What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-29 compared with 2023-03-01 · 607 added, 604 removed, 2126 unchanged (36% of the section changed)

14 unchanged sentences

Total investment securities 5,104,221 5,150,904

Loans held for sale, at fair value 18,118 139,516

Loans held for sale (includes fair value of $ 20,640 at December 31, 2023 and $ 18,118 at December 31, 2022 for loans originated for sale)

30,640 18,118

Loans 50,210,295 46,917,200

28 unchanged sentences

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

issued 507,896,910 shares at December 31, 2022 and 423,034,027 shares at December 31, 2021)

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

178,187 178,185

29 unchanged sentences

Net Interest Income 1,665,478 1,655,640 1,209,901

Provision (credit) for credit losses for held to maturity securities 481 ( 263 ) 635

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

Provision for credit losses for loans 45,625 56,336 32,896

5 unchanged sentences

Service charges on deposit accounts 41,306 36,930 21,424

(Losses) gains on securities transactions, net ( 1,230 ) 1,758 524

Gains (losses) on securities transactions, net 1,104 ( 1,230 ) 1,758

Fees from loan servicing 10,670 11,273 11,651

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

Gains on sales of assets, net 6,809 897 901

Bank owned life insurance 11,843 8,040 8,817

28 unchanged sentences

Net income $ 498,511 $ 568,851 $ 473,840

Other comprehensive (loss) income, net of tax:

Unrealized gains and losses on debt securities available for sale

Net (losses) gains arising during the period ( 136,981 ) ( 23,613 ) 27,845

Other comprehensive income (loss), net of tax:

Unrealized gains and losses on available for sale debt securities

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

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

1 unchanged sentence

Unrealized gains and losses on derivatives (cash flow hedges)

Net gains (losses) on derivatives arising during the period 3,362 127 ( 2,251 )

Net (losses) gains on derivatives arising during the period ( 757 ) 3,362 127

Less reclassification adjustment for net losses included in net income

2 unchanged sentences

Defined benefit pension and postretirement benefit plans

Net (losses) gains arising during the period ( 13,175 ) 10,306 ( 3,418 )

Net gains (losses) arising during the period 5,436 ( 13,175 ) 10,306

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

1 unchanged sentence

Total 5,349 ( 12,631 ) 11,316

Total other comprehensive (loss) income ( 146,070 ) ( 10,214 ) 24,496

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

Total comprehensive income $ 516,057 $ 422,781 $ 463,626

11 unchanged sentences

Balance - December 31, 2020 $ 209,691 403,859 $ 141,746 $ 3,637,468 $ 611,158 $ ( 7,718 ) $ ( 225 ) $ 4,592,120

Adjustment due to the adoption of ASU No.

2016-13 — — — — ( 28,187 ) — — ( 28,187 )

Balance - January 1, 2020 209,691 403,278 141,423 3,622,208 415,372 ( 32,214 ) ( 479 ) 4,356,001

Net income — — — — 473,840 — — 473,840

Other comprehensive income, net of tax — — — — — 24,496 — 24,496

Other comprehensive loss, net of tax — — — — — ( 10,214 ) — ( 10,214 )

Cash dividends declared:

7 unchanged sentences

— 3,484 1,238 39,931 ( 6,295 ) — 484 35,358

Common stock issued in acquisition — 15,709 5,498 205,636 — — — 211,134

Common stock repurchased — ( 1,615 ) — — — — ( 23,114 ) ( 23,114 )

Balance - December 31, 2021 209,691 421,437 148,482 3,883,035 883,645 ( 17,932 ) ( 22,855 ) 5,084,066

11 unchanged sentences

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

Purchase of treasury stock — ( 1,615 ) — — — — ( 23,114 ) ( 23,114 )

Common stock repurchased — ( 1,015 ) — — — — ( 13,517 ) ( 13,517 )

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

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

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

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

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

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

Cash dividends declared:

7 unchanged sentences

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

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

Purchase of treasury stock — ( 1,015 ) — — — — ( 13,517 ) ( 13,517 )

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

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

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

12 unchanged sentences

Provision for credit losses 50,184 56,817 32,633

Net amortization of premiums and accretion of discounts on securities and borrowings

10,653 30,251 38,315

Net accretion of discounts and amortization of premium on securities and borrowings ( 2,145 ) 10,653 30,251

Amortization of other intangible assets 39,768 37,825 21,827

Losses (gains) on securities transactions, net 1,230 ( 1,758 ) ( 524 )

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

Proceeds from sales of loans held for sale 205,575 389,666 1,180,912

1 unchanged sentence

Originations of loans held for sale ( 204,686 ) ( 267,158 ) ( 1,003,818 )

(Gains) losses on sales of assets, net ( 897 ) ( 901 ) 1,891

Gains on sales of assets, net ( 6,809 ) ( 897 ) ( 901 )

Loss on extinguishment of debt — — 8,406

Net deferred income tax expense (benefit) 7,485 26,827 ( 5,060 )

Net deferred income tax (benefit) expense ( 9,359 ) 7,485 26,827

Net change in:

Fair value of borrowings hedged by derivative transactions

( 28,907 ) ( 3,397 ) —

Fair value of financial instruments hedged by derivative transactions 4,810 ( 28,907 ) ( 3,397 )

Trading debt securities 9,465 24,692 ( 38,130 )

Lease right of use assets ( 37,125 ) 1,831 ( 6,550 )

Cash surrender value of bank owned life insurance ( 11,843 ) ( 8,040 ) ( 8,817 )

21 unchanged sentences

Net cash used in investing activities $ ( 3,349,502 ) $ ( 6,787,781 ) $ ( 1,080,781 )

See accompanying notes to consolidated financial statements.

2023 Form 10-K 82

24 unchanged sentences

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

Loans transferred to loans held for sale — — 30,020

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

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

3 unchanged sentences

Equity securities $ — $ 6,239 $ —

Available for sale debt securities 505,928 — —

Held to maturity debt securities 806,627 9,197 —

Investment securities available for sale — 505,928 —

Investment securities held to maturity — 806,627 9,197

Loans, net — 5,844,070 908,023

21 unchanged sentences

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Note 1)

Valley National Bancorp, a New Jersey Corporation (Valley), is a financial holding company whose commercial bank subsidiary, Valley National Bank (the Bank) and its subsidiaries provide a full range of commercial, retail and trust and investment services largely through its offices and ATM network throughout northern and central New Jersey, the New York City boroughs of Manhattan, Brooklyn and Queens, Long Island, Westchester County, New York, Florida, Alabama, California and Illinois.

Valley National Bancorp, a New Jersey corporation, is a financial holding company that through its commercial bank subsidiary, Valley National Bank and its subsidiaries, provides a full range of commercial, retail and trust and investment services largely through its offices and ATM network throughout northern and central New Jersey, the New York City boroughs of Manhattan, Brooklyn and Queens, Long Island, Westchester County, New York, Florida, Alabama, California and Illinois.

In addition to the Bank, Valley ’ s consolidated subsidiaries include, but are not limited to:

an insurance agency offering property and casualty, life and health insurance;

an asset management adviser that is a registered investment adviser with the Securities and Exchange Commission (SEC);

registered securities broker-dealers with the SEC and members of the Financial Industry Regulatory Authority (FINRA);

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

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

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

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All inter-company transactions and balances have been eliminated.

The accounting and reporting policies of Valley conform to U.S.

generally accepted accounting principles (U.S.

GAAP) and general practices within the financial services industry.

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

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

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Significant Estimates.

In preparing the consolidated financial statements in conformity with U.S.

GAAP, management has made estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statements of financial condition and results of operations for the periods indicated.

In preparing the consolidated financial statements in conformity with GAAP, management has made estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statements of financial condition and results of operations for the periods indicated.

Material estimates that require application of management’s most difficult, subjective or complex judgment and are particularly susceptible to change include:

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

Correction of an Immaterial Error.

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

See Note 8 for revised amounts to correct these errors.

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

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

Cash and Cash Equivalents

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

Investment Securities

Debt securities are classified at the time of purchase based on management’s intention, as securities held-to-maturity, securities available-for-sale or trading securities.

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

Investment securities held-to-maturity are carried at amortized cost, adjusted for amortization of premiums and accretion of discounts using the level-yield method over the contractual term of the securities, adjusted for actual prepayments, or to call date if the security was purchased at premium.

Investment securities classified as available-for-sale are carried at fair value with unrealized holding gains and losses reported as a component of

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other comprehensive income or loss, net of tax.

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

Trading debt securities, consisting of municipal bonds and U.S.

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

Investment Securities

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

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

Investment securities HTM are carried at amortized cost, adjusted for amortization of premiums and accretion of discounts using the level-yield method over the contractual term of the securities, adjusted for actual prepayments, or to call date if the security was purchased at premium.

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

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

Trading debt secu rities, consisting of U.S.

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

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

1 unchanged sentence

See Notes 3 and 4 for additional information.

Investments in Federal Home Loan Bank and Federal Reserve Bank stock, which have limited marketability, are carried at cost in other assets.

Investments in FHLB and FRB stock, which have limited marketability, are carried at cost in other assets.

Security transactions are recorded on a trade-date basis.

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Allowance for Credit Losses for Held to Maturity Debt Securities

Effective January 1, 2020, Valley estimates and recognizes an allowance for credit losses for held to maturity debt securities using the current expected credit loss methodology (CECL).

Valley's CECL model includes a zero loss expectation for certain securities within the held to maturity portfolio, and therefore Valley is not required to estimate an allowance for credit losses related to these securities.

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

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

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

Treasury securities, U.S.

agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and collateralized municipal bonds commonly referred to as Tax Exempt Mortgage Securities (TEMS).

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

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

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

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.

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Impairment of Available for Sale Debt Securities

The impairment model for available for sale debt securities differs from the CECL methodology applied to held to maturity debt securities because the available for sale debt securities are measured at fair value rather than amortized cost.

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

The impairment model for AFS debt securities differs from the CECL methodology applied to HTM debt securities because the AFS debt securities are measured at fair value rather than amortized cost.

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

In performing an assessment of whether any decline in fair value is due to a credit loss, Valley considers the extent to which the fair value is less than the amortized cost, changes in credit ratings, any adverse economic conditions, as well as all relevant information at the individual security level, such as credit deterioration of the issuer or collateral underlying the security.

3 unchanged sentences

Valley also assesses the intent to sell the securities (as well as the likelihood of a near-term recovery).

If Valley intends to sell an available for sale debt security or it is more likely than not that Valley will be required to sell the security before recovery of its amortized cost basis, the debt security is written down to its fair value and the write down is charged to the debt security’s fair value at the reporting date with any incremental impairment reported in earnings.

If Valley intends to sell an AFS debt security or it is more likely than not that Valley will be required to sell the security before recovery of its amortized cost basis, the debt security is written down to its fair value and the write down is charged to the debt security’s fair value at the reporting date with any incremental impairment reported in earnings.

See Note 4 for additional information.

2023 Form 10-K

Loans Held for Sale

Loans held for sale generally consist of residential mortgage loans originated and intended for sale in the secondary market and are carried at their estimated fair value on an instrument-by-instrument basis as permitted by the fair value option election under U.S.

Changes in fair value are recognized in non-interest income in the accompanying consolidated statements of income as a component of net gains on sales of loans.

Origination fees and costs related to loans originated for

2022 Form 10-K

sale (and carried at fair value) are recognized as earned and as incurred.

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

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

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See the “Loan Servicing Rights” section below.

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

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

Loans and Loan Fees

Loans are reported at their outstanding principal balance net of any unearned income, charge-offs, unamortized deferred fees and costs on originated loans and premium or discounts on purchased loans, except for purchased credit deteriorated (PCD) loans recorded at the purchase price, including non-credit discounts, plus the allowance for credit losses expected at the time of acquisition.

Loans are reported at their outstanding principal balance net of any unearned income, charge-offs, unamortized deferred fees and costs on originated loans and premium or discounts on purchased loans, except for PCD loans recorded at the purchase price, including non-credit discounts, plus the allowance for credit losses expected at the time of acquisition.

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

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Purchased Credit-Deteriorated Loans

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

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

We consider various factors in connection with this determination, including past due or non-accrual status, credit risk rating declines, and any write downs recorded based on the collectability of the asset, among other factors.

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Allowance for Credit Losses for Loans

Effective January 1, 2020, Valley uses the CECL methodology to estimates an allowance for credit losses for loans.

The allowance for credit losses (ACL) is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the loans.

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

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

Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed.

Provisions for credit losses for loans and recoveries on loan previously charged-off by Valley are added back to the allowance.

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

(1) a collective reserve component for estimated lifetime expected credit losses for pools of loans that share common risk characteristics and (2) an individual reserve component for loans that do not share common risk characteristics.

Provisions for credit losses for loans and recoveries on loans previously charged-off by Valley are added back to the allowance.

The ACL for loans includes the allowance for loan losses and the reserve for unfunded credit commitments.

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

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

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

Reserves for loans that share common risk characteristics.

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

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

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

The metrics are based on the migration of loans from performing to loss by credit quality rating or delinquency categories using historical life-of-loan analysis periods for each loan portfolio pool, and the severity of loss, based on the aggregate net lifetime losses.

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

2023 Form 10-K 86

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

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

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

The forecasts consist of a

2022 Form 10-K

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

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

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

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Reserves for loans that do not share common risk characteristics.

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

Factors considered by Valley in measuring the extent of expected credit loss include payment status, collateral value, borrower financial condition, guarantor support and the probability of collecting scheduled principal and interest payments when due.

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

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

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

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

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

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

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

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

The accrued interest is presented separately in the consolidated statements of financial condition.

Loans charge-offs.

Allowance for Unfunded Credit Commitments.

The allowance for unfunded credit commitments consists of reserves for credit losses on undisbursed non-cancellable lines of credit, new loan commitments and commercial letters of credit valued using a similar CECL methodology as used for loans.

Management's estimate of expected losses inherent in these off-balance sheet credit exposures also incorporates estimated utilization rate over the commitment's contractual period or an expected pull-through rate for new loan commitments.

The allowance for unfunded credit commitments is included in accrued expenses and other liabilities on the consolidated statements of financial condition.

Loan charge-offs.

Loans rated as “loss” within Valley's internal rating system are charged-off.

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Unsecured consumer loans are generally fully charged-off when the loan is 150 days past due.

Allowance for Unfunded Credit Commitments

The allowance for unfunded credit commitments consists of undisbursed non-cancellable lines of credit, new loan commitments and commercial letters of credit valued using a similar CECL methodology as used for loans.

The allowance for unfunded credit commitments is included in accrued expenses and other liabilities on the consolidated statements of financial condition.

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

Lessor Arrangements.

Valley's lessor arrangements primarily consist of direct financing and sales-type leases for equipment included in the commercial and industrial loan portfolio.

Direct financing and sales-type leases are carried at the aggregate of lease payments receivable plus estimated residual value of the leased assets, net of unearned income, charge-offs and unamortized deferred costs of origination.

Lease agreements may include options to renew and for the lessee to purchase the leased equipment at the end of the lease term.

2023 Form 10-K

Lessee Arrangements.

Valley's lessee arrangements predominantly consist of operating and finance leases for premises and equipment.

Lessee Leasing Arrangements.

Valley's lessee arrangements predominantly consist of operating leases for premises and equipment.

The majority of the operating leases include one or more options to renew that can significantly extend the lease terms.

Valley’s leases have a wide range of lease expirations through the year 2062.

Operating and finance leases are recognized as right of use (ROU) assets and lease liabilities in the consolidated statements of financial position.

Operating and finance leases are recognized as ROU assets and lease liabilities in the consolidated statements of financial position.

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

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Lease liabilities are reduced by actual lease payments.

Lessor Leasing Arrangements.

Valley's lessor arrangements primarily consist of direct financing and sales-type leases for equipment included in the commercial and industrial loan portfolio.

Lease agreements may include options to renew and for the lessee to purchase the leased equipment at the end of the lease term.

See Note 6 for additional information on Valley's lease related assets and obligations.

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Estimated useful lives range from 3 years for capitalized software to up to 40 years for buildings.

Leasehold improvements are amortized over the term of the lease or estimated useful life of the asset, whichever is shorter.

Leasehold improvements are amortized over the term of the lease or estimated useful life of the as set, whichever is shorter.

Major improvements are capitalized, while repairs and maintenance costs are charged to operations as incurred.

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Bank Owned Life Insurance

Valley owns bank owned life insurance (BOLI) to help offset the cost of employee benefits.

BOLI is recorded at its cash surrender value.

Valley’s BOLI is invested primarily in U.S.

Valley owns bank owned life insurance to help offset the cost of employee benefits.

Bank owned life insurance is recorded at its cash surrender value.

Valley’s bank owned life insurance is invested primarily in U.S.

Treasury securities and residential mortgage-backed securities issued by government sponsored enterprises and Ginnie Mae.

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Other Real Estate Owned

Valley acquires other real estate owned (OREO) through foreclosure on loans secured by real estate.

Valley acquires OREO through foreclosure on loans secured by real estate.

OREO is reported at the lower of cost or fair value, as established by a current appraisal (less estimated costs to sell) and it is included in other assets.

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Expenses incurred to maintain these properties, unrealized losses resulting from valuation write-downs after the date of foreclosure, and realized gains and losses upon sale of the properties are included in other non-interest expense.

OREO totaled $ 286 thousand and $ 2.3 million at December 31, 2022 and 2021, respectively.

There were no forec losed residential real estate properties included in OREO at December 31, 2022 and 2021, respectively.

OREO, including residential real estate properties was not material at December 31, 2023 and 2022.

Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process t otaled $ 1.6 million and $ 2.6 million at December 31, 2023 and 2022, respectively.

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

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

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

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

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

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Valley reviews goodwill for impairment annually during the second quarter using a quantitative test, or more frequently if a triggering event indicates impairment may have occurred.

Our determination of whether or not goodwill is impaired requires

2022 Form 10-K

us to make judgments, and use significant estimates and assumptions regarding estimated future cash flows.

If we change our strategy or if market conditions shift, our judgments may change, which may result in adjustments to the recorded goodwill balance.

During the second quarter 2022, Valley re-evaluated its segment reporting due to a bank acquisition discussed in Note 2 and other factors.

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

See Notes 8 and 21 for additional details.

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

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

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

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

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

Other Intangible Assets

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Stock-Based Compensation

Compensation expense for restricted stock units, restricted stock and stock option awards (i.e., non-vested stock awards) is based on the fair value of the award on the date of the grant and is recognized ratably over the service period of the award.

Compensation expense for RSUs, restricted stock and stock option awards (i.e., non-vested stock awards) is based on the fair value of the award on the date of the grant and is recognized ratably over the service period of the award.

Valley's long-term incentive compensation plan includes a service period requirement for award grantees who are eligible for retirement pursuant to which an award will vest at one-twelfth per month after the grant date and requires the grantees to continue service with Valley for one year in order for the award to fully vest.

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The fair value of each option granted is estimated using a binomial option pricing model.

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

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

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

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

2023 Form 10-K

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

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

See Note 12 for additional information.

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See Note 2 for additional information.

2022 Form 10-K

Fair Value Measurements

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

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

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

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

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

2023 Form 10-K 90

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

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

Deferred income tax expense or benefit results from

2022 Form 10-K

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

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

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

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

See Note 13 for additional disclosures.

See Note 13 for additional information.

Comprehensive Income

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

(i) unrealized gains and losses on debt securities available for sale;

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

and (iii) the benefit adjustment for the unfunded portion of its various employee, officer, and director pension plans and other post-employment benefits.

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

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

and (3) the benefit adjustment for the unfunded portion of its various employee, officer, and director pension plans and other post-employment benefits.

Income tax effects are released from accumulated other comprehensive income on an individual unit of account basis.

Valley presents comprehensive income and its components in the consolidated statements of comprehensive income for all periods presented.

See Note 19 for additional disclosures.

See Note 19 for additional information.

Earnings Per Common Share

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Diluted 0.95 1.14 1.12

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

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

Potential anti-dilutive weighted common shares were immaterial for the years ended December 31, 2022 and 2021 and totaled approximately 1.7 million for the year ended December 31, 2020.

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

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

2023 Form 10-K

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

Preferred and Common Stock Dividends

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

2022 Form 10-K

Cash dividends to both preferred and common shareholders are payable and accrued when declared by Valley's Board of Directors.

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

Treasury Stock

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For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income or loss and subsequently reclassified to earnings when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative is recognized directly in earnings.

Valley calculates the credit valuation adjustments to the fair value of derivatives designated as fair value hedges on a net basis by counterparty portfolio, as an accounting policy election.

Fair Value Hedges.

For derivatives designated as fair value hedges, changes in the fair value of the derivative and the hedged item related to the hedged risk are recognized in earnings.

Valley calculates the credit valuation adjustments to the fair value of derivatives designated as fair value hedges on a net basis by counterparty portfolio, as an accounting policy election.

On a quarterly basis, Valley assesses the effectiveness of each hedging relationship by comparing the changes in cash flows or fair value of the derivative hedging instrument with the changes in cash flows or fair value of the designated hedged item or transaction.

If a hedging relationship is terminated due to ineffectiveness, and the derivative instrument is not re-designated to a new hedging relationship, the subsequent change in fair value of such instrument is charged directly to earnings.

See Notes 15 and 16 for additional information on our derivative instruments.

Interest Rate Contracts and Other Non-designated Hedges.

Derivatives not designated as hedges do not meet the hedge accounting requirements under U.S.

Derivatives not designated as hedges do not meet the hedge accounting requirements under GAAP.

Contracts in an asset position are included in other assets and contracts in a liability position are included in other liabilities.

Changes in fair value of derivatives not designated in hedging relationships are recorded directly in earnings within other non-interest expense.

See Notes 15 and 16 for additional information on our derivative instruments.

New Authoritative Accounting Guidance

New Accounting Guidance Adopted in 2023 .

Accounting Standards Update (ASU) No.

2021-01 “Reference Rate Reform (Topic 848)” extends some of Accounting Standards Codification Topic 848’s optional expedients to derivative contracts impacted by the discounting transition, including for derivatives that do not reference LIBOR or other reference rates that are expected to be discontinued.

2021-01 is effective for all entities immediately upon issuance and may be elected retrospectively to eligible modifications as of any date from the beginning of the interim period that includes March 12, 2020, or prospectively to new modifications made on or after any date within the interim period including January 7, 2021 and it can be applied through December 31, 2022, similar to the other reference rate reform relief provided under Topic 848.

2021-01 had no significant impact on Valley’s consolidated financial statements.

2021-05 “Lessors – Certain Leases with Variable Lease Payments” updates guidance in ASC Topic 842, Leases and requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate as an operating lease at lease commencement if:

(i) the lease would have been classified as a sales-type lease or direct financing lease under ASC 842 classification criteria;

and (ii) the lessor would have recognized a selling loss at lease commencement.

Valley adopted ASU No.

2021-05 on January 1, 2022, and the new guidance did not have a significant impact on Valley’s consolidated financial statements.

2022 Form 10-K

New Accounting Guidance Issued in 2022.

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

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

2022-01 also clarifies that no assets may be added to a closed portfolio once it is designated in a portfolio layer method hedge.

2022-01 will be effective for Valley on January 1, 2023.

Valley is currently evaluating the impact of ASU No.

2022-01, but it is not expected to have a significant impact on Valley's consolidated financial statements.

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

2023 Form 10-K 92

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

Valley adopted ASU No.

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

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

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

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

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

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

However, gross recoveries will not be required.

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

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

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

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

2022-02 was effective for Valley on January 1, 2023.

Valley elected to apply the modified retrospective transition method by recording a cumulative-effect adjustment to the opening retained earnings and the allowance for loan losses as of January 1, 2023 related to expected credit losses on TDR's under ASC Topic 310-40.

While the guidance will result in expanded disclosures, the adoption of ASU No.

2022-02 and the resulting adjustments to retained earnings and the allowance for loan losses did not have a significant impact on Valley's consolidated financial statements.

Valley adopted ASU No.

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

The adoption of ASU No.

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

See Note 8 for required disclosures.

2023-09, Income Taxes (Topic 740):

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

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

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

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

Valley is currently evaluating the impact of ASU No.

Valley early adopted ASU No.

2023-09, electing retrospective application.

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

New Accounting Guidance Effective in the First Quarter 2024.

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

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

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

2023-02 became effective on January 1, 2024 and did not have a significant impact on Valley's consolidated financial statements.

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

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

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

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

2022-03 will be effective for Valley on January 1, 2024, and it can be applied prospectively, with any adjustments resulting from adoption recognized in earnings on the date of adoption.

The adoption of ASU No.

2022-03 did not have a significant impact on Valley's consolidated financial statements.

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

New Accounting Guidance Issued in 2023.

2023-07, Segment Reporting (Topic 280):

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

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

Early adoption is permitted.

The amendments in ASU No.

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

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

Valley is currently evaluating the impact of ASU No.

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

BUSINESS COMBINATIONS (Note 2)

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On April 1, 2022, Valley completed its acquisition of Bank Leumi Le-Israel Corporation, the U.S.

subsidiary of Bank Leumi Le-Israel B.M., and parent company of Bank Leumi USA, collectively referred to as “Bank Leumi USA”.

Bank Leumi USA maintained its headquarters in New York City with commercial banking offices in Chicago, Los Angeles, Palo Alto, and Aventura, Florida.

subsidiary of Bank Leumi Le-Israel B.M., and parent company of Bank Leumi USA, collectively referred to as (Bank Leumi USA), Bank Leumi USA maintained its headquarters in New York City with commercial banking offices in Chicago, Los Angeles, Palo Alto, and Aventura, Florida.

The common shareholders of Bank Leumi USA received 3.8025 shares of Valley common stock and $ 5.08 in cash for each Bank Leumi USA common share that they owned.

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

2023 Form 10-K

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

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

The adjustments mainly related to the fair val ue of deferred tax assets and other assets and resulted in a $ 2.6 million reduction in goodwill (see Note 8 for more information).

2022 Form 10-K

The following table sets forth assets acquired and liabilities assumed in the Bank Leumi USA acquisition, at their estimated fair values as of the closing date of the transaction:

April 1, 2022

(in thousands)

Assets acquired:

Cash and cash equivalents $ 443,588

Equity securities 6,239

Available for sale debt securities 505,928

Held to maturity debt securities 806,627

Loans 5,914,389

Allowance for loan losses ( 70,319 )

Loans, net 5,844,070

Premises and equipment 38,827

Lease right of use assets 49,273

Bank owned life insurance 126,861

Accrued interest receivable 25,717

Goodwill 400,582

Other intangible assets 153,380

Other assets 160,921

Total assets acquired $ 8,562,013

Liabilities assumed:

Non-interest bearing $ 4,511,537

Interest bearing:

Savings, NOW and money market 2,224,834

Total deposits 7,029,997

Short-term borrowings 103,794

Lease liabilities 79,683

Accrued expense and other liabilities 117,269

Total liabilities assumed $ 7,330,743

Common stock issued in acquisition 1,117,829

Cash paid in acquisition 113,441

The determination of the fair value of the assets acquired and liabilities assumed required management to make estimates about discount rates, future expected cash flows, market conditions, and other future events that are highly subjective in nature and subject to change.

The fair value estimates are subject to change for up to one year after the closing date of the transaction if additional information (existing at the date of closing) relative to closing date fair values becomes available .

Fair Value Measurement of Assets Acquired and Liabilities Assumed

Described below are the methods used to determine the fair values of the significant assets acquired and liabilities assumed in the Bank Leumi USA acquisition.

Cash and cash equivalents.

The estimated fair values of cash and cash equivalents approximate their stated face amounts, as these financial instruments are either due on demand or have short-term maturities.

Investment securities .

The estimated fair value of equity securities, which represents a privately held Community Reinvestment Act (CRA) fund, was measured at net asset value (NAV).

Other investment securities acquired from Bank Leumi

2022 Form 10-K

USA were classified as available for sale and held to maturity debt securities based on Valley's intent at the acquisition date.

Their estimated fair values were calculated utilizing Level 2 inputs similar to the valuation techniques used for Valley's investment portfolios detailed in Note 3.

The acquired loan portfolio was recorded at its estimated fair value based on a discounted cash flow methodology.

The acquired loan portfolio was segregated into categories for valuation purposes primarily based on loan type and loan risk rating.

The estimated fair value incorporates adjustments related to market loss assumptions and prevailing market interest rates for comparable assets and other market factors such as liquidity from a market participant perspective.

Management estimated the cash flows expected to be collected at the acquisition date by using valuation models that incorporated loan contractual characteristics (such as payment type, amortization type, and term to maturity) as well as estimates of key valuation assumptions (such as prepayment speeds, default rates, and loss severity rates).

The expected cash flows from the acquired loan portfolios were discounted to present value based on estimated market rates.

The market rates were estimated using a buildup approach based on the following components:

funding cost, servicing cost, and consideration of liquidity premium.

In addition, coupon rates for recently originated loans and available market data regarding origination rates were also considered in the analysis.

The methods used to estimate the Level 3 fair values of loans are sensitive to the assumptions and estimates used.

While management attempted to use assumptions and estimates that best reflected the acquired loan portfolios and current market conditions, a greater degree of subjectivity is inherent in these values than in those determined in active markets.

The acquired loans were also evaluated upon acquisition to determine whether they represented PCD loans, defined as loans which have experienced a more-than-insignificant deterioration in credit quality since origination.

Valley considered a variety of factors in assessing loans the PCD classification, including but not limited to risk grades, delinquency, non-performing status, current or previous troubled debt restructurings, watch list credits and other qualitative factors that indicated a deterioration in credit quality since origination.

For PCD loans, an initial allowance was determined based on Valley’s CECL methodology and was added to the acquisition date fair value of each PCD loan to establish its initial amortized cost basis.

The difference between the unpaid principal balance of loans and the calculated amortized cost basis resulted in a net non-credit discount totaling $ 18.8 million.

This net discount will be accreted into interest income over the loan's remaining life using the effective interest method.

The following table provides a reconciliation of the unpaid principal balance and fair value of loans identified as PCD acquired from Bank Leumi USA at the acquisition date:

April 1, 2022

($ in thousands)

Unpaid Principal Balance of PCD loans $ 1,922,272

Allowance for credit losses at acquisition * ( 70,319 )

Non-credit discount at acquisition ( 18,814 )

Fair value of acquired PCD loans $ 1,833,139

* Represents the initial reserve for PCD loans, reported net of an additional $ 62.4 million charge-offs recognized at the date of acquisition in accordance with Valley's charge-off policy.

Other intangible assets.

Other intangible assets recorded consist of core deposit intangibles (CDI) and other acquired client relationships.

CDI assets are measures of the value of non-maturity checking, savings, NOW and money market customer deposits that are acquired in a business combination.

The fair value for CDI was estimated based on a discounted cash flow methodology considering expected customer attrition rates, net maintenance cost of the deposit base, alternative costs of funds, and the interest costs associated with the customer deposits.

The CDI is amortized using an accelerated amortization method over an estimated useful life of 10 years.

For other acquired client relationships, fair value is measured using the multi-period excess earnings methodology under the income approach.

This method measures the future economic income that can be attributed to the existing client relationships acquired, after considering revenue and expense assumptions, expected client attrition rates, and subtracting returns for other complementary assets that contribute to the income over their expected remaining useful lives.

The resulting net cash flows are discounted to present value using an estimated intangible asset discount rate.

The other acquired client relationships are amortized using an accelerated amortization method over an estimated remaining useful life of 14 years.

2022 Form 10-K

The fair values of deposit liabilities with no stated maturity (i.e., non-interest bearing accounts and savings, NOW and money market accounts) are equal to the carrying amounts payable on demand.

The fair values of certificates of deposit represent contractual cash flows, discounted to present value using interest rates currently offered on deposits with similar characteristics and remaining maturities.

Supplemental Pro Forma Financial Information (Unaudited).

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

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

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

(in thousands)

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Net income 623,052 486,225

Other Recent Acquisitions

Landmark Insurance of the Palm Beaches .

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The total consideration for the merger was $ 211.1 million, consisting of approximately 15.7 million shares of Valley common stock.

During the first quarter 2022, Valley revised the estimated fair values of the acquired assets as of the acquisition date of Westchester based upon additional information obtained that existed as of December 1, 2021.

The adjustments related to the fair value of deferred tax assets and resulted in a $ 5.0 million increase in goodwill.

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

See Note 8 for details.

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

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

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

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

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

The merger expenses largely consisted of salaries and benefits expense;

technology, furniture and equipment expense;

and professional and legal fees within non-interest expense on the consolidated statements of income.

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

FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES (Note 3)

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Non-recurring fair value measurements:

Non-performing loans held for sale (3)

$ 10,000 $ — $ 10,000 $ —

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

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Available for sale debt securities:

Treasury securities 279,498 279,498 — —

government agency securities 26,964 — 26,964 —

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Total $ 94,860 $ — $ — $ 94,860

(1) Represents residential mortgage loans held for sale that are carried at fair value and had contractual unpaid principal balances totaling approximately $ 17.9 million and $ 136.3 million at December 31, 2022 and 2021, respectively.

(1) Represents residential mortgage loans held for sale that are carried at fair value and had contractual unpaid principal balances totaling $ 20.1 million and $ 17.9 million at December 31, 2023 and 2022, respectively.

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

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

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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Equity securities.

The fair value of equity securities consists of a publicly traded mutual fund, Community Reinvestment Act (CRA) investment fund and an investment related to the development of new financial technologies that are carried at quoted prices in active markets.

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

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

Equity securities at NAV .

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

Investments measured at NAV (or its equivalent) as a practical expedient are excluded from fair value hierarchy levels in the tables above.

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

Trading debt securities .

The fair value of trading debt securities, consisting of U.S.

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

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

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

The prices for municipal bonds investments are derived from market quotations and matrix pricing obtained through an independent pricing service.

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

The prices for

2023 Form 10-K 96

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

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

Available for sale debt securities.

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

In addition, Valley reviews the volume and level of activity for all available for sale debt securities and attempts to identify transactions which may not be orderly or reflective of a significant level of activity and volume.

In addition, Valley reviews the volume and level of activity for all AFS debt securities and attempts to identify transactions which may not be orderly or reflective of a significant level of activity and volume.

Loans held for sale.

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Derivatives are reported at fair value utilizing Level 2 inputs.

The fair values of Valley’s derivatives are determined using third party prices that are based on discounted cash flow analysis using observed market inputs, such as the LIBOR, Overnight Index Swap and Secured Overnight Financing Rate (SOFR) curves f or all cleared derivatives.

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

The fair value of mortgage banking derivatives, consisting of interest rate lock commitments to fund residential mortgage loans and forward commitments for the future delivery of such loans (including certain loans held for sale at December 31, 2023 and 2022), is determined based on the current market prices for similar instruments.

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

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

The credit valuation adjustments were not significant to the overall valuation of Valley’s derivatives at December 31, 2023 and 2022.

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

Non-performing loans held for sale .

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

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

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

The broker coordinated loan level due diligence with interested parties and established a formal bidding process in which each participant was required to provide an indicative non-binding bid.

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

Collateral dependent loans.

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

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

At December 31, 2022 and 2021, the adjustments to appraisals of foreclosed assets were no t material.

If further declines in the estimated fair value

2023 Form 10-K

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

There were no adjustments to the appraisals of foreclosed assets at December 31, 2023 and 2022.

Other Fair Value Disclosures

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These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire portfolio of financial instruments.

Because no market exists for a portion of

2022 Form 10-K

the financial instruments, fair value estimates may be based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors.

Because no market exists for a portion of the financial instruments, fair value estimates may be based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors.

These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision.

3 unchanged sentences

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

2023 Form 10-K 98

The carrying amounts and estimated fair values of financial instruments not measured and not reported at fair value on the consolidated statements of financial condition at December 31, 2023 and 2022 were as follows:

29 unchanged sentences

Level 1 159,496 159,496 45,617 45,617

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

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

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

1 unchanged sentence

(4) Included in accrued expenses and other liabilities.

2022 Form 10-K

INVESTMENT SECURITIES (Note 4)

4 unchanged sentences

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

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

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

See the “Realized Gains and Losses” section below.

2023 Form 10-K

Available for Sale Debt Securities

12 unchanged sentences

December 31, 2022

Treasury securities $ 308,137 $ — $ ( 28,639 ) $ 279,498

government agency securities $ 29,494 $ 47 $ ( 2,577 ) $ 26,964

6 unchanged sentences

Total $ 1,437,911 $ 111 $ ( 176,625 ) $ 1,261,397

Accrued interest on investments , which is excluded from the amortized cost of AFS debt securities, totaled $ 5.9 million and $ 5.6 million at December 31, 2023 and 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

2023 Form 10-K 100

22 unchanged sentences

December 31, 2022

Treasury securities $ 279,498 $ ( 28,639 ) $ — $ — $ 279,498 $ ( 28,639 )

government agency securities

11 unchanged sentences

Total $ 874,061 $ ( 97,008 ) $ 380,921 $ ( 79,617 ) $ 1,254,982 $ ( 176,625 )

Within the available for sale debt securities portfolio, the total number of security positions in an unrealized loss position at December 31, 2022 was 730 as compared to 139 at December 31, 2021.

As of December 31, 2022, the fair value of securities available for sale that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law, was $ 333.3 million.

The contractual maturities of available for sale debt securities at December 31, 2022 are set forth in the following table.

Within the AFS debt securities portfolio, the total number of security positions in an unrealized loss position was 687 and 730 at December 31, 2023 and 2022, respectively.

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

The contractual maturities of AFS debt securities at December 31, 2023 are set forth in the following table.

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

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

2023 Form 10-K

December 31, 2023

7 unchanged sentences

Total $ 1,454,439 $ 1,296,576

2022 Form 10-K

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

The weighted-average remaining expected life for residential mortgage-backed securities available for sale was 7.75 years at December 31, 2022.

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

The weighted-average remaining expected life for residential mortgage-backed securities AFS was 8.41 years at December 31, 2023.

Impairment Analysis of Available for Sale Debt Securities

Valley's available for sale debt securities portfolio includes corporate bonds and revenue bonds, among other securities.

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

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

economy and the COVID-19 pandemic, and their potential negative effect on the future performance of the security issuers.

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

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

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

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

Valley has evaluated available for sale debt securities that are in an unrealized loss position as of December 31, 2022 included in the tables above and has determined that the declines in fair value are mainly attributable to interest rates, credit spreads, market volatility and liquidity conditions, not credit quality or other factors.

Based on a comparison of the present value of expected cash flows to the amortized cost, management recognized no impairment during the years ended December 31, 2022, 2021 and 2020, and, as a result, there was no allowance for credit losses for available for sale debt securities at December 31, 2022 and 2021.

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

Valley also evaluated AFS debt securities that were in an unrealized loss position as of December 31, 2023 included in the tables above and has determined that the declines in fair value are mainly attributable to interest rates, credit spreads, market volatility and liquidity conditions, not credit quality or other factors.

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

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

(in thousands)

Beginning balance $ —

Provision for credit losses 5,000

Charge-offs ( 5,000 )

Ending balance $ —

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

None of the AFS debt securities were past due as of December 31, 2023.

As a result, there was no allowance for credit losses for AFS debt securities at December 31, 2023 and 2022.

2023 Form 10-K 102

Held to Maturity Debt Securities

24 unchanged sentences

Total $ 3,828,984 $ 2,105 $ ( 501,619 ) $ 3,329,470 $ 1,646 $ 3,827,338

Accrued interest on investments , which is excluded from the amortized cost of HTM debt securities, totaled $ 13.9 million and $ 13.5 million at December 31, 2023 and 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

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

2023 Form 10-K

19 unchanged sentences

December 31, 2022

Treasury securities $ 65,889 $ ( 1,022 ) $ — $ — $ 65,889 $ ( 1,022 )

government agency securities 209,863 ( 47,508 ) 1,673 ( 172 ) 211,536 ( 47,680 )

Obligations of states and political subdivisions:

Obligations of states and state agencies 62,443 ( 2,020 ) 18,231 ( 1,849 ) 80,674 ( 3,869 )

7 unchanged sentences

Total $ 1,610,100 $ ( 183,528 ) $ 1,492,658 $ ( 318,091 ) $ 3,102,758 $ ( 501,619 )

Within the securities held to maturity portfolio, the total number of security positions in an unrealized loss position was 802 and 108 at December 31, 2022 and 2021, respectively.

As of December 31, 2022, the fair value of debt securities held to maturity that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law was $ 771.8 million.

The contractual maturities of investments in debt securities held to maturity at December 31, 2022 are set forth in the table below.

Within the HTM securities portfolio, the total number of security positions in an unrealized loss position was 762 and 802 at December 31, 2023 and 2022, respectively.

As of December 31, 2023, the fair value of debt securities HTM that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law was $ 2.6 billion.

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

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

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

2023 Form 10-K 104

December 31, 2023

7 unchanged sentences

Total $ 3,740,413 $ 3,302,312

2022 Form 10-K

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

The weighted-average remaining expected life for residential mortgage-backed securities held to maturity was 10.2 years at December 31, 2022.

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

The weighted-average remaining expected life for residential mortgage-backed securities HTM was 10.79 years at December 31, 2023.

Credit Quality Indicators

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

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

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

24 unchanged sentences

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

At December 31, 2022, most of the obligations of states and political subdivisions were rated investment grade and a large portion of the “non-rated” category included TEMS securities secured by Ginnie Mae securities.

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

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

Trust preferred securities

2023 Form 10-K

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

Corporate bonds consist of debt primarily issued by banks.

Allowance for Credit Losses for Held to Maturity Debt Securities

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

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

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

Treasury securities, U.S.

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

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

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

See Note 1 for further details.

2022 Form 10-K

Held to maturity debt securities are carried net of an allowance for credit losses.

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

The following table details the activity in the allowance for credit losses for the years ended December 31, 2023, 2022 and 2021:

2 unchanged sentences

Beginning balance $ 1,646 $ 1,165 $ 1,428

Adoption of ASU No.

2016-13 on January 1, 2020 — — 793

Provision (credit) for credit losses 481 ( 263 ) 635

(Credit) provision for credit losses ( 441 ) 481 ( 263 )

Ending balance $ 1,205 $ 1,646 $ 1,165

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

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

Realized Gains and Losses

Gross gains and losses realized on sales, maturities and other securities transactions related to available for sale securities and net gains on trading debt securities included in earnings for the years ended December 31, 2022, 2021 and 2020 were as follows:

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

2023 2022 2021

8 unchanged sentences

Total ( 467 ) 95 ( 275 )

Net (losses) gains on trading debt securities ( 1,325 ) 1,213 —

(Losses) gains on securities transactions, net $ ( 1,230 ) $ 1,758 $ 524

Net gains (losses) on trading debt securities 702 ( 1,325 ) 1,213

Gains (losses) on securities transactions, net $ 1,104 $ ( 1,230 ) $ 1,758

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

2023 Form 10-K 106

3 unchanged sentences

Commercial and industrial $ 9,230,543 $ 8,804,830

Commercial and industrial $ 8,771,250 $ 5,411,601

Commercial and industrial PPP loans * 33,580 435,950

Total commercial and industrial loans 8,804,830 5,847,551

Commercial real estate:

8 unchanged sentences

Total loans $ 50,210,295 $ 46,917,200

* Represents SBA Paycheck Protection Program (PPP) loans, net of unearned fees totaling $ 667 thousand and $ 12.1 million at December 31, 2022 and 2021, respectively.

Total loans include net unearned discounts and deferred loan fees of $ 85.4 million and $ 120.5 million at December 31, 2023 and 2022, respectively.

The increase in total loans at December 31, 2022 is partially attributed to $ 5.9 billion of loans acquired in the Bank Leumi USA acquisition, which was inclusive of a $ 98.6 million net purchase discount at the acquisition date.

Net unearned discounts and deferred loan fees include the non-credit discount on acquired PCD loans and net unearned fees related to PPP loans at December 31, 2022 and 2021.

Accrued interest on loans , which is excluded from the amortized cost of loans held for investment, totaled $ 222.2 million and $ 175.9 million at December 31, 2023 and 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

There wer e no sales of loans from the held for investment portfolio during the years December 31, 2022 and 2021.

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

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

Related Party Loans

2 unchanged sentences

All loans to related parties are performing as of December 31, 2023.

The following table summarizes the changes in the total amounts of loans and advances to the related parties during the year ended December 31, 2022:

The following table summarizes the changes in the total outstanding balances of loans and advances to the related parties during the year ended December 31, 2023:

(in thousands)

Outstanding at beginning of year $ 233,439

December 31, 2022 $ 208,098

New loans and advances 29,484

Repayments ( 21,279 )

Outstanding at end of year $ 208,098

2022 Form 10-K

December 31, 2023 $ 216,303

Loan Portfolio Risk Elements and Credit Risk Management

1 unchanged sentence

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

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

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

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

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

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

Loan portfolio diversification is an important factor utilized by

2023 Form 10-K

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

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

Commercial and industrial loans.

A significant portion of Valley’s commercial and industrial loan portfolio is granted to long standing customers of proven ability, strong repayment performance, and high character.

A significant portion of Valley’s commercial and industrial loan portfolio consists of loans to long standing customers of proven ability, strong repayment performance, and high character.

Underwriting standards are designed to assess the borrower’s ability to generate recurring cash flow sufficient to meet the debt service requirements of loans granted.

4 unchanged sentences

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

Unsecured commercial and industrial loans totaled $ 555.3 million and $ 1.0 billion at December 31, 2022 and 2021, respectively (including $ 33.6 million and $ 436.0 million of SBA guaranteed PPP loans, respectively).

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

All of these loans are on non-accrual status due to ongoing weakness exhibited in the taxi industry caused by strong competition from alternative ride-sharing services and the economic stress caused by the COVID-19 pandemic and other factors.

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

Commercial real estate loans .

20 unchanged sentences

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

2022 Form 10-K

Home equity loans.

1 unchanged sentence

Valley mainly provides home equity loans to its residential mortgage customers within the footprint of its primary lending territory.

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

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

Automobile loans.

2 unchanged sentences

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

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

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

2023 Form 10-K 108

default occurs and the condition of the collateral being liquidated.

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

58 unchanged sentences

2023 Form 10-K 110

The following table presents the internal loan classification risk by loan portfolio class by origination year based on the most recent analysis performed at December 31, 2022 and 2021:

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

Amortized Cost Basis by Origination Year

11 unchanged sentences

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

Doubtful — — — — — 162 — — 162

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

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

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

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

1 unchanged sentence

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

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

2023 Form 10-K

17 unchanged sentences

Substandard 12,969 12,601 — 974 — 17,599 20,138 — 64,281

Doubtful — — — — — 13,743 — — 13,743

Total construction $ 955,349 $ 524,647 $ 61,131 $ 23,819 $ 8,676 $ 51,941 $ 2,075,272 $ — $ 3,700,835

1 unchanged sentence

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

The following table presents the amortized cost in those loan classes based on payment activity by origination year as of December 31, 2022 and 2021:

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

Amortized Cost Basis by Origination Year

17 unchanged sentences

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

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

2023 Form 10-K

18 unchanged sentences

Total consumer $ 795,819 $ 547,709 $ 217,412 $ 178,742 $ 93,100 $ 74,268 $ 1,368,622 $ 39,280 $ 3,314,952

Troubled debt restructured loans .

Loan modifications to borrowers experiencing financial difficulty .

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

If the borrower is experiencing financial difficulties and a concession has been made at the time of such modification, the loan is classified as a troubled debt restructured loan (TDR).

Generally, the concessions made for TDRs involve lowering the monthly payments on loans through either a reduction in interest rate below a market rate, an extension of the term of the loan without a corresponding adjustment to the risk premium reflected in the interest rate, or a combination of these two methods.

The concessions may also involve payment deferrals but rarely result in the forgiveness of principal or accrued interest.

In addition, Valley frequently obtains additional collateral or guarantor support when modifying such loans.

If the borrower has demonstrated performance under the previous terms of the loan and Valley’s underwriting process shows the borrower has the capacity to continue to perform under the restructured terms, the loan will continue to accrue interest.

Non-accruing restructured loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible.

Performing TDRs (not reported as non-accrual loans) t otaled $ 77.5 million and $ 71.3 million as of December 31, 2022 and 2021, respectively.

Non-performing TDRs totaled $ 124.0 million and $ 117.2 million as of December 31, 2022 and 2021, respectively.

The following table presents pre- and post-modification amortized cost of loans by loan class modified as TDRs during the years ended December 31, 2022 and 2021.

Post-modification amounts are presented as of December 31, 2022 and 2021, respectively.

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

Effective January 1, 2023, Valley adopted ASU No.

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

Valley adopted ASU No.

2022-02 using the modified retrospective transition method.

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

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

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

2023 Form 10-K 114

Troubled Debt

Restructurings Number of

Contracts Pre-Modification

Recorded Investment Post-Modification

Recorded Investment

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

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

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

($ in thousands)

December 31, 2022

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

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

Commercial real estate 5 26,375 25,608

Construction 2 11,025 9,077

Total commercial real estate 7 37,400 34,685

Residential mortgage — 568 — 568

Home equity — 31 — 31

Consumer — 43 — 43

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

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

Types of Modifications

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

12 month term extensions

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

Commercial real estate 6 to 36 month term extensions

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

Residential mortgage 12 month term extensions

Home equity 120 month term extension

Consumer 60 month term extension

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

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

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

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

2023 Form 10-K

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

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

Troubled Debt

Restructurings Number of

Contracts Pre-Modification

Recorded Investment Post-Modification

Recorded Investment

($ in thousands)

December 31, 2022

7 unchanged sentences

Total 112 $ 158,160 $ 128,269

The total TDRs presented in the table above had allocated a specific allowance for loan losses that totaled $ 63.0 million and $ 29.1 million at December 31, 2022 and 2021, respectively.

There were $ 26.2 million and $ 6.0 million of charge-offs related to TDRs for the years ended December 31, 2022 and 2021, respectively .

As of December 31, 2022 and 2021 , the commercial and industrial loan category in the above table mostly consisted of non-accrual TDR taxi medallion loans classified as substandard and doubtful.

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

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

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

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

Loans modified as TDRs within the previous 12 months and for which there was a payment default ( 90 or more days past due) in the years ended December 31, 2022 and 2021 were as follows:

Years Ended December 31,

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

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

Troubled Debt Restructurings Subsequently Defaulted Number of

Contracts Recorded

Investment Number of

Contracts Recorded

($ in thousands)

9 unchanged sentences

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

The following table presents collateral dependent loans by class as of December 31, 2022 and 2021:

2023 Form 10-K 116

The following table presents collateral dependent loans by class as of December 31, 2023 and 2022:

(in thousands)

2 unchanged sentences

Commercial real estate 98,785 74,855

Construction 46,634 55,344

Total commercial real estate loans 145,419 130,199

Residential mortgage 21,843 33,865

Home equity — 195

Consumer 589 —

Total $ 264,678 $ 258,692

12 unchanged sentences

Provision for loan losses $ 50,755 $ 48,236 $ 27,507

Provision for unfunded credit commitments 8,100 5,389 1,165

(Credit) provision for unfunded credit commitments ( 5,130 ) 8,100 5,389

Total provision for credit losses for loans $ 45,625 $ 56,336 $ 32,896

8 unchanged sentences

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

Allowance for PCD loans (1)

Impact of the adoption of ASU No.

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

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

Loans charged-off ( 48,015 ) ( 22,946 ) ( 194 ) ( 4,298 ) ( 75,453 )

7 unchanged sentences

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

3,528 2,953 57 4 6,542

Beginning balance, adjusted 136,542 254,108 25,326 13,545 429,521

Loans charged-off ( 33,250 ) ( 4,561 ) ( 28 ) ( 4,057 ) ( 41,896 )

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Net (charge-offs) recoveries ( 16,169 ) ( 2,488 ) 683 ( 1,128 ) ( 19,102 )

(Credit) provision for loan losses ( 13,935 ) 48,249 ( 4,346 ) ( 2,461 ) 27,507

Provision for loan losses 19,568 7,788 13,011 7,869 48,236

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

(1) T he allowance for PCD loans is presented net of PCD loan charge-offs totaling $ 62.4 million in the second quarter 2022 related to the Bank Leumi USA acquisition.

(2) T he allowance for PCD loans related to the Westchester acquisition during the fourth quarter 2021.

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

2023 Form 10-K 118

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LEASES (Note 6)

The following table presents the components of the right of use (ROU) assets and lease liabilities in the consolidated statements of financial condition by lease type at December 31, 2022 and 2021.

The following table presents the components of the ROU assets and lease liabilities in the consolidated statements of financial condition by lease type at December 31, 2023 and 2022.

(in thousands)

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Total $ 403,781 $ 358,884

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

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

2023 Form 10-K

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The following table presents supplemental information related to leases at December 31, 2023 and 2022:

Weighted-average remaining lease term (in thousands)

Weighted-average remaining lease term

Operating leases 12.5 years 10.8 years

Finance leases 2.3 years 1.0 year

Finance leases 2.6 years 2.3 years

Weighted-average discount rate

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Finance leases 1.49 % 1.39 %

2022 Form 10-K

The following table presents a maturity analysis of lessor and lessee arrangements outstanding as of December 31, 2023:

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Total $ 797,449 $ 403,766 $ 15

The total net investment in direct financing and sales-type leases was $ 863.8 million and $ 747.8 million at December 31, 2022 and 2021, respectively, comprised of $ 859.3 million and $ 745.2 million in lease receivables and $ 4.5 million and $ 2.6 million in unguaranteed residuals, respectively.

2023 Form 10-K 120

The total net investment in direct financing and sales-type leases was $ 797.4 million and $ 863.8 million at December 31, 2023 and 2022, respectively, comprised of $ 793.3 million and $ 859.3 million in lease receivables and $ 4.1 million and $ 4.5 million in non-guaranteed residuals, respectively.

Total lease income was $ 40.1 million, $ 34.4 million and $ 28.1 million for the years ended December 31, 2023, 2022, and 2021, respectively.

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GOODWILL AND OTHER INTANGIBLE ASSETS (Note 8)

The changes in the carrying amount of goodwill as allocated to our business segments, or reporting units thereof, for goodwill impairment analysis were:

Business Segment / Reporting Unit*

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

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

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

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

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

Reporting Unit (1)

Management Consumer

Lending Commercial

Lending Total

Banking Commercial Banking Total

(in thousands)

Balance at December 31, 2020 $ 25,754 $ 221,311 $ 1,135,377 $ 1,382,442

Goodwill from business combinations 13,097 1,079 62,390 76,566

Balance at December 31, 2021 $ 38,851 $ 222,390 $ 1,197,767 $ 1,459,008

Goodwill from business combinations 10,916 62,483 336,529 409,928

Balance at December 31, 2022 $ 49,767 $ 284,873 $ 1,534,296 $ 1,868,936

* Valley’s Wealth Management and Insurance Division is comprised of trust, asset management, insurance and tax credit advisory services.

This reporting unit is included in the Consumer Banking segment for financial reporting purposes.

December 31, 2021, as reported

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

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

December 31, 2021, as adjusted

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

December 31, 2022, as reported

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

Adjustment 28,375 64,773 ( 93,148 ) —

December 31, 2022, as adjusted

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

2023 Form 10-K

During the second quarter 2022, Valley performed the annual goodwill impairment test at its normal assessment date.

There was no impairment of goodwill recognized during the years ended December 31, 2022, 2021 and 2020.

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

Goodwill balances were reallocated across the new operating segments and reporting units (as reflected in the table above) based on their relative fair values using the valuation performed during the second quarter 2022.

Reporting Unit (1)

Management Consumer

Banking Commercial Banking Total

(in thousands)

December 31, 2021, as adjusted

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

Goodwill from business combinations, as adjusted (2)

43,827 89 366,012 409,928

December 31, 2022, as adjusted

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

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

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

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

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

1 unchanged sentence

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

The goodwill from business combinations set forth in the table above during 2021 related to the Westchester and DV acquisitions and totaled $ 63.5 million and $ 13.1 million, respectively.

Goodwill resulting from the DV acquisition was allocated entirely to the Wealth Management reporting unit.

See Note 2 for further details related to acquisitions.

During the second quarter 2023, Valley performed the annual goodwill impairment test at its normal assessment date.

During the year ended December 31, 2023, there were no triggering events that would more likely than not reduce the fair value of any reporting unit below its carrying amount.

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

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

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

Valley recorded $ 114.4 million of core deposit intangibles res ulting from the Bank Leumi USA acquisition.

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

The line item labeled “Other” included in the table above primarily consists of customer lists, certain financial asset servicing contracts and covenants not to compete, which are amortized over their expected lives generally using a straight-line method and have a weighted average amortization period of 13.4 years.

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

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

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

11 unchanged sentences

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

Impairment adjustment — 865 ( 818 )

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

Impairment recovery adjustment — — 865

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

Loan servicing rights are accounted for using the amortization method.

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

As shown in the above table, Valley recorded net recoveries of impairment charges totaling $ 865 thousand for the year ended December 31, 2021 and net impairment charges on its loan servicing rights totaling $ 818 thousand for the year ended December 31, 2020.

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

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

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

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

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

1 unchanged sentence

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

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

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

Year Loan Servicing

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DEPOSITS (Note 9)

Included in time deposits are certificates of deposit over $250 thousand totaling $ 1.8 billion and $ 861.5 million at December 31, 2022 and 2021, respectively.

Interest expense on time deposits of $250 thousand or more totaled approximately $ 3.4 million, $ 1.1 million and $ 4.5 million in 2022, 2021 and 2020, respectively.

2022 Form 10-K

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

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

The scheduled maturities of time deposits as of December 31, 2023 were as follows:

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2024 $ 12,332,120

2024 2,168,998

Thereafter 27,449

Total time deposits $ 13,176,724

2023 Form 10-K

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

6 unchanged sentences

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

The interest payments on the FHLB advances totaling $ 500 million at December 31, 2021 were hedged with interest rate swaps that expired during 2022.

See Note 15 for details on our derivative hedging activities.

Long-Term Borrowings

5 unchanged sentences

Total long-term borrowings $ 2,328,375 $ 1,543,058

(1) FHLB advances are presented net of unamortized premiums totaling $ 419 thousand and $ 1.0 million at December 31, 2022 and 2021, respectively.

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

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

FHLB Advances.

Long-term FHLB advances had a weighted average interest rate of 1.88 percent at December 31, 2022 and 2021.

Long-term FHLB advances had a weighted average interest rate of 3.75 percent and 1.88 percent at December 31, 2023 and 2022, respectively.

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

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

In June 2021, Valley prepaid $ 247.5 million of long-term FHLB advances with maturities scheduled through 2025 and a weighted average effective interest rate of 1.82 percent.

The transactions were funded with excess cash liquidity and accounted for as an early debt extinguishment resulting in a loss of $ 8.4 million reported within non-interest expense for the year ended December 31, 2021.

2022 Form 10-K

Long-Term Borrowings

3 unchanged sentences

Total long-term FHLB advances $ 1,689,804

There are no FHLB advances with scheduled repayments in years 2024 and thereafter, reported in the table above, which are callable for early redemption by the FHLB during 2023.

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

Subordinated Debt.

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

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

2023 Form 10-K 124

At December 31, 2023, Valley had the following subordinated debt outstanding by its maturity date:

• $ 125 million of 5.125 percent subordinated notes issued in September 2013 and due September 27, 2023 with no call dates or prepayments allowed, unless certain conditions exist.

Interest on the subordinated debentures is payable semi-annually in arrears on March 27 and September 27 of each year.

In conjunction with the issuance, Valley entered into an interest rate swap transaction used to hedge the change in the fair value of the subordinated notes.

In August 2016, the fair value interest rate swap with a notional amount of $ 125 million was terminated resulting in an adjusted fixed annual interest rate of 3.32 percent on the subordinated notes, after amortization of the derivative valuation adjustment recorded at the termination date.

The subordinated notes had a net carrying value of $ 126.6 million and $ 128.6 million at December 31, 2022 and 2021, respectively.

• $ 100 million of 4.55 percent subordinated debentures (notes) issued in June 2015 and due June 30, 2025 with no call dates or prepayments allowed unless certain conditions exist.

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Interest on the subordinated notes during the initial five-year term through June 15, 2025 is payable semi-annually on June 15 and December 15.

Thereafter, interest is expected to be set based on three-month Term SOFR plus 514 basis points and paid quarterly through maturity of the notes.

Thereafter, interest is expected to be set based on three-month Term SOFR p lus 514 basis poin ts and paid quarterly through maturity of the notes.

The subordinated notes had a net carrying value of $ 113.8 million and $ 113.6 million at December 31, 2023 and 2022, respectively.

3 unchanged sentences

Thereafter, interest is expected to be set based on three-month Term SOFR plus 236 basis points and paid quarterly through maturity of the notes.

The subordinated notes had a carrying value of $ 267.1 million and $ 293.0 million, net of unamortized debt issuance costs and fair value of hedging adjustment at December 31, 2022 and 2021, respectively.

During June 2021, Valley entered into an interest rate swap transaction used to hedge the change in the fair value of the $ 300 million in subordinated notes.

The subordinated notes had a carrying value of $ 276.6 million and $ 267.1 million, net of unamortized debt issuance costs and fair value of hedging adjustment at December 31, 2023 and 2022, respectivel y.

In June 2021, Valley executed an interest rate swap to hedge the change in the fair value of the $ 300 million in subordinated notes.

See Note 15 for additional details.

3 unchanged sentences

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

On April 1, 2021, Valley redeemed, at par value, $ 60 million of its callable 6.25 percent subordinated notes originally due April 1, 2026.

No gain or loss was incurred on this transaction.

Pledged Securities.

The fair value of securities pledged to secure public deposits, repurchase agreements, lines of credit, FHLB advances and for other purposes required by law approximate d $ 3.5 billion and $ 1.1 billion for December 31, 2023 and 2022, respectively.

2022 Form 10-K

JUNIOR SUBORDINATED DEBENTURES ISSUED TO CAPITAL TRUSTS (Note 11)

3 unchanged sentences

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

Valley does not consolidate its capital trusts based on U.S.

GAAP but wholly owns all of the common securities of each trust.

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

2023 Form 10-K

The table below summarizes the outstanding callable junior subordinated debentures and the related trust preferred securities issued by each trust as of December 31, 2023 and 2022:

1 unchanged sentence

Capital Trust I State Bancorp

Capital Trust II Aliant Statutory Trust II

Capital Trust II Aliant

Statutory Trust II

($ in thousands)

4 unchanged sentences

Contractual principal balance 24,743 10,310 10,310 15,464

Annual interest rate (2)

SOFR+spread adj.+ 1.4 %

SOFR+spread adj.+ 3.45 %

SOFR+ spread adj.+ 2.85 %

3-mo.SOFR+spread adj.+ 1.8 %

December 31, 2022

9 unchanged sentences

Face value $ 24,000 $ 10,000 $ 10,000 $ 15,000

Annual distribution rate 3-mo.

Annual distribution rate 2023 (2)

SOFR+spread adj.+ 1.4 %

SOFR+ spread adj.+ 3.45 %

SOFR+ spread adj.+ 2.85 %

SOFR+ spread adj.+ 1.8 %

Annual distribution rate 2022 (2)

LIBOR+ 3.45 %

4 unchanged sentences

(1) The carrying values include unamortized purchase accounting adjustments at December 31, 2023 and 2022.

(2) The 3-month Term SOFR rate is adjusted for the 0.26161 percent spread.

(3) All cash distributions are cumulative.

7 unchanged sentences

Defined Benefit Pension and Postretirement Benefit Plans

The Bank had offered a qualified non-contributory defined benefit plan and non-qualified supplement retirement plan to eligible employees and key executives who met certain age and service requirements, as well as a non-qualified directors' retirement plan.

The Bank had offered a qualified non-contributory defined benefit plan and a non-qualified supplemental retirement plan to eligible employees and key executives who met certain age and service requirements, as well as a non-qualified directors' retirement plan.

The qualified and non-qualified plans were frozen effective December 31, 2013.

Consequently, participants in

2022 Form 10-K

each plan will not accrue further benefits and their pension benefits were immediately vested and determined based on their compensation and service as of December 31, 2013.

Consequently, participants in each plan will not accrue further benefits and their pension benefits were immediately vested and determined based on their compensation and service as of December 31, 2013.

On April 1, 2022, Valley assumed a qualified non-contributory defined benefit pension plan (frozen to both benefits and new participants) covering certain former employees of Bank Leumi USA.

Valley also assumed other post-employment medical and life insurance benefit (OPEB) plans from Bank Leumi USA covering certain retired employees.

Valley also assumed Other post-employment medical and life insurance benefit ("OPEB") plans from Bank Leumi USA mostly covering retired former employees.

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

2023 Form 10-K 126

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

7 unchanged sentences

Interest cost 8,923 5,373 279 174

Actuarial loss ( 48,109 ) ( 5,418 ) ( 975 )

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

Benefits paid ( 12,105 ) ( 10,980 ) ( 648 ) ( 663 )

12 unchanged sentences

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

(2) Pension includes accrued interest receivable of $ 710 thousand and $ 783 thousand as of December 31, 2022 and 2021, respectively.

(2) Pension assets include accrued interest receivables of $ 826 thousand and $ 710 thousand as of December 31, 2023 and 2022, respectively.

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

5 unchanged sentences

Total $ 33,265 $ 38,535 $ ( 715 ) $ ( 632 )

2022 Form 10-K

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

3 unchanged sentences

Fair value of plan assets — —

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

The weighted average discount rate used in determining the actuarial present value of benefit obligations for the Pension plans was 5.31 percent a nd 2.87 percent as of December 31, 2022 and 2021, respectively, and 5.29 percent for the OPEB plans as of December 31, 2022.

2023 Form 10-K

payments streams required of each plan.

The weighted average discount rate used in determining the actuarial present value of benefit obligations for the Pension plans was 5.00 percent and 5.31 percent as of December 31, 2023 and 2022, respectively, and 4.97 percent and 5.29 percent for the OPEB plans as of December 31, 2023 and 2022, respectively.

The net periodic benefit (income) cost for the Pension and OPEB plans were reported within other non-interest expense included the following components for the years ended December 31, 2023, 2022 and 2021:

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Valley believes this provides a better estimate of interest costs than a single weighted average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the applicable period.

Other changes in plan assets and benefit obligations recognized in other comprehensive loss for the years ended December 31, 2022 and 2021 were as follows:

Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss for the years ended December 31, 2023 and 2022 were as follows:

2023 2022 2023 2022

(in thousands)

Net actuarial loss (gain) $ 19,777 $ ( 14,111 ) $ ( 976 )

Net actuarial (gain) loss $ ( 7,596 ) $ 19,777 $ ( 161 ) $ ( 976 )

Amortization of prior service cost ( 135 ) ( 135 ) — —

1 unchanged sentence

Total recognized in other comprehensive loss $ ( 7,789 ) $ 18,642 $ ( 107 ) $ ( 881 )

Total recognized in net periodic benefit (income) cost and other comprehensive loss (before tax) $ 4,292 $ ( 26,965 ) $ ( 802 )

2022 Form 10-K

Total recognized in net periodic benefit (income) cost and other comprehensive (income) loss (before tax) $ ( 21,465 ) $ 4,292 $ 118 $ ( 802 )

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

7 unchanged sentences

Thereafter 63,988 1,523

2023 Form 10-K 128

The weighted average assumptions used to determine net periodic benefit (income) cost for the years ended December 31, 2023, 2022 and 2021 were as follows:

1 unchanged sentence

Discount rate - projected benefit obligation 5.31 % 2.85 % 2.50 % 5.29 % 2.85 %

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

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

Discount rate - interest cost 5.23 % 2.49 % 1.88 % 5.29 % 2.85 %

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

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

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

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

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

3 unchanged sentences

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

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

In accordance with Section 402 (c) of ERISA, the investment management advisory firm and individual asset managers, if applicable, of both defined benefit pension plans are granted full discretion to buy, sell, invest and reinvest the portions of the portfolio assigned to them consistent with the Bank’s Pension Committee’s policy and guidelines.

The target asset allocation set for the plans are an approximate equal weighting of 50 percent fixed income securities and 50 percent equity securities.

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

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

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

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

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

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

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

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

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

Relative performance should be better than the median performance of bonds when judged against a suitable index of other fixed income portfolios and above the Merrill Lynch Intermediate Government/Corporate Index over rolling three-year periods.

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

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

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

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

The risk exposure of the qualified plan assets is managed by the Bank’s Pension Committee and diversification of the investments into various investment options, including plan assets managed by several asset managers.

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

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

In general, the plan assets of the qualified plan are investment securities that are well-diversified in terms of industry, capitalization and asset class.

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

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

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

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

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

2023 Form 10-K

10 unchanged sentences

Mutual funds 30 % $ 91,000 $ 91,000 $ — $ —

Treasury securities 20 57,587 57,587 — —

Equity securities 20 60,918 60,918 — —

Corporate bonds 19 56,267 — 56,267 —

Treasury securities 18 54,234 54,234 — —

Commingled fund 8 25,115 — 25,115 —

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Mutual funds 30 % $ 78,712 $ 78,712 $ — $ —

Treasury securities 22 59,931 59,931 — —

Equity securities 20 55,157 55,157 — —

Corporate bonds 17 46,839 — 46,839 —

Treasury securities 20 57,587 57,587 — —

Commingled fund 9 23,395 — 23,395 —

government agency securities 3 9,271 — 9,271 —

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Equity securities, U.S.

Treasury securities and cash and money market funds are valued at fair value in the tables above utilizing exchange quoted prices in active markets for identical instruments (Level 1 inputs).

Mutual funds are measured at their respective net asset values, which represent fair values of the securities held in the funds based on exchange quoted prices available in active markets (Level 1 inputs).

Treasury securities and cash and money market funds are valued at fair value in the tables above utilizing Level 1 inputs.

Mutual funds are measured at their respective net asset values, which represent fair values of the securities held in the funds based on Level 1 inputs.

Corporate bonds and U.S.

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

At December 31, 2022 and 2021, the remaining obligations under these p lans were $ 1.1 million and $ 1.3 million, respectively, of which $ 297 thousand an d $ 348 thousand, respectively, were funded by Valley.

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

As of December 31, 2023 and 2022, all of the obligations were included in other liabilities and $ 519 thousand (net of a $ 198 thousand tax benefit) and $ 585 thousand (net of a $ 231 thousand tax benefit), respectively, were recorded in accumulated other comprehensive loss.

The $ 817 thousand in accumulated other comprehensive loss will be reclassified to expense on a straight-line basis over the remaining benefit periods of these non-qualified plans.

Valley assumed, in the Oritani acquisition on December 1, 2019, certain obligations under non-qualified retirement plans described below:

• Non-qualified benefit equalization pension plan that provided benefits to certain officers who were disallowed certain benefits under former Oritani’s qualified pension plan.

This plan was terminated on November 30, 2019 and the accrued benefits are payable to plan participants in five equal installments beginning annually on December 1, 2020 through December 1, 2024.

The funded obligation under this plan totaled $ 653 thousand and $ 979 thousand at December 31, 2022 and 2021, respectively.

• Supplemental Executive Retirement Income Agreement (the SERP) for the former CEO of Oritani.

The $ 717 thousand pre-tax in accumulated other comprehensive loss will be reclassified to expense on a straight-line basis over the remaining benefit periods of these non-qualified plans.

Valley assumed, in the Oritani acquisition on December 1, 2019, certain obligations under non-qualified retirement plans, including a SERP for the former Chief Executive Officer of Oritani.

The SERP is a retirement benefit with a minimum payment period of 20 years upon death, disability, normal retirement, early retirement or separation from service after a change in control.

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The funded obligation under the SERP totaled $ 11.6 million and $ 12.3 million at December 31, 2023 and 2022, respectively.

Valley recorded net benefit income of $ 1.8 million and $ 357 thousand related to the valuation of the SERP for the years ended December 31, 2022 and 2021, respectively, and net benefit expense of $ 1.5 million for the year ended December 31, 2020 .

The above Oritani non-qualified plans are secured by investments in money market mutual funds which are held in a trust and classified as equity securities on the consolidated statements of financial condition at both December 31, 2022 and 2021.

Valley also assumed an Executive Group Life Insurance Replacement (“Split-Dollar”) Plan from Oritani.

The Split-Dollar plan provides life insurance benefits to certain eligible employees upon death while employed or following termination of employment due to disability, retirement or change in control.

Participants in the Split-Dollar plan are entitled to up to two times their base annual salary, as defined by the plan.

The accrued liability for the Split-Dollar plan totaled $ 1.6 million and $ 1.7 million at December 31, 2022 and 2021, respectively.

Valley recorded $ 121 thousand, $ 104 thousand and $ 812 thousand of expenses related to the Split-Dollar plan for the years ended December 31, 2022 , 2021 and 2020 respectively.

The SERP is secured by investments in money market mutual funds which are held in a trust and classified as equity securities on the consolidated statements of financial condition at both December 31, 2023 and 2022.

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

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

Amounts charged to salary expense were $ 54.6 million, $ 29.0 million and $ 25.1 million during 2022, 2021 and 2020, respectively.

Amounts charged to salary expense for cash incentive awards were $ 57.4 million, $ 54.6 million and $ 29.0 million during 2023, 2022 and 2021, respectively.

Savings and Investment Plan

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Valley has a non-qualified, unfunded deferred compensation plan maintained for the purpose of providing deferred compensation for selected employees participating in the 401(k) plan whose contributions are limited as a result of the limitations under Section 401(a)(17) of the Internal Revenue Code.

Each participant in the plan is permitted to defer per calendar year, up to five percent of the portion of the participant’s salary and cash bonus above the limit in effect under the

2022 Form 10-K

Company's 401(k) plan and receive employer matching contributions that become fully vested after two years of participation in the plan.

Each participant in the plan is permitted to defer per calendar year, up to five percent of the portion of the participant’s salary and cash bonus above the limit in effect under the Company's 401(k) plan and receive employer matching contributions that become fully vested after two years of participation in the plan.

Plan participants also receive an annual interest crediting on their balances held as of December 31 each year.

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Stock Based Compensation

On April 19, 2021, Valley's shareholders approved the Valley National Bancorp 2021 Incentive Compensation Plan (the 2021 Plan) administered by the Compensation and Human Capital Management Committee (the Committee) as appointed by Valley's Board of Directors.

The purpose of the 2021 Plan is to provide additional incentives to officers and key employees of Valley and its subsidiaries, whose substantial contributions are essential to the continued growth and success of Valley, and to attract and retain officers, other employees and non-employee directors whose efforts will result in the continued and long-term growth of Valley's business.

Upon shareholder approval of the 2021 Plan, Valley ceased granting new awards under the Valley National Bancorp 2016 Long-Term Stock Incentive Plan (the 2016 Plan).

Under the 2021 Plan, Valley may issue awards to its officers, employees and non-employee directors in amounts up to 9 million shares of common stock (less one share for every share granted after December 31, 2020 under the 2016 Plan) in the form of stock appreciation rights, both incentive and non-qualified stock options, restricted stock and restricted stock units (RSUs).

If after December 31, 2020 any award granted under the 2016 Plan is forfeited, expires, settled for cash, withheld for tax obligations, or otherwise does not result in the issuance of all or a portion of the shares subject to such award, the shares will be added to the 2021 Plan's share reserve.

As of December 31, 2022 , 5.0 million sh ares of common stock were available for issuance under the 2021 Plan.

The essential features of each award are described in the award agreement relating to that award.

The grant, exercise, vesting, settlement or payment of an award may be based upon the fair value of Valley's common stock on the last sale price reported for Valley's common stock on such date or the last sale price reported preceding such date, except for performance-based awards with a market condition.

The grant date fair values of performance-based awards that vest based on a market condition are determined by a third-party specialist using a Monte Carlo valuation model.

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

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

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

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

As of December 31, 2023, 12.5 million shares of common stock were available for issuance under the 2023 Plan.

2023 Form 10-K

Valley recorded total stock-based compensation expense of $ 33.1 million, $ 28.8 million and $ 20.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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As of December 31, 2023, the unrecognized amortization expense for all stock-based compensation totaled approximately $ 31.6 million and will be recognized over an average remaining vesting period of approximately 1.74 years.

Restricted Stock Units (RSUs) .

Restricted stock units are awarded as (1) performance-based RSUs and (2) time-based RSUs.

RSUs are awarded as (1) performance-based RSUs and (2) time-based RSUs.

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

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

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

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

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

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

The grant date fair value of the performance-based RSUs was $ 14.72 , $ 12.36 and $ 10.99 per share for the years ended December 31, 2022, 2021, and 2020, respectively.

The grant date fair value of time-based RSUs was $ 13.22 , $ 12.01 and $ 10.29 for the years ended December 31, 2022, 2021, and 2020, respectively.

The table below summarizes average grant date fair values of RSUs for the years ended December 31, 2023, 2022, and 2021:

Restricted Stock Units Average Grant Date Fair Values

2023 2022 2021

(in thousands, except per share data)

Average grant date fair value per share:

Performance-based RSUs $ 12.80 $ 14.72 $ 12.36

Time-based RSUs $ 11.25 $ 13.22 $ 12.01

The following table sets forth the changes in RSUs outstanding for the years ended December 31, 2023, 2022 and 2021:

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Outstanding at end of year 5,694,330 5,196,609 3,889,756

2022 Form 10-K

Restricted Stock.

Restricted stock is awarded to key employees providing for the immediate award of our common stock subject to certain vesting and restrictions under the 2016 Plan.

A restricted stock award is a grant of shares of Valley common stock subject to certain vesting and other restrictions.

Compensation expense is measured based on the grant-date fair value of the shares.

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and expected exercise term calculated based on Valley’s historical exercise experience.

On April 1, 2022, Valley issued replacement options for the pre-existing and fully vested stock awards consisting of Bank Leumi USA options for 2.7 million shares of Valley common stock at a weighted average exercise price of $ 8.47 .

On April 1, 2022, Valley issued replacement options for the pre-existing and fully vested stock option awards of Bank Leumi USA for 2.7 million shares of Valley common stock at a weighted average exercise price of $ 8.47 .

The stock plan under which the original Bank Leumi stock awards were issued is no longer active at the acquisition date.

The following table summarizes stock options activity as of December 31, 2022, 2021 and 2020 and changes during the years ended on those dates:

2023 Form 10-K 132

The following table summarizes stock option activity as of December 31, 2023, 2022 and 2021 and changes during the years ended on those dates:

2023 2022 2021

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2,914,829 2.0 8

2022 Form 10-K

INCOME TAXES (Note 13)

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189,180 204,331 140,072

Deferred expense (benefit):

Deferred (benefit) expense:

Federal ( 8,035 ) 7,263 19,709

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Total income tax expense $ 179,821 $ 211,816 $ 166,899

2023 Form 10-K

The tax effects of temporary differences that gave rise to the significant portions of the deferred tax assets and liabilities as of December 31, 2023 and 2022 were as follows:

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Purchase accounting 53,980 66,487

FDIC Special Assessment 13,894 —

Other 24,362 12,995

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Depreciation 20,963 16,625

Investment securities — 3,728

Other investments 11,175 8,838

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

State net operating loss carryforwards totaled approximately $ 80.2 million, net of a valuation allowance of $ 916 thousand at December 31, 2022, and expire during the period from 2029 through 2038.

Valley's capital loss carryforwards totaled $ 2.7 million at December 31, 2022.

These capital losses expire at the end of 2023.

It is unlikely Valley will recognize the benefit of the deferred tax asset and therefore a full valuation allowance was established against the capital loss carryforward of $ 726 thousand during 2022.

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

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

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

2022 Form 10-K

Reconciliation between the reported income tax expense and the amount computed by multiplying consolidated income before taxes by the statutory federal income tax rate of 21 percent for the years ended December 31, 2023, 2022, and 2021 were as follows:

2023 2022 2021

Amount Percent Amount Percent Amount Percent

(in thousands)

Federal income tax at expected statutory rate $ 163,940 $ 134,556 $ 111,314

federal statutory tax rate $ 142,450 21.0 % $ 163,940 21.0 % $ 134,556 21.0 %

Increase (decrease) due to:

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50,787 7.5 % 57,276 7.3 % 42,950 6.7 %

Tax-exempt interest, net of interest incurred to carry tax-exempt securities

( 2,696 ) ( 2,298 ) ( 2,786 )

Bank owned life insurance ( 1,597 ) ( 1,759 ) ( 2,026 )

Tax credits from securities and other investments ( 12,872 ) ( 9,942 ) ( 10,071 )

Non-deductible FDIC insurance premiums 4,796 2,457 3,283

Other, net 2,969 935 3,002

Tax credits ( 23,008 ) ( 3.4 ) % ( 12,872 ) ( 1.6 ) % ( 9,942 ) ( 1.6 ) %

Nontaxable or non-deductible items 6,659 1.0 % 4,952 0.6 % 431 0.1 %

Other adjustments 2,933 0.4 % ( 1,480 ) ( 0.2 ) % ( 1,096 ) ( 0.2 ) %

Income tax expense $ 179,821 26.5 % $ 211,816 27.1 % $ 166,899 26.0 %

We invest in certain tax-advantaged investments that support qualified affordable housing projects, community development, and prior to 2019, renewable energy resources.

* State taxes in New York, New York City, and New Jersey made up the majority (greater than 50 percent) of the tax effect in this category.

2023 Form 10-K 134

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

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

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

We previously invested in mobile solar generators sold and leased back by DC Solar and its affiliates (DC Solar).

DC Solar had its assets frozen in December 2018 by the U.S.

Department of Justice.

DC Solar and related entities are in Chapter 7 bankruptcy.

A group of investors who purchased mobile solar generators from, and leased them back to, DC Solar, including us received tax credits for making these renewable resource investments.

During the fourth quarter 2019, several of the co- conspirators pleaded guilty to fraud in the on-going federal investigation.

Based upon this information, Valley deemed that its tax positions related to the DC Solar funds did not meet the more likely than not recognition threshold in Valley's tax reserve assessment at December 31, 2019.

The principals pled guilty to fraud in early 2020.

As of December 31, 2022, 2021, and 2020, Valley believes that it was fully reserved for the renewable energy tax credits and other tax benefits previously recognized from the investments in the DC Solar funds plus interest.

Valley will continue to evaluate all its existing tax positions, however, cannot provide assurance that it will not recognize additional tax provisions related to this uncertain tax liability in the future.

A reconciliation of Valley’s reserve for uncertain tax liability positions for 2022, 2021 and 2020 is presented in the table below:

Valley had $ 30.4 million in reserve for tax liability positions at December 31, 2023, 2022, and 2021 related to certain tax credits and other tax benefits previously recognized by Valley, where, subsequently, a third-party fraud was uncovered by the U.S.

Department of Justice in 2018.

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

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

2023 2022 2021

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

It is reasonably possible that the liability for unrecognized tax benefits could increase or decrease in the next 12 months due to completion of tax authorities’ exams or the expiration of statutes of limitations.

Management estimates that the liability for unrecognized tax benefits could decrease by $ 30.4 million within the next 12 months.

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

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

Valley had accrued liabilities of approximately $ 10.5 million, $ 8.7 million and $ 7.6 million at December 31, 2022, 2021 and 2020, respectively, for interest expense associated with Valley’s uncertain tax positions at the respective period ends.

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

2022 Form 10-K

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

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

The following table presents income taxes paid for the years ended December 31, 2023, 2022 and 2021:

2023 2022 2021

(in thousands)

Federal taxes paid $ 162,502 $ 121,000 $ 100,000

State and city taxes paid:

New York 25,718 18,626 14,430

New Jersey 19,006 12,010 23,510

New York City 13,307 12,141 16,933

Other 15,970 8,325 8,497

Total state and city taxes paid 74,001 51,102 63,370

Total income taxes paid $ 236,503 $ 172,102 $ 163,370

Valley files income tax returns in the U.S.

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Valley’s tax credit investments are primarily related to investments promoting qualified affordable housing projects, and other investments related to community development and renewable energy sources.

Some of these tax-advantaged investments support Valley’s regulatory compliance with the Community Reinvestment Act.

Some of these tax-advantaged investments support Valley’s regulatory compliance with the CRA.

Valley’s investments in these entities generate a return primarily through the realization of federal income tax credits, and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods.

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

2023 Form 10-K

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

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$ 18,009 $ 12,407 $ 10,910

2022 Form 10-K

Impairment Analysis

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

2023 Form 10-K 136

On a periodic basis, Valley obtains financial reporting on its underlying tax credit investment assets for each fund.

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Commitments under unused lines of credit - credit card

138,564 116,208

Commitments to sell loans 24,418 22,008

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Commitments generally have specified expiration dates, which may be extended upon request, or other termination clauses and generally require payment of a fee.

These commitments do not necessarily represent future cash requirements, as it is anticipated that

2022 Form 10-K

many of these commitments will expire without being fully drawn upon.

These commitments do not necessarily represent future cash requirements, as it is anticipated that many of these commitments will expire without being fully drawn upon.

The Bank’s lending activity for outstanding loan commitments is primarily to customers within the states of New Jersey, New York, and Florida.

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Valley principally manages its exposure to a wide variety of business and operational risks through management of its core business activities.

Valley manages economic risks, including interest rate and liquidity risks, primarily by managing the amount, sources, and duration of its assets and liabilities and, from time to time, the use of derivative financial instruments.

Valley manages economic risks, including interest rate and liquidity risks, primarily by managing the amount, sources, and

2023 Form 10-K

duration of its assets and liabilities and, from time to time, the use of derivative financial instruments.

Specifically, Valley enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

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Interest rate swaps designated as cash flow hedges involve the payment of either fixed or variable-rate amounts in exchange for the receipt of variable or fixed-rate amounts from a counterparty, respectively.

At December 31, 2022, Valley had 6 interest rate swap agreements, with a total notional amount of $ 600 million, to hedge the changes in cash flows associated with certain variable rate loans.

Valley is required to pay variable rate amounts based on one-month CME Term SOFR and receives fixed rate payments based on the tenor of each swap.

Expiration dates for the swaps range from November 2024 to November 2026.

During the second quarter 2023, Valley terminated six interest rate swaps with a total notional amount of $ 600 million.

The terminated swaps, originally maturing from November 2024 to November 2026, were used to hedge the changes in cash flows associated with certain variable rate loans.

The transaction resulted in a pre-tax gain totaling $ 3.6 million reported in accumulated other comprehensive loss within shareholders' equity that will be amortized to interest income over the life of the previously hedged loans.

Fair Value Hedges of Fixed Rate Assets and Liabilities.

Valley is exposed to changes in the fair value of fixed-rate subordinated debt due to changes in interest rates.

Valley uses interest rate swaps to manage its exposure to changes in fair value on fixed rate debt instruments attributable to changes in the designated benchmark interest rate.

Interest rate swaps designated as fair value hedges involve the receipt of variable rate payments from a counterparty in exchange for Valley making fixed rate payments over the life of the agreements without the exchange of the underlying notional amount.

Valley is exposed to changes in the fair value of certain fixed-rate assets and liabilities due to changes in interest rates and uses interest rate swaps to manage its exposure to changes in fair value.

For derivatives that are designated and qualify as fair value hedges, the gain or loss on the derivative as well as the loss or gain on the hedged item attributable to the hedged risk are recognized in earnings.

In June 2021, Valley entered into a $ 300 million forward-starting interest rate swap agreement with a notional amount of

$ 300 million, maturing in June 2026, to hedge the change in the fair value of the 3 percent subordinated debt issued on May

Under the swap agreement, beginning in January 2022, Valley will receive fixed rate payments and pay variable rate

amounts based on SOFR plus 2.187 percent.

In June 2021, Valley entered into a $ 300 million forward-starting interest rate swap agreement with a notional amount of $ 300 million, maturing in June 2026, to hedge the change in the fair value of the 3 percent subordinated debt issued on May 28, 2021.

Under the swap agreement, beginning in January 2022, Valley receives fixed rate payments and pays variable rate amounts based on SOFR plus 2.187 percent.

During the fourth quarter 2023, Valley entered into interest rate swap agreements with notional amounts totaling $ 500 million, maturing in the fourth quarter 2025, with interest rates ranging from 4.2 percent to 4.6 percent to hedge the change in the fair value of certain fixed rate residential loans.

Valley received variable rate based on Floating SOFR Overnight Indexed Swap (OIS) Compound rate and pays a fixed weighted average rate of 4.47 percent.

Non-designated Hedges.

Derivatives not designated as hedges may be used to manage Valley’s exposure to interest rate movements or to provide a service to customers but do not meet the requirements for hedge accounting under U.S.

Derivatives not designated as hedges are not entered into for speculative purposes.

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At December 31, 2023, Valley had 43 credit swaps with an aggregate notional amount of $ 537.8 million related to risk participation agreements.

2022 Form 10-K

At December 31, 2022, Valley h ad two “steepener” swaps, each with a current notional amount of $ 10.4 million where the receive rate on the swap mirrors the pay rate on the brokered deposits and the rates paid on these types of hybrid instruments are based on a formula derived from the spread between the long and short ends of the constant maturity swap (CMS) rate curve.

Although these types of instruments do not meet the hedge accounting requirements, the change in fair value of both the bifurcated derivative and the stand alone swap tend to move in opposite directions with changes in the three-month LIBOR rate and therefore provide an effective economic hedge.

At December 31, 2023, Valley h a d two “steepener” swaps, each with a current notional amount of $ 10.4 million where the receive rate on the swap mirrors the pay rate on the brokered deposits and the rates paid on these types of hybrid instruments are based on a formula derived from the spread between the long and short ends of the Constant Maturity Swap rate curve.

Although these types of instruments do not meet the hedge accounting requirements, the change in fair value of both the bifurcated derivative and the stand alone swap tend to move in opposite directions with changes in the three-month Term SOFR rate (modified from the three-month LIBOR rate effective July 1, 2023) and, therefore, provide an effective economic hedge.

Valley regularly enters into mortgage banking derivatives which are non-designated hedges.

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Valley enters into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of future changes in interest rates on Valley’s commitments to fund the loans as well as on its portfolio of mortgage loans held for sale.

2023 Form 10-K 138

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

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* Other derivatives include risk participation agreements.

The Chicago Mercantile Exchange and London Clearing House variation margins are classified as a single-unit of account as settlements of cash flow hedges and other non-designated derivative instruments.

As a result, the fair value of the applicable derivative assets and liabilities are reported net of variation margin at December 31, 2022 and 2021 in the table above.

Beginning in the second quarter 2023, certain cash flow hedges and other non-designated derivative hedging instruments previously cleared through the Chicago Mercantile Exchange and London Clearing House were no longer subject to the variation margin netting under the single-unit of account.

Fair value interest rate swaps and certain non-designated derivative instruments are reported in the table above net of variation margin as settlements using a single-unit of account at December 31, 2023 and 2022, respectively.

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

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Amount of loss reclassified from accumulated other comprehensive loss to interest expense $ ( 891 ) $ ( 274 ) $ ( 3,436 )

Amount of gain (loss) recognized in other comprehensive income (loss) 4,683 138 ( 3,169 )

Amount of (loss) gain recognized in other comprehensive income (loss) ( 1,093 ) 4,683 138

The accumulated net after-tax gains and losses related to effective cash flow hedges included in accumulated other comprehensive loss were $ 2.1 million and $ 2.2 million at December 31, 2023 and 2022, respectively.

Amounts reported in accumulated other comprehensive loss related to cash flow interest rate derivatives are reclassified to interest income and expense as interest payments are received and paid on the hedged variable interest rate assets and liabilities.

Valley estimates that $ 1.2 million (before tax) will be reclassified as an increase to interest income in 2024.

2023 Form 10-K

Amounts reported in accumulated other comprehensive loss related to cash flow interest rate derivatives are reclassified to interest expense as interest payments are made on the hedged variable interest rate liabilities.

Valley estimates that $ 3.5 million will be reclassified as a decrease to interest expense in 2023.

Gains (losses) included in the consolidated statements of income related to interest rate derivatives designated as hedges of fair value were as follows:

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The following table presents the hedged items related to interest rate derivatives designated as fair value hedges and the cumulative basis fair value adjustment included in the net carrying amount of the hedged items at December 31, 2023 and 2022:

Line Item in the Statement of Financial Position in Which the Hedged Item is Included Net Carrying Amount of the Hedged Liability * Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability

Line Item in the Statement of Financial Position in Which the Hedged Item is Included Net Carrying Amount of the Hedged Asset/ Liability Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset/Liability

(in thousands)

December 31, 2023

Loans $ 503,877 $ 3,877

Long-term borrowings * 276,572 ( 21,445 )

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* Net carrying amount includes unamortized debt issuance costs of $ 2.0 million and $ 2.8 million at December 31, 2023 and 2022, respectively.

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

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

2023 2022 2021

2 unchanged sentences

Other non-interest expense $ 1,590 $ ( 1,392 ) $ 54

Capital markets income reported in non-interest income included fee income related to non-designated hedge derivative interest rate swaps (not designated as hedging instruments) executed with commercial loan customers totaling $ 43.1 million , $ 26.9 million and $ 59.0 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Capital markets income reported in non-interest income included fee income related to non-designated hedge derivative interest rate swaps executed with commercial loan customers and foreign exchange contracts (not designated as hedging instruments) with a combined total of $ 35.7 million, $ 48.8 million and $ 26.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Collateral Requirements and Credit Risk Related Contingency Features.

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

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

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

Valley has agreements with its derivative counterparties providing that if Valley defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then Valley could also be declared in default on its derivative counterparty agreements.

Additionally, Valley has an agreement with several of its derivative counterparties that contains provisions that require Valley’s debt to maintain an investment grade credit rating from each of the major credit rating agencies from which it receives a credit rating.

If Valley’s credit rating is reduced below investment grade, or such rating is withdrawn or suspended, then the counterparties could terminate the derivative positions and

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

As of December 31, 2023, Valley was in compliance

2023 Form 10-K 140

Valley would be required to settle its obligations under the agreements.

As of December 31, 2022, Valley was in compliance with all of the provisions of its derivative counterparty agreements.

The ag gregate fair value of all derivative financial instruments with credit risk-related contingent features in a net liability position at December 31, 2022 was not material.

with all of the provisions of its derivative counterparty agreements.

The ag gregate fair value of all derivative financial instruments with credit risk-related contingent features was in a net asset position at December 31, 2023.

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

BALANCE SHEET OFFSETTING (Note 16)

Certain financial instruments, including certain over-the-counter (OTC) derivatives (mostly interest rate swaps) and repurchase agreements (accounted for as secured long-term borrowings), may be eligible for offset in the consolidated statements of financial condition and/or subject to master netting arrangements or similar agreements.

Certain financial instruments, including certain OTC derivatives (mostly interest rate swaps) and repurchase agreements (accounted for as secured long-term borrowings), may be eligible for offset in the consolidated statements of financial condition and/or subject to master netting arrangements or similar agreements.

OTC derivatives include interest rate swaps executed and settled bilaterally with counterparties without the use of an organized exchange or central clearing house (presented in the table below).

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The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract.

Collateral, usually in the form of cash or marketable investment securities, is posted by the counterparty with net liability positions in accordance with contract thresholds.

Collateral, usually in the form of cash or marketable investment securities, is posted by or received from the counterparty with net liability or assets position, respectively, in accordance with contract thresholds.

Master repurchase agreements which include “right of set-off” provisions generally have a legally enforceable right to offset recognized amounts.

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December 31, 2023

Interest rate swaps $ 462,989 $ — $ 462,989 $ 12,766 $ ( 342,480 ) $ 133,275

Interest rate swaps $ 577,282 $ — $ 577,282 $ ( 12,766 ) $ ( 432 ) $ 564,084

Interest rate swaps and other contracts $ 458,129 $ — $ 458,129 $ 53,780 $ ( 302,180 ) $ 209,729

Interest rate swaps and other contracts $ 479,345 $ — $ 479,345 $ ( 53,780 ) $ — $ 425,565

Total liabilities $ 479,345 $ — $ 479,345 $ ( 53,780 ) $ — $ 425,565

December 31, 2022

Interest rate swaps $ 181,012 $ — $ 181,012 $ — $ — $ 181,012

Interest rate swaps $ 50,922 $ — $ 50,922 $ — $ ( 44,231 ) $ 6,691

Interest rate swaps and other contracts $ 453,251 $ — $ 453,251 $ 12,766 $ ( 342,480 ) $ 123,537

Interest rate swaps and other contracts $ 594,476 $ — $ 594,476 $ ( 12,766 ) $ ( 432 ) $ 581,278

Total liabilities $ 594,476 $ — $ 594,476 $ ( 12,766 ) $ ( 432 ) $ 581,278

* Cash collateral received from or pledged to our counterparties in relation to market value exposures of OTC derivative contacts in a asset/liability position.

* Cash collateral received from or pledged to our counterparties in relation to market value exposures of derivative contacts in an asset/liability position.

REGULATORY AND CAPITAL REQUIREMENTS (Note 17)

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In addition, the dividends declared cannot be in excess of the amount which would cause the subsidiary bank to fall below the minimum required for capital adequacy purposes.

Valley and Valley National Bank are subject to the regulatory capital requirements administered by the Federal Reserve Bank and the OCC.

Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct significant impact on Valley’s consolidated financial statements.

Under capital adequacy guidelines Valley and Valley National Bank must meet specific capital guidelines that involve quantitative measures of Valley’s assets, liabilities and certain off-balance sheet items as calculated under regulatory

Valley and Valley National Bank are subject to the regulatory capital requirements administered by the Federal Reserve and the OCC.

2023 Form 10-K

accounting practices.

Capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

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As of December 31, 2023 and 2022, Valley and Valley Nationa l Bank exceeded all capital adequacy requirements (see table below).

For regulatory capital purposes, in accordance with the Federal Reserve Board’s final interim rule as of April 3, 2020, w e deferred 100 percent of the CECL Day 1 impact to shareholders' equity plus 25 percent of the reserve build (i.e., provision for credit losses less net charge-offs) for a two-year period ending January 1, 2022.

For regulatory capital purposes, in accordance with the Federal Reserve’s final rule issued August 26, 2020, w e deferred 100 percent of the CECL Day 1 impact to shareholders' equity plus 25 percent of the reserve build (i.e., provision for credit losses less net charge-offs) for a two-year period ending January 1, 2022.

On January 1, 2022, the deferral amount totaling $ 47.3 million after-tax started to be phased-in by 25 percent and will increase by 25 percent per year until fully phased-in on January 1, 2025 .

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Repurchase Plan.

In 2007, Valley’s Board of Directors approved the repurchase of up to 4.7 million of common shares.

In 2007, the Board approved the repurchase of up to 4.7 million of common shares.

Purchases of Valley’s common shares may be made from time to time in the open market or in privately negotiated transactions generally not exceeding prevailing market prices.

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During 2022 and 2021 Valley repurchased approximately 1.0 million and 1.6 million of its common shares on the open market at an average price of $ 13.32 and $ 14.31 per share, respectively, under its 2007 stock repurchase plan.

Valley made no share repurchases under the plan during the year ended December 31, 2020.

In April 2022, Valley terminated its 2007 stock repurchase plan (and its remaining shares available for repurchase) and publicly announced a new stock purchase program for up to 25 million shares of Valley common stock.

The authorization to repurchase shares will expire on April 25, 2024.

During 2023, Valley repurchased 300 thousand common shares on the open market at an average price of $ 6.97 per share, under its 2022 stock repurchase plan.

Other Stock Repurchases.

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On June 19, 2015, Valley issued 4.6 million shares of its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A, no par value per share, with a liquidation preference of $ 25 per share.

Dividends on the preferred stock accrue and are payable quarterly in arrears, at a fixed rate per annum equal to 6.25 percent from the original issue date to, but excluding, June 30, 2025, and thereafter at a floating rate per annum equal to three-month LIBOR plus a spread of 3.85 percent.

The net proceeds from the preferred stock offering totaled $ 111.6 million.

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On August 3, 2017, Valley issued 4.0 million shares of its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series B, no par value per share, with a liquidation preference of $ 25 per share.

Dividends on the preferred stock will accrue and be payable quarterly in arrears, at a fixed rate per annum equal to 5.50 percent from the original issuance date to, but excluding, September 30, 2022, and thereafter at a floating rate per annum equal to three-month LIBOR plus a spread of 3.578 percent.

The net proceeds from the preferred stock offering totaled $ 98.1 million.

Commencing September 30, 2022, Valley may redeem the preferred shares at the liquidation preference plus accrued and unpaid dividends, subject to certain conditions.

Valley may redeem the preferred shares at the liquidation preference plus accrued and unpaid dividends, subject to certain conditions.

Preferred stock is included in Valley's (additional) Tier 1 capital and total risk-based capital at December 31, 2023 and 2022.

2023 Form 10-K 144

OTHER COMPREHENSIVE INCOME (Note 19)

The following table presents the tax effects allocated to each component of other comprehensive income (loss) for the years ended December 31, 2023, 2022 and 2021.

Components of other comprehensive income (loss) include changes in net unrealized gains and losses on debt securities available for sale;

Components of other comprehensive income (loss) include changes in net unrealized gains and losses on debt securities AFS;

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

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(in thousands)

Unrealized gains and losses on available for sale (AFS) debt securities

Net (losses) gains arising during the period $ ( 189,201 ) $ 52,220 $ ( 136,981 ) $ ( 32,586 ) $ 8,973 $ ( 23,613 ) $ 38,477 $ ( 10,632 ) $ 27,845

Unrealized gains and losses on available for sale debt securities

Net gains (losses) arising during the period $ 19,514 $ ( 6,564 ) $ 12,950 $ ( 189,201 ) $ 52,220 $ ( 136,981 ) $ ( 32,586 ) $ 8,973 $ ( 23,613 )

Less reclassification adjustment for net (gains) losses included in net income (1)

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Unrealized gains and losses on derivatives (cash flow hedges)

Net gains (losses) arising during the period 4,683 ( 1,321 ) 3,362 138 ( 11 ) 127 ( 3,169 ) 918 ( 2,251 )

Net (losses) gains arising during the period ( 1,093 ) 336 ( 757 ) 4,683 ( 1,321 ) 3,362 138 ( 11 ) 127

Less reclassification adjustment for net losses (gains) included in net income (2)

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Defined benefit pension and postretirement benefit plans

Net (losses) gains arising during the period ( 18,531 ) 5,356 ( 13,175 ) 14,381 ( 4,075 ) 10,306 ( 5,719 ) 2,301 ( 3,418 )

Net gains (losses) arising during the period 8,027 ( 2,591 ) 5,436 ( 18,531 ) 5,356 ( 13,175 ) 14,381 ( 4,075 ) 10,306

Amortization of prior service (cost) credit (3)

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7,896 ( 2,547 ) 5,349 ( 17,761 ) 5,130 ( 12,631 ) 15,784 ( 4,468 ) 11,316

Total other comprehensive (loss) income $ ( 202,036 ) $ 55,966 $ ( 146,070 ) $ ( 13,891 ) $ 3,677 $ ( 10,214 ) $ 32,844 $ ( 8,348 ) $ 24,496

2022 Form 10-K

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

Total other comprehensive income (loss) $ 26,345 $ ( 8,799 ) $ 17,546 $ ( 202,036 ) $ 55,966 $ ( 146,070 ) $ ( 13,891 ) $ 3,677 $ ( 10,214 )

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

(2) Included in interest expense.

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See Note 12 for details.

The following table presents the after-tax changes in the balances of each component of accumulated other comprehensive loss for the years ended December 31, 2022, 2021 and 2020:

2023 Form 10-K

The following table presents the after-tax changes in the balances of each component of accumulated other comprehensive (loss) income for the years ended December 31, 2023, 2022 and 2021:

Components of Accumulated Other Comprehensive Loss Total

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Balance-December 31, 2022 ( 127,818 ) 2,233 ( 38,417 ) ( 164,002 )

Other comprehensive (loss) income before reclassifications ( 136,981 ) 3,362 ( 13,175 ) ( 146,794 )

Amounts reclassified from other comprehensive (loss) income ( 23 ) 203 544 724

Other comprehensive (loss) income, net ( 137,004 ) 3,565 ( 12,631 ) ( 146,070 )

Other comprehensive income (loss) before reclassifications 12,950 ( 757 ) 5,436 17,629

Amounts reclassified from other comprehensive income (loss) ( 634 ) 638 ( 87 ) ( 83 )

Other comprehensive income (loss), net 12,316 ( 119 ) 5,349 17,546

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

2022 Form 10-K

PARENT COMPANY INFORMATION (Note 20)

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Total Liabilities and Shareholders’ Equity $ 7,526,048 $ 7,354,618

2023 Form 10-K 146

Condensed Statements of Income

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2023 2022 2021

(in thousands)

Dividends from subsidiary $ 425,000 $ 420,000 $ 150,000

Income from subsidiary — — 4,436

Net (losses) gains on equity securities ( 1,136 ) 1,491 —

Net gains (losses) on equity securities 1,036 ( 1,136 ) 1,491

Other interest and income 5,730 82 20

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2,058 1,741 1,152

(Gains) losses on securities transactions, net ( 1,036 ) 1,136 ( 1,491 )

Net change in:

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Cash and cash equivalents paid in acquisitions, net — ( 113,244 ) ( 3,983 )

Repayment of subordinated debt by subsidiary — — 100,000

Capital contributions to subsidiary ( 20 ) ( 125,055 ) ( 227,000 )

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OPERATING SEGMENTS (Note 21)

Prior to the second quarter 2022, Valley operated as four reportable segments:

Consumer Lending, Commercial Lending, Investment Management, and Corporate and Other Adjustments.

Prior to the second quarter 2022, Valley had three operating segments:

Consumer Lending, Commercial Lending, and Investment Management.

Valley re-evaluated its segment reporting during the second quarter 2022 to consider the Bank Leumi USA acquisition on April 1, 2022 along with other factors, including changes in the internal structure of operations, discrete financial information reviewed by key decision-makers, balance sheet management strategies and personnel.

In connection with the re-evaluation, Valley determined it operated reportable segments consisting of Consumer Banking, Commercial Banking and Treasury and Corporate Other.

Treasury and Corporate Other was reorganized to consolidate Treasury and other corporate-wide functions, including the Treasury managed investment securities portfolios and overnight interest earning cash balances formerly reported under Investment Management.

The discrete financial information related to the activities previously reported in the Investment Management segment is no longer provided to Valley's CEO, who is the chief operating decision maker.

Since its re-evaluation in 2022, Valley has managed its business operations under operating segments consisting of Consumer Banking and Commercial Banking.

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

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

Valley regularly assesses its strategic plans, operations, and reporting structures to identify its reportable segments.

There were no additional changes to Valley's reportable segments at December 31, 2022.

2022 Form 10-K

Consumer Banking is mainly comprised of residential mortgages and automobile loans, and to a lesser extent, secured personal lines of credit, home equity loans and other consumer loans.

Valley regularly assesses its strategic plans, operations and reporting structures to identify its operating segments and no additional changes to Valley's operating segments were determined necessary at December 31, 2023.

The Consumer Banking segment is mainly comprised of residential mortgages and automobile loans, and to a lesser extent, secured personal lines of credit, home equity loans and other consumer loans.

The duration of the residential mortgage loan portfolio is subject to movements in the market level of interest rates and forecasted prepayment speeds.

The average weighted life of the automobile loans within the portfolio is relatively unaffected by movements in the market level of interest rates.

The average weighted life of the automobile loans within the portfolio is relatively unaffected by movements in the market level of interest

2023 Form 10-K 148

However, the average life may be impacted by new loans as a result of the availability of credit within the automobile marketplace and consumer demand for purchasing new or used automobiles.

Consumer Banking also includes the Wealth Management and Insurance Services Division, comprised of trust, asset management, brokerage, insurance and tax credit advisory services.

Commercial Banking is comprised of floating rate and adjustable rate commercial and industrial loans and construction loans, as well as fixed rate owner occupied and commercial real estate loans.

The Commercial Banking segment is comprised of floating rate and adjustable rate commercial and industrial loans and construction loans, as well as fixed rate owner occupied and commercial real estate loans.

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.

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

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

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

Expenses related to the branch network, all other components of retail banking, along with the back office departments of the Bank are allocated from Treasury and Corporate Other to the Consumer and Commercial Banking segments.

Interest expense and internal transfer expense (for general corporate expenses) are allocated to each operating segment utilizing a transfer pricing methodology, which involves the allocation of operating and funding costs based on each segment's respective mix of average earning assets and or liabilities outstanding for the period.

Interest expense and internal transfer expense (for general corporate expenses) are allocated to each operating segment utilizing a transfer pricing methodology, which involves the allocation of operating and funding costs based on each segment's respective mix of average interest earning assets and or liabilities outstanding for the period.

The accounting for each segment and Treasury and Corporate Other includes internal accounting policies designed to measure consistent and reasonable financial reporting and may result in income and expense measurements that differ from amounts under GAAP.

The financial reporting for each segment contains allocations and reporting in line with Valley’s operations, which may not necessarily be comparable to any other financial institution.

The accounting for each segment includes internal accounting policies designed to measure consistent and reasonable financial reporting and may result in income and expense measurements that differ from amounts under U.S.

Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.

Fur thermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.

The prior period balances presented in the tables below reflect reclassifications to conform the presentation in those periods to the current operating segment structure.

Valley’s consolidated results were not impacted by the changes discussed above and remain unchanged for all periods presented.

The foll owing tables represent the financial data for Valley’s operating segments for the years ended December 31, 2022, 2021and 2020:

The foll owing tables represent the financial data for Valley’s operating segments, and Treasury and Corporate Other for the years ended December 31, 2023, 2022 and 2021:

Year Ended December 31, 2023

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Net interest income 223,452 1,353,234 78,954 1,655,640

(Credit) provision for credit losses ( 6,807 ) 39,703 ( 263 ) 32,633

Provision for credit losses 20,880 35,456 481 56,817

Net interest income after provision for credit losses 202,572 1,317,778 78,473 1,598,823

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Net interest income 219,598 951,409 38,894 1,209,901

Provision for credit losses 11,502 113,585 635 125,722

(Credit) provision for credit losses ( 6,807 ) 39,703 ( 263 ) 32,633

Net interest income after provision for credit losses 226,405 911,706 39,157 1,177,268

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

To the Shareholders and the Board of Directors

Valley National Bancorp:

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The model’s expected losses are adjusted for qualitative factors which includes a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience on a straight-line basis for the remaining life of the loan.

The forecasts consist of a multi-scenario economic forecast model which is

The forecasts consist of a multi

2023 Form 10-K

assigned relative probability weightings.

scenario economic forecast model which is assigned relative probability weightings.

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

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• evaluating the methodology used to develop the qualitative factor framework and the effect of those factors on the collective ALL by comparing the qualitative factors to the specific portfolio risk characteristics, trends and relevant industry practices and identified limitations of the underlying quantitative models.

2022 Form 10-K

We also assessed the sufficiency of the audit evidence obtained related to the collective ALL by evaluating the cumulative results of the audit procedures, qualitative aspects of the Company’s accounting practices and potential bias in the accounting estimate.

Fair value measurement of the acquired loans in the Bank Leumi USA business combination

As discussed in Note 2 to the consolidated financial statements, the Company acquired Bank Leumi Le-Israel Corporation, the U.S.

subsidiary of Bank Leumi Le-Israel B.M., and parent company of Bank Leumi USA (collectively referred to as Bank Leumi USA) on April 1, 2022.

The transaction was accounted for as a business combination using the acquisition method of accounting.

Accordingly, assets acquired, liabilities assumed, and consideration paid for Bank Leumi USA were recorded at their fair values at the acquisition date, including the fair value of acquired loans of $5.9 billion.

The fair value of acquired loans was based on a discounted cash flow methodology and the portfolio was segregated into categories for valuation purposes primarily based on loan type and loan risk rating.

The expected cash flows from the acquired loan categories were discounted using a forecast of principal and interest payments based on certain loan contractual characteristics, loan risk ratings and key valuation assumptions such as estimated market rates, prepayment speeds, default rates, and loss severity rates.

We identified the assessment of the fair value measurement of the acquired loans in the Bank Leumi USA business combination as a critical audit matter.

A high degree of audit effort, including specialized skills and knowledge, and auditor judgment was involved in the assessment due to significant measurement uncertainty.

Specifically, the assessment of the fair value measurement encompassed the evaluation of the fair value methodology and the development of key valuation assumptions.

The assessment also included an evaluation of loan risk ratings.

2023 Form 10-K 152

Goodwill impairment assessment of the Company’s reporting units

As discussed in Notes 1 and 8 to the consolidated financial statements, the carrying value of the Company’s goodwill balance is $1.9 billion as of December 31, 2023.

The Company’s goodwill is not amortized but is subject to annual testing for impairment in the second quarter, or more often, if events or circumstances indicate it may be impaired.

The Company elected to perform a quantitative impairment test for its annual assessment in the second quarter which compared the fair value of each of the reporting units with their respective carrying amounts, including goodwill.

If the fair value of each of the reporting units exceeded its carrying amounts, the goodwill of the reporting unit was not impaired.

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

Fair value is determined using market multiples and certain discounted cash flow methods.

Factors that may materially affect the fair value estimate include, among others, changes in discount rates, terminal value growth rates, and specific industry or market sector conditions.

Additionally, the Company performed a market capitalization reconciliation to support the appropriateness of the reporting units’ fair values and impairment test results, which included comparing the sum of the fair value of the reporting units to the Company’s market capitalization, adjusted for the present value of estimated synergies which a market participant acquirer could reasonably expect to realize from a hypothetical acquisition the Company.

We identified the Company’s annual goodwill impairment assessment as a critical audit matter.

A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgement was involved in performing procedures over 1) the individual reporting unit estimated cash flows and related key assumptions, which included the discount rate and the terminal value growth rate used in the discounted cash flow methods and 2) the present value of estimated synergies used in the market capitalization reconciliation and resulting control premium.

The key assumptions were challenging to test as they represented subjective determinations of future market and economic conditions that were also more sensitive to variation.

Minor changes in these assumptions could have had a significant effect on the Company’s measurement of the fair value of the reporting units and the impairment assessment of the carrying value of the goodwill.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s fair value measurement process for acquired loans, including controls related to (1) the development of the fair value methodology for acquired loans, (2) the determination of key valuation assumptions, and (3) the determination of loan risk ratings.

We involved credit risk professionals with specialized skills and knowledge who assisted in testing individual loan risk ratings for a selection of commercial loan relationships by evaluating the financial performance of the borrower, sources of repayment and any relevant guarantees or underlying collateral.

We involved valuation professionals with specialized skills and knowledge who assisted in:

• evaluating the fair value methodology for compliance with U.S.

generally accepted accounting principles, and

• developing an independent estimate of the fair value of acquired loans using key valuation assumptions, by loan category, used by other market participants and comparing the results to the Company’s fair value estimate.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s determination of the estimated fair value of the reporting units in the annual goodwill impairment assessment, including controls over the selection and development of key assumptions used in the discounted cash flow analyses and market capitalization reconciliation.

We involved valuation professionals with specialized skill and knowledge, who assisted in:

• evaluating the Company’s fair value methodology for the reporting units for compliance with U.S.

generally accepted accounting principles

• evaluating the Company’s discount rate by comparing it against a discount rate range that was independently developed using publicly available data for comparable entities

• evaluating the Company’s terminal value growth rate by comparing it against an average growth rate range that was independently developed using publicly available economic and industry data for the overall U.S.

economy, U.S.

capital markets, and comparable entities

• developing an independent expectation of the estimate of the reporting units’ fair value using the reporting units’ cash flow forecast and an independently developed discount rate and compared our independent expectation of fair value to the Company’s fair value estimate

• evaluating the total fair value of the Company’s reporting units through comparison to the Company’s market capitalization adjusted for expected synergies as of the measurement date by evaluating the reasonableness of the estimated synergies and resulting control premium for alignment with industry comparables, standards and market conditions.

We have served as the Company’s auditor since 2008.

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data