What changed in this filing

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Item 1. Financial Statements

2023-11-09 compared with 2023-08-07 · 311 added, 238 removed, 1338 unchanged (29% of the section changed)

3 unchanged sentences

(in thousands, except for share data)

September 30,

2023 December 31,

6 unchanged sentences

Available for sale debt securities 1,186,524 1,261,397

Held to maturity debt securities (net of allowance for credit losses of $ 1,351 at June 30, 2023 and $ 1,646 at December 31, 2022)

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

26 unchanged sentences

50,000,000 authorized shares:

Series A ( 4,600,000 shares issued at June 30, 2023 and December 31, 2022)

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 June 30, 2023 and December 31, 2022)

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 June 30, 2023 and December 31, 2022)

issued 507,896,910 shares at September 30, 2023 and December 31, 2022)

178,187 178,185

2 unchanged sentences

Accumulated other comprehensive loss ( 201,892 ) ( 164,002 )

Treasury stock, at cost ( 277,480 common shares at June 30, 2023 and 1,522,432 common shares at December 31, 2022)

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 )

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

23 unchanged sentences

Service charges on deposit accounts 10,952 10,338 31,970 26,617

Gains (losses) on securities transactions, net 217 ( 309 ) 595 ( 1,381 )

(Losses) gains on securities transactions, net ( 398 ) 323 197 ( 1,058 )

Fees from loan servicing 2,681 3,138 8,054 8,636

Gains on sales of loans, net 2,023 922 3,752 5,510

Gains (losses) on sales of assets, net 6,653 ( 106 ) 6,938 ( 372 )

Bank owned life insurance 2,709 1,681 7,736 5,840

24 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

3 unchanged sentences

Net losses arising during the period ( 37,115 ) ( 57,242 ) ( 37,996 ) ( 148,403 )

Less reclassification adjustment for net gains included in net income — — — ( 10 )

Less reclassification adjustment for net losses (gains) included in net income 5 ( 12 ) 5 ( 22 )

Total ( 37,110 ) ( 57,254 ) ( 37,991 ) ( 148,425 )

1 unchanged sentence

Net (losses) gains on derivatives arising during the period — ( 85 ) ( 775 ) 110

Less reclassification adjustment for net losses (gains) included in net income 516 ( 80 ) 895 306

Less reclassification adjustment for net (gains) losses included in net income ( 43 ) ( 13 ) 852 293

Total ( 43 ) ( 98 ) 77 403

4 unchanged sentences

See accompanying notes to consolidated financial statements.

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

For the Six Months Ended June 30, 2023

(in thousands)

For the Nine Months Ended September 30, 2023

Common Stock Accumulated

4 unchanged sentences

Shareholders’

(in thousands)

Balance - December 31, 2022 $ 209,691 506,374 $ 178,185 $ 4,980,231 $ 1,218,445 $ ( 164,002 ) $ ( 21,748 ) $ 6,400,802

28 unchanged sentences

$ 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.

VALLEY NATIONAL BANCORP

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

For the Six Months Ended June 30, 2022

(in thousands)

For the Nine Months Ended September 30, 2022

Common Stock Accumulated

4 unchanged sentences

Shareholders’

(in thousands)

Balance - December 31, 2021 $ 209,691 421,437 $ 148,482 $ 3,883,035 $ 883,645 $ ( 17,932 ) $ ( 22,855 ) $ 5,084,066

25 unchanged sentences

$ 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.

2 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

4 unchanged sentences

Provision for credit losses 29,604 49,578

Net amortization of premiums and accretion of discounts on securities and borrowings ( 639 ) 9,680

Net accretion of discounts and amortization of premium on securities and borrowings ( 28 ) 10,603

Amortization of other intangible assets 30,072 26,925

27 unchanged sentences

Proceeds from sales of real estate property and equipment 18,403 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.

VALLEY NATIONAL BANCORP

1 unchanged sentence

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from financing activities:

54 unchanged sentences

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 June 30, 2023 and for all periods presented have been made.

The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the entire fiscal year or any subsequent interim period.

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 SEC.

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.

9 unchanged sentences

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.

Business Combinations

1 unchanged sentence

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 Leumi USA common share that they owned.

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

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.

2 unchanged sentences

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 six months ended June 30, 2023.

There were no merger expenses for the three months ended June 30, 2023.

Merger expenses totaled $ 54.5 million and $ 58.9 million for the three and six months ended June 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.

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:

29 unchanged sentences

Earnings Per Common Share

The following table shows the calculation of both basic and diluted earnings per common share for the three and six months ended June 30, 2023 and 2022:

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

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

11 unchanged sentences

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 7.2 million and 2.2 million for the three months ended June 30, 2023 and 2022, respectively, and 3.0 million and 1.1 million for the six months ended June 30, 2023 and 2022, respectively.

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.

Accumulated Other Comprehensive Loss

The following tables present the after-tax changes in the balances of each component of accumulated other comprehensive loss for the three and six months ended June 30, 2023:

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 Loss Total

8 unchanged sentences

(in thousands)

Balance at March 31, 2023 $ ( 110,648 ) $ 5,410 $ ( 38,409 ) $ ( 143,647 )

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 — 516 8 524

Amounts reclassified from other comprehensive loss (income) 5 ( 43 ) 8 ( 30 )

Other comprehensive (loss) income, net ( 37,110 ) ( 43 ) 8 ( 37,145 )

Balance at June 30, 2023 $ ( 128,699 ) $ 2,353 $ ( 38,401 ) $ ( 164,747 )

Balance - September 30, 2023 $ ( 165,809 ) $ 2,310 $ ( 38,393 ) $ ( 201,892 )

Components of Accumulated Other Comprehensive Loss Total

8 unchanged sentences

(in thousands)

Balance at December 31, 2022 $ ( 127,818 ) $ 2,233 $ ( 38,417 ) $ ( 164,002 )

Balance - December 31, 2022 $ ( 127,818 ) $ 2,233 $ ( 38,417 ) $ ( 164,002 )

Other comprehensive loss before reclassification ( 37,996 ) ( 775 ) — ( 38,771 )

1 unchanged sentence

Other comprehensive (loss) income, net ( 37,991 ) 77 24 ( 37,890 )

Balance at June 30, 2023 $ ( 128,699 ) $ 2,353 $ ( 38,401 ) $ ( 164,747 )

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 six months ended June 30, 2023 and 2022:

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

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Components of Accumulated Other Comprehensive Loss 2023 2022 2023 2022 Income Statement Line Item

(in thousands)

Unrealized gains on AFS securities before tax $ — $ — $ — $ 14 Gains (losses) on securities transactions, net

Unrealized (losses) gains on AFS securities before tax $ ( 6 ) $ 16 $ ( 6 ) $ 30 Gains (losses) on securities transactions, net

Tax effect 1 ( 4 ) 1 ( 8 )

23 unchanged sentences

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 vintage disclosure requirements are also required to prospectively disclose current-period gross write-off information by vintage.

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.

20 unchanged sentences

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 June 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).

September 30,

2023 Fair Value Measurements at Reporting Date Using:

63 unchanged sentences

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 approximately $ 23.0 million and $ 17.9 million at June 30, 2023 and December 31, 2022, respectively.

(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.

3 unchanged sentences

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 securitie s.

The fair value of equity securities consists of a publicly traded mutual fund, a Community Reinvestment Act (CRA) investment fund and an investment related to the development of new financial technologies that are carried at quoted prices in active markets.

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.

Equity securities at NAV .

3 unchanged sentences

The fair value of trading debt securitie s, consisting of U.S.

Treasury securities are reported at fair value utilizing Level 1 inputs at June 30, 2023.

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 bonds investments were derived from market quotations and matrix pricing obtained through an independent pricing service.

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.

12 unchanged sentences

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 June 30, 2023 and December 31, 2022 based on the short duration these assets were held, and the credit quality of these loans.

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 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 Overnight Index Swap and Secured Overnight Financing Rate (SOFR) curves.

The fair value of mortgage banking derivatives, consisting of interest rate lock commitments to fund residential mortgage loans and forward commitments for the future delivery of such loans (including certain loans held for sale at June 30, 2023 and December 31, 2022), is determined based on the current market prices for similar instruments.

The fair values of most of the derivatives incorporate credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, to account for potential nonperformance risk of Valley and its counterparties.

The credit valuation adjustments were not significant to the overall valuation of Valley’s derivatives at June 30, 2023 and December 31, 2022.

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

1 unchanged sentence

Non-performing loans held for sale .

Valley transferred one non-performing construction loan totaling $ 10.0 million, net of charge-offs, to loans held for sale at June 30, 2023.

The transfer at the loan's fair value resulted in a $ 4.2 million charge-off to the allowance of loan losses for the three months ended June 30, 2023.

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 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 that is expected to close during the third quarter 2023.

The broker coordinated loan level due diligence with interested parties and established a formal bidding

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 .

3 unchanged sentences

Certain real estate appraisals may be discounted based on specific market data by location and property type.

At June 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 June 30, 2023, collateral dependent loans with a total amortized cost of $ 125.0 million, including our taxi medallion loan portfolio, were reduced by specific allowance for loan losses allocations totaling $ 61.0 million to a reported total net carrying amount of $ 64.0 million.

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 .

1 unchanged sentence

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 June 30, 2023 and December 31, 2022.

If further declines in the estimated fair value of the asset occur, an a sset 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

8 unchanged sentences

In addition, the tax implications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.

The carrying amounts and estimated fair values of financial instruments not measured and not reported at fair value on the consolidated statements of financial condition at June 30, 2023 and December 31, 2022 were as follows:

Hierarchy June 30, 2023 December 31, 2022

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:

Hierarchy September 30, 2023 December 31, 2022

Amount Fair Value Carrying

34 unchanged sentences

Equity Securities

Equity securities totaled $ 61.0 million and $ 48.7 million at June 30, 2023 and December 31, 2022, respectively.

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 June 30, 2023 and December 31, 2022, respectively.

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 $ 226 thousand and $ 628 thousand for the three and six months ended June 30, 2023, respectively.

We recorded net trading losses of $ 387 thousand and $ 1.4 million for the three and six months ended June 30, 2022, respectively.

We recorded net trading gains of $ 45 thousand and $ 673 thousand for the

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 June 30, 2023 and December 31, 2022 were as follows:

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:

Losses Fair Value

(in thousands)

June 30, 2023

September 30, 2023

Treasury securities $ 312,348 $ — $ ( 36,600 ) $ 275,748

17 unchanged sentences

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 $ 4.9 million and $ 5.6 million at June 30, 2023 and December 31, 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

The age of unrealized losses and fair value of the related available for sale debt securities at June 30, 2023 and December 31, 2022 were as follows:

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.

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 Months More than 12 Months Total

3 unchanged sentences

(in thousands)

June 30, 2023

September 30, 2023

Treasury securities $ — $ — $ 275,748 $ ( 36,600 ) $ 275,748 $ ( 36,600 )

21 unchanged sentences

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 725 and 730 at June 30, 2023 and December 31, 2022, respectively.

As of June 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 $ 847.1 million.

The contractual maturities of available for sale debt securities at June 30, 2023 are set forth in the following table.

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.

June 30, 2023

September 30, 2023

(in thousands)

6 unchanged sentences

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 7.68 years at June 30, 2023.

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

4 unchanged sentences

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 June 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 June 30, 2023 and the three and six months ended June 30, 2022.

The following table details the activity in the allowance for credit losses for the six months ended June 30, 2023.

Six Months Ended June 30, 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)

4 unchanged sentences

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 June 30, 2023 and there was no allowance for credit losses for available for sale debt securities at June 30, 2023, December 31, 2022 and June 30, 2022.

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.

Held to Maturity Debt Securities

The amortized cost, gross unrealized gains and losses and fair value of debt securities held to maturity at June 30, 2023 and December 31, 2022 were as follows:

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:

Losses Fair Value Allowance for Credit Losses Net Carrying Value

(in thousands)

June 30, 2023

September 30, 2023

Treasury securities $ 66,408 $ — $ ( 753 ) $ 65,655 $ — $ 66,408

19 unchanged sentences

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 $ 13.6 million and $ 13.5 million at June 30, 2023 and December 31, 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

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.

The age of unrealized losses and fair value of related debt securities held to maturity at June 30, 2023 and December 31, 2022 were as follows:

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 Months More than 12 Months Total

3 unchanged sentences

(in thousands)

June 30, 2023

September 30, 2023

Treasury securities $ — $ — $ 65,655 $ ( 753 ) $ 65,655 $ ( 753 )

25 unchanged sentences

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 811 and 802 at June 30, 2023 and December 31, 2022, respectively.

As of June 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.

The contractual maturities of investments in debt securities held to maturity at June 30, 2023 are set forth in the table below.

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.

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.

June 30, 2023

September 30, 2023

(in thousands)

6 unchanged sentences

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 10.05 years at June 30, 2023.

The weighted-average remaining expected life for residential mortgage-backed securities held to maturity was 9.84 years at September 30, 2023.

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 June 30, 2023 and December 31, 2022.

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 Rated BBB rated Non-investment grade rated Non-rated Total

(in thousands)

June 30, 2023

September 30, 2023

Treasury securities $ 66,408 $ — $ — $ — $ 66,408

22 unchanged sentences

Obligations of states and political subdivisions include municipal bonds and revenue bonds issued by various municipal corporations.

At June 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.

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.

1 unchanged sentence

Allowance for Credit Losses for Held to Maturity Debt Securities

Valley has a zero-loss expectation for certain securities within the held to maturity portfolio, and therefore it is not required to estimate an allowance for credit losses related to these securities under the CECL standard.

After an evaluation of qualitative factors, Valley identified the following securities types which it believes qualify for this exclusion:

1 unchanged sentence

government agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and TEMS collateralized municipal bonds.

The following table details the activity in the allowance for credit losses for the three and six months ended June 30, 2023 and 2022:

Three months ended June 30, Six months ended June 30,

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,

2023 2022 2023 2022

3 unchanged sentences

Ending balance $ 1,321 $ 1,696 $ 1,321 $ 1,696

There were no sales of available for sale and held to maturity debt securities during the three and six months ended June 30, 2023 and 2022, respectively.

Loans and Allowance for Credit Losses for Loans

The detail of the loan portfolio as of June 30, 2023 and December 31, 2022 was as follows:

June 30, 2023 December 31, 2022

The detail of the loan portfolio as of September 30, 2023 and December 31, 2022 was as follows:

September 30, 2023 December 31, 2022

(in thousands)

10 unchanged sentences

Total loans $ 50,097,519 $ 46,917,200

Total loans include net unearned discounts and deferred loan fees of $ 119.1 million and $ 120.5 million at June 30, 2023 and December 31, 2022, respectively.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $ 202.1 million and $ 175.9 million at June 30, 2023 and December 31, 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

During the three months ended June 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.

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 we re no sales of loans from the held for investment portfolio during the three and six months ended June 30, 2023 and 2022.

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

1 unchanged sentence

Management reviews and approves these policies and procedures on a regular basis with subsequent approval by the Board of Directors annually.

Credit authority relating to a

significant dollar percentage of the overall portfolio is centralized and controlled by the Credit Risk Management Division and by the Credit Committee.

A reporting system supplements the management review process by providing management with frequent reports concerning loan production, loan quality, internal loan classification, concentrations of credit, loan delinquencies, non-performing, and potential problem loans.

Credit authority relating to a significant dollar percentage of the overall portfolio is centralized and controlled by the Credit Risk Management Division and by the Credit Committee.

A reporting system supplements the management review process by providing management with frequent reports concerning loan production, loan quality, internal loan classification,

concentrations of credit, loan delinquencies, non-performing and potential problem loans.

Loan portfolio diversification is an important factor utilized by Valley to manage its risk across business sectors and through cyclical economic circumstances.

2 unchanged sentences

Credit Quality

The following table presents past due, current and non-accrual loans without an allowance for loan losses by loan portfolio class at June 30, 2023 and December 31, 2022:

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

6 unchanged sentences

(in thousands)

June 30, 2023

September 30, 2023

Commercial and industrial

40 unchanged sentences

Risk ratings are updated any time the situation warrants.

The following table presents the internal loan classification risk by loan portfolio class by origination year based on the most recent analysis performed at June 30, 2023 and December 31, 2022, as well as the gross loan charge-offs by year of origination for the six months ended June 30, 2023:

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:

Amortized Cost Basis by Origination Year

June 30, 2023 2023 2022 2021 2020 2019 Prior to 2019 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Total

September 30, 2023 2023 2022 2021 2020 2019 Prior to 2019 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Total

(in thousands)

4 unchanged sentences

Doubtful 2,947 561 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

3 unchanged sentences

Substandard 49,652 23,334 37,706 51,880 70,853 255,189 7,197 — 495,811

Doubtful — — — 190 — — — — 190

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

25 unchanged sentences

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 June 30, 2023 and December 31, 2022, as well as the gross loan charge-offs by year of origination for the six months ended June 30, 2023:

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:

Amortized Cost Basis by Origination Year

June 30, 2023 2023 2022 2021 2020 2019 Prior to 2019 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Total

September 30, 2023 2023 2022 2021 2020 2019 Prior to 2019 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Total

(in thousands)

37 unchanged sentences

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) if the borrower was experiencing financial difficulties and a concession has been made at the time of such modification.

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.

5 unchanged sentences

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.

The following table shows the amortized cost basis of loans to borrowers experiencing financial difficulty at June 30, 2023 that were modified during the three and six months ended June 30, 2023, disaggregated by class of financing receivable and type of modification.

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

June 30, 2023 Six Months Ended

June 30, 2023

Term extension Term extension and interest rate reduction Total Term extension Term extension and interest rate reduction Total

September 30, 2023

Interest rate reduction Term extension Term extension and interest rate reduction Total

($ in thousands)

1 unchanged sentence

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 reduction Term extension Term extension and interest rate reduction Total

($ 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 six months ended June 30, 2023:

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;

and one 12 month term extension combined with a reduction in interest rate from 9.38 percent to 6.50 percent

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 six months ended June 30, 2023 were current to their contractual payments as of June 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 six months ended June 30, 2023.

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.

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 six months ended June 30, 2022.

Post-modification amounts are presented as of June 30, 2022 using the allowance methodology for TDRs prior to the adoption of ASU 2022-02.

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

June 30, 2022

September 30, 2022

Troubled Debt Restructurings Number

5 unchanged sentences

Commercial real estate:

Commercial real estate 1 2,187 2,187

Construction 2 11,025 7,811

Total commercial real estate 3 13,212 9,998

Residential mortgage 1 44 44

Consumer 1 125 124

Total 69 $ 67,842 $ 64,789

Six Months Ended

June 30, 2022

Nine Months Ended

September 30, 2022

Troubled Debt Restructurings Number

5 unchanged sentences

Commercial real estate:

Commercial real estate 4 16,259 15,660

Construction 2 11,025 7,811

Total commercial real estate 6 27,284 23,471

Residential mortgage 9 5,135 5,116

1 unchanged sentence

Total 95 $ 142,323 $ 134,205

The total TDRs presented in the above tables had allocated allowance for loan losses of $ 56.0 million at June 30, 2022.

There were $ 1.5 million in charge-offs related to TDRs for the three and six months ended June 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 six months ended June 30, 2022.

Performing TDRs (not reported as non-accrual loans) and non-performing TDRs totaled $ 67.3 million and $ 154.4 million as of June 30, 2022.

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 six months ended June 30, 2022 were as follows:

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.

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

June 30, 2022 Six Months Ended

June 30, 2022

September 30, 2022 Nine Months Ended September 30, 2022

Troubled Debt Restructurings Subsequently Defaulted Number of

3 unchanged sentences

($ in thousands)

Construction 2 $ 17,599 2 $ 17,599

Commercial and industrial 1 $ 42,771 1 $ 42,771

Commercial real estate 2 5,207 2 5,207

Residential mortgage 1 1,071 1 1,071

Total 4 $ 49,049 4 $ 49,049

Loans in process of foreclosure.

Other real estate owned (OREO) totaled $ 824 thousand and $ 286 thousand at June 30, 2023 and December 31, 2022, respectively.

There were no foreclosed residential real estate properties included in OREO at June 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 $ 454 thousand and $ 2.6 million at June 30, 2023 and December 31, 2022, respectively.

Other real estate owned (OREO) was no t material at September 30, 2023 and December 31, 2022.

There were no f oreclosed 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.

1 unchanged sentence

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 June 30, 2023 and December 31, 2022:

The following table presents collateral dependent loans by class as of September 30, 2023 and December 31, 2022:

September 30,

2023 December 31,

3 unchanged sentences

Commercial real estate 132,508 130,199

Total commercial real estate loans 132,508 130,199

Residential mortgage 20,598 33,865

Home equity — 195

Consumer 589 —

Total $ 243,593 $ 258,692

2 unchanged sentences

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 $ 24.6 million at June 30, 2023 as compared to December 31, 2022.

The following table summarizes the ACL for loans at June 30, 2023 and December 31, 2022:

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,

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

4 unchanged sentences

Total provision for credit losses for loans $ 9,147 $ 1,835 $ 24,929 $ 49,047

The following table details the activity in the allowance for loan losses by loan portfolio segment for the three and six months ended June 30, 2023 and 2022:

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:

and Industrial Commercial

3 unchanged sentences

Three Months Ended

June 30, 2023

September 30, 2023

Allowance for loan losses:

2 unchanged sentences

Charged-off loans recovered 3,043 5 30 362 3,440

Net charge-offs ( 1,692 ) ( 6,269 ) ( 14 ) ( 650 ) ( 8,625 )

Provision for loan losses 1,945 2,632 2,459 1,123 8,159

Net (charge-offs) recoveries ( 4,444 ) ( 250 ) 10 ( 794 ) ( 5,478 )

Provision (credit) for loan losses 10,187 5,602 458 ( 5,026 ) 11,221

Ending balance $ 133,988 $ 245,047 $ 44,621 $ 18,519 $ 442,175

Three Months Ended

June 30, 2022

September 30, 2022

Allowance for loan losses:

Beginning balance $ 144,539 $ 277,227 $ 29,889 $ 17,164 $ 468,819

Allowance for purchased credit deteriorated (PCD) loans * 33,452 36,618 206 43 70,319

Loans charged-off ( 5,033 ) ( 4,000 ) — ( 962 ) ( 9,995 )

1 unchanged sentence

Net (charge-offs) recoveries 8,203 ( 2,271 ) 163 ( 485 ) 5,610

Provision for loan losses 12,472 20,436 1,421 3,981 38,310

Provision (credit) for loan losses 1,309 ( 7,176 ) 6,105 1,077 1,315

Ending balance $ 154,051 $ 267,780 $ 36,157 $ 17,756 $ 475,744

Six Months Ended

June 30, 2023

Nine Months Ended

September 30, 2023

Allowance for loan losses:

8 unchanged sentences

Ending balance $ 133,988 $ 245,047 $ 44,621 $ 18,519 $ 442,175

Six Months Ended

June 30, 2022

Nine Months Ended

September 30, 2022

Allowance for loan losses:

7 unchanged sentences

* Represents the allowance for acquired PCD loans, net of PCD loan charge-offs totaling $ 62.4 million in the second quarter 2022.

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 June 30, 2023 and December 31, 2022.

Commercial and Industrial Commercial

2 unchanged sentences

(in thousands)

June 30, 2023

September 30, 2023

Allowance for loan losses:

14 unchanged sentences

Goodwill and Other Intangible Assets

The carrying amounts of goodwill allocated to Valley's business segments, or reporting units thereof, for goodwill impairment analysis at both June 30, 2023 and December 31, 2022 were as follows:

Business Segment / Reporting Unit *

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 *

Management Consumer

2 unchanged sentences

(in thousands)

$ 49,767 $ 284,873 $ 1,534,296 $ 1,868,936

* Valley’s Wealth Management and Insurance Division is comprised of trust, asset management, brokerage, insurance and tax credit advisory services.

This reporting unit is included in the Consumer Banking segment for financial reporting purposes.

December 31, 2022, as reported $ 49,767 $ 284,873 $ 1,534,296 $ 1,868,936

Adjustment 28,375 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.

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 six months ended June 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 six months ended June 30, 2022.

The following table summarizes other intangible assets as of June 30, 2023 and December 31, 2022:

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:

Assets Accumulated

1 unchanged sentence

(in thousands)

June 30, 2023

September 30, 2023

Loan servicing rights $ 121,825 $ ( 99,513 ) $ 22,312

11 unchanged sentences

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 six months ended June 30, 2023 and 2022.

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.

1 unchanged sentence

Valley evaluates core deposits and other intangibles for impairment when an indication of impairment exists.

No impairment was recognized during the three and six months ended June 30, 2023 and 2022.

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:

7 unchanged sentences

2027 1,940 13,544 4,205

Valley recognized amortization expense on other intangible assets totaling approximately $ 9.8 million and $ 11.4 million for the three months ended June 30, 2023 and 2022, respectively and $ 20.3 million and $ 15.8 million for the six months ended June 30, 2023 and 2022, respectively.

Included in time deposits are certificates of deposit over $250 thousand totaling $ 2.0 billion and $ 1.8 billion at June 30, 2023 and December 31, 2022, respectively.

Interest expense on time deposits of $250 thousand or more total ed $ 5.1 million and $ 444 thousand for the three months ended June 30, 2023 and 2022, respectively and $ 7.5 million and $ 545 thousand for the six months ended June 30, 2023 and 2022, respectively.

The scheduled maturities of time deposits as of June 30, 2023 were as follows:

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.

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 total ed $ 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:

(in thousands)

5 unchanged sentences

Short-Term Borrowings

Short-term borrowings at June 30, 2023 and December 31, 2022 consisted of the following:

June 30, 2023 December 31, 2022

Short-term borrowings at September 30, 2023 and December 31, 2022 consisted of the following:

September 30, 2023 December 31, 2022

(in thousands)

2 unchanged sentences

Total short-term borrowings $ 89,802 $ 138,729

The weighted average interest rate for short-term FHLB advances was 5.30 percent and 1.60 percent at June 30, 2023 and December 31, 2022, respectively.

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 June 30, 2023 and December 31, 2022 consisted of the following:

June 30, 2023 December 31, 2022

Long-term borrowings at September 30, 2023 and December 31, 2022 consisted of the following:

September 30, 2023 December 31, 2022

(in thousands)

4 unchanged sentences

Total long-term borrowings $ 2,318,294 $ 1,543,058

(1) FHLB advances are presented net of unamortized premiums totaling $ 311 thousand and $ 419 thousand at June 30, 2023 and December 31, 2022, respectively.

(2) Subordinated debt is presented net of unamortized debt issuance costs totaling $ 6.0 million and $ 6.9 million at June 30, 2023 and December 31, 2022, respectively.

(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.

FHLB Advances.

Long-term FHLB advances had a weighted average interest rate of 3.75 percent and 1.88 percent at June 30, 2023 and December 31, 2022, respectively.

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 June 30, 2023 are scheduled for contractual balance repayments as follows:

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:

(in thousands)

2 unchanged sentences

Total long-term FHLB advances $ 1,688,000

There a re no FHLB advances reported in the table above, which are callable for early redemption by the FHLB during the next 12 months.

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.

There were no new issuances of the subordinated debt during the six months ended June 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 outstanding 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 .

Stock–Based Compensation

4 unchanged sentences

Restricted stock units are awarded as performance-based RSUs and time-based RSUs.

The perfor mance-based RSU awards are granted to certain officers and include RSUs with vesting conditions based upon certain levels of growth in Valley's tangible book value per share, plus dividends;

and RSUs, with vesting conditions based upon Valley's total shareholder return as compared to its peer group.

The table below summarizes RSU awards granted and average grant date fair values for the three and six months ended June 30, 2023 and 2022:

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.

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

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

7 unchanged sentences

Stock award fair values are expensed over the shorter of the vesting or required service period.

Valley recorded total stock-based compensation expense of $ 8.7 million and $ 6.2 million for the three months ended June 30, 2023

and 2022, respectively and $ 16.8 million and $ 13.4 million for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, the unrecognized amortization expense for all stock-based employee compensation totaled approximately $ 49.4 million.

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.

25 unchanged sentences

Changes in the fair value in credit derivatives are recognized directly in earnings.

At June 30, 2023, Valley had 36 credit swaps with an aggregate notional amount of $ 492.8 million related to risk participation agreements.

At June 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 LIBOR rate (modified to the three-month Term SOFR rate effective July 1, 2023) and, therefore, provide an effective economic hedge.

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.

2 unchanged sentences

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 a certain foreign currency denominated transactions (including foreign currency holdings and non-U.S.

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.

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Fair Value Fair Value

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* Other derivative contracts include risk participation agreements.

During 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 .

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.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

(in thousands)

Amount of (loss) gain reclassified from accumulated other comprehensive loss to interest income and expense $ ( 725 ) $ 116 $ ( 1,256 ) $ ( 426 )

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 $ 2.4 million and $ 2.2 million at June 30, 2023 and December 31, 2022, respectively.

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 and $ 238 thousand (before tax) will be reclassified as an increase to interest income and a decrease to interest expense, respectively, over the next 12 months.

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:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

5 unchanged sentences

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 June 30, 2023 and December 31, 2022, respectively.

Line Item in the Statement of Financial Position in Which the Hedged Item is Included Net Carrying Amount of the Hedged Liability * Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability

(in thousands)

June 30, 2023

September 30, 2023

Long-term borrowings $ 268,441 $ ( 29,373 )

1 unchanged sentence

Long-term borrowings $ 267,076 $ ( 30,132 )

* Net carrying amount includes unamortized debt issuance costs of $ 2.4 million and $ 2.8 million at June 30, 2023 and December 31, 2022, respectively.

* 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

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

2 unchanged sentences

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 $ 14.1 million and $ 13.2 million for the three months ended June 30, 2023 and 2022, respectively and $ 24.0 million and $ 27.6 million for the six months ended June 30, 2023 and 2022, respectively.

Capital markets income reported in non-interest income included fee income related to non-designated hedge derivative interest rate swaps executed with commer cial 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.

By using derivati ves, 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.

2 unchanged sentences

Valley has agreements with its derivative counterparties providing that if Valley defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then Valley could also be declared in default on its derivative counterparty agreements.

Additionally, Valley has an agreement with several of its derivative counterparties that contains provisions that require Valley’s debt to maintain an investment grade credit rating from each of the major credit rating agencies from which it receives a credit rating.

Additionally, Valley has an agreement with

several of its derivative counterparties that contains provisions that require Valley’s debt to maintain an investment grade credit rating from each of the major credit rating agencies from which it receives a credit rating.

If Valley’s credit rating is reduced below investment grade, or such rating is withdrawn or suspended, then the counterparties could terminate the derivative positions and Valley would be required to settle its obligations under the agreements.

As of June 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 in a net liability position at June 30, 2023 was not material.

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.

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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 June 30, 2023 and December 31, 2022.

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

6 unchanged sentences

(in thousands)

June 30, 2023

Interest rate swaps $ 548,592 $ — $ 548,592 $ 9,929 $ ( 468,200 ) $ 90,321

Interest rate swaps $ 577,209 $ — $ 577,209 $ ( 9,929 ) $ — $ 567,280

September 30, 2023

Interest rate swaps and other contracts $ 697,043 $ — $ 697,043 $ 1,590 $ ( 612,770 ) $ 85,863

Interest rate swaps and other contracts $ 729,316 $ — $ 729,316 $ ( 1,590 ) $ — $ 727,726

December 31, 2022

Interest rate swaps $ 453,251 $ — $ 453,251 $ 12,766 $ ( 342,480 ) $ 123,537

Interest rate swaps $ 594,476 $ — $ 594,476 $ ( 12,766 ) $ ( 432 ) $ 581,278

Interest rate swaps and other contracts $ 453,251 $ — $ 453,251 $ 12,766 $ ( 342,480 ) $ 123,537

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.

1 unchanged sentence

Valley’s tax credit investments are primarily related to investments promoting qualified affordable housing projects, and other investments related to community development and renewable energy sources.

Some of these tax-advantaged investments support Valley’s regulatory compliance with the Community Reinvestment Act.

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.

4 unchanged sentences

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 June 30, 2023 and December 31, 2022:

T he 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,

8 unchanged sentences

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 six months ended June 30, 2023 and 2022:

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

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

13 unchanged sentences

Operating Segments

Valley manages its business operations under reportable segments consisting of Consumer Banking, Commercial Banking and Treasury and Corporate Other.

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 reportable segments and no changes to the reportable segments were determined necessary d uring the first half of 2023.

Consumer Banking 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.

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 d uring 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.

2 unchanged sentences

Consumer Banking also includes the Wealth Management and Insurance Services Division, comprised of trust, asset management, brokerage, insurance and tax credit advisory services.

Commercial Banking 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.

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.

2 unchanged sentences

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.

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 segment includes internal accounting policies designed to measure consistent and reasonable financial reporting and may result in income and expense measurements that differ from amounts under U.S.

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.

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.

The following tables represent the financial data for Valley’s operating segments for the three and six months ended June 30, 2023 and 2022:

Three Months Ended June 30, 2023

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

Banking Commercial

6 unchanged sentences

Net interest income 33,330 379,945 ( 857 ) 412,418

Provision (credit) for credit losses 3,492 2,840 ( 282 ) 6,050

(Credit) provision for credit losses ( 4,568 ) 13,715 ( 30 ) 9,117

Net interest income after provision for credit losses 37,898 366,230 ( 827 ) 403,301

5 unchanged sentences

0.55 % 2.11 % ( 2.03 ) % 1.37 %

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Banking Commercial

6 unchanged sentences

Net interest income 58,302 372,636 23,054 453,992

Provision for credit losses 5,402 38,310 286 43,998

Provision (credit) for credit losses 7,182 ( 5,347 ) 188 2,023

Net interest income after provision for credit losses 51,120 377,983 22,866 451,969

5 unchanged sentences

0.97 % 2.84 % ( 1.90 ) % 1.95 %

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Banking Commercial

14 unchanged sentences

0.38 % 2.28 % ( 2.24 ) % 1.39 %

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Banking Commercial

15 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements