10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

x Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2016

OR

¨ Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number 1-11277

VALLEY NATIONAL BANCORP

(Exact name of registrant as specified in its charter)

New Jersey	22-2477875
(State or other jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)
1455 Valley Road Wayne, NJ	07470
(Address of principal executive office)	(Zip code)

973-305-8800

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.)    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common Stock (no par value), of which 254,475,120 shares were outstanding as of August 5, 2016

TABLE OF CONTENTS

		Page Number
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Consolidated Statements of Financial Condition as of June 30, 2016 and December 31, 2015	2
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2016 and 2015	3
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2016 and 2015	4
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015	5
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	83
Item 4.	Controls and Procedures	83
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	84
Item 1A.	Risk Factors	84
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	84
Item 6.	Exhibits	85
SIGNATURES		86

1

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except for share data)

	June 30, 2016			December 31, 2015
Assets	(Unaudited)
Cash and due from banks	$	220,156		$	243,575
Interest bearing deposits with banks	92,975			170,225
Investment securities:
Held to maturity (fair value of $1,803,711 at June 30, 2016 and $1,621,039 at December 31, 2015)	1,765,220			1,596,385
Available for sale	1,186,341			1,506,861
Total investment securities	2,951,561			3,103,246
Loans held for sale, at fair value	4,540			16,382
Loans	16,499,180			16,043,107
Less: Allowance for loan losses	(108,088		)	(106,178		)
Net loans	16,391,092			15,936,929
Premises and equipment, net	301,852			298,943
Bank owned life insurance	391,323			387,542
Accrued interest receivable	65,193			63,554
Goodwill	689,589			686,339
Other intangible assets, net	44,843			48,882
Other assets	656,614			656,999
Total Assets	$	21,809,738		$	21,612,616
Liabilities
Deposits:
Non-interest bearing	$	5,048,115		$	4,914,285
Interest bearing:
Savings, NOW and money market	8,243,307			8,181,362
Time	3,064,636			3,157,904
Total deposits	16,356,058			16,253,551
Short-term borrowings	1,411,844			1,076,991
Long-term borrowings	1,545,495			1,810,728
Junior subordinated debentures issued to capital trusts	41,496			41,414
Accrued expenses and other liabilities	222,633			222,841
Total Liabilities	19,577,526			19,405,525
Shareholders’ Equity
Preferred stock (no par value, authorized 30,000,000 shares; issued 4,600,000 shares at June 30, 2016 and December 31, 2015)	111,590			111,590
Common stock (no par value, authorized 332,023,233 shares; issued 254,399,394 shares at June 30, 2016 and 253,787,561 shares at December 31, 2015)	88,912			88,626
Surplus	1,934,469			1,927,399
Retained earnings	140,591			125,171
Accumulated other comprehensive loss	(42,999		)	(45,695		)
Treasury stock, at cost (37,080 common shares at June 30, 2016)	(351		)	—
Total Shareholders’ Equity	2,232,212			2,207,091
Total Liabilities and Shareholders’ Equity	$	21,809,738		$	21,612,616

See accompanying notes to consolidated financial statements.

2

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except for share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Interest Income
Interest and fees on loans	$	169,426		$	158,164		$	335,497		$	308,646
Interest and dividends on investment securities:
Taxable	14,256			12,233			28,255			27,165
Tax-exempt	3,734			3,595			7,424			7,207
Dividends	1,316			1,616			2,796			3,355
Interest on federal funds sold and other short-term investments	296			146			653			366
Total interest income	189,028			175,754			374,625			346,739
Interest Expense
Interest on deposits:
Savings, NOW and money market	9,961			5,911			19,204			11,906
Time	9,223			8,128			18,808			16,102
Interest on short-term borrowings	3,120			207			4,992			301
Interest on long-term borrowings and junior subordinated debentures	15,269			25,331			32,013			50,167
Total interest expense	37,573			39,577			75,017			78,476
Net Interest Income	151,455			136,177			299,608			268,263
Provision for credit losses	1,429			4,500			2,229			4,500
Net Interest Income After Provision for Credit Losses	150,026			131,677			297,379			263,763
Non-Interest Income
Trust and investment services	2,544			2,576			4,984			5,070
Insurance commissions	4,845			4,130			9,553			8,335
Service charges on deposit accounts	5,094			5,263			10,197			10,553
(Losses) gains on securities transactions, net	(3		)	(92		)	268			2,324
Fees from loan servicing	1,561			1,642			3,155			3,245
Gains on sales of loans, net	3,105			422			4,900			1,020
Gains on sales of assets, net	709			200			699			481
Bank owned life insurance	1,818			1,618			3,781			3,382
Change in FDIC loss-share receivable	1			595			(559		)	(3,325		)
Other	4,590			3,846			8,734			7,760
Total non-interest income	24,264			20,200			45,712			38,845
Non-Interest Expense
Salary and employee benefits expense	56,072			54,574			116,331			111,286
Net occupancy and equipment expense	22,168			22,132			44,957			44,332
FDIC insurance assessment	5,095			4,012			10,194			7,804
Amortization of other intangible assets	2,928			2,096			5,777			4,489
Professional and legal fees	5,472			4,059			9,367			7,400
Loss on extinguishment of debt	315			—			315			—
Amortization of tax credit investments	7,646			4,511			14,910			9,007
Telecommunication expense	2,294			2,045			4,680			4,051
Other	17,813			13,983			31,497			27,161
Total non-interest expense	119,803			107,412			238,028			215,530
Income Before Income Taxes	54,487			44,465			105,063			87,078
Income tax expense	15,460			12,474			29,849			24,746
Net Income	$	39,027		$	31,991		$	75,214		$	62,332
Dividends on preferred stock	1,797			—			3,594			—
Net Income Available to Common Shareholders	$	37,230		$	31,991		$	71,620		$	62,332
Earnings Per Common Share:
Basic	$	0.15		$	0.14		$	0.28		$	0.27
Diluted	0.15			0.14			0.28			0.27
Cash Dividends Declared per Common Share	0.11			0.11			0.22			0.22
Weighted Average Number of Common Shares Outstanding:
Basic	254,381,170			232,565,404			254,228,260			232,452,716
Diluted	254,771,213			232,586,616			254,575,873			232,457,748

See accompanying notes to consolidated financial statements.

3

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Net income	$	39,027		$	31,991		$	75,214		$	62,332
Other comprehensive (loss) income, net of tax:
Unrealized gains and losses on available for sale securities
Net (losses) gains arising during the period	(635		)	(5,845		)	7,648			(1,909		)
Less reclassification adjustment for net losses (gains) included in net income	2			55			(168		)	(1,354		)
Total	(633		)	(5,790		)	7,480			(3,263		)
Non-credit impairment losses on available for sale securities
Net change in non-credit impairment losses on securities	301			(31		)	242			(452		)
Less reclassification adjustment for accretion of credit impairment losses included in net income	—			(20		)	(286		)	(104		)
Total	301			(51		)	(44		)	(556		)
Unrealized gains and losses on derivatives (cash flow hedges)
Net (losses) gains on derivatives arising during the period	(2,122		)	1,131			(8,674		)	(4,128		)
Less reclassification adjustment for net losses included in net income	2,107			991			3,848			1,942
Total	(15		)	2,122			(4,826		)	(2,186		)
Defined benefit pension plan
Amortization of net loss	43			121			86			240
Total other comprehensive (loss) income	(304		)	(3,598		)	2,696			(5,765		)
Total comprehensive income	$	38,723		$	28,393		$	77,910		$	56,567

See accompanying notes to consolidated financial statements.

4

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)

	Six Months Ended June 30,
	2016			2015
Cash flows from operating activities:
Net income	$	75,214		$	62,332
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	12,440			10,230
Stock-based compensation	5,184			3,886
Provision for credit losses	2,229			4,500
Net amortization of premiums and accretion of discounts on securities and borrowings	7,047			12,519
Amortization of other intangible assets	5,777			4,489
Gains on securities transactions, net	(268		)	(2,324		)
Proceeds from sales of loans held for sale	185,577			53,005
Gains on sales of loans, net	(4,900		)	(1,020		)
Originations of loans held for sale	(171,123		)	(32,793		)
Gains on sales of assets, net	(699		)	(481		)
FDIC loss-share receivable (excluding reimbursements)	559			3,325
Net change in:
Trading securities	—			14,233
Fair value of borrowings hedged by derivative transactions	6,779			(1,059		)
Cash surrender value of bank owned life insurance	(3,781		)	(3,382		)
Accrued interest receivable	(1,639		)	(945		)
Other assets	(18,585		)	(25,207		)
Accrued expenses and other liabilities	(743		)	(1,696		)
Net cash provided by operating activities	99,068			99,612
Cash flows from investing activities:
Net loan originations	(15,384		)	(385,576		)
Loans purchased	(443,770		)	(629,074		)
Investment securities held to maturity:
Purchases	(309,507		)	(168,682		)
Sales	—			11,666
Maturities, calls and principal repayments	134,389			209,017
Investment securities available for sale:
Purchases	(432,530		)	(26,791		)
Sales	2,081			14,022
Maturities, calls and principal repayments	760,312			80,994
Proceeds from sales of real estate property and equipment	9,146			7,626
Purchases of real estate property and equipment	(15,353		)	(9,106		)
Reimbursements from the FDIC	94			1,753
Net cash used in investing activities	(310,522		)	(894,151		)
Cash flows from financing activities:
Net change in deposits	102,507			296,915
Net change in short-term borrowings	334,853			(20,633		)
Proceeds from issuance of long-term borrowings, net	—			98,851
Repayments of long-term borrowings	(269,000		)	—
Proceeds from issuance of preferred stock, net	—			111,590
Cash dividends paid to preferred shareholders	(3,594		)	—
Cash dividends paid to common shareholders	(55,857		)	(51,012		)
Purchase of common shares to treasury	(1,615		)	(2,082		)
Common stock issued, net	3,491			3,708
Net cash provided by financing activities	110,785			437,337
Net change in cash and cash equivalents	(100,669		)	(357,202		)
Cash and cash equivalents at beginning of year	413,800			830,407
Cash and cash equivalents at end of period	$	313,131		$	473,205

5

VALLEY NATIONAL BANCORP CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (in thousands)
	Six Months Ended June 30,
	2016		2015
Supplemental disclosures of cash flow information:
Cash payments for:
Interest on deposits and borrowings	$	76,693	$	78,777
Federal and state income taxes	12,964		38,525
Supplemental schedule of non-cash investing activities:
Transfer of loans to other real estate owned	$	2,899	$	4,369

See accompanying notes to consolidated financial statements.

6

VALLEY NATIONAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

The unaudited consolidated financial statements of Valley National Bancorp, a New Jersey corporation (Valley), include the accounts of its commercial bank subsidiary, Valley National Bank (the “Bank”), and all of Valley’s direct or indirect wholly-owned subsidiaries. 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. In accordance with applicable accounting standards, Valley does not consolidate statutory trusts established for the sole purpose of issuing trust preferred securities and related trust common securities.

In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly Valley’s financial position, results of operations and cash flows at June 30, 2016 and for all periods presented have been made. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the entire fiscal year.

In preparing the unaudited 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. Material estimates that are particularly susceptible to change are: the allowance for loan losses; the evaluation of goodwill and other intangible assets, and investment securities for impairment; fair value measurements of assets and liabilities; and income taxes. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the consolidated financial statements in the period they are deemed necessary. While management uses its best judgment, actual amounts or results could differ significantly from those estimates. The current economic environment has increased the degree of uncertainty inherent in these material estimates.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP and industry practice have been condensed or omitted pursuant to rules and regulations of the SEC. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Valley’s Annual Report on Form 10-K for the year ended December 31, 2015.

Note 2. Business Combinations

Acquisitions

On January 4, 2016, Masters Coverage Corp., an all-line insurance agency that is a wholly-owned subsidiary of the Bank, acquired certain assets of an independent insurance agency located in New York. The purchase price totaled approximately $1.4 million in cash and future cash consideration. The transaction generated goodwill and other intangible assets totaling $701 thousand and $660 thousand, respectively.

On December 1, 2015, Valley completed its acquisition of CNLBancshares, Inc. (CNL) and its wholly-owned subsidiary, CNLBank, headquartered in Orlando, Florida, a commercial bank with approximately $1.6 billion in assets, $825 million in loans and $1.2 billion in deposits and 16 branch offices on the date of its acquisition by Valley. The common shareholders of CNL received 0.705 of a share of Valley common stock for each CNL share they owned prior to the merger. The total consideration for the acquisition was approximately $230 million, consisting of 20.6 million shares of Valley's common stock.

During the first quarter of 2016, Valley revised the estimated fair values of the acquired assets as of the acquisition date as the result of additional information obtained. The adjustments mostly related to the fair value of certain purchased credit-impaired (PCI) loans, core deposit intangibles and time deposits which, on a combined basis, resulted in a $2.5 million increase in goodwill (see Note 10 for amount of goodwill as allocated to Valley's business segments). If additional information (that existed at the date of close) becomes available, the fair value estimates

7

for acquired assets and assumed liabilities are subject to change for up to one year after the closing date of the CNL acquisition.

Note 3. Earnings Per Common Share

The following table shows the calculation of both basic and diluted earnings per common share for the three and six months ended June 30, 2016 and 2015.

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands, except for share data)
Net income available to common shareholders	$	37,230	$	31,991	$	71,620	$	62,332
Basic weighted average number of common shares outstanding	254,381,170		232,565,404		254,228,260		232,452,716
Plus: Common stock equivalents	390,043		21,212		347,613		5,032
Diluted weighted average number of common shares outstanding	254,771,213		232,586,616		254,575,873		232,457,748
Earnings per common share:
Basic	$	0.15	$	0.14	$	0.28	$	0.27
Diluted	0.15		0.14		0.28		0.27

Common stock equivalents represent the dilutive effect of additional common shares issuable upon the assumed vesting or exercise, if applicable, of performance-based restricted stock units, common stock options and warrants to purchase Valley’s common shares. Common stock options and warrants with exercise prices that exceed the average market price of Valley’s common stock during the periods presented have an anti-dilutive effect on the diluted earnings per common share calculation and therefore are excluded from the diluted earnings per share calculation. Anti-dilutive common stock options and warrants equaled approximately 4.6 millionshares for both the three and six months ended June 30, 2016 and 6.1 million for both the three and six months ended June 30, 2015.

Note 4. Accumulated Other Comprehensive Loss

The following table presents the after-tax changes in the balances of each component of accumulated other comprehensive loss for the three and six months ended June 30, 2016.

	Components of Accumulated Other Comprehensive Loss												Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities			Non-credit Impairment Losses on AFS Securities			Unrealized Gains and (Losses) on Derivatives			Defined Benefit Pension Plan
	(in thousands)
Balance at March 31, 2016	$	2,777		$	(865	)	$	(22,455	)	$	(22,152	)	$	(42,695	)
Other comprehensive (loss) income before reclassifications	(635		)	301			(2,122		)	—			(2,456		)
Amounts reclassified from other comprehensive (loss) income	2			—			2,107			43			2,152
Other comprehensive (loss) income, net	(633		)	301			(15		)	43			(304		)
Balance at June 30, 2016	$	2,144		$	(564	)	$	(22,470	)	$	(22,109	)	$	(42,999	)

8

	Components of Accumulated Other Comprehensive Loss												Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities			Non-credit Impairment Losses on AFS Securities			Unrealized Gains and (Losses) on Derivatives			Defined Benefit Pension Plan
	(in thousands)
Balance at December 31, 2015	$	(5,336	)	$	(520	)	$	(17,644	)	$	(22,195	)	$	(45,695	)
Other comprehensive income (loss) before reclassifications	7,648			242			(8,674		)	—			(784		)
Amounts reclassified from other comprehensive income (loss)	(168		)	(286		)	3,848			86			3,480
Other comprehensive income (loss), net	7,480			(44		)	(4,826		)	86			2,696
Balance at June 30, 2016	$	2,144		$	(564	)	$	(22,470	)	$	(22,109	)	$	(42,999	)

The following table presents amounts reclassified from each component of accumulated other comprehensive loss on a gross and net of tax basis for the three and six months ended June 30, 2016 and 2015. 

	Amounts Reclassified from Accumulated Other Comprehensive Loss
	Three Months Ended June 30,						Six Months Ended June 30,
Components of Accumulated Other Comprehensive Loss	2016			2015			2016			2015			Income Statement Line Item
	(in thousands)
Unrealized gains (losses) on AFS securities before tax	$	(3	)	$	(92	)	$	268		$	2,324		(Losses) gains on securities transactions, net
Tax effect	1			37			(100		)	(970		)
Total net of tax	(2		)	(55		)	168			1,354
Non-credit impairment losses on AFS securities before tax:
Accretion of credit loss impairment due to an increase in expected cash flows	—			34			489			178			Interest and dividends on  investment securities (taxable)
Tax effect	—			(14		)	(203		)	(74		)
Total net of tax	—			20			286			104
Unrealized losses on derivatives (cash flow hedges) before tax	(3,597		)	(1,699		)	(6,568		)	(3,328		)	Interest expense
Tax effect	1,490			708			2,720			1,386
Total net of tax	(2,107		)	(991		)	(3,848		)	(1,942		)
Defined benefit pension plan:
Amortization of net loss	(72		)	(205		)	(144		)	(410		)	*
Tax effect	29			84			58			170
Total net of tax	(43		)	(121		)	(86		)	(240		)
Total reclassifications, net of tax	$	(2,152	)	$	(1,147	)	$	(3,480	)	$	(724	)

* Amortization of net loss is included in the computation of net periodic pension cost.

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Note 5. New Authoritative Accounting Guidance

Accounting Standards Update (ASU) No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" amends the accounting guidance on the impairment of financial instruments. The ASU No. 2016-13 adds to U.S. GAAP an impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity is required to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU No. 2016-13 is effective for Valley for reporting periods beginning January 1, 2020. Management is currently evaluating the impact of the ASU No. 2016-13 on Valley’s consolidated financial statements.

ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" simplifies several aspects of the stock compensation guidance in Topic 718 and other related guidance. The amendments focus on income tax accounting upon vesting or exercise of share-based payments, award classification, liability classification exception for statutory tax withholding requirements, estimating forfeitures, and cash flow presentation. ASU No. 2016-09 is effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018 with an early adoption permitted. ASU No. 2016-09 is not expected to have a significant impact on Valley's consolidated financial statements.

ASU No. 2016-02, “Leases (Topic 842)” requires the recognition of a right of use asset and related lease liability by lessees for leases classified as operating leases under current GAAP. Topic 842, which replaces the current guidance under Topic 840, retains a distinction between finance leases and operating leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee also will not significantly change from current GAAP. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize right of use assets and lease liabilities. Topic 842 will be effective for Valley for reporting periods beginning January 1, 2019, with an early adoption permitted. Valley must apply a modified retrospective transition approach for the applicable leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Management is currently evaluating the impact of Topic 842 on Valley’s consolidated financial statements.

ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities” requires that: (i) equity investments with readily determinable fair values must be measured at fair value with changes in fair value recognized in net income, (2) equity investments without readily determinable fair values must be measured at either fair value or at cost adjusted for changes in observable prices minus impairment. Changes in value under either of these methods would be recognized in net income, (3) entities that record financial liabilities at fair value due to a fair value option election must recognize changes in fair value in other comprehensive income if it is related to instrument-specific credit risk, and (4) entities must assess whether a valuation allowance is required for deferred tax assets related to available-for-sale debt securities. ASU No. 2016-01 is effective for Valley for reporting periods beginning January 1, 2018 and is not expected to have a material effect on Valley’s consolidated financial statements.

ASU No. 2015-07, "Fair Value Measurement (Topic 820) - Disclosure for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)", which removes the requirement to categorize within the fair value hierarchy all investments for which the fair value is measured using the net asset value per share practical expedient. ASU No. 2015-07 also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. ASU No. 2015-07 began effective for Valley for reporting periods after January 1, 2016 and did not have an impact on Valley's fair value measurement disclosures at Note 6.

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ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)" implements a common revenue standard that clarifies the principles for recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In 2016, the Financial Accounting Standards Board issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606) - Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” and ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing,” to further clarify the new guidance under Topic 606. ASU No. 2014-09 and its aforementioned amendments are effective on January 1, 2018. Management is currently evaluating the new revenue guidance but does not expect it to have a significant impact on Valley’s consolidated financial statements.

Note 6. Fair Value Measurement of Assets and Liabilities

Accounting Standards Codification (ASC) Topic 820, “Fair Value Measurements and Disclosures,” establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

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

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

Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

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

The following tables present the assets and liabilities that are measured at fair value on a recurring and nonrecurring basis by level within the fair value hierarchy as reported on the consolidated statements of financial condition at June 30, 2016 and December 31, 2015. The assets presented under “nonrecurring fair value measurements” in the table below are not measured at fair value on an ongoing basis but are subject to fair value adjustments under certain circumstances (e.g., when an impairment loss is recognized). 

	June 30, 2016		Fair Value Measurements at Reporting Date Using:
			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available for sale:
U.S. Treasury securities	$	51,035	$	51,035	$	—	$	—
U.S. government agency securities	25,290		—		25,290		—
Obligations of states and political subdivisions	125,746		—		125,746		—
Residential mortgage-backed securities	876,153		—		865,170		10,983
Trust preferred securities	8,240		—		6,122		2,118
Corporate and other debt securities	80,373		17,743		62,630		—
Equity securities	19,504		727		18,777		—
Total available for sale	1,186,341		69,505		1,103,735		13,101
Loans held for sale (1)	4,540		—		4,540		—
Other assets (2)	60,843		—		60,843		—
Total assets	$	1,251,724	$	69,505	$	1,169,118	$	13,101
Liabilities
Other liabilities (2)	$	79,897	$	—	$	79,897	$	—
Total liabilities	$	79,897	$	—	$	79,897	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans (3)	$	4,612	$	—	$	—	$	4,612
Loan servicing rights	5,918		—		—		5,918
Foreclosed assets (4)	2,642		—		—		2,642
Total	$	13,172	$	—	$	—	$	13,172

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			Fair Value Measurements at Reporting Date Using:
	December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available for sale:
U.S. Treasury securities	$	549,473	$	549,473	$	—	$	—
U.S. government agency securities	29,963		—		29,963		—
Obligations of states and political subdivisions	124,966		—		124,966		—
Residential mortgage-backed securities	696,428		—		684,777		11,651
Trust preferred securities	8,404		—		6,262		2,142
Corporate and other debt securities	77,552		17,710		59,842		—
Equity securities	20,075		1,198		18,877		—
Total available for sale	1,506,861		568,381		924,687		13,793
Loans held for sale (1)	16,382		—		16,382		—
Other assets (2)	33,774		—		33,774		—
Total assets	$	1,557,017	$	568,381	$	974,843	$	13,793
Liabilities
Other liabilities (2)	$	50,844	$	—	$	50,844	$	—
Total liabilities	$	50,844	$	—	$	50,844	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans (3)	$	15,427	$	—	$	—	$	15,427
Loan servicing rights	2,571		—		—		2,571
Foreclosed assets (4)	16,672		—		—		16,672
Total	$	34,670	$	—	$	—	$	34,670

(1) Loans held for sale carried at fair value (which consist of residential mortgages) had contractual unpaid principal balances totaling approximately $4.4 million and $16.1 million at June 30, 2016 and December 31, 2015, respectively.

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

(3) Excludes PCI loans.

(4) Includes covered (i.e., subject to loss-sharing agreements with the FDIC) other real estate owned totaling $100 thousand and $4.2 million at June 30, 2016 and December 31, 2015, respectively.

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The changes in Level 3 assets measured at fair value on a recurring basis for the three and six months ended June 30, 2016 and 2015 are summarized below: 

	Available for Sale Securities
	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Balance, beginning of the period	$	12,949		$	15,468		$	13,793		$	19,309
Total net gains (losses) included in other comprehensive income for the period	514			(90		)	(71		)	(882		)
Sales	—			—			—			(2,675		)
Settlements	(362		)	(666		)	(621		)	(1,040		)
Balance, end of the period	$	13,101		$	14,712		$	13,101		$	14,712

No changes in unrealized gains or losses on Level 3 securities were included in earnings during the three and six months ended June 30, 2016 and 2015. There were no transfers of assets into and out of Level 3, or between Level 1 and Level 2, during the three and six months ended June 30, 2016 and 2015.

There have been no material changes in the valuation methodologies used at June 30, 2016 from December 31, 2015.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following valuation techniques were used for financial instruments measured at fair value on a recurring basis. All the valuation techniques described below apply to the unpaid principal balance excluding any accrued interest or dividends at the measurement date. Interest income and expense are recorded within the consolidated statements of income depending on the nature of the instrument using the effective interest method based on acquired discount or premium.

Available for sale securities. All U.S. Treasury securities, certain corporate and other debt securities, and certain common and preferred equity securities (including certain trust preferred securities) are reported at fair value utilizing Level 1 inputs. The majority of other investment securities are reported at fair value utilizing Level 2 inputs. The prices for these instruments are obtained through an independent pricing service or dealer market participants with whom Valley has historically transacted both purchases and sales of investment securities. Prices obtained from these sources include prices derived from market quotations and matrix pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. Management reviews the data and assumptions used in pricing the securities by its third party provider to ensure the highest level of significant inputs are derived from market observable data. For certain securities, the inputs used by either dealer market participants or an independent pricing service may be derived from unobservable market information (Level 3 inputs). In these instances, Valley evaluates the appropriateness and quality of the assumption and the resulting price. In addition, Valley reviews the volume and level of activity for all available for sale and trading securities and attempts to identify transactions which may not be orderly or reflective of a significant level of activity and volume. For securities meeting these criteria, the quoted prices received from either market participants or an independent pricing service may be adjusted, as necessary, to estimate fair value and this results in fair values based on Level 3 inputs. In determining fair value, Valley utilizes unobservable inputs which reflect Valley’s own assumptions about the inputs that market participants would use in pricing each security. In developing its assertion of market participant assumptions, Valley utilizes the best information that is both reasonable and available without undue cost and effort.

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In calculating the fair value for the available for sale securities under Level 3, Valley prepared present value cash flow models for certain private label mortgage-backed securities. The cash flows for the residential mortgage-backed securities incorporated the expected cash flow of each security adjusted for default rates, loss severities and prepayments of the individual loans collateralizing the security.

The following table presents quantitative information about Level 3 inputs used to measure the fair value of these securities at June 30, 2016: 

Security Type	Valuation Technique	Unobservable Input	Range	Weighted Average
Private label mortgage-backed securities	Discounted cash flow	Prepayment rate	0.0-20.2%	10.1	%
		Default rate	3.6-16.2	7.9
		Loss severity	45.4-66.3	60.5

Significant increases or decreases in any of the unobservable inputs in the table above in isolation would result in a significantly lower or higher fair value measurement of the securities. Generally, a change in the assumption used for the default rate is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for prepayment rates.

For the Level 3 available for sale private label mortgage-backed securities (consisting of 4 securities), cash flow assumptions incorporated independent third party market participant data based on vintage year for each security. The discount rate utilized in determining the present value of cash flows for the mortgage-backed securities was arrived at by combining the yield on orderly transactions for similar maturity government sponsored mortgage-backed securities with (i) the historical average risk premium of similar structured private label securities, (ii) a risk premium reflecting current market conditions, including liquidity risk, and (iii) if applicable, a forecasted loss premium derived from the expected cash flows of each security. The estimated cash flows for each private label mortgage-backed security were then discounted at the aforementioned effective rate to determine the fair value. The quoted prices received from either market participants or independent pricing services are weighted with the internal price estimate to determine the fair value of each instrument.

For the Level 3 available for sale one pooled trust preferred security, the resulting estimated future cash flow was discounted at a yield determined by reference to similarly structured securities for which observable orderly transactions occurred. The discount rate was applied using a pricing matrix based on credit, security type and maturity characteristics to determine the fair value. The fair value calculation is received from an independent valuation adviser. In validating the fair value calculation from an independent valuation adviser, Valley reviews the accuracy of the inputs and the appropriateness of the unobservable inputs utilized in the valuation to ensure the fair value calculation is reasonable from a market participant perspective.

Loans held for sale. The conforming residential mortgage loans originated for sale are reported at fair value using Level 2 inputs. The fair values were calculated utilizing quoted prices for similar assets in active markets. To determine these fair values, the mortgages held for sale are put into multiple tranches, or pools, based on the coupon rate and maturity of each mortgage. The market prices for each tranche are obtained from both Fannie Mae and Freddie Mac. The market prices represent a delivery price, which reflects the underlying price each institution would pay Valley for an immediate sale of an aggregate pool of mortgages. The market prices received from Fannie Mae and Freddie Mac are then averaged and interpolated or extrapolated, where required, to calculate the fair value of each tranche. Depending upon the time elapsed since the origination of each loan held for sale, non-performance risk and changes therein were addressed in the estimate of fair value based upon the delinquency data provided to both Fannie Mae and Freddie Mac for market pricing and changes in market credit spreads. Non-performance risk did not materially impact the fair value of mortgage loans held for sale at June 30, 2016 and December 31, 2015 based on the short duration these assets were held, and the high credit quality of these loans.

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Derivatives. Derivatives are reported at fair value utilizing Level 2 inputs. The fair value 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 and Overnight Index Swap rate curves. 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 June 30, 2016 and December 31, 2015), is determined based on the current market prices for similar instruments provided by Fannie Mae and Freddie Mac. 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 credit valuation adjustments were not significant to the overall valuation of Valley’s derivatives at June 30, 2016 and December 31, 2015.

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

The following valuation techniques were used for certain non-financial assets measured at fair value on a nonrecurring basis, including non-performing loans held for sale carried at estimated fair value (less selling costs) when less than the unamortized cost, impaired loans reported at the fair value of the underlying collateral, loan servicing rights, other real estate owned and other repossessed assets, which are reported at fair value upon initial recognition or subsequent impairment as described below.

Impaired loans. Certain impaired loans are reported at the fair value of the underlying collateral if repayment is expected solely from the collateral and are commonly referred to as “collateral dependent impaired loans.” Collateral values are estimated using Level 3 inputs, consisting of individual appraisals that are significantly adjusted based on certain discounting criteria. At June 30, 2016, appraisals are discounted based on specific market data by location and property type. During the quarter ended June 30, 2016, collateral dependent impaired loans were individually re-measured and reported at fair value through direct loan charge-offs to the allowance for loan losses and/or a specific valuation allowance allocation based on the fair value of the underlying collateral. The collateral dependent loan charge-offs to the allowance for loan losses totaled $473 thousand and $1.7 million for the three months ended June 30, 2016 and 2015, respectively, and $952 thousand and $2.6 million for the six months ended June 30, 2016 and 2015, respectively. At June 30, 2016, collateral dependent impaired loans with a total recorded investment of $5.1 million were reduced by specific valuation allowance allocations totaling $460 thousand to a reported total net carrying amount of $4.6 million.

Loan servicing rights. Fair values for each risk-stratified group of loan servicing rights are calculated using a fair value model from a third party vendor that requires inputs that are both significant to the fair value measurement and unobservable (Level 3). The fair value model is based on various assumptions, including but not limited to, prepayment speeds, internal rate of return (“discount rate”), servicing cost, ancillary income, float rate, tax rate, and inflation. The prepayment speed and the discount rate are considered two of the most significant inputs in the model. At June 30, 2016, the fair value model used prepayment speeds (stated as constant prepayment rates) from 0 percent up to 24 percent and a discount rate of 8.0 percent for the valuation of the loan servicing rights. A significant degree of judgment is involved in valuing the loan servicing rights using Level 3 inputs. The use of different assumptions could have a significant positive or negative effect on the fair value estimate. Impairment charges are recognized on loan servicing rights when the amortized cost of a risk-stratified group of loan servicing rights exceeds the estimated fair value. Valley recorded net impairment charges on its loan servicing rights totaling $265 thousand and $457 thousand for the three and six months ended June 30, 2016, respectively, as compared net recoveries of impairment charges totaling $245 thousand and $161 thousand for three and six months ended June 30, 2015, respectively.

Foreclosed assets. Certain foreclosed assets (consisting of other real estate owned and other repossessed assets), upon initial recognition and transfer from loans, are re-measured and reported at fair value through a charge-off to the allowance for loan losses based upon the fair value of the foreclosed assets. The fair value of a foreclosed asset, upon initial recognition, is typically estimated using Level 3 inputs, consisting of an appraisal that is adjusted based on certain discounting criteria, similar to the criteria used for impaired loans described above. The appraisals of foreclosed assets were adjusted up to 2.8 percent at June 30, 2016. At June 30, 2016, foreclosed assets included

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$2.6 million of assets that were measured at fair value upon initial recognition or subsequently re-measured during the quarter ended June 30, 2016. The foreclosed assets charge-offs to the allowance for loan losses totaled $489 thousand and $434 thousand for the three months ended June 30, 2016 and 2015, respectively and $922 thousand and $891 thousand for six months ended June 30, 2016 and 2015, respectively. The re-measurement of foreclosed assets at fair value subsequent to their initial recognition resulted in net loss within non-interest expense of $295 thousand and $470 thousand for the three months ended June 30, 2016 and 2015, respectively and $912 thousand and $482 thousand for six months ended June 30, 2016 and 2015, respectively.

Other Fair Value Disclosures

ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.

The fair value estimates presented in the following table were based on pertinent market data and relevant information on the financial instruments available as of the valuation date. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire portfolio of financial instruments. Because no market exists for a portion of the financial instruments, fair value estimates may be based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For instance, Valley has certain fee-generating business lines (e.g., its mortgage servicing operation, trust and investment management departments) that were not considered in these estimates since these activities are not financial instruments. In addition, the tax implications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.

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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 June 30, 2016 and December 31, 2015 were as follows: 

	Fair Value Hierarchy	June 30, 2016				December 31, 2015
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(in thousands)
Financial assets
Cash and due from banks	Level 1	$	220,156	$	220,156	$	243,575	$	243,575
Interest bearing deposits with banks	Level 1	92,975		92,975		170,225		170,225
Investment securities held to maturity:
U.S. Treasury securities	Level 1	138,904		152,772		138,978		149,483
U.S. government agency securities	Level 2	12,076		12,563		12,859		13,130
Obligations of states and political subdivisions	Level 2	565,509		591,925		504,865		527,263
Residential mortgage-backed securities	Level 2	957,377		967,142		852,289		855,272
Trust preferred securities	Level 2	59,795		46,030		59,785		46,437
Corporate and other debt securities	Level 2	31,559		33,279		27,609		29,454
Total investment securities held to maturity		1,765,220		1,803,711		1,596,385		1,621,039
Net loans	Level 3	16,391,092		16,410,318		15,936,929		15,824,475
Accrued interest receivable	Level 1	65,193		65,193		63,554		63,554
Federal Reserve Bank and Federal Home Loan Bank stock (1)	Level 1	161,684		161,684		145,068		145,068
Financial liabilities
Deposits without stated maturities	Level 1	13,291,422		13,291,422		13,095,647		13,095,647
Deposits with stated maturities	Level 2	3,064,636		3,103,627		3,157,904		3,203,389
Short-term borrowings	Level 1	1,411,844		1,411,844		1,076,991		1,076,991
Long-term borrowings	Level 2	1,545,495		1,716,189		1,810,728		1,945,741
Junior subordinated debentures issued to capital trusts	Level 2	41,496		43,865		41,414		44,127
Accrued interest payable (2)	Level 1	11,434		11,434		13,110		13,110

(1) Included in other assets.

(2) Included in accrued expenses and other liabilities.

The following methods and assumptions were used to estimate the fair value of other financial assets and financial liabilities in the table above:

Cash and due from banks and interest bearing deposits with banks. The carrying amount is considered to be a reasonable estimate of fair value because of the short maturity of these items.

Investment securities held to maturity. Fair values are based on prices obtained through an independent pricing service or dealer market participants with whom Valley has historically transacted both purchases and sales of investment securities. Prices obtained from these sources include prices derived from market quotations and matrix pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things (Level 2 inputs). Additionally, Valley reviews the volume and level of activity for all classes of held to maturity securities and attempts to identify transactions which may not be orderly or reflective of a significant level of activity and volume. For securities meeting these criteria, the quoted prices received from either market participants or an independent pricing service may be adjusted, as necessary. If applicable, the adjustment to fair value is derived based on present value cash flow model projections prepared by Valley utilizing assumptions similar to those incorporated by market participants.

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Loans. Fair values of loans are estimated by discounting the projected futurecash flows using market discount rates that reflect the credit and interest-rate risk inherent in the loan. The discount rate is a product of both the applicable index and credit spread, subject to the estimated current new loan interest rates. The credit spread component is static for all maturities and may not necessarily reflect the value of estimating all actual cash flows re-pricing. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. Fair values estimated in this manner do not fully incorporate an exit-price approach to fair value, but instead are based on a comparison to current market rates for comparable loans.

Accrued interest receivable and payable. The carrying amounts of accrued interest approximate their fair value due to the short-term nature of these items.

Federal Reserve Bank and Federal Home Loan Bank stock. Federal Reserve Bank and FHLB stock are non-marketable equity securities and are reported at their redeemable carrying amounts, which approximate fair value.

Deposits. The carrying amounts of deposits without stated maturities (i.e., non-interest bearing, savings, NOW, and money market deposits) approximate their estimated fair value. The fair value of time deposits is based on the discounted value of contractual cash flows using estimated rates currently offered for alternative funding sources of similar remaining maturity.

Short-term and long-term borrowings. The carrying amounts of certain short-term borrowings, including securities sold under agreements to repurchase (and from time to time, federal funds purchased and FHLB borrowings) approximate their fair values because they frequently re-price to a market rate. The fair values of other short-term and long-term borrowings are estimated by obtaining quoted market prices of the identical or similar financial instruments when available. When quoted prices are unavailable, the fair values of the borrowings are estimated by discounting the estimated future cash flows using current market discount rates of financial instruments with similar characteristics, terms and remaining maturity.

Junior subordinated debentures issued to capital trusts. The fair value of debentures issued to capital trusts is estimated utilizing the income approach, whereby the expected cash flows, over the remaining estimated life of the security, are discounted using Valley’s credit spread over the current yield on a similar maturity of U.S. Treasury security or the three-month LIBOR for the variable rate indexed debentures (Level 2 inputs). The credit spread used to discount the expected cash flows was calculated based on the median current spreads for all fixed and variable publicly traded trust preferred securities issued by banks.

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Note 7. Investment Securities

Held to Maturity

The amortized cost, gross unrealized gains and losses and fair value of securities held to maturity at June 30, 2016 and December 31, 2015 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2016
U.S. Treasury securities	$	138,904	$	13,868	$	—		$	152,772
U.S. government agency securities	12,076		487		—			12,563
Obligations of states and political subdivisions:
Obligations of states and state agencies	193,343		13,148		—			206,491
Municipal bonds	372,166		13,268		—			385,434
Total obligations of states and political subdivisions	565,509		26,416		—			591,925
Residential mortgage-backed securities	957,377		14,173		(4,408		)	967,142
Trust preferred securities	59,795		39		(13,804		)	46,030
Corporate and other debt securities	31,559		1,720		—			33,279
Total investment securities held to maturity	$	1,765,220	$	56,703	$	(18,212	)	$	1,803,711
December 31, 2015
U.S. Treasury securities	$	138,978	$	10,505	$	—		$	149,483
U.S. government agency securities	12,859		271		—			13,130
Obligations of states and political subdivisions:
Obligations of states and state agencies	194,547		10,538		(10		)	205,075
Municipal bonds	310,318		11,955		(85		)	322,188
Total obligations of states and political subdivisions	504,865		22,493		(95		)	527,263
Residential mortgage-backed securities	852,289		11,018		(8,035		)	855,272
Trust preferred securities	59,785		36		(13,384		)	46,437
Corporate and other debt securities	27,609		1,894		(49		)	29,454
Total investment securities held to maturity	$	1,596,385	$	46,217	$	(21,563	)	$	1,621,039

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The age of unrealized losses and fair value of related securities held to maturity at June 30, 2016 and December 31, 2015were as follows:

	Less than Twelve Months					More than Twelve Months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
June 30, 2016
Residential mortgage-backed securities	$	225,255	$	(1,340	)	$	253,047	$	(3,068	)	$	478,302	$	(4,408	)
Trust preferred securities	—		—			44,638		(13,804		)	44,638		(13,804		)
Total	$	225,255	$	(1,340	)	$	297,685	$	(16,872	)	$	522,940	$	(18,212	)
December 31, 2015
Obligations of states and political subdivisions:
Obligations of states and state agencies	$	6,837	$	(5	)	$	1,965	$	(5	)	$	8,802	$	(10	)
Municipal bonds	8,814		(72		)	10,198		(13		)	19,012		(85		)
Total obligations of states and political subdivisions	15,651		(77		)	12,163		(18		)	27,814		(95		)
Residential mortgage-backed securities	244,440		(2,916		)	162,756		(5,119		)	407,196		(8,035		)
Trust preferred securities	—		—			45,047		(13,384		)	45,047		(13,384		)
Corporate and other debt securities	2,951		(49		)	—		—			2,951		(49		)
Total	$	263,042	$	(3,042	)	$	219,966	$	(18,521	)	$	483,008	$	(21,563	)

The unrealized losses on investment securities held to maturity are primarily due to changes in interest rates (including, in certain cases, changes in credit spreads) and, in some cases, lack of liquidity in the marketplace. Within the held to maturity portfolio, the total number of security positions in an unrealized loss position was 74 at both June 30, 2016 and December 31, 2015.

The unrealized losses within the residential mortgage-backed securities category of the held to maturity portfolio at June 30, 2016 mainly related to certain investment grade securities issued by Fannie Mae.

The unrealized losses existing for more than twelve months for trust preferred securities at June 30, 2016 primarily related to four non-rated single-issuer trust preferred securities issued by bank holding companies. All single-issuer trust preferred securities classified as held to maturity are paying in accordance with their terms, have no deferrals of interest or defaults and, if applicable, the issuers meet the regulatory capital requirements to be considered “well-capitalized institutions” at June 30, 2016.

Management does not believe that any individual unrealized loss as of June 30, 2016 included in the table above represents other-than-temporary impairment as management mainly attributes the declines in fair value to changes in interest rates and market volatility, not credit quality or other factors. Based on a comparison of the present value of expected cash flows to the amortized cost, management believes there are no credit losses on these securities. Valley does not have the intent to sell, nor is it more likely than not that Valley will be required to sell, the securities contained in the table above before the recovery of their amortized cost basis or maturity.

As of June 30, 2016, the fair value of investments held to maturity that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law, was $916.5 million.

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The contractual maturities of investments in debt securities held to maturity at June 30, 2016 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.  

	June 30, 2016
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	110,870	$	110,881
Due after one year through five years	169,388		180,766
Due after five years through ten years	310,727		332,730
Due after ten years	216,858		212,192
Residential mortgage-backed securities	957,377		967,142
Total investment securities held to maturity	$	1,765,220	$	1,803,711

Actual maturities of 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 6.1 years at June 30, 2016.

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Available for Sale

The amortized cost, gross unrealized gains and losses and fair value of securities available for sale at June 30, 2016 and December 31, 2015 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2016
U.S. Treasury securities	$	51,031	$	53	$	(49	)	$	51,035
U.S. government agency securities	24,913		397		(20		)	25,290
Obligations of states and political subdivisions:
Obligations of states and state agencies	43,399		873		(101		)	44,171
Municipal bonds	80,502		1,382		(309		)	81,575
Total obligations of states and political subdivisions	123,901		2,255		(410		)	125,746
Residential mortgage-backed securities	873,480		7,300		(4,627		)	876,153
Trust preferred securities*	10,300		—		(2,060		)	8,240
Corporate and other debt securities	79,501		1,453		(581		)	80,373
Equity securities	20,522		605		(1,623		)	19,504
Total investment securities available for sale	$	1,183,648	$	12,063	$	(9,370	)	$	1,186,341
December 31, 2015
U.S. Treasury securities	$	551,173	$	4	$	(1,704	)	$	549,473
U.S. government agency securities	29,316		665		(18		)	29,963
Obligations of states and political subdivisions:
Obligations of states and state agencies	44,285		196		(67		)	44,414
Municipal bonds	80,717		209		(374		)	80,552
Total obligations of states and political subdivisions	125,002		405		(441		)	124,966
Residential mortgage-backed securities	701,764		3,348		(8,684		)	696,428
Trust preferred securities*	10,458		—		(2,054		)	8,404
Corporate and other debt securities	78,202		1,239		(1,889		)	77,552
Equity securities	21,022		575		(1,522		)	20,075
Total investment securities available for sale	$	1,516,937	$	6,236	$	(16,312	)	$	1,506,861

* Includes two pooled trust preferred securities, principally collateralized by securities issued by banks and insurance companies, at June 30, 2016 and December 31, 2015.

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The age of unrealized losses and fair value of related securities available for sale at June 30, 2016 and December 31, 2015 were as follows:

	Less than Twelve Months					More than Twelve Months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
June 30, 2016
U.S. Treasury securities	$	25,036	$	(49	)	$	—	$	—		$	25,036	$	(49	)
U.S. government agency securities	—		—			4,336		(20		)	4,336		(20		)
Obligations of states and political subdivisions:
Obligations of states and state agencies	3,520		(101		)	—		—			3,520		(101		)
Municipal bonds	—		—			11,015		(309		)	11,015		(309		)
Total obligations of states and political subdivisions	3,520		(101		)	11,015		(309		)	14,535		(410		)
Residential mortgage-backed securities	233,742		(1,354		)	176,651		(3,273		)	410,393		(4,627		)
Trust preferred securities	—		—			8,240		(2,060		)	8,240		(2,060		)
Corporate and other debt securities	10,003		(12		)	24,719		(569		)	34,722		(581		)
Equity securities	—		—			14,172		(1,623		)	14,172		(1,623		)
Total	$	272,301	$	(1,516	)	$	239,133	$	(7,854	)	$	511,434	$	(9,370	)
December 31, 2015
U.S. Treasury securities	$	548,538	$	(1,704	)	$	—	$	—		$	548,538	$	(1,704	)
U.S. government agency securities	3,489		(5		)	4,736		(13		)	8,225		(18		)
Obligations of states and political subdivisions:
Obligations of states and state agencies	24,359		(67		)	—		—			24,359		(67		)
Municipal bonds	38,207		(128		)	13,551		(246		)	51,758		(374		)
Total obligations of states and political subdivisions	62,566		(195		)	13,551		(246		)	76,117		(441		)
Residential mortgage-backed securities	293,615		(4,147		)	164,010		(4,537		)	457,625		(8,684		)
Trust preferred securities	—		—			8,404		(2,054		)	8,404		(2,054		)
Corporate and other debt securities	21,203		(471		)	36,137		(1,418		)	57,340		(1,889		)
Equity securities	—		—			14,273		(1,522		)	14,273		(1,522		)
Total	$	929,411	$	(6,522	)	$	241,111	$	(9,790	)	$	1,170,522	$	(16,312	)

The unrealized losses on investment securities available for sale are primarily due to changes in interest rates (including, in certain cases, changes in credit spreads) and, in some cases, lack of liquidity in the marketplace. The total number of security positions in the securities available for sale portfolio in an unrealized loss position at June 30, 2016 was 117 as compared to 291 at December 31, 2015.

The unrealized losses within the residential mortgage-backed securities category of the available for sale portfolio at June 30, 2016 largely related to several investment grade residential mortgage-backed securities mainly issued by Ginnie Mae.

The unrealized losses more than twelve months for trust preferred securities at June 30, 2016 in the table above largely relate to 2 pooled trust preferred securities with an amortized cost of $10.3 million and a fair value of $8.3 million. One of the two pooled trust preferred securities had unrealized loss of $1.4 million and an investment grade rating at June 30, 2016.

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As of June 30, 2016, 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 $401.3 million.

The contractual maturities of investment securities available for sale at June 30, 2016 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.

	June 30, 2016
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	10,750	$	10,749
Due after one year through five years	91,209		92,467
Due after five years through ten years	123,271		124,178
Due after ten years	64,416		63,290
Residential mortgage-backed securities	873,480		876,153
Equity securities	20,522		19,504
Total investment securities available for sale	$	1,183,648	$	1,186,341

Actual maturities of 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 at June 30, 2016 was 9.7 years.

Other-Than-Temporary Impairment Analysis

Valley records impairment charges on its investment securities when the decline in fair value is considered other-than-temporary. Numerous factors, including lack of liquidity for re-sales of certain investment securities; decline in the creditworthiness of the issuer; absence of reliable pricing information for investment securities; adverse changes in business climate; adverse actions by regulators; prolonged decline in value of equity investments; or unanticipated changes in the competitive environment could have a negative effect on Valley’s investment portfolio and may result in other-than-temporary impairment on certain investment securities in future periods. Valley’s investment portfolios include private label mortgage-backed securities, trust preferred securities principally issued by bank holding companies (including two pooled trust preferred securities), corporate bonds, and perpetual preferred and common equity securities issued by banks. These investments may pose a higher risk of future impairment charges by Valley as a result of the unpredictable nature of the U.S. economy and its potential negative effect on the future performance of the security issuers and, if applicable, the underlying mortgage loan collateral of the security.

There were no other-than-temporary impairment losses on securities recognized in earnings for the six months ended June 30, 2016 and 2015. At June 30, 2016, four previously impaired private label mortgage-backed securities (prior to December 31, 2012) had a combined amortized cost and fair value of $11.3 million and $11.0 million, respectively, while one previously impaired pooled trust preferred security had an amortized cost and fair value of $2.8 million and $2.1 million, respectively. The previously impaired pooled trust preferred security was not accruing interest during the three and six months ended June 30, 2016 and 2015. Additionally, one previously impaired pooled trust preferred security was sold during the first quarter of 2015 for an immaterial gain. See the table and discussion below for additional information.

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The following table presents the changes in the credit loss component of cumulative other-than-temporary impairment losses on debt securities classified as either held to maturity or available for sale that Valley has previously recognized in earnings, for which a portion of the impairment loss (non-credit factors) was recognized in other comprehensive income for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30,					Six Months Ended June 30,
	2016		2015			2016			2015
	(in thousands)
Balance, beginning of period	$	5,348	$	6,421		$	5,837		$	8,947
Accretion of credit loss impairment due to an increase in expected cash flows	—		(34		)	(489		)	(178		)
Sales	—		—			—			(2,382		)
Balance, end of period	$	5,348	$	6,387		$	5,348		$	6,387

The credit loss component of the impairment loss represents the difference between the present value of expected future cash flows and the amortized cost basis of the security prior to considering credit losses. The beginning balance represents the credit loss component for debt securities for which other-than-temporary impairment occurred prior to each period presented. The credit loss component increases if other-than-temporary impairments (initial and subsequent) are recognized in earnings for credit impaired debt securities. The credit loss component is reduced if (i) Valley receives cash flows in excess of what it expected to receive over the remaining life of the credit impaired debt security, (ii) the security matures, (iii) the security is fully written down, or (iv) Valley sells, intends to sell or believes it will be required to sell previously credit impaired debt securities.

Realized Gains and Losses

Gross gains (losses) realized on sales, maturities and other securities transactions related to investment securities included in earnings for the three and six months ended June 30, 2016 and 2015 were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Sales transactions:
Gross gains	$	—		$	—		$	271		$	3,274
Gross losses	—			—			—			(947		)
	—			—			271			2,327
Maturities and other securities transactions:
Gross gains	$	—		$	40		$	—		$	129
Gross losses	(3		)	(132		)	(3		)	(132		)
	(3		)	(92		)	(3		)	(3		)
Total (losses) gains on securities transactions, net	$	(3	)	$	(92	)	$	268		$	2,324

Valley recognized gross gains from sales transactions of investment securities totaling $3.3 million for the six months endedJune 30, 2015 due to the sale of corporate debt securities and trust preferred securities with amortized cost totaling $25.9 million. These transactions included a corporate debt security classified as held to maturity and a previously impaired pooled trust preferred security with amortized costs of $9.8 million and $2.6 million, respectively. Additionally, Valley recognized $947 thousand of gross losses during the six months endedJune 30, 2015 due to the sale of mostly trust preferred securities with a total amortized cost of $8.3 million. The vast majority of the sales of investment securities were due to an investment portfolio re-balancing during the second quarter of 2015 due to changes in our regulatory capital calculation under the new Basel III regulatory capital reform (effective for Valley on January 1, 2015). Under ASC Topic 320, “Investments - Debt and Equity Securities,” the sale of held to maturity securities based

26

upon the change in capital requirements is permitted without tainting the remaining held to maturity investment portfolio.

Note 8. Loans

The detail of the loan portfolio as of June 30, 2016 and December 31, 2015 was as follows:

	June 30, 2016						December 31, 2015
	Non-PCI Loans		PCI Loans*		Total		Non-PCI Loans		PCI Loans*		Total
	(in thousands)
Loans:
Commercial and industrial	$	2,200,838	$	327,911	$	2,528,749	$	2,156,549	$	383,942	$	2,540,491
Commercial real estate:
Commercial real estate	6,822,650		1,196,144		8,018,794		6,069,532		1,355,104		7,424,636
Construction	632,332		136,515		768,847		607,694		147,253		754,947
Total commercial real estate loans	7,454,982		1,332,659		8,787,641		6,677,226		1,502,357		8,179,583
Residential mortgage	2,857,190		198,163		3,055,353		2,912,079		218,462		3,130,541
Consumer:
Home equity	380,200		105,530		485,730		391,809		119,394		511,203
Automobile	1,141,510		283		1,141,793		1,238,826		487		1,239,313
Other consumer	489,059		10,855		499,914		426,147		15,829		441,976
Total consumer loans	2,010,769		116,668		2,127,437		2,056,782		135,710		2,192,492
Total loans	$	14,523,779	$	1,975,401	$	16,499,180	$	13,802,636	$	2,240,471	$	16,043,107

____

* PCI loans include covered loans (mostly consisting of residential mortgage and commercial real estate loans) totaling $81.1 million and $122.3 million at June 30, 2016 and December 31, 2015, respectively.

Total non-covered loans include net unearned premiums and deferred loan costs of $8.3 million and $3.5 million at June 30, 2016 and December 31, 2015, respectively. The outstanding balances (representing contractual balances owed to Valley) for PCI loans totaled $2.1 billion and $2.4 billion at June 30, 2016 and December 31, 2015, respectively.

There were no sales of loans from the held for investment portfolio during the three and six months ended June 30, 2016 and 2015.

Purchased Credit-Impaired Loans (Including Covered Loans)

PCI loans are accounted for in accordance with ASC Subtopic 310-30 and are initially recorded at fair value (as determined by the present value of expected future cash flows) with no valuation allowance (i.e., the allowance for loan losses), and aggregated and accounted for as pools of loans based on common risk characteristics. The difference between the undiscounted cash flows expected at acquisition and the initial carrying amount (fair value) of the PCI loans, or the “accretable yield,” is recognized as interest income utilizing the level-yield method over the life of each pool. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “non-accretable difference,” are not recognized as a yield adjustment, as a loss accrual or a valuation allowance. Reclassifications of the non-accretable difference to the accretable yield may occur subsequent to the loan acquisition dates due to increases in expected cash flows of the loan pools. Valley's PCI loan portfolio included covered loans (i.e., loans in which the Bank will share losses with the FDIC under loss-sharing agreements) totaling $81.1 million and $122.3 million at June 30, 2016 and December 31, 2015, respectively.

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The following table presents changes in the accretable yield for PCI loans during the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Balance, beginning of period	$	387,120		$	309,858		$	415,179		$	336,208
Accretion	(31,519		)	(27,757		)	(59,578		)	(54,107		)
Balance, end of period	$	355,601		$	282,101		$	355,601		$	282,101

FDIC Loss-Share Receivable

The receivable arising from the loss-sharing agreements with the FDIC is measured separately from the covered loan portfolio because the agreements are not contractually part of the covered loans and are not transferable should the Bank choose to dispose of the covered loans. The FDIC loss share receivable (which is included in other assets on Valley's consolidated statements of financial condition) totaled $7.6 million and $8.3 million at June 30, 2016 and December 31, 2015, respectively. The aggregate effect of changes in the FDIC loss-share receivable was a net reduction in non-interest income of $559 thousand and $3.3 million for the six months ended June 30, 2016 and 2015, respectively. The larger net reduction during the first half of 2015 was mainly caused by the prospective recognition of the effect of additional cash flows from certain loan pools which were covered by commercial loan loss-sharing agreements that expired in March 2015.

Credit Risk Management

For all of its loan types Valley adheres to a credit policy designed to minimize credit risk while generating the maximum income given the level of risk. Management reviews and approves these policies and procedures on a regular basis with subsequent approval by the Board of Directors 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. Valley closely monitors economic conditions and loan performance trends to manage and evaluate its exposure to credit risk. 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.

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Credit Quality

The following table presents past due, non-accrual and current loans (excluding PCI loans, which are accounted for on a pool basis, and non-performing loans held for sale) by loan portfolio class at June 30, 2016 and December 31, 2015:

	Past Due and Non-Accrual Loans
	30-59 Days Past Due Loans		60-89 Days Past Due Loans		Accruing Loans 90 Days or More Past Due		Non-Accrual Loans		Total Past Due Loans		Current Non-PCI Loans		Total Non-PCI Loans
	(in thousands)
June 30, 2016
Commercial and industrial	$	5,187	$	5,714	$	218	$	6,573	$	17,692	$	2,183,146	$	2,200,838
Commercial real estate:
Commercial real estate	5,076		834		131		19,432		25,473		6,797,177		6,822,650
Construction	—		—		—		5,878		5,878		626,454		632,332
Total commercial real estate loans	5,076		834		131		25,310		31,351		7,423,631		7,454,982
Residential mortgage	10,177		2,326		314		14,866		27,683		2,829,507		2,857,190
Consumer loans:
Home equity	959		54		—		989		2,002		378,198		380,200
Automobile	1,552		577		127		141		2,397		1,139,113		1,141,510
Other consumer	24		13		12		—		49		489,010		489,059
Total consumer loans	2,535		644		139		1,130		4,448		2,006,321		2,010,769
Total	$	22,975	$	9,518	$	802	$	47,879	$	81,174	$	14,442,605	$	14,523,779
December 31, 2015
Commercial and industrial	$	3,920	$	524	$	213	$	10,913	$	15,570	$	2,140,979	$	2,156,549
Commercial real estate:
Commercial real estate	2,684		—		131		24,888		27,703		6,041,829		6,069,532
Construction	1,876		2,799		—		6,163		10,838		596,856		607,694
Total commercial real estate loans	4,560		2,799		131		31,051		38,541		6,638,685		6,677,226
Residential mortgage	6,681		1,626		1,504		17,930		27,741		2,884,338		2,912,079
Consumer loans:
Home equity	1,308		111		—		2,088		3,507		388,302		391,809
Automobile	1,969		491		164		118		2,742		1,236,084		1,238,826
Other consumer	71		24		44		—		139		426,008		426,147
Total consumer loans	3,348		626		208		2,206		6,388		2,050,394		2,056,782
Total	$	18,509	$	5,575	$	2,056	$	62,100	$	88,240	$	13,714,396	$	13,802,636

Impaired loans. Impaired loans, consisting of non-accrual commercial and industrial loans and commercial real estate loans over $250 thousand and all loans which were modified in troubled debt restructuring, are individually evaluated for impairment. PCI loans are not classified as impaired loans because they are accounted for on a pool basis.

29

The following table presents the information about impaired loans by loan portfolio class at June 30, 2016 and December 31, 2015:

	Recorded Investment With No Related Allowance		Recorded Investment With Related Allowance		Total Recorded Investment		Unpaid Contractual Principal Balance		Related Allowance
	(in thousands)
June 30, 2016
Commercial and industrial	$	3,211	$	19,500	$	22,711	$	26,614	$	3,294
Commercial real estate:
Commercial real estate	23,758		46,711		70,469		73,333		4,282
Construction	7,415		1,469		8,884		8,894		57
Total commercial real estate loans	31,173		48,180		79,353		82,227		4,339
Residential mortgage	6,901		15,753		22,654		24,126		1,261
Consumer loans:
Home equity	199		2,268		2,467		2,560		397
Total consumer loans	199		2,268		2,467		2,560		397
Total	$	41,484	$	85,701	$	127,185	$	135,527	$	9,291
December 31, 2015
Commercial and industrial	$	7,863	$	17,851	$	25,714	$	33,071	$	3,439
Commercial real estate:
Commercial real estate	30,113		37,440		67,553		71,263		3,354
Construction	8,847		5,530		14,377		14,387		317
Total commercial real estate loans	38,960		42,970		81,930		85,650		3,671
Residential mortgage	7,842		14,770		22,612		24,528		1,377
Consumer loans:
Home equity	263		1,869		2,132		2,224		295
Total consumer loans	263		1,869		2,132		2,224		295
Total	$	54,928	$	77,460	$	132,388	$	145,473	$	8,782

The following tables present by loan portfolio class, the average recorded investment and interest income recognized on impaired loans for the three and six months ended June 30, 2016 and 2015: 

	Three Months Ended June 30,
	2016				2015
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
Commercial and industrial	$	24,157	$	194	$	25,530	$	211
Commercial real estate:
Commercial real estate	70,194		475		75,688		894
Construction	10,027		53		11,485		126
Total commercial real estate loans	80,221		528		87,173		1,020
Residential mortgage	22,922		234		22,566		249
Consumer loans:
Home equity	3,071		20		4,607		38
Total consumer loans	3,071		20		4,607		38
Total	$	130,371	$	976	$	139,876	$	1,518

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	Six Months Ended June 30,
	2016				2015
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
Commercial and industrial	$	26,244	$	434	$	26,898	$	457
Commercial real estate:
Commercial real estate	71,296		1,114		77,098		1,380
Construction	9,915		101		14,063		276
Total commercial real estate loans	81,211		1,215		91,161		1,656
Residential mortgage	23,262		436		22,206		499
Consumer loans:
Home equity	2,715		43		4,049		68
Total consumer loans	2,715		43		4,049		68
Total	$	133,432	$	2,128	$	144,314	$	2,680

Interest income recognized on a cash basis (included in the table above) was immaterial for the three and six months ended June 30, 2016 and 2015.

Troubled debt restructured loans. 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). Valley’s PCI loans are excluded from the TDR disclosures below because they are evaluated for impairment on a pool by pool basis. When an individual PCI loan within a pool is modified as a TDR, it is not removed from its pool. All TDRs are classified as impaired loans and are included in the impaired loan disclosures above.

The majority of 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 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 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) totaled $82.1 million and $77.6 million as of June 30, 2016 and December 31, 2015, respectively. Non-performing TDRs totaled $13.7 million and $21.0 million as of June 30, 2016 and December 31, 2015, respectively.

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The following tables present loans by loan portfolio class modified as TDRs during the three and six months ended June 30, 2016 and 2015. The pre-modification and post-modification outstanding recorded investments disclosed in the table below represent the loan carrying amounts immediately prior to the modification and the carrying amounts at June 30, 2016 and 2015, respectively.

	Three Months Ended June 30, 2016					Three Months Ended June 30, 2015
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	($ in thousands)
Commercial and industrial	4	$	5,079	$	4,094	6	$	1,947	$	1,922
Commercial real estate:
Commercial real estate	2	6,111		6,077		3	1,562		1,573
Construction	—	—		—		1	500		1,190
Total commercial real estate	2	6,111		6,077		4	2,062		2,763
Residential mortgage	5	1,830		1,826		2	1,098		1,097
Consumer	—	—		—		1	1,081		1,079
Total	11	$	13,020	$	11,997	13	$	6,188	$	6,861

	Six Months Ended June 30, 2016					Six Months Ended June 30, 2015
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	($ in thousands)
Commercial and industrial	6	$	6,456	$	5,437	12	$	3,531	$	3,412
Commercial real estate:
Commercial real estate	3	6,658		6,388		4	6,562		6,573
Construction	—	—		—		1	500		1,190
Total commercial real estate	3	6,658		6,388		5	7,062		7,763
Residential mortgage	7	2,222		2,206		3	1,378		1,373
Consumer	1	55		53		1	1,081		1,079
Total	17	$	15,391	$	14,084	21	$	13,052	$	13,627

The majority of the TDR concessions made during the three and six months ended June 30, 2016 and 2015 involved an extension of the loan term, lowering the monthly payments and interest rate reduction. The total TDRs presented in the above table had allocated specific reserves for loan losses totaling $2.1 million and $1.0 million at June 30, 2016 and 2015, respectively.These specific reserves are included in the allowance for loan losses for loans individually evaluated for impairment disclosed in Note 9. One commercial and industrial TDR loan totaling $209 thousand was fully charged-off during the six months ended June 30, 2016. There were no charge-offs related to TDR modifications during the second quarter of 2016 and three and six months ended June 30, 2015.

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The following table presents non-PCI loans modified as TDRs within the previous 12 months for which there was a payment default (90 days or more past due) during the three and six months ended June 30, 2016.

	Three Months Ended June 30, 2016			Six Months Ended June 30, 2016
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial real estate	2	$	1,070	1	$	214
Residential mortgage	1	74		1	74
Consumer	1	30		1	30
Total	4	$	1,174	3	$	318

Credit quality indicators. Valley utilizes an internal loan classification system as a means of reporting problem loans within commercial and industrial, commercial real estate, and construction loan portfolio classes. Under Valley’s internal risk rating system, loan relationships could be classified as “Pass,” “Special Mention,” “Substandard,” “Doubtful,” and “Loss.” Substandard loans include loans that exhibit well-defined weakness and are characterized by the distinct possibility that Valley will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, based on currently existing facts, conditions and values, highly questionable and improbable. Loans classified as Loss are those considered uncollectible with insignificant value and are charged-off immediately to the allowance for loan losses, and, therefore, not presented in the table below. Loans that do not currently pose a sufficient risk to warrant classification in one of the aforementioned categories, but pose weaknesses that deserve management’s close attention are deemed Special Mention. Loans rated as Pass do not currently pose any identified risk and can range from the highest to average quality, depending on the degree of potential risk. Risk ratings are updated any time the situation warrants.

The following table presents the risk category of loans (excluding PCI loans) by class of loans at June 30, 2016 and December 31, 2015. 

Credit exposure - by internally assigned risk rating	Pass		Special Mention		Substandard		Doubtful		Total Non-PCI Loans
	(in thousands)
June 30, 2016
Commercial and industrial	$	2,114,575	$	52,028	$	34,235	$	—	$	2,200,838
Commercial real estate	6,666,210		65,621		90,819		—		6,822,650
Construction	622,721		527		9,084		—		632,332
Total	$	9,403,506	$	118,176	$	134,138	$	—	$	9,655,820
December 31, 2015
Commercial and industrial	$	2,049,752	$	68,243	$	36,254	$	2,300	$	2,156,549
Commercial real estate	5,893,354		79,279		96,899		—		6,069,532
Construction	596,530		1,102		10,062		—		607,694
Total	$	8,539,636	$	148,624	$	143,215	$	2,300	$	8,833,775

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For residential mortgages, automobile, home equity and other consumer loan portfolio classes (excluding PCI loans), Valley also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment in those loan classes based on payment activity as of June 30, 2016 and December 31, 2015:

Credit exposure - by payment activity	Performing Loans		Non-Performing Loans		Total Non-PCI Loans
	(in thousands)
June 30, 2016
Residential mortgage	$	2,842,324	$	14,866	$	2,857,190
Home equity	379,211		989		380,200
Automobile	1,141,510		141		1,141,651
Other consumer	489,059		—		489,059
Total	$	4,852,104	$	15,996	$	4,868,100
December 31, 2015
Residential mortgage	$	2,894,149	$	17,930	$	2,912,079
Home equity	389,721		2,088		391,809
Automobile	1,238,708		118		1,238,826
Other consumer	426,147		—		426,147
Total	$	4,948,725	$	20,136	$	4,968,861

Valley evaluates the credit quality of its PCI loan pools based on the expectation of the underlying cash flows of each pool, derived from the aging status and by payment activity of individual loans within the pool. The following table presents the recorded investment in PCI loans by class based on individual loan payment activity as of June 30, 2016 and December 31, 2015.

Credit exposure - by payment activity	Performing Loans		Non-Performing Loans		Total PCI Loans
	(in thousands)
June 30, 2016
Commercial and industrial	$	318,935	$	8,976	$	327,911
Commercial real estate	1,185,024		11,120		1,196,144
Construction	135,090		1,425		136,515
Residential mortgage	194,532		3,631		198,163
Consumer	110,545		6,123		116,668
Total	$	1,944,126	$	31,275	$	1,975,401
December 31, 2015
Commercial and industrial	$	373,665	$	10,277	$	383,942
Commercial real estate	1,342,030		13,074		1,355,104
Construction	141,547		5,706		147,253
Residential mortgage	214,713		3,749		218,462
Consumer	129,891		5,819		135,710
Total	$	2,201,846	$	38,625	$	2,240,471

Other real estate owned (OREO) totaled $12.1 million and $19.0 million (including $1.2 million and $5.0 million of OREO properties which are subject to loss-sharing agreements with the FDIC) at June 30, 2016 and December 31, 2015 respectively. OREO included foreclosed residential real estate properties totaling $6.8 millionand $7.0 million at June 30, 2016 and December 31, 2015, respectively. Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $9.4 millionand $12.3 million at June 30, 2016 and December 31, 2015, respectively.

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Note 9. Allowance for Credit Losses

The allowance for credit losses consists of the allowance for loan losses and the allowance for unfunded letters of credit. Management maintains the allowance for credit losses at a level estimated to absorb probable loan losses of the loan portfolio and unfunded letter of credit commitments at the balance sheet date. The allowance for loan losses is based on ongoing evaluations of the probable estimated losses inherent in the loan portfolio, including unexpected additional credit impairment of PCI loan pools subsequent to acquisition.

The following table summarizes the allowance for credit losses at June 30, 2016 and December 31, 2015: 

	June 30, 2016		December 31, 2015
	(in thousands)
Components of allowance for credit losses:
Allowance for loan losses	$	108,088	$	106,178
Allowance for unfunded letters of credit	2,326		2,189
Total allowance for credit losses	$	110,414	$	108,367

The following table summarizes the provision for credit losses for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands)
Components of provision for credit losses:
Provision for loan losses	$	1,363	$	4,382	$	2,092	$	4,382
Provision for unfunded letters of credit	66		118		137		118
Total provision for credit losses	$	1,429	$	4,500	$	2,229	$	4,500

The following tables detail activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2016 and 2015:

	Commercial and Industrial			Commercial Real Estate			Residential Mortgage			Consumer			Unallocated			Total
	(in thousands)
Three Months Ended June 30, 2016:
Allowance for loan losses:
Beginning balance	$	48,417		$	48,454		$	4,209		$	4,335		$	—		$	105,415
Loans charged-off	(493		)	(414		)	(151		)	(697		)	—			(1,755		)
Charged-off loans recovered	990			1,458			94			523			—			3,065
Net recoveries (charge-offs)	497			1,044			(57		)	(174		)	—			1,310
Provision for loan losses	(889		)	2,379			(657		)	530			—			1,363
Ending balance	$	48,025		$	51,877		$	3,495		$	4,691		$	—		$	108,088
Three Months Ended June 30, 2015:
Allowance for loan losses:
Beginning balance	$	44,893		$	41,656		$	4,092		$	4,972		$	7,018		$	102,631
Loans charged-off	(3,226		)	(2,590		)	(339		)	(1,194		)	—			(7,349		)
Charged-off loans recovered	1,986			690			130			365			—			3,171
Net charge-offs	(1,240		)	(1,900		)	(209		)	(829		)	—			(4,178		)
Provision for loan losses	(1,939		)	4,429			1,172			1,399			(679		)	4,382
Ending balance	$	41,714		$	44,185		$	5,055		$	5,542		$	6,339		$	102,835

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	Commercial and Industrial			Commercial Real Estate			Residential Mortgage			Consumer			Unallocated		Total
	(in thousands)
Six Months Ended June 30, 2016:
Allowance for loan losses:
Beginning balance	$	48,767		$	48,006		$	4,625		$	4,780		$	—	$	106,178
Loans charged-off	(1,744		)	(519		)	(232		)	(1,771		)	—		(4,266		)
Charged-off loans recovered	1,516			1,547			109			912			—		4,084
Net (charge-offs) recoveries	(228		)	1,028			(123		)	(859		)	—		(182		)
Provision for loan losses	(514		)	2,843			(1,007		)	770			—		2,092
Ending balance	$	48,025		$	51,877		$	3,495		$	4,691		$	—	$	108,088
Six Months Ended June 30, 2015:
Allowance for loan losses:
Beginning balance	$	43,676		$	42,840		$	5,093		$	5,179		$	5,565	$	102,353
Loans charged-off	(3,979		)	(2,740		)	(388		)	(1,908		)	—		(9,015		)
Charged-off loans recovered	3,037			1,150			244			684			—		5,115
Net charge-offs	(942		)	(1,590		)	(144		)	(1,224		)	—		(3,900		)
Provision for loan losses	(1,020		)	2,935			106			1,587			774		4,382
Ending balance	$	41,714		$	44,185		$	5,055		$	5,542		$	6,339	$	102,835

At December 31, 2015, Valley refined and enhanced its assessment of the adequacy of the allowance for loan losses, including both changes to look-back periods for certain portfolios, as well as enhancements to its qualitative factor framework. The enhancements were meant to increase the level of precision in the allowance for credit losses. As a result, Valley no longer has an “unallocated” segment in its allowance for credit losses, as the risks and uncertainties meant to be captured by the unallocated allowance have been included in the qualitative framework for the respective loan portfolio segment (reported in the tables above) at June 30, 2016. As such, the unallocated allowance has in essence been reallocated to the applicable portfolios based on the risks and uncertainties it was meant to capture.

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The following table represents the allocation of the allowance for loan losses and the related loans by loan portfolio segment disaggregated based on the impairment methodology at June 30, 2016 and December 31, 2015.

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
June 30, 2016
Allowance for loan losses:
Individually evaluated for impairment	$	3,294	$	4,339	$	1,261	$	397	$	9,291
Collectively evaluated for impairment	44,731		47,538		2,234		4,294		98,797
Total	$	48,025	$	51,877	$	3,495	$	4,691	$	108,088
Loans:
Individually evaluated for impairment	$	22,711	$	79,353	$	22,654	$	2,467	$	127,185
Collectively evaluated for impairment	2,178,127		7,375,629		2,834,536		2,008,302		14,396,594
Loans acquired with discounts related to credit quality	327,911		1,332,659		198,163		116,668		1,975,401
Total	$	2,528,749	$	8,787,641	$	3,055,353	$	2,127,437	$	16,499,180
December 31, 2015
Allowance for loan losses:
Individually evaluated for impairment	$	3,439	$	3,671	$	1,377	$	295	$	8,782
Collectively evaluated for impairment	45,328		44,335		3,248		4,485		97,396
Total	$	48,767	$	48,006	$	4,625	$	4,780	$	106,178
Loans:
Individually evaluated for impairment	$	25,714	$	81,930	$	22,612	$	2,132	$	132,388
Collectively evaluated for impairment	2,130,835		6,595,296		2,889,467		2,054,650		13,670,248
Loans acquired with discounts related to credit quality	383,942		1,502,357		218,462		135,710		2,240,471
Total	$	2,540,491	$	8,179,583	$	3,130,541	$	2,192,492	$	16,043,107

Note 10. Goodwill and Other Intangible Assets

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

	Business Segment / Reporting Unit*
	Wealth Management		Consumer Lending		Commercial Lending		Investment Management		Total
	(in thousands)
Balance at December 31, 2015	$	20,517	$	199,119	$	314,260	$	152,443	$	686,339
Goodwill from business combinations	701		697		1,416		436		3,250
Balance at June 30, 2016	$	21,218	$	199,816	$	315,676	$	152,879	$	689,589

* Valley’s Wealth Management Division is comprised of trust, asset management, and insurance services. This reporting unit is included in the Consumer Lending segment for financial reporting purposes.

Goodwill from business combinations, in the table above, includes the effect of the combined adjustments to the estimated fair values of the acquired assets (including core deposits presented in the table below) and liabilities as of the acquisition date of CNL, and goodwill related to the acquisition of certain assets from an independent insurance agency during the first quarter of 2016 (see Note 2 for further details). There was no impairment of goodwill during the three and six months ended June 30, 2016 and 2015.

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The following table summarizes other intangible assets as of June 30, 2016 and December 31, 2015:

	Gross Intangible Assets		Accumulated Amortization			Valuation Allowance			Net Intangible Assets
	(in thousands)
June 30, 2016
Loan servicing rights	$	66,793	$	(50,079	)	$	(746	)	$	15,968
Core deposits	61,504		(34,851		)	—			26,653
Other	4,087		(1,865		)	—			2,222
Total other intangible assets	$	132,384	$	(86,795	)	$	(746	)	$	44,843
December 31, 2015
Loan servicing rights	$	75,932	$	(59,251	)	$	(289	)	$	16,392
Core deposits	62,714		(31,934		)	—			30,780
Other	4,374		(2,664		)	—			1,710
Total other intangible assets	$	143,020	$	(93,849	)	$	(289	)	$	48,882

Loan servicing rights are accounted for using the amortization method. Under this method, Valley amortizes the loan servicing assets in proportion to, and over the period of, estimated net servicing revenues. On a quarterly basis, Valley stratifies its loan servicing assets into groupings based on risk characteristics and assesses each group for impairment based on fair value. Impairment charges on loan servicing rights are recognized in earnings when the book value of a stratified group of loan servicing rights exceeds its estimated fair value. See the "Assets and Liabilities Measured at Fair Value on a Non-recurring Basis" section of Note 6 for additional information regarding the fair valuation and impairment of loan servicing rights.

Core deposits are amortized using an accelerated method and have a weighted average amortization period of 11 years. The line item labeled “Other” included in the table above primarily consists of customer lists and covenants not to compete, which are amortized over their expected lives generally using a straight-line method and have a weighted average amortization period of approximately 20 years. Valley evaluates core deposits and other intangibles for impairment when an indication of impairment exists. No impairment was recognized during the three and six months ended June 30, 2016 and 2015.

The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2016 through 2020:

	Loan Servicing Rights		Core Deposits		Other
	(in thousands)
2016	$	2,440	$	2,711	$	148
2017	3,915		4,842		280
2018	3,050		4,215		249
2019	2,291		3,671		235
2020	1,734		3,127		220

Valley recognized amortization expense on other intangible assets, including net impairment charges on loan servicing rights, totaling approximately $2.9 million and $2.1 million for the three months ended June 30, 2016 and 2015, respectively, and $5.8 million and $4.5 million for the six months ended June 30, 2016 and 2015, respectively.

Note 11. Stock–Based Compensation

On April 28, 2016, Valley’s shareholders approved the new 2016 Long-Term Stock Incentive Plan (the "2016 Stock Plan") administered by the Compensation and Human Resources Committee (the “Committee”) appointed by Valley’s Board of Directors. The purpose of the 2016 Stock Plan is to provide incentives to attract, retain and

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motivate officers and other key employees by providing a direct financial interest in Valley's continued success, and provide the flexibility to grant equity awards to non-employee directors as part of their compensation. The 2016 Stock Plan will also ensure that Valley has sufficient shares to meet its anticipated long-term equity compensation needs. Effective January 1, 2016, the 2.2 million of common shares remaining under Valley's 2009 Long-Term Stock Incentive Plan (the "2009 Stock Plan") became available for future grants under the 2016 Stock Plan. Accordingly, Valley will no longer grant new awards under the 2009 Stock Plan.

Under the 2016 Stock Plan, Valley may award shares to its employees and non-employee directors shares of common stock in the form of stock appreciation rights, both incentive and non-qualified stock options, restricted stock and restricted stock units (RSUs). As of June 30, 2016, up to 8.3 million shares of common stock were available for issuance under the 2016 Stock 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.

Valley awarded time-based restricted stock totaling 498 thousand shares and 492 thousand shares during the six months ended June 30, 2016 and 2015, respectively, to both executive officers and key employees of Valley. Time-based restricted stock issued during the three months ended June 30, 2016 and2015 were immaterial. Valley also awarded 431 thousand and 313 thousandshares of performance-based RSUs under the 2016 Stock Plan during the six months ended June 30, 2016, respectively, to certain executive officers. There were no awards of the performance-based RSUs during the three months ended June 30, 2016 and2015. The RSUs earn dividend equivalents (equal to cash dividends paid on Valley's common stock) over the applicable performance period. Dividend equivalents and accrued interest, per the terms of the agreements, are accumulated and paid to the grantee at the vesting date, or forfeited if the performance conditions are not met.

The performance-based awards vest based on (i) growth in tangible book value per share plus dividends (75 percent of performance shares) and (ii) total shareholder return as compared to our peer group (25 percent of performance shares). The majority of the performance-based awards "cliff" vest after three years based on the cumulative performance of Valley during that time period. The non-performance based awards have vesting periods ranging from three to six years. Generally, the restrictions on such awards lapse at an annual or bi-annual rate of one-third of the total award commencing with the first or second anniversary of the date of grant, respectively. The average grant date fair value of non-performance and performance-based restricted stock awarded during the six months ended June 30, 2016 was $8.56.

Valley recorded stock-based compensation expense of $2.8 million and $2.0 million for the three months ended June 30, 2016 and2015, respectively, and $5.2 million and $4.5 million for the six months ended June 30, 2016 and 2015, respectively. The fair values of stock awards are expensed over the shorter of the vesting or required service period. As of June 30, 2016, the unrecognized amortization expense for all stock-based employee compensation totaled approximately $19.1 million and will be recognized over an average remaining vesting period of approximately 3 years.

Note 12. Derivative Instruments and Hedging Activities

Valley enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

Cash Flow Hedges of Interest Rate Risk. Valley’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, Valley uses interest rate swaps and caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the payment of either fixed or variable-rate amounts in exchange for the receipt of variable or fixed-rate amounts from a counterparty. Interest rate caps designated as cash flow hedges involve the

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receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.

Fair Value Hedges of Fixed Rate Assets and Liabilities. Valley is exposed to changes in the fair value of certain of its fixed rate assets or liabilities due to changes in benchmark interest rates based on one-month LIBOR. From time to time, Valley uses interest rate swaps to manage its exposure to changes in fair value. 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. 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. Valley includes the gain or loss on the hedged items in the same income statement line item as the loss or gain on the related derivatives.

Non-designated Hedges. Derivatives not designated as hedges may be used to manage Valley’s exposure to interest rate movements or to provide service to customers but do not meet the requirements for hedge accounting under U.S. GAAP. Derivatives not designated as hedges are not entered into for speculative purposes.

Under a program, Valley executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that Valley executes with a third party, such that Valley minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings.

During the second quarter of 2014, Valley issued $25 million of market linked certificates of deposit through a broker dealer. The rate paid on these hybrid instruments is based on a formula derived from the spread between the long and short ends of the constant maturity swap (CMS) rate curve. This type of instrument is referred to as a "steepener" since it derives its value from the slope of the CMS curve. Valley has determined that these hybrid instruments contain an embedded swap contract which has been bifurcated from the host contract. Valley entered into a swap (with a total notional amount of $25 million) almost simultaneously with the deposit issuance where the receive rate on the swap mirrors the pay rate on the brokered deposits. The bifurcated derivative and the stand alone swap are both marked to market through other non-interest expense. Although these 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 three-month LIBOR rate and therefore provide an effective economic hedge.

Valley regularly enters into mortgage banking derivatives which are non-designated hedges. These derivatives include interest rate lock commitments provided to customers to fund certain residential mortgage loans to be sold into the secondary market and forward commitments for the future delivery of such loans. Valley enters into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of future changes in interest rates on Valley’s commitments to fund the loans as well as on its portfolio of mortgage loans held for sale.

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Amounts included in the consolidated statements of financial condition related to the fair value of Valley’s derivative financial instruments were as follows:

	June 30, 2016						December 31, 2015
	Fair Value						Fair Value
	Other Assets		Other Liabilities		Notional Amount		Other Assets		Other Liabilities		Notional Amount
	(in thousands)
Derivatives designated as hedging instruments:
Cash flow hedge interest rate caps and swaps	$	536	$	32,367	$	907,000	$	1,284	$	24,823	$	907,000
Fair value hedge interest rate swaps	14,454		1,403		133,106		7,658		1,306		133,209
Total derivatives designated as hedging instruments	$	14,990	$	33,770	$	1,040,106	$	8,942	$	26,129	$	1,040,209
Derivatives not designated as hedging instruments:
Interest rate swaps and embedded derivatives	$	44,861	$	44,858	$	756,274	$	24,628	$	24,623	$	654,134
Mortgage banking derivatives	992		1,269		273,690		204		92		73,438
Total derivatives not designated as hedging instruments	$	45,853	$	46,127	$	1,029,964	$	24,832	$	24,715	$	727,572

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Amount of loss reclassified from accumulated other comprehensive loss to interest expense	$	(3,597	)	$	(1,699	)	$	(6,568	)	$	(3,328	)
Amount of (loss) gain recognized in other comprehensive income	(3,625		)	1,895			(14,657		)	(7,016		)

The net gains or losses related to cash flow hedge ineffectiveness were immaterial during the three and six months ended June 30, 2016 and 2015. The accumulated net after-tax losses related to effective cash flow hedges included in accumulated other comprehensive loss were $22.5 million and $17.6 million at June 30, 2016 and December 31, 2015, respectively.

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 $12.7 million will be reclassified as an increase to interest expense over the next 12 months.

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Gains (losses) included in the consolidated statements of income related to interest rate derivatives designated as hedges of fair value were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Derivative - interest rate swaps:
Interest income	$	2		$	157		$	(97	)	$	103
Interest expense	2,069			(3,832		)	6,797			(1,091		)
Hedged item - loans and borrowings:
Interest income	$	(2	)	$	(157	)	$	97		$	(103	)
Interest expense	(2,060		)	3,840			(6,779		)	1,059

The amounts recognized in non-interest expense related to ineffectiveness of fair value hedges were immaterial for the three and six months ended June 30, 2016 and 2015.

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2016			2015		2016			2015
	(in thousands)
Non-designated hedge interest rate derivatives
Other non-interest expense	$	(92	)	$	70	$	(389	)	$	108

Credit Risk Related Contingent Features. By using derivatives, Valley is exposed to credit risk if counterparties to the derivative contracts do not perform as expected. Management attempts to minimize counterparty credit risk through credit approvals, limits, monitoring procedures and obtaining collateral where appropriate. Credit risk exposure associated with derivative contracts is managed at Valley in conjunction 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 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 counterparty could terminate the derivative positions, and Valley would be required to settle its obligations under the agreements. As of June 30, 2016, Valley was in compliance with all of the provisions of its derivative counterparty agreements. As of June 30, 2016, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk related to these agreements was $60.3 million. Valley has derivative counterparty agreements that require minimum collateral posting thresholds for certain counterparties. At June 30, 2016, Valley had $75.7 million in collateral posted with its counterparties.

Note 13. Balance Sheet Offsetting

Certain financial instruments, including derivatives (consisting of interest rate caps and swaps) and repurchase agreements (accounted for as secured long-term borrowings), may be eligible for offset in the consolidated balance sheet and/or subject to master netting arrangements or similar agreements. Valley is party to master netting arrangements with its financial institution counterparties; however, Valley does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a

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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. Master repurchase agreements which include “right of set-off” provisions generally have a legally enforceable right to offset recognized amounts. In such cases, the collateral would be used to settle the fair value of the repurchase agreement should Valley be in default. The table below presents information about Valley’s financial instruments that are eligible for offset in the consolidated statements of financial condition as of June 30, 2016 and December 31, 2015.

							Gross Amounts Not Offset
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments			Cash Collateral				Net Amount
	(in thousands)
June 30, 2016
Assets:
Interest rate caps and swaps	$	59,851	$	—	$	59,851	$	(14,991	)	$	—			$	44,860
Liabilities:
Interest rate caps and swaps	$	78,628	$	—	$	78,628	$	(14,991	)	$	(63,637	)		$	—
Repurchase agreements	340,000		—		340,000		—			(340,000		)	*	—
Total	$	418,628	$	—	$	418,628	$	(14,991	)	$	(403,637	)		$	—
December 31, 2015
Assets:
Interest rate caps and swaps	$	33,570	$	—	$	33,570	$	(8,942	)	$	—			$	24,628
Liabilities:
Interest rate caps and swaps	$	50,752	$	—	$	50,752	$	(8,942	)	$	(41,810	)		$	—
Repurchase agreements	475,000		—		475,000		—			(475,000		)	*	—
Total	$	525,752	$	—	$	525,752	$	(8,942	)	$	(516,810	)		$	—

* Represents fair value of non-cash pledged investment securities.

Note 14. Tax Credit Investments

Valley’s tax credit investments are primarily related to investments promoting qualified affordable housing projects, and other investments related to community development and renewable energy sources. Some of these tax-advantaged investments support Valley’s regulatory compliance with the Community Reinvestment Act (CRA). Valley’s investments in these entities generate a return primarily through the realization of federal income tax credits, and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. These tax credits and deductions are recognized as a reduction of income tax expense.

Valley’s tax credit investments are carried in other assets on the consolidated statements of financial condition. Valley’s unfunded capital and other commitments related to the tax credit investments are carried in accrued expenses and other liabilities on the consolidated statements of financial condition. Valley recognizes amortization of tax credit investments, including impairment losses, within non-interest expense of the consolidated statements of income using the equity method of accounting. An impairment loss is recognized when the fair value of the tax credit investment is less than its carrying value.

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The following table presents the balances of Valley’s affordable housing tax credit investments, other tax credit investments, and related unfunded commitments at June 30, 2016 and December 31, 2015.

	June 30, 2016		December 31, 2015
	(in thousands)
Other Assets:
Affordable housing tax credit investments, net	$	30,536	$	32,094
Other tax credit investments, net	57,329		70,681
Total tax credit investments, net	$	87,865	$	102,775
Other Liabilities:
Unfunded affordable housing tax credit commitments	$	6,760	$	7,330
Unfunded other tax credit commitments	655		12,545
Total unfunded tax credit commitments	$	7,415	$	19,875

The following table presents other information relating to Valley’s affordable housing tax credit investments and other tax credit investments for the three and six months ended June 30, 2016 and 2015: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands)
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits	$	1,065	$	1,383	$	2,130	$	3,114
Other tax credit investment credits and tax benefits	3,268		4,903		6,536		8,521
Total reduction in income tax expense	$	4,333	$	6,286	$	8,666	$	11,635
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses	$	775	$	296	$	1,359	$	973
Affordable housing tax credit investment impairment losses	60		40		200		528
Other tax credit investment losses	594		493		668		790
Other tax credit investment impairment losses	6,217		3,682		12,683		6,716
Total amortization of tax credit investments recorded in non-interest expense	$	7,646	$	4,511	$	14,910	$	9,007

Note 15. Business Segments

The information under the caption “Business Segments” in Management’s Discussion and Analysis of Financial Condition and Results of Operations is incorporated herein by reference.

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Item 2. Management’s Discussion and Analysis (MD&A) of Financial Condition and Results of Operations

The following MD&A should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report. The words "Valley," the "Company," "we," "our" and "us" refer to Valley National Bancorp and its wholly owned subsidiaries, unless we indicate otherwise. Additionally, Valley’s principal subsidiary, Valley National Bank, is commonly referred to as the “Bank” in this MD&A.

The MD&A contains supplemental financial information, described in the sections that follow, which has been determined by methods other than U.S. generally accepted accounting principles (U.S. GAAP) that management uses in its analysis of our performance. Management believes these non-GAAP financial measures provide information useful to investors in understanding our underlying operational performance, our business and performance trends and facilitates comparisons with the performance of others in the financial services industry. These non-GAAP financial measures should not be considered in isolation or as a substitute for or superior to financial measures calculated in accordance with U.S. GAAP. These non-GAAP financial measures may also be calculated differently from similar measures disclosed by other companies.

Cautionary Statement Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q, both in the MD&A and elsewhere, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology as “should,” “expect,” “believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “typically,” “usually,” “anticipate,” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties and our actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements in addition to those risk factors disclosed in Valley’s Annual Report on Form 10-K for the year ended December 31, 2015, include, but are not limited to:

• weakness or a decline in the U.S. economy, in particular in New Jersey, New York Metropolitan area (including Long Island) and Florida;

• unexpected changes in market interest rates for interest earning assets and/or interest bearing liabilities;

• less than expected cost savings from the maturity, modification or prepayment of long-term borrowings that mature through 2022;

• further prepayment penalties related to the early extinguishment of high cost borrowings;

• less than expected cost savings in 2016 and 2017 from Valley's branch efficiency and cost reduction plans;

• lower than expected cash flows from purchased credit-impaired loans;

• claims and litigation pertaining to fiduciary responsibility, contractual issues, environmental laws and other matters;

• cyber attacks, computer viruses or other malware that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage our systems;

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

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• government intervention in the U.S. financial system and the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve;

• our inability to pay dividends at current levels, or at all, because of inadequate future earnings, regulatory restrictions or limitations, and changes in the composition of qualifying regulatory capital and minimum capital requirements (including those resulting from the U.S. implementation of Basel III requirements);

• higher than expected loan losses within one or more segments of our loan portfolio;

• unexpected significant declines in the loan portfolio due to the lack of economic expansion, increased competition, large prepayments, changes in regulatory lending guidance or other factors;

• unanticipated credit deterioration in our loan portfolio;

• unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather or other external events;

• an unexpected decline in real estate values within our market areas;

• changes in accounting policies or accounting standards, including the potential issuance of new authoritative accounting guidance which may increase the required level of our allowance for credit losses;

• higher than expected income tax expense or tax rates, including increases resulting from changes in tax laws, regulations and case law;

• higher than expected FDIC insurance assessments;

• the failure of other financial institutions with whom we have trading, clearing, counterparty and other financial relationships;

• lack of liquidity to fund our various cash obligations;

• unanticipated reduction in our deposit base;

• potential acquisitions that may disrupt our business;

• declines in value in our investment portfolio, including additional other-than-temporary impairment charges on our investment securities;

• future goodwill impairment due to changes in our business, changes in market conditions, or other factors;

• legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulations) subject us to additional regulatory oversight which may result in higher compliance costs and/or require us to change our business model;

• our inability to promptly adapt to technological changes;

• our internal controls and procedures may not be adequate to prevent losses;

• the inability to realize expected revenue synergies from the CNL merger in the amounts or in the timeframe anticipated;

• inability to retain customers and employees, including those of CNL; and

• other unexpected material adverse changes in our operations or earnings.

Critical Accounting Policies and Estimates

Valley’s accounting policies are fundamental to understanding management’s discussion and analysis of its financial condition and results of operations. Our significant accounting policies are presented in Note 1 to the consolidated financial statements included in Valley’s Annual Report on Form 10-K for the year ended December 31, 2015. We identified our policies on the allowance for loan losses, security valuations and impairments, goodwill and other intangible assets, and income taxes to be critical because management has to make subjective and/or complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions. Management has reviewed the

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application of these policies with the Audit Committee of Valley’s Board of Directors. Our critical accounting policies are described in detail in Part II, Item 7 in Valley’s Annual Report on Form 10-K for the year ended December 31, 2015.

New Authoritative Accounting Guidance

See Note 5 to the consolidated financial statements for a description of new authoritative accounting guidance including the respective dates of adoption and effects on results of operations and financial condition.

Executive Summary

Company Overview. At June 30, 2016, Valley had consolidated total assets of approximately $21.8 billion, total net loans of $16.4 billion, total deposits of $16.4 billion and total shareholders’ equity of $2.2 billion. Our commercial bank operations include branch office locations in northern and central New Jersey, the New York City Boroughs of Manhattan, Brooklyn, Queens, and Long Island; and Florida. Of our current 213 branch network, 66 percent, 18 percent and 16 percent of the branches are located in New Jersey, New York and Florida, respectively. We have grown both in asset size and locations significantly over the past several years primarily through bank acquisitions.

Valley’s most recent bank acquisition was completed on December 1, 2015 when Valley acquired CNLBancshares, Inc. (CNL) and its wholly-owned subsidiary, CNLBank, a commercial bank with approximately $1.6 billion in assets, $825 million in loans, and $1.2 billion in deposits, after purchase accounting adjustments, and a branch network of 16 offices on the date of its acquisition by Valley. The CNL acquisition helped strengthen Valley's Florida branch network (originally established in 2014) covering several major markets in central and southern Florida. In late February 2016, we completed the full systems integration of CNLBank's operations into Valley and realized the related staffing efficiencies effective April 1, 2016. See Item 1 of Valley’s Annual Report on Form 10-K for the year ended December 31, 2015 for more details regarding our acquisition of CNL and other past merger activity.

Quarterly Results. Net income for the second quarter of 2016 was $39.0 million or 0.15 per diluted common share, compared to $32.0 million, or 0.14 per diluted common share, for the second quarter of 2015. The $7.0 millionincreasein quarterly net income as compared to the same quarter one year ago was largely due to: (i) a $15.3 millionincrease in our net interest income mostly due to higher average loan balances (due to both acquired loans and organic growth) and the prepayment and maturity of $845 million and $182 million of high cost long-term borrowings in the fourth quarter of 2015 and first half of 2016, respectively, (ii) a $4.1 millionincrease in non-interest income mostly caused by increases in net gains on sales of residential mortgage loans and insurance commissions, and (iii) a $3.1 milliondecrease in the provision for credit losses, partially offset by (iv) a $12.4 millionincrease in non-interest expense mostly due to increases in amortization of tax credit investments, professional and legal fees, debt prepayment penalties and other operating losses, as well as higher salary and employee benefit expense and other expenses related to the December 2015 acquisition of CNL, and (v) an increase in income tax expense mainly due to higher pre-tax income. See the "Net Interest Income," "Non-Interest Income," and "Non-Interest Expense" sections below for more details on the items above impacting our second quarter2016 results, as well as other items discussed elsewhere in this MD&A.

Recent Development. In August 2016, we elected to prepay $405 million of FHLB borrowings with various maturity dates in 2018. The prepaid borrowings with a total average cost of 3.69 percent were funded with a new fixed-rate five-year FHLB advance totaling $405 million. The transaction was accounted for as a debt modification under U.S. GAAP. As a result, the new advance has an adjusted annual interest rate of 2.51 percent, after amortization of prepayment penalties totaling $20.0 million paid to the FHLB.

Additionally, Valley terminated an interest rate swap with a notional amount of $125 million in August 2016. The terminated swap, originally maturing in September 2023, was used to hedge the change in the fair value of Valley’s 5.125 percent subordinated notes issued in September 2013. The transaction will result in an adjusted fixed annual

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interest rate of 3.32 percent on the subordinated notes, after amortization of the derivative valuation adjustment recorded at the termination date.

Economic Overview and Indicators. During the second quarter of 2016, real gross domestic product (GDP) grew at a 1.2 percent annual rate after advancing 0.8 percent in the first quarter of 2016. The pace of hiring slowed somewhat compared to the full year of 2015 and business fixed investment remained weak. Growth in residential fixed investment however has been solid over recent quarters reflecting higher levels of disposable income from earlier declines in commodity prices (most notably oil) and rising confidence in the health of the labor market.

The labor market continued to improve as the civilian unemployment rate declined from 5.0 percent as of March 31, 2016 to 4.9 percent as of June 30, 2016. The pace of hiring slowed from a monthly average of 229 thousand of new jobs in 2015 to 147 thousand of new jobs in the second quarter of 2016. However, the addition of 255 thousand new jobs was reported for July 2016, which far surpassed the expectations of most economists. Measures of wages have increased albeit modestly which may indicate there is a shortage of labor resources.

In the second quarter of 2016, the pace of U.S. existing home sales increased compared to the linked first quarter and the second quarter of 2015. Home sales are expected to rise from current levels as market conditions remain generally favorable. Higher readings of consumer confidence that has been boosted by a strengthening labor market and higher levels of household disposable income should continue to support the housing market. However, low levels of home inventory may weigh on sales.

Compared to the first quarter of 2016, personal consumption of goods increased modestly in the second quarter of 2016 after essentially stalling in the first three months of the year. Personal consumption of services however continued to grow at a modest pace. Households may be shifting away from goods consumption for investment in housing. Equity and home prices continued to rise in the second quarter of 2016 after remaining volatile from certain global shocks in the beginning of the year which should continue to support the consumer.

The Federal Reserve’s Open Market Committee (FOMC) increased the target range of the federal funds rate by 25 basis points to 0.25 to 0.50 percent at its December 2015 meeting. The FOMC maintained the target range for the federal funds rate at 0.25 to 0.50 percent in their July 2016 meeting, citing concerns about recent global economic and financial developments and its impact on U.S. labor markets and inflation. In determining future policy actions, the FOMC will assess progress (both realized and expected) toward its objectives of maximum employment and two percent inflation. The FOMC has maintained its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and will continue rolling over maturing Treasury securities at auction. This policy should help maintain accommodative financial conditions through at least 2017. The FOMC has continued to emphasize that any additional change in monetary policy will be data dependent.

The 10-year U.S. Treasury note yield ended the first quarter at 1.49 percent, 78 basis points lower compared with December 31, 2015. The spread between the 2- and 10-year U.S. Treasury note yields was 0.91 percentage points at June 30, 2016, and 14 basis points and 30 basis points lower than compared to March 31, 2016 and December 31, 2015, respectively.

During the second quarter of 2016, we continued to see strong loan demand primarily for commercial real estate loans throughout our primary markets, including our expanded operations in Florida. However, new loan volumes in other areas, such as such automobile and home equity loans have slowed despite the relatively low levels of market interest rates. Contraction of the rate spreads between long- and short-term interest rates coupled with the repayment of higher rate financial instruments on our balance sheet may continue to weigh on our net interest income and margin in future periods. Additionally, the moderate pace of economic activity reported during the early stages of the third quarter may also challenge our business operations and results, as we have highlighted in remaining MD&A discussion below.

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The following economic indicators are just a few of the many factors that may be used to assess the market conditions in our primary markets of northern and central New Jersey, the New York City metropolitan area, and Florida.

	For the Month Ended
	June 30, 2016		March 31, 2016		December 31, 2015		September 30, 2015		June 30, 2015
Selected Economic Indicators:
Unemployment rate:
U.S.	4.90	%	5.00	%	5.00	%	5.10	%	5.30	%
New York Metro Region (1)	4.40		4.70		4.40		5.10		5.60
New Jersey	4.90		4.40		5.10		5.60		6.10
New York	4.80		4.80		4.80		5.10		5.50
Miami-Fort Lauderdale Metro Region	4.60		4.90		5.00		5.70		5.60
Florida	4.70		4.90		5.00		5.20		5.50
	Three Months Ended
	June 30, 2016		March 31, 2016		December 31, 2015		September 30, 2015		June 30, 2015
2-year U.S. Treasury rate (2)	0.77	%	0.84	%	0.84	%	0.69	%	0.61	%
10-year U.S. Treasury rate (2)	1.75		1.91		2.19		2.22		2.16
Real Gross Domestic Product (3)	1.20		1.10		1.40		2.00		3.90
Change in personal income (4) :
New Jersey	NA		4.20		3.79		4.44		4.27
New York	NA		4.72		3.69		4.59		4.59
Florida	NA		5.11		5.35		5.52		5.19
Homeowner vacancy rates:
New Jersey	1.90		1.80		1.40		1.40		1.80
New York	2.10		2.20		2.40		1.60		1.90
Florida	2.30		2.30		2.70		2.60		1.90
Number of U.S. regional existing home sales (5) :
Northeast census region	756,667		696,667		733,333		720,000		676,667
South census region	2,233,333		2,226,667		2,120,000		2,210,000		2,146,667
Number of building permits authorized for new homes (2) :
New Jersey	1,741		2,594		2,893		2,159		3,449
New York	2,041		2,345		5,495		2,982		10,387
Florida	8,679		8,619		10,141		9,003		8,374

NA—not available

(1) As reported by the Bureau of Labor Statistics for the NY-NJ-PA Metropolitan Statistical Area.

(2) Quarterly average for the period presented.

(3) Quarterly, compounded annual rate of change.

(4) Quarterly average, year over year percent change.

(5) Quarterly average, seasonally adjusted annual rate.

Sources: Bureau of Labor Statistics, U.S. Census Bureau, Federal Reserve Economic Data (FRED)

Loans. Loans increased by $363.2 million, or 9.0 percent on an annualized basis, to $16.5 billion at June 30, 2016 from March 31, 2016 largely due to a $426.4 million net increase in total commercial real estate loans and continued strong growth in collateralized personal lines of credit within the other consumer loans category. Residential mortgage loans decreased$46.5 million to $3.1 billion at June 30, 2016 from March 31, 2016 as we elected to sell $118.4 million of loan originations in an effort to manage the level of interest rate risk on our balance sheet during the second quarter. Total new organic loan originations, excluding new lines of credit and purchased loans, totaled over $900 million mostly in the commercial loan categories during the second quarter of 2016

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compared to approximately $600 million in the first quarter of 2016. Loan growth from new loan volumes was partly offset by a high level of loan repayments (partly due to credit risk considerations), including a $140.0 million decline in the acquired purchased credit-impaired (PCI) loan portion of the portfolio. Total commercial real estate loan growth, totaling 20.4 percent on an annualized basis, as compared to the total balance at March 31, 2016, was due to solid organic loan volumes throughout most of our New Jersey, New York and Florida markets, as well as purchased loan participations in the latter part of the second quarter, consisting of multi-family loans within our Northeast markets. See further details on our loan activities, including the covered loan portfolio, under the “Loan Portfolio” section below.

Asset Quality. Our past due loans and non-accrual loans, discussed further below, exclude PCI loans. Under U.S. GAAP, the PCI loans (acquired at a discount that is due, in part, to credit quality) are accounted for on a pool basis and are not subject to delinquency classification in the same manner as loans originated by Valley. All of the loans acquired from CNL in the fourth quarter of 2015 are accounted for as PCI loans. As of June 30, 2016, PCI loans totaled $2.0 billion and represented approximately 12.0 percent of our total loan portfolio.

Total non-PCI loan portfolio delinquencies (including loans past due 30 days or more and non-accrual loans) as a percentage of total loans decreased to 0.49 percent at June 30, 2016 as compared to 0.61 percent at March 31, 2016 largely due to strong collections within non-accrual loans and lower levels of delinquent residential mortgage loans across all of the past due loan categories. Overall, our non-performing assets (including non-accrual loans) decreased by 21.0 percent to $61.3 million at June 30, 2016 as compared to $77.6 million at March 31, 2016 mostly due to a 23.5 percentdecrease in non-accrual loans to $47.9 million.

Our lending strategy is based on underwriting standards designed to maintain high credit quality and we remain optimistic regarding the overall future performance of our loan portfolio. However, due to the potential for future credit deterioration caused by the somewhat unpredictable direction of U.S. economy and the housing and labor markets, management cannot provide assurance that our non-performing assets will not increase from the levels reported as of June 30, 2016. See the "Non-Performing Assets" section below for further analysis of our asset quality.

Deposits and Other Borrowings. The mix of the deposit categories of total average deposits for the second quarter of 2016 remained relatively unchanged as compared to the first quarter of 2016. Non-interest bearing deposits represented approximately 30 percent of total average deposits for the three months ended June 30, 2016, while savings, NOW and money market accounts were 51 percent and time deposits were 19 percent. Overall, average deposits totaling $16.5 billion for the second quarter of 2016increased by $72.9 million as compared to the first quarter of 2016 due, in large part, to increased volumes in non-interest deposits, savings, and money market accounts during the second quarter of 2016, partially offset by declines in time deposit and NOW balances. Average time deposits decreased$57.7 million to $3.1 billion for the second quarter of 2016 compared to the first quarter of 2016 mainly due to continued run-off of promotional retail certificates of deposit, as well as our shift to other borrowings alternatives, such as short-term FHLB advances, during the second quarter of 2016.

Average short-term borrowings increased$157.1 million, or 14.8 percent, to $1.2 billion for the three months ended June 30, 2016 as compared to the first quarter of 2016 mostly due to new FHLB advances of $155 million and $27 million issued in March and April 2016, respectively. Actual ending balances for short-term borrowings increased$241.2 million to $1.4 billion at June 30, 2016 as compared to March 31, 2016 due to the aforementioned $27 million in FHLB advances and another $380 million in new FHLB advances issued in late June 2016 that were primarily used for additional liquidity to fund new loan volumes, as well as to repay $135 million in short-term repos that matured in April 2016. The increase in short-term FHLB advances was also partially offset by a moderate decline in customer deposit balances swept into overnight repo accounts at June 30, 2016.

Average long-term borrowings (which include junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of condition) decreased$189.4 million, or 10.5 percent, to $1.6 billion for the second quarter of 2016 from $1.8 billion for the first quarter of 2016 largely due to the aforementioned maturity of $182 million of high cost long-term borrowings replaced by short-term FHLB borrowings during the first half of 2016. Actual ending balances for long-term borrowings decreased$114.8 million

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to $1.5 billion at June 30, 2016 as compared to March 31, 2016 primarily due to the May prepayment of $87 million of FHLB advances assumed in the acquisition of CNL, as well as the matured FHLB advances totaling $27 million. The $87 million prepayment of FHLB borrowings was entirely funded by cash balances that were held as collateral at the FHLB of Atlanta.

Selected Performance Indicators. The following table presents our annualized performance ratios for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Return on average assets	0.72	%	0.67	%	0.69	%	0.66	%
Return on average shareholders’ equity	6.97		6.75		6.75		6.62
Return on average tangible shareholders’ equity (ROATE)	10.38		9.96		10.07		9.81

ROATE, which is a non-GAAP measure, is computed by dividing net income by average shareholders’ equity less average goodwill and average other intangible assets, as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	($ in thousands)
Net income	$	39,027		$	31,991		$	75,214		$	62,332
Average shareholders’ equity	2,238,510			1,896,209			2,229,040			1,883,054
Less: Average goodwill and other intangible assets	(735,115		)	(611,474		)	(735,276		)	(612,510		)
Average tangible shareholders’ equity	$	1,503,395		$	1,284,735		$	1,493,764		$	1,270,544
Annualized ROATE	10.38		%	9.96		%	10.07		%	9.81		%

Management believes the ROATE measure provides information useful to management and investors in understanding our underlying operational performance, our business and performance trends and the measure facilitates comparisons with the performance of others in the financial services industry. This non-GAAP financial measure should not be considered in isolation or as a substitute for or superior to financial measures calculated in accordance with U.S. GAAP. These non-GAAP financial measures may also be calculated differently from similar measures disclosed by other companies.

All of the above ratios are, from time to time, impacted by net gains and losses on securities transactions, net gains on sales of loans and net impairment losses on securities recognized in non-interest income. These amounts can vary widely from period to period due to, among other factors, the level of sales of our investment securities classified as available for sale, the amount of residential mortgage loans originated for sale, and the results of our quarterly impairment analysis of the held to maturity and available for sale investment portfolios. See the “Non-Interest Income” section below for more details.

Net Interest Income

Net interest income on a tax equivalent basis totaling $153.5 million for the second quarter of 2016 increased $3.3 million and $15.4 million from the first quarter of 2016 and second quarter of 2015, respectively. Interest income on a tax equivalent basis increased $3.5 million to $191.0 million for the second quarter of 2016 as compared to the first quarter of 2016 mainly due to a $259.4 million increase in average loans, as well as the 2 and 8 basis point increases in the yield on average loans and taxable investments, respectively. The increase in yield on average loans for the second quarter of 2016 as compared to the linked first quarter was due, in part, to an increase in periodic interest income recoveries from closed PCI loan pools, as well as moderate increases in both periodic fee income from derivative interest rate swaps executed with commercial lending customers and loan prepayment penalty fees. Interest expense of

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$37.6 million for the three months ended June 30, 2016 remained relatively unchanged from the first quarter of 2016 and decreased$2.0 million as compared to the second quarter of 2015. During the second quarter of 2016, our interest expense on long-term borrowings declined by approximately $1.5 million largely due to the maturity of $155 million and $27 million of high cost FHLB borrowings in March and April 2016, respectively, as well as the May 2016 prepayment of an additional $87 million of FHLB borrowings assumed in the CNL acquisition. The reduction in interest expense from the FHLB repayments was partially offset a $1.2 million increase in interest expense on short-term borrowings mostly caused by cash flow interest rate swaps with a total notional amount of $182 million that became effective in March and April 2016. Interest expense on savings, NOW and money market deposits also increased $718 thousand during the second quarter of 2016. The increase was partially driven by an increase in the mix of higher rate money market balances within this category and a $35.3 million increase in the total average balances as compared to the first quarter of 2016.

Average interest earning assets increased to $19.5 billion for the second quarter of 2016 as compared to approximately $17.1 billion for the second quarter of 2015 largely due to the acquired loans and investments totaling $825.5 million and $327.3 million, respectively, in the acquisition of CNL on December 1, 2015, as well as strong organic and purchased loan growth over the last twelve month period. The broad-based loan growth within several loan categories since June 30, 2015 was largely supplemented by purchases of loan participations in multi-family loans and 1-4 family loans totaling a combined $1.0 billion primarily from local third party originators during the last twelve months ended June 30, 2016. Compared to the first quarter of 2016, average interest earning assets increased by $50.1 million from $19.5 billion largely due to organic and purchased loan growth mainly within commercial real estate and other consumer loans during the six months ended June 30, 2016, partially offset by maturing short-term U.S. Treasury securities and lower excess cash liquidity held primarily overnight with the Federal Reserve Bank of New York. Average overnight cash balances declined due, in part, to the timing of new loan originations, as well as the $87 million prepayment of FHLB advances during the second quarter of 2016. As a result of the loan growth over the last six months, average loans increased$259.4 million from the first quarter of 2016, while our average investments declined$47.4 million largely due to the maturity of short-term U.S. Treasury securities classified as available for sale purchased in late December 2015.

Average interest bearing liabilities increased$1.6 billion to $14.3 billion for the second quarter of 2016 as compared to the second quarter of 2015 mainly due to deposits and other borrowings totaling $1.2 billion and $147.8 million, respectively, assumed in the acquisition of CNL during the fourth quarter of 2015, and a much greater use of short-term FHLB advances since late December 2015 as part of our overall funding strategy. Compared to the first quarter of 2016, average interest bearing liabilities decreased$54.7 million in the second quarter of 2016 mostly due to the aforementioned prepayment of $87 million in FHLB advances assumed in the CNL acquisition and continued run-off of high-cost time deposits. See additional information under "Deposits and Other Borrowings" in the Executive Summary section above.

The net interest margin on a tax equivalent basis of 3.14 percent for the second quarter of 2016increased6 basis points from the first quarter of 2016, and decreased8 basis points as compared to the second quarter of 2015. The yield on average interest earning assets also increased by 6 basis points on a linked quarter basis driven mostly by higher loan yields. The yield on average loans increased 2 basis points to 4.17 percent for the second quarter of 2016, and was positively impacted by the aforementioned increases in periodic interest income and fees as compared to the first quarter of 2016. Our yield on average taxable investment securities increased by 8 basis points during the second quarter of 2016 as compared to the first quarter of 2016 largely due to the maturity of $500 million in low-yielding short-term U.S. Treasury securities purchased in late December 2015. The overall cost of average interest bearing liabilities increased by 1 basis point from 1.04 percent in the linked first quarter of 2016. The increase was primarily due to a 31 basis point increase in the cost of short-term borrowings largely caused by the aforementioned derivative transactions, partially offset by the maturities of high cost long-term borrowings during March and April 2016, and the run-off of some higher rate retail certificates of deposit. Our cost of total deposits increased 1 basis point to 0.47 percent for the second quarter of 2016 as compared to the three months ended March 31, 2016.

The expected future level of our net interest margin is subject to a multitude of conditional, and sometimes unpredictable, factors that can impact the actual margin results. For example, our margin may continue to face the risk of compression in the future due to, among other factors, the relatively low level of market interest rates on most

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interest earning asset alternatives, further repayment of higher yielding interest earning assets, the re-pricing risk related to our interest earning assets with short durations if long-term market rates were to decline below current levels, as well as the negative impact on interest expense from certain cash flow hedge derivative transactions related to our borrowings. However, we continuously manage our balance sheet and explore ways to reduce our cost of funds to optimize our net interest margin and overall returns. The aforementioned borrowings repaid in the first half of 2016, an additional $75 million of borrowings with a contractual interest rate of 5 percent that matured in July 2016, and the debt modification of $405 million in high cost FHLB borrowings during August 2016 (See "Recent Development" section above) are all expected to benefit our future net interest income and margin. Additionally, potential future loan growth from solid loan demand in our primary markets (that has continued into the early stages of the third quarter of 2016) is anticipated to positively impact our future net interest income.

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The following table reflects the components of net interest income for the three months ended June 30, 2016, March 31, 2016 and June 30, 2015:

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

Net Interest Income on a Tax Equivalent Basis

	Three Months Ended
	June 30, 2016								March 31, 2016								June 30, 2015
	Average Balance			Interest			Average Rate		Average Balance			Interest			Average Rate		Average Balance			Interest			Average Rate
	($ in thousands)
Assets
Interest earning assets:
Loans (1)(2)	$	16,252,915		$	169,430		4.17	%	$	15,993,543		$	166,075		4.15	%	$	14,143,580		$	158,169		4.47	%
Taxable investments (3)	2,433,896			15,572			2.56		2,497,986			15,479			2.48		2,214,976			13,849			2.50
Tax-exempt investments (1)(3)	585,948			5,745			3.92		569,265			5,677			3.99		537,777			5,531			4.11
Federal funds sold and other interest bearing deposits	264,813			296			0.45		426,676			357			0.33		235,353			146			0.25
Total interest earning assets	19,537,572			191,043			3.91		19,487,470			187,588			3.85		17,131,686			177,695			4.15
Allowance for loan losses	(107,892		)						(107,039		)						(104,446		)
Cash and due from banks	294,046								296,721								281,877
Other assets	2,003,679								2,013,099								1,798,802
Unrealized gains (losses) on securities available for sale, net	2,972								(9,973		)						320
Total assets	$	21,730,377							$	21,680,278							$	19,108,239
Liabilities and shareholders’ equity
Interest bearing liabilities:
Savings, NOW and money market deposits	$	8,369,553		$	9,961		0.48	%	$	8,334,289		$	9,243		0.44	%	$	7,076,104		$	5,911		0.33	%
Time deposits	3,070,113			9,223			1.20		3,127,842			9,585			1.23		2,792,637			8,128			1.16
Total interest bearing deposits	11,439,666			19,184			0.67		11,462,131			18,828			0.66		9,868,741			14,039			0.57
Short-term borrowings	1,218,154			3,120			1.02		1,061,011			1,872			0.71		255,097			207			0.32
Long-term borrowings (4)	1,623,136			15,269			3.76		1,812,556			16,744			3.70		2,582,616			25,331			3.92
Total interest bearing liabilities	14,280,956			37,573			1.05		14,335,698			37,444			1.04		12,706,454			39,577			1.25
Non-interest bearing deposits	5,013,821								4,918,463								4,331,647
Other liabilities	197,090								206,547								173,929
Shareholders’ equity	2,238,510								2,219,570								1,896,209
Total liabilities and shareholders’ equity	$	21,730,377							$	21,680,278							$	19,108,239
Net interest income/interest rate spread (5)				$	153,470		2.86	%				$	150,144		2.81	%				$	138,118		2.90	%
Tax equivalent adjustment				(2,015		)						(1,991		)						(1,941		)
Net interest income, as reported				$	151,455							$	148,153							$	136,177
Net interest margin (6)							3.10	%							3.04	%							3.18	%
Tax equivalent effect							0.04	%							0.04	%							0.04	%
Net interest margin on a fully tax equivalent basis (6)							3.14	%							3.08	%							3.22	%

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The following table reflects the components of net interest income for the six months ended June 30, 2016 and 2015:

Analysis of Average Assets, Liabilities and Shareholders’ Equity and

Net Interest Income on a Tax Equivalent Basis

	Six Months Ended
	June 30, 2016								June 30, 2015
	Average Balance			Interest			Average Rate		Average Balance			Interest			Average Rate
	($ in thousands)
Assets
Interest earning assets:
Loans (1)(2)	$	16,123,229		$	335,506		4.16	%	$	13,857,893		$	308,657		4.45	%
Taxable investments (3)	2,465,941			31,051			2.52		2,249,872			30,520			2.71
Tax-exempt investments (1)(3)	577,607			11,422			3.95		539,299			11,088			4.11
Federal funds sold and other interest bearing deposits	345,745			653			0.38		289,314			366			0.25
Total interest earning assets	19,512,522			378,632			3.88		16,936,378			350,631			4.14
Allowance for loan losses	(107,466		)						(104,414		)
Cash and due from banks	295,384								358,153
Other assets	2,008,389								1,791,057
Unrealized losses on securities available for sale, net	(3,501		)						(1,327		)
Total assets	$	21,705,328							$	18,979,847
Liabilities and shareholders’ equity
Interest bearing liabilities:
Savings, NOW and money market deposits	$	8,351,921		$	19,204		0.46	%	$	7,109,687		$	11,906		0.33	%
Time deposits	3,098,978			18,808			1.21		2,774,955			16,102			1.16
Total interest bearing deposits	11,450,899			38,012			0.66		9,884,642			28,008			0.57
Short-term borrowings	1,139,583			4,992			0.88		191,942			301			0.31
Long-term borrowings (4)	1,717,846			32,013			3.73		2,576,275			50,167			3.89
Total interest bearing liabilities	14,308,328			75,017			1.05	%	12,652,859			78,476			1.24	%
Non-interest bearing deposits	4,966,142								4,271,074
Other liabilities	201,818								172,860
Shareholders’ equity	2,229,040								1,883,054
Total liabilities and shareholders’ equity	$	21,705,328							$	18,979,847
Net interest income/interest rate spread (5)				$	303,615		2.83	%				$	272,155		2.90	%
Tax equivalent adjustment				(4,007		)						(3,892		)
Net interest income, as reported				$	299,608							$	268,263
Net interest margin (6)							3.07	%							3.17	%
Tax equivalent effect							0.04	%							0.04	%
Net interest margin on a fully tax equivalent basis (6)							3.11	%							3.21	%

(1) Interest income is presented on a tax equivalent basis using a 35 percent federal tax rate.

(2) Loans are stated net of unearned income and include non-accrual loans.

(3) The yield for securities that are classified as available for sale is based on the average historical amortized cost.

(4) Includes junior subordinated debentures issued to capital trusts which are presented separately on the consolidated

statements of financial condition.

(5) Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities and is presented on a fully tax equivalent basis.

(6) Net interest income as a percentage of total average interest earning assets.

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The following table demonstrates the relative impact on net interest income of changes in the volume of interest earning assets and interest bearing liabilities and changes in rates earned and paid by us on such assets and liabilities. Variances resulting from a combination of changes in volume and rates are allocated to the categories in proportion to the absolute dollar amounts of the change in each category.

Change in Net Interest Income on a Tax Equivalent Basis

	Three Months Ended June 30, 2016 Compared to June 30, 2015									Six Months Ended June 30, 2016 Compared to June 30, 2015
	Change Due to Volume			Change Due to Rate			Total Change			Change Due to Volume			Change Due to Rate			Total Change
	(in thousands)
Interest Income:
Loans*	$	22,489		$	(11,228	)	$	11,261		$	48,090		$	(21,241	)	$	26,849
Taxable investments	1,395			328			1,723			2,811			(2,280		)	531
Tax-exempt investments*	480			(266		)	214			768			(434		)	334
Federal funds sold and other interest bearing deposits	20			130			150			81			206			287
Total increase (decrease) in interest income	24,384			(11,036		)	13,348			51,750			(23,749		)	28,001
Interest Expense:
Savings, NOW and money market deposits	1,219			2,831			4,050			2,328			4,970			7,298
Time deposits	827			268			1,095			1,942			764			2,706
Short-term borrowings	1,854			1,059			2,913			3,441			1,250			4,691
Long-term borrowings and junior subordinated debentures	(9,064		)	(998		)	(10,062		)	(16,079		)	(2,075		)	(18,154		)
Total (decrease) increase in interest expense	(5,164		)	3,160			(2,004		)	(8,368		)	4,909			(3,459		)
Total increase (decrease) in net interest income	$	29,548		$	(14,196	)	$	15,352		$	60,118		$	(28,658	)	$	31,460

* Interest income is presented on a tax equivalent basis using a 35 percent tax rate.

Non-Interest Income

The following table presents the components of non-interest income for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Trust and investment services	$	2,544		$	2,576		$	4,984		$	5,070
Insurance commissions	4,845			4,130			9,553			8,335
Service charges on deposit accounts	5,094			5,263			10,197			10,553
(Losses) gains on securities transactions, net	(3		)	(92		)	268			2,324
Fees from loan servicing	1,561			1,642			3,155			3,245
Gains on sales of loans, net	3,105			422			4,900			1,020
Gains on sales of assets, net	709			200			699			481
Bank owned life insurance	1,818			1,618			3,781			3,382
Change in FDIC loss-share receivable	1			595			(559		)	(3,325		)
Other	4,590			3,846			8,734			7,760
Total non-interest income	$	24,264		$	20,200		$	45,712		$	38,845

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Insurance commissions increased$1.2 million for the six months ended June 30, 2016 as compared with the same period in 2015 mainly due to higher commissions generated from the Bank's insurance agency subsidiary, including additional fees related to certain intangible assets acquired from an independent insurance agency during the first quarter of 2016. See Note 2 to the consolidated financial statements for more details on this acquisition.

Net gains on securities transactions decreased$2.1 million for the six months ended June 30, 2016 as compared with the same period in 2015 due to an immaterial amount of investment securities sold during the six months ended June 30, 2016. Gross gains during the first half of 2015 related to the sale of corporate debt securities and trust preferred securities with a total unamortized cost of approximately $34.2 million, including one corporate debt security classified as held to maturity with amortized cost of $9.8 million during the first quarter of 2015. The sales of these securities were primarily due to an investment portfolio re-balancing during the first quarter of 2015 due to changes in our regulatory capital calculation under the new Basel III regulatory capital reform (effective for Valley on January 1, 2015). Under ASC Topic 320, “Investments - Debt and Equity Securities,” the sale of held to maturity securities based upon the change in capital requirements is permitted without tainting the remaining held to maturity investment portfolio.

Net gains on sales of loans increased$2.7 million and $3.9 million for the three and six months ended June 30, 2016 and 2015, respectively, as compared to the same periods in 2015 largely due to a higher volume of residential mortgage loans originated for sale during the first half of 2016 helped by the successful promotion of our low fixed cost mortgage and refinance programs. Loans originated for sale increased $103.3 million to $118.4 million for the second quarter of 2016 as compared to the same quarter in 2015. During the second quarter of 2016, we sold $128.8 million of fixed-rate residential mortgage loans as compared to $14.1 million in the second quarter of 2015. Our net gains on sales of loans for each period are comprised of both gains on sales of residential mortgages and the net change in the mark to market gains and losses on our loans held for sale carried at fair value at each period end.

The net change in the fair value of loans held for sale for three and six months ended June 30, 2016 and 2015 did not have a material impact on the net losses and gains on sale of loans during these periods. Our decision to either sell or retain our mortgage loan production is dependent upon, among other factors, the levels of interest rates, consumer demand, the economy and our ability to maintain the appropriate level of interest rate risk on our balance sheet. See further discussions of our residential mortgage loan origination activity under the “Loan Portfolio” section of this MD&A above.

Net gains on sales of assets increased$509 thousand for the second quarter of 2016 as compared to the same period in 2015 mainly due to net gains from the sale of two former branch locations that were closed as part of our on-going branch "right-sizing" effort initiated in the second half of 2015. See the "Branch Efficiency and Cost Reduction Plans" section below for additional information.

The Bank and the FDIC share in the losses on loans and real estate owned as part of the loss-sharing agreements from FDIC-assisted transactions, including loss-sharing agreements acquired from 1st United on November 1, 2014. The asset arising from the loss-sharing agreements is referred to as the “FDIC loss-share receivable” and it is included in "Other assets" on Valley's consolidated statements of financial condition. Within the non-interest income category, we may recognize income or expense related to the change in the FDIC loss-share receivable resulting from (i) a change in the estimated credit losses on the pools of covered loans, (ii) income from reimbursable expenses incurred during the period, (iii) accretion of the discount resulting from the present value of the receivable recorded at the acquisition dates, and (iv) prospective recognition of decreases in the receivable attributable to better than originally estimated cash flows on certain covered loan pools. The aggregate effect of changes in the FDIC loss-share receivable amounted to net reductions of $559 thousand and $3.3 million in non-interest income for the six months ended June 30, 2016and 2015, respectively. The majority of the larger reduction in both the receivable and non-interest income during the first half of 2015 related to the prospective adjustment to the receivable for better than originally estimated cash flows on certain pools of covered loans since the acquisition. These prospective adjustments were recognized only through the March 2015 expiration date of the related commercial loan loss-sharing agreements from Valley's 2010 FDIC-assisted transactions.

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See the “FDIC Loss-Share Receivable Related to Covered Loans and Foreclosed Assets” section below in this MD&A and Note 8 to the consolidated financial statements for further details.

Non-Interest Expense

The following table presents the components of non-interest expense for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Salary and employee benefits expense	$	56,072	$	54,574	$	116,331	$	111,286
Net occupancy and equipment expense	22,168		22,132		44,957		44,332
FDIC insurance assessment	5,095		4,012		10,194		7,804
Amortization of other intangible assets	2,928		2,096		5,777		4,489
Professional and legal fees	5,472		4,059		9,367		7,400
Amortization of tax credit investments	7,646		4,511		14,910		9,007
Loss on extinguishment of debt	315		—		315		—
Telecommunications expense	2,294		2,045		4,680		4,051
Other	17,813		13,983		31,497		27,161
Total non-interest expense	$	119,803	$	107,412	$	238,028	$	215,530

Salary and employee benefits expense increased$1.5 million and $5.0 million for the three and six months ended June 30, 2016, respectively, as compared to the same periods in 2015 largely due to additional staffing expenses related to our acquisition of CNL on December 1, 2015, partially offset by lower cash incentive compensation expense in the 2016 periods. However, salary and employee benefits expense decreased $4.2 million during the second quarter of 2016 as compared to the first quarter of 2016 mainly driven by staff reductions related to the CNL back office consolidation effective April 1, 2016 and, to a much lesser extent, branch closings and other operational efficiencies gained during the first six months of 2016, as well as the aforementioned decline in cash incentive compensation expense.

FDIC insurance assessments increased$1.1 million and $2.4 million for the three and six months ended June 30, 2016, respectively, as compared to the same periods in 2015 largely due to our growth resulting from the CNL acquisition and expansion of our loan portfolio during the first half of 2016.

Amortization of intangible assets increased$832 thousand and $1.3 million for the three and six months ended June 30, 2016, respectively, as compared to the same periods in 2015 mainly due to an increase in net impairment charges on certain loan servicing rights, as well as an increase in amortization expense of core deposit intangibles partly caused by the acquisition of CNL. Valley recorded net impairment charges on its loan servicing rights totaling $265 thousand and $457 thousand for the three and six months ended June 30, 2016, respectively, as compared net recoveries of impairment charges totaling $245 thousand and $161 thousand for three and six months ended June 30, 2015, respectively.

Professional and legal fees increased$1.4 million and $2.0 million for the three and six months ended June 30, 2016, respectively, as compared to the same periods in 2015 mostly due to an increase in legal fees related to various litigation and other general corporate matters during the second quarter of 2016.

Amortization of tax credit investments increased$3.1 million and $5.9 million for the three and six months ended June 30, 2016, respectively, as compared to the same periods in 2015 mainly due to additional purchases of tax-advantaged investments during the last twelve months. These investments, while negatively impacting the level of our operating expenses and efficiency ratio, directly reduce our income tax expense and effective tax rate. See Note 14 for more details regarding our tax credit investments.

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Loss on extinguishment of debt for the three and six months ended June 30, 2016 was due to the May 2016 prepayment of $87 million of FHLB advances assumed in the acquisition of CNL. The $87 million prepayment was entirely funded by cash balances that were held as collateral at the FHLB of Atlanta.

Other non-interest expense increased$3.8 million and $4.3 million for the three and six months ended June 30, 2016, respectively, as compared to the same periods in 2015. During the second quarter of 2016, operating losses, OREO expense, and branch closing costs increased $1.3 million, $506 thousand and $386 thousand, respectively, as compared to the same period of 2015. Within other non-interest expense, we also experience moderate increases in several items, such as debit card expenses, postage, stationery, and travel and entertainment as compared to three and six months ended June 30, 2015 partly caused by our growth, both organically and through acquisition.

The efficiency ratio measures total non-interest expense as a percentage of net interest income plus total non-interest income. We believe this non-GAAP measure, provides a meaningful comparison of our operational performance and facilitates investors’ assessments of business performance and trends in comparison to our peers in the banking industry. Our overall efficiency ratio, and its comparability to some of our peers, is negatively impacted by the amortization of tax credit investments within non-interest expense and, from time to time, reductions in our non-interest income related to changes in the FDIC loss-share receivable. The following table presents our efficiency ratio and a reconciliation of the efficiency ratio adjusted for such items during the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Total non-interest expense	$	119,803		$	107,412		$	238,028		$	215,530
Less: Amortization of tax credit investments	7,646			4,511			14,910			9,007
Total non-interest expense, adjusted	$	112,157		$	102,901		$	223,118		$	206,523
Net interest income	$	151,455		$	136,177		$	299,608		$	268,263
Total non-interest income	24,264			20,200			45,712			38,845
Total net interest income and non-interest income	$	175,719		$	156,377		$	345,320		$	307,108
Less: Change in FDIC loss-share receivable	1			595			(559		)	(3,325		)
Total net interest income and non-interest income, adjusted	$	175,718		$	155,782		$	345,879		$	310,433
Efficiency ratio	68.18		%	68.69		%	68.93		%	70.18		%
Efficiency ratio, adjusted	63.83		%	66.05		%	64.51		%	66.53		%

Branch Efficiency and Cost Reduction Plans

In the second quarter of 2015, we disclosed a branch efficiency plan to "right-size" our branch network. We, like many in the banking industry, have experienced a significant decline in branch foot traffic as the emergence of self-service technology continues to reshape the banking industry. In response to these shifts in customer preference we have invested in new delivery channels and systems that will modernize the branch banking experience. Mobile banking, remote deposit, enhanced ATMs, online account opening, cash recyclers and complementary online services are part of our modernization plan and will redefine the traditional banking experience at Valley.

As a result of our reviews and the evolution of banking in general, our current plan included the closure and consolidation of 28 branch locations based upon our continuous evaluation of customer delivery channel preferences, branch usage patterns, and other factors. As of June 30, 2016, 27 of the 28 branches were closed (a mix of leased and owned properties mostly of New Jersey locations), including 13 branches closed during the second quarter of 2016 and 1 branch closed in the first quarter of 2016.

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We have continued to evaluate the operational efficiency of our entire branch network (consisting of 113 leased and 100 owned office locations at June 30, 2016) to ensure the optimal performance of our retail operations, in conjunction with several other factors, including our customers’ delivery channel preferences, branch usage patterns, and the potential opportunity to move existing customer relationships to another branch location without imposing a negative impact on their banking experience. As a result of its second quarter 2016 evaluation, management identified three additional Florida-based leased branch locations for closure primarily due to their proximity to other branches in Valley's network. These additional branch closures are expected to be completed in August and September 2016, and resulted in the aforementioned branch closing costs recognized in the second quarter of 2016.

In addition to the branch closures, Valley commenced a cost reduction plan in the fourth quarter of 2015 aimed at achieving operational efficiencies through streamlining various aspects of Valley's business model, staff reductions and further utilization of technological enhancements. When both of these plans were consummated, we expected the fully implemented reduction in annual operating expenses to approximate $18 million. Due to the second quarter of 2016 enhancements, including the three additional branch closures in Florida, we now believe these savings will increase to $19.5 million. These measures are currently on track to save $15 million in pre-tax operating expenses for the full year of 2016, exclusive of the aforementioned CNL staffing reductions effective April 1, 2016.

Income Taxes

Income tax expense was $15.5 million and $12.5 million for the three months ended June 30, 2016 and 2015, respectively, and $29.8 million and $24.7 million for the six months ended June 30, 2016 and 2015, respectively. Income tax expense as a percentage of pre-tax income remained relatively unchanged during the three and six months ended June 30, 2016 as compared to the same periods one year ago, reflecting an effective tax rate of appropriately 28.4 percent for both 2016 periods.

U.S. GAAP requires that any change in judgment or change in measurement of a tax position taken in a prior annual period be recognized as a discrete event in the quarter in which it occurs, rather than being recognized as a change in effective tax rate for the current year. Our adherence to these tax guidelines may result in volatile effective income tax rates in future quarterly and annual periods. Factors that could impact management’s judgment include changes in income, tax laws and regulations, and tax planning strategies. For the remainder of 2016, we anticipate that our effective tax rate will range from 27 percent to 30 percent primarily reflecting the impacts of tax-exempt income, tax-advantaged investments and general business credits.

Business Segments

We have four business segments that we monitor and report on to manage our business operations. These segments are consumer lending, commercial lending, investment management, and corporate and other adjustments. Our reportable segments have been determined based upon Valley’s internal structure of operations and lines of business. Each business 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). Expenses related to the branch network, all other components of retail banking, along with the back office departments of our subsidiary bank are allocated from the corporate and other adjustments segment to each of the other three business segments. Interest expense and internal transfer expense (for general corporate expenses) are allocated to each business segment utilizing a “pool funding” methodology, which involves the allocation of uniform funding cost based on each segments’ average earning assets outstanding for the period. The financial reporting for each segment contains allocations and reporting in line with our 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. GAAP. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.

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The following tables present the financial data for each business segment for the three months ended June 30, 2016 and 2015:

	Three Months Ended June 30, 2016
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments			Total
	($ in thousands)
Average interest earning assets	$	5,099,474		$	11,153,441		$	3,284,657		$	—		$	19,537,572
Income (loss) before income taxes	14,160			47,425			5,359			(12,457		)	54,487
Annualized return on average interest earning assets (before tax)	1.11		%	1.70		%	0.65		%	N/A			1.12		%

	Three Months Ended June 30, 2015
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments			Total
	($ in thousands)
Average interest earning assets	$	4,599,430		$	9,544,150		$	2,988,106		$	—		$	17,131,686
Income (loss) before income taxes	7,481			44,468			3,113			(10,597		)	44,465
Annualized return on average interest earning assets (before tax)	0.65		%	1.86		%	0.42		%	N/A			1.04		%

Consumer Lending

This segment, representing approximately 31.4 percent of our loan portfolio at June 30, 2016, is mainly comprised of residential mortgage loans, home equity loans and automobile loans. The duration of the residential mortgage loan portfolio including covered loans (which represented 18.5 percentof our loan portfolio at June 30, 2016) is subject to movements in the market level of interest rates and forecasted prepayment speeds. The weighted average life of the automobile loans (representing 6.9 percent of total loans at June 30, 2016) is relatively unaffected by movements in the market level of interest rates. However, the average life may be impacted by new loans as a result of the availability of credit within the automobile marketplace and consumer demand for purchasing new or used automobiles. The consumer lending segment also includes the Wealth Management Division, comprised of trust, asset management, insurance services, and asset-based lending support services.

Average interest earning assets in this segment increased$500.0 million to $5.1 billion for the three months ended June 30, 2016as compared to the second quarter of 2015. The increase was due, in part, to the purchase of 1-4 family residential loans totaling $498 million from third party originators over the last 12-month period, as well as continued solid organic growth in secured personal lines of credit. At June 30, 2016, our consumer lending portfolio also included $117.7 million of PCI loans (mostly consisting of residential mortgage loans and home equity loans) acquired in connection with the CNL merger during the fourth quarter of 2015.

Income before income taxes generated by the consumer lending segment increased$6.7 millionto $14.2 millionfor the second quarter of 2016 as compared to $7.5 million for the first quarter of 2015 largely due to a $4.8 million increase in net interest income and a $2.6 milliondecrease in the provision for credit losses. The increase in net interest income as compared to the same period one year ago was mainly due to higher average loan balances caused by the aforementioned loan activity since June 30, 2015. Non-interest income also increased $3.3 million for the second quarter of 2016 as compared to same period in 2015 mainly due to a $2.7 million increase in net gains on sales of loans caused by a higher level of sales volumes during second quarter of 2016. The positive impact of the aforementioned items was partially offset by increases in non-interest expense and internal transfer expense totaling $2.4 million and $1.7 million, respectively, as compared to the second quarterof 2015.

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The net interest margin on the consumer lending portfolio increased13 basis points to 2.77 percent for the second quarter of 2016 as compared to the same quarter one year ago. The net interest margin was positively impacted by a 15 basis point decrease in the costs associated with our funding sources, partially offset by a 2 basis point decline in yield on average loans. The decrease in our cost of funds was primarily due to the lower cost of our average long-term borrowings driven by the prepayment and maturity of high cost borrowings totaling $845 million, $155 million, and $27 million in the fourth quarter of 2015, first quarter of 2016 and second quarter of 2016, respectively, as well as continued run-off of higher cost certificates of deposits over the last twelve months. We also elected to prepay $87 million in FHLB advances assumed in the acquisition of CNL during May 2016.

Commercial Lending

The commercial lending 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 mix of interest rate characteristics, commercial lending is Valley’s business segment that is most sensitive to movements in market interest rates. Commercial and industrial loans totaled approximately $2.5 billionand represented 15.3 percent of the total loan portfolio at June 30, 2016. Commercial real estate loans and construction loans totaled $8.8 billion and represented 53.3 percentof the total loan portfolio at June 30, 2016.

Average interest earning assets in this segment increased$1.6 billion to $11.2 billion for the three months ended June 30, 2016 as compared to the second quarter of 2015. This increase was due, in part, to solid organic commercial real estate loan growth across many segments of borrowers, purchases of participations in multi-family loans (mostly in New York City) totaling over $502.5 million over the last 12 months, as well as PCI loans totaling $618 million at June 30, 2016 that were acquired in connection with the CNL merger.

For the three months ended June 30, 2016, income before income taxes for the commercial lending segment increased$3.0 millionto $47.4 million as compared to the second quarter of 2015 mostly due to an increase in net interest income, partially offset by an increase in internal transfer expense. Net interest income increased$7.8 million to $105.3 million for the second quarter of 2016 as compared to the same period in 2015 largely due to the aforementioned organic, purchased and acquired loan growth over the last 12 months.Internal transfer expense increased$3.7 million during the second quarter of 2016 as compared to the same period in 2015 due, in part, to the acquisition of CNL.

The net interest margin for this segment decreased31 basis points to 3.78 percent for the second quarter of 2016 as compared to the same quarter one year ago as a result of a 46 basis point decline in yield on average loans, partially offset by a 15 basis point decrease in the cost of our funding sources. The decrease in the yield on loans was primarily due to the new and refinanced loan volumes at current interest rates that are relatively low compared to the overall yield of our loan portfolio, as well as lower reforecasted yields on certain PCI loan pools recognized during the six months ended June 30, 2016.

Investment Management

The investment management segment generates a large portion of our income through investments in various types of securities and interest-bearing deposits with other banks. These investments are mainly comprised of fixed rate securities, and depending on our liquid cash position, federal funds sold and interest-bearing deposits with banks (primarily the Federal Reserve Bank of New York), as part of our asset/liability management strategies. The fixed rate investments are one of Valley’s least sensitive assets to changes in market interest rates. However, a portion of the investment portfolio is invested in shorter-duration securities to maintain the overall asset sensitivity of our balance sheet (see the “Asset/Liability Management” section below for further analysis).

Average interest earning assets in this segment increased$296.6 million during the second quarter of 2016 as compared to the second quarter of 2015. The increase was partly due to $327.3 million of investment securities classified as available for sale that were acquired in connection with the CNL merger and a $29.5 million increase the average federal funds sold and other interest bearing deposit balances. However, cash used to purchase new securities totaling $742.0 million was outpaced by cash inflows of $896.8 million from maturities, calls and

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principal payments of securities (primarily related to short-term U.S. Treasury securities and residential mortgage-backed securities) during the six months ended June 30, 2016 as some of the inflow was reinvested in the commercial and consumer lending segments.

For the quarter ended June 30, 2016, income before income taxes for the investment management segment increased approximately $2.2 million to $5.4 million compared to the second quarter in 2015 mainly due to a $2.6 millionincrease in net interest income. The increase in net interest income was mainly driven by the higher average investment balances in the second quarter of 2016.

The net interest margin for this segment increased17basis points to 1.92 percentfor the second quarter of 2016 as compared to the same quarter one year ago largely due to a 15 basis point decrease in costs associated with our funding sources, as well as a 2 basis point increase in the yield on average investments.

Corporate and other adjustments

The amounts disclosed as “corporate and other adjustments” represent income and expense items not directly attributable to a specific segment, including net securities gains and losses not reported in the investment management segment above, interest expense related to subordinated notes, as well as income and expense from derivative financial instruments.

The pre-tax net loss for the corporate segment increased$1.9 million to $12.5 million for the three months ended June 30, 2016 as compared to $10.6 million for the three months ended June 30, 2015 mainly due to a $9.0 millionincrease in non-interest expense, partially offset by increases in in internal transfer income and non-interest income totaling $5.9 million and $1.2 million, respectively, as compared to the second quarter of 2015. The increase in non-interest expense during the second quarter of 2016 related to increases in several general expense categories including, but not limited to, amortization of tax credit investments, net occupancy and equipment expense, salary and employee benefits expense, and professional and legal fees. Non-interest income increased due, in part, to a $509 thousand increase in the gains on sales of assets for the three months ended June 30, 2016 as compared to the same quarter in 2015. See further details in the "Non-Interest Income" and "Non-Interest Expense" sections above.

The following tables present the financial data for each business segment for the six months ended June 30, 2016 and 2015:

	Six Months Ended June 30, 2016
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments			Total
	($ in thousands)
Average interest earning assets	$	5,147,551		$	10,975,678		$	3,389,293		$	—		$	19,512,522
Income (loss) before income taxes	28,261			91,292			9,362			(23,852		)	105,063
Annualized return on average interest earning assets (before tax)	1.10		%	1.66		%	0.55		%	N/A			1.08		%

	Six Months Ended June 30, 2015
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments			Total
	($ in thousands)
Average interest earning assets	$	4,551,725		$	9,306,168		$	3,078,485		$	—		$	16,936,378
Income (loss) before income taxes	18,140			78,091			7,672			(16,825		)	87,078
Annualized return on average interest earning assets (before tax)	0.80		%	1.68		%	0.50		%	N/A			1.03		%

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Consumer Lending

Average interest earning assets in this segment increased$595.8 million to $5.1 billion for the six months ended June 30, 2016 as compared to the same period in 2015. The increase was due, in part, to the purchase of 1-4 family residential loans totaling $498 million from third party originators over the last 12-month period, as well as continued solid organic growth in secured personal lines of credit. At June 30, 2016, our consumer lending portfolio also included $117.7 million of PCI loans (mostly consisting of residential mortgage loans and home equity loans) acquired in connection with the CNL merger during the fourth quarter of 2015. These increases were partially offset by a decline in our automobile portfolio during the first six months of 2016.

Income before income taxes generated by the consumer lending segment increased$10.1 millionto $28.3 millionfor the six months ended June 30, 2016 as compared to the same period of 2015 largely due to a $9.5 million increase in net interest income and a $1.8 milliondecrease in the provision for credit losses. The increase in net interest income as compared to the same period one year ago was mainly due to higher average loan balances caused by the aforementioned loan activity since June 30, 2015. Non-interest income also increased$4.8 million for the six months ended June 30, 2016 as compared to the period of 2015 mainly due to a $3.9 million increase in net gains on sales of loans caused by a higher level of sales volumes during the first half of 2016. The positive impact of these items was partially offset by increases in both non-interest expense and internal transfer expense totaling $2.7 million and $3.3 million, respectively, as compared to the six months ended June 30, 2015.

The net interest margin on the consumer lending portfolio increased6 basis points to 2.78 percent for the six months ended June 30, 2016 as compared to the same period in 2015 mainly due to a 15 basis point decrease in the costs associated with our funding sources, partially offset by a 9 basis point decline in yield on average loans. The decrease in yield on average loans was largely caused by purchased, new and refinanced loan volumes that remain at relatively low interest rates as compared to the overall yield of our loan portfolio, as well as repayment of higher yielding loans, including PCI loans.

Commercial Lending

Average interest earning assets in this segment increased$1.7 billion to $11.0 billion for the six months ended June 30, 2016 as compared to the same period in 2015. This increase was due, in part, to solid organic commercial real estate loan growth across many segments of borrowers including strong production from our Florida market. We also supplemented our organic originations with purchases of participations in multi-family loans totaling over $502.5 million over the last 12 months, as well as $681 million of PCI loans acquired in connection with the CNL merger on December 1, 2015.

For the six months ended June 30, 2016, income before income taxes for the commercial lending segment increased$13.2 millionto $91.3 million as compared to the same period in 2015 mostly due to an increase in both net interest income and non-interest income, partially offset by an increase in internal transfer expense. Net interest income increased$19.5 million to $206.8 million for the six months ended June 30, 2016 as compared to the same period in 2015 largely due to the aforementioned organic, purchased and acquired loan growth over the last 12 months.Non-interest income increased$2.2 million as compared to the first half of 2015 largely due to the positive aggregate effect of changes in the FDIC loss-share receivable. See the "Non-interest income" section above for further details. Internal transfer expense increased$8.2 million during the first half of 2016 as compared to the same period in 2015 due, in part, to additional operating expenses related to our growth, including the acquisition of CNL.

The net interest margin for this segment decreased26 basis points to 3.77 percent for the six months ended June 30, 2016 as compared to the same period in 2015 as a result of a 41 basis point decline in yield on average loans, partially offset by a 15 basis point decrease in the cost of our funding sources. The decrease in the yield on loans was primarily due to the new and refinanced loan volumes at current interest rates that are relatively low compared to the overall yield of our loan portfolio, as well as lower reforecasted yields on certain PCI loan pools recognized during the first six months of 2016.

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Investment Management

Average interest earning assets in this segment increased$310.8 million during the six months ended June 30, 2016 as compared to the same period in 2015. The increase was due, in part, to the aforementioned investment securities acquired in connection with the CNL merger and a $56.4 million increase the average federal funds sold and other interest bearing deposit balances, partially offset by some reinvestment of normal repayments of investment securities into the commercial and consumer lending segments.

For the six months ended June 30, 2016, income before income taxes for the investment management segment increased approximately $1.7 million to $9.4 million compared to the same period of 2015 largely due to a $2.3 millionincrease in net interest income. The increase in net interest income was mainly driven by higher average balances for the six months ended June 30, 2016 as compared to the same period in 2015. This increase was partially offset by higher internal transfer expense totaling $24.8 million during the six months ended June 30, 2016 as compared to $23.9 million for the same period in 2015.

The net interest margin for this segment decreased4basis points to 1.83 percentfor the first half of 2016 as compared to the same period one year ago largely due to a 19 basis point decrease in the yield on average investments driven by principal repayments of higher yielding investments, partially offset by a 15 basis point decrease in in costs associated with our funding sources.

Corporate and other adjustments

The pre-tax net loss for the corporate segment increased$7.0 million to $23.9 million for the six months ended June 30, 2016as compared to the same period of 2015 mainly due to a $19.0 millionincrease in non-interest expense, partially offset by a $12.5 million increase in internal transfer income. The increase in non-interest expense related to increases in several general expense categories, including, but not limited to, salary and employee benefits expense related to the acquisition of the CNL, amortization of tax credit investments, and net occupancy and equipment expense. See further details in the "Non-Interest Income" and "Non-Interest Expense" sections above.

ASSET/LIABILITY MANAGEMENT

Interest Rate Sensitivity

Our success is largely dependent upon our ability to manage interest rate risk. Interest rate risk can be defined as the exposure of our interest rate sensitive assets and liabilities to the movement in interest rates. Our Asset/Liability Management Committee is responsible for managing such risks and establishing policies that monitor and coordinate our sources and uses of funds. Asset/Liability management is a continuous process due to the constant change in interest rate risk factors. In assessing the appropriate interest rate risk levels for us, management weighs the potential benefit of each risk management activity within the desired parameters of liquidity, capital levels and management’s tolerance for exposure to income fluctuations. Many of the actions undertaken by management utilize fair value analysis and attempts to achieve consistent accounting and economic benefits for financial assets and their related funding sources. We have predominately focused on managing our interest rate risk by attempting to match the inherent risk and cash flows of financial assets and liabilities. Specifically, management employs multiple risk management activities such as optimizing the level of new residential mortgage originations retained in our mortgage portfolio through increasing or decreasing loan sales in the secondary market, product pricing levels, the desired maturity levels for new originations, the composition levels of both our interest earning assets and interest bearing liabilities, as well as several other risk management activities.

We use a simulation model to analyze net interest income sensitivity to movements in interest rates. The simulation model projects net interest income based on various interest rate scenarios over a 12-month and 24-month period. The model is based on the actual maturity and re-pricing characteristics of rate sensitive assets and liabilities. The model incorporates certain assumptions which management believes to be reasonable regarding the impact of changing interest rates and the prepayment assumptions of certain assets and liabilities as of June 30, 2016. The

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model assumes immediate changes in interest rates without any proactive change in the composition or size of the balance sheet, or other future actions that management might undertake to mitigate this risk. In the model, the forecasted shape of the yield curve remains static as of June 30, 2016. The impact of interest rate derivatives, such as interest rate swaps and caps, is also included in the model.

Our simulation model is based on market interest rates and prepayment speeds prevalent in the market as of June 30, 2016. Although the size of Valley’s balance sheet is forecasted to remain static as of June 30, 2016 in our model, the composition is adjusted to reflect new interest earning assets and funding originations coupled with rate spreads utilizing our actual originations during the second quarter of 2016. The model also utilizes an immediate parallel shift in the market interest rates at June 30, 2016.

The assumptions used in the net interest income simulation are inherently uncertain. Actual results may differ significantly from those presented in the table below due to the frequency and timing of changes in interest rates and changes in spreads between maturity and re-pricing categories. Overall, our net interest income is affected by changes in interest rates and cash flows from our loan and investment portfolios. We actively manage these cash flows in conjunction with our liability mix, duration and interest rates to optimize the net interest income, while structuring the balance sheet in response to actual or potential changes in interest rates. Additionally, our net interest income is impacted by the level of competition within our marketplace. Competition can negatively impact the level of interest rates attainable on loans and increase the cost of deposits, which may result in downward pressure on our net interest margin in future periods. Other factors, including, but not limited to, the slope of the yield curve and projected cash flows will impact our net interest income results and may increase or decrease the level of asset sensitivity of our balance sheet.

Convexity is a measure of how the duration of a financial instrument changes as market interest rates change. Potential movements in the convexity of bonds held in our investment portfolio, as well as the duration of the loan portfolio may have a positive or negative impact on our net interest income in varying interest rate environments. As a result, the increase or decrease in forecasted net interest income may not have a linear relationship to the results reflected in the table above. Management cannot provide any assurance about the actual effect of changes in interest rates on our net interest income.

The following table reflects management’s expectations of the change in our net interest income over the next 12- month period in light of the aforementioned assumptions. While an instantaneous and severe shift in interest rates was used in this simulation model, we believe that any actual shift in interest rates would likely be more gradual and would therefore have a more modest impact than shown in the table below.

	Estimated Change in Future Net Interest Income
Changes in Interest Rates	Dollar Change			Percentage Change
(in basis points)	($ in thousands)
+200	$	(27,417	)	(4.54	)%
+100	(12,438		)	(2.07	)
–100	4,259			0.70

As noted in the table above, a 100 basis point immediate increase in interest rates is projected to decrease net interest income over the next 12 months by 2.07 percent. The sensitivity of our balance sheet to such a move in interest rates at June 30, 2016 increased as compared to March 31, 2016 (which was a decrease of 0.30 percent in net interest income over a 12 month period). The increase in sensitivity is due to a shift to a greater reliance on short-term borrowings as compared to March 31, 2016. These balances will inherently reprice more quickly in rising rate environments than traditional longer-term funding. Also contributing to the increase in net interest income sensitivity is an increase in asset duration signaling a slower time to asset repricing. Future changes in the overall mix of Valley's fixed and variable interest earning assets and interest bearing liabilities, as well as other factors, including, but not limited to, the slope of the yield curve and projected cash flows, will impact our net interest income results and may increase or decrease the level of asset sensitivity of our balance sheet.

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Our interest rate swaps and caps designated as cash flow hedging relationships are designed to protect us from upward movements in interest rates on certain deposits and other borrowings based on the prime rate (as reported by The Wall Street Journal) or the three-month LIBOR rate. We have 11 cash flow hedge interest rate swaps with a total notional value of $782 million at June 30, 2016 that currently pay fixed and receive floating rates, as well as 1 interest rate cap with a total notional value of $125 million. We also utilize fair value and non-designated hedge interest rate swaps to effectively convert fixed rate loans, brokered certificates of deposit and long-term borrowings to floating rate instruments. The cash flow hedges are expected to benefit our net interest income in a rising interest rate environment. However, due to the prolonged low level of market interest rates and the strike rate of these instruments, the cash flow hedge interest rate swaps and cap negatively impacted our net interest income during the three and six months ended June 30, 2016. We expect this negative trend to continue into the foreseeable future due to the moderate pace of the Federal Reserve’s current monetary policies designed to impact the level of market interest rates. See Note 12 to the consolidated financial statements for further details on our derivative transactions.

Despite the negative impact of such derivative transactions, the possibility of an improving U.S. economy, an additional $75 million in high cost borrowings that matured in July 2016, the debt modification of $405 million in high cost FHLB borrowings during August 2016 and solid commercial lending demand and approved new loan pipelines during the second quarter of 2016 could all benefit our future net interest income.

Liquidity

Bank Liquidity

Liquidity measures the ability to satisfy current and future cash flow needs as they become due. A bank’s liquidity reflects its ability to meet loan demand, to accommodate possible outflows in deposits and to take advantage of interest rate opportunities in the marketplace. Liquidity management is monitored by our Asset/Liability Management Committee and the Investment Committee of the Board of Directors of Valley National Bank, which review historical funding requirements, current liquidity position, sources and stability of funding, marketability of assets, options for attracting additional funds, and anticipated future funding needs, including the level of unfunded commitments. Our goal is to maintain sufficient liquidity to cover current and potential funding requirements.

The Bank has no required regulatory liquidity ratios to maintain; however, it adheres to an internal liquidity policy. The current policy maintains that we may not have a ratio of loans to deposits in excess of 125 percent and reliance on wholesale funding greater than 25 percent of total funding. The Bank was in compliance with the foregoing policies at June 30, 2016.

On the asset side of the balance sheet, the Bank has numerous sources of liquid funds in the form of cash and due from banks, interest bearing deposits with banks (including the Federal Reserve Bank of New York), investment securities held to maturity that are maturing within 90 days or would otherwise qualify as maturities if sold (i.e., 85 percent of original cost basis has been repaid), investment securities available for sale, loans held for sale, and, from time to time, federal funds sold and receivables related to unsettled securities transactions. These liquid assets totaled approximately $1.6 billion, representing 8.3 percent of earning assets, at June 30, 2016 and $2.1 billion, representing 10.7 percent of earning assets, at December 31, 2015. Of the $1.6 billion of liquid assets at June 30, 2016, approximately $401 million of various investment securities were pledged to counterparties to support our earning asset funding strategies. We anticipate the receipt of approximately $417 million in principal from securities in the total investment portfolio over the next 12 months due to normally scheduled principal repayments and expected prepayments of certain securities, primarily residential mortgage-backed securities.

Additional liquidity is derived from scheduled loan payments of principal and interest, as well as prepayments received. Loan principal payments (including loans held for sale at June 30, 2016) are projected to be approximately $4.5 billion over the next 12 months. As a contingency plan for significant funding needs, liquidity could also be derived from the sale of conforming residential mortgages from our loan portfolio, or from the temporary curtailment of lending activities.

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On the liability side of the balance sheet, we utilize multiple sources of funds to meet liquidity needs, including retail and commercial deposits, brokered and municipal deposits, and short-term and long-term borrowings. Our core deposit base, which generally excludes certificates of deposit over $100 thousand as well as brokered certificates of deposit, represents the largest of these sources. Core deposits averaged approximately $14.8 billion and $13.0 billion for the second quarter of 2016 and for the year ended December 31, 2015, respectively, representing 75.6 percent and 74.7 percent of average earning assets for the same respective periods. The level of interest bearing deposits is affected by interest rates offered, which is often influenced by our need for funds and the need to match the maturities of assets and liabilities.

Additional funding may be provided through deposit gathering networks and in the form of federal funds purchased through our well established relationships with numerous correspondent banks. While there are no firm lending commitments currently in place, management believes that we could borrow approximately $727 million for a short time from these banks on a collective basis. The Bank is also a member of the Federal Home Loan Bank of New York (FHLB) and has the ability to borrow from them in the form of FHLB Advances 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 addition to the FHLB Advances, the Bank has pledged such assets to collateralize $350 million in municipal deposit letters of credit issued by the FHLB on Valley’s behalf to secure certain public deposits at June 30, 2016. Furthermore, we are able to obtain overnight borrowings from the Federal Reserve Bank via the discount window as a contingency for additional liquidity. At June 30, 2016, our borrowing capacity under the Federal Reserve's discount window was $939.8 million.

We also have access to other short-term and long-term borrowing sources to support our asset base, such as repos (i.e., securities sold under agreements to repurchase). Our short-term borrowings increased $334.9 million to $1.4 billion at June 30, 2016 as compared to December 31, 2015 due to a $562 million increase in FHLB advances, partially offset by decreases of $177.1 million and $50 million in repo balances and overnight federal funds purchased, respectively. The overall increase in short-term borrowings has been largely driven by higher levels of loan originations (including residential mortgages originated for sale), repayments of long-term borrowing, and a moderate decline in our use of time deposits in our current liquidity/funding strategies.

Corporation Liquidity

Valley’s recurring cash requirements primarily consist of dividends to preferred and common shareholders and interest expense on subordinated notes and junior subordinated debentures issued to capital trusts. As part of our on-going asset/liability management strategies, Valley could also use cash to repurchase shares of its outstanding common stock under its share repurchase program or redeem its callable junior subordinated debentures. These cash needs are routinely satisfied by dividends collected from the Bank. Projected cash flows from the Bank are expected to be adequate to pay preferred and common dividends, if declared, and interest expense payable to subordinated note holders and capital trusts, given the current capital levels and current profitable operations of the bank subsidiary. In addition to dividends received from the Bank, Valley can satisfy its cash requirements by utilizing its own cash and potential new funds borrowed from outside sources or capital issuances. Valley also has the right to defer interest payments on its $41.5 million of junior subordinated debentures, and therefore distributions on its trust preferred securities for consecutive quarterly periods up to five years, but not beyond the stated maturity dates, and subject to other conditions.

Investment Securities Portfolio

As of June 30, 2016, we had approximately $1.8 billion and $1.2 billion in held to maturity and available for sale investment securities, respectively. Our total investment portfolio was comprised of U.S. Treasury securities, U.S. government agencies, tax-exempt issues of states and political subdivisions, residential mortgage-backed securities (including 12 private label mortgage-backed securities), single-issuer trust preferred securities principally issued by bank holding companies (including 2 pooled securities), high quality corporate bonds and perpetual preferred and common equity securities issued by banks at June 30, 2016. There were no securities in the name of any one issuer

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exceeding 10 percent of shareholders’ equity, except for residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac.

Among other securities, our investments in the private label mortgage-backed securities, trust preferred securities, perpetual preferred securities, equity securities, and bank issued corporate bonds may pose a higher risk of future impairment charges to us as a result of the uncertain direction of the U.S. economy and its potential negative effect on the future performance of the security issuers and, if applicable, the underlying mortgage loan collateral of the security.

Other-Than-Temporary Impairment Analysis

We may be required to record impairment charges on our investment securities if they suffer a decline in value that is considered other-than-temporary. Numerous factors, including lack of liquidity for re-sales of certain investment securities, absence of reliable pricing information for investment securities, adverse changes in business climate, adverse actions by regulators, or unanticipated changes in the competitive environment could have a negative effect on our investment portfolio and may result in other-than temporary impairment on our investment securities in future periods. See our Annual Report on Form 10-K for the year ended December 31, 2015, for additional information regarding our impairment analysis by security type.

The investment grades in the table below reflect the most current independent analysis performed by third parties of each security as of the date presented and not necessarily the investment grades at the date of our purchase of the securities. For many securities, the rating agencies may not have performed an independent analysis of the tranches owned by us, but rather an analysis of the entire investment pool. For this and other reasons, we believe the assigned investment grades may not accurately reflect the actual credit quality of each security and should not be viewed in isolation as a measure of the quality of our investment portfolio.

The following table presents the held to maturity and available for sale investment securities portfolios by investment grades at June 30, 2016.

	June 30, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Held to maturity investment grades:*
AAA Rated	$	1,257,981	$	39,173	$	(4,409	)	$	1,292,745
AA Rated	247,857		14,031		(1		)	261,887
A Rated	41,365		3,435		—			44,800
Non-investment grade	3,741		26		(63		)	3,704
Not rated	214,276		38		(13,739		)	200,575
Total investment securities held to maturity	$	1,765,220	$	56,703	$	(18,212	)	$	1,803,711
Available for sale investment grades:*
AAA Rated	$	981,534	$	8,596	$	(3,972	)	$	986,158
AA Rated	79,389		1,818		(1,537		)	79,670
A Rated	28,124		111		(12		)	28,223
BBB Rated	49,484		657		(1,869		)	48,272
Non-investment grade	17,153		444		(1,358		)	16,239
Not rated	27,964		437		(622		)	27,779
Total investment securities available for sale	$	1,183,648	$	12,063	$	(9,370	)	$	1,186,341

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* Rated using external rating agencies (primarily S&P and Moody’s). Ratings categories include the entire range. For example, “A rated” includes A+, A, and A-. Split rated securities with two ratings are categorized at the higher of the rating levels.

The held to maturity portfolio includes $214.3 million in investments not rated by the rating agencies with aggregate unrealized losses of $13.7 million at June 30, 2016. The unrealized losses for this category primarily relate to 4 single-issuer bank trust preferred issuances with a combined amortized cost of $35.9 million. All single-issuer trust preferred securities classified as held to maturity, including the aforementioned four securities, are paying in accordance with their terms and have no deferrals of interest or defaults. Additionally, we analyze the performance of each issuer on a quarterly basis, including a review of performance data from the issuer’s most recent bank regulatory report to assess the company’s credit risk and the probability of impairment of the contractual cash flows of the applicable security. Based upon our quarterly review at June 30, 2016, all of the issuers appear to meet the regulatory capital minimum requirements to be considered a “well-capitalized” financial institution and/or have maintained performance levels adequate to support the contractual cash flows of the security.

There was no other-than-temporary impairment recognized in earnings as a result of Valley's impairment analysis of its securities during the six months endedJune 30, 2016 and 2015 as the collateral supporting much of the investment securities has improved or performed as expected.

Loan Portfolio

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

	June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015
Loans
Commercial and industrial	$	2,528,749		$	2,537,545		$	2,540,491		$	2,400,618		$	2,372,031
Commercial real estate:
Commercial real estate	8,018,794			7,585,139			7,424,636			6,960,677			6,783,149
Construction	768,847			776,057			754,947			569,653			586,068
Total commercial real estate	8,787,641			8,361,196			8,179,583			7,530,330			7,369,217
Residential mortgage	3,055,353			3,101,814			3,130,541			2,999,262			2,704,081
Consumer:
Home equity	485,730			491,555			511,203			478,129			482,366
Automobile	1,141,793			1,188,063			1,239,313			1,219,758			1,198,064
Other consumer	499,914			455,814			441,976			388,717			354,535
Total consumer loans	2,127,437			2,135,432			2,192,492			2,086,604			2,034,965
Total loans	$	16,499,180		$	16,135,987		$	16,043,107		$	15,016,814		$	14,480,294
As a percent of total loans:
Commercial and industrial	15.3		%	15.8		%	15.8		%	16.0		%	16.4		%
Commercial real estate	53.3		%	51.8		%	51.0		%	50.1		%	50.9		%
Residential mortgage	18.5		%	19.2		%	19.5		%	20.0		%	18.7		%
Consumer loans	12.9		%	13.2		%	13.7		%	13.9		%	14.0		%
Total	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%

(1) Includes covered loans (primarily consisting of commercial real estate loans and residential mortgage loans) totaling $81.1 million, $86.8 million, $122.3 million, $129.5 million and $145.2 million at June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively.

(2) Total non-covered loans include net unearned premiums and deferred loan costs of $8.3 million, $5.6 million, $3.5 million and $106 thousand at June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, respectively, and net unearned discounts and deferred loan fees of $2.1 million at June 30, 2015.

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Total loans increased$363.2 million, or 9.0 percent on an annualized basis, to approximately $16.5 billion at June 30, 2016 from March 31, 2016. Our loan portfolio includes purchased credit-impaired (PCI) loans, which include covered loans subject to loss-sharing agreements, are loans acquired at a discount that is due, in part, to credit quality. At June 30, 2016, our PCI loan portfolio decreased $140.0 million to $2.0 billion as compared to March 31, 2016 primarily due to a high level of loan repayments (some resulting from credit risk considerations by management). The non-PCI loan portion of the loan portfolio increased $503.2 million to approximately $14.5 billion at June 30, 2016 as compared to March 31, 2016 largely due to increases in total commercial estate loans and collateralized personal lines of credit within the other consumer loan category discussed further below.

Total commercial and industrial loans decreased$8.8 million, or 1.4 percent on an annualized basis, from March 31, 2016 to approximately $2.5 billion at June 30, 2016 due to a decline of $32.7 million in the PCI loan portion of the portfolio during the second quarter of 2016. The non-PCI commercial and industrial loan portfolio increased by approximately 4.4 percent on an annualized basis to $2.2 billion at June 30, 2016 from March 31, 2016. In addition to the PCI loan repayments, the level of loan growth within this portfolio continues to be challenged by strong market competition for both new and existing commercial loan borrowers within our primary markets.

Commercial real estate loans (excluding construction loans) increased$433.7 million from March 31, 2016 to $8.0 billion at June 30, 2016 mainly due to a $517.7 million, or 32.8 percent on an annualized basis, increase in the non-PCI loan portfolio. The increase in non-PCI loans was due to solid organic loan volumes from all of our primary markets, including Florida, and $238 million of participations in multi-family loans (mostly in New York City) purchased in late May 2016. The purchased participation loans are seasoned loans with expected shorter durations. Each of these purchased participation loans was stress-tested by Valley under its normal underwriting criteria to further satisfy ourselves as to their credit quality. The organic loan volumes generated across a broad based segment of borrowers within the commercial real estate portfolio were partially offset by an $84.0 million decline in the acquired PCI loan portion of the portfolio. Construction loans were $768.8 million at June 30, 2016 and remained relatively unchanged as compared to March 31, 2016 largely due to new construction loan volumes being somewhat limited to existing customer relationships with a strong performance history.

Total residential mortgage loans decreased$46.5 million, or approximately 6.0 percent on an annualized basis, to approximately $3.1 billion at June 30, 2016 from March 31, 2016 mostly due to a larger percentage of loans originated for sale rather than investment, as well as a $11.0 million decline in the PCI loan portion of the portfolio during the second quarter of 2016. Valley sold approximately $128.8 million of residential mortgage loans originated for sale (including $15.3 million of loans held for sale at March 31, 2016) during the second quarter of 2016. New and refinanced residential mortgage loan originations totaled approximately $177.7 million for the second quarter of 2016 as compared to $83.6 million and $181.2 million for the first quarter of 2016 and second quarter of 2015, respectively. Of the $177.7 million in total originations, $13.2 million, or 7.4 percent, represented new Florida residential mortgage loans. We expect to continue to sell a large portion of our fixed rate residential mortgage loan originations as part of our overall interest rate risk management strategies.

Automobile loans decreased by $46.3 million, or 15.6 percent on an annualized basis, to $1.1 billion at June 30, 2016 as compared to March 31, 2016 as our new indirect auto loan volumes did not keep pace with the normal portfolio repayment activity in the second quarter of 2016, as was also experienced in the linked first quarter of 2016. The decline in indirect auto originations during the first six months of 2016 was largely caused by current market loan pricing and fee constraints resulting from recent regulatory lending guidance. During the early stages of the third quarter of 2016, management implemented various strategies to enhance new auto volumes, including new technology to improve the decision-making process for our auto dealer network. While we believe such enhancements and continued growth opportunities in the new Florida markets will lead to higher new loan volumes, we can provide no assurance that our auto loans will not continue to decline in future periods.

Other consumer loans increased$44.1 million, or 38.7 percent on an annualized basis, to $499.9 million at June 30, 2016 as compared to $455.8 million at March 31, 2016 mainly due to continued growth and customer usage of collateralized personal lines of credit. Home equity loans totaling $485.7 million at June 30, 2016 decreased by $5.8 million as compared to March 31, 2016 mostly due to normal repayment activity largely within the PCI loan

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portion of the portfolio. New home equity volumes and customer usage of existing home equity lines of credit continue to be weak, despite the relatively favorable low interest rate environment.

We are cautiously optimistic that we will continue to experience overall loan growth primarily within the commercial lending segment during the third quarter of 2016 and the foreseeable future. The approved organic commercial loan pipeline continues to be strong, totaling nearly $700 million in all of our markets at the end of the second quarter, despite the strong market competition for high quality commercial credits. However, we can make no assurances that our total loans will increase, or remain at current levels in the future.

Most of our lending is in northern and central New Jersey, New York City, Long Island and central and southern Florida, with the exception of smaller auto and residential mortgage loan portfolios derived from the other neighboring states of New Jersey, which could present a geographic and credit risk if there was another significant broad based economic downturn or a prolonged economic recovery within these regions. We are witnessing new loan activity across Valley's entire geographic footprint, including new loans and solid loan pipelines from our Florida lending operations. Valley’s Florida Division accounted for over $100 million of $950 million in new and purchased commercial loan volume, excluding lines of credit, during the second quarter of 2016. However, the New Jersey and New York Metropolitan markets continue to account for a disproportionately larger percentage of our lending activity. To mitigate these risks, we are making efforts to maintain a diversified portfolio as to type of borrower and loan to guard against a potential downward turn in any one economic sector. Geographically, we intend to make further inroads into the Florida lending market, through acquisition or select de novo branch efforts.

Purchased Credit-Impaired Loans (Including Covered Loans)

PCI loans totaled $2.0 billion and $2.2 billion at June 30, 2016 and December 31, 2015, respectively, mostly consisting of loans acquired in business combinations subsequent to 2011, and covered loans in which the Bank will share losses with the FDIC under loss-sharing agreements. Our covered loans, consisting primarily of residential mortgage loans and commercial real estate loans, totaled $81.1 million and $122.3 million at June 30, 2016 and December 31, 2015, respectively. The decrease in covered loans was largely due to the expiration of a commercial loss-sharing agreement acquired from 1st United Bancorp, Inc. effective January 1, 2016 and the reclassification of such loans to non-covered PCI loans during the first quarter of 2016. Additional information regarding all of our loss-sharing agreements with the FDIC can be found in our Annual Report on Form 10-K for the year ended December 31, 2015.

As required by U.S. GAAP, all of our PCI loans are accounted for under ASC Subtopic 310-30. This accounting guidance requires the PCI loans to be aggregated and accounted for as pools of loans based on common risk characteristics. A pool is accounted for as one asset with a single composite interest rate, aggregate fair value and expected cash flows. For PCI loan pools accounted for under ASC Subtopic 310-30, the difference between the contractually required payments due and the cash flows expected to be collected, considering the impact of prepayments, is referred to as the non-accretable difference. The contractually required payments due represent the total undiscounted amount of all uncollected principal and interest payments. Contractually required payments due may increase or decrease for a variety of reasons, e.g. when the contractual terms of the loan agreement are modified, when interest rates on variable rate loans change, or when principal and/or interest payments are received. The Bank estimates the undiscounted cash flows expected to be collected by incorporating several key assumptions including probability of default, loss given default, and the amount of actual prepayments after the acquisition dates. The non-accretable difference, which is neither accreted into income nor recorded on our consolidated balance sheet, reflects estimated future credit losses and uncollectable contractual interest expected to be incurred over the life of the loans. The excess of the undiscounted cash flows expected at the acquisition date over the carrying amount (fair value) of the PCI loans is referred to as the accretable yield. This amount is accreted into interest income over the remaining life of the loans, or pool of loans, using the level yield method. The accretable yield is affected by changes in interest rate indices for variable rate loans, changes in prepayment assumptions, and changes in expected principal and interest payments over the estimated lives of the loans. Prepayments affect the estimated life of PCI loans and could change the amount of interest income, and possibly principal, expected to be collected. Reclassifications of the non-accretable difference to the accretable yield may occur subsequent to the loan acquisition dates due to increases in expected cash flows of the loan pools.

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At both acquisition and subsequent quarterly reporting dates, we use a third party service provider to assist with validation of our assessment of the contractual and estimated cash flows. Valley provides the third party with updated loan-level information derived from Valley’s main operating system, contractually required loan payments and expected cash flows for each loan pool individually reviewed by us. Using this information, the third party provider determines both the contractual cash flows and cash flows expected to be collected. The loan-level information used to reforecast the cash flows was subsequently aggregated on a pool basis. The expected payment data, discount rates, impairment data and changes to the accretable yield received back from the third party were reviewed by Valley to determine whether this information is accurate and the resulting financial statement effects are reasonable.

Similar to contractual cash flows, we reevaluate expected cash flows on a quarterly basis. Unlike contractual cash flows which are determined based on known factors, significant management assumptions are necessary in forecasting the estimated cash flows. We attempt to ensure the forecasted expectations are reasonable based on the information currently available; however, due to the uncertainties inherent in the use of estimates, actual cash flow results may differ from our forecast and the differences may be significant. To mitigate such differences, we carefully prepare and review the assumptions utilized in forecasting estimated cash flows.

On a quarterly basis, Valley analyzes the actual cash flow versus the forecasts at the loan pool level and variances are reviewed to determine their cause. In re-forecasting future estimated cash flow, Valley will adjust the credit loss expectations for loan pools, as necessary. These adjustments are based, in part, on actual loss severities recognized for each loan type, as well as changes in the probability of default. For periods in which Valley does not reforecast estimated cash flows, the prior reporting period’s estimated cash flows are adjusted to reflect the actual cash received and credit events which transpired during the current reporting period.

The following tables summarize the changes in the carrying amounts of PCI loans (net of the allowance for loan losses, if applicable), and the accretable yield on these loans for the three and six months ended June 30, 2016 and 2015.

	Three Months Ended June 30,
	2016						2015
	Carrying Amount, Net			Accretable Yield			Carrying Amount, Net			Accretable Yield
	(in thousands)
PCI loans:
Balance, beginning of the period	$	2,115,421		$	387,120		$	1,649,181		$	309,858
Accretion	28,325			(28,325		)	27,757			(27,757		)
Payments received	(167,439		)	—			(104,587		)	—
Transfers to other real estate owned	(906		)	—			(1,080		)	—
Other, net	—			(3,194		)	—			—
Balance, end of the period	$	1,975,401		$	355,601		$	1,571,271		$	282,101

	Six Months Ended June 30,
	2016						2015
	Carrying Amount, Net			Accretable Yield			Carrying Amount, Net			Accretable Yield
	(in thousands)
PCI loans:
Balance, beginning of the period	$	2,240,471		$	415,179		$	1,721,601		$	336,208
Accretion	56,384			(56,384		)	54,107			(54,107		)
Payments received	(317,084		)	—			(202,774		)
Transfers to other real estate owned	(1,176		)	—			(1,080		)	—
Other, net	(3,194		)	(3,194		)	(583		)	—
Balance, end of the period	$	1,975,401		$	355,601		$	1,571,271		$	282,101

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PCI loans in the table above at June 30, 2015 are presented net of the allocation of the allowance for loan losses totaling $200 thousand. This allowance allocation was established due to a decrease in the expected cash flows for certain pools of covered loans based on higher levels of credit impairment than originally forecasted by us at the acquisition dates. There was no allowance allocation for PCI loan losses at June 30, 2016.

Although we recognized additional credit impairment for certain covered pools prior to 2012, and excluding PCI loans recently acquired from CNL in December of 2015, on an aggregate basis the acquired pools of loans are performing better than originally expected at the acquisition dates. Based on our current estimates, we expect to receive more future cash flows than originally modeled at the acquisition dates. For the pools with better than expected cash flows, the forecasted increase is recorded as a prospective adjustment to our interest income on these loan pools over future periods. The decrease in the FDIC loss-share receivable due to the increase in expected cash flows for covered loan pools is recognized on a prospective basis over the shorter period of the lives of the loan pools and the loss-share agreements accordingly with a corresponding reduction in non-interest income for the period. See section below for further details regarding the FDIC loss-share receivable. Conversely, an increase or decrease in expected future cash flows of covered loans since the acquisition dates will increase or decrease (if applicable) the clawback liability (the amount the FDIC requires us to pay back if certain thresholds are met) accordingly. 

FDIC Loss-Share Receivable Related to Covered Loans and Foreclosed Assets

The receivable arising from the loss-sharing agreements with the FDIC is measured separately from the covered loan portfolio because the agreements are not contractually part of the covered loans and are not transferable should the Bank choose to dispose of the covered loans. The FDIC loss share receivable (which is included in other assets on Valley's consolidated statements of financial condition) totaled $7.6 million and $8.3 million at June 30, 2016 and December 31, 2015, respectively. The aggregate effect of changes in the FDIC loss-share receivable was a net reduction in non-interest income of $559 thousand and $3.3 million for the six months ended June 30, 2016 and 2015, respectively. The larger net reduction during the first half of 2015 was mainly caused by the prospective recognition of the effect of additional cash flows from certain loan pools which were covered by commercial loan loss-sharing agreements that expired in March 2015.

Non-performing Assets

Non-performing assets (excluding PCI loans) include non-accrual loans, other real estate owned (OREO), other repossessed assets (consisting of automobiles) and non-accrual debt securities at June 30, 2016. Loans are generally placed on non-accrual status when they become past due in excess of 90 days as to payment of principal or interest. Exceptions to the non-accrual policy may be permitted if the loan is sufficiently collateralized and in the process of collection. OREO is acquired through foreclosure on loans secured by land or real estate. OREO and other repossessed assets are reported at the lower of cost or fair value, less cost to sell at the time of acquisition and at the lower of fair value, less estimated costs to sell, or cost thereafter. The level of non-performing assets has decreased 15.8 percent over the last 12 month period to $61.3 million at June 30, 2016 mostly due to strong collections within non-accrual loan category during the second quarter of 2016 and a steady decline in OREO balances. As a result, non-performing assets as a percentage of total loans and non-performing assets declined to 0.37 percent at June 30, 2016 as compared to 0.48 percent at March 31, 2016 (as shown in the table below). Past due loans and non-accrual loans in the table below exclude PCI loans. Under U.S. GAAP, the PCI loans (acquired at a discount that is due, in part, to credit quality) are accounted for on a pool basis and are not subject to delinquency classification in the same manner as loans originated by Valley. For details regarding performing and non-performing PCI loans, see the "Credit quality indicators" section in Note 8 to the consolidated financial statements.

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The following table sets forth by loan category accruing past due and non-performing assets on the dates indicated in conjunction with our asset quality ratios:

	June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015
	($ in thousands)
Accruing past due loans: (1)
30 to 59 days past due:
Commercial and industrial	$	5,187		$	8,395		$	3,920		$	2,081		$	1,080
Commercial real estate	5,076			1,389			2,684			2,950			1,542
Construction	—			1,326			1,876			4,707			404
Residential mortgage	10,177			14,628			6,681			5,617			4,690
Consumer	2,535			3,200			3,348			3,491			2,440
Total 30 to 59 days past due	22,975			28,938			18,509			18,846			10,156
60 to 89 days past due:
Commercial and industrial	5,714			613			524			1,996			475
Commercial real estate	834			120			—			1,415			2,182
Construction	—			—			2,799			—			—
Residential mortgage	2,326			3,056			1,626			1,977			1,280
Consumer	644			731			626			722			644
Total 60 to 89 days past due	9,518			4,520			5,575			6,110			4,581
90 or more days past due:
Commercial and industrial	218			221			213			224			226
Commercial real estate	131			131			131			245			133
Construction	—			—			—			—			—
Residential mortgage	314			2,613			1,504			3,468			3,014
Consumer	139			66			208			166			160
Total 90 or more days past due	802			3,031			2,056			4,103			3,533
Total accruing past due loans	$	33,295		$	36,489		$	26,140		$	29,059		$	18,270
Non-accrual loans: (1)
Commercial and industrial	$	6,573		$	11,484		$	10,913		$	12,845		$	9,019
Commercial real estate	19,432			26,604			24,888			22,129			21,760
Construction	5,878			5,978			6,163			5,959			4,775
Residential mortgage	14,866			16,747			17,930			16,657			17,269
Consumer	1,130			1,807			2,206			1,634			1,855
Total non-accrual loans	47,879			62,620			62,100			59,224			54,678
Other real estate owned (OREO) (2)	10,903			12,368			13,563			14,691			14,476
Other repossessed assets	369			495			437			369			1,510
Non-accrual debt securities (3)	2,118			2,102			2,142			2,182			2,123
Total non-performing assets (NPAs)	$	61,269		$	77,585		$	78,242		$	76,466		$	72,787
Performing troubled debt restructured loans	$	82,140		$	80,506		$	77,627		$	91,210		$	97,625
Total non-accrual loans as a % of loans	0.29		%	0.39		%	0.39		%	0.39		%	0.38		%
Total NPAs as a % of loans and NPAs	0.37			0.48			0.49			0.51			0.50
Total accruing past due and non-accrual loans as a % of loans	0.49			0.61			0.55			0.59			0.50
Allowance for loan losses as a % of non-accrual loans	225.75			168.34			170.98			176.53			188.07

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(1) Past due loans and non-accrual loans exclude PCI loans that are accounted for on a pool basis.

(2) This table excludes covered OREO properties related to FDIC-assisted transactions totaling $1.2 million, $2.4 million and $5.0 million at June 30, 2016, March 31, 2016 and December 31, 2015, respectively, and $5.4 million at both September 30, 2015 and June 30, 2015.

(3) Includes other-than-temporarily impaired trust preferred securities classified as available for sale, which are presented at carrying value, net of net unrealized losses totaling $634 thousand, $651 thousand, $610 thousand, $570 thousand, $630 thousand at June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively.

Loans past due 30 to 59 days decreased$6.0 million to $23.0 million at June 30, 2016 as compared to March 31, 2016 mainly due to a decrease residential mortgage loans, as well as commercial and industrial loans and consumer loans. Residential mortgage loans within this delinquency category decreased $4.5 million to $10.2 million at June 30, 2016 compared to $14.6 million at March 31, 2016 caused, in large part, by better performance within our serviced by others portfolio at June 30, 2016. The residential mortgage loans within this category remained somewhat elevated at June 30, 2016 due to an additional $1.8 million loan at June 30, 2016 that was previously reported within loans past due 90 or more and still accruing interest at March 31, 2016.

Loans past due 60 to 89 days increased$5.0 million to $9.5 million at June 30, 2016 as compared to March 31, 2016

mainly due to one commercial and industrial loan relationship collateralized by taxi cab medallions totaling $5.2 million. This $5.2 million relationship is the only past due relationship in our entire taxi medallion loan portfolio totaling $151.4 million, which primarily consists of loans to New York City fleet owners, at June 30, 2016. Valley's historical taxi medallion lending criteria has been conservative in regards to capping the loan amounts in relation to market valuations, as well as obtaining personal guarantees and other collateral whenever possible. We will continue to closely monitor this portfolio's performance and the potential impact of the changes in market valuations for taxi medallions due to relatively new competing services.

Loans past due 90 days or more and still accruing decreased$2.2 million to $802 thousand at June 30, 2016 compared to $3.0 million at March 31, 2016 mostly due to a decrease in residential mortgage loans caused, in part, by the aforementioned $1.8 million loan that migrated to the loans past due 30 to 59 days category at June 30, 2016.

Non-accrual loans decreased$14.7 million to $47.9 million at June 30, 2016 as compared to $62.6 million at March 31, 2016 largely due to strong collections within commercial and industrial loans and commercial real estate loan portfolios resulting from several full repayments of impaired loans during the second quarter of 2016.

OREO properties decreased$1.5 million to $10.9 million at June 30, 2016 from $12.4 million at March 31, 2016. Our residential mortgage loan foreclosure activity remains low due to the nominal amount of individual loan delinquencies within the residential mortgage and home equity portfolios and the average time to complete a foreclosure in the State of New Jersey, which currently exceeds two and a half years. The residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in-process totaled $9.4 million at June 30, 2016. We believe this lengthy legal process negatively impacts the level of our non-accrual loans and NPAs, and the ability to compare our NPA levels to similar banks located outside of our primary markets as of June 30, 2016.

Troubled debt restructured loans (TDRs) represent loan modifications for customers experiencing financial difficulties where a concession has been granted. Performing TDRs (i.e., TDRs not reported as loans 90 days or more past due and still accruing or as non-accrual loans) totaled $82.1 million at June 30, 2016 and consisted of 96 loans (primarily in the commercial and industrial loan and commercial real estate portfolios). On an aggregate basis, the $82.1 million in performing TDRs at June 30, 2016 had a modified weighted average interest rate of approximately 4.74 percent as compared to a pre-modification weighted average interest rate of 4.95 percent.

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Allowance for Credit Losses

The allowance for credit losses includes the allowance for loan losses and the reserve for unfunded commercial letters of credit. Management maintains the allowance for credit losses at a level estimated to absorb probable losses inherent in the loan portfolio and unfunded letter of credit commitments at the balance sheet dates, based on ongoing evaluations of the loan portfolio. Our methodology for evaluating the appropriateness of the allowance for loan losses includes:

• segmentation of the loan portfolio based on the major loan categories, which consist of commercial, commercial real estate (including construction), residential mortgage, and other consumer loans (including automobile and home equity loans);

• tracking the historical levels of classified loans and delinquencies;

• assessing the nature and trend of loan charge-offs;

• providing specific reserves on impaired loans; and

• evaluating the PCI loan pools for additional credit impairment subsequent to the acquisition dates.

Additionally, the qualitative factors, such as the volume of non-performing loans, concentration risks by size, type, and geography, new markets, collateral adequacy, credit policies and procedures, staffing, underwriting consistency, loan review and economic conditions are taken into consideration when evaluating the adequacy of the allowance for credit losses. Allowance for credit losses methodology and accounting policy are fully described in Part II, Item 7 and Note 1 to the consolidated financial statements in Valley’s Annual Report on Form 10-K for the year ended December 31, 2015.

While management utilizes its best judgment and information available, the ultimate adequacy of the allowance for credit losses is dependent upon a variety of factors largely beyond our control, including the view of the OCC toward loan classifications, performance of the loan portfolio, and the economy. The OCC may require, based on their judgments about information available to them at the time of their examination, that certain loan balances be charged off or require that adjustments be made to the allowance for loan losses when their credit evaluations differ from those of management

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

	Three Months Ended									Six Months Ended
	June 30, 2016			March 31, 2016			June 30, 2015			June 30, 2016			June 30, 2015
	($ in thousands)
Average loans outstanding	$	16,252,915		$	15,993,543		$	14,143,580		$	16,123,229		$	13,857,893
Beginning balance - Allowance for credit losses	$	107,675		$	108,367		$	104,565		$	108,367		$	104,287
Loans charged-off:
Commercial and industrial	(493		)	(1,251		)	(3,226		)	(1,744		)	(3,979		)
Commercial real estate	(414		)	(105		)	(1,787		)	(519		)	(1,864		)
Construction	—			—			(803		)	—			(876		)
Residential mortgage	(151		)	(81		)	(339		)	(232		)	(388		)
Consumer	(697		)	(1,074		)	(1,194		)	(1,771		)	(1,908		)
Total charge-offs	(1,755		)	(2,511		)	(7,349		)	(4,266		)	(9,015		)
Charged-off loans recovered:
Commercial and industrial	990			526			1,986			1,516			3,037
Commercial real estate	1,458			89			215			1,547			238
Construction	—			—			475			—			912
Residential mortgage	94			15			130			109			244
Consumer	523			389			365			912			684
Total recoveries	3,065			1,019			3,171			4,084			5,115
Net recoveries (charge-offs)	1,310			(1,492		)	(4,178		)	(182		)	(3,900		)
Provision charged for credit losses	1,429			800			4,500			2,229			4,500
Ending balance - Allowance for credit losses	$	110,414		$	107,675		$	104,887		$	110,414		$	104,887
Components of allowance for credit losses:
Allowance for loan losses	$	108,088		$	105,415		$	102,835		$	108,088		$	102,835
Allowance for unfunded letters of credit	2,326			2,260			2,052			2,326			2,052
Allowance for credit losses	$	110,414		$	107,675		$	104,887		$	110,414		$	104,887
Components of provision for credit losses:
Provision for loan losses	$	1,363		$	729		$	4,382		$	2,092		$	4,382
Provision for unfunded letters of credit	66			71			118			137			118
Provision for credit losses	$	1,429		$	800		$	4,500		$	2,229		$	4,500
Annualized ratio of net (recoveries) charge-offs to average loans outstanding	(0.03		)%	0.04		%	0.12		%	0.00		%	0.06		%
Allowance for credit losses as a % of non-PCI loans	0.76			0.77			0.81			0.76			0.81
Allowance for credit losses as a % of total loans	0.67			0.67			0.72			0.67			0.72

During the second quarter of 2016, we recognized net recoveries of loan charge-offs of $1.3 million as compared to net charge-offs totaling $1.5 million and $4.2 million for the first quarter of 2016 and the second quarter of 2015, respectively. The quarter over quarter improvement in net loan charge-offs was largely due to an increase in gross recoveries within the commercial loan categories. However, the decrease in net loan charge-offs during the second quarter of 2016 as compared to the same period in 2015 was primarily driven by significantly lower gross charge offs

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across all of the loan categories during the second quarter of 2016 as the portfolio's performance has continued to improve over the twelve month period. Net loan charge-offs totaled only $182 thousand for the six months ended June 30, 2016, despite a $1.0 million decline in gross recoveries as compared to the same period one year ago.

During the second quarter of 2016, we recorded a $1.4 million provision for credit losses as compared to a provision of $800 thousand and $4.5 million for the first quarter of 2016 and second quarter of 2015, respectively. The increase in the provision from the linked first quarter of 2016 was mostly due to the significant organic and purchased loan growth within the commercial real estate loan portfolio. The decrease in the provision from the second quarter of 2015 was mainly due to the continued low level of loan charge-off activity across all loan types in our loan portfolio during the second quarter of 2016, as well as several other quantitative and qualitative factors that impacted our analysis of the allowance for credit losses at June 30, 2016.

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

	June 30, 2016				March 31, 2016				June 30, 2015
	Allowance Allocation		Allocation as a % of Loan Category		Allowance Allocation		Allocation as a % of Loan Category		Allowance Allocation		Allocation as a % of Loan Category
	($ in thousands)
Loan Category:
Commercial and Industrial loans*	$	50,351	1.99	%	$	50,677	2.00	%	$	43,765	1.85	%
Commercial real estate loans:
Commercial real estate	35,869		0.45	%	31,812		0.42	%	30,515		0.46	%
Construction	16,008		2.08	%	16,642		2.14	%	13,670		2.34	%
Total commercial real estate loans	51,877		0.59	%	48,454		0.58	%	44,185		0.61	%
Residential mortgage loans	3,495		0.11	%	4,209		0.14	%	5,055		0.19	%
Consumer loans:
Home equity	968		0.20	%	1,061		0.22	%	1,649		0.34	%
Auto and other consumer	3,723		0.23	%	3,274		0.20	%	3,894		0.25	%
Total consumer loans	4,691		0.22	%	4,335		0.20	%	5,543		0.27	%
Unallocated	—				—		—		6,339		—
Total allowance for credit losses	$	110,414	0.67	%	$	107,675	0.67	%	$	104,887	0.72	%

* Includes the reserve for unfunded letters of credit.

The allowance for credit losses comprised of our allowance for loan losses and reserve for unfunded letters of credit, as a percentage of total loans was 0.67 percent at both June 30, 2016 and March 31, 2016, as compared to 0.72 percent of total loans at June 30, 2015. At June 30, 2016, our allowance allocations for losses as a percentage of total loans moderately decreased within several loan categories as compared to March 31, 2016 due, in part, to the lower level of net loan charge-offs, delinquent and impaired loans, loan growth during the second quarter, and a decline in internally classified loans at June 30, 2016. The overall mix of these items, significant loan growth in the commercial real estate and other consumer loan categories of the portfolio, assumptions based on the current economic environment, as well as other qualitative factors impacted our estimate of the allowance for credit losses at June 30, 2016.

During the fourth quarter of 2015, Valley refined and enhanced its assessment of the adequacy of the allowance for loan losses by extending the loss look-back period on the majority of its loan portfolios from three years to four years in order to capture more of the current economic cycle as it continued throughout 2015. Valley also enhanced its qualitative factor framework to capture the risks of several factors, including, but not limited to, the impact of changes in capitalization rates on collateral values, concentrations of certain loan types, including multi-family and exculpated loans, the volume of loans purchased from and serviced by third parties, as well as the rate of growth in Valley's real estate portfolios. These enhancements are meant to increase the level of precision in the allowance for credit losses.

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As a result, Valley no longer has an “unallocated” segment in its allowance for credit losses, as the risks and uncertainties meant to be captured by the unallocated allowance have been included in the qualitative framework for the respective portfolios at June 30, 2016 and March 31, 2016. As such, the unallocated allowance has in essence been reallocated to the certain portfolios based on the risks and uncertainties it was meant to capture.

Our allowance for credit losses as a percentage of total non-PCI loans (excluding PCI loans with carrying values totaling approximately $2.0 billion) was 0.76 percent at June 30, 2016 as compared to 0.77 percent and 0.81 percent at March 31, 2016 and June 30, 2015, respectively. PCI loans, including all of the loans acquired from CNL during the fourth quarter of 2015, are accounted for on a pool basis and initially recorded net of fair valuation discounts related to credit which may be used to absorb future losses on such loans before any allowance for loan losses is recognized subsequent to acquisition. Due to the adequacy of such discounts, there were no allowance reserves related to PCI loans at June 30, 2016.

Capital Adequacy

A significant measure of the strength of a financial institution is its shareholders’ equity. Our shareholders’ equity totaled approximately $2.2 billion and represented 10.2 percent of total assets at both June 30, 2016 and December 31, 2015. During the six months ended June 30, 2016, total shareholders’ equity increased $25.1 million, which was comprised of (i) net income of $75.2 million, (ii) a decrease in our accumulated other comprehensive loss of $2.7 million, (iii) net proceeds of $3.1 million from the re-issuance of treasury and authorized common shares issued under our dividend reinvestment plan totaling a combined 323 thousand shares, and (iv) an increase of $3.8 million attributable to the effect of our stock incentive plan, partially offset by (v) cash dividends declared on common and preferred stock totaling $56.1 million and $3.6 million, respectively. See Note 4 to the consolidated financial statements for additional information regarding changes in our accumulated other comprehensive loss during the three and six months ended June 30, 2016.

Valley and Valley National Bank are subject to the regulatory capital requirements administered by the Federal Reserve Bank and the OCC. Quantitative measures established by regulation to ensure capital adequacy require Valley and Valley National Bank to maintain minimum amounts and ratios of common equity Tier 1 capital, total and Tier 1 capital to risk-weighted assets, and Tier 1 capital to average assets, as defined in the regulations.

Effective January 1, 2015, Valley implemented the Basel III regulatory capital framework and related Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). Basel III final rules require a new common equity Tier 1 capital to risk-weighted assets ratio of 4.5 percent, Tier 1 capital to risk-weighted assets of 6.0 percent, ratio of total capital to risk-weighted assets of 8.0 percent, and minimum leverage ratio of 4.0 percent. The new rule changes included the implementation of a new capital conservation buffer that is added to the minimum requirements for capital adequacy purposes. The capital conservation buffer is subject to a three year phase-in period that started on January 1, 2016, at 0.625 percent of risk-weighted assets and increases each subsequent year by 0.625 percent until reaching its final level of 2.5 percent when fully phased-in on January 1, 2019. As of June 30, 2016, and December 31, 2015, Valley and Valley National Bank exceeded all capital adequacy requirements with the capital conservation buffer under the Basel III Capital Rules (see tables below).

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The following tables present Valley’s and Valley National Bank’s actual capital positions and ratios under Basel III risk-based capital guidelines at June 30, 2016 and December 31, 2015:

	Actual				Minimum Capital Requirements with Capital Conservation Buffer				To Be Well Capitalized Under Prompt Corrective Action Provision
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	($ in thousands)
As of June 30, 2016
Total Risk-based Capital
Valley	$	1,928,990	11.69	%	$	1,423,436	8.625	%	N/A		N/A
Valley National Bank	1,871,141		11.37		1,419,462		8.625		$	1,645,753	10.00	%
Common Equity Tier 1 Capital
Valley	1,443,162		8.74		845,810		5.125		N/A		N/A
Valley National Bank	1,660,727		10.09		843,448		5.125		1,069,739		6.50
Tier 1 Risk-based Capital
Valley	1,549,576		9.39		1,093,364		6.625		N/A		N/A
Valley National Bank	1,660,727		10.09		1,090,311		6.625		1,316,602		8.00
Tier 1 Leverage Capital
Valley	1,549,576		7.38		840,080		4.00		N/A		N/A
Valley National Bank	1,660,727		7.92		838,258		4.00		1,047,822		5.00

	Actual				Minimum Capital Requirements				To Be Well Capitalized Under Prompt Corrective Action Provision
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	($ in thousands)
As of December 31, 2015
Total Risk-based Capital
Valley	$	1,910,304	12.02	%	$	1,271,171	8.00	%	N/A		N/A
Valley National Bank	1,826,420		11.53		1,266,942		8.00		$	1,583,677	10.00	%
Common Equity Tier 1 Capital
Valley	1,431,973		9.01		715,034		4.50		N/A		N/A
Valley National Bank	1,618,053		10.22		712,655		4.50		1,029,390		6.50
Tier 1 Risk-based Capital
Valley	1,543,937		9.72		953,378		6.00		N/A		N/A
Valley National Bank	1,618,053		10.22		950,206		6.00		1,266,942		8.00
Tier 1 Leverage Capital
Valley	1,543,937		7.90		781,388		4.00		N/A		N/A
Valley National Bank	1,618,053		8.29		780,831		4.00		976,039		5.00

The Dodd-Frank Act requires federal banking agencies to issue regulations that require banks with total consolidated assets of more than $10.0 billion to conduct and publish company-run annual stress tests to assess the potential impact of different scenarios on the consolidated earnings and capital of each bank and certain related items over a nine-quarter forward-looking planning horizon, taking into account all relevant exposures and activities. On October 9, 2012, the FRB published final rules implementing the stress testing requirements for banks with total consolidated assets of more than $10.0 billion but less than $50.0 billion. These rules set forth the timing and type of stress test activities, as well as rules governing controls, oversight and disclosure.

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In March 2014, the FRB, OCC, and FDIC issued final supervisory guidance for these stress tests. This joint final supervisory guidance discusses supervisory expectations for stress test practices, provides examples of practices that would be consistent with those expectations, and offers additional details about stress test methodologies. It also emphasizes the importance of stress testing as an ongoing risk management practice.

We submitted our latest stress testing results (utilizing data as of December 31, 2015) to the FRB on July 28, 2016. The FRB will disclose the results to the public in October 2016. The full disclosure of the stress testing results, including the results for Valley National Bank, a summary of the supervisory severely adverse scenario and additional information regarding the methodologies used to conduct the stress test at December 31, 2015 will be available under the Shareholder Relations section of our website at www.valleynationalbank.com when the FRB discloses the results to the public. The previous year results (utilizing data as of December 31, 2014) can currently be found on our website.

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

	June 30, 2016		December 31, 2015
	($ in thousands, except for share data)
Common shares outstanding	254,362,314		253,787,561
Shareholders’ equity	$	2,232,212	$	2,207,091
Less: Preferred stock	111,590		111,590
Less: Goodwill and other intangible assets	734,432		735,221
Tangible shareholders’ equity	$	1,386,190	$	1,360,280
Tangible book value per common share	$	5.45	$	5.36
Book value per common share	$	8.34	$	8.26

Management believes the tangible book value per common share ratio provides information useful to management and investors in understanding our underlying operational performance, our business and performance trends and facilitates comparisons with the performance of others in the financial services industry. This non-GAAP financial measure should not be considered in isolation or as a substitute for or superior to financial measures calculated in accordance with U.S. GAAP. This non-GAAP financial measure may also be calculated differently from similar measures disclosed by other companies.

Typically, our primary source of capital growth is through retention of earnings. Our rate of earnings retention is derived by dividing undistributed earnings per common share by earnings (or net income available to common stockholders) per common share. Our retention ratio was 21.4 percent for the six months ended June 30, 2016 as compared to zero for the year ended December 31, 2015. Our rate of earnings retention increased during the first half of 2016 as compared to the full year of 2015, which was negatively impacted by $51.1 million in pre-tax debt prepayment penalties recognized during the fourth quarter of 2016, and, to a much lesser extent, merger costs from the acquisition of CNL in December 2015. We expect our future retention rate to improve due to, among other factors, synergies realized from the integration of CNL's back office operations completed in February 2016 and the related CNL staffing reductions effective April 1, 2016, as well as our current branch efficiency and cost reduction plans discussed elsewhere in this MD&A.

Cash dividends declared amounted to $0.22per common share for both the six months ended June 30, 2016 and 2015. The Board is committed to examining and weighing relevant facts and considerations, including its commitment to shareholder value, each time it makes a cash dividend decision in this economic environment. The Federal Reserve has cautioned all bank holding companies about distributing dividends which may reduce the level of capital or not allow capital to grow in light of the increased capital levels as required under the Basel III rules.

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Off-Balance Sheet Arrangements, Contractual Obligations and Other Matters

For a discussion of Valley’s off-balance sheet arrangements and contractual obligations see information included in Valley’s Annual Report on Form 10-K for the year ended December 31, 2015 in the MD&A section -“Off-Balance Sheet Arrangements” and Notes 12 and 13 to the consolidated financial statements included in this report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk refers to potential losses arising from changes in interest rates, foreign exchange rates, equity prices, and commodity prices. Valley’s market risk is composed primarily of interest rate risk. See page 65 for a discussion of interest rate sensitivity.

Item 4. Controls and Procedures

Valley’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), with the assistance of other members of Valley’s management, have evaluated the effectiveness of Valley’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, Valley’s CEO and CFO have concluded that Valley’s disclosure controls and procedures are effective as of the end of the period covered by this report.

Valley’s CEO and CFO have also concluded that there have not been any changes in Valley’s internal control over financial reporting during the quarter ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, Valley’s internal control over financial reporting.

Valley’s management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, provides reasonable, not absolute, assurance that the objectives of the control system are met. The design of a control system reflects resource constraints and the benefits of controls must be considered relative to their costs. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Valley have been or will be detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns occur because of simple error or mistake. Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events. There can be no assurance that any design will succeed in achieving its stated goals under all future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with the policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

In the normal course of business, we may be a party to various outstanding legal proceedings and claims. There have been no material changes in the legal proceedings previously disclosed under Part I, Item 3 of Valley’s Annual Report on Form 10-K for the year ended December 31, 2015.

Item 1A. Risk Factors

There has been no material change in the risk factors previously disclosed under Part I, Item 1A of Valley’s Annual Report on Form 10-K for the year ended December 31, 2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the quarter, we did not sell any equity securities not registered under the Securities Act of 1933, as amended. Purchases of equity securities by the issuer and affiliated purchasers during the three months ended June 30, 2016 were as follows:

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total  Number of Shares  Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans (2)	Maximum Number of Shares that May Yet Be Purchased Under the Plans (2)
April 1, 2016 to April 30, 2016	8,586	$	9.40	—	4,112,465
May 1, 2016 to May 31, 2016	2,633	9.27		—	4,112,465
June 1, 2016 to June 30, 2016	1,521	9.19		—	4,112,465
Total	12,740	$	9.35	—

(1) Represents repurchases made in connection with the vesting of employee restricted stock awards.

(2) On January 17, 2007, Valley publicly announced its intention to repurchase up to 4.7 million outstanding common shares in the open market or in privately negotiated transactions. The repurchase plan has no stated expiration date. No repurchase plans or programs expired or terminated during the three months ended June 30, 2016.

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Item 6. Exhibits

(3)	Articles of Incorporation and By-laws:
	(3.1)	Restated Certificate of Incorporation of the Registrant, incorporated herein by reference to Exhibit 3.A of the Registrant's Annual Report on Form 10-K filed on February 29, 2016.
	(3.2)	Certificate of Designations relating to the 6.25% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A, incorporated herein by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on June 19, 2015.
	(3.3)	By-laws of the Registrant, as amended, incorporated herein by reference to Exhibit 3.1 to the Registrant's Form 8-K filed on December 5, 2013.

(10)	Material Contracts
	(10.1)	Valley National Bancorp 2016 Long-Term Stock Incentive Plan incorporated herein by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed on May 2, 2016.+
	(10.2)	Valley National Bancorp Performance Restricted Stock Unit Award Agreement, under the Valley National Bancorp 2016 Long-Term Stock Incentive Plan incorporated herein by reference to Exhibit 10.2 of the Registrant’s Form 8-K filed on May 2, 2016.+
	(10.3)	Form of Change in Control Agreement between Valley, Valley National Bank and Robert Bardusch, dated April 18, 2016.+*
	(10.4)	Change in Control Severance Plan applicable to First Senior Vice Presidents  and Senior Vice Presidents who previously had or were eligible for change in control agreements +*

(31.1)	Certification pursuant to Securities Exchange Rule 13a-14(a)/15d-14(a) signed by Gerald H. Lipkin, Chairman of the Board, President and Chief Executive Officer of the Company.*
(31.2)	Certification pursuant to Securities Exchange Rule 13a-14(a)/15d-14(a) signed by Alan D. Eskow, Senior Executive Vice President and Chief Financial Officer of the Company.*
(32)	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Gerald H. Lipkin, Chairman of the Board, President and Chief Executive Officer of the Company, and Alan D. Eskow, Senior Executive Vice President and Chief Financial Officer of the Company.*
(101)	Interactive Data File *

* Filed herewith.

+ Management contract and compensatory plan or agreement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	VALLEY NATIONAL BANCORP
	(Registrant)
Date:	/s/ Gerald H. Lipkin
August 8, 2016	Gerald H. Lipkin
	Chairman of the Board, President
	and Chief Executive Officer
Date:	/s/ Alan D. Eskow
August 8, 2016	Alan D. Eskow
	Senior Executive Vice President and
	Chief Financial Officer

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EX-10.3

CHANGE-IN-CONTROL AGREEMENT

ROBERT BARDUSCH

THIS CHANGE IN CONTROL AGREEMENT (this “Agreement”), is made as of this 18^th day of April, 2016, among VALLEY NATIONAL BANK (“Bank”), a national banking association with its principal office at 1455 Valley Road, Wayne, New Jersey, VALLEY NATIONAL BANCORP (“Valley”), a New Jersey corporation which maintains its principal office at 1455 Valley Road, Wayne, New Jersey (Valley and the Bank collectively are the “Company”) and ROBERT BARDUSCH (the “Executive”).

BACKGROUND

WHEREAS, the Executive has worked diligently in the Executive’s position in the business of the Bank and Valley;

WHEREAS, the Boards of Directors of the Bank and Valley (either one, the “Board of Directors” and, together, the “Company Boards”) believe that the future services of the Executive are of great value to the Bank and Valley and that it is important for the growth and development of the Bank that the Executive continue in the Executive’s position;

WHEREAS, if the Company receives any proposal from a third person concerning a possible business combination with, or acquisition of equities securities of, the Company, the Company Boards believe it is imperative that the Company and the Company Boards be able to rely upon the Executive to continue in the Executive’s position, and that they be able to receive and rely upon the Executive’s advice, if they request it, as to the best interests of the Company and its shareholders, without concern that the Executive might be distracted by the personal uncertainties and risks created by such a proposal;

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WHEREAS, to achieve that goal, and to retain the Executive’s services prior to any such activity, the Company Boards and the Executive have agreed to enter into this Agreement to govern the Executive’s termination benefits in the event of a Change in Control of the Company, as hereinafter defined.

NOW, THEREFORE, to assure the Company that it will have the continued dedication of the Executive and the availability of the Executive’s advice and counsel notwithstanding the possibility, threat or occurrence of a bid to take over control of the Company, and to induce the Executive to remain in the employ of the Company, and for other good and valuable consideration, the Company and the Executive, each intending to be legally bound hereby agree as follows:

1.Definitions

a.Base Salary. “Base Salary”, as used in Section 9 hereof, means the annual cash base salary (excluding any bonus and the value of any fringe benefits) paid to the Executive at the time of the termination of employment unless such amount has been reduced after a Change in Control, in which case such amount shall be the highest base salary in effect during the 18 months prior to the Change in Control.

b.Cause. For purposes of this Agreement “Cause” with respect to the termination by the Company of Executive’s employment shall mean (i) willful and continued failure by the Executive to perform the Executive’s duties for the Company under this Agreement after at least one warning in writing from the Board of Directors identifying specifically any such failure; (ii) the willful engaging by the Executive in misconduct which causes material injury to the Company as specified in a written notice to the Executive from the Board of Directors; or (iii) conviction of a crime, other than a traffic violation, habitual drunkenness, drug abuse, or excessive absenteeism other than for illness, after a warning (with respect to drunkenness or absenteeism

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only) in writing from the Board of Directors to refrain from such behavior. No act or failure to act on the part of the Executive shall be considered willful unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the action or omission was in the best interest of the Company.

c.Change in Control. “Change in Control” means any of the following events: (i) when Valley or a Valley Subsidiary acquires actual knowledge that any person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act), other than an affiliate of Valley or a Valley Subsidiary or an employee benefit plan established or maintained by Valley, a Valley Subsidiary or any of their respective affiliates, is or becomes the beneficial owner (as defined in Rule 13d‑3 of the Exchange Act) directly or indirectly, of securities of Valley representing more than twenty‑five percent (25%) of the combined voting power of Valley’s then outstanding securities (a “Control Person”); (ii) upon the first purchase of Valley’s common stock pursuant to a tender or exchange offer (other than a tender or exchange offer made by Valley, a Valley Subsidiary or an employee benefit plan established or maintained by Valley, a Valley Subsidiary or any of their respective affiliates); (iii) the consummation of (A) a transaction, other than a Non‑Control Transaction, pursuant to which Valley is merged with or into, or is consolidated with, or becomes the subsidiary of another corporation, (B) a sale or disposition of all or substantially all of Valley’s assets or (C) a plan of liquidation or dissolution of Valley; (iv) if during any period of two (2) consecutive years, individuals (the “Continuing Directors”) who at the beginning of such period constitute the Board of Directors of Valley (the “Valley Board”) cease for any reason to constitute at least 60% thereof or, following a Non‑Control Transaction, 60% of the board of directors of the Surviving Corporation; provided that any individual whose election or nomination for election as a member of the Valley Board (or, following a Non‑Control Transaction, the board of directors of the Surviving Corporation) was approved by a vote of at least two‑thirds of the Continuing Directors

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then in office shall be considered a Continuing Director; or (v) upon a sale of (A) common stock of the Bank if after such sale any person (as such term is used in Section 13(d) and 14(d)(2) of the Exchange Act) other than Valley, an employee benefit plan established or maintained by Valley or a Valley Subsidiary, or an affiliate of Valley or a Valley Subsidiary, owns a majority of the Bank’s common stock or (B) all or substantially all of the Bank’s assets (other than in the ordinary course of business). For purposes of this paragraph: (I) Valley will be deemed to have become a subsidiary of another corporation if any other corporation (which term shall include, in addition to a corporation, a limited liability company, partnership, trust, or other organization) owns, directly or indirectly, 50 percent or more of the total combined outstanding voting power of all classes of stock of Valley or any successor to Valley; (II) “Non‑Control Transaction” means a transaction in which Valley is merged with or into, or is consolidated with, or becomes the subsidiary of another corporation pursuant to a definitive agreement providing that at least 60% of the directors of the Surviving Corporation immediately after the transaction are persons who were directors of Valley on the day before the first public announcement relating to the transaction; (III) the “Surviving Corporation” in a transaction in which Valley becomes the subsidiary of another corporation is the ultimate parent entity of Valley or Valley’s successor; (IV) the “Surviving Corporation” in any other transaction pursuant to which Valley is merged with or into another corporation is the surviving or resulting corporation in the merger or consolidation; and (V) “Valley Subsidiary” means any corporation in an unbroken chain of corporations, beginning with Valley, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

d.Continuously Employed. “Continuously employed”, as used in Section 9, means continuously employed by the Bank but excludes any period of employment by a bank or financial institution acquired by or merged into the Bank and excludes any period of

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employment by the Bank if such period is separated from the current employment with the Bank by a break in service (other a break in service resulting solely from illness, disability or family leave).

e.Contract Period. “Contract Period” shall mean the period commencing the day immediately preceding a Change in Control and ending on the earlier of (i) the second anniversary of the Change in Control or (ii) the death of the Executive. For the purpose of this Agreement, a Change in Control shall be deemed to have occurred at the date specified in the definition of Change-in-Control.

f.Exchange Act. “Exchange Act” means the Securities Exchange Act of 1934, as amended.

g.Good Reason. When used with reference to a voluntary termination by Executive of the Executive’s employment with the Company, “Good Reason” shall mean any of the following, if taken without Executive’s express written consent:

(1) The assignment to Executive of any duties inconsistent with, or the reduction of powers or functions associated with, Executive’s position, duties, responsibilities and status with the Company immediately prior to a Change in Control. A change in title or positions resulting merely from a merger of the Bank or Valley into or with another bank or company which does not downgrade in any way the Executive’s powers, duties and responsibilities shall not meet the requirements of this paragraph;

(2)    A reduction by the Company in Executive’s annual base compensation as in effect immediately prior to a Change in Control or the failure to award Executive annual increases in accordance herewith;

(3)    A failure by the Company to continue any bonus plan in which Executive participated immediately prior to the Change in control or a failure by the Company to

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continue Executive as a participant in such plan on at least the same basis as Executive participated in such plan prior to the Change in Control;

(4)    The Company’s transfer of Executive to another geographic location more than 35 miles from the Executive’s present office location, except for required travel on the Company’s business to an extent substantially consistent with Executive’s business travel obligations immediately prior to such Change in Control;

(5)    The failure by the Company to continue in effect any employee benefit plan, program or arrangement (including, without limitation the Company’s retirement plan, benefit equalization plan, life insurance plan, health and accident plan, disability plan, deferred compensation plan or long term stock incentive plan) in which Executive is participating immediately prior to a Change in Control (except that the Company may institute or continue plans, programs or arrangements providing Executive with substantially similar benefits); the taking of any action by the Company which would adversely affect Executive’s participation in or materially reduce Executive’s benefits under, any of such plans, programs or arrangements; the failure to continue, or the taking of any action which would deprive Executive, of any material fringe benefit enjoyed by Executive immediately prior to such Change in Control; or the failure by the Company to provide Executive with the number of paid vacation days to which Executive was entitled immediately prior to such Change in Control;

(6)    The failure by the Company to obtain an assumption in writing of the obligations of the Company to perform this Agreement by any successor to the Company and to provide such assumption to the Executive prior to any Change in Control; or

(7)    Any purported termination of Executive’s employment by the Company during the term of this Agreement which is not effected pursuant to all of the requirements

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of this Agreement; and, for purposes of this Agreement, no such purported termination shall be effective.

h. Pro-rata Bonus Amount. “Pro-rata Bonus Amount”, as used in Section 9, means an amount equal to a “portion” of the highest cash bonus awarded to the Executive in or for the three calendar years immediately prior to the Change in Control, regardless of when paid. The “portion” of such cash bonus shall be a fraction, the numerator of which is the number of calendar months or part thereof which the Executive has worked in the calendar year in which the termination occurs and the denominator of which is 12.

2.    Employment. The Company hereby agrees to employ the Executive, and the Executive hereby accepts employment, during the Contract Period upon the terms and conditions set forth herein.

3.    Position. During the Contract Period the Executive shall be employed by the bank as a Senior Officer, or such other corporate or divisional profit center as shall then be the principal successor to the business, assets and properties of the Company, with substantially the same title and the same duties and responsibilities as before the Change in Control. The Executive shall devote full time and attention to the business of the Company, and shall not during the Contract Period be engaged in any other business activity. This paragraph shall not be construed as preventing the Executive from managing any investments which do not require any service on the Executive’s part in the operation of such investments.

4.    Cash Compensation. The Company shall pay to the Executive compensation for services during the Contract Period as follows:

a.Base Salary. A base annual salary equal to the annual salary in effect as of the Change in Control. The annual salary shall be payable in installments in accordance with the Company’s usual payroll method.

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b.Annual Bonus. An annual cash bonus equal to at least the average of the cash bonuses awarded to the Executive in the three years prior to the Change in Control (excluding any year for which cash bonuses were prohibited by law or regulation). Subject to any express regulatory requirements, the bonus shall be paid within 45 days of the end of the calendar year for which the bonus is awarded.

c.Annual Review. The Board of Directors during the Contract Period shall review annually, or at more frequent intervals which the Board of Directors determines is appropriate, the Executive’s compensation and shall award the Executive additional compensation to reflect the Executive’s performance, the performance of the Company and competitive compensation levels, all as determined in the discretion of the Board of Directors.

5.    Expenses and Fringe Benefits.

a.Expenses. During the Contract Period, the Executive shall be entitled to reimbursement for all business expenses incurred by the Executive with respect to the business of the Company in the same manner and to the same extent as such expenses were previously reimbursed to the Executive immediately prior to the Change in Control.

b.Benefit Equalization Plan. During the Contract Period, if the Executive was entitled to benefits under the Company’s Benefit Equalization Plan (“BEP”) prior to the Change in Control, the Executive shall be entitled to continued benefits under the BEP after the Change in Control and such BEP may not be modified to reduce or eliminate such benefits during the Contract Period.

c.Club Membership and Automobile. If prior to the Change in Control, the Executive was entitled to membership in a country club and/or the use of an automobile, the Executive shall be entitled to the same membership and/or use of an automobile at least comparable to the automobile provided to the Executive prior to the Change in Control.

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d.Other Benefits. The Executive also shall be entitled to vacations and sick days, in accordance with the practices and procedures of the Company, as such existed immediately prior to the Change in Control. During the Contract Period, the Executive also shall be entitled to hospital, health, medical and life insurance, and any other benefits enjoyed, from time to time, by senior officers of the Company, all upon terms as favorable as those enjoyed by other senior officers of the Company. Notwithstanding anything in this paragraph 5(d) to the contrary, if the Company adopts any change in the benefits provided for senior officers of the Company, and such policy is uniformly applied to all officers of the Company (and any successor or acquirer of the Company, if any), then no such change shall be deemed to be contrary to this paragraph.

6.    Termination for Cause. The Company shall have the right to terminate the Executive for Cause, upon written notice to the Executive of the termination which notice shall specify the reasons for the termination. In the event of termination for Cause the Executive shall not be entitled to any further benefits under this Agreement.

7.    Disability. During the Contract Period if the Executive becomes permanently disabled, or is unable to perform the duties contemplated hereunder for 4 consecutive months in any 12 month period, the Company may terminate the employment of the Executive. In such event, the Executive shall not be entitled to any further benefits under this Agreement.

8.    Death Benefits. Upon the Executive’s death during the Contract Period, the Executive’s estate shall not be entitled to any further benefits under this Agreement.

9.    Termination Without Cause or Resignation for Good Reason. The Company may terminate the Executive without Cause during the Contract Period by written notice to the Executive providing four weeks notice. The Executive may resign for Good Reason during the Contract Period upon four weeks’ written notice to the Company specifying facts and circumstances claimed to support the Good Reason. The Executive shall be entitled to give a Notice of Termination

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that his or her employment is being terminated for Good Reason at any time during the Contract Period, not later than twelve months after any occurrence of an event stated to constitute Good Reason. If the Company terminates the Executive’s employment during the Contract Period without Cause or if the Executive Resigns for Good Reason, the Company shall, subject to section 12 hereof:

a. within 20 business days of the termination of employment pay the Executive a lump sum equal to: (i), one (1) year of Base Salary plus a Pro-rata Bonus Amount or (ii), if the Executive has been continuously employed by the Bank for more than 3 full years, then three (3) years of Base Salary plus a Pro-rata Bonus Amount.

b. the Company shall, within 20 business days of the termination of employment with the Company, pay the Executive a lump sum amount equal to one hundred percent (100%) of the premium of the life insurance coverage provided to a similarly situated active employee (based upon the coverage and rates in effect on the date the Executive terminates employment) for the equivalent period of the lump sum severance payment (i.e. one (1) year or three (3) years); and

c. the Company shall, within 20 business days of the termination of employment with the Company, pay the Executive a lump sum amount equal to one hundred twenty-five percent (125%) of (A) the aggregate COBRA premium amounts (based upon COBRA rates then in effect) for the equivalent period of the lump sum payment (i.e. one (1) year or three (3) years) of the medical and dental coverage that was being provided to the Executive (and his spouse) at the time of termination of employment, minus (B) the aggregate amount of any employee contribution that would have been required of the Executive (determined as of the termination of employment) for such period.

The Executive shall not have a duty to mitigate the damages suffered by the Executive in connection with the termination by the Company of the Executive’s employment without Cause

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or a resignation for Good Reason during the Contract Period. If the Company fails to pay the Executive any lump sum amounts due the Executive hereunder, the Executive, after giving 10 days’ written notice to the Company identifying the Company’s failure, shall be entitled to recover from the Company all of the Executive’s reasonable legal fees and expenses incurred in connection with enforcement against the Company of the terms of this Agreement. The Executive shall be denied payment of legal fees and expenses only if a court finds that the Executive sought payment of such fees without reasonable cause.

10.    Resignation Without Good Reason. The Executive shall be entitled to resign from the employment of the Company at any time during the Contact Period without Good Reason, but upon such resignation the Executive shall not be entitled to any additional compensation for the time after which the Executive ceases to be employed by the Company, and shall not be entitled to any of the other benefits provided hereunder. No such resignation shall be effective unless in writing with four weeks’ notice thereof.

11.    Non-Disclosure of Confidential Information.

a.    Non-Disclosure of Confidential Information. Except in the course of the Executive’s employment with the Company and in the pursuit of the business of the Company or any of its subsidiaries or affiliates, the Executive shall not, at any time during or following the Contract Period, disclose or use, any confidential information or proprietary data of the Company or any of its subsidiaries or affiliates. The Executive agrees that, among other things, all information concerning the identity of and the Company’s relations with its customers is confidential information.

b.    Specific Performance. Executive agrees that the Company does not have an adequate remedy at law for the breach of this section and agrees that he or she shall be subject to injunctive relief and equitable remedies as a result of the breach of this section. The

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invalidity or unenforceability of any provision of this Agreement shall not affect the force and effect of the remaining valid portions.

c. Survival. This section shall survive the termination of the Executive’s employment hereunder and the expiration of this Agreement.

12. Certain Reduction of Payments by the Company.

a. Anything in this Agreement to the contrary notwithstanding, prior to the payment of any lump sum amount payable hereunder, the certified public accountants of the Company immediately prior to a Change of Control (the “Certified Public Accountants”) shall determine as promptly as practical and in any event within 20 business days following the termination of employment of Executive whether any payment or distribution by the Company to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (a “Payment”) would more likely than not be nondeductible by the Company for Federal income purposes because of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and if it is then the aggregate present value of amounts payable or distributable to or for the benefit of Executive pursuant to this Agreement (such payments or distributions pursuant to this Agreement are thereinafter referred to as “Agreement Payments”) shall be reduced (but not below zero) to the reduced Amount. For purposes of this paragraph, the “Reduced Amount” shall be an amount expressed in present value which maximizes the aggregate present value of Agreement Payments without causing any Payment to be nondeductible by the Company because of said Section 280G of the Code.

b. If under paragraph (a) of this section the Certified Public Accountants determine that any Payment would more likely than not be nondeductible by the Company because of Section 280G of the Code, the Company shall promptly give the Executive notice to that effect and a copy of the detailed calculation thereof and of the Reduced Amount, and the Executive may

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then elect, in the Executive’s sole discretion, which and how much of the Agreement Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Agreement Payments equals the Reduced Amount), and shall advise the Company in writing of the election within 20 business days of the receipt of notice. If no such election is made by the Executive within such 20-day period, the Company may elect which and how much of the Agreement Payments shall be eliminated or reduced (as long as after such election the Aggregate present Value of the Agreement Payments equals the Reduced Amount) and shall notify the Executive promptly of such election. For purposes of this paragraph, present Value shall be determined in accordance with Section 280G(d)(4) of the Code. All determinations made by the Certified Public Accountants shall be binding upon the Company and Executive shall be made within 20 business days of a termination of employment of Executive. With the consent of the Executive, the Company may suspend part or all of the lump sum payment due under Section 9 hereof and any other payments due to the Executive hereunder until the Certified Public Accountants finish the determination and the Executive (or the Company, as the case may be) elect how to reduce the Agreement Payments, if necessary. As promptly as practicable following such determination and the elections hereunder, the Company shall pay to or distribute to or for the benefit of Executive such amounts as are then due to Executive under this Agreement and shall promptly pay to or distribute for the benefit of Executive in the future such amounts as become due to Executive under this Agreement.

c. As a result of the uncertainty in the application of Section 280G of the Code, it is possible that Agreement Payments may have been made by the Company which should not have been made (“Overpayment”) or that additional Agreement Payments which will have not been made by the Company could have been made (“Underpayment”), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the Certified Public Accountants, based upon the assertion of a deficiency by the Internal Revenue Service against the Company or

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Executive which said Certified Public Accountants believe has a high probability of success, determines that an Overpayment has been made, any such Overpayment shall be treated for all purposes as a loan to Executive which Executive shall repay to the Company together with interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code; provided, however, that no amount shall be payable by Executive to the Company in and for the extent such payment would not reduce the amount which is subject to taxation under Section 4999 of the Code. In the event that the Certified Public Accountants, based upon controlling precedent, determine that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive together with interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.

13.    Term and Effect Prior to Change in Control.

a. Term. Except as otherwise provided for hereunder, this Agreement shall commence on the date hereof and shall remain in effect for a period of 3 years from the date hereof (the “Initial Term”) or until the end of the Contract Period, whichever is later. The Initial Term shall be automatically extended for an additional one year period on the anniversary date hereof (so that the Initial Term is always 3 years) unless, prior to a Change in Control, the Personnel and Compensation Committee of the Bank notifies the Executive in writing at any time that the Contract is not so extended, in which case the Initial Term shall end upon the later of (i) 3 years after the date hereof, or (ii) twenty-four months after the date of such written notice.

b. No Effect Prior to Change in Control. This Agreement shall not effect any rights of the Company to terminate the Executive prior to a Change in Control or any rights of the Executive granted in any other agreement or contract or plan with the Company. The rights, duties and benefits provided hereunder shall only become effective upon and after a Change in

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Control. If the full-time employment of the Executive by the Company is ended for any reason prior to a Change in Control, this Agreement shall thereafter be of no further force and effect.

14. Severance Compensation and Benefits Not in Derogation of Other Benefits. Anything to the contrary herein contained notwithstanding, the payment or obligation to pay any monies, or granting of any benefits, rights or privileges to Executive as provided in this Agreement shall not be in lieu or derogation of the rights and privileges that the Executive now has or will have under any plans or programs of or agreements with the Company, except that if the Executive received any payment hereunder, the Executive shall not be entitled to any payment under the Company’s severance policy for officers and directors.

15.    Delay in Payment. Notwithstanding anything else to the contrary in this Agreement, the BEP, or any other plan, contract, program or otherwise, the Company (and its affiliates) are expressly authorized to delay any scheduled payments under this Agreement, the BEP, and any other plan, contract, program or otherwise, as such payments relate to the Executive, if the Company (or its affiliate) determines that such delay is necessary in order to comply with the requirements of Section 409A of the Internal Revenue Code. No such payment may be delayed beyond the date that is six (6) months following the Executive ’s separation from service (as defined in Section 409A). At the end of such period of delay, the Executive will be paid the delayed payment amounts, plus interest for the period of any such delay. For purposes of the preceding sentence, interest shall be calculated using the six (6) month Treasury Bill rate in effect on the date on which the payment is delayed, and shall be compounded daily. If the conditions of the severance exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) (or any successor Regulation thereto) are satisfied, payment of benefits shall not be delayed for six (6) months following termination of employment to the extent permitted under the severance exception.

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83551011.2

16.    Miscellaneous. This Agreement is the joint and several obligation of the Bank and Valley. The terms of this Agreement shall be governed by, and interpreted and construed in accordance with the provisions of, the laws of New Jersey. This Agreement supersedes all prior agreements and understandings with respect to the matters covered hereby, including expressly any prior agreement with the Company concerning change in control benefits. The amendment or termination of this Agreement may be made only in a writing executed by the Company and the Executive, and no amendment or termination of this Agreement shall be effective unless and until made in such a writing. This Agreement shall be binding upon any successor (whether direct or indirect, by purchase, merge, consolidation, liquidation or otherwise) to all or substantially all of the assets of the Company. This Agreement is personal to the Executive and the Executive may not assign any of the Executive’s rights or duties hereunder but this Agreement shall be enforceable by the Executive’s legal representatives, executors or administrators. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

16

83551011.2

IN WITNESS WHEREOF, Valley National Bank and Valley National Bancorp each have caused this Agreement to be signed by their duly authorized representatives pursuant to the authority of their Boards of Directors, and the Executive has personally executed this Agreement, all as of the day and year first written above.

ATTEST:	VALLEY NATIONAL BANCORP
/s/ Alan Eskow	By: /s/ Gerald Korde
Alan Eskow, Secretary	Gerald Korde, Chairman,
	Compensation and Human Resources Committee

ATTEST:	VALLEY NATIONAL BANK
/s/ Alan Eskow	By: /s/ Gerald Korde
Alan Eskow, Secretary	Gerald Korde, Chairman,
	Compensation and Human Resources Committee

WITNESS:	VALLEY NATIONAL BANK
By: /s/ Dawn Barone	By: /s/ Robert Bardusch
Dawn Barone	Robert Bardusch, Executive

17

83551011.2

EX-10.4

VALLEY NATIONAL BANCORP

Change in Control Severance Plan

ARTICLE I

PURPOSE

This Change in Control Severance Plan has been established by Valley National Bancorp (the “Company”) on January 27, 2016 (the “Effective Date”) to provide Participants with the opportunity to receive severance protections in connection with a Change in Control of the Company. The Plan provides special severance benefits to First Senior Vice Presidents and Senior Vice Presidents who have more than three years of employment with the Company and are employed at the time of the Change in Control if such persons do not have separate contractual arrangements with the Company at that time. The purpose of the Plan is to attract and retain talent and to assure the present and future continuity, objectivity and dedication of management when faced with a Change in Control. The Plan is intended to be a top hat welfare benefit plan under ERISA.

Capitalized terms used but not otherwise defined herein have the meanings set forth in Article II.

ARTICLE II

DEFINITIONS

“Administrator” means the Compensation and Human Resources Committee or any committee or sub-committee thereof duly authorized by the Board to administer the Plan, The Board may at any time administer the Plan, in whole or in part, notwithstanding that the Board has previously appointed a committee to act as the Administrator. After the occurrence of a Change in Control, “Administrator” shall refer to the compensation committee of the Board of a successor entity if the Company no longer has an independent existence.

“Applicable Severance Multiplier” means the applicable number set forth in the table below (except as may otherwise be determined in accordance with Section 3.02):

Years of Continuous Employment	First Senior Vice President	Senior Vice President
3 – 6	1.0	0.5
6 or more	2.0	1.0

“Board” means the Board of Directors of the Company, as constituted from time to time, or the Board of a successor to the Company upon the occurrence of a Change in Control.

“Cause” means (i) willful and continued failure by the Participant to perform his or her duties for the Company after at least one warning in writing from the Board of Directors identifying specifically any such failure; (ii) the willful engaging by the Participant in misconduct which causes material injury to the Company as specified in a written notice to the Participant from the Board of Directors; or (iii) conviction of a crime, other than a traffic violation, habitual drunkenness, drug abuse, or excessive absenteeism other than for illness, after a warning (with respect to drunkenness or absenteeism only) in writing from the Board of Directors to refrain from such behavior. No act or failure to act on the part of the Participant shall be considered willful unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that the action or omission was in the best interest of the Company.

“Certified Public Accountants” has the meaning set forth in Section 7.01.

“Change in Control” means any of the following events: (i) when the Company or a Company Subsidiary acquires actual knowledge that any Person, other than an affiliate of the Company or a Company Subsidiary or an employee benefit plan established or maintained by the Company, a Company Subsidiary or any of their respective affiliates, is or becomes the beneficial owner (as defined in Rule 13d‑3 of the Exchange Act) directly or indirectly, of securities of the Company representing more than twenty‑five percent (25%) of the combined voting power of the Company’s then outstanding securities (a “Control Person”); (ii) upon the first purchase of the Company’s common stock pursuant to a tender or exchange offer (other than a tender or exchange offer made by the Company, a Company Subsidiary or an employee benefit plan established or maintained by the Company, a Company Subsidiary or any of their respective affiliates); (iii) the consummation of (A) a transaction, other than a Non‑Control Transaction, pursuant to which the Company is merged with or into, or is consolidated with, or becomes the subsidiary of another corporation, (B) a sale or disposition of all or substantially all of the Company’s assets or (C) a plan of liquidation or dissolution of the Company; (iv) if during any period of two (2) consecutive years, individuals (the “Continuing Directors”) who at the beginning of such period constitute the Board cease for any reason to constitute at least 60% thereof or, following a Non‑Control Transaction, 60% of the board of directors of the Surviving Corporation; provided that any individual whose election or nomination for election as a member of the Board (or, following a Non‑Control Transaction, the board of directors of the Surviving Corporation) was approved by a vote of at least two‑thirds of the Continuing Directors then in office shall be considered a Continuing Director; or (v) upon a sale of (A) common stock of Valley National Bank (the “Bank”) if after such sale any Person other than the Company, an employee benefit plan established or maintained by the Company or a Company Subsidiary, or an affiliate of the Company or a Company Subsidiary, owns a majority of the Bank’s common stock or (B) all or substantially all of the Bank’s assets (other than in the ordinary course of business). For purposes of this paragraph: (I) the Company will be deemed to have become a subsidiary of another corporation if any other corporation (which term shall include, in addition to a corporation, a limited liability company, partnership, trust, or other organization) owns, directly or indirectly, 50 percent or more of the total combined outstanding voting power of all classes of stock of the Company or any successor to the Company; (II) “Non‑Control Transaction” means a transaction in which the Company is merged with or into, or is consolidated with, or becomes the subsidiary of another corporation pursuant to a definitive agreement providing that at least 60% of the directors of the Surviving Corporation immediately after the transaction are Persons who were directors of the Company on the day before the first public announcement relating to the transaction; (III) the “Surviving Corporation” in a transaction in which the Company becomes the subsidiary of another corporation is the ultimate parent entity of the Company or the Company’s successor; (IV) the “Surviving Corporation” in any other transaction pursuant to which the Company is merged with or into another corporation is the surviving or resulting corporation in the merger or consolidation; and (V) “Company Subsidiary” means any corporation in an unbroken chain of corporations, beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

“Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code shall be deemed to include a reference to any regulations promulgated thereunder.

“Continuous Employment” means the continuous employment with the Company or its subsidiaries, but not, by way of clarification, employment with any entity acquired by the Company by merger or otherwise.

“Covered Period” means the period of time beginning on the day immediately preceding the first occurrence of a Change in Control and lasting through the earlier of the Participant’s death and (i) in the case of a Participant who is a First Senior Vice President, the two-year anniversary of the occurrence of the Change in Control, and (ii) in the case of a Participant who is a Senior Vice President, the one-year anniversary of the occurrence of the Change in Control, provided, however, that with respect to those Eligible Employees who have executed and delivered to the Company a termination letter in substantially the form attached hereto as Exhibit A, the Covered Period shall be (i) in the case of a Participant who is a First Senior Vice President, the three-year anniversary of the occurrence of the Change in Control, and (ii) in the case of a Participant who is a Senior Vice President, the two-year anniversary of the occurrence of the Change in Control

“Effective Date” has the meaning set forth in Article I.

“Eligible Employee” means any full-time employee of the Company who is a Senior Vice President or First Senior Vice President as of the date of occurrence of the Change in Control and who, as of the date of the occurrence of the Change in Control, does not have a separate written agreement with the Company which provides for the payment of severance or compensation following the Change in Control, provided, in each case, that such Person has at least three years of Continuous Employment with the Company. Eligible employees shall be limited to a select group of management or highly compensated employees within the meaning of Sections 201, 301 and 404 of ERISA. For purposes of clarity, no Senior Vice President or First Senior Vice President of the Company shall be an Eligible Employee unless he or she has three or more years of Continuous Employment with the Company at the time of the Change in Control.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Exchange Act” means the Securities and Exchange Act of 1934, as amended.

“Good Reason” means any of the following, if taken without Participant’s express written consent: (a) a reduction by the Company in Participant’s annual base compensation as in effect immediately prior to a Change in Control, (b) failure by the Company to continue any material bonus plan in which Participant participated immediately prior to the Change in Control unless the Company or a successor of the Company continues Participant as a participant in a similar bonus plan on at least the same basis as Participant participated prior to the Change in Control, (c) the Company’s transfer of Participant to another geographic location more than 35 miles from the Participant’s present office location, except for required travel on the Company’s business to an extent substantially consistent with Participant’s business travel obligations immediately prior to such Change in Control, or (d) the failure of any Person acquiring the Company to assume this Plan in writing on or before the closing date of any transaction in which the Company is acquired.

“Overpayment” has the meaning set forth in Section 7.03.

“Participant” has the meaning set forth in Section 3.01.

“Payment” has the meaning set forth in Section 7.01.

“Person” has the meaning ascribed to it in Section 13(d)(3) of the Exchange Act.

“Plan” means this Valley National Bancorp Change in Control Severance Plan, as may be amended and/or restated from time to time.

“Plan Payments” has the meaning set forth in Section 7.01.

“Pro-Rata Bonus Amount” means an amount equal to a “portion” of the highest cash bonus awarded to the Participant in or for the three calendar years immediately prior to the Change in Control, regardless of when paid. The “portion” of such cash bonus shall be a fraction, the numerator of which is the number of calendar months or part thereof which the Participant has worked in the calendar year in which the termination occurs and the denominator of which is 12.

“Qualifying Termination” means the termination of a Participant’s employment during the Covered Period either:

(a)by the Company without Cause; or

(b)by the Participant for Good Reason.

provided, however, that notwithstanding anything to the contrary herein, a Qualifying Termination shall not include the termination of a Participant’s employment by reason of the death or disability of a Participant.

“Reduced Amount” has the meaning set forth in Section 7.01.

“Release” has the meaning set forth in Section 6.01(c).

“Specified Employee Payment Date” has the meaning set forth in Section 10.13(b).

“Underpayment” has the meaning set forth in Section 7.03.

ARTICLE III

PARTICIPATION

Section 3.01 Participants. Each Eligible Employee of the Company shall be a “Participant” in the Plan. Notwithstanding the preceding sentence, the Company shall have the right to remove a Participant from participation in the Plan, but such removal shall not be effective unless the Company provides written notice of such removal to the Participant at least 12 months prior to the occurrence of a Change in Control.

Section 3.02 Change in Applicable Severance Multiplier. The Company may change a Participant’s Applicable Severance Multiplier at any time, but no such change (to the extent that it is a reduction in his or her then Applicable Severance Multiplier) shall be effective unless the Company provides written notice of such change to the Participant at least 12 months prior to the occurrence of a Change in Control.

ARTICLE IV

SEVERANCE AND BENEFITS

Section 4.01 Severance. If a Participant has a Qualifying Termination, then, subject to Articles VI and VII and Section 10.13, the Company will provide the Participant with the following:

(a)Severance in a lump sum amount equal to (i) the product of the Participant’s Applicable Severance Multiplier times the sum of the Participant’s base salary in effect on the Qualifying Termination or, if greater, in effect on the first occurrence of a Change in Control, plus (ii) the Pro Rata Bonus Amount.

(b)A lump sum amount equal to one hundred percent (100%) of the Company paid annual premium of the life insurance coverage provided to a similarly situated active employee (based upon the coverage and rates in effect on the date the Participant terminates employment) times the Applicable Severance Multiplier.

(c)a lump sum amount equal to one hundred twenty-five percent (125%) of (A) the aggregate annual COBRA premium amounts (based upon COBRA rates then in effect) times the Applicable Severance Multiplier for the medical and dental coverage that was being provided to the Participant (and his or her spouse and eligible dependents) at the time of termination of employment with the Company, minus (B) the aggregate amount of any employee contribution that would have been required of the Participant (determined based on the active employee rate as of the termination of employment) for such period.

(d)Amounts due to a Participant under this Section 4.01 will be paid in a single lump-sum on the later of (i) the 25th business day following the qualifying Termination, or (ii) the 5th business day following the date that the release described in Section 6.01(c) is effective.

ARTICLE V

EQUITY AWARDS

Section 5.01 Equity Awards The Plan does not affect the terms of any outstanding equity awards. The treatment of any outstanding equity awards shall be determined in accordance with the terms of the Company equity plan or plans under which they were granted and any applicable award agreements.

ARTICLE VI

CONDITIONS

Section6.01 Conditions A Participant’s entitlement to any severance benefits under Article IV and Article V will be subject to:

(a)the Participant having a Qualifying Termination; and

(b)the Participant executing a release of claims in favor of the Company, its affiliates and their respective officers and directors in a form to be provided by the Company (the “Release”) and such Release becoming effective and irrevocable in accordance with applicable law following the Participant’s Qualifying Termination; and

ARTICLE VII

SECTION 280G

Section 7.01 Reduction. Anything in this Plan to the contrary notwithstanding, prior to the payment of any lump sum amount payable hereunder, the certified public accountants of the Company immediately prior to a Change of Control (the “Certified Public Accountants”) shall determine as promptly as practical and in any event within 20 business days following the Qualifying Termination whether any payment or distribution by the Company to or for the benefit of the Participant (whether paid or payable or distributed or distributable pursuant to the terms of this Plan or otherwise) (a “Payment”) would more likely than not be nondeductible by the Company for Federal income purposes because of Section 280G of the Code, and if it is then the aggregate present value of amounts payable or distributable to or for the benefit of Participant pursuant to this Plan (such payments or distributions pursuant to this Agreement are thereinafter referred to as “Plan Payments”) shall be reduced (but not below zero) to the Reduced Amount. For purposes of this paragraph, the “Reduced Amount” shall be an amount expressed in present value which maximizes the aggregate present value of Payments without causing any Payment to be nondeductible by the Company because of said Section 280G of the Code

Section 7.02 Method of Reduction. If under paragraph (a) of this section the Certified Public Accountants determines that any Payment would more likely than not be nondeductible by the Company because of Section 280G of the Code, the Company shall promptly give the Participant notice to that effect and a copy of the detailed calculation thereof and of the Reduced Amount. Plan Payments shall be reduced by the Company by first reducing cash payments, followed, if necessary, by the following categories (in order): stock options, restricted stock units, restricted stock, all other non-cash benefits, in each case as determined in a manner that is consistent with the requirements of Section 409A of the Code. For purposes of this paragraph, present value shall be determined in accordance with Section 280G(d)(4) of the Code. All determinations made by the Certified Public Accountants shall be binding upon the Company and Participant shall be made within 20 business days of a Qualifying Termination. The Company may suspend part or all of the lump sum payments due hereunder until the Company finishes the determination and the Company determines how to reduce the Payments, if necessary. As promptly as practicable following such determination and the elections hereunder, the Company shall pay to or distribute to or for the benefit of the Participant such amounts as are then due to the Participant under this Plan and shall promptly pay to or distribute for the benefit of Participant in the future such amounts as become due to Participant under this Plan.

Section 7.03 Overpayment or Underpayment. As a result of the uncertainty in the application of Section 280G of the Code, it is possible that Payments may be made by the Company which should not have been made (“Overpayment”) or that additional Payments which will have not been made by the Company could have been made (“Underpayment”), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the Certified Public Accountants, based upon the assertion of a deficiency by the Internal Revenue Service against the Company or Participant which said Certified Public Accountants believe has a high probability of success, determines that an Overpayment has been made, any such Overpayment shall be treated for all purposes as a loan to Participant which Participant shall repay to the Company together with interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code; provided, however, that no amount shall be payable by Participant to the Company in and for the extent such payment would not reduce the amount which is subject to taxation under Section 4999 of the Code. In the event that the Certified Public Accountants, based upon controlling precedent, determine that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of the Participant together with interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.

ARTICLE VIII

CLAIMS PROCEDURES

Section 8.01 Initial Claims. Generally, a Participant will not need to file a claim for benefits under this Plan. If a Participant becomes entitled to a benefit hereunder, the Administrator will notify the Participant of his or her entitlement. If, however, a Participant does not receive such notification, or if the Participant disagrees with the amount of such entitlement, then the Participant or his or her authorized representative must submit a written claim for benefits to the Plan within 60 days after the Participant’s Qualifying Termination. Claims should be addressed and sent to the following person or any successor to the following person:

Carol Diesner, Director of Human Resources

Valley National Bancorp

1455 Valley Road

Wayne, NJ 07470

If the Participant’s claim is denied, in whole or in part, the Participant will be furnished with written notice of the denial within 90 days after the Administrator’s receipt of the Participant’s written claim, unless special circumstances require an extension of time for processing the claim, in which case a period not to exceed 180 days will apply. If such an extension of time is required, written notice of the extension will be furnished to the Participant before the termination of the initial 90-day period and will describe the special circumstances requiring the extension, and the date on which a decision is expected to be rendered. Written notice of the denial of the Participant’s claim will contain the following information:

(a)the specific reason or reasons for the denial of the Participant’s claim;

(b)references to the specific Plan provisions on which the denial of the Participant’s claim was based;

(c)a description of any additional information or material required by the Administrator to reconsider the Participant’s claim (to the extent applicable) and an explanation of why such material or information is necessary; and

(d)a description of the Plan’s review procedure and time limits applicable to such procedures, including a statement of the Participant’s right to bring a civil action under Section 502(a) of ERISA following a benefit claim denial on review.

Section 8.02 Appeal of Denied Claims. If the Participant’s claim is denied and he or she wishes to submit a request for a review of the denied claim, the Participant or his or her authorized representative must follow the procedures described below:

(a)Upon receipt of the denied claim, the Participant (or his or her authorized representative) may file a request for review of the claim in writing with the Administrator. This request for review must be filed no later than 60 days after the Participant has received written notification of the denial.

(b)The Participant has the right to submit in writing to the Administrator any comments, documents, records or other information relating to his or her claim for benefits.

(c)The Participant has the right to be provided with, upon request and free of charge, reasonable access to and copies of all pertinent documents, records and other information that is relevant to his or her claim for benefits.

(d)The review of the denied claim will take into account all comments, documents, records and other information that the Participant submitted relating to his or her claim, without regard to whether such information was submitted or considered in the initial denial of his claim.

Section 8.03 Administrator’s Response to Appeal. The Administrator will provide the Participant with written notice of its decision within 60 days after the Administrator’s receipt of the Participant’s written claim for review. There may be special circumstances which require an extension of this 60-day period. In any such case, the Administrator will notify the Participant in writing within the 60-day period and the final decision will be made no later than 120 days after the Administrator’s receipt of the Participant’s written claim for review. The Administrator’s decision on the Participant’s claim for review will be communicated to the Participant in writing and will clearly state:

(a)the specific reason or reasons for the denial of the Participant’s claim;

(b)reference to the specific Plan provisions on which the denial of the Participant’s claim is based;

(c)a statement that the Participant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, the Plan and all documents, records and other information relevant to his or her claim for benefits; and

(e) a statement describing the Participant’s right to bring an action under Section 502(a) of ERISA.

Section 8.04 Exhaustion of Administrative Remedies. The exhaustion of these claims procedures is mandatory for resolving every claim and dispute arising under the Plan. As to such claims and disputes:

(a)no claimant shall be permitted to commence any legal action to recover benefits or to enforce or clarify rights under the Plan under Section 502 or Section 510 of ERISA or under any other provision of law, whether or not statutory, until these claims procedures have been exhausted in their entirety; and

(b)in any such legal action, all explicit and implicit determinations by the Administrator (including, but not limited to, determinations as to whether the claim, or a request for a review of a denied claim, was timely filed) shall be afforded the maximum deference permitted by law.

Section 8.05 Legal Fees. If after compliance with the procedures set forth in this Article VIII, it is determined that the Company has failed to pay the Participant amounts due the Participant hereunder in excess of [$5,000], the Participant shall be entitled to recover from the Company all of the Participant’s reasonable legal fees and expenses incurred in connection with the pursuit of Participant’s claim hereunder.

ARTICLE IX

ADMINISTRATION, AMENDMENT AND TERMINATION

Section 9.01 Administration. The Administrator has the exclusive right, power and authority, in its sole and absolute discretion, to administer and interpret the Plan. The Administrator has all powers reasonably necessary to carry out its responsibilities under the Plan including (but not limited to) the sole and absolute discretionary authority to:

(a)administer the Plan according to its terms and to interpret Plan policies and procedures;

(b)resolve and clarify inconsistencies, ambiguities and omissions in the Plan and among and between the Plan and other related documents;

(c)take all actions and make all decisions regarding questions of eligibility and entitlement to benefits, and benefit amounts;

(d)make, amend, interpret, and enforce all appropriate rules and regulations for the administration of the Plan;

(e)process and approve or deny all claims for benefits; and

(f)decide or resolve any and all questions, including benefit entitlement determinations and interpretations of the Plan, as may arise in connection with the Plan.

The decision of the Administrator on any disputes arising under the Plan, including (but not limited to) questions of construction, interpretation and administration shall be final, conclusive and binding on all Persons having an interest in or under the Plan, subject only to judicial review in accordance with applicable law.

Section 9.02 Duration. The Plan shall terminate only in accordance with Section 9.03.

Section 9.03 Amendment and Termination. The Company reserves the right to amend or terminate the Plan at any time prior to the occurrence of a Change in Control by providing at least twelve (12) months advance written notice to each Participant. No amendment shall be made to the Plan following a Change in Control. Notwithstanding the foregoing, the Company at any time prior to the occurrence of a Change in Control may make any amendments without advance written notice which (i) enhance the severance benefits, (ii) correct inconsistencies or typographical errors, or (iii) make other changes intended to protect the Participants, so long as any such amendments, in the reasonable opinion of the Administrator, do not adversely affect the benefits provided under the Plan or the protections afforded Participants.

ARTICLE X

GENERAL PROVISIONS

Section 10.01 At-will Employment. The Plan does not alter the status of each Participant as an at- will employee of the Company. Nothing contained herein shall be deemed to give any Participant the right to remain employed by the Company or to interfere with the rights of the Company to terminate the employment of any Participant at any time, with or without Cause.

Section 10.02 Effect on Other Plans, Agreements and Benefits.

(a)Any severance benefits payable to a Participant under the Plan will be in lieu of and not in addition to any severance benefits to which the Participant would otherwise be entitled under any general severance policy or severance plan maintained by the Company or any agreement between the Participant and the Company that provides for severance benefits (unless the policy, plan or agreement expressly provides for severance benefits to be in addition to those provided under the Plan); and (ii) any severance benefits payable to a Participant under the Plan will be reduced by any severance benefits to which the Participant is entitled by operation of a statute or government regulations.

(b)Any severance benefits payable to a Participant under the Plan will not be counted as compensation for purposes of determining benefits under any other benefit policies or plans of the Company, except to the extent expressly provided therein.

Section 10.03 Mitigation and Offset. If the Participant obtains other employment, such other employment will not affect the Participant’s rights or the Company’s obligations under the Plan.

The Company’s obligation to make the payments and provide the benefits required under the Plan will not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other rights that the Company may have against the Participant.

Section 10.04 Severability. The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision of the Plan. If any provision of the Plan is held by a court of competent jurisdiction to be illegal, invalid, void or unenforceable, such provision shall be deemed modified, amended and narrowed to the extent necessary to render such provision legal, valid and enforceable, and the other remaining provisions of the Plan shall not be affected but shall remain in full force and effect.

Section 10.05 Headings and Subheadings. Headings and subheadings contained in the Plan are intended solely for convenience and no provision of the Plan is to be construed by reference to the heading or subheading of any section or paragraph.

Section 10.06 Unfunded Obligations. The amounts to be paid to Participants under the Plan are unfunded obligations of the Company. The Company is not required to segregate any monies or other assets from its general funds with respect to these obligations. Participants shall not have any preference or security interest in any assets of the Company other than as a general unsecured creditor.

Section 10.07 Successors. The Plan will be binding upon any successor to the Company, or substantially all its assets, as the result of the occurrence of a Change in Control), in the same manner and to the same extent that the Company would be obligated under the Plan if no succession had taken place. In the case of any transaction in which a successor would not by the foregoing provision or by operation of law be bound by the Plan, the Company shall require any successor to the Company to expressly and unconditionally assume the Plan in writing and honor the obligations of the Company hereunder, in the same manner and to the same extent that the Company would be required to perform if no succession had taken place. All payments and benefits that become due to a Participant under the Plan will inure to the benefit of his or her heirs, assigns, designees or legal representatives.

Section 10.08 Transfer and Assignment. Neither a Participant nor his or her permitted successors shall have any right to sell, assign, transfer, pledge, anticipate or otherwise encumber, transfer, hypothecate or convey any amounts payable under the Plan prior to the date that such amounts are paid.

Section 10.09 Waiver. Any party’s failure to enforce any provision or provisions of the Plan will not in any way be construed as a waiver of any such provision or provisions, nor prevent any party from thereafter enforcing each and every other provision of the Plan.

Section 10.10 Governing Law. To the extent not pre-empted by federal law, the Plan shall be construed in accordance with and governed by the laws of New Jersey without regard to conflicts of law principles. Any action or proceeding to enforce the provisions of the Plan will be brought only in a state or federal court located in the state of New Jersey, county of Passaic, and each party consents to the venue and jurisdiction of such court. The parties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue.

Section 10.11 Clawback. Any amounts payable under the Plan are subject to any policy (whether in existence as of the Effective Date or later adopted) established by the Company prior to the occurrence of a Change in Control providing for clawback or recovery of amounts that were paid to the Participant. The Company will make any determination for clawback or recovery in accordance with the policy and with any applicable law or regulation.

Section 10.12 Withholding. The Company shall have the right to withhold from any amount payable hereunder any Federal, state and local taxes in order for the Company to satisfy any withholding tax obligation it may have under any applicable law or regulation.

Section 10.13 Section 409A.

(a) The Plan is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and administered in accordance with Section 409A of the Code. Notwithstanding any other provision of the Plan, payments provided under the Plan may only be made upon an event and in a manner that complies with Section 409A of the Code or an applicable exemption. Any payments under the Plan that may be excluded from Section 409A of the Code either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A of the Code to the maximum extent possible. For purposes of Section 409A of the Code, each installment payment provided under the Plan shall be treated as a separate payment. Any payments to be made under the Plan upon a termination of employment shall only be made upon a “separation from service” under Section 409A of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under the Plan comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by a Participant on account of non-compliance with Section 409Aof the Code.

(b)Notwithstanding any other provision of the Plan, if any payment or benefit provided to a Participant in connection with his or her Qualifying Termination is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and the Participant is determined to be a “specified employee” as defined in Section 409A(a)(2)(b)(i) of the Code, then such payment or benefit shall not be paid until the first payroll date to occur following the six-month anniversary of the Qualifying Termination or, if earlier, on the Participant’s death (the “Specified Employee Payment Date”). The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date shall be paid to the Participant in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule. Notwithstanding any other provision of the Plan, if any payment or benefit is conditioned on the Participant’s execution of a Release, the first payment shall include all amounts that would otherwise have been paid to the Participant during the period beginning on the date of the Qualifying Termination and ending on the payment date if no delay had been imposed.

(c)To the extent required by Section 409A of the Code, each reimbursement or in-kind benefit provided under the Plan shall be provided in accordance with the following: (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; and (ii) any right to reimbursements or in-kind benefits under the Plan shall not be subject to liquidation or exchange for another benefit.

EXHIBIT A

To:    Valley National Bancorp

1455 Valley Road

Wayne, NJ 07470

[Date]

I, [Name] hereby agree that as of the date hereof, the [First] Senior Vice President Change-In-Control Agreement dated [Date] between Valley National Bancorp (“Valley”) and myself (the “Agreement”) is hereby terminated and that I am no longer entitled to any payments or benefits under the Agreement.

I understand that in consideration of the termination of the Agreement, I will become a Participant in the Valley National Bancorp Change In Control Severance Plan (the “Plan”) and that the Covered Period (as such term is defined in the Plan) will be increased by a period of one year.

I acknowledge that I have not been promised any other benefits by Valley and that I am signing this letter voluntarily without any influence from any officer, director or employee of Valley.

Very truly yours,

[Name]

92231307.14

EX-31.1

EXHIBIT (31.1)

CERTIFICATION

I, Gerald H. Lipkin, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Valley National Bancorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2016

/s/ Gerald H. Lipkin

Gerald H. Lipkin

Chairman of the Board, President and

Chief Executive Officer

EX-31.2

EXHIBIT (31.2)

I, Alan D. Eskow, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Valley National Bancorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2016

/s/ Alan D. Eskow

Alan D. Eskow

Senior Executive Vice President and

Chief Financial Officer

EX-32

EXHIBIT (32)

CERTIFICATION OF CEO AND CFO PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Valley National Bancorp (the “Company”) for the period ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Gerald H. Lipkin, as Chief Executive Officer of the Company, and Alan D. Eskow, as Chief Financial Officer of the Company, each hereby certify, pursuant to 18 U.S.C. (section) 1350, as adopted pursuant to (section) 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Gerald H. Lipkin

Gerald H. Lipkin

Chairman of the Board, President and

Chief Executive Officer

August 8, 2016

/s/ Alan D. Eskow

Alan D. Eskow

Senior Executive Vice President and

Chief Financial Officer

August 8, 2016

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 05, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Trading Symbol	VLY
Entity Registrant Name	VALLEY NATIONAL BANCORP
Entity Central Index Key	0000714310
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		254,475,120

XML

Consolidated Statements of Financial Condition - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Assets
Cash and due from banks	$ 220,156	$ 243,575
Interest bearing deposits with banks	92,975	170,225
Investment securities:
Held to maturity (fair value of $1,803,711 at June 30, 2016 and $1,621,039 at December 31, 2015)	1,765,220	1,596,385
Available for sale	1,186,341	1,506,861
Total investment securities	2,951,561	3,103,246
Loans held for sale, at fair value	4,540	16,382
Loans	16,499,180	16,043,107
Less: Allowance for loan losses	(108,088)	(106,178)
Net loans	16,391,092	15,936,929
Premises and equipment, net	301,852	298,943
Bank owned life insurance	391,323	387,542
Accrued interest receivable	65,193	63,554
Goodwill	689,589	686,339
Other intangible assets, net	44,843	48,882
Other assets	656,614	656,999
Total Assets	21,809,738	21,612,616
Liabilities
Deposits: Non-interest bearing	5,048,115	4,914,285
Deposits: Interest bearing:
Savings, NOW and money market	8,243,307	8,181,362
Time	3,064,636	3,157,904
Total deposits	16,356,058	16,253,551
Short-term borrowings	1,411,844	1,076,991
Long-term borrowings	1,545,495	1,810,728
Junior subordinated debentures issued to capital trusts	41,496	41,414
Accrued expenses and other liabilities	222,633	222,841
Total Liabilities	19,577,526	19,405,525
Shareholders’ Equity
Preferred stock (no par value, authorized 30,000,000 shares; issued 4,600,000 shares at June 30, 2016 and December 31, 2015)	111,590	111,590
Common stock (no par value, authorized 332,023,233 shares; issued 254,399,394 shares at June 30, 2016 and 253,787,561 shares at December 31, 2015)	88,912	88,626
Surplus	1,934,469	1,927,399
Retained earnings	140,591	125,171
Accumulated other comprehensive loss	(42,999)	(45,695)
Treasury stock, at cost (37,080 common shares at June 30, 2016)	(351)	0
Total Shareholders’ Equity	2,232,212	2,207,091
Total Liabilities and Shareholders’ Equity	$ 21,809,738	$ 21,612,616

XML

Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Held to maturity, fair value	$ 1,803,711	$ 1,621,039
Preferred stock, par value (in usd per share)
Preferred stock, shares authorized (in shares)	30,000,000	30,000,000
Preferred stock, shares issued (in shares)	4,600,000	4,600,000
Common stock, par value (in usd per share)
Common stock, shares authorized (in shares)	332,023,233	332,023,233
Common stock, shares issued (in shares)	254,399,394	253,787,561
Treasury stock, shares (in shares)	37,080	0

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Interest Income
Interest and fees on loans	$ 169,426	$ 158,164	$ 335,497	$ 308,646
Interest and dividends on investment securities:
Taxable	14,256	12,233	28,255	27,165
Tax-exempt	3,734	3,595	7,424	7,207
Dividends	1,316	1,616	2,796	3,355
Interest on federal funds sold and other short-term investments	296	146	653	366
Total interest income	189,028	175,754	374,625	346,739
Interest Expense
Savings, NOW and money market	9,961	5,911	19,204	11,906
Time	9,223	8,128	18,808	16,102
Interest on short-term borrowings	3,120	207	4,992	301
Interest on long-term borrowings and junior subordinated debentures	15,269	25,331	32,013	50,167
Total interest expense	37,573	39,577	75,017	78,476
Net Interest Income	151,455	136,177	299,608	268,263
Provision for credit losses	1,429	4,500	2,229	4,500
Net Interest Income After Provision for Credit Losses	150,026	131,677	297,379	263,763
Non-Interest Income
Trust and investment services	2,544	2,576	4,984	5,070
Insurance commissions	4,845	4,130	9,553	8,335
Service charges on deposit accounts	5,094	5,263	10,197	10,553
(Losses) gains on securities transactions, net	(3)	(92)	268	2,324
Fees from loan servicing	1,561	1,642	3,155	3,245
Gains on sales of loans, net	3,105	422	4,900	1,020
Gains on sales of assets, net	709	200	699	481
Bank owned life insurance	1,818	1,618	3,781	3,382
Change in FDIC loss-share receivable	1	595	(559)	(3,325)
Other	4,590	3,846	8,734	7,760
Total non-interest income	24,264	20,200	45,712	38,845
Non-Interest Expense
Salary and employee benefits expense	56,072	54,574	116,331	111,286
Net occupancy and equipment expense	22,168	22,132	44,957	44,332
FDIC insurance assessment	5,095	4,012	10,194	7,804
Amortization of other intangible assets	2,928	2,096	5,777	4,489
Professional and legal fees	5,472	4,059	9,367	7,400
Loss on extinguishment of debt	315	0	315	0
Amortization of tax credit investments	7,646	4,511	14,910	9,007
Telecommunication expense	2,294	2,045	4,680	4,051
Other	17,813	13,983	31,497	27,161
Total non-interest expense	119,803	107,412	238,028	215,530
Income Before Income Taxes	54,487	44,465	105,063	87,078
Income tax expense	15,460	12,474	29,849	24,746
Net Income	39,027	31,991	75,214	62,332
Dividends on preferred stock	1,797	0	3,594	0
Net Income Available to Common Shareholders	$ 37,230	$ 31,991	$ 71,620	$ 62,332
Earnings Per Common Share:
Basic (in usd per share)	$ 0.15	$ 0.14	$ 0.28	$ 0.27
Diluted (in usd per share)	0.15	0.14	0.28	0.27
Cash Dividends Declared per Common Share (in usd per share)	$ 0.11	$ 0.11	$ 0.22	$ 0.22
Weighted Average Number of Common Shares Outstanding:
Basic (in shares)	254,381,170	232,565,404	254,228,260	232,452,716
Diluted (in shares)	254,771,213	232,586,616	254,575,873	232,457,748

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 39,027	$ 31,991	$ 75,214	$ 62,332
Other comprehensive (loss) income, net of tax:
Net (losses) gains arising during the period	(635)	(5,845)	7,648	(1,909)
Less reclassification adjustment for net losses (gains) included in net income	2	55	(168)	(1,354)
Total	(633)	(5,790)	7,480	(3,263)
Non-credit impairment losses on available for sale securities
Net change in non-credit impairment losses on securities	301	(31)	242	(452)
Less reclassification adjustment for accretion of credit impairment losses included in net income	0	(20)	(286)	(104)
Total	301	(51)	(44)	(556)
Unrealized gains and losses on derivatives (cash flow hedges)
Net (losses) gains on derivatives arising during the period	(2,122)	1,131	(8,674)	(4,128)
Less reclassification adjustment for net losses included in net income	2,107	991	3,848	1,942
Total	(15)	2,122	(4,826)	(2,186)
Defined benefit pension plan
Amortization of net loss	43	121	86	240
Total other comprehensive (loss) income	(304)	(3,598)	2,696	(5,765)
Total comprehensive income	$ 38,723	$ 28,393	$ 77,910	$ 56,567

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 75,214	$ 62,332
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	12,440	10,230
Stock-based compensation	5,184	3,886
Provision for credit losses	2,229	4,500
Net amortization of premiums and accretion of discounts on securities and borrowings	7,047	12,519
Amortization of other intangible assets	5,777	4,489
Gains on securities transactions, net	(268)	(2,324)
Proceeds from sales of loans held for sale	185,577	53,005
Gains on sales of loans, net	(4,900)	(1,020)
Originations of loans held for sale	(171,123)	(32,793)
Gains on sales of assets, net	(699)	(481)
FDIC loss-share receivable (excluding reimbursements)	559	3,325
Net change in:
Trading securities	0	14,233
Fair value of borrowings hedged by derivative transactions	6,779	(1,059)
Cash surrender value of bank owned life insurance	(3,781)	(3,382)
Accrued interest receivable	(1,639)	(945)
Other assets	(18,585)	(25,207)
Accrued expenses and other liabilities	(743)	(1,696)
Net cash provided by operating activities	99,068	99,612
Cash flows from investing activities:
Net loan originations	(15,384)	(385,576)
Loans purchased	(443,770)	(629,074)
Investment securities held to maturity:
Purchases	(309,507)	(168,682)
Sales	0	11,666
Maturities, calls and principal repayments	134,389	209,017
Investment securities available for sale:
Purchases	(432,530)	(26,791)
Sales	2,081	14,022
Maturities, calls and principal repayments	760,312	80,994
Proceeds from sales of real estate property and equipment	9,146	7,626
Purchases of real estate property and equipment	(15,353)	(9,106)
Reimbursements from the FDIC	94	1,753
Net cash used in investing activities	(310,522)	(894,151)
Cash flows from financing activities:
Net change in deposits	102,507	296,915
Net change in short-term borrowings	334,853	(20,633)
Proceeds from issuance of long-term borrowings, net	0	98,851
Repayments of long-term borrowings	(269,000)	0
Proceeds from issuance of preferred stock, net	0	111,590
Cash dividends paid to preferred shareholders	(3,594)	0
Cash dividends paid to common shareholders	(55,857)	(51,012)
Purchase of common shares to treasury	(1,615)	(2,082)
Common stock issued, net	3,491	3,708
Net cash provided by financing activities	110,785	437,337
Net change in cash and cash equivalents	(100,669)	(357,202)
Cash and cash equivalents at beginning of year	413,800	830,407
Cash and cash equivalents at end of period	313,131	473,205
Supplemental disclosures of cash flow information:
Interest on deposits and borrowings	76,693	78,777
Federal and state income taxes	12,964	38,525
Supplemental schedule of non-cash investing activities:
Transfer of loans to other real estate owned	$ 2,899	$ 4,369

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The unaudited consolidated financial statements of Valley National Bancorp, a New Jersey corporation (Valley), include the accounts of its commercial bank subsidiary, Valley National Bank (the “Bank”), and all of Valley’s direct or indirect wholly-owned subsidiaries. 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. In accordance with applicable accounting standards, Valley does not consolidate statutory trusts established for the sole purpose of issuing trust preferred securities and related trust common securities.

In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly Valley’s financial position, results of operations and cash flows at June 30, 2016 and for all periods presented have been made. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the entire fiscal year.

In preparing the unaudited 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. Material estimates that are particularly susceptible to change are: the allowance for loan losses; the evaluation of goodwill and other intangible assets, and investment securities for impairment; fair value measurements of assets and liabilities; and income taxes. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the consolidated financial statements in the period they are deemed necessary. While management uses its best judgment, actual amounts or results could differ significantly from those estimates. The current economic environment has increased the degree of uncertainty inherent in these material estimates.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP and industry practice have been condensed or omitted pursuant to rules and regulations of the SEC. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Valley’s Annual Report on Form 10-K for the year ended December 31, 2015.

XML

Business Combinations

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Business Combinations

Business Combinations

Acquisitions

On January 4, 2016, Masters Coverage Corp., an all-line insurance agency that is a wholly-owned subsidiary of the Bank, acquired certain assets of an independent insurance agency located in New York. The purchase price totaled approximately $1.4 million in cash and future cash consideration. The transaction generated goodwill and other intangible assets totaling $701 thousand and $660 thousand, respectively.

On December 1, 2015, Valley completed its acquisition of CNLBancshares, Inc. (CNL) and its wholly-owned subsidiary, CNLBank, headquartered in Orlando, Florida, a commercial bank with approximately $1.6 billion in assets, $825 million in loans and $1.2 billion in deposits and 16 branch offices on the date of its acquisition by Valley. The common shareholders of CNL received 0.705 of a share of Valley common stock for each CNL share they owned prior to the merger. The total consideration for the acquisition was approximately $230 million, consisting of 20.6 million shares of Valley's common stock.

During the first quarter of 2016, Valley revised the estimated fair values of the acquired assets as of the acquisition date as the result of additional information obtained. The adjustments mostly related to the fair value of certain purchased credit-impaired (PCI) loans, core deposit intangibles and time deposits which, on a combined basis, resulted in a $2.5 million increase in goodwill (see Note 10 for amount of goodwill as allocated to Valley's business segments). If additional information (that existed at the date of close) becomes available, the fair value estimates for acquired assets and assumed liabilities are subject to change for up to one year after the closing date of the CNL acquisition.

XML

Earnings Per Common Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

The following table shows the calculation of both basic and diluted earnings per common share for the three and six months ended June 30, 2016 and 2015.

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands, except for share data)
Net income available to common shareholders	$	37,230	$	31,991	$	71,620	$	62,332
Basic weighted average number of common shares outstanding	254,381,170		232,565,404		254,228,260		232,452,716
Plus: Common stock equivalents	390,043		21,212		347,613		5,032
Diluted weighted average number of common shares outstanding	254,771,213		232,586,616		254,575,873		232,457,748
Earnings per common share:
Basic	$	0.15	$	0.14	$	0.28	$	0.27
Diluted	0.15		0.14		0.28		0.27

Common stock equivalents represent the dilutive effect of additional common shares issuable upon the assumed vesting or exercise, if applicable, of performance-based restricted stock units, common stock options and warrants to purchase Valley’s common shares. Common stock options and warrants with exercise prices that exceed the average market price of Valley’s common stock during the periods presented have an anti-dilutive effect on the diluted earnings per common share calculation and therefore are excluded from the diluted earnings per share calculation. Anti-dilutive common stock options and warrants equaled approximately 4.6 millionshares for both the three and six months ended June 30, 2016 and 6.1 million for both the three and six months ended June 30, 2015.

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Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The following table presents the after-tax changes in the balances of each component of accumulated other comprehensive loss for the three and six months ended June 30, 2016.

	Components of Accumulated Other Comprehensive Loss												Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities			Non-credit Impairment Losses on AFS Securities			Unrealized Gains and (Losses) on Derivatives			Defined Benefit Pension Plan
	(in thousands)
Balance at March 31, 2016	$	2,777		$	(865	)	$	(22,455	)	$	(22,152	)	$	(42,695	)
Other comprehensive (loss) income before reclassifications	(635		)	301			(2,122		)	—			(2,456		)
Amounts reclassified from other comprehensive (loss) income	2			—			2,107			43			2,152
Other comprehensive (loss) income, net	(633		)	301			(15		)	43			(304		)
Balance at June 30, 2016	$	2,144		$	(564	)	$	(22,470	)	$	(22,109	)	$	(42,999	)

	Components of Accumulated Other Comprehensive Loss												Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities			Non-credit Impairment Losses on AFS Securities			Unrealized Gains and (Losses) on Derivatives			Defined Benefit Pension Plan
	(in thousands)
Balance at December 31, 2015	$	(5,336	)	$	(520	)	$	(17,644	)	$	(22,195	)	$	(45,695	)
Other comprehensive income (loss) before reclassifications	7,648			242			(8,674		)	—			(784		)
Amounts reclassified from other comprehensive income (loss)	(168		)	(286		)	3,848			86			3,480
Other comprehensive income (loss), net	7,480			(44		)	(4,826		)	86			2,696
Balance at June 30, 2016	$	2,144		$	(564	)	$	(22,470	)	$	(22,109	)	$	(42,999	)

The following table presents amounts reclassified from each component of accumulated other comprehensive loss on a gross and net of tax basis for the three and six months ended June 30, 2016 and 2015. 

	Amounts Reclassified from Accumulated Other Comprehensive Loss
	Three Months Ended June 30,						Six Months Ended June 30,
Components of Accumulated Other Comprehensive Loss	2016			2015			2016			2015			Income Statement Line Item
	(in thousands)
Unrealized gains (losses) on AFS securities before tax	$	(3	)	$	(92	)	$	268		$	2,324		(Losses) gains on securities transactions, net
Tax effect	1			37			(100		)	(970		)
Total net of tax	(2		)	(55		)	168			1,354
Non-credit impairment losses on AFS securities before tax:
Accretion of credit loss impairment due to an increase in expected cash flows	—			34			489			178			Interest and dividends on  investment securities (taxable)
Tax effect	—			(14		)	(203		)	(74		)
Total net of tax	—			20			286			104
Unrealized losses on derivatives (cash flow hedges) before tax	(3,597		)	(1,699		)	(6,568		)	(3,328		)	Interest expense
Tax effect	1,490			708			2,720			1,386
Total net of tax	(2,107		)	(991		)	(3,848		)	(1,942		)
Defined benefit pension plan:
Amortization of net loss	(72		)	(205		)	(144		)	(410		)	*
Tax effect	29			84			58			170
Total net of tax	(43		)	(121		)	(86		)	(240		)
Total reclassifications, net of tax	$	(2,152	)	$	(1,147	)	$	(3,480	)	$	(724	)

* Amortization of net loss is included in the computation of net periodic pension cost.

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New Authoritative Accounting Guidance

6 Months Ended

Jun. 30, 2016

Accounting Changes and Error Corrections [Abstract]

New Authoritative Accounting Guidance

New Authoritative Accounting Guidance

Accounting Standards Update (ASU) No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" amends the accounting guidance on the impairment of financial instruments. The ASU No. 2016-13 adds to U.S. GAAP an impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity is required to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU No. 2016-13 is effective for Valley for reporting periods beginning January 1, 2020. Management is currently evaluating the impact of the ASU No. 2016-13 on Valley’s consolidated financial statements.

ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" simplifies several aspects of the stock compensation guidance in Topic 718 and other related guidance. The amendments focus on income tax accounting upon vesting or exercise of share-based payments, award classification, liability classification exception for statutory tax withholding requirements, estimating forfeitures, and cash flow presentation. ASU No. 2016-09 is effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018 with an early adoption permitted. ASU No. 2016-09 is not expected to have a significant impact on Valley's consolidated financial statements.

ASU No. 2016-02, “Leases (Topic 842)” requires the recognition of a right of use asset and related lease liability by lessees for leases classified as operating leases under current GAAP. Topic 842, which replaces the current guidance under Topic 840, retains a distinction between finance leases and operating leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee also will not significantly change from current GAAP. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize right of use assets and lease liabilities. Topic 842 will be effective for Valley for reporting periods beginning January 1, 2019, with an early adoption permitted. Valley must apply a modified retrospective transition approach for the applicable leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Management is currently evaluating the impact of Topic 842 on Valley’s consolidated financial statements.

ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities” requires that: (i) equity investments with readily determinable fair values must be measured at fair value with changes in fair value recognized in net income, (2) equity investments without readily determinable fair values must be measured at either fair value or at cost adjusted for changes in observable prices minus impairment. Changes in value under either of these methods would be recognized in net income, (3) entities that record financial liabilities at fair value due to a fair value option election must recognize changes in fair value in other comprehensive income if it is related to instrument-specific credit risk, and (4) entities must assess whether a valuation allowance is required for deferred tax assets related to available-for-sale debt securities. ASU No. 2016-01 is effective for Valley for reporting periods beginning January 1, 2018 and is not expected to have a material effect on Valley’s consolidated financial statements.

ASU No. 2015-07, "Fair Value Measurement (Topic 820) - Disclosure for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)", which removes the requirement to categorize within the fair value hierarchy all investments for which the fair value is measured using the net asset value per share practical expedient. ASU No. 2015-07 also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. ASU No. 2015-07 began effective for Valley for reporting periods after January 1, 2016 and did not have an impact on Valley's fair value measurement disclosures at Note 6.

ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)" implements a common revenue standard that clarifies the principles for recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In 2016, the Financial Accounting Standards Board issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606) - Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” and ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing,” to further clarify the new guidance under Topic 606. ASU No. 2014-09 and its aforementioned amendments are effective on January 1, 2018. Management is currently evaluating the new revenue guidance but does not expect it to have a significant impact on Valley’s consolidated financial statements.

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Fair Value Measurement of Assets and Liabilities

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurement of Assets and Liabilities

Fair Value Measurement of Assets and Liabilities

Accounting Standards Codification (ASC) Topic 820, “Fair Value Measurements and Disclosures,” establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

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

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

Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

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

The following tables present the assets and liabilities that are measured at fair value on a recurring and nonrecurring basis by level within the fair value hierarchy as reported on the consolidated statements of financial condition at June 30, 2016 and December 31, 2015. The assets presented under “nonrecurring fair value measurements” in the table below are not measured at fair value on an ongoing basis but are subject to fair value adjustments under certain circumstances (e.g., when an impairment loss is recognized). 

	June 30, 2016		Fair Value Measurements at Reporting Date Using:
			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available for sale:
U.S. Treasury securities	$	51,035	$	51,035	$	—	$	—
U.S. government agency securities	25,290		—		25,290		—
Obligations of states and political subdivisions	125,746		—		125,746		—
Residential mortgage-backed securities	876,153		—		865,170		10,983
Trust preferred securities	8,240		—		6,122		2,118
Corporate and other debt securities	80,373		17,743		62,630		—
Equity securities	19,504		727		18,777		—
Total available for sale	1,186,341		69,505		1,103,735		13,101
Loans held for sale (1)	4,540		—		4,540		—
Other assets (2)	60,843		—		60,843		—
Total assets	$	1,251,724	$	69,505	$	1,169,118	$	13,101
Liabilities
Other liabilities (2)	$	79,897	$	—	$	79,897	$	—
Total liabilities	$	79,897	$	—	$	79,897	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans (3)	$	4,612	$	—	$	—	$	4,612
Loan servicing rights	5,918		—		—		5,918
Foreclosed assets (4)	2,642		—		—		2,642
Total	$	13,172	$	—	$	—	$	13,172

			Fair Value Measurements at Reporting Date Using:
	December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available for sale:
U.S. Treasury securities	$	549,473	$	549,473	$	—	$	—
U.S. government agency securities	29,963		—		29,963		—
Obligations of states and political subdivisions	124,966		—		124,966		—
Residential mortgage-backed securities	696,428		—		684,777		11,651
Trust preferred securities	8,404		—		6,262		2,142
Corporate and other debt securities	77,552		17,710		59,842		—
Equity securities	20,075		1,198		18,877		—
Total available for sale	1,506,861		568,381		924,687		13,793
Loans held for sale (1)	16,382		—		16,382		—
Other assets (2)	33,774		—		33,774		—
Total assets	$	1,557,017	$	568,381	$	974,843	$	13,793
Liabilities
Other liabilities (2)	$	50,844	$	—	$	50,844	$	—
Total liabilities	$	50,844	$	—	$	50,844	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans (3)	$	15,427	$	—	$	—	$	15,427
Loan servicing rights	2,571		—		—		2,571
Foreclosed assets (4)	16,672		—		—		16,672
Total	$	34,670	$	—	$	—	$	34,670

(1) Loans held for sale carried at fair value (which consist of residential mortgages) had contractual unpaid principal balances totaling approximately $4.4 million and $16.1 million at June 30, 2016 and December 31, 2015, respectively.

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

(3) Excludes PCI loans.

(4) Includes covered (i.e., subject to loss-sharing agreements with the FDIC) other real estate owned totaling $100 thousand and $4.2 million at June 30, 2016 and December 31, 2015, respectively.

The changes in Level 3 assets measured at fair value on a recurring basis for the three and six months ended June 30, 2016 and 2015 are summarized below: 

	Available for Sale Securities
	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Balance, beginning of the period	$	12,949		$	15,468		$	13,793		$	19,309
Total net gains (losses) included in other comprehensive income for the period	514			(90		)	(71		)	(882		)
Sales	—			—			—			(2,675		)
Settlements	(362		)	(666		)	(621		)	(1,040		)
Balance, end of the period	$	13,101		$	14,712		$	13,101		$	14,712

No changes in unrealized gains or losses on Level 3 securities were included in earnings during the three and six months ended June 30, 2016 and 2015. There were no transfers of assets into and out of Level 3, or between Level 1 and Level 2, during the three and six months ended June 30, 2016 and 2015.

There have been no material changes in the valuation methodologies used at June 30, 2016 from December 31, 2015.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following valuation techniques were used for financial instruments measured at fair value on a recurring basis. All the valuation techniques described below apply to the unpaid principal balance excluding any accrued interest or dividends at the measurement date. Interest income and expense are recorded within the consolidated statements of income depending on the nature of the instrument using the effective interest method based on acquired discount or premium.

Available for sale securities. All U.S. Treasury securities, certain corporate and other debt securities, and certain common and preferred equity securities (including certain trust preferred securities) are reported at fair value utilizing Level 1 inputs. The majority of other investment securities are reported at fair value utilizing Level 2 inputs. The prices for these instruments are obtained through an independent pricing service or dealer market participants with whom Valley has historically transacted both purchases and sales of investment securities. Prices obtained from these sources include prices derived from market quotations and matrix pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. Management reviews the data and assumptions used in pricing the securities by its third party provider to ensure the highest level of significant inputs are derived from market observable data. For certain securities, the inputs used by either dealer market participants or an independent pricing service may be derived from unobservable market information (Level 3 inputs). In these instances, Valley evaluates the appropriateness and quality of the assumption and the resulting price. In addition, Valley reviews the volume and level of activity for all available for sale and trading securities and attempts to identify transactions which may not be orderly or reflective of a significant level of activity and volume. For securities meeting these criteria, the quoted prices received from either market participants or an independent pricing service may be adjusted, as necessary, to estimate fair value and this results in fair values based on Level 3 inputs. In determining fair value, Valley utilizes unobservable inputs which reflect Valley’s own assumptions about the inputs that market participants would use in pricing each security. In developing its assertion of market participant assumptions, Valley utilizes the best information that is both reasonable and available without undue cost and effort.

In calculating the fair value for the available for sale securities under Level 3, Valley prepared present value cash flow models for certain private label mortgage-backed securities. The cash flows for the residential mortgage-backed securities incorporated the expected cash flow of each security adjusted for default rates, loss severities and prepayments of the individual loans collateralizing the security.

The following table presents quantitative information about Level 3 inputs used to measure the fair value of these securities at June 30, 2016: 

Security Type	Valuation Technique	Unobservable Input	Range	Weighted Average
Private label mortgage-backed securities	Discounted cash flow	Prepayment rate	0.0-20.2%	10.1	%
		Default rate	3.6-16.2	7.9
		Loss severity	45.4-66.3	60.5

Significant increases or decreases in any of the unobservable inputs in the table above in isolation would result in a significantly lower or higher fair value measurement of the securities. Generally, a change in the assumption used for the default rate is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for prepayment rates.

For the Level 3 available for sale private label mortgage-backed securities (consisting of 4 securities), cash flow assumptions incorporated independent third party market participant data based on vintage year for each security. The discount rate utilized in determining the present value of cash flows for the mortgage-backed securities was arrived at by combining the yield on orderly transactions for similar maturity government sponsored mortgage-backed securities with (i) the historical average risk premium of similar structured private label securities, (ii) a risk premium reflecting current market conditions, including liquidity risk, and (iii) if applicable, a forecasted loss premium derived from the expected cash flows of each security. The estimated cash flows for each private label mortgage-backed security were then discounted at the aforementioned effective rate to determine the fair value. The quoted prices received from either market participants or independent pricing services are weighted with the internal price estimate to determine the fair value of each instrument.

For the Level 3 available for sale one pooled trust preferred security, the resulting estimated future cash flow was discounted at a yield determined by reference to similarly structured securities for which observable orderly transactions occurred. The discount rate was applied using a pricing matrix based on credit, security type and maturity characteristics to determine the fair value. The fair value calculation is received from an independent valuation adviser. In validating the fair value calculation from an independent valuation adviser, Valley reviews the accuracy of the inputs and the appropriateness of the unobservable inputs utilized in the valuation to ensure the fair value calculation is reasonable from a market participant perspective.

Loans held for sale. The conforming residential mortgage loans originated for sale are reported at fair value using Level 2 inputs. The fair values were calculated utilizing quoted prices for similar assets in active markets. To determine these fair values, the mortgages held for sale are put into multiple tranches, or pools, based on the coupon rate and maturity of each mortgage. The market prices for each tranche are obtained from both Fannie Mae and Freddie Mac. The market prices represent a delivery price, which reflects the underlying price each institution would pay Valley for an immediate sale of an aggregate pool of mortgages. The market prices received from Fannie Mae and Freddie Mac are then averaged and interpolated or extrapolated, where required, to calculate the fair value of each tranche. Depending upon the time elapsed since the origination of each loan held for sale, non-performance risk and changes therein were addressed in the estimate of fair value based upon the delinquency data provided to both Fannie Mae and Freddie Mac for market pricing and changes in market credit spreads. Non-performance risk did not materially impact the fair value of mortgage loans held for sale at June 30, 2016 and December 31, 2015 based on the short duration these assets were held, and the high credit quality of these loans.

Derivatives. Derivatives are reported at fair value utilizing Level 2 inputs. The fair value 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 and Overnight Index Swap rate curves. 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 June 30, 2016 and December 31, 2015), is determined based on the current market prices for similar instruments provided by Fannie Mae and Freddie Mac. 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 credit valuation adjustments were not significant to the overall valuation of Valley’s derivatives at June 30, 2016 and December 31, 2015.

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

The following valuation techniques were used for certain non-financial assets measured at fair value on a nonrecurring basis, including non-performing loans held for sale carried at estimated fair value (less selling costs) when less than the unamortized cost, impaired loans reported at the fair value of the underlying collateral, loan servicing rights, other real estate owned and other repossessed assets, which are reported at fair value upon initial recognition or subsequent impairment as described below.

Impaired loans. Certain impaired loans are reported at the fair value of the underlying collateral if repayment is expected solely from the collateral and are commonly referred to as “collateral dependent impaired loans.” Collateral values are estimated using Level 3 inputs, consisting of individual appraisals that are significantly adjusted based on certain discounting criteria. At June 30, 2016, appraisals are discounted based on specific market data by location and property type. During the quarter ended June 30, 2016, collateral dependent impaired loans were individually re-measured and reported at fair value through direct loan charge-offs to the allowance for loan losses and/or a specific valuation allowance allocation based on the fair value of the underlying collateral. The collateral dependent loan charge-offs to the allowance for loan losses totaled $473 thousand and $1.7 million for the three months ended June 30, 2016 and 2015, respectively, and $952 thousand and $2.6 million for the six months ended June 30, 2016 and 2015, respectively. At June 30, 2016, collateral dependent impaired loans with a total recorded investment of $5.1 million were reduced by specific valuation allowance allocations totaling $460 thousand to a reported total net carrying amount of $4.6 million.

Loan servicing rights. Fair values for each risk-stratified group of loan servicing rights are calculated using a fair value model from a third party vendor that requires inputs that are both significant to the fair value measurement and unobservable (Level 3). The fair value model is based on various assumptions, including but not limited to, prepayment speeds, internal rate of return (“discount rate”), servicing cost, ancillary income, float rate, tax rate, and inflation. The prepayment speed and the discount rate are considered two of the most significant inputs in the model. At June 30, 2016, the fair value model used prepayment speeds (stated as constant prepayment rates) from 0 percent up to 24 percent and a discount rate of 8.0 percent for the valuation of the loan servicing rights. A significant degree of judgment is involved in valuing the loan servicing rights using Level 3 inputs. The use of different assumptions could have a significant positive or negative effect on the fair value estimate. Impairment charges are recognized on loan servicing rights when the amortized cost of a risk-stratified group of loan servicing rights exceeds the estimated fair value. Valley recorded net impairment charges on its loan servicing rights totaling $265 thousand and $457 thousand for the three and six months ended June 30, 2016, respectively, as compared net recoveries of impairment charges totaling $245 thousand and $161 thousand for three and six months ended June 30, 2015, respectively.

Foreclosed assets. Certain foreclosed assets (consisting of other real estate owned and other repossessed assets), upon initial recognition and transfer from loans, are re-measured and reported at fair value through a charge-off to the allowance for loan losses based upon the fair value of the foreclosed assets. The fair value of a foreclosed asset, upon initial recognition, is typically estimated using Level 3 inputs, consisting of an appraisal that is adjusted based on certain discounting criteria, similar to the criteria used for impaired loans described above. The appraisals of foreclosed assets were adjusted up to 2.8 percent at June 30, 2016. At June 30, 2016, foreclosed assets included $2.6 million of assets that were measured at fair value upon initial recognition or subsequently re-measured during the quarter ended June 30, 2016. The foreclosed assets charge-offs to the allowance for loan losses totaled $489 thousand and $434 thousand for the three months ended June 30, 2016 and 2015, respectively and $922 thousand and $891 thousand for six months ended June 30, 2016 and 2015, respectively. The re-measurement of foreclosed assets at fair value subsequent to their initial recognition resulted in net loss within non-interest expense of $295 thousand and $470 thousand for the three months ended June 30, 2016 and 2015, respectively and $912 thousand and $482 thousand for six months ended June 30, 2016 and 2015, respectively.

Other Fair Value Disclosures

ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.

The fair value estimates presented in the following table were based on pertinent market data and relevant information on the financial instruments available as of the valuation date. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire portfolio of financial instruments. Because no market exists for a portion of the financial instruments, fair value estimates may be based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For instance, Valley has certain fee-generating business lines (e.g., its mortgage servicing operation, trust and investment management departments) that were not considered in these estimates since these activities are not financial instruments. In addition, the tax implications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.

The carrying amounts and estimated fair values of financial instruments not measured and not reported at fair value on the consolidated statements of financial condition at June 30, 2016 and December 31, 2015 were as follows: 

	Fair Value Hierarchy	June 30, 2016				December 31, 2015
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(in thousands)
Financial assets
Cash and due from banks	Level 1	$	220,156	$	220,156	$	243,575	$	243,575
Interest bearing deposits with banks	Level 1	92,975		92,975		170,225		170,225
Investment securities held to maturity:
U.S. Treasury securities	Level 1	138,904		152,772		138,978		149,483
U.S. government agency securities	Level 2	12,076		12,563		12,859		13,130
Obligations of states and political subdivisions	Level 2	565,509		591,925		504,865		527,263
Residential mortgage-backed securities	Level 2	957,377		967,142		852,289		855,272
Trust preferred securities	Level 2	59,795		46,030		59,785		46,437
Corporate and other debt securities	Level 2	31,559		33,279		27,609		29,454
Total investment securities held to maturity		1,765,220		1,803,711		1,596,385		1,621,039
Net loans	Level 3	16,391,092		16,410,318		15,936,929		15,824,475
Accrued interest receivable	Level 1	65,193		65,193		63,554		63,554
Federal Reserve Bank and Federal Home Loan Bank stock (1)	Level 1	161,684		161,684		145,068		145,068
Financial liabilities
Deposits without stated maturities	Level 1	13,291,422		13,291,422		13,095,647		13,095,647
Deposits with stated maturities	Level 2	3,064,636		3,103,627		3,157,904		3,203,389
Short-term borrowings	Level 1	1,411,844		1,411,844		1,076,991		1,076,991
Long-term borrowings	Level 2	1,545,495		1,716,189		1,810,728		1,945,741
Junior subordinated debentures issued to capital trusts	Level 2	41,496		43,865		41,414		44,127
Accrued interest payable (2)	Level 1	11,434		11,434		13,110		13,110

(1) Included in other assets.

(2) Included in accrued expenses and other liabilities.

The following methods and assumptions were used to estimate the fair value of other financial assets and financial liabilities in the table above:

Cash and due from banks and interest bearing deposits with banks. The carrying amount is considered to be a reasonable estimate of fair value because of the short maturity of these items.

Investment securities held to maturity. Fair values are based on prices obtained through an independent pricing service or dealer market participants with whom Valley has historically transacted both purchases and sales of investment securities. Prices obtained from these sources include prices derived from market quotations and matrix pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things (Level 2 inputs). Additionally, Valley reviews the volume and level of activity for all classes of held to maturity securities and attempts to identify transactions which may not be orderly or reflective of a significant level of activity and volume. For securities meeting these criteria, the quoted prices received from either market participants or an independent pricing service may be adjusted, as necessary. If applicable, the adjustment to fair value is derived based on present value cash flow model projections prepared by Valley utilizing assumptions similar to those incorporated by market participants.

Loans. Fair values of loans are estimated by discounting the projected futurecash flows using market discount rates that reflect the credit and interest-rate risk inherent in the loan. The discount rate is a product of both the applicable index and credit spread, subject to the estimated current new loan interest rates. The credit spread component is static for all maturities and may not necessarily reflect the value of estimating all actual cash flows re-pricing. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. Fair values estimated in this manner do not fully incorporate an exit-price approach to fair value, but instead are based on a comparison to current market rates for comparable loans.

Accrued interest receivable and payable. The carrying amounts of accrued interest approximate their fair value due to the short-term nature of these items.

Federal Reserve Bank and Federal Home Loan Bank stock. Federal Reserve Bank and FHLB stock are non-marketable equity securities and are reported at their redeemable carrying amounts, which approximate fair value.

Deposits. The carrying amounts of deposits without stated maturities (i.e., non-interest bearing, savings, NOW, and money market deposits) approximate their estimated fair value. The fair value of time deposits is based on the discounted value of contractual cash flows using estimated rates currently offered for alternative funding sources of similar remaining maturity.

Short-term and long-term borrowings. The carrying amounts of certain short-term borrowings, including securities sold under agreements to repurchase (and from time to time, federal funds purchased and FHLB borrowings) approximate their fair values because they frequently re-price to a market rate. The fair values of other short-term and long-term borrowings are estimated by obtaining quoted market prices of the identical or similar financial instruments when available. When quoted prices are unavailable, the fair values of the borrowings are estimated by discounting the estimated future cash flows using current market discount rates of financial instruments with similar characteristics, terms and remaining maturity.

Junior subordinated debentures issued to capital trusts. The fair value of debentures issued to capital trusts is estimated utilizing the income approach, whereby the expected cash flows, over the remaining estimated life of the security, are discounted using Valley’s credit spread over the current yield on a similar maturity of U.S. Treasury security or the three-month LIBOR for the variable rate indexed debentures (Level 2 inputs). The credit spread used to discount the expected cash flows was calculated based on the median current spreads for all fixed and variable publicly traded trust preferred securities issued by banks.

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Investment Securities

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

Held to Maturity

The amortized cost, gross unrealized gains and losses and fair value of securities held to maturity at June 30, 2016 and December 31, 2015 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2016
U.S. Treasury securities	$	138,904	$	13,868	$	—		$	152,772
U.S. government agency securities	12,076		487		—			12,563
Obligations of states and political subdivisions:
Obligations of states and state agencies	193,343		13,148		—			206,491
Municipal bonds	372,166		13,268		—			385,434
Total obligations of states and political subdivisions	565,509		26,416		—			591,925
Residential mortgage-backed securities	957,377		14,173		(4,408		)	967,142
Trust preferred securities	59,795		39		(13,804		)	46,030
Corporate and other debt securities	31,559		1,720		—			33,279
Total investment securities held to maturity	$	1,765,220	$	56,703	$	(18,212	)	$	1,803,711
December 31, 2015
U.S. Treasury securities	$	138,978	$	10,505	$	—		$	149,483
U.S. government agency securities	12,859		271		—			13,130
Obligations of states and political subdivisions:
Obligations of states and state agencies	194,547		10,538		(10		)	205,075
Municipal bonds	310,318		11,955		(85		)	322,188
Total obligations of states and political subdivisions	504,865		22,493		(95		)	527,263
Residential mortgage-backed securities	852,289		11,018		(8,035		)	855,272
Trust preferred securities	59,785		36		(13,384		)	46,437
Corporate and other debt securities	27,609		1,894		(49		)	29,454
Total investment securities held to maturity	$	1,596,385	$	46,217	$	(21,563	)	$	1,621,039

The age of unrealized losses and fair value of related securities held to maturity at June 30, 2016 and December 31, 2015were as follows:

	Less than Twelve Months					More than Twelve Months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
June 30, 2016
Residential mortgage-backed securities	$	225,255	$	(1,340	)	$	253,047	$	(3,068	)	$	478,302	$	(4,408	)
Trust preferred securities	—		—			44,638		(13,804		)	44,638		(13,804		)
Total	$	225,255	$	(1,340	)	$	297,685	$	(16,872	)	$	522,940	$	(18,212	)
December 31, 2015
Obligations of states and political subdivisions:
Obligations of states and state agencies	$	6,837	$	(5	)	$	1,965	$	(5	)	$	8,802	$	(10	)
Municipal bonds	8,814		(72		)	10,198		(13		)	19,012		(85		)
Total obligations of states and political subdivisions	15,651		(77		)	12,163		(18		)	27,814		(95		)
Residential mortgage-backed securities	244,440		(2,916		)	162,756		(5,119		)	407,196		(8,035		)
Trust preferred securities	—		—			45,047		(13,384		)	45,047		(13,384		)
Corporate and other debt securities	2,951		(49		)	—		—			2,951		(49		)
Total	$	263,042	$	(3,042	)	$	219,966	$	(18,521	)	$	483,008	$	(21,563	)

The unrealized losses on investment securities held to maturity are primarily due to changes in interest rates (including, in certain cases, changes in credit spreads) and, in some cases, lack of liquidity in the marketplace. Within the held to maturity portfolio, the total number of security positions in an unrealized loss position was 74 at both June 30, 2016 and December 31, 2015.

The unrealized losses within the residential mortgage-backed securities category of the held to maturity portfolio at June 30, 2016 mainly related to certain investment grade securities issued by Fannie Mae.

The unrealized losses existing for more than twelve months for trust preferred securities at June 30, 2016 primarily related to four non-rated single-issuer trust preferred securities issued by bank holding companies. All single-issuer trust preferred securities classified as held to maturity are paying in accordance with their terms, have no deferrals of interest or defaults and, if applicable, the issuers meet the regulatory capital requirements to be considered “well-capitalized institutions” at June 30, 2016.

Management does not believe that any individual unrealized loss as of June 30, 2016 included in the table above represents other-than-temporary impairment as management mainly attributes the declines in fair value to changes in interest rates and market volatility, not credit quality or other factors. Based on a comparison of the present value of expected cash flows to the amortized cost, management believes there are no credit losses on these securities. Valley does not have the intent to sell, nor is it more likely than not that Valley will be required to sell, the securities contained in the table above before the recovery of their amortized cost basis or maturity.

As of June 30, 2016, the fair value of investments held to maturity that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law, was $916.5 million.

The contractual maturities of investments in debt securities held to maturity at June 30, 2016 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.  

	June 30, 2016
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	110,870	$	110,881
Due after one year through five years	169,388		180,766
Due after five years through ten years	310,727		332,730
Due after ten years	216,858		212,192
Residential mortgage-backed securities	957,377		967,142
Total investment securities held to maturity	$	1,765,220	$	1,803,711

Actual maturities of 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 6.1 years at June 30, 2016.

Available for Sale

The amortized cost, gross unrealized gains and losses and fair value of securities available for sale at June 30, 2016 and December 31, 2015 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2016
U.S. Treasury securities	$	51,031	$	53	$	(49	)	$	51,035
U.S. government agency securities	24,913		397		(20		)	25,290
Obligations of states and political subdivisions:
Obligations of states and state agencies	43,399		873		(101		)	44,171
Municipal bonds	80,502		1,382		(309		)	81,575
Total obligations of states and political subdivisions	123,901		2,255		(410		)	125,746
Residential mortgage-backed securities	873,480		7,300		(4,627		)	876,153
Trust preferred securities*	10,300		—		(2,060		)	8,240
Corporate and other debt securities	79,501		1,453		(581		)	80,373
Equity securities	20,522		605		(1,623		)	19,504
Total investment securities available for sale	$	1,183,648	$	12,063	$	(9,370	)	$	1,186,341
December 31, 2015
U.S. Treasury securities	$	551,173	$	4	$	(1,704	)	$	549,473
U.S. government agency securities	29,316		665		(18		)	29,963
Obligations of states and political subdivisions:
Obligations of states and state agencies	44,285		196		(67		)	44,414
Municipal bonds	80,717		209		(374		)	80,552
Total obligations of states and political subdivisions	125,002		405		(441		)	124,966
Residential mortgage-backed securities	701,764		3,348		(8,684		)	696,428
Trust preferred securities*	10,458		—		(2,054		)	8,404
Corporate and other debt securities	78,202		1,239		(1,889		)	77,552
Equity securities	21,022		575		(1,522		)	20,075
Total investment securities available for sale	$	1,516,937	$	6,236	$	(16,312	)	$	1,506,861

* Includes two pooled trust preferred securities, principally collateralized by securities issued by banks and insurance companies, at June 30, 2016 and December 31, 2015.

The age of unrealized losses and fair value of related securities available for sale at June 30, 2016 and December 31, 2015 were as follows:

	Less than Twelve Months					More than Twelve Months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
June 30, 2016
U.S. Treasury securities	$	25,036	$	(49	)	$	—	$	—		$	25,036	$	(49	)
U.S. government agency securities	—		—			4,336		(20		)	4,336		(20		)
Obligations of states and political subdivisions:
Obligations of states and state agencies	3,520		(101		)	—		—			3,520		(101		)
Municipal bonds	—		—			11,015		(309		)	11,015		(309		)
Total obligations of states and political subdivisions	3,520		(101		)	11,015		(309		)	14,535		(410		)
Residential mortgage-backed securities	233,742		(1,354		)	176,651		(3,273		)	410,393		(4,627		)
Trust preferred securities	—		—			8,240		(2,060		)	8,240		(2,060		)
Corporate and other debt securities	10,003		(12		)	24,719		(569		)	34,722		(581		)
Equity securities	—		—			14,172		(1,623		)	14,172		(1,623		)
Total	$	272,301	$	(1,516	)	$	239,133	$	(7,854	)	$	511,434	$	(9,370	)
December 31, 2015
U.S. Treasury securities	$	548,538	$	(1,704	)	$	—	$	—		$	548,538	$	(1,704	)
U.S. government agency securities	3,489		(5		)	4,736		(13		)	8,225		(18		)
Obligations of states and political subdivisions:
Obligations of states and state agencies	24,359		(67		)	—		—			24,359		(67		)
Municipal bonds	38,207		(128		)	13,551		(246		)	51,758		(374		)
Total obligations of states and political subdivisions	62,566		(195		)	13,551		(246		)	76,117		(441		)
Residential mortgage-backed securities	293,615		(4,147		)	164,010		(4,537		)	457,625		(8,684		)
Trust preferred securities	—		—			8,404		(2,054		)	8,404		(2,054		)
Corporate and other debt securities	21,203		(471		)	36,137		(1,418		)	57,340		(1,889		)
Equity securities	—		—			14,273		(1,522		)	14,273		(1,522		)
Total	$	929,411	$	(6,522	)	$	241,111	$	(9,790	)	$	1,170,522	$	(16,312	)

The unrealized losses on investment securities available for sale are primarily due to changes in interest rates (including, in certain cases, changes in credit spreads) and, in some cases, lack of liquidity in the marketplace. The total number of security positions in the securities available for sale portfolio in an unrealized loss position at June 30, 2016 was 117 as compared to 291 at December 31, 2015.

The unrealized losses within the residential mortgage-backed securities category of the available for sale portfolio at June 30, 2016 largely related to several investment grade residential mortgage-backed securities mainly issued by Ginnie Mae.

The unrealized losses more than twelve months for trust preferred securities at June 30, 2016 in the table above largely relate to 2 pooled trust preferred securities with an amortized cost of $10.3 million and a fair value of $8.3 million. One of the two pooled trust preferred securities had unrealized loss of $1.4 million and an investment grade rating at June 30, 2016.

As of June 30, 2016, 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 $401.3 million.

The contractual maturities of investment securities available for sale at June 30, 2016 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.

	June 30, 2016
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	10,750	$	10,749
Due after one year through five years	91,209		92,467
Due after five years through ten years	123,271		124,178
Due after ten years	64,416		63,290
Residential mortgage-backed securities	873,480		876,153
Equity securities	20,522		19,504
Total investment securities available for sale	$	1,183,648	$	1,186,341

Actual maturities of 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 at June 30, 2016 was 9.7 years.

Other-Than-Temporary Impairment Analysis

Valley records impairment charges on its investment securities when the decline in fair value is considered other-than-temporary. Numerous factors, including lack of liquidity for re-sales of certain investment securities; decline in the creditworthiness of the issuer; absence of reliable pricing information for investment securities; adverse changes in business climate; adverse actions by regulators; prolonged decline in value of equity investments; or unanticipated changes in the competitive environment could have a negative effect on Valley’s investment portfolio and may result in other-than-temporary impairment on certain investment securities in future periods. Valley’s investment portfolios include private label mortgage-backed securities, trust preferred securities principally issued by bank holding companies (including two pooled trust preferred securities), corporate bonds, and perpetual preferred and common equity securities issued by banks. These investments may pose a higher risk of future impairment charges by Valley as a result of the unpredictable nature of the U.S. economy and its potential negative effect on the future performance of the security issuers and, if applicable, the underlying mortgage loan collateral of the security.

There were no other-than-temporary impairment losses on securities recognized in earnings for the six months ended June 30, 2016 and 2015. At June 30, 2016, four previously impaired private label mortgage-backed securities (prior to December 31, 2012) had a combined amortized cost and fair value of $11.3 million and $11.0 million, respectively, while one previously impaired pooled trust preferred security had an amortized cost and fair value of $2.8 million and $2.1 million, respectively. The previously impaired pooled trust preferred security was not accruing interest during the three and six months ended June 30, 2016 and 2015. Additionally, one previously impaired pooled trust preferred security was sold during the first quarter of 2015 for an immaterial gain. See the table and discussion below for additional information.

The following table presents the changes in the credit loss component of cumulative other-than-temporary impairment losses on debt securities classified as either held to maturity or available for sale that Valley has previously recognized in earnings, for which a portion of the impairment loss (non-credit factors) was recognized in other comprehensive income for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30,					Six Months Ended June 30,
	2016		2015			2016			2015
	(in thousands)
Balance, beginning of period	$	5,348	$	6,421		$	5,837		$	8,947
Accretion of credit loss impairment due to an increase in expected cash flows	—		(34		)	(489		)	(178		)
Sales	—		—			—			(2,382		)
Balance, end of period	$	5,348	$	6,387		$	5,348		$	6,387

The credit loss component of the impairment loss represents the difference between the present value of expected future cash flows and the amortized cost basis of the security prior to considering credit losses. The beginning balance represents the credit loss component for debt securities for which other-than-temporary impairment occurred prior to each period presented. The credit loss component increases if other-than-temporary impairments (initial and subsequent) are recognized in earnings for credit impaired debt securities. The credit loss component is reduced if (i) Valley receives cash flows in excess of what it expected to receive over the remaining life of the credit impaired debt security, (ii) the security matures, (iii) the security is fully written down, or (iv) Valley sells, intends to sell or believes it will be required to sell previously credit impaired debt securities.

Realized Gains and Losses

Gross gains (losses) realized on sales, maturities and other securities transactions related to investment securities included in earnings for the three and six months ended June 30, 2016 and 2015 were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Sales transactions:
Gross gains	$	—		$	—		$	271		$	3,274
Gross losses	—			—			—			(947		)
	—			—			271			2,327
Maturities and other securities transactions:
Gross gains	$	—		$	40		$	—		$	129
Gross losses	(3		)	(132		)	(3		)	(132		)
	(3		)	(92		)	(3		)	(3		)
Total (losses) gains on securities transactions, net	$	(3	)	$	(92	)	$	268		$	2,324

Valley recognized gross gains from sales transactions of investment securities totaling $3.3 million for the six months endedJune 30, 2015 due to the sale of corporate debt securities and trust preferred securities with amortized cost totaling $25.9 million. These transactions included a corporate debt security classified as held to maturity and a previously impaired pooled trust preferred security with amortized costs of $9.8 million and $2.6 million, respectively. Additionally, Valley recognized $947 thousand of gross losses during the six months endedJune 30, 2015 due to the sale of mostly trust preferred securities with a total amortized cost of $8.3 million. The vast majority of the sales of investment securities were due to an investment portfolio re-balancing during the second quarter of 2015 due to changes in our regulatory capital calculation under the new Basel III regulatory capital reform (effective for Valley on January 1, 2015). Under ASC Topic 320, “Investments - Debt and Equity Securities,” the sale of held to maturity securities based upon the change in capital requirements is permitted without tainting the remaining held to maturity investment portfolio.

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Loans

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

Loans

Loans

The detail of the loan portfolio as of June 30, 2016 and December 31, 2015 was as follows:

	June 30, 2016						December 31, 2015
	Non-PCI Loans		PCI Loans*		Total		Non-PCI Loans		PCI Loans*		Total
	(in thousands)
Loans:
Commercial and industrial	$	2,200,838	$	327,911	$	2,528,749	$	2,156,549	$	383,942	$	2,540,491
Commercial real estate:
Commercial real estate	6,822,650		1,196,144		8,018,794		6,069,532		1,355,104		7,424,636
Construction	632,332		136,515		768,847		607,694		147,253		754,947
Total commercial real estate loans	7,454,982		1,332,659		8,787,641		6,677,226		1,502,357		8,179,583
Residential mortgage	2,857,190		198,163		3,055,353		2,912,079		218,462		3,130,541
Consumer:
Home equity	380,200		105,530		485,730		391,809		119,394		511,203
Automobile	1,141,510		283		1,141,793		1,238,826		487		1,239,313
Other consumer	489,059		10,855		499,914		426,147		15,829		441,976
Total consumer loans	2,010,769		116,668		2,127,437		2,056,782		135,710		2,192,492
Total loans	$	14,523,779	$	1,975,401	$	16,499,180	$	13,802,636	$	2,240,471	$	16,043,107

____

* PCI loans include covered loans (mostly consisting of residential mortgage and commercial real estate loans) totaling $81.1 million and $122.3 million at June 30, 2016 and December 31, 2015, respectively.

Total non-covered loans include net unearned premiums and deferred loan costs of $8.3 million and $3.5 million at June 30, 2016 and December 31, 2015, respectively. The outstanding balances (representing contractual balances owed to Valley) for PCI loans totaled $2.1 billion and $2.4 billion at June 30, 2016 and December 31, 2015, respectively.

There were no sales of loans from the held for investment portfolio during the three and six months ended June 30, 2016 and 2015.

Purchased Credit-Impaired Loans (Including Covered Loans)

PCI loans are accounted for in accordance with ASC Subtopic 310-30 and are initially recorded at fair value (as determined by the present value of expected future cash flows) with no valuation allowance (i.e., the allowance for loan losses), and aggregated and accounted for as pools of loans based on common risk characteristics. The difference between the undiscounted cash flows expected at acquisition and the initial carrying amount (fair value) of the PCI loans, or the “accretable yield,” is recognized as interest income utilizing the level-yield method over the life of each pool. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “non-accretable difference,” are not recognized as a yield adjustment, as a loss accrual or a valuation allowance. Reclassifications of the non-accretable difference to the accretable yield may occur subsequent to the loan acquisition dates due to increases in expected cash flows of the loan pools. Valley's PCI loan portfolio included covered loans (i.e., loans in which the Bank will share losses with the FDIC under loss-sharing agreements) totaling $81.1 million and $122.3 million at June 30, 2016 and December 31, 2015, respectively.

The following table presents changes in the accretable yield for PCI loans during the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Balance, beginning of period	$	387,120		$	309,858		$	415,179		$	336,208
Accretion	(31,519		)	(27,757		)	(59,578		)	(54,107		)
Balance, end of period	$	355,601		$	282,101		$	355,601		$	282,101

FDIC Loss-Share Receivable

The receivable arising from the loss-sharing agreements with the FDIC is measured separately from the covered loan portfolio because the agreements are not contractually part of the covered loans and are not transferable should the Bank choose to dispose of the covered loans. The FDIC loss share receivable (which is included in other assets on Valley's consolidated statements of financial condition) totaled $7.6 million and $8.3 million at June 30, 2016 and December 31, 2015, respectively. The aggregate effect of changes in the FDIC loss-share receivable was a net reduction in non-interest income of $559 thousand and $3.3 million for the six months ended June 30, 2016 and 2015, respectively. The larger net reduction during the first half of 2015 was mainly caused by the prospective recognition of the effect of additional cash flows from certain loan pools which were covered by commercial loan loss-sharing agreements that expired in March 2015.

Credit Risk Management

For all of its loan types Valley adheres to a credit policy designed to minimize credit risk while generating the maximum income given the level of risk. Management reviews and approves these policies and procedures on a regular basis with subsequent approval by the Board of Directors 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. Valley closely monitors economic conditions and loan performance trends to manage and evaluate its exposure to credit risk. 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.

Credit Quality

The following table presents past due, non-accrual and current loans (excluding PCI loans, which are accounted for on a pool basis, and non-performing loans held for sale) by loan portfolio class at June 30, 2016 and December 31, 2015:

	Past Due and Non-Accrual Loans
	30-59 Days Past Due Loans		60-89 Days Past Due Loans		Accruing Loans 90 Days or More Past Due		Non-Accrual Loans		Total Past Due Loans		Current Non-PCI Loans		Total Non-PCI Loans
	(in thousands)
June 30, 2016
Commercial and industrial	$	5,187	$	5,714	$	218	$	6,573	$	17,692	$	2,183,146	$	2,200,838
Commercial real estate:
Commercial real estate	5,076		834		131		19,432		25,473		6,797,177		6,822,650
Construction	—		—		—		5,878		5,878		626,454		632,332
Total commercial real estate loans	5,076		834		131		25,310		31,351		7,423,631		7,454,982
Residential mortgage	10,177		2,326		314		14,866		27,683		2,829,507		2,857,190
Consumer loans:
Home equity	959		54		—		989		2,002		378,198		380,200
Automobile	1,552		577		127		141		2,397		1,139,113		1,141,510
Other consumer	24		13		12		—		49		489,010		489,059
Total consumer loans	2,535		644		139		1,130		4,448		2,006,321		2,010,769
Total	$	22,975	$	9,518	$	802	$	47,879	$	81,174	$	14,442,605	$	14,523,779
December 31, 2015
Commercial and industrial	$	3,920	$	524	$	213	$	10,913	$	15,570	$	2,140,979	$	2,156,549
Commercial real estate:
Commercial real estate	2,684		—		131		24,888		27,703		6,041,829		6,069,532
Construction	1,876		2,799		—		6,163		10,838		596,856		607,694
Total commercial real estate loans	4,560		2,799		131		31,051		38,541		6,638,685		6,677,226
Residential mortgage	6,681		1,626		1,504		17,930		27,741		2,884,338		2,912,079
Consumer loans:
Home equity	1,308		111		—		2,088		3,507		388,302		391,809
Automobile	1,969		491		164		118		2,742		1,236,084		1,238,826
Other consumer	71		24		44		—		139		426,008		426,147
Total consumer loans	3,348		626		208		2,206		6,388		2,050,394		2,056,782
Total	$	18,509	$	5,575	$	2,056	$	62,100	$	88,240	$	13,714,396	$	13,802,636

Impaired loans. Impaired loans, consisting of non-accrual commercial and industrial loans and commercial real estate loans over $250 thousand and all loans which were modified in troubled debt restructuring, are individually evaluated for impairment. PCI loans are not classified as impaired loans because they are accounted for on a pool basis.

The following table presents the information about impaired loans by loan portfolio class at June 30, 2016 and December 31, 2015:

	Recorded Investment With No Related Allowance		Recorded Investment With Related Allowance		Total Recorded Investment		Unpaid Contractual Principal Balance		Related Allowance
	(in thousands)
June 30, 2016
Commercial and industrial	$	3,211	$	19,500	$	22,711	$	26,614	$	3,294
Commercial real estate:
Commercial real estate	23,758		46,711		70,469		73,333		4,282
Construction	7,415		1,469		8,884		8,894		57
Total commercial real estate loans	31,173		48,180		79,353		82,227		4,339
Residential mortgage	6,901		15,753		22,654		24,126		1,261
Consumer loans:
Home equity	199		2,268		2,467		2,560		397
Total consumer loans	199		2,268		2,467		2,560		397
Total	$	41,484	$	85,701	$	127,185	$	135,527	$	9,291
December 31, 2015
Commercial and industrial	$	7,863	$	17,851	$	25,714	$	33,071	$	3,439
Commercial real estate:
Commercial real estate	30,113		37,440		67,553		71,263		3,354
Construction	8,847		5,530		14,377		14,387		317
Total commercial real estate loans	38,960		42,970		81,930		85,650		3,671
Residential mortgage	7,842		14,770		22,612		24,528		1,377
Consumer loans:
Home equity	263		1,869		2,132		2,224		295
Total consumer loans	263		1,869		2,132		2,224		295
Total	$	54,928	$	77,460	$	132,388	$	145,473	$	8,782

The following tables present by loan portfolio class, the average recorded investment and interest income recognized on impaired loans for the three and six months ended June 30, 2016 and 2015: 

	Three Months Ended June 30,
	2016				2015
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
Commercial and industrial	$	24,157	$	194	$	25,530	$	211
Commercial real estate:
Commercial real estate	70,194		475		75,688		894
Construction	10,027		53		11,485		126
Total commercial real estate loans	80,221		528		87,173		1,020
Residential mortgage	22,922		234		22,566		249
Consumer loans:
Home equity	3,071		20		4,607		38
Total consumer loans	3,071		20		4,607		38
Total	$	130,371	$	976	$	139,876	$	1,518

	Six Months Ended June 30,
	2016				2015
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
Commercial and industrial	$	26,244	$	434	$	26,898	$	457
Commercial real estate:
Commercial real estate	71,296		1,114		77,098		1,380
Construction	9,915		101		14,063		276
Total commercial real estate loans	81,211		1,215		91,161		1,656
Residential mortgage	23,262		436		22,206		499
Consumer loans:
Home equity	2,715		43		4,049		68
Total consumer loans	2,715		43		4,049		68
Total	$	133,432	$	2,128	$	144,314	$	2,680

Interest income recognized on a cash basis (included in the table above) was immaterial for the three and six months ended June 30, 2016 and 2015.

Troubled debt restructured loans. 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). Valley’s PCI loans are excluded from the TDR disclosures below because they are evaluated for impairment on a pool by pool basis. When an individual PCI loan within a pool is modified as a TDR, it is not removed from its pool. All TDRs are classified as impaired loans and are included in the impaired loan disclosures above.

The majority of 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 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 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) totaled $82.1 million and $77.6 million as of June 30, 2016 and December 31, 2015, respectively. Non-performing TDRs totaled $13.7 million and $21.0 million as of June 30, 2016 and December 31, 2015, respectively.

The following tables present loans by loan portfolio class modified as TDRs during the three and six months ended June 30, 2016 and 2015. The pre-modification and post-modification outstanding recorded investments disclosed in the table below represent the loan carrying amounts immediately prior to the modification and the carrying amounts at June 30, 2016 and 2015, respectively.

	Three Months Ended June 30, 2016					Three Months Ended June 30, 2015
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	($ in thousands)
Commercial and industrial	4	$	5,079	$	4,094	6	$	1,947	$	1,922
Commercial real estate:
Commercial real estate	2	6,111		6,077		3	1,562		1,573
Construction	—	—		—		1	500		1,190
Total commercial real estate	2	6,111		6,077		4	2,062		2,763
Residential mortgage	5	1,830		1,826		2	1,098		1,097
Consumer	—	—		—		1	1,081		1,079
Total	11	$	13,020	$	11,997	13	$	6,188	$	6,861

	Six Months Ended June 30, 2016					Six Months Ended June 30, 2015
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	($ in thousands)
Commercial and industrial	6	$	6,456	$	5,437	12	$	3,531	$	3,412
Commercial real estate:
Commercial real estate	3	6,658		6,388		4	6,562		6,573
Construction	—	—		—		1	500		1,190
Total commercial real estate	3	6,658		6,388		5	7,062		7,763
Residential mortgage	7	2,222		2,206		3	1,378		1,373
Consumer	1	55		53		1	1,081		1,079
Total	17	$	15,391	$	14,084	21	$	13,052	$	13,627

The majority of the TDR concessions made during the three and six months ended June 30, 2016 and 2015 involved an extension of the loan term, lowering the monthly payments and interest rate reduction. The total TDRs presented in the above table had allocated specific reserves for loan losses totaling $2.1 million and $1.0 million at June 30, 2016 and 2015, respectively.These specific reserves are included in the allowance for loan losses for loans individually evaluated for impairment disclosed in Note 9. One commercial and industrial TDR loan totaling $209 thousand was fully charged-off during the six months ended June 30, 2016. There were no charge-offs related to TDR modifications during the second quarter of 2016 and three and six months ended June 30, 2015.

The following table presents non-PCI loans modified as TDRs within the previous 12 months for which there was a payment default (90 days or more past due) during the three and six months ended June 30, 2016.

	Three Months Ended June 30, 2016			Six Months Ended June 30, 2016
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial real estate	2	$	1,070	1	$	214
Residential mortgage	1	74		1	74
Consumer	1	30		1	30
Total	4	$	1,174	3	$	318

Credit quality indicators. Valley utilizes an internal loan classification system as a means of reporting problem loans within commercial and industrial, commercial real estate, and construction loan portfolio classes. Under Valley’s internal risk rating system, loan relationships could be classified as “Pass,” “Special Mention,” “Substandard,” “Doubtful,” and “Loss.” Substandard loans include loans that exhibit well-defined weakness and are characterized by the distinct possibility that Valley will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, based on currently existing facts, conditions and values, highly questionable and improbable. Loans classified as Loss are those considered uncollectible with insignificant value and are charged-off immediately to the allowance for loan losses, and, therefore, not presented in the table below. Loans that do not currently pose a sufficient risk to warrant classification in one of the aforementioned categories, but pose weaknesses that deserve management’s close attention are deemed Special Mention. Loans rated as Pass do not currently pose any identified risk and can range from the highest to average quality, depending on the degree of potential risk. Risk ratings are updated any time the situation warrants.

The following table presents the risk category of loans (excluding PCI loans) by class of loans at June 30, 2016 and December 31, 2015. 

Credit exposure - by internally assigned risk rating	Pass		Special Mention		Substandard		Doubtful		Total Non-PCI Loans
	(in thousands)
June 30, 2016
Commercial and industrial	$	2,114,575	$	52,028	$	34,235	$	—	$	2,200,838
Commercial real estate	6,666,210		65,621		90,819		—		6,822,650
Construction	622,721		527		9,084		—		632,332
Total	$	9,403,506	$	118,176	$	134,138	$	—	$	9,655,820
December 31, 2015
Commercial and industrial	$	2,049,752	$	68,243	$	36,254	$	2,300	$	2,156,549
Commercial real estate	5,893,354		79,279		96,899		—		6,069,532
Construction	596,530		1,102		10,062		—		607,694
Total	$	8,539,636	$	148,624	$	143,215	$	2,300	$	8,833,775

For residential mortgages, automobile, home equity and other consumer loan portfolio classes (excluding PCI loans), Valley also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment in those loan classes based on payment activity as of June 30, 2016 and December 31, 2015:

Credit exposure - by payment activity	Performing Loans		Non-Performing Loans		Total Non-PCI Loans
	(in thousands)
June 30, 2016
Residential mortgage	$	2,842,324	$	14,866	$	2,857,190
Home equity	379,211		989		380,200
Automobile	1,141,510		141		1,141,651
Other consumer	489,059		—		489,059
Total	$	4,852,104	$	15,996	$	4,868,100
December 31, 2015
Residential mortgage	$	2,894,149	$	17,930	$	2,912,079
Home equity	389,721		2,088		391,809
Automobile	1,238,708		118		1,238,826
Other consumer	426,147		—		426,147
Total	$	4,948,725	$	20,136	$	4,968,861

Valley evaluates the credit quality of its PCI loan pools based on the expectation of the underlying cash flows of each pool, derived from the aging status and by payment activity of individual loans within the pool. The following table presents the recorded investment in PCI loans by class based on individual loan payment activity as of June 30, 2016 and December 31, 2015.

Credit exposure - by payment activity	Performing Loans		Non-Performing Loans		Total PCI Loans
	(in thousands)
June 30, 2016
Commercial and industrial	$	318,935	$	8,976	$	327,911
Commercial real estate	1,185,024		11,120		1,196,144
Construction	135,090		1,425		136,515
Residential mortgage	194,532		3,631		198,163
Consumer	110,545		6,123		116,668
Total	$	1,944,126	$	31,275	$	1,975,401
December 31, 2015
Commercial and industrial	$	373,665	$	10,277	$	383,942
Commercial real estate	1,342,030		13,074		1,355,104
Construction	141,547		5,706		147,253
Residential mortgage	214,713		3,749		218,462
Consumer	129,891		5,819		135,710
Total	$	2,201,846	$	38,625	$	2,240,471

Other real estate owned (OREO) totaled $12.1 million and $19.0 million (including $1.2 million and $5.0 million of OREO properties which are subject to loss-sharing agreements with the FDIC) at June 30, 2016 and December 31, 2015 respectively. OREO included foreclosed residential real estate properties totaling $6.8 millionand $7.0 million at June 30, 2016 and December 31, 2015, respectively. Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $9.4 millionand $12.3 million at June 30, 2016 and December 31, 2015, respectively.

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Allowance for Credit Losses

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

Allowance for Credit Losses

Allowance for Credit Losses

The allowance for credit losses consists of the allowance for loan losses and the allowance for unfunded letters of credit. Management maintains the allowance for credit losses at a level estimated to absorb probable loan losses of the loan portfolio and unfunded letter of credit commitments at the balance sheet date. The allowance for loan losses is based on ongoing evaluations of the probable estimated losses inherent in the loan portfolio, including unexpected additional credit impairment of PCI loan pools subsequent to acquisition.

The following table summarizes the allowance for credit losses at June 30, 2016 and December 31, 2015: 

	June 30, 2016		December 31, 2015
	(in thousands)
Components of allowance for credit losses:
Allowance for loan losses	$	108,088	$	106,178
Allowance for unfunded letters of credit	2,326		2,189
Total allowance for credit losses	$	110,414	$	108,367

The following table summarizes the provision for credit losses for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands)
Components of provision for credit losses:
Provision for loan losses	$	1,363	$	4,382	$	2,092	$	4,382
Provision for unfunded letters of credit	66		118		137		118
Total provision for credit losses	$	1,429	$	4,500	$	2,229	$	4,500

The following tables detail activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2016 and 2015:

	Commercial and Industrial			Commercial Real Estate			Residential Mortgage			Consumer			Unallocated			Total
	(in thousands)
Three Months Ended June 30, 2016:
Allowance for loan losses:
Beginning balance	$	48,417		$	48,454		$	4,209		$	4,335		$	—		$	105,415
Loans charged-off	(493		)	(414		)	(151		)	(697		)	—			(1,755		)
Charged-off loans recovered	990			1,458			94			523			—			3,065
Net recoveries (charge-offs)	497			1,044			(57		)	(174		)	—			1,310
Provision for loan losses	(889		)	2,379			(657		)	530			—			1,363
Ending balance	$	48,025		$	51,877		$	3,495		$	4,691		$	—		$	108,088
Three Months Ended June 30, 2015:
Allowance for loan losses:
Beginning balance	$	44,893		$	41,656		$	4,092		$	4,972		$	7,018		$	102,631
Loans charged-off	(3,226		)	(2,590		)	(339		)	(1,194		)	—			(7,349		)
Charged-off loans recovered	1,986			690			130			365			—			3,171
Net charge-offs	(1,240		)	(1,900		)	(209		)	(829		)	—			(4,178		)
Provision for loan losses	(1,939		)	4,429			1,172			1,399			(679		)	4,382
Ending balance	$	41,714		$	44,185		$	5,055		$	5,542		$	6,339		$	102,835

	Commercial and Industrial			Commercial Real Estate			Residential Mortgage			Consumer			Unallocated		Total
	(in thousands)
Six Months Ended June 30, 2016:
Allowance for loan losses:
Beginning balance	$	48,767		$	48,006		$	4,625		$	4,780		$	—	$	106,178
Loans charged-off	(1,744		)	(519		)	(232		)	(1,771		)	—		(4,266		)
Charged-off loans recovered	1,516			1,547			109			912			—		4,084
Net (charge-offs) recoveries	(228		)	1,028			(123		)	(859		)	—		(182		)
Provision for loan losses	(514		)	2,843			(1,007		)	770			—		2,092
Ending balance	$	48,025		$	51,877		$	3,495		$	4,691		$	—	$	108,088
Six Months Ended June 30, 2015:
Allowance for loan losses:
Beginning balance	$	43,676		$	42,840		$	5,093		$	5,179		$	5,565	$	102,353
Loans charged-off	(3,979		)	(2,740		)	(388		)	(1,908		)	—		(9,015		)
Charged-off loans recovered	3,037			1,150			244			684			—		5,115
Net charge-offs	(942		)	(1,590		)	(144		)	(1,224		)	—		(3,900		)
Provision for loan losses	(1,020		)	2,935			106			1,587			774		4,382
Ending balance	$	41,714		$	44,185		$	5,055		$	5,542		$	6,339	$	102,835

At December 31, 2015, Valley refined and enhanced its assessment of the adequacy of the allowance for loan losses, including both changes to look-back periods for certain portfolios, as well as enhancements to its qualitative factor framework. The enhancements were meant to increase the level of precision in the allowance for credit losses. As a result, Valley no longer has an “unallocated” segment in its allowance for credit losses, as the risks and uncertainties meant to be captured by the unallocated allowance have been included in the qualitative framework for the respective loan portfolio segment (reported in the tables above) at June 30, 2016. As such, the unallocated allowance has in essence been reallocated to the applicable portfolios based on the risks and uncertainties it was meant to capture.

The following table represents the allocation of the allowance for loan losses and the related loans by loan portfolio segment disaggregated based on the impairment methodology at June 30, 2016 and December 31, 2015.

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
June 30, 2016
Allowance for loan losses:
Individually evaluated for impairment	$	3,294	$	4,339	$	1,261	$	397	$	9,291
Collectively evaluated for impairment	44,731		47,538		2,234		4,294		98,797
Total	$	48,025	$	51,877	$	3,495	$	4,691	$	108,088
Loans:
Individually evaluated for impairment	$	22,711	$	79,353	$	22,654	$	2,467	$	127,185
Collectively evaluated for impairment	2,178,127		7,375,629		2,834,536		2,008,302		14,396,594
Loans acquired with discounts related to credit quality	327,911		1,332,659		198,163		116,668		1,975,401
Total	$	2,528,749	$	8,787,641	$	3,055,353	$	2,127,437	$	16,499,180
December 31, 2015
Allowance for loan losses:
Individually evaluated for impairment	$	3,439	$	3,671	$	1,377	$	295	$	8,782
Collectively evaluated for impairment	45,328		44,335		3,248		4,485		97,396
Total	$	48,767	$	48,006	$	4,625	$	4,780	$	106,178
Loans:
Individually evaluated for impairment	$	25,714	$	81,930	$	22,612	$	2,132	$	132,388
Collectively evaluated for impairment	2,130,835		6,595,296		2,889,467		2,054,650		13,670,248
Loans acquired with discounts related to credit quality	383,942		1,502,357		218,462		135,710		2,240,471
Total	$	2,540,491	$	8,179,583	$	3,130,541	$	2,192,492	$	16,043,107

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

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

	Business Segment / Reporting Unit*
	Wealth Management		Consumer Lending		Commercial Lending		Investment Management		Total
	(in thousands)
Balance at December 31, 2015	$	20,517	$	199,119	$	314,260	$	152,443	$	686,339
Goodwill from business combinations	701		697		1,416		436		3,250
Balance at June 30, 2016	$	21,218	$	199,816	$	315,676	$	152,879	$	689,589

* Valley’s Wealth Management Division is comprised of trust, asset management, and insurance services. This reporting unit is included in the Consumer Lending segment for financial reporting purposes.

Goodwill from business combinations, in the table above, includes the effect of the combined adjustments to the estimated fair values of the acquired assets (including core deposits presented in the table below) and liabilities as of the acquisition date of CNL, and goodwill related to the acquisition of certain assets from an independent insurance agency during the first quarter of 2016 (see Note 2 for further details). There was no impairment of goodwill during the three and six months ended June 30, 2016 and 2015.

The following table summarizes other intangible assets as of June 30, 2016 and December 31, 2015:

	Gross Intangible Assets		Accumulated Amortization			Valuation Allowance			Net Intangible Assets
	(in thousands)
June 30, 2016
Loan servicing rights	$	66,793	$	(50,079	)	$	(746	)	$	15,968
Core deposits	61,504		(34,851		)	—			26,653
Other	4,087		(1,865		)	—			2,222
Total other intangible assets	$	132,384	$	(86,795	)	$	(746	)	$	44,843
December 31, 2015
Loan servicing rights	$	75,932	$	(59,251	)	$	(289	)	$	16,392
Core deposits	62,714		(31,934		)	—			30,780
Other	4,374		(2,664		)	—			1,710
Total other intangible assets	$	143,020	$	(93,849	)	$	(289	)	$	48,882

Loan servicing rights are accounted for using the amortization method. Under this method, Valley amortizes the loan servicing assets in proportion to, and over the period of, estimated net servicing revenues. On a quarterly basis, Valley stratifies its loan servicing assets into groupings based on risk characteristics and assesses each group for impairment based on fair value. Impairment charges on loan servicing rights are recognized in earnings when the book value of a stratified group of loan servicing rights exceeds its estimated fair value. See the "Assets and Liabilities Measured at Fair Value on a Non-recurring Basis" section of Note 6 for additional information regarding the fair valuation and impairment of loan servicing rights.

Core deposits are amortized using an accelerated method and have a weighted average amortization period of 11 years. The line item labeled “Other” included in the table above primarily consists of customer lists and covenants not to compete, which are amortized over their expected lives generally using a straight-line method and have a weighted average amortization period of approximately 20 years. Valley evaluates core deposits and other intangibles for impairment when an indication of impairment exists. No impairment was recognized during the three and six months ended June 30, 2016 and 2015.

The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2016 through 2020:

	Loan Servicing Rights		Core Deposits		Other
	(in thousands)
2016	$	2,440	$	2,711	$	148
2017	3,915		4,842		280
2018	3,050		4,215		249
2019	2,291		3,671		235
2020	1,734		3,127		220

Valley recognized amortization expense on other intangible assets, including net impairment charges on loan servicing rights, totaling approximately $2.9 million and $2.1 million for the three months ended June 30, 2016 and 2015, respectively, and $5.8 million and $4.5 million for the six months ended June 30, 2016 and 2015, respectively.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock–Based Compensation

On April 28, 2016, Valley’s shareholders approved the new 2016 Long-Term Stock Incentive Plan (the "2016 Stock Plan") administered by the Compensation and Human Resources Committee (the “Committee”) appointed by Valley’s Board of Directors. The purpose of the 2016 Stock Plan is to provide incentives to attract, retain and motivate officers and other key employees by providing a direct financial interest in Valley's continued success, and provide the flexibility to grant equity awards to non-employee directors as part of their compensation. The 2016 Stock Plan will also ensure that Valley has sufficient shares to meet its anticipated long-term equity compensation needs. Effective January 1, 2016, the 2.2 million of common shares remaining under Valley's 2009 Long-Term Stock Incentive Plan (the "2009 Stock Plan") became available for future grants under the 2016 Stock Plan. Accordingly, Valley will no longer grant new awards under the 2009 Stock Plan.

Under the 2016 Stock Plan, Valley may award shares to its employees and non-employee directors shares of common stock in the form of stock appreciation rights, both incentive and non-qualified stock options, restricted stock and restricted stock units (RSUs). As of June 30, 2016, up to 8.3 million shares of common stock were available for issuance under the 2016 Stock 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.

Valley awarded time-based restricted stock totaling 498 thousand shares and 492 thousand shares during the six months ended June 30, 2016 and 2015, respectively, to both executive officers and key employees of Valley. Time-based restricted stock issued during the three months ended June 30, 2016 and2015 were immaterial. Valley also awarded 431 thousand and 313 thousandshares of performance-based RSUs under the 2016 Stock Plan during the six months ended June 30, 2016, respectively, to certain executive officers. There were no awards of the performance-based RSUs during the three months ended June 30, 2016 and2015. The RSUs earn dividend equivalents (equal to cash dividends paid on Valley's common stock) over the applicable performance period. Dividend equivalents and accrued interest, per the terms of the agreements, are accumulated and paid to the grantee at the vesting date, or forfeited if the performance conditions are not met.

The performance-based awards vest based on (i) growth in tangible book value per share plus dividends (75 percent of performance shares) and (ii) total shareholder return as compared to our peer group (25 percent of performance shares). The majority of the performance-based awards "cliff" vest after three years based on the cumulative performance of Valley during that time period. The non-performance based awards have vesting periods ranging from three to six years. Generally, the restrictions on such awards lapse at an annual or bi-annual rate of one-third of the total award commencing with the first or second anniversary of the date of grant, respectively. The average grant date fair value of non-performance and performance-based restricted stock awarded during the six months ended June 30, 2016 was $8.56.

Valley recorded stock-based compensation expense of $2.8 million and $2.0 million for the three months ended June 30, 2016 and2015, respectively, and $5.2 million and $4.5 million for the six months ended June 30, 2016 and 2015, respectively. The fair values of stock awards are expensed over the shorter of the vesting or required service period. As of June 30, 2016, the unrecognized amortization expense for all stock-based employee compensation totaled approximately $19.1 million and will be recognized over an average remaining vesting period of approximately 3 years.

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Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

Valley enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

Cash Flow Hedges of Interest Rate Risk. Valley’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, Valley uses interest rate swaps and caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the payment of either fixed or variable-rate amounts in exchange for the receipt of variable or fixed-rate amounts from a counterparty. Interest rate caps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.

Fair Value Hedges of Fixed Rate Assets and Liabilities. Valley is exposed to changes in the fair value of certain of its fixed rate assets or liabilities due to changes in benchmark interest rates based on one-month LIBOR. From time to time, Valley uses interest rate swaps to manage its exposure to changes in fair value. 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. 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. Valley includes the gain or loss on the hedged items in the same income statement line item as the loss or gain on the related derivatives.

Non-designated Hedges. Derivatives not designated as hedges may be used to manage Valley’s exposure to interest rate movements or to provide service to customers but do not meet the requirements for hedge accounting under U.S. GAAP. Derivatives not designated as hedges are not entered into for speculative purposes.

Under a program, Valley executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that Valley executes with a third party, such that Valley minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings.

During the second quarter of 2014, Valley issued $25 million of market linked certificates of deposit through a broker dealer. The rate paid on these hybrid instruments is based on a formula derived from the spread between the long and short ends of the constant maturity swap (CMS) rate curve. This type of instrument is referred to as a "steepener" since it derives its value from the slope of the CMS curve. Valley has determined that these hybrid instruments contain an embedded swap contract which has been bifurcated from the host contract. Valley entered into a swap (with a total notional amount of $25 million) almost simultaneously with the deposit issuance where the receive rate on the swap mirrors the pay rate on the brokered deposits. The bifurcated derivative and the stand alone swap are both marked to market through other non-interest expense. Although these 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 three-month LIBOR rate and therefore provide an effective economic hedge.

Valley regularly enters into mortgage banking derivatives which are non-designated hedges. These derivatives include interest rate lock commitments provided to customers to fund certain residential mortgage loans to be sold into the secondary market and forward commitments for the future delivery of such loans. Valley enters into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of future changes in interest rates on Valley’s commitments to fund the loans as well as on its portfolio of mortgage loans held for sale.

Amounts included in the consolidated statements of financial condition related to the fair value of Valley’s derivative financial instruments were as follows:

	June 30, 2016						December 31, 2015
	Fair Value						Fair Value
	Other Assets		Other Liabilities		Notional Amount		Other Assets		Other Liabilities		Notional Amount
	(in thousands)
Derivatives designated as hedging instruments:
Cash flow hedge interest rate caps and swaps	$	536	$	32,367	$	907,000	$	1,284	$	24,823	$	907,000
Fair value hedge interest rate swaps	14,454		1,403		133,106		7,658		1,306		133,209
Total derivatives designated as hedging instruments	$	14,990	$	33,770	$	1,040,106	$	8,942	$	26,129	$	1,040,209
Derivatives not designated as hedging instruments:
Interest rate swaps and embedded derivatives	$	44,861	$	44,858	$	756,274	$	24,628	$	24,623	$	654,134
Mortgage banking derivatives	992		1,269		273,690		204		92		73,438
Total derivatives not designated as hedging instruments	$	45,853	$	46,127	$	1,029,964	$	24,832	$	24,715	$	727,572

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Amount of loss reclassified from accumulated other comprehensive loss to interest expense	$	(3,597	)	$	(1,699	)	$	(6,568	)	$	(3,328	)
Amount of (loss) gain recognized in other comprehensive income	(3,625		)	1,895			(14,657		)	(7,016		)

The net gains or losses related to cash flow hedge ineffectiveness were immaterial during the three and six months ended June 30, 2016 and 2015. The accumulated net after-tax losses related to effective cash flow hedges included in accumulated other comprehensive loss were $22.5 million and $17.6 million at June 30, 2016 and December 31, 2015, respectively.

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 $12.7 million will be reclassified as an increase to interest expense over the next 12 months.

Gains (losses) included in the consolidated statements of income related to interest rate derivatives designated as hedges of fair value were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Derivative - interest rate swaps:
Interest income	$	2		$	157		$	(97	)	$	103
Interest expense	2,069			(3,832		)	6,797			(1,091		)
Hedged item - loans and borrowings:
Interest income	$	(2	)	$	(157	)	$	97		$	(103	)
Interest expense	(2,060		)	3,840			(6,779		)	1,059

The amounts recognized in non-interest expense related to ineffectiveness of fair value hedges were immaterial for the three and six months ended June 30, 2016 and 2015.

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2016			2015		2016			2015
	(in thousands)
Non-designated hedge interest rate derivatives
Other non-interest expense	$	(92	)	$	70	$	(389	)	$	108

Credit Risk Related Contingent Features. By using derivatives, Valley is exposed to credit risk if counterparties to the derivative contracts do not perform as expected. Management attempts to minimize counterparty credit risk through credit approvals, limits, monitoring procedures and obtaining collateral where appropriate. Credit risk exposure associated with derivative contracts is managed at Valley in conjunction 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 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 counterparty could terminate the derivative positions, and Valley would be required to settle its obligations under the agreements. As of June 30, 2016, Valley was in compliance with all of the provisions of its derivative counterparty agreements. As of June 30, 2016, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk related to these agreements was $60.3 million. Valley has derivative counterparty agreements that require minimum collateral posting thresholds for certain counterparties. At June 30, 2016, Valley had $75.7 million in collateral posted with its counterparties.

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Balance Sheet Offsetting

6 Months Ended

Jun. 30, 2016

Offsetting [Abstract]

Balance Sheet Offsetting

Balance Sheet Offsetting

Certain financial instruments, including derivatives (consisting of interest rate caps and swaps) and repurchase agreements (accounted for as secured long-term borrowings), may be eligible for offset in the consolidated balance sheet and/or subject to master netting arrangements or similar agreements. Valley is party to master netting arrangements with its financial institution counterparties; however, Valley does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral, usually in the form of cash or marketable investment securities, is posted by the counterparty with net liability positions in accordance with contract thresholds. Master repurchase agreements which include “right of set-off” provisions generally have a legally enforceable right to offset recognized amounts. In such cases, the collateral would be used to settle the fair value of the repurchase agreement should Valley be in default. The table below presents information about Valley’s financial instruments that are eligible for offset in the consolidated statements of financial condition as of June 30, 2016 and December 31, 2015.

							Gross Amounts Not Offset
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments			Cash Collateral				Net Amount
	(in thousands)
June 30, 2016
Assets:
Interest rate caps and swaps	$	59,851	$	—	$	59,851	$	(14,991	)	$	—			$	44,860
Liabilities:
Interest rate caps and swaps	$	78,628	$	—	$	78,628	$	(14,991	)	$	(63,637	)		$	—
Repurchase agreements	340,000		—		340,000		—			(340,000		)	*	—
Total	$	418,628	$	—	$	418,628	$	(14,991	)	$	(403,637	)		$	—
December 31, 2015
Assets:
Interest rate caps and swaps	$	33,570	$	—	$	33,570	$	(8,942	)	$	—			$	24,628
Liabilities:
Interest rate caps and swaps	$	50,752	$	—	$	50,752	$	(8,942	)	$	(41,810	)		$	—
Repurchase agreements	475,000		—		475,000		—			(475,000		)	*	—
Total	$	525,752	$	—	$	525,752	$	(8,942	)	$	(516,810	)		$	—

* Represents fair value of non-cash pledged investment securities.

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Tax Credit Investments

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Tax Credit Investments

Tax Credit Investments

Valley’s tax credit investments are primarily related to investments promoting qualified affordable housing projects, and other investments related to community development and renewable energy sources. Some of these tax-advantaged investments support Valley’s regulatory compliance with the Community Reinvestment Act (CRA). Valley’s investments in these entities generate a return primarily through the realization of federal income tax credits, and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. These tax credits and deductions are recognized as a reduction of income tax expense.

Valley’s tax credit investments are carried in other assets on the consolidated statements of financial condition. Valley’s unfunded capital and other commitments related to the tax credit investments are carried in accrued expenses and other liabilities on the consolidated statements of financial condition. Valley recognizes amortization of tax credit investments, including impairment losses, within non-interest expense of the consolidated statements of income using the equity method of accounting. An impairment loss is recognized when the fair value of the tax credit investment is less than its carrying value.

The following table presents the balances of Valley’s affordable housing tax credit investments, other tax credit investments, and related unfunded commitments at June 30, 2016 and December 31, 2015.

	June 30, 2016		December 31, 2015
	(in thousands)
Other Assets:
Affordable housing tax credit investments, net	$	30,536	$	32,094
Other tax credit investments, net	57,329		70,681
Total tax credit investments, net	$	87,865	$	102,775
Other Liabilities:
Unfunded affordable housing tax credit commitments	$	6,760	$	7,330
Unfunded other tax credit commitments	655		12,545
Total unfunded tax credit commitments	$	7,415	$	19,875

The following table presents other information relating to Valley’s affordable housing tax credit investments and other tax credit investments for the three and six months ended June 30, 2016 and 2015: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands)
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits	$	1,065	$	1,383	$	2,130	$	3,114
Other tax credit investment credits and tax benefits	3,268		4,903		6,536		8,521
Total reduction in income tax expense	$	4,333	$	6,286	$	8,666	$	11,635
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses	$	775	$	296	$	1,359	$	973
Affordable housing tax credit investment impairment losses	60		40		200		528
Other tax credit investment losses	594		493		668		790
Other tax credit investment impairment losses	6,217		3,682		12,683		6,716
Total amortization of tax credit investments recorded in non-interest expense	$	7,646	$	4,511	$	14,910	$	9,007

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Business Segments

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Business Segments

Business Segments

The information under the caption “Business Segments” in Management’s Discussion and Analysis of Financial Condition and Results of Operations is incorporated herein by reference.

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New Authoritative Accounting Guidance (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Changes and Error Corrections [Abstract]

New Authoritative Accounting Guidance

New Authoritative Accounting Guidance

Accounting Standards Update (ASU) No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" amends the accounting guidance on the impairment of financial instruments. The ASU No. 2016-13 adds to U.S. GAAP an impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity is required to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU No. 2016-13 is effective for Valley for reporting periods beginning January 1, 2020. Management is currently evaluating the impact of the ASU No. 2016-13 on Valley’s consolidated financial statements.

ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" simplifies several aspects of the stock compensation guidance in Topic 718 and other related guidance. The amendments focus on income tax accounting upon vesting or exercise of share-based payments, award classification, liability classification exception for statutory tax withholding requirements, estimating forfeitures, and cash flow presentation. ASU No. 2016-09 is effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018 with an early adoption permitted. ASU No. 2016-09 is not expected to have a significant impact on Valley's consolidated financial statements.

ASU No. 2016-02, “Leases (Topic 842)” requires the recognition of a right of use asset and related lease liability by lessees for leases classified as operating leases under current GAAP. Topic 842, which replaces the current guidance under Topic 840, retains a distinction between finance leases and operating leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee also will not significantly change from current GAAP. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize right of use assets and lease liabilities. Topic 842 will be effective for Valley for reporting periods beginning January 1, 2019, with an early adoption permitted. Valley must apply a modified retrospective transition approach for the applicable leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Management is currently evaluating the impact of Topic 842 on Valley’s consolidated financial statements.

ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities” requires that: (i) equity investments with readily determinable fair values must be measured at fair value with changes in fair value recognized in net income, (2) equity investments without readily determinable fair values must be measured at either fair value or at cost adjusted for changes in observable prices minus impairment. Changes in value under either of these methods would be recognized in net income, (3) entities that record financial liabilities at fair value due to a fair value option election must recognize changes in fair value in other comprehensive income if it is related to instrument-specific credit risk, and (4) entities must assess whether a valuation allowance is required for deferred tax assets related to available-for-sale debt securities. ASU No. 2016-01 is effective for Valley for reporting periods beginning January 1, 2018 and is not expected to have a material effect on Valley’s consolidated financial statements.

ASU No. 2015-07, "Fair Value Measurement (Topic 820) - Disclosure for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)", which removes the requirement to categorize within the fair value hierarchy all investments for which the fair value is measured using the net asset value per share practical expedient. ASU No. 2015-07 also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. ASU No. 2015-07 began effective for Valley for reporting periods after January 1, 2016 and did not have an impact on Valley's fair value measurement disclosures at Note 6.

ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)" implements a common revenue standard that clarifies the principles for recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In 2016, the Financial Accounting Standards Board issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606) - Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” and ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing,” to further clarify the new guidance under Topic 606. ASU No. 2014-09 and its aforementioned amendments are effective on January 1, 2018. Management is currently evaluating the new revenue guidance but does not expect it to have a significant impact on Valley’s consolidated financial statements.

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Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table shows the calculation of both basic and diluted earnings per common share for the three and six months ended June 30, 2016 and 2015.

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands, except for share data)
Net income available to common shareholders	$	37,230	$	31,991	$	71,620	$	62,332
Basic weighted average number of common shares outstanding	254,381,170		232,565,404		254,228,260		232,452,716
Plus: Common stock equivalents	390,043		21,212		347,613		5,032
Diluted weighted average number of common shares outstanding	254,771,213		232,586,616		254,575,873		232,457,748
Earnings per common share:
Basic	$	0.15	$	0.14	$	0.28	$	0.27
Diluted	0.15		0.14		0.28		0.27

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Loss

The following table presents the after-tax changes in the balances of each component of accumulated other comprehensive loss for the three and six months ended June 30, 2016.

	Components of Accumulated Other Comprehensive Loss												Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities			Non-credit Impairment Losses on AFS Securities			Unrealized Gains and (Losses) on Derivatives			Defined Benefit Pension Plan
	(in thousands)
Balance at March 31, 2016	$	2,777		$	(865	)	$	(22,455	)	$	(22,152	)	$	(42,695	)
Other comprehensive (loss) income before reclassifications	(635		)	301			(2,122		)	—			(2,456		)
Amounts reclassified from other comprehensive (loss) income	2			—			2,107			43			2,152
Other comprehensive (loss) income, net	(633		)	301			(15		)	43			(304		)
Balance at June 30, 2016	$	2,144		$	(564	)	$	(22,470	)	$	(22,109	)	$	(42,999	)

	Components of Accumulated Other Comprehensive Loss												Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities			Non-credit Impairment Losses on AFS Securities			Unrealized Gains and (Losses) on Derivatives			Defined Benefit Pension Plan
	(in thousands)
Balance at December 31, 2015	$	(5,336	)	$	(520	)	$	(17,644	)	$	(22,195	)	$	(45,695	)
Other comprehensive income (loss) before reclassifications	7,648			242			(8,674		)	—			(784		)
Amounts reclassified from other comprehensive income (loss)	(168		)	(286		)	3,848			86			3,480
Other comprehensive income (loss), net	7,480			(44		)	(4,826		)	86			2,696
Balance at June 30, 2016	$	2,144		$	(564	)	$	(22,470	)	$	(22,109	)	$	(42,999	)

Reclassification out of Accumulated Other Comprehensive Income

The following table presents amounts reclassified from each component of accumulated other comprehensive loss on a gross and net of tax basis for the three and six months ended June 30, 2016 and 2015. 

	Amounts Reclassified from Accumulated Other Comprehensive Loss
	Three Months Ended June 30,						Six Months Ended June 30,
Components of Accumulated Other Comprehensive Loss	2016			2015			2016			2015			Income Statement Line Item
	(in thousands)
Unrealized gains (losses) on AFS securities before tax	$	(3	)	$	(92	)	$	268		$	2,324		(Losses) gains on securities transactions, net
Tax effect	1			37			(100		)	(970		)
Total net of tax	(2		)	(55		)	168			1,354
Non-credit impairment losses on AFS securities before tax:
Accretion of credit loss impairment due to an increase in expected cash flows	—			34			489			178			Interest and dividends on  investment securities (taxable)
Tax effect	—			(14		)	(203		)	(74		)
Total net of tax	—			20			286			104
Unrealized losses on derivatives (cash flow hedges) before tax	(3,597		)	(1,699		)	(6,568		)	(3,328		)	Interest expense
Tax effect	1,490			708			2,720			1,386
Total net of tax	(2,107		)	(991		)	(3,848		)	(1,942		)
Defined benefit pension plan:
Amortization of net loss	(72		)	(205		)	(144		)	(410		)	*
Tax effect	29			84			58			170
Total net of tax	(43		)	(121		)	(86		)	(240		)
Total reclassifications, net of tax	$	(2,152	)	$	(1,147	)	$	(3,480	)	$	(724	)

* Amortization of net loss is included in the computation of net periodic pension cost.

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Fair Value Measurement of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

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

The following tables present the assets and liabilities that are measured at fair value on a recurring and nonrecurring basis by level within the fair value hierarchy as reported on the consolidated statements of financial condition at June 30, 2016 and December 31, 2015. The assets presented under “nonrecurring fair value measurements” in the table below are not measured at fair value on an ongoing basis but are subject to fair value adjustments under certain circumstances (e.g., when an impairment loss is recognized). 

	June 30, 2016		Fair Value Measurements at Reporting Date Using:
			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available for sale:
U.S. Treasury securities	$	51,035	$	51,035	$	—	$	—
U.S. government agency securities	25,290		—		25,290		—
Obligations of states and political subdivisions	125,746		—		125,746		—
Residential mortgage-backed securities	876,153		—		865,170		10,983
Trust preferred securities	8,240		—		6,122		2,118
Corporate and other debt securities	80,373		17,743		62,630		—
Equity securities	19,504		727		18,777		—
Total available for sale	1,186,341		69,505		1,103,735		13,101
Loans held for sale (1)	4,540		—		4,540		—
Other assets (2)	60,843		—		60,843		—
Total assets	$	1,251,724	$	69,505	$	1,169,118	$	13,101
Liabilities
Other liabilities (2)	$	79,897	$	—	$	79,897	$	—
Total liabilities	$	79,897	$	—	$	79,897	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans (3)	$	4,612	$	—	$	—	$	4,612
Loan servicing rights	5,918		—		—		5,918
Foreclosed assets (4)	2,642		—		—		2,642
Total	$	13,172	$	—	$	—	$	13,172

			Fair Value Measurements at Reporting Date Using:
	December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available for sale:
U.S. Treasury securities	$	549,473	$	549,473	$	—	$	—
U.S. government agency securities	29,963		—		29,963		—
Obligations of states and political subdivisions	124,966		—		124,966		—
Residential mortgage-backed securities	696,428		—		684,777		11,651
Trust preferred securities	8,404		—		6,262		2,142
Corporate and other debt securities	77,552		17,710		59,842		—
Equity securities	20,075		1,198		18,877		—
Total available for sale	1,506,861		568,381		924,687		13,793
Loans held for sale (1)	16,382		—		16,382		—
Other assets (2)	33,774		—		33,774		—
Total assets	$	1,557,017	$	568,381	$	974,843	$	13,793
Liabilities
Other liabilities (2)	$	50,844	$	—	$	50,844	$	—
Total liabilities	$	50,844	$	—	$	50,844	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans (3)	$	15,427	$	—	$	—	$	15,427
Loan servicing rights	2,571		—		—		2,571
Foreclosed assets (4)	16,672		—		—		16,672
Total	$	34,670	$	—	$	—	$	34,670

(1) Loans held for sale carried at fair value (which consist of residential mortgages) had contractual unpaid principal balances totaling approximately $4.4 million and $16.1 million at June 30, 2016 and December 31, 2015, respectively.

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

(3) Excludes PCI loans.

(4) Includes covered (i.e., subject to loss-sharing agreements with the FDIC) other real estate owned totaling $100 thousand and $4.2 million at June 30, 2016 and December 31, 2015, respectively.

Changes in Level 3 Assets Measured at Fair Value on Recurring Basis

The changes in Level 3 assets measured at fair value on a recurring basis for the three and six months ended June 30, 2016 and 2015 are summarized below: 

	Available for Sale Securities
	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Balance, beginning of the period	$	12,949		$	15,468		$	13,793		$	19,309
Total net gains (losses) included in other comprehensive income for the period	514			(90		)	(71		)	(882		)
Sales	—			—			—			(2,675		)
Settlements	(362		)	(666		)	(621		)	(1,040		)
Balance, end of the period	$	13,101		$	14,712		$	13,101		$	14,712

Schedule of Quantitative Information about Level 3 Inputs Used to Measure Fair Value of Available for Sale Securities

The following table presents quantitative information about Level 3 inputs used to measure the fair value of these securities at June 30, 2016: 

Security Type	Valuation Technique	Unobservable Input	Range	Weighted Average
Private label mortgage-backed securities	Discounted cash flow	Prepayment rate	0.0-20.2%	10.1	%
		Default rate	3.6-16.2	7.9
		Loss severity	45.4-66.3	60.5

Carrying Amounts and Estimated Fair Values of Financial Instruments

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 June 30, 2016 and December 31, 2015 were as follows: 

	Fair Value Hierarchy	June 30, 2016				December 31, 2015
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(in thousands)
Financial assets
Cash and due from banks	Level 1	$	220,156	$	220,156	$	243,575	$	243,575
Interest bearing deposits with banks	Level 1	92,975		92,975		170,225		170,225
Investment securities held to maturity:
U.S. Treasury securities	Level 1	138,904		152,772		138,978		149,483
U.S. government agency securities	Level 2	12,076		12,563		12,859		13,130
Obligations of states and political subdivisions	Level 2	565,509		591,925		504,865		527,263
Residential mortgage-backed securities	Level 2	957,377		967,142		852,289		855,272
Trust preferred securities	Level 2	59,795		46,030		59,785		46,437
Corporate and other debt securities	Level 2	31,559		33,279		27,609		29,454
Total investment securities held to maturity		1,765,220		1,803,711		1,596,385		1,621,039
Net loans	Level 3	16,391,092		16,410,318		15,936,929		15,824,475
Accrued interest receivable	Level 1	65,193		65,193		63,554		63,554
Federal Reserve Bank and Federal Home Loan Bank stock (1)	Level 1	161,684		161,684		145,068		145,068
Financial liabilities
Deposits without stated maturities	Level 1	13,291,422		13,291,422		13,095,647		13,095,647
Deposits with stated maturities	Level 2	3,064,636		3,103,627		3,157,904		3,203,389
Short-term borrowings	Level 1	1,411,844		1,411,844		1,076,991		1,076,991
Long-term borrowings	Level 2	1,545,495		1,716,189		1,810,728		1,945,741
Junior subordinated debentures issued to capital trusts	Level 2	41,496		43,865		41,414		44,127
Accrued interest payable (2)	Level 1	11,434		11,434		13,110		13,110

(1) Included in other assets.

(2) Included in accrued expenses and other liabilities.

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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Securities Held to Maturity

The amortized cost, gross unrealized gains and losses and fair value of securities held to maturity at June 30, 2016 and December 31, 2015 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2016
U.S. Treasury securities	$	138,904	$	13,868	$	—		$	152,772
U.S. government agency securities	12,076		487		—			12,563
Obligations of states and political subdivisions:
Obligations of states and state agencies	193,343		13,148		—			206,491
Municipal bonds	372,166		13,268		—			385,434
Total obligations of states and political subdivisions	565,509		26,416		—			591,925
Residential mortgage-backed securities	957,377		14,173		(4,408		)	967,142
Trust preferred securities	59,795		39		(13,804		)	46,030
Corporate and other debt securities	31,559		1,720		—			33,279
Total investment securities held to maturity	$	1,765,220	$	56,703	$	(18,212	)	$	1,803,711
December 31, 2015
U.S. Treasury securities	$	138,978	$	10,505	$	—		$	149,483
U.S. government agency securities	12,859		271		—			13,130
Obligations of states and political subdivisions:
Obligations of states and state agencies	194,547		10,538		(10		)	205,075
Municipal bonds	310,318		11,955		(85		)	322,188
Total obligations of states and political subdivisions	504,865		22,493		(95		)	527,263
Residential mortgage-backed securities	852,289		11,018		(8,035		)	855,272
Trust preferred securities	59,785		36		(13,384		)	46,437
Corporate and other debt securities	27,609		1,894		(49		)	29,454
Total investment securities held to maturity	$	1,596,385	$	46,217	$	(21,563	)	$	1,621,039

Age of Unrealized Losses and Fair Value of Related Securities Held to Maturity

The age of unrealized losses and fair value of related securities held to maturity at June 30, 2016 and December 31, 2015were as follows:

	Less than Twelve Months					More than Twelve Months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
June 30, 2016
Residential mortgage-backed securities	$	225,255	$	(1,340	)	$	253,047	$	(3,068	)	$	478,302	$	(4,408	)
Trust preferred securities	—		—			44,638		(13,804		)	44,638		(13,804		)
Total	$	225,255	$	(1,340	)	$	297,685	$	(16,872	)	$	522,940	$	(18,212	)
December 31, 2015
Obligations of states and political subdivisions:
Obligations of states and state agencies	$	6,837	$	(5	)	$	1,965	$	(5	)	$	8,802	$	(10	)
Municipal bonds	8,814		(72		)	10,198		(13		)	19,012		(85		)
Total obligations of states and political subdivisions	15,651		(77		)	12,163		(18		)	27,814		(95		)
Residential mortgage-backed securities	244,440		(2,916		)	162,756		(5,119		)	407,196		(8,035		)
Trust preferred securities	—		—			45,047		(13,384		)	45,047		(13,384		)
Corporate and other debt securities	2,951		(49		)	—		—			2,951		(49		)
Total	$	263,042	$	(3,042	)	$	219,966	$	(18,521	)	$	483,008	$	(21,563	)

Contractual Maturities of Debt Securities Held to Maturity

The contractual maturities of investments in debt securities held to maturity at June 30, 2016 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.  

	June 30, 2016
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	110,870	$	110,881
Due after one year through five years	169,388		180,766
Due after five years through ten years	310,727		332,730
Due after ten years	216,858		212,192
Residential mortgage-backed securities	957,377		967,142
Total investment securities held to maturity	$	1,765,220	$	1,803,711

Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Securities Available for Sale

The amortized cost, gross unrealized gains and losses and fair value of securities available for sale at June 30, 2016 and December 31, 2015 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2016
U.S. Treasury securities	$	51,031	$	53	$	(49	)	$	51,035
U.S. government agency securities	24,913		397		(20		)	25,290
Obligations of states and political subdivisions:
Obligations of states and state agencies	43,399		873		(101		)	44,171
Municipal bonds	80,502		1,382		(309		)	81,575
Total obligations of states and political subdivisions	123,901		2,255		(410		)	125,746
Residential mortgage-backed securities	873,480		7,300		(4,627		)	876,153
Trust preferred securities*	10,300		—		(2,060		)	8,240
Corporate and other debt securities	79,501		1,453		(581		)	80,373
Equity securities	20,522		605		(1,623		)	19,504
Total investment securities available for sale	$	1,183,648	$	12,063	$	(9,370	)	$	1,186,341
December 31, 2015
U.S. Treasury securities	$	551,173	$	4	$	(1,704	)	$	549,473
U.S. government agency securities	29,316		665		(18		)	29,963
Obligations of states and political subdivisions:
Obligations of states and state agencies	44,285		196		(67		)	44,414
Municipal bonds	80,717		209		(374		)	80,552
Total obligations of states and political subdivisions	125,002		405		(441		)	124,966
Residential mortgage-backed securities	701,764		3,348		(8,684		)	696,428
Trust preferred securities*	10,458		—		(2,054		)	8,404
Corporate and other debt securities	78,202		1,239		(1,889		)	77,552
Equity securities	21,022		575		(1,522		)	20,075
Total investment securities available for sale	$	1,516,937	$	6,236	$	(16,312	)	$	1,506,861

* Includes two pooled trust preferred securities, principally collateralized by securities issued by banks and insurance companies, at June 30, 2016 and December 31, 2015.

Age of Unrealized Losses and Fair Value of Related Securities

The age of unrealized losses and fair value of related securities available for sale at June 30, 2016 and December 31, 2015 were as follows:

	Less than Twelve Months					More than Twelve Months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
June 30, 2016
U.S. Treasury securities	$	25,036	$	(49	)	$	—	$	—		$	25,036	$	(49	)
U.S. government agency securities	—		—			4,336		(20		)	4,336		(20		)
Obligations of states and political subdivisions:
Obligations of states and state agencies	3,520		(101		)	—		—			3,520		(101		)
Municipal bonds	—		—			11,015		(309		)	11,015		(309		)
Total obligations of states and political subdivisions	3,520		(101		)	11,015		(309		)	14,535		(410		)
Residential mortgage-backed securities	233,742		(1,354		)	176,651		(3,273		)	410,393		(4,627		)
Trust preferred securities	—		—			8,240		(2,060		)	8,240		(2,060		)
Corporate and other debt securities	10,003		(12		)	24,719		(569		)	34,722		(581		)
Equity securities	—		—			14,172		(1,623		)	14,172		(1,623		)
Total	$	272,301	$	(1,516	)	$	239,133	$	(7,854	)	$	511,434	$	(9,370	)
December 31, 2015
U.S. Treasury securities	$	548,538	$	(1,704	)	$	—	$	—		$	548,538	$	(1,704	)
U.S. government agency securities	3,489		(5		)	4,736		(13		)	8,225		(18		)
Obligations of states and political subdivisions:
Obligations of states and state agencies	24,359		(67		)	—		—			24,359		(67		)
Municipal bonds	38,207		(128		)	13,551		(246		)	51,758		(374		)
Total obligations of states and political subdivisions	62,566		(195		)	13,551		(246		)	76,117		(441		)
Residential mortgage-backed securities	293,615		(4,147		)	164,010		(4,537		)	457,625		(8,684		)
Trust preferred securities	—		—			8,404		(2,054		)	8,404		(2,054		)
Corporate and other debt securities	21,203		(471		)	36,137		(1,418		)	57,340		(1,889		)
Equity securities	—		—			14,273		(1,522		)	14,273		(1,522		)
Total	$	929,411	$	(6,522	)	$	241,111	$	(9,790	)	$	1,170,522	$	(16,312	)

Contractual Maturities of Investment Securities Available for Sale

The contractual maturities of investment securities available for sale at June 30, 2016 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.

	June 30, 2016
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	10,750	$	10,749
Due after one year through five years	91,209		92,467
Due after five years through ten years	123,271		124,178
Due after ten years	64,416		63,290
Residential mortgage-backed securities	873,480		876,153
Equity securities	20,522		19,504
Total investment securities available for sale	$	1,183,648	$	1,186,341

Changes in Credit Loss Component of Cumulative Other-than-Temporary Impairment Losses on Debt Securities

The following table presents the changes in the credit loss component of cumulative other-than-temporary impairment losses on debt securities classified as either held to maturity or available for sale that Valley has previously recognized in earnings, for which a portion of the impairment loss (non-credit factors) was recognized in other comprehensive income for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30,					Six Months Ended June 30,
	2016		2015			2016			2015
	(in thousands)
Balance, beginning of period	$	5,348	$	6,421		$	5,837		$	8,947
Accretion of credit loss impairment due to an increase in expected cash flows	—		(34		)	(489		)	(178		)
Sales	—		—			—			(2,382		)
Balance, end of period	$	5,348	$	6,387		$	5,348		$	6,387

Realized Gains and Losses on Sales of Investment Securities

Gross gains (losses) realized on sales, maturities and other securities transactions related to investment securities included in earnings for the three and six months ended June 30, 2016 and 2015 were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Sales transactions:
Gross gains	$	—		$	—		$	271		$	3,274
Gross losses	—			—			—			(947		)
	—			—			271			2,327
Maturities and other securities transactions:
Gross gains	$	—		$	40		$	—		$	129
Gross losses	(3		)	(132		)	(3		)	(132		)
	(3		)	(92		)	(3		)	(3		)
Total (losses) gains on securities transactions, net	$	(3	)	$	(92	)	$	268		$	2,324

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Loans (Tables)

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

Schedule of Loan Portfolio Non-Covered and Covered PCI Loans and Non-PCI Loans

The detail of the loan portfolio as of June 30, 2016 and December 31, 2015 was as follows:

	June 30, 2016						December 31, 2015
	Non-PCI Loans		PCI Loans*		Total		Non-PCI Loans		PCI Loans*		Total
	(in thousands)
Loans:
Commercial and industrial	$	2,200,838	$	327,911	$	2,528,749	$	2,156,549	$	383,942	$	2,540,491
Commercial real estate:
Commercial real estate	6,822,650		1,196,144		8,018,794		6,069,532		1,355,104		7,424,636
Construction	632,332		136,515		768,847		607,694		147,253		754,947
Total commercial real estate loans	7,454,982		1,332,659		8,787,641		6,677,226		1,502,357		8,179,583
Residential mortgage	2,857,190		198,163		3,055,353		2,912,079		218,462		3,130,541
Consumer:
Home equity	380,200		105,530		485,730		391,809		119,394		511,203
Automobile	1,141,510		283		1,141,793		1,238,826		487		1,239,313
Other consumer	489,059		10,855		499,914		426,147		15,829		441,976
Total consumer loans	2,010,769		116,668		2,127,437		2,056,782		135,710		2,192,492
Total loans	$	14,523,779	$	1,975,401	$	16,499,180	$	13,802,636	$	2,240,471	$	16,043,107

____

* PCI loans include covered loans (mostly consisting of residential mortgage and commercial real estate loans) totaling $81.1 million and $122.3 million at June 30, 2016 and December 31, 2015, respectively.

Changes in Accretable Yield for Covered Loans

The following table presents changes in the accretable yield for PCI loans during the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Balance, beginning of period	$	387,120		$	309,858		$	415,179		$	336,208
Accretion	(31,519		)	(27,757		)	(59,578		)	(54,107		)
Balance, end of period	$	355,601		$	282,101		$	355,601		$	282,101

Past Due, Non-Accrual and Current Non-Covered Loans by Loan Portfolio Class

The following table presents past due, non-accrual and current loans (excluding PCI loans, which are accounted for on a pool basis, and non-performing loans held for sale) by loan portfolio class at June 30, 2016 and December 31, 2015:

	Past Due and Non-Accrual Loans
	30-59 Days Past Due Loans		60-89 Days Past Due Loans		Accruing Loans 90 Days or More Past Due		Non-Accrual Loans		Total Past Due Loans		Current Non-PCI Loans		Total Non-PCI Loans
	(in thousands)
June 30, 2016
Commercial and industrial	$	5,187	$	5,714	$	218	$	6,573	$	17,692	$	2,183,146	$	2,200,838
Commercial real estate:
Commercial real estate	5,076		834		131		19,432		25,473		6,797,177		6,822,650
Construction	—		—		—		5,878		5,878		626,454		632,332
Total commercial real estate loans	5,076		834		131		25,310		31,351		7,423,631		7,454,982
Residential mortgage	10,177		2,326		314		14,866		27,683		2,829,507		2,857,190
Consumer loans:
Home equity	959		54		—		989		2,002		378,198		380,200
Automobile	1,552		577		127		141		2,397		1,139,113		1,141,510
Other consumer	24		13		12		—		49		489,010		489,059
Total consumer loans	2,535		644		139		1,130		4,448		2,006,321		2,010,769
Total	$	22,975	$	9,518	$	802	$	47,879	$	81,174	$	14,442,605	$	14,523,779
December 31, 2015
Commercial and industrial	$	3,920	$	524	$	213	$	10,913	$	15,570	$	2,140,979	$	2,156,549
Commercial real estate:
Commercial real estate	2,684		—		131		24,888		27,703		6,041,829		6,069,532
Construction	1,876		2,799		—		6,163		10,838		596,856		607,694
Total commercial real estate loans	4,560		2,799		131		31,051		38,541		6,638,685		6,677,226
Residential mortgage	6,681		1,626		1,504		17,930		27,741		2,884,338		2,912,079
Consumer loans:
Home equity	1,308		111		—		2,088		3,507		388,302		391,809
Automobile	1,969		491		164		118		2,742		1,236,084		1,238,826
Other consumer	71		24		44		—		139		426,008		426,147
Total consumer loans	3,348		626		208		2,206		6,388		2,050,394		2,056,782
Total	$	18,509	$	5,575	$	2,056	$	62,100	$	88,240	$	13,714,396	$	13,802,636

Impaired Loans

The following table presents the information about impaired loans by loan portfolio class at June 30, 2016 and December 31, 2015:

	Recorded Investment With No Related Allowance		Recorded Investment With Related Allowance		Total Recorded Investment		Unpaid Contractual Principal Balance		Related Allowance
	(in thousands)
June 30, 2016
Commercial and industrial	$	3,211	$	19,500	$	22,711	$	26,614	$	3,294
Commercial real estate:
Commercial real estate	23,758		46,711		70,469		73,333		4,282
Construction	7,415		1,469		8,884		8,894		57
Total commercial real estate loans	31,173		48,180		79,353		82,227		4,339
Residential mortgage	6,901		15,753		22,654		24,126		1,261
Consumer loans:
Home equity	199		2,268		2,467		2,560		397
Total consumer loans	199		2,268		2,467		2,560		397
Total	$	41,484	$	85,701	$	127,185	$	135,527	$	9,291
December 31, 2015
Commercial and industrial	$	7,863	$	17,851	$	25,714	$	33,071	$	3,439
Commercial real estate:
Commercial real estate	30,113		37,440		67,553		71,263		3,354
Construction	8,847		5,530		14,377		14,387		317
Total commercial real estate loans	38,960		42,970		81,930		85,650		3,671
Residential mortgage	7,842		14,770		22,612		24,528		1,377
Consumer loans:
Home equity	263		1,869		2,132		2,224		295
Total consumer loans	263		1,869		2,132		2,224		295
Total	$	54,928	$	77,460	$	132,388	$	145,473	$	8,782

Average Recorded Investment and Interest Income Recognized on Impaired Loans

The following tables present by loan portfolio class, the average recorded investment and interest income recognized on impaired loans for the three and six months ended June 30, 2016 and 2015: 

	Three Months Ended June 30,
	2016				2015
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
Commercial and industrial	$	24,157	$	194	$	25,530	$	211
Commercial real estate:
Commercial real estate	70,194		475		75,688		894
Construction	10,027		53		11,485		126
Total commercial real estate loans	80,221		528		87,173		1,020
Residential mortgage	22,922		234		22,566		249
Consumer loans:
Home equity	3,071		20		4,607		38
Total consumer loans	3,071		20		4,607		38
Total	$	130,371	$	976	$	139,876	$	1,518

	Six Months Ended June 30,
	2016				2015
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
Commercial and industrial	$	26,244	$	434	$	26,898	$	457
Commercial real estate:
Commercial real estate	71,296		1,114		77,098		1,380
Construction	9,915		101		14,063		276
Total commercial real estate loans	81,211		1,215		91,161		1,656
Residential mortgage	23,262		436		22,206		499
Consumer loans:
Home equity	2,715		43		4,049		68
Total consumer loans	2,715		43		4,049		68
Total	$	133,432	$	2,128	$	144,314	$	2,680

Pre-Modification and Post-Modification Outstanding Recorded Investments and Non-PCI Loans That Subsequently Defaulted

The following table presents non-PCI loans modified as TDRs within the previous 12 months for which there was a payment default (90 days or more past due) during the three and six months ended June 30, 2016.

	Three Months Ended June 30, 2016			Six Months Ended June 30, 2016
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial real estate	2	$	1,070	1	$	214
Residential mortgage	1	74		1	74
Consumer	1	30		1	30
Total	4	$	1,174	3	$	318

The following tables present loans by loan portfolio class modified as TDRs during the three and six months ended June 30, 2016 and 2015. The pre-modification and post-modification outstanding recorded investments disclosed in the table below represent the loan carrying amounts immediately prior to the modification and the carrying amounts at June 30, 2016 and 2015, respectively.

	Three Months Ended June 30, 2016					Three Months Ended June 30, 2015
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	($ in thousands)
Commercial and industrial	4	$	5,079	$	4,094	6	$	1,947	$	1,922
Commercial real estate:
Commercial real estate	2	6,111		6,077		3	1,562		1,573
Construction	—	—		—		1	500		1,190
Total commercial real estate	2	6,111		6,077		4	2,062		2,763
Residential mortgage	5	1,830		1,826		2	1,098		1,097
Consumer	—	—		—		1	1,081		1,079
Total	11	$	13,020	$	11,997	13	$	6,188	$	6,861

	Six Months Ended June 30, 2016					Six Months Ended June 30, 2015
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	($ in thousands)
Commercial and industrial	6	$	6,456	$	5,437	12	$	3,531	$	3,412
Commercial real estate:
Commercial real estate	3	6,658		6,388		4	6,562		6,573
Construction	—	—		—		1	500		1,190
Total commercial real estate	3	6,658		6,388		5	7,062		7,763
Residential mortgage	7	2,222		2,206		3	1,378		1,373
Consumer	1	55		53		1	1,081		1,079
Total	17	$	15,391	$	14,084	21	$	13,052	$	13,627

Risk Category of Loans

The following table presents the risk category of loans (excluding PCI loans) by class of loans at June 30, 2016 and December 31, 2015. 

Credit exposure - by internally assigned risk rating	Pass		Special Mention		Substandard		Doubtful		Total Non-PCI Loans
	(in thousands)
June 30, 2016
Commercial and industrial	$	2,114,575	$	52,028	$	34,235	$	—	$	2,200,838
Commercial real estate	6,666,210		65,621		90,819		—		6,822,650
Construction	622,721		527		9,084		—		632,332
Total	$	9,403,506	$	118,176	$	134,138	$	—	$	9,655,820
December 31, 2015
Commercial and industrial	$	2,049,752	$	68,243	$	36,254	$	2,300	$	2,156,549
Commercial real estate	5,893,354		79,279		96,899		—		6,069,532
Construction	596,530		1,102		10,062		—		607,694
Total	$	8,539,636	$	148,624	$	143,215	$	2,300	$	8,833,775

Recorded Investment in Loan Classes Based on Payment Activity

The following table presents the recorded investment in those loan classes based on payment activity as of June 30, 2016 and December 31, 2015:

Credit exposure - by payment activity	Performing Loans		Non-Performing Loans		Total Non-PCI Loans
	(in thousands)
June 30, 2016
Residential mortgage	$	2,842,324	$	14,866	$	2,857,190
Home equity	379,211		989		380,200
Automobile	1,141,510		141		1,141,651
Other consumer	489,059		—		489,059
Total	$	4,852,104	$	15,996	$	4,868,100
December 31, 2015
Residential mortgage	$	2,894,149	$	17,930	$	2,912,079
Home equity	389,721		2,088		391,809
Automobile	1,238,708		118		1,238,826
Other consumer	426,147		—		426,147
Total	$	4,948,725	$	20,136	$	4,968,861

The following table presents the recorded investment in PCI loans by class based on individual loan payment activity as of June 30, 2016 and December 31, 2015.

Credit exposure - by payment activity	Performing Loans		Non-Performing Loans		Total PCI Loans
	(in thousands)
June 30, 2016
Commercial and industrial	$	318,935	$	8,976	$	327,911
Commercial real estate	1,185,024		11,120		1,196,144
Construction	135,090		1,425		136,515
Residential mortgage	194,532		3,631		198,163
Consumer	110,545		6,123		116,668
Total	$	1,944,126	$	31,275	$	1,975,401
December 31, 2015
Commercial and industrial	$	373,665	$	10,277	$	383,942
Commercial real estate	1,342,030		13,074		1,355,104
Construction	141,547		5,706		147,253
Residential mortgage	214,713		3,749		218,462
Consumer	129,891		5,819		135,710
Total	$	2,201,846	$	38,625	$	2,240,471

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Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

Summary of Allowance for Credit Losses

The following table summarizes the allowance for credit losses at June 30, 2016 and December 31, 2015: 

	June 30, 2016		December 31, 2015
	(in thousands)
Components of allowance for credit losses:
Allowance for loan losses	$	108,088	$	106,178
Allowance for unfunded letters of credit	2,326		2,189
Total allowance for credit losses	$	110,414	$	108,367

Summary of Provision for Credit Losses

The following table summarizes the provision for credit losses for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands)
Components of provision for credit losses:
Provision for loan losses	$	1,363	$	4,382	$	2,092	$	4,382
Provision for unfunded letters of credit	66		118		137		118
Total provision for credit losses	$	1,429	$	4,500	$	2,229	$	4,500

Summary of Activity in Allowance for Loan Losses

The following tables detail activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2016 and 2015:

	Commercial and Industrial			Commercial Real Estate			Residential Mortgage			Consumer			Unallocated			Total
	(in thousands)
Three Months Ended June 30, 2016:
Allowance for loan losses:
Beginning balance	$	48,417		$	48,454		$	4,209		$	4,335		$	—		$	105,415
Loans charged-off	(493		)	(414		)	(151		)	(697		)	—			(1,755		)
Charged-off loans recovered	990			1,458			94			523			—			3,065
Net recoveries (charge-offs)	497			1,044			(57		)	(174		)	—			1,310
Provision for loan losses	(889		)	2,379			(657		)	530			—			1,363
Ending balance	$	48,025		$	51,877		$	3,495		$	4,691		$	—		$	108,088
Three Months Ended June 30, 2015:
Allowance for loan losses:
Beginning balance	$	44,893		$	41,656		$	4,092		$	4,972		$	7,018		$	102,631
Loans charged-off	(3,226		)	(2,590		)	(339		)	(1,194		)	—			(7,349		)
Charged-off loans recovered	1,986			690			130			365			—			3,171
Net charge-offs	(1,240		)	(1,900		)	(209		)	(829		)	—			(4,178		)
Provision for loan losses	(1,939		)	4,429			1,172			1,399			(679		)	4,382
Ending balance	$	41,714		$	44,185		$	5,055		$	5,542		$	6,339		$	102,835

	Commercial and Industrial			Commercial Real Estate			Residential Mortgage			Consumer			Unallocated		Total
	(in thousands)
Six Months Ended June 30, 2016:
Allowance for loan losses:
Beginning balance	$	48,767		$	48,006		$	4,625		$	4,780		$	—	$	106,178
Loans charged-off	(1,744		)	(519		)	(232		)	(1,771		)	—		(4,266		)
Charged-off loans recovered	1,516			1,547			109			912			—		4,084
Net (charge-offs) recoveries	(228		)	1,028			(123		)	(859		)	—		(182		)
Provision for loan losses	(514		)	2,843			(1,007		)	770			—		2,092
Ending balance	$	48,025		$	51,877		$	3,495		$	4,691		$	—	$	108,088
Six Months Ended June 30, 2015:
Allowance for loan losses:
Beginning balance	$	43,676		$	42,840		$	5,093		$	5,179		$	5,565	$	102,353
Loans charged-off	(3,979		)	(2,740		)	(388		)	(1,908		)	—		(9,015		)
Charged-off loans recovered	3,037			1,150			244			684			—		5,115
Net charge-offs	(942		)	(1,590		)	(144		)	(1,224		)	—		(3,900		)
Provision for loan losses	(1,020		)	2,935			106			1,587			774		4,382
Ending balance	$	41,714		$	44,185		$	5,055		$	5,542		$	6,339	$	102,835

Summary of Allocation of Allowance for Loan Losses and Related Loans by Loan Portfolio Segment Disaggregated Based on Impairment Methodology

The following table represents the allocation of the allowance for loan losses and the related loans by loan portfolio segment disaggregated based on the impairment methodology at June 30, 2016 and December 31, 2015.

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
June 30, 2016
Allowance for loan losses:
Individually evaluated for impairment	$	3,294	$	4,339	$	1,261	$	397	$	9,291
Collectively evaluated for impairment	44,731		47,538		2,234		4,294		98,797
Total	$	48,025	$	51,877	$	3,495	$	4,691	$	108,088
Loans:
Individually evaluated for impairment	$	22,711	$	79,353	$	22,654	$	2,467	$	127,185
Collectively evaluated for impairment	2,178,127		7,375,629		2,834,536		2,008,302		14,396,594
Loans acquired with discounts related to credit quality	327,911		1,332,659		198,163		116,668		1,975,401
Total	$	2,528,749	$	8,787,641	$	3,055,353	$	2,127,437	$	16,499,180
December 31, 2015
Allowance for loan losses:
Individually evaluated for impairment	$	3,439	$	3,671	$	1,377	$	295	$	8,782
Collectively evaluated for impairment	45,328		44,335		3,248		4,485		97,396
Total	$	48,767	$	48,006	$	4,625	$	4,780	$	106,178
Loans:
Individually evaluated for impairment	$	25,714	$	81,930	$	22,612	$	2,132	$	132,388
Collectively evaluated for impairment	2,130,835		6,595,296		2,889,467		2,054,650		13,670,248
Loans acquired with discounts related to credit quality	383,942		1,502,357		218,462		135,710		2,240,471
Total	$	2,540,491	$	8,179,583	$	3,130,541	$	2,192,492	$	16,043,107

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in the Carrying Amount of Goodwill

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

	Business Segment / Reporting Unit*
	Wealth Management		Consumer Lending		Commercial Lending		Investment Management		Total
	(in thousands)
Balance at December 31, 2015	$	20,517	$	199,119	$	314,260	$	152,443	$	686,339
Goodwill from business combinations	701		697		1,416		436		3,250
Balance at June 30, 2016	$	21,218	$	199,816	$	315,676	$	152,879	$	689,589

* Valley’s Wealth Management Division is comprised of trust, asset management, and insurance services. This reporting unit is included in the Consumer Lending segment for financial reporting purposes.

Other Intangible Assets

The following table summarizes other intangible assets as of June 30, 2016 and December 31, 2015:

	Gross Intangible Assets		Accumulated Amortization			Valuation Allowance			Net Intangible Assets
	(in thousands)
June 30, 2016
Loan servicing rights	$	66,793	$	(50,079	)	$	(746	)	$	15,968
Core deposits	61,504		(34,851		)	—			26,653
Other	4,087		(1,865		)	—			2,222
Total other intangible assets	$	132,384	$	(86,795	)	$	(746	)	$	44,843
December 31, 2015
Loan servicing rights	$	75,932	$	(59,251	)	$	(289	)	$	16,392
Core deposits	62,714		(31,934		)	—			30,780
Other	4,374		(2,664		)	—			1,710
Total other intangible assets	$	143,020	$	(93,849	)	$	(289	)	$	48,882

Estimated Future Amortization Expense

The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2016 through 2020:

	Loan Servicing Rights		Core Deposits		Other
	(in thousands)
2016	$	2,440	$	2,711	$	148
2017	3,915		4,842		280
2018	3,050		4,215		249
2019	2,291		3,671		235
2020	1,734		3,127		220

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Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Consolidated Statements of Financial Condition Related to Fair Value of Derivative Financial Instruments

Amounts included in the consolidated statements of financial condition related to the fair value of Valley’s derivative financial instruments were as follows:

	June 30, 2016						December 31, 2015
	Fair Value						Fair Value
	Other Assets		Other Liabilities		Notional Amount		Other Assets		Other Liabilities		Notional Amount
	(in thousands)
Derivatives designated as hedging instruments:
Cash flow hedge interest rate caps and swaps	$	536	$	32,367	$	907,000	$	1,284	$	24,823	$	907,000
Fair value hedge interest rate swaps	14,454		1,403		133,106		7,658		1,306		133,209
Total derivatives designated as hedging instruments	$	14,990	$	33,770	$	1,040,106	$	8,942	$	26,129	$	1,040,209
Derivatives not designated as hedging instruments:
Interest rate swaps and embedded derivatives	$	44,861	$	44,858	$	756,274	$	24,628	$	24,623	$	654,134
Mortgage banking derivatives	992		1,269		273,690		204		92		73,438
Total derivatives not designated as hedging instruments	$	45,853	$	46,127	$	1,029,964	$	24,832	$	24,715	$	727,572

Losses Related to Interest Rate Derivatives Designated as Hedges of Cash Flows

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Amount of loss reclassified from accumulated other comprehensive loss to interest expense	$	(3,597	)	$	(1,699	)	$	(6,568	)	$	(3,328	)
Amount of (loss) gain recognized in other comprehensive income	(3,625		)	1,895			(14,657		)	(7,016		)

Gains (Losses) Related to Interest Rate Derivatives Designated as Hedges of Fair Value

Gains (losses) included in the consolidated statements of income related to interest rate derivatives designated as hedges of fair value were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Derivative - interest rate swaps:
Interest income	$	2		$	157		$	(97	)	$	103
Interest expense	2,069			(3,832		)	6,797			(1,091		)
Hedged item - loans and borrowings:
Interest income	$	(2	)	$	(157	)	$	97		$	(103	)
Interest expense	(2,060		)	3,840			(6,779		)	1,059

Gains (Losses) Related to Derivative Instruments Not Designated as Hedging Instruments

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2016			2015		2016			2015
	(in thousands)
Non-designated hedge interest rate derivatives
Other non-interest expense	$	(92	)	$	70	$	(389	)	$	108

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Balance Sheet Offsetting (Tables)

6 Months Ended

Jun. 30, 2016

Offsetting [Abstract]

Gross Presentation Effects of Offsetting and Net Presentation of Valley's Financial Instruments

The table below presents information about Valley’s financial instruments that are eligible for offset in the consolidated statements of financial condition as of June 30, 2016 and December 31, 2015.

							Gross Amounts Not Offset
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments			Cash Collateral				Net Amount
	(in thousands)
June 30, 2016
Assets:
Interest rate caps and swaps	$	59,851	$	—	$	59,851	$	(14,991	)	$	—			$	44,860
Liabilities:
Interest rate caps and swaps	$	78,628	$	—	$	78,628	$	(14,991	)	$	(63,637	)		$	—
Repurchase agreements	340,000		—		340,000		—			(340,000		)	*	—
Total	$	418,628	$	—	$	418,628	$	(14,991	)	$	(403,637	)		$	—
December 31, 2015
Assets:
Interest rate caps and swaps	$	33,570	$	—	$	33,570	$	(8,942	)	$	—			$	24,628
Liabilities:
Interest rate caps and swaps	$	50,752	$	—	$	50,752	$	(8,942	)	$	(41,810	)		$	—
Repurchase agreements	475,000		—		475,000		—			(475,000		)	*	—
Total	$	525,752	$	—	$	525,752	$	(8,942	)	$	(516,810	)		$	—

* Represents fair value of non-cash pledged investment securities.

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Tax Credit Investments (Tables)

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Affordable Housing Tax Credit Investments, Other Tax Credit Investments, and Related Unfunded Commitments

The following table presents the balances of Valley’s affordable housing tax credit investments, other tax credit investments, and related unfunded commitments at June 30, 2016 and December 31, 2015.

	June 30, 2016		December 31, 2015
	(in thousands)
Other Assets:
Affordable housing tax credit investments, net	$	30,536	$	32,094
Other tax credit investments, net	57,329		70,681
Total tax credit investments, net	$	87,865	$	102,775
Other Liabilities:
Unfunded affordable housing tax credit commitments	$	6,760	$	7,330
Unfunded other tax credit commitments	655		12,545
Total unfunded tax credit commitments	$	7,415	$	19,875

Affordable Housing Tax Credit Investments and Other Tax Credit Investments

The following table presents other information relating to Valley’s affordable housing tax credit investments and other tax credit investments for the three and six months ended June 30, 2016 and 2015: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands)
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits	$	1,065	$	1,383	$	2,130	$	3,114
Other tax credit investment credits and tax benefits	3,268		4,903		6,536		8,521
Total reduction in income tax expense	$	4,333	$	6,286	$	8,666	$	11,635
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses	$	775	$	296	$	1,359	$	973
Affordable housing tax credit investment impairment losses	60		40		200		528
Other tax credit investment losses	594		493		668		790
Other tax credit investment impairment losses	6,217		3,682		12,683		6,716
Total amortization of tax credit investments recorded in non-interest expense	$	7,646	$	4,511	$	14,910	$	9,007

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Business Combinations (Details) $ in Thousands			3 Months Ended
	Jan. 04, 2016 USD ($)	Dec. 01, 2015 USD ($) Branch	Mar. 31, 2016 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Business Acquisition [Line Items]
Goodwill				$ 689,589	$ 686,339
Masters Coverage Corp.
Business Acquisition [Line Items]
Purchase price	$ 1,400
Goodwill	701
Other intangible assets acquired	$ 660
CNL Bancshares, Inc.
Business Acquisition [Line Items]
Purchase price		$ 230,000
Assets acquired		1,600,000
Loans acquired		825,000
Deposits acquired		$ 1,200,000
Number of branches acquired (in branch) | Branch		16
Common stock issued per share held (in shares)		0.705
Consideration given in stock		$ 20,600
Increase in goodwill			$ 2,500

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Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings Per Share Reconciliation
Net income available to common shareholders	$ 37,230	$ 31,991	$ 71,620	$ 62,332
Basic weighted average number of common shares outstanding (in shares)	254,381,170	232,565,404	254,228,260	232,452,716
Plus: Common stock equivalents (in shares)	390,043	21,212	347,613	5,032
Diluted weighted average number of common shares outstanding (in shares)	254,771,213	232,586,616	254,575,873	232,457,748
Earnings per common share:
Basic (in usd per share)	$ 0.15	$ 0.14	$ 0.28	$ 0.27
Diluted (in usd per share)	$ 0.15	$ 0.14	$ 0.28	$ 0.27
Anti-dilutive common stock options and warrants (in shares)	4,600,000	6,100,000	4,600,000	6,100,000

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Accumulated Other Comprehensive Loss - Schedule of Changes in Accumulated Other Comprehensive Loss After Tax (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Accumulated Other Comprehensive Income (Loss)
Beginning balance			$ 2,207,091
Other comprehensive income (loss) before reclassifications	$ (2,456)		(784)
Amounts reclassified from other comprehensive income (loss)	2,152	$ 1,147	3,480	$ 724
Total other comprehensive income (loss)	(304)		2,696
Ending balance	2,232,212		2,232,212
Unrealized Gains and Losses on Available for Sale (AFS) Securities
Accumulated Other Comprehensive Income (Loss)
Beginning balance	2,777		(5,336)
Other comprehensive income (loss) before reclassifications	(635)		7,648
Amounts reclassified from other comprehensive income (loss)	2		(168)
Total other comprehensive income (loss)	(633)		7,480
Ending balance	2,144		2,144
Non-credit Impairment Losses on AFS Securities
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(865)		(520)
Other comprehensive income (loss) before reclassifications	301		242
Amounts reclassified from other comprehensive income (loss)	0		(286)
Total other comprehensive income (loss)	301		(44)
Ending balance	(564)		(564)
Unrealized Gains and (Losses) on Derivatives
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(22,455)		(17,644)
Other comprehensive income (loss) before reclassifications	(2,122)		(8,674)
Amounts reclassified from other comprehensive income (loss)	2,107		3,848
Total other comprehensive income (loss)	(15)		(4,826)
Ending balance	(22,470)		(22,470)
Total Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(42,695)		(45,695)
Ending balance	(42,999)		(42,999)
Defined Benefit Pension Plan
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(22,152)		(22,195)
Other comprehensive income (loss) before reclassifications	0		0
Amounts reclassified from other comprehensive income (loss)	43	$ 121	86	$ 240
Total other comprehensive income (loss)	43		86
Ending balance	$ (22,109)		$ (22,109)

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Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reclassification Out Of Accumulated Other Comprehensive Loss
Interest and dividends on investment securities (taxable)	$ 0	$ 34	$ 489	$ 178
Interest expense	(37,573)	(39,577)	(75,017)	(78,476)
Tax effect	(15,460)	(12,474)	(29,849)	(24,746)
Net Income	39,027	31,991	75,214	62,332
Total reclassifications, net of tax	(2,152)	(1,147)	(3,480)	(724)
Unrealized gains on AFS securities before tax
Reclassification Out Of Accumulated Other Comprehensive Loss
Total reclassifications, net of tax	(2)		168
Non-credit impairment losses on AFS securities before tax
Reclassification Out Of Accumulated Other Comprehensive Loss
Total reclassifications, net of tax	0		286
Unrealized losses on derivatives (cash flow hedges) before tax
Reclassification Out Of Accumulated Other Comprehensive Loss
Total reclassifications, net of tax	(2,107)		(3,848)
Defined benefit pension plan
Reclassification Out Of Accumulated Other Comprehensive Loss
Amortization of net loss	(72)	(205)	(144)	(410)
Tax effect	29	84	58	170
Total reclassifications, net of tax	(43)	(121)	(86)	(240)
Reclassification Out of Accumulated Other Comprehensive Income (Loss)
Reclassification Out Of Accumulated Other Comprehensive Loss
Interest expense	(3,597)	(1,699)	(6,568)	(3,328)
Reclassification Out of Accumulated Other Comprehensive Income (Loss) | Unrealized gains on AFS securities before tax
Reclassification Out Of Accumulated Other Comprehensive Loss
(Losses) gains on securities transactions, net	(3)	(92)	268	2,324
Tax effect	1	37	(100)	(970)
Net Income	(2)	(55)	168	1,354
Reclassification Out of Accumulated Other Comprehensive Income (Loss) | Non-credit impairment losses on AFS securities before tax
Reclassification Out Of Accumulated Other Comprehensive Loss
Interest and dividends on investment securities (taxable)	0	34	489	178
Tax effect	0	(14)	(203)	(74)
Net Income	0	20	286	104
Reclassification Out of Accumulated Other Comprehensive Income (Loss) | Unrealized losses on derivatives (cash flow hedges) before tax
Reclassification Out Of Accumulated Other Comprehensive Loss
Interest expense	(3,597)	(1,699)	(6,568)	(3,328)
Tax effect	1,490	708	2,720	1,386
Net Income	$ (2,107)	$ (991)	$ (3,848)	$ (1,942)

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Fair Value Measurement of Assets and Liabilities - Assets and Liabilities Measured at Fair Value on Recurring and Non-Recurring Basis (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	$ 1,186,341	$ 1,506,861
Unpaid principal balances of loans held for sale	4,400	16,100
Covered real estate owned	1,200	5,000
U.S. Treasury securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	51,035	549,473
U.S. government agency securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	25,290	29,963
Obligations of states and political subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	125,746	124,966
Residential mortgage-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	876,153	696,428
Trust preferred securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	8,240	8,404
Corporate and other debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	80,373	77,552
Equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	19,504	20,075
Non-Recurring Fair Value Measurements
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Covered real estate owned	100	4,200
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring Fair Value Measurements
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	69,505	568,381
Loans held for sale	0	0
Other assets	0	0
Total assets	69,505	568,381
Other liabilities	0	0
Total liabilities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring Fair Value Measurements | U.S. Treasury securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	51,035	549,473
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring Fair Value Measurements | U.S. government agency securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring Fair Value Measurements | Obligations of states and political subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring Fair Value Measurements | Residential mortgage-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring Fair Value Measurements | Trust preferred securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring Fair Value Measurements | Corporate and other debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	17,743	17,710
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring Fair Value Measurements | Equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	727	1,198
Quoted Prices in Active Markets for Identical Assets (Level 1) | Non-Recurring Fair Value Measurements
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Collateral dependent impaired loans	0	0
Loan servicing rights	0	0
Foreclosed assets	0	0
Total	0	0
Significant Other Observable Inputs (Level 2) | Recurring Fair Value Measurements
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	1,103,735	924,687
Loans held for sale	4,540	16,382
Other assets	60,843	33,774
Total assets	1,169,118	974,843
Other liabilities	79,897	50,844
Total liabilities	79,897	50,844
Significant Other Observable Inputs (Level 2) | Recurring Fair Value Measurements | U.S. Treasury securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	0	0
Significant Other Observable Inputs (Level 2) | Recurring Fair Value Measurements | U.S. government agency securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	25,290	29,963
Significant Other Observable Inputs (Level 2) | Recurring Fair Value Measurements | Obligations of states and political subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	125,746	124,966
Significant Other Observable Inputs (Level 2) | Recurring Fair Value Measurements | Residential mortgage-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	865,170	684,777
Significant Other Observable Inputs (Level 2) | Recurring Fair Value Measurements | Trust preferred securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	6,122	6,262
Significant Other Observable Inputs (Level 2) | Recurring Fair Value Measurements | Corporate and other debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	62,630	59,842
Significant Other Observable Inputs (Level 2) | Recurring Fair Value Measurements | Equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	18,777	18,877
Significant Other Observable Inputs (Level 2) | Non-Recurring Fair Value Measurements
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Collateral dependent impaired loans	0	0
Loan servicing rights	0	0
Foreclosed assets	0	0
Total	0	0
Significant Unobservable Inputs (Level 3) | Recurring Fair Value Measurements
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	13,101	13,793
Loans held for sale	0	0
Other assets	0	0
Total assets	13,101	13,793
Other liabilities	0	0
Total liabilities	0	0
Significant Unobservable Inputs (Level 3) | Recurring Fair Value Measurements | U.S. Treasury securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	0	0
Significant Unobservable Inputs (Level 3) | Recurring Fair Value Measurements | U.S. government agency securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	0	0
Significant Unobservable Inputs (Level 3) | Recurring Fair Value Measurements | Obligations of states and political subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	0	0
Significant Unobservable Inputs (Level 3) | Recurring Fair Value Measurements | Residential mortgage-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	10,983	11,651
Significant Unobservable Inputs (Level 3) | Recurring Fair Value Measurements | Trust preferred securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	2,118	2,142
Significant Unobservable Inputs (Level 3) | Recurring Fair Value Measurements | Corporate and other debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	0	0
Significant Unobservable Inputs (Level 3) | Recurring Fair Value Measurements | Equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	0	0
Significant Unobservable Inputs (Level 3) | Non-Recurring Fair Value Measurements
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Collateral dependent impaired loans	4,612	15,427
Loan servicing rights	5,918	2,571
Foreclosed assets	2,642	16,672
Total	13,172	34,670
Fair Value | Recurring Fair Value Measurements
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	1,186,341	1,506,861
Loans held for sale	4,540	16,382
Other assets	60,843	33,774
Total assets	1,251,724	1,557,017
Other liabilities	79,897	50,844
Total liabilities	79,897	50,844
Fair Value | Recurring Fair Value Measurements | U.S. Treasury securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	51,035	549,473
Fair Value | Recurring Fair Value Measurements | U.S. government agency securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	25,290	29,963
Fair Value | Recurring Fair Value Measurements | Obligations of states and political subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	125,746	124,966
Fair Value | Recurring Fair Value Measurements | Residential mortgage-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	876,153	696,428
Fair Value | Recurring Fair Value Measurements | Trust preferred securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	8,240	8,404
Fair Value | Recurring Fair Value Measurements | Corporate and other debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	80,373	77,552
Fair Value | Recurring Fair Value Measurements | Equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	19,504	20,075
Fair Value | Non-Recurring Fair Value Measurements
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Collateral dependent impaired loans	4,612	15,427
Loan servicing rights	5,918	2,571
Foreclosed assets	2,642	16,672
Total	$ 13,172	$ 34,670

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Fair Value Measurement of Assets and Liabilities - Changes in Level 3 Assets Measured at Fair Value on Recurring Basis (Detail) - Available-for-sale Securities - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Changes in Level 3 Assets
Balance, beginning of the period	$ 12,949	$ 15,468	$ 13,793	$ 19,309
Total net gains (losses) included in other comprehensive income for the period	514	(90)	(71)	(882)
Sales	0	0	0	(2,675)
Settlements	(362)	(666)	(621)	(1,040)
Balance, end of the period	$ 13,101	$ 14,712	$ 13,101	$ 14,712

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Fair Value Measurement of Assets and Liabilities - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Fair Value Assets Measured On Recurring Basis
Impaired collateral dependent loans, charge-offs	$ 473,000	$ 1,700,000	$ 952,000	$ 2,600,000
Collateral dependent impaired loans, recorded investment	5,100,000		5,100,000
Specific valuation allowance allocations	460,000		460,000
Reported net carrying amount of impaired loans	4,600,000		$ 4,600,000
Valuation of loan servicing rights, discount rate			8.00%
Net impairment charges (recoveries) on its loan servicing rights	265,000	(245,000)	$ 457,000	(161,000)
Maximum discount on foreclosed assets			2.80%
Foreclosed assets measured at fair value upon initial recognition	2,600,000
Allowance for loan losses, charge-offs	489,000	434,000	$ 922,000	891,000
Loss due to re-measurement of repossessed assets	295,000	470,000	$ 912,000	482,000
Minimum
Fair Value Assets Measured On Recurring Basis
Valuation of loan servicing rights, prepayment rate			0.00%
Maximum
Fair Value Assets Measured On Recurring Basis
Valuation of loan servicing rights, prepayment rate			24.00%
Available-for-sale Securities
Fair Value Assets Measured On Recurring Basis
Changes in unrealized losses on Level 3 securities	$ 0	$ 0	$ 0	$ 0

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Fair Value Measurement of Assets and Liabilities - Schedule of Quantitative Information about Level 3 Inputs Used to Measure Fair Value of Available for Sale Securities (Detail) - Significant Unobservable Inputs (Level 3) - Residential mortgage-backed securities	6 Months Ended
	Jun. 30, 2016
Fair Value Assets Measured On Recurring Basis
Valuation technique to measure fair value	Discounted cash flow
Prepayment rate, Weighted Average of unobservable inputs	10.10%
Default rate, Weighted Average of unobservable inputs	7.90%
Loss severity, Weighted Average of unobservable inputs	60.50%
Minimum
Fair Value Assets Measured On Recurring Basis
Prepayment rate, Range of unobservable inputs	0.00%
Default rate, Range of unobservable inputs	3.60%
Loss severity, Range of unobservable inputs	45.40%
Maximum
Fair Value Assets Measured On Recurring Basis
Prepayment rate, Range of unobservable inputs	20.20%
Default rate, Range of unobservable inputs	16.20%
Loss severity, Range of unobservable inputs	66.30%

XML

Fair Value Measurement of Assets and Liabilities - Carrying Amounts and Estimated Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Interest bearing deposits with banks	$ 92,975	$ 170,225
Total investment securities held to maturity	1,803,711	1,621,039
Accrued interest receivable	65,193	63,554
Deposits with stated maturities	3,064,636	3,157,904
Carrying Amount
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Total investment securities held to maturity	1,765,220	1,596,385
Carrying Amount | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Cash and due from banks	220,156	243,575
Interest bearing deposits with banks	92,975	170,225
Accrued interest receivable	65,193	63,554
Federal Reserve Bank and Federal Home Loan Bank stock	161,684	145,068
Deposits without stated maturities	13,291,422	13,095,647
Short-term borrowings	1,411,844	1,076,991
Accrued interest payable	11,434	13,110
Carrying Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury securities
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Total investment securities held to maturity	138,904	138,978
Carrying Amount | Significant Other Observable Inputs (Level 2)
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Deposits with stated maturities	3,064,636	3,157,904
Long-term borrowings	1,545,495	1,810,728
Junior subordinated debentures issued to capital trusts	41,496	41,414
Carrying Amount | Significant Other Observable Inputs (Level 2) | U.S. government agency securities
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Total investment securities held to maturity	12,076	12,859
Carrying Amount | Significant Other Observable Inputs (Level 2) | Obligations of states and political subdivisions
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Total investment securities held to maturity	565,509	504,865
Carrying Amount | Significant Other Observable Inputs (Level 2) | Residential mortgage-backed securities
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Total investment securities held to maturity	957,377	852,289
Carrying Amount | Significant Other Observable Inputs (Level 2) | Trust preferred securities
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Total investment securities held to maturity	59,795	59,785
Carrying Amount | Significant Other Observable Inputs (Level 2) | Corporate and other debt securities
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Total investment securities held to maturity	31,559	27,609
Carrying Amount | Significant Unobservable Inputs (Level 3)
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Net loans	16,391,092	15,936,929
Fair Value
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Total investment securities held to maturity	1,803,711	1,621,039
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Cash and due from banks	220,156	243,575
Interest bearing deposits with banks	92,975	170,225
Accrued interest receivable	65,193	63,554
Federal Reserve Bank and Federal Home Loan Bank stock	161,684	145,068
Deposits without stated maturities	13,291,422	13,095,647
Short-term borrowings	1,411,844	1,076,991
Accrued interest payable	11,434	13,110
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury securities
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Total investment securities held to maturity	152,772	149,483
Fair Value | Significant Other Observable Inputs (Level 2)
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Deposits with stated maturities	3,103,627	3,203,389
Long-term borrowings	1,716,189	1,945,741
Junior subordinated debentures issued to capital trusts	43,865	44,127
Fair Value | Significant Other Observable Inputs (Level 2) | U.S. government agency securities
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Total investment securities held to maturity	12,563	13,130
Fair Value | Significant Other Observable Inputs (Level 2) | Obligations of states and political subdivisions
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Total investment securities held to maturity	591,925	527,263
Fair Value | Significant Other Observable Inputs (Level 2) | Residential mortgage-backed securities
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Total investment securities held to maturity	967,142	855,272
Fair Value | Significant Other Observable Inputs (Level 2) | Trust preferred securities
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Total investment securities held to maturity	46,030	46,437
Fair Value | Significant Other Observable Inputs (Level 2) | Corporate and other debt securities
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Total investment securities held to maturity	33,279	29,454
Fair Value | Significant Unobservable Inputs (Level 3)
Fair value and carrying amounts of assets and liabilities not measured and not reported at fair value on the consolidated statement of financial condition
Net loans	$ 16,410,318	$ 15,824,475

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Investment Securities - Additional Information (Detail) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016 USD ($) Security	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($) Security	Jun. 30, 2015 USD ($)	Dec. 31, 2015 USD ($) Security
Investment Securities [Line Items]
Number of security positions in the securities held to maturity portfolio in an unrealized loss position (in security) | Security	74		74		74
Fair value of investments held to maturity pledged as collateral	$ 916,500		$ 916,500
Weighted-average remaining expected life of residential mortgage-backed securities held to maturity, years			6 years 1 month
Number of security positions in the securities available for sale portfolio in an unrealized loss position (in security) | Security	117		117		291
Held to Maturity, Amortized Cost	$ 1,765,220		$ 1,765,220		$ 1,596,385
Amortized cost	1,183,648		1,183,648		1,516,937
Gross unrealized losses	9,370		9,370		16,312
Fair value of securities available for sale pledged as collateral	401,300		$ 401,300
Weighted-average remaining expected life of residential mortgage-backed securities available for sale, years			9 years 8 months 28 days
Available for sale	1,186,341		$ 1,186,341		1,506,861
Gross gains, Sales transactions	0	$ 0	271	$ 3,274
Amortized Cost				25,900
Loss on Sale of Investments	$ 0	0	$ 0	(947)
Trust Preferred Securities Subject to Mandatory Redemption
Investment Securities [Line Items]
Available for sale		8,300		8,300
Corporate and other debt securities
Investment Securities [Line Items]
Held to Maturity, Amortized Cost		9,800		9,800
Pooled Trust Preferred Securities
Investment Securities [Line Items]
Number of security positions in the securities available for sale portfolio in an unrealized loss position (in security) | Security	2		2
Amortized cost	$ 10,300		$ 10,300
Available for sale	8,300		8,300
Pooled Trust Preferred Securities | Investment Grade
Investment Securities [Line Items]
Gross unrealized losses	1,400		1,400
Four Private Label Mortgage-Backed Securities
Investment Securities [Line Items]
Amortized cost	11,300		11,300
Available for sale	11,000		11,000
Obligations of states and political subdivisions
Investment Securities [Line Items]
Held to Maturity, Amortized Cost	565,509		565,509		504,865
Amortized cost	123,901		123,901		125,002
Gross unrealized losses	410		410		441
Available for sale	125,746		125,746		124,966
Residential mortgage-backed securities
Investment Securities [Line Items]
Held to Maturity, Amortized Cost	957,377		957,377		852,289
Amortized cost	873,480		873,480		701,764
Gross unrealized losses	4,627		4,627		8,684
Available for sale	876,153		876,153		$ 696,428
Pooled Trust Preferred Securities Sold
Investment Securities [Line Items]
Available for sale		$ 2,600		$ 2,600
Trust Preferred Securities Subject to Mandatory Redemption | Previously Other-Than-Temporarily Impaired Securities
Investment Securities [Line Items]
Amortized cost	2,800		2,800
Available for sale	$ 2,100		$ 2,100
Trust Preferred Securities | Non-Rated
Investment Securities [Line Items]
Number of security positions in the securities held to maturity portfolio in an unrealized loss position (in security) | Security	4		4

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Investment Securities - Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Securities Held to Maturity (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Held-to-Maturity Securities [Line Items]
Held to Maturity, Amortized Cost	$ 1,765,220	$ 1,596,385
Gross Unrealized Gains	56,703	46,217
Gross Unrealized Losses	(18,212)	(21,563)
Held to maturity, fair value	1,803,711	1,621,039
U.S. Treasury securities
Schedule of Held-to-Maturity Securities [Line Items]
Held to Maturity, Amortized Cost	138,904	138,978
Gross Unrealized Gains	13,868	10,505
Gross Unrealized Losses	0	0
Held to maturity, fair value	152,772	149,483
U.S. government agency securities
Schedule of Held-to-Maturity Securities [Line Items]
Held to Maturity, Amortized Cost	12,076	12,859
Gross Unrealized Gains	487	271
Gross Unrealized Losses	0	0
Held to maturity, fair value	12,563	13,130
Obligations of states and state agencies
Schedule of Held-to-Maturity Securities [Line Items]
Held to Maturity, Amortized Cost	193,343	194,547
Gross Unrealized Gains	13,148	10,538
Gross Unrealized Losses	0	(10)
Held to maturity, fair value	206,491	205,075
Municipal bonds
Schedule of Held-to-Maturity Securities [Line Items]
Held to Maturity, Amortized Cost	372,166	310,318
Gross Unrealized Gains	13,268	11,955
Gross Unrealized Losses	0	(85)
Held to maturity, fair value	385,434	322,188
Obligations of states and political subdivisions
Schedule of Held-to-Maturity Securities [Line Items]
Held to Maturity, Amortized Cost	565,509	504,865
Gross Unrealized Gains	26,416	22,493
Gross Unrealized Losses	0	(95)
Held to maturity, fair value	591,925	527,263
Residential mortgage-backed securities
Schedule of Held-to-Maturity Securities [Line Items]
Held to Maturity, Amortized Cost	957,377	852,289
Gross Unrealized Gains	14,173	11,018
Gross Unrealized Losses	(4,408)	(8,035)
Held to maturity, fair value	967,142	855,272
Trust preferred securities
Schedule of Held-to-Maturity Securities [Line Items]
Held to Maturity, Amortized Cost	59,795	59,785
Gross Unrealized Gains	39	36
Gross Unrealized Losses	(13,804)	(13,384)
Held to maturity, fair value	46,030	46,437
Corporate and other debt securities
Schedule of Held-to-Maturity Securities [Line Items]
Held to Maturity, Amortized Cost	31,559	27,609
Gross Unrealized Gains	1,720	1,894
Gross Unrealized Losses	0	(49)
Held to maturity, fair value	$ 33,279	$ 29,454

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Investment Securities - Age of Unrealized Losses and Fair Value of Related Securities Held to Maturity (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value	$ 225,255	$ 263,042
Less than Twelve Months, Unrealized Losses	(1,340)	(3,042)
More than Twelve Months, Fair Value	297,685	219,966
More than Twelve Months, Unrealized Losses	(16,872)	(18,521)
Total, Fair Value	522,940	483,008
Total, Unrealized Losses	(18,212)	(21,563)
Obligations of states and state agencies
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value		6,837
Less than Twelve Months, Unrealized Losses		(5)
More than Twelve Months, Fair Value		1,965
More than Twelve Months, Unrealized Losses		(5)
Total, Fair Value		8,802
Total, Unrealized Losses		(10)
Municipal bonds
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value		8,814
Less than Twelve Months, Unrealized Losses		(72)
More than Twelve Months, Fair Value		10,198
More than Twelve Months, Unrealized Losses		(13)
Total, Fair Value		19,012
Total, Unrealized Losses		(85)
Obligations of states and political subdivisions
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value		15,651
Less than Twelve Months, Unrealized Losses		(77)
More than Twelve Months, Fair Value		12,163
More than Twelve Months, Unrealized Losses		(18)
Total, Fair Value		27,814
Total, Unrealized Losses		(95)
Residential mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value	225,255	244,440
Less than Twelve Months, Unrealized Losses	(1,340)	(2,916)
More than Twelve Months, Fair Value	253,047	162,756
More than Twelve Months, Unrealized Losses	(3,068)	(5,119)
Total, Fair Value	478,302	407,196
Total, Unrealized Losses	(4,408)	(8,035)
Trust preferred securities
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value	0	0
Less than Twelve Months, Unrealized Losses	0	0
More than Twelve Months, Fair Value	44,638	45,047
More than Twelve Months, Unrealized Losses	(13,804)	(13,384)
Total, Fair Value	44,638	45,047
Total, Unrealized Losses	$ (13,804)	(13,384)
Corporate and other debt securities
Schedule of Available-for-sale Securities [Line Items]
Less than Twelve Months, Fair Value		2,951
Less than Twelve Months, Unrealized Losses		(49)
More than Twelve Months, Fair Value		0
More than Twelve Months, Unrealized Losses		0
Total, Fair Value		2,951
Total, Unrealized Losses		$ (49)

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Investment Securities - Contractual Maturities of Debt Securities Held to Maturity (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Due in one year, Amortized Cost	$ 110,870
Due after one year through five years, Amortized Cost	169,388
Due after five years through ten years, Amortized Cost	310,727
Due after ten years, Amortized Cost	216,858
Residential mortgage-backed securities, Amortized Cost	957,377
Held to Maturity, Amortized Cost	1,765,220	$ 1,596,385
Due in one year, Fair Value	110,881
Due after one year through five years, Fair Value	180,766
Due after five years through ten years, Fair Value	332,730
Due after ten years, Fair Value	212,192
Residential mortgage-backed securities, Fair Value	967,142
Fair Value	$ 1,803,711	$ 1,621,039

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Investment Securities - Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Securities Available for Sale (Detail) $ in Thousands	Jun. 30, 2016 USD ($) Security	Dec. 31, 2015 USD ($) Security
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	$ 1,183,648	$ 1,516,937
Gross Unrealized Gains	12,063	6,236
Gross Unrealized Losses	(9,370)	(16,312)
Fair Value	1,186,341	1,506,861
U.S. Treasury securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	51,031	551,173
Gross Unrealized Gains	53	4
Gross Unrealized Losses	(49)	(1,704)
Fair Value	51,035	549,473
U.S. government agency securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	24,913	29,316
Gross Unrealized Gains	397	665
Gross Unrealized Losses	(20)	(18)
Fair Value	25,290	29,963
Obligations of states and state agencies
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	43,399	44,285
Gross Unrealized Gains	873	196
Gross Unrealized Losses	(101)	(67)
Fair Value	44,171	44,414
Municipal bonds
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	80,502	80,717
Gross Unrealized Gains	1,382	209
Gross Unrealized Losses	(309)	(374)
Fair Value	81,575	80,552
Obligations of states and political subdivisions
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	123,901	125,002
Gross Unrealized Gains	2,255	405
Gross Unrealized Losses	(410)	(441)
Fair Value	125,746	124,966
Residential mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	873,480	701,764
Gross Unrealized Gains	7,300	3,348
Gross Unrealized Losses	(4,627)	(8,684)
Fair Value	876,153	696,428
Trust preferred securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	10,300	10,458
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(2,060)	(2,054)
Fair Value	8,240	8,404
Corporate and other debt securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	79,501	78,202
Gross Unrealized Gains	1,453	1,239
Gross Unrealized Losses	(581)	(1,889)
Fair Value	80,373	77,552
Equity securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	20,522	21,022
Gross Unrealized Gains	605	575
Gross Unrealized Losses	(1,623)	(1,522)
Fair Value	19,504	$ 20,075
Pooled Trust Preferred Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	10,300
Fair Value	$ 8,300
Number of available for sale securities (in security) | Security	2	2

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Investment Securities - Age of Unrealized Losses and Fair Value of Related Securities (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Held-to-Maturity Securities [Line Items]
Less than Twelve Months, Fair Value	$ 272,301	$ 929,411
Less than Twelve Months, Unrealized Losses	(1,516)	(6,522)
More than Twelve Months, Fair Value	239,133	241,111
More than Twelve Months, Unrealized Losses	(7,854)	(9,790)
Total, Fair Value	511,434	1,170,522
Total, Unrealized Losses	(9,370)	(16,312)
U.S. Treasury securities
Schedule of Held-to-Maturity Securities [Line Items]
Less than Twelve Months, Fair Value	25,036	548,538
Less than Twelve Months, Unrealized Losses	(49)	(1,704)
More than Twelve Months, Fair Value	0	0
More than Twelve Months, Unrealized Losses	0	0
Total, Fair Value	25,036	548,538
Total, Unrealized Losses	(49)	(1,704)
U.S. government agency securities
Schedule of Held-to-Maturity Securities [Line Items]
Less than Twelve Months, Fair Value	0	3,489
Less than Twelve Months, Unrealized Losses	0	(5)
More than Twelve Months, Fair Value	4,336	4,736
More than Twelve Months, Unrealized Losses	(20)	(13)
Total, Fair Value	4,336	8,225
Total, Unrealized Losses	(20)	(18)
Obligations of states and state agencies
Schedule of Held-to-Maturity Securities [Line Items]
Less than Twelve Months, Fair Value	3,520	24,359
Less than Twelve Months, Unrealized Losses	(101)	(67)
More than Twelve Months, Fair Value	0	0
More than Twelve Months, Unrealized Losses	0	0
Total, Fair Value	3,520	24,359
Total, Unrealized Losses	(101)	(67)
Municipal bonds
Schedule of Held-to-Maturity Securities [Line Items]
Less than Twelve Months, Fair Value	0	38,207
Less than Twelve Months, Unrealized Losses	0	(128)
More than Twelve Months, Fair Value	11,015	13,551
More than Twelve Months, Unrealized Losses	(309)	(246)
Total, Fair Value	11,015	51,758
Total, Unrealized Losses	(309)	(374)
Obligations of states and political subdivisions
Schedule of Held-to-Maturity Securities [Line Items]
Less than Twelve Months, Fair Value	3,520	62,566
Less than Twelve Months, Unrealized Losses	(101)	(195)
More than Twelve Months, Fair Value	11,015	13,551
More than Twelve Months, Unrealized Losses	(309)	(246)
Total, Fair Value	14,535	76,117
Total, Unrealized Losses	(410)	(441)
Residential mortgage-backed securities
Schedule of Held-to-Maturity Securities [Line Items]
Less than Twelve Months, Fair Value	233,742	293,615
Less than Twelve Months, Unrealized Losses	(1,354)	(4,147)
More than Twelve Months, Fair Value	176,651	164,010
More than Twelve Months, Unrealized Losses	(3,273)	(4,537)
Total, Fair Value	410,393	457,625
Total, Unrealized Losses	(4,627)	(8,684)
Trust preferred securities
Schedule of Held-to-Maturity Securities [Line Items]
Less than Twelve Months, Fair Value	0	0
Less than Twelve Months, Unrealized Losses	0	0
More than Twelve Months, Fair Value	8,240	8,404
More than Twelve Months, Unrealized Losses	(2,060)	(2,054)
Total, Fair Value	8,240	8,404
Total, Unrealized Losses	(2,060)	(2,054)
Corporate and other debt securities
Schedule of Held-to-Maturity Securities [Line Items]
Less than Twelve Months, Fair Value	10,003	21,203
Less than Twelve Months, Unrealized Losses	(12)	(471)
More than Twelve Months, Fair Value	24,719	36,137
More than Twelve Months, Unrealized Losses	(569)	(1,418)
Total, Fair Value	34,722	57,340
Total, Unrealized Losses	(581)	(1,889)
Equity securities
Schedule of Held-to-Maturity Securities [Line Items]
Less than Twelve Months, Fair Value	0	0
Less than Twelve Months, Unrealized Losses	0	0
More than Twelve Months, Fair Value	14,172	14,273
More than Twelve Months, Unrealized Losses	(1,623)	(1,522)
Total, Fair Value	14,172	14,273
Total, Unrealized Losses	$ (1,623)	$ (1,522)

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Investment Securities - Contractual Maturities of Investment Securities Available for Sale (Detail) $ in Thousands	Jun. 30, 2016 USD ($)
Schedule of Available-for-sale Securities [Line Items]
Due in one year, Amortized Cost	$ 10,750
Due after one year through five years, Amortized Cost	91,209
Due after five years through ten years, Amortized Cost	123,271
Due after ten years, Amortized Cost	64,416
Total investment securities available for sale, Amortized Cost	1,183,648
Due in one year, Fair Value	10,749
Due after one year through five years, Fair Value	92,467
Due after five years through ten years, Fair Value	124,178
Due after ten years, Fair Value	63,290
Total investment securities available for sale, Fair Value	1,186,341
Residential mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Securities without a single maturity date, Amortized Cost	873,480
Securities without a single maturity date, Fair Value	876,153
Equity securities
Schedule of Available-for-sale Securities [Line Items]
Securities without a single maturity date, Amortized Cost	20,522
Securities without a single maturity date, Fair Value	$ 19,504

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Investment Securities - Changes in Credit Loss Component of Cumulative Other-than-Temporary Impairment Losses on Debt Securities (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Balance, beginning of period	$ 5,348	$ 6,421	$ 5,837	$ 8,947
Accretion of credit loss impairment due to an increase in expected cash flows	0	(34)	(489)	(178)
Sales	0	0	0	(2,382)
Balance, end of period	$ 5,348	$ 6,387	$ 5,348	$ 6,387

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Investment Securities - Realized Gains and Losses on Sales of Investment Securities (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Investments, Debt and Equity Securities [Abstract]
Gross gains, Sales transactions	$ 0	$ 0	$ 271	$ 3,274
Gross losses, sales transactions	0	0	0	(947)
Gains (losses) on Sales transactions, net	0	0	271	2,327
Gross gains, Maturities and other securities transactions	0	40	0	129
Gross losses, Maturities and other securities transactions	(3)	(132)	(3)	(132)
Gross gains (losses), Maturities and other securities transactions	(3)	(92)	(3)	(3)
Total (losses) gains on securities transactions, net	$ (3)	$ (92)	$ 268	$ 2,324

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Loans - Schedule of Loan Portfolio Non-Covered and Covered PCI Loans and Non-PCI Loans (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable
Loans	$ 16,499,180	$ 16,043,107
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Loans	2,528,749	2,540,491
Commercial real estate loans
Accounts, Notes, Loans and Financing Receivable
Loans	8,787,641	8,179,583
Commercial real estate loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Loans	8,018,794	7,424,636
Commercial real estate loans | Construction
Accounts, Notes, Loans and Financing Receivable
Loans	768,847	754,947
Residential mortgage
Accounts, Notes, Loans and Financing Receivable
Loans	3,055,353	3,130,541
Consumer
Accounts, Notes, Loans and Financing Receivable
Loans	2,127,437	2,192,492
Consumer | Home equity
Accounts, Notes, Loans and Financing Receivable
Loans	485,730	511,203
Consumer | Automobile
Accounts, Notes, Loans and Financing Receivable
Loans	1,141,793	1,239,313
Consumer | Other consumer
Accounts, Notes, Loans and Financing Receivable
Loans	499,914	441,976
PCI Loans
Accounts, Notes, Loans and Financing Receivable
Loans	1,975,401	2,240,471
Covered loans	81,100	122,300
PCI Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Loans	327,911	383,942
PCI Loans | Commercial real estate loans
Accounts, Notes, Loans and Financing Receivable
Loans	1,332,659	1,502,357
PCI Loans | Commercial real estate loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Loans	1,196,144	1,355,104
PCI Loans | Commercial real estate loans | Construction
Accounts, Notes, Loans and Financing Receivable
Loans	136,515	147,253
PCI Loans | Residential mortgage
Accounts, Notes, Loans and Financing Receivable
Loans	198,163	218,462
PCI Loans | Consumer
Accounts, Notes, Loans and Financing Receivable
Loans	116,668	135,710
PCI Loans | Consumer | Home equity
Accounts, Notes, Loans and Financing Receivable
Loans	105,530	119,394
PCI Loans | Consumer | Automobile
Accounts, Notes, Loans and Financing Receivable
Loans	283	487
PCI Loans | Consumer | Other consumer
Accounts, Notes, Loans and Financing Receivable
Loans	10,855	15,829
Non-PCI Loans
Accounts, Notes, Loans and Financing Receivable
Loans	14,523,779	13,802,636
Non-PCI Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Loans	2,200,838	2,156,549
Non-PCI Loans | Commercial real estate loans
Accounts, Notes, Loans and Financing Receivable
Loans	7,454,982	6,677,226
Non-PCI Loans | Commercial real estate loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Loans	6,822,650	6,069,532
Non-PCI Loans | Commercial real estate loans | Construction
Accounts, Notes, Loans and Financing Receivable
Loans	632,332	607,694
Non-PCI Loans | Residential mortgage
Accounts, Notes, Loans and Financing Receivable
Loans	2,857,190	2,912,079
Non-PCI Loans | Consumer
Accounts, Notes, Loans and Financing Receivable
Loans	2,010,769	2,056,782
Non-PCI Loans | Consumer | Home equity
Accounts, Notes, Loans and Financing Receivable
Loans	380,200	391,809
Non-PCI Loans | Consumer | Automobile
Accounts, Notes, Loans and Financing Receivable
Loans	1,141,510	1,238,826
Non-PCI Loans | Consumer | Other consumer
Accounts, Notes, Loans and Financing Receivable
Loans	$ 489,059	$ 426,147

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Loans - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable
Non-covered loans net of unearned premiums, discounts and deferred loan fees	$ 8,300,000		$ 8,300,000		$ 3,500,000
Outstanding balances for PCI loans	2,100,000,000		2,100,000,000		2,400,000,000
Sales of loans	0	$ 0	0	$ 0
FDIC loss-share receivable	7,600,000		7,600,000		8,300,000
Change in FDIC loss-share receivable	1,000	595,000	$ (559,000)	(3,325,000)
Number of consecutive months for performing restructured loans to be put on accrual status			6 months
TDRs not reported as non-accrual loans	82,100,000		$ 82,100,000		77,600,000
Non-performing TDRs	13,700,000		13,700,000		21,000,000
Specific reserves for loan losses			2,100,000	1,000,000
Partial loan charge-offs related to loans modified as TDRs	0	$ 0	209,000	$ 0
Other real estate owned	12,100,000		12,100,000		19,000,000
Other real estate owned covered by loss sharing agreements	1,200,000		$ 1,200,000		5,000,000
Number Of Days Loans Placed On Non Accrual Status			90 days
Residential real estate properties
Accounts, Notes, Loans and Financing Receivable
Other real estate owned	6,800,000		$ 6,800,000		7,000,000
In formal foreclosure proceedings
Accounts, Notes, Loans and Financing Receivable
Residential mortgage and consumer loans secured by residential real estate properties	9,400,000		9,400,000		12,300,000
Commercial and industrial | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Impaired loans	250,000		250,000
PCI Loans
Accounts, Notes, Loans and Financing Receivable
Total PCI Loans including covered loans	$ 81,100,000		$ 81,100,000		$ 122,300,000

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Loans - Changes in Accretable Yield for Covered Loans (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance, beginning of period	$ 387,120	$ 309,858	$ 415,179	$ 336,208
Accretion	(31,519)	(27,757)	(59,578)	(54,107)
Balance, end of period	$ 355,601	$ 282,101	$ 355,601	$ 282,101

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Loans - Past Due, Non-Accrual and Current Non-Covered Loans by Loan Portfolio Class (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	$ 47,879	$ 62,100
Total Past Due Loans	81,174	88,240
Current Non-PCI Loans	14,442,605	13,714,396
Total Non-PCI Loans	14,523,779	13,802,636
30-59 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	22,975	18,509
60-89 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	9,518	5,575
Accruing Loans 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	802	2,056
Commercial and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	6,573	10,913
Total Past Due Loans	17,692	15,570
Current Non-PCI Loans	2,183,146	2,140,979
Total Non-PCI Loans	2,200,838	2,156,549
Commercial and industrial | 30-59 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	5,187	3,920
Commercial and industrial | 60-89 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	5,714	524
Commercial and industrial | Accruing Loans 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	218	213
Commercial real estate loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	25,310	31,051
Total Past Due Loans	31,351	38,541
Current Non-PCI Loans	7,423,631	6,638,685
Total Non-PCI Loans	7,454,982	6,677,226
Commercial real estate loans | Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	19,432	24,888
Total Past Due Loans	25,473	27,703
Current Non-PCI Loans	6,797,177	6,041,829
Total Non-PCI Loans	6,822,650	6,069,532
Commercial real estate loans | Construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	5,878	6,163
Total Past Due Loans	5,878	10,838
Current Non-PCI Loans	626,454	596,856
Total Non-PCI Loans	632,332	607,694
Commercial real estate loans | 30-59 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	5,076	4,560
Commercial real estate loans | 30-59 Days Past Due Loans | Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	5,076	2,684
Commercial real estate loans | 30-59 Days Past Due Loans | Construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	0	1,876
Commercial real estate loans | 60-89 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	834	2,799
Commercial real estate loans | 60-89 Days Past Due Loans | Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	834	0
Commercial real estate loans | 60-89 Days Past Due Loans | Construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	0	2,799
Commercial real estate loans | Accruing Loans 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	131	131
Commercial real estate loans | Accruing Loans 90 Days or More Past Due | Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	131	131
Commercial real estate loans | Accruing Loans 90 Days or More Past Due | Construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	0	0
Residential mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	14,866	17,930
Total Past Due Loans	27,683	27,741
Current Non-PCI Loans	2,829,507	2,884,338
Total Non-PCI Loans	2,857,190	2,912,079
Residential mortgage | 30-59 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	10,177	6,681
Residential mortgage | 60-89 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	2,326	1,626
Residential mortgage | Accruing Loans 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	314	1,504
Consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	1,130	2,206
Total Past Due Loans	4,448	6,388
Current Non-PCI Loans	2,006,321	2,050,394
Total Non-PCI Loans	2,010,769	2,056,782
Consumer | Home equity
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	989	2,088
Total Past Due Loans	2,002	3,507
Current Non-PCI Loans	378,198	388,302
Total Non-PCI Loans	380,200	391,809
Consumer | Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	141	118
Total Past Due Loans	2,397	2,742
Current Non-PCI Loans	1,139,113	1,236,084
Total Non-PCI Loans	1,141,510	1,238,826
Consumer | Other consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	0	0
Total Past Due Loans	49	139
Current Non-PCI Loans	489,010	426,008
Total Non-PCI Loans	489,059	426,147
Consumer | 30-59 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	2,535	3,348
Consumer | 30-59 Days Past Due Loans | Home equity
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	959	1,308
Consumer | 30-59 Days Past Due Loans | Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	1,552	1,969
Consumer | 30-59 Days Past Due Loans | Other consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	24	71
Consumer | 60-89 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	644	626
Consumer | 60-89 Days Past Due Loans | Home equity
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	54	111
Consumer | 60-89 Days Past Due Loans | Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	577	491
Consumer | 60-89 Days Past Due Loans | Other consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	13	24
Consumer | Accruing Loans 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	139	208
Consumer | Accruing Loans 90 Days or More Past Due | Home equity
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	0	0
Consumer | Accruing Loans 90 Days or More Past Due | Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	127	164
Consumer | Accruing Loans 90 Days or More Past Due | Other consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	$ 12	$ 44

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Loans - Impaired Loans (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	$ 41,484	$ 54,928
Recorded Investment With Related Allowance	85,701	77,460
Total Recorded Investment	127,185	132,388
Unpaid Contractual Principal Balance	135,527	145,473
Related Allowance	9,291	8,782
Commercial and industrial
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	3,211	7,863
Recorded Investment With Related Allowance	19,500	17,851
Total Recorded Investment	22,711	25,714
Unpaid Contractual Principal Balance	26,614	33,071
Related Allowance	3,294	3,439
Commercial real estate loans
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	31,173	38,960
Recorded Investment With Related Allowance	48,180	42,970
Total Recorded Investment	79,353	81,930
Unpaid Contractual Principal Balance	82,227	85,650
Related Allowance	4,339	3,671
Commercial real estate loans | Commercial real estate
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	23,758	30,113
Recorded Investment With Related Allowance	46,711	37,440
Total Recorded Investment	70,469	67,553
Unpaid Contractual Principal Balance	73,333	71,263
Related Allowance	4,282	3,354
Commercial real estate loans | Construction
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	7,415	8,847
Recorded Investment With Related Allowance	1,469	5,530
Total Recorded Investment	8,884	14,377
Unpaid Contractual Principal Balance	8,894	14,387
Related Allowance	57	317
Residential mortgage
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	6,901	7,842
Recorded Investment With Related Allowance	15,753	14,770
Total Recorded Investment	22,654	22,612
Unpaid Contractual Principal Balance	24,126	24,528
Related Allowance	1,261	1,377
Consumer
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	199	263
Recorded Investment With Related Allowance	2,268	1,869
Total Recorded Investment	2,467	2,132
Unpaid Contractual Principal Balance	2,560	2,224
Related Allowance	397	295
Consumer | Home equity
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	199	263
Recorded Investment With Related Allowance	2,268	1,869
Total Recorded Investment	2,467	2,132
Unpaid Contractual Principal Balance	2,560	2,224
Related Allowance	$ 397	$ 295

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Loans - Average Recorded Investment and Interest Income Recognized on Impaired Loans (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	$ 130,371	$ 139,876	$ 133,432	$ 144,314
Interest Income Recognized	976	1,518	2,128	2,680
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	24,157	25,530	26,244	26,898
Interest Income Recognized	194	211	434	457
Commercial real estate loans
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	80,221	87,173	81,211	91,161
Interest Income Recognized	528	1,020	1,215	1,656
Commercial real estate loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	70,194	75,688	71,296	77,098
Interest Income Recognized	475	894	1,114	1,380
Commercial real estate loans | Construction
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	10,027	11,485	9,915	14,063
Interest Income Recognized	53	126	101	276
Residential mortgage
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	22,922	22,566	23,262	22,206
Interest Income Recognized	234	249	436	499
Consumer
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	3,071	4,607	2,715	4,049
Interest Income Recognized	20	38	43	68
Consumer | Home equity
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	3,071	4,607	2,715	4,049
Interest Income Recognized	$ 20	$ 38	$ 43	$ 68

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Loans - Pre-Modification and Post-Modification Outstanding Recorded Investments (Detail) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016 USD ($) Contract	Jun. 30, 2015 USD ($) Contract	Jun. 30, 2016 USD ($) Contract	Jun. 30, 2015 USD ($) Contract
Accounts, Notes, Loans and Financing Receivable
Troubled Debt Restructurings, Number of Contracts (in contract) | Contract	11	13	17	21
Troubled Debt Restructurings, Pre-Modification Outstanding Recorded Investment	$ 13,020	$ 6,188	$ 15,391	$ 13,052
Troubled Debt Restructurings, Post-Modification Outstanding Recorded Investment	$ 11,997	$ 6,861	$ 14,084	$ 13,627
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Troubled Debt Restructurings, Number of Contracts (in contract) | Contract	4	6	6	12
Troubled Debt Restructurings, Pre-Modification Outstanding Recorded Investment	$ 5,079	$ 1,947	$ 6,456	$ 3,531
Troubled Debt Restructurings, Post-Modification Outstanding Recorded Investment	$ 4,094	$ 1,922	$ 5,437	$ 3,412
Commercial real estate loans
Accounts, Notes, Loans and Financing Receivable
Troubled Debt Restructurings, Number of Contracts (in contract) | Contract	2	4	3	5
Troubled Debt Restructurings, Pre-Modification Outstanding Recorded Investment	$ 6,111	$ 2,062	$ 6,658	$ 7,062
Troubled Debt Restructurings, Post-Modification Outstanding Recorded Investment	$ 6,077	$ 2,763	$ 6,388	$ 7,763
Commercial real estate loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Troubled Debt Restructurings, Number of Contracts (in contract) | Contract	2	3	3	4
Troubled Debt Restructurings, Pre-Modification Outstanding Recorded Investment	$ 6,111	$ 1,562	$ 6,658	$ 6,562
Troubled Debt Restructurings, Post-Modification Outstanding Recorded Investment	$ 6,077	$ 1,573	$ 6,388	$ 6,573
Commercial real estate loans | Construction
Accounts, Notes, Loans and Financing Receivable
Troubled Debt Restructurings, Number of Contracts (in contract) | Contract	0	1	0	1
Troubled Debt Restructurings, Pre-Modification Outstanding Recorded Investment	$ 0	$ 500	$ 0	$ 500
Troubled Debt Restructurings, Post-Modification Outstanding Recorded Investment	$ 0	$ 1,190	$ 0	$ 1,190
Residential mortgage
Accounts, Notes, Loans and Financing Receivable
Troubled Debt Restructurings, Number of Contracts (in contract) | Contract	5	2	7	3
Troubled Debt Restructurings, Pre-Modification Outstanding Recorded Investment	$ 1,830	$ 1,098	$ 2,222	$ 1,378
Troubled Debt Restructurings, Post-Modification Outstanding Recorded Investment	$ 1,826	$ 1,097	$ 2,206	$ 1,373
Consumer
Accounts, Notes, Loans and Financing Receivable
Troubled Debt Restructurings, Number of Contracts (in contract) | Contract	0	1	1	1
Troubled Debt Restructurings, Pre-Modification Outstanding Recorded Investment	$ 0	$ 1,081	$ 55	$ 1,081
Troubled Debt Restructurings, Post-Modification Outstanding Recorded Investment	$ 0	$ 1,079	$ 53	$ 1,079

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Loans - Troubled Debt Restructurings Subsequently Defaulted (Details) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2016 USD ($) Contract	Jun. 30, 2016 USD ($) Contract
Financing Receivable, Modifications [Line Items]
Number of Contracts (in contract) | Contract	4	3
Recorded Investment | $	$ 1,174	$ 318
Commercial real estate loans
Financing Receivable, Modifications [Line Items]
Number of Contracts (in contract) | Contract	2	1
Recorded Investment | $	$ 1,070	$ 214
Residential mortgage
Financing Receivable, Modifications [Line Items]
Number of Contracts (in contract) | Contract	1	1
Recorded Investment | $	$ 74	$ 74
Consumer
Financing Receivable, Modifications [Line Items]
Number of Contracts (in contract) | Contract	1	1
Recorded Investment | $	$ 30	$ 30

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Loans - Risk Category of Loans (Detail) - Non-PCI Loans - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	$ 9,655,820	$ 8,833,775
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	2,200,838	2,156,549
Commercial real estate loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	6,822,650	6,069,532
Commercial real estate loans | Construction
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	632,332	607,694
Pass
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	9,403,506	8,539,636
Pass | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	2,114,575	2,049,752
Pass | Commercial real estate loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	6,666,210	5,893,354
Pass | Commercial real estate loans | Construction
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	622,721	596,530
Special Mention
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	118,176	148,624
Special Mention | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	52,028	68,243
Special Mention | Commercial real estate loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	65,621	79,279
Special Mention | Commercial real estate loans | Construction
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	527	1,102
Substandard
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	134,138	143,215
Substandard | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	34,235	36,254
Substandard | Commercial real estate loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	90,819	96,899
Substandard | Commercial real estate loans | Construction
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	9,084	10,062
Doubtful
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	0	2,300
Doubtful | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	0	2,300
Doubtful | Commercial real estate loans | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	0	0
Doubtful | Commercial real estate loans | Construction
Accounts, Notes, Loans and Financing Receivable
Total Non-PCI Loans	$ 0	$ 0

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Loans - Recorded Investment in Loan Classes Based on Payment Activity (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Non-PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	$ 4,868,100	$ 4,968,861
PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,975,401	2,240,471
Performing Loans | Non-PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	4,852,104	4,948,725
Performing Loans | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,944,126	2,201,846
Non-Performing Loans | Non-PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	15,996	20,136
Non-Performing Loans | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	31,275	38,625
Commercial and industrial | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	327,911	383,942
Commercial and industrial | Performing Loans | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	318,935	373,665
Commercial and industrial | Non-Performing Loans | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	8,976	10,277
Commercial real estate loans | PCI Loans | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,196,144	1,355,104
Commercial real estate loans | PCI Loans | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	136,515	147,253
Commercial real estate loans | Performing Loans | PCI Loans | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,185,024	1,342,030
Commercial real estate loans | Performing Loans | PCI Loans | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	135,090	141,547
Commercial real estate loans | Non-Performing Loans | PCI Loans | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	11,120	13,074
Commercial real estate loans | Non-Performing Loans | PCI Loans | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,425	5,706
Residential mortgage | Non-PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	2,857,190	2,912,079
Residential mortgage | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	198,163	218,462
Residential mortgage | Performing Loans | Non-PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	2,842,324	2,894,149
Residential mortgage | Performing Loans | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	194,532	214,713
Residential mortgage | Non-Performing Loans | Non-PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	14,866	17,930
Residential mortgage | Non-Performing Loans | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	3,631	3,749
Consumer | Non-PCI Loans | Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	380,200	391,809
Consumer | Non-PCI Loans | Automobile
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,141,651	1,238,826
Consumer | Non-PCI Loans | Other consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	489,059	426,147
Consumer | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	116,668	135,710
Consumer | Performing Loans | Non-PCI Loans | Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	379,211	389,721
Consumer | Performing Loans | Non-PCI Loans | Automobile
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,141,510	1,238,708
Consumer | Performing Loans | Non-PCI Loans | Other consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	489,059	426,147
Consumer | Performing Loans | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	110,545	129,891
Consumer | Non-Performing Loans | Non-PCI Loans | Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	989	2,088
Consumer | Non-Performing Loans | Non-PCI Loans | Automobile
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	141	118
Consumer | Non-Performing Loans | Non-PCI Loans | Other consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0	0
Consumer | Non-Performing Loans | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	$ 6,123	$ 5,819

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Allowance for Credit Losses - Summary of Allowance for Credit Losses (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Receivables [Abstract]
Allowance for loans	$ 108,088	$ 105,415	$ 106,178	$ 102,835	$ 102,631	$ 102,353
Allowance for unfunded letters of credit	2,326		2,189
Total allowance for credit losses	$ 110,414		$ 108,367

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Allowance for Credit Losses - Summary of Provision for Credit Losses (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Receivables [Abstract]
Provision for loans	$ 1,363	$ 4,382	$ 2,092	$ 4,382
Provision for unfunded letters of credit	66	118	137	118
Total provision for credit losses	$ 1,429	$ 4,500	$ 2,229	$ 4,500

XML

Allowance for Credit Losses - Summary of Activity in Allowance for Loan Losses (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	$ 105,415	$ 102,631	$ 106,178	$ 102,353
Loans charged-off	(1,755)	(7,349)	(4,266)	(9,015)
Charged-off loans recovered	3,065	3,171	4,084	5,115
Net (charge-offs) recoveries	1,310	(4,178)	(182)	(3,900)
Provision for loan losses	1,363	4,382	2,092	4,382
Ending balance	108,088	102,835	108,088	102,835
Commercial and industrial
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	48,417	44,893	48,767	43,676
Loans charged-off	(493)	(3,226)	(1,744)	(3,979)
Charged-off loans recovered	990	1,986	1,516	3,037
Net (charge-offs) recoveries	497	(1,240)	(228)	(942)
Provision for loan losses	(889)	(1,939)	(514)	(1,020)
Ending balance	48,025	41,714	48,025	41,714
Commercial real estate loans
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	48,454	41,656	48,006	42,840
Loans charged-off	(414)	(2,590)	(519)	(2,740)
Charged-off loans recovered	1,458	690	1,547	1,150
Net (charge-offs) recoveries	1,044	(1,900)	1,028	(1,590)
Provision for loan losses	2,379	4,429	2,843	2,935
Ending balance	51,877	44,185	51,877	44,185
Residential mortgage
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	4,209	4,092	4,625	5,093
Loans charged-off	(151)	(339)	(232)	(388)
Charged-off loans recovered	94	130	109	244
Net (charge-offs) recoveries	(57)	(209)	(123)	(144)
Provision for loan losses	(657)	1,172	(1,007)	106
Ending balance	3,495	5,055	3,495	5,055
Consumer
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	4,335	4,972	4,780	5,179
Loans charged-off	(697)	(1,194)	(1,771)	(1,908)
Charged-off loans recovered	523	365	912	684
Net (charge-offs) recoveries	(174)	(829)	(859)	(1,224)
Provision for loan losses	530	1,399	770	1,587
Ending balance	4,691	5,542	4,691	5,542
Unallocated
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	0	7,018	0	5,565
Loans charged-off	0	0	0	0
Charged-off loans recovered	0	0	0	0
Net (charge-offs) recoveries	0	0	0	0
Provision for loan losses	0	(679)	0	774
Ending balance	$ 0	$ 6,339	$ 0	$ 6,339

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Allowance for Credit Losses - Summary of Allocation of Allowance for Loan Losses and Related Loans by Loan Portfolio Segment Disaggregated Based on Impairment Methodology (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Allowance for Loan Losses:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	$ 9,291	$ 8,782
Collectively evaluated for impairment	98,797	97,396
Total Loans	108,088	106,178
Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	127,185	132,388
Collectively evaluated for impairment	14,396,594	13,670,248
Total Loans	16,499,180	16,043,107
Loans acquired with discounts related to credit quality | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans	1,975,401	2,240,471
Commercial and industrial | Allowance for Loan Losses:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	3,294	3,439
Collectively evaluated for impairment	44,731	45,328
Total Loans	48,025	48,767
Commercial and industrial | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	22,711	25,714
Collectively evaluated for impairment	2,178,127	2,130,835
Total Loans	2,528,749	2,540,491
Commercial and industrial | Loans acquired with discounts related to credit quality | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans	327,911	383,942
Commercial real estate loans | Allowance for Loan Losses:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	4,339	3,671
Collectively evaluated for impairment	47,538	44,335
Total Loans	51,877	48,006
Commercial real estate loans | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	79,353	81,930
Collectively evaluated for impairment	7,375,629	6,595,296
Total Loans	8,787,641	8,179,583
Commercial real estate loans | Loans acquired with discounts related to credit quality | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans	1,332,659	1,502,357
Residential mortgage | Allowance for Loan Losses:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	1,261	1,377
Collectively evaluated for impairment	2,234	3,248
Total Loans	3,495	4,625
Residential mortgage | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	22,654	22,612
Collectively evaluated for impairment	2,834,536	2,889,467
Total Loans	3,055,353	3,130,541
Residential mortgage | Loans acquired with discounts related to credit quality | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans	198,163	218,462
Consumer | Allowance for Loan Losses:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	397	295
Collectively evaluated for impairment	4,294	4,485
Total Loans	4,691	4,780
Consumer | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	2,467	2,132
Collectively evaluated for impairment	2,008,302	2,054,650
Total Loans	2,127,437	2,192,492
Consumer | Loans acquired with discounts related to credit quality | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans	$ 116,668	$ 135,710

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Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Finite-Lived Intangible Assets [Line Items]
Goodwill impairment	$ 0	$ 0	$ 0	$ 0
Amortization of other intangible assets	2,928,000	2,096,000	$ 5,777,000	4,489,000
Core Deposits
Finite-Lived Intangible Assets [Line Items]
Weighted average amortization period, years			11 years
Other
Finite-Lived Intangible Assets [Line Items]
Weighted average amortization period, years			20 years
Core Deposits and Other
Finite-Lived Intangible Assets [Line Items]
Impairment of core deposits and intangibles	$ 0	$ 0	$ 0	$ 0

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Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets - Carrying Amount of Goodwill (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 686,339
Goodwill from business combinations	3,250
Goodwill, ending balance	689,589
Wealth Management
Goodwill [Roll Forward]
Goodwill, beginning balance	20,517
Goodwill from business combinations	701
Goodwill, ending balance	21,218
Consumer Lending
Goodwill [Roll Forward]
Goodwill, beginning balance	199,119
Goodwill from business combinations	697
Goodwill, ending balance	199,816
Commercial Lending
Goodwill [Roll Forward]
Goodwill, beginning balance	314,260
Goodwill from business combinations	1,416
Goodwill, ending balance	315,676
Investment Management
Goodwill [Roll Forward]
Goodwill, beginning balance	152,443
Goodwill from business combinations	436
Goodwill, ending balance	$ 152,879

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Goodwill and Other Intangible Assets - Other Intangible Assets (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	$ 132,384	$ 143,020
Accumulated Amortization	(86,795)	(93,849)
Valuation Allowance	(746)	(289)
Net Intangible Assets	44,843	48,882
Loan Servicing Rights
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	66,793	75,932
Accumulated Amortization	(50,079)	(59,251)
Valuation Allowance	(746)	(289)
Net Intangible Assets	15,968	16,392
Core Deposits
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	61,504	62,714
Accumulated Amortization	(34,851)	(31,934)
Valuation Allowance	0	0
Net Intangible Assets	26,653	30,780
Other
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	4,087	4,374
Accumulated Amortization	(1,865)	(2,664)
Valuation Allowance	0	0
Net Intangible Assets	$ 2,222	$ 1,710

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Goodwill and Other Intangible Assets - Estimated Future Amortization Expense (Detail) $ in Thousands	Jun. 30, 2016 USD ($)
Loan Servicing Rights
Finite-Lived Intangible Assets [Line Items]
2016	$ 2,440
2017	3,915
2018	3,050
2019	2,291
2020	1,734
Core Deposits
Finite-Lived Intangible Assets [Line Items]
2016	2,711
2017	4,842
2018	4,215
2019	3,671
2020	3,127
Other
Finite-Lived Intangible Assets [Line Items]
2016	148
2017	280
2018	249
2019	235
2020	$ 220

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Stock-Based Compensation (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Average grant date fair value (usd per share)			$ 8.56
Stock-based compensation expense	$ 2.8	$ 2.0	$ 5.2	$ 4.5
Stock-based compensation amortization expense unrecognized	$ 19.1		$ 19.1
Average remaining vesting, years			3 years
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, awarded during the period	0	0	431,000	313,000
Incentive stock option's maximum term, years			3 years
Performance Shares | Growth in Tangible Book Value per Share Plus Dividends
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights as a percentage			75.00%
Performance Shares | Total Shareholder Return as Compared to Our Peer Group
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights as a percentage			25.00%
Non-Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, awarded during the period			498,000	492,000
Award vesting rights as a percentage			33.33%
Non-Performance Shares | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Incentive stock option's maximum term, years			3 years
Non-Performance Shares | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Incentive stock option's maximum term, years			6 years
2009 Employee Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, available for grant	2,200,000		2,200,000
2016 Employee Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, available for grant	8,300,000		8,300,000

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Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Derivative [Line Items]
Derivative instruments not designated as hedging instruments, liability	$ 25.0
Aggregate fair value of net liability position	60.3
Collateral posted with counterparties	75.7
Interest Rate Swaps
Derivative [Line Items]
Accumulated net after-tax losses related to effective cash flow hedges	22.5	$ 17.6
Estimated amount of interest rate derivatives to be reclassified to interest expense	$ 12.7

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Derivative Instruments and Hedging Activities - Consolidated Statements of Financial Condition Related to Fair Value of Derivative Financial Instruments (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Interest Rate Caps and Swaps
Derivative [Line Items]
Other Assets	$ 0	$ 0
Other Liabilities	78,628	50,752
Derivatives designated as hedging instruments:
Derivative [Line Items]
Other Assets	14,990	8,942
Other Liabilities	33,770	26,129
Notional Amount	1,040,106	1,040,209
Derivatives designated as hedging instruments: | Cash Flow Hedge | Interest Rate Caps and Swaps
Derivative [Line Items]
Other Assets	536	1,284
Other Liabilities	32,367	24,823
Notional Amount	907,000	907,000
Derivatives designated as hedging instruments: | Fair Value Hedge | Interest Rate Swaps
Derivative [Line Items]
Other Assets	14,454	7,658
Other Liabilities	1,403	1,306
Notional Amount	133,106	133,209
Derivatives not designated as hedging instruments:
Derivative [Line Items]
Other Assets	45,853	24,832
Other Liabilities	46,127	24,715
Notional Amount	1,029,964	727,572
Derivatives not designated as hedging instruments: | Interest Rate Swaps
Derivative [Line Items]
Other Assets	44,861	24,628
Other Liabilities	44,858	24,623
Notional Amount	756,274	654,134
Derivatives not designated as hedging instruments: | Mortgage Banking Derivatives
Derivative [Line Items]
Other Assets	992	204
Other Liabilities	1,269	92
Notional Amount	$ 273,690	$ 73,438

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Derivative Instruments and Hedging Activities - Losses Related to Interest Rate Derivatives Designated as Hedges of Cash Flows (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Amounts Related To Interest Rate Derivatives Included In Income Designated As Hedges Of Cash Flows [Line Items]
Amount of loss reclassified from accumulated other comprehensive loss to interest expense	$ (37,573)	$ (39,577)	$ (75,017)	$ (78,476)
Amount of (loss) gain recognized in other comprehensive income	(3,625)	1,895	(14,657)	(7,016)
Reclassification Out of Accumulated Other Comprehensive Income (Loss)
Amounts Related To Interest Rate Derivatives Included In Income Designated As Hedges Of Cash Flows [Line Items]
Amount of loss reclassified from accumulated other comprehensive loss to interest expense	$ (3,597)	$ (1,699)	$ (6,568)	$ (3,328)

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Derivative Instruments and Hedging Activities - Gains (Losses) Related to Interest Rate Derivatives Designated as Hedges of Fair Value (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Gain Loss On Fair Value Hedges Recognized In Earnings [Line Items]
Gains (losses) on derivatives	$ (92)	$ 70	$ (389)	$ 108
Designated as Fair Value Hedge | Interest Income | Interest Rate Swaps
Gain Loss On Fair Value Hedges Recognized In Earnings [Line Items]
Gains (losses) on derivatives	2	157	(97)	103
Designated as Fair Value Hedge | Interest Income | Loans and Long-term Borrowings | Derivatives designated as hedging instruments:
Gain Loss On Fair Value Hedges Recognized In Earnings [Line Items]
Gains (losses) on derivatives	(2)	(157)	97	(103)
Designated as Fair Value Hedge | Interest Expense | Interest Rate Swaps
Gain Loss On Fair Value Hedges Recognized In Earnings [Line Items]
Gains (losses) on derivatives	2,069	(3,832)	6,797	(1,091)
Designated as Fair Value Hedge | Interest Expense | Loans and Long-term Borrowings | Derivatives designated as hedging instruments:
Gain Loss On Fair Value Hedges Recognized In Earnings [Line Items]
Gains (losses) on derivatives	$ (2,060)	$ 3,840	$ (6,779)	$ 1,059

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Derivative Instruments and Hedging Activities - (Losses) Gains Related to Derivative Instruments Not Designated as Hedging Instruments (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Non-designated hedge interest rate derivatives
Other non-interest expense	$ (92)	$ 70	$ (389)	$ 108

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Balance Sheet Offsetting - Gross Presentation Effects of Offsetting and Net Presentation of Valley's Financial Instruments (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Offsetting Liabilities
Gross Amounts Recognized, Total Liabilities	$ 418,628	$ 525,752
Gross Amounts Offset, Total Liabilities	0	0
Net Amounts Presented, Total Liabilities	418,628	525,752
Gross Amounts Not Offset, Financial Instruments	(14,991)	(8,942)
Gross Amounts Not Offset, Cash Collateral	(403,637)	(516,810)
Net Amount, Total	0	0
Repurchase Agreements
Offsetting Liabilities
Gross Amounts Recognized, Liabilities	340,000	475,000
Gross Amounts Offset, Liabilities	0	0
Net Amounts Presented, Liabilities	340,000	475,000
Gross Amounts Not Offset, Liabilities	0	0
Gross Amounts Not Offset, Liabilities	(340,000)	(475,000)
Net Amount, Liabilities	0	0
Interest Rate Caps and Swaps
Offsetting Assets
Gross Amounts Recognized, Assets	59,851	33,570
Gross Amounts Offset, Assets	0	0
Net Amounts Presented, Assets	59,851	33,570
Gross Amounts Not Offset, Financial Instruments	(14,991)	(8,942)
Gross Amounts Not Offset, Cash Collateral	0	0
Net Amount, Assets	44,860	24,628
Offsetting Liabilities
Gross Amounts Recognized, Liabilities	78,628	50,752
Gross Amounts Offset, Liabilities	0	0
Net Amounts Presented, Liabilities	78,628	50,752
Gross Amounts Not Offset, Financial Instruments	(14,991)	(8,942)
Gross Amounts Not Offset, Cash Collateral	(63,637)	(41,810)
Net Amount, Liabilities	$ 0	$ 0

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Tax Credit Investments Tax Credit Investments - Affordable Housing Tax Credit Investments, Other Tax Credit Investments, and Related Unfunded Commitments (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Other Assets
Other Assets [Abstract]
Affordable housing tax credit investments, net	$ 30,536	$ 32,094
Other tax credit investments, net	57,329	70,681
Total tax credit investments, net	87,865	102,775
Other Liabilities
Other Liabilities [Abstract]
Unfunded affordable housing tax credit commitments	6,760	7,330
Unfunded other tax credit commitments	655	12,545
Total unfunded tax credit commitments	$ 7,415	$ 19,875

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Tax Credit Investments Tax Credit Investments - Affordable Housing Tax Credit Investments and Other Tax Credit Investments (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Schedule of Equity Method Investments [Line Items]
Affordable housing tax credits and other tax benefits	$ 1,065	$ 1,383	$ 2,130	$ 3,114
Other tax credit investment credits and tax benefits	3,268	4,903	6,536	8,521
Total reduction in income tax expense	4,333	6,286	8,666	11,635
Non-Interest Expenses [Member]
Schedule of Equity Method Investments [Line Items]
Affordable housing tax credit investment losses	775	296	1,359	973
Affordable housing tax credit investment impairment losses	60	40	200	528
Other tax credit investment losses	594	493	668	790
Other tax credit investment impairment losses	6,217	3,682	12,683	6,716
Total amortization of tax credit investments recorded in non-interest expense	$ 7,646	$ 4,511	$ 14,910	$ 9,007