What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-28 compared with 2024-02-29 · 473 added, 553 removed, 2180 unchanged (32% of the section changed)

7 unchanged sentences

Equity securities 71,513 64,464

64,464 48,731

Trading debt securities — 3,973

Available for sale debt securities 3,369,724 1,296,576

1,296,576 1,261,397

Held to maturity debt securities (net of allowance for credit losses of $ 647 at December 31, 2024 and $ 1,205 at December 31, 2023)

32 unchanged sentences

98,101 98,101

Series C ( 6,000,000 shares issued at December 31, 2024)

Common stock ( no par value, authorized 650,000,000 shares;

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

issued 558,786,093 shares at December 31, 2024 and 507,896,910 shares at December 31, 2023)

195,998 178,187

2 unchanged sentences

Accumulated other comprehensive loss ( 155,334 ) ( 146,456 )

Treasury stock, at cost ( 186,983 common shares at December 31, 2023 and 1,522,432 common shares at December 31, 2022)

( 1,391 ) ( 21,748 )

Treasury stock, at cost ( 186,983 common shares at December 31, 2023)

Total Shareholders’ Equity 7,435,127 6,701,391

23 unchanged sentences

Net Interest Income 1,628,708 1,665,478 1,655,640

Provision for credit losses for available for sale and held to maturity securities 4,559 481 ( 263 )

(Credit) provision for credit losses for available for sale and held to maturity securities ( 558 ) 4,559 481

Provision for credit losses for loans 309,388 45,625 56,336

7 unchanged sentences

Fees from loan servicing 12,393 10,670 11,273

Gains on sales of loans, net 6,054 6,418 26,669

(Losses) gains on sales of loans, net ( 5,840 ) 6,054 6,418

Gains on sales of assets, net 3,727 6,809 897

9 unchanged sentences

Professional and legal fees 70,315 80,567 82,618

Loss on extinguishment of debt — — 8,406

Amortization of tax credit investments 18,946 18,009 12,407

17 unchanged sentences

Net income $ 380,271 $ 498,511 $ 568,851

Other comprehensive income (loss), net of tax:

Unrealized gains and losses on available for sale debt securities

Net gains (losses) arising during the period 12,950 ( 136,981 ) ( 23,613 )

Less reclassification adjustment for net gains included in net income ( 634 ) ( 23 ) ( 491 )

Other comprehensive (loss) income, net of tax:

Unrealized losses and gains on available for sale debt securities

Net (losses) gains arising during the period ( 18,397 ) 12,950 ( 136,981 )

Amounts reclassified to earnings 1 ( 634 ) ( 23 )

Total ( 18,396 ) 12,316 ( 137,004 )

1 unchanged sentence

Net (losses) gains on derivatives arising during the period — ( 757 ) 3,362

Less reclassification adjustment for net losses included in net income

638 203 2,447

Amounts reclassified to earnings ( 869 ) 638 203

Total ( 869 ) ( 119 ) 3,565

1 unchanged sentence

Net gains (losses) arising during the period 10,609 5,442 ( 13,175 )

Amortization of prior service credit ( 90 ) ( 100 ) ( 96 )

Amortization of actuarial net loss 3 644 1,106

Amortization of prior service cost ( 97 ) ( 90 ) ( 100 )

Amortization of actuarial net (losses) gains ( 125 ) ( 3 ) 644

Total 10,387 5,349 ( 12,631 )

Total other comprehensive income (loss) 17,546 ( 146,070 ) ( 10,214 )

Total other comprehensive (loss) income ( 8,878 ) 17,546 ( 146,070 )

Total comprehensive income $ 371,393 $ 516,057 $ 422,781

25 unchanged sentences

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

Adjustment due to the adoption of ASU 2022-02 — — — — 990 — — 990

Balance - January 1, 2023 209,691 506,374 178,185 4,980,231 1,219,435 ( 164,002 ) ( 21,748 ) 6,401,792

Net income — — — — 498,511 — — 498,511

Other comprehensive loss, net of tax — — — — — ( 146,070 ) — ( 146,070 )

Other comprehensive income, net of tax — — — — — 17,546 — 17,546

Cash dividends declared:

7 unchanged sentences

— 1,309 2 9,758 ( 4,011 ) — 18,049 23,798

Common stock issued in acquisition — 84,863 29,702 1,088,127 — — — 1,117,829

Common stock issued — 327 — — ( 650 ) — 4,400 3,750

Common stock repurchased — ( 300 ) — — — — ( 2,092 ) ( 2,092 )

Balance - December 31, 2023 209,691 507,710 178,187 4,989,989 1,471,371 ( 146,456 ) ( 1,391 ) 6,701,391

Adjustment due to the adoption of ASU 2022-02 — — — — 990 — — 990

Balance - January 1, 2023 209,691 506,374 178,185 4,980,231 1,219,435 ( 164,002 ) ( 21,748 ) 6,401,792

Net income — — — — 380,271 — — 380,271

Other comprehensive income, net of tax — — — — — 17,546 — 17,546

Other comprehensive loss, net of tax — — — — — ( 8,878 ) — ( 8,878 )

Cash dividends declared:

3 unchanged sentences

— — — — ( 9,163 ) — — ( 9,163 )

Preferred stock, Series C, $ 0.84 per share

— — — — ( 5,018 ) — — ( 5,018 )

Common Stock, $ 0.44 per share

2 unchanged sentences

— 1,878 592 20,380 — — 1,391 22,363

Preferred stock issued 144,654 — — — — — — 144,654

Common stock issued — 49,198 17,219 431,701 — — — 448,920

Common stock repurchased — ( 300 ) — — — — ( 2,092 ) ( 2,092 )

Balance - December 31, 2024 $ 354,345 558,786 $ 195,998 $ 5,442,070 $ 1,598,048 $ ( 155,334 ) $ — $ 7,435,127

14 unchanged sentences

Amortization of other intangible assets 35,045 39,768 37,825

Gains on available for sale and held to maturity debt securities, net ( 401 ) ( 95 ) ( 545 )

Losses (gains) on available for sale and held to maturity debt securities, net 15 ( 401 ) ( 95 )

Proceeds from sales of loans held for sale 253,749 205,575 389,666

Gains on sales of loans, net ( 6,054 ) ( 6,418 ) ( 26,669 )

Losses (gains) on sales of loans, net 5,840 ( 6,054 ) ( 6,418 )

Originations of loans held for sale ( 244,710 ) ( 204,686 ) ( 267,158 )

Gains on sales of assets, net ( 3,727 ) ( 6,809 ) ( 897 )

Loss on extinguishment of debt — — 8,406

Net deferred income tax (benefit) expense ( 6,139 ) ( 9,359 ) 7,485

22 unchanged sentences

Proceeds from sales of real estate property and equipment 3,199 18,308 10,832

Proceeds from sales of loans held for investments — — 4,498

Proceeds from sales of loans not originated for sale 1,226,759 — —

Proceeds from sale of commercial premium finance lending division 98,060 — —

Purchases of real estate property and equipment ( 16,144 ) ( 76,046 ) ( 68,935 )

1 unchanged sentence

Net cash used in investing activities $ ( 709,284 ) $ ( 3,349,502 ) $ ( 6,787,781 )

See accompanying notes to consolidated financial statements.

2024 Form 10-K

9 unchanged sentences

Repayments of long-term borrowings ( 165,000 ) ( 475,000 ) —

Proceeds from issuance of preferred stock, net 144,654 — —

Cash dividends paid to preferred shareholders ( 21,369 ) ( 14,338 ) ( 13,146 )

12 unchanged sentences

Supplemental schedule of non-cash investing activities:

Transfer of loans to other real estate owned $ 974 $ — $ 141

Transfer of loans to loans held for sale 10,000 — —

Transfer of loans to other real estate owned, net $ 12,431 $ 974 $ —

Transfer of loans to loans held for sale, net 1,042,725 10,000 —

Lease right of use assets obtained in exchange for operating lease liabilities

20 unchanged sentences

Total liabilities assumed $ — $ — $ 7,332,875

Net (liabilities assumed) non-cash assets acquired $ — $ 796,288 $ ( 110,484 )

Net non-cash assets acquired $ — $ — $ 796,288

Cash and cash equivalents acquired in acquisitions, net $ — $ — $ 321,540

9 unchanged sentences

an asset management adviser that is a registered investment adviser with the SEC;

registered securities broker-dealers with the SEC and members of FINRA;

a registered securities broker-dealer with the SEC and member of FINRA, which is also licensed as an insurance agency to provide life and health insurance;

a title insurance agency in New York, which also provides services in New Jersey;

5 unchanged sentences

The accounting and reporting policies of Valley conform to GAAP and general practices within the financial services industry.

In accordance with applicable accounting standards, Valley does not consolidate statutory trusts established for the sole purpose of issuing trust preferred securities and related trust common securities.

In accordance with GAAP, Valley does not consolidate statutory trusts established for the sole purpose of issuing trust preferred securities and related trust common securities.

See Note 11 for more details.

Certain prior period amounts have been reclassified to conform to the current presentation, including changes to our operating segment reporting structure, as further discussed in Note 8 and Note 21 .

Certain prior period amounts have been reclassified to conform to the current presentation.

In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly Valley’s financial position, results of operations, changes in shareholders' equity and cash flows at December 31, 2024 and for all periods presented have been made.

5 unchanged sentences

While management uses its best judgment, actual amounts or results could differ significantly from those estimates.

The current economic environment has increased the degree of uncertainty inherent in these material estimates.

The current economic environment can also increase the degree of uncertainty inherent in these material estimates.

Actual results may differ from those estimates.

Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date.

Correction of an Immaterial Error.

Valley’s previously reported goodwill carrying amounts of goodwill allocated to Valley’s reporting units disclosure for the years ended December 31, 2022 and 2021 were adjusted for the correction of an immaterial error related to the reallocation of goodwill resulting from Valley’s change in operating segments during the second quarter 2022.

See Note 8 for revised amounts to correct these errors.

These errors had no impact on the reported amount of total goodwill.

Management has determined that the errors were not material to prior periods and they had no impact on Valley’s financial position, results of operations, changes in shareholders' equity and cash flows at December 31, 2022 and for all periods presented.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, interest bearing deposits in other banks (including the Federal Reserve Bank of New York) and, from time to time, overnight federal funds sold.

Federal funds sold essentially represents an uncollateralized loan.

Federal funds sold essentially represent an uncollateralized loan.

Therefore, Valley regularly evaluates the credit risk associated with the other financial institutions to ensure that the Bank does not become exposed to any significant credit risk on these cash equivalents.

2023 Form 10-K 84

Investment Securities

Debt securities are classified at the time of purchase based on management’s intention, as securities HTM, securities AFS or trading securities.

Debt securities are classified at the time of purchase based on management’s intention, such as securities HTM, securities AFS or trading securities.

Investment securities classified as HTM are those that management has the positive intent and ability to hold until maturity.

1 unchanged sentence

Investment securities classified as AFS are carried at fair value with unrealized holding gains and losses reported as a component of other comprehensive income or loss, net of tax.

Realized gains or losses on the AFS securities are recognized by the specific identification method and are included in net gains and losses on securities transactions within non-interest income.

Trading debt secu rities, consisting of U.S.

Treasury securities and sometimes municipal bonds, are reported at fair value with the unrealized gains or losses due to changes in fair value reported within non-interest income.

Realized gains

2024 Form 10-K

or losses on the AFS securities are recognized by the specific identification method and are included in net gains and losses on securities transactions within non-interest income.

Trading debt secu rities are reported at fair value with the unrealized gains or losses due to changes in fair value reported within non-interest income.

Net trading gains and losses are included in net gains and losses on securities transactions within non-interest income.

7 unchanged sentences

Allowance for Credit Losses for Held to Maturity Debt Securities

Valley estimates and recognizes an allowance for credit losses for HTM debt securities using CECL methodology.

Valley estimates and recognizes an allowance for credit losses for HTM debt securities using the CECL methodology.

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

5 unchanged sentences

The model is adjusted for a probability weighted multi-scenario economic forecast to estimate future credit losses.

Valley uses a two-year reasonable and supportable forecast period, followed by a one-year period over which estimated losses revert to historical loss experience for the remaining life of the investment security.

The economic forecast methodology and governance for debt securities is aligned with Valley's economic forecast used for the loan portfolio.

11 unchanged sentences

See Note 4 for additional information.

2023 Form 10-K

Loans Held for Sale

2 unchanged sentences

Origination fees and costs related to loans originated for sale (and carried at fair value) are recognized as earned and as incurred.

Loans held for sale are generally sold with loan servicing rights retained by Valley.

Loans held for sale are generally sold with loan

2024 Form 10-K

servicing rights retained by Valley.

Gains recognized on loan sales include the value assigned to the rights to service the loan.

1 unchanged sentence

Occasionally, Valley may elect to transfer certain loans at the lower of unamortized cost or fair market value to loans held for sale from the held for investment loan portfolio.

At December 31, 2023 , loans held for sale consisted of several residential mortgage loans originated for sale and one non-performing commercial real estate loan with a carrying value of $ 10 million transferred from the loan portfolio during 2023.

At December 31, 2024 , loans held for sale consisted of several residential mortgage loans originated for sale and one non-performing commercial real estate loan with a carrying value of $ 8.8 million .

Loans and Loan Fees

1 unchanged sentence

Loan origination and commitment fees, net of related costs are deferred and amortized as an adjustment of loan yield over the estimated life of the loans approximating the effective interest method.

Loans are deemed to be past due when the contractually required principal and interest payments have not been received as they become due.

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.

Loans are deemed to be past due when the contractual principal and interest payments have not been received as they become due.

Loans are placed on non-accrual status generally, when they become 90 days past due and/or the full and timely collection of principal and interest becomes uncertain.

When a loan is placed on non-accrual status, interest accruals cease, and uncollected accrued interest is reversed and charged against current income.

1 unchanged sentence

A loan in which the borrowers’ obligation has not been released in bankruptcy courts may be restored to an accruing basis when it becomes well secured and is in the process of collection, or all past due amounts become current under the loan agreement and collectability is no longer doubtful.

Purchased Credit-Deteriorated Loans

Loans classified as PCD loans are acquired loans, mainly through bank acquisitions, where there is evidence of more than insignificant credit deterioration since their origination.

4 unchanged sentences

Allowance for Credit Losses for Loans

Valley uses the CECL methodology to estimate an allowance for credit losses (ACL) for loans.

Valley uses the CECL methodology to estimate an ACL for loans.

The ACL is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the loans.

3 unchanged sentences

Under CECL, Valley's methodology to establish the allowance for loan losses has two basic components:

(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 common risk characteristics, consisting of collateral dependent loans.

(i) a collective reserve component for estimated lifetime expected credit losses for pools of loans that share common risk characteristics and (ii) an individually evaluated reserve component for loans that do not share common risk characteristics, consisting of collateral dependent loans.

Valley also maintains a separate allowance for unfunded credit commitments mainly consisting of reserves for credit losses on undisbursed non-cancellable lines of credit, new loan commitments and commercial standby letters of credit.

1 unchanged sentence

Valley estimates the collective ACL using a current expected credit losses methodology which is based on relevant information about historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the loan balances.

In estimating the component of the allowance on a collective basis, Valley uses a transition matrix model which calculates an expected life of loan loss percentage for each loan pool by generating probability of default and loss given default metrics.

The metrics are based on the migration of loans from performing to loss by credit quality rating or delinquency categories using historical life-of-loan analysis periods for

2023 Form 10-K 86

each loan portfolio pool, and the severity of loss, based on the aggregate net lifetime losses.

The model's expected losses based on loss history are adjusted for qualitative factors.

In estimating the component of the allowance on a collective basis, Valley uses a transition matrix model which calculates an expected life of loan loss percentage for each loan pool by using probability of default and loss given default metrics.

The probability of default and loss given default metrics are adjusted using a scaling factor to incorporate a full economic cycle.

The expected life of loan loss percentages are determined by analyzing the migration of loans from performing to loss by credit quality rating or delinquency categories using historical life-of-loan data for each loan portfolio pool, and by assessing the severity of loss, based on the aggregate net lifetime losses incurred.

The expected credit losses based on loss history are adjusted for qualitative factors.

Among other things, these adjustments include and account for differences in:

(i) the impact of the reasonable and supportable economic forecast, probability weightings and reversion period, (ii) other asset specific risks to the extent they do not exist in the historical loss information, and (iii) net expected recoveries of charged off loan balances.

These adjustments are based on qualitative factors not reflected in the quantitative model but are likely to impact the measurement of estimated credit losses.

The expected lifetime loss rate is the life of loan loss percentage from the transition matrix model plus the impact of the adjustments for qualitative factors.

(i) the impact of the reasonable and supportable economic forecast, probability weightings and economic variables under each scenario and reversion period, (ii) other asset specific risks to the extent they do not exist in the historical loss information, and (iii) net expected recoveries of charged off loan balances.

These adjustments are based on qualitative factors not reflected in the transition matrix but are likely to impact the measurement of estimated credit losses.

The expected lifetime loss rate is the life

2024 Form 10-K

of loan loss percentage from the transition matrix model plus the impact of the adjustments for qualitative factors.

The expected credit losses are the product of multiplying the model’s expected lifetime loss rate by the exposure at default at period end on an undiscounted basis.

Valley utilizes a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience for the remaining life of the loan on a straight-line basis.

The forecasts consist of a multi-scenario economic forecast model to estimate future credit losses that is governed by a cross-functional committee.

Valley utilizes a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience on a straight-line basis for the remaining life of the loan.

The forecast consists of multi-scenario economic forecasts to estimate future credit losses that is governed by a cross-functional committee.

The committee meets each quarter to determine which economic scenarios developed by Moody's will be incorporated into the model, as well as the relative probability weightings of the selected scenarios, based upon all readily available information.

The model projects economic variables under each scenario based on detailed statistical analyses.

Valley has identified and selected key variables that most closely correlated to its historical credit performance, which include:

GDP, unemployment and the Case-Shiller Home Price Index.

Valley has identified and selected key variables that most closely correlated to its historical credit performance, which include GDP, unemployment and the Case-Shiller Home Price Index.

The loan credit quality data utilized in the transition matrix model is based on an internal credit risk rating system for the commercial and industrial loan and commercial real estate loan portfolio segments and delinquency aging status for the residential and consumer loan portfolio segments.

3 unchanged sentences

and (iii) the economic environment and industry in which the borrower operates.

This analysis is performed at the relationship manager level for all commercial and industrial loans and commercial real estate loans, and evaluated by the Loan Review Department on a test basis.

Loans with a grade that are below a “Pass” grade are adversely classified.

This analysis is performed at the relationship manager level for all commercial and industrial loans, and commercial real estate loans, which are evaluated by the Loan Review Department on a test basis.

Loans with a grade below a “Pass” grade are adversely classified.

Once a loan becomes adversely classified, it automatically transitions from the “Pass” segment of the model to the corresponding adversely rated pool segment.

1 unchanged sentence

Reserves for loans that do not share common risk characteristics.

Valley measures specific reserves for individual loans that do not share common risk characteristics with other loans, consisting of collateral dependent loans, and prior to the adoption of ASU No.

2022-02 on January 1, 2023, TDRs and expected TDRs, based on the amount of lifetime expected credit losses calculated on those loans and charge-offs of those amounts determined to be uncollectible.

Collateral dependent loan balances are written down to the estimated current fair value (less estimated selling costs) of each loan’s underlying collateral resulting in an immediate charge-off to the allowance, excluding any consideration for personal guarantees that may be pursued in the Bank’s collection process.

If repayment of a TDR or expected TDR was based upon future expected cash flows, the present value of the expected future cash flows discounted at the loan’s original effective interest rate was compared to the carrying value of the loan, and any shortfall is recorded as the allowance for credit losses.

The effective interest rate used to discount expected cash flows was also adjusted to incorporate expected prepayments, if applicable.

Valley measures specific reserves for individual loans that do not share common risk characteristics with other loans, consisting of collateral dependent loans based on the amount of lifetime expected credit losses calculated on those loans and charge-offs of those amounts determined to be uncollectible.

Certain individually evaluated loans where substantially all the repayment is expected from the collateral, are deemed collateral dependent, and the related expected credit losses are determined based on the fair value of the underlying collateral (less selling costs, if repayment or satisfaction of the loan depends on the sale of the collateral).

Any amount deemed uncollectible related to a collateral dependent loan is immediately charged off to the allowance.

Valley elected to exclude accrued interest on loans from the amortized cost of loans held for investment.

11 unchanged sentences

See Note 5 for a discussion of Valley’s loan credit quality and additional allowance for credit losses.

2023 Form 10-K

Lessee Leasing Arrangements.

4 unchanged sentences

The ROU assets represent the right to use underlying assets for the lease terms and lease liabilities represent Valley’s obligations to make lease payments arising from the lease.

The ROU assets include any prepaid lease payments and initial direct costs, less any lease incentives.

The ROU assets include any prepaid lease payments and initial

2024 Form 10-K

direct costs, less any lease incentives.

At the commencement dates of leases, ROU assets and lease liabilities are initially recognized based on their net present values with the lease terms including options to extend or terminate the lease when Valley is reasonably certain that the options will be exercised to extend.

31 unchanged sentences

Goodwill is not amortized and is subject, at a minimum, to an annual impairment assessment, or more often, if events or circumstances indicate it may be impaired.

An impairment loss is recognized if the carrying value of the net assets assigned to the reporting

2023 Form 10-K 88

unit exceeds the fair value of the reporting unit, with the impairment loss not to exceed the amount of goodwill allocated to the unit.

An impairment loss is recognized if the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, with the impairment loss not to exceed the amount of goodwill allocated to the unit.

Goodwill is allocated to Valley's reporting unit, which is an operating segment or one level below, at the date goodwill is recorded.

2 unchanged sentences

Valley's determination of whether or not goodwill is impaired requires it to make judgments and use significant estimates and assumptions regarding estimated future cash flows.

As part of the annual impairment test, Valley also performs a market capitalization reconciliation to support the appropriateness of its results.

As part of the annual impairment test, Valley also performs a market capitalization reconciliation to support the appropriateness of its

2024 Form 10-K

In performing this reconciliation, Valley compares the sum of fair value of its reporting units to Valley’s market capitalization, adjusted for the presented value of estimated synergies which a market participant acquirer could reasonably expect to realize from a hypothetical acquisition of Valley.

If Valley changed its strategy or if market conditions shift, Valley's judgments may change, which may result in adjustments to the recorded goodwill balance.

The previously reported carrying amounts of goodwill allocated to Valley's reporting units at December 31, 2022 and 2021 were adjusted in Note 8 for the correction of an immaterial error related to the reallocation of goodwill resulting from a change in operating segments during the second quarter 2022.

If Valley changed its strategy or if market conditions shifted, Valley's judgments may change, which may result in adjustments to the recorded goodwill balance.

Other Intangible Assets

22 unchanged sentences

The fair value of RSUs and awards is based upon the last sale price reported for Valley’s common stock on the date of grant or the last sale price reported preceding such date, except for performance-based stock awards with a market condition.

The grant date fair value of a performance-based stock award that vests based on a

2023 Form 10-K

market condition is determined by a third-party specialist using a Monte Carlo valuation model.

The grant date fair value of a performance-based stock award that vests based on a market condition is determined by a third-party specialist using a Monte Carlo valuation model.

There have been no changes to any of the key model characteristics, assumptions and parameters.

7 unchanged sentences

See Note 2 for additional information.

2024 Form 10-K

Fair Value Measurements

6 unchanged sentences

Revenue From Contracts With Customers

Certain revenues included in Valley's non-interest income relates to fee-based revenue from contracts with customers.

Certain revenues included in Valley's non-interest income relate to fee-based income from contracts with customers.

Revenue from contracts with customers within the scope of ASC Topic 606 is recognized when performance obligations, under the terms of the contract, are satisfied.

This income is measured as the amount of consideration expected to be received in exchange for the providing of services.

This income is measured as the amount of consideration expected to be received in exchange for providing services.

Contracts with customers can include multiple services, which are accounted for as separate “performance obligations” if they are determined to be distinct.

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Valley acts in the capacity of an agent between Valley's customer and the insurance carrier.

Valley's performance obligation is satisfied when the terms of the policy have been agreed upon and the insurance policy becomes effective.

Valley's performance obligation is satisfied over the term of the insurance policy.

Service charges on deposit accounts.

5 unchanged sentences

Revenue from capital markets transactions (including interest rate swap fees, foreign exchange fees and loan syndication fees), net gains and losses on securities transactions, fees from loan servicing, net gains on sales of loans, bank owned life insurance income, and certain fees within other income are excluded from the scope of ASC Topic 606 and are recognized under other applicable accounting guidance.

2023 Form 10-K 90

Valley uses the asset and liability method to provide income taxes on all transactions recorded in the consolidated financial statements.

4 unchanged sentences

A valuation allowance is established to reduce deferred tax assets to the amount we expect to realize.

Deferred income tax expense or benefit results from differences between assets and liabilities measured for financial reporting versus income-tax return purposes.

Deferred income tax expense or benefit results from

2024 Form 10-K

differences between assets and liabilities measured for financial reporting versus income-tax return purposes.

The effect on deferred taxes of a change in tax rates is recognized in income tax expense in the period that includes the enactment date.

Valley maintains a reserve related to certain tax positions that management believes contain an element of uncertainty.

Valley may maintain a reserve related to certain tax positions that management believes contain an element of uncertainty.

An uncertain tax position is measured based on the largest amount of benefit that management believes is more likely than not to be realized.

Periodically, Valley evaluates each of its tax positions and strategies to determine whether the reserve continues to be appropriate.

Periodically, Valley evaluates each of its tax positions and strategies to determine whether a reserve is appropriate.

See Note 13 for additional information.

3 unchanged sentences

Valley’s components of other comprehensive income or loss, net of deferred tax, include:

(1) unrealized gains and losses on debt securities AFS;

(1) unrealized gains and losses on AFS debt securities;

(2) unrealized gains and losses on derivatives used in cash flow hedging relationships;

5 unchanged sentences

In Valley's computation of the earnings per common share, the numerator of both the basic and diluted earnings per common share is net income available to common shareholders (which is equal to net income less dividends on preferred stock).

The weighted average number of common shares outstanding used in the denominator for basic earnings per common share is increased to determine the denominator used for diluted earnings per common share by the effect of potentially dilutive common stock equivalents utilizing the treasury stock method.

The weighted average number of common shares outstanding is used in the denominator for basic earnings per common share which is increased to determine the denominator used for diluted earnings per common share by the effect of potentially dilutive common stock equivalents utilizing the treasury stock method.

The following table shows the calculation of both basic and diluted earnings per common share for the years ended December 31, 2024, 2023 and 2022:

9 unchanged sentences

Common stock equivalents represent the dilutive effect of additional common shares issuable upon the assumed vesting or exercise, if applicable, of RSUs and common stock options to purchase Valley’s common shares.

Common stock options with exercise prices that exceed the average market price of Valley’s common stock during the periods presented may have an anti-dilutive effect on the diluted earnings per common share calculation and therefore are excluded from the diluted earnings per share calculation along with RSUs.

Potential anti-dilutive weighted common shares totaled approximately 2.4 million and

2023 Form 10-K

188 thousand for the years ended December 31, 2023 and 2022, respectively, and were not material for the year ended December 31, 2021.

Common stock options and RSUs with exercise prices that exceed the average market price of Valley’s common stock during the periods presented may have an anti-dilutive effect on the diluted earnings per common share calculation and therefore are excluded from the diluted earnings per share calculation.

Potential anti-dilutive weighted common shares totaled approximately 3.5 million, 2.4 million and 188 thousand for the years ended December 31, 2024, 2023 and 2022, respectively.

Preferred and Common Stock Dividends

Valley issued 4.6 million and 4.0 million shares of non-cumulative perpetual preferred stock in June 2015 and August 2017, respectively, which were initially recorded at fair value.

Valley issued 4.6 million, 4.0 million and 6.0 million shares of non-cumulative perpetual preferred stock in June 2015, August 2017 and August 2024 respectively, which were initially recorded at fair value.

See Note 18 for additional details on the preferred stock issuances.

The preferred shares are senior to Valley common stock, whereas the current year dividends must be paid before Valley can pay dividends to its common shareholders.

The preferred shares are senior to Valley common stock, whereas the current year's dividends must be paid before Valley can pay dividends to its common shareholders.

Preferred dividends declared are deducted from net income for computing income available to common shareholders and earnings per common share computations.

Cash dividends to both preferred and common shareholders are payable and accrued when declared by the Board.

2024 Form 10-K

Treasury Stock

2 unchanged sentences

As part of its asset/liability management strategies and to accommodate commercial borrowers, Valley has used interest rate swaps to hedge variability in cash flows or fair values caused by changes in interest rates.

Valley also uses derivatives not designated as hedges for non-speculative purposes to (1) manage its exposure to interest rate movements related to a service for commercial lending customers, (2) share the risk of default on the interest rate swaps related to certain purchased or sold loan participations through the use of risk participation agreements, (3) manage the interest rate risk of mortgage banking activities with customer interest rate lock commitments and forward contracts to sell residential mortgage loans and (4) manage the exposure of foreign currency exchange rate fluctuation with foreign currency forward and option contracts primarily to accommodate our customers.

Valley also uses derivatives not designated as hedges for non-speculative purposes to (1) manage its exposure to interest rate movements related to a service for commercial lending customers, (2) share the risk of default on the interest rate swaps related to certain purchased or sold loan participations through the use of risk participation agreements, (3) manage the interest rate risk of mortgage banking activities with customer interest rate lock commitments and forward contracts to sell residential mortgage loans, (4) manage the exposure of foreign currency exchange rate fluctuation with foreign currency forward and option contracts primarily to accommodate our customers and (5) manage the credit risk of a select pool of automobile loans to enhance the risk profile of these assets for regulatory capital purposes.

Valley also has hybrid instruments, consisting of market linked certificates of deposit with an embedded swap contract.

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New Accounting Guidance Adopted in 2024 .

2022-01, “Derivatives and Hedging (Topic 815):

Fair Value Hedging - Portfolio Layer Method,” expands and clarifies the current guidance on accounting for fair value hedge basis adjustments under the portfolio layer method for both single-layer and multiple-layer hedges.

This method allows entities to designate multiple hedging relationships with a single closed portfolio, and therefore a larger portion of the interest rate risk associated with such a portfolio is eligible to be hedged.

2022-01 also clarifies that no assets may be added to a closed

2023 Form 10-K 92

portfolio once it is designated in a portfolio layer method hedge.

Valley adopted ASU No.

2022-01 on January 1, 2023 and the guidance did not have a significant impact on Valley's consolidated financial statements.

2022-02, “Financial Instruments – Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures,” eliminates the troubled debt restructuring (TDR) accounting model for creditors, such as Valley, that have adopted Topic 326, “Financial Instruments – Credit Losses.” ASU No.

2022-02 requires all loan modifications to be accounted for under the general loan modification guidance in Subtopic 310-20.

On a prospective basis, entities are subject to new disclosure requirements covering modifications of receivables to borrowers experiencing financial difficulty.

Public business entities within the scope of the Topic 326 disclosure requirements are also required to prospectively disclose current-period gross write-off information by vintage.

Entities can elect to adopt the guidance on TDRs using either a prospective or modified retrospective transition method.

Valley adopted ASU No.

2022-02 on January 1, 2023 and elected to apply the modified retrospective transition method.

The adoption of ASU No.

2022-02 resulted in a $ 1.4 million decrease in the allowance for loan losses, and a $ 990 thousand increase to retained earnings, net of taxes.

See Note 8 for required disclosures.

2023-09, Income Taxes (Topic 740):

"Improvements to Income Tax Disclosures," requires greater disaggregation of income tax disclosures related to income taxes paid, net of refunds received;

and the income tax rate reconciliation presented in both dollars and percentages.

2023-09 is effective for annual periods beginning after December 15, 2024.

The new guidance should be applied on a prospective basis, with retrospective application permitted.

Valley is currently evaluating the impact of ASU No.

Valley early adopted ASU No.

2023-09, electing retrospective application.

See required disclosures in Note 13 and the Consolidated Statements of Cash flows.

New Accounting Guidance Effective in the First Quarter 2024.

2023-02, “Investments –Equity Method and Joint Ventures (Topic 323):

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Under the new guidance, Valley did not elect to apply the proportional amortization method as an accounting policy for its eligible tax credit investments and, as a result, there were no adjustments from adoption recognized in earnings on the date of adoption.

See additional disclosures regarding Valley's tax credit investments at Note 14.

See additional disclosures regarding Valley's tax credit investments in Note 14 .

2022-03, “Fair Value Measurement of Equity Securities subject to Contractual Sale Restrictions,” updates guidance in ASC Topic 820, Fair Value Measurement and clarifies that a contractual sale restriction should not be considered in measuring fair value.

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(ii) the circumstances that could cause a lapse in restrictions;

and (iii) the fair value of the securities with contractual sale restrictions.

and (iii) the fair value of the securities with

2024 Form 10-K

contractual sale restrictions.

2022-03 became effective on January 1, 2024 and Valley's adoption did not have a significant impact on its consolidated financial statements.

New Accounting Guidance Issued in 2023.

2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” requires public entities to disclose detailed information about a reportable segment’s expenses on both an annual and interim basis.

2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The amendments in ASU No.

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Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

2023-07 became effective on December 31, 2024 and Valley's adoption did not have a significant impact on its consolidated financial statements, other than enhanced disclosures included in Note 21.

New Accounting Guidance Issued in 2024.

2024-03, "Income Statement—Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses," requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements.

2024-03 does not change the expense captions an entity presents on the face of the income statement.

2024-03 can be applied prospectively, and it is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption and retrospective application are permitted.

Valley is currently evaluating the impact of ASU No.

2023-07, but it is not expected to have a significant impact on Valley's consolidated financial statements.

2024-03 on its consolidated financial statements.

BUSINESS COMBINATIONS (Note 2)

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owned approximately 14 percent of Valley's common stock as of April 1, 2022.

2023 Form 10-K

The transaction was accounted for under the acquisition method of accounting and accordingly the results of Bank Leumi USA's operations have been included in Valley's consolidated financial statements for the year ended December 31, 2022 from the date of acquisition.

During 2022, Valley revised the estimated fair values of certain acquired assets as of the acquisition date of Bank Leumi USA based upon additional information obtained that existed as of April 1, 2022.

The adjustments mainly related to the fair val ue of deferred tax assets and other assets and resulted in a $ 2.6 million reduction in goodwill.

The following table summarizes unaudited supplemental pro forma financial information giving effect to the Bank Leumi USA merger as if it had been completed on January 1, 2021:

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The transaction was accounted for under the acquisition method of accounting and accordingly the results of Landmark's operations have been included in Valley's consolidated financial statements for the year ended December 31, 2022 from the date of acquisition.

The Westchester Bank Holding Corporation.

On December 1, 2021, Valley completed its acquisition of The Westchester Bank Holding Corporation (Westchester) and its principal subsidiary, The Westchester Bank, which was headquartered in White Plains, New York.

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.

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.

During 2022, Valley revised the estimated fair values of deferred tax assets resulting in increased goodwill.

See Note 8 for details.

Dudley Ventures.

On October 8, 2021, Valley acquired certain subsidiaries of Arizona-based Dudley Ventures (DV), an advisory firm specializing in the investment and management of tax credits.

The transaction included the acquisition of DV Fund Advisors and DV Advisory Services, which were both subsequently merged and renamed Dudley Ventures, as well as DV's community development entity, DV Community Investment.

The transaction price included $ 11.3 million of cash at the closing date and fixed future stock consideration totaling $ 3.75 million, which resulted in the issuance of 327,083 shares of our common stock to the former principals of Dudley Ventures in February 2023.

On November 16, 2021, Valley also acquired DV Financial Services, a registered broker-dealer regulated by FINRA, which is largely inactive.

Merger expenses for all acquisition related activities totaled $ 14.1 million , $ 71.2 million and $ 8.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Merger expenses for all acquisition related activities totaled $ 14.1 million and $ 71.2 million for the years ended December 31, 2023 and December 31, 2022, respectively.

The merger expenses largely consisted of technology costs, salaries and employee benefits expense, and professional and legal fees within non-interest expense on the consolidated statements of income.

2024 Form 10-K

FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES (Note 3)

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• Level 1 - Unadjusted exchange quoted prices in active markets for identical assets or liabilities, or identical liabilities traded as assets that the reporting entity has the ability to access at the measurement date.

2023 Form 10-K 94

• Level 2 - Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly (i.e., quoted prices on similar assets) for substantially the full term of the asset or liability.

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Equity securities at net asset value (NAV)

Trading debt securities 3,973 3,973 — —

Available for sale debt securities:

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$ 8,750 $ — $ 8,750 $ —

Collateral dependent loans, net 90,580 — — 90,580

Collateral dependent loans 139,424 — — 139,424

Foreclosed assets 13,852 — — 13,852

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Non-recurring fair value measurements:

Collateral dependent impaired loans, net $ 92,923 $ — $ — $ 92,923

Non-performing loans held for sale (3)

$ 10,000 $ — $ 10,000 $ —

Collateral dependent loans 90,580 — — 90,580

Foreclosed assets 1,444 — — 1,444

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(2) Derivative financial instruments are included in this category.

(3) Reported at lower of cost or market value.

(3) Reported at lower of cost or fair value.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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Equity securities.

The equity securities consisted of two publicly traded mutual funds, CRA investments and several other equity investments we have made in companies that develop new financial technologies and in partnerships that invest in such companies.

The equity securities consisted of two publicly traded mutual funds, CRA investments and a publicly traded financial technology company.

These investments are reported at fair value utilizing Level 1 inputs.

Equity securities at NAV .

Valley also has privately held CRA funds at fair value measured at NAV using the most recently available financial information from the investee.

Valley also has privately held CRA funds and investments in limited liability companies and partnerships at fair value measured at NAV using the most recently available financial information from the investee.

Certain equity investments without readily determinable fair values are measured at NAV per share (or its equivalent) as a practical expedient, which are excluded from fair value hierarchy levels in the tables above.

2024 Form 10-K

Trading debt securities .

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Treasury securities, are reported at fair value utilizing Level 1 inputs at December 31, 2023.

At December 31, 2022, trading debt securities consisted of U.S.

Treasury securities and municipal bonds reported at fair value utilizing Level 1 and Level 2 inputs, respectively.

The prices for

2023 Form 10-K 96

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

Management reviews the data and assumptions used in pricing the securities by its third-party provider to ensure the highest level of significant inputs are derived from market observable data.

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The fair values were calculated utilizing quoted prices for similar assets in active markets.

The market prices represent a delivery price, which reflects the underlying price each institution would pay Valley for an immediate sale of an aggregate pool of mortga ges.

Non-performance risk did not materially impact the fair value of mortgage loans held for sale at December 31, 2023 and 2022 based on the short duration these assets were held and the credit quality of these loans.

The market prices represent a delivery price, which reflects the underlying price each institution would pay Valley for an immediate sale of an aggregate pool of mortgages.

Non-performance risk did not materially impact the fair value of mortgage loans held for sale at December 31, 2024 and 2023 based on the short duration these assets were held and their credit quality.

Derivatives are reported at fair value utilizing Level 2 inputs.

The fair values of Valley’s derivatives are determined using third party prices that are based on discounted cash flow analysis using observed market inputs, such as the Secured Overnight Financing Rate (SOFR) curve at December 31, 2023.

The fair values of Valley’s derivatives are determined using third party prices that are based on discounted cash flow analysis using observed market inputs, such as the SOFR curve at December 31, 2024 and 2023.

The fair value of mortgage banking derivatives, consisting of interest rate lock commitments to fund residential mortgage loans and forward commitments for the future delivery of such loans (including certain loans held for sale at December 31, 2024 and 2023), is determined based on the current market prices for similar instruments.

The fair value of a credit default swap related to a portion of Valley's automobile loan portfolio is based on estimated discounted cash flows that incorporate market data for auto credit loss forecasts and anticipated cash outflows for the instrument's premium payments.

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

The credit valuation adjustments were not significant to the overall valuation of Valley’s derivatives at December 31, 2024 and 2023.

See Note 1 5 for additional details on Valley's derivatives.

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

The following valuation techniques were used for certain non-financial assets measured at fair value on a non-recurring basis, including collateral dependent loans reported at the fair value of the underlying collateral, loan servicing rights and foreclosed assets, which are reported at fair value upon initial recognition or subsequent impairment as described below.

Non-performing loans held for sale .

During the year ended December 31, 2023 , Valley transferred a non-performing construction loan totaling $ 10.0 million, net of charge-offs, to loans held for sale.

The transfer at the loan’s fair value resulted in a $ 4.2 million charge-off to the allowance of loan losses.

The following valuation techniques were used for certain non-financial assets measured at fair value on a non-recurring basis, including collateral dependent loans reported at the fair value of the underlying collateral and foreclosed assets, which are reported at fair value upon initial recognition or subsequent impairment as described below.

Non-performing commercial real estate loan held for sale.

During the year ended December 31, 2023 , Valley transferred a non-performing construction loan totaling $ 10.0 million, net of charge-offs of $ 4.2 million to the allowance for loan losses, to loans held for sale.

The fair value of the loan was determined using Level 2 inputs, including bids from a third party broker engaged to solicit interest from potential purchasers.

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Fair value was determined based on a non-binding sale agreement selected by Valley during the bidding process.

During the year ended December 31, 2024, an additional $ 1.2 million write-down was recorded to earnings to reflect the loan's current estimated fair value of $ 8.8 million at December 31, 2024.

Collateral dependent loans.

Collateral dependent loans are loans where foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and substantially all of the repayment is expected from the collateral.

Collateral dependent loans are loans where foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and substantially all the repayment is expected from the collateral.

Collateral dependent loans are reported at the fair value of the underlying collateral when the fair value is lower than the recorded investment in the loan.

Collateral values are estimated using Level 3 inputs, consisting of individual third-party appraisals that may be adjusted based on certain discounting criteria.

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At December 31, 2024, collateral dependent loans were individually re-measured and reported at fair value through direct loan charge-offs to the allowance for loan losses based on the fair value of the underlying collateral.

At December 31, 2023, collateral dependent loans with a total amortized cost of $ 164.8 million and $ 172.2 million at December 31, 2023 and 2022, respectively, including our taxi medallion loan portfolio, were reduced by specific allowance for loan losses allocations totaling $ 74.2 million and $ 79.2 million to a reported total net carrying amount of $ 90.6 million and $ 92.9 million at December 31, 2023 and 2022, respectively .

Collateral dependent loans with a total amortized cost of $ 215.2 million and $ 164.8 million at December 31, 2024 and 2023, respectively, (including taxi medallion loans totaling $ 49.5 million and $ 62.3 million at December 31, 2024 and 2023, respectively) were reduced by specific allowance for loan losses allocations totaling $ 75.8

2024 Form 10-K

million and $ 74.2 million to a reported total net carrying amount of $ 139.4 million and $ 90.6 million at December 31, 2024 and 2023, respectively .

Foreclosed assets.

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When an asset is acquired, the excess of the loan balance over fair value, less estimated selling costs, is charged to the allowance for loan losses.

If further declines in the estimated fair value

2023 Form 10-K

of an asset occur, the asset is re-measured and reported at fair value through a write-down recorded in non-interest expense.

If further declines in the estimated fair value of an asset occur, the asset is re-measured and reported at fair value through a write-down recorded in non-interest expense.

There were no adjustments to the appraisals of foreclosed assets at December 31, 2024 and 2023.

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Fair value estimates are based on existing balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments.

For instance, Valley has certain fee-generating business lines (e.g., its mortgage servicing operations, trust and investment management departments) that were not considered in these estimates since these activities are not financial instruments.

For instance, Valley has certain fee-generating business lines (e.g., its mortgage servicing operations or Wealth Management reporting unit) that were not considered in these estimates since these activities are not financial instruments.

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

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Accrued interest receivable Level 1 239,941 239,941 245,498 245,498

Federal Reserve Bank and Federal Home Loan Bank stock (3)

FRB and FHLB stock (3)

Level 2 328,497 328,497 320,727 320,727

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Level 1 150,564 150,564 159,496 159,496

(1) Represent equity securities without a readily determinable fair value measured at costs less impairment, if any.

(1) Represents equity securities without a readily determinable fair value, which are measured based on the price at which the investment was acquired plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments.

Total changes in the valuation of equity securities for the year ended December 31, 2024 and 2023, respectively, were immaterial.

(2) The carrying amount is presented gross without the allowance for credit losses.

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Trading Debt Securities

The fair value of trading debt securities totaled $ 4.0 million and $ 13.4 million at December 31, 2023 and 2022, respectively.

Valley had no trading debt securities at December 31, 2024.

The fair value of trading debt securities totaled $ 4.0 million at December 31, 2023.

Net trading gains are included in net gains and losses on securities transactions within non-interest income.

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Available for Sale Debt Securities

The amortized cost, gross unrealized gains and losses and fair value of available for sale debt securities at December 31, 2023 and 2022 were as follows:

The amortized cost, gross unrealized gains and losses and fair value of AFS debt securities at December 31, 2024 and 2023 were as follows:

(in thousands)

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2024 Form 10-K

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

The age of unrealized losses and fair value of related AFS debt securities at December 31, 2024 and 2023 were as follows:

Twelve Months More than

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Within the AFS debt securities portfolio, the total number of security positions in an unrealized loss position was 726 and 687 at December 31, 2024 and 2023, respectively.

As of December 31, 2023, the fair value of securities AFS that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law, was $ 840.3 million.

As of December 31, 2024, the fair value of securities AFS that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law, was $ 1.8 billion.

Contractual Maturities

The contractual maturities of AFS debt securities at December 31, 2024 are set forth in the following table.

Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties.

Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary.

Contractual maturities may differ from actual maturities as borrowers may have the right to call or repay obligations with or without call or prepayment penalties.

Residential mortgage-backed securities are not included in the maturity categories in the following maturity summary as actual maturities may differ from contractual maturities because the underlying mortgages may be called or prepaid without penalties.

2024 Form 10-K

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Total $ 3,552,273 $ 3,369,724

Actual maturities of AFS debt securities may differ from those presented above since certain obligations provide the issuer the right to call or prepay the obligation prior to scheduled maturity without penalty.

The weighted-average remaining expected life for residential mortgage-backed securities AFS was 8.23 years at December 31, 2024.

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See Note 1 for further information regarding Valley's accounting policy.

Based on a comparison of the present value of expected cash flows to the amortized cost, Valley recognized a credit-related impairment of one corporate bond issued by Signature Bank resulting in a provision for credit losses and full charge-off of the bond totaling $ 5.0 million during the first quarter 2023.

Valley also evaluated AFS debt securities that were in an unrealized loss position as of December 31, 2024 included in the tables above and has determined that the declines in fair value are mainly attributable to interest rates, credit spreads, market volatility and liquidity conditions, not credit quality or other factors.

There was no impairment recognized during the years ended December 31, 2022 and 2021.

The following table details the activity in the allowance for credit losses for the year ended December 31, 2023.

(in thousands)

Beginning balance $ —

Provision for credit losses 5,000

Charge-offs ( 5,000 )

Ending balance $ —

Valley does not intend to sell any of its AFS debt securities in an unrealized loss position at December 31, 2023 prior to recovery of their amortized cost basis, and it is more likely than not that Valley will not be required to sell any of its securities prior to recovery of their amortized cost basis.

During the first quarter 2023, Valley recognized a credit-related impairment of one corporate bond issued by Signature Bank resulting in both a provision for credit losses and full charge-off security totaling $ 5.0 million.

The credit-related impairment was based on a comparison of the present value of expected cash flows to the amortized cost.

The bond was subsequently sold and the sale resulted in a $ 869 thousand gain during the fourth quarter 2023.

There was no impairment recognized during years ended December 31, 2024 and 2022.

Valley does not intend to sell any of its AFS debt securities in an unrealized loss position prior to recovery of their amortized cost basis, and it is more likely than not that Valley will not be required to sell any of its securities prior to recovery of their amortized cost basis.

None of the AFS debt securities were past due as of December 31, 2024.

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Held to Maturity Debt Securities

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

The amortized cost, gross unrealized gains and losses and fair value of HTM debt securities at December 31, 2024 and 2023 were as follows:

Losses Fair Value Allowance for Credit Losses Net Carrying Value

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Obligations of states and state agencies

68,025 — ( 5,335 ) 62,690 2 68,023

Municipal bonds 304,464 9 ( 20,802 ) 283,671 48 304,416

Total obligations of states and political subdivisions

372,489 9 ( 26,137 ) 346,361 50 372,439

Residential mortgage-backed securities 2,710,642 2,088 ( 420,582 ) 2,292,148 — 2,710,642

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Obligations of states and state agencies

88,556 552 ( 4,155 ) 84,953 395 88,161

Municipal bonds 316,914 40 ( 14,380 ) 302,574 49 316,865

Total obligations of states and political subdivisions

405,470 592 ( 18,535 ) 387,527 444 405,026

Residential mortgage-backed securities 2,885,303 6,059 ( 369,436 ) 2,521,926 — 2,885,303

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Accrued interest on investments , which is excluded from the amortized cost of HTM debt securities, totaled $ 13.0 million and $ 13.9 million at December 31, 2024 and 2023, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

HTM debt securities are carried net of an allowance for credit losses.

HTM debt securities are carried net of an allowance for credit losses (as shown in the table above).

2024 Form 10-K

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

The age of unrealized losses and fair value of related HTM debt securities at December 31, 2024 and 2023 were as follows:

Twelve Months More than

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As of December 31, 2024, the fair value of debt securities HTM that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law was $ 1.2 billion.

The contractual maturities of investments in debt securities HTM at December 31, 2023 are set forth in the table below.

Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties.

Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary.

Contractual Maturities

The contractual maturities of investments in HTM debt securities at December 31, 2024 are set forth in the table below.

Contractual maturities may differ from actual maturities as borrowers may have the right to call or repay obligations with or without call or prepayment penalties.

2024 Form 10-K

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Total $ 3,532,220 $ 3,028,284

Actual maturities of HTM debt securities may differ from those presented above since certain obligations provide the issuer the right to call or prepay the obligation prior to scheduled maturity without penalty.

The weighted-average remaining expected life for residential mortgage-backed securities HTM was 9.41 years at December 31, 2024.

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Valley monitors the credit quality of the HTM debt securities utilizing the most current credit ratings from external rating agencies.

The following table summarizes the amortized cost of held to maturity debt securities by external credit rating at December 31, 2023 and 2022.

The following table summarizes the amortized cost of HTM debt securities by external credit rating at December 31, 2024 and 2023.

AAA/AA/A Rated BBB rated Non-investment grade rated Non-rated Total

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

At December 31, 2023, most of the obligations of states and political subdivisions were rated investment grade and a large portion of the “non-rated” category included TEMS secured by Ginnie Mae securities.

Trust preferred securities

2023 Form 10-K

consist of non-rated single-issuer securities issued by bank holding companies.

At December 31, 2024, most of the obligations of states and political subdivisions were rated investment grade and a large portion of the “non-rated” category included municipal bonds secured by Ginnie Mae securities.

Trust preferred securities consist of non-rated single-issuer securities issued by bank holding companies.

Corporate bonds consist of debt primarily issued by banks.

2024 Form 10-K

Allowance for Credit Losses for Held to Maturity Debt Securities

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

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

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

Treasury securities, U.S.

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

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

To measure the expected credit losses on HTM debt securities that have loss expectations, Valley estimates the expected credit losses using a discounted cash flow model developed by a third-party.

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Realized Gains and Losses

Gross gains and losses realized on sales, maturities and other securities transactions related to AFS securities and net gains on trading debt securities included in earnings for the years ended December 31, 2023, 2022 and 2021 were as follows:

Gross gains and losses realized on sales, maturities and other securities transactions related to AFS securities and net gains and losses on trading debt securities included in earnings for the years ended December 31, 2024, 2023 and 2022 were as follows:

2024 2023 2022

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Sales transactions:

$ 869 $ — $ 1,370

Gross losses — — ( 550 )

Gross gains $ — $ 869 $ —

Total — 869 —

Maturities and other securities transactions:

$ 21 $ 171 $ 10

Gross gains 3 21 171

Gross losses ( 18 ) ( 488 ) ( 76 )

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Gains (losses) on securities transactions, net $ 100 $ 1,104 $ ( 1,230 )

The gross gains on sales transactions for the year ended December 31, 2023 represent a gain on sale of a previously impaired and fully charged-off corporate bond issued by Signature Bank that was classified as AFS.

The gross gains on sales transactions for the year ended December 31, 2023 resulted from the sale of a previously impaired and fully charged-off corporate bond issued by Signature Bank.

2024 Form 10-K

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Accrued interest on loans , which is excluded from the amortized cost of loans held for investment, totaled $ 208.9 million and $ 222.2 million at December 31, 2024 and 2023, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

During the year ended December 31, 2023, Valley transferred a non-performing construction loan totaling $ 10.0 million, net of $ 4.2 million charge-offs from the held for investment loan portfolio to loans held for sale.

There were no sales of loans from the held for investment portfolio during the years December 31, 2023 and 2022.

Loans Portfolio Sales and Transfers to Loans Held for Sale

Valley sells residential mortgage loans originated for sale (at fair value) primarily to Fannie Mae and Freddie Mac in the normal course of business.

Under certain circumstances, Valley may decide to sell loans that were not originated with the intent to sell.

During 2024, Valley sold $ 75.5 million of performing residential mortgage loans not originated for sale resulting in a modest net gain.

In February 2024, Valley completed the sale of its commercial premium finance lending business for $ 96.8 million.

This asset sale included $ 95.5 million of assets, mainly consisting of $ 93.6 million of loans, and $ 2.8 million of related liabilities.

The transaction generated a $ 3.6 million net gain for the year ended December 31, 2024.

During 2024, Valley transferred from the held for investment portfolio $ 151.0 million and $ 79.7 million of performing commercial real estate and construction loans, respectively, and sold them at par value through loan participation agreements with a related party, Bank Leumi Le-Israel B.M.

Valley also transferred another pool of performing commercial real estate loans totaling $ 933.0 million, net of unearned fees, to loans held for sale in 2024.

These performing loans were sold to an unrelated party during the fourth quarter 2024 and resulted in a $ 13.7 million net loss (due to transaction costs and a net market discount) for the year ended December 31, 2024.

During the year ended December 31, 2023, Valley transferred from the held for investment loan portfolio a non-performing construction loan totaling $ 10.0 million, net of $ 4.2 million in charge-offs at the transfer date.

The non-performing loan held for sale had a carrying value of $ 8.8 million, net of a $ 1.2 million valuation allowance, at December 31, 2024.

See Note 3 for further details.

Related Party Loans

In the ordinary course of business, Valley has granted loans to certain directors, executive officers and their affiliates (collectively referred to as “related parties”).

These loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other unaffiliated persons and do not involve more than normal risk of collectability.

All loans to related parties are performing as of December 31, 2024.

2024 Form 10-K

The following table summarizes the changes in the total outstanding balances of loans and advances to the related parties during the year ended December 31, 2024:

6 unchanged sentences

Credit risk management.

For all loan types discussed below, Valley adheres to a credit policy designed to minimize credit risk while generating the maximum income given the level of risk appetite.

Valley adheres to a credit policy designed to minimize credit risk while generating the maximum income given the level of risk appetite.

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

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

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

Loan portfolio diversification is an important factor utilized by

2023 Form 10-K

Valley to manage its risk across business sectors and through cyclical economic circumstances.

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

Additionally, Valley does not accept crypto assets as loan collateral for any of its loan portfolio classes discussed further below.

Commercial and industrial loans.

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.

While such recurring cash flow serves as the primary source of repayment, a significant number of the loans are collateralized by borrower assets intended to serve as a secondary source of repayment should the need arise.

Anticipated cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value, or in the case of loans secured by accounts receivable, the ability of the borrower to collect all amounts due from its customers.

While a focused area for growth in the percentage mix of our total loan portfolio, 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 for both existing and new customers are based on cash flow from the operations of the business.

While such recurring cash flow serves as the primary source of repayment, a significant number of the loans are secured by collateral such as business equipment, inventory, and real estate.

Short-term loans may be made on an unsecured basis based on a borrower’s financial strength and past performance.

Whenever possible, Valley will obtain the personal guarantee of the borrower’s principals to mitigate the risk.

Unsecured loans, when made, are generally granted to the Bank’s most creditworthy borrowers.

The commercial portfolio also includes taxi medallion loans totaling approximately $ 62.3 million with related reserves of $ 37.7 million at December 31, 2023.

All of these loans are on non-accrual status due to ongoing weakness exhibited in the taxi industry caused by strong competition from alternative ride-sharing services and other factors.

Whenever possible, Valley will obtain the personal guarantee of the borrower’s principals to potentially help mitigate the risk.

Commercial real estate loans .

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Construction loans .

With respect to loans to developers and builders, Valley originates and manages construction loans structured on either a revolving or non-revolving basis, depending on the nature of the underlying development project.

Valley originates and manages construction loans to developers and builders structured on either a revolving or non-revolving basis, depending on the nature of the underlying development project.

These loans are generally secured by the real estate to be developed and may also be secured by additional real estate to mitigate the risk.

5 unchanged sentences

Valley originates residential, first mortgage loans based on underwriting standards that generally comply with Fannie Mae and/or Freddie Mac requirements.

In deciding whether to originate each residential mortgage, Valley considers the qualifications of the borrower as well as the value of the underlying property.

Appraisals and valuations of real estate collateral are contracted directly with independent appraisers or from valuation services and not through appraisal management companies.

The Bank’s appraisal management policy and procedure is in accordance with regulatory requirements and guidance issued by the Bank’s primary regulator.

Credit scoring, using FICO ® and other proprietary credit scoring models are employed in the ultimate, judgmental credit decision by Valley’s underwriting staff.

Valley does not use third party contract underwriting services.

Residential mortgage loans include fixed and variable interest rate loans secured by one to four family homes mostly located in northern and central New Jersey, the New York City metropolitan area, and Florida.

Valley’s ability to be repaid on such loans is closely linked to the economic and real estate market conditions in these regions.

In deciding whether to originate each residential mortgage, Valley considers the qualifications of the borrower as well as the value of the underlying property.

Home equity loans.

Residential mortgage loans include fixed and variable interest rate loans secured by one to four family homes.

2024 Form 10-K

Consumer loans.

The consumer loan portfolio consists of a home equity, automobile and other consumer loans.

Home equity lending consists of both fixed and variable interest rate products.

1 unchanged sentence

Valley generally will not exceed a combined (i.e., first and second mortgage) loan-to-value ratio o f 80 percent when originating a home equity loan.

Automobile loans.

Valley uses both judgmental and scoring systems in the credit decision process for automobile loans.

Automobile originations (including light truck and sport utility vehicles) are largely produced via indirect channels, originated through approved automobile dealers.

Automotive collateral is generally a depreciating asset and there are times in the life of an automobile loan where the amount owed on a vehicle may exceed its collateral value.

Additionally, automobile charge-offs will vary based on the strength or weakness of the used vehicle market, original advance rate, when in the life cycle of a loan a

2023 Form 10-K 108

default occurs and the condition of the collateral being liquidated.

Additionally, automobile charge-offs will vary based on the strength or weakness of the used vehicle market, original advance rate, when in the life cycle of a loan a default occurs, and the condition of the collateral being liquidated.

Where permitted by law, and subject to the limitations of the bankruptcy code, deficiency judgments are sought and acted upon to ultimately collect all money owed, even when a default resulted in a loss at collateral liquidation.

Valley uses a third party to actively track collision and comprehensive risk insurance required of the borrower on the automobile and this third party provides coverage to Valley in the event of an uninsured collateral loss.

Other consumer loans.

Valley’s other consumer loan portfolio includes direct consumer term loans, both secured and unsecured.

The other consumer loan portfolio includes exposures in personal lines of credit (mainly those secured by cash surrender value of life insurance), credit card loans and personal loans.

Unsecured consumer loans totaled approximately $ 76.6 million and $ 63.8 million, including $ 29.1 million and $ 16.8 million of credit card loans, at December 31, 2023 and 2022, respectively.

Management believes the aggregate risk exposure to unsecured loans and lines of credit was not significant at December 31, 2023.

Credit Quality

51 unchanged sentences

2024 Form 10-K

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

The following table presents the internal loan classification risk by loan portfolio class by origination year based on the most recent analysis performed at December 31, 2024 and 2023, as well as the gross loan charge-offs by year of origination for the years ended December 31, 2024 and 2023:

Amortized Cost Basis by Origination Year

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Substandard 84,410 107,944 387,638 288,906 236,927 520,858 11,167 — 1,637,850

Doubtful — 3,060 — 35,756 9,813 1,883 — — 50,512

Total commercial real estate $ 2,338,118 $ 3,433,126 $ 5,988,114 $ 4,400,609 $ 2,604,959 $ 6,937,081 $ 749,597 $ 78,621 $ 26,530,225

Pass $ 545,597 $ 680,260 $ 334,899 $ 92,765 $ 17,955 $ 45,161 $ 1,224,698 $ 58,644 $ 2,999,979

Special Mention 13,278 — 664 5,069 — 2,504 16,691 — 38,206

Substandard 9,835 — 8,950 4,942 — — 43,474 — 67,201

16 unchanged sentences

Substandard 58,115 25,709 12,122 48,506 70,439 214,095 4,415 2,077 435,478

Doubtful — — — — — 162 — — 162

Total commercial real estate $ 4,272,246 $ 6,738,948 $ 5,052,212 $ 3,022,501 $ 2,469,773 $ 5,957,963 $ 622,497 $ 107,099 $ 28,243,239

Pass $ 753,759 $ 655,198 $ 267,336 $ 10,318 $ 40,584 $ 43,560 $ 1,762,890 $ 139,599 $ 3,673,244

Special Mention — — — — — — 14,268 — 14,268

Substandard 6,721 — 9,276 — — 17,668 — — 33,665

1 unchanged sentence

Total construction $ 760,480 $ 675,097 $ 276,612 $ 10,318 $ 40,584 $ 61,228 $ 1,762,890 $ 139,599 $ 3,726,808

Gross loan charge-offs $ 307 $ 12,919 $ 28,438 $ 6,946 $ 5,031 $ 13,446 $ 3,729 $ 145 $ 70,961

2024 Form 10-K

For residential mortgages, automobile, home equity and other consumer loan portfolio classes, Valley evaluates credit quality based on the aging status of the loan and by payment activity.

The following table presents the amortized cost in those loan classes based on payment activity by origination year as of December 31, 2023 and 2022, as well as the gross loan charge-offs by year of origination for the year ended December 31, 2023:

For residential mortgages, home equity, automobile and other consumer loan portfolio classes, Valley evaluates credit quality based on the aging status of the loan and by payment activity.

The following table presents the amortized cost in those loan classes based on payment activity by origination year as of December 31, 2024 and 2023, as well as the gross loan charge-offs by year of origination for the years ended December 31, 2024 and 2023:

Amortized Cost Basis by Origination Year

38 unchanged sentences

Total consumer $ 541,513 $ 597,411 $ 374,145 $ 127,568 $ 101,615 $ 135,506 $ 1,538,050 $ 24,887 $ 3,440,695

Gross loan charge-offs $ 296 $ 903 $ 357 $ 232 $ 752 $ 1,921 $ 31 $ — $ 4,492

Loan modifications to borrowers experiencing financial difficulty .

From time to time, Valley may extend, restructure, or otherwise modify the terms of existing loans, on a case-by-case basis, to remain competitive and retain certain customers, as well as assist other customers who may be experiencing financial difficulties.

Prior to 2023, a loan was classified as a TDR loan if the borrower was experiencing financial difficulties and a concession was made at the time of such modification.

Effective January 1, 2023, Valley adopted ASU No.

2022-02 which eliminated the accounting guidance for TDR loans while enhancing disclosure requirements for certain loan modifications by creditors when a borrower is experiencing financial difficulty.

Valley adopted ASU No.

2022-02 using the modified retrospective transition method.

At the date of adoption, Valley was no longer required to utilize a loan-level discounted cash flow approach for determining the allowance for certain modified loans previously classified as TDR loans.

As a result, Valley elected to utilize its collective reserve methodology for pools of loans that share common risk characteristics for determining the reserves for the modified loans formerly classified as TDR loans.

This change resulted in the recognition of a cumulative-effect adjustment which decreased the allowance for loan losses with an offsetting entry to retained earnings, net of deferred taxes, at January 1, 2023.

2024 Form 10-K

The following table shows the amortized cost basis of loans to borrowers experiencing financial difficulty at December 31, 2023 that were modified during the year ended December 31, 2023, disaggregated by class of financing receivable and type of modification.

The following table shows the amortized cost basis of loans to borrowers experiencing financial difficulty at December 31, 2024 and 2023 that were modified during the years ended December 31, 2024 and 2023, disaggregated by class of financing receivable and type of modification.

Each of the types of modifications was less than one percent of their respective loan categories.

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

Interest Rate Reduction Term Extension Term Extension and Interest Rate Reduction Other Than Insignificant Payment Delay Total % of Total Loan Class

($ in thousands)

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Commercial real estate 3,223 82,206 16,198 173,780 275,407 1.04

Construction — — — 2,505 2,505 0.08

Residential mortgage — 1,041 — 1,136 2,177 0.04

Home equity — — — 44 44 0.01

Total $ 4,048 $ 195,245 $ 16,198 $ 177,465 $ 392,956 0.81

Commercial and industrial $ 2,967 $ 58,287 $ 2,500 $ — $ 63,754 0.69 %

Commercial real estate — 123,838 3,690 — 127,528 0.45

Residential mortgage — 568 — — 568 0.01

Home equity — 31 — — 31 0.01

Consumer — 43 — — 43 —

Total $ 2,967 $ 182,767 $ 6,190 $ — $ 191,924 0.17

The following table describes the types of modifications made to borrowers experiencing financial difficulty during the year ended December 31, 2023:

Types of Modifications

Commercial and industrial Reductions in interest rate from 3.50 percent, 1.84 percent and 1.83 percent to 1.00 percent

12 month term extensions

12 month term extensions combined with a reduction in interest rate from 9.50 percent to 6.50 percent

Commercial real estate 6 to 36 month term extensions

term extension combined with a reduction in interest rate from 8.75 percent to 6.00 percent

Residential mortgage 12 month term extensions

Home equity 120 month term extension

Consumer 60 month term extension

Valley closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of modification efforts.

Valley has loans to borrowers experiencing financial difficulty that were modified within the previous 12 months and for which there was a payment default ( 90 or more days past due) totaling $ 14.9 million at December 31, 2023.

All of these loans were modified by term extensions and were on non-accrual status at December 31, 2023.

Valley did not extend any commitments to lend additional funds to borrowers experiencing financial difficulty whose loans had been modified during the year ended December 31, 2023.

The following table describes the types of modifications made to borrowers experiencing financial difficulty during the years ended December 31, 2024 and 2023:

Weighted Average Interest Rate Reduction Weighted Average Term Extension (in months) Weighted Average Payment Deferral (in months)

Commercial and industrial 3.10 % 10 —

Commercial real estate 0.91 12 10

Construction — — 43

Residential mortgage — 145 7

Home equity — 120 5

Commercial and industrial 2.16 % 12 —

Commercial real estate 2.75 17 —

Residential mortgage — 43 —

Home equity — 120 —

Consumer — 60 —

2024 Form 10-K

The following table presents pre- and post-modification amortized cost of loans by loan class modified as TDRs during the year ended December 31, 2022 .

Post-modification amounts are presented as of December 31, 2022 using the allowance methodology for TDRs prior to the adoption of ASU No.

Troubled Debt

Restructurings Number of

Contracts Pre-Modification

Recorded Investment Post-Modification

Recorded Investment

Valley closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of modification efforts.

The following table presents the aging analysis of loans that have been modified within the previous 12 months at December 31, 2024 and 2023.

Current 30-89 Days Past Due 90 Days Or More Past Due Total

($ in thousands)

2 unchanged sentences

Commercial real estate 275,361 — 46 275,407

Commercial real estate 5 26,375 25,608

Construction 2,505 — — 2,505

Total commercial real estate 7 37,400 34,685

Residential mortgage 1,898 184 95 * 2,177

Consumer 1 125 116

Home equity — 44 — 44

Total $ 390,525 $ 2,290 $ 141 $ 392,956

The total TDRs presented in the table above had allocated a specific allowance for loan losses that totaled $ 63.0 million at December 31, 2022.

There was $ 26.2 million of charge-offs related to TDRs for the year ended December 31, 2022.

As of December 31, 2022, the commercial and industrial loan category in the above table mostly consisted of non-accrual TDR taxi medallion loans classified as substandard and doubtful.

Valley did not extend any commitments to lend additional funds to borrowers whose loans have been modified as TDRs during the year ended December 31, 2022.

Performing TDRs (not reported as non-accrual loans) and non-performing TDRs totaled $ 77.5 million and $ 124.0 million, respectively, as of December 31, 2022.

Loans modified as TDRs within the previous 12 months and for which there was a payment default ( 90 or more days past due) in the year ended December 31, 2022 were as follows:

Troubled Debt Restructurings Subsequently Defaulted Number of

Contracts Recorded

($ in thousands)

December 31, 2023

Commercial and industrial $ 45,169 $ 3,697 $ 14,888 * $ 63,754

Commercial real estate 124,958 2,570 — 127,528

Residential mortgage 207 361 — 568

Home equity 31 — — 31

Consumer 43 — — 43

Total $ 170,408 $ 6,628 $ 14,888 $ 191,924

* Indicates non-accrual loans.

The following table provides the amortized cost basis of financing receivables that had a payment default during the years ended December 31, 2024 and 2023 and were modified in the 12 months before default to borrowers experiencing financial difficulty.

Term Extension Other than Insignificant Payment Delay

($ in thousands)

Commercial real estate $ 46 $ —

Construction — —

Total commercial real estate 2 5,207

Residential mortgage 868 95

Total $ 914 $ 95

Commercial and industrial $ 14,888 $ —

Total $ 14,888 $ —

Valley did not extend any commitments to lend additional funds to borrowers experiencing financial difficulty whose loans had been modified during the year ended December 31, 2024 and 2023.

Collateral dependent loans.

Loans are collateral dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral.

When Valley determines that foreclosure is probable, the collateral dependent loan balances are written down to the estimated current fair value (less estimated selling costs) resulting in an immediate charge-off to the allowance, excluding any consideration for personal guarantees that may be pursued in the Bank’s collection process.

When Valley determines that repayment or satisfaction of the loan depends on the sale of the collateral, the collateral dependent loan balances are written down to the estimated current fair value (less estimated selling costs) resulting in an immediate charge-off to the allowance, excluding any consideration for personal guarantees that may be pursued in the Bank’s collection process.

2024 Form 10-K

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Total $ 329,702 $ 264,678

* Commercial and industrial loans presented in the table above are primarily collateralized by taxi medallions .

* Includes non-accrual loans collateralized by taxi medallions totaling $ 49.5 million and $ 62.3 million at December 31, 2024 and 2023, respectively.

Allowance for Credit Losses for Loans

21 unchanged sentences

Beginning balance $ 133,359 $ 249,598 $ 42,957 $ 20,166 $ 446,080

Impact of the adoption of ASU No.

2022-02 ( 739 ) ( 589 ) ( 12 ) ( 28 ) ( 1,368 )

Beginning balance, adjusted 139,202 258,819 39,008 20,258 457,287

Loans charged-off ( 68,299 ) ( 138,495 ) ( 29 ) ( 8,289 ) ( 215,112 )

6 unchanged sentences

Beginning balance $ 139,941 $ 259,408 $ 39,020 $ 20,286 $ 458,655

Allowance for PCD loans * 33,452 36,618 206 43 70,319

Impact of the adoption of ASU No.

2022-02 ( 739 ) ( 589 ) ( 12 ) ( 28 ) ( 1,368 )

Beginning balance, adjusted 139,202 258,819 39,008 20,258 457,287

4 unchanged sentences

Ending balance $ 133,359 $ 249,598 $ 42,957 $ 20,166 $ 446,080

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

2023 Form 10-K 118

The following table represents the allocation of the allowance for loan losses and the related loans by loan portfolio segment disaggregated based on the allowance measurement methodology for the years ended December 31, 2024 and 2023.

19 unchanged sentences

Total $ 9,230,543 $ 31,970,047 $ 5,569,010 $ 3,440,695 $ 50,210,295

2024 Form 10-K

LEASES (Note 6)

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Total $ 388,303 $ 403,781

During the second quarter 2023, Valley recognized an operating lease ROU asset and related lease liability totaling $ 58.3 million and $ 66.4 million, respectively, related to its new headquarters located in Morristown, New Jersey.

During 2023, Valley recognized an operating lease ROU asset and related lease liability totaling $ 58.3 million and $ 66.4 million, respectively, related to its new headquarters located in Morristown, New Jersey.

The ROU asset was reduced by construction allowance incentives totaling $ 8.2 million, which are amortized over the lease term.

2023 Form 10-K

The following table presents the components by lease type, of total lease cost recognized in the consolidated statements of income for the years ended December 31, 2024, 2023, and 2022:

16 unchanged sentences

Financing cash flows from finance leases 3 18 745

2024 Form 10-K

The following table presents supplemental information related to leases at December 31, 2024 and 2023:

18 unchanged sentences

Total $ 746,460 $ 384,745 $ 3,558

2023 Form 10-K 120

The total net investment in direct financing and sales-type leases was $ 746.5 million and $ 797.4 million at December 31, 2024 and 2023, respectively, comprised of $ 741.0 million and $ 793.3 million in lease receivables and $ 5.5 million and $ 4.1 million in non-guaranteed residuals, respectively.

11 unchanged sentences

Depreciation and amortization of premises and equipment included in net occupancy expense for the years ended December 31, 2024, 2023 and 2022 was approximately $ 43.7 million, $ 43.4 million, and $ 41.2 million, respectively.

GOODWILL AND OTHER INTANGIBLE ASSETS (Note 8)

As discussed in Note 21 , Valley made changes to its operating structure and strategy during the second quarter 2022 (and subsequent to the annual goodwill impairment test), which resulted in changes in its operating segments and reporting units to reflect how the CEO, who is the chief operating decision maker, intends to manage Valley, allocates resources and measures performance.

Goodwill balances were reallocated across the new operating segments and reporting units based on their relative fair values using the valuation performed during the second quarter 2022.

During 2023, the carrying amounts of goodwill allocated to Valley's reporting units at December 31, 2022 and 2021, as reflected in the table below, were adjusted for the correction of an immaterial error related to the reallocation of goodwill during the second quarter 2022.

As a result of the segment change in the second quarter 2022, the goodwill balance of $ 220.5 million from the former Investment Management reporting unit was allocated to the Consumer Banking (formerly Consumer Lending) and Commercial Banking (formerly Commercial Lending) reporting units, on a relative fair value basis, in the amounts of $ 41.3 million and $ 179.2 million, respectively.

The following tables summarize the effects of the adjustment on the amounts previously reported in the goodwill allocation table, the corrected (or “as adjusted”) amounts for each applicable period end and the changes in goodwill for each period presented.

Reporting Unit (1)

Management Consumer

Banking Commercial Banking Total

(in thousands)

December 31, 2021, as reported

$ 38,851 $ 222,390 $ 1,197,767 $ 1,459,008

Adjustment ( 4,536 ) 127,167 ( 122,631 ) —

December 31, 2021, as adjusted

$ 34,315 $ 349,557 $ 1,075,136 $ 1,459,008

December 31, 2022, as reported

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

Adjustment 28,375 64,773 ( 93,148 ) —

December 31, 2022, as adjusted

$ 78,142 $ 349,646 $ 1,441,148 $ 1,868,936

2024 Form 10-K

GOODWILL AND OTHER INTANGIBLE ASSETS (Note 8)

The following table presents carrying amounts of goodwill allocated to Valley's reporting units at December 31, 2024 and 2023.

Reporting Unit (*)

2 unchanged sentences

(in thousands)

December 31, 2021, as adjusted

$ 34,315 $ 349,557 $ 1,075,136 $ 1,459,008

Goodwill from business combinations, as adjusted (2)

43,827 89 366,012 409,928

December 31, 2022, as adjusted

$ 78,142 $ 349,646 $ 1,441,148 $ 1,868,936

December 31, 2023 $ 78,142 $ 349,646 $ 1,441,148 $ 1,868,936

Goodwill $ 78,142 $ 349,646 $ 1,441,148 $ 1,868,936

* The Wealth Management and Consumer Banking reporting units are both components of the overall Consumer Banking operating segment, which is further described in Note 21 .

(2) Includes adjustments of $ 32.9 million, $( 62.4 ) million and $ 29.4 million for Wealth Management, Consumer Banking and Commercial Banking, respectively, to reflect the correction of an immaterial error related to the reallocation of goodwill during the second quarter 2022.

The goodwill from business combinations set forth in the table above during 2022 related to the acquisitions of Bank Leumi USA and Landmark totaled $ 400.6 million and $ 4.4 million , respectively.

The goodwill from Landmark transaction was allocated entirely to the Wealth Management reporting unit during t he year ended December 31, 2022.

Valley also recorded $ 4.9 million of additional goodwill during 2022 reflecting an adjustment to the deferred tax assets acquired from Westchester as of the acquisition date.

See Note 2 for further details related to acquisitions.

During the second quarter 2024, Valley performed the annual goodwill impairment test at its normal assessment date.

During the year ended December 31, 2024, there were no triggering events that would more likely than not reduce the fair value of any reporting unit below its carrying amount.

There was no impairment of goodwill recognized during the years ended December 31, 2023, 2022 and 2021 and the correction of the error in allocation of goodwill to reporting units described above had no impact on this conclusion.

The following tables summarize other intangible assets as of December 31, 2023 and 2022:

There was no impairment of goodwill recognized during the years ended December 31, 2024, 2023 and 2022.

The following tables summarize other intangible assets at December 31, 2024 and 2023:

Assets Accumulated

12 unchanged sentences

Core deposits are amortized using an accelerated method over a period of 10.0 years.

Valley recorded $ 114.4 million of core deposit intangibles res ulting from the Bank Leumi USA acquisition during the year ended December 31, 2022 .

The line item labeled “Other” included in the table above primarily consists of customer lists, certain financial asset servicing contracts and covenants not to compete, which are amortized over their expected lives generally using a straight-line method and have a weighted average amortization period of 13.5 years.

Valley recorded $ 39.0 million and $ 6.2 million of other intangible assets resulting from the Bank Leumi USA and Landmark acquisitions, respectively, during the year ended December 31, 2022.

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

No impairment was recognized during the years ended December 31, 2024, 2023 and 2022.

2023 Form 10-K 122

The following table summarizes the change in loan servicing rights during the years ended December 31, 2024, 2023 and 2022:

1 unchanged sentence

(in thousands)

Loan servicing rights:

Balance at beginning of year $ 23,807 $ 23,685 $ 22,810

Beginning balance $ 21,950 $ 23,807 $ 23,685

Origination of loan servicing rights 3,375 2,643 5,307

Amortization expense ( 4,197 ) ( 4,500 ) ( 5,185 )

Balance at end of year $ 21,950 $ 23,807 $ 23,685

Valuation allowance:

Balance at beginning of year $ — $ — $ ( 865 )

Impairment recovery adjustment — — 865

Balance at end of year, net of valuation allowance $ 21,950 $ 23,807 $ 23,685

Ending balance $ 21,128 $ 21,950 $ 23,807

Loan servicing rights are accounted for using the amortization method.

There was no net impairment recognized during December 31, 2023 and 2022 .

As shown in the above table, Valley recorded net recoveries of impairment charges totaling $ 865 thousand for the year ended December 31, 2021.

There was no valuation allowance at December 31, 2024, 2023 and 2022 and no net impairment recognized during the years ended December 31, 2024, 2023 and 2022.

2024 Form 10-K 124

The Bank services residential mortgage loan portfolios and it is compensated for loan administrative services performed for mortgage servicing rights of loans originated and sold by the Bank, and to a lesser extent, purchased mortgage servicing rights.

The aggregate principal balances of residential mortgage loans serviced by the Bank for others approximated $ 3.3 billion, $ 3.5 billion and $ 3.6 billion at December 31, 2023, 2022 and 2021, respectively.

The aggregate principal balances of residential mortgage loans serviced by the Bank for others approximated $ 3.3 billion at both December 31, 2024 and 2023 and $ 3.5 billion at December 31, 2022.

The outstanding balance of loans serviced for others is not included in the consolidated statements of financial condition.

Valley recognized amortization expense on other intangible assets, including net (recoveries of) impairment charges on loan servicing rights (reflected in the table above), of $ 39.8 million, $ 37.8 million and $ 21.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Valley recognized amortization expense on other intangible assets of $ 35.0 million, $ 39.8 million and $ 37.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The following table presents the estimated amortization expense of other intangible assets over the next five-year period:

8 unchanged sentences

DEPOSITS (Note 9)

Included in time deposits are certificates of deposit over $250 thousand totaling $ 2.6 billion and $ 1.8 billion at December 31, 2023 and 2022, respectively.

Interest expense on time deposits of $250 thousand or more totaled $ 9.5 million, $ 3.4 million and $ 1.1 million in 2023, 2022 and 2021, respectively.

The scheduled maturities of time deposits as of December 31, 2024 were as follows:

1 unchanged sentence

2025 $ 9,240,979

2026 1,781,725

2027 1,257,252

Thereafter 11,330

Total time deposits $ 12,342,544

2023 Form 10-K

Deposits from certain directors, executive officers and their affiliates totaled $ 81.9 million and $ 101.1 million at December 31, 2023 and 2022, respectively.

The following table presents additional information about deposits at December 31, 2024 and 2023 :

(in thousands)

Certificates of deposits in excess of the FDIC limit included in time deposits $ 2,366,648 $ 2,587,535

Deposits from certain directors, executives, and other affiliates 67,835 81,902

BORROWED FUNDS (Note 10)

1 unchanged sentence

Short-term borrowings at December 31, 2024 and 2023 consisted of the following:

(in thousands)

FHLB advances $ — $ 850,000

1 unchanged sentence

Total short-term borrowings $ 72,718 $ 917,834

The weighted average interest rate for short-term FHLB advances was 5.62 percent and 1.60 percent at December 31, 2023 and 2022, respectively.

The weighted average interest rate for short-term FHLB advances was 5.62 percent for the year ended December 31, 2023.

2024 Form 10-K

Long-Term Borrowings

Long-term borrowings at December 31, 2024 and 2023 consisted of the following:

(in thousands)

FHLB advances, net *

3 unchanged sentences

Total long-term borrowings $ 3,174,155 $ 2,328,375

(1) FHLB advances are presented net of unamortized premiums totaling $ 209 thousand and $ 419 thousand at December 31, 2023 and 2022, respectively.

(2) Subordinated debt is presented net of unamortized debt issuance costs totaling $ 5.2 million and $ 6.9 million at December 31, 2023 and 2022, respectively.

* FHLB advances and subordinated debt are reported net of unamortized premiums and debt issuance costs, respectively, that were immaterial at both December 31, 2024 and 2023.

FHLB Advances.

7 unchanged sentences

Total long-term FHLB advances $ 2,526,604

None of the FHLB advances reported in the table above are callable for early redemption by the FHLB during the next 12 months.

The FHLB advances reported in the table above are not callable for early redemption.

Subordinated Debt.

On September 27, 2023 , Valley repaid $ 125 million of 5.125 percent matured subordinated notes issued in September 2013.

There were no new issuances of the subordinated debt during the year ended December 31, 2023.

2023 Form 10-K 124

At December 31, 2024, Valley had the following subordinated debt outstanding by its maturity date:

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Interest on the subordinated notes during the initial five year term through September 30, 2027, is payable semi-annually in arrears on March 30 and September 30, commencing on March 30, 2023.

Thereafter, interest will be set based on three-month Term SOFR plus 278 basis points and paid quarterly through maturity of the notes.

The subordinated notes had a net carrying va lue of $ 148.1 million at December 31, 2023.

Thereafter, interest

2024 Form 10-K 126

will be set based on three-month Term SOFR plus 278 basis points and paid quarterly through maturity of the notes.

The subordinated notes had a net carrying va lue of $ 148.6 million and $ 148.2 million at December 31, 2024 and 2023, respectivel y.

Pledged Securities.

3 unchanged sentences

These trusts were established for the sole purpose of issuing trust preferred securities and related trust common securities.

The proceeds from such issuances were used by the trust to purchase an equivalent amount of junior subordinated debentures issued by the acquired bank, and now assumed by Valley.

The proceeds from such issuances were used by the trust to purchase an equivalent amount of junior subordinated debentures issued by the acquired bank, and assumed by Valley.

The junior subordinated debentures, the sole assets of the trusts, are unsecured obligations of Valley, and are subordinate and junior in right of payment to all present and future senior and subordinated indebtedness and certain other financial obligations of Valley.

Valley does not consolidate its capital trusts based on GAAP but wholly owns all of the common securities of each trust.

2023 Form 10-K

The table below summarizes the outstanding callable junior subordinated debentures and the related trust preferred securities issued by each trust as of December 31, 2024 and 2023:

19 unchanged sentences

Annual interest rate 3-mo.

LIBOR+ 3.45 %

LIBOR+ 2.85 %

SOFR+spread adj.+ 1.4 %

SOFR+spread adj.+ 3.45 %

SOFR+spread adj.+ 2.85 %

SOFR+spread adj.+ 1.8 %

Stated maturity date July 30, 2037 November 7, 2032 January 23, 2034 December 15, 2036

7 unchanged sentences

SOFR+ spread adj.+ 1.8 %

Annual distribution rate 2022 (2)

LIBOR+ 3.45 %

LIBOR+ 2.85 %

Issuance date July 2, 2007 October 29, 2002 December 19, 2003 December 14, 2006

10 unchanged sentences

The trust preferred securities are included in Valley’s total risk-based capital (as Tier 2 capital) for regulatory purposes at December 31, 2024 and 2023.

2024 Form 10-K

BENEFIT PLANS (Note 12)

6 unchanged sentences

The OPEB plans are active, but closed to new participants.

2023 Form 10-K 126

Collectively, all qualified and non-qualified plans are referred to as the “Pension” in the tables below unless indicated otherwise.

4 unchanged sentences

Projected benefit obligation at beginning of year $ 179,918 $ 175,496 $ 5,451 $ 5,981

Acquisition (1)

— 49,008 — 7,445

Interest cost 8,542 8,923 245 279

Actuarial gain (loss) 7,604 ( 48,109 ) ( 161 ) ( 975 )

Actuarial (loss) gain ( 6,017 ) 7,604 178 ( 161 )

Benefits paid ( 11,920 ) ( 12,105 ) ( 721 ) ( 648 )

2 unchanged sentences

Fair value of plan assets at beginning of year $ 302,860 $ 275,406 $ — $ —

Acquisition — 53,433 — —

Actual return on plan assets 30,595 37,993 — —

2 unchanged sentences

Fair value of plan assets at end of year * $ 351,723 $ 302,860 $ — $ —

$ 302,860 $ 275,406 $ — $ —

Funded status of the plan

1 unchanged sentence

Accumulated benefit obligation 170,523 179,918 $ 5,153 $ 5,451

(1) Beginning balances of the Pension and OPEB plans assumed from Bank Leumi USA are presented as of April 1, 2022, based on the actuarial valuation by the plan administrator.

* Pension assets include accrued interest receivables of $ 986 thousand and $ 826 thousand as of December 31, 2024 and 2023, respectively.

2024 Form 10-K 128

Amounts recognized as a component of accumulated other comprehensive loss at end of year that have not been recognized as a component of the net periodic pension expense for Valley’s Pension and OPEB plans are presented in the following table:

3 unchanged sentences

Prior service cost 180 216 — —

Deferred (benefit) tax expense ( 12,697 ) ( 15,116 ) 273 249

Deferred tax (benefit) expense ( 8,630 ) ( 12,697 ) 206 273

Total $ 22,777 $ 33,265 $ ( 543 ) $ ( 715 )

The non-qualified plans presented within Pension in the tables above had a projected benefit obligation, accumulated benefit obligation, and fair value of plan assets as follows:

The non-qualified plans presented within Pension in the tables above had a projected benefit obligation, a ccumulated benefit obligation, and fair value of plan assets at December 31, 2024 and 2023 as follows:

(in thousands)

2 unchanged sentences

Fair value of plan assets — —

In determining the discount rate assumptions, management looks to current rates on fixed-income corporate debt securities that receive a rating of AA or higher from either Moody’s or S&P with durations equal to the expected benefit

2023 Form 10-K

payments streams required of each plan.

The weighted average discount rate used in determining the actuarial present value of benefit obligations for the Pension plans was 5.57 percent and 5.00 percent as of December 31, 2024 and 2023, respectively, and 5.51 percent and 4.97 percent for the OPEB plans as of December 31, 2024 and 2023, respectively.

17 unchanged sentences

Total recognized in net periodic benefit (income) cost and other comprehensive (income) loss (before tax) $ ( 28,070 ) $ ( 21,465 ) $ 423 $ 118

2024 Form 10-K

The benefit payments, which reflect expected future service, (as appropriate) expected to be paid in future years, are presented in the following table:

7 unchanged sentences

Thereafter 64,991 1,618

2023 Form 10-K 128

The weighted average assumptions used to determine net periodic benefit (income) cost for the years ended December 31, 2024, 2023 and 2022 were as follows:

1 unchanged sentence

Discount rate - projected benefit obligation 5.00 % 5.31 % 2.85 % 4.96 % 5.29 % 2.85 %

Discount rate - service cost N/A N/A N/A N/A 2.85 %

Discount rate - interest cost 4.92 % 5.23 % 2.49 % 4.96 % 5.29 % 2.85 %

Expected long-term return on plan assets 7.50 % 6.79 % 6.75 % N/A N/A

Rate of compensation increase N/A N/A N/A N/A N/A

Expected long-term return on plan assets 7.25 % 7.50 % 6.79 % N/A N/A N/A

Assumed healthcare cost trend rate * N/A N/A N/A 7.00 % 5.50 % 5.75 %

1 unchanged sentence

The rate to which the healthcare cost trend rate is assumed to decline (ultimate trend rate) along with the year that the ultimate trend rate will be reached is 4.5 percent in 2035.

The expected long-term rate of return on plans' assets is the average rate of return expected to be realized on funds invested or expected to be invested to provide for the benefits included in the benefit obligation.

The expected long-term rate of return on plans assets is established at the beginning of the year based upon historical and projected returns for each asset category.

The expected long-term rate of return on qualified plan assets is the average rate of return expected to be realized on funds invested or expected to be invested to provide for the benefits included in the benefit obligation.

The expected long-term rate of return on plan assets is established at the beginning of the year based upon historical and projected returns for each asset category.

The expected rate of return on plan assets assumption is based on the concept that it is a long-term assumption independent of the current economic environment and changes would be made in the expected return only when long-term inflation expectations change, asset allocations chang e materially or when asset class returns are expected to change for the long-term.

In accordance with Section 402 (c) of Employee Retirement Income Security Act of 1974, as amended, the investment management advisory firm and individual asset managers, if applicable, of both defined benefit pension plans are granted full discretion to buy, sell, invest and reinvest the portions of the portfolio assigned to them consistent with the Bank Pension Committee’s policy and guidelines and under the supervision of an independent non-discretionary investment consulting firm that reports to the Pension Committee and Trustees.

The long-term asset allocation targets set for the plans reflect return requirements and risk tolerances specific to each plan.

The asset allocation targets for Valley National Bank Pension Plan (Valley Plan) are set to achieve a required-return assumption with an approximate equal weighting of 50 percent fixed income securities and 50 percent equity securities.

The Bank Leumi Employee Retirement Income Plan (Bank Leumi Plan) asset allocation targets are set in accordance with a “liability-driven investment” (LDI) approach whereby the mix of assets varies to minimize funded-status volatility while meeting required-return assumption.

The Bank Leumi Plan assets will be invested in approximately 55 percent high-quality fixed income and 45 percent in marketable equities.

The Bank Retirement Plans Committee, assisted by an independent non-discretionary investment consulting firm, (1) determines the qualified plans’ investment goals, objectives and risk parameters, (2) directs the diversification of the investments into various suitable investment options and asset types, and (3) regularly monitors the performance of the assets.

Individual asset managers are granted full discretion to buy, sell, invest and reinvest the portions of the asset portfolio assigned to them consistent with the Bank Retirement Plans Committee’s policy and guidelines.

The long-term strategic assets allocation targets reflect investment return requirements and risk tolerances specific to each plan.

The asset allocation targets are generally divided into approximately equal weightings (50 percent) of growth assets, including U.S.

and International marketable equity securities, and fixed income assets, largely comprised of high-quality U.S.

bonds of both intermediate and long duration plus cash equivalents.

The plans’ investments are well-diversified in terms of industry, economic sector, market capitalization and asset type.

Although much depends upon market conditions, the absolute investment objective for the equity portion is to earn at least a mid-to-high single digit return, after adjustment by the CPI, over rolling five-year periods.

Relative performance should be above the median of a suitable grouping of other equity portfolios and a suitable index over rolling three-year periods.

For the fixed income portion of the Valley Plan, the absolute objective is to earn a positive annual real return, after adjustment by the CPI, over rolling five-year periods.

For the fixed income portion of the Bank Leumi Plan, the absolute objective is to earn an annual real return that, to the greatest extent possible, offsets the change in value of the plan’s liability.

Relative performance should be better than the median performance of bonds when judged against a suitable index of other fixed income portfolios and above suitable market benchmark over rolling three-year periods.

Cash equivalents will be invested in money market funds or in other high quality instruments approved by the Trustees of the qualified plan.

At the direction of the Trustees, and with the assistance of an independent non-discretionary investment consulting firm, the Bank’s Pension Committee manages the risk exposure of the qualified plans’ assets;

directs the diversification of the plans’ investments into various suitable investment options and supervises plan assets managed by several individual asset managers.

The Pension Committee engages an independent non-discretionary investment consulting firm that regularly monitors the performance of the plan assets and the individual asset managers to ensure they are compliant with the policies adopted by the Pension Committee and Trustees.

If the risk profile and overall return of assets managed are not in line with the risk objectives or expected return benchmarks for the qualified plan, the investment consulting firm may recommend the termination of an asset manager to the Pension Committee.

In general, the assets of the qualified plans are marketable investment securities that are well-diversified in terms of industry, economic sector, market capitalization and asset class.

For the fixed income portion of the plan assets, the absolute objective is to earn a positive annual real return, after adjustment by the CPI, over rolling five-year periods.

2024 Form 10-K 130

The following table presents the weighted-average asset allocations by asset category for the defined benefit pension plans that are measured at fair value by level within the fair value hierarchy.

The following tables present the weighted-average asset allocations by asset category for the defined benefit pension plans that are measured at fair value by level within the fair value hierarchy at December 31, 2024 and 2023.

See Note 3 for further details regarding the fair value hierarchy.

8 unchanged sentences

Mutual funds 31 % $ 109,951 $ 109,951 $ — $ —

Equity securities 20 60,918 60,918 — —

Corporate bonds 21 73,599 — 73,599 —

Equity securities 17 58,474 58,474 — —

Treasury securities 14 50,573 50,573 — —

39 unchanged sentences

Valley maintains separate non-qualified plans for former directors and senior management of Merchants Bank of New York acquired in January of 2001.

At December 31, 2023 and 2022, the remaining obligations under these p lans were $ 963 thousand and $ 1.1 million, respectively, of which $ 246 thousand an d $ 297 thousand, respectively, were funded by Valley.

At December 31, 2024 and 2023, the remaining obligations under these plans were $ 811 thousand and $ 962 thousand, respectively.

Valley's accrued expense related to these plans totaled $ 195 thousand and $ 246 thousand at December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, all of the obligations were included in other liabilities and $ 447 thousand (net of a $ 170 thousand tax benefit) and $ 519 thousand (net of a $ 198 thousand tax benefit), respectively, were recorded in accumulated other comprehensive loss.

5 unchanged sentences

The SERP is secured by investments in money market mutual funds which are held in a trust and classified as equity securities on the consolidated statements of financial condition at both December 31, 2024 and 2023.

Valley recorded net benefit income of $ 1.5 million, $ 1.8 million and $ 357 thousand related to the valuation of the SERP for the years ended December 31, 2023, 2022 and 2021, respectively.

Valley recorded net benefit income of $ 1.3 million, $ 1.5 million and $ 1.8 million related to the valuation of the SERP for the years ended December 31, 2024, 2023 and 2022, respectively.

Valley National Bank and its subsidiaries may award cash incentive and merit bonuses to its officers and employees based upon a percentage of the covered employees’ compensation as determined by the achievement of certain performance objectives.

11 unchanged sentences

Stock Based Compensation

On April 25, 2023, Valley's shareholders approved the Valley National Bancorp 2023 Incentive Compensation Plan (the 2023 Plan).

The purpose of the 2023 Plan is to provide additional long-term incentives to employees, directors and officers whose contributions are essential to the continued growth and success of Valley.

Upon shareholder approval of the 2023 Plan, Valley ceased granting awards under the Valley National Bancorp 2021 Incentive Compensation Plan (the 2021 Plan).

Under the 2023 Plan, Valley may issue awards to its officers, employees and non-employee directors in amounts up to 14.5 million shares of common stock, less one share for every share granted under the prior 2021 Plan after December 31, 2022.

Valley maintains an incentive compensation plan to provide additional long-term incentives to officers, employees and non-employee directors whose contributions are essential to the continued growth and success of Valley.

Under the plan, Valley may issue awards in amounts up to 14.5 million shares, subject to certain adjustments.

As of December 31, 2024, 9.6 million shares of common stock were available for issuance under the plan.

2023 Form 10-K

Valley recorded total stock-based compensation expense of $ 29.0 million, $ 33.1 million and $ 28.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The stock-based compensation expense for 2023, 2022 and 2021 included $ 2.3 million, $ 2.3 million and $ 1.6 million, respectively, related to stock awards granted to retirement eligible employees.

The stock-based compensation expense included $ 3.0 million for 2024

2024 Form 10-K 132

and $ 2.3 million for both 2023 and 2022 related to stock awards granted to retirement eligible employees.

Compensation expense for awards to retirement eligible employees is amortized monthly over a one year required service period after the grant date.

5 unchanged sentences

Generally, time-based RSUs vest ratably in one-third increments each year over a three-year vesting period.

The RSUs earn dividend equivalents (equal to cash dividends paid on Valley's common share) over the applicable performance or service period.

The RSUs earn dividend equivalents (equal to cash dividends paid on Valley's common shares) over the applicable performance or service period.

Dividend equivalents, per the terms of the agreements, are accumulated and paid to the grantee at the vesting date, or forfeited if the applicable performance or service conditions are not met.

2 unchanged sentences

2024 2023 2022

(in thousands, except per share data)

Average grant date fair value per share:

13 unchanged sentences

The following table sets forth the changes in restricted stock awards outstanding for the years ended December 31, 2023 and 2022.

There were no restricted stock awards outstanding during the year ended December 31, 2024.

Restricted Stock Awards Outstanding

2023 2022 2021

Outstanding at beginning of year 5,245 213,908

Vested ( 5,245 ) ( 208,663 )

Forfeited — — ( 8,689 )

Outstanding at end of year — 5,245

64 unchanged sentences

Net deferred tax asset (included in other assets) $ 203,610 $ 195,229

Valley's federal net operating loss carryforwards totaled approximately $ 39.8 million at December 31, 2023, and expire during the period from 2029 through 2034.

State net operating loss carryforwards totaled approximately $ 61.6 million at December 31, 2023, and expire during the period from 2029 through 2038.

Valley's capital loss carryforwards totaled approximately $ 4.1 million, net of a valuation allowance of $ 424 thousand at December 31, 2023, and expire during 2028.

Valley's federal net operating loss carryforwards totaled $ 31.8 million at December 31, 2024, and expire during the period from 2029 through 2034.

State net operating loss carryforwards totaled $ 55.3 million at December 31, 2024, and expire during the period from 2029 through 2038.

Valley's capital loss carryforwards totaled $ 4.8 million, net of a valuation allowance of $ 1.3 million at December 31, 2024, and expire during the period from 2028 to 2029.

Based upon taxes paid and projections of future taxable income over the periods in which the net deferred tax assets are deductible, management believes that it is more likely than not that Valley will realize the benefits of these deductible differences and loss carryforwards.

9 unchanged sentences

Nontaxable or non-deductible items

Disallowed FDIC Insurance Premiums 11,071 2.5 % 7,950 1.2 % 4,796 0.6 %

Other nontaxable or non-deductible ( 1,075 ) ( 0.2 ) % ( 1,291 ) ( 0.2 ) % 156 — %

Changes in unrecognized tax benefits ( 46,431 ) ( 10.6 ) % — — % — — %

Other adjustments 3,962 0.9 % 2,933 0.4 % ( 1,480 ) ( 0.2 ) %

2 unchanged sentences

2024 Form 10-K

We invest in certain tax-advantaged investments that support qualified affordable housing projects, community development and renewable energy resources.

Our investments in these projects are designed to generate a return primarily through the realization of federal and state income tax credits, and other tax benefits, over specified time periods.

Third parties perform diligence on these investments for us on which we rely both at inception and on an on-going basis.

We are subject to the risk that previously recorded tax credits, which remain subject to recapture by taxing authorities based on compliance features required to be met at the project level, may fail to meet certain government compliance requirements and may not be able to be realized.

Valley had $ 30.4 million in reserve for tax liability positions at December 31, 2023 and 2022 related to certain tax credits and other tax benefits previously recognized by Valley, where, subsequently, a third-party fraud was uncovered by the U.S.

Department of Justice in 2018.

While we believe that Valley was fully reserved for the tax positions related to this matter at December 31, 2023, we continue to evaluate all our existing tax positions each quarter under GAAP.

A reconciliation of Valley’s gross unrecognized tax benefits for 2023, 2022 and 2021 is presented in the table below:

During the fourth quarter 2024, the statute of limitations with respect to the matter expired and the tax authority closed its examination resulting in no changes to the originally filed tax returns.

Based on the timing of the events and expiration of the statute of limitations during the fourth quarter 2024, Valley reassessed its positions and fully reduced its previous balance of unrecognized tax benefits.

A reconciliation of Valley’s gross unrecognized tax benefits for the years ended December 31, 2024, 2023 and 2022 is presented in the table below:

2024 2023 2022

1 unchanged sentence

Beginning balance $ 30,359 $ 30,359 $ 30,359

Settlements with taxing authorities — — ( 1,559 )

Reductions due to expiration of statute of limitations ( 30,359 ) — —

Ending balance $ — $ 30,359 $ 30,359

The entire balance of unrecognized tax benefits, if recognized, would favorably affect Valley's effective income tax rate.

It is reasonably possible that the liability for unrecognized tax benefits could increase or decrease in the next twelve months due to completion of tax authorities’ exams or the expiration of statutes of limitations.

The entire balance of unrecognized tax benefits was recognized and had a favorable effect on Valley's effective income tax rate for the year ended December 31, 2024.

Valley’s policy is to report interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

Valley accrued approximately $ 13.4 million, $ 10.5 million and $ 8.7 million of interest expense associated with Valley's uncertain tax positions at December 31, 2023, 2022 and 2021, respectively.

Valley accrued approximately $ 13.4 million and $ 10.5 million of interest expense associated with Valley's uncertain tax positions at December 31, 2023 and 2022, respectively.

Valley monitors its tax positions for the underlying facts, circumstances, and information available including changes in tax laws, case law, and regulations that may necessitate subsequent de-recognition of previous tax benefits.

10 unchanged sentences

Total income taxes paid $ 89,701 $ 236,503 $ 172,102

Valley files income tax returns in the U.S.

Valley files income tax returns in U.S.

federal and various state jurisdictions.

8 unchanged sentences

These tax credits and deductions are recognized as a reduction of income tax expense.

2023 Form 10-K

Valley’s tax credit investments are carried in other assets on the consolidated statements of financial condition.

1 unchanged sentence

Valley recognizes amortization of tax credit investments, including impairment losses, within non-interest expense in the consolidated statements of income using the equity method of accounting.

After initial measurement, the carrying amounts of tax credit investments with non-readily determinable fair values are increased to reflect Valley's share of income of the investee and are reduced to reflect its share of losses of the investee, dividends received and impairments, if applicable.

After initial measurement, the carrying amounts of tax credit investments with non-readily determinable fair values

2024 Form 10-K 136

are increased to reflect Valley's share of income of the investee and are reduced to reflect its share of losses of the investee, dividends received and impairments, if applicable.

See the “Impairment Analysis” section below.

33 unchanged sentences

• Change in the economic or technological environment that could adversely affect the investee’s operations.

2023 Form 10-K 136

On a periodic basis, Valley obtains financial reporting on its underlying tax credit investment assets for each fund.

2 unchanged sentences

Annually, Valley obtains the audited financial statements prepared by an independent accounting firm for each investment, as well as the annual tax returns.

Generally, none of the aforementioned review factors are individually conclusive and the relative importance of each factor will vary based on facts and circumstances.

However, the longer the expected period of recovery, the stronger and more objective the positive evidence needs to be in order to overcome the presumption that the impairment is other than temporary.

If management determines that a decline in value is other than temporary per its quarterly and annual reviews, including current probable cash flow projections, the applicable tax credit investment is written down to its estimated fair value through an impairment charge to earnings, which establishes the new cost basis of the investment.

Generally, none of the aforementioned review factors are individually conclusive and the relative importance of each factor varies based on facts and circumstances.

However, the longer the expected period of recovery, the stronger and more objective the positive evidence needs to be in order to overcome the presumption that

2024 Form 10-K

the impairment is other than temporary.

If management determines that a decline in value is other than temporary as a result of its quarterly and annual reviews, including current probable cash flow projections, the applicable tax credit investment is written down to its estimated fair value through an impairment charge to earnings, which establishes the new cost basis of the investment.

COMMITMENTS AND CONTINGENCIES (Note 15)

Financial Instruments with Off-balance Sheet Risk

In the ordinary course of business in meeting the financial needs of its customers, Valley, through its subsidiary Valley National Bank, is a party to various financial instruments, which are not reflected in the consolidated financial statements.

In the ordinary course of business, meeting the financial needs of its customers, Valley, through its subsidiary Valley National Bank, is a party to various financial instruments, which are not reflected in the consolidated financial statements.

These financial instruments include standby and commercial letters of credit, unused portions of lines of credit and commitments to extend various types of credit.

25 unchanged sentences

Valley principally manages its exposure to a wide variety of business and operational risks through management of its core business activities.

Valley manages economic risks, including interest rate and liquidity risks, primarily by managing the amount, sources, and

2023 Form 10-K

duration of its assets and liabilities and, from time to time, the use of derivative financial instruments.

Valley manages economic risks, including interest rate and liquidity risks, primarily by managing the amount, sources, and duration of its assets and liabilities and, from time to time, the use of derivative financial instruments.

Specifically, Valley enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

2 unchanged sentences

Valley’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements.

To accomplish these objectives, Valley uses interest rate swaps as part of its interest rate risk management strategy.

To accomplish these objectives, Valley has used

2024 Form 10-K 138

interest rate swaps, from time to time, as part of its interest rate risk management strategy.

Interest rate swaps designated as cash flow hedges involve the payment of either fixed or variable-rate amounts in exchange for the receipt of variable or fixed-rate amounts from a counterparty, respectively.

3 unchanged sentences

Fair Value Hedges of Fixed Rate Assets and Liabilities.

Valley is exposed to changes in the fair value of certain fixed-rate assets and liabilities due to changes in interest rates and uses interest rate swaps to manage its exposure to changes in fair value.

Valley is exposed to changes in the fair value of certain fixed-rate assets and liabilities due to changes in interest rates and interest rate swaps to manage its exposure to changes in fair value.

For derivatives that are designated and qualify as fair value hedges, the gain or loss on the derivative as well as the loss or gain on the hedged item attributable to the hedged risk are recognized in earnings.

In June 2021, Valley entered into a $ 300 million forward-starting interest rate swap agreement with a notional amount of $ 300 million, maturing in June 2026, to hedge the change in the fair value of the 3 percent subordinated debt issued on May 28, 2021.

During the third quarter 2024, Valley terminated interest rate swaps with a total notional amount of $ 500 million used to hedge the fair value of certain fixed rate residential loans.

The terminated swaps had original maturity dates in the fourth quarter 2025.

The carrying amount of the hedged assets included an immaterial cumulative loss adjustment at the date of termination that will be amortized to earnings through the fourth quarter 2025.

During 2024, Valley entered into 11 forward-starting interest rate swap agreements with notional amounts totaling $ 480.3 million to hedge the changes in fair value of certain fixed rate brokered time deposits.

Commencing in first quarter of 2025, Valley will receive fixed rate amounts ranging from approximately 4.12 percent to 4.65 percent, in exchange for variable-rate payments based on the Floating SOFR Overnight Indexed Swap compound rate.

The swaps have expiration dates ranging from April 2026 to June 2027.

During 2021, Valley entered into a $ 300 million forward-starting interest rate swap agreement with a notional amount of $ 300 million, maturing in June 2026, to hedge the change in the fair value of the 3 percent subordinated debt issued on May 28, 2021.

Under the swap agreement, beginning in January 2022, Valley receives fixed rate payments and pays variable rate amounts based on SOFR plus 2.187 percent.

During the fourth quarter 2023, Valley entered into interest rate swap agreements with notional amounts totaling $ 500 million, maturing in the fourth quarter 2025, with interest rates ranging from 4.2 percent to 4.6 percent to hedge the change in the fair value of certain fixed rate residential loans.

Valley received variable rate based on Floating SOFR Overnight Indexed Swap (OIS) Compound rate and pays a fixed weighted average rate of 4.47 percent.

Non-designated Hedges.

5 unchanged sentences

Valley sometimes enters into risk participation agreements with external lenders where the banks are sharing their risk of default on the interest rate swaps on participated loans.

Valley either pays or receives a fee depending on the participation type.

Valley either pays or receives a fee depending on the type of participation.

Risk participation agreements are credit derivatives not designated as hedges.

3 unchanged sentences

At December 31, 2024, Valley h a d two “steepener” swaps, each with a current notional amount of $ 10.4 million where the receive rate on the swap mirrors the pay rate on the brokered deposits and the rates paid on these types of hybrid instruments are based on a formula derived from the spread between the long and short ends of the Constant Maturity Swap rate curve.

Although these types of instruments do not meet the hedge accounting requirements, the change in fair value of both the bifurcated derivative and the stand alone swap tend to move in opposite directions with changes in the three-month Term SOFR rate (modified from the three-month LIBOR rate effective July 1, 2023) and, therefore, provide an effective economic hedge.

Although these types of instruments do not meet the hedge accounting requirements, the change in fair value of both the bifurcated derivative and the stand alone swap tend to move in opposite directions with changes in the three-month Term SOFR rate and, therefore, provide an effective economic hedge.

Valley regularly enters into mortgage banking derivatives which are non-designated hedges.

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2024 Form 10-K

Valley enters foreign currency forward and option contracts, primarily to accommodate our customers, that are not designated as hedging instruments.

Valley enters into foreign currency forward and option contracts, primarily to accommodate our customers, that are not designated as hedging instruments.

Upon the origination of certain foreign currency denominated transactions (including foreign currency holdings and non-U.S.

dollar denominated loans) with a client, we enter into a respective hedging contract with a third party financial institution to mitigate the economic impact of foreign currency exchange rate fluctuation.

During June 2024, Valley entered into a credit default swap related to $ 1.5 billion in automobile loans primarily to enhance the risk profile of these assets for regulatory capital purposes.

The covered loans have a total remaining balance of approximately $ 1.1 billion within Valley's $ 1.9 billion automobile loan portfolio at December 31, 2024.

The credit default swap is a freestanding contract measured at fair value with resulting gains or losses recognized in non-interest expense.

The premium amortization expense and other transaction costs associated with the credit protection totaled $ 6.8 million for the year ended December 31, 2024 and were recorded in other expense reported in non-interest expense.

Amounts included in the consolidated statements of financial condition related to the fair value of Valley’s derivative financial instruments were as follows at December 31, 2024 and 2023:

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Derivatives designated as hedging instruments:

Cash flow hedge interest rate swaps $ — $ — $ — $ 3,971 $ 4 $ 600,000

Fair value hedge interest rate swaps $ 2,419 $ 13,993 $ 780,322 $ — $ 21,460 $ 800,000

Total derivatives designated as hedging instruments $ 2,419 $ 13,993 $ 780,322 $ — $ 21,460 $ 800,000

$ — $ 21,460 $ 800,000 $ 3,971 $ 29,798 $ 900,000

Derivatives not designated as hedging instruments:

3 unchanged sentences

Mortgage banking derivatives 150 192 45,752 74 472 38,797

Credit default swap — 35 1,142,026 — — —

Total derivatives not designated as hedging instruments $ 441,844 $ 440,207 $ 19,085,615 $ 466,227 $ 466,643 $ 17,878,243

$ 466,227 $ 466,643 $ 17,878,243 $ 463,156 $ 577,439 $ 16,058,364

* Other derivatives include risk participation agreements.

Beginning in the second quarter 2023, certain cash flow hedges and other non-designated derivative hedging instruments previously cleared through the Chicago Mercantile Exchange and London Clearing House were no longer subject to the variation margin netting under the single-unit of account.

Fair value interest rate swaps and certain non-designated derivative instruments are reported in the table above net of variation margin as settlements using a single-unit of account at December 31, 2023 and 2022, respectively.

Gains (losses) included in the consolidated statements of income and in other comprehensive income (loss), on a pre-tax basis, related to interest rate derivatives designated as hedges of cash flows were as follows:

Total derivative financial instruments $ 444,263 $ 454,200 $ 19,865,937 $ 466,227 $ 488,103 $ 18,678,243

* Other derivative contracts include risk participation agreements.

2024 2023 2022

(in thousands)

Amount of loss reclassified from accumulated other comprehensive loss to interest expense $ ( 891 ) $ ( 274 ) $ ( 3,436 )

Amount of gain (loss) reclassified from accumulated other comprehensive loss to interest expense $ 1,204 $ ( 891 ) $ ( 274 )

Amount of (loss) gain recognized in other comprehensive income (loss) — ( 1,093 ) 4,683

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Amounts reported in accumulated other comprehensive loss related to cash flow interest rate derivatives are reclassified to interest income and expense as interest payments are received and paid on the hedged variable interest rate assets and liabilities.

The reclassification amount for the year ended December 31, 2024 represents amortization of a gain recognized from the termination of six interest rate swaps during the second quarter 2023.

Valley estimates that $ 1.1 million (before tax) will be reclassified as an increase to interest income in 2025.

2024 Form 10-K 140

Gains (losses) included in the consolidated statements of income related to interest rate derivatives designated as hedges of fair value were as follows:

Gains (losses) included in the consolidated statements of income related to interest rate derivatives designated as hedges of fair value for the years ended December 31, 2024, 2023, and 2022 were as follows:

2024 2023 2022

3 unchanged sentences

Interest expense 9,765 8,473 ( 466 )

Hedged item—subordinated debt and loans:

Hedged items - loans, time deposits and subordinated debt:

Interest income $ ( 3,396 ) $ 3,877 $ —

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The following table presents the hedged items related to interest rate derivatives designated as fair value hedges and the cumulative basis fair value adjustment included in the net carrying amount of the hedged items at December 31, 2024 and 2023:

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

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

(in thousands)

December 31, 2024

Loans $ 503,877 $ 3,877

Time deposits $ 482,723 $ 2,419

Long-term borrowings * 284,966 ( 13,859 )

December 31, 2023

Loans $ 503,877 $ 3,877

Long-term borrowings * 276,572 ( 21,445 )

* Net carrying amount includes unamortized debt issuance costs of $ 1.2 million and $ 2.0 million at December 31, 2024 and 2023, respectively.

The net losses (gains) included in the consolidated statements of income related to derivative instruments not designated as hedging instruments were as follows:

The net (losses) gains included in the consolidated statements of income related to derivative instruments not designated as hedging instruments for the years ended December 31, 2024, 2023, and 2022 were as follows:

2024 2023 2022

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

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

As of December 31, 2023, Valley was in compliance

If Valley’s credit rating is reduced below

2024 Form 10-K

with all of the provisions of its derivative counterparty agreements.

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

As of December 31, 2024, Valley was in compliance with all of the provisions of its derivative counterparty agreements.

The ag gregate fair value of all derivative financial instruments with credit risk-related contingent features was in a net asset position at December 31, 2024.

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The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract.

Collateral, usually in the form of cash or marketable investment securities, is posted by or received from the counterparty with net liability or assets position, respectively, in accordance with contract thresholds.

Collateral, usually in the form of cash or marketable investment securities, is posted by or received from the counterparty with net liability or asset positions, respectively, in accordance with contract thresholds.

Master repurchase agreements which include “right of set-off” provisions generally have a legally enforceable right to offset recognized amounts.

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Total liabilities $ 479,345 $ — $ 479,345 $ ( 53,780 ) $ — $ 425,565

* Cash collateral received from or pledged to our counterparties in relation to market value exposures of derivative contacts in an asset/liability position.

* Cash collateral received from or pledged to our counterparties in relation to market value exposures of OTC derivative contracts in an asset/liability position.

2024 Form 10-K 142

REGULATORY AND CAPITAL REQUIREMENTS (Note 17)

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Valley and Valley National Bank are subject to the regulatory capital requirements administered by the Federal Reserve and the OCC.

Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct significant impact on Valley’s consolidated financial

2023 Form 10-K

Under capital adequacy guidelines Valley and Valley National Bank must meet specific capital guidelines that involve quantitative measures of Valley’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.

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Repurchase Plan.

In 2007, the Board approved the repurchase of up to 4.7 million of common shares.

Purchases of Valley’s common shares may be made from time to time in the open market or in privately negotiated transactions generally not exceeding prevailing market prices.

Repurchased shares are held in treasury and are expected to be used for general corporate purposes.

During 2022 and 2021 Valley repurchased approximately 1.0 million and 1.6 million of its common shares on the open market at an average price of $ 13.32 and $ 14.31 per share, respectively, under its 2007 stock repurchase plan.

In April 2022, Valley terminated its 2007 stock repurchase plan (and its remaining shares available for repurchase) and publicly announced a new stock purchase program for up to 25 million shares of Valley common stock.

The authorization to repurchase shares will expire on April 25, 2024.

During 2023, Valley repurchased 300 thousand common shares on the open market at an average price of $ 6.97 per share, under its 2022 stock repurchase plan.

In February 2024, Valley publicly announced its current stock repurchase program for up to 25 million shares of Valley common stock.

The authorization to repurchase shares under the repurchase program became effective on April 26, 2024 and will expire on April 26, 2026.

There were no repurchases of Valley's common shares under the plan during the year ended December 31, 2024.

During 2023 and 2022, Valley repurchased 300 thousand and 1.0 million common shares, respectively, on the open market at average prices of $ 6.97 and $ 13.32 per share, respectively, under previously announced stock repurchase plans that are now terminated.

Other Stock Repurchases.

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2024 Form 10-K 144

Common Stock Issuance.

On November 12, 2024, Valley issued and sold 49,197,860 shares of its common stock in a registered public offering, including 6,417,112 shares purchased under an over-allotment option exercised in full by the underwriters at the public offering price of $ 9.35 per share.

The net proceeds of the offering, after deducting underwriting discounts and commissions and offering expenses payable by Valley, were $ 448.9 million and were used for additional investment in the Bank as regulatory capital during the fourth quarter 2024.

Preferred Stock

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Valley may redeem the preferred shares at the liquidation preference plus accrued and unpaid dividends, subject to certain conditions.

Series C Issuance.

On August 5, 2024, Valley issued 6.0 million shares of its Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series C, no par value per share, with a liquidation preference of $ 25 per share.

Dividends on the preferred stock will accrue and be payable quarterly in arrears, at a fixed rate per annum equal to 8.25 percent from the date of original issue to, but excluding September 30, 2029, and thereafter at a rate per annum equal to the five-year U.S.

treasury rate as of the most recent dividend payment date plus a spread of 4.182 percent.

Net proceeds from the preferred stock offering totaled $ 144.7 million.

Commencing September 30, 2029, Valley may redeem the preferred shares at the liquidation preference plus accrued and unpaid dividends, subject to certain conditions.

Preferred stock is included in Valley's (additional) Tier 1 capital and total risk-based capital at December 31, 2024 and 2023.

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Unrealized gains and losses on available for sale debt securities

Net gains (losses) arising during the period $ 19,514 $ ( 6,564 ) $ 12,950 $ ( 189,201 ) $ 52,220 $ ( 136,981 ) $ ( 32,586 ) $ 8,973 $ ( 23,613 )

Less reclassification adjustment for net (gains) losses included in net income (1)

Net (losses) gains arising during the period $ ( 24,687 ) $ 6,290 $ ( 18,397 ) $ 19,514 $ ( 6,564 ) $ 12,950 $ ( 189,201 ) $ 52,220 $ ( 136,981 )

Amounts reclassified to earnings (1)

1 — 1 ( 863 ) 229 ( 634 ) ( 31 ) 8 ( 23 )

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Net (losses) gains arising during the period — — — ( 1,093 ) 336 ( 757 ) 4,683 ( 1,321 ) 3,362

Less reclassification adjustment for net losses (gains) included in net income (2)

Amounts reclassified to earnings (2)

( 1,204 ) 335 ( 869 ) 891 ( 253 ) 638 274 ( 71 ) 203

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14,416 ( 4,029 ) 10,387 7,896 ( 2,547 ) 5,349 ( 17,761 ) 5,130 ( 12,631 )

Total other comprehensive income (loss) $ 26,345 $ ( 8,799 ) $ 17,546 $ ( 202,036 ) $ 55,966 $ ( 146,070 ) $ ( 13,891 ) $ 3,677 $ ( 10,214 )

Total other comprehensive (loss) income $ ( 11,474 ) $ 2,596 $ ( 8,878 ) $ 26,345 $ ( 8,799 ) $ 17,546 $ ( 202,036 ) $ 55,966 $ ( 146,070 )

(1) Included in gains (losses) on securities transactions, net.

(2) Included in interest expense.

(2) Included in interest expense or interest income depending on hedged item.

(3) Included in the computation of net periodic pension cost.

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Balance-December 31, 2021 $ 9,186 $ ( 1,332 ) $ ( 25,786 ) $ ( 17,932 )

Other comprehensive income (loss) before reclassifications ( 23,613 ) 127 10,306 ( 13,180 )

Amounts reclassified from other comprehensive (loss) income ( 491 ) 2,447 1,010 2,966

Other comprehensive income (loss), net ( 24,104 ) 2,574 11,316 ( 10,214 )

Balance-December 31, 2021 9,186 ( 1,332 ) ( 25,786 ) ( 17,932 )

Other comprehensive (loss) income before reclassifications ( 136,981 ) 3,362 ( 13,175 ) ( 146,794 )

Amounts reclassified from other comprehensive (loss) income ( 23 ) 203 544 724

Amounts reclassified to earnings ( 23 ) 203 544 724

Other comprehensive (loss) income, net ( 137,004 ) 3,565 ( 12,631 ) ( 146,070 )

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Other comprehensive income (loss) before reclassifications 12,950 ( 757 ) 5,442 17,635

Amounts reclassified from other comprehensive income (loss) ( 634 ) 638 ( 87 ) ( 83 )

Amounts reclassified to earnings ( 634 ) 638 ( 93 ) ( 89 )

Other comprehensive income (loss), net 12,316 ( 119 ) 5,349 17,546

Balance-December 31, 2023 ( 115,502 ) 2,114 ( 33,068 ) ( 146,456 )

Other comprehensive (loss) income before reclassifications ( 18,397 ) — 10,609 ( 7,788 )

Amounts reclassified to earnings 1 ( 869 ) ( 222 ) ( 1,090 )

Other comprehensive (loss) income, net ( 18,396 ) ( 869 ) 10,387 ( 8,878 )

Balance-December 31, 2024 $ ( 133,898 ) $ 1,245 $ ( 22,681 ) $ ( 155,334 )

PARENT COMPANY INFORMATION (Note 20)

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Cash $ 277,072 $ 193,248

Interest bearing deposits with banks — 250

Equity securities 37,076 29,404

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2024 2023 2022

(in thousands)

Dividends from subsidiary $ 300,000 $ 425,000 $ 420,000

Net gains (losses) on equity securities 1,036 ( 1,136 ) 1,491

Other interest and income 5,730 82 20

Net (losses) gains on equity securities ( 1,581 ) 1,036 ( 1,136 )

Other income and interest 7,360 5,730 82

Total Income 305,779 431,766 418,946

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Income before income tax and equity in undistributed earnings of subsidiary 252,632 375,694 370,842

375,694 370,842 122,974

Income tax benefit ( 54,017 ) ( 10,961 ) ( 13,098 )

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1,947 2,058 1,741

(Gains) losses on securities transactions, net ( 1,036 ) 1,136 ( 1,491 )

Losses (gains) on equity securities, net 1,581 ( 1,036 ) 1,136

Net change in:

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Repayment of long-term borrowings — ( 125,000 ) —

Proceeds from issuance of preferred stock, net 144,654 — —

Dividends paid to preferred shareholders ( 21,369 ) ( 14,338 ) ( 13,146 )

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Common stock issued, net 451,164 4,006 120

Net cash (used in) provided by financing activities ( 372,218 ) ( 95,640 ) 30,905

Net cash provided by (used in) financing activities 337,354 ( 372,218 ) ( 95,640 )

Net change in cash and cash equivalents 83,824 47,351 67,887

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OPERATING SEGMENTS (Note 21)

Prior to the second quarter 2022, Valley had three operating segments:

Consumer Lending, Commercial Lending, and Investment Management.

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.

Since its re-evaluation in 2022, Valley has managed its business operations under operating segments consisting of Consumer Banking and Commercial Banking.

Valley manages its business operations under operating segments consisting of Consumer Banking and Commercial Banking.

Activities not assigned to the operating segments are included in Treasury and Corporate Other.

Each operating segment is reviewed routinely for its asset growth, contribution to income before income taxes and return on average interest earning assets and impairment (if events or circumstances indicate a possible inability to realize the carrying amount).

Valley regularly assesses its strategic plans, operations and reporting structures to identify its operating segments and no additional changes to Valley's operating segments were determined necessary at December 31, 2023.

The CEO of Valley is the CODM who assesses performance of each operating segment to better understand their cost, opportunity value and impact to Valley's consolidated earnings.

Each operating segment is reviewed routinely for its asset growth, contribution to our income before income taxes, return on average interest earning assets and impairment (if events or circumstances indicate a possible inability to realize the carrying amount).

Valley regularly assesses its strategic plans, operations, and reporting structures to identify its reportable segment s.

The Consumer Banking segment is mainly comprised of residential mortgages and automobile loans, and to a lesser extent, secured personal lines of credit, home equity loans and other consumer loans.

The duration of the residential mortgage loan portfolio is subject to movements in the market level of interest rates and forecasted prepayment speeds.

The average weighted life of the automobile loans within the portfolio is relatively unaffected by movements in the market level of interest

2023 Form 10-K 148

The average weighted life of the automobile loans within the portfolio is relatively unaffected by movements in the market level of interest rates.

However, the average life may be impacted by new loans as a result of the availability of credit within the automobile marketplace and consumer demand for purchasing new or used automobiles.

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

The Commercial Banking segment is comprised of floating rate and adjustable rate commercial and industrial loans and construction loans, as well as fixed rate owner occupied and commercial real estate loans.

Consumer Banking also includes the Wealth

2024 Form 10-K

Management and Insurance Services Division, comprised of asset management advisory, brokerage, trust, personal and title insurance, tax credit advisory services, and international and domestic private banking businesses.

The Commercial Banking segment is comprised of floating rate and adjustable rate commercial and industrial loans and construction loans, as well as adjustable and fixed rate owner occupied and commercial real estate loans.

Due to the portfolio’s interest rate characteristics, Commercial Banking is Valley’s operating segment that is most sensitive to movements in market interest rates.

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Interest income is generated through investments in various types of securities (mainly comprised of fixed rate securities) and interest-bearing deposits with other banks (primarily the Federal Reserve Bank of New York).

Expenses related to the branch network, all other components of retail banking, along with the back office departments of the Bank are allocated from Treasury and Corporate Other to the Consumer and Commercial Banking segments.

Interest expense and internal transfer expense (for general corporate expenses) are allocated to each operating segment utilizing a transfer pricing methodology, which involves the allocation of operating and funding costs based on each segment's respective mix of average interest earning assets and or liabilities outstanding for the period.

The accounting for each segment and Treasury and Corporate Other includes internal accounting policies designed to measure consistent and reasonable financial reporting and may result in income and expense measurements that differ from amounts under GAAP.

Other non-interest income items and general expenses are allocated from Treasury and Corporate Other to each operating segment utilizing a methodology that involves an allocation of operating and funding costs based on each segment's respective mix of average interest earning assets outstanding for the period, number of deposits, or direct allocation to the segments based on the nature of income and expense.

U nallocated items included in Treasury and Corporate Other consist of net gains and losses on AFS and HTM securities transactions, amortization of tax credit investments, as well as other non-core items, including merger, restructuring and FDIC special assessment charges and income from litigation settlements.

The accounting for each operating segment and Treasury and Corporate Other includes internal accounting policies designed to measure consistent and reasonable financial reporting and may result in income and expense measurements that differ from amounts under GAAP.

The financial reporting for each segment contains allocations and reporting in line with Valley’s operations, which may not necessarily be comparable to any other financial institution.

Fur thermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.

The prior period balances presented in the tables below reflect reclassifications to conform the presentation in those periods to the current operating segment structure.

Valley’s consolidated results were not impacted by the changes discussed above and remain unchanged for all periods presented.

Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.

Certain prior period amounts have been reclassified to conform to the current presentation for each operating segment and Treasury and Corporate Other.

The foll owing tables represent the financial data for Valley’s operating segments, and Treasury and Corporate Other for the years ended December 31, 2024, 2023 and 2022:

Year Ended December 31, 2023

Banking Commercial

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Non-interest expense

Internal transfer expense (income) 107,639 480,593 ( 588,232 ) —

Income before income taxes $ 34,552 $ 891,484 $ ( 247,704 ) $ 678,332

Salary and employee benefits expense 118,953 389,622 50,020 558,595

Net occupancy expense 18,003 71,360 12,761 102,124

Technology, furniture, and equipment expense 25,681 93,811 15,617 135,109

FDIC insurance assessment 10,448 42,271 8,757 61,476

Professional and legal fees 11,254 52,666 6,395 70,315

Other segment items * 58,282 54,007 65,952 178,241

Total non-interest expense $ 242,621 $ 703,737 $ 159,502 $ 1,105,860

Income (loss) before income taxes $ 47,781 $ 475,247 $ ( 84,509 ) $ 438,519

Return on average interest earning assets (pre-tax) (unaudited) 0.48 % 1.18 % ( 1.16 ) % 0.77 %

Net interest margin 1.81 % 3.45 % 0.86 % 2.84 %

2024 Form 10-K 150

Year Ended December 31, 2022

Banking Commercial

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Non-interest expense

Internal transfer expense (income) 121,220 491,507 ( 612,727 ) —

Salary and employee benefits expense 111,748 389,666 62,177 563,591

Net occupancy expense 19,313 69,780 12,377 101,470

Technology, furniture, and equipment expense 25,661 98,716 26,331 150,708

FDIC insurance assessment 7,380 30,477 50,297 88,154

Professional and legal fees 13,016 56,755 10,796 80,567

Other segment items * 48,650 56,188 73,363 178,201

Total non-interest expense $ 225,768 $ 701,582 $ 235,341 $ 1,162,691

Income (loss) before income taxes $ 38,055 $ 787,809 $ ( 147,532 ) $ 678,332

Return on average interest earning assets (pre-tax) (unaudited) 0.40 % 1.98 % ( 2.06 ) % 1.20 %

Year Ended December 31, 2021

Net interest margin 1.71 % 3.61 % 0.91 % 2.95 %

Banking Commercial

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Net interest income 232,746 1,310,947 111,947 1,655,640

(Credit) provision for credit losses ( 6,807 ) 39,703 ( 263 ) 32,633

Provision for credit losses 20,880 35,456 481 56,817

Net interest income after provision for credit losses 211,866 1,275,491 111,466 1,598,823

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Non-interest expense

Internal transfer expense (income) 81,423 286,335 ( 367,758 ) —

Salary and employee benefits expense 104,405 344,689 77,643 526,737

Net occupancy expense 18,948 62,829 12,575 94,352

Technology, furniture, and equipment expense 26,796 94,671 40,285 161,752

FDIC insurance assessment 4,692 18,144 — 22,836

Professional and legal fees 12,441 50,314 19,863 82,618

Other segment items * 47,919 43,534 45,201 136,654

Total non-interest expense $ 215,201 $ 614,181 $ 195,567 $ 1,024,949

Income (loss) before income taxes $ 95,343 $ 763,840 $ ( 78,516 ) $ 780,667

Return on average interest earning assets (pre-tax) (unaudited) 1.11 % 2.29 % ( 1.28 ) % 1.62 %

Net interest margin 2.70 % 3.93 % 1.82 % 3.44 %

* Other segment items include amortization of intangible assets, amortization of tax credit investments and other general operating expenses.

2024 Form 10-K

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Allowance for loan losses evaluated on a collective basis

As discussed in Note 5 to the consolidated financial statements, the Company’s total allowance for loan losses as of December 31, 2023 was $446 million, of which $372 million related to the loans collectively evaluated for credit losses (the collective ALL).

Allowance for loan losses

As discussed in Notes 1 and 5 to the consolidated financial statements, the Company’s total allowance for loan losses (the ALL) as of December 31, 2024 was $558.9 million, of which $483.0 million related to the loans collectively evaluated for credit losses (the collective ALL) and $75.9 million related to individually evaluated loans (individually evaluated ALL).

The collective ALL includes the measure of expected credit losses on a collective basis for those loans that share similar risk characteristics.

In estimating the collective ALL, the Company uses a transition matrix model which calculates an expected life of loan loss percentage for each loan pool by using probability of default and loss given default metrics.

The metrics are based on the migration of loans from performing to loss by credit quality rating or delinquency categories using life-of-loan analysis periods for each loan portfolio pool, and the severity of loss, based on the aggregate net lifetime losses incurred.

The expected credit losses are the product of multiplying the model’s expected life of loan loss percentages by the exposure at default at period end.

The model’s expected losses are adjusted for qualitative factors which includes a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience on a straight-line basis for the remaining life of the loan.

The forecasts consist of a multi

The PD and LGD metrics are adjusted using a scaling factor to incorporate a full economic cycle.

The expected credit losses are adjusted for qualitative factors not reflected in the transition matrix model but are likely to impact the measurement of estimated credit losses.

The qualitative factors include a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience on a straight-line basis for the remaining life of the loan.

The forecast consists of multi-scenario economic forecasts which are assigned relative probability weightings and projects economic variables under each scenario.

2024 Form 10-K 152

scenario economic forecast model which is assigned relative probability weightings.

These adjustments are based on qualitative factors not reflected in the quantitative model but are likely to impact the measurement of estimated credit losses.

We identified the assessment of the collective ALL as a critical audit matter.

A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment of the collective ALL.

Specifically, the assessment encompassed the evaluation of the collective ALL methodology, including the model and methods used to estimate the (1) life of loan loss percentages and the related significant assumptions, including probability of default, loss given default and credit risk ratings for commercial loans, and (2) the qualitative factors, including the reasonable and supportable economic forecasts and related weightings, and reversion.

The assessment also included an evaluation of the conceptual soundness and performance of the methodology utilized to derive the quantitative life of loan loss percentages and qualitative factors and the Company’s procedures to validate the model utilized to produce the lifetime loss estimate.

The expected lifetime loss rates are the life of loan loss percentages from the transition matrix model plus the impact of the adjustments for the qualitative factors.

The expected credit losses are the product of multiplying the model’s lifetime loss rates by the exposure at default at period end.

In addition, certain individually evaluated loans, where substantially all the repayment is expected from the collateral, are deemed collateral dependent and the related expected credit losses are determined based on the fair value of the underlying collateral.

We identified the assessment of the ALL as a critical audit matter.

A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment of the ALL due to estimation uncertainty.

Specifically, the assessment of the collective ALL encompassed the evaluation of the collective ALL methodology and the transition matrix model used to estimate the expected life of loan loss percentages and its significant assumptions, including credit quality ratings and scaling factor.

The assessment of the collective ALL also included an evaluation of the conceptual soundness and performance of the transition matrix model utilized to derive the expected life of loan loss percentages.

In addition, the assessment also encompassed the conceptual soundness of the methodology utilized to estimate the qualitative factors and their related significant assumptions, including the selection of the multi-scenario economic forecasts and economic variables and related weightings.

For the individually evaluated ALL, the assessment included an evaluation of the fair value of the underlying collateral for those loans deemed collateral dependent.

In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s measurement of the collective ALL estimate, including controls over the:

• development of the collective ALL methodology

• continued use and appropriateness of changes made to the transition matrix model

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s measurement of the ALL estimate, including controls over the:

• development of the ALL methodology

• continued use and appropriateness of the transition matrix model

• performance monitoring of the transition matrix model

• identification and determination of the significant assumptions used in the model

• continued use and ongoing monitoring of the appropriateness of the reasonable and supportable forecast period

• development of the qualitative factors, including the significant assumptions used in the measurement of the qualitative factors

• procedures performed by the Company to validate the model is fit for use and appropriate to estimate lifetime losses

• periodic testing of loan risk ratings for loan portfolios

• identification and determination of the significant assumptions used in the transition matrix model

• identification of qualitative factors and development of the qualitative framework, including the significant assumptions used in the measurement of the qualitative factors

• appropriateness of third-party appraisals

• analysis of the collective ALL results, trends and ratios.

We evaluated the Company’s process to develop the collective ALL estimate by testing certain sources of data, factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors and assumptions.

We evaluated the Company’s process to develop the ALL estimate by testing certain sources of data, factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors and assumptions.

In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in:

For the collective ALL:

• evaluating the Company’s collective ALL methodology for compliance with U.S.

generally accepted accounting principles

• evaluating the judgments made by the Company relative to the assessment and performance monitoring of the transition matrix model used to calculate the life of loan loss percentage by comparing them to Company-specific metrics and trends and the applicable industry and regulatory practices

• testing the conceptual soundness and performance of the transition matrix model by inspecting the model documentation and model validation documentation to determine whether the model is suitable for the intended use

• evaluating the economic forecast scenarios and related weightings by comparing them to the Company’s business environment and relevant industry practices

• determining whether the loan portfolio is segmented by similar risk characteristics by comparing to the Company’s business environment and relevant industry practices

• testing individual credit risk ratings for a selection of commercial loans by evaluating the financial performance of the borrower, sources of repayment and any relevant guarantees or underlying collateral

• evaluating the methodology used to develop the qualitative factor framework and the effect of those factors on the collective ALL by comparing the qualitative factors to the specific portfolio risk characteristics, trends and relevant industry practices and identified limitations of the underlying quantitative models.

We also assessed the sufficiency of the audit evidence obtained related to the collective ALL by evaluating the cumulative results of the audit procedures, qualitative aspects of the Company’s accounting practices and potential bias in the accounting estimate.

• evaluating the judgments made by the Company relative to the assessment and performance monitoring of the transition matrix model used to calculate the expected life of loan loss percentages by comparing them to Company-specific metrics and trends and the applicable industry and regulatory practices

• testing the conceptual soundness and performance of the transition matrix model by inspecting the model documentation to determine whether the model is suitable for the intended use

• testing individual credit quality ratings for a selection of commercial loans by evaluating the financial performance of the borrower, sources of repayment and any relevant guarantees or underlying collateral

• evaluating the judgments made by management relative to the Company’s scaling factor by inspecting documentation to determine whether the assumption is suitable to incorporate a full economic cycle

• evaluating the selection of the multi-scenario economic forecasts and economic variables and related weightings by comparing them to the Company’s business environment and relevant industry practices

• evaluating the methodology used to develop the qualitative factors and their significant assumptions and the effect of those factors on the collective ALL by comparing to the specific portfolio risk characteristics, trends and relevant industry practices and identified limitations of the underlying quantitative models.

2024 Form 10-K

For the individually evaluated ALL:

• testing of individual fair value of collateral for a selection of borrower relationships by evaluating methods and assumptions used by the third-party appraiser.

We also assessed the sufficiency of the audit evidence obtained related to the ALL estimate by evaluating the cumulative results of the audit procedures, qualitative aspects of the Company’s accounting practices and potential bias in the accounting estimate.

Goodwill impairment assessment of the Company’s reporting units

8 unchanged sentences

We identified the Company’s annual goodwill impairment assessment as a critical audit matter.

A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgement was involved in performing procedures over 1) the individual reporting unit estimated cash flows and related key assumptions, which included the discount rate and the terminal value growth rate used in the discounted cash flow methods and 2) the present value of estimated synergies used in the market capitalization reconciliation and resulting control premium.

A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgement was involved in performing procedures over 1) the individual reporting unit estimated cash flows and related key assumptions, which included the discount rate used in the discounted cash flow methods and 2) the present value of estimated synergies used in the market capitalization reconciliation and resulting control premium.

The key assumptions were challenging to test as they represented subjective determinations of future market and economic conditions that were also more sensitive to variation.

6 unchanged sentences

• evaluating the Company’s discount rate by comparing it against a discount rate range that was independently developed using publicly available data for comparable entities

• evaluating the Company’s terminal value growth rate by comparing it against an average growth rate range that was independently developed using publicly available economic and industry data for the overall U.S.

economy, U.S.

capital markets, and comparable entities

• developing an independent expectation of the estimate of the reporting units’ fair value using the reporting units’ cash flow forecast and an independently developed discount rate and compared our independent expectation of fair value to the Company’s fair value estimate

• evaluating the total fair value of the Company’s reporting units through comparison to the Company’s market capitalization adjusted for expected synergies as of the measurement date by evaluating the reasonableness of the estimated synergies and resulting control premium for alignment with industry comparables, standards and market conditions.

5 unchanged sentences

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data