What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-07 compared with 2025-08-07 · 388 added, 351 removed, 848 unchanged (47% of the section changed)

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federal government and its agencies in connection with prolonged inflationary pressures, which could have a material adverse effect on our clients, our business, our employees, and our ability to provide services to our customers;

• the impact of unfavorable macroeconomic conditions or downturns, including instability or volatility in financial markets resulting from the impact of tariffs, any retaliatory actions, related market uncertainty, or other factors;

• the impact of unfavorable macroeconomic conditions or downturns, including instability or volatility in financial markets resulting from the impact of tariffs and other trade policies and practices, any retaliatory actions, related market uncertainty, or other factors;

government debt default or rating downgrade;

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and other potential negative effects on our business, employees or clients caused by factors outside of our control, such as new legislation and policy changes under the current U.S.

presidential administration, geopolitical instabilities or events, natural and other disasters, including severe weather events, health emergencies, acts of terrorism, or other external events;

presidential administration, the recent prolonged shutdown of the U.S federal government, geopolitical instabilities or events, natural and other disasters, including severe weather events, health emergencies, acts of terrorism, or other external events;

• the impact of any potential instability within the U.S.

financial sector or future bank failures, including the possibility of a run on deposits by a coordinated deposit base, and the impact of the actual or perceived concerns regarding the soundness, or creditworthiness, of other financial institutions, including any resulting disruption within the financial markets, increased expenses, including FDIC insurance assessments, or adverse impact on our stock price, deposits or our ability to borrow or raise capital;

financial sector or future bank failures, including the possibility of a run on deposits by a coordinated deposit base, and the impact of any actual or perceived concerns regarding the soundness, or creditworthiness, of other financial institutions, including any resulting disruption within the financial markets, increased expenses, including FDIC insurance assessments, or adverse impact on our stock price, deposits or our ability to borrow or raise capital;

• the impact of negative public opinion regarding Valley or banks in general that damages our reputation and adversely impacts business and revenues;

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• greater than expected technology-related costs due to, among other factors, prolonged or failed implementations, additional project staffing and obsolescence caused by continuous and rapid market innovations;

• increased competitive challenges and our ability to stay current with rapid technological changes in the financial services industry, including the use of artificial intelligence, as well as our ability to assess and monitor the effects of, and risks associated with, the implementation and use of such technology;

• cyberattacks, ransomware attacks, computer viruses, malware or other cybersecurity incidents that may breach the security of our websites or other systems or networks to obtain unauthorized access to personal, confidential, proprietary or sensitive information, destroy data, disable or degrade service, or sabotage our systems or networks, and the increasing sophistication of such attacks;

• increased competitive challenges and competitive pressure on pricing of our products and services;

• our ability to stay current with rapid technological changes in the financial services industry;

including the use of artificial intelligence, blockchain and digital currencies and related regulatory developments, as well as our ability to assess and monitor the effects of, and risks associated with, the implementation and use of such technology;

• results of examinations by the OCC, the FRB, the CFPB and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for credit losses, write-down assets, reimburse customers, change the way we do business, or limit or eliminate certain other banking activities;

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In preparing the consolidated financial statements, management has made estimates, judgments and assumptions in accordance with these policies 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.

At June 30, 2025, we identified our policies on the allowance for credit losses, goodwill and other intangible assets, and income taxes to be critical accounting policies because management has to make subjective and/or complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions.

At September 30, 2025, we identified our policies on the allowance for credit losses, goodwill and other intangible assets, and income taxes to be critical accounting policies because management has to make subjective and/or complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions.

Management has reviewed the application of these policies and estimates with the Audit Committee of Valley’s Board.

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Company Overview.

At June 30, 2025, Valley had consolidated total assets of approximately $62.7 billion, total net loans of $48.8 billion, total deposits of $50.7 billion and total shareholders’ equity of $7.6 billion.

At September 30, 2025, Valley had consolidated total assets of approximately $63.0 billion, total net loans of $48.7 billion, total deposits of $51.2 billion and total shareholders’ equity of $7.7 billion.

Valley operates many convenient branch office locations and commercial banking offices in northern and central New Jersey, the New York City boroughs of Manhattan, Brooklyn and Queens, Long Island, Westchester County, New York, Florida, California, Alabama, and Illinois.

Of our current 230 branch network, 55 percent, 18 percent, and 18 percent of the branches are located in New Jersey, New York, and Florida, respectively, with the remaining 9 percent of the branches in Alabama, California, and Illinois combined.

Of our current 229 branch network, 55 percent, 18 percent, and 18

percent of the branches are located in New Jersey, New York, and Florida, respectively, with the remaining 9 percent of the branches in Alabama, California, and Illinois combined.

Financial Condition.

During the second quarter 2025, we continued to strengthen our balance sheet to best perform in the current uncertain economic environment, while also prudently managing the overall risk of our loan portfolio.

The following items, including key balance sheet initiatives, are highlights at June 30, 2025.

During the third quarter 2025, we continued to strengthen our balance sheet to best perform in the current uncertain economic environment, while also prudently managing the overall risk of our loan portfolio.

The following items, including key balance sheet initiatives, are highlights at September 30, 2025.

• Commercial Real Estate Loan Concentration:

Total commercial real estate loans (including construction loans) totaled $28.8 billion, or 58.4 percent of total loans at June 30, 2025, as compared to $29.1 billion, or 59.8 percent of total loans at March 31, 2025.

The decrease was mostly due to normal repayment activity and selective originations as we continue to proactively diversify our loan portfolio and focus on the generation of more profitable and holistic banking client relationships.

As a result, our CRE loan concentration ratio declined to approximately 349 percent at June 30, 2025 from 353 percent at March 31, 2025.

Total commercial real estate loans (including construction loans) totaled $28.7 billion, or 58.2 percent of total loans at September 30, 2025, as compared to $28.8 billion, or 58.4 percent of total loans at June 30, 2025.

The decrease of $142.5 million was mostly due to the targeted runoff of transactional commercial real estate loans.

As a result, our CRE loan concentration ratio declined to approximately 337 percent at September 30, 2025 from 349 percent at June 30, 2025.

Our current balance sheet goal is a continued gradual reduction of the CRE loan concentration ratio and to maintain the ratio below 350 percent through December 31, 2025.

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• Allowance for Credit Losses for Loans :

The ACL for loans totaled $594.0 million and $594.1 million at June 30, 2025 and March 31, 2025, respectively, representing 1.20 percent and 1.22 percent of total loans at each respective date.

The moderate decrease reflects, among other factors, a decline in quantitative reserves in certain loan categories and lower specific reserves associated with collateral dependent loans at June 30, 2025.

The ACL for loans totaled $598.6 million and $594.0 million at September 30, 2025 and June 30, 2025, respectively, representing 1.21 percent and 1.20 percent of total loans at each respective date.

The increase reflects, among other factors, moderate increases in both the economic forecast and non-economic qualitative reserve components of the ACL for loans and higher specific reserves associated with collateral dependent loans, partially offset by a decline in quantitative reserves in certain loan categories at September 30, 2025.

Given our current projections and credit trends within our loan portfolio, we anticipate the ACL will range between 1.20 percent and 1.25 percent of total loans through December 31, 2025.

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• Credit Quality:

Net loan charge-offs totaled $37.8 million for the second quarter 2025 as compared to $41.9 million and $36.8 million for the first quarter 2025 and second quarter 2024, respectively.

Non-accrual loans totaled $354.4 million, or 0.72 percent of total loans, at June 30, 2025 as compared to $346.5 million, or 0.71 percent of total loans, at March 31, 2025.

Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) increased $147.5 million to $199.2 million, or 0.40 percent of total loans, at June 30, 2025 as compared to $51.7 million, or 0.11 percent of total loans, at March 31, 2025.

The majority of this increase related to three CRE loans, of which two were no longer past due in July 2025.

Net loan charge-offs totaled $14.6 million for the third quarter 2025 as compared to $37.8 million and $42.9 million for the second quarter 2025 and third quarter 2024, respectively.

Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) decreased $114.4 million to $84.8 million, or 0.17 percent of total loans, at September 30, 2025 as compared to $199.2 million, or 0.40 percent of total loans, at June 30, 2025.

Non-accrual loans totaled $421.5 million, or 0.86 percent of total loans, at September 30, 2025 as compared to $354.4 million, or 0.72 percent of total loans, at June 30, 2025.

The increase in non-accrual loans was mostly due to three new non-performing CRE and construction loans totaling $67.0 million.

These loans are largely well-collateralized and have total allocated reserves of $8.8 million within the ACL for loans at September 30, 2025.

See the “Non-Performing Assets” section for additional information.

• Liquid Assets:

Our liquid assets totaled $5.4 billion at June 30, 2025, representing 9.3 percent of interest earning assets, as compared with $5.1 billion, or 9.1 percent of interest earning assets at March 31, 2025.

Our liquid assets totaled $5.7 billion at September 30, 2025, representing 9.9 percent of interest earning assets, as compared with $5.4 billion, or 9.3 percent of interest earning assets at June 30, 2025.

We continue to maintain significant access to readily available, diverse funding sources to fulfill both short-term and long-term funding needs.

See the “Bank Liquidity” section for additional information.

Total deposit balances increased $759.4 million to $50.7 billion at June 30, 2025 as compared to $50.0 billion at March 31, 2025 mainly due to increases in both direct and indirect (brokered) customer time deposits during the second quarter 2025, partially offset by the outflows of certain indirect customer deposits in the savings, NOW and money market deposit category.

Non-interest bearing deposits increased $118.2 million to $11.7 billion at June 30, 2025 from March 31, 2025.

Total deposit balances increased $450.5 million to $51.2 billion at September 30, 2025 as compared to $50.7 billion at June 30, 2025 mainly due to deposit inflows from commercial customer and government deposits in the savings, NOW and money market deposit category during the third quarter 2025, partially offset by a $629.9 million decline in indirect customer deposits.

Non-interest bearing deposits were $11.7 billion at both September 30, 2025 and June 30, 2025.

See the "Deposits and Other Borrowings" section below for more details.

• Subordinated Debt Redemptions:

On June 15, 2025, we redeemed in full $115 million of 5.25 percent fixed-to-floating rate subordinated notes issued in June 2020 and due in June 2030.

The transaction was accounted for as an early debt extinguishment and resulted in a $922 thousand pre-tax loss reported within non-interest expense for the second quarter 2025.

In addition, we repaid $100 million of 4.55 percent fixed rate subordinated notes that matured on June 30, 2025.

• Investment Securities:

Total investment securities increased $226.1 million to $7.5 billion, or 12.0 percent of total assets, at June 30, 2025 as compared to March 31, 2025 mainly due to targeted purchases of residential mortgage backed securities mostly issued by Ginnie Mae (with a risk-weighting of zero for regulatory capital purposes) that were classified as AFS.

Total investment securities increased $231.7 million to $7.7 billion, or 12.3 percent of total assets, at September 30, 2025 as compared to June 30, 2025 mainly due to targeted purchases of residential mortgage backed securities and, to a lesser extent, corporate debt and U.S.

Treasury securities that were classified as AFS during the third quarter 2025.

See the “Investment Securities Portfolio” section for more details.

• Regulatory Capital and Shareholders' Equity:

Total shareholders' equity increased $75.5 million to $7.6 billion at June 30, 2025 as compared to March 31, 2025.

Valley's total risk-based capital, common equity Tier 1 capital, Tier 1 capital and Tier 1 leverage capital ratios were 13.67 percent, 10.85 percent, 11.57 percent, and 9.49 percent, respectively, at June 30, 2025 as compared to 13.91 percent, 10.80 percent, 11.53 percent and 9.41 percent, respectively, at March 31, 2025.

The decline in our total risk-based capital ratio as compared to March 31, 2025 reflects the early redemption of our $115 million of 5.25 percent fixed-to-floating rate subordinated notes, which were previously eligible for full regulatory capital treatment.

Currently, we expect that Valley's common equity Tier 1 capital will gradually increase to approximately 11 percent by December 31, 2025 largely through projected growth in our retained earnings and continuous management of the overall regulatory risk weighted asset profile of our balance sheet, including the goal to reduce our commercial real estate loan concentration.

Total shareholders' equity increased $120.0 million to $7.7 billion at September 30, 2025 as compared to June 30, 2025.

Valley's total risk-based capital, common equity Tier 1 capital, Tier 1 capital and Tier 1 leverage capital ratios were 13.83 percent, 11.00 percent, 11.72 percent, and 9.52 percent, respectively, at September 30, 2025 as compared to 13.67 percent, 10.85 percent, 11.57 percent and 9.49 percent, respectively, at June 30, 2025.

During the third quarter 2025, we repurchased 1.3 million shares of our common stock at an average price of $9.39 under our current stock repurchase plan.

During the nine months ended September 30, 2025, we repurchased a total of 1.8 million shares of our common stock at an average price of $9.18 under this plan.

We expect Valley's common equity Tier 1 capital to remain at approximately 11 percent through December 31, 2025.

See the "Capital Adequacy" section below for more information.

Quarterly Results.

Net income for the second quarter 2025 was $133.2 million, or $0.22 per diluted common share, as compared to $70.4 million, or $0.13 per diluted common share, for the second quarter 2024.

Net income for the third quarter 2025 was $163.4 million, or $0.28 per diluted common share, as compared to $97.9 million, or $0.18 per diluted common share, for the third quarter 2024.

The $65.5 million increase in quarterly net income as compared to the same quarter one year ago was mainly due to the following changes:

• a $30.7 million increase in net interest income mainly driven by lower interest rates on most interest bearing deposit products in the second quarter 2025 and additional interest income from investment security purchases, partially offset by lower yields on adjustable-rate loans;

• a $44.3 million decrease in our provision for credit losses partly due to a decline in the impact of specific reserves for collateral dependent commercial loans and the change in quantitative reserves on a linked quarter basis;

• an $11.4 million increase in non-interest income that was mainly driven by increases in service charges on deposit accounts, capital markets income, tax credit investment advisory service fees, and bank owned life insurance income.

• a $35.7 million increase in net interest income mainly driven by lower interest rates on most interest bearing deposit products in the third quarter 2025 and additional interest income from investment security purchases, partially offset by lower yields on adjustable-rate loans and a decline in average loans;

• a $55.9 million decrease in our provision for credit losses partly due to a decline in the impact of specific reserves for collateral dependent commercial loans and the comparative change in quantitative reserves on a linked quarter basis;

• a $4.2 million increase in non-interest income that was driven by increases in several categories, including net gains on sales of loans, service charges on deposit accounts and capital markets income, partially offset by a decline in income from litigation settlements.

Which were partially offset by:

• a $6.6 million increase in non-interest expense primarily due to increases in salary and employee benefits expense, amortization of tax credit investments, and net occupancy expense, partially offset by lower technology, furniture and equipment expense and FDIC insurance assessment fees;

• a $17.0 million increase in income taxes mainly due to higher pre-tax income.

See the “Net Interest Income,” “Non-Interest Income,” “Non-Interest Expense” and “Income Taxes” sections below for more details on the impact of the items above and other infrequent non-core items impacting our second quarter 2025 results.

• a $12.5 million increase in non-interest expense primarily due to increases in salary and employee benefits expense, professional and legal fees and amortization of tax credit investments, partially offset by lower FDIC insurance assessment and net occupancy expenses;

• a $17.8 million increase in income taxes mainly due to higher pre-tax income, partially offset by our increased investment in tax credits.

Economic Conditions.

During the second quarter 2025, real GDP increased at an estimated annual rate of 3.0 percent as compared to a decrease of 0.5 percent during the first quarter 2025.

The second quarter rebound from the first quarter 2025 was mainly driven by a decrease in imports and a modest increase in consumer spending and government expenditures.

These movements were partially offset by decreases in gross private domestic investment driven by a reduction in inventory as inventory levels normalized after businesses and consumers stockpiled goods ahead of anticipated tariff increases in the first quarter 2025.

While core inflation recently came in slightly below most forecasts, pricing trends did not significantly ease during the second quarter 2025.

Overall, the rate of inflation has increased to 2.7 percent in the second quarter 2025 as compared to 2.4 percent for the first quarter 2025.

Over the last four months of 2024 at its FOMC meetings, the Federal Reserve lowered the target range for the federal funds rate from 5.25 – 5.50 percent to 4.25 – 4.50 percent and have held the target steady since.

The latest projections from the FOMC still indicate two rate cuts are expected during the remainder of 2025.

The FOMC also indicated that the Federal Reserve will continue to reduce its Treasury securities, agency debt and agency mortgage-

backed securities.

The primary concerns of (1) supporting maximum employment and, more specifically, (2) returning inflation to its 2 percent target has led to the FOMC's most recent decision to hold the federal funds target rate steady.

During the third quarter 2025, real GDP increased at an estimated annual rate of 3.8 percent as compared to an increase of 3.0 percent during the second quarter 2025.

The third quarter increase from the second quarter 2025 was driven by several factors, including but not limited to consumer spending, decreased imports, and technology related business investment.

While core inflation moderately increased during the third quarter 2025, it still came in slightly below most forecasts.

Overall, the rate of inflation has increased to 3.0 percent in the third quarter 2025 as compared to 2.7 percent for the second quarter 2025.

Over the last four months of 2024 at its FOMC meetings, the Federal Reserve lowered the target range for the federal funds rate from 5.25 – 5.50 percent to 4.25 – 4.50 percent.

This range held steady until the FOMC lowered the target range to 4.00 – 4.25 percent in September 2025 and again to a range of 3.75 - 4.00 percent in October 2025 mainly due to a combination of an increase in downside risks to employment in recent months and moderating inflation as compared to forecasts.

Based on the Federal Reserve Chairman's recent comments, the market expectation for another rate cut at the December 2025 meeting has declined from prior forecasts.

The FOMC also indicated that the Federal Reserve will halt the reduction in its asset holdings starting December 1, 2025.

primary concerns of (1) supporting maximum employment and (2) returning inflation to its 2 percent target remain a central focus of any future FOMC interest rate cut and other monetary policy decisions.

The 10-year U.S.

Treasury note yield ended the second quarter 2025 at 4.24 percent, or 1 basis point higher as compared to the first quarter 2025, and the 2-year U.S.

Treasury note yield ended the second quarter 2025 at 3.72 percent, or 15 basis points lower as compared to the first quarter 2025.

The second quarter 2025 economic lookout was weakened by the continued negative impact of volatile U.S.

tariff policies and trade negotiations, heightened geopolitical tensions, immigration enforcement, persistent concerns about the government deficit, including the impact of the recently passed OBBBA, and the level of inflation.

Treasury note yield ended the third quarter 2025 at 4.16 percent, or 8 basis points lower as compared to the second quarter 2025, and the 2-year U.S.

Treasury note yield ended the third quarter 2025 at 3.60 percent, or 12 basis points lower as compared to the second quarter 2025.

The third quarter 2025 economic outlook remained pressured by the ongoing instability of U.S.

tariff policies and trade discussions, continued geopolitical strains, tighter immigration measures, slowing labor markets, and the prolonged U.S.

federal government shutdown combined with persistent concerns about the federal deficit.

Additionally, inflation and fiscal uncertainty have kept recession risks elevated in analysts’ forecasts, and banks continue to face a difficult operating climate.

As a result of these factors, many market analysts have increased the likelihood of a recession in their forecast for the coming year, and foresee an overall challenging bank operating environment.

Should these conditions persist or further deteriorate, they may adversely impact our banking clients and our financial results, as highlighted elsewhere in this MD&A.

If these trends continue or worsen, they could negatively impact our banking clients and financial performance, as noted elsewhere in this MD&A.

Deposits and Other Borrowings

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Our cumulative deposit beta in the interest rate increase cycle (between December 31, 2021 and June 30, 2024) was approximately 58 percent.

The Federal Reserve started an interest rate decrease cycle during the third quarter 2024.

Our cumulative deposit beta in this current interest rate decrease cycle (between June 30, 2024 and June 30, 2025) was 51 percent as compared to 53 percent (between June 30, 2024 and March 31, 2025) one quarter ago.

The relative stabilization of our cumulative deposit beta in the second quarter 2025 was mainly driven by the Federal Reserve's decision to leave the target federal funds rate unchanged in the second quarter of 2025, and our ability to broadly maintain the level of interest rates offered on our interest bearing deposit products.

See the "Net Interest Income" section for additional details on the changes in our cost of deposits during the second quarter 2025.

Total average deposits increased by $767.8 million to $49.9 billion for the second quarter 2025 as compared to the first quarter 2025.

Average time deposit balances increased $548.7 million from the first quarter 2025 largely due to new direct retail customer CDs and our greater use of indirect customer (i.e., brokered) CDs in our funding mix during the second quarter 2025.

Average non-interest bearing deposits increased $113.8 million to $11.3 billion for the second quarter 2025 as compared to the first quarter 2025, while average savings, NOW and money market deposits increased $105.4 million to $26.5 billion for the same period.

Our cumulative deposit beta in this current interest rate decrease cycle (between June 30, 2024 and September 30, 2025) was 47 percent as compared to 51 percent (between June 30, 2024 and June 30, 2025) one quarter ago.

The decline of our cumulative deposit beta in the third quarter 2025 as compared to the second quarter 2025 was mainly driven by one additional day in the third quarter and a modest increase in the cost of newly originated customer deposits.

These factors were partly mitigated by our ongoing efforts to reduce interest rates on existing customer deposits.

See the "Net Interest Income" section for additional details on the changes in our cost of deposits during the third quarter 2025.

Total average deposits increased by $1.3 billion to $51.2 billion for the third quarter 2025 as compared to the second quarter 2025.

Average savings, NOW and money market deposits increased $554.4 million to $27.0 billion for the third quarter 2025 as compared to the second quarter 2025 mainly due to deposit inflows from commercial customer and government deposit accounts.

Average time deposit balances increased $501.7 million from the second quarter 2025 largely due to new direct retail customer CDs from promotional offerings over the last six month period.

Average non-interest bearing deposits increased $204.0 million to $11.5 billion for the third quarter 2025 as compared to the second quarter 2025 mostly due to normal fluctuations in commercial customer deposit balances.

Average non-interest-bearing deposits;

savings, NOW and money market deposits;

and time deposits represented approximately 23 percent, 53 percent, and 24 percent of total deposits for the second quarter 2025, respectively, as compared to 23 percent, 54 percent, and 23 percent of total deposits for the first quarter 2025, respectively .

Actual ending balances for deposits increased $759.4 million to $50.7 billion at June 30, 2025 from March 31, 2025 due to increases of $962.9 million and $118.2 million in time deposits and non-interest bearing deposits, respectively, partially offset by a $321.6 million decrease in savings, NOW and money market deposit balances.

The increase in time deposit balances was mainly driven by continued deposit inflows from new promotional retail CD offerings and brokered customer CDs during the second quarter 2025.

The increase in non-interest bearing deposit balances was mostly due to higher commercial customer deposit inflows in the second quarter 2025.

Savings, NOW and money market deposit balances decreased at June 30, 2025 from March 31, 2025 largely due to lower indirect customer deposits, as well as some seasonal runoff in governmental deposits account balances.

Total indirect customer deposits (including both brokered money market and time deposits) totaled $6.5 billion and $6.3 billion in June 30, 2025 and March 31, 2025, respectively.

and time deposits represented approximately 22 percent, 53 percent, and 25 percent of total deposits for the third quarter 2025, respectively, as compared to 23 percent, 53 percent, and 24 percent of total deposits for the second quarter 2025, respectively .

Actual ending balances for deposits increased $450.5 million to $51.2 billion at September 30, 2025 from June 30, 2025 mainly due to a $1.2 billion increase in savings, NOW and money market deposit balances due to the aforementioned deposit inflows during the third quarter 2025, partially offset by a $616.8 million decrease in time deposits.

The decrease in time deposit balances was mainly driven by the repayment of maturing indirect customer CDs during the third quarter 2025.

Total indirect customer deposits (consisting of brokered time and money market deposits) totaled $5.8 billion and $6.5 billion at September 30, 2025 and June 30, 2025, respectively.

Non-interest bearing deposits were approximately $11.7 billion at both September 30, 2025 and June 30, 2025 and remained relatively stable across our customer base during the third quarter 2025.

Non-interest bearing deposits;

savings, NOW and money market deposits;

and time deposits represented approximately 23 percent, 52 percent and 25 percent of total deposits

as of June 30, 2025, respectively, as compared to 23 percent, 53 percent and 24 percent of total deposits as of March 31, 2025, respectively.

The following table summarizes CDs included in time deposits in excess of the FDIC insurance limit by maturity at June 30, 2025:

June 30, 2025

and time deposits represented approximately 23 percent, 53 percent and 24

percent of total deposits as of September 30, 2025, respectively, as compared to 23 percent, 52 percent and 25 percent of total deposits as of June 30, 2025, respectively.

The following table summarizes CDs included in time deposits in excess of the FDIC insurance limit by maturity at September 30, 2025:

September 30, 2025

(in thousands)

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Total $ 2,599,999

Total estimated uninsured deposits, excluding collateralized government deposits and intercompany deposits (i.e., deposits eliminated in consolidation), totaled approximately $13.1 billion, or 26 percent of total deposits, at June 30, 2025 as compared to $13.0 billion, or 26 percent of total deposits, at March 31, 2025.

While we maintained a diversified commercial and consumer deposit base at June 30, 2025, deposit gathering initiatives and our current direct customer deposit base could be challenged due to market competition, attractive non-deposit investment alternatives in the financial markets and other factors.

As a result, we cannot guarantee that we will be able to maintain deposit levels at or near those reported at June 30, 2025.

Total estimated uninsured deposits, excluding collateralized government deposits and intercompany deposits (i.e., deposits eliminated in consolidation), totaled approximately $13.7 billion, or 27 percent of total deposits, at September 30, 2025 as compared to $13.1 billion, or 26 percent of total deposits, at June 30, 2025.

We gathered approximately $1 billion of core deposits during the third quarter 2025 mostly through commercial channels reflecting our proactive business development efforts and the continued success of our treasury management sales efforts.

While we maintained a diversified commercial and consumer deposit base at September 30, 2025, deposit gathering initiatives and our current direct customer deposit base could be challenged due to market competition, attractive non-deposit investment alternatives in the financial markets and other factors.

As a result, we cannot guarantee that we will be able to maintain deposit levels at or near those reported at September 30, 2025.

Management continuously monitors liquidity and all available funding sources including non-deposit borrowings discussed below.

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The following table presents average short-term and long-term borrowings for the periods indicated :

Three Months Ended Six Months Ended

June 30, 2025 March 31, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Three Months Ended Nine Months Ended

September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

(in thousands)

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Total $ 2,961,510 $ 3,146,434 $ 3,324,992 $ 3,037,927 $ 3,090,874

Average short-term borrowings for the second quarter 2025 decreased $111.1 million from the first quarter 2025 and increased $99.0 million from the second quarter 2024.

The decrease from the first quarter 2025 was mainly due to the maturity and repayment of FHLB advances.

The increase from the second quarter 2024 was mostly driven by a greater use of short-term FHLB advances in our mix of funding sources during the second quarter 2025.

Average long-term borrowings (including junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of financial condition) increased $140.1 million as compared to the first quarter 2025 and decreased $172.8 million as compared to t he second quarter 2024.

The increase as compared to the first quarter 2025 was mainly due to new issuances of FHLB advances totaling $210.0 million in the second quarter

The decrease compared to the second quarter 2024 w as partly due to maturity and repayment of $273.0 million of FHLB advances in January 2025.

Actual ending balances of short-term borrowings increased $103.2 million to $162.2 million at June 30, 2025 from March 31, 2025 largely due to the increase in FHLB advances.

Long-term borrowings totaled $2.9 billion at June 30, 2025 and remained relatively unchanged compared to March 31, 2025.

In June 2025, we fully redeemed $215.0 million of subordinated notes that were mostly offset by the issuance of new long-term FHLB advances during the second quarter 2025.

Average short-term borrowings for the third quarter 2025 decreased $107.3 million from the second quarter 2025 and increased $7.9 million from the third quarter 2024.

The decrease from the second quarter 2025 was mainly due to the maturity and repayment of FHLB advances.

Average long-term borrowings (including junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of financial condition) decreased $184.9 million and $363.5 million as compared to t he second quarter 2025 and third quarter

2024, respectively.

The decrease as compared to the second quarter 2025 was mainly due to the redemption of $215.0 million of subordinated notes during June 2025.

The decrease compared to the third quarter 2024 was mostly due to maturity and repayment of $273.0 million of FHLB advances in January 2025 and the aforementioned subordinated notes redeemed in June 2025.

Actual ending balances of short-term borrowings decreased $111.2 million to $51.1 million at September 30, 2025 from June 30, 2025 largely due to the repayment of $100 million of maturing short-term FHLB advances.

Long-term borrowings totaled $2.9 billion at September 30, 2025 and remained relatively unchanged compared to June 30, 2025.

Non-GAAP Financial Measures

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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Efficiency ratio, as adjusted 53.37 56.13 54.79 58.26

September 30,

2025 December 31,

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

5 unchanged sentences

(3,817) — (3,817) 8,757

Losses on available for sale and held to maturity debt securities, net (2)

Net losses on the sale of commercial real estate loans (2)

— 5,794 — 5,794

Restructuring charge (3)

3,854 — 4,654 954

Litigation reserve (4)

1,012 — 1,012 —

(Gains) losses on available for sale and held to maturity debt securities, net (5)

(28) 1 (17) 12

Litigation settlements (6)

— (7,334) — (7,334)

Gain on sale of commercial premium finance lending division (7)

4 unchanged sentences

Net income, as adjusted (non-GAAP) $ 164,088 $ 96,754 $ 404,569 $ 267,845

Included in the FDIC insurance assessment.

Included in (losses) gains on securities transactions, net.

Represents the change in estimated special assessment losses included in the FDIC insurance assessment expense.

Represents actual and mark to market losses on bulk performing commercial real estate loan sales included in gains (losses) on sales of loans, net.

Represents severance expense related to workforce reductions within salary and employee benefits expense.

Represents legal reserves and settlement charges included in professional and legal fees.

Included in gains on securities transactions, net.

Represents recoveries from legal settlements included in other income.

Included in other income within non-interest income.

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

2 unchanged sentences

Loss on extinguishment of debt (pre-tax) — — 922 —

FDIC special assessment (1)

FDIC special assessment (pre-tax) (1)

(3,817) — (3,817) 8,757

Restructuring charge (2)

Restructuring charge (pre-tax) (2)

3,854 — 4,654 954

Amortization of tax credit investments 9,134 5,791 18,454 11,353

Amortization of tax credit investments (pre-tax) 8,147 5,853 26,601 17,206

Litigation reserve (pre-tax) (3)

1,012 — 1,012 —

Total non-interest expense, as adjusted (non-GAAP) $ 272,789 $ 263,618 $ 813,353 $ 800,361

1 unchanged sentence

Total non-interest income, as reported (GAAP) 64,887 60,671 185,785 173,299

Losses on available for sale and held to maturity debt securities, net (3)

Gain on sale of commercial premium finance lending division (4)

Net losses on the sale of commercial real estate loans (pre-tax) (4)

— 5,794 — 5,794

(Gains) losses on available for sale and held to maturity debt securities, net (pre-tax) (5)

(28) 1 (17) 12

Litigation settlements (pre-tax) (6)

— (7,334) — (7,334)

Gain on sale of commercial premium finance lending division (pre-tax) (7)

— — — (3,629)

Gross operating income, as adjusted (non-GAAP) $ 511,083 $ 469,630 $ 1,484,505 $ 1,373,873

Efficiency ratio (non-GAAP) 53.37 % 56.13 % 54.79 % 58.26 %

Included in the FDIC insurance assessment.

Represents the change in estimated special assessment losses included in the FDIC insurance assessment expense.

Represents severance expense related to workforce reductions within salary and employee benefits expense.

Included in (losses) gains on securities transactions, net.

Represents legal reserves and settlement charges included in professional and legal fees.

Represents actual and mark to market losses on bulk performing commercial real estate loan sales included in gains (losses) on sales of loans, net.

Included in gains on securities transactions, net.

Represents recoveries from legal settlements included in other income.

Included in other income within non-interest income.

Tangible book value per common share is computed by dividing shareholders’ equity less preferred stock, goodwill and other intangible assets by common shares outstanding, as follows:

September 30,

2025 December 31,

8 unchanged sentences

Net Interest Income

Net interest income on a tax equivalent basis of $433.7 million for the second quarter 2025 increased $12.3 million compared to the first quarter 2025 and increased $30.7 million as compared to the second quarter 2024.

Interest income on a tax equivalent basis increased $20.3 million to $806.3 million for the second quarter 2025 as compared to the first quarter 2025.

The increase was mostly driven by (i) higher yields on new loan originations, (ii) increased average loan balances driven by new organic loan originations largely within the commercial and industrial loan portfolio, (iii) additional interest income from purchases of taxable investments mainly within the available for sale portfolio during the first half of 2025 and (iv) one additional day in the second quarter 2025.

Total interest expense increased $8.0 million to $372.6 million for the second quarter 2025 as compared to the first quarter 2025 largely due to (i) a $548.7 million increase in average time deposit balances, (ii) the increased cost of certain non-maturity deposits and (iii) the aforementioned increase in day count.

Average interest earning assets increased $780.7 million to $57.6 billion for the second quarter 2025 as compared to the second quarter 2024 mainly due to a $2.0 billion increase in average taxable investments largely resulting from purchases of residential mortgage-backed securities classified as available for sale over the past 12 months, largely offset by lower average loan balances and to a lesser extent lower excess liquidity held in overnight interest-bearing deposits with banks.

Compared to the first quarter 2025, average interest earning assets increased by $661.9 million during the second quarter 2025 .

The increase was mainly driven by increases of $377.7 million in average loans, $42.4 million overnight interest bearing cash balances and an increase of $249.8 million in average taxable investments.

The increase in average loan balances to $49.0 billion for the second quarter 2025 was mostly due to continued growth in the commercial and industrial loan portfolio.

Average interest bearing liabilities increased $337.4 million to $41.9 billion for the second quarter 2025 as compared to the second quarter 2024 primarily due to increases of $411.2 million and $99.0 million in average interest bearing deposits and short-term borrowings, respectively, partially offset by a decrease of $172.8 million in long-term borrowings.

As compared to the first quarter 2025, average interest bearing liabilities increased by $683.0 million for the second quarter 2025 largely due to an increase in average time deposit balances.

Net interest income on a tax equivalent basis of $447.5 million for the third quarter 2025 increased $13.8 million compared to the second quarter 2025 and increased $35.7 million as compared to the third quarter 2024.

Interest income on a tax equivalent basis increased $21.9 million to $828.2 million for the third quarter 2025 as compared to the second quarter 2025.

The increase was mostly driven by (i) higher yields on most new loan originations, (ii) increases in average loans and taxable investments and (iii) one additional day in the third quarter 2025.

Total interest expense increased $8.1 million to $380.7 million for the third quarter 2025 as compared to the second quarter 2025.

The increase was largely due to a $1.1 billion increase in average interest bearing deposit balances, partially offset by the positive impact of the early redemption of $115 million of subordinated notes on June 15, 2025, lower utilization of short-term FHLB borrowings and the repayment of higher-cost indirect customer deposits throughout the third quarter 2025.

Average interest earning assets increased $971.5 million to $58.6 billion for the third quarter 2025 as compared to the third quarter 2024 mainly due to a $1.5 billion increase in average taxable investments largely resulting from purchases of residential mortgage-backed securities classified as available for sale over the past 12 months and, to a lesser extent, higher excess liquidity held in overnight interest-bearing deposits with banks.

These items were partially offset by a $856.1 million decrease in average loan balances mostly caused by our strategic efforts to reduce the level of transactional commercial real estate loans in our portfolio.

Compared to the second quarter 2025, average interest earning assets increased by $1.1 billion during the third quarter 2025.

The increase was primarily driven by increases of $663.6 million, $238.2 million, and $171.5 million in average overnight interest bearing cash, loans and taxable investment balances, respectively.

Average interest bearing liabilities increased $20.7 million to $42.7 billion for the third quarter 2025 as compared to the third quarter 2024 primarily due to an increase of $376.3 million in average interest bearing deposits, partially offset by a decrease of $363.5 million in long-term borrowings.

As compared to the second quarter 2025, average interest bearing liabilities increased by $763.9 million for the third quarter 2025 largely due to an increases in both average savings, NOW and money market and time deposit balances, partially offset by lower long and short-term average FHLB advances and the redemption of certain subordinated notes in June 2025.

See additional information under “ Deposits and Other Borrowings ” in the Executive Summary section above.

Net interest margin on a tax equivalent basis of 3.01 percent for the second quarter 2025 increased by 5 basis points from 2.96 percent for the first quarter 2025 and increased 17 basis points from 2.84 percent for the second quarter 2024.

The increase as compared to the first quarter 2025 was mostly due to the 7 basis point increase in the yield on

average interest earning assets largely caused by higher interest rates on new loan originations in the second quarter 2025 and higher yielding investment purchases.

The overall cost of average interest bearing liabilities increased 2 basis points to 3.56 percent for the second quarter 2025 as compared to the first quarter 2025 mostly due to higher interest rates on certain non-maturity deposit products, partially offset by a lower overall cost of time deposits driven by both new volumes and maturities.

Our cost of total average deposits was 2.67 percent for the second quarter 2025 as compared to 2.65 percent and 3.18 percent for the first quarter 2025 and the second quarter 2024, respectively.

Net interest margin on a tax equivalent basis of 3.05 percent for the third quarter 2025 increased by 4 basis points from 3.01 percent for the second quarter 2025 and increased 19 basis points from 2.86 percent for the third quarter 2024.

The increase as compared to the second quarter 2025 was mostly due to the 5 basis point increase in the yield on average interest earning assets largely caused by higher interest rates on most new loan originations in the third quarter 2025 and higher yielding investment purchases during the last six months, which were both partially offset by our elevated cash position.

The overall cost of average interest bearing liabilities increased 1 basis points to 3.57 percent for the third quarter 2025 as compared to the second quarter 2025 mostly due to a 4 basis point increase in the cost of non-maturity interest bearing deposits, partially offset by a lower overall cost of time deposits mostly driven by the repayment of indirect customer CD maturities.

Our cost of total average deposits was 2.69 percent for the third quarter 2025 as compared to 2.67 percent and 3.25 percent for the second quarter 2025 and the third quarter 2024, respectively.

In Valley's Annual Report, we provided guidance that we anticipated net interest income growth of approximately 9 to 12 percent for the full year of 2025 as compared to $1.6 billion reported for 2024.

Based upon our current projections, we now expect the growth of our net interest income for 2025 to fall within a range of 8 to 10 percent range largely due to lower anticipated loan growth of 3 percent for same period.

Our forecasts include additional assumptions and, therefore, we cannot provide any assurances that our future net interest income or margin will meet our current estimates or remain near the levels reported for the second quarter 2025.

Based upon our current projections, we now expect 8 percent growth in our net interest income for 2025 largely due to lower anticipated loan growth of approximately 2 percent for same period.

For a detailed discussion on the risks related to interest rates please refer to Part I, Item 1A.

“Risk Factors” in Valley's Annual Report.

The following table reflects the components of net interest income for the three months ended June 30, 2025, March 31, 2025 and June 30, 2024:

The following table reflects the components of net interest income for the three months ended September 30, 2025, June 30, 2025 and September 30, 2024:

Quarterly Analysis of Average Assets, Liabilities and Shareholders’ Equity and

1 unchanged sentence

Three Months Ended

June 30, 2025 March 31, 2025 June 30, 2024

September 30, 2025 June 30, 2025 September 30, 2024

Balance Interest Average

37 unchanged sentences

3.05 % 3.01 % 2.86 %

The following table reflects the components of net interest income for the six months ended June 30, 2025 and 2024:

Six Months Ended

June 30, 2025 June 30, 2024

The following table reflects the components of net interest income for the nine months ended September 30, 2025 and 2024:

Nine Months Ended

September 30, 2025 September 30, 2024

Average Balance Interest Average Rate Average Balance Interest Average Rate

46 unchanged sentences

Change in Net Interest Income on a Tax Equivalent Basis

Three Months Ended June 30, 2025

Compared to June 30, 2024 Six Months Ended June 30, 2025

Compared to June 30, 2024

Three Months Ended September 30, 2025

Compared to September 30, 2024 Nine Months Ended September 30, 2025

Compared to September 30, 2024

Volume Change

8 unchanged sentences

Total increase (decrease) in interest income 5,362 (39,053) (33,691) 260 (106,368) (106,108)

1,359 (29,845) (28,486) (5,531) (66,886) (72,417)

Interest Expense:

3 unchanged sentences

Long-term borrowings and junior subordinated debentures (4,410) 1,037 (3,373) (1,895) 3,111 1,216

Total de crease in interest expense

(638) (58,539) (59,177) (6,532) (123,106) (129,638)

Total decrease in interest expense (5,218) (64,134) (69,352) (11,228) (187,762) (198,990)

Total increase in net interest income $ 10,580 $ 25,081 $ 35,661 $ 11,488 $ 81,394 $ 92,882

1 unchanged sentence

Non-Interest Income

Non-interest income represented 12.6 percent and 11.3 percent of total net interest income plus non-interest income for the three months ended June 30, 2025 and 2024, respectively, and 12.4 percent of total interest income plus non-interest income for both the six months ended June 30, 2025 and 2024, respectively.

For the three and six months ended June 30, 2025, non-interest income increased $11.4 million and $8.3 million, respectively, as compared to the same periods in 2024 mainly driven by increases in service charges on deposit accounts, capital markets income and bank owned life insurance income.

Non-interest income represented 12.7 percent and 12.9 percent of total net interest income plus non-interest income for the three months ended September 30, 2025 and 2024, respectively, and 12.5 percent and 12.6 percent for the nine months ended September 30, 2025 and 2024, respectively.

For the three and nine months ended September 30, 2025, non-interest income increased $4.2 million and $12.5 million, respectively, as compared to the same periods in 2024 mainly driven by increases in service charges on deposit accounts, capital markets income and net gains on sales of loans.

See further details below.

The following table presents the components of non-interest income for the three and six months ended June 30, 2025 and 2024:

The following table presents the components of non-interest income for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

4 unchanged sentences

Service charges on deposit accounts 16,764 12,826 44,195 35,287

(Losses) gains on securities transactions, net (1) 3 45 52

Gains on securities transactions, net 28 47 73 99

Fees from loan servicing 3,405 3,443 10,291 9,322

Gains on sales of loans, net 2,025 884 4,222 2,502

Gains (losses) on sales of loans, net 740 (3,644) 4,962 (1,142)

Bank owned life insurance 4,657 5,387 15,453 13,167

1 unchanged sentence

Total non-interest income $ 64,887 $ 60,671 $ 185,785 $ 173,299

Wealth management and trust fee income decreased $2.0 million for the six months ended June 30, 2025 as compared to the same period in 2024 mainly due to brokerage fees.

Brokerage fees decreased $1.8 million to $10.6 million for the six months ended June 30, 2025 as compared to the same period in 2024 due to lower customer trading volume at our broker dealer subsidiary.

Capital markets income increased $2.0 million and $3.3 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024.

The increase for both periods was mostly due to fee growth from higher volumes of interest rate swap transactions related to commercial lending activities, as well as fees from foreign exchange and loan syndication transactions.

Service charges on deposit accounts increased $3.5 million and $5.0 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024 mainly due to additional treasury service related fees for commercial deposit accounts, partially offset by lower overdraft fees.

Bank owned life insurance income increased $1.5 million and $3.0 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024 due to higher returns on the underlying investment securities during the respective periods.

Other non-interest income increased $1.9 million and decreased $4.3 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024.

The increase as compared to the

second quarter 2024 was mainly due to a $1.5 million increase in card fee income for three months ended June 30, 2025.

The decrease for the six months ended June 30, 2025 was largely as a result of a $3.6 million net gain realized on the sale of our commercial premium finance lending business during the first quarter 2024.

Capital markets income increased $3.5 million and $6.7 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024.

The increases for both periods were mostly due to fee income growth from higher volumes of (i) interest rate swap transactions related to commercial lending activities and (ii) loan syndication transactions.

Service charges on deposit accounts increased $3.9 million and $8.9 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024 mainly due to additional treasury management service related fees generated from commercial deposit accounts.

Net gains on sales of loans increased $4.4 million and $6.1 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024 mainly due to a $5.8 million mark-to- market loss recognized during the third quarter of 2024 on the transfer of performing commercial real estate loans to loans held for sale.

The net gains in both periods of 2025 were partially offset by a $1.3 million loss realized on the sale of one non-performing commercial real estate loan classified as held for sale during the third quarter 2025.

Bank owned life insurance income increased $2.3 million for the nine months ended September 30, 2025 as compared to the same period in 2024 largely driven by higher returns on the underlying investment securities during most of the 2025 period.

Other non-interest income decreased $7.8 million and $12.2 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024.

The decrease as compared to the third quarter 2024 was mainly due to income from litigation settlements totaling $7.3 million recorded during the third quarter 2024.

The decrease for the nine months ended September 30, 2025 was largely as a result of the aforementioned income from litigation settlements combined with a $3.6 million net gain realized on the sale of our commercial premium finance lending business during the first quarter 2024.

Non-Interest Expense

Non-interest expense increased $6.6 million and $2.9 million for the three and six months ended June 30, 2025 , respectively, as compared to the same quarter in 2024 mainly due to increases in salary and employee benefits expense, professional and legal fees, amortization of tax credit investments and net occupancy expense.

Non-interest expense increased $12.5 million and $15.4 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024 mainly due to increases in professional and legal fees, salary and employee benefits expense, and amortization of tax credit investments, partially offset by a decrease in the FDIC insurance assessment expense.

See further details below.

The following table presents the components of non-interest expense for the three and six months ended June 30, 2025 and 2024:

The following table presents the components of non-interest expense for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

10 unchanged sentences

Total non-interest expense $ 281,985 $ 269,471 $ 842,725 $ 827,278

Salary and employee benefits expense increased $4.6 million and $5.4 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024 mainly due to annual salary merit increases, cash incentive compensation and increased medical related expenses, partially offset by lower stock-based compensation expense.

Net occupancy expense increased $1.2 million and $2.8 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024 mainly due to incremental increases in cleaning and maintenance, rent expense and depreciation expense.

Technology, furniture and equipment expense decreased $4.5 million and $10.1 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024.

The decreases were mostly driven by a reduction in software licensing costs, as well as moderately lower depreciation and telecommunication related expenses.

FDIC insurance assessment expense decreased $2.3 million and $7.6 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods of 2024.

The decreases were primarily due to additional estimated expenses of $1.4 million and $8.8 million recorded during the three and six months ended June 30, 2024, respectively, related to the FDIC special assessment.

Amortization of other intangibles decreased $1.1 million and $2.5 million for the three and six months ended June 30, 2025 , respectively, as compared to the same periods in 2024 mainly due to a decline in amortization expense related to core deposits and loan servicing rights.

Loss on extinguishment of debt totaling $922 thousand for both the three and six months ended June 30, 2025 related to the June 15, 2025 early redemption of $115 million of 5.25 percent subordinated notes issued in June 2020 which were due in June 2030.

Amortization of tax credit investments increased $3.3 million and $7.1 million for the three and six months ended June 30, 2025 , respectively, as compared to the same periods in 2024 mainly due to large purchases of tax-advantaged investments over the last twelve months.

Salary and employee benefits expense increased $8.0 million and $13.4 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024.

The increases in both periods were mainly due to salary increases, including the impact of targeted investment in new talent, higher severance and medical insurance related expenses, partially offset by lower stock-based compensation expense.

Severance expense related to workforce reductions totaled $3.9 million and $4.7 million three and nine months ended September 30, 2025, respectively, and $954 thousand for the nine months ended September 30, 2024.

There were no severance charges related to workforce reductions for the three months ended September 30, 2024.

Net occupancy expense decreased $2.1 million for the three months ended September 30, 2025 as compared to the same period in 2024.

The decrease was mainly due to lower rent related expenses and depreciation expense combined with higher rental income.

Technology, furniture and equipment expense decreased $8.4 million for the nine months ended September 30, 2025 as compared to the same period in 2024 mostly driven by a $5.1 million reduction in data processing expenses.

FDIC insurance assessment expense decreased $6.4 million and $14.1 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods of 2024.

The decreases mostly reflect the impact of changes in the total estimated expense related to the FDIC special assessment.

Professional and legal fees increased $10.1 million and $11.4 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods of 2024.

The increases for both periods were largely due to higher consulting fees related to enhancing our business operating model and other transformation efforts.

Legal fees also increased $3.1 million and $1.5 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods of 2024.

Overall, we expect the higher level of professional and legal fees incurred during the third quarter 2025 to continue into the fourth quarter 2025 and, at least, the first half of 2026.

Amortization of tax credit investments increased $2.3 million and $9.4 million for the three and nine months ended September 30, 2025 , respectively, as compared to the same periods in 2024 mainly due to large purchases of tax-advantaged investments over the last twelve months.

See Note 14 for more details regarding our tax credit investments.

Other non-interest expense increased $2.4 million and $5.7 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024.

The increase for the three months ended June 30, 2025 was mainly due to the fair valuation write-down totaling $2.9 million related to one commercial real estate OREO

property recorded during the second quarter 2025 and higher advertising expense.

The increase for the six months ended June 30, 2025 was largely due to the aforementioned OREO related charge, a $2.9 million loss from the sale of one commercial real estate OREO property, as well as additional costs related to a loan credit risk transfer transaction, consisting of a credit default swap, executed in June 2024.

The premium expense and other transaction costs associated with this credit protection totaled $1.8 million and $3.8 million for the three and six months ended June 30, 2025, respectively.

The increases in both 2025 periods were partially offset by incremental increases in other expense categories.

Income tax expense totaled $39.9 million for the second quarter 2025 as compared to $33.1 million for the first quarter 2025 and $22.9 million for the second quarter 2024.

Our effective tax rate was 23.1 percent, 23.8 percent and 24.5 percent for the second quarter 2025, first quarter 2025 and second quarter 2024, respectively.

The decrease in the effective tax rate as compared to the second quarter 2024 was primarily due to a higher level of investment in tax credits.

Other non-interest expense increased $5.8 million for the nine months ended September 30, 2025 as compared to the same period in 2024.

The increase was largely due to the fair valuation write-down totaling $2.9 million related to one commercial real estate OREO property and a $2.9 million loss on sale of commercial OREO property.

Income tax expense totaled $46.6 million for the third quarter 2025 as compared to $39.9 million for the second quarter 2025 and $28.8 million for the third quarter 2024.

Our effective tax rate was 22.2 percent, 23.1 percent and 22.7 percent for the third quarter 2025, second quarter 2025 and third quarter 2024, respectively.

The moderate decrease in the effective tax rate for the third quarter 2025 was primarily due to larger investment in tax credits.

GAAP requires that any change in judgment or change in measurement of a tax position taken in a prior annual period be recognized as a discrete event in the quarter in which it occurs, rather than being recognized as a change in effective tax rate for the current year.

3 unchanged sentences

The OBBBA extends or reinstates certain provisions of the 2017 Tax Cuts and Jobs Act, includes tax relief measures, modifies certain energy tax credits and sets various limits on tax deductions, among other key provisions.

We are currently evaluating the provisions of the OBBBA, but it is not expected to have a material impact on our consolidated financial statements.

Based on the current information available, we anticipate that our effective tax rate will be approximately within the 23 to 25 percent range for the remainder of 2025.

The enactment of the OBBBA did not have a material impact on our consolidated financial statements for the third quarter 2025.

We will continue to evaluate certain provisions of the OBBBA that are effective starting in 2026, but they are also not expected to have a material impact on our consolidated financial statements.

Based on the current information available (exclusive of any discrete events), we anticipate that our effective tax rate will be approximately within the 23 to 24 percent range for the fourth quarter 2025.

Operating Segments

6 unchanged sentences

See Note 1 5 to the consolidated financial statements for additional details.

The following tables present the financial data for Valley's operating segments, and Treasury and Corporate Other for the three months ended June 30, 2025 and 2024:

Three Months Ended June 30, 2025

The following tables present the financial data for Valley's operating segments, and Treasury and Corporate Other for the three months ended September 30, 2025 and 2024:

Three Months Ended September 30, 2025

Banking Commercial

15 unchanged sentences

Professional and legal fees 3,739 17,413 3,109 24,261

Loss on extinguishment of debt — — 922 922

Other segment items * 14,285 14,986 17,703 46,974

4 unchanged sentences

Net interest margin 2.35 % 3.62 % 1.46 % 3.04 %

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Banking Commercial

23 unchanged sentences

Consumer Banking Segment

The Consumer Banking segment represented 19.6 percent of our loan portfolio at June 30, 2025, and was mainly comprised of residential mortgage loans and automobile loans, and to a lesser extent, home equity loans, secured personal lines of credit and other consumer loans (including credit card loans).

The duration of the residential mortgage loan portfolio (which represented 11.5 percent of our loan portfolio at June 30, 2025) is subject to movements in the market level of interest rates and forecasted prepayment speeds.

The weighted average life of the automobile loans portfolio (which represented 4.4 percent of total loans at June 30, 2025) is relatively unaffected by movements in the market level of interest rates.

The Consumer Banking segment represented 20.0 percent of our loan portfolio at September 30, 2025, and was mainly comprised of residential mortgage loans and automobile loans, and to a lesser extent, home equity loans, secured personal lines of credit and other consumer loans (including credit card loans).

The duration of the residential mortgage loan portfolio (which represented 11.8 percent of our loan portfolio at September 30, 2025) is subject to movements in the market level of interest rates and forecasted prepayment speeds.

The weighted average life of the automobile loans portfolio (which represented 4.4 percent of total loans at September 30, 2025) 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 our international and domestic private banking businesses.

Consumer Banking’s average interest earning assets increased $592.3 million to $10.4 billion for t he second quarter 2025 as compared to the same period of 2024 .

The increase was mostly due to strong growth in our automobile loan portfolio over the last 12-month period and, to a lesser extent, growth in residential mortgage and home equity loans.

Consumer Banking’s average interest earning assets increased $910.3 million to $10.8 billion for the third quarter 2025 as compared to the same period of 2024.

The increase was mostly due to strong growth in our automobile loan portfolio over the last 12-month period and, to a lesser extent, residential mortgage loan growth and an increase in average other consumer loans mainly driven by higher secured personal lines of credit balances.

See additional details in the "Loan Portfolio" section of this MD&A.

Income before income taxes generated by the Consumer Banking segment increased $19.8 million to $31.8 million for the second quarter 2025 as compared to the second quarter 2024.

The increase was mainly driven by a combination of higher net interest income and a lower provision for loan losses, partially offset by an increase in non-interest expense.

Net interest income for this segment increased $17.9 million mainly due to the aforementioned growth in average loans coupled with lower funding costs.

The provision for loan losses decreased $4.1 million for

the second quarter 2025 as compared to the second quarter 2024 mainly due to moderately lower allocations of reserves to residential mortgage loans based on the continued high level of credit performance within this portfolio.

Non-interest expense increased $2.8 million for the second quarter 2025 due, in part, to normal annual merit salary increases impacting salary and employee benefits expense year over year.

Net interest margin on the Consumer Banking portfolio increased 59 basis points to 2.37 percent for the second quarter 2025 as compared to the second quarter 2024 mainly due to a 19 basis point increase in the yield on average loa ns combined with a 40 basis point decrease in the costs associated with our funding sou rces.

The 19 basis point increase in loan yield was largely due to higher yielding new loan originations over most of the last 12-month period.

The decrease in our funding costs was mainly driven by lower interest rates on most deposit products during the second quarter 2025 and repayment of maturing higher cost time deposits over the last 12-month period.

Our cost of total average deposits was 2.67 percent for the second quarter 2025 as compared to 3.18 percent for the second quarter 2024.

Income before income taxes generated by the Consumer Banking segment increased $15.4 million to $30.9 million for the third quarter 2025 as compared to the third quarter 2024.

The increase was mainly driven by an increase in net interest income and, to a lesser extent, a lower provision for credit losses, partially offset by an increase in non-interest expense.

Net interest income for this segment increased $17.9 million mainly due to the aforementioned

growth in average loans coupled with lower funding costs.

The provision for credit losses decreased $2.7 million for the third quarter 2025 as compared to the third quarter 2024 mainly due to the impact of $8.0 million of qualitative reserves related to the estimated impact of Hurricane Helene recorded during the third quarter 2024, and an improvement in the linked quarter change in quantitative reserves of our allowance for credit losses for loans at September 30, 2025 as compared to one year ago.

Non-interest expense increased $7.1 million for the third quarter 2025 largely due to (i) increased salary and employee benefits expense, including higher severance and medical insurance related expenses, and (ii) increased professional and legal fees.

See further details in the “Non-Interest Income” section of this MD&A.

Net interest margin on the Consumer Banking portfolio increased 50 basis points to 2.35 percent for the third quarter 2025 as compared to the third quarter 2024 mainly due to a 52 basis point decrease in the costs associated with our funding sou rces combined with a 2 basis point decrease in the yield on average loa ns.

The decrease in our funding costs was mainly driven by lower interest rates on most deposit products during the third quarter 2025 as compared to one year ago and the repayment of maturing higher cost time deposits over the last 12-month period.

See the “Net Interest Income” section above for more details on our net interest margin and funding sources.

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

Commercial and industrial loans totaled approximately $10.9 billion and represented 22.0 percent of the total loan portfolio at June 30, 2025.

Commercial real estate and construction loans totaled $28.8 billion and represented 58.4 percent of the total loan portfolio at June 30, 2025.

Average interest earning assets in the Commercial Banking segment decreased $1.6 billion to $38.6 billion for the second quarter 2025 as compared to the second quarter 2024.

The decrease was mostly due to the bulk sales of certain performing commercial real estate loans during both late March 2024 and the fourth quarter 2024, as well as continued net commercial real estate loan repayment activity.

Commercial and industrial loans totaled approximately $10.8 billion and represented 21.8 percent of the total loan portfolio at September 30, 2025.

Commercial real estate and construction loans totaled $28.7 billion and represented 58.2 percent of the total loan portfolio at September 30, 2025.

Average interest earning assets in the Commercial Banking segment decreased $1.8 billion to $38.4 billion for the third quarter 2025 as compared to the third quarter 2024.

The decrease was mostly due to the bulk sales of certain performing commercial real estate loans during the fourth quarter 2024 and continued runoff of transactional commercial real estate loans, partially offset by strong growth in commercial and industrial loans over the last 12-month period.

See additional details in the "Loan Portfolio" section of this MD&A.

Income before income taxes for Commercial Banking increased $41.9 million to $150.1 million for the second quarter 2025 as compared to the same period of 2024 mainly due to a decrease in the provision for credit losses and higher non-interest income.

The provision for credit losses decreased $40.2 million to $37.1 million as compared to the same period in 2024 mainly due to a decline in quantitative reserves within several loan categories and lower specific reserves associated with collateral dependent loans at June 30, 2025.

Income before income taxes for Commercial Banking increased $58.3 million to $184.7 million for the third quarter 2025 as compared to the same period of 2024 mainly due to a decrease in the provision for credit losses and higher non-interest income.

The provision for credit losses decreased $53.2 million to $15.8 million as compared to the same period in 2024 mainly due to a decline in the impact of net loan charge-offs and the change in quantitative reserves within our allowance for credit losses for loans as compared to one year ago.

See more information in the “Allowance for Credit Losses for Loans” section of this MD&A.

Non-interest income increased $8.5 million during the second quarter 2025 mainly due to higher capital markets income and service charges on deposit accounts related to treasury services for commercial customers.

Non-interest income increased $5.5 million during the third quarter 2025 mainly due to higher service charges on deposit accounts related to treasury management services for commercial deposit customers and an increase in capital markets income.

See further details in the “Non-Interest Income” section of this MD&A.

Net interest income for this segment decreased $6.9 million to $339.9 million for the second quarter 2025 as compared to the same period in 2024 largely due to a decrease in interest income caused by the aforementioned decline in average loan balances that was mostly offset by a decline in funding cost.

The net interest margin for this segment increased 7 basis poin ts to 3.52 percent for the second quarter 2025 as compared to the second quarter 2024 due to a 46 basis point decrease in the cost of our funding sources, largely offset by a 39 basis point decrease in the yield on average loans.

The net interest margin for this segment increased 18 basis poin ts to 3.62 percent for the third quarter 2025 as compared to the third quarter 2024 due to a 52 basis point decrease in the cost of our funding sources, partially offset by a 34 basis point decrease in the yield on average loans.

Treasury and Corporate Other

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Interest income is generated through investments in various types of securities (mainly comprised of fixed rate securities) and interest-bearing deposits with other banks (primarily the Federal Reserve Bank of New York).

Expenses related to the branch network, all other components of retail banking, along with the back office departments of the Bank are

allocated from Treasury and Corporate Other to 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 allocations to the segments based on the nature of income and expense.

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 allocations to the segments based on the nature of income and expense.

U nallocated items included in Treasury and Corporate Other mainly 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 loss on extinguishment of debt, corporate restructuring charges and the FDIC special assessment.

Treasury and Corporate Other's average interest earning assets increased $1.8 billion to $8.5 billion for the second quarter 2025 compared to the second quarter 2024 primarily due to an increase in average taxable investments largely resulting from additional purchases of residential mortgage-backed securities classified as AFS over the last 12-month period.

For the second quarter 2025 , loss before income taxes totaled $8.9 million compared to $26.9 million of income before taxes for the same period in 2024.

The $18.0 million decrease in the pre-tax loss from the second quarter 2024 was mainly driven by a $19.7 million increase in net interest income primarily resulting from the increase in average taxable investments.

Non-interest expense increased $3.8 million to $45.1 million for the second quarter 2025 as compared to the same period in 2024 mainly due to increases in the amortization of tax credit investments and salaries and employee benefits expense.

See further details in the “Non-Interest Expense” section of this MD&A.

Treasury and Corporate Other's net interest margin increased 79 basis points to 1.45 percent for the second quarter 2025 as compared to the second quarter 2024 due to a 34 basis point increase in the yield on average investments caused by the purchase of the higher yielding new investment securities over the last 12 months coupled with a 45 basis point decrease in the cost of our funding sources.

The following tables present the financial data for Valley's operating segments and Treasury and Corporate Other for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30, 2025

Treasury and Corporate Other's average interest earning assets increased $1.8 billion to $9.4 billion for the third quarter 2025 compared to the third quarter 2024 mostly resulting from additional purchases of residential mortgage-backed securities classified as AFS over the last 12-month period and, to a lesser extent, a $315.1 million increase in average interest bearing cash held in overnight accounts.

For the third quarter 2025 , loss before income taxes totaled $5.6 million compared to $15.2 million of income before taxes for the same period in 2024.

The $9.5 million improvement in the pre-tax loss from the third quarter 2024 was mainly driven by a $15.2 million increase in net interest income primarily resulting from the increase in average taxable investments, partially offset by lower non-interest income.

Non-interest income decreased $3.2 million for the third quarter 2025 as compared to the same period in 2024 mainly due to income from litigation settlements totaling $7.3 million recorded during the third quarter 2024, partially offset by net incremental increases in other non-interest income categories.

Non-interest expense increased $2.4 million to $44.2 million for the third quarter 2025 as compared to the same period in 2024 mainly due to increases in salary and employee benefits expense and the amortization of tax credit investments, partially offset by lower FDIC insurance assessment expense.

See further details in the “Non-Interest Income” and “Non-Interest Expense” sections of this MD&A.

Treasury and Corporate Other's net interest margin increased 45 basis points to 1.46 percent for the third quarter 2025 as compared to the third quarter 2024 due to a 52 basis point decrease in the cost of our funding sources, partially offset by a 7 basis point decrease in the yield on average interest earning assets.

The following tables present the financial data for Valley's operating segments and Treasury and Corporate Other for the nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30, 2025

Banking Commercial

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Net interest margin 2.31 % 3.55 % 1.45 % 3.00 %

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Banking Commercial

20 unchanged sentences

Consumer Banking Segment

The Consumer Banking segment's average interest earning assets increased $614.1 million to $10.4 billion for the six months ended June 30, 2025 as compared to the same period in 2024.

The Consumer Banking segment's average interest earning assets increased $716.7 million to $10.6 billion for the nine months ended September 30, 2025 as compared to the same period in 2024.

The increase was mostly due to strong growth in our automobile loan portfolio over the last 12-month period and, to a lesser extent, higher average residential mortgage and home equity loan balances.

These increases were partially offset by a moderate decline in average other consumer loans mainly driven by lower secured personal lines of credit balances.

Income before income taxes generated by Consumer Banking increased $45.6 million to $69.1 million for the six months ended June 30, 2025 as compared to the same period in 2024 and was mainly attributable to an increase in net interest income combined with a lower provision for loan losses, partially offset by an increase in non-interest expense.

Income before income taxes generated by Consumer Banking increased $61.0 million to $100.0 million for the nine months ended September 30, 2025 as compared to the same period in 2024 and was mainly attributable to an increase in net interest income combined with a lower provision for credit losses, partially offset by an increase in non-interest expense.

Net interest income for this segment increased $54.4 million largely due to the aforementioned growth in average loans coupled with lower funding costs.

The provision for loan losses decreased $15.9 million for the six months ended June 30, 2025 mainly due to lower quantitative reserves within the residential mortgage loan portfolio.

Non-interest expense increased $8.6 million for the six months ended June 30, 2025 as compared to the same period in 2024 mostly due to increases in salaries and employee benefits and professional and legal fees.

See further details in the “Non-Interest Expense” section of th is MD&A.

Net interest margin on the Consumer Banking portfolio increased 60 basis points to 2.27 percent for the six months ended June 30, 2025 as compared to the same period in 2024 mainly due to a 48 basis point decrease in the costs associated with our funding sources coupled with 12 basis point increase in the yield on average loans .

The decrease in our fu nding costs w as mainly caused by lower interest rates on most deposit products during the six months ended June 30, 2025, as well as the maturity and repayment of higher cost time deposits.

The provision for credit losses decreased $18.6 million for the nine months ended September 30, 2025 as compared to the same period in 2024 part ly due to the impact of $8.0 million of qualitative reserves related to the estimated impact of Hurricane Helene recorded during the third quarter 2024 and an a reduction in the impact of our economic forecast component of the allowance for credit losses for loans, amongst other factors.

Non-interest expense increased $15.7 million for the nine months ended September 30, 2025 as compared to the same period in 2024 mostly due to increases in salary and employee benefits expense and professional and legal fees.

See further details in the “Non-Interest Expense” section of this MD&A.

Net interest margin on the Consumer Banking portfolio increased 58 basis points to 2.31 percent for the nine months ended September 30, 2025 as compared to the same period in 2024 mainly due to a 50 basis point decrease in the costs associated with our funding sources coupled with an 8 basis point increase in the yield on average loans .

The decrease in our funding costs was mainly caused by lower interest rates on most deposit products during the nine months ended September 30, 2025, as well as the maturity and repayment of higher cost time deposits.

The 8 basis points increase in loan yield was largely due to higher yielding new loan originations and adjustable rate loans in our portfolio.

See details in the “Net Interest Income” section above for more details on our net interest margin.

The return on average interest earning assets before income taxes for the Consumer Banking segment was 1.33 percent for the six months ended June 30, 2025 compared to 0.48 percent for the same period in 2024.

The return on average interest earning assets before income taxes for the Consumer Banking segment was 1.26 percent for the nine months ended September 30, 2025 compared to 0.53 percent for the same period in 2024.

Commercial Banking Segment

Average interest earning assets in the Commercial Banking segment decreased $1.9 billion to $38.4 billion for the six months ended June 30, 2025 as compared to the same period in 2024.

This decrease was mostly due to the bulk sales of certain performing commercial real estate loans during both late March 2024 and the fourth quarter 2024, as well as continued commercial real estate loan repayment activity.

For the six months ended June 30, 2025, income before income taxes for Commercial Banking decreased $3.3 million to $254.4 million as compared to the same period in 2024 mainly driven by a decrease in net interest income, partially offset by a lower provision for loan losses and higher non-interest income.

Net interest income for this segment decreased $20.3 million to $673.4 million for the six months ended June 30, 2025 as compared to the same period in 2024 primarily due to lower average loan balances in this segment.

The provision for credit losses decreased $11.0 million to $108.5 million during the six months ended June 30, 2025 as compared to the same period in 2024 mainly due to declines in quantitative reserves in certain loan categories and lower specific reserves associated with collateral dependent loans at June 30, 2025.

Non-interest income increased $4.4 million as compared to the same period in 2024 mostly due to growth in our capital markets income.

See details in the “Allowance for Credit Losses for Loans” and “Non-Interest Income” sections of this MD&A.

The net interest margin for this segment increased 6 basis points to 3.50 percent for the six months ended June 30, 2025 as compared to the same period in 2024, mainly due to a 48 basis point decrease in the cost of our funding sources that was mostly offset by a 42 basis point decrease in the yield on average loans.

The return on average interest earning assets before income taxes for the commercial banking segment was 1.32 percent for the six months ended June 30, 2025 compared to 1.28 percent for the same period in 2024.

Average interest earning assets in the Commercial Banking segment decreased $1.9 billion to $38.4 billion for the nine months ended September 30, 2025 as compared to the same period in 2024.

This decrease was mostly due to the bulk sales of certain performing commercial real estate loans during the fourth quarter 2024, as well as continued loan repayment activity within the commercial real estate loan category, partially offset by higher average commercial and industrial loan balances.

For the nine months ended September 30, 2025, income before income taxes for Commercial Banking increased $55.1 million to $439.1 million as compared to the same period in 2024 mainly driven by a decrease in provision for credit losses and higher non-interest income, partially offset by a decrease in net interest income.

The provision for credit losses decreased $64.2 million to $124.3 million during the nine months ended September 30, 2025 as compared to the same period in 2024 mainly due to a decline in the impact of net loan charge-offs in the 2025 period, and improvement in our economic outlook and lower quantitative reserves in certain commercial loan categories at September 30, 2025 as compared to one year ago.

Non-interest income increased $9.8 million as compared to the same period in 2024 mostly due to growth in treasury management service fees on commercial deposit accounts.

Net interest income for this segment decreased $17.7 million to $1.0 billion for the nine months ended September 30, 2025 as compared to the same period in 2024 mainly due to lower average loan balances in this segment, partially offset by lower cost of funding.

See det ails in the “Allowance for Credit Losses for Loans” and “Non-Interest Income” sections of this MD&A.

The net interest margin for this segment increased 11 basis points to 3.55 percent for the nine months ended September 30, 2025 as compared to the same period in 2024, mainly due to a 50 basis point decrease in the cost of our funding sources that was partially offset by a 39 basis point decrease in the yield on average loans.

The return on average interest earning assets before income taxes for the commercial banking segment was 1.52 percent for the nine months ended September 30, 2025 compared to 1.27 percent for the same period in 2024.

Treasury and Corporate Other

Treasury and Corporate Other's average interest earning assets increased $1.8 billion during the six months ended June 30, 2025 mainly due to an increase of approximately $2.0 billion in average investments , partially offset by a $142.7 million decline in average interest bearing cash held overnight .

The increase in average investments was primarily due to additional purchases of residential mortgage-backed securities classified as AFS over the last 12-month period.

The loss before income taxes totaled $11.3 million for the six months ended June 30, 2025 as compared to $58.4 million for the same period in 2024.

The $47.1 million decrease in pre-tax loss was mainly driven by an increase in net interest income and, to a lesser extent, a decline in non-interest expense.

Net interest income increase d $41.1 million as compared to the same period a year ago largely due to the additional interest income generated by higher average taxable investments.

Non-interest expense decreased $4.0 million to $82.1 million for the six months ended June 30, 2025 as compared to the same period in 2024 largely due to a decrease in the FDIC insurance special assessment allocated to our Treasury activities, partially offset by higher OREO related expenses and amortization of tax credit investments.

Treasury and Corporate Other's average interest earning assets increased $1.8 billion during the nine months ended September 30, 2025 mainly due to an increase of approximately $1.8 billion in average investments mostly due to additional purchases of residential mortgage-backed securities classified as AFS over the last 12-month period.

The loss before income taxes totaled $16.9 million for the nine months ended September 30, 2025 as compared to $73.6 million for the same period in 2024.

The $56.7 million decrease in pre-tax loss was mainly driven by an increase in net interest income.

Net interest income increased $56.3 million as compared to the same period a year ago, which was largely due to the additional interest income generated by higher average taxable investments.

Non-interest expense moderately decreased $1.6 million to $126.3 million for the nine months ended September 30, 2025 as compared to the same period in 2024.

See further details in the “Non-Interest Expense” section of this MD&A.

Treasury and Corporate Other's net interest margin increased 85 basis points to 1.44 percent for the six months ended June 30, 2025 as compared to the same period in 2024 due to a 48 basis point decrease in cost of our funding sources coupled with a 37 basis point increase in the yield on average investments.

The increase in the yield on average investments as compared to the same period in 2024 was largely driven by the purchases of new higher yielding investments.

Treasury and Corporate Other's net interest margin increased 71 basis points to 1.45 percent for the nine months ended September 30, 2025 as compared to the same period in 2024 due to a 50 basis point decrease in cost of our funding sources coupled with a 21 basis point increase in the yield on average investments.

The increase in the yield on average investments as compared to the same period in 2024 was largely driven by the purchases of new higher yielding investments over the last 12-month period.

ASSET/LIABILITY MANAGEMENT

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Interest rate risk can be defined as the exposure of our interest rate sensitive assets and liabilities to the movement in interest rates.

Our Asset/Liability

Management Committee is responsible for managing such risks and establishing policies that monitor and coordinate our sources and uses of funds.

Our Asset/Liability Management Committee is responsible for managing such risks and establishing policies that monitor and coordinate our sources and uses of funds.

Asset/Liability management is a continuous process due to the constant change in interest rate risk factors.

6 unchanged sentences

The model is based on the actual maturity and re-pricing characteristics of rate sensitive assets and liabilities.

The model incorporates certain assumptions which management believes to be reasonable regarding the impact of changing interest rates, non-maturity deposit betas, and the prepayment assumptions of certain assets and liabilities as of June 30, 2025.

The model assumes immediate changes in interest rates without any proactive change in the composition or size of the balance sheet, or other future actions that management might undertake to mitigate this risk.

In the model, the forecasted shape of the yield curve remains static as of June 30, 2025.

In the model, the forecasted shape of the yield curve remains static as of September 30, 2025.

The impact of interest rate derivatives, such as interest rate swaps, is also included in the model.

Our simulation model is based on market interest rates and prepayment speeds prevalent in the market as of June 30, 2025.

Although the size of Valley’s balance sheet is forecast to remain static as of June 30, 2025, in our model, the composition is adjusted to reflect new interest earning assets and funding originations coupled with rate spreads utilizing our actual originations during the second quarter 2025.

The model utilizes an immediate parallel shift in market interest rates at June 30, 2025.

Our simulation model is based on market interest rates and prepayment speeds prevalent in the market as of September 30, 2025.

Although the size of Valley’s balance sheet is forecast to remain static as of September 30, 2025, in our model, the composition is adjusted to reflect new interest earning assets and funding originations coupled with rate spreads utilizing our actual originations during the third quarter 2025.

The model utilizes an immediate parallel shift in market interest rates at September 30, 2025.

The assumptions used in the net interest income simulation are inherently uncertain.

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As noted in the table above, a 100 basis point immediate decrease in interest rates combined with a static balance sheet where the size, mix, and proportions of assets and liabilities remain unchanged, is projected to decrease net interest income over the next 12-month period by 1.60 percent.

Management believes the interest rate sensitivity of our balance sheet remains within a n expected t olerance range at June 30, 2025.

Management believes the interest rate sensitivity of our balance sheet remains within a n expected t olerance range at September 30, 2025.

However, the level of net interest income sensitivity may increase or decrease in the future as a result of several factors, including potential changes in our balance sheet strategies, the slope of the yield curve and projected cash flows.

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Among other actions, the Treasury Department actively monitors Valley's current liquidity profile, sources and stability of funding, availability of assets for pledging or sale, opportunities to gather additional funds, and anticipated future funding needs, including the level of unfunded commitments.

The Bank adheres to certain internal liquidity measures including ratios of loans to deposits below 110 percent and wholesale funding to total funding below 25 percent, as summarized in the table below.

The Bank adheres to certain internal liquidity measures including ratios of loans to deposits below 105.0 percent and wholesale funding to total funding below 22.5 percent .

Management maintains flexibility to temporarily exceed these internal limits in certain operating environments, but also strives to outperform these limits when possible.

The Bank was in compliance with the foregoing policies at June 30, 2025 .

The following table presents Valley's loans to deposits and wholesale funding to total funding ratios at June 30, 2025 and December 31, 2024:

The Bank was in compliance with the foregoing policies at September 30, 2025 and December 31, 2024, as summarized in the table below .

The following table presents Valley's loans to deposits and wholesale funding to total funding ratios at September 30, 2025 and December 31, 2024:

September 30,

2025 December 31,

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In the ordinary course of operations, the Bank also enters into various financial obligations, including contractual obligations that may require future cash payments.

Management believes the Bank has the ability to generate and obtain adequate amounts of cash to meet its short-term and long-term obligations as they come due by utilizing various cash resources described below.

Management believes the Bank has the ability to generate and obtain adequate amounts of

cash to meet its short-term and long-term obligations as they come due by utilizing various cash resources described below.

On the asset side of the balance sheet, the Bank has numerous sources of liquid funds in the form of cash and due from banks, interest bearing deposits with banks (including the FRB of New York) and other sources.

The following

table summarizes Valley's sources of liquid assets:

The following table summarizes Valley's sources of liquid assets:

September 30,

2025 December 31,

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(1) Represents securities that are maturing within 90 days or would otherwise qualify as maturities if sold (i.e., 85 percent of original cost basis has been repaid) within the held to maturity debt security portfolio.

(2) Includes a pproximately $1.0 billion and $1.8 billion of various investment securities that were pledged to counterparties to support our earning asset funding strategies at June 30, 2025 and December 31, 2024, respectively.

Total liquid assets represented 9.3 percent and 9.6 percent of interest earning assets at June 30, 2025 and December 31, 2024, respectively.

T he level of cash liquidity on the balance sheet (as shown in the table above) decreased from December 31, 2024 to a more normalized level at June 30, 2025 as part of our liquidity management efforts, including, but not limited to, the repayment of maturing higher cost indirect customer CDs during the first quarter 2025.

Total liquid assets represented 9.9 percent and 9.6 percent of interest earning assets at September 30, 2025 and December 31, 2024, respectively.

T he level of cash liquidity on the balance sheet (as shown in the table above) increased from December 31, 2024 to a more normalized, but slightly elevated level at September 30, 2025 as part of our overall liquidity management efforts.

Other sources of funds on the asset side are derived from scheduled loan payments of principal and interest, as well as prepayments received.

At June 30, 2025, estimated cash inflows from total loans are projected to be approximatel y $16.1 billion over the next 12-month period.

At September 30, 2025, estimated cash inflows from total loans are projected to be approximatel y $13.1 billion over the next 12-month period.

As a contingency plan for any liquidity constraints, liquidity could also be derived from the sale of conforming residential mortgages from our loan portfolio or alleviated from the temporary curtailment of lending activities.

We anticipate the receipt of approximately $1.8 billion in principal payments from securities in the total investment portfolio at June 30, 2025 over the next 12-month period due to normally scheduled principal repayments and expected prepayments of certain securities, primarily residential mortgage-backed securities.

We anticipate the receipt of approximately $2.3 billion in principal payments from securities in the total investment portfolio at September 30, 2025 over the next 12-month period due to normally scheduled principal repayments and expected prepayments of certain securities, primarily residential mortgage-backed securities.

On the liability side of the balance sheet, we utilize multiple sources of funds to meet liquidity needs, including commercial and consumer deposits, fully FDIC-insured indirect customer deposits, collateralized municipal deposits, and short-term and long-term borrowings.

Our core deposit base, which generally excludes all fully insured indirect customer deposits, as well as retail certificates of deposit over $250 thousand, represents the largest of these source s.

Average core deposits totaled approximately $41.5 billion and $39.1 billion for the six months ended June 30, 2025 and for the year ended December 31, 2024, respectively, representing 72.6 percent and 68.3 percent of average interest earning assets for the respective periods.

Average core deposits totaled approximately $42.0 billion and $39.1 billion for the nine months ended September 30, 2025 and for the year ended December 31, 2024, respectively, representing 72.3 percent and 68.3 percent of average interest earning assets for the respective periods.

The level of interest bearing deposits is affected by interest rates offered, which is often influenced by our need for funds, rates prevailing in the capital markets, competition, and the need to manage interest rate risk sensitivity.

In addition to customer deposits, the Bank has access to readily available borrowing sources to supplement its current and projected funding needs.

The following table presents short-term borrowings outstanding at June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

The following table presents short-term borrowings, consisting of securities sold under agreements to repurchase, outstanding at September 30, 2025 and December 31, 2024:

September 30, 2025 December 31, 2024

(in thousands)

FHLB advances $ 100,000 $ —

Securities sold under agreements to repurchase $ 51,052 $ 72,718

Total short-term borrowings $ 162,244 $ 72,718

The following table summarizes the Bank's estimated unused available non-deposit borrowing capacities at June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

The following table summarizes the Bank's estimated unused available non-deposit borrowing capacities at September 30, 2025 and December 31, 2024:

September 30, 2025 December 31, 2024

(in thousands)

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Investment Securities Portfolio

As of June 30, 2025, we had $77.4 million, $3.9 billion and $3.5 billion in equity, AFS debt and HTM debt securities, respectively.

As of September 30, 2025, we had $78.3 million, $4.1 billion and $3.5 billion in equity, AFS debt and HTM debt securities, respectively.

The AFS and HTM debt securities portfolios, which comprise the majority of the securities we own, include:

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Declines in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market interest rates, are recorded through other comprehensive income, net of applicable taxes.

We have evaluated all AFS debt securities that are in an unrealized loss position as of June 30, 2025 and December 31, 2024 and determined that the declines in fair value were mainly attributable to interest rates, credit spreads, market volatility and liquidity conditions, not credit quality or other factors .

There was no impairment recognized within the AFS debt securities portfolio during the three and six months ended June 30, 2025 and June 30, 2024.

We have evaluated all AFS debt securities that are in an unrealized loss position as of September 30, 2025 and December 31, 2024 and determined that the declines in fair value were mainly attributable to interest rates, credit spreads, market volatility and liquidity conditions, not credit quality or other factors.

There was no impairment recognized within the AFS debt securities portfolio during the three and nine months ended September 30, 2025 and September 30, 2024.

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

None of the AFS debt securities w ere past due as of June 30, 2025 and there was no allowance for credit losses for AFS debt securities at June 30, 2025 and December 31, 2024 .

None of the AFS debt securities w ere past due as of September 30, 2025 and there was no allowance for credit losses for AFS debt securities at September 30, 2025 and December 31, 2024 .

Held to maturity debt securities.

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The assumptions used in the model for pools of securities with common risk characteristics include the historical lifetime probability of default and severity of loss in the event of default, with the model incorporating several economic cycles of loss history data to calculate expected credit losses given default at the individual security level.

HTM debt securities were carried net of an allowance for credit losses totaling approximately $637 thousand and $647 thousand at June 30, 2025 and December 31, 2024, respectively.

There were no net charge-offs of HTM debt securities during the three and six months ended June 30, 2025 and June 30, 2024.

HTM debt securities were carried net of an allowance for credit losses totaling approximately $637 thousand and $647 thousand at September 30, 2025 and December 31, 2024, respectively.

There were no net charge-offs of HTM debt securities during the three and nine months ended September 30, 2025 and September 30, 2024.

Investment grades.

2 unchanged sentences

For this and other reasons, we believe the assigned investment grades may not accurately reflect the actual credit quality of each security and should not be viewed in isolation as a measure of the quality of our investment portfolio.

The following table presents the available for sale and held to maturity debt investment securities portfolios by investment grades at June 30, 2025:

June 30, 2025

The following table presents the available for sale and held to maturity debt investment securities portfolios by investment grades at September 30, 2025:

September 30, 2025

Losses Fair Value

17 unchanged sentences

Split rated securities with two ratings are categorized at the higher of the rating levels.

The unrealized losses in the AAA/AA/A rated categories of both the AFS and HTM debt securities portfolios (in the above table) were largely related to residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac and continue to be driven by the higher market interest rate environment.

The investment securities AFS and HTM portfolios included investments with carrying values of $126.4 million and $167.0 million, respectively, at June 30, 2025 not rated by the rating agencies with aggregate unrealized losses of $8.4 million and $10.6 million, respectively.

The investment securities AFS and HTM portfolios included investments with carrying values of $137.0 million and $178.5 million, respectively, at September 30, 2025 not rated by the rating agencies with aggregate unrealized losses of $6.3 million and $10.4 million, respectively.

The unrealized losses within non-rated AFS debt securities mostly related to several large corporate bonds negatively impacted by rising interest rates and not changes in underlying credit.

The unrealized losses within non-rated HTM debt securities included four single-issuer bank trust preferred issuances with a combined amortized cost of $36.1 million with $6.4 million gross unrealized losses and several corporate debt securities that were negatively impacted by rising interest rates, and not changes in their underlying credit.

The unrealized losses within non-rated HTM debt securities included four single-issuer bank trust preferred issuances with a combined amortized cost of $36.1 million with $5.5 million gross unrealized losses and several corporate debt securities that were negatively impacted by a higher level of market interest rates, and not changes in their underlying credit.

See Note 6 to the consolidated financial statements for additional information regarding our investment securities portfolio.

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The following table reflects the composition of the loan portfolio as of the dates presented:

2025 March 31,

September 30,

2025 June 30,

2025 December 31,

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Total 100.0 % 100.0 % 100.0 %

Includes loans collateralized by properties that are greater than 50 percent rent regulated totaling approximately $606 million, $577 million and $553 million at June 30, 2025, March 31, 2025 and December 31, 2024, respectively.

Includes net unearned discount and deferred loan fees of $21.5 million, $30.1 million and $45.3 million at June 30, 2025, March 31, 2025 and December 31, 2024, respectively.

Total loans increased $734.3 million, or 6.0 percent on an annualized basis, to $49.4 billion at June 30, 2025 from March 31, 2025 mostly due to organic growth within commercial and industrial loans and, to a lesser extent, automobile and residential mortgage loans during the second quarter 2025.

Loans held for sale are presented separately from total loans on the consolidated statements of financial condition and totaled $28.1 million and $27.4 million at June 30, 2025 and March 31, 2025 , respectively.

Commercial and industrial loans grew by $719.8 million, or 28.4 percent on an annualized basis, to $10.9 billion at June 30, 2025 from March 31, 2025 largely due to our continued strategic focus on organic growth within this category.

New loan volumes continue to be a diverse range of relationship-driven middle market businesses in our primary markets combined with growth from certain specialty nationwide business lines, including healthcare and capital-call facilities in the fund finance market.

Commercial real estate loans (excluding construction loans) decreased $116.6 million to $26.0 billion at June 30, 2025 from March 31, 2025.

The decrease was largely driven by runoff from repayment activity and our efforts to focus new loan originations on more profitable holistic banking clients.

As a result, our CRE loan concentration ratio declined to approximately 349 percent at June 30, 2025 from 353 percent at March 31, 2025.

Our current balance sheet goal is a continued gradual reduction of the CRE concentration ratio and maintain the ratio below 350 percent through December 31, 2025.

Overall, commercial real estate loans are well-diversified across our footprint areas in Florida, Alabama, New Jersey, New York and Manhattan with a combined weighted average loan to value ratio of 58 percent and debt service coverage ratio of 1.67 at June 30, 2025.

Commercial real estate collateralized by office buildings totaled approximately $3.0 billion at June 30, 2025 and was relatively unchanged from March 31, 2025.

Our loans collateralized by office buildings had a combined weighted average loan to value rate of 63 percent and debt service coverage ratio of 1.85 at June 30, 2025.

Construction loans decreased $172.1 million to $2.9 billion at June 30, 2025 from March 31, 2025 mainly due to the migration of completed projects to permanent financing within the multifamily loan category during the second quarter 2025.

Residential mortgage loans increased $73.6 million to $5.7 billion at June 30, 2025 from March 31, 2025 as new loan originations outpaced repayment activity.

New and refinanced residential mortgage loan originations totaled $204.1 million for the second quarter 2025 as compared to $132.8 million and $135.4 million for the first quarter 2025 and second quarter 2024, respectively.

We retained approximately 78.9 percent and 71.8 percent of the total residential mortgage originations in our held for investment loan portfolio during the second quarter 2025 and first quarter 2025, respectively.

Consumer loans increased $229.5 million, or 24.4 percent on an annualized basis, to $4.0 billion at June 30, 2025 as compared to March 31, 2025.

Within this portfolio, automobile loans increased by $137.6 million, or 27.0 percent on an annualized basis, to $2.2 billion at June 30, 2025 as compared to March 31, 2025 mainly due to (i) continued efforts to expand our indirect auto dealer network within our market areas, (ii) strong consumer demand generated by our indirect auto dealer network, particularly in April 2025 due to initial tariff pricing fears, and (iii) low levels of prepayment activity within the portfolio during the second quarter 2025.

Home equity loans increased $32.4 million from March 31, 2025 to June 30, 2025 mostly due to an uptick in new lines of credit and outstanding balances.

Auto loan originations totaled $384.9 million for the second quarter 2025 as compared to $375.5 million for the first quarter 2025.

Other consumer loans increased $59.5 million to $1.2 billion at June 30, 2025 as compared to March 31, 2025 primarily due primarily to increased usage of collateralized personal lines of credit.

Includes loans collateralized by properties that are greater than 50 percent rent regulated totaling approximately $651 million, $606 million and $553 million at September 30, 2025, June 30, 2025 and December 31, 2024, respectively.

Includes net unearned discount and deferred loan fees of $15.1 million, $21.5 million and $45.3 million at September 30, 2025, June 30, 2025 and December 31, 2024, respectively.

Total loans decreased $118.6 million, or 1.0 percent on an annualized basis, to $49.3 billion at September 30, 2025 from June 30, 2025 mostly due to decreases of $142.5 million and $112.2 million in total commercial real estate loans and commercial and industrial loans, respectively, partially offset by increases in residential mortgage and total consumer loans.

Loans held for sale are presented separately from total loans on the consolidated statements of financial condition and totaled $18.1 million and $28.1 million at September 30, 2025 and June 30, 2025, respectively.

The decrease from June 30, 2025 was primarily due to the sale of a $10.2 million non-performing construction loan to an unrelated party.

The non-performing loan sale resulted in a $1.3 million loss recognized within net gains on sales of loans for the third quarter 2025.

Commercial and industrial loans decreased by $112.2 million, or 4.1 percent on an annualized basis, to $10.8 billion at September 30, 2025 from June 30, 2025 mostly due to repayment activity in a small portfolio of loans made to the commodities industry during the third quarter 2025.

We continue to focus on new loan origination from a diverse range of relationship-driven small business and middle market opportunities in our primary markets

combined with certain specialty nationwide business lines.

As part of this focus, we have specifically targeted growth in healthcare and capital-call facilities in the fund finance market due to their attractive credit risk-adjusted profiles.

Commercial real estate loans (excluding construction loans) increased $195.1 million to $26.2 billion at September 30, 2025 from June 30, 2025.

The increase was largely driven by an increase of $307.9 million, or 21.3 percent on an annualized basis, in owner occupied loans resulting from the migration of completed construction project to permanent financing, as well as new loan origination volumes.

Non-owner occupied and multifamily loans decreased $73.4 million and $39.5 million, respectively, at September 30, 2025 from June 30, 2025 due to the targeted runoff of transactional loans outpacing our selective loan originations within these categories.

The CRE loan concentration ratio declined to approximately 337 percent at September 30, 2025 from 349 percent at June 30, 2025.

Our current balance sheet goal is a continued gradual reduction of the CRE concentration ratio and to maintain the ratio below 350 percent through December 31, 2025.

Overall, commercial real estate loans are well-diversified across our footprint areas in Florida, Alabama, New Jersey, New York, including Manhattan, with a combined weighted average loan to value ratio of 58 percent and debt service coverage ratio of 1.67 at September 30, 2025.

Commercial real estate collateralized by office buildings totaled approximately $3.0 billion at September 30, 2025 and was relatively unchanged from June 30, 2025.

Our loans collateralized by office buildings had a combined weighted average loan to value rate of 63 percent and debt service coverage ratio of 1.95 at September 30, 2025.

Construction loans decreased $337.6 million to $2.5 billion at September 30, 2025 from June 30, 2025 mainly due to the completion of existing projects that were moved to permanent financing within both the non-owner and owner occupied loan categories of the commercial real estate loan portfolio or repaid during the third quarter 2025.

Residential mortgage loans increased $85.4 million to $5.8 billion at September 30, 2025 from June 30, 2025 as new loan originations continued to outpace repayment activity.

New and refinanced residential mortgage loan originations totaled $208.7 million for the third quarter 2025 as compared to $204.1 million and $179.3 million for the second quarter 2025 and third quarter 2024, respectively.

In addition, during the third quarter we purchased $15.1 million of loans from unrelated third party lenders for qualifying CRA purposes.

We retained approximately 79 percent of the total residential mortgage originations in our held for investment loan portfolio during both the third quarter 2025 and second quarter 2025.

Consumer loans increased $50.7 million, or 5.1 percent on an annualized basis, to $4.0 billion at September 30, 2025 as compared to June 30, 2025.

Within this portfolio, home equity loans increased $21.3 million , or 13.4 percent on an annualized basis, largely driven by increased line usage and new originations.

Automobile loans increased by $13.1 million, or 2.4 percent on an annualized basis, to $2.2 billion at September 30, 2025 as compared to June 30, 2025 mainly due to continued efforts to expand our indirect auto dealer network within our market area, partially offset by higher prepayment activity within the portfolio during the third quarter 2025.

Auto loan originations totaled $269.5 million for the third quarter 2025 as compared to $384.9 million for the second quarter 2025.

Other consumer loans increased $16.3 million to $1.2 billion at September 30, 2025 as compared to June 30, 2025 primarily due to a moderate increase in new originations and usage of secured personal lines of credit during the third quarter 2025.

A significant part of our lending is in northern and central Ne w Jersey, New York City, Long Island and Florida.

To mitigate our geographic risks , we make efforts to maintain a diversified portfolio as to type of borrower and loan to guard against a potential downward turn in any one economic sector.

To mitigate our geographic risks , we maintain a diversified portfolio across borrower types and loans to protect against potential downturns in any single sector.

We continue to proactively diversify our loan portfolio by reducing new originations of certain types of commercial real estate lending, such as non-owner occupied and multifamily loans through highly selective new loan origination.

We also remain significantly focused on attracting a high quality customer relationships within the commercial and industrial loan portfolio.

In Valley's Annual Report, we provided guidance that we anticipated loan growth for 2025, net of continued runoff from scheduled maturities of commercial real estate non-owner occupied and multifamily loans, in the range of 3 to 5 percent as compared to total loans of $48.8 billion at December 31, 2024.

Based upon our current projections, we now expect total loan growth for 2025 to be approximately 3 percent due to the current level of competition for high quality commercial loan relationships, customer demand and other factors.

However, there can be no assurance that we will achieve such growth levels given the potential for unforeseen changes in the market and other conditions detailed in our risk factors set forth under Item 1A.

Based upon our current projections, we expect total loan growth for 2025 to be approximately 2 percent as compared to total loans of $48.8 billion at December 31, 2024, and expanding by a range of 4 to 6 percent in 2026 from 2025 due to current customer demand, targeted investment in our commercial lending team, and other factors.

However, there can be no assurance that we will achieve such growth levels given

the potential for unforeseen changes in the market and other conditions detailed in our risk factors set forth under Item 1A.

Risk Factors of Valley's Annual Report.

Non-performing Assets

NPAs include non-accrual loans, OREO, and other repossessed assets (which consist of automobiles and taxi medallions) at June 30, 2025.

NPAs include non-accrual loans, OREO, and other repossessed assets (which consist of automobiles and taxi medallions) at September 30, 2025.

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

2 unchanged sentences

OREO and other repossessed assets are reported at lower of cost or fair value, less estimated cost to sell.

Our NPAs increased $4.6 million to $360.8 million at June 30, 2025 as compared to March 31, 2025 mainly due to increases in non-accrual commercial real estate loans and residential mortgage loans, largely offset by a decrease in non-accrual commercial and industrial loans and lower OREO balances at June 30, 2025.

NPAs as a percentage of total loans and NPAs totaled 0.73 percent at June 30, 2025 and remained unchanged from March 31, 2025 (as shown in the table below).

We believe our total NPAs have continued to remain relatively low as a percentage of the total loan portfolio and NPAs, which is reflective of our consistent approach to the loan underwriting criteria for both Valley originated loans and loans purchased from third parties.

Our NPAs increased $66.6 million, or 18.4 percent, to $427.3 million at September 30, 2025 as compared to June 30, 2025 mainly due to increases in non-accrual commercial real estate and construction loans at September 30, 2025.

NPAs as a percentage of total loans and NPAs totaled 0.86 percent and 0.73 percent at September 30, 2025 and June 30, 2025, respectively (as shown in the table below).

Despite the increase in NPAs since June 30, 2025, we believe our total NPAs at September 30, 2025 are within our credit expectations for the loan portfolio and are reflective of our consistent approach to the loan underwriting criteria for both Valley originated loans and loans purchased from third parties.

For additional details, see the “Credit Quality Indicators” section in Note 7 to the consolidated financial statements.

Our lending strategy is based on underwriting standards designed to maintain high credit quality, and we remain optimistic regarding the overall future performance of our loan portfolio.

During the six months ended June 30, 2025, the majority of our borrowers continued to demonstrate resilience despite the impact of elevated borrowing costs, inflation, labor costs and other factors.

We continue to proactively monitor our commercial loans for potential negative trends/borrower weakness due to the current operating environment, including the potential negative impact of current and future tariff actions, and internally risk rate them accordingly.

During the nine months ended September 30, 2025, the majority of our borrowers continued to demonstrate resilience despite the impact of elevated borrowing costs, inflation, labor costs and other factors.

We continue to proactively monitor our commercial loans for potential negative trends and borrower weakness due to the current operating environment, including the potential negative impact of current and future tariff actions, and internally risk rate them accordingly.

Based on our most recent portfolio review, we believe that we have relatively modest direct exposure to customer businesses most influenced by changing tariff policies.

However, management cannot provide assurance that the NPAs will not increase from the levels reported at June 30, 2025 due to the aforementioned or other factors potentially impacting our lending customers.

However, management cannot provide assurance that the NPAs will not increase from the levels reported at September 30, 2025 due to the aforementioned or other factors potentially impacting our lending customers.

The following table sets forth by loan category accruing past due and NPAs at the dates indicated in conjunction with our asset quality ratios:

2025 March 31,

September 30,

2025 June 30,

2025 December 31,

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138.79 163.53 155.45

Loans 30 to 59 days past due increased $89.5 million to $123.0 million at June 30, 2025 as compared to March 31, 2025 due, in large part, to one $39.2 million commercial real estate loan and one $35.0 million construction loan included in this early stage delinquency category at June 30, 2025.

The $39.2 million commercial real estate loan 30 to 59 days past due was subsequently paid in full by the borrower in July 2025.

Loans 60 to 89 days past due increased $62.8 million to $73.3 million at June 30, 2025 as compared to March 31, 2025 mainly due to a $60.6 million commercial real estate loan.

This past due loan was subsequently modified and was brought current to its restructured terms in July 2025.

Loans 90 days or more past due and still accruing interest decreased $4.8 million to $2.9 million at June 30, 2025 as compared to March 31, 2025 mainly due to a decrease in residential mortgage loan delinquencies.

Loans 30 to 59 days past due decreased $59.4 million to $63.6 million at September 30, 2025 as compared to June 30, 2025 largely due to a $39.2 million commercial real estate loan included in this early stage delinquency category at June 30, 2025 that was subsequently paid in full during July 2025 and a $35.0 million construction loan reported in this past due category at June 30, 2025 that migrated to non-accrual loans during the third quarter 2025.

Loans 60 to 89 days past due decreased $57.2 million to $16.2 million at September 30, 2025 as compared to June 30, 2025 mainly due to a $60.6 million commercial real estate past due loan included in this delinquency category at June 30, 2025 that was subsequently modified and was brought current to its restructured terms during the third quarter 2025.

Loans 90 days or more past due and still accruing interest increased $2.1 million to $5.0 million at September 30, 2025 as compared to June 30, 2025 mainly due to slightly higher residential mortgage loan delinquencies.

All loans 90 days or more past due and still accruing interest are well-secured and in the process of collection.

Non-accrual loans increased $7.9 million to $354.4 million at June 30, 2025 as compared to $346.5 million at March 31, 2025 mainly because of a net increase in non-performing commercial real estate loans during the second quarter 2025, which was partially offset by a decline in non-performing commercial and industrial loans.

Non-accrual commercial and industrial loans decreased largely due to the full charge-offs of four loan relationships totaling $17.4 million during the second quarter 2025.

Non-performing taxi medallion loans included in non-accrual commercial and industrial loans totaled $48.6 million at June 30, 2025 and had related reserves of $25.4 million, or 52.2 percent of such loans, within the allowance for loan losses as compared to $49.2 million of loans with related reserves of $25.6 million at March 31, 2025 .

Non-accrual loans increased $67.1 million to $421.5 million, or 0.86 percent of total loans at September 30, 2025 as compared to $354.4 million, or 0.72 percent of total loans, at June 30, 2025.

The increase was mainly driven by one $35.0 million construction loan that migrated from the 30 to 59 days past due delinquency category at June 30, 2025 and two smaller non-performing commercial real estate loans, partially offset by the sale of a $10.2 million non-performing construction loan classified as held for sale during the third quarter 2025.

Non-performing taxi medallion loans included in non-accrual commercial and industrial loans totaled $48.2 million at September 30, 2025 and had related reserves of $25.2 million, or 52.2 percent of such loans, within the allowance for loan losses as compared to $48.6 million of loans with related reserves of $25.4 million at June 30, 2025 .

Further potential declines in the market valuation of taxi medallions and the current operating environment mainly within New York City may negatively impact the performance of this portfolio.

OREO decreased $2.9 million to $4.8 million at June 30, 2025 from March 31, 2025 mostly due to the fair valuation write-down related to one commercial real estate property recorded during the second quarter 2025.

See Note 7 to the consolidated financial statements for additional information.

Although the timing of collection is uncertain, management believes that the majority of the non-accrual loans at June 30, 2025 are well secured and largely collectable, based in part on our quarterly review of collateral dependent loans and the valuation of the underlying collateral, if applicable.

Although the timing of collection is uncertain, management believes that the majority of the non-accrual loans at September 30, 2025 are well secured and largely collectable, based in part on our quarterly review of collateral dependent loans and the valuation of the underlying collateral, if applicable.

Any estimated shortfall in the net realizable value for collateral dependent loans is charged-off when a loan is 90 or 120 days past due or sooner if it is probable that a loan may not be fully collectable.

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

The expected lifetime loss rate is the life of loan loss percentage from the transition matrix model plus the

impact of the adjustments for qualitative factors.

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

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

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

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

The forecast consists of multi-scenario economic forecasts to estimate future credit losses and are governed by a cross-

functional committee.

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

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Valley maintained the majority of its probability weighting used in the economic forecast to the Moody’s Baseline scenario with less emphasis on the S-3 downside and S-1 upside scenarios.

The probability weightings were unchanged from March 31, 2025.

At June 30, 2025, the standalone Moody's Baseline scenario reflected a moderately weaker outlook as compared to March 31, 2025 in terms of most metrics highlighted below.

At June 30, 2025, Moody's Baseline forecast included the following specific assumptions:

• GDP expansion of 0.6 percent in the third quarter 2025;

• Unemployment of 4.3 percent in the third quarter 2025 and 4.3 percent to 4.8 percent over the remainder of the forecast period ending in the second quarter 2027;

• The target federal funds rate range of 4.25 - 4.50 perce nt was unchanged from March 31, 2025 with two possible 25 basis point cuts in September and December 2025;

• The inflation rate is projected to grow during the remainder of 2025 through the second quarter 2026 from 2.7 percent in June 30, 2025 and decline to near 2.0 percent in early 2027;

• A decline in business investment due to deceleration in GDP and the potential negative impact of tariffs and other uncertainty related to ongoing international trade matters.

The probability weightings were unchanged from June 30, 2025.

At September 30, 2025, the standalone Moody's Baseline scenario reflected a moderately weaker outlook as compared to June 30, 2025 in terms of most metrics highlighted below.

At September 30, 2025, Moody's Baseline forecast included the following specific assumptions:

• GDP growth:

GDP expansion of 0.8 percent in the fourth quarter 2025 increasing to 2.0 percent in late 2027.

• Unemployment Rate:

Unemployment rate of 4.4 percent for the fourth quarter 2025 with a range of 4.4 - 4.8 percent over the remainder of the forecast period ending in the third quarter 2027.

• Federal funds:

The target federal funds rate range of 4.00 - 4.25 percent at September 30, 2025 with additional rate cuts of 25 basis points in both October and December 2025.

The inflation rate is projected to grow to 3.1 percent during the fourth quarter 2025 and start to decrease to 2.6 percent in 2026 and continue to trend down to near 2.0 percent by early 2027.

See more details regarding our allowance for credit losses for loans in Note 7 to the consolidated financial statements.

The table below summarizes the relationship among loans, loans charged-off, loan recoveries, the provision for credit losses and the allowance for credit losses for loans for the periods indicated:

Three Months Ended Six Months Ended

2025 March 31,

2025 June 30,

2024 June 30,

Three Months Ended Nine Months Ended

September 30,

2025 June 30,

2025 September 30,

2024 September 30,

2025 September 30,

($ in thousands)

5 unchanged sentences

Construction (541) — (4,831) (1,704) (12,637)

Residential mortgage (26) (46) — (72) —

Total consumer (1,478) (2,213) (2,597) (5,831) (5,668)

22 unchanged sentences

The following table presents the relationship among net loans charged-off and recoveries, and average loan balances outstanding for the periods indicated:

Three Months Ended Six Months Ended

June 30, 2025 March 31, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Three Months Ended Nine Months Ended

September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

($ in thousands)

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Total annualized net loan charge-offs to total average loans outstanding 0.12 0.31 0.34 0.26 0.27

Gross loan charge-offs totaled $42.1 million for the second quarter 2025 and included $23.5 million of partial and full charge-offs related to five non-performing commercial and industrial loan relationships with combined specific reserves of $11.2 million at March 31, 2025.

Net loan charge-offs (as presented in the above table) declined from the first quarter 2025 and continued to trend within management's expectations for the credit quality of the loan portfolio at June 30, 2025.

Gross loan charge-offs totaled $16.6 million for the third quarter 2025 and were largely driven by partial charge-offs within the commercial real estate loan category related to the current estimated fair valuations of the collateral for four non-performing loan relationships.

Net loan charge-offs and total annualized net loan charge-offs to total average loans outstanding (as presented in the above table) declined from the second quarter 2025 and third quarter 2024 and continued to trend within management's expectations for the credit quality of the loan portfolio at September 30, 2025.

While we currently expect to sustain a similar level of total net loan charge-offs in the fourth quarter 2025, we can make no assurances that net loan charge-offs will remain at the level reported for the third quarter 2025.

The following table summarizes the allocation of the allowance for credit losses for loans to loan portfolio categories and the allocations as a percentage of each loan category:

June 30, 2025 March 31, 2025 June 30, 2024

September 30, 2025 June 30, 2025 September 30, 2024

Allocation Allocation

21 unchanged sentences

Allowance for credit losses for loans as a % of total loans 1.21 % 1.20 % 1.14 %

The allowance for credit losses for loans, comprised of our allowance for loan losses and unfunded credit commitments, as a percentage of total loans was 1.20 percent at June 30, 2025, 1.22 percent at March 31, 2025, and 1.06 percent at June 30, 2024.

For the second quarter 2025, the provision for credit losses for loans totaled $37.8 million as compared to $62.7 million and $82.1 million for the first quarter 2025 and second quarter 2024, respectively.

The second quarter 2025 provision reflects, among other factors, the impact of loan growth mainly within the commercial and industrial loan portfolio, loan charge-offs and a moderate weakening of our economic forecast as compared to March 31, 2025, partially offset by a decline in quantitative reserves in certain loan categories and lower specific reserves associated with collateral dependent loans at June 30, 2025.

The allowance for credit losses for loans, comprised of our allowance for loan losses and unfunded credit commitments, as a percentage of total loans was 1.21 percent at September 30, 2025, 1.20 percent at June 30, 2025, and 1.14 percent at September 30, 2024.

For the third quarter 2025, the provision for credit losses for loans totaled $19.2 million as compared to $37.8 million and $75.0 million for the second quarter 2025 and third quarter 2024, respectively.

The third quarter 2025 provision reflects, among other factors, moderate increases in both the economic forecast and non-economic qualitative reserve components of the allowance for credit losses and higher specific reserves associated with collateral dependent loans, partially offset by a decline in quantitative reserves in certain loan categories, including commercial and industrial and construction loans, at September 30, 2025.

Capital Adequacy

A significant measure of the strength of a financial institution is its shareholders’ equity.

At June 30, 2025 and December 31, 2024, shareholders' equity totaled approximately $7.6 billion and $7.4 billion, respectively, which represented 12.1 percent and 11.9 percent of total assets, respectively.

During the six months ended June 30, 2025, total shareholders’ equity increased by approximately $140.3 million primarily due to the following:

At September 30, 2025 and December 31, 2024, shareholders' equity totaled approximately $7.7 billion and $7.4 billion, respectively, which represented 12.2 percent and 11.9 percent of total assets, respectively.

During the nine months ended September 30, 2025, total shareholders’ equity increased by approximately $260.2 million primarily due to the following:

• net income of $402.6 million,

• other comprehensive income of $56.5 million,

• an $8.8 million increase attributable to the effect of our stock incentive plan, partially offset by

• a $26.4 million increase attributable to the effect of our stock incentive plan,

partially offset by

• cash dividends declared on common and preferred stock totaling a combined $208.9 million and

• repurchases of $4.3 million of our common stock held in treasury stock.

• repurchases of $16.4 million shares of our common stock held in treasury stock.

Valley and the Bank are subject to the regulatory capital requirements administered by the FRB and the OCC.

Quantitative measures established by regulation to ensure capital adequacy require Valley and the Bank to maintain

minimum amounts and ratios of common equity Tier 1 capital, total and Tier 1 capital to risk-weighted assets, and Tier 1 capital to average assets, as defined in the regulations.

Quantitative measures established by regulation to ensure capital adequacy require Valley and the Bank to maintain minimum amounts and ratios of common equity Tier 1 capital, total and Tier 1 capital to risk-weighted assets, and Tier 1 capital to average assets, as defined in the regulations.

Valley is required to maintain a common equity Tier 1 capital to risk-weighted assets ratio of 4.5 percent, Tier 1 capital to risk-weighted assets ratio of 6.0 percent, ratio of total capital to risk-weighted assets of 8.0 percent, and a minimum leverage ratio of 4.0 percent, plus a 2.5 percent capital conservation buffer added to the minimum requirements for capital adequacy purposes.

As of June 30, 2025 and December 31, 2024, Valley and Valley National Bank exceeded all capital adequacy requirements (see table below).

The following table presents Valley’s and Valley National Bank’s actual capital positions and ratios under Basel III risk-based capital guidelines at June 30, 2025 and December 31, 2024:

As of September 30, 2025 and December 31, 2024, Valley and Valley National Bank exceeded all capital adequacy requirements (see table below).

The following table presents Valley’s and Valley National Bank’s actual capital positions and ratios under Basel III risk-based capital guidelines at September 30, 2025 and December 31, 2024:

Actual Minimum Capital

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($ in thousands)

As of June 30, 2025

As of September 30, 2025

Total Risk-based Capital

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Valley National Bank 6,041,434 9.91 2,438,511 4.00 3,048,139 5.00

Valley's total risk-based capital ratio decreased to 13.67 percent at June 30, 2025 as compared to 13.87 percent at December 31, 2024 which reflects the early redemption of our $115 million of 5.25 percent fixed-to-floating subordinated notes, which were previously eligible for full regulatory capital treatment.

Valley's total risk-based capital ratio decreased to 13.83 percent at September 30, 2025 as compared to 13.87 percent at December 31, 2024 which reflects, but is not limited to, the early redemption of our $115 million of 5.25 percent fixed-to-floating subordinated notes in June 2025, which were previously eligible for full regulatory capital treatment.

Typically, our primary source of capital growth is through retention of earnings.

Our rate of earnings retention is derived by dividing undistributed earnings per common share by earnings (or net income available to common shareholders) per common share.

Our retention ratio was approximately 45.0 percent for the six months ended June 30, 2025 as compared to 36.2 percent for the full year ended December 31, 2024.

The increase in our retention ratio was largely due to the increase in our net income available to common shareholders for the six months ended June 30, 2025 as compared to the same period one year ago.

Cash dividends declared amounted to $0.22 per common share for each of the six months ended June 30, 2025 and 2024.

Our retention ratio was approximately 51.5 percent for the nine months ended September 30, 2025 as compared to 36.2 percent for the full year ended December 31, 2024.

The increase in our retention ratio was largely due to the increase in our net income available to common shareholders for the nine months ended September 30, 2025 as compared to the same period one year ago.

Cash dividends declared amounted to $0.33 per common share for each of the nine months ended September 30, 2025 and 2024.

The Board is committed to examining and weighing relevant facts and considerations, including its commitment to shareholder value, each time it makes a cash dividend decision.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis