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Item 1. Financial Statements

2025-05-08 compared with 2024-11-12 · 271 added, 487 removed, 1085 unchanged (41% of the section changed)

2 unchanged sentences

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except for share data) September 30,

(in thousands, except for share data) March 31,

2025 December 31,

4 unchanged sentences

Equity securities 74,425 71,513

Trading debt securities 3,996 3,973

Available for sale debt securities 3,658,704 3,369,724

Held to maturity debt securities (net of allowance for credit losses of $ 1,076 at September 30, 2024 and $ 1,205 at December 31, 2023)

Held to maturity debt securities (net of allowance for credit losses of $ 633 at March 31, 2025 and $ 647 at December 31, 2024)

3,545,328 3,531,573

Total investment securities 7,278,457 6,972,810

Loans held for sale (includes fair value of $ 17,153 at September 30, 2024 and $ 20,640 at December 31, 2023 for loans originated for sale)

Loans held for sale (includes fair value of $ 8,427 at March 31, 2025 and $ 16,931 at December 31, 2024 for loans originated for sale)

27,377 25,681

24 unchanged sentences

50,000,000 authorized shares:

Series A ( 4,600,000 shares issued at September 30, 2024 and December 31, 2023)

Series A ( 4,600,000 shares issued at March 31, 2025 and December 31, 2024)

111,590 111,590

Series B ( 4,000,000 shares issued at September 30, 2024 and December 31, 2023)

Series B ( 4,000,000 shares issued at March 31, 2025 and December 31, 2024)

98,101 98,101

Series C ( 6,000,000 shares issued at September 30, 2024)

Series C ( 6,000,000 shares issued at March 31, 2025 and December 31, 2024)

144,654 144,654

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

issued 509,252,936 shares at September 30, 2024 and 507,896,910 shares at December 31, 2023)

issued 560,278,101 shares at March 31, 2025 and 558,786,093 shares at December 31, 2024)

196,520 195,998

2 unchanged sentences

Accumulated other comprehensive loss ( 128,252 ) ( 155,334 )

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

Treasury stock, at cost ( 250,000 common shares at March 31, 2025)

Total Shareholders’ Equity 7,499,897 7,435,127

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Interest Income

22 unchanged sentences

Service charges on deposit accounts 12,726 11,249

Gains (losses) on securities transactions, net 47 ( 398 ) 99 197

Gains on securities transactions, net 46 49

Fees from loan servicing 3,215 3,188

(Losses) gains on sales of loans, net ( 3,644 ) 2,023 ( 1,142 ) 3,752

Gains on sales of loans, net 2,197 1,618

Gains on sales of assets, net 43 3,694

25 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net income $ 106,058 $ 96,280

2 unchanged sentences

Net gains (losses) arising during the period 27,212 ( 10,205 )

Less reclassification adjustment for net losses included in net income 1 5 9 5

Total 27,212 ( 10,205 )

Unrealized gains and losses on derivatives (cash flow hedges)

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

Less reclassification adjustment for net (gains) losses included in net income ( 219 ) ( 43 ) ( 651 ) 852

Amounts reclassified to earnings ( 218 ) ( 222 )

Total ( 218 ) ( 222 )

6 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

For the Nine Months Ended September 30, 2024

For the Three Months Ended March 31, 2025

Common Stock Accumulated

7 unchanged sentences

Net income — — — — 106,058 — — 106,058

Other comprehensive loss, net of tax — — — — — ( 10,392 ) — ( 10,392 )

Cash dividends declared:

Preferred stock, Series A, $ 0.39 per share

— — — — ( 1,797 ) — — ( 1,797 )

Preferred stock, Series B, $ 0.58 per share

— — — — ( 2,322 ) — — ( 2,322 )

Common stock, $ 0.11 per share

— — — — ( 56,794 ) — — ( 56,794 )

Effect of stock incentive plan, net

— 1,183 348 ( 966 ) — — 1,391 773

Balance - March 31, 2024 $ 209,691 508,893 $ 178,535 $ 4,989,023 $ 1,506,738 $ ( 156,848 ) $ — $ 6,727,139

Net income — — — — 70,424 — — 70,424

Other comprehensive loss, net of tax — — — — — ( 5,765 ) — ( 5,765 )

Cash dividends declared:

Preferred stock, Series A, $ 0.39 per share

— — — — ( 1,797 ) — ` ( 1,797 )

Preferred stock, Series B, $ 0.58 per share

— — — — ( 2,311 ) — — ( 2,311 )

Common stock, $ 0.11 per share

— — — — ( 56,678 ) — — ( 56,678 )

Effect of stock incentive plan, net

— 312 110 6,615 — — — 6,725

Balance - June 30, 2024

$ 209,691 509,205 $ 178,645 $ 4,995,638 $ 1,516,376 $ ( 162,613 ) $ — $ 6,737,737

Net income — — — — 97,856 — — 97,856

Other comprehensive income, net of tax — — — — — 27,082 — 27,082

8 unchanged sentences

— — — — ( 62,460 ) — — ( 62,460 )

Preferred Stock Issued 144,654 — 144,654

Effect of stock incentive plan, net

— 1,492 522 2,686 — — — 3,208

Balance - September 30, 2024 $ 354,345 509,253 $ 178,661 $ 5,002,718 $ 1,551,428 $ ( 114,772 ) $ — $ 6,972,380

For the Nine Months Ended September 30, 2023

Purchase of treasury stock — ( 250 ) — — — — ( 2,162 ) ( 2,162 )

Balance - March 31, 2025 $ 354,345 560,028 $ 196,520 $ 5,444,756 $ 1,634,690 $ ( 128,252 ) $ ( 2,162 ) $ 7,499,897

For the Three Months Ended March 31, 2024

Common Stock Accumulated

6 unchanged sentences

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 — — — — 96,280 — — 96,280

9 unchanged sentences

— 1,183 348 ( 966 ) — — 1,391 773

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

Balance - March 31, 2024

$ 209,691 508,893 $ 178,535 $ 4,989,023 $ 1,506,738 $ ( 156,848 ) $ — $ 6,727,139

Net income — — — — 139,060 — — 139,060

Other comprehensive loss, net of tax — — — — — ( 21,100 ) — ( 21,100 )

Cash dividends declared:

Preferred stock, Series A, $ 0.39 per share

— — — — ( 1,797 ) — — ( 1,797 )

Preferred stock, Series B, $ 0.56 per share

— — — — ( 2,233 ) — — ( 2,233 )

Common stock, $ 0.11 per share

— — — — ( 56,474 ) — — ( 56,474 )

Effect of stock incentive plan, net — 157 1 6,845 ( 2 ) — 1,395 8,239

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

Balance - June 30, 2023

$ 209,691 507,619 $ 178,187 $ 4,974,507 $ 1,379,534 $ ( 164,747 ) $ ( 1,988 ) $ 6,575,184

Net income — — — — 141,346 — — 141,346

Other comprehensive loss, net of tax — — — — — ( 37,145 ) — ( 37,145 )

Cash dividends declared:

Preferred stock, Series A, $ 0.39 per share

— — — — ( 1,797 ) — — ( 1,797 )

Preferred stock, Series B, $ 0.58 per share

— — — — ( 2,330 ) — — ( 2,330 )

Common stock, $ 0.11 per share

— — — — ( 56,459 ) — — ( 56,459 )

Effect of stock incentive plan, net — 42 — 8,241 ( 10 ) — 269 8,500

Balance - September 30, 2023

$ 209,691 507,661 $ 178,187 $ 4,982,748 $ 1,460,284 $ ( 201,892 ) $ ( 1,719 ) $ 6,627,299

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

Net income $ 106,058 $ 96,280

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation and amortization 9,892 10,794

5 unchanged sentences

Proceeds from sales of loans held for sale at fair value 47,094 41,650

Losses (gains) on sales of loans, net 1,142 ( 3,752 )

Gains on sales of loans, net ( 2,197 ) ( 1,618 )

Originations of loans held for sale ( 37,437 ) ( 37,581 )

8 unchanged sentences

Accrued expenses and other liabilities ( 297,029 ) 117,399

Net cash provided by operating activities 156,344 656,777

Net cash (used in) provided by operating activities ( 17,122 ) 99,511

Cash flows from investing activities:

Net loan originations and purchases ( 408,268 ) ( 3,235,439 )

Loans originated and purchased, net of principal collected 88,203 ( 67,432 )

Equity securities:

6 unchanged sentences

Purchases ( 341,315 ) ( 183,924 )

Sales — 17,910

Maturities, calls and principal repayments 91,660 18,338

4 unchanged sentences

Purchases of real estate property and equipment ( 3,047 ) ( 3,639 )

Net cash used in investing activities ( 1,178,727 ) ( 3,246,364 )

Net cash (used in) provided by investing activities ( 175,310 ) 91,985

VALLEY NATIONAL BANCORP

1 unchanged sentence

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from financing activities:

3 unchanged sentences

Repayments of long-term borrowings ( 273,000 ) ( 65,000 )

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

Cash dividends paid to preferred shareholders ( 6,956 ) ( 4,119 )

Cash dividends paid to common shareholders ( 62,930 ) ( 57,944 )

Purchase of common shares related to stock compensation plan activity ( 7,037 ) ( 7,381 )

Purchase of common shares to treasury ( 2,162 ) —

1 unchanged sentence

Other, net ( 95 ) ( 2 )

Net cash provided by financing activities 1,171,063 2,785,463

Net cash used in financing activities ( 473,996 ) ( 141,888 )

Net change in cash and cash equivalents ( 666,428 ) 49,608

14 unchanged sentences

The unaudited consolidated financial state ments of Valley include the accounts of the Bank and all other entities in which Valley has a controlling financial interest.

All inter-company transactions and balances have been eliminated.

All intercompany transactions and balances have been eliminated.

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

1 unchanged sentence

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

In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly Valley’s financial position, results of operations, changes in shareholders' equity and cash flows at September 30, 2024 and for all periods presented have been made.

The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the entire fiscal year or any subsequent interim period.

In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly Valley’s financial position, results of operations, changes in shareholders' equity and cash flows at March 31, 2025 and for all periods presented have been made.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the entire fiscal year or any subsequent interim period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP and industry practice have been condensed or omitted pursuant to rules and regulations of the SEC.

6 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 recent economic environment has increased and may continue to 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.

Preferred Stock 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 for aggregate consideration of $ 150 million.

Dividends on the preferred stock accrue and are payable quarterly in arrears, at a fixed rate per annum equal to 8.250 % 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 4.182 percent.

Net proceeds to Valley after deducting underwriting discounts, commissions and offering expenses were $ 144.7 million.

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 are expected to be used for general corporate purposes and investments in the Bank as regulatory capital.

Earnings Per Common Share

The following table shows the calculation of both basic and diluted earnings per common share for the three and nine months ended September 30, 2024 and 2023:

The following table shows the calculation of both basic and diluted earnings per common share for the three months ended March 31, 2025 and 2024:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in thousands, except for share and per share data)

8 unchanged sentences

Diluted 0.18 0.18

Common stock equivalents represent the dilutive effect of additional common shares issuable upon the assumed vesting or exercise, if applicab le, 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.

Pote ntial anti-dilutive weighted common shares totaled approximately 3.6 million and 2.8 million for the three months ended September 30, 2024 and 2023, respectively, and 4.0 million and 2.6 million for the nine months ended September 30, 2024 and 2023, respectively.

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 and RSUs with exercise and vesting 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.

Pote ntial anti-dilutive weighted common shares totaled approximately 638 thousand and 1.3 million for the three months ended March 31, 2025 and 2024, respectively.

Accumulated Other Comprehensive Loss

The following tables present the after-tax changes in the balances of each component of accumulated other comprehensive loss for th e three and nine months ended September 30, 2024 and 2023:

Components of Accumulated Other Comprehensive Loss Total

Comprehensive

Unrealized Gains

and Losses on

AFS Securities Unrealized Gains

and Losses on

Derivatives Defined Benefit

Pension and Postretirement Benefit Plans

(in thousands)

June 30, 2024 $ ( 131,299 ) $ 1,682 $ ( 32,996 ) $ ( 162,613 )

Other comprehensive income before reclassification 48,023 — — 48,023

Amounts reclassified from other comprehensive income 1 ( 219 ) 36 ( 182 )

Other comprehensive income (loss) , net 48,024 ( 219 ) 36 47,841

September 30, 2024 $ ( 83,275 ) $ 1,463 $ ( 32,960 ) $ ( 114,772 )

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

Other comprehensive loss before reclassification ( 37,115 ) — — ( 37,115 )

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

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

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

The following tables present the after-tax changes in the balances of each component of accumulated other comprehensive loss for th e three months ended March 31, 2025 and 2024:

Components of Accumulated Other Comprehensive Loss Total

9 unchanged sentences

Other comprehensive income before reclassification 27,212 — — 27,212

Amounts reclassified from other comprehensive income 9 ( 651 ) 108 ( 534 )

Amounts reclassified to earnings — ( 218 ) 88 ( 130 )

Other comprehensive income (loss), net 27,212 ( 218 ) 88 27,082

September 30, 2024 $ ( 83,275 ) $ 1,463 $ ( 32,960 ) $ ( 114,772 )

March 31, 2025 $ ( 106,686 ) $ 1,027 $ ( 22,593 ) $ ( 128,252 )

December 31, 2023 $ ( 115,502 ) $ 2,114 $ ( 33,068 ) $ ( 146,456 )

Other comprehensive loss before reclassification ( 10,205 ) — — ( 10,205 )

Amounts reclassified from other comprehensive loss 5 852 24 881

Amounts reclassified to earnings — ( 222 ) 35 ( 187 )

Other comprehensive (loss) income, net ( 10,205 ) ( 222 ) 35 ( 10,392 )

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

The following table presents amounts reclassified from each component of accumulated other comprehensive loss on a gross and net of tax basis for the three and nine months ended September 30, 2024 and 2023:

March 31, 2024 $ ( 125,707 ) $ 1,892 $ ( 33,033 ) $ ( 156,848 )

The following table presents amounts reclassified from each component of accumulated other comprehensive loss on a gross and net of tax basis for the three months ended March 31, 2025 and 2024:

Amounts Reclassified from

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

Components of Accumulated Other Comprehensive Loss 2025 2024 Income Statement Line Item

(in thousands)

Unrealized losses on AFS securities before tax $ ( 1 ) $ ( 6 ) $ ( 12 ) $ ( 6 ) Gains (losses) on securities transactions, net

Tax effect — 1 3 1

Total net of tax ( 1 ) ( 5 ) ( 9 ) ( 5 )

Unrealized gains (losses) on derivatives (cash flow hedges) before tax 302 63 899 ( 1,193 ) Interest income

Unrealized gains on derivatives (cash flow hedges) before tax $ 301 $ 298 Included in interest income.

Tax effect ( 83 ) ( 76 )

1 unchanged sentence

Defined benefit pension and postretirement benefit plans:

Amortization of actuarial net loss ( 50 ) ( 11 ) ( 149 ) ( 33 ) *

Amortization of actuarial net loss ( 121 ) ( 49 ) Included in the computation of net periodic pension cost recognized within other non-interest expense.

Tax effect 33 14

1 unchanged sentence

Total reclassifications, net of tax $ 130 $ 187

* Amortization of actuarial net loss is included in the computation of net periodic pension cost recognized within other non-interest expense.

New Authoritative Accounting Guidance

New Accounting Guidance Adopted in the First Quarter 2024

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

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method,” is intended to improve the accounting and disclosures for investments in certain tax credit structures.

2023-02 allows the option to apply the proportional amortization method to account for investments made primarily for the purpose of receiving income tax credits and other income tax benefits when certain requirements are met.

2023-02 became effective on

January 1, 2024 and did not have a significant impact on Valley's consolidated financial statements.

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 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.

It also requires entities with investments in equity securities subject to contractual sale restrictions to disclose certain qualitative and quantitative information about such securities including (i) the nature and remaining duration of the restriction;

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

and (iii) the fair value of the securities with 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 Effective at December 31, 2024

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.

2023-07 should be applied retrospectively to all periods presented in the financial statements.

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.

The adoption of ASU No.

2023-07 is not expected to have a significant impact on Valley's consolidated financial statements, other than enhanced disclosures.

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.

Subsequently issued ASU No.

2025-01 amended the effective date of ASU No.

2024-03 to require all public business entities to adopt the new guidance for annual reporting 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.

2024-03 on its consolidated financial statements.

Fair Value Measurement of Assets and Liabilities

6 unchanged sentences

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

The following tables present the assets and liabilities that are measured at fair value on a recurring and non-recurring basis by level within the fair value hierarchy as reported on the consolidated statements of financial condition at September 30, 2024 and December 31, 2023.

The assets presented under “non-recurring fair value measurements” in the tables below are not measured at fair value on an ongoing basis but are subject to fair value adjustments under certain circumstances (e.g., when an impairment loss is recognized).

September 30,

2025 Fair Value Measurements at Reporting Date Using:

10 unchanged sentences

Equity securities at net asset value (NAV)

Trading debt securities 3,996 3,996 — —

Available for sale debt securities:

14 unchanged sentences

Non-recurring fair value measurements:

Commercial real estate loans held for sale:

Performing $ 817,298 $ — $ 817,298 $ —

Non-performing 8,750 — 8,750 —

Total commercial real estate loans held for sale (3)

Non-performing loans held for sale (3)

$ 18,950 $ — $ 18,950 $ —

1 unchanged sentence

Foreclosed assets (3)

9,768 — — 9,768

Total $ 110,191 $ — $ 18,950 $ 91,241

11 unchanged sentences

Equity securities at net asset value (NAV)

Trading debt securities 3,973 3,973 — —

Available for sale debt securities:

18 unchanged sentences

Foreclosed assets (3)

13,852 — — 13,852

Total $ 162,026 $ — $ 8,750 $ 153,276

(1) Represents residential mortgage loans held for sale that are carried at fair value and had contractual unpaid principal balances totaling $ 16.9 million and $ 20.1 million at September 30, 2024 and December 31, 2023, respectively.

(1) Represents residential mortgage originated for sale that are carried at fair value and had contractual unpaid principal balances totaling $ 8.3 million and $ 16.8 million at March 31, 2025 and December 31, 2024, respectively.

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

8 unchanged sentences

Equity securities at NAV .

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

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.

Trading debt securities .

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

Treasury securities, are reported at fair value utilizing Level 1 inputs at September 30, 2024 and December 31, 2023 .

Man agement 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.

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, excluded from fair value hierarchy levels in the table above, are measured at NAV per share (or its equivalent) as a practical expedient.

Available for sale debt securities.

11 unchanged sentences

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

Non-performance risk did not materially impact the fair value of mortgage loans held for sale at September 30, 2024 and December 31, 2023 based on the short duration these assets were held and their credit quality.

Non-performance risk did not materially impact the fair value of mortgage loans held for sale at March 31, 2025 and December 31, 2024 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 SOFR curve at September 30, 2024.

The fair value of mortgage banking derivatives, consisting of interest rate lock commitments to fund residential mortgage loans and forward commitments for the future delivery of such loans (including certain loans held for sale at September 30, 2024 and December 31, 2023), is determined based on the current market prices for similar instruments.

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 March 31, 2025 and December 31, 2024), 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 September 30, 2024 and December 31, 2023.

The credit valuation adjustments were not significant to the overall valuation of Valley’s derivatives at March 31, 2025 and December 31, 2024.

See Note 12 for additional details on Valley's derivatives.

1 unchanged sentence

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.

Performing commercial real estate loans held for sale.

During the three months ended September 30, 2024 , Valley transferred certain performing commercial real estate loans totaling $ 823.1 million, net of unearned fees, to loans held for sale.

The fair value of the loans was determined using level 2 inputs, based on the terms of a sale agreement executed in October 2024 with an unrelated third party selected from a broker-led bidding process.

The fair value mark on the performing loans totaled a $ 5.8 million loss and was recorded within net losses on sales of loans for the three months ended September 30, 2024.

Valley expects the sale of the loans to close in the fourth quarter 2024.

Non-performing commercial real estate loan held for sale .

Du ring 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.

Non-performing commercial real estate loans held for sale .

During 2023, Valley transferred a non-performing construction loan totaling $ 10.0 million, net of $ 4.2 million charge-offs, 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.

1 unchanged sentence

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

During the nine months ended September 30, 2024, an additional $ 1.2 million write-down was recorded to reflect the loan's current estimated fair value of $ 8.8 million at September 30, 2024.

During 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 and March 31, 2025.

During the three months ended March 31, 2025, Valley transferred a non-performing construction loan totaling $ 10.2 million, net of $ 638 thousand charge-offs 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 to purchase from multiple third-parties.

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

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 the repayment is expected from the collateral.

Collateral dependent loans are reported at the fair value of the underlying 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.

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

At September 30, 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 September 30, 2024, collateral dependent loans with a total amortized cost of $ 177.3 million, including taxi medallion loans totaling $ 52.2 million, were reduced by specific allowance for loan losses allocations totaling $ 57.5 million to a reported total net carrying amount of $ 119.8 million.

At March 31, 2025, 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.

Collateral dependent loans with a total amortized cost of $ 142.9 million, (including taxi medallion loans totaling $ 49.2 million), were reduced by specific allowance for loan losses allocations totaling $ 61.4 million to a reported total net carrying amount of $ 81.5 million at March 31, 2025.

Foreclosed assets .

2 unchanged sentences

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

There were no adjustments to the appraisals of foreclosed assets at September 30, 2024 and December 31, 2023.

There were no adjustments to the appraisals of foreclosed assets at March 31, 2025 and December 31, 2024.

Other Fair Value Disclosures

6 unchanged sentences

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.

The carrying amounts and estimated fair values of financial instruments not measured and not reported at fair value on the consolidated statements of financial condition at September 30, 2024 and December 31, 2023 were as follows:

Hierarchy September 30, 2024 December 31, 2023

The carrying amounts and estimated fair values of financial instruments not measured and not reported at fair value on the consolidated statements of financial condition at March 31, 2025 and December 31, 2024 were as follows:

Hierarchy March 31, 2025 December 31, 2024

Amount Fair Value Carrying

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(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 nine months ended September 30, 2024 and for the year ended December 31, 2023 were immaterial.

Total changes in the valuation of equity securities for the three months ended March 31, 2025 and for the year ended December 31, 2024, respectively, were immaterial.

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

3 unchanged sentences

Equity Securities

Equity securities totaled $ 73.1 million and $ 64.5 million at September 30, 2024 and December 31, 2023, respectively.

Equity securities totaled $ 74.4 million and $ 71.5 million at March 31, 2025 and December 31, 2024, respectively.

See Note 5 for further details on equity securities.

Trading Debt Securities

The fair value of trading debt securities totaled $ 4.0 million at both September 30, 2024 and December 31, 2023.

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

We recorded net trading gains of $ 111 thousand and $ 673 thousand for the nine months ended September

30, 2024 and 2023, respectively.

The net trading gains were immaterial for both three months ended September 30, 2024 and 2023.

Available for Sale Debt Securities

The amortized cost, gross unrealized gains and losses and fair value of AFS debt securities at September 30, 2024 and December 31, 2023 were as follows:

The amortized cost, gross unrealized gains and losses and fair value of AFS debt securities at March 31, 2025 and December 31, 2024 were as follows:

Losses Fair Value

(in thousands)

September 30, 2024

March 31, 2025

Treasury securities $ 321,009 $ — $ ( 24,756 ) $ 296,253

17 unchanged sentences

Total $ 3,552,273 $ 4,063 $ ( 186,612 ) $ 3,369,724

Accrued interest on investments , which is excluded from the amortized cost of AFS debt securities, totaled $ 10.1 million and $ 5.9 million at September 30, 2024 and December 31, 2023, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

The age of unrealized losses and fair value of the related AFS debt securities at September 30, 2024 and December 31, 2023 were as follows:

Accrued interest on investments , which is excluded from the amortized cost of AFS debt securities, totaled $ 14.7 million and $ 13.1 million at March 31, 2025 and December 31, 2024, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

The age of unrealized losses and fair value of the related AFS debt securities at March 31, 2025 and December 31, 2024 were as follows:

Less than 12 Months More than 12 Months Total

3 unchanged sentences

(in thousands)

September 30, 2024

March 31, 2025

Treasury securities $ — $ — $ 296,253 $ ( 24,756 ) $ 296,253 $ ( 24,756 )

21 unchanged sentences

Total $ 1,483,442 $ ( 22,242 ) $ 1,126,912 $ ( 164,370 ) $ 2,610,354 $ ( 186,612 )

Within the AFS debt securities portfolio, the total number of security positions in an unrealized loss position was 656 and 687 at September 30, 2024 and December 31, 2023, respectively.

As of September 30, 2024, the fair value of AFS securities that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law, was $ 2.1 billion.

The contractual maturities of AFS debt securities at September 30, 2024 are set forth in the following table.

Within the AFS debt securities portfolio, the total number of security positions in an unrealized loss position was 677 and 726 at March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025, the fair value of AFS securities that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law, was $ 902.5 million.

Contractual Maturities

The contractual maturities of AFS debt securities at March 31, 2025 are set forth in the following table.

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.

September 30, 2024

March 31, 2025

(in thousands)

5 unchanged sentences

Total $ 3,804,160 $ 3,658,704

The weighted average remaining expected life for residential mortgage-backed securities AFS was 6.90 years at September 30, 2024.

The weighted average remaining expected life for residential mortgage-backed securities AFS was 9.42 years at March 31, 2025.

Impairment Analysis of Available For Sale Debt Securities

Valley's AFS debt securities portfolio includes corporate bonds and revenue bonds, among other securities.

These types of securities may pose a higher risk of future impairment charges by Valley as a result of the unpredictable nature of the U.S.

These types of securities may pose a higher risk of future impairment charges by Valley due to a variety of factors such as the unpredictable nature of the U.S.

economy and its potential negative effect on the future performance of the security issuers.

AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses on a quarterly basis.

Valley also evaluated AFS debt securities that were in an unrealized loss position as of September 30, 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.

Based on a comparison of the present value of expected cash flows to the amortized cost, th ere was no impairment recognized during the three and nine months ended September 30, 2024.

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 of the security totaling $ 5.0 million 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.

Valley also evaluated AFS debt securities that were in an unrealized loss position as of March 31, 2025 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.

Based on a comparison of the present value of expected cash flows to the amortized cost, th ere was no impairment recognized during the three months ended March 31, 2025 and 2024 .

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 September 30, 2024.

As a result, there was no allowance for credit los ses for AFS debt securities at September 30, 2024, December 31, 2023, and September 30, 2023.

None of the AFS debt securities were past due as of March 31, 2025.

As a result, there was no allowance for credit los ses for AFS debt securities at March 31, 2025 and December 31, 2024.

Held to Maturity Debt Securities

The amortized cost, gross unrealized gains and losses and fair value of HTM debt securities at September 30, 2024 and December 31, 2023 were as follows:

The amortized cost, gross unrealized gains and losses and fair value of HTM debt securities at March 31, 2025 and December 31, 2024 were as follows:

Losses Fair Value Allowance for Credit Losses Net Carrying Value

(in thousands)

September 30, 2024

March 31, 2025

Treasury securities $ 25,290 $ — $ ( 21 ) $ 25,269 $ — $ 25,290

20 unchanged sentences

Total $ 3,532,220 $ 2,107 $ ( 506,043 ) $ 3,028,284 $ 647 $ 3,531,573

Accrued interest on investments , which is excluded from the amortized cost of HTM debt securities, totaled $ 12.3 million and $ 13.9 million at September 30, 2024 and December 31, 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.

The age of unrealized losses and fair value of related HTM debt securities at September 30, 2024 and December 31, 2023 were as follows:

Accrued interest on investments , which is excluded from the amortized cost of HTM debt securities, totaled $ 12.1 million and $ 13.0 million at March 31, 2025 and December 31, 2024, 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 (as shown in the table above).

The age of unrealized losses and fair value of related HTM debt securities at March 31, 2025 and December 31, 2024 were as follows:

Less than 12 Months More than 12 Months Total

3 unchanged sentences

(in thousands)

September 30, 2024

March 31, 2025

Treasury securities $ 25,269 $ ( 21 ) $ — $ — $ 25,269 $ ( 21 )

government agency securities 22,109 ( 58 ) 237,231 ( 40,935 ) 259,340 ( 40,993 )

23 unchanged sentences

Total $ 328,108 $ ( 3,761 ) $ 2,492,592 $ ( 502,282 ) $ 2,820,700 $ ( 506,043 )

Within the HTM securities portfolio, the total number of security positions in an unrealized loss position was 733 and 762 at September 30, 2024 and December 31, 2023, respectively.

As of September 30, 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 $ 2.7 billion.

The contractual maturities of investments in HTM debt securities at September 30, 2024 are set forth in the table below.

Within the HTM securities portfolio, the total number of security positions in an unrealized loss position was 743 and 798 at March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025, 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.

Contractual Maturities

The contractual maturities of investments in HTM debt securities at March 31, 2025 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.

September 30, 2024

March 31, 2025

(in thousands)

5 unchanged sentences

Total $ 3,545,961 $ 3,097,634

The weighted-average remaining expected life for residential mortgage-backed securitie s HTM was 9.21 years at September 30, 2024.

The weighted-average remaining expected life for residential mortgage-backed securitie s HTM was 10.22 years at March 31, 2025.

Credit Quality Indicators

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

The following table summarizes the amortized cost of HTM debt securities by external credit rating at September 30, 2024 and December 31, 2023.

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

The following table summarizes the amortized cost of HTM debt securities by external credit rating at March 31, 2025 and December 31, 2024.

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

(in thousands)

September 30, 2024

March 31, 2025

Treasury securities $ 25,290 $ — $ — $ 25,290

22 unchanged sentences

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

At September 30, 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.

At March 31, 2025, 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.

1 unchanged sentence

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:

2 unchanged sentences

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

The following table details the activity in the allowance for credit losses for HTM securities for the three and nine months ended September 30, 2024 and 2023:

The following table details the activity in the allowance for credit losses for HTM securities for the three months ended March 31, 2025 and 2024:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in thousands)

2 unchanged sentences

Ending balance $ 633 $ 1,131

There were no net charge-offs of HTM debt securities in the respective periods presented in the table above.

Loans and Allowance for Credit Losses for Loans

The detail of the loan portfolio as of September 30, 2024 and December 31, 2023 was as follows:

September 30, 2024 December 31, 2023

The details of the loan portfolio as of March 31, 2025 and December 31, 2024 were as follows:

March 31, 2025 December 31, 2024

(in thousands)

10 unchanged sentences

Total loans $ 48,657,128 $ 48,799,711

Total loans include net unearned discounts and deferred loan fees of $ 48.1 million and $ 85.4 million at September 30, 2024 and December 31, 2023, respectively.

Accrued interest on loans , which is excluded from the amortized cost of loans held for investment, totaled $ 221.3 million and $ 222.2 million at September 30, 2024 and December 31, 2023, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

Total loans include net unearned discounts and deferred loan fees of $ 30.1 million and $ 45.3 million at March 31, 2025 and December 31, 2024, respectively.

Accrued interest on loans , which is excluded from the amortized cost of loans held for investment, totaled $ 205.3 million and $ 208.9 million at March 31, 2025 and December 31, 2024, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

Loans Portfolio Sales and Transfers to Loans Held for Sale

1 unchanged sentence

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

During the first quarter 2024, Valley sold $ 151.0 million and $ 45.6 million of commercial real estate and construction loans, respectively, at par value through loan participation agreements with a related party, Bank Leumi Le-Israel B.M .

During the first quarter 2024, Valley also transferred $ 34.1 million of construction loans from loans held for investment to loans held for sale as of March 31, 2024.

These loans were subsequently sold at par value through loan participation agreements with BLITA in April 2024.

During the third quarter 2024, Valley transferred performing commercial real estate loans totaling $ 823.1 million, net of unearned fees, to loans held for sale at September 30, 2024.

On October 23, 2024, the Bank entered into an agreement to sell these loans to an unrelated third party, and the sale is expected to close in the fourth quarter 2024.

See Note 5 for additional information regarding this transaction.

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

During the three months ended March 31, 2025, Valley transferred a non-performing construction loan totaling

$ 10.2 million, net of $ 638 thousand charge-offs, from the held for investment loan portfolio to loans held for sale.

See Note 5 for further details.

During the three months ended March 31, 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 first quarter 2024.

Valley continues to hold certain commercial premium finance loans totaling $ 20.9 million at September 30, 2024 which are mostly expected to run-off at their scheduled maturity dates.

There were no sales or transfers of loans from the held for investment portfolio (other than those described above) during the three and nine months ended September 30, 2024 and September 30, 2023.

There w ere no other transfers or sales of loans from the held for investment portfolio during the three months ended March 31, 2025 and 2024.

Credit Risk Management

For all loan types, 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 Valley to manage its risk across business sectors and through cyclical economic circumstances.

2 unchanged sentences

Credit Quality

The following table presents past due, current, and non-accrual loans without an allowance for loan losses by loan portfolio class at September 30, 2024 and December 31, 2023:

The following table presents past due, current, and non-accrual loans without an allowance for loan losses by loan portfolio class at March 31, 2025 and December 31, 2024:

Past Due and Non-Accrual Loans

6 unchanged sentences

(in thousands)

September 30, 2024

March 31, 2025

Commercial and industrial

40 unchanged sentences

Risk ratings are updated any time the situation warrants.

The following table presents the internal loan classification risk by loan portfolio class by origination year based on the most recent analysis performed at September 30, 2024 and December 31, 2023, as well as the gross loan charge-offs by year of origination for the nine months ended September 30, 2024 and 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 March 31, 2025 and December 31, 2024, as well as the gross loan charge-offs by year of origination for the three months ended March 31, 2025 and for the year ended December 31, 2024:

Amortized Cost Basis by Origination Year

September 30, 2024 2024 2023 2022 2021 2020 Prior to 2020 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Total

March 31, 2025 2025 2024 2023 2022 2021 Prior to 2021

Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Total

(in thousands)

14 unchanged sentences

Substandard — 773 75 8,950 4,477 — 52,222 32,930 99,427

Doubtful — — 10,824 — 7,272 — — — 18,096

Total construction $ 153,394 $ 563,135 $ 619,201 $ 333,597 $ 83,090 $ 72,943 $ 1,143,795 $ 57,780 $ 3,026,935

1 unchanged sentence

Amortized Cost Basis by Origination Year

December 31, 2023 2023 2022 2021 2020 2019 Prior to 2019 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Total

December 31, 2024 2024 2023 2022 2021 2020 Prior to 2020

Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Total

(in thousands)

9 unchanged sentences

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

3 unchanged sentences

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 September 30, 2024 and December 31, 2023, as well as the gross loan charge-offs by year of origination for the nine months ended September 30, 2024 and for the year ended December 31, 2023:

The following table presents the amortized cost in those loan classes based on payment activity by origination year as of March 31, 2025 and December 31, 2024, as well as the gross loan charge-offs by year of origination for the three months ended March 31, 2025 and for the year ended December 31, 2024:

Amortized Cost Basis by Origination Year

September 30, 2024 2024 2023 2022 2021 2020 Prior to 2020 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Total

March 31, 2025 2025 2024 2023 2022 2021 Prior to 2021

Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Total

(in thousands)

17 unchanged sentences

Amortized Cost Basis by Origination Year

December 31, 2023 2023 2022 2021 2020 2019 Prior to 2019 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Total

December 31, 2024 2024 2023 2022 2021 2020 Prior to 2020

Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Total

(in thousands)

18 unchanged sentences

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

The following tables present the amortized cost basis of loans to borrowers experiencing financial difficulty at September 30, 2024 that were modified during the three and nine months ended September 30, 2024 and 2023, disaggregated by class of financing receivable and type of modification.

Interest rate reduction Term extension Term extension and interest rate reduction Other than Insignificant Payment Delay Total % of Total Loan Class

The following tables present the amortized cost basis of loans to borrowers experiencing financial difficulty at March 31, 2025 that were modified during the three months ended March 31, 2025 and 2024, disaggregated by class of financing receivable and type of modification.

Term extension Term extension and interest rate reduction Term extension and principal forgiveness Other than Insignificant Payment Delay Total % of Total Loan Class

($ in thousands)

Three Months Ended

September 30, 2024

March 31, 2025

Commercial and industrial $ 2,145 $ — $ — $ 5,660 $ 7,805 0.08 %

2 unchanged sentences

Three Months Ended

September 30, 2023

March 31, 2024

Commercial and industrial $ 34,271 $ 143 $ — $ — $ 34,414 0.38 %

2 unchanged sentences

Total $ 34,424 $ 16,365 $ — $ — $ 50,789 0.10 %

Nine Months Ended

September 30, 2024

The following table describes the types of modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2025 and 2024:

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

Three Months Ended

March 31, 2025

Commercial and industrial — % 11 $ — 6

Commercial real estate — 31 17,500 * 6

Three Months Ended

March 31, 2024

Commercial and industrial 1.11 % 3 $ — —

Commercial real estate 1.06 12 — —

Home equity — 120 — —

* Relates to one loan that was partially charged off during the fourth quarter 2024 with the subsequent execution of the corresponding principal forgiveness completed in the first quarter 2025.

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

The following table presents the aging analysis of loans that have been modified within the previous 12 months at March 31, 2025 and 2024.

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

March 31, 2025 ($ in thousands)

Commercial and industrial $ 113,632 * $ — $ — $ 113,632

Commercial real estate 243,689 — 46 243,735

Residential mortgage 2,051 — 95 2,146

Home equity 41 — — 41

Total $ 359,413 $ — $ 141 $ 359,554

Nine Months Ended

September 30, 2023

March 31, 2024

Commercial and industrial $ 73,859 * $ 5,916 * $ 4,943 * $ 84,718

2 unchanged sentences

Home equity 122 — — 122

Other consumer — 48 — — 48 —

Total $ 170,198 $ 6,276 $ 7,096 $ 183,570

The following tables describe the types of modifications made to borrowers experiencing financial difficulty.

Types of Modifications

Three and Nine months ended September 30, 2024

Commercial and industrial 3 to 24 month term extensions

24 month term extensions combined with a reduction in interest rate from 2.10 percent to 1.00 percent

Five reductions in interest rate one from 7.50 percent and four from 6.09 percent to 4.88 percent and 1.83 percent, respectively

Commercial real estate 2 to 36 month term extensions

12 to 18 month term extensions combined with a reduction in interest rate from 8.06 percent to 7.00 percent

Five other than insignificant payment delays, consisting of 12 month moratoriums on contractual principal payments

Residential mortgage 50 month term extensions

Home equity 120 month term extension

Three and Nine months ended September 30, 2023

Commercial and industrial 12 month term extensions

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

Two reductions in interest rate from 1.84 percent and 1.83 percent to 1.00 percent, respectively

Commercial real estate 6 - 36 month term extensions

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

Residential mortgage 12 month term extensions

Home equity 120 month term extension

Consumer 60 month term extensions

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

The following table presents the aging analysis of loans that have been modified within the previous 12 months.

At September 30, 2024

Current 30-89 Days Past Due 90 Days or More Past Due * Total

* Includes non-accrual loans.

T he following table provides the amortized cost basis of financing receivables that had a payment default during the three months ended March 31, 2025 and 2024 and were modified in the 12 months before default to borrowers experiencing financial difficulty.

March 31, 2025 Term extension Other than Insignificant Payment Delay

(in thousands)

Commercial and industrial $ 91,411 $ — $ — $ 91,411

Commercial real estate $ 46 $ —

1 unchanged sentence

Total $ 46 $ 95

* All loan balances in this delinquency category were non-accrual loans at September 30, 2024.

Valley did not extend any commitments to lend additional funds to borrowers experiencing financial difficulty whose loans had been modified during the three and nine months ended September 30, 2024 and 2023.

March 31, 2024

Commercial and industrial $ 7,096 $ —

Total $ 7,096 $ —

Loans in process of foreclosure.

OREO balance totaled $ 7.2 million at September 30, 2024 and included one commercial property and one immaterial foreclosed residential property.

The balance of OREO was not material at December 31, 2023 with no f oreclosed residential real estate.

Residential mortgage and consumer loans secured by

residential real estate properties for which formal foreclosure proceedings are in process totaled $ 4.2 million and $ 1.6 million at September 30, 2024 and December 31, 2023, respectively.

OREO balance totaled $ 7.7 million and $ 12.2 million at March 31, 2025 and December 31, 2024, respectively.

Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $ 4.3 million and $ 4.6 million at March 31, 2025 and December 31, 2024, respectively.

Collateral dependent loans.

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

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

The following table presents collateral dependent loans by class as of September 30, 2024 and December 31, 2023:

September 30,

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.

The following table presents collateral dependent loans by class as of March 31, 2025 and December 31, 2024:

2025 December 31,

7 unchanged sentences

Home equity 1,332 1,341

Consumer — 589

Total $ 296,000 $ 329,702

* Includes non-accrual loans collateralized by taxi medallions totaling $ 52.2 million and $ 62.3 million at September 30, 2024 and December 31, 2023, respectively.

* Include non-accrual loans collateralized by taxi medallions totaling $ 49.2 million and $ 49.5 million at March 31, 2025 and December 31, 2024, respectively.

Allowance for Credit Losses for Loans

The allowance for credit losses for loans consists of the allowance for loan losses and the allowance for unfunded credit commitments.

The following table summarizes the ACL for loans at September 30, 2024 and December 31, 2023:

September 30,

The following table summarizes the ACL for loans at March 31, 2025 and December 31, 2024:

2025 December 31,

6 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in thousands)

3 unchanged sentences

Total provision for credit losses for loans $ 62,675 $ 45,274

The following tables detail the activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2024 and 2023:

The following table details the activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2025 and 2024:

and Industrial Commercial

3 unchanged sentences

Three Months Ended

September 30, 2024

Allowance for loan losses:

Beginning balance $ 149,243 $ 301,093 $ 47,697 $ 21,277 $ 519,310

Loans charged-off ( 7,501 ) ( 38,123 ) — ( 2,597 ) ( 48,221 )

Charged-off loans recovered 3,162 1,601 29 521 5,313

Net (charge-offs) recoveries ( 4,339 ) ( 36,522 ) 29 ( 2,076 ) ( 42,908 )

Provision for loan losses 21,461 44,457 3,819 2,188 71,925

Ending balance $ 166,365 $ 309,028 $ 51,545 $ 21,389 $ 548,327

Three Months Ended

September 30, 2023

March 31, 2025

Allowance for loan losses:

5 unchanged sentences

Ending balance $ 184,700 $ 321,662 $ 48,906 $ 22,932 $ 578,200

Nine Months Ended

September 30, 2024

Three Months Ended

March 31, 2024

Allowance for loan losses:

5 unchanged sentences

Ending balance $ 138,593 $ 265,847 $ 44,377 $ 20,431 $ 469,248

Nine Months Ended

September 30, 2023

Allowance for loan losses:

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

Impact of the adoption of ASU No.

( 739 ) ( 589 ) ( 12 ) ( 28 ) ( 1,368 )

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

Loans charged-off ( 37,399 ) ( 12,226 ) ( 169 ) ( 3,024 ) ( 52,818 )

Charged-off loans recovered 6,615 33 186 1,513 8,347

Net (charge-offs) recoveries ( 30,784 ) ( 12,193 ) 17 ( 1,511 ) ( 44,471 )

Provision (credit) for loan losses 25,570 ( 1,579 ) 5,596 ( 228 ) 29,359

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

The following table represents the allocation of the allowance for loan losses and the related loans by loan portfolio segment disaggregated based on the allowance measurement methodology at September 30, 2024 and December 31, 2023.

Commercial and Industrial Commercial

2 unchanged sentences

(in thousands)

September 30, 2024

March 31, 2025

Allowance for loan losses:

14 unchanged sentences

Goodwill and Other Intangible Assets

The carrying amounts of goodwill allocated to Valley's reporting units at both September 30, 2024 and December 31, 2023, were as follows:

The carrying amounts of goodwill allocated to Valley's reporting units at both March 31, 2025 and December 31, 2024, were as follows:

Reporting Unit *

5 unchanged sentences

* The Wealth Management and Consumer Banking reporting units are both components of the overall Consumer Banking operating segment, which is further described in Note 15 .

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

The results of the 2024 annual impairment test resulted in no impairment of goodwill.

During the nine months ended September 30, 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 imp airment of goodwill recognized during the three and nine months ended September 30, 2024 and 2023.

The following table summarizes other intangible assets as of September 30, 2024 and December 31, 2023:

During the three months ended March 31, 2025 , 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 imp airment of goodwill recognized during the three months ended March 31, 2025 and 2024.

The following table summarizes other intangible assets as of March 31, 2025 and December 31, 2024:

Assets Accumulated

1 unchanged sentence

(in thousands)

September 30, 2024

March 31, 2025

Loan servicing rights $ 126,659 $ ( 105,739 ) $ 20,920

11 unchanged sentences

Impairment charges on loan servicing rights are recognized in earnings when the book value of a stratified group of loan servicing rights exceeds its estimated fair value.

There was no impairment of loan servicing rights recognized during the three and nine months ended September 30, 2024 and 2023.

There was no impairment of loan servicing rights recognized during the three months ended March 31, 2025 and 2024.

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

1 unchanged sentence

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

There was no impairment of core deposits and other intangibles recognized during the three and nine months ended September 30, 2024 and 2023.

There was no impairment of core deposits and other intangibles recognized during the three months ended March 31, 2025 and 2024.

The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2025 through 2029:

7 unchanged sentences

2029 1,643 7,500 3,081

Valley recognized amortization expense on other intangible assets totaling approximately $ 8.7 million and $ 9.7 million for the three months ended September 30, 2024 and 2023, respectively, and $ 26.7 million and $ 30.1 million for the nine months ended September 30, 2024 and 2023, respectively.

Included in time deposits are certificates of deposit over $250 thousand totaling $ 2.2 billion and $ 2.6 billion at September 30, 2024 and December 31, 2023, respectively.

Interest expense on time deposits of over $250 thousand total ed $ 24.4 million and $ 5.4 million for the three months ended September 30, 2024 and 2023, respectively, and $ 72.4 million and $ 12.9 million for the nine months ended September 30, 2024 and 2023, respectively.

The scheduled maturities of time deposits as of September 30, 2024 were as follows:

Valley recognized amortization expense on other intangible assets totaling approximately $ 8.0 million and $ 9.4 million for the three months ended March 31, 2025 and 2024, respectively.

Included in time deposits are certificates of deposit over $250 thousand totaling $ 2.4 billion at both March 31, 2025 and December 31, 2024.

The scheduled maturities of time deposits as of March 31, 2025 were as follows:

(in thousands)

2 unchanged sentences

2027 1,265,409

2027 1,144,759

Thereafter 14,935

2 unchanged sentences

Short-Term Borrowings

Short-term borrowings at September 30, 2024 and December 31, 2023 consisted of the following:

September 30, 2024 December 31, 2023

Short-term borrowings at March 31, 2025 and December 31, 2024 consisted of the following:

March 31, 2025 December 31, 2024

(in thousands)

FHLB advances $ — $ 850,000

Securities sold under agreements to repurchase $ 59,026 $ 72,718

Total short-term borrowings $ 59,026 $ 72,718

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

Long-Term Borrowings

Long-term borrowings at September 30, 2024 and December 31, 2023 consisted of the following:

September 30, 2024 December 31, 2023

Long-term borrowings at March 31, 2025 and December 31, 2024 consisted of the following:

March 31, 2025 December 31, 2024

(in thousands)

FHLB advances, net $ 2,253,604 $ 2,526,608

$ 2,626,660 $ 1,690,013

Subordinated debt, net *

1 unchanged sentence

Total long-term borrowings $ 2,904,567 $ 3,174,155

(1) FHLB advances are presented net of unamortized premiums totaling $ 56 thousand and $ 209 thousand at September 30, 2024 and December 31, 2023, respectively.

(2) Subordinated debt is presented net of unamortized debt issuance costs totaling $ 4.0 million and $ 5.2 million at September 30, 2024 and December 31, 2023, respectively.

* Subordinated debt is reported net of debt issuance costs that were immaterial at both March 31, 2025 and December 31, 2024.

FHLB advances.

Long-term FHLB advances had a weighted average interest rate of 4.10 percent and 3.75 percent at September 30, 2024 and December 31, 2023, respectively.

Long-term FHLB advances had a weighted average interest rate of 4.47 percent and 4.20 percent at March 31, 2025 and December 31, 2024, respectively.

FHLB advances are secured by pledges of certain eligible collateral, including but not limited to, U.S.

government and agency mortgage-backed securities and a

blanket assignment of qualifying first lien mortgage loans, consisting of both residential mortgage and commercial real estate loans.

The long-term FHLB advances at September 30, 2024 are scheduled for contractual balance repayments as follows:

government and agency mortgage-backed securities and a blanket assignment of qualifying first lien mortgage loans, consisting of both residential mortgage and commercial real estate loans.

The long-term FHLB advances at March 31, 2025 are scheduled for contractual balance repayments as follows:

(in thousands)

2024 $ 100,000

Thereafter 250,000

Total long-term FHLB advances $ 2,253,604

1 unchanged sentence

Subordinated debt.

There were no new issuances of subordinated debt during the nine months ended September 30, 2024.

See Note 10 in Valley’s Annual Report for additional information on the outstanding subordinated debt at September 30, 2024.

There were no new issuances of subordinated debt during the three months ended March 31, 2025.

See Note 10 in Valley’s Annual Report for additional information on the outstanding subordinated debt at March 31, 2025.

Stock–Based Compensation

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

Under the plan, Valley may issue awards to its officers, employees and non-employee directors in amounts up to 14.5 million, subject to certain adjustments.

As of September 30, 2024, 9.3 million shares of common stock were available for issuance under the plan.

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, subject to certain adjustments.

As of March 31, 2025, 6.9 million shares of common stock were available for issuance under the plan.

RSUs are awarded as performance-based RSUs and time-based RSUs.

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

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

The table below summarizes RSU awards granted and average grant date fair values for the three and nine months ended September 30, 2024 and 2023:

Performance-based RSUs vest based on (i) growth in tangible book value per share plus dividends and (ii) total shareholder return as compared to our peer group.

The performance based RSUs “cliff” vest after three years based on the cumulative performance of Valley during that time period.

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 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.

The table below summarizes RSU awards granted and average grant date fair values for the three months ended March 31, 2025 and 2024:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in thousands, except per share data)

6 unchanged sentences

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

Valley recorded total stock-based compensation expense of approximately $ 7.3 million and $ 8.6 million for the three months ended September 30, 2024 and 2023, respectively, and $ 23.0 million and $ 25.4 million for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, the unrecognized amortization expense for all stock-based employee compensation totaled approximately $ 37.0 million.

This expense will be recognized over

an average remaining vesting period of approximately 1.9 years.

Valley recorded total stock-based compensation expense of approximately $ 6.8 million and $ 8.1 million for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, the unrecognized amortization expense for all stock-based employee compensation totaled approximately $ 51.7 million.

This expense will be recognized over an average remaining vesting period of approximately 2.4 years.

See Note 12 in Valley’s Annual Report for additional information on the stock-based compensation awards.

3 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 this objective, Valley uses interest rate swaps as part of its interest rate risk management strategy.

To accomplish these objectives, Valley has used 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.

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 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 uses interest rate swaps to manage the 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.

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 the nine months ended September 30, 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.

See Note 15 to Valley's Annual Report for additional information regarding Valley's fair value hedges.

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.

1 unchanged sentence

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

At September 30, 2024, Valley had 47 credit swaps with an aggregate notional amount of $ 596.3 million related to risk participation agreements.

At September 30, 2024, Valley had two “steepener” swaps, each with a current notional amount of $ 10.4 million where the receive rate on the swap mirrors the pay rate on the brokered deposits and the rates paid on these types of hybrid instruments are based on a formula derived from the spread between the long and short ends of the Constant Maturity Swap rate curve.

At March 31, 2025, Valley had 61 credit swaps with an aggregate notional amount of $ 855.7 million related to risk participation agreements.

At March 31, 2025, Valley had two “steepener” swaps, each with a current notional amount of $ 10.4 million where the receive rate on the swap mirrors the pay rate on the brokered deposits and the rates paid on these types of hybrid instruments are based on a formula derived from the spread between the long and short ends of the Constant Maturity Swap 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 and, therefore, provide an effective economic hedge.

3 unchanged sentences

Valley enters into foreign currency forward and option contracts, primarily to accommodate our customers, that are not designated as hedging instruments.

Upon the origination of certain foreign currency denominated transactions (including foreign currency holdings and non-U.S.

Upon the origination of certain foreign currency denominated transactions

(including foreign currency holdings and non-U.S.

dollar denominated loans) with a client, we enter into a respective hedging contract with a third party financial institution to mitigate the economic impact of foreign currency exchange rate fluctuation.

During June 2024, Valley entered into a credit default swap related to approximately $ 1.5 billion of 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 $ 1.3 billion within Valley's $ 1.8 billion automobile loan portfolio at September 30, 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 $ 3.2 million and $ 4.7 million for the three and nine months ended September 30, 2024 and were recorded in other expense reported in non-interest expense.

During June 2024, Valley entered into a credit default swap related to approximately $ 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 $ 1.0 billion within Valley's $ 2.0 billion automobile loan portfolio at March 31, 2025.

The credit default swap is a free-standing contract measured at fair value with resulting gains or losses recognized in non-interest expense.

The premium amortization expense associated with the credit protection totaled $ 2.0 million for the three months ended March 31, 2025 and was 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:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Fair Value Fair Value

3 unchanged sentences

Fair value hedge interest rate swaps $ 7,078 $ 13,641 $ 780,322 $ 2,419 $ 13,993 $ 780,322

Total derivatives designated as hedging instruments $ 7,078 $ 13,641 $ 780,322 $ 2,419 $ 13,993 $ 780,322

Derivatives not designated as hedging instruments:

7 unchanged sentences

* Other derivative contracts include risk participation agreements.

Gains (losses) included in the consolidated statements of income and other comprehensive loss, on a pre-tax basis, related to interest rate derivatives designated as hedges of cash flows were as follows:

Gains included in the consolidated statements of income and other comprehensive loss, on a pre-tax basis, related to previously terminated interest rate derivatives designated as hedges of cash flows were as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in thousands)

Amount of gain (loss) reclassified from accumulated other comprehensive loss to interest income $ 302 $ 63 $ 899 $ ( 1,193 )

Amount of loss recognized in other comprehensive loss — — — ( 1,093 )

The accumulated after-tax gains related to effective cash flow hedges included in accumulated other comprehensive loss were $ 1.5 million and $ 2.1 million at September 30, 2024 and December 31, 2023, respectively.

Amounts reported in accumulated other comprehensive loss related to cash flow interest rate derivatives are reclassified to interest income.

The reclassification amoun t for the three and nine months ended September 30, 2024 and the three months ended September 30, 2023 represents amortization of a gain recognized from the termination of six interest rate swaps during the second quarter 2023.

Amount of gain reclassified from accumulated other comprehensive loss to interest income $ 301 $ 298

The accumulated after-tax gains related to the previously terminated cash flow hedges included in accumulated other comprehensive loss were $ 1.0 million and $ 1.2 million at March 31, 2025 and December 31, 2024, respectively.

Valley estimates that $ 1.0 million (before tax) will be reclassified as an increase to interest income over the next 12 months.

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in thousands)

2 unchanged sentences

Interest expense 4,569 ( 1,291 )

Hedged items - loans, brokered deposits and subordinated debt:

Hedged items - loans, time deposits and subordinated debt:

Interest income $ ( 161 ) $ ( 4,924 )

1 unchanged sentence

The changes in the fair value of the hedged item designated as a qualifying hedge are captured as an adjustment to the carrying amount of the hedged item (basis adjustment).

The following table presents the hedged item related to interest rate derivatives designated as fair value hedges and the cumulative basis fair value adjustment included in the net carrying amount of the hedged item at September 30, 2024 and December 31, 2023, respectively.

The following table presents the hedged item related to interest rate derivatives designated as fair value hedges and the cumulative basis fair value adjustment included in the net carrying amount of the hedged item at March 31, 2025 and December 31, 2024, respectively.

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)

September 30, 2024

March 31, 2025

Time deposits $ 484,240 $ 3,936

1 unchanged sentence

December 31, 2024

Loans $ 503,877 $ 3,877

Time deposits $ 482,723 $ 2,419

Long-term borrowings * 284,966 ( 13,859 )

* Net carrying amount includes unamortized debt issuance costs of $ 1.4 million and $ 2.0 million at September 30, 2024 and December 31, 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:

* Net carrying amount includes unamortized debt issuance costs of $ 1.0 million and $ 1.2 million at March 31, 2025 and December 31, 2024, respectively.

The net losses included in the consolidated statements of income related to derivative instruments not designated as hedging instruments were as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in thousands)

1 unchanged sentence

Other non-interest expense $ ( 3,059 ) $ ( 1,055 )

Capital markets income reported in non-interest income included fee income related to non-designated hedge derivative interest rate swaps executed with commer cial loan customers and foreign exchange contracts (not designated as hedging instruments) with a combined total of $ 5.7 million for both the three months ended September 30, 2024 and 2023 and $ 17.0 million and $ 29.7 million for the nine months ended September 30, 2024 and 2023, respectively.

Capital markets income reported in non-interest income included fee income related to non-designated hedge derivative interest rate swaps executed with commer cial loan customers and foreign exchange contracts (not designated as hedging instruments) with a combined total of $ 5.8 million and $ 4.5 million for the three months ended March 31, 2025 and 2024, respectively.

Collateral Requirements and Credit Risk Related Contingent Features .

1 unchanged sentence

Management attempts to minimize counterparty credit risk through credit approvals, limits, monitoring procedures and obtaining collateral where appropriate.

Credit risk exposure associated with derivative contracts is managed at Valley in conjunction with Valley’s consolidated counterparty risk management process.

Credit risk exposure associated with derivative contracts is managed at Valley in conjunction

with Valley’s consolidated counterparty risk management process.

Valley’s counterparties and the risk limits monitored by management are periodically reviewed and approved by the Board.

2 unchanged sentences

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

As of September 30, 2024, Valley was in compliance with all of the provisions of its derivative counterparty agreements.

The aggregate fair value of all derivative financial instruments with credit risk-related contingent features was in a net asset position at September 30, 2024.

As of March 31, 2025, Valley was in compliance with all of the provisions of its derivative counterparty agreements.

The aggregate fair value of all derivative financial instruments with credit risk-related contingent features was in a net asset position at March 31, 2025.

Valley has derivative counterparty agreements that require minimum collateral posting thresholds for certain counterparties.

11 unchanged sentences

Total amount of collateral held or pledged cannot exceed the net derivative fair values with the counterparty.

The table below presents information about Valley’s financial instruments eligible for offset in the consolidated statements of financial condition as of September 30, 2024 and December 31, 2023.

The table below presents information about Valley’s financial instruments eligible for offset in the consolidated statements of financial condition as of March 31, 2025 and December 31, 2024.

Gross Amounts Not Offset

6 unchanged sentences

(in thousands)

September 30, 2024

March 31, 2025

Interest rate swaps and other contracts $ 311,399 $ — $ 311,399 $ 48,470 $ ( 248,322 ) $ 111,547

13 unchanged sentences

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

The following table presents the balances of Valley’s affordable housing tax credit investments, other tax credit investments, and related unfunded commitments at September 30, 2024 and December 31, 2023:

September 30,

The following table presents the balances of Valley’s affordable housing tax credit investments, other tax credit investments, and related unfunded commitments at March 31, 2025 and December 31, 2024:

2025 December 31,

4 unchanged sentences

Total tax credit investments, net $ 351,677 $ 301,210

Other Liabilities:

Unfunded affordable housing tax credit commitments $ — $ 1,305

Total unfunded tax credit commitments $ — $ 1,305

The following table presents other information relating to Valley’s affordable housing tax credit investments and other tax credit investments for the three and nine months ended September 30, 2024 and 2023:

The following table presents other information relating to Valley’s affordable housing tax credit investments and other tax credit investments for the three months ended March 31, 2025 and 2024:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in thousands)

12 unchanged sentences

Activities not assigned to the operating segments are included in Treasury and Corporate Other.

Each operating segment is reviewed routinely for its asset growth, contribution to income before income taxes and return on average interest earning assets and impairment (if events or circumstances indicate a possible inability to realize the carrying amount).

Valley regularly assesses its strategic plans, operations and reporting structures to identify its operating segments and no changes to Valley's operating segments were determined necessary d uring the three and nine months ended September 30, 2024 .

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.

No changes to the operating segments were determined necessary during the three months ended March 31, 2025.

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.

2 unchanged sentences

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, as well as Valley's international and domestic private banking businesses.

Consumer Banking also includes the Wealth 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.

the portfolio’s interest rate characteristics, Commercial Banking is Valley’s operating segment that is most sensitive to movements in market interest rates.

Treasury and Corporate Other largely consists of the Treasury managed HTM debt securities and AFS debt securities portfolios mainly utilized in the liquidity management needs of our lending segments and income and expense items resulting from support functions not directly attributable to a specific segment.

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 FRB 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.

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.

2 unchanged sentences

Certain prior period amounts have been reclassified to conform to the current presentation for each operating segment and Treasury and Corporate Other.

The following tables represent the financial data for Valley’s operating segments and Treasury and Corporate Other for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, 2024

The following tables represent the financial data for Valley’s operating segments and Treasury and Corporate Other for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31, 2025

Banking Commercial

10 unchanged sentences

Non-interest expense

Internal transfer expense (income) 29,709 121,053 ( 150,762 ) —

Salary and employee benefits expense 31,974 102,990 7,654 142,618

Net occupancy expense 4,705 17,457 3,726 25,888

Technology, furniture, and equipment expense 6,237 19,853 3,806 29,896

FDIC insurance assessment 2,700 10,167 — 12,867

Professional and legal fees 2,899 10,943 1,828 15,670

Other segment items * 14,286 15,443 19,950 49,679

Total non-interest expense $ 62,801 $ 176,853 $ 36,964 $ 276,618

Income (loss) before income taxes $ 37,307 $ 104,226 $ ( 2,413 ) $ 139,120

1 unchanged sentence

1.46 % 1.08 % ( 0.12 ) % 0.98 %

Three Months Ended September 30, 2023

Banking Commercial

Banking Treasury and Corporate Other Total

($ in thousands)

Average interest earning assets

$ 9,681,379 $ 40,338,035 $ 6,783,151 $ 56,802,565

Interest income $ 106,384 $ 647,258 $ 59,376 $ 813,018

Interest expense 65,987 274,377 60,236 400,600

Net interest income 40,397 372,881 ( 860 ) 412,418

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

Net interest income after provision for credit losses 44,965 359,166 ( 830 ) 403,301

Non-interest income 21,035 13,015 24,614 58,664

Non-interest expense 20,796 40,248 206,089 267,133

Internal transfer expense (income) 30,104 121,878 ( 151,982 ) —

Income before income taxes $ 15,100 $ 210,055 $ ( 30,323 ) $ 194,832

Return on average interest earning assets (pre-tax)

0.62 % 2.08 % ( 1.79 ) % 1.37 %

Nine Months Ended September 30, 2024

Net interest margin 2.24 % 3.47 % 1.44 % 2.95 %

Three Months Ended March 31, 2024

Banking Commercial

10 unchanged sentences

Non-interest expense

Internal transfer expense (income) 91,782 374,903 ( 466,685 ) —

Income (loss) before income taxes $ 37,311 $ 408,247 $ ( 96,100 ) $ 349,458

Return on average interest earning assets (pre-tax)

0.50 % 1.35 % ( 1.86 ) % 0.82 %

Nine Months Ended September 30, 2023

Banking Commercial

Banking Treasury and Corporate Other Total

($ in thousands)

Average interest earning assets

$ 9,599,359 $ 39,520,794 $ 7,390,844 $ 56,510,997

Interest income $ 305,025 $ 1,819,015 $ 196,667 $ 2,320,707

Interest expense 172,202 708,961 171,341 1,052,504

Net interest income 132,823 1,110,054 25,326 1,268,203

Provision for credit losses 5,368 19,561 4,675 29,604

Net interest income after provision for credit losses 127,455 1,090,493 20,651 1,238,599

Non-interest income 59,858 43,105 70,075 173,038

Non-interest expense 65,595 127,810 628,865 822,270

Internal transfer expense (income) 90,460 372,426 ( 462,886 ) —

Salary and employee benefits expense 28,658 101,858 11,315 141,831

Net occupancy expense 4,268 17,363 2,692 24,323

Technology, furniture, and equipment expense 6,537 25,264 3,661 35,462

FDIC insurance assessment 2,114 8,728 7,394 18,236

Professional and legal fees 2,827 12,082 1,556 16,465

Other segment items * 12,591 13,203 18,199 43,993

Total non-interest expense $ 56,995 $ 178,498 $ 44,817 $ 280,310

Income (loss) before income taxes $ 11,574 $ 149,369 $ ( 31,490 ) $ 129,453

1 unchanged sentence

0.47 % 1.48 % ( 1.98 ) % 0.91 %

Net interest margin 1.57 % 3.43 % 0.51 % 2.78 %

* Other segment items include amortization of intangible assets, amortization of tax credit investments and other general operating expenses.

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

What changed 10-Q

Item 1. Financial Statements