Treasury and Corporate OtherTotal
 ($ in thousands)
Average interest earning assets$8,307,993$36,033,901$6,189,348$50,531,242
Income (loss) before income taxes20,137255,802(29,415)246,524
Annualized return on average interest earning assets (before tax)
0.97 %2.84 %(1.90)%1.95 %
See Note 16 to the consolidated financial statements for additional details.
Consumer Banking Segment
The Consumer Banking segment represented 17.9 percent of our loan portfolio at September 30, 2023, and was 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 11.1 percent of our loan portfolio at September 30, 2023) is subject to movements in the market level of interest rates and forecasted prepayment speeds. The weighted average life of the automobile loans (which represented 3.2 percent of total loans at September 30, 2023) 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. Consumer Banking also includes the Wealth Management and Insurance Services Division, comprised of trust, asset management, brokerage, insurance and tax credit advisory services.
Average interest earning assets within Consumer Banking increased $633.1 million to $8.9 billion for the three months ended September 30, 2023 as compared to the same period of 2022. The increase was largely due to new residential mortgage loan volumes originated for investment rather than sale over the last 12-month period, and, to a lesser extent, growth in home equity and secured personal lines of credit.
Income before income taxes for Consumer Banking decreased $7.9 million to $12.3 million for the third quarter 2023 as compared to the third quarter 2022. The decrease was mainly driven by lower net interest income, partially offset by lower provision for credit losses and decrease in non-interest expense. Net interest income decreased $25.0 million in the third quarter 2023 as compared to the same period of 2022 due to additional interest expense generated from the higher cost of average deposit and other borrowing, as well as an increase in the average balance of these interest bearing liabilities. The provision for loan losses decreased $11.8 million for the three months ended September 30, 2023 due, in part, to a decline in reserves related to quarterly loan growth and a decrease in non-economic qualitative factors as compared to one year ago. See further details in the “Allowance for Credit Losses” section of this MD&A. Non-interest expense decreased $4.4 million to $19.9 million for the third quarter 2023 as compared to the third quarter 2022. See further details in the "Non-Interest Income" and "Non-Interest Expense" sections of this MD&A.
67


Net interest margin on the Consumer Banking portfolio decreased 131 basis points to 1.50 percent for the third quarter 2023 as compared to the third quarter 2022 mainly due to a 213 basis point increase in the costs associated with our funding sources, partially offset by an 82 basis point increase in the yield on average loans. The increase in our funding costs was mainly driven by higher interest rates on most of our interest bearing commercial and retail deposit products, increased utilization of fully FDIC-insured indirect customer deposits and higher cost of other borrowings held during the third quarter 2023. The 82 basis point increase in loan yield was largely due to higher yielding new loan volumes and adjustable rate loans in our portfolio. See the "Executive Summary" and the "Net Interest Income" sections above for more details on our net interest margin and funding sources.
The return on average interest earning assets before income taxes for the consumer banking segment was 0.55 percent for the third quarter 2023 compared to 0.97 percent for the third quarter 2022.
Commercial Banking Segment
The Commercial Banking 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 Banking is Valley’s operating segment that is most sensitive to movements in market interest rates. Commercial and industrial loans totaled approximately $9.3 billion and represented 18.5 percent of the total loan portfolio at September 30, 2023. Commercial real estate loans and construction loans totaled $31.9 billion and represented 63.6 percent of the total loan portfolio at September 30, 2023.
Average interest earning assets in Commercial Banking increased $5.0 billion to $41.1 billion for the three months ended September 30, 2023 as compared to the third quarter 2022 primarily due to organic loan growth largely concentrated in the commercial real estate loan portfolio.
Income before income taxes for Commercial Banking decreased $38.8 million to $217.0 million for the three months ended September 30, 2023 as compared to the same period of 2022 mainly due to increases in the provision for credit losses and internal transfer expense, as well as lower non-interest income. The provision for credit losses increased $19.1 million to $13.7 million as compared to the same period in 2022 mainly driven by higher quantitative reserves and specific reserves related to certain commercial loan portfolios. See details in the "Allowance for Credit Losses for Loans" section of this MD&A. Internal transfer expense increased $13.3 million to $127.2 million for the three months ended September 30, 2023 as compared to the third quarter 2022. Non-interest income decreased $12.3 million to $11.2 million for the three months ended September 30, 2023 as compared to the third quarter 2022 mainly due to a decline in the volume of interest rate swap transactions executed for commercial loan customers. The negative impact of the above items was partially offset by higher net interest income. Net interest income for this segment increased $7.3 million to $379.9 million for the third quarter 2023 as compared to the same period in 2022 primarily due to both higher average commercial loan balances and interest rates on new and adjustable loans.
The net interest margin for this segment decreased 44 basis points to 3.70 percent for the third quarter 2023 as compared to the third quarter 2022 due to a 213 basis point increase in the cost of our funding sources, partially offset by a 169 basis point increase in the yield on average loans.
The return on average interest earning assets before income taxes for the commercial banking segment was 2.11 percent for the three months ended September 30, 2023 compared to 2.84 percent for the same period in 2022.
Treasury and Corporate Other
Treasury and Corporate Other largely consists of the Treasury managed held to maturity and available for sale debt securities portfolios mainly utilized in the liquidity management needs of our lending segments and income and expense items resulting from support functions not directly attributable to a specific segment. Interest income is generated through investments in various types of securities (mainly comprised of fixed rate securities) and interest-bearing deposits with other banks (primarily the Federal Reserve Bank of New York). Expenses related to the branch network, all other components of retail banking, along with the back office departments of the Bank are
68


allocated from Treasury and Corporate Other to the Consumer Banking and Commercial Banking segments. Interest expense and internal transfer expense (for general corporate expenses) are allocated to each operating segment utilizing a transfer pricing methodology, which involves the allocation of operating and funding costs based on each segment's respective mix of average interest earning assets and/or liabilities outstanding for the period. Other items disclosed in Treasury and Corporate Other include net gains and losses on available for sale and held to maturity securities transactions, interest expense related to subordinated notes, amortization of tax credit investments, as well as other non-core items, including merger and restructuring expenses.
Average interest earning assets within Treasury and Corporate Other increased $593.8 million to $6.8 billion for the three months ended September 30, 2023 largely due to a $508.6 million increase in average overnight interest bearing deposits with banks as compared to the same period in 2022. Our average overnight cash levels largely increased during the first half of 2023 as a cautionary liquidity management measure resulting from the bank failures in March and April 2023. During the third quarter 2023, we began to manage these excess cash levels down to more normalized overnight levels by September 30, 2023.
For the three months ended September 30, 2023, loss before income taxes totaled $34.5 million compared to $29.4 million for the same period in 2022. The $5.1 million increase in the pre-tax loss during the third quarter 2023 was mainly due to lower net interest income and higher non-interest expense, partially offset by increases in the internal transfer income and non-interest income. The internal transfer income increased $15.3 million to $155.5 million for the three months ended September 30, 2023 as compared to the same period a year ago due to the lower allocation of non-interest expense over the same period. Non-interest expense increased $8.5 million to $214.0 million during the three months ended September 30, 2023 as compared to the same period in 2022 largely due to general increases in several categories caused by our acquired and organic growth in operations. See further details in the "Non-Interest Income" and "Non-Interest Expense" sections of this MD&A.
The net interest margin for Treasury and Corporate Other decreased 123 basis points to 0.78 percent for the third quarter 2023 as compared to the third quarter 2022 due to a 213 basis point increase in cost of our funding sources, partially offset by a 90 basis point increase in the yield on average investments. The increase in the yield on average investments as compared to the same period a year ago was largely driven by new higher yielding investments and a reduction in premium amortization expense mostly caused by slower principal repayments in the rising interest rate environment.
The following tables present the financial data for Valley's operating segments and Treasury and Corporate Other for the nine months ended September 30, 2023 and 2022:
 Nine Months Ended September 30, 2023
 Consumer
Banking		Commercial
Banking		Treasury and Corporate OtherTotal
 ($ in thousands)
Average interest earning assets$8,871,992$40,248,161$7,390,844$56,510,997
Income (loss) before income taxes25,496688,117(124,246)589,367
Annualized return on average interest earning assets (before tax)
0.38 %2.28 %(2.24)%1.39 %

 Nine Months Ended September 30, 2022
 Consumer
Banking		Commercial
Banking		Treasury and Corporate OtherTotal
 ($ in thousands)
Average interest earning assets$7,978,732$32,551,062$6,075,623$46,605,417
Income (loss) before income taxes56,796519,640(40,905)535,531
Annualized return on average interest earning assets (before tax)
0.95 %2.13 %(0.90)%1.53 %

69


Consumer Banking Segment

The Consumer Banking segment's average interest earning assets increased $893.3 million to $8.9 billion for the nine months ended September 30, 2023 as compared to the same period in 2022. The increase was largely due to new residential mortgage loan volumes originated for investment rather than sale over the last 12-month period, as well as growth in home equity loans and secured personal lines of credit.

Income before income taxes generated by Consumer Banking decreased $31.3 million to $25.5 million for the nine months ended September 30, 2023 as compared to the same period in 2022. The decrease was mainly driven by lower net interest income. Net interest income decreased $61.9 million for the nine months ended September 30, 2023 as compared to the same period in 2022 mainly due to additional interest expense generated from higher average deposit balances, as well as an increase in interest rates on such balances. The negative impact of these items was partially offset by an $11.9 million increase in non-interest income coupled with a lower provision for loan losses and internal transfer expense. The increase in non-interest income was mainly driven by increases in wealth management and trust fees and service charges on deposit accounts. The provision for loan losses decreased $9.1 million for the nine months ended September 30, 2023 mainly due to a decrease in non-economic qualitative factors within our CECL model as compared to the same period in 2022. See further details in the “Allowance for Credit Losses” section of this MD&A.

Net interest margin on the Consumer Banking portfolio decreased 122 basis points to 1.67 percent for the nine months ended September 30, 2023 as compared to the same period in 2022 mainly due to a 205 basis point increase in the costs associated with our funding sources, partially offset by an 83 basis point increase in the yield on average loans. The 83 basis point increase in loan yield was largely due to higher yielding new loan volumes and adjustable rate loans in our portfolio. See the "Executive Summary" and the "Net Interest Income" sections above for more details on our net interest margin and funding sources.
The return on average interest earning assets before income taxes for the Consumer Banking segment was 0.38 percent for the nine months ended September 30, 2023 compared to 0.95 percent for the same period in 2022.
Commercial Banking Segment

Average interest earning assets in the Commercial Banking segment increased $7.7 billion to $40.2 billion for the nine months ended September 30, 2023 as compared to the same period in 2022. This increase was primarily due to organic loan growth, especially in the commercial real estate portfolio over the 12-month period ended September 30, 2023, as well as average balances related to loans acquired from Bank Leumi USA on April 1, 2022.

For the nine months ended September 30, 2023, income before income taxes for Commercial Banking increased $168.5 million to $688.1 million as compared to the same period in 2022 mainly due to an increase in net interest income and lower provision for credit losses, partially offset by higher non-interest expense and lower non-interest income. Net interest income increased $179.9 million to $1.1 billion for the nine months ended September 30, 2023 as compared to the same period in 2022 primarily due to higher average commercial loan balances and higher interest rates on new and adjustable loans. The provision for credit losses decreased $15.0 million to $19.6 million during the nine months ended September 30, 2023 as compared to $34.6 million for the same period in 2022 due, in part to a provision for non-PCD loans and unfunded credit commitments acquired from Bank Leumi in the second quarter 2022. See details in the "Allowance for Credit Losses for Loans" section of this MD&A. Non-interest expense increased $22.9 million to $104.2 million for the nine months ended September 30, 2023 as compared to the same period in 2022 mainly due to acquired and organic growth in our commercial operations. See further details in the "Non-Interest Income" and "Non-Interest Expense" sections of this MD&A.

The net interest margin for this segment decreased 15 basis point to 3.75 percent for the nine months ended September 30, 2023 as compared to the same period in 2022 due to a 205 basis point increase in the cost of our funding sources, partially offset by a 190 basis point increase in yield on average loans.
70


The return on average interest earning assets before income taxes for the commercial banking segment was 2.28 percent for the nine months ended September 30, 2023 compared to 2.13 percent for the same period in 2022.
Treasury and Corporate Other
Treasury and Corporate Other's average interest earning assets increased $1.3 billion during the nine months ended September 30, 2023 as compared to the same period in 2022 mainly due to higher excess liquidity, investment securities acquired from Bank Leumi USA, and, to a much lesser extent, purchases of new investment securities over the last 12-month period. Average interest bearing deposits with banks increased $786.5 million for the nine months ended September 30, 2023 as compared to the same period in 2022 due to additional cash held as a cautionary liquidity management measure from March 2023 and through a portion of the third quarter 2023.
The loss before income taxes totaled $124.2 million for the nine months ended September 30, 2023 as compared to $40.9 million for the same period in 2022. The $83.3 million increase in pre-tax loss was mainly due to decreases in both net interest income and internal transfer income combined with an increase in non-interest expense, partially offset by higher non-interest income. Non-interest expense increased $38.9 million to $656.6 million for the nine months ended September 30, 2023 as compared to the same period in 2022 largely due to expenses related to our expanded banking operations and organic business growth, including higher salary and employee benefits expense, technology, furniture and equipment and professional and legal fees. Internal transfer income decreased $21.3 million to $442.4 million for the nine months ended September 30, 2023 as compared to the same period in 2022 due to lower allocations of the overhead expense to the Consumer Banking and Commercial Banking segments over the same period. Non-interest income increased $20.7 million during the nine months ended September 30, 2023 as compared to the same period in 2022 mostly due to incremental increases in several operating non-interest income categories caused by acquired and organic growth of our business operations over the last 12-month period. See further details in the "Non-Interest Income" and "Non-Interest Expense" sections of this MD&A. Provision for credit losses increased $4.1 million mainly due to a corporate bond issued by one failed bank within our AFS debt securities portfolio that was fully charged-off during the first quarter 2023.

Treasury and Corporate Other's net interest margin decreased 71 basis points to 1.16 percent for the nine months ended September 30, 2023 as compared to the same period in 2022 due to a 205 basis point increase in cost of our funding sources, partially offset by a 134 basis point increase in the yield on average investments. The increased yield on average investments as compared to the same period in 2022 was largely driven by new higher yielding investments and a reduction in premium amortization expense mostly caused by slower principal repayments in the rising interest rate environment.
ASSET/LIABILITY MANAGEMENT
Interest Rate Risk
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.
71


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, 2023. 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, 2023. 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, 2023. Although the size of Valley’s balance sheet is forecasted to remain static as of September 30, 2023 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 2023. The model also utilizes an immediate parallel shift in market interest rates at September 30, 2023.
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.
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 considering 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 RatesDollar
Change		Percentage
Change
(in basis points)($ in thousands)
+300$173,440 10.11 %
+200115,296 6.72 
+10057,439 3.35 
–100(57,001)(3.32)
–200(114,091)(6.65)
–300(169,410)(9.88)
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
72


interest income over the next 12-month period by 3.35 percent. Management believes the interest rate sensitivity of our balance sheet remains within an acceptable tolerance range at September 30, 2023. 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 our balance sheet strategies, the slope of the yield curve and projected cash flows.
Liquidity and Cash Requirements
Bank Liquidity
Liquidity measures Valley's ability to satisfy its current and future cash flow needs. Our objective is to have liquidity available to fulfill loan demands, repay deposits and other liabilities, and execute balance sheet strategies in all market conditions while adhering to internal controls and income targets. Valley's liquidity program is managed by the Treasury Department and routinely monitored by the Asset and Liability Management Committee and two board committees. Among other actions, Treasury actively monitors Valley's current liquidity profile, sources and stability of funding, availability of assets for pledging or sale, opportunities to gather additional funds, and anticipated future funding needs, including the level of unfunded commitments.
The Bank adheres to certain internal liquidity measures including ratios of loans to deposits below 110 percent and wholesale funding to total funding below 25 percent, as summarized in the table below. Management maintains flexibility to temporarily exceed these thresholds in certain operating environments.
The following table presents Valley's loan to deposits and wholesale funding to total funding ratios at September 30, 2023 and December 31, 2022:
September 30,
2023		December 31,
2022
Loans to deposits100.4 %98.5 %
Wholesale funding to total funding22.5 13.8 
Valley's short and long-term cash requirements include contractual obligations under borrowings, deposits, payments related to leases, capital expenditures and other purchase commitments. In the ordinary course of operations, the Bank also enters into various financial obligations, including contractual obligations that may require future cash payments. Management believes the Bank has the ability to generate and obtain adequate amounts of cash to meet its short-term and long-term obligations as they come due by utilizing various cash resources described below.
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) and other sources. The following table summarizes Valley's sources of liquid assets:
September 30,
2023		December 31,
2022
(in thousands)
Cash and due from banks$444,857 $444,325 
Interest bearing deposits with banks698,966 503,622 
Trading debt securities3,441 13,438 
Held to maturity debt securities (1)
196,168 177,614 
Available for sale debt securities (2)
1,186,524 1,261,397 
Loans held for sale33,834 18,118 
Total liquid assets$2,563,790 $2,418,514 
(1)     Represents securities 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) within the held to maturity debt security portfolio.
73


(2)     Includes approximately $803 million and $333 million of various investment securities that were pledged to counterparties to support our earning asset funding strategies at September 30, 2023 and December 31, 2022, respectively.
Total liquid assets represented 4.6 percent of interest earning assets at both September 30, 2023 and December 31, 2022.
Other sources of funds on the asset side are derived from scheduled loan payments of principal and interest, as well as prepayments received. At September 30, 2023, estimated cash inflows from total loans are projected to be approximately $14.8 billion over the next 12-month period. 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. We anticipate the receipt of approximately $385.0 million in principal payments from securities in the total investment portfolio at September 30, 2023 over the next 12-month period due to normally scheduled principal repayments and expected prepayments of certain securities, primarily residential mortgage-backed securities.
On the liability side of the balance sheet, we utilize multiple sources of funds to meet liquidity needs, including retail and commercial deposits, fully FDIC-insured indirect customer deposits, collateralized municipal deposits, and short-term and long-term borrowings. Our core deposit base, which generally excludes all fully insured indirect customer deposits, as well as retail certificates of deposit over $250 thousand, represents the largest of these sources. Average core deposits totaled approximately $39.8 billion and $38.1 billion for the nine months ended September 30, 2023 and for the year ended December 31, 2022, respectively, representing 70.5 percent and 79.2 percent of average interest earning assets for the respective periods. The level of interest bearing deposits is affected by interest rates offered, which is often influenced by our need for funds, rates prevailing in the capital markets, competition, and the need to manage interest rate risk sensitivity.
In addition to customer deposits, the Bank has ample access to readily available borrowing sources available to supplement its current and projected funding needs. The following table presents short-term borrowings outstanding at September 30, 2023 and December 31, 2022:
September 30, 2023December 31, 2022
 (in thousands)
FHLB advances$— $24,035 
Securities sold under agreements to repurchase89,802 114,694 
Total short-term borrowings$89,802 $138,729 
The following table summarizes the Bank's estimated unused available non-deposit borrowing capacities at September 30, 2023 and December 31, 2022:
September 30, 2023December 31, 2022
(in thousands)
FHLB borrowing capacity*$13,599,000 $6,891,000 
Unused FRB discount window*7,780,000 2,099,000 
Unused federal funds lines available from commercial banks2,150,000 1,940,000 
Unencumbered investment securities1,120,000 3,502,000 
Total$24,649,000 $14,432,000 
*     FHLB and FRB borrowings are collateralized by certain pledged securities, including but not limited to U.S. government and agency mortgage-backed securities and blanket qualifying first lien on certain real estate and residential mortgage secured loans.
Additionally, the Federal Reserve established the Bank Term Funding Program on March 12, 2023 as a funding source for eligible depository institutions. The Program can provide short-term liquidity (up to one year) against the par value of certain high-quality collateral, such as U.S. Treasury securities, and eliminate the potential need for an
74


institution to sell those securities in times of stress. Advances under the Program can be requested until March 11, 2024. This Program is currently another short-term liquidity source for Valley. Valley had no outstanding borrowings under the Program at September 30, 2023.
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 ongoing 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 and subordinated notes (including $125 million of 5.125 percent subordinated notes which matured on September 27, 2023). Valley's 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 of up to five years, but not beyond the stated maturity dates, and subject to other conditions.
Investment Securities Portfolio
As of September 30, 2023, we had $63.2 million, $1.2 billion, and $3.8 billion in equity, available for sale debt securities and held to maturity debt securities, respectively. The available for sale and held to maturity debt securities portfolios, which comprise the majority of the securities we own, include: U.S. Treasury securities, U.S. government agency securities, tax-exempt and taxable issuances of states and political subdivisions, residential mortgage-backed securities, single-issuer trust preferred securities principally issued by bank holding companies and high quality corporate bonds. Among other securities, our available for sale debt securities include securities such as bank issued and other corporate bonds, as well as municipal special revenue bonds, which may pose a higher risk of future impairment charges to us as a result of the uncertain economic environment and its potential negative effect on the future performance of the security issuers. The equity securities consisted of two publicly traded mutual funds, CRA investments and several other equity investments we have made in companies that develop new financial technologies and in partnerships that invest in such companies. Our CRA and other equity investments are a mix of both publicly traded entities and privately held entities. We also had $3.4 million of trading debt securities at September 30, 2023 consisting of U.S. Treasury securities.
We continually evaluate our investment securities portfolio in response to established asset/liability management objectives, changing market conditions that could affect profitability, and the level of interest rate risk to which we are exposed. These evaluations may cause us to change the level of funds we deploy into investment securities, change the composition of our investment securities portfolio, and change the proportion of investments primarily made into the available for sale and held to maturity debt securities portfolios.
Allowance for Credit Losses and Impairment Analysis
Available for sale debt securities. 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 that the fair value is less than the amortized cost basis. Declines in fair value that have not been recorded through an allowance for credit losses,
75


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, 2023 and December 31, 2022 and determined that the declines in fair value were 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, Valley recognized a credit related impairment of one corporate bond issued by Signature Bank resulting in both a provision for credit losses and full charge-off of the security totaling $5.0 million during the nine months ended September 30, 2023. There was no other impairment recognized within the available for sale debt securities portfolio during the three months ended September 30, 2023 and the three and nine months ended September 30, 2022.
Valley does not intend to sell any of its available for sale debt securities in an unrealized loss position prior to
recovery of our amortized cost basis, and it is more likely than not that Valley will not be required to sell any of its securities prior to recovery of our amortized cost basis. None of the available for sale debt securities were past due as of September 30, 2023 and there was no allowance for credit losses for available for sale debt securities at September 30, 2023 and December 31, 2022.
Held to maturity debt securities. Valley estimates the expected credit losses on held to maturity debt securities that have loss expectations using a discounted cash flow model developed by a third party. 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. Held to maturity debt securities were carried net of an allowance for credit losses totaling approximately $1.3 million and $1.6 million at September 30, 2023 and December 31, 2022, respectively.
Investment grades. 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.
76

The following table presents the available for sale and held to maturity debt investment securities portfolios by investment grades at September 30, 2023:
 September 30, 2023
 Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
(in thousands)
Available for sale investment grades: *
AAA Rated$1,035,612 $27 $(160,362)$875,277 
AA Rated150,090 — (40,723)109,367 
A Rated22,106 — (3,991)18,115 
BBB Rated105,725 — (8,711)97,014 
Non-investment grade5,000 — (1,248)3,752 
Not rated96,960 — (13,961)82,999 
Total$1,415,493 $27 $(228,996)$1,186,524 
Held to maturity investment grades: *
AAA Rated$3,389,048 $38 $(601,461)$2,787,625 
AA Rated221,059 — (28,103)192,956 
A Rated3,963 — (276)3,687 
BBB Rated6,000 — (714)5,286 
Non-investment grade5,351 — (1,121)4,230 
Not rated173,288 — (15,992)157,296 
Total$3,798,709 $38 $(647,667)$3,151,080 
Allowance for credit losses1,321 — — 1,321 
Total, net of allowance for credit losses$3,797,388 $38 $(647,667)$3,149,759 
*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 unrealized losses in the AAA and AA rated categories of both the available for sale and held to maturity debt securities portfolios (in the above table) were largely related to residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac and continued to be driven by the rising interest rate environment during the last 12 months. The investment securities available for sale and held to maturity portfolio included $97.0 million and $173.3 million, respectively, of investments not rated by the rating agencies with aggregate unrealized losses of $14.0 million and $16.0 million, respectively, at September 30, 2023. The unrealized losses within non-rated available for sale debt securities mostly related to several large corporate bonds negatively impacted by rising interest rates, and not changes in underlying credit. The unrealized losses within non-rated held to maturity debt
securities mostly related to four single-issuer bank trust preferred issuances with a combined amortized cost of $36.1 million and several corporate and other debt securities.
See Note 7 to the consolidated financial statements for additional information regarding our investment securities portfolio.
77

Loan Portfolio
The following table reflects the composition of the loan portfolio as of the dates presented:
September 30,
2023		June 30,
2023		December 31,
2022
 ($ in thousands)
Loans
Commercial and industrial$9,274,630 $9,287,309 $8,804,830 
Commercial real estate:
Commercial real estate28,041,050 27,793,072 25,732,033 
Construction3,833,269 3,815,761 3,700,835 
Total commercial real estate31,874,319 31,608,833 29,432,868 
Residential mortgage5,562,665 5,560,356 5,364,550 
Consumer:
Home equity548,918 535,493 503,884 
Automobile1,585,987 1,632,875 1,746,225 
Other consumer1,251,000 1,252,382 1,064,843 
Total consumer loans3,385,905 3,420,750 3,314,952 
Total loans*
$50,097,519 $49,877,248 $46,917,200 
As a percent of total loans:
Commercial and industrial18.5 %18.6 %18.8 %
Commercial real estate63.6 63.4 62.7 
Residential mortgage11.1 11.1 11.4 
Consumer loans6.8 6.9 7.1 
Total100.0 %100.0 %100.0 %
*     Includes net unearned discount and deferred loan fees of $110.9 million, $119.1 million and $120.5 million at September 30, 2023, June 30, 2023 and December 31, 2022, respectively.
Total loans increased $220.3 million, or 1.8 percent on an annualized basis to $50.1 billion at September 30, 2023 from June 30, 2023 mainly as a result of select new loan originations in the commercial real estate loan portfolio. Loans held for sale at fair value, presented separately from total loans on the consolidated statements of financial condition totaled $33.8 million and $33.0 million at September 30, 2023 and June 30, 2023, respectively.
Commercial real estate loans (excluding construction loans) increased $248.0 million to $28.0 billion at September 30, 2023 from June 30, 2023 reflecting new originations mainly within non-owner occupied and multi-family loans across our geographic market areas. At September 30, 2023, commercial real estate loans collateralized by office buildings were approximately $3.2 billion of the $28.0 billion portfolio. These loans are geographically disbursed largely across Florida, Alabama, New Jersey, New York and Manhattan with a combined weighted average loan to value ratio of 53 percent and debt service coverage ratio of 1.63. The majority of the office space loans are multi-tenant with no recent charge-offs.
Construction loans increased only $17.5 million to $3.8 billion at September 30, 2023 from June 30, 2023 due to minimal advances on pre-existing construction loan projects and highly selective underwriting of new projects during the third quarter 2023.
Residential mortgage loans remained relatively unchanged at September 30, 2023 from June 30, 2023. New and refinanced residential mortgage loan originations totaled $150.2 million for the third quarter 2023 as compared to $188.0 million and $342.9 million for the second quarter 2023 and third quarter 2022, respectively. During the third quarter 2023, we retained approximately 45.7 percent of the total residential mortgage originations in our held for investment loan portfolio. Additionally, the volume of primarily new loan applications has continued to be relatively low in the early stages of the fourth quarter 2023 largely due to the higher level of mortgage interest rates and this may continue to challenge our ability to grow this loan category.
78

Home equity loans increased by $13.4 million to $548.9 million at September 30, 2023 compared to June 30, 2023 largely due to moderate increases in pre-existing line utilization, while new home equity loan originations remain challenged due to the unfavorable high interest rate environment.
Automobile loans decreased by $46.9 million, or 11.5 percent on an annualized basis, to $1.6 billion at September 30, 2023 as compared to June 30, 2023 as a moderate uptick in new indirect auto loan volumes from our dealership network did not keep pace with the portfolio repayment activity during the third quarter 2023. We anticipate that the impact of inflation on average new and used vehicle prices coupled with high market interest rates could deter consumer demand and continue to have a negative impact on our ability to grow this loan category during the fourth quarter 2023.
Other consumer loans decreased $1.4 million to $1.3 billion at September 30, 2023 as compared to June 30, 2023 as demand and utilization of collateralized personal lines of credit slowed during the third quarter 2023.
A significant part of our lending is in northern and central New Jersey, New York City, Long Island and Florida. 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.
Annualized loan growth slowed to 1.8 percent for the third quarter 2023 from 10.0 percent in the second quarter 2023 largely as expected mostly due to the impact of higher market interest rates. Annualized loan growth for the nine months ended September 30, 2023 totaled 9.0 percent. We remain selective on new loan originations and generally supportive of compelling projects led by our high quality and tenured customer base. Moving forward, we anticipate loan growth in the fourth quarter 2023 to approximate the linked quarter level experienced in the third quarter 2023.
Non-performing Assets
Non-performing assets (NPAs) include non-accrual loans, other real estate owned (OREO), and other repossessed assets (which primarily consist of automobiles and taxi medallions) at September 30, 2023. 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 lower of cost or fair value, less estimated cost to sell.
Our NPAs increased $4.2 million to $260.3 million at September 30, 2023 as compared to June 30, 2023 mostly driven by an increase in non-accrual commercial and industrial loans. NPAs as a percentage of total loans and NPAs totaled 0.52 percent and 0.51 percent at September 30, 2023 and June 30, 2023, respectively (as shown in the table below). Our total NPAs has remained relatively low as a percentage of the total loan portfolio and the level of NPAs, which is reflective of our consistent approach to the loan underwriting criteria for both Valley originated loans and loans purchased from third parties. 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. During the nine months ended September 30, 2023, our overall credit trends have remained stable, and the majority of our borrowers continued to demonstrate resilience despite the impact of higher borrowing costs, slower economic growth, elevated inflation and the overall uncertain economy. However, management cannot provide assurance that the non-performing assets will not materially increase from the levels reported at September 30, 2023 due to the aforementioned or other factors potentially impacting our lending customers.
79

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,
2023		June 30,
2023		March 31,
2023
 ($ in thousands)
Accruing past due loans:
30 to 59 days past due:
Commercial and industrial$10,687 $6,229 $20,716 
Commercial real estate8,053 3,612 13,580 
Residential mortgage13,159 15,565 12,599 
Total consumer15,509 8,431 7,845 
Total 30 to 59 days past due47,408 33,837 54,740 
60 to 89 days past due:
Commercial and industrial5,720 7,468 24,118 
Commercial real estate2,620 — — 
Residential mortgage9,710 1,348 2,133 
Total consumer1,720 4,126 1,519 
Total 60 to 89 days past due19,770 12,942 27,770 
90 or more days past due:
Commercial and industrial6,629 6,599 8,927 
Commercial real estate— 2,242 — 
Construction3,990 3,990 6,450 
Residential mortgage1,348 1,165 1,668 
Total consumer391 1,006 747 
Total 90 or more days past due12,358 15,002 17,792 
Total accruing past due loans$79,536 $61,781 $100,302 
Non-accrual loans:
Commercial and industrial$87,655 $84,449 $78,606 
Commercial real estate83,338 82,712 67,938 
Construction62,788 63,043 68,649 
Residential mortgage21,614 20,819 23,483 
Total consumer3,545 3,068 3,318 
Total non-accrual loans258,940 254,091 241,994 
Other real estate owned (OREO)71 824 1,189 
Other repossessed assets1,314 1,230 1,752 
Total non-performing assets (NPAs)$260,325 $256,145 $244,935 
Total non-accrual loans as a % of loans0.52 %0.51 %0.50 %
Total NPAs as a % of loans and NPAs0.52 0.51 0.50 
Total accruing past due and non-accrual loans as a % of loans
0.68 0.63 0.70 
Allowance for loan losses as a % of non-accrual loans
170.76 171.76 180.54 
Loans past due 30 to 59 days increased $13.6 million to $47.4 million at September 30, 2023 as compared to June 30, 2023. The increase within this early stage delinquency category was mainly due to one $7.0 million commercial real estate loan, as well as increases in commercial and industrial and secured consumer loan delinquencies.
Loans past due 60 to 89 days increased $6.8 million to $19.8 million at September 30, 2023 as compared to June 30, 2023 largely due to higher residential mortgage delinquencies and a $2.3 million commercial real estate loan that migrated from the 30-59 days past due category at June 30, 2023, partially offset by a decline in commercial and industrial and consumer loan delinquencies.
80

Loans 90 days or more past due and still accruing interest decreased $2.6 million to $12.4 million at September 30, 2023 as compared to June 30, 2023 mainly due to a payoff of a $2.2 million commercial real estate loan. All loans 90 days or more past due and still accruing interest are well-secured and in the process of collection.
Non-accrual loans increased $4.8 million to $258.9 million at September 30, 2023 as compared to $254.1 million at June 30, 2023 mostly driven by an increase in the commercial and industrial loan category. Non-accrual commercial and industrial loans increased $3.2 million to $87.7 million at September 30, 2023 mainly due to one new non-performing loan relationship totaling $4.2 million at September 30, 2023.
Although the timing of collection is uncertain, management believes that the majority of the non-accrual loans at September 30, 2023, are well secured and largely collectible, based in part on our quarterly review of collateral dependent loans and the valuation of the underlying collateral, if applicable. Any estimated shortfall in each collateral valuation results in an allocation of specific reserves within our allowance for credit losses for loans.
Non-performing taxi medallion loans totaled $65.1 million of the $87.7 million non-accrual commercial and industrial loans at September 30, 2023. At September 30, 2023, all taxi medallion loans in the loan portfolio were on non-accrual status and had related reserves of $37.9 million, or 58.7 percent of such loans, within the allowance for loan losses. Potential further declines in the market valuation of taxi medallions and the current operating environment mainly within New York City may negatively impact the performance of this portfolio.
OREO properties totaled $71 thousand at September 30, 2023 and decreased $753 thousand as compared to June 30, 2023 primarily due to sales of OREO properties. The sales of OREO properties resulted in gains of $256 thousand and $370 thousand for the three and nine months ended September 30, 2023, respectively, as compared to net losses of $69 thousand and $692 thousand for the three and nine months ended September 30, 2022, respectively. The residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $970 thousand and $2.6 million at September 30, 2023 and December 31, 2022, respectively.
Allowance for Credit Losses for Loans
The allowance for credit losses (ACL) for loans includes the allowance for loan losses and the reserve for unfunded credit commitments. Under CECL, our methodology to establish the allowance for loan losses has two basic components: (i) a collective reserve component for estimated expected credit losses for pools of loans that share common risk characteristics and (ii) an individual reserve component for loans that do not share risk characteristics, consisting of collateral dependent 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 standby letters of credit.
Valley estimated the collective ACL using a current expected credit losses methodology which is based on relevant information about historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the loan balances. 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 within the commercial and industrial loan categories 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. 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) the impact of the reasonable and supportable economic forecast, relative probability weightings and reversion period, (ii) other asset specific risks to the extent that they do not exist in the historical loss information, and (iii) net expected recoveries of charged-off loan balances. These adjustments are based on qualitative factors not reflected in the quantitative model but are likely to impact the measurement of estimated credit losses. The expected lifetime loss rate is the life of loan loss percentage from the transition matrix model plus the impact of the adjustments for qualitative factors. The expected
81

credit losses are the product of multiplying the model’s expected lifetime loss rate by the exposure at default at period end on an undiscounted basis.
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 on a straight-line basis. The forecasts consist of a multi-scenario economic forecast model to estimate future credit losses and are 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.
At September 30, 2023, Valley continued to maintain the majority of its probability weighting used in the economic forecast to the Moody’s Baseline scenario with slightly less emphasis on the S-3 downside and S-4 adverse scenarios as compared to June 30, 2023. The standalone Moody's Baseline forecast at September 30, 2023 contained, among other things, slower but positive GDP growth rates, a cooling labor market and a continued deceleration of inflation, and overall, it provided a moderately more pessimistic outlook as compared to June 30, 2023.
At September 30, 2023, the Moody's Baseline forecast included the following specific assumptions:
•GDP expansion of approximately 0.5 percent in the fourth quarter 2023;
•Unemployment of 3.9 percent in the fourth quarter 2023 and 4.0 to 4.2 percent over the remainder of the forecast period ending in the third quarter 2025;
•Continued concerns about increased debt burden pushed by rising interest rates, elevated inflation and house prices;
•Consumer spending remained a source of growth and its contribution grew to the largest in nearly two years, as the cost-of-living adjusted boosted after-tax income adding another 1.1 percent to growth;
•The Federal Reserve opted to pause its rate hikes, keeping the federal funds rate at 5.25 - 5.50 percent with possible increases by the end of 2023; and
•Inflation moderately cooled, but remained at 3.7 percent in the third quarter 2023.
See more details regarding our allowance for credit losses for loans in Note 8 to the consolidated financial statements.
82

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 EndedNine Months Ended
September 30,
2023		June 30,
2023		September 30,
2022		September 30,
2023		September 30,
2022
 ($ in thousands)
Allowance for credit losses for loans
Beginning balance$458,676$460,969$490,963$483,255$375,702
Impact of the adoption of ASU No. 2022-02 (1)
———(1,368)—
Allowance for purchased credit deteriorated (PCD) loans, net (2)
————70,319
Beginning balance, adjusted458,676460,969490,963481,887446,021
Loans charged-off:
Commercial and industrial(7,487)(3,865)(5,033)(37,399)(11,144)
Commercial real estate(255)(2,065)(4,000)(2,320)(4,173)
Construction—(4,208)—(9,906)—
Residential mortgage(20)(149)—(169)(27)
Total consumer(1,156)(1,040)(962)(3,024)(2,513)
Total loans charge-offs(8,918)(11,327)(9,995)(52,818)(17,857)
Charged-off loans recovered:
Commercial and industrial3,0432,17313,2366,61516,012
Commercial real estate541,729332,060
Residential mortgage30135163186694
Total consumer3623904771,5132,431
Total loans recovered3,4402,70215,6058,34721,197
Total net loan (charge-offs) recoveries(5,478)(8,625)5,610(44,471)3,340
Provision charged for credit losses9,1476,3321,83524,92949,047
Ending balance$462,345$458,676$498,408$462,345$498,408
Components of allowance for credit losses for loans:
Allowance for loan losses$442,175$436,432$475,744$442,175$475,744
Allowance for unfunded credit commitments20,17022,24422,66420,17022,664
Allowance for credit losses for loans$462,345$458,676$498,408$462,345$498,408
Components of provision for credit losses for loans:
Provision for credit losses for loans
$11,221$8,159$1,315$29,359$42,883
(Credit) provision for unfunded credit commitments
(2,074)(1,827)520(4,430)6,164
Total provision for credit losses for loans$9,147$6,332$1,835$24,929$49,047
Allowance for credit losses for loans as a % of total loans
0.92 %0.92 %1.10 %0.92 %1.10 %
(1) Represents the opening adjustment for the adoption of ASU No. 2022-02 effective January 1, 2023.
(2) Represents the allowance for acquired PCD loans, net of PCD loan charge-offs totaling $62.4 million in the second quarter 2022.


83

The following table presents the relationship among net loans charged-off and recoveries, and average loan balances outstanding for the periods indicated:
 Three Months EndedNine Months Ended
 September 30, 2023June 30, 2023September 30, 2022September 30, 2023September 30, 2022
 ($ in thousands)
Net loan (charge-offs) recoveries
Commercial and industrial$(4,444)$(1,692)$8,203$(30,784)$4,868
Commercial real estate(250)(2,061)(2,271)(2,287)(2,113)
Construction—(4,208)—(9,906)—
Residential mortgage10(14)16317667
Total consumer(794)(650)(485)(1,511)(82)
Total $(5,478)$(8,625)$5,610$(44,471)$3,340
Average loans outstanding
Commercial and industrial$9,072,476$9,043,832$8,540,485$8,989,877$7,529,507
Commercial real estate28,053,13427,808,27824,306,68427,476,71822,416,996
Construction3,952,6923,787,1833,186,7323,781,5662,604,559
Residential mortgage5,548,2575,489,5015,134,7695,527,1454,925,469
Total consumer3,392,8553,329,1433,173,2243,344,8473,053,263
Total$50,019,414$49,457,937$44,341,894$49,120,153$40,529,794
Annualized net loan charge-offs (recoveries) to average loans outstanding
Commercial and industrial0.20%0.07%(0.38)%0.46%(0.09)%
Commercial real estate0.000.030.040.010.01
Construction0.000.440.000.350.00
Residential mortgage0.000.00(0.01)0.00(0.02)
Total consumer0.090.080.060.060.00
Total loans 0.040.07(0.05)0.12(0.01)
Net loan charge-offs totaled $5.5 million for the third quarter 2023 as compared to $8.6 million for the second quarter 2023 and net recoveries of loan charge-offs of $5.6 million for the third quarter 2022. The decrease from the second quarter 2023 was largely due to slightly elevated net loan charges-offs during the second quarter 2023 partly resulting from the valuation/and partial write down of a non-performing construction loan transferred from the held for investment loan portfolio to loans held for sale at June 30, 2023. Gross charge-offs totaled $8.9 million for the third quarter 2023 and included a $4.0 million partial charge-off of one commercial and industrial loan relationship.
The amount of net loan charge-offs (as presented in the above table) and the low level of individual loan charge-offs for the third quarter 2023 continued to trend within management's expectations for the credit quality of the loan portfolio at September 30, 2023.

84

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, 2023June 30, 2023September 30, 2022
 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$133,988 1.44 %$128,245 1.38 %$154,051 1.77 %
Commercial real estate loans:
Commercial real estate191,562 0.68 194,177 0.70 217,124 0.89 
Construction53,485 1.40 45,518 1.19 50,656 1.42 
Total commercial real estate loans245,047 0.77 239,695 0.76 267,780 0.95 
Residential mortgage loans44,621 0.80 44,153 0.79 36,157 0.70 
Consumer loans:
Home equity3,689 0.67 4,020 0.75 4,083 0.87 
Auto and other consumer14,830 0.52 20,319 0.70 13,673 0.49 
Total consumer loans18,519 0.55 24,339 0.71 17,756 0.55 
Allowance for loan losses442,175 0.88 436,432 0.88 475,744 1.05 
Allowance for unfunded credit commitments
20,170 22,244 22,664 
Total allowance for credit losses for loans
$462,345 $458,676 $498,408 
Allowance for credit losses for loans as a % total loans0.92 %0.92 %1.10 %
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 0.92 percent at both September 30, 2023 and June 30, 2023, and 1.10 percent at September 30, 2022. During the third quarter 2023, the provision for credit losses for loans totaled $9.1 million as compared to $6.3 million and $1.8 million for the second quarter 2023 and third quarter 2022, respectively. The provision for credit losses for the third quarter 2023 reflects, among other factors, higher quantitative reserves related to classified loans within the commercial portfolios and specific reserves associated with collateral dependent loans, partially offset by a negative (credit) provision for unfunded credit commitments driven by a decline in these obligations at September 30, 2023. Our economic forecast related reserves at September 30, 2023 remained relatively unchanged from June 30, 2023.
Capital Adequacy
A significant measure of the strength of a financial institution is its shareholders’ equity. At September 30, 2023 and December 31, 2022, shareholders’ equity totaled approximately $6.6 billion and $6.4 billion, which represented 10.8 percent and 11.1 percent of total assets, respectively.
During the nine months ended September 30, 2023, total shareholders’ equity increased by approximately $226.5 million primarily due to the following:
•net income of $427.0 million,
•a $16.2 million increase attributable to the effect of our stock incentive plan,
•additional capital issued totaling $3.8 million,
•a $990 thousand net cumulative effect adjustment to retained earnings for the adoption of ASU 2022-02, partially offset by
•cash dividends declared on common and preferred stock totaling a combined $181.5 million,
85

•other comprehensive loss of $37.9 million, and
•repurchases of $2.1 million of our common stock with these shares held in treasury stock.
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 a 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, 2023 and December 31, 2022, Valley and Valley National Bank exceeded all capital adequacy requirements (see table below).
For regulatory capital purposes, in accordance with the Federal Reserve Board’s final interim rule as of April 3, 2020, we deferred 100 percent of the CECL Day 1 impact to shareholders' equity plus 25 percent of the reserve build (i.e., provision for credit losses less net charge-offs) for a two-year period ending January 1, 2022. On January 1, 2022, the deferral amount totaling $47.3 million after-tax started to be phased-in by 25 percent and will increase 25 percent per year until fully phased-in on January 1, 2025. As of September 30, 2023, approximately $23.6 million of the $47.3 million deferral amount was recognized as a reduction to regulatory capital and, as a result, decreased our risk-based capital ratios by approximately 6 basis points.
86

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, 2023 and December 31, 2022:
 ActualMinimum Capital
Requirements		To Be Well Capitalized
Under Prompt Corrective
Action Provision
 AmountRatioAmountRatioAmountRatio
 
 ($ in thousands)
As of September 30, 2023
Total Risk-based Capital
Valley$5,827,969 11.68 %$5,237,838 10.50 %N/AN/A
Valley National Bank5,779,646 11.59 5,235,883 10.50 $4,986,555 10.00 %
Common Equity Tier 1 Capital
Valley4,593,883 9.21 3,491,892 7.00 N/AN/A
Valley National Bank5,404,401 10.84 3,490,589 7.00 3,241,261 6.50 
Tier 1 Risk-based Capital
Valley4,808,724 9.64 4,240,155 8.50 N/AN/A
Valley National Bank5,404,401 10.84 4,238,572 8.50 3,989,244 8.00 
Tier 1 Leverage Capital
Valley4,808,724 8.08 2,381,015 4.00 N/AN/A
Valley National Bank5,404,401 9.07 2,383,420 4.00 2,979,275 5.00 
As of December 31, 2022
Total Risk-based Capital
Valley$5,569,639 11.63 %$5,026,621 10.50 %N/AN/A
Valley National Bank5,659,511 11.84 5,018,129 10.50 $4,779,170 10.00 %
Common Equity Tier 1 Capital
Valley4,315,659 9.01 3,351,080 7.00 N/AN/A
Valley National Bank5,284,372 11.06 3,345,419 7.00 3,106,461 6.50 
Tier 1 Risk-based Capital
Valley4,530,500 9.46 4,069,169 8.50 N/AN/A
Valley National Bank5,284,372 11.06 4,062,295 8.50 3,823,336 8.00 
Tier 1 Leverage Capital
Valley4,530,500 8.23 2,200,822 4.00 N/AN/A
Valley National Bank5,284,372 9.60 2,200,891 4.00 2,751,114 5.00 
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 shareholders) per common share. Our retention ratio was approximately 59.3 percent for the nine months ended September 30, 2023 as compared to 61.4 percent for the year ended December 31, 2022.
Cash dividends declared amounted to $0.33 per common share for each of the nine months ended September 30, 2023 and 2022. 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.
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, 2022 in the MD&A section - “Liquidity and Cash Requirements” and Notes 13 and 14 to the consolidated financial statements included in this report.

87

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 71 for a discussion of interest rate risk.

Item 4.Controls and Procedures
(a) Disclosure control 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 control over financial reporting. 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, 2023 that have materially affected, or are reasonably likely to materially affect, Valley’s internal control over financial reporting.
Valley’s management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control 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.
88


PART II - OTHER INFORMATION 
Item 1.Legal Proceedings
In the ordinary course of business, we are a party to various 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, 2022.

Item 1A.Risk Factors
There have been no material changes in the risk factors previously disclosed in the section titled "Risk Factors" in Part I, Item 1A of Valley’s Annual Report on Form 10-K for the year ended December 31, 2022, except as described below, and previously disclosed in Valley’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023:
Our financial results and condition may be adversely impacted by recent events in the banking industry or any future similar events.
Recent events impacting the banking industry, including the bank failures in March and April 2023, have resulted in significant disruption and volatility in the capital markets, reduced current valuations of bank securities, and decreased confidence in banks among depositors and other counterparties as well as investors. These events occurred in the context of rapidly rising interest rates which, among other things, have resulted in unrealized losses in longer duration debt securities and loans held by banks, increased competition for deposits and potentially increased the risk of recession. These events have had, and may continue to have, an adverse impact on the market price of our common stock.
While the Department of the Treasury, the Federal Reserve, and the FDIC took steps to ensure that depositors of recently failed banks would have access to their insured and uninsured deposits, and to facilitate sales of certain failed banks, there is no assurance that these or similar actions will restore customer confidence in the banking system, and we may be further impacted by concerns regarding the soundness of other financial institutions, or other future bank failures or disruptions. Any loss of client deposits or changes in our credit ratings could increase the cost of funding, limit access to capital markets or negatively impact our overall liquidity or capitalization. The cost of resolving the recent bank failures may also prompt the FDIC to increase its premiums above current levels or to issue additional special assessments.
These recent events and any future similar events may also result in changes to laws or regulations governing bank holding companies and banks, including higher capital requirements, or the imposition of restrictions through supervisory or enforcement activities, which could materially impact our business.

89

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, 2023 were as follows:

ISSUER PURCHASES OF EQUITY SECURITIES 
PeriodTotal  Number of
Shares  Purchased (1)		Average
Price Paid
Per Share		Total Number of Shares
Purchased as Part of
Publicly Announced
Plans		Maximum Number of
Shares that May Yet Be
Purchased Under the Plans (2)
July 1, 2023 to July 31, 20234,422 $8.24 — 24,700,000 
August 1, 2023 to August 31, 20236,954 9.58 — 24,700,000 
September 1, 2023 to September 30, 20234,135 9.07 — 24,700,000 
Total15,511 $9.06 — 
(1)Includes repurchases made in connection with the vesting of employee restricted stock awards.
(2)On April 26, 2022, Valley publicly announced a stock repurchase program for up to 25 million shares of Valley common stock. The authorization to repurchase will expire on April 25, 2024.

Item 5. Other Information
a.None.
b.None.
c.None.

Item 6.Exhibits

(3)Articles of Incorporation and By-laws:
(3.1)
(3.2)
(31.1)
(31.2)
(32)
(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.
+Management contract and compensatory plan or arrangement.

90

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 9, 2023  Ira Robbins
  Chairman of the Board and
  Chief Executive Officer
(Principal Executive Officer)
Date:   /s/ Michael D. Hagedorn
November 9, 2023  Michael D. Hagedorn
  Senior Executive Vice President and
  Chief Financial Officer
(Principal Financial Officer)
91