VALLEY NATIONAL BANCORP 10-Q

Item 1. Financial Statements VALLEY NATIONAL BANCORP CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (in thousands, except for share data) March 31, 2025 December 31, 2024 Assets (Unaudited) Cash and due from banks $ 508,887 $ 411,412 Interest bearing deposits with banks 714,810 1,478,713 Investment securities: Equity securities 74,425 71,513 Available for sale debt securities 3,658,704 3,369,724 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 $ 8,427 at March 31, 2025 and $ 16,931 at December 31, 2024 for loans originated for sale) 27,377 25,681 Loans 48,657,128 48,799,711 Less: Allowance for loan losses ( 578,200 ) ( 558,850 ) Net loans 48,078,928 48,240,861 Premises and equipment, net 344,123 350,796 Lease right of use assets 334,013 328,475 Bank owned life insurance 733,135 731,574 Accrued interest receivable 238,326 239,941 Goodwill 1,868,936 1,868,936 Other intangible assets, net 121,340 128,661 Other assets 1,617,323 1,713,831 Total Assets $ 61,865,655 $ 62,491,691 Liabilities Deposits: Non-interest bearing $ 11,628,578 $ 11,428,674 Interest bearing: Savings, NOW and money market 26,413,258 26,304,639 Time 11,924,008 12,342,544 Total deposits 49,965,844 50,075,857 Short-term borrowings 59,026 72,718 Long-term borrowings 2,904,567 3,174,155 Junior subordinated debentures issued to capital trusts 57,542 57,455 Lease liabilities 394,334 388,303 Accrued expenses and other liabilities 984,445 1,288,076 Total Liabilities 54,365,758 55,056,564 Shareholders’ Equity Preferred stock, no par value; 50,000,000 authorized shares: 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 March 31, 2025 and December 31, 2024) 98,101 98,101 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 560,278,101 shares at March 31, 2025 and 558,786,093 shares at December 31, 2024) 196,520 195,998 Surplus 5,444,756 5,442,070 Retained earnings 1,634,690 1,598,048 Accumulated other comprehensive loss ( 128,252 ) ( 155,334 ) Treasury stock, at cost ( 250,000 common shares at March 31, 2025) ( 2,162 ) — Total Shareholders’ Equity 7,499,897 7,435,127 Total Liabilities and Shareholders’ Equity $ 61,865,655 $ 62,491,691 See accompanying notes to consolidated financial statements. 3 VALLEY NATIONAL BANCORP CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands, except for per share data) Three Months Ended March 31, 2025 2024 Interest Income Interest and fees on loans $ 703,609 $ 771,553 Interest and dividends on investment securities: Taxable 63,898 35,797 Tax-exempt 4,702 4,796 Dividends 5,664 6,828 Interest on federal funds sold and other short-term investments 6,879 9,682 Total interest income 784,752 828,656 Interest Expense Interest on deposits: Savings, NOW and money market 200,221 232,506 Time 125,069 151,065 Interest on short-term borrowings 2,946 20,612 Interest on long-term borrowings and junior subordinated debentures 36,411 30,925 Total interest expense 364,647 435,108 Net Interest Income 420,105 393,548 (Credit) provision for credit losses for available for sale and held to maturity securities ( 14 ) ( 74 ) Provision for credit losses for loans 62,675 45,274 Net Interest Income After Provision for Credit Losses 357,444 348,348 Non-Interest Income Wealth management and trust fees 15,031 17,930 Insurance commissions 3,402 2,251 Capital markets 6,940 5,670 Service charges on deposit accounts 12,726 11,249 Gains on securities transactions, net 46 49 Fees from loan servicing 3,215 3,188 Gains on sales of loans, net 2,197 1,618 Gains on sales of assets, net 43 3,694 Bank owned life insurance 4,777 3,235 Other 9,917 12,531 Total non-interest income 58,294 61,415 Non-Interest Expense Salary and employee benefits expense 142,618 141,831 Net occupancy expense 25,888 24,323 Technology, furniture and equipment expense 29,896 35,462 FDIC insurance assessment 12,867 18,236 Amortization of other intangible assets 8,019 9,412 Professional and legal fees 15,670 16,465 Amortization of tax credit investments 9,320 5,562 Other 32,340 29,019 Total non-interest expense 276,618 280,310 Income Before Income Taxes 139,120 129,453 Income tax expense 33,062 33,173 Net Income 106,058 96,280 Dividends on preferred stock 6,955 4,119 Net Income Available to Common Shareholders $ 99,103 $ 92,161 Earnings Per Common Share: Basic $ 0.18 $ 0.18 Diluted 0.18 0.18 See accompanying notes to consolidated financial statements. 4 VALLEY NATIONAL BANCORP CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands) Three Months Ended March 31, 2025 2024 Net income $ 106,058 $ 96,280 Other comprehensive gain (loss), net of tax: Unrealized gains and losses on available for sale securities Net gains (losses) arising during the period 27,212 ( 10,205 ) Total 27,212 ( 10,205 ) Unrealized gains and losses on derivatives (cash flow hedges) Amounts reclassified to earnings ( 218 ) ( 222 ) Total ( 218 ) ( 222 ) Defined benefit pension and postretirement benefit plans Amortization of actuarial net loss 88 35 Total other comprehensive income (loss) 27,082 ( 10,392 ) Total comprehensive income $ 133,140 $ 85,888 See accompanying notes to consolidated financial statements. 5 VALLEY NATIONAL BANCORP CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) For the Three Months Ended March 31, 2025 Common Stock Accumulated Preferred Stock Shares Amount Surplus Retained Earnings Other Comprehensive Loss Treasury Stock Total Shareholders’ Equity ($ in thousands) Balance - December 31, 2024 $ 354,345 558,786 $ 195,998 $ 5,442,070 $ 1,598,048 $ ( 155,334 ) $ — $ 7,435,127 Net income — — — — 106,058 — — 106,058 Other comprehensive income, net of tax — — — — — 27,082 — 27,082 Cash dividends declared: Preferred stock, Series A, $ 0.39 per share — — — — ( 1,797 ) — — ( 1,797 ) Preferred stock, Series B, $ 0.52 per share — — — — ( 2,065 ) — — ( 2,065 ) Preferred stock, Series C, $ 0.52 per share — — — — ( 3,094 ) — — ( 3,094 ) Common stock, $ 0.11 per share — — — — ( 62,460 ) — — ( 62,460 ) Effect of stock incentive plan, net — 1,492 522 2,686 — — — 3,208 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 Preferred Stock Shares Amount Surplus Retained Earnings Other Comprehensive Loss Treasury Stock Total Shareholders’ Equity ($ in thousands) Balance - December 31, 2023 $ 209,691 507,710 $ 178,187 $ 4,989,989 $ 1,471,371 $ ( 146,456 ) $ ( 1,391 ) $ 6,701,391 Net income — — — — 96,280 — — 96,280 Other comprehensive income, 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 See accompanying notes to consolidated financial statements. 6 VALLEY NATIONAL BANCORP CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Three Months Ended March 31, 2025 2024 Cash flows from operating activities: Net income $ 106,058 $ 96,280 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization 9,892 10,794 Stock-based compensation 6,840 8,104 Provision for credit losses 62,661 45,200 Net accretion of discounts and amortization of premium on securities and borrowings ( 1,827 ) ( 779 ) Amortization of other intangible assets 8,019 9,412 Losses on available for sale and held to maturity debt securities, net 11 7 Proceeds from sales of loans held for sale at fair value 47,094 41,650 Gains on sales of loans, net ( 2,197 ) ( 1,618 ) Originations of loans held for sale ( 37,437 ) ( 37,581 ) Gains on sales of assets, net ( 43 ) ( 3,694 ) Net change in: Fair value of financial instruments hedged by derivative transactions 4,693 3,540 Trading debt securities — ( 16 ) Lease right of use assets ( 5,710 ) 7,123 Cash surrender value of bank owned life insurance ( 4,777 ) ( 3,235 ) Accrued interest receivable 1,615 ( 8,395 ) Other assets 85,015 ( 184,680 ) Accrued expenses and other liabilities ( 297,029 ) 117,399 Net cash (used in) provided by operating activities ( 17,122 ) 99,511 Cash flows from investing activities: Loans originated and purchased, net of principal collected 88,203 ( 67,432 ) Equity securities: Purchases ( 3,045 ) ( 957 ) Sales 427 408 Held to maturity debt securities: Purchases ( 89,352 ) ( 39,639 ) Maturities, calls and principal repayments 75,678 67,777 Available for sale debt securities: Purchases ( 341,315 ) ( 183,924 ) Maturities, calls and principal repayments 91,660 18,338 Death benefit proceeds from bank owned life insurance 3,226 3,620 Proceeds from sales of real estate property and equipment 2,255 2,850 Proceeds from sales of loans not originated for sale — 196,523 Proceeds from sale of commercial premium finance lending division — 98,060 Purchases of real estate property and equipment ( 3,047 ) ( 3,639 ) Net cash (used in) provided by investing activities ( 175,310 ) 91,985 7 VALLEY NATIONAL BANCORP CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (continued) (in thousands) Three Months Ended March 31, 2025 2024 Cash flows from financing activities: Net change in deposits $ ( 111,529 ) $ ( 164,883 ) Net change in short-term borrowings ( 13,692 ) ( 842,610 ) Proceeds from issuance of long-term borrowings, net — 1,000,000 Repayments of long-term borrowings ( 273,000 ) ( 65,000 ) 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 ) — Common stock issued, net 3,405 51 Other, net ( 95 ) ( 2 ) Net cash used in financing activities ( 473,996 ) ( 141,888 ) Net change in cash and cash equivalents ( 666,428 ) 49,608 Cash and cash equivalents at beginning of year 1,890,125 891,225 Cash and cash equivalents at end of period $ 1,223,697 $ 940,833 Supplemental disclosures of cash flow information: Cash payments for: Interest on deposits and borrowings $ 403,276 $ 485,127 Federal and state income taxes 13,044 6,487 Supplemental schedule of non-cash investing activities: Transfer of loans to other real estate owned, net $ 694 $ — Transfer of loans to loans held for sale, net 10,200 34,143 Lease right of use assets obtained in exchange for operating lease liabilities 14,886 4,809 See accompanying notes to consolidated financial statements. 8 VALLEY NATIONAL BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. Basis of Presentation The unaudited consolidated financial state ments of Valley include the accounts of the Bank and all other entities in which Valley has a controlling financial interest. 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. In accordance with GAAP, Valley does not consolidate statutory trusts established for the sole purpose of issuing trust preferred securities and related trust common securities. 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 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. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Valley’s Annual Report. Significant Estimates. In preparing the unaudited consolidated financial statements in conformit y with GAAP, management has made estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statements of financial condition and results of operations for the periods indicated. Material estimates that require application of management’s most difficult, subjective or complex judgment and are particularly susceptible to change include: the allowance for credit losses, the evaluation of goodwill and other intangible assets for impairment, and income taxes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are deemed necessary. While management uses its best judgment, actual amounts or results could differ significantly from those estimates. The 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. Note 2. Earnings Per Common Share 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 March 31, 2025 2024 (in thousands, except for share and per share data) Net income available to common shareholders $ 99,103 $ 92,161 Basic weighted average number of common shares outstanding 559,613,272 508,340,719 Plus: Common stock equivalents 3,692,253 2,293,226 Diluted weighted average number of common shares outstanding 563,305,525 510,633,945 Earnings per common share: Basic $ 0.18 $ 0.18 Diluted 0.18 0.18 9 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. Note 3. 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 months ended March 31, 2025 and 2024: Components of Accumulated Other Comprehensive Loss Total Accumulated Other Comprehensive Loss Unrealized Gains and Losses on AFS Securities Unrealized Gains and Losses on Derivatives Defined Benefit Pension and Postretirement Benefit Plans (in thousands) December 31, 2024 $ ( 133,898 ) $ 1,245 $ ( 22,681 ) $ ( 155,334 ) Other comprehensive income before reclassification 27,212 — — 27,212 Amounts reclassified to earnings — ( 218 ) 88 ( 130 ) Other comprehensive income (loss), net 27,212 ( 218 ) 88 27,082 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 to earnings — ( 222 ) 35 ( 187 ) Other comprehensive (loss) income, net ( 10,205 ) ( 222 ) 35 ( 10,392 ) 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 Accumulated Other Comprehensive Loss Three Months Ended March 31, Components of Accumulated Other Comprehensive Loss 2025 2024 Income Statement Line Item (in thousands) Unrealized gains on derivatives (cash flow hedges) before tax $ 301 $ 298 Included in interest income. Tax effect ( 83 ) ( 76 ) Total net of tax 218 222 Defined benefit pension and postretirement benefit plans: 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 Total net of tax ( 88 ) ( 35 ) Total reclassifications, net of tax $ 130 $ 187 10 Note 4. New Authoritative Accounting Guidance ASU No. 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. ASU No. 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. Note 5. Fair Value Measurement of Assets and Liabilities ASC Topic 820, "Fair Value Measurement," establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: • Level 1 - Unadjusted exchange quoted prices in active markets for identical assets or liabilities, or identical liabilities traded as assets that the reporting entity has the ability to access at the measurement date. • Level 2 - Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly (i.e., quoted prices on similar assets) for substantially the full term of the asset or liability. • Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Assets and Liabilities Measured at Fair Value on a Recurring and Non-Recurring Basis The following tables present the assets and liabilities that are measured at fair value on a recurring and non-recurring basis by level within the fair value hierarchy as reported on the consolidated statements of financial condition at March 31, 2025 and December 31, 2024. 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). 11 March 31, 2025 Fair Value Measurements at Reporting Date Using: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in thousands) Recurring fair value measurements: Assets Investment securities: Equity securities $ 23,545 $ 23,545 $ — $ — Equity securities at net asset value (NAV) 10,870 — — — Available for sale debt securities: U.S. Treasury securities 296,253 296,253 — — U.S. government agency securities 22,400 — 22,400 — Obligations of states and political subdivisions 187,381 — 187,381 — Residential mortgage-backed securities 2,967,535 — 2,967,535 — Corporate and other debt securities 185,135 — 185,135 — Total available for sale debt securities 3,658,704 296,253 3,362,451 — Loans held for sale (1) 8,427 — 8,427 — Other assets (2) 326,722 — 326,722 — Total assets $ 4,028,268 $ 319,798 $ 3,697,600 $ — Liabilities Other liabilities (2) $ 332,888 $ — $ 332,888 $ — Total liabilities $ 332,888 $ — $ 332,888 $ — Non-recurring fair value measurements: Non-performing loans held for sale (3) $ 18,950 $ — $ 18,950 $ — Collateral dependent loans 81,473 — — 81,473 Foreclosed assets (3) 9,768 — — 9,768 Total $ 110,191 $ — $ 18,950 $ 91,241 12 Fair Value Measurements at Reporting Date Using: December 31, 2024 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in thousands) Recurring fair value measurements: Assets Investment securities: Equity securities $ 23,642 $ 23,642 $ — $ — Equity securities at net asset value (NAV) 11,000 — — — Available for sale debt securities: U.S. Treasury securities 291,549 291,549 — — U.S. government agency securities 22,543 — 22,543 — Obligations of states and political subdivisions 192,509 — 192,509 — Residential mortgage-backed securities 2,681,076 — 2,681,076 — Corporate and other debt securities 182,047 — 182,047 — Total available for sale debt securities 3,369,724 291,549 3,078,175 — Loans held for sale (1) 16,931 — 16,931 — Other assets (2) 444,263 — 444,263 — Total assets $ 3,865,560 $ 315,191 $ 3,539,369 $ — Liabilities Other liabilities (2) $ 454,200 $ — $ 454,200 $ — Total liabilities $ 454,200 $ — $ 454,200 $ — Non-recurring fair value measurements: Non-performing loan held for sale (3) $ 8,750 $ — $ 8,750 $ — Collateral dependent loans 139,424 — — 139,424 Foreclosed assets (3) 13,852 — — 13,852 Total $ 162,026 $ — $ 8,750 $ 153,276 (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. (3) Reported at lower of cost or fair value . Assets and Liabilities Measured at Fair Value on a Recurring Basis The following valuation techniques were used for financial instruments measured at fair value on a recurring basis. All the valuation techniques described below apply to the unpaid principal balance, excluding any accrued interest or dividends at the measurement date. Interest income and expense are recorded within the consolidated statements of income depending on the nature of the instrument using the effective interest method based on acquired discount or premium. Equity securities . The equity securities consisted of two publicly traded mutual funds, CRA inves tments and a publicly traded financial technology company. These investments are reported at fair value utilizing Level 1 inputs. Equity securities at NAV . Valley also has privately held CRA funds 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. 13 Available for sale debt securities. U.S. Treasury securities are reported at fair value utilizing Level 1 inputs. The majority of other investment securities are reported at fair value utilizing Level 2 inputs. The prices for these instruments are obtained through an independent pricing service or dealer market participants with whom Valley has historically transacted both purchases and sales of investment securities. Prices obtained from these sources include prices derived from market quotations and matrix pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. Management reviews the data and assumptions used in pricing the securities by its third-party provider to ensure the highest level of significant inputs are derived from market observable data. In addition, Valley reviews the volume and level of activity for a ll AFS debt s ecurities and attempts to identify transactions which may not be orderly or reflective of a significant level of activity and volume. Loans held for sale. Residential mortgage loans originated for sale are reported at fair value using Level 2 inputs. The fair values were calculated utilizing quoted prices for similar assets in active markets. The market prices represent a delivery price, which reflects the underlying price each institution would pay Valley for an immediate sale of an aggregate pool of mortgages. Non-performance risk did not materially impact the fair value of mortgage loans held for sale at March 31, 2025 and December 31, 2024 based on the short duration these assets were held and their credit quality. Derivatives. Derivatives are reported at fair value utilizing Level 2 inputs. The fair values of Valley’s derivatives are determined using third-party prices that are based on discounted cash flow analysis using observed market inputs, such as the SOFR curve, at March 31, 2025 and December 31, 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 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 March 31, 2025 and December 31, 2024. See Note 12 for additional details on Valley's derivatives. Assets and Liabilities Measured at Fair Value on a Non-recurring Basis The following valuation techniques were used for certain non-financial assets measured at fair value on a non-recurring basis, including collateral dependent loans reported at the fair value of the underlying collateral and foreclosed assets, which are reported at fair value upon initial recognition or subsequent impairment as described below. 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. The broker coordinated loan level due diligence with interested parties and established a bidding process in which each participant was required to provide an indicative non-binding bid. Fair value was determined based on a non-binding sale agreement selected by Valley in the bidding process. 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. 14 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 sale of 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 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 . Certain foreclosed assets (consisting of other real estate owned and other repossessed assets included in other assets), upon initial recognition and transfer from loans, are re-measured and reported at fair value using Level 3 inputs, consisting of a third-party appraisal less estimated cost to sell. When an asset is acquired, the excess of the loan balance over fair value, less estimated selling costs, is charged to the allowance for loan losses. If further declines in the estimated fair value of 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 March 31, 2025 and December 31, 2024. Other Fair Value Disclosures ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. The fair value estimates presented in the following table were based on pertinent market data and relevant information on the financial instruments available as of the valuation date. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire portfolio of financial instruments. Because no market exists for a portion of the financial instruments, fair value estimates may be based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates are based on existing balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For instance, Valley has certain fee-generating business lines (e.g., its mortgage servicing operations 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. 15 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: Fair Value Hierarchy March 31, 2025 December 31, 2024 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Financial assets Cash and due from banks Level 1 $ 508,887 $ 508,887 $ 411,412 $ 411,412 Interest bearing deposits with banks Level 1 714,810 714,810 1,478,713 1,478,713 Equity securities (1) Level 3 40,010 40,010 36,871 36,871 Held to maturity debt securities: U.S. Treasury securities Level 1 25,290 25,269 25,480 25,461 U.S. government agency securities Level 2 300,865 259,872 301,315 252,302 Obligations of states and political subdivisions Level 2 358,186 329,121 372,489 346,361 Residential mortgage-backed securities Level 2 2,742,355 2,373,276 2,710,642 2,292,148 Trust preferred securities Level 2 36,086 29,480 36,081 29,145 Corporate and other debt securities Level 2 83,179 80,616 86,213 82,867 Total held to maturity debt securities (2) 3,545,961 3,097,634 3,532,220 3,028,284 Net loans Level 3 48,078,928 46,833,553 48,240,861 46,634,654 Accrued interest receivable Level 1 238,326 238,326 239,941 239,941 FRB and FHLB stock (3) Level 2 329,602 329,602 328,497 328,497 Financial liabilities Deposits without stated maturities Level 1 38,041,836 38,041,836 37,733,313 37,733,313 Deposits with stated maturities Level 2 11,924,008 11,953,730 12,342,544 12,363,365 Short-term borrowings Level 2 59,026 56,112 72,718 68,032 Long-term borrowings Level 2 2,904,567 2,863,577 3,174,155 3,109,622 Junior subordinated debentures issued to capital trusts Level 2 57,542 55,163 57,455 54,957 Accrued interest payable (4) Level 1 111,934 111,934 150,564 150,564 (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 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) Included in other assets. (4) Included in accrued expenses and other liabilities. Note 6. Investment Securities Equity Securities 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. 16 Available for Sale Debt Securities 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: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) March 31, 2025 U.S. Treasury securities $ 321,009 $ — $ ( 24,756 ) $ 296,253 U.S. government agency securities 23,850 22 ( 1,472 ) 22,400 Obligations of states and political subdivisions: Obligations of states and state agencies 45,848 — ( 840 ) 45,008 Municipal bonds 179,928 — ( 37,555 ) 142,373 Total obligations of states and political subdivisions 225,776 — ( 38,395 ) 187,381 Residential mortgage-backed securities 3,034,723 16,242 ( 83,430 ) 2,967,535 Corporate and other debt securities 198,802 310 ( 13,977 ) 185,135 Total $ 3,804,160 $ 16,574 $ ( 162,030 ) $ 3,658,704 December 31, 2024 U.S. Treasury securities $ 319,551 $ — $ ( 28,002 ) $ 291,549 U.S. government agency securities 24,636 20 ( 2,113 ) 22,543 Obligations of states and political subdivisions: Obligations of states and state agencies 46,211 — ( 682 ) 45,529 Municipal bonds 179,284 — ( 32,304 ) 146,980 Total obligations of states and political subdivisions 225,495 — ( 32,986 ) 192,509 Residential mortgage-backed securities 2,784,895 3,796 ( 107,615 ) 2,681,076 Corporate and other debt securities 197,696 247 ( 15,896 ) 182,047 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 $ 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. 17 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 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (in thousands) March 31, 2025 U.S. Treasury securities $ — $ — $ 296,253 $ ( 24,756 ) $ 296,253 $ ( 24,756 ) U.S. government agency securities — — 21,158 ( 1,472 ) 21,158 ( 1,472 ) Obligations of states and political subdivisions: Obligations of states and state agencies — — 5,938 ( 840 ) 5,938 ( 840 ) Municipal bonds — — 134,643 ( 37,555 ) 134,643 ( 37,555 ) Total obligations of states and political subdivisions — — 140,581 ( 38,395 ) 140,581 ( 38,395 ) Residential mortgage-backed securities 683,881 ( 8,598 ) 499,009 ( 74,832 ) 1,182,890 ( 83,430 ) Corporate and other debt securities 4,750 ( 250 ) 165,075 ( 13,727 ) 169,825 ( 13,977 ) Total $ 688,631 $ ( 8,848 ) $ 1,122,076 $ ( 153,182 ) $ 1,810,707 $ ( 162,030 ) December 31, 2024 U.S. Treasury securities $ — $ — $ 291,549 $ ( 28,002 ) $ 291,549 $ ( 28,002 ) U.S. government agency securities — — 21,281 ( 2,113 ) 21,281 ( 2,113 ) Obligations of states and political subdivisions: Obligations of states and state agencies — — 6,208 ( 682 ) 6,208 ( 682 ) Municipal bonds — — 139,216 ( 32,304 ) 139,216 ( 32,304 ) Total obligations of states and political subdivisions — — 145,424 ( 32,986 ) 145,424 ( 32,986 ) Residential mortgage-backed securities 1,483,442 ( 22,242 ) 501,858 ( 85,373 ) 1,985,300 ( 107,615 ) Corporate and other debt securities — — 166,800 ( 15,896 ) 166,800 ( 15,896 ) 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 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. 18 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. March 31, 2025 Amortized Cost Fair Value (in thousands) Due in one year $ 178,207 $ 176,182 Due after one year through five years 124,394 120,137 Due after five years through ten years 171,134 155,918 Due after ten years 295,702 238,932 Residential mortgage-backed securities 3,034,723 2,967,535 Total $ 3,804,160 $ 3,658,704 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 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 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 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. 19 Held to Maturity Debt Securities 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: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Allowance for Credit Losses Net Carrying Value (in thousands) March 31, 2025 U.S. Treasury securities $ 25,290 $ — $ ( 21 ) $ 25,269 $ — $ 25,290 U.S. government agency securities 300,865 — ( 40,993 ) 259,872 — 300,865 Obligations of states and political subdivisions: Obligations of states and state agencies 66,602 53 ( 4,799 ) 61,856 1 66,601 Municipal bonds 291,584 11 ( 24,330 ) 267,265 46 291,538 Total obligations of states and political subdivisions 358,186 64 ( 29,129 ) 329,121 47 358,139 Residential mortgage-backed securities 2,742,355 4,985 ( 374,064 ) 2,373,276 — 2,742,355 Trust preferred securities 36,086 — ( 6,606 ) 29,480 418 35,668 Corporate and other debt securities 83,179 8 ( 2,571 ) 80,616 168 83,011 Total $ 3,545,961 $ 5,057 $ ( 453,384 ) $ 3,097,634 $ 633 $ 3,545,328 December 31, 2024 U.S. Treasury securities $ 25,480 $ — $ ( 19 ) $ 25,461 $ — $ 25,480 U.S. government agency securities 301,315 — ( 49,013 ) 252,302 — 301,315 Obligations of states and political subdivisions: Obligations of states and state agencies 68,025 — ( 5,335 ) 62,690 2 68,023 Municipal bonds 304,464 9 ( 20,802 ) 283,671 48 304,416 Total obligations of states and political subdivisions 372,489 9 ( 26,137 ) 346,361 50 372,439 Residential mortgage-backed securities 2,710,642 2,088 ( 420,582 ) 2,292,148 — 2,710,642 Trust preferred securities 36,081 — ( 6,936 ) 29,145 414 35,667 Corporate and other debt securities 86,213 10 ( 3,356 ) 82,867 183 86,030 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 $ 12.1 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). 20 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 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (in thousands) March 31, 2025 U.S. Treasury securities $ 25,269 $ ( 21 ) $ — $ — $ 25,269 $ ( 21 ) U.S. government agency securities 22,109 ( 58 ) 237,231 ( 40,935 ) 259,340 ( 40,993 ) Obligations of states and political subdivisions: Obligations of states and state agencies 5,948 ( 8 ) 43,721 ( 4,791 ) 49,669 ( 4,799 ) Municipal bonds 35,687 ( 572 ) 191,086 ( 23,758 ) 226,773 ( 24,330 ) Total obligations of states and political subdivisions 41,635 ( 580 ) 234,807 ( 28,549 ) 276,442 ( 29,129 ) Residential mortgage-backed securities 43,444 ( 821 ) 1,920,109 ( 373,243 ) 1,963,553 ( 374,064 ) Trust preferred securities — — 29,480 ( 6,606 ) 29,480 ( 6,606 ) Corporate and other debt securities 12,991 ( 9 ) 57,616 ( 2,562 ) 70,607 ( 2,571 ) Total $ 145,448 $ ( 1,489 ) $ 2,479,243 $ ( 451,895 ) $ 2,624,691 $ ( 453,384 ) December 31, 2024 U.S. Treasury securities $ 25,461 $ ( 19 ) $ — $ — $ 25,461 $ ( 19 ) U.S. government agency securities 22,621 ( 75 ) 229,143 ( 48,938 ) 251,764 ( 49,013 ) Obligations of states and political subdivisions: Obligations of states and state agencies 20,632 ( 517 ) 42,058 ( 4,818 ) 62,690 ( 5,335 ) Municipal bonds 36,766 ( 440 ) 210,723 ( 20,362 ) 247,489 ( 20,802 ) Total obligations of states and political subdivisions 57,398 ( 957 ) 252,781 ( 25,180 ) 310,179 ( 26,137 ) Residential mortgage-backed securities 216,651 ( 2,687 ) 1,917,644 ( 417,895 ) 2,134,295 ( 420,582 ) Trust preferred securities — — 29,145 ( 6,936 ) 29,145 ( 6,936 ) Corporate and other debt securities 5,977 ( 23 ) 63,879 ( 3,333 ) 69,856 ( 3,356 ) 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 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. 21 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. 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. March 31, 2025 Amortized Cost Fair Value (in thousands) Due in one year $ 64,515 $ 64,387 Due after one year through five years 56,432 55,699 Due after five years through ten years 167,145 157,478 Due after ten years 515,514 446,794 Residential mortgage-backed securities 2,742,355 2,373,276 Total $ 3,545,961 $ 3,097,634 The weighted-average remaining expected life for residential mortgage-backed securitie s HTM was 10.22 years at March 31, 2025. 22 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 March 31, 2025 and December 31, 2024. AAA/AA/A Rated BBB rated Non-rated Total (in thousands) March 31, 2025 U.S. Treasury securities $ 25,290 $ — $ — $ 25,290 U.S. government agency securities 300,865 — — 300,865 Obligations of states and political subdivisions: Obligations of states and state agencies 51,881 — 14,721 66,602 Municipal bonds 263,230 — 28,354 291,584 Total obligations of states and political subdivisions 315,111 — 43,075 358,186 Residential mortgage-backed securities 2,742,355 — — 2,742,355 Trust preferred securities — — 36,086 36,086 Corporate and other debt securities — 6,000 77,179 83,179 Total $ 3,383,621 $ 6,000 $ 156,340 $ 3,545,961 December 31, 2024 U.S. Treasury securities $ 25,480 $ — $ — $ 25,480 U.S. government agency securities 301,315 — — 301,315 Obligations of states and political subdivisions: Obligations of states and state agencies 52,770 — 15,255 68,025 Municipal bonds 277,921 — 26,543 304,464 Total obligations of states and political subdivisions 330,691 — 41,798 372,489 Residential mortgage-backed securities 2,710,642 — — 2,710,642 Trust preferred securities — — 36,081 36,081 Corporate and other debt securities — 6,000 80,213 86,213 Total $ 3,368,128 $ 6,000 $ 158,092 $ 3,532,220 Obligations of states and political subdivisions include municipal bonds and revenue bonds issued by various municipal corporations. 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. Corporate bonds consist of debt primarily issued by banks. Allowance for Credit Losses for Held to Maturity Debt Securities 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: U.S. Treasury securities, U.S. government agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and collateralized municipal bonds. To measure the expected credit losses on HTM debt securities that have loss expectations, Valley estimates the expected credit losses using a discounted cash flow model developed by a third-party. 23 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 March 31, 2025 2024 (in thousands) Beginning balance $ 647 $ 1,205 Credit for credit losses ( 14 ) ( 74 ) Ending balance $ 633 $ 1,131 There were no net charge-offs of HTM debt securities in the respective periods presented in the table above. Note 7. Loans and Allowance for Credit Losses for Loans 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) Loans: Commercial and industrial $ 10,150,205 $ 9,931,400 Commercial real estate: Commercial real estate 26,087,621 26,530,225 Construction 3,026,935 3,114,733 Total commercial real estate loans 29,114,556 29,644,958 Residential mortgage 5,636,407 5,632,516 Consumer: Home equity 602,161 604,433 Automobile 2,041,227 1,901,065 Other consumer 1,112,572 1,085,339 Total consumer loans 3,755,960 3,590,837 Total loans $ 48,657,128 $ 48,799,711 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 Valley sells residential mortgage loans originated for sale (at fair value) primarily to Fannie Mae and Freddie Mac in the normal course of business. Under certain circumstances, Valley may decide to sell loans that were not originated with the intent to sell. During 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. 24 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. 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 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. Loan portfolio diversification is an important factor utilized by Valley to manage its risk across business sectors and through cyclical economic circumstances. Additionally, Valley does not accept crypto assets as loan collateral for any of its loan portfolio classes. See Valley’s Annual Report for further details. Credit Quality The following table presents past due, current, and non-accrual loans without an allowance for loan losses by loan portfolio class at March 31, 2025 and December 31, 2024: Past Due and Non-Accrual Loans 30-59 Days Past Due Loans 60-89 Days Past Due Loans 90 Days or More Past Due Loans Non-Accrual Loans Total Past Due Loans Current Loans Total Loans Non-Accrual Loans Without Allowance for Loan Losses (in thousands) March 31, 2025 Commercial and industrial $ 3,609 $ 420 $ — $ 110,146 $ 114,175 $ 10,036,030 $ 10,150,205 $ 20,402 Commercial real estate: Commercial real estate 170 — — 172,011 172,181 25,915,440 26,087,621 128,229 Construction — — — 24,275 24,275 3,002,660 3,026,935 4,477 Total commercial real estate loans 170 — — 196,286 196,456 28,918,100 29,114,556 132,706 Residential mortgage 16,747 7,700 6,892 35,393 66,732 5,569,675 5,636,407 24,643 Consumer loans: Home equity 1,661 379 30 4,363 6,433 595,728 602,161 1,332 Automobile 8,508 1,454 448 242 10,652 2,030,575 2,041,227 — Other consumer 2,718 575 386 21 3,700 1,108,872 1,112,572 — Total consumer loans 12,887 2,408 864 4,626 20,785 3,735,175 3,755,960 1,332 Total $ 33,413 $ 10,528 $ 7,756 $ 346,451 $ 398,148 $ 48,258,980 $ 48,657,128 $ 179,083 25 Past Due and Non-Accrual Loans 30-59 Days Past Due Loans 60-89 Days Past Due Loans 90 Days or More Past Due Loans Non-Accrual Loans Total Past Due Loans Current Loans Total Loans Non-Accrual Loans Without Allowance for Loan Losses (in thousands) December 31, 2024 Commercial and industrial $ 2,389 $ 1,007 $ 1,307 $ 136,675 $ 141,378 $ 9,790,022 $ 9,931,400 $ 15,947 Commercial real estate: Commercial real estate 20,902 24,903 — 157,231 203,036 26,327,189 26,530,225 91,095 Construction — — — 24,591 24,591 3,090,142 3,114,733 5,002 Total commercial real estate loans 20,902 24,903 — 181,822 227,627 29,417,331 29,644,958 96,097 Residential mortgage 21,295 5,773 3,533 36,786 67,387 5,565,129 5,632,516 23,543 Consumer loans: Home equity 1,651 181 — 3,961 5,793 598,640 604,433 1,341 Automobile 8,583 1,346 407 230 10,566 1,890,499 1,901,065 — Other consumer 2,318 2,957 642 24 5,941 1,079,398 1,085,339 — Total consumer loans 12,552 4,484 1,049 4,215 22,300 3,568,537 3,590,837 1,341 Total $ 57,138 $ 36,167 $ 5,889 $ 359,498 $ 458,692 $ 48,341,019 $ 48,799,711 $ 136,928 Credit quality indicators. Valley utilizes an internal loan classification system as a means of reporting problem loans within commercial and industrial, commercial real estate, and construction loan portfolio classes. Under Valley’s internal risk rating system, loan relationships could be classified as “Pass,” “Special Mention,” “Substandard,” “Doubtful,” and “Loss.” Substandard loans include loans that exhibit well-defined weakness and are characterized by the distinct possibility that Valley will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, based on currently existing facts, conditions and values, highly questionable and improbable. Loans classified as Loss are those considered uncollectible with insignificant value and are charged-off immediately to the allowance for loan losses and, therefore, not presented in the table below. Loans that do not currently pose a sufficient risk to warrant classification in one of the aforementioned categories but pose weaknesses that deserve management’s close attention are deemed Special Mention. Pass rated loans do not currently pose any identified risk and can range from the highest to average quality, depending on the degree of potential risk. Risk ratings are updated any time the situation warrants. 26 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: Term Loans Amortized Cost Basis by Origination Year 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) Commercial and industrial Risk Rating: Pass $ 402,895 $ 1,683,588 $ 775,801 $ 657,761 $ 405,335 $ 592,244 $ 4,880,356 $ 8,136 $ 9,406,116 Special Mention 13,814 1,186 5,973 3,413 11,255 14,628 210,855 3,766 264,890 Substandard — 36,081 13,898 62,525 4,373 52,761 217,195 20,266 407,099 Doubtful — — 7,120 2 321 51,744 12,913 — 72,100 Total commercial and industrial $ 416,709 $ 1,720,855 $ 802,792 $ 723,701 $ 421,284 $ 711,377 $ 5,321,319 $ 32,168 $ 10,150,205 Commercial real estate Risk Rating: Pass $ 600,990 $ 2,070,782 $ 2,622,556 $ 5,052,632 $ 3,667,440 $ 8,058,437 $ 514,996 $ 78,387 $ 22,666,220 Special Mention — 127,965 308,325 293,431 218,617 359,533 165,641 — 1,473,512 Substandard 37,705 68,730 159,182 452,111 330,105 834,911 14,640 68 1,897,452 Doubtful — — 3,060 — 34,525 12,852 — — 50,437 Total commercial real estate $ 638,695 $ 2,267,477 $ 3,093,123 $ 5,798,174 $ 4,250,687 $ 9,265,733 $ 695,277 $ 78,455 $ 26,087,621 Construction Risk Rating: Pass $ 153,394 $ 549,099 $ 614,599 $ 324,001 $ 69,166 $ 72,943 $ 1,062,079 $ 24,850 $ 2,870,131 Special Mention — 13,263 4,527 646 9,447 — 29,494 — 57,377 Substandard — 773 75 8,950 4,477 — 52,222 32,930 99,427 Total construction $ 153,394 $ 563,135 $ 619,201 $ 333,597 $ 83,090 $ 72,943 $ 1,143,795 $ 57,780 $ 3,026,935 Gross loan charge-offs $ — $ 70 $ 842 $ 2,488 $ 7,308 $ 6,807 $ 9,776 $ 14,588 $ 41,879 27 Term Loans Amortized Cost Basis by Origination Year 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) Commercial and industrial Risk Rating: Pass $ 1,769,585 $ 828,087 $ 703,962 $ 476,091 $ 246,992 $ 392,834 $ 4,804,095 $ 6,006 $ 9,227,652 Special Mention 30,755 3,553 59,434 11,646 270 72,514 147,254 10,762 336,188 Substandard 24,613 13,479 9,415 4,296 2,813 7,382 201,053 39,011 302,062 Doubtful — 8,911 4 928 — 52,064 3,591 — 65,498 Total commercial and industrial $ 1,824,953 $ 854,030 $ 772,815 $ 492,961 $ 250,075 $ 524,794 $ 5,155,993 $ 55,779 $ 9,931,400 Commercial real estate Risk Rating: Pass $ 2,097,314 $ 2,941,270 $ 5,310,807 $ 3,883,333 $ 2,302,480 $ 6,086,608 $ 597,266 $ 78,621 $ 23,297,699 Special Mention 156,394 380,852 289,669 192,614 55,739 327,732 141,164 — 1,544,164 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 Construction Risk Rating: 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 Doubtful — — 2,074 — 7,273 — — — 9,347 Total construction $ 568,710 $ 680,260 $ 346,587 $ 102,776 $ 25,228 $ 47,665 $ 1,284,863 $ 58,644 $ 3,114,733 Gross loan charge-offs $ 706 $ 31,809 $ 7,523 $ 44,610 $ 66,632 $ 49,436 $ 3,930 $ 2,148 $ 206,794 28 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 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: Term Loans Amortized Cost Basis by Origination Year 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) Residential mortgage Performing $ 85,961 $ 426,158 $ 408,214 $ 1,274,491 $ 1,402,246 $ 1,939,273 $ 77,898 $ — $ 5,614,241 90 days or more past due — 952 769 3,276 1,749 14,739 — 681 22,166 Total residential mortgage $ 85,961 $ 427,110 $ 408,983 $ 1,277,767 $ 1,403,995 $ 1,954,012 $ 77,898 $ 681 $ 5,636,407 Consumer loans Home equity Performing $ 7,472 $ 22,481 $ 27,294 $ 38,220 $ 9,828 $ 54,408 $ 431,436 $ 9,112 $ 600,251 90 days or more past due — — 3 173 105 1,029 — 600 1,910 Total home equity 7,472 22,481 27,297 38,393 9,933 55,437 431,436 9,712 602,161 Automobile Performing $ 345,515 $ 787,382 $ 308,544 $ 321,091 $ 178,895 $ 99,088 $ — $ — $ 2,040,515 90 days or more past due — 116 95 170 94 237 — — 712 Total automobile 345,515 787,498 308,639 321,261 178,989 99,325 — — 2,041,227 Other consumer Performing $ 5,866 $ 13,311 $ 30,004 $ 14,866 $ 1,700 $ 58,528 $ 976,315 $ 11,592 $ 1,112,182 90 days or more past due — 30 — 61 — 38 — 261 390 Total other consumer 5,866 13,341 30,004 14,927 1,700 58,566 976,315 11,853 1,112,572 Total consumer $ 358,853 $ 823,320 $ 365,940 $ 374,581 $ 190,622 $ 213,328 $ 1,407,751 $ 21,565 $ 3,755,960 Gross loan charge-offs $ — $ 522 $ 297 $ 348 $ 152 $ 762 $ — $ 59 $ 2,140 29 Term Loans Amortized Cost Basis by Origination Year 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) Residential mortgage Performing $ 428,138 $ 413,528 $ 1,282,524 $ 1,420,835 $ 494,430 $ 1,490,512 $ 75,479 $ 954 $ 5,606,400 90 days or more past due 530 771 1,030 1,533 5,286 16,285 — 681 26,116 Total residential mortgage $ 428,668 $ 414,299 $ 1,283,554 $ 1,422,368 $ 499,716 $ 1,506,797 $ 75,479 $ 1,635 $ 5,632,516 Consumer loans Home equity Performing $ 22,947 $ 29,445 $ 38,774 $ 10,302 $ 3,340 $ 50,613 $ 438,817 $ 9,061 $ 603,299 90 days or more past due — 48 51 1 — 855 — 179 1,134 Total home equity 22,947 29,493 38,825 10,303 3,340 51,468 438,817 9,240 604,433 Automobile Performing $ 863,281 $ 343,203 $ 363,901 $ 211,294 $ 59,288 $ 59,512 $ — $ — $ 1,900,479 90 days or more past due 71 122 140 70 2 181 — — 586 Total automobile 863,352 343,325 364,041 211,364 59,290 59,693 — — 1,901,065 Other consumer Performing $ 15,164 $ 25,884 $ 15,787 $ 1,588 $ 337 $ 53,917 $ 956,339 $ 15,917 $ 1,084,933 90 days or more past due — 59 61 — — 38 — 248 406 Total other consumer 15,164 25,943 15,848 1,588 337 53,955 956,339 16,165 1,085,339 Total consumer $ 901,463 $ 398,761 $ 418,714 $ 223,255 $ 62,967 $ 165,116 $ 1,395,156 $ 25,405 $ 3,590,837 Gross loan charge-offs $ 1,014 $ 1,883 $ 1,511 $ 1,015 $ 519 $ 2,245 $ — $ 131 $ 8,318 Loan modifications to borrowers experiencing financial difficulty. From time to time, Valley may extend, restructure, or otherwise modify the terms of existing loans, on a case-by-case basis, to remain competitive and retain certain customers, as well as assist other customers who may be experiencing financial difficulties. 30 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 March 31, 2025 Commercial and industrial $ 2,145 $ — $ — $ 5,660 $ 7,805 0.08 % Commercial real estate 7,398 — 20,823 396 28,617 0.11 Total $ 9,543 $ — $ 20,823 $ 6,056 $ 36,422 0.07 % Three Months Ended March 31, 2024 Commercial and industrial $ 34,271 $ 143 $ — $ — $ 34,414 0.38 % Commercial real estate 62 16,222 — — 16,284 0.06 Home equity 91 — — — 91 0.02 Total $ 34,424 $ 16,365 $ — $ — $ 50,789 0.10 % 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. 31 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 March 31, 2024 Commercial and industrial $ 73,859 * $ 5,916 * $ 4,943 * $ 84,718 Commercial real estate 96,217 — 2,153 98,370 Residential mortgage — 360 — 360 Home equity 122 — — 122 Total $ 170,198 $ 6,276 $ 7,096 $ 183,570 * 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 real estate $ 46 $ — Residential mortgage — 95 Total $ 46 $ 95 March 31, 2024 Commercial and industrial $ 7,096 $ — Total $ 7,096 $ — Loans in process of foreclosure. 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 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. 32 The following table presents collateral dependent loans by class as of March 31, 2025 and December 31, 2024: March 31, 2025 December 31, 2024 (in thousands) Collateral dependent loans: Commercial and industrial * $ 102,046 $ 131,898 Commercial real estate 163,248 156,825 Construction 4,477 15,841 Total commercial real estate loans 167,725 172,666 Residential mortgage 24,897 23,797 Home equity 1,332 1,341 Total $ 296,000 $ 329,702 * 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 March 31, 2025 and December 31, 2024: March 31, 2025 December 31, 2024 (in thousands) Components of allowance for credit losses for loans: Allowance for loan losses $ 578,200 $ 558,850 Allowance for unfunded credit commitments 15,854 14,478 Total allowance for credit losses for loans $ 594,054 $ 573,328 The following table summarizes the provision for credit losses for loans for the periods indicated: Three Months Ended March 31, 2025 2024 (in thousands) Components of provision for credit losses for loans: Provision for loan losses $ 61,299 $ 46,723 Provision (credit) for unfunded credit commitments 1,376 ( 1,449 ) Total provision for credit losses for loans $ 62,675 $ 45,274 33 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: Commercial and Industrial Commercial Real Estate Residential Mortgage Consumer Total (in thousands) Three Months Ended March 31, 2025 Allowance for loan losses: Beginning balance $ 173,002 $ 304,148 $ 58,895 $ 22,805 $ 558,850 Loans charged-off ( 28,456 ) ( 13,423 ) — ( 2,140 ) ( 44,019 ) Charged-off loans recovered 810 249 168 843 2,070 Net (charge-offs) recoveries ( 27,646 ) ( 13,174 ) 168 ( 1,297 ) ( 41,949 ) Provision (credit) for loan losses 39,344 30,688 ( 10,157 ) 1,424 61,299 Ending balance $ 184,700 $ 321,662 $ 48,906 $ 22,932 $ 578,200 Three Months Ended March 31, 2024 Allowance for loan losses: Beginning balance $ 133,359 $ 249,598 $ 42,957 $ 20,166 $ 446,080 Loans charged-off ( 14,293 ) ( 8,798 ) — ( 1,809 ) ( 24,900 ) Charged-off loans recovered 682 241 25 397 1,345 Net (charge-offs) recoveries ( 13,611 ) ( 8,557 ) 25 ( 1,412 ) ( 23,555 ) Provision for loan losses 18,845 24,806 1,395 1,677 46,723 Ending balance $ 138,593 $ 265,847 $ 44,377 $ 20,431 $ 469,248 34 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 March 31, 2025 and December 31, 2024. Commercial and Industrial Commercial Real Estate Residential Mortgage Consumer Total (in thousands) March 31, 2025 Allowance for loan losses: Individually evaluated for credit losses $ 52,745 $ 8,674 $ 26 $ — $ 61,445 Collectively evaluated for credit losses 131,955 312,988 48,880 22,932 516,755 Total $ 184,700 $ 321,662 $ 48,906 $ 22,932 $ 578,200 Loans: Individually evaluated for credit losses $ 102,046 $ 167,725 $ 24,897 $ 1,332 $ 296,000 Collectively evaluated for credit losses 10,048,159 28,946,831 5,611,510 3,754,628 48,361,128 Total $ 10,150,205 $ 29,114,556 $ 5,636,407 $ 3,755,960 $ 48,657,128 December 31, 2024 Allowance for loan losses: Individually evaluated for credit losses $ 59,603 $ 16,225 $ 27 $ — $ 75,855 Collectively evaluated for credit losses 113,399 287,923 58,868 22,805 482,995 Total $ 173,002 $ 304,148 $ 58,895 $ 22,805 $ 558,850 Loans: Individually evaluated for credit losses $ 131,898 $ 172,666 $ 23,797 $ 1,341 $ 329,702 Collectively evaluated for credit losses 9,799,502 29,472,292 5,608,719 3,589,496 48,470,009 Total $ 9,931,400 $ 29,644,958 $ 5,632,516 $ 3,590,837 $ 48,799,711 Note 8. Goodwill and Other Intangible Assets 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 * Wealth Management Consumer Banking Commercial Banking Total (in thousands) $ 78,142 $ 349,646 $ 1,441,148 $ 1,868,936 * The Wealth Management and Consumer Banking reporting units are both components of the overall Consumer Banking operating segment, which is further described in Note 15 . 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. 35 The following table summarizes other intangible assets as of March 31, 2025 and December 31, 2024: Gross Intangible Assets Accumulated Amortization Net Intangible Assets (in thousands) March 31, 2025 Loan servicing rights $ 126,659 $ ( 105,739 ) $ 20,920 Core deposits 215,620 ( 143,767 ) 71,853 Other 50,393 ( 21,826 ) 28,567 Total other intangible assets $ 392,672 $ ( 271,332 ) $ 121,340 December 31, 2024 Loan servicing rights $ 125,961 $ ( 104,833 ) $ 21,128 Core deposits 215,620 ( 138,080 ) 77,540 Other 50,393 ( 20,400 ) 29,993 Total other intangible assets $ 391,974 $ ( 263,313 ) $ 128,661 Loan servicing rights are accounted for using the amortization method. Under this method, Valley amortizes the loan servicing assets over the period of the economic life of the assets arising from estimated net servicing revenues. On a quarterly basis, Valley stratifies its loan servicing assets into groupings based on risk characteristics and assesses each group for impairment based on fair value. Impairment charges on loan servicing rights are recognized in earnings when the book value of a stratified group of loan servicing rights exceeds its estimated fair value. There was no 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. The line item labeled “Other” included in the table above primarily consists of customer lists, certain financial asset servicing contracts and covenants not to compete, which are amortized over their expected lives generally using a straight-line method and have a weighted average amortization period of approximately 13.5 years. 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 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: Year Loan Servicing Rights Core Deposits Other (in thousands) 2025 $ 1,990 $ 15,361 $ 3,954 2026 2,413 17,223 4,805 2027 2,124 13,544 4,205 2028 1,862 10,117 3,633 2029 1,643 7,500 3,081 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. 36 Note 9. Deposits 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: Year Amount (in thousands) 2025 $ 7,611,465 2026 2,725,068 2027 1,265,409 2028 278,296 2029 28,835 Thereafter 14,935 Total time deposits $ 11,924,008 Note 10. Borrowed Funds Short-Term Borrowings Short-term borrowings at March 31, 2025 and December 31, 2024 consisted of the following: March 31, 2025 December 31, 2024 (in thousands) Securities sold under agreements to repurchase $ 59,026 $ 72,718 Total short-term borrowings $ 59,026 $ 72,718 Long-Term Borrowings 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 Subordinated debt, net * 650,963 647,547 Total long-term borrowings $ 2,904,567 $ 3,174,155 * 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 4.47 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. 37 The long-term FHLB advances at March 31, 2025 are scheduled for contractual balance repayments as follows: Year Amount (in thousands) 2025 $ — 2026 601,804 2027 926,800 2028 475,000 2029 250,000 Total long-term FHLB advances $ 2,253,604 The FHLB advances reported in the table above are not callable for early redemption. Subordinated debt. 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. Note 11. Stock–Based Compensation 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. 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 March 31, 2025 2024 (in thousands, except per share data) Award shares granted: Performance-based RSUs 649 958 Time-based RSUs 2,506 2,794 Average grant date fair value per share: Performance-based RSUs $ 11.06 $ 7.88 Time-based RSUs $ 9.96 $ 8.51 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 $ 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. 38 Note 12. Derivative Instruments and Hedging Activities Valley enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest and currency rates. Cash Flow Hedges of Interest Rate Risk. Valley’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish 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 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 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. See Note 15 to Valley's Annual Report for additional information regarding Valley's fair value hedges. Non-designated Hedges. Derivatives not designated as hedges may be used to manage Valley’s exposure to interest rate movements or to provide a service to customers but do not meet the requirements for hedge accounting under GAAP. Derivatives not designated as hedges are not entered into for speculative purposes. Valley executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that Valley executes with a third- party, such that Valley minimizes its net risk exposure resulting from such transactions. As these interest rate swaps do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. Valley sometimes enters into risk participation agreements with external lenders where the banks are sharing their risk of default on the interest rate swaps on participated loans. Valley either pays or receives a fee depending on the type of participation. Risk participation agreements are credit derivatives not designated as hedges. Credit derivatives are not speculative and are not used to manage interest rate risk in assets or liabilities. Changes in the fair value in credit derivatives are recognized directly in earnings. At 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. Valley regularly enters into mortgage banking derivatives which are non-designated hedges. These derivatives include interest rate lock commitments provided to customers to fund certain residential mortgage loans to be sold into the secondary market and forward commitments for the future delivery of such loans. Valley enters into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of future changes in interest rates on Valley's commitments to fund the loans as well as on its portfolio of mortgage loans held for sale. Valley enters into foreign currency forward and option contracts, primarily to accommodate our customers, that are not designated as hedging instruments. Upon the origination of certain foreign currency denominated transactions 39 (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 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: March 31, 2025 December 31, 2024 Fair Value Fair Value Other Assets Other Liabilities Notional Amount Other Assets Other Liabilities Notional Amount (in thousands) Derivatives designated as hedging instruments: 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: Interest rate swaps and other contracts * $ 304,321 $ 304,084 $ 16,545,194 $ 423,683 $ 423,492 $ 16,209,499 Foreign currency derivatives 15,295 14,968 1,532,812 18,011 16,488 1,688,338 Mortgage banking derivatives 28 151 32,605 150 192 45,752 Credit default swap — 44 1,001,143 — 35 1,142,026 Total derivatives not designated as hedging instruments $ 319,644 $ 319,247 $ 19,111,754 $ 441,844 $ 440,207 $ 19,085,615 Total derivative financial instruments $ 326,722 $ 332,888 $ 19,892,076 $ 444,263 $ 454,200 $ 19,865,937 * Other derivative contracts include risk participation agreements. 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 March 31, 2025 2024 (in thousands) 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. 40 Gains (losses) included in the consolidated statements of income related to interest rate derivatives designated as hedges of fair value were as follows: Three Months Ended March 31, 2025 2024 (in thousands) Derivative - interest rate swap: Interest income $ — $ 4,879 Interest expense 4,569 ( 1,291 ) Hedged items - loans, time deposits and subordinated debt: Interest income $ ( 161 ) $ ( 4,924 ) Interest expense ( 4,532 ) 1,383 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 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) March 31, 2025 Time deposits $ 484,240 $ 3,936 Long-term borrowings * 288,183 ( 10,843 ) December 31, 2024 Time deposits $ 482,723 $ 2,419 Long-term borrowings * 284,966 ( 13,859 ) * 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 March 31, 2025 2024 (in thousands) Non-designated hedge interest rate swaps and credit derivatives 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 $ 5.8 million and $ 4.5 million for the three months ended March 31, 2025 and 2024, respectively. Collateral Requirements and Credit Risk Related Contingent Features . By using derivati ves, Valley is exposed to credit risk if counterparties to the derivative contracts do not perform as expected. Management attempts to minimize counterparty credit risk through credit approvals, limits, monitoring procedures and obtaining collateral where appropriate. Credit risk exposure associated with derivative contracts is managed at Valley in conjunction 41 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. Valley has agreements with its derivative counterparties providing that if Valley defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then Valley could also be declared in default on its derivative counterparty agreements. Additionally, Valley has an agreement with several of its derivative counterparties that contains provisions that require Valley’s debt to maintain an investment grade credit rating from each of the major credit rating agencies from which it receives a credit rating. 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 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. Note 13. Balance Sheet Offsetting Certain financial instruments, including certain OTC derivatives (mostly interest rate swaps) and repurchase agreements (accounted for as secured long-term borrowings), may be eligible for offset in the consolidated statements of financial condition and/or subject to master netting arrangements or similar agreements. OTC derivatives include interest rate swaps executed and settled bilaterally with counterparties without the use of an organized exchange or central clearing house (presented in the table below). The credit risk associated with bilateral OTC derivatives is managed through obtaining collateral and enforceable master netting agreements. Valley is party to master netting arrangements with its financial institution counterparties; however, Valley does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral, usually in the form of cash or marketable investment securities, is posted by or received from the counterparty with net liability or asset positions, respectively, in accordance with contract thresholds. Master repurchase agreements which include “right of set-off” provisions generally have a legally enforceable right to offset recognized amounts. In such cases, the collateral would be used 42 to settle the fair value of the swap or repurchase agreement should Valley be in default. 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 March 31, 2025 and December 31, 2024. Gross Amounts Not Offset Gross Amounts Recognized Gross Amounts Offset Net Amounts Presented Financial Instruments Cash Collateral * Net Amount (in thousands) March 31, 2025 Assets Interest rate swaps and other contracts $ 311,399 $ — $ 311,399 $ 48,470 $ ( 248,322 ) $ 111,547 Liabilities Interest rate swaps and other contracts $ 317,725 $ — $ 317,725 $ ( 48,470 ) $ — $ 269,255 December 31, 2024 Assets Interest rate swaps and other contracts $ 426,102 $ — $ 426,102 $ 32,571 $ ( 358,520 ) $ 100,153 Liabilities Interest rate swaps and other contracts $ 437,485 $ — $ 437,485 $ ( 32,571 ) $ — $ 404,914 * Cash collateral received from or pledged to our counterparties in relation to market value exposures of OTC derivative contracts in an asset/liability position. Note 14. Tax Credit Investments Valley’s tax credit investments are primarily related to investments promoting qualified affordable housing projects, and other investments related to community development and renewable energy sources. Some of these tax-advantaged investments support Valley’s regulatory compliance with the CRA. Valley’s investments in these entities generate a return primarily through the realization of federal income tax credits and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. These tax credits and deductions are recognized as a reduction of income tax expense. Valley’s tax credit investments are carried in other assets on the consolidated statements of financial condition. Valley’s unfunded capital and other commitments related to the tax credit investments are carried in accrued expenses and other liabilities on the consolidated statements of financial condition. Valley recognizes amortization of tax credit investments, including impairment losses, within non-interest expense in the consolidated statements of income using the equity method of accounting. After initial measurement, the carrying amounts of tax credit investments with non-readily determinable fair values are increased to reflect Valley's share of income of the investee and are reduced to reflect its share of losses of the investee, dividends received and impairments, if applicable. 43 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: March 31, 2025 December 31, 2024 (in thousands) Other assets: Affordable housing tax credit investments, net $ 21,848 $ 22,742 Other tax credit investments, net 329,829 278,468 Total tax credit investments, net $ 351,677 $ 301,210 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 March 31, 2025 2024 (in thousands) Components of income tax expense: Affordable housing tax credits and other tax benefits $ 1,225 $ 1,396 Other tax credit investment credits and tax benefits 10,889 6,345 Total reduction in income tax expense $ 12,114 $ 7,741 Amortization of tax credit investments: Affordable housing tax credit investment losses $ 700 $ 875 Affordable housing tax credit investment impairment losses 365 481 Other tax credit investment losses 772 600 Other tax credit investment impairment losses 7,483 3,606 Total amortization of tax credit investments recorded in non-interest expense $ 9,320 $ 5,562 Note 15. Operating Segments Valley manages its business operations under operating segments consisting of Consumer Banking and Commercial Banking. Activities not assigned to the operating segments are included in Treasury and Corporate Other. 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. The duration of the residential mortgage loan portfolio is subject to movements in the market level of interest rates and forecasted prepayment speeds. The average weighted life of the automobile loans within the portfolio is relatively unaffected by movements in the market level of interest rates. However, the average life may be impacted by new loans as a result of the availability of credit within the automobile marketplace and consumer demand for purchasing new or used automobiles. Consumer Banking also includes the Wealth Management and Insurance Services Division, comprised of 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 44 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 Federal Reserve Bank of New York). Expenses related to the branch network, all other components of retail banking, along with the back office departments of the Bank are allocated from Treasury and Corporate Other to operating segments. Other non-interest income items and general expenses are allocated from Treasury and Corporate Other to each operating segment utilizing a methodology that involves an allocation of operating and funding costs based on each segment's respective mix of average interest earning assets outstanding for the period, number of deposits, or direct allocation to the segments based on the nature of income and expense. U nallocated items included in Treasury and Corporate Other consist of net gains and losses on AFS and HTM securities transactions, amortization of tax credit investments, as well as other non-core items, including merger, restructuring and FDIC special assessment charges and income from litigation settlements. The accounting for each operating segment and Treasury and Corporate Other includes internal accounting policies designed to measure consistent and reasonable financial reporting and may result in income and expense measurements that differ from amounts under GAAP. The financial reporting for each segment contains allocations and reporting in line with Valley’s operations, which may not necessarily be comparable to any other financial institution. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data. Certain prior period amounts have been reclassified to conform to the current presentation for each operating segment and Treasury and Corporate Other. The 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 Consumer Banking Commercial Banking Treasury and Corporate Other Total ($ in thousands) Average interest earning assets $ 10,210,226 $ 38,444,695 $ 8,236,770 $ 56,891,691 Interest income $ 122,463 $ 579,896 $ 82,393 $ 784,752 Interest expense 65,442 246,411 52,794 364,647 Net interest income 57,021 333,485 29,599 420,105 Provision (credit) for credit losses ( 8,733 ) 71,408 ( 14 ) 62,661 Net interest income after provision for credit losses 65,754 262,077 29,613 357,444 Non-interest income 34,354 19,002 4,938 58,294 Non-interest expense 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 Return on average interest earning assets (pre-tax) 1.46 % 1.08 % ( 0.12 ) % 0.98 % Net interest margin 2.24 % 3.47 % 1.44 % 2.95 % 45 Three Months Ended March 31, 2024 Consumer Banking Commercial Banking Treasury and Corporate Other Total ($ in thousands) Average interest earning assets $ 9,796,681 $ 40,449,910 $ 6,372,206 $ 56,618,797 Interest income $ 113,762 $ 657,791 $ 57,103 $ 828,656 Interest expense 75,286 310,852 48,970 435,108 Net interest income 38,476 346,939 8,133 393,548 Provision (credit) for credit losses 3,072 42,202 ( 74 ) 45,200 Net interest income after provision for credit losses 35,404 304,737 8,207 348,348 Non-interest income 33,165 23,130 5,120 61,415 Non-interest expense 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 Return on average interest earning assets (pre-tax) 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.