−Removed: The disclosures set forth in this item are qualified by Item 1A.—Risk Factors and the section captioned “Cautionary Statement Concerning Forward-Looking Statements” in Item 7.—Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) of this Annual Report on Form 10-K (referred to as this “report”) and other cautionary statements set forth elsewhere in this report.
−Removed: Valley National Bancorp, headquartered in Wayne, New Jersey, is a New Jersey corporation organized in 1983 and is registered as a bank holding company and a financial holding company with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) under the Bank Holding Company Act of 1956, as amended (BHC Act).
−Removed: The words “Valley,” “the Company,” “we,” “our” and “us” refer to Valley National Bancorp and its subsidiaries, unless we indicate otherwise.
+Added: The disclosures set forth in this item are qualified by Item 1A.
+Added: Risk Factors and the section captioned “Cautionary Statement Concerning Forward-Looking Statements” in Item 7.
+Added: Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") of this Report and other cautionary statements set forth elsewhere in this Report.
+Added: Valley National Bancorp, headquartered in Morristown, New Jersey, is a New Jersey corporation organized in 1983 and is registered as a bank holding company and a financial holding company with the Federal Reserve under the BHC Act.
At December 31, 2023, Valley had consolidated total assets of $60.9 billion, total net loans of $49.8 billion, total deposits of $49.2 billion and total shareholders’ equity of $6.7 billion.
1 unchanged sentence
Valley’s principal subsidiary, Valley National Bank (commonly referred to as the “Bank” in this Report), has been chartered as a national banking association under the laws of the United States since 1927.
−Removed: Valley and the Bank offer a full suite of national and regional banking solutions through various commercial, private banking, retail, insurance and wealth management financial services products.
+Added: Valley, through the Bank and its subsidiaries, offers a full suite of national and regional banking solutions through various commercial, private banking, retail, insurance and wealth management financial services products.
Valley provides personalized service and customized solutions to assist its customers with their financial service needs.
Our solutions include, but are not limited to, traditional consumer and commercial deposit and lending products, commercial real estate financing, asset-based loans, small business loans, equipment financing, insurance and wealth management solutions, and personal financing solutions, such as residential mortgages, home equity loans and automobile financing.
−Removed: Valley also offers niche financial services, including loan and deposit products for homeowners associations, insurance premium financing, cannabis-related business banking and venture banking, which we offer nationally.
+Added: Valley also offers niche financial services, including loan and deposit products for homeowners associations, cannabis-related business banking and venture banking, which we offer nationally.
The Bank also provides convenient account access to customers through a number of account management services, including access to more than 200 branch locations across New Jersey, New York, Florida, Alabama, California and Illinois;
5 unchanged sentences
Valley’s consolidated subsidiaries include the Bank, as well as subsidiaries with the following primary functions:
−Removed: an insurance agency offering property and casualty, life and health insurance;
−Removed: asset management advisers that are registered investment advisers with the Securities and Exchange Commission (SEC);
−Removed: registered securities broker-dealers with the SEC and members of the Financial Industry Regulatory Authority (FINRA);
+Added: insurance agencies offering property and casualty, life and health insurance;
+Added: asset management advisers that are registered as investment advisers with the SEC;
+Added: registered securities broker-dealers with the SEC and members of FINRA;
a title insurance agency in New York which also provides services in New Jersey;
4 unchanged sentences
On April 1, 2022, Valley completed its acquisition of Bank Leumi Le-Israel Corporation, the U.S.
−Removed: subsidiary of Bank Leumi Le-Israel B.M., and parent company of Bank Leumi USA, collectively referred to as “Bank Leumi USA”.
−Removed: Bank Leumi USA maintained its headquarters in New York City with commercial banking offices in Chicago, Los Angeles, Palo Alto, and Aventura, Florida.
+Added: 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.
6 unchanged sentences
As of December 1, 2021, Westchester had approximately $1.4 billion in assets, $915.0 million in loans, and $1.2 billion in deposits, after purchase accounting adjustments, and a branch network of seven locations in Westchester County, New York.
−Removed: The common shareholders of Westchester received 229.645 shares of Valley
−Removed: 2022 Form 10-K
−Removed: common stock for each Westchester share they owned prior to the merger.
+Added: The common shareholders of Westchester received 229.645 shares of Valley common stock for each Westchester share they owned prior to the merger.
The total consideration for the merger was $211.1 million, consisting of approximately 15.7 million shares of Valley common stock.
+Added: 2023 Form 10-K
Dudley Ventures.
4 unchanged sentences
See Note 2 to the consolidated financial statements for further details on these and other acquisitions.
+Added: Competition for Deposits, Lending and Other Financial Services
+Added: Valley National Bank is the largest commercial bank headquartered in New Jersey, with its top markets located in northern and central New Jersey, the New York City boroughs of Manhattan, Brooklyn and Queens, Long Island, Westchester County, New York, Florida and Alabama.
+Added: Valley ranked 12th in competitive ranking and market share based on the deposits reported by 161 FDIC-insured financial institutions in the New York, Northern New Jersey and Long Island deposit markets as of June 30, 2023.
+Added: The FDIC also ranked Valley 6th, 25th, 18th, 16th and 83rd in the states of New Jersey, New York, Florida, Alabama and California, respectively, based on deposit market share as of June 30, 2023.
+Added: While we believe our FDIC rankings reflect a solid foundation in our primary markets, the market for banking and bank-related services is highly competitive and we face substantial competition in all areas of our operations from a variety of bank and non-bank competitors, some of which are larger and may have more financial resources than Valley .
+Added: Some of these competitors may have fewer regulatory constraints, or more resources, lending limits and name recognition than Valley.
+Added: Valley competes with other providers of financial services such as commercial and savings banks, savings and loan associations, credit unions, money market and mutual funds, mortgage companies, fintech companies, title agencies, asset managers, insurance companies, and a large list of other local, regional and national institutions which offer financial services.
+Added: We believe we remain competitive by offering premier relationship banking service and advice, as well as a robust suite of innovative financial products and solutions to keep pace with evolving customer preferences across our footprint.
+Added: The financial services industry is continually undergoing rapid technological change with frequent introductions of new, technology-driven products and services, which increases efficiency and enables financial institutions to better serve customers and to reduce costs.
+Added: Fintech and direct bank competitors provide innovative digital solutions to traditional retail banking services and products, and in some cases without the extensive burden associated with being a regulated depository institution.
+Added: We work to meet these challenges by utilizing internal resources and external technology partners to continually enhance our online and mobile banking products.
+Added: By combining technology-enabled solutions with our premier relationship-based service model, we continue to compete effectively in the Commercial and Consumer Banking segments of our business.
+Added: This level of service and commitment is particularly impactful because of our strong community presence with over 90 years of service, providing us a competitive advantage with such customers over certain competitors that are not traditional banks.
+Added: Overall, our customers are influenced by the convenience, solution-based service from our knowledgeable staff and personal contacts, as well as the robust availability of our diverse products and services.
+Added: We provide such convenience through our multi-channel delivery system, including more than 200 branch offices, an extensive ATM network, and our telephone, on-line and digital banking systems.
+Added: We continually review our pricing, products, locations, alternative delivery channels and various acquisition prospects, and periodically engage in discussions regarding possible acquisitions to maintain and enhance our competitive position.
Operating Segments
−Removed: Our operating segments are reassessed by management, at least on an annual basis, to ensure the proper identification and reporting of our operating segments.
−Removed: Valley re-evaluated its segment reporting during the second quarter 2022 to consider the Bank Leumi USA acquisition on April 1, 2022, along with other factors, including changes in the internal structure of operations, discrete financial information reviewed by key decision-makers, balance sheet management strategies and personnel.
−Removed: As a result, Valley currently reports the results of its operations and manages its business through three operating segments:
−Removed: Commercial Banking, Consumer Banking and Treasury and Corporate Other.
−Removed: Valley’s Wealth Management and Insurance Services Division, comprised of trust, asset management, insurance and tax credit advisory services, is a reporting unit within the consumer banking segment.
+Added: Our business strategies, operations and reporting structures are reassessed by management, at least on an annual basis, to ensure the proper identification and reporting of our operating segments.
+Added: In addition to our annual assessment, Valley re-evaluated its segment reporting during the second quarter 2022 to consider the Bank Leumi USA acquisition on April 1, 2022, along with other factors, including changes in the internal structure of operations, discrete financial information reviewed by key decision-makers, balance sheet management strategies and personnel.
+Added: As a result, Valley currently manages its business operations under operating segments consisting of Consumer Banking and Commercial Banking.
+Added: Activities not assigned to the operating segments are included in Treasury and Corporate Other.
+Added: Valley’s Wealth Management and Insurance Services Division, comprised of asset management, brokerage, trust, insurance and tax credit advisory services, is a reporting unit within the Consumer Banking segment.
See Note 21 to the consolidated financial statements for additional details, including the financial performance of our operating segments.
+Added: 2023 Form 10-K 6
Commercial Banking
1 unchanged sentence
Commercial and industrial loans totaled approximately $9.2 billion and represented 18.4 percent of the total loan portfolio at December 31, 2023.
−Removed: During 2022, we acquired $2.4 billion of commercial and industrial loans from Bank Leumi USA.
We make commercial loans to small and middle market businesses most often located in New Jersey, New York, and Florida, as well as lending on a national basis within our specialty lines of business.
−Removed: A significant proportion of Valley’s commercial and industrial loan portfolio is granted to long-standing customers of proven ability, strong repayment performance, and high character.
+Added: A significant portion of Valley’s commercial and industrial loan portfolio consists of loans to long-standing customers of proven ability, strong repayment performance, and high character.
Underwriting standards are designed to assess the borrower’s ability to generate recurring cash flow sufficient to meet the debt service requirements of loans granted.
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Working capital advances are generally used to finance seasonal requirements and are repaid at the end of the cycle.
−Removed: Short-term commercial business loans may be collateralized by a lien on accounts receivable, inventory, equipment and/or partly collateralized by real estate.
+Added: Short-term commercial business loans may be collateralized by a lien on accounts receivable, inventory or equipment and/or partly collateralized by real estate.
Short-term loans may also be made on an unsecured basis based on a borrower’s financial strength and past performance.
1 unchanged sentence
Unsecured loans, when made, are generally granted to the Bank’s most creditworthy borrowers.
−Removed: Unsecured commercial and industrial loans totaled $555.3 million (including $33.6 million of SBA guaranteed PPP loans) at December 31, 2022.
+Added: Unsecured commercial and industrial loans totaled $1.3 billion at December 31, 2023.
In addition, we provide financing to the health care and industrial equipment leasing market through our leasing subsidiary, Highland Capital Corp.
−Removed: Valley National Bank is a certified SBA lender and originated $3.2 billion in Paycheck Protection Program (PPP) loans authorized by the CARES Act during 2020 and 2021.
−Removed: The approximate 21,500 PPP loans to local businesses provided critical funding during an unprecedented economic crisis caused by the COVID-19 pandemic.
−Removed: Valley supported small businesses throughout the entire PPP process including assistance with the subsequent PPP loan forgiveness process.
−Removed: At December 31, 2022, Valley had $33.6 million of PPP loans that remained outstanding as compared to $436.0 million at December 31, 2021.
Commercial real estate loans.
Commercial real estate and construction loans totaled $32.0 billion and represented 63.7 percent of the total loan portfolio at December 31, 2023.
−Removed: During 2022, we acquired $3.1 billion of commercial real estate loans from Bank Leumi USA.
+Added: The following table presents the commercial real estate portfolio by loan type and the percent of each loan type to total loans at December 31, 2023 and 2022:
+Added: Balance Outstanding Percent of Loan Category to Total Loans Balance Outstanding Percent of Loan Category to Total Loans
+Added: ($ in thousands)
+Added: Commercial real estate:
+Added: Non owner-occupied $ 15,078,464 30.0 % $ 13,552,024 28.9 %
+Added: Multifamily *
+Added: 8,860,219 17.7 7,929,118 16.8
+Added: Owner occupied 4,304,556 8.6 4,250,891 9.1
+Added: Total $ 28,243,239 56.3 % $ 25,732,033 54.8 %
+Added: Construction 3,726,808 7.4 3,700,835 7.9
+Added: Total commercial real estate loans $ 31,970,047 63.7 % $ 29,432,868 62.7 %
+Added: * Includes approximately $421 million of loans collateralized by fully rent regulated multifamily properties at December 31, 2023.
We originate commercial real estate loans that are secured by various diversified property types across the New York metropolitan area (New Jersey, New York and Pennsylvania), Florida and our other primary market footprints.
−Removed: Property types in this portfolio range from multi-family residential properties to non-owner occupied commercial, industrial/
−Removed: 2022 Form 10-K
−Removed: warehouse and retail.
−Removed: Loans are generally written on an adjustable basis with rates tied to a specifically identified market rate index.
+Added: Property types in this portfolio range from multifamily residential properties to non-owner occupied commercial, industrial/warehouse, retail and, to a much lesser extent, commercial office buildings.
+Added: Commercial real estate loans collateralized by office buildings totaled approximately $3.3 billion at December 31, 2023 with a combined weighted average loan to value ratio of 53 percent and debt service coverage ratio of 1.63.
+Added: The majority of the office properties collateralizing our portfolio are multi-tenant and dispersed geographically in Florida, Alabama, New Jersey and New York (including approximately $268.6 million of loans with properties located in Manhattan at December 31, 2023).
+Added: All commercial real estate loans are generally written on an adjustable basis with rates tied to a specifically identified market rate index.
Adjustment periods generally range between five to ten years and repayment is generally structured on a fully amortizing basis for terms up to thirty years.
2 unchanged sentences
Repayment of most loans is dependent upon the cash flow generated from the property securing the loan or the business that occupies the property.
−Removed: Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy and accordingly, conservative loan to value ratios are required at origination, as well as stress tested to evaluate the impact of market changes relating to key underwriting elements.
−Removed: The properties securing the commercial real estate portfolio represent diverse types, with most properties located within Valley’s primary markets.
+Added: Commercial real estate loans may be more adversely affected by conditions in the real estate markets or the overall economy
+Added: 2023 Form 10-K
+Added: and accordingly, conservative loan to value ratios are required at origination.
+Added: Valley also performs regular and comprehensive stress testing of the portfolio to evaluate the potential impact of market changes on loan performance.
With respect to loans to developers and builders, we originate and manage construction loans structured on either a revolving or a non-revolving basis, depending on the nature of the underlying development project.
−Removed: Our construction loans totaling approximately $3.7 billion at December 31, 2022 are generally secured by the real estate to be developed and may also be secured by additional real estate to mitigate the risk.
−Removed: During 2022, we acquired $834 million of construction loans from Bank Leumi USA.
+Added: Our construction loans are generally secured by the real estate to be developed and may also be secured by additional real estate to mitigate the risk.
Within our construction portfolio, we have a diverse mix of both residential (for sale and rental) and commercial development projects.
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Appraisals and valuations of real estate collateral are contracted through an approved appraisal management company.
−Removed: The appraisal management company adheres to all regulatory requirements.
−Removed: The Bank’s appraisal management policy and procedure is in accordance with regulatory requirements and guidance issued by the Bank’s primary regulator.
+Added: The appraisal management company is required to adhere to all regulatory requirements.
+Added: The Bank’s appraisal management policy and procedure complies with regulatory requirements and guidance issued by the Bank’s primary regulator.
Credit scoring, using FICO ® and other proprietary credit scoring models is employed in the ultimate, judgmental credit decision by Valley’s underwriting staff.
1 unchanged sentence
In deciding whether to originate each residential mortgage, Valley considers the qualifications of the borrower, the value of the underlying property and other factors that we believe are predictive of future loan performance.
−Removed: Valley originated first mortgages include both fixed rate and adjustable rate mortgage (ARM) products with 10-year to 30-year maturities.
+Added: Valley originated first mortgages include both fixed rate and adjustable rate mortgage products with 10-year to 30-year maturities.
The adjustable rate loans have a fixed-rate, fixed payment, introductory period of 5 to 10 years that is selected by the borrower.
Additionally, Valley originates jumbo residential mortgage loans, which are mostly fixed-rate with 30-year maturities.
−Removed: At December 31, 2022, fixed and adjustable rate jumbo residential mortgage loans totaled approximatel y $2.6 billion and $1.1 billion, respectively.
+Added: At December 31, 2023, fixed and adjustable rate jumbo residential mortgage loans totaled approximately $2.6 billion and $1.1 billion, respectively.
Interest-only (i.e., non-amortizing) residential mortgage loans within our jumbo portfolio totaled $191.4 million (or 3.44 percent of the total residential mortgage loan portfolio) at December 31, 2023.
6 unchanged sentences
Automobile originations (including light truck and sport utility vehicles) are largely produced via indirect channels, originated through approved automobile dealers.
−Removed: Our indirect auto lending model in Florida and Alabama uses New Jersey based underwriting and loan servicing platform.
−Removed: The Florida auto dealer network generated approximately $134.1 million and $143.6 million of auto loans in 2022 and 2021, respectively, while the auto loans originated from Alabama totaled $29.5 million in 2022 as compared to $49.4 million in 2021.
−Removed: Home equity lending consists of both fixed and variable interest rate products
−Removed: 2022 Form 10-K
−Removed: mainly to provide home equity loans to our residential m ortgage customers or take a secondary position to another lender’s first lien position within the footprint of our primary lending territories.
+Added: Home equity lending consists of both fixed and variable interest rate products mainly to provide home equity loans to our residential m ortgage customers or take a secondary position to another lender’s first lien position within the footprint of our primary lending territories.
We generally will not exceed a combined (i.e., first and second mortgage) loan-to-value ratio of 80 percent when originating a home equity loan.
−Removed: Other consumer loans include direct consumer term loans, both secured and unsecured, but are largely comprised of personal lines of credit secured by cash surrender value of life insurance.
+Added: Other consumer loans include direct consumer term loans, both secured and unsecured, but are largely comprised of personal lines of credit secured by the cash surrender value of life insurance.
The product is mainly originated through the Bank’s retail branch network and third party financial advisors.
−Removed: Unsecured consumer loans totaled approximately $63.8 million, including $16.8 million of credit card loans, at December 31, 2022.
+Added: Unsecured consumer loans totaled approximately $76.6 million, including $29.1 million of credit c ard loans, at December 31, 2023.
Wealth Management.
Our Wealth Management and Insurance Services Division provides asset management advisory, brokerage, trust, commercial, personal and title insurance, and tax credit advisory services.
−Removed: Asset management advisory services include investment services for individuals and small to medium sized businesses, trusts and custom-tailored investment strategies designed for various types of retirement plans.
−Removed: Our brokerage services mainly facilitate the buying and selling of registered securities for banking clients.
+Added: Asset management advisory services include investment services for individuals and small to medium sized businesses, trusts and investment strategies designed for various investment profiles and objectives.
+Added: Our brokerage services mainly facilitate the buying and selling of securities for
+Added: 2023 Form 10-K 8
+Added: banking customers.
Trust services include living and testamentary trusts, investment management, custodial and escrow services, and estate administration primarily to individuals.
2 unchanged sentences
Although we are primarily focused on our lending and wealth management services, a large portion of our income is generated through investments in various types of securities.
−Removed: 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.
+Added: Treasury and Corporate Other largely consists of the Treasury managed HTM and AFS 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.
As of December 31, 2023, our total investment securities and interest bearing deposits with banks were $5.1 billion and $607.1 million, respectively.
1 unchanged sentence
Changes in Loan Portfolio Composition
−Removed: At December 31, 2022 and 2021, approximately 75 percent of Valley’s gross loans totaling $46.9 billion and $34.2 billion, respectively, consisted of commercial real estate (including construction loans), residential mortgage and home equity loans.
−Removed: The remaining 25 percent at both December 31, 2022 and 2021, respectively, consisted of loans not collateralized by real estate.
+Added: At December 31, 2023 and 2022, approximately 76 percent and 75 percent of Valley’s gross loans totaling $50.2 billion and $46.9 billion, respectively, consisted of commercial real estate (including construction loans), residential mortgage and home equity loans.
+Added: The remaining 24 percent and 25 percent December 31, 2023 and 2022, respectively, consisted of loans not collateralized by real estate.
Valley has no internally planned changes that would significantly impact the current composition of our loan portfolio by loan type.
−Removed: However, we have continued to diversify the types of borrowers within our geographic concentrations in New Jersey, the New York City metropolitan area, including Westchester County, New York, and Florida.
+Added: However, we have recently focused greater efforts on commercial and industrial loan and owner-occupied commercial real estate loan growth with a de-emphasis on growth in other types of commercial real estate lending.
+Added: We also continue to diversify the types of borrowers within our geographic concentrations in New Jersey, the New York City metropolitan area, including Westchester County, New York, and Florida.
Many external factors outlined in Item 1A.
3 unchanged sentences
MD&A in this Report for further discussion of our loan composition and concentration risks.
−Removed: The following table presents the loan portfolio and loans held for sale by segments by state and our percentage of total loans by state at December 31, 2022.
−Removed: Loan Portfolio and Loans Held for Sale by Segment:
+Added: The following table presents the loan portfolio and loans held for sale by state and the percentage of total loans by state at December 31, 2023.
Commercial and Industrial Commercial
−Removed: Real Estate Residential Consumer Total % of Total
+Added: Real Estate Residential Consumer Total Loans
New York $ 2,161,270 $ 10,514,010 $ 1,496,950 $ 1,037,073 $ 15,209,303 30 %
6 unchanged sentences
Total $ 9,230,543 $ 31,980,047 $ 5,589,650 $ 3,440,695 $ 50,240,935 100 %
−Removed: Loans held for sale, at fair value — — 18,118 — 18,118
+Added: Loans held for sale — 10,000 20,640 — 30,640
Total loan portfolio $ 9,230,543 $ 31,970,047 $ 5,569,010 $ 3,440,695 $ 50,210,295
−Removed: 2022 Form 10-K
Risk Management
4 unchanged sentences
Liquidity risk is the risk that we will be unable to fund obligations to loan customers, depositors or other creditors at a reasonable cost.
−Removed: Valley’s Board performs its risk oversight function primarily through several standing committees, including the Risk Committee, all of which report to the full Board.
−Removed: The full Board regularly engages in discussions of risk management and receives reports on risk factors from our executive management, other Company officers and the chair of the Risk Committee.
+Added: The Board performs its risk oversight function primarily through several standing committees, including its Risk Committee, all of which report to the Board.
+Added: The Board regularly engages in discussions of risk management and receives reports on risk factors from our executive management, other members of management and the chair of the Risk Committee.
The Risk Committee assists the Board with, among other things, oversight of management's established enterprise-wide risk management framework and risk culture which are intended to align with Valley’s strategic plan and which the Risk Committee deems appropriate for Valley’s capital, business activities, size and risk appetite.
−Removed: Management utilizes the enterprise-wide risk management framework to holistically manage and monitor risks across the organization and to aggregate and manage the risk appetite approved by the board.
−Removed: As part of the risk management framework, the Risk Committee reviews and recommends to the Board risk tolerances and limits for strategic, credit, interest rate, price, liquidity, compliance, operational (including cyber and information security risk), and reputation risks, oversees risk management within those tolerances and monitors compliance with applicable laws and regulations.
+Added: Management utilizes the enterprise-wide risk
+Added: 2023 Form 10-K
+Added: management framework to holistically manage and monitor risks across the organization and to aggregate and manage the risk appetite approved by the Board.
+Added: As part of the risk management framework, the Risk Committee reviews and recommends to the Board risk tolerances and limits for strategic, credit, interest rate, price, liquidity, compliance, operational (including information security and cybersecurity risk), and reputation risks, oversees risk management within those tolerances and monitors compliance with applicable laws and regulations.
With guidance from and oversight by the Risk Committee, management continually refines and enhances its risk management policies, procedures and monitoring programs to be able to adapt to changing risks.
2 unchanged sentences
The results of the internal stress tests are considered in combination with other risk management and monitoring practices at Valley to maintain an overall risk management program.
−Removed: Cyber Security
−Removed: Information security is a significant operational risk for Valley.
−Removed: Information security includes the risk of losses resulting from cyber-attacks.
−Removed: Valley frequently experiences attempted cyber security attacks against its systems as described in Item 1A.
−Removed: To date, there have been no incidents that have resulted in material losses or significant disruption of services to our customers.
−Removed: Over the last several years, we have continued to significantly increase the resources dedicated to cybersecurity.
−Removed: We believe that further increases are likely to be required in the future, in anticipation of increases in the sophistication and persistence of cyber-attacks.
−Removed: We employ personnel dedicated to overseeing the infrastructure and systems necessary to defend against cyber security incidents.
−Removed: Senior management is briefed on information and cyber security matters, preparedness and any incidents requiring a response.
−Removed: Valley’s Board, through its Risk Committee, has primary oversight responsibility for information security and receives regular updates and reporting from management on information and cyber security matters, including information related to any third-party assessments of Valley’s cyber program.
−Removed: Management regularly updates Valley’s information security policies to address these matters and are presented to the Risk Committee for approval.
−Removed: We may be required to expend significant additional resources to modify our protective measures, to investigate and remediate vulnerabilities or other exposures and if we experience a cyber security breach of customer data, to make required notifications to customers and disclosure to government officials.
−Removed: As a result, cyber security and the continued development and enhancement of the controls and processes designed to protect our systems, computers, software, data and networks from attack, damage or unauthorized access is a high priority for us.
−Removed: While we have confidence in our cyber security practices and personnel, we also know we are not immune from a costly and successful attack.
+Added: Information security is also a significant operational risk for Valley.
+Added: The Board, through its Risk Committee, has primary oversight responsibility for information security and receives regular updates and reporting from management on information security and cybersecurity matters, including material cybersecurity risks and mitigation strategies and information related to any third-party assessments of Valley’s cybersecurity program.
+Added: Risk Factors for a further discussion of risks related to cybersecurity and Item 1C.
+Added: Cybersecurity for a further discussion of risk management strategies and governance processes related to cybersecurity.
Credit Risk Management and Underwriting Approach
1 unchanged sentence
For all loan types, we adhere to a credit policy designed to minimize credit risk while generating the maximum income given the level of risk appetite.
−Removed: Management reviews and approves these policies and procedures on a regular basis with subsequent approval by the Board of Directors annually.
−Removed: Credit authority relating to a significant dollar percentage of the overall portfolio is centralized and controlled by the Credit Risk Management Division and by a Credit Committee.
+Added: Management reviews and approves these policies and procedures on a regular basis with subsequent approval by the Board annually.
+Added: Credit authority relating to a significant dollar percentage of the overall portfolio is centralized and controlled by the Credit Risk Management Division and by a Management Credit Committee.
A reporting system supplements the review process by providing management with frequent reports concerning loan production, loan quality, internal loan classifications, concentrations of credit, loan delinquencies, non-performing and potential problem loans.
Loan portfolio diversification is an important factor utilized by us to manage the portfolio’s risk across business sectors, geographic markets and through cyclical economic circumstances.
−Removed: 2022 Form 10-K
Our historical and current loan underwriting practice prohibits the origination of payment option adjustable residential mortgages which allow for negative interest amortization and subprime loans.
2 unchanged sentences
Loan underwriting and loan documentation .
−Removed: Loan approvals are well documented in accordance with specific and detailed underwriting policies and verification procedures.
+Added: Loan approvals are documented in accordance with specific and detailed underwriting policies and verification procedures.
General underwriting guidance is consistent across all loan types with possible variations in procedures and due diligence dictated by specific loan requests.
6 unchanged sentences
commercial or residential real estate;
−Removed: general business assets including working assets such as accounts receivable, inventory, or fixed assets such as equipment or rolling stock;
+Added: general business assets including working assets such as accounts receivable or inventory, or fixed assets such as equipment or rolling stock;
marketable securities or other forms of liquid assets such as bank deposits or cash surrender value of life insurance;
or other assets wherein adequate protective value can be established and/or verified by reliable outside independent appraisers.
−Removed: In addition to these types of collateral, we, in many cases, will obtain the personal guarantee of the borrower’s principals or an affiliated corporate entity to mitigate the risk of certain commercial and industrial loans and commercial real estate loans.
+Added: In addition to these types of collateral, we, in many cases, will obtain the personal guarantee of the borrower’s principals or an affiliated corporate entity to mitigate the risk associated with certain commercial and industrial loans and commercial real estate loans.
Valley does not accept crypto assets as loan collateral.
1 unchanged sentence
Credit granted to these entities and the ultimate repayment of such loans is primarily based on the cash flow generated from the property securing the loan or the business that occupies the property.
−Removed: The underlying real property securing the loans is considered a secondary source of repayment, and normally such loans are also supported by guarantees of the legal entity members.
+Added: The underlying real property securing the loans is considered a secondary source of repayment, and normally such loans are also supported by guarantees of the legal entity
+Added: 2023 Form 10-K 10
Absent such guarantees or approval by our credit committee, our commercial real estate underwriting guidelines require that the loan to value ratio (at origination) should not exceed 60 percent, except for certain low risk loan categories where the loan to value ratio requirement may be higher, based on the estimated market value of the property as established by an independent licensed appraiser.
−Removed: Reevaluation of collateral values .
−Removed: Commercial loan renewals, refinancings and other subsequent transactions that include the advancement of new funds or result in the extension of the amortization period beyond the original term, require a new or updated appraisal.
−Removed: Renewals, refinancings and other subsequent transactions that do not include the advancement of new funds (other than for reasonable closing costs) or, in the case of commercial loans, the extension of the amortization period beyond the original term, do not require a new appraisal unless management believes there has been a material change in market conditions or the physical aspects of the property which may negatively impact the collectability of our loan.
+Added: Reevaluation of collateral .
+Added: Commercial loan renewals, re-financings and other subsequent transactions that include the advancement of new funds or result in the extension of the amortization period beyond the original term, require a new or updated appraisal.
+Added: Renewals, re-financings and other subsequent transactions that do not include the advancement of new funds (other than for reasonable closing costs) or, in the case of commercial loans, the extension of the amortization period beyond the original term, do not require a new appraisal unless management believes there has been a material change in market conditions or the physical aspects of the property which may negatively impact the collectability of our loan.
In general, the period of time an appraisal continues to be relevant will vary depending upon the circumstances affecting the property and the marketplace.
−Removed: Examples of factors that could cause material changes to reported values include the passage of time, the volatility of the local market, the availability of financing, the inventory of competing properties, new improvements to, or lack of maintenance of, the subject or competing surrounding properties, changes in zoning and environmental contamination.
+Added: Examples of factors that could cause material changes to reported values include re-appraisal triggered by events such as credit renewal, modification or loan deterioration;
+Added: the volatility of the local market;
+Added: the availability of financing;
+Added: the inventory of competing properties;
+Added: new improvements to, or lack of maintenance of;
+Added: the subject or competing surrounding properties;
+Added: changes in zoning and environmental contamination.
Certain collateral dependent loans are reported at the fair value of the underlying collateral (less estimated selling costs) if repayment is expected solely from the collateral and are commonly referred to as “collateral dependent loans.” Commercial real estate loans are collateralized by real estate and construction loans are generally secured by the real estate to be developed and may also be secured by additional real estate or other collateral to mitigate the risk.
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However, certain residential mortgage loans may be originated for sale and sold without new appraisals when the investor (Fannie Mae or Freddie Mac) accepts a refinance of an existing government sponsored enterprise loan without the benefit of a new appraisal.
−Removed: Additionally, all loan types are assessed for full or partial
−Removed: 2022 Form 10-K
−Removed: charge-off when they are between 90 and 120 days past due (or sooner when the borrowers’ obligation has been released in bankruptcy) based upon their estimated net realizable value.
+Added: Additionally, all loan types are assessed for full or partial charge-off when they are between 90 and 120 days past due (or sooner when the borrowers’ obligation has been released in bankruptcy) based upon their estimated net realizable value.
See Note 1 to our consolidated financial statements for additional information concerning our loan portfolio risk elements, credit risk management and our loan charge-off policy.
3 unchanged sentences
Additionally, on a case-by-case basis, we may extend, restructure, or otherwise modify the terms of existing loans from time to time to remain competitive and retain certain profitable customers, as well as assist customers who may be experiencing financial difficulties.
−Removed: If the borrower is experiencing financial difficulties and a concession has been made at the time of such modification, the loan is classified as a troubled debt restructured loan (TDR).
−Removed: The majority of the concessions made for TDRs involve an extension of the term of the loan without a corresponding adjustment to the risk premium reflected in the interest rate, lowering the monthly payments on loans through either a reduction in interest rate below a market rate or a combination of these two methods.
−Removed: Concessions rarely result in the forgiveness of principal or accrued interest.
+Added: All modified loans are reported as such by type of modification unless the modification results in the creation of a new loan.
+Added: In certain cases, a modification may be related to loan(s) with an elevated risk profile and/or delinquent payment(s).
+Added: These modifications rarely result in the forgiveness of principal or accrued interest.
In addition, Valley frequently obtains additional collateral or guarantor support when modifying such loans.
−Removed: If the borrower has demonstrated performance under the previous terms and Valley’s underwriting process shows the borrower has the capacity to continue to perform under the restructured terms, the loan will continue to accrue interest.
−Removed: Non-accruing restructured loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible.
+Added: If the borrower has demonstrated performance under the previous terms and Valley’s underwriting process shows the borrower has the capacity to continue to perform under the modified terms, the loan will continue to accrue interest.
+Added: Non-accruing modified loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible.
+Added: See Note 1 and Note 5 to our consolidated financial statements for additional information.
Extension of Credit to Past Due Borrowers
Loans are placed on non-accrual status generally when they become 90 days past due and the full and timely collection of principal and interest becomes uncertain.
−Removed: Valley prohibits the advancement of additional funds on non-accrual loans, TDRs and CARES Act loan modifications, except under certain workout plans if such extension of credit is intended to mitigate losses.
+Added: Valley prohibits the advancement of additional funds on non-accrual loans, except under certain workout plans if such extension of credit is intended to mitigate losses.
+Added: 2023 Form 10-K
Allowance for Credit Losses
−Removed: We maintain an allowance for credit losses (ACL) for financial assets measured at amortized cost.
−Removed: The ACL consists of the allowance for loan losses and unfunded loan commitments (combined the “allowance of credit losses for loans”), and the allowance for credit losses for held to maturity securities.
−Removed: The estimate of expected credit losses under the current expected credit losses (CECL) methodology adopted on January 1, 2020 is based on relevant information about the past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts.
+Added: We maintain an ACL for financial assets measured at amortized cost.
+Added: The ACL consists of the allowance for loan losses and unfunded loan commitments (together, the “allowance of credit losses for loans”), and the allowance for credit losses for HTM securities.
+Added: The estimate of expected credit losses under the CECL methodology is based on relevant information about the past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts.
Our CECL methodology to estimate the allowance for loan losses has two components:
−Removed: (i) a collective reserve component for estimated lifetime 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, TDR, and expected TDR loans.
+Added: (i) a collective reserve component for estimated lifetime 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.
+Added: 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 cr edit .
The allowance for unfunded credit commitments mainly consists of undisbursed non-cancellable lines of credit, new loan commitments and commercial standby letters of credit valued using a similar methodology as used for loans.
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Management's estimate of expected losses inherent in these off-balance sheet credit exposures also incorporates estimated utilization rate over the commitment's contractual period or an expected pull-through rate for new loan commitments.
−Removed: 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.
+Added: To measure the expected credit losses on HTM debt securities that have loss expectations, Valley estimates the expected credit losses using a discounted cash flow model developed by a third-party.
The amount of ACL is based on ongoing, quarterly assessments by management.
3 unchanged sentences
We generally do not purchase other types of loans.
−Removed: The loan purchase decision is usually based on several factors, including current loan origination volumes, market interest rates, excess liquidity, our continuous efforts to meet the credit needs of certain borrowers under the Community Rein vestment Act (CRA), as well as other asset/liability management strategies.
−Removed: Valley purchased approximately $36.6 million and $58.3 million of 1-4 family loans, qualifying for CRA purposes during 2022 and 2021, respectively.
+Added: The loan purchase decision is usually based on several factors, including current loan origination volumes, market interest rates, excess liquidity, our continuous efforts to meet the credit needs of certain borrowers under the CRA, as well as other asset/liability management strategies.
+Added: Valley purchased approximately $25.4 million an d $36.6 million of 1-4 family loans qualifying for CRA purposes during 2023 and 2022, respectively.
All purchased loans are selected using Valley’s normal underwriting criteria at the time of purchase, or in some cases guaranteed by third parties.
1 unchanged sentence
Additionally, each purchased participation loan is stress-tested by Valley to assure its credit quality.
−Removed: 2022 Form 10-K
Purchased commercial loans (including commercial and industrial and commercial real estate participation loans) and residential mortgage loans totaled approximately $2.0 billion and $516.9 million , respectively, at December 31, 2023 representing 5.0 percent and 9.3 percent of our total commercial and residential mortgage loans, respectively.
−Removed: At December 31, 2022, 2.7 percent of commercial loans originated by third parties were past due 30 days or more, which represented 9.5 percent of our total commercial loan portfolio delinquencies, and 2.7 percent of residential mortgage loans originated by third parties were past due 30 days or more which represented 28.2 percent of our total residential mortgage portfolio delinquencies.
+Added: At December 31, 2023, less than 1 percent of commercial loans originated by third parties were past due 30 days or more, which represented 1.4 percen t of our total commercial loan portfolio delinquencies, and 3.4 percent of residential mortgage loans originated by third parties were past due 30 days or more which represente d 27.0 percent of our total residential mortgage portfolio delinquencies.
Additionally, Valley has performed credit due diligence on the majority of the loans acquired in its bank acquisitions (disclosed under the “Recent Acquisitions” section above) in determining their fair value as of the acquisition date.
See the “Loan Portfolio” section of our MD&A of this Report below for additional information.
−Removed: Valley National Bank is one of the largest commercial banks headquartered in New Jersey, with its top markets located in northern and central New Jersey, the New York City boroughs of Manhattan, Brooklyn and Queens, Long Island, Westchester County, New York, Florida and Alabama.
−Removed: Valley ranked 16th in competitive ranking and market share based on the deposits reported by 162 FDIC-insured financial institutions in the New York, Northern New Jersey and Long Island deposit markets as of June 30, 2022.
−Removed: The FDIC also ranked Valley 6th, 27th, 17th, and 16th in the states of New Jersey, New York, Florida, and Alabama, respectively, based on deposit market share as of June 30, 2022.
−Removed: While our FDIC rankings reflect a solid foundation in our primary markets, the market for banking and bank-related services is highly competitive and we face substantial competition in all areas of our operations from a variety of different competitors, many of which are larger and may have more financial resources than Valley to deal with the potential negative changes in the financial markets and regulatory landscape.
−Removed: Many of these competitors may have fewer regulatory co nstraints, greater resources and lending limits than we, have greater name recognition and market presence that benefit them in attracting business, and offer certain services that we do not or cannot provide.
−Removed: In addition, larger competitors may be able to price loans and deposits more aggressively than we do.
−Removed: Valley competes with other providers of financial services such as commercial and savings banks, savings and loan associations, credit unions, money market and mutual funds, mortgage companies, title agencies, asset managers, insurance companies, and a large list of other local, regional and national institutions which offer financial services.
−Removed: We compete by offering quality products and innovative services at competitive prices, and by maintaining our products and services offerings to keep pace with customer preferences in the market areas in which we operate.
−Removed: Further, the financial services industry is facing a wave of digital disruption from financial technology (fintech) companies and other large financial services providers.
−Removed: The financial services industry is continually undergoing rapid technological change with frequent introductions of new, technology-driven products and services which increases efficiency and enables financial institutions to better serve customers and to reduce costs.
−Removed: These competitors provide innovative digital solutions to traditional retail banking services and products.
−Removed: Additionally, fintech companies tend to have stronger operating efficiencies and fewer regulatory burdens than their traditional bank counterparts, including Valley.
−Removed: We also face intense competition from direct banks because online banking provides customers the ability to rapidly deposit and withdraw funds and open and close accounts making the transaction experience more efficient.
−Removed: Nevertheless, we believe we can compete effectively by utilizing various strategies and product offerings including our long history of local, solutions-based customer service.
−Removed: This level of service and commitment is particularly impactful because of our strong community presence with over 90 years of service, providing us a competitive advantage with such customers over certain non-traditional bank competitors.
−Removed: Overall, our customers are influenced by the convenience, solution-based service from our knowledgeable staff and personal contacts, as well as availability of products and services.
−Removed: We provide such convenience through our multi-channel delivery system, including more than 200 branch offices, an extensive ATM network, and our telephone, on-line and digital banking systems.
−Removed: We continually review our pricing, products, locations, alternative delivery channels and various acquisition prospects, and periodically engage in discussions regarding possible acquisitions to maintain and enhance our competitive position.
−Removed: 2022 Form 10-K
Human Capital
−Removed: We strive to build an inclusive, diverse, and high-performing culture where empowered associates, innovation and collaboration thrive.
−Removed: We are a customer-centric organization committed to our associates, our customers, and our shareholders.
+Added: We strive to foster an inclusive, diverse, and high-performing culture where empowered associates, innovation and collaboration thrive.
+Added: We are a customer-centric organization committed to our associates, customers, and shareholders.
Demographics.
−Removed: As of December 31, 2022, Valley National Bank and its subsidiaries employed 3,826 full and part time employees across our multi-state footprint.
+Added: As of December 31, 2023, Valley employed 3,749 full and part time employees across our multi-state footprint.
During the year 2023, we hired 726 employees, and our voluntary turnover rate was 14 percent.
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Diversity, Equity and Inclusion.
−Removed: We embrace and value our inclusive culture of belonging that celebrates unique perspectives and experiences.
−Removed: We leverage our strong and inclusive culture to provide quality service to our customers, the communities in which we operate and each other.
−Removed: We remain focused on one guiding principle - we all belong at Valley.
−Removed: This vision drives our Associate Resource Group Program (ARG Program), which is open to every Valley associate and our Diversity Equity and Inclusion (DEI) Governance Framework.
−Removed: Within this framework, we strive to enhance our ability to bring new ideas to the table, raise new questions, innovate our practices and products, and strengthen our connections with our communities.
−Removed: This structure includes the DEI Leadership Advisory Council, chaired by our CEO, which is charged with maintaining Valley’s commitment to DEI and ensuring that these principles are part of Valley’s business practices and policies.
+Added: Our inclusive culture of belonging aims to provide a foundation to fully leverage the rich tapestry of our associates’ unique perspectives and experiences.
+Added: Our strong and inclusive culture allows us to provide quality service to our customers, the communities in which we operate and each other.
+Added: We remain focused on our guiding principle—we all belong at Valley.
+Added: This vision drives our Associate Resource Group (ARG) Program, which is open to every associate, and our DEI Governance Framework.
+Added: Within this framework, we strive to enhance our ability to bring new ideas to
+Added: 2023 Form 10-K 12
+Added: the table, raise new questions, innovate our practices and products, and strengthen our connections with our communities.
+Added: The DEI Governance Framework includes the DEI Leadership Advisory Council, chaired by our CEO, which is charged with maintaining Valley’s commitment to DEI and ensuring that these principles are part of Valley’s business practices and policies.
As of December 31, 2023, the population of our workforce broken down by diversity and gender was as follows, based on information voluntarily provided by our workforce:
−Removed: In comparison to the percentages shown above, the diversity of the population of our workforce was relatively unchanged from one year ago, whereas of December 31, 2021, 63 percent and 37 percent identified as Female and Male, respectively.
Total Rewards.
We offer competitive total rewards programs to attract, engage, retain, and motivate talent across our footprint.
−Removed: These programs include base wages, performance-based bonus and incentive compensation, stock awards, a 401(k) Plan with a very competitive company match, healthcare and insurance benefits, voluntary benefits, commuter benefits, health savings account, flexible spending accounts, tuition reimbursement, paid time off, disability, family leave, wellness and employee assistance programs.
+Added: These programs include base wages, performance-based bonus and incentive compensation, stock awards, a 401(k) Plan with a competitive company match, healthcare and insurance benefits, voluntary benefits, commuter benefits, a health savings account, flexible spending accounts, tuition and adoption reimbursement, paid time off, disability, family leave, wellness and employee assistance programs.
Health and Safety.
Valley remains committed to the safety, health and well-being of our associates.
−Removed: Valley recently increased the duration of our paid short-term disability benefit for eligible associates dealing with personal illness.
+Added: In January 2023, Valley increased the duration of our paid short-term disability benefit for eligible associates dealing with personal illness.
Our bereavement leave was also revised to provide associates more flexibility when faced with the loss of a significant person in their life.
−Removed: Valley introduced paid parental leave to all birth, adoptive and foster parents to support bonding.
−Removed: We continue to engage with associates who request a reasonable accommodation to perform their role and promote our Employee Assistance Program.
−Removed: Valley keeps the associate contribution to our health plans low and promotes incentives offered by our insurance carriers to stay healthy and prevent chronic illness.
−Removed: Valley partners with our 401(k) plan provider to educate associates on financial wellness solutions.
−Removed: In addition to paid time off for vacation and other personal needs, Valley further encourages work-life balance by offering partial and full-time remote work arrangements and flexible work hours to many of our associates.
+Added: Valley introduced a paid parental leave to all birth, adoptive and foster parents to support bonding.
+Added: We continue to engage with associates who request a reasonable accommodation to perform their roles and promote our Employee Assistance Program.
+Added: Valley also keeps the associate contribution to our health plans low and promotes incentives offered by our insurance carriers to stay healthy and prevent chronic illness.
+Added: Valley partners with our 401(k) provider to educate associates on financial wellness solutions.
+Added: In addition to paid time off for vacation and other personal needs, Valley encourages work/life balance by offering partial and full-time remote work arrangements and flexible work hours to many of our associates.
Associates may also use two paid days off a year to volunteer their time to a cause that is important to them.
+Added: In addition, Valley recently implemented the Workplace Giving program that provides associates with the opportunity to donate to their favorite charities and double the impact through a matching contribution from Valley.
2023 Form 10-K
−Removed: Our overall purpose and goal to attract, develop and retain key and top talent within both our Talent Acquisition and Talent Development teams is crucial to all aspects of Valley's activities and long-term success and is central to our long-term strategy.
+Added: Our Talent Acquisition and Talent Development teams continue to focus on the attraction, development, and retention of key and top talent – a crucial aspect of Valley's long-term success and strategy.
We actively engage our senior business leaders in reviewing their critical roles in coordination with their strategic talent initiatives through our annual Talent Review and Succession Planning process, which has created a broader understanding of our key talent needs.
−Removed: We continue to evolve our workplace strategies that center on the people experience with a breadth of development opportunities, including our flagship Leadership Development programs, to provide meaningful experiences that challenge our high potential and high performing associates.
+Added: We continue to center our workplace strategies on the people experience, offering a variety of development opportunities - including our flagship Leadership Development and mentorship programs - to provide meaningful experiences that challenge our high potential and high performing associates.
Our goal is to enhance the core capabilities of our top talent in leadership and management skills to prepare them for future roles.
−Removed: We also continue to look to strengthen Valley’s position as an Employer of Choice by enhancing our end-to-end associate onboarding experience and leveraging our annual engagement survey results to continue to influence our culture and employee satisfaction.
+Added: We also continue to look to strengthen Valley’s position as an Employer of Choice by enhancing our end-to-end associate onboarding experience and leveraging our engagement and pulse survey results to continue to influence our culture and employee satisfaction.
Corporate Social and Environmental Responsibility
Valley recognizes the social and environmental responsibility that arises from the impact of our activities on peoples’ lives and society as a whole.
−Removed: To comply with this responsibility, we established the Environmental, Social and Governance (ESG) Council in 2020 with respect to ESG issues and issued our first ESG report in 2021.
−Removed: The Council helps guide us to consider how environmental, social and governmental issues impact Valley’s ability to achieve its long-term strategy while being socially responsible.
−Removed: Additional information regarding Valley's human capital management and corporate social and environmental responsibility can be found under “Environmental, Social and Governance (ESG) Matters” in our 2023 Proxy Statement when it is issued.
+Added: To comply with this responsibility, we established the ESG Council in 2020 with respect to ESG issues and issued our first ESG report in 2021.
+Added: The ESG Council helps guide us to consider how environmental, social and governance issues impact Valley’s ability to achieve its long-term strategy while being socially responsible.
+Added: Additional information regarding Valley's human capital management and corporate social and environmental responsibility can be found under “Environmental, Social and Governance (ESG) Matters” in our 2024 Proxy Statement when it is filed with the SEC.
Information about our Executive Officers
−Removed: 2022 Executive
Since Office Principal occupation during last five years other than Valley
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Iadanza 65 2015 President of Valley and Valley National Bank
−Removed: Hagedorn 56 2019 Senior Executive Vice President, Chief Financial Officer of Valley and Valley National Bank 2015 - 2018 Vice Chairman, UMB Financial Corporation, President and CEO, UMB Bank n.a.
+Added: Russell Barrett 48 2024 Senior Executive Vice President of Valley and Chief Operations Officer 2013 - 2020 Managing Director - BNP Paribas
Chillura 57 2020 Senior Executive Vice President of Valley and President, Commercial Banking, of Valley National Bank
−Removed: Raja Dakkuri 51 2022 Senior Executive Vice President, Chief Risk Officer of Valley and Valley National Bank 2015 - 2022 Executive at Bank Leumi USA since 2015 where he was most recently the CFO & COO
+Added: Raja Dakkuri 52 2022 Senior Executive Vice President, Chief Risk Officer of Valley and Valley National Bank 2015 - 2022 Executive at Bank Leumi USA since 2015 where he was most recently the CFO and Chief Operating Officer
+Added: Hagedorn 57 2019 Senior Executive Vice President, Chief Financial Officer of Valley and Valley National Bank
Surowiec 63 2017 Senior Executive Vice President of Valley and Chief People Officer of Valley National Bank
−Removed: Mark Saeger 58 2018 Executive Vice President of Valley and Chief Credit Officer of Valley National Bank
Crandell 53 2007 Executive Vice President, Chief Accounting Officer of Valley and Valley National Bank
−Removed: All officers serve at the pleasure of the Board of Directors.
+Added: Mark Saeger 59 2018 Executive Vice President of Valley and Chief Credit Officer of Valley National Bank
+Added: All officers serve at the pleasure of the Board.
Available Information
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We make our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and amendments thereto available on our website at www.valley.com without charge as soon as reasonably practicable after filing or furnishing them to the SEC.
−Removed: Also available on our website, are Valley’s Code of Conduct and Ethics that applies to all of our employees, including our executive officers and directors, Valley’s Audit Committee Charter, Valley’s Compensation
+Added: Also available on our website are Valley’s Code of Conduct and Ethics that applies to all
2023 Form 10-K 14
−Removed: and Human Capital Management Committee Charter, Valley’s Nominating and Corporate Governance Committee Charter, and Valley’s Corporate Governance Guidelines.
+Added: of our employees, including our executive officers, as well as non-employee directors, Valley’s Audit Committee Charter, Valley’s Compensation and Human Capital Management Committee Charter, Valley’s Nominating, Governance, and Corporate Sustainability Committee Charter, and Valley’s Corporate Governance Guidelines.
Additionally, we will provide without charge a copy of our Annual Report on Form 10-K or the Code of Conduct and Ethics to any shareholder by mail.
Requests should be sent to Valley National Bancorp, Attention:
−Removed: Shareholder Relations, 1455 Valley Road, Wayne, NJ 07470.
+Added: Shareholder Relations, 70 Speedwell Avenue, Morristown, New Jersey, 07960.
+Added: We use our website to distribute Company information, including as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD.
+Added: We routinely post and make accessible financial and other information, including ESG information, regarding the Company on our website.
+Added: Investors should monitor our website, including the Investor Relations portion of our website, in addition to our press releases, SEC filings, public conference calls and webcasts.
SUPERVISION AND REGULATION
−Removed: The banking industry is highly regulated.
−Removed: Statutory and regulatory controls increase a bank holding company’s cost of doing business and limit the options of its management to deploy assets and maximize income.
−Removed: The compliance cost for Valley is significant and subject to increase as new governmental regulations are enacted and/or the level of enforcement of those regulations increases.
−Removed: In particular, Valley employs specialists and retains outside advisors with the expectation that Valley will have sufficient resources to comply with the regulations to which it is subject.
−Removed: Certain of Valley's competitors, including credit unions, fintech companies, and others, are not regulated to the extent that Valley and other banks are, which may place Valley at a competitive disadvantage.
−Removed: The following discussion is not intended to be a complete list of all the activities regulated by the banking laws or of the impact of such laws and regulations on Valley or Valley National Bank.
−Removed: It is intended only to briefly summarize some material provisions.
+Added: The banking industry is highly regulated, and banking organizations are subject to regulation, supervision, and examination by various federal and state regulators.
+Added: The statutory and regulatory framework that governs us is intended primarily for the protection of the FDIC-insured deposits and depositors, consumers, the stability of the U.S.
+Added: banking and financial system, and the health of the national economy, rather than stockholders.
+Added: Banking laws and regulations, as well as examination and supervision, increase a bank holding company’s cost of doing business and limit the options of its management to deploy assets and maximize income.
+Added: The compliance cost for Valley is significant and subject to increase as new governmental regulations are enacted and/or the level and intensity of supervision and of enforcement increases.
+Added: In particular, Valley employs specialists and retains outside advisors with the expectation that Valley will have sufficient resources to comply with the regulations and supervision to which it is subject.
+Added: Certain of Valley’s competitors, including credit unions, fintech companies, and others, are not regulated or supervised to the extent that Valley and other banks are, which may place Valley at a competitive disadvantage.
+Added: Federal and state banking regulators regularly examine Valley and its subsidiaries to evaluate their financial condition and monitor their compliance with laws and regulatory policies.
+Added: Following those exams, Valley and the Bank are assigned supervisory ratings.
+Added: These ratings are considered confidential supervisory information and disclosure to third parties is not allowed without permission of the issuing regulator.
+Added: Violations of laws and regulations or deemed deficiencies in risk management practices may be incorporated into these supervisory ratings.
+Added: A downgrade in these ratings could limit Valley’s ability to pursue acquisitions or conduct other expansionary activities for a period of time, require new or additional regulatory approvals before engaging in certain other business activities or investments, affect a subsidiary bank’s deposit insurance assessment rate, and impose additional recordkeeping and corporate governance requirements, as well as generally increase regulatory scrutiny of Valley.
+Added: Banking and other financial services statutes, regulations, and policies are frequently under review by Congress, state legislatures, and federal and state regulatory agencies.
+Added: In addition to laws and regulations, state and federal bank regulatory agencies may issue policy statements, interpretive letters, and similar written guidance applicable to Valley and its subsidiaries.
+Added: Any change in the statutes, regulations, or regulatory policies applicable to Valley, including changes in their interpretation or implementation, could have a material effect on our business or organization.
+Added: The scope of the laws and regulations, and the intensity of the supervision to which Valley is subject, have increased in recent years, initially in response to the financial crisis, and more recently in light of other factors, including the banking turmoil in early 2023, technological factors, market changes and climate change concerns, and as a result, Valley may face increased scrutiny and possible denials of bank mergers and acquisitions by federal bank regulators.
+Added: Regulatory enforcement and fines have also increased across the banking and financial services sector.
+Added: Valley expects that its business will remain subject to extensive regulation and supervision.
+Added: The following discussion describes certain elements of the comprehensive regulatory framework applicable to Valley and the Bank.
+Added: These descriptions do not summarize all laws and regulations applicable to Valley, the Bank, or Valley’s other subsidiaries.
Bank Holding Company Regulation
Valley is a bank holding company within the meaning of the BHC Act.
−Removed: As a bank holding company, Valley is supervised by the FRB and is required to file reports with the FRB and provide such additional information as the FRB may require.
+Added: As a bank holding company, Valley is supervised by the Federal Reserve and is required to file reports with the Federal Reserve and provide such additional information as the Federal Reserve may require.
In July 2021, Valley elected to be treated as a financial holding company.
−Removed: The BHC Act prohibits a bank holding company, with certain exceptions, from acquiring direct or indirect ownership or control of five percent or more of the voting shares of any company which is not a bank and from engaging in any business other than that of banking, managing and controlling banks or furnishing services to subsidiary banks, except that it may, upon application, engage in, and may own shares of companies engaged in, certain businesses found by the FRB to be so closely related to banking “as to be a proper incident thereto.” As detailed further below, a bank holding company that has elected to be treated as a financial holding company, as Valley has, may engage in a broader range of non-banking activities that are “financial in nature.” The BHC Act requires prior approval by the FRB of the acquisition by Valley of five percent or more of the voting stock of any other bank.
−Removed: Satisfactory capital ratios, Community Reinvestment Act ratings, and anti-money laundering policies are generally prerequisites to obtaining federal regulatory approval to make acquisitions.
−Removed: The policy of the FRB provides that a bank holding company is expected to act as a source of financial strength to its subsidiary bank and to commit resources to support the subsidiary bank in circumstances in which it might not do so absent that policy.
+Added: The BHC Act prohibits a bank holding company, with certain exceptions, from acquiring direct or indirect ownership or control of five percent or more of the voting shares of any company which is not a bank and from engaging in any business other than that of banking, managing and controlling banks or furnishing services to subsidiary banks, except that it may, upon
+Added: 2023 Form 10-K
+Added: application, engage in, and may own shares of companies engaged in, certain businesses found by the Federal Reserve to be so closely related to banking “as to be a proper incident thereto.” As detailed further below, a bank holding company that has elected to be treated as a financial holding company, as Valley has, may engage in a broader range of non-banking activities that are “financial in nature.” The BHC Act requires prior approval by the Federal Reserve of the acquisition by Valley of five percent or more of the voting stock of any other bank.
+Added: Satisfactory capital ratios, CRA ratings, and anti-money laundering policies as well as the absence of an enforcement action or material supervisory concerns are generally prerequisites to obtaining federal regulatory approval to make acquisitions.
+Added: Valley is required by statute to act as a source of managerial and financial strength to the Bank and to commit resources to support the Bank in circumstances in which it might not do so absent the statutory requirement.
Acquisitions through the Bank require approval of the OCC.
−Removed: The BHC Act does not place territorial restrictions on the activities of non-bank subsidiaries of bank holding companies.
As a financial holding company, Valley may engage in a broader range of non-banking activities than permitted for bank holding companies and their subsidiaries that have not elected to become financial holding companies.
6 unchanged sentences
and any activities previously found by the Federal Reserve to be so closely related to banking as to be a proper incident thereto.
−Removed: In order to maintain our status as a financial holding company, we and the Bank are expected to be well capitalized and well managed, as defined in applicable regulations and determined in part by the results of regulatory examinations, and must comply with Community Reinvestment Act obligations.
−Removed: Failure to maintain these standards may result in restrictions on our activities and may ultimately permit the Federal Reserve to take enforcement actions against us and restrict our ability to engage in activities defined to be financial in nature.
+Added: In order to maintain our status as a financial holding company, we and the Bank are expected to be well capitalized and well managed, as defined in applicable regulations and determined by the results of examinations, and must comply with CRA obligations.
+Added: Failure to maintain these standards may result in restrictions on our activities and may ultimately permit the Federal Reserve to take enforcement actions against us and restrict our ability to engage in activities defined to be financial in nature and limits on our ability to engage in new activities that are financial in nature.
Regulation of Bank Subsidiary
−Removed: Valley National Bank is subject to the supervision of, and to regular examination by, the OCC.
−Removed: Various laws and the regulations thereunder applicable to Valley and its bank subsidiary impose restrictions and requirements in many areas, including capital requirements, the maintenance of reserves, establishment of new offices, the making of loans and investments, consumer protection, employment practices, bank acquisitions and entry into new types of business.
−Removed: There are various legal
−Removed: 2022 Form 10-K
−Removed: limitations, including Sections 23A and 23B of the Federal Reserve Act, which govern the extent to which a bank subsidiary may finance or otherwise supply funds to its holding company or its holding company’s non-bank subsidiaries.
−Removed: Under federal law, no bank subsidiary may, subject to limited exceptions, make loans or extensions of credit to, or investments in the securities of, its parent or the non-bank subsidiaries of its parent (other than direct subsidiaries of such bank which are not financial subsidiaries) or take their securities as collateral for loans to any borrower.
−Removed: Each bank subsidiary is also subject to collateral security requirements for any loans or extensions of credit permitted by such exceptions.
−Removed: With the approval of the OCC, and subject to certain legal requirements, a bank may establish financial subsidiaries which may act as insurance agents, securities brokers and perform other non-banking functions.
+Added: The Bank is subject to the supervision of, and to regular examination by, the OCC.
+Added: Various laws and the regulations thereunder applicable to Valley and the Bank impose restrictions and requirements in many areas, including capital requirements, the maintenance of reserves, establishment of new offices, the making of loans and investments, consumer protection, employment practices, bank acquisitions and entry into new types of business.
+Added: There are various legal limitations, including Sections 23A and 23B of the Federal Reserve Act, which govern the extent to which the Bank may finance or otherwise supply funds to Valley or Valley’s non-bank subsidiaries.
+Added: Section 22 of the Federal Reserve Act prohibits the Bank from paying to a director, officer, attorney or employee a rate on deposits that is greater than the rate paid to other depositors on similar deposits with the Bank.
+Added: Regulation W governs and limits transactions between the Bank and Valley.
+Added: The Bank is also subject to collateral security requirements for any loans or extensions of credit permitted by such exceptions.
Capital Requirements
−Removed: The FRB and the OCC have rules establishing a comprehensive capital framework for U.S.
+Added: The Federal Reserve and the OCC have rules establishing a comprehensive capital framework for U.S.
banking organizations, referred to as the Basel III rules.
−Removed: Under Basel III, the minimum capital ratios for us and Valley National Bank are as follows:
+Added: Under Basel III, the minimum capital ratios for Valley and the Bank are as follows:
• 4.5 percent CET1 (common equity Tier 1) to risk-weighted assets.
2 unchanged sentences
• 4.0 percent Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known as the “leverage ratio”).
−Removed: Under Basel III, both Valley and Valley National Bank are required to maintain a 2.5 percent “capital conservation buffer” on top of the minimum risk-weighted asset ratios, effectively resulting in minimum ratios of (i) CET1 to risk-weighted assets of at least 7.0 percent, (ii) Tier 1 capital to risk-weighted assets of at least 8.5 percent, and (iii) total capital to risk-weighted assets of at least 10.5 percent.
+Added: Under Basel III, both Valley and the Bank are required to maintain a 2.5 percent “capital conservation buffer” on top of the minimum risk-weighted asset ratios, effectively resulting in minimum ratios of (i) CET1 to risk-weighted assets of at least 7.0 percent, (ii) Tier 1 capital to risk-weighted assets of at least 8.5 percent, and (iii) total capital to risk-weighted assets of at least 10.5 percent.
The capital conservation buffer is designed to absorb losses during periods of economic stress.
1 unchanged sentence
Basel III also provides for a number of complex deductions from and adjustments to its various capital components.
−Removed: Pursuant to the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA), each federal banking agency has promulgated regulations, specifying the levels at which a financial institution would be considered “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” or “critically undercapitalized,” and to take certain mandatory and discretionary supervisory actions based on the capital level of the institution.
−Removed: With respect to Valley National Bank, Basel III also revised the “prompt corrective action” regulations of FDICIA, by (i) introducing a CET1 ratio requirement at each capital quality level (other than critically undercapitalized);
−Removed: (ii) increasing the minimum Tier 1 capital ratio requirement for each category;
−Removed: and (iii) requiring a leverage ratio of 5 percent to be well-capitalized.
−Removed: The OCC’s regulations implementing these provisions of FDICIA provide that an institution will be classified as “well capitalized” if it (i) has a total risk-based capital ratio of at least 10.0 percent, (ii) has a Tier 1 risk-based capital ratio of at least 8.0 percent, (iii) has a CET1 ratio of at least 6.5 percent, (iv) has a Tier 1 leverage ratio of at least 5.0 percent, and (v) meets certain other requirements.
−Removed: An institution will be classified as “adequately capitalized” if it meets the aforementioned minimum capital ratios under Basel III.
−Removed: An institution will be classified as “undercapitalized” if it (i) has a total risk-based capital ratio of less than 8.0 percent, (ii) has a Tier 1 risk-based capital ratio of less than 6.0 percent, (iii) has a CET1 ratio of less than 4.5 percent or (iv) has Tier 1 leverage ratio of less than 4.0 percent.
−Removed: An institution will be classified as “significantly undercapitalized” if it (i) has a total risk-based capital ratio of less than 6.0 percent, (ii) has a Tier 1 risk-based capital ratio of less than 4.0 percent, (iii) has a CET1 ratio of less than 3.0 percent or (iv) has a Tier 1 leverage ratio of less than 3.0 percent.
−Removed: An institution will be classified as “critically undercapitalized” if it has a tangible equity to total assets ratio that is equal to or less than 2.0 percent.
−Removed: An insured depository institution may be deemed to be in a lower capitalization category if it receives an unsatisfactory examination rating.
−Removed: Similar categories apply to bank holding companies.
−Removed: Valley National Bank’s capital ratios were all above the minimum levels required for it to be considered a “well capitalized” financial institution at December 31, 2022, under the “prompt corrective action” regulations.
−Removed: For regulatory capital purposes, in accordance with the Federal Reserve Board’s final interim rule as of April 3, 2020, w e 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.
−Removed: On January 1, 2022, the deferral amount totaling $47.3 million after-tax started to be phased-in by 25 percent and will increase by 25 percent per year until fully phased-
2023 Form 10-K 16
−Removed: in on January 1, 2025.
+Added: Pursuant to the FDICIA, each federal banking agency has promulgated regulations, specifying the levels at which a financial institution would be considered “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” or “critically undercapitalized,” and to take certain mandatory and discretionary supervisory actions based on the capital level of the institution.
+Added: To be well capitalized, the bank must maintain the following capital ratios:
+Added: • Common Equity Tier 1 Capital Ratio of 6.5% or greater;
+Added: • Tier 1 Capital Ratio of 8.0% or greater;
+Added: • Total Capital Ratio of 10.0% or greater;
+Added: • Tier 1 Leverage Ratio of 5.0% or greater.
+Added: Failure to be well capitalized or to meet minimum capital requirements could result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have an adverse material effect on our operations or financial condition.
+Added: Failure to be well-capitalized or to meet minimum capital requirements could also result in restrictions on our ability to pay dividends or otherwise distribute capital or to receive regulatory approval of applications.
+Added: See the “Capital Adequacy” section of the MD&A for additional disclosure on capital adequacy.
+Added: For regulatory capital purposes, in accordance with the Federal Reserve’s final rule issued August 26, 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.
+Added: On January 1, 2022, the deferral amount totaling $47.3 million after-tax started to be phased-in by 25 percent and will increase by 25 percent per year until fully phased-in on January 1, 2025.
As of December 31, 2023, approximately $23.6 million of the $47.3 million deferral amount was recognized as a reduction to regulatory capital and, as a result, reduced our risk-based capital ratios by approximately 6 basis points.
+Added: Prompt Corrective Action
+Added: The FDICIA requires the federal bank regulatory agencies to take "prompt corrective action" regarding FDIC-insured depository institutions that do not meet certain capital adequacy standards.
+Added: A depository institution’s treatment for purposes of the prompt corrective action provisions depends upon its level of capitalization and certain other factors.
+Added: An institution that fails to remain well capitalized becomes subject to a series of restrictions that increase in severity as its capital condition weakens.
+Added: Such restrictions may include a prohibition on capital distributions, restrictions on asset growth or restrictions on the ability to receive regulatory approval of applications.
+Added: The FDICIA also provides for enhanced supervisory authority over under capitalized institutions, including authority for the appointment of a conservator or receiver for the institution.
+Added: In certain instances, a bank holding company may be required to guarantee the performance of an under capitalized subsidiary bank’s capital restoration plan.
+Added: The Bank’s capital ratios were all above the minimum levels required for it to be considered a “well capitalized” financial institution at December 31, 2023 and 2022, under the “prompt corrective action” regulations.
+Added: For further discussion of Valley and the Bank’s regulatory capital, see the “Capital Adequacy” section of the MD&A.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act)
1 unchanged sentence
Some of the effects are discussed below.
−Removed: The Dodd-Frank Act created the Consumer Financial Protection Bureau (CFPB) and shifted most of the federal consumer protection rules applicable to banks and the enforcement power with respect to such rules to the CFPB.
−Removed: Under the Durbin Amendment contained in the Dodd-Frank Act, the FRB adopted rules applying to banks with more than $10 billion in assets which established a maximum permissible interchange fee equal to no more than 21 cents plus 5 basis points of the transaction value for many types of debit interchange transactions.
−Removed: The FRB also adopted a rule to allow a debit card issuer to recover 1 cent per transaction for fraud prevention purposes if the issuer complies with certain fraud-related requirements required by the FRB.
−Removed: The FRB also has rules governing routing and exclusivity that require issuers to offer two unaffiliated networks for routing transactions on each debit or prepaid product.
+Added: Under the Durbin Amendment contained in the Dodd-Frank Act, the Federal Reserve adopted rules applying to banks with more than $10 billion in assets which established a maximum permissible interchange fee equal to no more than 21 cents plus 5 basis points of the transaction value for many types of debit interchange transactions.
+Added: The Federal Reserve also adopted a rule to allow a debit card issuer to recover 1 cent per transaction for fraud prevention purposes if the issuer complies with certain fraud-related requirements required by the Federal Reserve.
+Added: The Federal Reserve also has rules governing routing and exclusivity that require issuers to offer two unaffiliated networks for routing transactions on each debit or prepaid product.
Because we exceed $10 billion in assets, we are subject to the interchange fee cap.
+Added: On October 25, 2023, the Federal Reserve released a notice of proposed rule making that would lower the maximum interchange fee that a large debit card issuer can receive on a debit card transaction.
+Added: Under the proposal, initially the base component would decrease from 21.0 cents to 14.4 cents, the ad valorem component would decrease from 5.0 basis points to 4 basis points multiplied by the value of the transaction, and the fraud-prevention adjustment would increase from 1.0 cents to 1.3 cents for debit card transactions performed from the effective date of the final rule to June 30, 2025.
+Added: In addition, the proposal would adopt an approach for future adjustments to the interchange fee cap, which would occur every other year based on issuer cost data gathered from large debit card issuers.
+Added: We will continue to monitor the status of the proposed rule and are in the
+Added: 2023 Form 10-K
+Added: process of evaluating this proposed rule making and assessing the scale of its adverse impact on Valley and the Bank if adopted as proposed.
The Dodd-Frank Act also imposed stress testing on Valley and the Bank.
−Removed: However, the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act (the “EGRRCPA”) and a joint interagency statement regarding the impact of the EGRRCPA resulted in Valley and the Bank being no longer subject to the stress testing requirements.
+Added: However, the EGRRCPA and a joint interagency statement regarding the impact of the EGRRCPA resulted in Valley and the Bank being no longer subject to the stress testing requirements.
However, under safety and soundness principles we continue to conduct stress testing of our own design.
−Removed: The Volcker Rule (contained in the Dodd-Frank Act) prohibits an insured depository institution and its affiliates from:
−Removed: (i) engaging in certain “proprietary trading” and (ii) investing in or sponsoring certain types of funds (Covered Funds).
−Removed: The Rule also effectively prohibits most short-term trading strategies investments and prohibits the use of some hedging strategies.
−Removed: In 2021, the Volcker Rule was amended to exempt certain qualifying venture capital funds from the definition of Covered Funds.
−Removed: We identified no investments held as of December 31, 2022 that meet the definition of Covered Funds.
−Removed: Valley has invested in venture capital funds consistent with the exemption requirements.
+Added: The Volcker Rule prohibits an insured depository institution and its affiliates from:
+Added: (i) engaging in certain short-term “proprietary trading” activities, as defined in the Volcker Rule, and (ii) investing in or sponsoring certain types of “covered funds,” as defined in the Volcker Rule.
+Added: The Volcker Rule regulation contains exemptions for market-making, hedging, underwriting, trading in U.S.
+Added: government and agency obligations, and also permits certain ownership interests in certain types of covered funds to be retained.
+Added: It also permits the offering and sponsoring of covered funds under certain conditions.
Incentive Compensation
−Removed: The Dodd-Frank Act requires the federal bank regulators and the SEC to maintain guidelines prohibiting incentive-based payment arrangements at specified regulated entities, including us and our Bank, having at least $1 billion in total assets that encourage inappropriate risks by providing an executive officer, employee, director or principal stockholder with excessive compensation, fees, or benefits or that could lead to material financial loss to the entity.
−Removed: The FRB and the OCC review, as part of their regular, risk-focused examination process, the incentive compensation arrangements of banking organizations, similar to the Bank, which are not “large, complex banking organizations.” These reviews are tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements.
+Added: The federal banking agencies have issued joint guidance on incentive compensation designed to ensure that the incentive compensation policies of banking organizations, such as Valley and the Bank, do not encourage imprudent risk taking and are consistent with the safety and soundness of the organization.
+Added: The Federal Reserve and the OCC review the incentive compensation arrangements of banking organizations as part of their regular risk-focused examination process.
+Added: These reviews are tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements.
Dividend Limitations
1 unchanged sentence
Valley’s revenues (on a parent company only basis) result in substantial part from dividends paid by the Bank.
−Removed: The Bank’s dividend payments, without prior regulatory approval, are subject to regulatory limitations.
−Removed: Under the National Bank Act, without consent, a national bank may declare, in any one year, dividends only in an amount aggregating not more than the sum of its net profits for such year and its retained net profits for the preceding two years.
−Removed: In addition, the bank regulatory agencies have the authority to prohibit us from paying dividends if the supervising agency determines that such payment would constitute an unsafe or unsound banking practice.
−Removed: Among other things, consultation with the FRB supervisory staff is required in advance of our declaration or payment of a dividend to our shareholders that exceeds our earnings for the trailing four-quarter period in which the dividend is being paid.
+Added: The Bank’s dividend payments are subject to regulatory limitations.
+Added: Under the National Bank Act, without consent, a national bank may declare, in any one year, dividends only in an aggregate amount not more than the sum of its net profits for such year and its retained net profits for the preceding two years.
+Added: In addition, the bank regulatory agencies have the authority to prohibit us from paying dividends if the supervising agency determines that such payment would constitute an unsafe or unsound practice.
+Added: Among other things, consultation with the Federal Reserve supervisory staff is required in advance of our declaration or payment of a dividend to our shareholders that exceeds our earnings for the trailing four-quarter period in which the dividend is being paid.
Transactions by the Bank with Related Parties
−Removed: Valley National Bank’s authority to extend credit to its directors, executive officers and 10 percent shareholders, as well as to entities controlled by such persons (insiders), is currently governed by the requirements of the National Bank Act, Sarbanes-Oxley Act and Regulation O of the FRB thereunder.
−Removed: Among other things, these provisions require that extensions of
−Removed: 2022 Form 10-K
−Removed: credit to insiders (i) be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features and (ii) not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of the Bank’s capital.
−Removed: In addition, extensions of credit in excess of certain limits must be approved by the Bank’s Board of Directors.
−Removed: Under the Sarbanes-Oxley Act, Valley and its subsidiaries, other than the Bank under the authority of Regulation O, may not extend or arrange for any personal loans to its directors and executive officers.
−Removed: Section 22 of the Federal Reserve Act prohibits the Bank from paying to a director, officer, attorney or employee a rate on deposits that is greater than the rate paid to other depositors on similar deposits with the Bank.
−Removed: Regulation W governs and limits transactions between the Bank and Valley.
+Added: The Bank’s authority to extend credit to its directors, executive officers and 10 percent shareholders, as well as to entities controlled by such persons (insiders), is governed by the requirements of the National Bank Act, the Sarbanes-Oxley Act of 2002 and Regulation O of the Federal Reserve.
+Added: Among other things, these provisions require that extensions of credit to insiders (i) be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features and (ii) not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of the Bank’s capital.
Community Reinvestment
−Removed: Under the Community Reinvestment Act (CRA), as implemented and overseen by federal banking regulators, a national bank has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low-and moderate-income neighborhoods.
+Added: Under the CRA, as implemented and overseen by federal banking regulators, a national bank has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low-and moderate-income neighborhoods.
The CRA does not establish specific lending requirements or programs for financial institutions, nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community.
1 unchanged sentence
The CRA also requires all institutions to make public disclosure of their CRA ratings.
−Removed: Valley National Bank received an overall “outstanding” CRA rating in its most recent completed examination for the three-year period ending in 2021.
+Added: The Bank received an overall “outstanding” CRA rating in its most recent completed examination for the three-year period ending in 2021.
A bank that does not have a CRA program that is deemed "satisfactory" or better by its regulator may be prevented from making acquisitions.
−Removed: USA PATRIOT Act
−Removed: As part of the USA PATRIOT Act, Congress adopted the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001 (the “Anti Money Laundering Act”).
−Removed: The Anti Money Laundering Act authorizes the Secretary of the U.S.
+Added: 2023 Form 10-K 18
+Added: On October 24, 2023, the federal banking agencies finalized a rule to amend their regulations implementing the CRA.
+Added: The final rule would, among other things, establish a tailored framework for CRA evaluations and data collection based on bank size and business models and, for banks with over $2 billion in total assets, implement separate evaluations for retail lending, retail services and products, community development financing, and community development services.
+Added: The evaluation of retail services and products banks would also cover digital delivery systems, including online banking or mobile banking, for banks with over $10 billion in total assets, such as the Bank.
+Added: The final rule will become effective on April 1, 2024, with staggered compliance dates of January 1, 2026 and January 1, 2027.
+Added: Bank Secrecy Act (BSA)/USA PATRIOT Act
+Added: The Bank is subject to the reporting and recordkeeping requirements of the BSA and its implementing regulations.
+Added: Under the BSA, the Bank is required, among other things, to establish and maintain a BSA/AML Program with procedures reasonably designed to assure and monitor compliance with BSA regulatory requirements.
+Added: As part of the USA PATRIOT Act, Congress adopted the Anti-Money Laundering Act, which amended the BSA and introduced and expanded certain requirements.
+Added: For example, the BSA, as amended by the Anti-Money Laundering Act, requires each financial institution to:
+Added: (i) establish an anti-money laundering program;
+Added: (ii) establish due diligence policies, procedures and controls that are reasonably designed to detect and report instances of money laundering in United States private banking accounts and correspondent accounts maintained for non-United States persons or their representatives;
+Added: and (iii) avoid establishing, maintaining, administering, or managing correspondent accounts in the United States for, or on behalf of, a foreign shell bank that does not have a physical presence in any country.
+Added: In addition, the BSA, as amended, authorizes the Secretary of the U.S.
Treasury, in consultation with the heads of other government agencies, to adopt special measures applicable to financial institutions such as banks, bank holding companies, broker-dealers and insurance companies.
−Removed: Among its other provisions, the Anti Money Laundering Act requires each financial institution:
−Removed: (i) to establish an anti-money laundering program;
−Removed: (ii) to establish due diligence policies, procedures and controls that are reasonably designed to detect and report instances of money laundering in United States private banking accounts and correspondent accounts maintained for non-United States persons or their representatives;
−Removed: and (iii) to avoid establishing, maintaining, administering, or managing correspondent accounts in the United States for, or on behalf of, a foreign shell bank that does not have a physical presence in any country.
−Removed: Regulations implementing the due diligence requirements require minimum standards to verify customer identity and maintain accurate records, encourage cooperation among financial institutions, federal banking agencies, and law enforcement authorities regarding possible money laundering or terrorist activities, prohibit the anonymous use of “concentration accounts,” and require all covered financial institutions to have in place an anti-money laundering compliance program.
−Removed: The OCC, along with other banking agencies, have strictly enforced various anti-money laundering and suspicious activity reporting requirements using formal and informal enforcement tools to cause banks to comply with these provisions.
−Removed: A bank that is issued a formal or informal enforcement requirement with respect to its Anti Money Laundering program will be prevented from making acquisitions.
−Removed: Office of Foreign Assets Control Regulation (OFAC)
−Removed: Treasury Department’s OFAC administers and enforces economic and trade sanctions against targeted foreign countries and regimes, under authority of various laws, including designated foreign countries, nationals and others.
−Removed: OFAC publishes lists of specially designated targets and countries.
−Removed: We and our Bank are responsible for, among other things, blocking accounts of, and transactions with, such targets and countries, prohibiting unlicensed trade and financial transactions with them and reporting blocked transactions after their occurrence.
+Added: In 2021, Congress passed the Anti-Money Laundering Act of 2020, which amended the BSA and requires FinCEN to undertake a number of rulemakings that will update and expand the BSA’s regulatory requirements and may affect the Bank’s compliance obligations.
+Added: Regulations implementing the BSA, among other things, require covered financial institutions to implement customer identification and customer due diligence programs, including minimum standards to verify customer identity and maintain accurate records;
+Added: encourage cooperation among financial institutions, federal banking agencies, and law enforcement authorities regarding possible money laundering or terrorist activities;
+Added: prohibit the anonymous use of “concentration accounts”;
+Added: require financial institutions to identify and report suspicious transactions;
+Added: and require all financial institutions to have in place an anti-money laundering compliance program reasonably designed to ensure compliance with the BSA.
+Added: The OCC, along with other banking agencies and FinCEN, have strictly enforced various anti-money laundering and suspicious activity reporting requirements using formal and informal enforcement tools to cause banks to comply with these provisions.
+Added: A bank that is issued a formal or informal enforcement requirement with respect to its BSA/AML Program may be prevented from making acquisitions.
+Added: OFAC Regulation
+Added: Department of the Treasury’s OFAC administers and enforces economic and trade sanctions against targeted foreign countries and regimes, under authority of various laws, including designated foreign countries, nationals and others.
+Added: OFAC publishes lists of specially designated targets and issues regulations and implements executive orders that restrict dealings with certain countries and territories.
+Added: We and the Bank are responsible for, among other things, blocking accounts of, and transactions with, such targets and countries, prohibiting unlicensed trade and financial transactions with them and reporting blocked transactions after their occurrence.
Failure to comply with these sanctions could have serious legal and reputational consequences, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required.
−Removed: 2022 Form 10-K
Consumer Financial Protection Bureau Supervision
−Removed: As a financial institution with more than $10 billion in assets, Valley National Bank is supervised by the CFPB for consumer protection purposes.
−Removed: The CFPB’s regulation of Valley National Bank is focused on risks to consumers and compliance with the federal consumer financial laws and includes regular examinations of the Bank.
−Removed: The CFPB, along with the Department of Justice and bank regulatory authorities also seek to enforce discriminatory lending laws.
+Added: The Bank is subject to a variety of federal and state statutes and regulations designed to protect consumers and promote lending to various sectors of the economy and population.
+Added: The CFPB has broad rulemaking and supervisory powers under various federal consumer financial protection laws, including the laws and regulations that relate to deposit products, credit card, mortgage, automobile, student, and other consumer loans, and other consumer financial products and services offered.
+Added: The CFPB also has examination and enforcement authority with respect to consumer financial laws for depository institutions with
+Added: 2023 Form 10-K
+Added: $10 billion or more in assets, such as the Bank, including the authority to prevent unfair, deceptive or abusive practices in connection with the offering of consumer financial products or services.
+Added: The CFPB, along with the U.S.
+Added: Department of Justice and bank regulatory authorities, also seeks to enforce discriminatory lending laws.
In such actions, the CFPB and others have used a disparate impact analysis, which measures discriminatory results without regard to intent.
Consequently, unintentional actions by Valley could have a material adverse impact on our lending and results of operations if the actions are found to be discriminatory by our regulators.
−Removed: Valley National Bank is subject to federal consumer protection statutes and regulations promulgated under those laws, including, but not limited to the following:
+Added: The Bank is subject to federal consumer protection statutes and regulations promulgated under those laws, including, but not limited to the following:
• Truth-In-Lending Act and Regulation Z, governing disclosures of credit terms to consumer borrowers;
10 unchanged sentences
Insurance of Deposit Accounts
−Removed: The Bank’s deposits are insured up to applicable limits by the FDIC.
−Removed: Under the FDIC’s risk-based system, insured institutions are assigned to one of four risk categories based on supervisory evaluations, regulatory capital levels and certain other factors with less risky institutions paying lower assessments on their deposits.
−Removed: As required by the Dodd-Frank Act, the FDIC adopted rules that revise the assessment base to consist of average consolidated total assets during the assessment period minus the average tangible equity during the assessment period.
−Removed: In addition, the rules eliminated the adjustment for secured borrowings, including Federal Home Loan Bank (FHLB) advances, and made certain other changes to the impact of unsecured borrowings and brokered deposits on an institution’s deposit insurance assessment.
−Removed: The rules also revised the assessment rate schedule to provide initial base assessment rates ranging from 5 to 35 basis points and total base assessment rates ranging from 2.5 to 45 basis points after adjustment.
−Removed: The Dodd-Frank Act made permanent a $250 thousand limit for federal deposit insurance.
−Removed: Transition from London Interbank Offered Rate
−Removed: Central banks around the world, including the FRB, are working to implement the transition from the London Interbank Offered Rate (LIBOR) to replacement benchmarks including the Secured Overnight Financing Rate (SOFR) in the United
+Added: The Bank’s deposits are insured by the FDIC up to applicable limits, which are generally $250,000 per account ownership type.
+Added: The FDIC imposes a risk-based deposit premium assessment system that determines assessment rates for an insured depository institution based on an assessment rate calculator, under which insured depository institutions are assigned to one of four risk categories based on supervisory evaluations, regulatory capital levels and certain other factors with less risky institutions paying lower assessments on their deposits.
+Added: The assessment rate is applied to total average assets less tangible equity, as defined under the Dodd-Frank Act.
+Added: The assessment rate schedule can change from time to time at the discretion of the FDIC, subject to certain limits.
+Added: Under the current system, premiums are assessed quarterly.
+Added: The FDIC, as required under the FDIA, established a plan in September 2020 to restore the DIF reserve ratio to meet or exceed the statutory minimum of 1.35 percent within eight years.
+Added: This plan did not include an increase in the deposit insurance assessment rate.
+Added: Based on the FDIC’s recent projections, however, the FDIC determined that the DIF reserve ratio is at risk of not reaching the statutory minimum by the statutory deadline of September 30, 2028 without increasing the deposit insurance assessment rates.
+Added: In October 2022, the FDIC adopted a final rule to increase initial base deposit insurance assessment rate schedules by 2 basis points, beginning with the first quarterly assessment period of 2023.
+Added: The FDIC also concurrently maintained the Designated Reserve Ratio for the DIF at 2 percent.
+Added: In November 2023, the FDIC issued a final rule to implement a special assessment to recoup losses to the DIF associated with protecting uninsured depositors following the bank failures in the first half of 2023.
+Added: Under the rule, the assessment base for the special assessment is equal to an insured depository institution’s estimated uninsured deposits reported as of December 31, 2022, adjusted to exclude the first $5 billion of uninsured deposits.
+Added: The FDIC will collect the special assessment at an annual rate of approximately 13.4 basis points over eight quarterly assessment periods, beginning with the first quarter 2024.
+Added: The special assessment for the Bank resulted in a $50.3 million pre-tax charge to earnings in the fourth quarter 2023.
+Added: The FDIC retains the right to cease collection early, extend the special assessment collection period, and impose a final shortfall special
2023 Form 10-K 20
−Removed: Most tenors of LIBOR will cease being published on June 30, 2023, although some tenors ceased at the end of 2021.
−Removed: federal banking agencies issued guidance essentially requiring banking organizations to cease using LIBOR as a reference rate in new contracts by the end of 2021.
−Removed: The change away from LIBOR may have an adverse impact on the value of, return on and trading markets for a broad array of financial products, including any LIBOR-based securities, loans and derivatives that are included in our financial assets and liabilities.
−Removed: The transition away from LIBOR also required extensive changes to the contracts that govern these LIBOR-based products, as well as our systems and processes.
−Removed: The Adjustable Interest Rate (LIBOR Act), which was signed into law on March 15, 2022, provides that a LIBOR-based benchmark in any contract that contains no or inadequate “fallback provisions” will be automatically replaced, once LIBOR ceases to be published, by a benchmark replacement selected by the Federal Reserve.
−Removed: On December 16, 2022, the Federal Reserve adopted a final rule implementing the LIBOR Act that, among other things, identifies the applicable SOFR-based benchmark replacements under the LIBOR Act, for various contact types.
−Removed: The LIBOR Act pre-empts similar state laws such as the New York State statute providing for recommended benchmark replacements for contracts governed by New York law without adequate fallback provisions.
−Removed: A number of the Bank's commercial loans, certain residential mortgage loans, derivative positions, trust preferred securities issued to our capital trusts and the reset provisions for our preferred stock issuances are based upon LIBOR.
−Removed: The Bank will also be subject to changes to models and systems that currently use LIBOR reference rates, as well as market and strategic risks that could arise from the use of alternative reference rates.
−Removed: Regulators have expressed concern about litigation that could arise due to the change from LIBOR to another benchmark.
−Removed: As of December 31, 2021, Valley ceased originating any LIBOR based products.
−Removed: We continue to make significant progress on the transition away from LIBOR, as coordinated by the Bank’s working group established to facilitate the transition.
+Added: assessment if actual losses exceed the amounts collected.
+Added: Refer to the "Subsequent Events" and "Non-Interest Expense" sections of the MD&A for additional information related to the FDIC’s special assessment.
Federal Securities Laws
−Removed: Valley’s common stock is registered with the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
+Added: Valley’s common stock is registered with the SEC under the Exchange Act.
Valley is subject to the information, proxy solicitation, insider trading and other requirements and restrictions under the Exchange Act.
Broker-Dealer and Securities Regulation
−Removed: The SEC is the federal agency charged with administration of the federal securities laws in the United States.
−Removed: broker-dealer subsidiaries are subject to SEC regulations relating to their business operations, including, but not limited to sales and trading practices, capital structure, record-keeping, privacy requirements, and the conduct of directors, officers and employees.
+Added: broker-dealer subsidiaries are subject to federal securities laws relating to all aspects of their securities business operations, including, but not limited to, sales and trading practices, securities offerings, handling of customer funds, net capital levels, record-keeping, privacy requirements, and the conduct of directors, officers and employees.
Our broker-dealer subsidiaries are also subject to regulation by state securities commissions in those states in which they conduct business.
Our primary U.S.
−Removed: broker-dealer, Valley Financial Management, Inc.
−Removed: (VFM), is currently registered as a broker-dealer in most U.S.
+Added: broker-dealer, VFM, is currently registered as a broker-dealer in most U.S.
states, the District of Columbia and Puerto Rico.
−Removed: Broker-dealer supervision .
−Removed: Much of the regulation of broker-dealers in the U.S.
−Removed: has been delegated to self-regulatory organizations (SROs), such as the Financial Industry Regulatory Authority (FINRA) and securities exchanges.
−Removed: These SROs adopt and amend rules for regulating the industry, subject to the approval of government agencies.
−Removed: These SROs also conduct periodic examinations of member broker-dealers.
−Removed: The SEC, SROs and state securities regulators may conduct administrative proceedings that can result in censure, fine, suspension or expulsion of a broker-dealer, its officers, employees or other associated persons.
−Removed: Such administrative proceedings, whether or not resulting in adverse findings, can require substantial expenditures and may adversely impact the reputation of a broker-dealer.
−Removed: Securities Investor Protection Corporation .
−Removed: broker-dealer subsidiaries are subject to the Securities Investor Protection Act (SIPA) and are required by federal law to be members of the Securities Investors Protection Corporation (SIPC).
−Removed: The SIPC was established under SIPA and oversees the liquidation of broker-dealers during liquidation or financial distress.
−Removed: The SIPC fund provides protection for cash and securities held in client accounts up to $500,000 per client, with a limitation of $250,000 on claims for cash balances.
−Removed: Our broker-dealer subsidiaries are “introducing” broker-dealers and operate under SEC Rule 15c3-3(k)(2)(i) & (ii) (Customer Protection Rule).
−Removed: They do not hold customers’ funds or safekeep customer securities or clear transactions for clients;
−Removed: instead, transactions are cleared on a fully disclosed basis through a third-party broker dealer that provides clearing, custody and other ancillary services.
−Removed: Net capital requirements .
−Removed: Our broker-dealer subsidiaries are subject to certain of the SEC’s financial stability rules, including the:
−Removed: (i) net capital rule;
−Removed: (ii) record-keeping rules;
−Removed: and (iii) notification rules.
−Removed: Rule 15c3-1 of the Exchange Act (the
−Removed: 2022 Form 10-K
−Removed: “Net Capital Rule”) requires that a broker-dealer maintain minimum net capital.
−Removed: Generally, a broker-dealer’s net capital is net worth plus qualified subordinated debt less deductions for non-allowable (or non-liquid) assets and other adjustments and operational charges.
−Removed: At December 31, 2022, our broker-dealer subsidiaries were in compliance with applicable net capital requirements.
−Removed: The SEC, FINRA and other regulatory organizations impose rules that require notification when net capital falls below certain predefined thresholds.
−Removed: These rules also dictate the ratio of debt-to-equity in the regulatory capital composition of a broker-dealer, and constrain the ability of a broker-dealer to expand its business under certain circumstances.
−Removed: If a broker-dealer fails to maintain the required net capital, it may be subject to penalties and other regulatory sanctions, including suspension or revocation of registration by the SEC or applicable regulatory authorities, and suspension or expulsion by these regulators could ultimately lead to the broker-dealer’s liquidation.
−Removed: Additionally, the Net Capital Rule and certain FINRA rules impose requirements that may have the effect of prohibiting a broker-dealer from distributing or withdrawing capital and requiring prior notice to, and approval from, the SEC and FINRA for certain capital withdrawals.
−Removed: Anti-money laundering .
−Removed: Our broker-dealer subsidiaries must comply with the Bank Secrecy Act, the USA PATRIOT Act and other rules and regulations, including FINRA requirements, designed to fight international money laundering and to block terrorist access to the U.S.
−Removed: financial system.
−Removed: We are required to have systems and procedures to ensure compliance with such laws and regulations.
−Removed: Standard of care .
−Removed: Pursuant to the Dodd-Frank Act, the SEC was charged with considering whether broker-dealers should be subject to a standard of care similar to the fiduciary standard applicable to registered investment advisors.
−Removed: In June 2019, the SEC adopted a package of rule-makings and interpretations related to the provision of advice by broker-dealers and investment advisers, including Regulation Best Interest and Form CRS.
−Removed: Among other things, Regulation Best Interest requires a broker-dealer to act in the best interest of a retail client when making a recommendation to that client of any securities transaction or investment strategy involving securities.
−Removed: Form CRS requires that broker-dealers and investment advisers provide retail investors with a brief summary document containing simple, easy-to-understand information about the nature of the relationship between the parties.
−Removed: Various states have also proposed, or adopted, laws and regulations seeking to impose new standards of conduct on broker-dealers that may differ from the SEC’s regulations, which may lead to additional implementation costs.
+Added: In addition, our broker-dealer subsidiaries are members of the Securities Investor Protection Corporation and are subject to rules of certain SROs, including FINRA and securities exchanges.
+Added: Our broker-dealer subsidiaries are subject to various requirements related to sales practices and customer relationships, including Regulation Best Interest, which requires broker-dealers and investment advisers to act in the “best interest” of retail customers at the time a recommendation is made without placing the financial or other interests of the broker-dealer or investment adviser ahead of the interest of the retail customer.
+Added: Margin lending by our broker-dealers is regulated by the Federal Reserve’s restrictions on lending in connection with purchases and short sales of securities.
+Added: Our broker-dealers are also subject to maintenance and other margin requirements imposed under FINRA and other SRO rules.
+Added: The SEC and FINRA have active enforcement functions that oversee broker-dealers and can bring actions that result in fines, restitution, a limitation on permitted activities, disqualification to continue to conduct certain activities and an inability to rely on certain favorable exemptions.
+Added: In addition, certain changes in the activities of a broker-dealer require approval from FINRA, and FINRA takes into account a variety of considerations in acting upon applications for such approval, including internal controls, capital levels, management experience and quality, prior enforcement and disciplinary history, and supervisory concerns.
Investment Advisers Act
−Removed: VFM and our subsidiary Hallmark Capital Management, Inc.
−Removed: (“HCM”) are registered investment advisers.
−Removed: In this capacity, VFM and HCM are subject to the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”), and SEC rules and regulations thereunder, including with respect to record-keeping, operational and marketing requirements, disclosure obligations and prohibitions on fraudulent activities.
+Added: VFM and our subsidiary Valley Wealth Managers, Inc.
+Added: (formerly Hallmark Capital Management, Inc.) are registered investment advisers.
+Added: In this capacity, VFM and Valley Wealth Managers, Inc.
+Added: are subject to the Investment Advisers Act, and SEC rules and regulations thereunder, including with respect to record-keeping, operational and marketing requirements, disclosure obligations, fiduciary and other obligations and prohibitions on fraudulent activities.
The SEC is authorized to institute proceedings and impose sanctions for violations of the Investment Advisers Act, ranging from fines and censure to termination of an investment adviser’s registration.
2 unchanged sentences
Insurance regulation
−Removed: Valley’s insurance agency subsidiary (Valley Insurance Services, Inc.) provides property and casualty insurance, employee benefits, risk management, loss control and claims services to business clients, as well as home, auto, boat and life insurance to individuals.
+Added: Valley’s insurance agency subsidiary, Valley Insurance Services, provides property and casualty insurance, employee benefits, risk management, loss control and claims services to business clients, as well as home, auto, boat and life insurance to individuals.
In addition, VFM is licensed as an insurance agency to provide life and health insurance in several states.
7 unchanged sentences
2023 Form 10-K
+Added: Data Privacy and Cybersecurity Regulation
+Added: In the course of our operations, we collect, use, store, disclose, transfer and otherwise process personal information of our customers, employees and third parties with whom we conduct business.
+Added: Accordingly, we are subject to a variety of increasingly stringent federal, state and local laws and regulations relating to data privacy and cybersecurity.
+Added: For example, at the U.S.
+Added: federal level, we are subject to, among other laws and regulations, the rules and regulations promulgated under the authority of the Federal Trade Commission (which has the authority to regulate and enforce against unfair or deceptive acts or practices in or affecting commerce, including acts and practices with respect to data privacy and security) and the Gramm Leach Bliley Act (which regulates the confidentiality and security of customer information obtained by financial institutions and certain other types of financial services businesses).
+Added: Further, in the spring of 2022, federal banking regulators imposed a new cybersecurity-related notification rule that requires banking organizations to notify their primary federal regulator as soon as possible and within 36 hours of incidents that, among other things, have materially disrupted or degraded, or are reasonably likely to materially disrupt or degrade, the banking organization’s ability to deliver services to a material portion of its customer base, jeopardize the key viability of key operations of the banking organization, or impact the stability of the financial sector.
+Added: The rule also imposes requirements on bank service providers to notify their affected banking organization customers of certain computer-security incidents.
+Added: At the state level, we are subject to laws and regulations such as the California Consumer Privacy Act (as amended by the California Privacy Rights Act, collectively, the CCPA), which broadly defines personal information and gives California residents expanded privacy rights and protections, such as affording them the right to access and request deletion of their information and to opt out of certain sharing and sales of personal information.
+Added: Numerous other states also have enacted, or are in the process of enacting or considering, comprehensive state-level data privacy and cybersecurity laws and regulations that share similarities with the CCPA.
+Added: Moreover, laws in all 50 U.S.
+Added: states require businesses to provide notice under certain circumstances to consumers whose personal information has been disclosed as a result of a data breach.
+Added: Additionally, the New York State Department of Financial Services (NYDFS) has issued Cybersecurity Requirements for Financial Services Companies, which took effect in 2017 and were recently amended, and which require banks, insurance companies and other financial services institutions regulated by the NYDFS to establish and maintain a cybersecurity program designed to protect consumers and ensure the safety and soundness of New York State’s financial services industry.
+Added: The cybersecurity regulation includes specific requirements for these institutions’ cybersecurity compliance programs and imposes an obligation to conduct ongoing, comprehensive risk assessments.
+Added: Further, on an annual basis, each institution is required to submit a certification of compliance with these requirements.
+Added: If laws and regulations relating to data privacy and cybersecurity are implemented, interpreted or applied in a manner inconsistent with our current or future practices or policies, or if we fail to comply with applicable laws or regulations, we could be subject to investigations, enforcement actions and other proceedings.
+Added: Risk Factors—“We are subject to complex and evolving laws, regulations, rules, standards and contractual obligations regarding data privacy and cybersecurity, which could increase the cost of doing business, compliance risks and potential liability” for more information regarding other risks related to data privacy and cybersecurity and Item 1C.
+Added: Cybersecurity for more information regarding our cybersecurity risk management program.
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.