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, 2017

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," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act (check one):

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the

Exchange Act. ¨

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 264,029,734 shares were outstanding as of August 3, 2017

TABLE OF CONTENTS

		Page Number
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Consolidated Statements of Financial Condition as of June 30, 2017 and December 31, 2016	2
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2017 and 2016	3
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2017 and 2016	4
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2017 and 2016	5
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	47
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	85
Item 6.	Exhibits	86
SIGNATURES		87

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, 2017			December 31, 2016
Assets	(Unaudited)
Cash and due from banks	$	227,830		$	220,791
Interest bearing deposits with banks	129,959			171,710
Investment securities:
Held to maturity (fair value of $1,828,732 at June 30, 2017 and $1,924,597 at December 31, 2016)	1,822,263			1,925,572
Available for sale	1,464,054			1,297,373
Total investment securities	3,286,317			3,222,945
Loans held for sale (includes fair value of $17,919 at June 30, 2017 and $57,708 at December 31, 2016 for loans originated for sale)	139,576			57,708
Loans	17,710,760			17,236,103
Less: Allowance for loan losses	(116,446		)	(114,419		)
Net loans	17,594,314			17,121,684
Premises and equipment, net	290,001			291,180
Bank owned life insurance	393,997			391,830
Accrued interest receivable	69,732			66,816
Goodwill	690,637			690,637
Other intangible assets, net	43,700			45,484
Other assets	583,287			583,654
Total Assets	$	23,449,350		$	22,864,439
Liabilities
Deposits:
Non-interest bearing	$	5,197,997		$	5,252,825
Interest bearing:
Savings, NOW and money market	8,683,028			9,339,012
Time	3,368,993			3,138,871
Total deposits	17,250,018			17,730,708
Short-term borrowings	1,734,444			1,080,960
Long-term borrowings	1,819,615			1,433,906
Junior subordinated debentures issued to capital trusts	41,658			41,577
Accrued expenses and other liabilities	179,714			200,132
Total Liabilities	21,025,449			20,487,283
Shareholders’ Equity
Preferred stock (no par value, authorized 50,000,000 shares at June 30, 2017; issued 4,600,000 shares at June 30, 2017 and December 31, 2016)	111,590			111,590
Common stock (no par value, authorized 450,000,000 shares at June 30, 2017; issued 263,990,794 shares at June 30, 2017 and 263,804,877 shares at December 31, 2016)	92,423			92,353
Surplus	2,049,613			2,044,401
Retained earnings	207,177			172,754
Accumulated other comprehensive loss	(36,679		)	(42,093		)
Treasury stock, at cost (19,028 common shares at June 30, 2017 and 166,047 shares at December 31, 2016)	(223		)	(1,849		)
Total Shareholders’ Equity	2,423,901			2,377,156
Total Liabilities and Shareholders’ Equity	$	23,449,350		$	22,864,439

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,
	2017		2016			2017			2016
Interest Income
Interest and fees on loans	$	185,860	$	169,426		$	360,874		$	335,497
Interest and dividends on investment securities:
Taxable	18,928		14,256			36,517			28,255
Tax-exempt	3,943		3,734			7,974			7,424
Dividends	2,137		1,316			4,288			2,796
Interest on federal funds sold and other short-term investments	279		296			610			653
Total interest income	211,147		189,028			410,263			374,625
Interest Expense
Interest on deposits:
Savings, NOW and money market	12,714		9,961			22,897			19,204
Time	10,166		9,223			19,719			18,808
Interest on short-term borrowings	5,516		3,120			9,417			4,992
Interest on long-term borrowings and junior subordinated debentures	13,791		15,269			26,741			32,013
Total interest expense	42,187		37,573			78,774			75,017
Net Interest Income	168,960		151,455			331,489			299,608
Provision for credit losses	3,632		1,429			6,102			2,229
Net Interest Income After Provision for Credit Losses	165,328		150,026			325,387			297,379
Non-Interest Income
Trust and investment services	2,800		2,544			5,544			4,984
Insurance commissions	4,358		4,845			9,419			9,553
Service charges on deposit accounts	5,342		5,094			10,578			10,197
Gains (losses) on securities transactions, net	22		(3		)	(1		)	268
Fees from loan servicing	1,831		1,561			3,646			3,155
Gains on sales of loans, net	4,791		3,105			8,919			4,900
Bank owned life insurance	1,701		1,818			4,164			3,781
Other	3,845		5,300			7,480			8,874
Total non-interest income	24,690		24,264			49,749			45,712
Non-Interest Expense
Salary and employee benefits expense	61,338		56,072			125,054			116,331
Net occupancy and equipment expense	22,609		22,168			45,644			44,957
FDIC insurance assessment	4,928		5,095			10,055			10,194
Amortization of other intangible assets	2,562		2,928			5,098			5,777
Professional and legal fees	4,302		5,472			8,997			9,367
Amortization of tax credit investments	7,732		7,646			13,056			14,910
Telecommunication expense	2,707		2,294			5,366			4,680
Other	13,061		18,128			26,921			31,812
Total non-interest expense	119,239		119,803			240,191			238,028
Income Before Income Taxes	70,779		54,487			134,945			105,063
Income tax expense	20,714		15,460			38,785			29,849
Net Income	$	50,065	$	39,027		$	96,160		$	75,214
Dividends on preferred stock	1,797		1,797			3,594			3,594
Net Income Available to Common Shareholders	$	48,268	$	37,230		$	92,566		$	71,620
Earnings Per Common Share:
Basic	$	0.18	$	0.15		$	0.35		$	0.28
Diluted	0.18		0.15			0.35			0.28
Cash Dividends Declared per Common Share	0.11		0.11			0.22			0.22
Weighted Average Number of Common Shares Outstanding:
Basic	263,958,292		254,381,170			263,878,103			254,228,260
Diluted	264,778,242		254,771,213			264,662,863			254,575,873

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,
	2017			2016			2017			2016
Net income	$	50,065		$	39,027		$	96,160		$	75,214
Other comprehensive income, net of tax:
Unrealized gains and losses on available for sale securities
Net gains (losses) arising during the period	1,896			(635		)	3,203			7,648
Less reclassification adjustment for net (gains) losses included in net income	(13		)	2			—			(168		)
Total	1,883			(633		)	3,203			7,480
Non-credit impairment losses on available for sale securities
Net change in non-credit impairment losses on securities	21			301			134			242
Less reclassification adjustment for accretion of credit impairment losses included in net income	(39		)	—			(126		)	(286		)
Total	(18		)	301			8			(44		)
Unrealized gains and losses on derivatives (cash flow hedges)
Net losses on derivatives arising during the period	(873		)	(2,122		)	(746		)	(8,674		)
Less reclassification adjustment for net losses included in net income	1,356			2,107			2,831			3,848
Total	483			(15		)	2,085			(4,826		)
Defined benefit pension plan
Amortization of net loss	59			43			118			86
Total other comprehensive income	2,407			(304		)	5,414			2,696
Total comprehensive income	$	52,472		$	38,723		$	101,574		$	77,910

See accompanying notes to consolidated financial statements.

4

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)

	Six Months Ended June 30,
	2017			2016
Cash flows from operating activities:
Net income	$	96,160		$	75,214
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	12,549			12,440
Stock-based compensation	6,872			5,184
Provision for credit losses	6,102			2,229
Net amortization of premiums and accretion of discounts on securities and borrowings	11,366			7,047
Amortization of other intangible assets	5,098			5,777
Losses (gains) on securities transactions, net	1			(268		)
Proceeds from sales of loans held for sale	303,268			185,577
Gains on sales of loans, net	(8,919		)	(4,900		)
Originations of loans held for sale	(154,475		)	(171,123		)
Losses (gains) on sales of assets, net	453			(699		)
Net change in:
Fair value of borrowings hedged by derivative transactions	—			6,779
Cash surrender value of bank owned life insurance	(4,164		)	(3,781		)
Accrued interest receivable	(2,916		)	(1,639		)
Other assets	(1,521		)	(17,932		)
Accrued expenses and other liabilities	(20,709		)	(743		)
Net cash provided by operating activities	249,165			99,162
Cash flows from investing activities:
Net loan originations and purchases	(707,654		)	(459,154		)
Investment securities held to maturity:
Purchases	(60,230		)	(309,507		)
Maturities, calls and principal repayments	157,351			134,389
Investment securities available for sale:
Purchases	(252,770		)	(432,530		)
Sales	—			2,081
Maturities, calls and principal repayments	87,188			760,312
Death benefit proceeds from bank owned life insurance	1,998			—
Proceeds from sales of real estate property and equipment	6,822			9,146
Purchases of real estate property and equipment	(12,976		)	(15,353		)
Net cash used in investing activities	(780,271		)	(310,616		)
Cash flows from financing activities:
Net change in deposits	(480,690		)	102,507
Net change in short-term borrowings	653,484			334,853
Proceeds from issuance of long-term borrowings, net	560,000			—
Repayments of long-term borrowings	(175,000		)	(269,000		)
Cash dividends paid to preferred shareholders	(3,594		)	(3,594		)
Cash dividends paid to common shareholders	(58,000		)	(55,857		)
Purchase of common shares to treasury	(2,183		)	(1,615		)
Common stock issued, net	2,377			3,491
Net cash provided by financing activities	496,394			110,785
Net change in cash and cash equivalents	(34,712		)	(100,669		)
Cash and cash equivalents at beginning of year	392,501			413,800
Cash and cash equivalents at end of period	$	357,789		$	313,131

5

VALLEY NATIONAL BANCORP CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (in thousands)
	Six Months Ended June 30,
	2017		2016
Supplemental disclosures of cash flow information:
Cash payments for:
Interest on deposits and borrowings	$	100,380	$	76,693
Federal and state income taxes	7,683		12,964
Supplemental schedule of non-cash investing activities:
Transfer of loans to other real estate owned	$	5,865	$	2,899
Transfer of loans to loans held for sale	225,541		—

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, 2017 and for all periods presented have been made. The results of operations for the three and six months ended June 30, 2017 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, 2016.

On April 27, 2017, Valley's shareholders approved an amendment to Valley's Restated Certificate of Incorporation to increase the authorized shares of common stock and preferred stock to 450,000,000 shares and 50,000,000 shares, respectively.

7

Note 2. 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, 2017 and 2016.

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
	(in thousands, except for share data)
Net income available to common shareholders	$	48,268	$	37,230	$	92,566	$	71,620
Basic weighted average number of common shares outstanding	263,958,292		254,381,170		263,878,103		254,228,260
Plus: Common stock equivalents	819,950		390,043		784,760		347,613
Diluted weighted average number of common shares outstanding	264,778,242		254,771,213		264,662,863		254,575,873
Earnings per common share:
Basic	$	0.18	$	0.15	$	0.35	$	0.28
Diluted	0.18		0.15		0.35		0.28

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 3.3 million shares for both the three and six months ended June 30, 2017 and 4.6 millionsharesfor both the three and six months ended June 30, 2016, respectively.

Note 3. 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, 2017.

	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, 2017	$	(8,774	)	$	(616	)	$	(10,862	)	$	(18,834	)	$	(39,086	)
Other comprehensive income before reclassifications	1,896			21			(873		)	—			1,044
Amounts reclassified from other comprehensive income	(13		)	(39		)	1,356			59			1,363
Other comprehensive income, net	1,883			(18		)	483			59			2,407
Balance at June 30, 2017	$	(6,891	)	$	(634	)	$	(10,379	)	$	(18,775	)	$	(36,679	)

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	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, 2016	$	(10,094	)	$	(642	)	$	(12,464	)	$	(18,893	)	$	(42,093	)
Other comprehensive income before reclassifications	3,203			134			(746		)	—			2,591
Amounts reclassified from other comprehensive income	—			(126		)	2,831			118			2,823
Other comprehensive income, net	3,203			8			2,085			118			5,414
Balance at June 30, 2017	$	(6,891	)	$	(634	)	$	(10,379	)	$	(18,775	)	$	(36,679	)

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, 2017 and 2016. 

	Amounts Reclassified from Accumulated Other Comprehensive Loss
	Three Months Ended June 30,						Six Months Ended June 30,
Components of Accumulated Other Comprehensive Loss	2017			2016			2017			2016			Income Statement Line Item
	(in thousands)
Unrealized gains (losses) on AFS securities before tax	22			$	(3	)	(1		)	268			Gains (losses) on securities transactions, net
Tax effect	(9		)	1			1			(100		)
Total net of tax	13			(2		)	—			168
Non-credit impairment losses on AFS securities before tax:
Accretion of credit loss impairment due to an increase in expected cash flows	67			—			215			489			Interest and dividends on investment securities (taxable)
Tax effect	(28		)	—			(89		)	(203		)
Total net of tax	39			—			126			286
Unrealized losses on derivatives (cash flow hedges) before tax	(2,314		)	(3,597		)	(4,832		)	(6,568		)	Interest expense
Tax effect	958			1,490			2,001			2,720
Total net of tax	(1,356		)	(2,107		)	(2,831		)	(3,848		)
Defined benefit pension plan:
Amortization of net loss	(101		)	(72		)	(202		)	(144		)	*
Tax effect	42			29			84			58
Total net of tax	(59		)	(43		)	(118		)	(86		)
Total reclassifications, net of tax	$	(1,363	)	$	(2,152	)	$	(2,823	)	$	(3,480	)

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

9

Note 4. New Authoritative Accounting Guidance

Accounting Standards Update (ASU) No. 2017-08, "Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt Securities" shortens the amortization period for certain callable debt securities held at a premium. ASU No. 2017-08 requires the premium to be amortized to the earliest call date. The accounting for securities held at a discount does not change and the discount continues to be amortized as an adjustment to yield over the contractual life (to maturity) of the instrument. ASU No. 2017-08

is effective for Valley for the annual and interim reporting periods beginning January 1, 2018 with early adoption permitted, and is to be applied retrospectively. ASU No. 2017-08 is not expected to have a significant impact on Valley's consolidated financial statements.

ASU No. 2017-07, "Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" requires service cost to be reported in the same financial statement line item(s) as other current employee compensation costs. All other components of expense must be presented separately from service cost, and outside any subtotal of income from operations. Only the service cost component of expense is eligible to be capitalized. ASU No. 2017-07 is effective for Valley for its annual and interim reporting periods beginning January1, 2018 with early adoption permitted. ASU No. 2017-07 is not expected to have a significant impact on the presentation on Valley's consolidated financial statements.

ASU No. 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test guidance) to measure a goodwill impairment charge. Instead, an entity will be required to record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on Step 1 of the current guidance). In addition, ASU No. 2017-04 eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. However, an entity will be required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU No. 2017-04 is effective for Valley for its annual or any interim goodwill impairment tests in fiscal years beginning January 1, 2020 and is not expected to have a significant impact on the presentation of Valley's consolidated financial statements. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017.

ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" clarifies on how certain cash receipts and cash payments should be classified and presented in the statement of cash flow. The ASU No. 2016-15 includes guidance on eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU No. 2016-15 is effective for Valley for annual and interim reporting periods beginning January 1, 2018 and it should be applied using a retrospective transition method to each period presented. ASU No. 2016-15 is not expected to have a significant impact on the presentation of Valley's consolidated statements of cash flows.    

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 on Valley’s consolidated financial statements. Valley expects that the new guidance will result in an increase in its allowance for credit losses due to several factors, including: (i) the allowance related to Valley loans will increase to include credit losses over the full remaining expected life of the portfolio, and will consider expected future changes in macroeconomic conditions, (ii) the nonaccretable difference (as defined in Note 7) on PCI loans will be recognized as an allowance,

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offset by an increase in the carrying value of the related loans, and (iii) an allowance will be established for estimated credit losses on investment securities classified as held to maturity. The extent of the increase is under evaluation, but will depend upon the nature and characteristics of the Valley's loan and investment portfolios at the adoption date, and the economic conditions and forecasts at that date.

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, recognition methods for forfeitures within stock compensation expense, and the cash flow presentation. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively.  Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. ASU No. 2016-09 became effective for Valley for reporting periods after January 1, 2017 and did not have a significant impact on Valley's consolidated financial statements. At adoption, Valley elected to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using the prospective transition method. Valley also elected to continue to estimate the forfeitures of stock awards as a component of total stock compensation expense based on the number of awards that are expected to vest.

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 by reviewing its existing lease contracts and service contracts that may include embedded leases. Valley expects a gross-up of its consolidated statements of financial condition as a result of recognizing lease liabilities and right of use assets; the extent of such gross-up is under evaluation. Valley does not expect material changes to the recognition of operating lease expense in its consolidated statements of income.

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, (ii) 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 with changes in value under either of these methods recognized in net income, (iii) 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 (iv) 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. 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

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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. While Valley has not identified any material changes in the timing of revenue recognition under the new guidance, its review is ongoing. However, Valley does not expect the new revenue guidance to have a significant impact on its consolidated financial statements.

Note 5. 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, 2017 and December 31, 2016. 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, 2017		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	$	50,097	$	50,097	$	—	$	—
U.S. government agency securities	46,368		—		46,368		—
Obligations of states and political subdivisions	119,194		—		119,194		—
Residential mortgage-backed securities	1,163,720		—		1,154,868		8,852
Trust preferred securities	6,219		—		4,341		1,878
Corporate and other debt securities	67,674		7,956		59,718		—
Equity securities	10,782		920		9,862		—
Total available for sale	1,464,054		58,973		1,394,351		10,730
Loans held for sale (1)	17,919		—		17,919		—
Other assets (2)	26,764		—		26,764		—
Total assets	$	1,508,737	$	58,973	$	1,439,034	$	10,730
Liabilities
Other liabilities (2)	$	23,902	$	—	$	23,902	$	—
Total liabilities	$	23,902	$	—	$	23,902	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans (3)	$	31,489	$	—	$	—	$	31,489
Loan servicing rights	7,410		—		—		7,410
Foreclosed assets	1,340		—		—		1,340
Total	$	40,239	$	—	$	—	$	40,239

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			Fair Value Measurements at Reporting Date Using:
	December 31, 2016		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	$	49,591	$	49,591	$	—	$	—
U.S. government agency securities	23,041		—		23,041		—
Obligations of states and political subdivisions	119,767		—		119,767		—
Residential mortgage-backed securities	1,015,542		—		1,005,589		9,953
Trust preferred securities	8,009		—		6,074		1,935
Corporate and other debt securities	60,565		8,064		52,501		—
Equity securities	20,858		1,306		19,552		—
Total available for sale	1,297,373		58,961		1,226,524		11,888
Loans held for sale (1)	57,708		—		57,708		—
Other assets (2)	29,055		—		29,055		—
Total assets	$	1,384,136	$	58,961	$	1,313,287	$	11,888
Liabilities
Other liabilities (2)	$	44,077	$	—	$	44,077	$	—
Total liabilities	$	44,077	$	—	$	44,077	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans (3)	$	5,385	$	—	$	—	$	5,385
Loan servicing rights	6,489		—		—		6,489
Foreclosed assets	4,532		—		—		4,532
Total	$	16,406	$	—	$	—	$	16,406

(1) Represents loans originated for sale (which consist of residential mortgage loans) that are carried at fair value and had contractual unpaid principal balances totaling approximately $17.5 million and $58.2 million at June 30, 2017 and December 31, 2016, respectively.

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

(3) Excludes PCI loans.

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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, 2017 and 2016 are summarized below: 

	Available for Sale Securities
	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
	(in thousands)
Balance, beginning of the period	$	11,367		$	12,949		$	11,888		$	13,793
Total net (losses) gains included in other comprehensive income	(31		)	514			13			(71		)
Settlements, net	(606		)	(362		)	(1,171		)	(621		)
Balance, end of the period	$	10,730		$	13,101		$	10,730		$	13,101

No changes in unrealized gains or losses on Level 3 securities were included in earnings during the three and six months ended June 30, 2017 and 2016. There were no transfers of assets into or out of Level 3, or between Level 1 and Level 2, during the three and six months ended June 30, 2017 and 2016.

There have been no material changes in the valuation methodologies used at June 30, 2017 from December 31, 2016.

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 preferred equity 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, 2017: 

Security Type	Valuation Technique	Unobservable Input	Range	Weighted Average
Private label mortgage-backed securities	Discounted cash flow	Prepayment rate	6.2 - 31.6%	19.8	%
		Default rate	2.6 - 36.7	7.5
		Loss severity	47.2 - 66.0	60.4

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 residential mortgage-backed securities (consisting of 4 private label 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 trust preferred securities (consisting of one pooled 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, 2017 and December 31, 2016 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, 2017 and December 31, 2016), 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, 2017 and December 31, 2016.

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 impaired loans reported at the fair value of the underlying collateral, loan servicing rights and foreclosed assets, which are reported at fair value upon initial recognition or subsequent impairment as described below.

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 may be adjusted based on certain discounting criteria. At June 30, 2017, certain appraisals were discounted based on specific market data by location and property type. During the quarter ended June 30, 2017, 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 $1.9 million and $473 thousand for the three months ended June 30, 2017 and 2016, respectively, and $2.1 millionand$952 thousand for the six months ended June 30, 2017 and 2016, respectively. At June 30, 2017, collateral dependent impaired loans with a total recorded investment of $35.2 million were reduced by specific valuation allowance allocations totaling $3.7 million to a reported total net carrying amount of $31.5 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, 2017, the fair value model used prepayment speeds (stated as constant prepayment rates) from 0 percent up to 25 percent and a discount rate of 8 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 recoveries of net impairment charges on its loan servicing rights totaling $50 thousand and $51 thousand for the three and six months ended June 30, 2017, respectively, as compared to net impairment charges totaling $265 thousand and $457 thousand for three and six months ended June 30, 2016, 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. There were no adjustments of the appraisals of foreclosed assets at June 30, 2017. At June 30, 2017, foreclosed assets included $1.3 million of assets that were measured at fair value upon initial recognition or subsequently re-measured during

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the quarter ended June 30, 2017. The foreclosed assets charge-offs to the allowance for loan losses totaled $282 thousand and $489 thousand for the three months ended June 30, 2017 and 2016, respectively, and $994 thousand and $922 thousand for six months ended June 30, 2017 and 2016, respectively. The re-measurement of foreclosed assets at fair value subsequent to their initial recognition resulted in net losses within non-interest expense of $290 thousand for both the three and six months ended June 30, 2017, and $295 thousandand $912 thousand for three and six months ended June 30, 2016, 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, 2017 and December 31, 2016 were as follows: 

	Fair Value Hierarchy	June 30, 2017				December 31, 2016
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(in thousands)
Financial assets
Cash and due from banks	Level 1	$	227,830	$	227,830	$	220,791	$	220,791
Interest bearing deposits with banks	Level 1	129,959		129,959		171,710		171,710
Investment securities held to maturity:
U.S. Treasury securities	Level 1	138,754		147,656		138,830		147,495
U.S. government agency securities	Level 2	10,597		10,802		11,329		11,464
Obligations of states and political subdivisions	Level 2	501,402		517,830		566,590		577,826
Residential mortgage-backed securities	Level 2	1,070,137		1,062,008		1,112,460		1,102,802
Trust preferred securities	Level 2	59,814		48,268		59,804		47,290
Corporate and other debt securities	Level 2	41,559		42,168		36,559		37,720
Total investment securities held to maturity		1,822,263		1,828,732		1,925,572		1,924,597
Net loans	Level 3	17,594,314		17,187,164		17,121,684		16,756,655
Accrued interest receivable	Level 1	69,732		69,732		66,816		66,816
Federal Reserve Bank and Federal Home Loan Bank stock (1)	Level 1	201,116		201,116		147,127		147,127
Financial liabilities
Deposits without stated maturities	Level 1	13,881,025		13,881,025		14,591,837		14,591,837
Deposits with stated maturities	Level 2	3,368,993		3,375,127		3,138,871		3,160,572
Short-term borrowings	Level 1	1,734,444		1,739,208		1,080,960		1,081,751
Long-term borrowings	Level 2	1,819,615		1,906,668		1,433,906		1,523,386
Junior subordinated debentures issued to capital trusts	Level 2	41,658		46,298		41,577		45,785
Accrued interest payable (2)	Level 1	10,931		10,931		10,675		10,675

(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 FHLB borrowings (and from time to time, federal funds purchased) 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 6. Investment Securities

Held to Maturity

The amortized cost, gross unrealized gains and losses and fair value of securities held to maturity at June 30, 2017 and December 31, 2016 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2017
U.S. Treasury securities	$	138,754	$	8,902	$	—		$	147,656
U.S. government agency securities	10,597		205		—			10,802
Obligations of states and political subdivisions:
Obligations of states and state agencies	249,607		9,623		(1,688		)	257,542
Municipal bonds	251,795		8,519		(26		)	260,288
Total obligations of states and political subdivisions	501,402		18,142		(1,714		)	517,830
Residential mortgage-backed securities	1,070,137		7,658		(15,787		)	1,062,008
Trust preferred securities	59,814		32		(11,578		)	48,268
Corporate and other debt securities	41,559		927		(318		)	42,168
Total investment securities held to maturity	$	1,822,263	$	35,866	$	(29,397	)	$	1,828,732
December 31, 2016
U.S. Treasury securities	$	138,830	$	8,665	$	—		$	147,495
U.S. government agency securities	11,329		135		—			11,464
Obligations of states and political subdivisions:
Obligations of states and state agencies	252,185		6,692		(1,428		)	257,449
Municipal bonds	314,405		6,438		(466		)	320,377
Total obligations of states and political subdivisions	566,590		13,130		(1,894		)	577,826
Residential mortgage-backed securities	1,112,460		8,432		(18,090		)	1,102,802
Trust preferred securities	59,804		40		(12,554		)	47,290
Corporate and other debt securities	36,559		1,190		(29		)	37,720
Total investment securities held to maturity	$	1,925,572	$	31,592	$	(32,567	)	$	1,924,597

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The age of unrealized losses and fair value of related securities held to maturity at June 30, 2017 and December 31, 2016were 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, 2017
Obligations of states and political subdivisions:
Obligations of states and state agencies	$	63,537	$	(1,688	)	$	—	$	—		$	63,537	$	(1,688	)
Municipal bonds	4,664		(26		)	—		—			4,664		(26		)
Total obligations of states and political subdivisions	68,201		(1,714		)	—		—			68,201		(1,714		)
Residential mortgage-backed securities	622,527		(11,860		)	156,974		(3,927		)	779,501		(15,787		)
Trust preferred securities	—		—			36,883		(11,578		)	36,883		(11,578		)
Corporate and other debt securities	4,682		(318		)	—		—			4,682		(318		)
Total	$	695,410	$	(13,892	)	$	193,857	$	(15,505	)	$	889,267	$	(29,397	)
December 31, 2016
Obligations of states and political subdivisions:
Obligations of states and state agencies	$	98,114	$	(1,428	)	$	—	$	—		$	98,114	$	(1,428	)
Municipal bonds	27,368		(466		)	—		—			27,368		(466		)
Total obligations of states and political subdivisions	125,482		(1,894		)	—		—			125,482		(1,894		)
Residential mortgage-backed securities	692,108		(14,420		)	114,505		(3,670		)	806,613		(18,090		)
Trust preferred securities	—		—			45,898		(12,554		)	45,898		(12,554		)
Corporate and other debt securities	2,971		(29		)	—		—			2,971		(29		)
Total	$	820,561	$	(16,343	)	$	160,403	$	(16,224	)	$	980,964	$	(32,567	)

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 121 at June 30, 2017 and 132 at December 31, 2016.

The unrealized losses within the residential mortgage-backed securities category of the held to maturity portfolio at June 30, 2017 mainly related to investment grade securities issued by Ginnie Mae.

The unrealized losses existing for more than twelve months for trust preferred securities at June 30, 2017 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, 2017.

Management does not believe that any individual unrealized loss as of June 30, 2017 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.

22

As of June 30, 2017, 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 $997.2 million.

The contractual maturities of investments in debt securities held to maturity at June 30, 2017 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, 2017
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	53,859	$	54,621
Due after one year through five years	210,615		218,428
Due after five years through ten years	325,933		343,717
Due after ten years	161,719		149,958
Residential mortgage-backed securities	1,070,137		1,062,008
Total investment securities held to maturity	$	1,822,263	$	1,828,732

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 7.5 years at June 30, 2017.

23

Available for Sale

The amortized cost, gross unrealized gains and losses and fair value of securities available for sale at June 30, 2017 and December 31, 2016 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2017
U.S. Treasury securities	$	51,009	$	7	$	(919	)	$	50,097
U.S. government agency securities	46,147		292		(71		)	46,368
Obligations of states and political subdivisions:
Obligations of states and state agencies	39,286		336		(218		)	39,404
Municipal bonds	79,824		459		(493		)	79,790
Total obligations of states and political subdivisions	119,110		795		(711		)	119,194
Residential mortgage-backed securities	1,175,171		2,564		(14,015		)	1,163,720
Trust preferred securities*	7,796		—		(1,577		)	6,219
Corporate and other debt securities	67,177		701		(204		)	67,674
Equity securities	10,505		737		(460		)	10,782
Total investment securities available for sale	$	1,476,915	$	5,096	$	(17,957	)	$	1,464,054
December 31, 2016
U.S. Treasury securities	$	51,020	$	6	$	(1,435	)	$	49,591
U.S. government agency securities	22,815		232		(6		)	23,041
Obligations of states and political subdivisions:
Obligations of states and state agencies	40,696		70		(424		)	40,342
Municipal bonds	80,045		147		(767		)	79,425
Total obligations of states and political subdivisions	120,741		217		(1,191		)	119,767
Residential mortgage-backed securities	1,029,827		2,061		(16,346		)	1,015,542
Trust preferred securities*	10,164		—		(2,155		)	8,009
Corporate and other debt securities	60,651		436		(522		)	60,565
Equity securities	20,505		1,114		(761		)	20,858
Total investment securities available for sale	$	1,315,723	$	4,066	$	(22,416	)	$	1,297,373

* Includes two pooled trust preferred securities, principally collateralized by securities issued by banks and insurance companies, at June 30, 2017 and December 31, 2016.

24

The age of unrealized losses and fair value of related securities available for sale at June 30, 2017 and December 31, 2016 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, 2017
U.S. Treasury securities	$	49,168	$	(919	)	$	—	$	—		$	49,168	$	(919	)
U.S. government agency securities	31,236		(68		)	3,808		(3		)	35,044		(71		)
Obligations of states and political subdivisions:
Obligations of states and state agencies	13,118		(169		)	1,628		(49		)	14,746		(218		)
Municipal bonds	18,302		(193		)	11,059		(300		)	29,361		(493		)
Total obligations of states and political subdivisions	31,420		(362		)	12,687		(349		)	44,107		(711		)
Residential mortgage-backed securities	739,362		(9,680		)	136,402		(4,335		)	875,764		(14,015		)
Trust preferred securities	—		—			6,219		(1,577		)	6,219		(1,577		)
Corporate and other debt securities	30,335		(75		)	11,034		(129		)	41,369		(204		)
Equity securities	—		—			5,184		(460		)	5,184		(460		)
Total	$	881,521	$	(11,104	)	$	175,334	$	(6,853	)	$	1,056,855	$	(17,957	)
December 31, 2016
U.S. Treasury securities	$	48,660	$	(1,435	)	$	—	$	—		$	48,660	$	(1,435	)
U.S. government agency securities	2,530		(4		)	4,034		(2		)	6,564		(6		)
Obligations of states and political subdivisions:
Obligations of states and state agencies	28,628		(404		)	753		(20		)	29,381		(424		)
Municipal bonds	42,573		(506		)	11,081		(261		)	53,654		(767		)
Total obligations of states and political subdivisions	71,201		(910		)	11,834		(281		)	83,035		(1,191		)
Residential mortgage-backed securities	788,030		(11,889		)	132,718		(4,457		)	920,748		(16,346		)
Trust preferred securities	—		—			8,009		(2,155		)	8,009		(2,155		)
Corporate and other debt securities	32,292		(294		)	15,192		(228		)	47,484		(522		)
Equity securities	—		—			14,883		(761		)	14,883		(761		)
Total	$	942,713	$	(14,532	)	$	186,670	$	(7,884	)	$	1,129,383	$	(22,416	)

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, 2017 was 274 as compared to 298 at December 31, 2016.

The unrealized losses for the residential mortgage-backed securities category of the available for sale portfolio at June 30, 2017 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, 2017 in the table above largely relate to 2 pooled trust preferred securities with an amortized cost of $7.8 million and a fair value of $6.2 million. One of the two pooled trust preferred securities had unrealized loss of $703 thousand and an investment grade rating at June 30, 2017.

25

As of June 30, 2017, 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 $703.9 million.

The contractual maturities of investment securities available for sale at June 30, 2017 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, 2017
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	24,831	$	24,752
Due after one year through five years	70,802		74,052
Due after five years through ten years	115,497		114,927
Due after ten years	80,109		78,821
Residential mortgage-backed securities	1,175,171		1,163,720
Equity securities	10,505		10,782
Total investment securities available for sale	$	1,476,915	$	1,467,054

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 was 9.1 years at June 30, 2017.

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) and corporate bonds 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 three and six months ended June 30, 2017 and 2016. At June 30, 2017, four previously impaired private label mortgage-backed securities (prior to December 31, 2012) had a combined amortized cost and fair value of $9.1 million and $8.9 million, respectively, while one previously impaired pooled trust preferred security had an amortized cost and fair value of $2.8 million and $1.9 million, respectively. The previously impaired pooled trust preferred security was not accruing interest during the three and six months ended June 30, 2017 and 2016.

26

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, 2017 and 2016:

	Three Months Ended June 30,					Six Months Ended June 30,
	2017			2016		2017			2016
	(in thousands)
Balance, beginning of period	$	4,767		$	5,348	$	4,916		$	5,837
Accretion of credit loss impairment due to an increase in expected cash flows	(67		)	—		(216		)	(489		)
Balance, end of period	$	4,700		$	5,348	$	4,700		$	5,348

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 and losses realized on sales, maturities and other investment securities transactions included in earnings were immaterial for the three and six months ended June 30, 2017 and 2016.

27

Note 7. Loans

The detail of the loan portfolio as of June 30, 2017 and December 31, 2016 was as follows:

	June 30, 2017						December 31, 2016
	Non-PCI Loans		PCI Loans*		Total		Non-PCI Loans		PCI Loans*		Total
	(in thousands)
Loans:
Commercial and industrial	$	2,417,924	$	213,388	$	2,631,312	$	2,357,018	$	281,177	$	2,638,195
Commercial real estate:
Commercial real estate	8,201,235		1,029,279		9,230,514		7,628,328		1,091,339		8,719,667
Construction	825,196		55,877		881,073		710,266		114,680		824,946
Total commercial real estate loans	9,026,431		1,085,156		10,111,587		8,338,594		1,206,019		9,544,613
Residential mortgage	2,569,500		155,277		2,724,777		2,684,195		183,723		2,867,918
Consumer:
Home equity	369,372		81,138		450,510		376,213		92,796		469,009
Automobile	1,150,217		126		1,150,343		1,139,082		145		1,139,227
Other consumer	635,847		6,384		642,231		569,499		7,642		577,141
Total consumer loans	2,155,436		87,648		2,243,084		2,084,794		100,583		2,185,377
Total loans	$	16,169,291	$	1,541,469	$	17,710,760	$	15,464,601	$	1,771,502	$	17,236,103

* PCI loans include covered loans (mostly consisting of residential mortgage and commercial real estate loans) totaling $44.5 million and $70.4 million at June 30, 2017 and December 31, 2016, respectively.

Total loans (excluding PCI covered loans) include net unearned premiums and deferred loan costs of $16.7 million and $15.3 million at June 30, 2017 and December 31, 2016, respectively. The outstanding balances (representing contractual balances owed to Valley) for PCI loans totaled $1.7 billion and $1.9 billion at June 30, 2017 and December 31, 2016, respectively.

Valley transferred $225.5 million of residential mortgage loans from the loan portfolio to loans held for sale during the six months ended June 30, 2017. Exclusive of such transfers, there were no sales of loans from the held for investment portfolio during the three and six months ended June 30, 2017 and 2016.

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 $44.5 million and $70.4 million at June 30, 2017 and December 31, 2016, respectively.

28

The following table presents changes in the accretable yield for PCI loans during the three and six months ended June 30, 2017 and 2016:

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
	(in thousands)
Balance, beginning of period	$	269,831		$	387,120		$	294,514		$	415,179
Accretion	(23,553		)	(31,519		)	(48,236		)	(59,578		)
Balance, end of period	$	246,278		$	355,601		$	246,278		$	355,601

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 $7.1 million and $7.2 million at June 30, 2017 and December 31, 2016, respectively.

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.

29

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, 2017 and December 31, 2016:

	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, 2017
Commercial and industrial	$	2,391	$	2,686	$	—	$	11,072	$	16,149	$	2,401,775	$	2,417,924
Commercial real estate:
Commercial real estate	6,983		8,233		2,315		15,514		33,045		8,168,190		8,201,235
Construction	—		854		2,879		1,334		5,067		820,129		825,196
Total commercial real estate loans	6,983		9,087		5,194		16,848		38,112		8,988,319		9,026,431
Residential mortgage	4,677		1,721		3,353		12,825		22,576		2,546,924		2,569,500
Consumer loans:
Home equity	988		229		—		1,306		2,523		366,849		369,372
Automobile	3,242		774		255		103		4,374		1,145,843		1,150,217
Other consumer	163		4		20		—		187		635,660		635,847
Total consumer loans	4,393		1,007		275		1,409		7,084		2,148,352		2,155,436
Total	$	18,444	$	14,501	$	8,822	$	42,154	$	83,921	$	16,085,370	$	16,169,291
December 31, 2016
Commercial and industrial	$	6,705	$	5,010	$	142	$	8,465	$	20,322	$	2,336,696	$	2,357,018
Commercial real estate:
Commercial real estate	5,894		8,642		474		15,079		30,089		7,598,239		7,628,328
Construction	6,077		—		1,106		715		7,898		702,368		710,266
Total commercial real estate loans	11,971		8,642		1,580		15,794		37,987		8,300,607		8,338,594
Residential mortgage	12,005		3,564		1,541		12,075		29,185		2,655,010		2,684,195
Consumer loans:
Home equity	929		415		—		1,028		2,372		373,841		376,213
Automobile	3,192		723		188		146		4,249		1,134,833		1,139,082
Other consumer	76		9		21		—		106		569,393		569,499
Total consumer loans	4,197		1,147		209		1,174		6,727		2,078,067		2,084,794
Total	$	34,878	$	18,363	$	3,472	$	37,508	$	94,221	$	15,370,380	$	15,464,601

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.

30

The following table presents the information about impaired loans by loan portfolio class at June 30, 2017 and December 31, 2016:

	Recorded Investment With No Related Allowance		Recorded Investment With Related Allowance		Total Recorded Investment		Unpaid Contractual Principal Balance		Related Allowance
	(in thousands)
June 30, 2017
Commercial and industrial	$	3,933	$	56,304	$	60,237	$	65,809	$	6,746
Commercial real estate:
Commercial real estate	32,641		30,629		63,270		65,333		2,751
Construction	679		2,067		2,746		2,746		218
Total commercial real estate loans	33,320		32,696		66,016		68,079		2,969
Residential mortgage	8,464		7,725		16,189		17,488		582
Consumer loans:
Home equity	2,888		663		3,551		3,643		51
Total consumer loans	2,888		663		3,551		3,643		51
Total	$	48,605	$	97,388	$	145,993	$	155,019	$	10,348
December 31, 2016
Commercial and industrial	$	3,609	$	27,031	$	30,640	$	35,957	$	5,864
Commercial real estate:
Commercial real estate	21,318		36,974		58,292		60,267		3,612
Construction	1,618		2,379		3,997		3,997		260
Total commercial real estate loans	22,936		39,353		62,289		64,264		3,872
Residential mortgage	8,398		9,958		18,356		19,712		725
Consumer loans:
Home equity	1,182		2,352		3,534		3,626		70
Total consumer loans	1,182		2,352		3,534		3,626		70
Total	$	36,125	$	78,694	$	114,819	$	123,559	$	10,531

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, 2017 and 2016: 

	Three Months Ended June 30,
	2017				2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
Commercial and industrial	$	46,283	$	288	$	24,157	$	194
Commercial real estate:
Commercial real estate	60,119		483		70,194		475
Construction	2,759		20		10,027		53
Total commercial real estate loans	62,878		503		80,221		528
Residential mortgage	17,555		184		22,922		234
Consumer loans:
Home equity	4,799		34		3,071		20
Total consumer loans	4,799		34		3,071		20
Total	$	131,515	$	1,009	$	130,371	$	976

31

	Six Months Ended June 30,
	2017				2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
Commercial and industrial	$	38,371	$	596	$	26,244	$	434
Commercial real estate:
Commercial real estate	57,722		808		71,296		1,114
Construction	2,728		39		9,915		101
Total commercial real estate loans	60,450		847		81,211		1,215
Residential mortgage	18,974		392		23,262		436
Consumer loans:
Home equity	4,847		74		2,715		43
Total consumer loans	4,847		74		2,715		43
Total	$	122,642	$	1,909	$	133,432	$	2,128

Interest income recognized on a cash basis (included in the table above) was immaterial for the three and six months ended June 30, 2017 and 2016.

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 of the loan and Valley’s underwriting process shows the borrower has the capacity to continue to perform under the restructured terms, the loan will continue to accrue interest. Non-accruing restructured loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible.

Performing TDRs (not reported as non-accrual loans) totaled $109.8 million and $85.2 million as of June 30, 2017 and December 31, 2016, respectively. Non-performing TDRs totaled $15.8 million and $10.6 million as of June 30, 2017 and December 31, 2016, respectively.

The following tables present loans by loan portfolio class modified as TDRs during the three and six months ended June 30, 2017 and 2016. 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, 2017 and 2016, respectively.

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	Three Months Ended June 30, 2017					Three Months Ended June 30, 2016
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	47	$	40,077	$	38,367	4	$	5,079	$	4,094
Commercial real estate:
Commercial real estate	5	23,604		23,604		2	6,111		6,077
Construction	—	—		—		—	—		—
Total commercial real estate	5	23,604		23,604		2	6,111		6,077
Residential mortgage	2	549		545		5	1,830		1,826
Total	54	$	64,230	$	62,516	11	$	13,020	$	11,997

	Six Months Ended June 30, 2017					Six Months Ended June 30, 2016
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	53	$	46,315	$	43,660	6	$	6,456	$	5,437
Commercial real estate:
Commercial real estate	6	23,782		23,777		3	6,658		6,388
Construction	1	560		480		—	—		—
Total commercial real estate	7	24,342		24,257		3	6,658		6,388
Residential mortgage	5	1,170		1,167		7	2,222		2,206
Consumer	—	—		—		1	55		53
Total	65	$	71,827	$	69,084	17	$	15,391	$	14,084

The total TDRs presented in the above table had allocated specific reserves for loan losses totaling $5.3 million and $2.1 million at June 30, 2017 and 2016, respectively.These specific reserves are included in the allowance for loan losses for loans individually evaluated for impairment disclosed in Note 8. 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 three and six months ended June 30, 2017.

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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, 2017 and 2016.

	Three Months Ended June 30, 2017			Three Months Ended June 30, 2016
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial and industrial	6	$	5,358	—	$	—
Commercial real estate	—	—		2	1,070
Residential mortgage	—	—		1	74
Consumer	—	—		1	30
Total	6	$	5,358	4	$	1,174

	Six Months Ended June 30, 2017			Six Months Ended June 30, 2016
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial and industrial	7	$	5,433	—	$	—
Commercial real estate	1	736		1	214
Residential mortgage	1	153		1	74
Consumer	—	—		1	30
Total	9	$	6,322	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.

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The following table presents the risk category of loans (excluding PCI loans) by class of loans at June 30, 2017 and December 31, 2016. 

Credit exposure - by internally assigned risk rating	Pass		Special Mention		Substandard		Doubtful		Total Non-PCI Loans
	(in thousands)
June 30, 2017
Commercial and industrial	$	2,237,178	$	76,419	$	98,034	$	6,293	$	2,417,924
Commercial real estate	8,063,898		51,960		85,377		—		8,201,235
Construction	822,602		364		2,230		—		825,196
Total	$	11,123,678	$	128,743	$	185,641	$	6,293	$	11,444,355
December 31, 2016
Commercial and industrial	$	2,246,457	$	44,316	$	64,649	$	1,596	$	2,357,018
Commercial real estate	7,486,469		57,591		84,268		—		7,628,328
Construction	708,070		200		1,996		—		710,266
Total	$	10,440,996	$	102,107	$	150,913	$	1,596	$	10,695,612

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, 2017 and December 31, 2016:

Credit exposure - by payment activity	Performing Loans		Non-Performing Loans		Total Non-PCI Loans
	(in thousands)
June 30, 2017
Residential mortgage	$	2,556,675	$	12,825	$	2,569,500
Home equity	368,066		1,306		369,372
Automobile	1,150,114		103		1,150,217
Other consumer	635,847		—		635,847
Total	$	4,710,702	$	14,234	$	4,724,936
December 31, 2016
Residential mortgage	$	2,672,120	$	12,075	$	2,684,195
Home equity	375,185		1,028		376,213
Automobile	1,138,936		146		1,139,082
Other consumer	569,499		—		569,499
Total	$	4,755,740	$	13,249	$	4,768,989

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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, 2017 and December 31, 2016.

Credit exposure - by payment activity	Performing Loans		Non-Performing Loans		Total PCI Loans
	(in thousands)
June 30, 2017
Commercial and industrial	$	201,297	$	12,091	$	213,388
Commercial real estate	1,014,923		14,356		1,029,279
Construction	54,775		1,102		55,877
Residential mortgage	150,031		5,246		155,277
Consumer	86,728		920		87,648
Total	$	1,507,754	$	33,715	$	1,541,469
December 31, 2016
Commercial and industrial	$	272,483	$	8,694	$	281,177
Commercial real estate	1,080,376		10,963		1,091,339
Construction	113,370		1,310		114,680
Residential mortgage	179,793		3,930		183,723
Consumer	98,469		2,114		100,583
Total	$	1,744,491	$	27,011	$	1,771,502

Other real estate owned (OREO) totaled $10.2 million at both June 30, 2017 and December 31, 2016 (including $558 thousand of OREO properties which are subject to loss-sharing agreements with the FDIC at December 31, 2016). There were no covered OREO properties at June 30, 2017. OREO included foreclosed residential real estate properties totaling $2.3 millionand $1.6 million at June 30, 2017 and December 31, 2016, respectively. Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $6.2 millionand $7.1 million at June 30, 2017 and December 31, 2016, respectively.

Note 8. 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. There was no allowance allocation for PCI loan losses at June 30, 2017 and December 31, 2016.

The following table summarizes the allowance for credit losses at June 30, 2017 and December 31, 2016: 

	June 30, 2017		December 31, 2016
	(in thousands)
Components of allowance for credit losses:
Allowance for loan losses	$	116,446	$	114,419
Allowance for unfunded letters of credit	2,175		2,185
Total allowance for credit losses	$	118,621	$	116,604

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2017			2016		2017			2016
	(in thousands)
Components of provision for credit losses:
Provision for loan losses	$	3,710		$	1,363	$	6,112		$	2,092
Provision for unfunded letters of credit	(78		)	66		(10		)	137
Total provision for credit losses	$	3,632		$	1,429	$	6,102		$	2,229

The following table details activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2017 and 2016:

	Commercial and Industrial			Commercial Real Estate			Residential Mortgage			Consumer			Total
	(in thousands)
Three Months Ended June 30, 2017
Allowance for loan losses:
Beginning balance	$	51,288		$	56,302		$	3,592		$	4,261		$	115,443
Loans charged-off	(2,910		)	(139		)	(229		)	(1,011		)	(4,289		)
Charged-off loans recovered	312			640			235			395			1,582
Net (charge-offs) recoveries	(2,598		)	501			6			(616		)	(2,707		)
Provision for loan losses	2,927			(1,348		)	588			1,543			3,710
Ending balance	$	51,617		$	55,455		$	4,186		$	5,188		$	116,446
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

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	Commercial and Industrial			Commercial Real Estate			Residential Mortgage			Consumer			Total
	(in thousands)
Six Months Ended June 30, 2017
Allowance for loan losses:
Beginning balance	$	50,820		$	55,851		$	3,702		$	4,046		$	114,419
Loans charged-off	(4,624		)	(553		)	(359		)	(2,132		)	(7,668		)
Charged-off loans recovered	1,160			782			683			958			3,583
Net (charge-offs) recoveries	(3,464		)	229			324			(1,174		)	(4,085		)
Provision for loan losses	4,261			(625		)	160			2,316			6,112
Ending balance	$	51,617		$	55,455		$	4,186		$	5,188		$	116,446
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

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, 2017 and December 31, 2016.

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
June 30, 2017
Allowance for loan losses:
Individually evaluated for impairment	$	6,746	$	2,969	$	582	$	51	$	10,348
Collectively evaluated for impairment	44,871		52,486		3,604		5,137		106,098
Total	$	51,617	$	55,455	$	4,186	$	5,188	$	116,446
Loans:
Individually evaluated for impairment	$	60,237	$	66,016	$	16,189	$	3,551	$	145,993
Collectively evaluated for impairment	2,357,687		8,960,415		2,553,311		2,151,885		16,023,298
Loans acquired with discounts related to credit quality	213,388		1,085,156		155,277		87,648		1,541,469
Total	$	2,631,312	$	10,111,587	$	2,724,777	$	2,243,084	$	17,710,760
December 31, 2016
Allowance for loan losses:
Individually evaluated for impairment	$	5,864	$	3,872	$	725	$	70	$	10,531
Collectively evaluated for impairment	44,956		51,979		2,977		3,976		103,888
Total	$	50,820	$	55,851	$	3,702	$	4,046	$	114,419
Loans:
Individually evaluated for impairment	$	30,640	$	62,289	$	18,356	$	3,534	$	114,819
Collectively evaluated for impairment	2,326,378		8,276,305		2,665,839		2,081,260		15,349,782
Loans acquired with discounts related to credit quality	281,177		1,206,019		183,723		100,583		1,771,502
Total	$	2,638,195	$	9,544,613	$	2,867,918	$	2,185,377	$	17,236,103

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Note 9. Goodwill and Other Intangible Assets

Goodwill totaled $690.6 million at both June 30, 2017 and December 31, 2016. There were no changes to the carrying amounts of goodwill allocated to Valley’s business segments, or reporting units thereof, for goodwill impairment analysis (as reported in Valley’s Annual Report on Form 10-K for the year ended December 31, 2016). There was no impairment of goodwill during the three and six months ended June 30, 2017 and 2016.

The following table summarizes other intangible assets as of June 30, 2017 and December 31, 2016:

	Gross Intangible Assets		Accumulated Amortization			Valuation Allowance			Net Intangible Assets
	(in thousands)
June 30, 2017
Loan servicing rights	$	75,413	$	(54,253	)	$	(849	)	$	20,311
Core deposits	43,396		(21,941		)	—			21,455
Other	4,087		(2,153		)	—			1,934
Total other intangible assets	$	122,896	$	(78,347	)	$	(849	)	$	43,700
December 31, 2016
Loan servicing rights	$	73,002	$	(52,634	)	$	(900	)	$	19,468
Core deposits	61,504		(37,562		)	—			23,942
Other	4,087		(2,013		)	—			2,074
Total other intangible assets	$	138,593	$	(92,209	)	$	(900	)	$	45,484

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 5 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, 2017 and 2016.

The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2017 through 2021:

	Loan Servicing Rights		Core Deposits		Other
	(in thousands)
2017	$	2,719	$	2,356	$	139
2018	4,503		4,215		249
2019	3,557		3,671		235
2020	2,813		3,127		220
2021	2,115		2,582		206

Valley recognized amortization expense on other intangible assets, including net impairment (or recovery of impairment) charges on loan servicing rights, totaling approximately $2.6 million and $2.9 million for the three

39

months ended June 30, 2017 and 2016, respectively, and $5.1 million and $5.8 million for the six months ended June 30, 2017 and 2016, respectively.

Note 10. Stock–Based Compensation

Valley currently has one active employee stock option plan, the 2016 Long-Term Stock Incentive Plan (the “2016 Stock Plan”), adopted by Valley’s Board of Directors on January 29, 2016 and approved by its shareholders on April 28, 2016. The purpose of the 2016 Plan is to provide additional incentive to officers and key employees of Valley and its subsidiaries, whose substantial contributions are essential to the continued growth and success of Valley, and to attract and retain competent and dedicated officers and other key employees whose efforts will result in the continued and long-term growth of Valley’s business.

Under the 2016 Stock Plan, Valley may award 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) to its employees and non-employee directors. As of June 30, 2017, 7.3 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.

Restricted Stock. Restricted stock is awarded to key employees, providing for the immediate award of our common stock subject to certain vesting and restrictions under the 2016 Stock Plan. Compensation expense is measured based on the grant-date fair value of the shares. Valley awarded time-based restricted stock totaling 482 thousand shares and 498 thousand shares during the six months ended June 30, 2017 and 2016, respectively, to both executive officers and key employees of Valley. The majority of the awards have vesting periods of three years. Generally, the restrictions on such awards lapse at an annual rate of one-third of the total award commencing with the first anniversary of the date of grant. The average grant date fair value of the restricted stock awards granted during the six months ended June 30, 2017 and 2016 was $11.71 per share and $8.77 per share, respectively.

Restricted Stock Units. Valley granted 371 thousand shares and 431 thousand shares of performance-based RSUs to certain executive officers for the six months ended June 30, 2017 and 2016, respectively. 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 performance based awards "cliff" vest after three years based on the cumulative performance of Valley during that time period. 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 (if applicable), 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 grant date fair value of the RSUs granted during the six months ended June 30, 2017 and 2016 was $11.05 per share and $8.32 per share, respectively.

Valley recorded total stock-based compensation expense of $2.7 million and $2.8 million for the three months ended June 30, 2017 and2016, respectively, and $6.9 million and $5.2 million for the six months ended June 30, 2017 and 2016, respectively. The fair values of stock awards are expensed over the shorter of the vesting or required service period. As of June 30, 2017, the unrecognized amortization expense for all stock-based employee compensation totaled approximately $16.5 million and will be recognized over an average remaining vesting period of 2.1 years.

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Note 11. 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, respectively. 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.

At June 30, 2017, Valley has one "steepener" swap with a total current notional amount of $14.5 million where the receive rate on the swap mirrors the pay rate on the brokered deposits and the rate paid on these types of hybrid instruments are based on a formula derived from the spread between the long and short ends of the constant maturity swap (CMS) rate curve. Although these types of instruments do not meet the hedge accounting requirements, the change in fair value of both the bifurcated derivative and the stand alone swap tend to move in opposite directions with changes in 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, 2017							December 31, 2016
	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	$	528	$	31	*	$	707,000	$	802	$	15,641	$	707,000
Fair value hedge interest rate swaps	—		836			7,889		—		986		7,999
Total derivatives designated as hedging instruments	$	528	$	867		$	714,889	$	802	$	16,627	$	714,999
Derivatives not designated as hedging instruments:
Interest rate swaps and embedded derivatives	$	26,058	$	22,870	*	$	1,288,274	$	25,285	$	25,284	$	1,075,722
Mortgage banking derivatives	178		165			88,567		2,968		2,166		246,583
Total derivatives not designated as hedging instruments	$	26,236	$	23,035		$	1,376,841	$	28,253	$	27,450	$	1,322,305

* The fair value for the Chicago Mercantile Exchange cleared derivative positions is inclusive of accrued interest payable and the portion of the cash collateral representing the variation margin posted with (or by) the applicable counterparties.

Chicago Mercantile Exchange (CME) amended their rules to legally characterize the variation margin posted between counterparties to be classified as settlements of the outstanding derivative contracts instead of cash collateral.  Effective January 1, 2017, Valley adopted the new rule on a prospective basis to classify its CME variation margin as a single-unit of account with the fair value of certain cash flow and non-designated derivative instruments. As a result, the fair value of the designated cash flow derivatives and non-designated interest rate swaps cleared with the CME were offset by variation margins totaling $13.0 million and $3.3 million, respectively, and reported in the table above on a net basis at June 30, 2017.

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,
	2017			2016			2017			2016
	(in thousands)
Amount of loss reclassified from accumulated other comprehensive loss to interest expense	$	(2,314	)	$	(3,597	)	$	(4,832	)	$	(6,568	)
Amount of loss recognized in other comprehensive income	(1,482		)	(3,625		)	(1,265		)	(14,657		)

The net gains or losses related to cash flow hedge ineffectiveness were immaterial during the three and six months ended June 30, 2017 and 2016. The accumulated net after-tax losses related to effective cash flow hedges included in accumulated other comprehensive loss were $10.4 million and $12.5 million at June 30, 2017 and December 31, 2016, 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 $6.9 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,
	2017			2016			2017			2016
	(in thousands)
Derivative - interest rate swaps:
Interest income	$	52		$	2		$	149		$	(97	)
Interest expense	—			2,069			—			6,797
Hedged item - loans and borrowings:
Interest income	$	(52	)	$	(2	)	$	(149	)	$	97
Interest expense	—			(2,060		)	—			(6,779		)

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, 2017 and 2016.

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2017		2016			2017			2016
	(in thousands)
Non-designated hedge interest rate derivatives
Other non-interest expense	$	70	$	(92	)	$	(790	)	$	(389	)

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, 2017, Valley was in compliance with all of the provisions of its derivative counterparty agreements. As of June 30, 2017, 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 $10.5 million. Valley has derivative counterparty agreements that require minimum collateral posting thresholds for certain counterparties. At June 30, 2017, Valley had $43.3 million in collateral posted with counterparties, net of CME variation margin.

Note 12. 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

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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, 2017 and December 31, 2016.

							Gross Amounts Not Offset
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments			Cash Collateral				Net Amount
	(in thousands)
June 30, 2017
Assets:
Interest rate caps and swaps	$	26,586	$	—	$	26,586	$	(3,888	)	$	—			$	22,698
Liabilities:
Interest rate caps and swaps	$	23,737	$	—	$	23,737	$	(3,888	)	$	(9,314	)	(1)	$	10,535
Repurchase agreements	200,000		—		200,000		—			(200,000		)	(2)	—
Total	$	223,737	$	—	$	223,737	$	(3,888	)	$	(209,314	)		$	10,535
December 31, 2016
Assets:
Interest rate caps and swaps	$	26,087	$	—	$	26,087	$	(5,268	)	$	—			$	20,819
Liabilities:
Interest rate caps and swaps	$	41,911	$	—	$	41,911	$	(5,268	)	$	(36,643	)	(1)	$	—
Repurchase agreements	165,000		—		165,000		—			(165,000		)	(2)	—
Total	$	206,911	$	—	$	206,911	$	(5,268	)	$	(201,643	)		$	—

(1) Represents the amount of collateral posted with derivatives counterparties that offsets net liabilities. Actual cash collateral posted with all counterparties totaled $59.6 million and $52.4 million at June 30, 2017 and December 31, 2016, respectively.

(2) Represents the fair value of non-cash pledged investment securities.

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Note 13. 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, 2017 and December 31, 2016.

	June 30, 2017		December 31, 2016
	(in thousands)
Other Assets:
Affordable housing tax credit investments, net	$	28,559	$	29,567
Other tax credit investments, net	36,204		44,763
Total tax credit investments, net	$	64,763	$	74,330
Other Liabilities:
Unfunded affordable housing tax credit commitments	$	4,690	$	4,850
Unfunded other tax credit commitments	3,582		7,276
Total unfunded tax credit commitments	$	8,272	$	12,126

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, 2017 and 2016: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
	(in thousands)
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits	$	1,271	$	1,065	$	2,555	$	2,130
Other tax credit investment credits and tax benefits	8,680		3,268		14,966		6,536
Total reduction in income tax expense	$	9,951	$	4,333	$	17,521	$	8,666
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses	$	358	$	775	$	754	$	1,359
Affordable housing tax credit investment impairment losses	130		60		254		200
Other tax credit investment losses	1,060		594		1,827		668
Other tax credit investment impairment losses	6,184		6,217		10,221		12,683
Total amortization of tax credit investments recorded in non-interest expense	$	7,732	$	7,646	$	13,056	$	14,910

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Note 14. Litigation

In the normal course of business, Valley is a party to various outstanding legal proceedings and claims. In the opinion of management, the financial condition, results of operations and liquidity of Valley should not be materially affected by the outcome of such legal proceedings and claims. However, in the event of an unexpected adverse outcome in one or more of our legal proceedings, operating results for a particular period may be negatively impacted. Disclosure is required when a risk of material loss in a litigation or claim is more than remote, even when the risk of a material loss is less than likely. Unless an estimate cannot be made, disclosure is also required of the estimate of the reasonably possible loss or range of loss.

Although there can be no assurance as to the ultimate outcome, Valley has generally denied, or believes it has a meritorious defense and will deny liability in litigation pending against Valley and claims made, including the matter described below. Valley intends to defend vigorously each case against it. Liabilities are established for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated.

Merrick Bank Corporation v. Valley National Bank and American Express Travel Related Services v. Valley National Bank litigation. For about a decade, Valley served as the depository bank for various charter operators under regulations of the Department of Transportation (DOT) and contracts entered into with charter operators under those regulations. The purported intent of the regulations is to afford some protection to the customers of the charter operators. A charter operator has several options with regard to fulfilling its obligations under the regulations, with one option requiring the charter operator to deposit the proceeds of tickets purchased for a charter flight into an FDIC insured bank account. The funds for a flight are released when the charter operator certifies that the flight has been completed. Valley stopped serving as a depository bank for the charter business due to the narrow profit in that business combined with the legal expenses incurred to defend itself in a prior case in which Valley was completely successful and the anticipated legal expenses from the following similar cases that are still pending.

Valley served as the depository bank for Myrtle Beach Direct Air (Direct Air) under a contract between Direct Air and Valley approved by the DOT under the DOT regulations. Direct Air commenced operations in 2007 but in March 2012 Direct Air ceased operations and filed for bankruptcy. Thereafter the United States Justice Department charged three of the principals of Direct Air with criminal fraud; that case is expected to go to trial in March 2018. Merrick Bank Corp. (Merrick) was the merchant bank for Direct Air and processed credit card purchases for Direct Air. Following the bankruptcy of Direct Air, Merrick incurred chargebacks in the approximate amount of $26.2 million when the Direct Air customers whose flights had been canceled obtained a credit from their card issuing banks for the cost of the ticket or other item purchased from Direct Air. Merrick was not able to recover the chargebacks from Direct Air. Direct Air’s depository account at Valley contained approximately $1.0 million at the time Direct Air ceased operations.

Merrick filed an action against Valley with ten counts in December 2013. Valley moved to dismiss five of the counts and, in March 2015, the court dismissed four of the five counts. American Express Travel Related Services (American Express) filed a similar action against Valley claiming about $3.0 million in chargebacks. Five of American Express’ eleven counts have been dismissed. The two cases have now been consolidated in the Federal District Court of New Jersey.

During April 2017, all parties attended a mediation, however it was unsuccessful. Shortly before the mediation, Valley filed summary judgment motions on all of the remaining counts in both the Merrick and American Express cases. Merrick and American Express also filed summary judgment motions against Valley. Valley does not anticipate an immediate decision to be rendered on the motions.

At June 30, 2017, Valley could not estimate an amount or range of reasonably possible losses related to the matter described above. Based upon information currently available and advice of counsel, Valley believes that the eventual outcome of such claims will not have a material adverse effect on Valley’s consolidated financial position. However, in the event of unexpected future developments, it is possible that the ultimate resolution of the matters, if unfavorable, may be material to Valley’s results of operations for a particular period.

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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.

Note 16. Subsequent Events

USAmeriBancorp, Inc. Merger Agreement

On July 26, 2017, Valley announced its entry into a merger agreement with USAmeriBancorp, Inc. (USAB) headquartered in Clearwater, Florida. USAB largely through its wholly-owned subsidiary, USAmeriBank, has approximately $4.4 billion in assets, $3.6 billion in loans and $3.5 billion in deposits and maintains a branch network of 30 offices. The acquisition will expand Valley's Florida presence and establish a presence in Alabama. The common shareholders of USAB will receive 6.1 shares of Valley common stock for each USAB share they own, subject to adjustment in the event Valley’s average stock price falls below $11.50 or rises above $13.00 prior to closing. Both Valley and USAB have walkaway rights if the volume-weighted average closing price is below $11.00 and USAB has a walkaway right if the volume-weighted average closing price is above $13.50. The transaction is valued at an estimated $816 million, based on Valley’s closing stock price on July 25, 2017. The acquisition is expected to close early in the first quarter of 2018, subject to standard regulatory approvals, shareholder approvals from Valley and USAB, as well as other customary conditions.

Issuance of Series B Preferred Stock

On August 3, 2017, Valley issued 4.0 million shares of its Fixed-to-Floating Rate Non-Cumulative Perpetual

Preferred Stock, Series B, no par value per share, with a liquidation preference of $25 per share for aggregate consideration of $100 million. Dividends on the preferred stock will accrue and be payable quarterly in arrears, at a fixed rate per annum equal to 5.50 percent from the original issuance date to, but excluding, September 30, 2022, and thereafter at a floating rate per annum equal to three-month LIBOR plus a spread of 3.578 percent. Net proceeds to Valley after deducting underwriting discounts, commissions and offering expenses are expected to be approximately $98.1 million.

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

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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, 2016, include, but are not limited to:

• failure to obtain shareholder or regulatory approval for the merger of USAB with Valley or to satisfy other conditions to the merger on the proposed terms and within the proposed timeframe;

• delays in closing the merger;

• the inability to realize expected cost savings and synergies from the merger of USAB with Valley in the amounts or in the timeframe anticipated;

• changes in the estimate of non-recurring charges;

• the diversion of management's time on issues relating to the merger;

• costs or difficulties relating to integration matters might be greater than expected;

• material adverse changes in Valley’s or USAB’s operations or earnings;

• an increase or decrease in the stock price of Valley during the 30 day pricing period prior to the closing of the merger which could cause an adjustment to the exchange ratio or give either Valley or USAB the right to terminate the merger agreement under certain circumstances;

• the inability to retain USAB’s customers and employees;

• weakness or a decline in the economy, mainly in New Jersey, New York, Florida and Alabama, as well as an unexpected decline in commercial real estate values within our market areas;

• less than expected cost reductions and revenue enhancement from Valley's cost reduction plans including its earnings enhancement program called "LIFT";

• damage verdicts or settlements or restrictions related to existing or potential litigations arising from claims of breach of fiduciary responsibility, negligence, fraud, contractual claims, environmental laws, patent or trade mark infringement, employment related claims, and other matters;

• the loss of or decrease in lower-cost funding sources within our deposit base may adversely impact our net interest income and net income;

• 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;

• changes in accounting policies or accounting standards, including the new authoritative accounting guidance (known as the current expected credit loss (CECL) model) which may increase the required level of our allowance for credit losses after adoption on January 1, 2020;

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

• our inability to pay dividends at current levels, or at all, because of inadequate future earnings, regulatory restrictions or limitations, and changes in our capital requirements;

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

• 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; and

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

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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, 2016. 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 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, 2016.

New Authoritative Accounting Guidance

See Note 4 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, 2017, Valley had consolidated total assets of approximately $23.4 billion, total net loans of $17.6 billion, total deposits of $17.3 billion and total shareholders’ equity of $2.4 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 209 branch network, 67 percent, 18 percent and 15 percent of the branches are located in New Jersey, New York and Florida, respectively. We have grown significantly in asset size over the past several years primarily through bank acquisitions that expanded our operating footprint into several Florida markets in 2014 and 2015, as well as normal lending activity.

USAmeriBancorp, Inc. In July 2017, we announced our entry into a merger agreement with USAmeriBancorp, Inc. (USAB) headquartered in Clearwater, Florida. USAB largely through its wholly-owned subsidiary, USAmeriBank, has approximately $4.4 billion in assets, $3.6 billion in loans and $3.5 billion in deposits and maintains a branch network of 30 offices. The acquisition represents a significant addition to Valley’s Florida franchise, and will meaningfully enhance its presence in the Tampa Bay market, which is Florida’s second largest metropolitan area by population. The acquisition will also bring Valley to the Birmingham, Montgomery, and Tallapoosa areas in Alabama, where USAmeriBank maintains 15 offices contributing approximately $1.1 billion of deposits and $520 million in loans.

Each USAB shareholder will receive 6.1 shares of Valley common stock for each share of USAB common stock if Valley’s volume-weighted average closing price during the 30 day trading ending 5 days prior to closing is between $11.50 and $13.00. In the event that the volume-weighted average closing price is less than $11.50, then the exchange ratio shall be $69.00 divided by the volume-weighted average closing price. If Valley’s volume-weighted average closing price is greater than $13.00, then the exchange ratio shall be $79.30 divided by the volume-weighted average closing price. Both Valley and USAB have walkaway rights if the volume-weighted average closing price is below $11.00 and USAB has a walkaway right if the volume-weighted average closing price is above $13.50. The transaction is valued at an estimated $816 million, based on Valley’s closing stock price on July 25, 2017. The acquisition is expected to close early in the first quarter of 2018, subject to standard regulatory approvals, shareholder approvals from Valley and USAB, as well as other customary conditions.

See Item 1 of Valley’s Annual Report on Form 10-K for the year ended December 31, 2016 for more details regarding our other recent acquisitions.

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Earnings Enhancement Program. In December 2016, Valley announced a company-wide earnings enhancement initiative called LIFT. The LIFT program is a review of our business practices with goals of improving our overall efficiency, targeting resources to more value-added activities and delivering on the financial banking experience expected by our customers. During July 2017, we completed the idea generation and approval phase of the LIFT program. As a result of these efforts, we plan to achieve approximately $22 million in total cost reductions and revenue enhancements on an annualized pre-tax run-rate through a combination of workforce reduction and other efficiency and revenue initiatives. We estimate that these changes will result in employee severance and other implementation costs of approximately $11 million, the majority of which will be recorded in the third quarter of 2017. The implementation phase of the initiative enhancements is currently underway and is expected to be fully phased-in over the next 24 months.

As part of the LIFT program and the normal on-going review of our business, we will evaluate the operational efficiency of our entire branch network (consisting of 110 leased and 99 owned office locations at June 30, 2017). This review will 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.

Preferred Stock Offering. On August 3, 2017, Valley issued 4.0 million shares of its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series B, no par value per share, with a liquidation preference of $25 per share for aggregate consideration of $100 million. Dividends on the preferred stock will accrue and be payable quarterly in arrears, at a fixed rate per annum equal to 5.50 percent from the original issuance date to, but excluding, September 30, 2022, and thereafter at a floating rate per annum equal to three-month LIBOR plus a spread of 3.578 percent. Valley intends to use the net proceeds for general corporate purposes and investments in Valley National Bank as regulatory capital. Net proceeds to Valley after deducting underwriting discounts, commissions and offering expenses are expected to be approximately $98.1 million.

Quarterly Results. Net income for the second quarter of 2017 was $50.1 million, or $0.18 per diluted common share, compared to $39.0 million, or $0.15 per diluted common share, for the second quarter of 2016. The $11.0 millionincreasein quarterly net income as compared to the same quarter one year ago was largely due to: (i) a $17.5 millionincrease in our net interest income mostly due to higher average loan balances driven by both strong organic and purchased loan volume over the last 12 months and the modification of $405 million of high cost long-term borrowings in the third quarter of 2016, (ii) a $564 thousanddecrease in non-interest expense mostly due to lower expense in several categories, including, but not limited to, advertising expense, professional and legal expense, operating losses, branch closing costs, and gains on other real estate owned, partially offset by higher salary and employee benefit expense, (iii) a $426 thousandincrease in non-interest income mostly caused by an increase in net gains on sales of residential mortgage loans, partially offset by (iv) a $2.2 millionincrease in the provision for credit losses largely caused by loan growth, 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 quarter2017 results, as well as other items discussed elsewhere in this MD&A.

Economic Overview. During the second quarter of 2017, real gross domestic product (GDP) grew at a 2.6 percent annual rate after advancing 1.2 percent in the first quarter of 2017. The pace of hiring accelerated although wage growth remained somewhat subdued. Overall price growth decelerated notably from the beginning of the year, business fixed investment increased modestly, and residential fixed investment declined as borrowing costs remained higher compared to levels experienced in 2016.

The civilian unemployment rate decreased from 4.5 percent as of March 31, 2017 to 4.4 percent as of June 30, 2017 even as the number of people entering the workforce increased, demonstrating the continued strength of the labor market. The pace of hiring accelerated from a monthly average of 166 thousand for the first quarter of 2017 to 194 thousand in the second quarter of 2017. Measures of wage growth remain subdued relative to the level of slack in the labor market, as measured by the unemployment rate, which may be contributing to the softness in household consumption.

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In the second quarter of 2017, the pace of U.S. existing home sales decreased compared to the previous quarter as inventory levels increased. Home prices have appreciated to a level above the prior peak experienced in 2007. In addition, borrowing costs remained higher compared to levels experienced in 2016. The average interest rate of a 30 year fixed rate mortgage during the second quarter of 2017 was 3.98 percent compared to 3.59 percent in 2016.     

Growth in personal consumption of goods and services continued to grow in the second quarter of 2017 although below the pace experienced in 2016. Although Valley's auto loan origination volumes were somewhat lower in the second quarter of 2017, U.S. automobile sales increased, reflecting confidence in the health of the consumer after a weaker first quarter of 2017. Household balance sheets continue to improve as equity and home prices rose in the second quarter of 2017. Further price appreciation may support consumer spending in the second half of 2017.

The Federal Reserve’s Open Market Committee (FOMC) raised the target range for the federal funds rate to 1.00 to 1.25 percent at their June 2017 meeting, although the Committee remained concerned about continued low levels of inflation and inflation expectations. In determining future policy actions, the FOMC will assess progress - both realized and expected - toward its objectives of maximum employment and 2-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. The FOMC has continued to emphasize that changes in monetary policy will be data dependent.

The 10-year U.S. Treasury note yield ended the second quarter at 2.31 percent, 9 basis points lower compared with March 31, 2017. The spread between the 2- and 10-year U.S. Treasury note yields was 0.93 percentage at June 30, 2017, 20 basis points lower compared to March 31, 2017.

While we are currently witnessing slightly higher interest rates on pending loan originations within most of our loan pipelines in the early stages of the third quarter of 2017, we do see some offset potentially coming in the form of higher deposit and borrowing costs in our primary markets. To that end, despite strong loan demand, particularly in commercial real estate lending, our business operations and results could be challenged in the future due to several external factors, including, but not limited to, the decline in the spread between short- and long-term market interest rates and/or slower than expected economic activity within our markets.

Loans. Loans increased by $261.3 million, or 6.0 percent on an annualized basis, to $17.7 billion at June 30, 2017 from March 31, 2017 largely due to a net increase of $259.3 million in total commercial real estate loans. The overall loan growth was partially offset by a decrease of $20.7 million in residential mortgage loans caused by the transfer of approximately $122 million of performing 30-year fixed rate mortgages to loans held for sale at June 30, 2017. The sale of these loans is expected to be completed during the third quarter of 2017 and result in a pre-tax gain of approximately $4 million. See further details on our loan activities 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. As of June 30, 2017, PCI loans totaled $1.5 billion and represented approximately 8.7 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 0.47 percent at June 30, 2017 as compared to 0.61 percent at March 31, 2017 mostly due to a decrease in commercial loans past due 30 to 59 days. Non-performing assets (including non-accrual loans) increased by 5.9 percent to $54.6 million at June 30, 2017 as compared to $51.5 million at March 31, 2017 due to a $3.9 million increase in non-accrual loans, partially offset by a moderate decline in both foreclosed assets and non-accrual debt securities.

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 unpredictable future strength of the U.S. economy and the housing and labor markets, as well as other market factors that may continue to negatively impact the performance of our $140.5

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million taxi medallion loan portfolio, management cannot provide assurance that our non-performing assets will not increase from the levels reported as of June 30, 2017. 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 2017 remained relatively unchanged as compared to the first quarter of 2017. Non-interest bearing deposits represented approximately 30 percent of total average deposits for the three months ended June 30, 2017, while savings, NOW and money market accounts were 51 percent and time deposits were 19 percent of the total average deposits. Overall, average deposits totaled $17.3 billion for the second quarter of 2017 and decreased by $78.3 million as compared to the first quarter of 2017 due, in large part, to lower average savings, NOW and money market deposits, partially offset by higher average balances in the other deposit categories. Average savings, NOW and money market deposits declined $246.4 million to $8.8 billion for the second quarter of 2017 as compared to the first quarter of 2017 due to fluctuations in commercial and retail deposit accounts, as well as a decrease of approximately $102 million in average brokered money market deposit account balances. Actual ending balances for deposits also decreased$81.1 million, or 0.5 percent, to approximately $17.3 billion at June 30, 2017 from March 31, 2017 mostly due to the aforementioned changes impacting average money market deposits during the second quarter of 2017. However, time deposits increased $153.9 million to $3.4 billion at June 30, 2017 as compared to March 31, 2017 largely due to new initiatives in our certificate of deposit portfolio which commenced in the second quarter of 2017.

Average short-term borrowings increased$274.8 million, or 17.6 percent, to $1.8 billion for the second quarter of 2017 as compared to the first quarter of 2017 mostly due to our increased use of short-term FHLB advances for additional liquidity to fund new loan volumes starting in the first quarter. Actual ending balances for short-term borrowings increased$89.5 million to $1.7 billion at June 30, 2017 as compared to March 31, 2017 mostly due to a new $100 million repo borrowing used as alternate funding in May 2017.

Average long-term borrowings (which include junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of condition) increased to $1.7 billion for the second quarter of 2017 and increased$185.4 million as compared to the first quarter of 2017. Actual ending balances for long-term borrowings also increased$185.6 million to $1.8 billion at June 30, 2017 as compared to March 31, 2017. Both the increases in average and ending balances were primarily due to the new FHLB advances with contractual terms between 13 and 15 months.

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,
	2017		2016		2017		2016
Return on average assets	0.86	%	0.72	%	0.83	%	0.69	%
Return on average shareholders’ equity	8.27		6.97		7.98		6.75
Return on average tangible shareholders’ equity (ROATE)	11.88		10.38		11.48		10.07

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:

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	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
	($ in thousands)
Net income	$	50,065		$	39,027		$	96,160		$	75,214
Average shareholders’ equity	2,420,848			2,238,510			2,410,063			2,229,040
Less: Average goodwill and other intangible assets	(734,616		)	(735,115		)	(735,393		)	(735,276		)
Average tangible shareholders’ equity	$	1,686,232		$	1,503,395		$	1,674,670		$	1,493,764
Annualized ROATE	11.88		%	10.38		%	11.48		%	10.07		%

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 $171.1 million for the second quarter of 2017 increased $17.6 million as compared to the second quarter of 2016 and increased $6.4 million as compared to the first quarter of 2017. Interest income on a tax equivalent basis increased $12.0 million to $213.3 million for the second quarter of 2017 as compared to the first quarter of 2017 mainly due to a 16 basis point increase in the yield on average loans, and increases of $388.6 million and $131.4 million in average loans and taxable investments, respectively. The increase in yield on average loans for the second quarter of 2017 as compared to the linked first quarter was due to higher market interest rates on new loan originations, and a $3.5 million increase in periodic commercial loan fee income related to derivative interest rate swaps executed with customers. Interest expense of $42.2 million for the second quarter of 2017 increased$5.6 million as compared to the first quarter of 2017. During the second quarter of 2017, our interest expense on deposits increased by approximately $3.1 million from the linked first quarter largely due to an increase in short-term market interest rates, a $101.7 million decrease in our average low cost brokered money market deposit account balances and one more day during the second quarter. Interest expense on short-term and long-term borrowings also increased $1.6 million and $840 thousand, respectively, in the second quarter of 2017 as compared to the first quarter of 2017 due, in part, to increases of $274.8 million and $185.4 million in the average balances, respectively. Average short-term and long-term borrowings increased as compared to the first quarter of 2017 mostly due to new FHLB borrowings used to offset a decline in deposits and fund new loans during the second quarter of 2017.

Average interest earning assets increased to $21.4 billion for the second quarter of 2017 as compared to approximately $19.5 billion for the second quarter of 2016 largely due to strong organic and purchased loan growth over the last 12 month period. The broad-based loan growth within several loan categories since June 30, 2016 was largely supplemented by purchased loans, primarily consisting of participations in multi-family loans and whole 1-4 family loans (that were a mix of qualifying and non-qualifying CRA loans with adjustable and fixed rates) over the last 12 months ended June 30, 2017. Compared to the first quarter of 2017, average interest earning assets increased by $467.2 million from $20.9 billion largely due to continued loan growth. Average loans increased$388.6 million to $17.7 billion for the second quarter of 2017 from the first quarter of 2017 mostly due to organic loan growth within the commercial real estate and other consumer loan portfolios. Average total investments increased $99.7 million during the second quarter of 2017 and helped drive a $21.1 million decline in average overnight cash balances, along with normal

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fluctuations in overnight cash balances due to the timing of loan originations and additional borrowings to fund such loans.

Average interest bearing liabilities increased$1.3 billion to $15.6 billion for the second quarter of 2017 as compared to the second quarter of 2016 mainly due to greater use of both low cost brokered money market deposits and short-term FHLB advances as part of our overall funding and liquidity strategy over the last 12 month period. Compared to the first quarter of 2017, average interest bearing liabilities increased$325.8 million in the second quarter of 2017 mostly due to higher levels of FHLB borrowings and time deposit account balances, partially offset by lower money market deposit account balances. See additional information under "Deposits and Other Borrowings" in the Executive Summary section above.

Our net interest margin on a tax equivalent basis of 3.20 percent for the second quarter of 2017increased by 6 basis points as compared to both the second quarter of 2016 and first quarter of 2017. The yield on average interest earning assets increased by 14 basis points on a linked quarter basis mostly due to the higher yield on average loans. The yield on average loans increased 16 basis points to 4.20 percent for the second quarter of 2017 and was positively impacted by the aforementioned increases in market interest rates and periodic commercial loan fees as compared to the first quarter of 2017. The yield on average taxable investment securities increased by 6 basis points to 2.84 percent for the second quarter of 2017 from the first quarter of 2017 largely due to a decline in premium amortization expense caused by lower principal repayments on residential mortgage-backed securities. The overall cost of average interest bearing liabilities increased by 12 basis points to 1.08 percent during the second quarter of 2017 from 0.96 percent in the linked first quarter of 2017. The increase was due, in part, to higher interest rates on most deposits and short-term borrowings and one more day during the second quarter of 2017, partially offset by a 19 basis point decrease in the cost of long-term borrowings mostly caused by new lower cost FHLB borrowings. Our cost of total deposits was 0.53 percent for the second quarter of 2017 as compared to 0.45 percent for the first quarter of 2017.

Looking forward, our net interest margin for the third quarter of 2017 may decline as compared to the second quarter of 2017 due to a decline in variable interest income items, such as derivative swap and loan fee income, as well as a multitude of conditional, and sometimes unpredictable, factors that can impact our 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 long-term market interest rates, further repayment of higher yielding interest earning assets, and the re-pricing risk related to interest bearing deposits and short-term borrowings due to a rise in short-term market interest rates. Additionally, our investment portfolios include a large number of residential mortgage-backed securities purchased at a premium. The amortization of such premiums, which impacts both the yield and interest income recognized on such securities, may increase or decrease depending upon the level of principal prepayments and market interest rates. To manage these risks, we continuously explore ways to maximize our mix of interest earning assets on our balance sheet, while maintaining a low cost of funds to optimize our net interest margin and overall returns. The increase in both the U.S. and Valley prime rates (to 4.25 percent and 5.25 percent, respectively) in response to the Federal Reserve's 25 basis point increase in the targeted federal funds rate in mid-June 2017 should benefit both our future net interest income and margin. Additionally, potential future loan growth from both the commercial and consumer lending segments (based upon solid loan pipelines seen in the early stages of the third quarter of 2017) 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, 2017, March 31, 2017 and June 30, 2016:

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

Net Interest Income on a Tax Equivalent Basis

	Three Months Ended
	June 30, 2017								March 31, 2017								June 30, 2016
	Average Balance			Interest			Average Rate		Average Balance			Interest			Average Rate		Average Balance			Interest			Average Rate
	($ in thousands)
Assets
Interest earning assets:
Loans (1)(2)	$	17,701,676		$	185,863		4.20	%	$	17,313,100		$	175,017		4.04	%	$	16,252,915		$	169,430		4.17	%
Taxable investments (3)	2,967,729			21,065			2.84		2,836,300			19,740			2.78		2,433,896			15,572			2.56
Tax-exempt investments (1)(3)	581,263			6,066			4.17		612,946			6,201			4.05		585,948			5,745			3.92
Federal funds sold and other interest bearing deposits	166,003			279			0.67		187,118			331			0.71		264,813			296			0.45
Total interest earning assets	21,416,671			213,273			3.98		20,949,464			201,289			3.84		19,537,572			191,043			3.91
Allowance for loan losses	(116,254		)						(115,300		)						(107,892		)
Cash and due from banks	231,960								241,346								294,046
Other assets	1,879,853								1,938,949								2,003,679
Unrealized (losses) gains on securities available for sale, net	(15,971		)						(18,173		)						2,972
Total assets	$	23,396,259							$	22,996,286							$	21,730,377
Liabilities and shareholders’ equity
Interest bearing liabilities:
Savings, NOW and money market deposits	$	8,803,028		$	12,715		0.58	%	$	9,049,446		$	10,183		0.45	%	$	8,369,553		$	9,961		0.48	%
Time deposits	3,290,407			10,166			1.24		3,178,452			9,553			1.20		3,070,113			9,223			1.20
Total interest bearing deposits	12,093,435			22,881			0.76		12,227,898			19,736			0.65		11,439,666			19,184			0.67
Short-term borrowings	1,837,809			5,516			1.20		1,563,000			3,901			1.00		1,218,154			3,120			1.02
Long-term borrowings (4)	1,679,691			13,790			3.28		1,494,273			12,950			3.47		1,623,136			15,269			3.76
Total interest bearing liabilities	15,610,935			42,187			1.08		15,285,171			36,587			0.96		14,280,956			37,573			1.05
Non-interest bearing deposits	5,195,052								5,138,870								5,013,821
Other liabilities	169,424								173,086								197,090
Shareholders’ equity	2,420,848								2,399,159								2,238,510
Total liabilities and shareholders’ equity	$	23,396,259							$	22,996,286							$	21,730,377
Net interest income/interest rate spread (5)				$	171,086		2.90	%				$	164,702		2.88	%				$	153,470		2.86	%
Tax equivalent adjustment				(2,126		)						(2,173		)						(2,015		)
Net interest income, as reported				$	168,960							$	162,529							$	151,455
Net interest margin (6)							3.16	%							3.10	%							3.10	%
Tax equivalent effect							0.04	%							0.04	%							0.04	%
Net interest margin on a fully tax equivalent basis (6)							3.20	%							3.14	%							3.14	%

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The following table reflects the components of net interest income for the six months ended June 30, 2017 and 2016:

Analysis of Average Assets, Liabilities and Shareholders’ Equity and

Net Interest Income on a Tax Equivalent Basis

	Six Months Ended
	June 30, 2017								June 30, 2016
	Average Balance			Interest			Average Rate		Average Balance			Interest			Average Rate
	($ in thousands)
Assets
Interest earning assets:
Loans (1)(2)	$	17,508,461		$	360,880		4.12	%	$	16,123,229		$	335,506		4.16	%
Taxable investments (3)	2,902,378			40,805			2.81		2,465,941			31,051			2.52
Tax-exempt investments (1)(3)	597,017			12,267			4.11		577,607			11,422			3.95
Federal funds sold and other interest bearing deposits	176,502			610			0.69		345,745			653			0.38
Total interest earning assets	21,184,358			414,562			3.91		19,512,522			378,632			3.88
Allowance for loan losses	(115,780		)						(107,466		)
Cash and due from banks	236,627								295,384
Other assets	1,909,238								2,008,389
Unrealized losses on securities available for sale, net	(17,066		)						(3,501		)
Total assets	$	23,197,377							$	21,705,328
Liabilities and shareholders’ equity
Interest bearing liabilities:
Savings, NOW and money market deposits	8,925,556			22,898			0.51	%	8,351,921			19,204			0.46	%
Time deposits	3,234,739			19,719			1.22		3,098,978			18,808			1.21
Total interest bearing deposits	12,160,295			42,617					11,450,899			38,012			0.66
Short-term borrowings	1,701,164			9,417			1.11		1,139,583			4,992			0.88
Long-term borrowings (4)	1,587,494			26,740			3.37		1,717,846			32,013			3.73
Total interest bearing liabilities	15,448,953			78,774			1.02		14,308,328			75,017			1.05
Non-interest bearing deposits	5,167,116								4,966,142
Other liabilities	171,245								201,818
Shareholders’ equity	2,410,063								2,229,040
Total liabilities and shareholders’ equity	$	23,197,377							$	21,705,328
Net interest income/interest rate spread (5)				$	335,788		2.89	%				$	303,615		2.83	%
Tax equivalent adjustment				(4,299		)						(4,007		)
Net interest income, as reported				$	331,489							$	299,608
Net interest margin (6)							3.13	%							3.07	%
Tax equivalent effect							0.04	%							0.04	%
Net interest margin on a fully tax equivalent basis (6)							3.17	%							3.11	%

(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, 2017 Compared to June 30, 2016									Six Months Ended June 30, 2017 Compared to June 30, 2016
	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*	$	13,999		$	2,434		$	16,433		$	27,396		$	(2,022	)	$	25,374
Taxable investments	3,665			1,828			5,493			5,882			3,872			9,754
Tax-exempt investments*	(46		)	367			321			391			454			845
Federal funds sold and other interest bearing deposits	(134		)	117			(17		)	(418		)	375			(43		)
Total increase in interest income	17,484			4,746			22,230			33,251			2,679			35,930
Interest Expense:
Savings, NOW and money market deposits	537			2,217			2,754			1,376			2,318			3,694
Time deposits	675			268			943			827			84			911
Short-term borrowings	1,791			605			2,396			2,883			1,542			4,425
Long-term borrowings and junior subordinated debentures	517			(1,996		)	(1,479		)	(2,326		)	(2,947		)	(5,273		)
Total increase in interest expense	3,520			1,094			4,614			2,760			997			3,757
Total increase in net interest income	$	13,964		$	3,652		$	17,616		$	30,491		$	1,682		$	32,173

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

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Non-Interest Income

The following table presents the components of non-interest income for the three and six months ended June 30, 2017 and 2016:

	Three Months Ended June 30,					Six Months Ended June 30,
	2017		2016			2017			2016
	(in thousands)
Trust and investment services	$	2,800	$	2,544		$	5,544		$	4,984
Insurance commissions	4,358		4,845			9,419			9,553
Service charges on deposit accounts	5,342		5,094			10,578			10,197
Gains (losses) on securities transactions, net	22		(3		)	(1		)	268
Fees from loan servicing	1,831		1,561			3,646			3,155
Gains on sales of loans, net	4,791		3,105			8,919			4,900
Bank owned life insurance	1,701		1,818			4,164			3,781
Other	3,845		5,300			7,480			8,874
Total non-interest income	$	24,690	$	24,264		$	49,749		$	45,712

Non-interest income increased $426 thousand and $4.0 million for the three and six months ended June 30, 2017, respectively, as compared with the same periods in 2016 primarily due to an increase in net gains on sales of loans, partially offset by lower other non-interest income.

Net gains on sales of loans increased$1.7 million and $4.0 million for the three and six months ended June 30, 2017, respectively, as compared to the same periods in 2016. The increase was largely driven by the completion of the sale of approximately $104 million of performing 30-year fixed rate mortgages transferred to loans held for sale at March 31, 2017. During the second quarter of 2017, we sold a total of $159.9 million of residential mortgage loans (including $115.1 million of loans held for sale at March 31, 2017) as compared to $54.0 million in the second quarter of 2016. During the six months ended June 30, 2017, we sold $296.5 million of residential mortgage loans as compared to $182.8 million for the same period one year ago. 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 originated for sale and carried at fair value at each period end. The net change in the fair value of loans held for sale resulted in net losses of $157 thousand and $849 thousand for the three months ended June 30, 2017 and 2016, respectively, and net gains of $848 thousand and $123 thousand for the six months ended June 30, 2017 and 2016, respectively. See further discussions of our residential mortgage loan origination activity under the “Loan Portfolio” section of this MD&A below.

Other non-interest income decreased$1.5 million and $1.4 million for the three and six months ended June 30, 2017 as compared to the same periods in 2016. The decrease was largely due to a decline in net gains on sales of assets for the second quarter of 2017 as compared to the same quarter in 2016 caused by net gains from the sale of two closed branch locations recognized in the second quarter of 2016.

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Non-Interest Expense

The following table presents the components of non-interest expense for the three and six months ended June 30, 2017 and 2016:

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
	(in thousands)
Salary and employee benefits expense	$	61,338	$	56,072	$	125,054	$	116,331
Net occupancy and equipment expense	22,609		22,168		45,644		44,957
FDIC insurance assessment	4,928		5,095		10,055		10,194
Amortization of other intangible assets	2,562		2,928		5,098		5,777
Professional and legal fees	4,302		5,472		8,997		9,367
Amortization of tax credit investments	7,732		7,646		13,056		14,910
Telecommunications expense	2,707		2,294		5,366		4,680
Other	13,061		18,128		26,921		31,812
Total non-interest expense	$	119,239	$	119,803	$	240,191	$	238,028

Non-interest expense decreased$564 thousand for the three months ended June 30, 2017 and increased$2.2 million for the six months endedJune 30, 2017 as compared with the same periods in 2016. The increase during the first half of 2017 as compared to the 2016 period was mainly due to higher salary and employee benefits expense, partially offset by decreases in other non-interest expense and amortization of tax credit investments.

Salary and employee benefits expense increased$5.3 million and $8.7 million for the three and six months ended June 30, 2017 as compared to the same periods in 2016 mainly due to increased salaries and cash incentive compensation for the three and six months ended June 30, 2017, respectively. In addition, health insurance expenses increased by $728 thousand and $985 thousand during the three and six months ended June 30, 2017, respectively, as compared with the same periods in 2016. Our health care expenses are at times volatile due to self-funding of a large portion of our insurance plan and these medical expenses can and will fluctuate in the future based on our plan experience. The increase in salary and employee benefits expense during the six months ended June 30, 2017 was also attributable to a $1.6 million increase in stock-based compensation expense as compared to the same period of 2016.

Professional and legal fees decreased$1.2 million for the three months ended June 30, 2017 as compared to the same period in 2016 largely due to a decrease in legal fees related to general corporate matters and litigation.

Amortization of tax credit investments decreased$1.9 million for the six months ended June 30, 2017 as compared with the same period in 2016 mainly due to the lower level of net tax credit investments held at June 30, 2017 as compared to June 30, 2016. These investments, while negatively impacting the level of our operating expenses and efficiency ratio, produce tax credits that reduce our income tax expense and effective tax rate. See Note 13 to the consolidated financial statements for more details regarding our tax credit investments.

Other non-interest income expenses decreased$5.1 million and $4.9 million for the three and six months ended June 30, 2017, respectively, as compared with the same periods in 2016 mainly due to declines in both operating losses and branch closing costs and an increase in net gains on other real estate owned.

Efficiency Ratios

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.

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The following table presents our efficiency ratio and a reconciliation of the efficiency ratio adjusted for certain items during the three and six months ended June 30, 2017 and 2016:

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
	($ in thousands)
Total non-interest expense	$	119,239		$	119,803		$	240,191		$	238,028
Less: Amortization of tax credit investments	7,732			7,646			13,056			14,910
Total non-interest expense, adjusted	$	111,507		$	112,157		$	227,135		$	223,118
Net interest income	$	168,960		$	151,455		$	331,489		$	299,608
Total non-interest income	24,690			24,264			49,749			45,712
Total net interest income and non-interest income	$	193,650		$	175,719		$	381,238		$	345,320
Efficiency ratio	61.57		%	68.18		%	63.00		%	68.93		%
Efficiency ratio, adjusted	57.58		%	63.83		%	59.58		%	64.61		%

Income Taxes

Income tax expense was $20.7 million and $15.5 million for the three months ended June 30, 2017 and 2016, respectively, and $38.8 million and $29.8 million for the six months ended June 30, 2017 and 2016, respectively. Our effective tax rate was 29.3 percent and 28.4 percent for the three months ended June 30, 2017 and 2016, respectively, and 28.7 percent and 28.4 percent for the six months ended June 30, 2017 and 2016, respectively.

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 2017, we anticipate that our effective tax rate will range from 28 percent to 31 percent. The effective tax rate is generally lower than the statutory rate primarily due to tax credits derived from our investments in qualified affordable housing projects and other investments related to community development and renewable energy sources, as well as earnings from other tax-exempt investments. See Note 13 to the consolidated financial statements for additional information regarding our tax credit investments.

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,

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changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.

The following tables present the financial data for each business segment for the three months ended June 30, 2017 and 2016:

	Three Months Ended June 30, 2017
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments			Total
	($ in thousands)
Average interest earning assets	$	5,125,615		$	12,576,063		$	3,714,993		$	—		$	21,416,671
Income (loss) before income taxes	15,055			58,387			9,864			(12,527		)	70,779
Annualized return on average interest earning assets (before tax)	1.17		%	1.86		%	1.06		%	N/A			1.32		%

	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		%

Consumer Lending

This segment, representing approximately 28.0 percent of our loan portfolio at June 30, 2017, is mainly comprised of residential mortgage loans and automobile loans, and to a lesser extent, home equity loans, secured personal lines of credit and other consumer loans (including credit card loans). The duration of the residential mortgage loan portfolio (which represented 15.4 percentof our loan portfolio at June 30, 2017, including covered loans) is subject to movements in the market level of interest rates and forecasted prepayment speeds. The weighted average life of the automobile loans (representing 6.5 percent of total loans at June 30, 2017) 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, and insurance services.

Average interest earning assets in this segment increased$26.1 million to $5.1 billion for the three months ended June 30, 2017as compared to the second quarter of 2016. The increase was largely due to solid organic growth in secured personal lines of credit and auto loans, partially offset by a decline in residential mortgage loans caused by a high volume of loan sales into the secondary market. Home equity loan volumes and customer usage of existing home equity lines of credit also steadily declined since June 30, 2016 despite the relatively favorable interest rate environment.

Income before income taxes generated by the consumer lending segment increased$895 thousandto $15.1 millionfor the second quarter of 2017 as compared to $14.2 million for the second quarter of 2016 largely due to an increase in non-interest income of $2.1 million and a decrease of $1.4 million in internal transfer expense for the second quarter of 2017 as compared to the same period in 2016. The increase in non-interest income was mostly driven by a $1.7 million increase in the net gains on sales of loans caused by the increased level of sales during second quarter of 2017. The positive impact of the aforementioned items was partially offset by a $2.3 million

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increase in the provision for loan losses during the three months ended June 30, 2017 as compared to the second quarter of 2016. See further details in the "Allowance for Credit Losses" section.

The net interest margin on the consumer lending portfolio increased2 basis points to 2.79 percent for the second quarter of 2017 as compared to the same quarter one year ago. The net interest margin was positively impacted by a 4 basis point increase in yield on average loans, partially offset by a 2 basis point increase in the costs associated with our funding sources. The increase in our cost of funds was largely due to higher interest rates on most deposits and short-term borrowings. The increase in the cost of short-term borrowings was mostly due to new FHLB borrowings used to offset a decline in deposits and fund new loans during the second quarter of 2017. See the "Executive Summary" and the "Net Interest Income" sections above for more details on our deposits and other borrowings.

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 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 $2.6 billionand represented 14.8 percent of the total loan portfolio at June 30, 2017. Commercial real estate loans and construction loans totaled $10.1 billion and represented 57.1 percentof the total loan portfolio at June 30, 2017.

Average interest earning assets in this segment increased$1.4 billion to $12.6 billion for the three months ended June 30, 2017 as compared to the second quarter of 2016. This increase was due, in part, to solid organic commercial real estate loan growth across many segments of borrowers and purchases of loan participations (mostly consisting of multi-family loans in New York City) totaling over $551 million during the last 12 months.

For the three months ended June 30, 2017, income before income taxes for the commercial lending segment increased$11.0 millionto $58.4 million as compared to the same quarter of 2016 mostly due to an increase in net interest income, partially offset by an increase in the internal transfer expense. Net interest income increased$12.5 million to $117.8 million for the second quarter of 2017 as compared to the same period in 2016 largely due to the aforementioned organic and purchased loan growth over the last 12 months.Internal transfer expense increased$849 thousand during the second quarter of 2017 as compared to the same period in 2016.

The net interest margin for this segment decreased3 basis points to 3.75 percent for the second quarter of 2017 as compared to the same quarter one year ago as a result of a 1 basis point decline in yield on average loans and a 2 basis point increase in the cost of our funding sources. The decrease in the yield on loans was primarily due to the new and refinanced commercial loan volumes at interest rates that are lower somewhat lower than compared to the overall portfolio yield for the second quarter of 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$430.3 million during the second quarter of 2017 as compared to the second quarter of 2016. The increase was mainly due to purchases of residential mortgage-backed securities classified as held for maturity and available for sale in the last 12 months, partially offset by a $98.8 million decrease in average federal funds sold and other interest bearing deposits for the three months ended June 30, 2017 as compared to the same period in 2016.

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For the quarter ended June 30, 2017, income before income taxes for the investment management segment increased$4.5 million to $9.9 million as compared to the second quarter in 2016 mainly due to a $4.9 millionincrease in net interest income. The increase in net interest income was mainly driven by the higher average investment balances and higher yields on average investments in the second quarter of 2017 as compared to the same period in 2016.

The net interest margin for this segment increased30basis points to 2.22 percentfor the second quarter of 2017 as compared to the same quarter one year ago largely due to a 32 basis point increase in the yield on average investments partially offset by a 2 basis point increase in costs associated with our funding sources. The increase in the yield on average investments was largely due to a decline in premium amortization expense caused by lower principal repayments on residential mortgage-backed securities.

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 moderately increased$70 thousand to $12.5 million for the three months ended June 30, 2017 as compared to the three months ended June 30, 2016.

The following tables present the financial data for each business segment for the six months ended June 30, 2017 and 2016:

	Six Months Ended June 30, 2017
	Consumer Lending			Commercial Lending			Investment Management			Corporate and Other Adjustments			Total
	($ in thousands)
Average interest earning assets	$	5,085,438		$	12,423,025		$	3,675,895		$	—		$	21,184,358
Income (loss) before income taxes	30,459			107,765			19,576			(22,855		)	134,945
Annualized return on average interest earning assets (before tax)	1.20		%	1.73		%	1.07		%	N/A			1.27		%

	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		%

Consumer Lending

Average interest earning assets in this segment decreased$62.1 million to $5.1 billion for the six months ended June 30, 2017as compared to the same period in 2016. The decrease was largely due to declines in residential mortgage loans and home equity loans. The decline in residential mortgage loans over the last 12 months was largely driven by normal repayment activity, a high percentage of loans originated for sale rather than investment, and the transfer and the sale of approximately $170 million and $104 million of performing fixed rate mortgages

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from loans held for investment portfolio to loans held for sale in the fourth quarter of 2016 and the first quarter of 2017, respectively. The negative impact of the decline average residential mortgage loan balance was partially offset by higher auto and secured personal lines of credit loan volumes.

Income before income taxes generated by the consumer lending segment increased$2.2 millionto $30.5 millionfor the six months ended June 30, 2017 as compared to $28.3 million for the same period in 2016 largely due to an increase in non-interest income of $5.5 million and a decrease of $2.6 million in internal transfer expense for the six months ended June 30, 2017as compared to the same period in 2016. The increase in non-interest income was mostly driven by a $4.0 million increase in the net gains on sales of loans caused by a higher level of sales volumes during the six months ended June 30, 2017. The positive impact of the aforementioned items was partially offset by increases of $2.8 million and $2.5 million in the provision for loan losses and non-interest expense, respectively, for the six months ended June 30, 2017 as compared to the same period in 2016.

The net interest margin on the consumer lending portfolio remained unchanged at 2.78 percent for the six months ended June 30, 2017as compared to the same period one year ago. However, the net interest margin results were comprised of a 2 basis point decline in yield on average loans which was offset by a 2 basis point decrease in the costs associated with our funding sources. The decrease in our cost of funds was primarily due to a 36 basis point decline in the cost of our average long-term borrowings as compared to six months ended June 30, 2016 largely due to modification and maturity of certain high cost borrowings in the second half of 2016. See the "Executive Summary" and the "Net Interest Income" sections above for more details on our deposits and other borrowings.

Commercial Lending

Average interest earning assets in this segment increased$1.4 billion to $12.4 billion for the six months ended June 30, 2017 as compared to the same period in 2016. This increase was due, in part, to solid organic commercial real estate loan volumes in New York, New Jersey and Florida and purchases of loan participations during the last 12 months.

For the six months ended June 30, 2017, income before income taxes for the commercial lending segment increased$16.5 millionto $107.8 million as compared to the same period of 2016 mostly due to an increase in net interest income, partially offset by increases in the provision for credit losses and internal transfer expense. Net interest income increased$23.4 million to $230.2 million for the six months ended June 30, 2017as compared to the same period in 2016 largely due to the aforementioned organic and purchased and loan growth over the last 12 months. The provision for credit losses increased$1.1 million to $3.4 million during the six months ended June 30, 2017 as compared to $2.3 million for the same period in 2016. See further details in the "Allowance for Credit Losses" section. Internal transfer expense increased$4.7 million during the six months ended June 30, 2017 as compared to the same period in 2016.

The net interest margin for this segment decreased7 basis points to 3.70 percent for the six months ended June 30, 2017 as compared to the same period one year ago as a result of a 9 basis point decline in yield on average loans, partially offset by a 2 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 during the past 12 months at lower interest rates compared to the overall yield of our loan portfolio.

Investment Management

Average interest earning assets in this segment increased$286.6 million for the six months ended June 30, 2017 as compared to the same period in 2016. The increase was mainly due to purchases of residential mortgage-backed securities classified as held for maturity and available for sale in the last 12 months, partially offset by a $169.2 million decrease in average federal funds sold and other interest bearing deposits for the six months ended June 30, 2017 as compared to the same period in 2016.

For the six months ended June 30, 2017, income before income taxes for the investment management segment increased$10.2 million to $19.6 million as compared to the same period in 2016 mainly due to a $10.0 million

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increase in net interest income. The increase in net interest income was mainly driven by the higher average investment balances and higher yield on average investments during the six months ended June 30, 2017 as compared to the same period in 2016.

The net interest margin for this segment increased40 basis points to 2.23 percent for the six months ended June 30, 2017 as compared to the same period one year ago mostly due to a 38 basis point increase in the yield on average investments and a 2 basis point decrease in costs associated with our funding sources. The increase in the yield on average investments was largely due to a decline in premium amortization expense caused by lower principal repayments on residential mortgage-backed securities during the six months ended June 30, 2017.

Corporate and other adjustments

The pre-tax net loss for the corporate segment decreased$997 thousand to $22.9 million for the six months ended June 30, 2017 as compared to $23.9 million for the same period in 2016 mainly due to a $2.3 million increase in internal transfer income and $1.3 milliondecrease in non-interest expense, partially offset by $1.8 milliondecrease in non-interest income. The increase in non-interest expense related to several general expense categories, including, but not limited to, salary and employee benefits expense and amortization of tax credit investments. Non-interest income decreased largely due to a decline in other non-interest income, as well as a $269 thousand decrease in net gains on securities transactions for the six months ended June 30, 2017 as compared with the same period in 2016. 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, 2017. The model assumes immediate changes in interest rates without any proactive change in the composition or size of the balance sheet, or other future actions that management might undertake to mitigate this risk. In the model, the forecasted shape of the yield curve remains static as of June 30, 2017. 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, 2017. Although the size of Valley’s balance sheet is forecasted to remain static as of June 30, 2017 in our model, the composition is adjusted to reflect new interest earning assets and funding originations coupled with rate

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spreads utilizing our actual originations during the second quarter of 2017. The model also utilizes an immediate parallel shift in the market interest rates at June 30, 2017.

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	$	(4,721	)	(0.72	)%
+100	(830		)	(0.13	)
–100	(23,033		)	(3.50	)

As noted in the table above, a 100 basis point immediate increase in interest rates combined with a static balance sheet where the size, mix, and proportions of assets and liabilities remain unchanged is projected to decrease net interest income over the next 12 months by 0.13 percent. The Bank’s sensitivity to changes in market rates changed in both size and direction as compared to December 31, 2016 (which was an increase of 0.03 percent in net interest income over a 12 month period). However, the change in sensitivity is not expected to materially impact Valley’s ability to generate net interest income. In addition, we believe the balance sheet remains well-positioned to respond positively to a rising market interest rate environment. Our current asset sensitivity to a 100 basis point immediate increase in interest rates is impacted by, among other factors, asset cash flow and repricing characteristics, complemented by a funding structure that provides for very stable earnings and low volatility. Future changes including, but not limited to, the slope of the yield curve and projected cash flows will affect our net interest income results and may increase or decrease the level of net interest income sensitivity.

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. Our cash flow interest rate swaps had a total notional value of $582 million at June 30, 2017 and currently pay fixed and receive floating rates. We also utilize fair value and non-designated hedge interest rate swaps to effectively convert fixed rate loans, and a much smaller amount of certain brokered certificates of deposit, to floating rate instruments. The cash flow hedges are expected to benefit

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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 six months ended June 30, 2017. This negative trend will likely continue based upon the current market expectations regarding the Federal Reserve’s monetary policies which are designed to impact the level of market interest rates. However, $100 million of the $582 million in notional value swaps expired in July 2017 and will reduce the overall negative impact of such instruments on our future net interest income. See Note 11 to the consolidated financial statements for further details on our derivative transactions.

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 or reliance on wholesale funding greater than 25 percent of total funding. The Bank was in compliance with the foregoing policies at June 30, 2017.

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 $2.1 billion, representing 9.7 percent of earning assets, at June 30, 2017 and $1.8 billion, representing 8.9 percent of earning assets, at December 31, 2016. Of the $2.1 billion of liquid assets at June 30, 2017, approximately $704 million of various investment securities were pledged to counterparties to support our earning asset funding strategies. We anticipate the receipt of approximately $364 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, 2017) 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.

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 fully insured brokered deposits and both retail and brokered certificates of deposit over $250 thousand, represents the largest of these sources. Average core deposits totaled approximately $15.3 billion and $14.7 billion for the six months ended June 30, 2017 and for the year ended December 31, 2016, respectively, representing 72.1 percent and 73.9 percent of average earning assets for the respective periods. The level of interest bearing deposits is affected by interest rates offered, which is often influenced by our need for funds and the need to match the maturities of assets and liabilities.

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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. 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, 2017, our borrowing capacity under the Federal Reserve's discount window was $1.1 billion.

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 $654 million to $1.7 billion at June 30, 2017 as compared to December 31, 2016 due to increases of $625 million and $29 million in

FHLB advances and repo balances, respectively. The new FHLB advances were used as alternate funding for a decline in money market deposits during the first half of 2017, as well as for additional liquidity and loan funding purposes.

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 the 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.

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Investment Securities Portfolio

As of June 30, 2017, we had $1.8 billion and $1.5 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 issuances of states and political subdivisions, residential mortgage-backed securities (including 9 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 equity securities issued by banks at June 30, 2017. There were no securities in the name of any one issuer 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, equity securities, and bank issued corporate bonds may pose a higher risk of future impairment charges to us as a result of the uncertain economic environment 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, 2016, 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.

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The following table presents the held to maturity and available for sale investment securities portfolios by investment grades at June 30, 2017.

	June 30, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Held to maturity investment grades:*
AAA Rated	$	1,368,246	$	24,681	$	(15,790	)	$	1,377,137
AA Rated	241,927		9,331		(26		)	251,232
A Rated	35,541		1,596		—			37,137
Non-investment grade	3,618		117		(41		)	3,694
Not rated	172,931		141		(13,540		)	159,532
Total investment securities held to maturity	$	1,822,263	$	35,866	$	(29,397	)	$	1,828,732
Available for sale investment grades:*
AAA Rated	$	1,312,640	$	2,986	$	(15,403	)	$	1,300,223
AA Rated	56,910		296		(236		)	56,970
A Rated	21,994		13		(57		)	21,950
BBB Rated	41,276		573		(155		)	41,694
Non-investment grade	11,860		737		(1,346		)	11,251
Not rated	32,235		491		(760		)	31,966
Total investment securities available for sale	$	1,476,915	$	5,096	$	(17,957	)	$	1,464,054

* 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 $172.9 million in investments not rated by the rating agencies with aggregate unrealized losses of $13.5 million at June 30, 2017. 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, 2017, 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 three and six months endedJune 30, 2017 and 2016 as the collateral supporting much of the investment securities has improved or performed as expected.

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Loan Portfolio

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

	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
	($ in thousands)
Loans
Commercial and industrial	$	2,631,312		$	2,642,319		$	2,638,195		$	2,558,968		$	2,528,749
Commercial real estate:
Commercial real estate	9,230,514			9,016,418			8,719,667			8,313,855			8,018,794
Construction	881,073			835,854			824,946			802,568			768,847
Total commercial real estate	10,111,587			9,852,272			9,544,613			9,116,423			8,787,641
Residential mortgage	2,724,777			2,745,447			2,867,918			2,826,130			3,055,353
Consumer:
Home equity	450,510			458,891			469,009			476,820			485,730
Automobile	1,150,343			1,150,053			1,139,227			1,121,606			1,141,793
Other consumer	642,231			600,516			577,141			534,188			499,914
Total consumer loans	2,243,084			2,209,460			2,185,377			2,132,614			2,127,437
Total loans (1)(2)	$	17,710,760		$	17,449,498		$	17,236,103		$	16,634,135		$	16,499,180
As a percent of total loans:
Commercial and industrial	14.8		%	15.1		%	15.3		%	15.4		%	15.3		%
Commercial real estate	57.1		%	56.5		%	55.4		%	54.8		%	53.3		%
Residential mortgage	15.4		%	15.7		%	16.6		%	17.0		%	18.5		%
Consumer loans	12.7		%	12.7		%	12.7		%	12.8		%	12.9		%
Total	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%

(1) Includes covered loans subject to loss-sharing agreements with the FDIC (primarily consisting of residential mortgage loans and commercial real estate loans) totaling $44.5 million, $47.8 million, $70.4 million, $76.0 million, and $81.1 million at June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016 and June 30, 2016, respectively.

(2) Includes net unearned premiums and deferred loan costs of $16.7 million, $15.7 million, $15.3 million, $10.5 million, and $8.3 million, at June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016 and June 30, 2016, respectively.

Total loans increased$261.3 million to approximately $17.7 billion at June 30, 2017 from March 31, 2017. Our loan portfolio includes purchased credit-impaired (PCI) loans, which are loans acquired at a discount that is due, in part, to credit quality. At June 30, 2017, our PCI loan portfolio decreased $113.2 million to $1.5 billion as compared to March 31, 2017 primarily due to continued larger loan repayments, of which some resulted from continued efforts by management to encourage borrower prepayment. The increase in non-PCI loan portion of the loan portfolio (net of $122 million in performing residential mortgage loans transferred to loans held for sale during the second quarter) was largely due to a $259.3 million increase in total commercial real estate loans. During the second quarter of 2017, Valley also originated $36.8 millionof residential mortgage loans for sale rather than investment. Loans held for sale totaled $139.6 million and $115.1 million at June 30, 2017 and March 31, 2017, respectively. See additional information regarding our residential mortgage loan activities below.

Total commercial and industrial loans decreased$11.0 million from March 31, 2017 to approximately $2.6 billion at June 30, 2017. The loan volumes were outpaced by a $30.8 million decline in the PCI loan portion of the portfolio during the second quarter of 2017. Exclusive of the decline in PCI loans, the non-PCI commercial and industrial loan portfolio increased by $19.8 million, or approximately 3.3 percent on an annualized basis, to $2.4 billion at June 30, 2017 from March 31, 2017. The second quarter growth in non-PCI loans was largely due to a secured commercial lending arrangement with a large regional auto retailer. 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.

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Commercial real estate loans (excluding construction loans) increased$214.1 million from March 31, 2017 to $9.2 billion at June 30, 2017 mainly due to a $250 million, or 12.6 percent on an annualized basis, increase in the non-PCI loan portfolio. The increase in non-PCI loans was primarily due to solid organic loan volumes in New York, New Jersey and Florida, particularly amongst our pre-existing long-term customer base, as well as approximately $22 million of loan participations purchased in the second quarter of 2017. Each purchased participation loan is reviewed by Valley under its normal underwriting criteria and stress-tested to assure its credit quality. The organic loan volumes generated across a broad-based segment of borrowers within the commercial real estate portfolio were partially offset by a $35.9 million decline in the acquired PCI loan portion of the portfolio. Construction loans increased $45.2 million to $881.1 million at June 30, 2017 from March 31, 2017. The increase was mostly due to advances on existing construction projects.

Total residential mortgage loans decreased$20.7 million, or approximately 3.0 percent on an annualized basis, to approximately $2.7 billion at June 30, 2017 from March 31, 2017 mostly due to the aforementioned transfer of $122 million in mortgage loans to loans held for sale and new loans originated for sale rather than investment during the second quarter of 2017. Valley sold approximately $136.6 million of residential mortgage loans (including $115.1 million of loans held for sale at March 31, 2017) during the second quarter of 2017. New and refinanced residential mortgage loan originations totaled approximately $194.4 million for the second quarter of 2017 as compared to $163.7 million and $177.7 million for the first quarter of 2017 and second quarter of 2016, respectively. Of the $194.4 million in total originations, $23.8 million, or 12.3 percent, represented new Florida residential mortgage loans.

Home equity loans decreased $8.4 million to $450.5 million at June 30, 2017 as compared to March 31, 2017 mostly due to PCI loan repayment activity. New home equity loan volumes and customer usage of existing home equity lines of credit continue to be weak, despite the relatively favorable low interest rate environment.

Automobile loans increased by $290 thousand to $1.2 billion at June 30, 2017 as compared to March 31, 2017. The auto loan portfolio remained relatively unchanged as new auto loan origination volumes declined as compared to the first quarter of 2017 largely due to slower application activity during the first half of the second quarter of 2017. Our Florida dealership network contributed over $23 million in auto loan originations, representing approximately 18 percent of Valley's total new auto loan production for the second quarter of 2017 as compared to approximately $24 million, or 17 percent, of Valley's total auto originations for the first quarter of 2017.

Other consumer loans increased$41.7 million, or 27.8 percent on an annualized basis, to $642.2 million at June 30, 2017 as compared to $600.5 million at March 31, 2017 mainly due to continued growth and customer usage of collateralized personal lines of credit.

Most of our lending is in northern and central New Jersey, New York City, Long Island and 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. 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 may make further inroads into the Florida lending market, through bank acquisitions (such as our recently announced merger agreement with USAB - See "Executive Summary" section above for details), select de novo branch efforts or adding lending staff.

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Purchased Credit-Impaired Loans (Including Covered Loans)

PCI loans totaled $1.5 billion and $1.8 billion at June 30, 2017 and December 31, 2016, 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 $44.5 million and $70.4 millionat June 30, 2017 and December 31, 2016, 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, 2017 and the reclassification of such loans to non-covered PCI loans during the first quarter of 2017. 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, 2016.

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, loss accrual or 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.

We reevaluate expected and contractual 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, we also analyze the actual cash flow versus the forecasts at the loan pool level and variances are reviewed to determine their cause. If a re-forecast of future estimated cash flow is necessary, we will adjust the credit loss expectations for the loan pools. 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 we don't 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.

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, if applicable, 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. 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. 

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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, 2017 and 2016.

	Three Months Ended June 30,
	2017						2016
	Carrying Amount			Accretable Yield			Carrying Amount			Accretable Yield
	(in thousands)
PCI loans:
Balance, beginning of the period	$	1,654,701		$	269,831		$	2,115,421		$	387,120
Accretion	23,553			(23,553		)	28,325			(28,325		)
Payments received	(136,785		)	—			(167,439		)	—
Transfers to other real estate owned	—			—			(906		)	—
Other, net	—			—			—			(3,194		)
Balance, end of the period	$	1,541,469		$	246,278		$	1,975,401		$	355,601

	Six Months Ended June 30,
	2017						2016
	Carrying Amount			Accretable Yield			Carrying Amount			Accretable Yield
	(in thousands)
PCI loans:
Balance, beginning of the period	$	1,771,502		$	294,514		2,240,471			415,179
Accretion	48,236			(48,236		)	56,384			(56,384		)
Payments received	(274,735		)	—			(317,084		)	—
Transfers to other real estate owned	(3,534		)	—			(1,176		)	—
Other, net	—			—			(3,194		)	(3,194		)
Balance, end of the period	$	1,541,469		$	246,278		$	1,975,401		$	355,601

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 $7.1 million and $7.2 million at June 30, 2017 and December 31, 2016, respectively.

Non-performing Assets

Non-performing assets (excluding PCI loans) include non-accrual loans, other real estate owned (OREO), other repossessed assets (which mainly consist of automobiles) and non-accrual debt securities at June 30, 2017. 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. Our non-performing assets totaling $54.6 million at June 30, 2017 increased 5.9 percent from March 31, 2017 primarily due to a moderate increase in non-accrual loans, but decreased 11.0 percent as compared to June 30, 2016 (as shown in the table below). Non-performing assets as a percentage of total loans and non-performing assets totaled 0.31 percent and 0.29 percent at June 30, 2017 and March 31, 2017, respectively. Overall, we believe total non-performing assets has remained relatively low as a percentage of the total loan portfolio and non-performing assets over the last 12 month period and is reflective of our consistent approach to the loan underwriting criteria for both Valley originated loans and loans purchased from third parties.

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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 7 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, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
	($ in thousands)
Accruing past due loans: (1)
30 to 59 days past due:
Commercial and industrial	$	2,391		$	29,734		$	6,705		$	4,306		$	5,187
Commercial real estate	6,983			11,637			5,894			9,385			5,076
Construction	—			7,760			6,077			—			—
Residential mortgage	4,677			7,533			12,005			9,982			10,177
Total Consumer	4,393			3,740			4,197			3,146			2,535
Total 30 to 59 days past due	18,444			60,404			34,878			26,819			22,975
60 to 89 days past due:
Commercial and industrial	2,686			341			5,010			788			5,714
Commercial real estate	8,233			359			8,642			4,291			834
Construction	854			—			—			—			—
Residential mortgage	1,721			4,177			3,564			2,733			2,326
Total Consumer	1,007			787			1,147			1,234			644
Total 60 to 89 days past due	14,501			5,664			18,363			9,046			9,518
90 or more days past due:
Commercial and industrial	—			405			142			145			218
Commercial real estate	2,315			—			474			478			131
Construction	2,879			—			1,106			1,881			—
Residential mortgage	3,353			1,355			1,541			590			314
Total Consumer	275			314			209			226			139
Total 90 or more days past due	8,822			2,074			3,472			3,320			802
Total accruing past due loans	$	41,767		$	68,142		$	56,713		$	39,185		$	33,295
Non-accrual loans: (1)
Commercial and industrial	$	11,072		$	8,676		$	8,465		$	7,875		$	6,573
Commercial real estate	15,514			15,106			15,079			14,452			19,432
Construction	1,334			1,461			715			1,136			5,878
Residential mortgage	12,825			11,650			12,075			14,013			14,866
Total Consumer	1,409			1,395			1,174			965			1,130
Total non-accrual loans	42,154			38,288			37,508			38,441			47,879
Other real estate owned (OREO) (2)	10,182			10,737			9,612			10,257			10,903
Other repossessed assets	342			475			384			307			369
Non-accrual debt securities (3)	1,878			2,007			1,935			2,025			2,118
Total non-performing assets (NPAs)	$	54,556		$	51,507		$	49,439		$	51,030		$	61,269
Performing troubled debt restructured loans	$	109,802		$	80,360		$	85,166		$	81,093		$	82,140
Total non-accrual loans as a % of loans	0.24		%	0.22		%	0.22		%	0.23		%	0.29		%
Total NPAs as a % of loans and NPAs	0.31			0.29			0.29			0.31			0.37
Total accruing past due and non-accrual loans as a % of loans	0.47			0.61			0.55			0.47			0.49
Allowance for loan losses as a % of non-accrual loans	276.24			301.51			305.05			287.97			225.75

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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 $558 thousand, $1.0 million, and $1.2 million at December 31, 2016, September 30, 2016, and June 30, 2016, respectively. There were no covered OREO properties at June 30, 2017 and March 31, 2017.

(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 $875 thousand, $745 thousand, $817 thousand, $728 thousand, $634 thousand at June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016 and June 30, 2016, respectively.

Loans past due 30 to 59 days decreased$42.0 million to $18.4 million at June 30, 2017 as compared to March 31, 2017. Within the past due category, commercial and industrial loans decreased$27.3 million mainly due to $19.2 million loans collateralized by New York City (NYC) taxi cab medallions reported in this delinquency category at March 31, 2017 which were current to their contractual payments at June 30, 2017, as well as normal fluctuations in this early stage delinquency category. Commercial real estate loans past due 30 to 59 days decreased by $4.7 million largely due to migration of one internally classified relationship totaling $5.9 million included from this delinquency category at March 31, 2017 to loans past due 60 to 89 days at June 30, 2017. There were no construction loans past due 30 to 59 days at June 30, 2017 as compared to $7.8 million at March 31, 2017 due to a few previously past due loans that were current to their contractual payments at June 30, 2017.

Loans past due 60 to 89 days increased$8.8 million to $14.5 million at June 30, 2017 as compared to March 31, 2017 largely due to a $7.9 million increase in past due commercial real estate loans caused, in part, by the aforementioned migration of one internally classified relationship totaling $5.9 million reported within the 30 to 59 days past due delinquency category at March 31, 2017. Commercial and industrial loans also increased$2.3 million to $2.7 million at June 30, 2017 as compared to March 31, 2017 mostly due to three loans collateralized by NYC taxi cab medallions totaling $2.4 million. Partially offsetting these increases, residential mortgage delinquencies declined $2.5 million at June 30, 2017 as compared to March 31, 2017.

Loans past due 90 days or more and still accruing increased$6.7 million to $8.8 million at June 30, 2017 as compared to $2.1 million at March 31, 2017 largely due to performing matured construction and commercial real estate loans in the normal process of renewal totaling $5.2 million. All of the loans past due 90 days or more and still accruing are considered to be well secured and in the process of collection.

Non-accrual loans increased$3.9 million to $42.2 million at June 30, 2017 as compared to $38.3 million at March 31, 2017 largely due to two impaired Chicago taxi medallion relationships (within the commercial and industrial category) with a combined total of $5.6 million that were placed on non-accrual at June 30, 2017.

At June 30, 2017, our entire taxi medallion loan portfolio totaled $140.5 million, consisting of $130.4 million and $10.1 million of NYC and Chicago taxi medallion loans, respectively. At June 30, 2017, the medallion portfolio included impaired loans of $37.4 million with related reserves of $3.7 million within the allowance for loan losses as compared to impaired loans of $6.3 million with related reserves of $2.6 million at March 31, 2017. At June 30, 2017, the impaired medallion loans largely consisted of performing troubled debt restructured (TDR) loans and the aforementioned non-accrual Chicago taxi cab medallion loans totaling $5.6 million. Loans past due 30 to 59 days and loans past due 60 to 89 days include $809 thousand and $2.4 million of NYC taxi medallions at June 30, 2017, respectively, which are all outstanding to one borrower. We are currently renegotiating the terms of these past due loans. 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. However, we continue to closely monitor this portfolio's performance and the potential impact of the changes in market valuation for taxi medallions due to competing car service providers and other factors.

OREO properties decreased$555 thousand to $10.2 million at June 30, 2017 from $10.7 million at March 31, 2017. The residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $6.2 million at June 30, 2017.

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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) increased$29.4 million to $109.8 million at June 30, 2017 as compared to $80.4 million at March 31, 2017 mainly due to taxi medallion loans totaling $33.4 million that were restructured and classified as TDR during the second quarter of 2017. Performing TDRs consisted of 124 loans (primarily in the commercial and industrial loan and commercial real estate portfolios). On an aggregate basis, the $109.8 million in performing TDRs at June 30, 2017 had a modified weighted average interest rate of approximately 4.53 percent as compared to a pre-modification weighted average interest rate of 4.30 percent. The increase in the modified weighted average interest rate of the performing TDRs as compared to the pre-modification weighted average interest rate was largely due to several loans restructured at higher current market interest rates, but with extended loan terms.

Despite the increase in taxi medallion loans classified as TDR and non-accrual loans during the second quarter of 2017, we believe our overall credit quality metrics continued to reflect our solid underwriting standards at June 30, 2017. However, we can provide no assurances as to the future level of our loan delinquencies.

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. The allowance for credit loss 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, 2016.

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, 2017			March 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016
	($ in thousands)
Average loans outstanding	$	17,701,676		$	17,313,100		$	16,252,915		$	17,508,461		$	16,123,229
Beginning balance - Allowance for credit losses	117,696			116,604			107,675			116,604			108,367
Loans charged-off:
Commercial and industrial	(2,910		)	(1,714		)	(493		)	(4,624		)	(1,744		)
Commercial real estate	(139		)	(414		)	(414		)	(553		)	(519		)
Construction	—			—			—			—			—
Residential mortgage	(229		)	(130		)	(151		)	(359		)	(232		)
Total Consumer	(1,011		)	(1,121		)	(697		)	(2,132		)	(1,771		)
Total charge-offs	(4,289		)	(3,379		)	(1,755		)	(7,668		)	(4,266		)
Charged-off loans recovered:
Commercial and industrial	312			848			990			1,160			1,516
Commercial real estate	346			142			1,458			488			1,547
Construction	294			—			—			294			—
Residential mortgage	235			448			94			683			109
Total Consumer	395			563			523			958			912
Total recoveries	1,582			2,001			3,065			3,583			4,084
Net (charge-offs) recoveries	(2,707		)	(1,378		)	1,310			(4,085		)	(182		)
Provision charged for credit losses	3,632			2,470			1,429			6,102			2,229
Ending balance - Allowance for credit losses	$	118,621		$	117,696		$	110,414		$	118,621		$	110,414
Components of allowance for credit losses:
Allowance for loan losses	$	116,446		$	115,443		$	108,088		$	116,446		$	108,088
Allowance for unfunded letters of credit	2,175			2,253			2,326			2,175			2,326
Allowance for credit losses	$	118,621		$	117,696		$	110,414		$	118,621		$	110,414
Components of provision for credit losses:
Provision for losses on loans	$	3,710		$	2,402		$	1,363		$	6,112		$	2,092
Provision for unfunded letters of credit	(78		)	68			66			(10		)	137
Provision for credit losses	$	3,632		$	2,470		$	1,429		$	6,102		$	2,229
Annualized ratio of net charge-offs (recoveries) to average loans outstanding	0.06		%	0.03		%	(0.03		)%	0.05		%	0.00		%
Allowance for credit losses as a % of non-PCI loans	0.73			0.75			0.76			0.73			0.76
Allowance for credit losses as a % of total loans	0.67			0.67			0.67			0.67			0.67

During the second quarter of 2017, we recognized net loan charge-offs of $2.7 million as compared to $1.4 million for the first quarter of 2017, and net loan recoveries of $1.3 million the second quarter of 2016. The increase in net loan charge-offs as compared to the first quarter of 2017 was largely due to one charged-off impaired loan totaling $1.9 million within the commercial and industrial loan portfolio during the second quarter of 2017.

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During the second quarter of 2017, we recorded a $3.6 million provision for credit losses as compared to $2.5 million and $1.4 million for the first quarter of 2017 and the second quarter of 2016, respectively. The quarter over quarter increase in the provision was due, in part, to solid second quarter loan growth and an increase in allocated reserves for impaired loans at June 30, 2017.

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, 2017				March 31, 2017				June 30, 2016
	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*	$	53,792	2.04	%	$	53,541	2.03	%	$	50,351	1.99	%
Commercial real estate loans:
Commercial real estate	37,180		0.40	%	38,146		0.42	%	35,869		0.45	%
Construction	18,275		2.07	%	18,156		2.17	%	16,008		2.08	%
Total commercial real estate loans	55,455		0.55	%	56,302		0.57	%	51,877		0.59	%
Residential mortgage loans	4,186		0.15	%	3,592		0.13	%	3,495		0.11	%
Consumer loans:
Home equity	582		0.13	%	433		0.09	%	968		0.20	%
Auto and other consumer	4,606		0.26	%	3,828		0.22	%	3,723		0.23	%
Total consumer loans	5,188		0.23	%	4,261		0.19	%	4,691		0.22	%
Total allowance for credit losses	$	118,621	0.67	%	$	117,696	0.67	%	$	110,414	0.67	%

* 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 June 30, 2017, March 31, 2017 and June 30, 2016. At June 30, 2017, our allowance allocations for losses as a percentage of total loans remained relatively stable in most loan categories as compared to March 31, 2017, but declined 0.10 basis points for construction loans primarily due to the continued low level of recent loss experience in this portfolio. There were no construction loan charge-offs during the six months endedJune 30, 2017 and the year ended December 31, 2016.

Our allowance for credit losses as a percentage of total non-PCI loans (excluding PCI loans with carrying values totaling approximately $1.5 billion) was 0.73 percent at June 30, 2017, as compared to 0.75 percent and 0.76 percent at March 31, 2017 and June 30, 2016, respectively. PCI loans 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, 2017, March 31, 2017 and June 30, 2016.

Capital Adequacy

A significant measure of the strength of a financial institution is its shareholders’ equity. At both June 30, 2017 and December 31, 2016, shareholders’ equity totaled approximately $2.4 billion and represented 10.3 percent and 10.4 percent of total assets, respectively. During the six months ended June 30, 2017, total shareholders’ equity increased by $46.7 million primarily due to (i) net income of $96.2 million, (ii) a $5.4 million decrease in our accumulated other comprehensive loss, (iii) a $4.5 million increase attributable to the effect of our stock incentive plan, and (iv) net proceeds of $2.2 million from the re-issuance of treasury and authorized common shares issued under our dividend reinvestment plan totaling a combined 186 thousand shares. These positive changes were partially offset by cash dividends declared on common and preferred stock totaling a combined $61.6 million. See Note 3 to the

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consolidated financial statements for additional information regarding changes in our accumulated other comprehensive loss during the three and six months ended June 30, 2017.

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, 2017, and December 31, 2016, Valley and Valley National Bank exceeded all capital adequacy requirements with the capital conservation buffer under the Basel III Capital Rules (see tables below).

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, 2017 and December 31, 2016:

	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, 2017
Total Risk-based Capital
Valley	$	2,132,436	11.99	%	$	1,644,928	9.250	%	N/A		N/A
Valley National Bank	2,076,401		11.70		1,641,551		9.250		$	1,774,650	10.00	%
Common Equity Tier 1 Capital
Valley	1,631,680		9.18		1,022,523		5.750		N/A		N/A
Valley National Bank	1,857,730		10.47		1,020,423		5.750		1,153,522		6.50
Tier 1 Risk-based Capital
Valley	1,744,690		9.81		1,289,268		7.250		N/A		N/A
Valley National Bank	1,857,730		10.47		1,286,621		7.250		1,419,720		8.00
Tier 1 Leverage Capital
Valley	1,744,690		7.69		907,078		4.00		N/A		N/A
Valley National Bank	1,857,730		8.21		905,662		4.00		1,132,078		5.00

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	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 December 31, 2016
Total Risk-based Capital
Valley	$	2,084,531	12.15	%	$	1,480,006	8.625	%	N/A		N/A
Valley National Bank	2,023,857		11.82		1,476,767		8.625		$	1,712,193	10.00	%
Common Equity Tier 1 Capital
Valley	1,590,825		9.27		879,424		5.125		N/A		N/A
Valley National Bank	1,807,201		10.55		877,499		5.125		1,112,926		6.50
Tier 1 Risk-based Capital
Valley	1,698,767		9.90		1,136,816		6.625		N/A		N/A
Valley National Bank	1,807,201		10.55		1,134,328		6.625		1,369,755		8.00
Tier 1 Leverage Capital
Valley	1,698,767		7.74		878,244		4.00		N/A		N/A
Valley National Bank	1,807,201		8.25		876,026		4.00		1,095,032		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.

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, 2016) to the FRB on July 27, 2017. 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, 2016 will be available under the Shareholder Relations section of our website (www.valleynationalbank.com) under the Dodd-Frank Act Stress Test Reports section when the FRB discloses the results to the public in October 2017. The previous year results (utilizing data as of December 31, 2015) can currently be found on our website.

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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, 2017		December 31, 2016
	($ in thousands, except for share data)
Common shares outstanding	263,971,766		263,638,830
Shareholders’ equity	$	2,423,901	$	2,377,156
Less: Preferred stock	111,590		111,590
Less: Goodwill and other intangible assets	734,337		736,121
Tangible common shareholders’ equity	$	1,577,974	$	1,529,445
Tangible book value per common share	$	5.98	$	5.80
Book value per common share	$	8.76	$	8.59

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 37.1 percent for the six months ended June 30, 2017 as compared to 30.2 percent for the year ended December 31, 2016. We expect our retention ratio to improve during the remainder of 2017 due to, among other factors, solid loan growth and potential earnings improvement from LIFT, our earnings enhancement initiative to review our business practices with the primary goal of improving Valley's overall efficiency.

Cash dividends declared amounted to $0.22per common share for both the six months ended June 30, 2017 and 2016. 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. Prior to the date of this filing, Valley has received no objection or adverse guidance from the FRB or the OCC regarding the current level of its quarterly common stock dividend.

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, 2016 in the MD&A section - “Off-Balance Sheet Arrangements” and Notes 11 and 12 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

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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, 2017 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.

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. See Note 14 to the consolidated financial statements for further details.

Item 1A. Risk Factors

Other than the additional risk factor described below, 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, 2016.

The acquisition of USAmeriBancorp, Inc. may not be successful, which may adversely affect our business, financial condition and results of operation.

In July 2017, we announced our entry into a merger agreement with USAmeriBancorp, Inc. (USAB) and its wholly-owned subsidiary, USAmeriBank, headquartered in Clearwater, Florida. The acquisition of USAB is subject to several conditions, including the receipt of necessary shareholder and regulatory approvals. The satisfaction of such conditions could delay the acquisition of USAB for a significant period or prevent it from occurring. In addition, both Valley and USAB may terminate the merger agreement under certain circumstances, including but not limited to, if Valley’s share price falls below $11.00 in the preclosing measurement period. If we do not complete the acquisition of USAB or if it is significantly delayed, the expected benefits of such acquisition may not be fully realized, if at all, and we may incur significant expenses and our business and results of operations may be materially adversely affected.

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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, 2017 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, 2017 to April 30, 2017	—	$	—	—	4,112,465
May 1, 2017 to May 31, 2017	2,719	11.72		—	4,112,465
June 1, 2017 to June 30, 2017	—	—		—	4,112,465
Total	2,719	$	11.72	—

(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, 2017.

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Item 6. Exhibits

(2)	Plan of acquisition, reorganization, arrangement, liquidation or succession:
	(2.1)	Agreement and Plan of Merger, dated July 26, 2017, by and between Valley National Bancorp and USAmeriBancorp, Inc., incorporated herein by reference to Exhibit 2.1 to the Registrant’s Form 8-K Current Report filed on July 28, 2017.
(3)	Articles of Incorporation and By-laws:
	(3.1)	Certificate of Amendment to the Restated Certificate of Incorporation of the Registrant, incorporated herein by reference to Exhibit 3.1 of the Registrant's Form 10-Q Quarterly Report filed on May 8, 2017.
	(3.2)	Certificate of Amendment to the Restated Certificate of Incorporation of the Registrant, incorporated herein by reference to Exhibit 3.1 of the Registrant's Form 8-K Current Report filed on August 1, 2017.
	(3.3)	Restated Certificate of Incorporation of the Registrant, incorporated herein by reference to Exhibit 3.A of the Registrant's Form 10-K Annual Report filed on February 29, 2016.
	(3.4)	By-laws of the Registrant, as amended and restated, incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K Current Report filed on December 7, 2016.
(10)	Material Contracts:
	(10.1)	Underwriting Agreement, dated July 27, 2017, by and between the Company and Keefe, Bruyette & Woods, Inc., as representative of the underwriters named therein, incorporated herein by reference to Exhibit 1.1 to the Registrant’s Form 8-K Current Report filed on August 1, 2017.
	(10.2)	Amended and Restated Change in Control Agreement dated June 28, 2017 between Valley, Valley National Bank and Dianne M. Grenz.+*
	(10.3)	Severance Agreement dated June 28, 2017 between Valley, Valley National Bank and Dianne M. Grenz.+*
(31.1)	Certification pursuant to Securities Exchange Rule 13a-14(a)/15d-14(a) signed by Gerald H. Lipkin, Chairman of the Board 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 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 7, 2017	Gerald H. Lipkin
	Chairman of the Board
	and Chief Executive Officer
Date:	/s/ Alan D. Eskow
August 7, 2017	Alan D. Eskow
	Senior Executive Vice President and
	Chief Financial Officer

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EX-10.2

EXHIBIT 10.2

AMENDED AND RESTATED CHANGE-IN-CONTROL AGREEMENT

DIANNE GRENZ

THIS AMENDED AND RESTATED CHANGE-IN-CONTROL AGREEMENT (this “Agreement”), is made as of this 28th day of June, 2017, 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 Dianne Grenz (the “Executive”).

BACKGROUND

WHEREAS, the Executive has been continuously employed by the Bank and Valley for many years;

WHEREAS, the Executive has worked diligently in the Executive’s positions 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 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 Boards believe it is imperative that the Company and the 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

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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;

WHEREAS, to achieve that goal, and to retain the Executive’s services prior to any such activity, the Compensation Committee of the Boards has approved entering into this Agreement to govern the Executive’s employment terms and termination benefits in the event of and for a period of time after a Change-in-Control of the Company, as hereinafter defined;

WHEREAS, the Executive and the Company had entered into a Change-in-Control Agreement dated October 21, 2014, and have agreed to amend and restate that Agreement with this Agreement;

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 an acquisition or 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.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 (required 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 Executive shall be considered willful unless done, or omitted to be done,

2

by the Executive not in good faith and without reasonable belief that the action or omission was in the best interest of the Company.

b.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 Section 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 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 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

3

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 individuals 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.

c.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 third 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.

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

e.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, title, duties, responsibilities and status with the Company

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immediately prior to a Change-in-Control; any removal of Executive from, or any failure to re-elect Executive to any positions(s) or offices(s) Executive held immediately prior to such Change-in-Control;

(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 (except that the Company may institute plans, programs or arrangements providing the Executive substantially similar benefits) or a failure by the Company to 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; or a failure to pay the Executive the bonus provided for in Section 4.b hereof at the time and in the manner therein specified;

(4)The Company’s transfer of Executive to another geographic location outside of New Jersey or more than 25 miles from the Executive’s present office location, except for required occasional travel on the Company’s business to an extent 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

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

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 Company in the position the Executive held with the Company prior to the Change-in-Control, or with such other corporate or divisional profit center as shall then be the principal successor to the business, assets and properties of the Company, with 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 or from continuing to serve on any boards of directors or trustees which he served prior to the Change-in-Control or for which consent is provided after a Change-in-Control.

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 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 and excluding any year prior to the 2014 performance year, although that may require only a two year average). 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 or terminated 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, during the Contract Period, 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.

d.Other Benefits. During the Contract Period, the Executive also shall be entitled to vacations and sick days, in accordance with the practices and procedures of the Company, as such existed

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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) including the chief executive officer of such entities, then no such change shall be deemed to be contrary to this paragraph.

6.Termination for Cause. During the Contract Period, 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 be entitled to any compensation or benefits earned through the date of termination but shall not be entitled to any further compensation or benefits under this Agreement.

7.Disability. During the Contract Period if the Executive becomes permanently disabled, or is unable to perform the duties hereunder for 4 consecutive months, the Company may terminate the employment of the Executive. In such event, the Executive shall be entitled to any compensation or benefits earned through the date of such termination plus a lump sum payable within ten business days of termination of employment equal to one twelfth of the Executive’s highest annual salary (including any 401(k) plan deferral) paid in any of the three calendar years immediately prior to the Change-in-Control but the Executive shall not be entitled to any further compensation or benefits under this Agreement.

8.Death Benefits. Upon the Executive’s death during the Contract Period, the Executive’s estate shall be entitled to any compensation or benefits earned through the date of death plus a lump sum payable within thirty business days of the date of death equal to one twelfth of the Executive’s highest annual salary (including any 401(k) plan deferral) paid in any of the three calendar years immediately prior to the Change-in-Control but the Executive shall not be entitled to any further compensation or benefits under this Agreement.

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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 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 during the Contract Period, the Company shall, subject to section 12 hereof:

a.within 20 business days of the termination of employment, pay the Executive a lump sum severance payment equal to three (3) times the Executive’s highest annual compensation paid during or for a calendar year, in any of the three calendar years immediately prior to the Change-in-Control, where annual compensation means (i) salary paid during a calendar year (including any 401(k) plan deferral) plus (ii) cash bonuses awarded to the Executive for such calendar year, regardless of when paid.

b.within 20 business days of the termination of employment, pay the Executive in an amount equal to three (3) times 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); and

c.within 20 business days of the termination of employment, pay the Executive a lump sum amount equal three (3) times one hundred twenty-five percent (125%) of (A) the aggregate annual COBRA premium amounts (based upon COBRA rates then in effect) and annual dental coverage premium amounts, reflecting what was being provided to the Executive (and his spouse and family) at the time of termination of employment, minus (B) the aggregate annual amount of any employee contribution that would have been required of the Executive (determined as of the termination of employment).

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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 or a resignation for Good Reason during the Contract Period. If the Company fails to pay the Executive any lump sum amounts or other benefits 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 on a monthly basis as incurred 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 and not in good faith.

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 shall be subject to injunctive relief and equitable remedies as a result of the breach of this section. The invalidity or unenforceability of any provision of this Agreement shall not affect the force and effect of the remaining valid portions. No alleged breach or breach

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of this Section 11 shall give the Company the right to withhold or offset against any payments or benefits due the Executive under this Agreement.

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. Cutback. 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. Notice and Choice of Cutback. 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 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

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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. Correction for Overpayment. 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 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

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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 in section b below, this Agreement shall commence on the date hereof and shall remain in effect for a period of 3 years from the date hereof (the “Term”) or until the end of the Contract Period, whichever is later. The Term shall be automatically extended for an additional one year period on the anniversary date hereof (so that the Term is always 3 years) unless, prior to a Change-in-Control, the Compensation and Human Resources Committee of Valley notifies the Executive in writing that the Contract is not so extended, in which case the Term shall end at the expiration of then current 3 year Term.

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-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 as long as the Executive receives the lump sum payments due under Section 9 hereunder, the Executive shall not be entitled to any other severance payments under the

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Company’s severance policy for officers and employees or under the Executive’s letter agreement providing for severance, dated the date hereof.

15.Notice. During the Contract Period, any notice of termination of the employment of the Executive by the Company or by the Executive to the Company shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a dated notice which shall (i) indicate the specific termination provision in this Agreement relied upon; (ii) set forth, if necessary, in reasonable detail the facts and circumstances claimed to provide a basis for termination of the employment of the Executive or from the Company under the provision so indicated; (iii) specify a date of termination, which shall be not less than two weeks nor more than six weeks after such Notice of Termination is given, except in the case of termination of employment by the Company of the Executive for Cause pursuant to Section 6 hereof, in which case the Notice of Termination may specify a date of termination as of the date such Notice of Termination is given; and (iv) be given by personal delivery or, if the individual is not personally available, by certified mail to the last known address of the individual. Upon the death of the Executive, no Notice of Termination need be given.

16.Payroll and Withholding Taxes. All payments to be made or benefits to be provided hereunder by the Company shall be subject to applicable federal and state payroll or withholding taxes, including if applicable the Excise Tax.

17.Section 409A Compliance. This Agreement is intended to be compliant with, or exempt from, the requirements of Section 409A of the Internal Revenue Code (“Section 409A”), taking into account the severance pay exception and the short term deferral rules that are applicable under 409A, and it shall be administered accordingly. 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. Any

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such payment (which shall be considered to be a separate payment and, and not a series of payments) shall be delayed until the first day of the month following the date that is six (6) months after the Executive ’s separation from service (as defined and determined under 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.

18.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 the Change in Control Agreement dated October 21, 2014. 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.

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.

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ATTEST:	VALLEY NATIONAL BANCORP
/s/ Alan D. Eskow	By:/s/ Gerald Korde
Alan D. Eskow, Secretary	Gerald Korde, Chairman,
	Compensation and Human Resources
	Committee
ATTEST:	VALLEY NATIONAL BANK
/s/ Alan D. Eskow	By:/s/ Gerald Korde
Alan D. Eskow, Secretary	Gerald Korde, Chairman,
	Compensation and Human Resources
	Committee
WITNESS:
/s/ Linda Meier	/s/ Dianne Grenz
Linda Meier	Dianne Grenz, Executive

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EX-10.3

EXHIBIT 10.3

VALLEY NATIONAL BANK

1455 Valley Road

Wayne, NJ 07470

June 28, 2017

Ms. Dianne Grenz

Sr. Executive Vice President

Valley National Bancorp

Valley National Bank

1455 Valley Road

Wayne, New Jersey 07470

Dear Ms. Grenz:

The Compensation and Human Resources Committee of the Board of Directors of Valley National Bancorp (“Bancorp”) and Valley National Bank (the “Bank”) (collectively, the “Company”) have determined that it is in the best interests of the Bancorp and the Bank for the Company to agree to provide you with certain limited severance rights as provided herein.

The Board recognizes that your employment by the Company without any severance agreement, other than your Amended and Restated Change in Control Agreement dated the date hereof (“Change in Control Agreement”), creates tensions which may cause you to seek opportunities elsewhere or affect your views of your present compensation. These arrangements are being made to alleviate, in part, those concerns.

In view of the foregoing, in consideration of your continued employment with the Company and your consent to this letter, the Company agrees:

1.If the Company elects to terminate you as Senior Executive Vice President of Valley National Bancorp and/or Valley National Bank (or such office as you shall then hold), the Company will pay you a lump sum severance benefit equal to 24 months of your annual base salary plus an amount equal to the sum of (i) one times your most recent annual cash bonus and (ii) a fraction of your most recent annual cash bonus, with the numerator of the fraction being the number of months that has elapsed in the current calendar year prior to your termination date and the denominator of which is 12. The Company will pay you such amount within 5 business days following the date that the Release described in Paragraph 3 is effective and irrevocable. This severance benefit will not be paid if the Company terminates you for “Cause”. “Cause” means (i) willful and continued failure by the Executive to perform her duties for the Company after at least one warning in writing from the Company’s 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 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. No severance will be paid under paragraphs 1 or 2 in the event you are paid a severance benefit pursuant to your Change in Control Agreement.

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2. If you are terminated other than for Cause, the Company shall pay you (or your estate in the case of death) a lump sum amount equal to one hundred twenty-five percent (125%), less applicable withholdings, of (A) the aggregate COBRA premium amounts (based upon COBRA rates in effect at date of termination) for three (3) years of the health, hospitalization and medical insurance coverage that was being provided to you (and your spouse) at the time of termination of employment, minus (B) the aggregate amount of any employee contributions that would have been required of you (determined as of the termination of employment) for such three (3) year period. The Company also shall pay you a lump sum amount equal to one hundred twenty-five percent (125%), less applicable withholdings, of the Company’s share of the premium for three (3) years of the life insurance coverage provided to a similarly situated active employee (based upon the coverage and group rates in effect on the date of termination of employment). The Company will pay you such amounts within 5 business days following the date that the Release described in Paragraph 3 is effective and irrevocable.

3.Notwithstanding anything else to the contrary in this letter agreement, the Company may delay payment of benefits provided in Sections 1 and 2 herein for six (6) months following your termination from employment to the extent necessary to comply with Section 409A of the Internal Revenue Code. At the end of such period of delay, you 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 the short-term deferral rate under Treasury Regulation 1.409A-1(b)(4) (or any successor Regulations 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 exceptions.

Notwithstanding anything else to the contrary in this letter agreement, payments and benefits provided under Sections 1 and 2 herein are subject to required federal, state and local tax withholding requirements, theexecution by you of a release of claims in favor of the Company, its affiliates and their respective officers and directors in a reasonable form to be provided by the Company (the “Release”) and such Release becoming effective and irrevocable in accordance with applicable law. The Release will include your resignation from all other positions with the Company.

As partial consideration for the Company entering into this letter agreement, you agree as follows:

4. Following the termination of your employment with the Company for any reason, you shall retain in confidence any confidential information known to you concerning the Company and its business.

5. While you are employed by the Company and for a period of one year thereafter, you will not, without the prior written approval of the Board of Directors of Bancorp, directly or indirectly, as officer, director, employee, five (5) percent shareholder, principal or agent, or in any other capacity, own, manage, operate, consult with or be employed by any insured depository institution which transacts business in the States of New Jersey, New York or Florida if such insured depository institution employs or utilizes you in any capacity to solicit the Company’s loan, trust, deposit customers, or other customers of the Company, or employees of the Company. This paragraph shall have no force or effect after the occurrence of a Change in Control, as such term is defined in your Change in Control Agreement.

You agree that the Company has no adequate remedy at law for the violation of paragraphs 4 and 5 and that the Company shall be entitled to injunctive relief to enforce such provisions.

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Both parties mutually agree as follows:

6.In the event the Company fails to pay to you or your spouse any of the benefits provided herein for a period in excess of ten (10) business days after a written request to do so, you (or your spouse) shall be entitled to be paid or reimbursed by the Company for the legal fees and expenses incurred by you (or your spouse) in enforcing or interpreting the provisions of this letter agreement. The Company hereby agrees to pay or reimburse you for such fees and expenses on a monthly basis, upon your submission of bills or requests for payment. A court shall be entitled to deny you your legal fees and expenses only if it finds you made a claim for benefits hereunder not in good faith and without reasonable cause.

7.This letter agreement shall commence on the date hereof and expire on June 30, 2019 (June 30, 2019 is referred to hereafter as the “Expiration Date”). On June 30 of each year starting June 30, 2018, the Expiration Date shall be automatically extended for an additional one (1) year period (so this letter agreement remains a two (2) year contract) unless you or Bancorp otherwise elect and so notify the other party in writing 60 calendar days prior to May 31 of any year starting with May 31, 2018, in which case this letter agreement shall terminate on the then existing Expiration Date.

8.This letter agreement shall be of no further force and effect following the occurrence of a “Change in Control” as such term is defined in your Change in Control Agreement and after the occurrence of a Change in Control your employment and severance benefits shall be governed only by your Change in Control Agreement.

9.This letter agreement shall be binding upon and inure to the benefit of you, your estate and the Company, and any successor to the Company. Neither this letter agreement nor any rights arising hereunder may be assigned or pledged by you. This letter agreement may be amended, supplemented or changed at any time only by a writing signed by Bancorp and yourself. This letter agreement constitutes the entire agreement between the Company and you with respect to the matters covered hereby and replaces any prior agreements or understandings (whether written or unwritten) with respect to such matters. In the event your services are terminated and you are entitled to payments, you shall not be obligated to mitigate your damages and the Company may not offset amounts due to you hereunder. However, in the event you breach the non-compete contained in paragraph 5 hereof during any period when it is effective, the Company shall not thereafter be obligated to provide you with any benefits hereunder and you shall not be entitled to be paid your legal fees or expenses as provided in paragraph 6 hereof.

If you are in agreement with the foregoing, please so indicate by signing and returning to the Company the enclosed copy of this letter, whereupon this letter shall constitute an agreement between you and the Company.

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	Very truly yours,
	VALLEY NATIONAL BANCORP
	By:/s/ Gerald Korde
AGREED AND ACCEPTED	Gerald Korde, Chairman,
	Compensation and Human Resources
	Committee
/s/ Dianne Grenz	VALLEY NATIONAL BANK
Dianne Grenz
	By:/s/ Gerald Korde
	Gerald Korde, Chairman,
	Compensation and Human Resources
	Committee

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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 7, 2017

/s/ Gerald H. Lipkin

Gerald H. Lipkin

Chairman of the Board 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 7, 2017

/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, 2017 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 and

Chief Executive Officer

August 7, 2017

/s/ Alan D. Eskow

Alan D. Eskow

Senior Executive Vice President and

Chief Financial Officer

August 7, 2017

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 03, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
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		264,029,734

XML

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Assets
Cash and due from banks	$ 227,830	$ 220,791
Interest bearing deposits with banks	129,959	171,710
Investment securities:
Held to maturity (fair value of $1,828,732 at June 30, 2017 and $1,924,597 at December 31, 2016)	1,822,263	1,925,572
Available for sale	1,464,054	1,297,373
Total investment securities	3,286,317	3,222,945
Loans held for sale (includes fair value of $17,919 at June 30, 2017 and $57,708 at December 31, 2016 for loans originated for sale)	139,576	57,708
Loans	17,710,760	17,236,103
Less: Allowance for loan losses	(116,446)	(114,419)
Net loans	17,594,314	17,121,684
Premises and equipment, net	290,001	291,180
Bank owned life insurance	393,997	391,830
Accrued interest receivable	69,732	66,816
Goodwill	690,637	690,637
Other intangible assets, net	43,700	45,484
Other assets	583,287	583,654
Total Assets	23,449,350	22,864,439
Deposits:
Non-interest bearing	5,197,997	5,252,825
Interest bearing:
Savings, NOW and money market	8,683,028	9,339,012
Time	3,368,993	3,138,871
Total deposits	17,250,018	17,730,708
Short-term borrowings	1,734,444	1,080,960
Long-term borrowings	1,819,615	1,433,906
Junior subordinated debentures issued to capital trusts	41,658	41,577
Accrued expenses and other liabilities	179,714	200,132
Total Liabilities	21,025,449	20,487,283
Shareholders’ Equity
Preferred stock (no par value, authorized 50,000,000 shares at June 30, 2017; issued 4,600,000 shares at June 30, 2017 and December 31, 2016)	111,590	111,590
Common stock (no par value, authorized 450,000,000 shares at June 30, 2017; issued 263,990,794 shares at June 30, 2017 and 263,804,877 shares at December 31, 2016)	92,423	92,353
Surplus	2,049,613	2,044,401
Retained earnings	207,177	172,754
Accumulated other comprehensive loss	(36,679)	(42,093)
Treasury stock, at cost (19,028 common shares at June 30, 2017 and 166,047 shares at December 31, 2016)	(223)	(1,849)
Total Shareholders’ Equity	2,423,901	2,377,156
Total Liabilities and Shareholders’ Equity	$ 23,449,350	$ 22,864,439

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Investment securities held to maturity:	$ 1,828,732	$ 1,924,597
Loans held for sale, fair value	$ 17,919	$ 57,708
Preferred stock, par value (usd per share)
Preferred stock, shares authorized (in shares)	50,000,000
Preferred stock, shares issued (in shares)	4,600,000	4,600,000
Common stock, par value (usd per share)
Common stock, shares authorized (in shares)	450,000,000
Common stock, shares issued (in shares)	263,990,794	263,804,877
Treasury stock, shares (in shares)	19,028	166,047

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CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Interest Income
Interest and fees on loans	$ 185,860	$ 169,426	$ 360,874	$ 335,497
Interest and dividends on investment securities:
Taxable	18,928	14,256	36,517	28,255
Tax-exempt	3,943	3,734	7,974	7,424
Dividends	2,137	1,316	4,288	2,796
Interest on federal funds sold and other short-term investments	279	296	610	653
Total interest income	211,147	189,028	410,263	374,625
Interest on deposits:
Savings, NOW and money market	12,714	9,961	22,897	19,204
Time	10,166	9,223	19,719	18,808
Interest on short-term borrowings	5,516	3,120	9,417	4,992
Interest on long-term borrowings and junior subordinated debentures	13,791	15,269	26,741	32,013
Total interest expense	42,187	37,573	78,774	75,017
Net Interest Income	168,960	151,455	331,489	299,608
Provision for credit losses	3,632	1,429	6,102	2,229
Net Interest Income After Provision for Credit Losses	165,328	150,026	325,387	297,379
Non-Interest Income
Trust and investment services	2,800	2,544	5,544	4,984
Insurance commissions	4,358	4,845	9,419	9,553
Service charges on deposit accounts	5,342	5,094	10,578	10,197
Gains (losses) on securities transactions, net	22	(3)	(1)	268
Fees from loan servicing	1,831	1,561	3,646	3,155
Gains on sales of loans, net	4,791	3,105	8,919	4,900
Bank owned life insurance	1,701	1,818	4,164	3,781
Other	3,845	5,300	7,480	8,874
Total non-interest income	24,690	24,264	49,749	45,712
Non-Interest Expense
Salary and employee benefits expense	61,338	56,072	125,054	116,331
Net occupancy and equipment expense	22,609	22,168	45,644	44,957
FDIC insurance assessment	4,928	5,095	10,055	10,194
Amortization of other intangible assets	2,562	2,928	5,098	5,777
Professional and legal fees	4,302	5,472	8,997	9,367
Amortization of tax credit investments	7,732	7,646	13,056	14,910
Telecommunication expense	2,707	2,294	5,366	4,680
Other	13,061	18,128	26,921	31,812
Total non-interest expense	119,239	119,803	240,191	238,028
Income Before Income Taxes	70,779	54,487	134,945	105,063
Income tax expense	20,714	15,460	38,785	29,849
Net Income	50,065	39,027	96,160	75,214
Dividends on preferred stock	1,797	1,797	3,594	3,594
Net Income Available to Common Shareholders	$ 48,268	$ 37,230	$ 92,566	$ 71,620
Earnings Per Common Share:
Basic (usd per share)	$ 0.18	$ 0.15	$ 0.35	$ 0.28
Diluted (usd per share)	0.18	0.15	0.35	0.28
Cash Dividends Declared per Common Share (usd per share)	$ 0.11	$ 0.11	$ 0.22	$ 0.22
Weighted Average Number of Common Shares Outstanding:
Basic (in shares)	263,958,292	254,381,170	263,878,103	254,228,260
Diluted (in shares)	264,778,242	254,771,213	264,662,863	254,575,873

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 50,065	$ 39,027	$ 96,160	$ 75,214
Unrealized gains and losses on available for sale securities
Net gains (losses) arising during the period	1,896	(635)	3,203	7,648
Less reclassification adjustment for net (gains) losses included in net income	(13)	2	0	(168)
Total	1,883	(633)	3,203	7,480
Non-credit impairment losses on available for sale securities
Net change in non-credit impairment losses on securities	21	301	134	242
Less reclassification adjustment for accretion of credit impairment losses included in net income	(39)	0	(126)	(286)
Total	(18)	301	8	(44)
Unrealized gains and losses on derivatives (cash flow hedges)
Net losses on derivatives arising during the period	(873)	(2,122)	(746)	(8,674)
Less reclassification adjustment for net losses included in net income	1,356	2,107	2,831	3,848
Total	483	(15)	2,085	(4,826)
Defined benefit pension plan
Amortization of net loss	59	43	118	86
Total other comprehensive income	2,407	(304)	5,414	2,696
Total comprehensive income	$ 52,472	$ 38,723	$ 101,574	$ 77,910

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net income	$ 96,160	$ 75,214
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	12,549	12,440
Stock-based compensation	6,872	5,184
Provision for credit losses	6,102	2,229
Net amortization of premiums and accretion of discounts on securities and borrowings	11,366	7,047
Amortization of other intangible assets	5,098	5,777
Losses (gains) on securities transactions, net	1	(268)
Proceeds from sales of loans held for sale	303,268	185,577
Gains on sales of loans, net	(8,919)	(4,900)
Originations of loans held for sale	(154,475)	(171,123)
Losses (gains) on sales of assets, net	453	(699)
Net change in:
Fair value of borrowings hedged by derivative transactions	0	6,779
Cash surrender value of bank owned life insurance	(4,164)	(3,781)
Accrued interest receivable	(2,916)	(1,639)
Other assets	(1,521)	(17,932)
Accrued expenses and other liabilities	(20,709)	(743)
Net cash provided by operating activities	249,165	99,162
Cash flows from investing activities:
Net loan originations and purchases	(707,654)	(459,154)
Investment securities held to maturity:
Purchases	(60,230)	(309,507)
Maturities, calls and principal repayments	157,351	134,389
Investment securities available for sale:
Purchases	(252,770)	(432,530)
Sales	0	2,081
Maturities, calls and principal repayments	87,188	760,312
Death benefit proceeds from bank owned life insurance	1,998	0
Proceeds from sales of real estate property and equipment	6,822	9,146
Purchases of real estate property and equipment	(12,976)	(15,353)
Net cash used in investing activities	(780,271)	(310,616)
Cash flows from financing activities:
Net change in deposits	(480,690)	102,507
Net change in short-term borrowings	653,484	334,853
Proceeds from issuance of long-term borrowings, net	560,000	0
Repayments of long-term borrowings	(175,000)	(269,000)
Cash dividends paid to preferred shareholders	(3,594)	(3,594)
Cash dividends paid to common shareholders	(58,000)	(55,857)
Purchase of common shares to treasury	(2,183)	(1,615)
Common stock issued, net	2,377	3,491
Net cash provided by financing activities	496,394	110,785
Net change in cash and cash equivalents	(34,712)	(100,669)
Cash and cash equivalents at beginning of year	392,501	413,800
Cash and cash equivalents at end of period	357,789	313,131
Cash payments for:
Interest on deposits and borrowings	100,380	76,693
Federal and state income taxes	7,683	12,964
Supplemental schedule of non-cash investing activities:
Transfer of loans to other real estate owned	5,865	2,899
Transfer of loans to loans held for sale	$ 225,541	$ 0

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Basis of Presentation

6 Months Ended

Jun. 30, 2017

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, 2017 and for all periods presented have been made. The results of operations for the three and six months ended June 30, 2017 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, 2016.

On April 27, 2017, Valley's shareholders approved an amendment to Valley's Restated Certificate of Incorporation to increase the authorized shares of common stock and preferred stock to 450,000,000 shares and 50,000,000 shares, respectively.

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Earnings Per Common Share

6 Months Ended

Jun. 30, 2017

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, 2017 and 2016.

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
	(in thousands, except for share data)
Net income available to common shareholders	$	48,268	$	37,230	$	92,566	$	71,620
Basic weighted average number of common shares outstanding	263,958,292		254,381,170		263,878,103		254,228,260
Plus: Common stock equivalents	819,950		390,043		784,760		347,613
Diluted weighted average number of common shares outstanding	264,778,242		254,771,213		264,662,863		254,575,873
Earnings per common share:
Basic	$	0.18	$	0.15	$	0.35	$	0.28
Diluted	0.18		0.15		0.35		0.28

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 3.3 million shares for both the three and six months ended June 30, 2017 and 4.6 millionsharesfor both the three and six months ended June 30, 2016, respectively.

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Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2017

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, 2017.

	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, 2017	$	(8,774	)	$	(616	)	$	(10,862	)	$	(18,834	)	$	(39,086	)
Other comprehensive income before reclassifications	1,896			21			(873		)	—			1,044
Amounts reclassified from other comprehensive income	(13		)	(39		)	1,356			59			1,363
Other comprehensive income, net	1,883			(18		)	483			59			2,407
Balance at June 30, 2017	$	(6,891	)	$	(634	)	$	(10,379	)	$	(18,775	)	$	(36,679	)

	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, 2016	$	(10,094	)	$	(642	)	$	(12,464	)	$	(18,893	)	$	(42,093	)
Other comprehensive income before reclassifications	3,203			134			(746		)	—			2,591
Amounts reclassified from other comprehensive income	—			(126		)	2,831			118			2,823
Other comprehensive income, net	3,203			8			2,085			118			5,414
Balance at June 30, 2017	$	(6,891	)	$	(634	)	$	(10,379	)	$	(18,775	)	$	(36,679	)

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, 2017 and 2016. 

	Amounts Reclassified from Accumulated Other Comprehensive Loss
	Three Months Ended June 30,						Six Months Ended June 30,
Components of Accumulated Other Comprehensive Loss	2017			2016			2017			2016			Income Statement Line Item
	(in thousands)
Unrealized gains (losses) on AFS securities before tax	22			$	(3	)	(1		)	268			Gains (losses) on securities transactions, net
Tax effect	(9		)	1			1			(100		)
Total net of tax	13			(2		)	—			168
Non-credit impairment losses on AFS securities before tax:
Accretion of credit loss impairment due to an increase in expected cash flows	67			—			215			489			Interest and dividends on investment securities (taxable)
Tax effect	(28		)	—			(89		)	(203		)
Total net of tax	39			—			126			286
Unrealized losses on derivatives (cash flow hedges) before tax	(2,314		)	(3,597		)	(4,832		)	(6,568		)	Interest expense
Tax effect	958			1,490			2,001			2,720
Total net of tax	(1,356		)	(2,107		)	(2,831		)	(3,848		)
Defined benefit pension plan:
Amortization of net loss	(101		)	(72		)	(202		)	(144		)	*
Tax effect	42			29			84			58
Total net of tax	(59		)	(43		)	(118		)	(86		)
Total reclassifications, net of tax	$	(1,363	)	$	(2,152	)	$	(2,823	)	$	(3,480	)

* 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, 2017

Accounting Changes and Error Corrections [Abstract]

New Authoritative Accounting Guidance

New Authoritative Accounting Guidance

Accounting Standards Update (ASU) No. 2017-08, "Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt Securities" shortens the amortization period for certain callable debt securities held at a premium. ASU No. 2017-08 requires the premium to be amortized to the earliest call date. The accounting for securities held at a discount does not change and the discount continues to be amortized as an adjustment to yield over the contractual life (to maturity) of the instrument. ASU No. 2017-08

is effective for Valley for the annual and interim reporting periods beginning January 1, 2018 with early adoption permitted, and is to be applied retrospectively. ASU No. 2017-08 is not expected to have a significant impact on Valley's consolidated financial statements.

ASU No. 2017-07, "Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" requires service cost to be reported in the same financial statement line item(s) as other current employee compensation costs. All other components of expense must be presented separately from service cost, and outside any subtotal of income from operations. Only the service cost component of expense is eligible to be capitalized. ASU No. 2017-07 is effective for Valley for its annual and interim reporting periods beginning January1, 2018 with early adoption permitted. ASU No. 2017-07 is not expected to have a significant impact on the presentation on Valley's consolidated financial statements.

ASU No. 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test guidance) to measure a goodwill impairment charge. Instead, an entity will be required to record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on Step 1 of the current guidance). In addition, ASU No. 2017-04 eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. However, an entity will be required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU No. 2017-04 is effective for Valley for its annual or any interim goodwill impairment tests in fiscal years beginning January 1, 2020 and is not expected to have a significant impact on the presentation of Valley's consolidated financial statements. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017.

ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" clarifies on how certain cash receipts and cash payments should be classified and presented in the statement of cash flow. The ASU No. 2016-15 includes guidance on eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU No. 2016-15 is effective for Valley for annual and interim reporting periods beginning January 1, 2018 and it should be applied using a retrospective transition method to each period presented. ASU No. 2016-15 is not expected to have a significant impact on the presentation of Valley's consolidated statements of cash flows.    

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 on Valley’s consolidated financial statements. Valley expects that the new guidance will result in an increase in its allowance for credit losses due to several factors, including: (i) the allowance related to Valley loans will increase to include credit losses over the full remaining expected life of the portfolio, and will consider expected future changes in macroeconomic conditions, (ii) the nonaccretable difference (as defined in Note 7) on PCI loans will be recognized as an allowance, offset by an increase in the carrying value of the related loans, and (iii) an allowance will be established for estimated credit losses on investment securities classified as held to maturity. The extent of the increase is under evaluation, but will depend upon the nature and characteristics of the Valley's loan and investment portfolios at the adoption date, and the economic conditions and forecasts at that date.

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, recognition methods for forfeitures within stock compensation expense, and the cash flow presentation. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively.  Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. ASU No. 2016-09 became effective for Valley for reporting periods after January 1, 2017 and did not have a significant impact on Valley's consolidated financial statements. At adoption, Valley elected to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using the prospective transition method. Valley also elected to continue to estimate the forfeitures of stock awards as a component of total stock compensation expense based on the number of awards that are expected to vest.

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 by reviewing its existing lease contracts and service contracts that may include embedded leases. Valley expects a gross-up of its consolidated statements of financial condition as a result of recognizing lease liabilities and right of use assets; the extent of such gross-up is under evaluation. Valley does not expect material changes to the recognition of operating lease expense in its consolidated statements of income.

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, (ii) 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 with changes in value under either of these methods recognized in net income, (iii) 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 (iv) 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. 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. While Valley has not identified any material changes in the timing of revenue recognition under the new guidance, its review is ongoing. However, Valley does not expect the new revenue guidance to have a significant impact on its consolidated financial statements.

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Fair Value Measurement of Assets and Liabilities

6 Months Ended

Jun. 30, 2017

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, 2017 and December 31, 2016. 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, 2017		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	$	50,097	$	50,097	$	—	$	—
U.S. government agency securities	46,368		—		46,368		—
Obligations of states and political subdivisions	119,194		—		119,194		—
Residential mortgage-backed securities	1,163,720		—		1,154,868		8,852
Trust preferred securities	6,219		—		4,341		1,878
Corporate and other debt securities	67,674		7,956		59,718		—
Equity securities	10,782		920		9,862		—
Total available for sale	1,464,054		58,973		1,394,351		10,730
Loans held for sale (1)	17,919		—		17,919		—
Other assets (2)	26,764		—		26,764		—
Total assets	$	1,508,737	$	58,973	$	1,439,034	$	10,730
Liabilities
Other liabilities (2)	$	23,902	$	—	$	23,902	$	—
Total liabilities	$	23,902	$	—	$	23,902	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans (3)	$	31,489	$	—	$	—	$	31,489
Loan servicing rights	7,410		—		—		7,410
Foreclosed assets	1,340		—		—		1,340
Total	$	40,239	$	—	$	—	$	40,239

			Fair Value Measurements at Reporting Date Using:
	December 31, 2016		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	$	49,591	$	49,591	$	—	$	—
U.S. government agency securities	23,041		—		23,041		—
Obligations of states and political subdivisions	119,767		—		119,767		—
Residential mortgage-backed securities	1,015,542		—		1,005,589		9,953
Trust preferred securities	8,009		—		6,074		1,935
Corporate and other debt securities	60,565		8,064		52,501		—
Equity securities	20,858		1,306		19,552		—
Total available for sale	1,297,373		58,961		1,226,524		11,888
Loans held for sale (1)	57,708		—		57,708		—
Other assets (2)	29,055		—		29,055		—
Total assets	$	1,384,136	$	58,961	$	1,313,287	$	11,888
Liabilities
Other liabilities (2)	$	44,077	$	—	$	44,077	$	—
Total liabilities	$	44,077	$	—	$	44,077	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans (3)	$	5,385	$	—	$	—	$	5,385
Loan servicing rights	6,489		—		—		6,489
Foreclosed assets	4,532		—		—		4,532
Total	$	16,406	$	—	$	—	$	16,406

(1) Represents loans originated for sale (which consist of residential mortgage loans) that are carried at fair value and had contractual unpaid principal balances totaling approximately $17.5 million and $58.2 million at June 30, 2017 and December 31, 2016, respectively.

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

(3) Excludes PCI loans.

The changes in Level 3 assets measured at fair value on a recurring basis for the three and six months ended June 30, 2017 and 2016 are summarized below: 

	Available for Sale Securities
	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
	(in thousands)
Balance, beginning of the period	$	11,367		$	12,949		$	11,888		$	13,793
Total net (losses) gains included in other comprehensive income	(31		)	514			13			(71		)
Settlements, net	(606		)	(362		)	(1,171		)	(621		)
Balance, end of the period	$	10,730		$	13,101		$	10,730		$	13,101

No changes in unrealized gains or losses on Level 3 securities were included in earnings during the three and six months ended June 30, 2017 and 2016. There were no transfers of assets into or out of Level 3, or between Level 1 and Level 2, during the three and six months ended June 30, 2017 and 2016.

There have been no material changes in the valuation methodologies used at June 30, 2017 from December 31, 2016.

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 preferred equity 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, 2017: 

Security Type	Valuation Technique	Unobservable Input	Range	Weighted Average
Private label mortgage-backed securities	Discounted cash flow	Prepayment rate	6.2 - 31.6%	19.8	%
		Default rate	2.6 - 36.7	7.5
		Loss severity	47.2 - 66.0	60.4

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 residential mortgage-backed securities (consisting of 4 private label 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 trust preferred securities (consisting of one pooled 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, 2017 and December 31, 2016 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, 2017 and December 31, 2016), 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, 2017 and December 31, 2016.

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 impaired loans reported at the fair value of the underlying collateral, loan servicing rights and foreclosed assets, which are reported at fair value upon initial recognition or subsequent impairment as described below.

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 may be adjusted based on certain discounting criteria. At June 30, 2017, certain appraisals were discounted based on specific market data by location and property type. During the quarter ended June 30, 2017, 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 $1.9 million and $473 thousand for the three months ended June 30, 2017 and 2016, respectively, and $2.1 millionand$952 thousand for the six months ended June 30, 2017 and 2016, respectively. At June 30, 2017, collateral dependent impaired loans with a total recorded investment of $35.2 million were reduced by specific valuation allowance allocations totaling $3.7 million to a reported total net carrying amount of $31.5 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, 2017, the fair value model used prepayment speeds (stated as constant prepayment rates) from 0 percent up to 25 percent and a discount rate of 8 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 recoveries of net impairment charges on its loan servicing rights totaling $50 thousand and $51 thousand for the three and six months ended June 30, 2017, respectively, as compared to net impairment charges totaling $265 thousand and $457 thousand for three and six months ended June 30, 2016, 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. There were no adjustments of the appraisals of foreclosed assets at June 30, 2017. At June 30, 2017, foreclosed assets included $1.3 million of assets that were measured at fair value upon initial recognition or subsequently re-measured during the quarter ended June 30, 2017. The foreclosed assets charge-offs to the allowance for loan losses totaled $282 thousand and $489 thousand for the three months ended June 30, 2017 and 2016, respectively, and $994 thousand and $922 thousand for six months ended June 30, 2017 and 2016, respectively. The re-measurement of foreclosed assets at fair value subsequent to their initial recognition resulted in net losses within non-interest expense of $290 thousand for both the three and six months ended June 30, 2017, and $295 thousandand $912 thousand for three and six months ended June 30, 2016, 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, 2017 and December 31, 2016 were as follows: 

	Fair Value Hierarchy	June 30, 2017				December 31, 2016
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(in thousands)
Financial assets
Cash and due from banks	Level 1	$	227,830	$	227,830	$	220,791	$	220,791
Interest bearing deposits with banks	Level 1	129,959		129,959		171,710		171,710
Investment securities held to maturity:
U.S. Treasury securities	Level 1	138,754		147,656		138,830		147,495
U.S. government agency securities	Level 2	10,597		10,802		11,329		11,464
Obligations of states and political subdivisions	Level 2	501,402		517,830		566,590		577,826
Residential mortgage-backed securities	Level 2	1,070,137		1,062,008		1,112,460		1,102,802
Trust preferred securities	Level 2	59,814		48,268		59,804		47,290
Corporate and other debt securities	Level 2	41,559		42,168		36,559		37,720
Total investment securities held to maturity		1,822,263		1,828,732		1,925,572		1,924,597
Net loans	Level 3	17,594,314		17,187,164		17,121,684		16,756,655
Accrued interest receivable	Level 1	69,732		69,732		66,816		66,816
Federal Reserve Bank and Federal Home Loan Bank stock (1)	Level 1	201,116		201,116		147,127		147,127
Financial liabilities
Deposits without stated maturities	Level 1	13,881,025		13,881,025		14,591,837		14,591,837
Deposits with stated maturities	Level 2	3,368,993		3,375,127		3,138,871		3,160,572
Short-term borrowings	Level 1	1,734,444		1,739,208		1,080,960		1,081,751
Long-term borrowings	Level 2	1,819,615		1,906,668		1,433,906		1,523,386
Junior subordinated debentures issued to capital trusts	Level 2	41,658		46,298		41,577		45,785
Accrued interest payable (2)	Level 1	10,931		10,931		10,675		10,675

(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 FHLB borrowings (and from time to time, federal funds purchased) 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, 2017

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, 2017 and December 31, 2016 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2017
U.S. Treasury securities	$	138,754	$	8,902	$	—		$	147,656
U.S. government agency securities	10,597		205		—			10,802
Obligations of states and political subdivisions:
Obligations of states and state agencies	249,607		9,623		(1,688		)	257,542
Municipal bonds	251,795		8,519		(26		)	260,288
Total obligations of states and political subdivisions	501,402		18,142		(1,714		)	517,830
Residential mortgage-backed securities	1,070,137		7,658		(15,787		)	1,062,008
Trust preferred securities	59,814		32		(11,578		)	48,268
Corporate and other debt securities	41,559		927		(318		)	42,168
Total investment securities held to maturity	$	1,822,263	$	35,866	$	(29,397	)	$	1,828,732
December 31, 2016
U.S. Treasury securities	$	138,830	$	8,665	$	—		$	147,495
U.S. government agency securities	11,329		135		—			11,464
Obligations of states and political subdivisions:
Obligations of states and state agencies	252,185		6,692		(1,428		)	257,449
Municipal bonds	314,405		6,438		(466		)	320,377
Total obligations of states and political subdivisions	566,590		13,130		(1,894		)	577,826
Residential mortgage-backed securities	1,112,460		8,432		(18,090		)	1,102,802
Trust preferred securities	59,804		40		(12,554		)	47,290
Corporate and other debt securities	36,559		1,190		(29		)	37,720
Total investment securities held to maturity	$	1,925,572	$	31,592	$	(32,567	)	$	1,924,597

The age of unrealized losses and fair value of related securities held to maturity at June 30, 2017 and December 31, 2016were 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, 2017
Obligations of states and political subdivisions:
Obligations of states and state agencies	$	63,537	$	(1,688	)	$	—	$	—		$	63,537	$	(1,688	)
Municipal bonds	4,664		(26		)	—		—			4,664		(26		)
Total obligations of states and political subdivisions	68,201		(1,714		)	—		—			68,201		(1,714		)
Residential mortgage-backed securities	622,527		(11,860		)	156,974		(3,927		)	779,501		(15,787		)
Trust preferred securities	—		—			36,883		(11,578		)	36,883		(11,578		)
Corporate and other debt securities	4,682		(318		)	—		—			4,682		(318		)
Total	$	695,410	$	(13,892	)	$	193,857	$	(15,505	)	$	889,267	$	(29,397	)
December 31, 2016
Obligations of states and political subdivisions:
Obligations of states and state agencies	$	98,114	$	(1,428	)	$	—	$	—		$	98,114	$	(1,428	)
Municipal bonds	27,368		(466		)	—		—			27,368		(466		)
Total obligations of states and political subdivisions	125,482		(1,894		)	—		—			125,482		(1,894		)
Residential mortgage-backed securities	692,108		(14,420		)	114,505		(3,670		)	806,613		(18,090		)
Trust preferred securities	—		—			45,898		(12,554		)	45,898		(12,554		)
Corporate and other debt securities	2,971		(29		)	—		—			2,971		(29		)
Total	$	820,561	$	(16,343	)	$	160,403	$	(16,224	)	$	980,964	$	(32,567	)

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 121 at June 30, 2017 and 132 at December 31, 2016.

The unrealized losses within the residential mortgage-backed securities category of the held to maturity portfolio at June 30, 2017 mainly related to investment grade securities issued by Ginnie Mae.

The unrealized losses existing for more than twelve months for trust preferred securities at June 30, 2017 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, 2017.

Management does not believe that any individual unrealized loss as of June 30, 2017 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, 2017, 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 $997.2 million.

The contractual maturities of investments in debt securities held to maturity at June 30, 2017 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, 2017
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	53,859	$	54,621
Due after one year through five years	210,615		218,428
Due after five years through ten years	325,933		343,717
Due after ten years	161,719		149,958
Residential mortgage-backed securities	1,070,137		1,062,008
Total investment securities held to maturity	$	1,822,263	$	1,828,732

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 7.5 years at June 30, 2017.

Available for Sale

The amortized cost, gross unrealized gains and losses and fair value of securities available for sale at June 30, 2017 and December 31, 2016 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2017
U.S. Treasury securities	$	51,009	$	7	$	(919	)	$	50,097
U.S. government agency securities	46,147		292		(71		)	46,368
Obligations of states and political subdivisions:
Obligations of states and state agencies	39,286		336		(218		)	39,404
Municipal bonds	79,824		459		(493		)	79,790
Total obligations of states and political subdivisions	119,110		795		(711		)	119,194
Residential mortgage-backed securities	1,175,171		2,564		(14,015		)	1,163,720
Trust preferred securities*	7,796		—		(1,577		)	6,219
Corporate and other debt securities	67,177		701		(204		)	67,674
Equity securities	10,505		737		(460		)	10,782
Total investment securities available for sale	$	1,476,915	$	5,096	$	(17,957	)	$	1,464,054
December 31, 2016
U.S. Treasury securities	$	51,020	$	6	$	(1,435	)	$	49,591
U.S. government agency securities	22,815		232		(6		)	23,041
Obligations of states and political subdivisions:
Obligations of states and state agencies	40,696		70		(424		)	40,342
Municipal bonds	80,045		147		(767		)	79,425
Total obligations of states and political subdivisions	120,741		217		(1,191		)	119,767
Residential mortgage-backed securities	1,029,827		2,061		(16,346		)	1,015,542
Trust preferred securities*	10,164		—		(2,155		)	8,009
Corporate and other debt securities	60,651		436		(522		)	60,565
Equity securities	20,505		1,114		(761		)	20,858
Total investment securities available for sale	$	1,315,723	$	4,066	$	(22,416	)	$	1,297,373

* Includes two pooled trust preferred securities, principally collateralized by securities issued by banks and insurance companies, at June 30, 2017 and December 31, 2016.

The age of unrealized losses and fair value of related securities available for sale at June 30, 2017 and December 31, 2016 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, 2017
U.S. Treasury securities	$	49,168	$	(919	)	$	—	$	—		$	49,168	$	(919	)
U.S. government agency securities	31,236		(68		)	3,808		(3		)	35,044		(71		)
Obligations of states and political subdivisions:
Obligations of states and state agencies	13,118		(169		)	1,628		(49		)	14,746		(218		)
Municipal bonds	18,302		(193		)	11,059		(300		)	29,361		(493		)
Total obligations of states and political subdivisions	31,420		(362		)	12,687		(349		)	44,107		(711		)
Residential mortgage-backed securities	739,362		(9,680		)	136,402		(4,335		)	875,764		(14,015		)
Trust preferred securities	—		—			6,219		(1,577		)	6,219		(1,577		)
Corporate and other debt securities	30,335		(75		)	11,034		(129		)	41,369		(204		)
Equity securities	—		—			5,184		(460		)	5,184		(460		)
Total	$	881,521	$	(11,104	)	$	175,334	$	(6,853	)	$	1,056,855	$	(17,957	)
December 31, 2016
U.S. Treasury securities	$	48,660	$	(1,435	)	$	—	$	—		$	48,660	$	(1,435	)
U.S. government agency securities	2,530		(4		)	4,034		(2		)	6,564		(6		)
Obligations of states and political subdivisions:
Obligations of states and state agencies	28,628		(404		)	753		(20		)	29,381		(424		)
Municipal bonds	42,573		(506		)	11,081		(261		)	53,654		(767		)
Total obligations of states and political subdivisions	71,201		(910		)	11,834		(281		)	83,035		(1,191		)
Residential mortgage-backed securities	788,030		(11,889		)	132,718		(4,457		)	920,748		(16,346		)
Trust preferred securities	—		—			8,009		(2,155		)	8,009		(2,155		)
Corporate and other debt securities	32,292		(294		)	15,192		(228		)	47,484		(522		)
Equity securities	—		—			14,883		(761		)	14,883		(761		)
Total	$	942,713	$	(14,532	)	$	186,670	$	(7,884	)	$	1,129,383	$	(22,416	)

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, 2017 was 274 as compared to 298 at December 31, 2016.

The unrealized losses for the residential mortgage-backed securities category of the available for sale portfolio at June 30, 2017 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, 2017 in the table above largely relate to 2 pooled trust preferred securities with an amortized cost of $7.8 million and a fair value of $6.2 million. One of the two pooled trust preferred securities had unrealized loss of $703 thousand and an investment grade rating at June 30, 2017.

As of June 30, 2017, 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 $703.9 million.

The contractual maturities of investment securities available for sale at June 30, 2017 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, 2017
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	24,831	$	24,752
Due after one year through five years	70,802		74,052
Due after five years through ten years	115,497		114,927
Due after ten years	80,109		78,821
Residential mortgage-backed securities	1,175,171		1,163,720
Equity securities	10,505		10,782
Total investment securities available for sale	$	1,476,915	$	1,467,054

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 was 9.1 years at June 30, 2017.

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) and corporate bonds 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 three and six months ended June 30, 2017 and 2016. At June 30, 2017, four previously impaired private label mortgage-backed securities (prior to December 31, 2012) had a combined amortized cost and fair value of $9.1 million and $8.9 million, respectively, while one previously impaired pooled trust preferred security had an amortized cost and fair value of $2.8 million and $1.9 million, respectively. The previously impaired pooled trust preferred security was not accruing interest during the three and six months ended June 30, 2017 and 2016.

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, 2017 and 2016:

	Three Months Ended June 30,					Six Months Ended June 30,
	2017			2016		2017			2016
	(in thousands)
Balance, beginning of period	$	4,767		$	5,348	$	4,916		$	5,837
Accretion of credit loss impairment due to an increase in expected cash flows	(67		)	—		(216		)	(489		)
Balance, end of period	$	4,700		$	5,348	$	4,700		$	5,348

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 and losses realized on sales, maturities and other investment securities transactions included in earnings were immaterial for the three and six months ended June 30, 2017 and 2016.

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Loans

6 Months Ended

Jun. 30, 2017

Receivables [Abstract]

Loans

Loans

The detail of the loan portfolio as of June 30, 2017 and December 31, 2016 was as follows:

	June 30, 2017						December 31, 2016
	Non-PCI Loans		PCI Loans*		Total		Non-PCI Loans		PCI Loans*		Total
	(in thousands)
Loans:
Commercial and industrial	$	2,417,924	$	213,388	$	2,631,312	$	2,357,018	$	281,177	$	2,638,195
Commercial real estate:
Commercial real estate	8,201,235		1,029,279		9,230,514		7,628,328		1,091,339		8,719,667
Construction	825,196		55,877		881,073		710,266		114,680		824,946
Total commercial real estate loans	9,026,431		1,085,156		10,111,587		8,338,594		1,206,019		9,544,613
Residential mortgage	2,569,500		155,277		2,724,777		2,684,195		183,723		2,867,918
Consumer:
Home equity	369,372		81,138		450,510		376,213		92,796		469,009
Automobile	1,150,217		126		1,150,343		1,139,082		145		1,139,227
Other consumer	635,847		6,384		642,231		569,499		7,642		577,141
Total consumer loans	2,155,436		87,648		2,243,084		2,084,794		100,583		2,185,377
Total loans	$	16,169,291	$	1,541,469	$	17,710,760	$	15,464,601	$	1,771,502	$	17,236,103

* PCI loans include covered loans (mostly consisting of residential mortgage and commercial real estate loans) totaling $44.5 million and $70.4 million at June 30, 2017 and December 31, 2016, respectively.

Total loans (excluding PCI covered loans) include net unearned premiums and deferred loan costs of $16.7 million and $15.3 million at June 30, 2017 and December 31, 2016, respectively. The outstanding balances (representing contractual balances owed to Valley) for PCI loans totaled $1.7 billion and $1.9 billion at June 30, 2017 and December 31, 2016, respectively.

Valley transferred $225.5 million of residential mortgage loans from the loan portfolio to loans held for sale during the six months ended June 30, 2017. Exclusive of such transfers, there were no sales of loans from the held for investment portfolio during the three and six months ended June 30, 2017 and 2016.

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 $44.5 million and $70.4 million at June 30, 2017 and December 31, 2016, respectively.

The following table presents changes in the accretable yield for PCI loans during the three and six months ended June 30, 2017 and 2016:

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
	(in thousands)
Balance, beginning of period	$	269,831		$	387,120		$	294,514		$	415,179
Accretion	(23,553		)	(31,519		)	(48,236		)	(59,578		)
Balance, end of period	$	246,278		$	355,601		$	246,278		$	355,601

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 $7.1 million and $7.2 million at June 30, 2017 and December 31, 2016, respectively.

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, 2017 and December 31, 2016:

	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, 2017
Commercial and industrial	$	2,391	$	2,686	$	—	$	11,072	$	16,149	$	2,401,775	$	2,417,924
Commercial real estate:
Commercial real estate	6,983		8,233		2,315		15,514		33,045		8,168,190		8,201,235
Construction	—		854		2,879		1,334		5,067		820,129		825,196
Total commercial real estate loans	6,983		9,087		5,194		16,848		38,112		8,988,319		9,026,431
Residential mortgage	4,677		1,721		3,353		12,825		22,576		2,546,924		2,569,500
Consumer loans:
Home equity	988		229		—		1,306		2,523		366,849		369,372
Automobile	3,242		774		255		103		4,374		1,145,843		1,150,217
Other consumer	163		4		20		—		187		635,660		635,847
Total consumer loans	4,393		1,007		275		1,409		7,084		2,148,352		2,155,436
Total	$	18,444	$	14,501	$	8,822	$	42,154	$	83,921	$	16,085,370	$	16,169,291
December 31, 2016
Commercial and industrial	$	6,705	$	5,010	$	142	$	8,465	$	20,322	$	2,336,696	$	2,357,018
Commercial real estate:
Commercial real estate	5,894		8,642		474		15,079		30,089		7,598,239		7,628,328
Construction	6,077		—		1,106		715		7,898		702,368		710,266
Total commercial real estate loans	11,971		8,642		1,580		15,794		37,987		8,300,607		8,338,594
Residential mortgage	12,005		3,564		1,541		12,075		29,185		2,655,010		2,684,195
Consumer loans:
Home equity	929		415		—		1,028		2,372		373,841		376,213
Automobile	3,192		723		188		146		4,249		1,134,833		1,139,082
Other consumer	76		9		21		—		106		569,393		569,499
Total consumer loans	4,197		1,147		209		1,174		6,727		2,078,067		2,084,794
Total	$	34,878	$	18,363	$	3,472	$	37,508	$	94,221	$	15,370,380	$	15,464,601

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, 2017 and December 31, 2016:

	Recorded Investment With No Related Allowance		Recorded Investment With Related Allowance		Total Recorded Investment		Unpaid Contractual Principal Balance		Related Allowance
	(in thousands)
June 30, 2017
Commercial and industrial	$	3,933	$	56,304	$	60,237	$	65,809	$	6,746
Commercial real estate:
Commercial real estate	32,641		30,629		63,270		65,333		2,751
Construction	679		2,067		2,746		2,746		218
Total commercial real estate loans	33,320		32,696		66,016		68,079		2,969
Residential mortgage	8,464		7,725		16,189		17,488		582
Consumer loans:
Home equity	2,888		663		3,551		3,643		51
Total consumer loans	2,888		663		3,551		3,643		51
Total	$	48,605	$	97,388	$	145,993	$	155,019	$	10,348
December 31, 2016
Commercial and industrial	$	3,609	$	27,031	$	30,640	$	35,957	$	5,864
Commercial real estate:
Commercial real estate	21,318		36,974		58,292		60,267		3,612
Construction	1,618		2,379		3,997		3,997		260
Total commercial real estate loans	22,936		39,353		62,289		64,264		3,872
Residential mortgage	8,398		9,958		18,356		19,712		725
Consumer loans:
Home equity	1,182		2,352		3,534		3,626		70
Total consumer loans	1,182		2,352		3,534		3,626		70
Total	$	36,125	$	78,694	$	114,819	$	123,559	$	10,531

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, 2017 and 2016: 

	Three Months Ended June 30,
	2017				2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
Commercial and industrial	$	46,283	$	288	$	24,157	$	194
Commercial real estate:
Commercial real estate	60,119		483		70,194		475
Construction	2,759		20		10,027		53
Total commercial real estate loans	62,878		503		80,221		528
Residential mortgage	17,555		184		22,922		234
Consumer loans:
Home equity	4,799		34		3,071		20
Total consumer loans	4,799		34		3,071		20
Total	$	131,515	$	1,009	$	130,371	$	976

	Six Months Ended June 30,
	2017				2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
Commercial and industrial	$	38,371	$	596	$	26,244	$	434
Commercial real estate:
Commercial real estate	57,722		808		71,296		1,114
Construction	2,728		39		9,915		101
Total commercial real estate loans	60,450		847		81,211		1,215
Residential mortgage	18,974		392		23,262		436
Consumer loans:
Home equity	4,847		74		2,715		43
Total consumer loans	4,847		74		2,715		43
Total	$	122,642	$	1,909	$	133,432	$	2,128

Interest income recognized on a cash basis (included in the table above) was immaterial for the three and six months ended June 30, 2017 and 2016.

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 of the loan and Valley’s underwriting process shows the borrower has the capacity to continue to perform under the restructured terms, the loan will continue to accrue interest. Non-accruing restructured loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible.

Performing TDRs (not reported as non-accrual loans) totaled $109.8 million and $85.2 million as of June 30, 2017 and December 31, 2016, respectively. Non-performing TDRs totaled $15.8 million and $10.6 million as of June 30, 2017 and December 31, 2016, respectively.

The following tables present loans by loan portfolio class modified as TDRs during the three and six months ended June 30, 2017 and 2016. 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, 2017 and 2016, respectively.

	Three Months Ended June 30, 2017					Three Months Ended June 30, 2016
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	47	$	40,077	$	38,367	4	$	5,079	$	4,094
Commercial real estate:
Commercial real estate	5	23,604		23,604		2	6,111		6,077
Construction	—	—		—		—	—		—
Total commercial real estate	5	23,604		23,604		2	6,111		6,077
Residential mortgage	2	549		545		5	1,830		1,826
Total	54	$	64,230	$	62,516	11	$	13,020	$	11,997

	Six Months Ended June 30, 2017					Six Months Ended June 30, 2016
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	53	$	46,315	$	43,660	6	$	6,456	$	5,437
Commercial real estate:
Commercial real estate	6	23,782		23,777		3	6,658		6,388
Construction	1	560		480		—	—		—
Total commercial real estate	7	24,342		24,257		3	6,658		6,388
Residential mortgage	5	1,170		1,167		7	2,222		2,206
Consumer	—	—		—		1	55		53
Total	65	$	71,827	$	69,084	17	$	15,391	$	14,084

The total TDRs presented in the above table had allocated specific reserves for loan losses totaling $5.3 million and $2.1 million at June 30, 2017 and 2016, respectively.These specific reserves are included in the allowance for loan losses for loans individually evaluated for impairment disclosed in Note 8. 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 three and six months ended June 30, 2017.

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, 2017 and 2016.

	Three Months Ended June 30, 2017			Three Months Ended June 30, 2016
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial and industrial	6	$	5,358	—	$	—
Commercial real estate	—	—		2	1,070
Residential mortgage	—	—		1	74
Consumer	—	—		1	30
Total	6	$	5,358	4	$	1,174

	Six Months Ended June 30, 2017			Six Months Ended June 30, 2016
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial and industrial	7	$	5,433	—	$	—
Commercial real estate	1	736		1	214
Residential mortgage	1	153		1	74
Consumer	—	—		1	30
Total	9	$	6,322	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, 2017 and December 31, 2016. 

Credit exposure - by internally assigned risk rating	Pass		Special Mention		Substandard		Doubtful		Total Non-PCI Loans
	(in thousands)
June 30, 2017
Commercial and industrial	$	2,237,178	$	76,419	$	98,034	$	6,293	$	2,417,924
Commercial real estate	8,063,898		51,960		85,377		—		8,201,235
Construction	822,602		364		2,230		—		825,196
Total	$	11,123,678	$	128,743	$	185,641	$	6,293	$	11,444,355
December 31, 2016
Commercial and industrial	$	2,246,457	$	44,316	$	64,649	$	1,596	$	2,357,018
Commercial real estate	7,486,469		57,591		84,268		—		7,628,328
Construction	708,070		200		1,996		—		710,266
Total	$	10,440,996	$	102,107	$	150,913	$	1,596	$	10,695,612

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, 2017 and December 31, 2016:

Credit exposure - by payment activity	Performing Loans		Non-Performing Loans		Total Non-PCI Loans
	(in thousands)
June 30, 2017
Residential mortgage	$	2,556,675	$	12,825	$	2,569,500
Home equity	368,066		1,306		369,372
Automobile	1,150,114		103		1,150,217
Other consumer	635,847		—		635,847
Total	$	4,710,702	$	14,234	$	4,724,936
December 31, 2016
Residential mortgage	$	2,672,120	$	12,075	$	2,684,195
Home equity	375,185		1,028		376,213
Automobile	1,138,936		146		1,139,082
Other consumer	569,499		—		569,499
Total	$	4,755,740	$	13,249	$	4,768,989

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, 2017 and December 31, 2016.

Credit exposure - by payment activity	Performing Loans		Non-Performing Loans		Total PCI Loans
	(in thousands)
June 30, 2017
Commercial and industrial	$	201,297	$	12,091	$	213,388
Commercial real estate	1,014,923		14,356		1,029,279
Construction	54,775		1,102		55,877
Residential mortgage	150,031		5,246		155,277
Consumer	86,728		920		87,648
Total	$	1,507,754	$	33,715	$	1,541,469
December 31, 2016
Commercial and industrial	$	272,483	$	8,694	$	281,177
Commercial real estate	1,080,376		10,963		1,091,339
Construction	113,370		1,310		114,680
Residential mortgage	179,793		3,930		183,723
Consumer	98,469		2,114		100,583
Total	$	1,744,491	$	27,011	$	1,771,502

Other real estate owned (OREO) totaled $10.2 million at both June 30, 2017 and December 31, 2016 (including $558 thousand of OREO properties which are subject to loss-sharing agreements with the FDIC at December 31, 2016). There were no covered OREO properties at June 30, 2017. OREO included foreclosed residential real estate properties totaling $2.3 millionand $1.6 million at June 30, 2017 and December 31, 2016, respectively. Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $6.2 millionand $7.1 million at June 30, 2017 and December 31, 2016, respectively.

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Allowance for Credit Losses

6 Months Ended

Jun. 30, 2017

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. There was no allowance allocation for PCI loan losses at June 30, 2017 and December 31, 2016.

The following table summarizes the allowance for credit losses at June 30, 2017 and December 31, 2016: 

	June 30, 2017		December 31, 2016
	(in thousands)
Components of allowance for credit losses:
Allowance for loan losses	$	116,446	$	114,419
Allowance for unfunded letters of credit	2,175		2,185
Total allowance for credit losses	$	118,621	$	116,604

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2017			2016		2017			2016
	(in thousands)
Components of provision for credit losses:
Provision for loan losses	$	3,710		$	1,363	$	6,112		$	2,092
Provision for unfunded letters of credit	(78		)	66		(10		)	137
Total provision for credit losses	$	3,632		$	1,429	$	6,102		$	2,229

The following table details activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2017 and 2016:

	Commercial and Industrial			Commercial Real Estate			Residential Mortgage			Consumer			Total
	(in thousands)
Three Months Ended June 30, 2017
Allowance for loan losses:
Beginning balance	$	51,288		$	56,302		$	3,592		$	4,261		$	115,443
Loans charged-off	(2,910		)	(139		)	(229		)	(1,011		)	(4,289		)
Charged-off loans recovered	312			640			235			395			1,582
Net (charge-offs) recoveries	(2,598		)	501			6			(616		)	(2,707		)
Provision for loan losses	2,927			(1,348		)	588			1,543			3,710
Ending balance	$	51,617		$	55,455		$	4,186		$	5,188		$	116,446
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

	Commercial and Industrial			Commercial Real Estate			Residential Mortgage			Consumer			Total
	(in thousands)
Six Months Ended June 30, 2017
Allowance for loan losses:
Beginning balance	$	50,820		$	55,851		$	3,702		$	4,046		$	114,419
Loans charged-off	(4,624		)	(553		)	(359		)	(2,132		)	(7,668		)
Charged-off loans recovered	1,160			782			683			958			3,583
Net (charge-offs) recoveries	(3,464		)	229			324			(1,174		)	(4,085		)
Provision for loan losses	4,261			(625		)	160			2,316			6,112
Ending balance	$	51,617		$	55,455		$	4,186		$	5,188		$	116,446
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

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, 2017 and December 31, 2016.

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
June 30, 2017
Allowance for loan losses:
Individually evaluated for impairment	$	6,746	$	2,969	$	582	$	51	$	10,348
Collectively evaluated for impairment	44,871		52,486		3,604		5,137		106,098
Total	$	51,617	$	55,455	$	4,186	$	5,188	$	116,446
Loans:
Individually evaluated for impairment	$	60,237	$	66,016	$	16,189	$	3,551	$	145,993
Collectively evaluated for impairment	2,357,687		8,960,415		2,553,311		2,151,885		16,023,298
Loans acquired with discounts related to credit quality	213,388		1,085,156		155,277		87,648		1,541,469
Total	$	2,631,312	$	10,111,587	$	2,724,777	$	2,243,084	$	17,710,760
December 31, 2016
Allowance for loan losses:
Individually evaluated for impairment	$	5,864	$	3,872	$	725	$	70	$	10,531
Collectively evaluated for impairment	44,956		51,979		2,977		3,976		103,888
Total	$	50,820	$	55,851	$	3,702	$	4,046	$	114,419
Loans:
Individually evaluated for impairment	$	30,640	$	62,289	$	18,356	$	3,534	$	114,819
Collectively evaluated for impairment	2,326,378		8,276,305		2,665,839		2,081,260		15,349,782
Loans acquired with discounts related to credit quality	281,177		1,206,019		183,723		100,583		1,771,502
Total	$	2,638,195	$	9,544,613	$	2,867,918	$	2,185,377	$	17,236,103

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill totaled $690.6 million at both June 30, 2017 and December 31, 2016. There were no changes to the carrying amounts of goodwill allocated to Valley’s business segments, or reporting units thereof, for goodwill impairment analysis (as reported in Valley’s Annual Report on Form 10-K for the year ended December 31, 2016). There was no impairment of goodwill during the three and six months ended June 30, 2017 and 2016.

The following table summarizes other intangible assets as of June 30, 2017 and December 31, 2016:

	Gross Intangible Assets		Accumulated Amortization			Valuation Allowance			Net Intangible Assets
	(in thousands)
June 30, 2017
Loan servicing rights	$	75,413	$	(54,253	)	$	(849	)	$	20,311
Core deposits	43,396		(21,941		)	—			21,455
Other	4,087		(2,153		)	—			1,934
Total other intangible assets	$	122,896	$	(78,347	)	$	(849	)	$	43,700
December 31, 2016
Loan servicing rights	$	73,002	$	(52,634	)	$	(900	)	$	19,468
Core deposits	61,504		(37,562		)	—			23,942
Other	4,087		(2,013		)	—			2,074
Total other intangible assets	$	138,593	$	(92,209	)	$	(900	)	$	45,484

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 5 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, 2017 and 2016.

The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2017 through 2021:

	Loan Servicing Rights		Core Deposits		Other
	(in thousands)
2017	$	2,719	$	2,356	$	139
2018	4,503		4,215		249
2019	3,557		3,671		235
2020	2,813		3,127		220
2021	2,115		2,582		206

Valley recognized amortization expense on other intangible assets, including net impairment (or recovery of impairment) charges on loan servicing rights, totaling approximately $2.6 million and $2.9 million for the three months ended June 30, 2017 and 2016, respectively, and $5.1 million and $5.8 million for the six months ended June 30, 2017 and 2016, respectively.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock–Based Compensation

Valley currently has one active employee stock option plan, the 2016 Long-Term Stock Incentive Plan (the “2016 Stock Plan”), adopted by Valley’s Board of Directors on January 29, 2016 and approved by its shareholders on April 28, 2016. The purpose of the 2016 Plan is to provide additional incentive to officers and key employees of Valley and its subsidiaries, whose substantial contributions are essential to the continued growth and success of Valley, and to attract and retain competent and dedicated officers and other key employees whose efforts will result in the continued and long-term growth of Valley’s business.

Under the 2016 Stock Plan, Valley may award 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) to its employees and non-employee directors. As of June 30, 2017, 7.3 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.

Restricted Stock. Restricted stock is awarded to key employees, providing for the immediate award of our common stock subject to certain vesting and restrictions under the 2016 Stock Plan. Compensation expense is measured based on the grant-date fair value of the shares. Valley awarded time-based restricted stock totaling 482 thousand shares and 498 thousand shares during the six months ended June 30, 2017 and 2016, respectively, to both executive officers and key employees of Valley. The majority of the awards have vesting periods of three years. Generally, the restrictions on such awards lapse at an annual rate of one-third of the total award commencing with the first anniversary of the date of grant. The average grant date fair value of the restricted stock awards granted during the six months ended June 30, 2017 and 2016 was $11.71 per share and $8.77 per share, respectively.

Restricted Stock Units. Valley granted 371 thousand shares and 431 thousand shares of performance-based RSUs to certain executive officers for the six months ended June 30, 2017 and 2016, respectively. 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 performance based awards "cliff" vest after three years based on the cumulative performance of Valley during that time period. 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 (if applicable), 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 grant date fair value of the RSUs granted during the six months ended June 30, 2017 and 2016 was $11.05 per share and $8.32 per share, respectively.

Valley recorded total stock-based compensation expense of $2.7 million and $2.8 million for the three months ended June 30, 2017 and2016, respectively, and $6.9 million and $5.2 million for the six months ended June 30, 2017 and 2016, respectively. The fair values of stock awards are expensed over the shorter of the vesting or required service period. As of June 30, 2017, the unrecognized amortization expense for all stock-based employee compensation totaled approximately $16.5 million and will be recognized over an average remaining vesting period of 2.1 years.

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Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2017

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, respectively. 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.

At June 30, 2017, Valley has one "steepener" swap with a total current notional amount of $14.5 million where the receive rate on the swap mirrors the pay rate on the brokered deposits and the rate paid on these types of hybrid instruments are based on a formula derived from the spread between the long and short ends of the constant maturity swap (CMS) rate curve. Although these types of instruments do not meet the hedge accounting requirements, the change in fair value of both the bifurcated derivative and the stand alone swap tend to move in opposite directions with changes in 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, 2017							December 31, 2016
	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	$	528	$	31	*	$	707,000	$	802	$	15,641	$	707,000
Fair value hedge interest rate swaps	—		836			7,889		—		986		7,999
Total derivatives designated as hedging instruments	$	528	$	867		$	714,889	$	802	$	16,627	$	714,999
Derivatives not designated as hedging instruments:
Interest rate swaps and embedded derivatives	$	26,058	$	22,870	*	$	1,288,274	$	25,285	$	25,284	$	1,075,722
Mortgage banking derivatives	178		165			88,567		2,968		2,166		246,583
Total derivatives not designated as hedging instruments	$	26,236	$	23,035		$	1,376,841	$	28,253	$	27,450	$	1,322,305

* The fair value for the Chicago Mercantile Exchange cleared derivative positions is inclusive of accrued interest payable and the portion of the cash collateral representing the variation margin posted with (or by) the applicable counterparties.

Chicago Mercantile Exchange (CME) amended their rules to legally characterize the variation margin posted between counterparties to be classified as settlements of the outstanding derivative contracts instead of cash collateral.  Effective January 1, 2017, Valley adopted the new rule on a prospective basis to classify its CME variation margin as a single-unit of account with the fair value of certain cash flow and non-designated derivative instruments. As a result, the fair value of the designated cash flow derivatives and non-designated interest rate swaps cleared with the CME were offset by variation margins totaling $13.0 million and $3.3 million, respectively, and reported in the table above on a net basis at June 30, 2017.

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,
	2017			2016			2017			2016
	(in thousands)
Amount of loss reclassified from accumulated other comprehensive loss to interest expense	$	(2,314	)	$	(3,597	)	$	(4,832	)	$	(6,568	)
Amount of loss recognized in other comprehensive income	(1,482		)	(3,625		)	(1,265		)	(14,657		)

The net gains or losses related to cash flow hedge ineffectiveness were immaterial during the three and six months ended June 30, 2017 and 2016. The accumulated net after-tax losses related to effective cash flow hedges included in accumulated other comprehensive loss were $10.4 million and $12.5 million at June 30, 2017 and December 31, 2016, 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 $6.9 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,
	2017			2016			2017			2016
	(in thousands)
Derivative - interest rate swaps:
Interest income	$	52		$	2		$	149		$	(97	)
Interest expense	—			2,069			—			6,797
Hedged item - loans and borrowings:
Interest income	$	(52	)	$	(2	)	$	(149	)	$	97
Interest expense	—			(2,060		)	—			(6,779		)

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, 2017 and 2016.

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2017		2016			2017			2016
	(in thousands)
Non-designated hedge interest rate derivatives
Other non-interest expense	$	70	$	(92	)	$	(790	)	$	(389	)

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, 2017, Valley was in compliance with all of the provisions of its derivative counterparty agreements. As of June 30, 2017, 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 $10.5 million. Valley has derivative counterparty agreements that require minimum collateral posting thresholds for certain counterparties. At June 30, 2017, Valley had $43.3 million in collateral posted with counterparties, net of CME variation margin.

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Balance Sheet Offsetting

6 Months Ended

Jun. 30, 2017

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, 2017 and December 31, 2016.

							Gross Amounts Not Offset
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments			Cash Collateral				Net Amount
	(in thousands)
June 30, 2017
Assets:
Interest rate caps and swaps	$	26,586	$	—	$	26,586	$	(3,888	)	$	—			$	22,698
Liabilities:
Interest rate caps and swaps	$	23,737	$	—	$	23,737	$	(3,888	)	$	(9,314	)	(1)	$	10,535
Repurchase agreements	200,000		—		200,000		—			(200,000		)	(2)	—
Total	$	223,737	$	—	$	223,737	$	(3,888	)	$	(209,314	)		$	10,535
December 31, 2016
Assets:
Interest rate caps and swaps	$	26,087	$	—	$	26,087	$	(5,268	)	$	—			$	20,819
Liabilities:
Interest rate caps and swaps	$	41,911	$	—	$	41,911	$	(5,268	)	$	(36,643	)	(1)	$	—
Repurchase agreements	165,000		—		165,000		—			(165,000		)	(2)	—
Total	$	206,911	$	—	$	206,911	$	(5,268	)	$	(201,643	)		$	—

(1) Represents the amount of collateral posted with derivatives counterparties that offsets net liabilities. Actual cash collateral posted with all counterparties totaled $59.6 million and $52.4 million at June 30, 2017 and December 31, 2016, respectively.

(2) Represents the fair value of non-cash pledged investment securities.

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Tax Credit Investments

6 Months Ended

Jun. 30, 2017

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, 2017 and December 31, 2016.

	June 30, 2017		December 31, 2016
	(in thousands)
Other Assets:
Affordable housing tax credit investments, net	$	28,559	$	29,567
Other tax credit investments, net	36,204		44,763
Total tax credit investments, net	$	64,763	$	74,330
Other Liabilities:
Unfunded affordable housing tax credit commitments	$	4,690	$	4,850
Unfunded other tax credit commitments	3,582		7,276
Total unfunded tax credit commitments	$	8,272	$	12,126

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, 2017 and 2016: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
	(in thousands)
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits	$	1,271	$	1,065	$	2,555	$	2,130
Other tax credit investment credits and tax benefits	8,680		3,268		14,966		6,536
Total reduction in income tax expense	$	9,951	$	4,333	$	17,521	$	8,666
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses	$	358	$	775	$	754	$	1,359
Affordable housing tax credit investment impairment losses	130		60		254		200
Other tax credit investment losses	1,060		594		1,827		668
Other tax credit investment impairment losses	6,184		6,217		10,221		12,683
Total amortization of tax credit investments recorded in non-interest expense	$	7,732	$	7,646	$	13,056	$	14,910

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Litigation

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Litigation

Litigation

In the normal course of business, Valley is a party to various outstanding legal proceedings and claims. In the opinion of management, the financial condition, results of operations and liquidity of Valley should not be materially affected by the outcome of such legal proceedings and claims. However, in the event of an unexpected adverse outcome in one or more of our legal proceedings, operating results for a particular period may be negatively impacted. Disclosure is required when a risk of material loss in a litigation or claim is more than remote, even when the risk of a material loss is less than likely. Unless an estimate cannot be made, disclosure is also required of the estimate of the reasonably possible loss or range of loss.

Although there can be no assurance as to the ultimate outcome, Valley has generally denied, or believes it has a meritorious defense and will deny liability in litigation pending against Valley and claims made, including the matter described below. Valley intends to defend vigorously each case against it. Liabilities are established for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated.

Merrick Bank Corporation v. Valley National Bank and American Express Travel Related Services v. Valley National Bank litigation. For about a decade, Valley served as the depository bank for various charter operators under regulations of the Department of Transportation (DOT) and contracts entered into with charter operators under those regulations. The purported intent of the regulations is to afford some protection to the customers of the charter operators. A charter operator has several options with regard to fulfilling its obligations under the regulations, with one option requiring the charter operator to deposit the proceeds of tickets purchased for a charter flight into an FDIC insured bank account. The funds for a flight are released when the charter operator certifies that the flight has been completed. Valley stopped serving as a depository bank for the charter business due to the narrow profit in that business combined with the legal expenses incurred to defend itself in a prior case in which Valley was completely successful and the anticipated legal expenses from the following similar cases that are still pending.

Valley served as the depository bank for Myrtle Beach Direct Air (Direct Air) under a contract between Direct Air and Valley approved by the DOT under the DOT regulations. Direct Air commenced operations in 2007 but in March 2012 Direct Air ceased operations and filed for bankruptcy. Thereafter the United States Justice Department charged three of the principals of Direct Air with criminal fraud; that case is expected to go to trial in March 2018. Merrick Bank Corp. (Merrick) was the merchant bank for Direct Air and processed credit card purchases for Direct Air. Following the bankruptcy of Direct Air, Merrick incurred chargebacks in the approximate amount of $26.2 million when the Direct Air customers whose flights had been canceled obtained a credit from their card issuing banks for the cost of the ticket or other item purchased from Direct Air. Merrick was not able to recover the chargebacks from Direct Air. Direct Air’s depository account at Valley contained approximately $1.0 million at the time Direct Air ceased operations.

Merrick filed an action against Valley with ten counts in December 2013. Valley moved to dismiss five of the counts and, in March 2015, the court dismissed four of the five counts. American Express Travel Related Services (American Express) filed a similar action against Valley claiming about $3.0 million in chargebacks. Five of American Express’ eleven counts have been dismissed. The two cases have now been consolidated in the Federal District Court of New Jersey.

During April 2017, all parties attended a mediation, however it was unsuccessful. Shortly before the mediation, Valley filed summary judgment motions on all of the remaining counts in both the Merrick and American Express cases. Merrick and American Express also filed summary judgment motions against Valley. Valley does not anticipate an immediate decision to be rendered on the motions.

At June 30, 2017, Valley could not estimate an amount or range of reasonably possible losses related to the matter described above. Based upon information currently available and advice of counsel, Valley believes that the eventual outcome of such claims will not have a material adverse effect on Valley’s consolidated financial position. However, in the event of unexpected future developments, it is possible that the ultimate resolution of the matters, if unfavorable, may be material to Valley’s results of operations for a particular period.

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Business Segments

6 Months Ended

Jun. 30, 2017

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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Subsequent Events

6 Months Ended

Jun. 30, 2017

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

USAmeriBancorp, Inc. Merger Agreement

On July 26, 2017, Valley announced its entry into a merger agreement with USAmeriBancorp, Inc. (USAB) headquartered in Clearwater, Florida. USAB largely through its wholly-owned subsidiary, USAmeriBank, has approximately $4.4 billion in assets, $3.6 billion in loans and $3.5 billion in deposits and maintains a branch network of 30 offices. The acquisition will expand Valley's Florida presence and establish a presence in Alabama. The common shareholders of USAB will receive 6.1 shares of Valley common stock for each USAB share they own, subject to adjustment in the event Valley’s average stock price falls below $11.50 or rises above $13.00 prior to closing. Both Valley and USAB have walkaway rights if the volume-weighted average closing price is below $11.00 and USAB has a walkaway right if the volume-weighted average closing price is above $13.50. The transaction is valued at an estimated $816 million, based on Valley’s closing stock price on July 25, 2017. The acquisition is expected to close early in the first quarter of 2018, subject to standard regulatory approvals, shareholder approvals from Valley and USAB, as well as other customary conditions.

Issuance of Series B Preferred Stock

On August 3, 2017, Valley issued 4.0 million shares of its Fixed-to-Floating Rate Non-Cumulative Perpetual

Preferred Stock, Series B, no par value per share, with a liquidation preference of $25 per share for aggregate consideration of $100 million. Dividends on the preferred stock will accrue and be payable quarterly in arrears, at a fixed rate per annum equal to 5.50 percent from the original issuance date to, but excluding, September 30, 2022, and thereafter at a floating rate per annum equal to three-month LIBOR plus a spread of 3.578 percent. Net proceeds to Valley after deducting underwriting discounts, commissions and offering expenses are expected to be approximately $98.1 million.

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New Authoritative Accounting Guidance (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Changes and Error Corrections [Abstract]

New Authoritative Accounting Guidance

New Authoritative Accounting Guidance

Accounting Standards Update (ASU) No. 2017-08, "Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt Securities" shortens the amortization period for certain callable debt securities held at a premium. ASU No. 2017-08 requires the premium to be amortized to the earliest call date. The accounting for securities held at a discount does not change and the discount continues to be amortized as an adjustment to yield over the contractual life (to maturity) of the instrument. ASU No. 2017-08

is effective for Valley for the annual and interim reporting periods beginning January 1, 2018 with early adoption permitted, and is to be applied retrospectively. ASU No. 2017-08 is not expected to have a significant impact on Valley's consolidated financial statements.

ASU No. 2017-07, "Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" requires service cost to be reported in the same financial statement line item(s) as other current employee compensation costs. All other components of expense must be presented separately from service cost, and outside any subtotal of income from operations. Only the service cost component of expense is eligible to be capitalized. ASU No. 2017-07 is effective for Valley for its annual and interim reporting periods beginning January1, 2018 with early adoption permitted. ASU No. 2017-07 is not expected to have a significant impact on the presentation on Valley's consolidated financial statements.

ASU No. 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test guidance) to measure a goodwill impairment charge. Instead, an entity will be required to record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on Step 1 of the current guidance). In addition, ASU No. 2017-04 eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. However, an entity will be required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU No. 2017-04 is effective for Valley for its annual or any interim goodwill impairment tests in fiscal years beginning January 1, 2020 and is not expected to have a significant impact on the presentation of Valley's consolidated financial statements. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017.

ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" clarifies on how certain cash receipts and cash payments should be classified and presented in the statement of cash flow. The ASU No. 2016-15 includes guidance on eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU No. 2016-15 is effective for Valley for annual and interim reporting periods beginning January 1, 2018 and it should be applied using a retrospective transition method to each period presented. ASU No. 2016-15 is not expected to have a significant impact on the presentation of Valley's consolidated statements of cash flows.    

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 on Valley’s consolidated financial statements. Valley expects that the new guidance will result in an increase in its allowance for credit losses due to several factors, including: (i) the allowance related to Valley loans will increase to include credit losses over the full remaining expected life of the portfolio, and will consider expected future changes in macroeconomic conditions, (ii) the nonaccretable difference (as defined in Note 7) on PCI loans will be recognized as an allowance, offset by an increase in the carrying value of the related loans, and (iii) an allowance will be established for estimated credit losses on investment securities classified as held to maturity. The extent of the increase is under evaluation, but will depend upon the nature and characteristics of the Valley's loan and investment portfolios at the adoption date, and the economic conditions and forecasts at that date.

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, recognition methods for forfeitures within stock compensation expense, and the cash flow presentation. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively.  Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. ASU No. 2016-09 became effective for Valley for reporting periods after January 1, 2017 and did not have a significant impact on Valley's consolidated financial statements. At adoption, Valley elected to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using the prospective transition method. Valley also elected to continue to estimate the forfeitures of stock awards as a component of total stock compensation expense based on the number of awards that are expected to vest.

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 by reviewing its existing lease contracts and service contracts that may include embedded leases. Valley expects a gross-up of its consolidated statements of financial condition as a result of recognizing lease liabilities and right of use assets; the extent of such gross-up is under evaluation. Valley does not expect material changes to the recognition of operating lease expense in its consolidated statements of income.

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, (ii) 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 with changes in value under either of these methods recognized in net income, (iii) 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 (iv) 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. 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. While Valley has not identified any material changes in the timing of revenue recognition under the new guidance, its review is ongoing. However, Valley does not expect the new revenue guidance to have a significant impact on its consolidated financial statements.

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Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2017

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, 2017 and 2016.

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
	(in thousands, except for share data)
Net income available to common shareholders	$	48,268	$	37,230	$	92,566	$	71,620
Basic weighted average number of common shares outstanding	263,958,292		254,381,170		263,878,103		254,228,260
Plus: Common stock equivalents	819,950		390,043		784,760		347,613
Diluted weighted average number of common shares outstanding	264,778,242		254,771,213		264,662,863		254,575,873
Earnings per common share:
Basic	$	0.18	$	0.15	$	0.35	$	0.28
Diluted	0.18		0.15		0.35		0.28

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2017

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, 2017.

	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, 2017	$	(8,774	)	$	(616	)	$	(10,862	)	$	(18,834	)	$	(39,086	)
Other comprehensive income before reclassifications	1,896			21			(873		)	—			1,044
Amounts reclassified from other comprehensive income	(13		)	(39		)	1,356			59			1,363
Other comprehensive income, net	1,883			(18		)	483			59			2,407
Balance at June 30, 2017	$	(6,891	)	$	(634	)	$	(10,379	)	$	(18,775	)	$	(36,679	)

	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, 2016	$	(10,094	)	$	(642	)	$	(12,464	)	$	(18,893	)	$	(42,093	)
Other comprehensive income before reclassifications	3,203			134			(746		)	—			2,591
Amounts reclassified from other comprehensive income	—			(126		)	2,831			118			2,823
Other comprehensive income, net	3,203			8			2,085			118			5,414
Balance at June 30, 2017	$	(6,891	)	$	(634	)	$	(10,379	)	$	(18,775	)	$	(36,679	)

Reclassification out of Accumulated Other Comprehensive Loss

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, 2017 and 2016. 

	Amounts Reclassified from Accumulated Other Comprehensive Loss
	Three Months Ended June 30,						Six Months Ended June 30,
Components of Accumulated Other Comprehensive Loss	2017			2016			2017			2016			Income Statement Line Item
	(in thousands)
Unrealized gains (losses) on AFS securities before tax	22			$	(3	)	(1		)	268			Gains (losses) on securities transactions, net
Tax effect	(9		)	1			1			(100		)
Total net of tax	13			(2		)	—			168
Non-credit impairment losses on AFS securities before tax:
Accretion of credit loss impairment due to an increase in expected cash flows	67			—			215			489			Interest and dividends on investment securities (taxable)
Tax effect	(28		)	—			(89		)	(203		)
Total net of tax	39			—			126			286
Unrealized losses on derivatives (cash flow hedges) before tax	(2,314		)	(3,597		)	(4,832		)	(6,568		)	Interest expense
Tax effect	958			1,490			2,001			2,720
Total net of tax	(1,356		)	(2,107		)	(2,831		)	(3,848		)
Defined benefit pension plan:
Amortization of net loss	(101		)	(72		)	(202		)	(144		)	*
Tax effect	42			29			84			58
Total net of tax	(59		)	(43		)	(118		)	(86		)
Total reclassifications, net of tax	$	(1,363	)	$	(2,152	)	$	(2,823	)	$	(3,480	)

* 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, 2017

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, 2017 and December 31, 2016. 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, 2017		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	$	50,097	$	50,097	$	—	$	—
U.S. government agency securities	46,368		—		46,368		—
Obligations of states and political subdivisions	119,194		—		119,194		—
Residential mortgage-backed securities	1,163,720		—		1,154,868		8,852
Trust preferred securities	6,219		—		4,341		1,878
Corporate and other debt securities	67,674		7,956		59,718		—
Equity securities	10,782		920		9,862		—
Total available for sale	1,464,054		58,973		1,394,351		10,730
Loans held for sale (1)	17,919		—		17,919		—
Other assets (2)	26,764		—		26,764		—
Total assets	$	1,508,737	$	58,973	$	1,439,034	$	10,730
Liabilities
Other liabilities (2)	$	23,902	$	—	$	23,902	$	—
Total liabilities	$	23,902	$	—	$	23,902	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans (3)	$	31,489	$	—	$	—	$	31,489
Loan servicing rights	7,410		—		—		7,410
Foreclosed assets	1,340		—		—		1,340
Total	$	40,239	$	—	$	—	$	40,239

			Fair Value Measurements at Reporting Date Using:
	December 31, 2016		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	$	49,591	$	49,591	$	—	$	—
U.S. government agency securities	23,041		—		23,041		—
Obligations of states and political subdivisions	119,767		—		119,767		—
Residential mortgage-backed securities	1,015,542		—		1,005,589		9,953
Trust preferred securities	8,009		—		6,074		1,935
Corporate and other debt securities	60,565		8,064		52,501		—
Equity securities	20,858		1,306		19,552		—
Total available for sale	1,297,373		58,961		1,226,524		11,888
Loans held for sale (1)	57,708		—		57,708		—
Other assets (2)	29,055		—		29,055		—
Total assets	$	1,384,136	$	58,961	$	1,313,287	$	11,888
Liabilities
Other liabilities (2)	$	44,077	$	—	$	44,077	$	—
Total liabilities	$	44,077	$	—	$	44,077	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans (3)	$	5,385	$	—	$	—	$	5,385
Loan servicing rights	6,489		—		—		6,489
Foreclosed assets	4,532		—		—		4,532
Total	$	16,406	$	—	$	—	$	16,406

(1) Represents loans originated for sale (which consist of residential mortgage loans) that are carried at fair value and had contractual unpaid principal balances totaling approximately $17.5 million and $58.2 million at June 30, 2017 and December 31, 2016, respectively.

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

(3) Excludes PCI loans.

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, 2017 and 2016 are summarized below: 

	Available for Sale Securities
	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
	(in thousands)
Balance, beginning of the period	$	11,367		$	12,949		$	11,888		$	13,793
Total net (losses) gains included in other comprehensive income	(31		)	514			13			(71		)
Settlements, net	(606		)	(362		)	(1,171		)	(621		)
Balance, end of the period	$	10,730		$	13,101		$	10,730		$	13,101

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, 2017: 

Security Type	Valuation Technique	Unobservable Input	Range	Weighted Average
Private label mortgage-backed securities	Discounted cash flow	Prepayment rate	6.2 - 31.6%	19.8	%
		Default rate	2.6 - 36.7	7.5
		Loss severity	47.2 - 66.0	60.4

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, 2017 and December 31, 2016 were as follows: 

	Fair Value Hierarchy	June 30, 2017				December 31, 2016
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(in thousands)
Financial assets
Cash and due from banks	Level 1	$	227,830	$	227,830	$	220,791	$	220,791
Interest bearing deposits with banks	Level 1	129,959		129,959		171,710		171,710
Investment securities held to maturity:
U.S. Treasury securities	Level 1	138,754		147,656		138,830		147,495
U.S. government agency securities	Level 2	10,597		10,802		11,329		11,464
Obligations of states and political subdivisions	Level 2	501,402		517,830		566,590		577,826
Residential mortgage-backed securities	Level 2	1,070,137		1,062,008		1,112,460		1,102,802
Trust preferred securities	Level 2	59,814		48,268		59,804		47,290
Corporate and other debt securities	Level 2	41,559		42,168		36,559		37,720
Total investment securities held to maturity		1,822,263		1,828,732		1,925,572		1,924,597
Net loans	Level 3	17,594,314		17,187,164		17,121,684		16,756,655
Accrued interest receivable	Level 1	69,732		69,732		66,816		66,816
Federal Reserve Bank and Federal Home Loan Bank stock (1)	Level 1	201,116		201,116		147,127		147,127
Financial liabilities
Deposits without stated maturities	Level 1	13,881,025		13,881,025		14,591,837		14,591,837
Deposits with stated maturities	Level 2	3,368,993		3,375,127		3,138,871		3,160,572
Short-term borrowings	Level 1	1,734,444		1,739,208		1,080,960		1,081,751
Long-term borrowings	Level 2	1,819,615		1,906,668		1,433,906		1,523,386
Junior subordinated debentures issued to capital trusts	Level 2	41,658		46,298		41,577		45,785
Accrued interest payable (2)	Level 1	10,931		10,931		10,675		10,675

(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, 2017

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, 2017 and December 31, 2016 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2017
U.S. Treasury securities	$	138,754	$	8,902	$	—		$	147,656
U.S. government agency securities	10,597		205		—			10,802
Obligations of states and political subdivisions:
Obligations of states and state agencies	249,607		9,623		(1,688		)	257,542
Municipal bonds	251,795		8,519		(26		)	260,288
Total obligations of states and political subdivisions	501,402		18,142		(1,714		)	517,830
Residential mortgage-backed securities	1,070,137		7,658		(15,787		)	1,062,008
Trust preferred securities	59,814		32		(11,578		)	48,268
Corporate and other debt securities	41,559		927		(318		)	42,168
Total investment securities held to maturity	$	1,822,263	$	35,866	$	(29,397	)	$	1,828,732
December 31, 2016
U.S. Treasury securities	$	138,830	$	8,665	$	—		$	147,495
U.S. government agency securities	11,329		135		—			11,464
Obligations of states and political subdivisions:
Obligations of states and state agencies	252,185		6,692		(1,428		)	257,449
Municipal bonds	314,405		6,438		(466		)	320,377
Total obligations of states and political subdivisions	566,590		13,130		(1,894		)	577,826
Residential mortgage-backed securities	1,112,460		8,432		(18,090		)	1,102,802
Trust preferred securities	59,804		40		(12,554		)	47,290
Corporate and other debt securities	36,559		1,190		(29		)	37,720
Total investment securities held to maturity	$	1,925,572	$	31,592	$	(32,567	)	$	1,924,597

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, 2017 and December 31, 2016were 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, 2017
Obligations of states and political subdivisions:
Obligations of states and state agencies	$	63,537	$	(1,688	)	$	—	$	—		$	63,537	$	(1,688	)
Municipal bonds	4,664		(26		)	—		—			4,664		(26		)
Total obligations of states and political subdivisions	68,201		(1,714		)	—		—			68,201		(1,714		)
Residential mortgage-backed securities	622,527		(11,860		)	156,974		(3,927		)	779,501		(15,787		)
Trust preferred securities	—		—			36,883		(11,578		)	36,883		(11,578		)
Corporate and other debt securities	4,682		(318		)	—		—			4,682		(318		)
Total	$	695,410	$	(13,892	)	$	193,857	$	(15,505	)	$	889,267	$	(29,397	)
December 31, 2016
Obligations of states and political subdivisions:
Obligations of states and state agencies	$	98,114	$	(1,428	)	$	—	$	—		$	98,114	$	(1,428	)
Municipal bonds	27,368		(466		)	—		—			27,368		(466		)
Total obligations of states and political subdivisions	125,482		(1,894		)	—		—			125,482		(1,894		)
Residential mortgage-backed securities	692,108		(14,420		)	114,505		(3,670		)	806,613		(18,090		)
Trust preferred securities	—		—			45,898		(12,554		)	45,898		(12,554		)
Corporate and other debt securities	2,971		(29		)	—		—			2,971		(29		)
Total	$	820,561	$	(16,343	)	$	160,403	$	(16,224	)	$	980,964	$	(32,567	)

Contractual Maturities of Debt Securities Held to Maturity

The contractual maturities of investments in debt securities held to maturity at June 30, 2017 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, 2017
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	53,859	$	54,621
Due after one year through five years	210,615		218,428
Due after five years through ten years	325,933		343,717
Due after ten years	161,719		149,958
Residential mortgage-backed securities	1,070,137		1,062,008
Total investment securities held to maturity	$	1,822,263	$	1,828,732

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, 2017 and December 31, 2016 were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2017
U.S. Treasury securities	$	51,009	$	7	$	(919	)	$	50,097
U.S. government agency securities	46,147		292		(71		)	46,368
Obligations of states and political subdivisions:
Obligations of states and state agencies	39,286		336		(218		)	39,404
Municipal bonds	79,824		459		(493		)	79,790
Total obligations of states and political subdivisions	119,110		795		(711		)	119,194
Residential mortgage-backed securities	1,175,171		2,564		(14,015		)	1,163,720
Trust preferred securities*	7,796		—		(1,577		)	6,219
Corporate and other debt securities	67,177		701		(204		)	67,674
Equity securities	10,505		737		(460		)	10,782
Total investment securities available for sale	$	1,476,915	$	5,096	$	(17,957	)	$	1,464,054
December 31, 2016
U.S. Treasury securities	$	51,020	$	6	$	(1,435	)	$	49,591
U.S. government agency securities	22,815		232		(6		)	23,041
Obligations of states and political subdivisions:
Obligations of states and state agencies	40,696		70		(424		)	40,342
Municipal bonds	80,045		147		(767		)	79,425
Total obligations of states and political subdivisions	120,741		217		(1,191		)	119,767
Residential mortgage-backed securities	1,029,827		2,061		(16,346		)	1,015,542
Trust preferred securities*	10,164		—		(2,155		)	8,009
Corporate and other debt securities	60,651		436		(522		)	60,565
Equity securities	20,505		1,114		(761		)	20,858
Total investment securities available for sale	$	1,315,723	$	4,066	$	(22,416	)	$	1,297,373

* Includes two pooled trust preferred securities, principally collateralized by securities issued by banks and insurance companies, at June 30, 2017 and December 31, 2016.

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, 2017 and December 31, 2016 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, 2017
U.S. Treasury securities	$	49,168	$	(919	)	$	—	$	—		$	49,168	$	(919	)
U.S. government agency securities	31,236		(68		)	3,808		(3		)	35,044		(71		)
Obligations of states and political subdivisions:
Obligations of states and state agencies	13,118		(169		)	1,628		(49		)	14,746		(218		)
Municipal bonds	18,302		(193		)	11,059		(300		)	29,361		(493		)
Total obligations of states and political subdivisions	31,420		(362		)	12,687		(349		)	44,107		(711		)
Residential mortgage-backed securities	739,362		(9,680		)	136,402		(4,335		)	875,764		(14,015		)
Trust preferred securities	—		—			6,219		(1,577		)	6,219		(1,577		)
Corporate and other debt securities	30,335		(75		)	11,034		(129		)	41,369		(204		)
Equity securities	—		—			5,184		(460		)	5,184		(460		)
Total	$	881,521	$	(11,104	)	$	175,334	$	(6,853	)	$	1,056,855	$	(17,957	)
December 31, 2016
U.S. Treasury securities	$	48,660	$	(1,435	)	$	—	$	—		$	48,660	$	(1,435	)
U.S. government agency securities	2,530		(4		)	4,034		(2		)	6,564		(6		)
Obligations of states and political subdivisions:
Obligations of states and state agencies	28,628		(404		)	753		(20		)	29,381		(424		)
Municipal bonds	42,573		(506		)	11,081		(261		)	53,654		(767		)
Total obligations of states and political subdivisions	71,201		(910		)	11,834		(281		)	83,035		(1,191		)
Residential mortgage-backed securities	788,030		(11,889		)	132,718		(4,457		)	920,748		(16,346		)
Trust preferred securities	—		—			8,009		(2,155		)	8,009		(2,155		)
Corporate and other debt securities	32,292		(294		)	15,192		(228		)	47,484		(522		)
Equity securities	—		—			14,883		(761		)	14,883		(761		)
Total	$	942,713	$	(14,532	)	$	186,670	$	(7,884	)	$	1,129,383	$	(22,416	)

Contractual Maturities of Investment Securities Available for Sale

The contractual maturities of investment securities available for sale at June 30, 2017 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, 2017
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	24,831	$	24,752
Due after one year through five years	70,802		74,052
Due after five years through ten years	115,497		114,927
Due after ten years	80,109		78,821
Residential mortgage-backed securities	1,175,171		1,163,720
Equity securities	10,505		10,782
Total investment securities available for sale	$	1,476,915	$	1,467,054

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, 2017 and 2016:

	Three Months Ended June 30,					Six Months Ended June 30,
	2017			2016		2017			2016
	(in thousands)
Balance, beginning of period	$	4,767		$	5,348	$	4,916		$	5,837
Accretion of credit loss impairment due to an increase in expected cash flows	(67		)	—		(216		)	(489		)
Balance, end of period	$	4,700		$	5,348	$	4,700		$	5,348

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Loans (Tables)

6 Months Ended

Jun. 30, 2017

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, 2017 and December 31, 2016 was as follows:

	June 30, 2017						December 31, 2016
	Non-PCI Loans		PCI Loans*		Total		Non-PCI Loans		PCI Loans*		Total
	(in thousands)
Loans:
Commercial and industrial	$	2,417,924	$	213,388	$	2,631,312	$	2,357,018	$	281,177	$	2,638,195
Commercial real estate:
Commercial real estate	8,201,235		1,029,279		9,230,514		7,628,328		1,091,339		8,719,667
Construction	825,196		55,877		881,073		710,266		114,680		824,946
Total commercial real estate loans	9,026,431		1,085,156		10,111,587		8,338,594		1,206,019		9,544,613
Residential mortgage	2,569,500		155,277		2,724,777		2,684,195		183,723		2,867,918
Consumer:
Home equity	369,372		81,138		450,510		376,213		92,796		469,009
Automobile	1,150,217		126		1,150,343		1,139,082		145		1,139,227
Other consumer	635,847		6,384		642,231		569,499		7,642		577,141
Total consumer loans	2,155,436		87,648		2,243,084		2,084,794		100,583		2,185,377
Total loans	$	16,169,291	$	1,541,469	$	17,710,760	$	15,464,601	$	1,771,502	$	17,236,103

* PCI loans include covered loans (mostly consisting of residential mortgage and commercial real estate loans) totaling $44.5 million and $70.4 million at June 30, 2017 and December 31, 2016, 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, 2017 and 2016:

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
	(in thousands)
Balance, beginning of period	$	269,831		$	387,120		$	294,514		$	415,179
Accretion	(23,553		)	(31,519		)	(48,236		)	(59,578		)
Balance, end of period	$	246,278		$	355,601		$	246,278		$	355,601

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, 2017 and December 31, 2016:

	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, 2017
Commercial and industrial	$	2,391	$	2,686	$	—	$	11,072	$	16,149	$	2,401,775	$	2,417,924
Commercial real estate:
Commercial real estate	6,983		8,233		2,315		15,514		33,045		8,168,190		8,201,235
Construction	—		854		2,879		1,334		5,067		820,129		825,196
Total commercial real estate loans	6,983		9,087		5,194		16,848		38,112		8,988,319		9,026,431
Residential mortgage	4,677		1,721		3,353		12,825		22,576		2,546,924		2,569,500
Consumer loans:
Home equity	988		229		—		1,306		2,523		366,849		369,372
Automobile	3,242		774		255		103		4,374		1,145,843		1,150,217
Other consumer	163		4		20		—		187		635,660		635,847
Total consumer loans	4,393		1,007		275		1,409		7,084		2,148,352		2,155,436
Total	$	18,444	$	14,501	$	8,822	$	42,154	$	83,921	$	16,085,370	$	16,169,291
December 31, 2016
Commercial and industrial	$	6,705	$	5,010	$	142	$	8,465	$	20,322	$	2,336,696	$	2,357,018
Commercial real estate:
Commercial real estate	5,894		8,642		474		15,079		30,089		7,598,239		7,628,328
Construction	6,077		—		1,106		715		7,898		702,368		710,266
Total commercial real estate loans	11,971		8,642		1,580		15,794		37,987		8,300,607		8,338,594
Residential mortgage	12,005		3,564		1,541		12,075		29,185		2,655,010		2,684,195
Consumer loans:
Home equity	929		415		—		1,028		2,372		373,841		376,213
Automobile	3,192		723		188		146		4,249		1,134,833		1,139,082
Other consumer	76		9		21		—		106		569,393		569,499
Total consumer loans	4,197		1,147		209		1,174		6,727		2,078,067		2,084,794
Total	$	34,878	$	18,363	$	3,472	$	37,508	$	94,221	$	15,370,380	$	15,464,601

Impaired Loans

The following table presents the information about impaired loans by loan portfolio class at June 30, 2017 and December 31, 2016:

	Recorded Investment With No Related Allowance		Recorded Investment With Related Allowance		Total Recorded Investment		Unpaid Contractual Principal Balance		Related Allowance
	(in thousands)
June 30, 2017
Commercial and industrial	$	3,933	$	56,304	$	60,237	$	65,809	$	6,746
Commercial real estate:
Commercial real estate	32,641		30,629		63,270		65,333		2,751
Construction	679		2,067		2,746		2,746		218
Total commercial real estate loans	33,320		32,696		66,016		68,079		2,969
Residential mortgage	8,464		7,725		16,189		17,488		582
Consumer loans:
Home equity	2,888		663		3,551		3,643		51
Total consumer loans	2,888		663		3,551		3,643		51
Total	$	48,605	$	97,388	$	145,993	$	155,019	$	10,348
December 31, 2016
Commercial and industrial	$	3,609	$	27,031	$	30,640	$	35,957	$	5,864
Commercial real estate:
Commercial real estate	21,318		36,974		58,292		60,267		3,612
Construction	1,618		2,379		3,997		3,997		260
Total commercial real estate loans	22,936		39,353		62,289		64,264		3,872
Residential mortgage	8,398		9,958		18,356		19,712		725
Consumer loans:
Home equity	1,182		2,352		3,534		3,626		70
Total consumer loans	1,182		2,352		3,534		3,626		70
Total	$	36,125	$	78,694	$	114,819	$	123,559	$	10,531

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, 2017 and 2016: 

	Three Months Ended June 30,
	2017				2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
Commercial and industrial	$	46,283	$	288	$	24,157	$	194
Commercial real estate:
Commercial real estate	60,119		483		70,194		475
Construction	2,759		20		10,027		53
Total commercial real estate loans	62,878		503		80,221		528
Residential mortgage	17,555		184		22,922		234
Consumer loans:
Home equity	4,799		34		3,071		20
Total consumer loans	4,799		34		3,071		20
Total	$	131,515	$	1,009	$	130,371	$	976

	Six Months Ended June 30,
	2017				2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
Commercial and industrial	$	38,371	$	596	$	26,244	$	434
Commercial real estate:
Commercial real estate	57,722		808		71,296		1,114
Construction	2,728		39		9,915		101
Total commercial real estate loans	60,450		847		81,211		1,215
Residential mortgage	18,974		392		23,262		436
Consumer loans:
Home equity	4,847		74		2,715		43
Total consumer loans	4,847		74		2,715		43
Total	$	122,642	$	1,909	$	133,432	$	2,128

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, 2017 and 2016.

	Three Months Ended June 30, 2017			Three Months Ended June 30, 2016
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial and industrial	6	$	5,358	—	$	—
Commercial real estate	—	—		2	1,070
Residential mortgage	—	—		1	74
Consumer	—	—		1	30
Total	6	$	5,358	4	$	1,174

	Six Months Ended June 30, 2017			Six Months Ended June 30, 2016
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial and industrial	7	$	5,433	—	$	—
Commercial real estate	1	736		1	214
Residential mortgage	1	153		1	74
Consumer	—	—		1	30
Total	9	$	6,322	3	$	318

The following tables present loans by loan portfolio class modified as TDRs during the three and six months ended June 30, 2017 and 2016. 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, 2017 and 2016, respectively.

	Three Months Ended June 30, 2017					Three Months Ended June 30, 2016
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	47	$	40,077	$	38,367	4	$	5,079	$	4,094
Commercial real estate:
Commercial real estate	5	23,604		23,604		2	6,111		6,077
Construction	—	—		—		—	—		—
Total commercial real estate	5	23,604		23,604		2	6,111		6,077
Residential mortgage	2	549		545		5	1,830		1,826
Total	54	$	64,230	$	62,516	11	$	13,020	$	11,997

	Six Months Ended June 30, 2017					Six Months Ended June 30, 2016
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	53	$	46,315	$	43,660	6	$	6,456	$	5,437
Commercial real estate:
Commercial real estate	6	23,782		23,777		3	6,658		6,388
Construction	1	560		480		—	—		—
Total commercial real estate	7	24,342		24,257		3	6,658		6,388
Residential mortgage	5	1,170		1,167		7	2,222		2,206
Consumer	—	—		—		1	55		53
Total	65	$	71,827	$	69,084	17	$	15,391	$	14,084

Risk Category of Loans

The following table presents the risk category of loans (excluding PCI loans) by class of loans at June 30, 2017 and December 31, 2016. 

Credit exposure - by internally assigned risk rating	Pass		Special Mention		Substandard		Doubtful		Total Non-PCI Loans
	(in thousands)
June 30, 2017
Commercial and industrial	$	2,237,178	$	76,419	$	98,034	$	6,293	$	2,417,924
Commercial real estate	8,063,898		51,960		85,377		—		8,201,235
Construction	822,602		364		2,230		—		825,196
Total	$	11,123,678	$	128,743	$	185,641	$	6,293	$	11,444,355
December 31, 2016
Commercial and industrial	$	2,246,457	$	44,316	$	64,649	$	1,596	$	2,357,018
Commercial real estate	7,486,469		57,591		84,268		—		7,628,328
Construction	708,070		200		1,996		—		710,266
Total	$	10,440,996	$	102,107	$	150,913	$	1,596	$	10,695,612

Recorded Investment in Loan Classes Based on Payment Activity

The following table presents the recorded investment in PCI loans by class based on individual loan payment activity as of June 30, 2017 and December 31, 2016.

Credit exposure - by payment activity	Performing Loans		Non-Performing Loans		Total PCI Loans
	(in thousands)
June 30, 2017
Commercial and industrial	$	201,297	$	12,091	$	213,388
Commercial real estate	1,014,923		14,356		1,029,279
Construction	54,775		1,102		55,877
Residential mortgage	150,031		5,246		155,277
Consumer	86,728		920		87,648
Total	$	1,507,754	$	33,715	$	1,541,469
December 31, 2016
Commercial and industrial	$	272,483	$	8,694	$	281,177
Commercial real estate	1,080,376		10,963		1,091,339
Construction	113,370		1,310		114,680
Residential mortgage	179,793		3,930		183,723
Consumer	98,469		2,114		100,583
Total	$	1,744,491	$	27,011	$	1,771,502

The following table presents the recorded investment in those loan classes based on payment activity as of June 30, 2017 and December 31, 2016:

Credit exposure - by payment activity	Performing Loans		Non-Performing Loans		Total Non-PCI Loans
	(in thousands)
June 30, 2017
Residential mortgage	$	2,556,675	$	12,825	$	2,569,500
Home equity	368,066		1,306		369,372
Automobile	1,150,114		103		1,150,217
Other consumer	635,847		—		635,847
Total	$	4,710,702	$	14,234	$	4,724,936
December 31, 2016
Residential mortgage	$	2,672,120	$	12,075	$	2,684,195
Home equity	375,185		1,028		376,213
Automobile	1,138,936		146		1,139,082
Other consumer	569,499		—		569,499
Total	$	4,755,740	$	13,249	$	4,768,989

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Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2017

Receivables [Abstract]

Summary of Allowance for Credit Losses

The following table summarizes the allowance for credit losses at June 30, 2017 and December 31, 2016: 

	June 30, 2017		December 31, 2016
	(in thousands)
Components of allowance for credit losses:
Allowance for loan losses	$	116,446	$	114,419
Allowance for unfunded letters of credit	2,175		2,185
Total allowance for credit losses	$	118,621	$	116,604

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,
	2017			2016		2017			2016
	(in thousands)
Components of provision for credit losses:
Provision for loan losses	$	3,710		$	1,363	$	6,112		$	2,092
Provision for unfunded letters of credit	(78		)	66		(10		)	137
Total provision for credit losses	$	3,632		$	1,429	$	6,102		$	2,229

Summary of Activity in Allowance for Loan Losses

The following table details activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2017 and 2016:

	Commercial and Industrial			Commercial Real Estate			Residential Mortgage			Consumer			Total
	(in thousands)
Three Months Ended June 30, 2017
Allowance for loan losses:
Beginning balance	$	51,288		$	56,302		$	3,592		$	4,261		$	115,443
Loans charged-off	(2,910		)	(139		)	(229		)	(1,011		)	(4,289		)
Charged-off loans recovered	312			640			235			395			1,582
Net (charge-offs) recoveries	(2,598		)	501			6			(616		)	(2,707		)
Provision for loan losses	2,927			(1,348		)	588			1,543			3,710
Ending balance	$	51,617		$	55,455		$	4,186		$	5,188		$	116,446
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

	Commercial and Industrial			Commercial Real Estate			Residential Mortgage			Consumer			Total
	(in thousands)
Six Months Ended June 30, 2017
Allowance for loan losses:
Beginning balance	$	50,820		$	55,851		$	3,702		$	4,046		$	114,419
Loans charged-off	(4,624		)	(553		)	(359		)	(2,132		)	(7,668		)
Charged-off loans recovered	1,160			782			683			958			3,583
Net (charge-offs) recoveries	(3,464		)	229			324			(1,174		)	(4,085		)
Provision for loan losses	4,261			(625		)	160			2,316			6,112
Ending balance	$	51,617		$	55,455		$	4,186		$	5,188		$	116,446
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

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, 2017 and December 31, 2016.

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
June 30, 2017
Allowance for loan losses:
Individually evaluated for impairment	$	6,746	$	2,969	$	582	$	51	$	10,348
Collectively evaluated for impairment	44,871		52,486		3,604		5,137		106,098
Total	$	51,617	$	55,455	$	4,186	$	5,188	$	116,446
Loans:
Individually evaluated for impairment	$	60,237	$	66,016	$	16,189	$	3,551	$	145,993
Collectively evaluated for impairment	2,357,687		8,960,415		2,553,311		2,151,885		16,023,298
Loans acquired with discounts related to credit quality	213,388		1,085,156		155,277		87,648		1,541,469
Total	$	2,631,312	$	10,111,587	$	2,724,777	$	2,243,084	$	17,710,760
December 31, 2016
Allowance for loan losses:
Individually evaluated for impairment	$	5,864	$	3,872	$	725	$	70	$	10,531
Collectively evaluated for impairment	44,956		51,979		2,977		3,976		103,888
Total	$	50,820	$	55,851	$	3,702	$	4,046	$	114,419
Loans:
Individually evaluated for impairment	$	30,640	$	62,289	$	18,356	$	3,534	$	114,819
Collectively evaluated for impairment	2,326,378		8,276,305		2,665,839		2,081,260		15,349,782
Loans acquired with discounts related to credit quality	281,177		1,206,019		183,723		100,583		1,771,502
Total	$	2,638,195	$	9,544,613	$	2,867,918	$	2,185,377	$	17,236,103

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Other Intangible Assets

The following table summarizes other intangible assets as of June 30, 2017 and December 31, 2016:

	Gross Intangible Assets		Accumulated Amortization			Valuation Allowance			Net Intangible Assets
	(in thousands)
June 30, 2017
Loan servicing rights	$	75,413	$	(54,253	)	$	(849	)	$	20,311
Core deposits	43,396		(21,941		)	—			21,455
Other	4,087		(2,153		)	—			1,934
Total other intangible assets	$	122,896	$	(78,347	)	$	(849	)	$	43,700
December 31, 2016
Loan servicing rights	$	73,002	$	(52,634	)	$	(900	)	$	19,468
Core deposits	61,504		(37,562		)	—			23,942
Other	4,087		(2,013		)	—			2,074
Total other intangible assets	$	138,593	$	(92,209	)	$	(900	)	$	45,484

Estimated Future Amortization Expense

The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2017 through 2021:

	Loan Servicing Rights		Core Deposits		Other
	(in thousands)
2017	$	2,719	$	2,356	$	139
2018	4,503		4,215		249
2019	3,557		3,671		235
2020	2,813		3,127		220
2021	2,115		2,582		206

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Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2017

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, 2017							December 31, 2016
	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	$	528	$	31	*	$	707,000	$	802	$	15,641	$	707,000
Fair value hedge interest rate swaps	—		836			7,889		—		986		7,999
Total derivatives designated as hedging instruments	$	528	$	867		$	714,889	$	802	$	16,627	$	714,999
Derivatives not designated as hedging instruments:
Interest rate swaps and embedded derivatives	$	26,058	$	22,870	*	$	1,288,274	$	25,285	$	25,284	$	1,075,722
Mortgage banking derivatives	178		165			88,567		2,968		2,166		246,583
Total derivatives not designated as hedging instruments	$	26,236	$	23,035		$	1,376,841	$	28,253	$	27,450	$	1,322,305

* The fair value for the Chicago Mercantile Exchange cleared derivative positions is inclusive of accrued interest payable and the portion of the cash collateral representing the variation margin posted with (or by) the applicable counterparties.

Gains (Losses) Related to Interest Rate Derivatives Designated as Hedges of Cash Flows

osses 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,
	2017			2016			2017			2016
	(in thousands)
Amount of loss reclassified from accumulated other comprehensive loss to interest expense	$	(2,314	)	$	(3,597	)	$	(4,832	)	$	(6,568	)
Amount of loss recognized in other comprehensive income	(1,482		)	(3,625		)	(1,265		)	(14,657		)

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,
	2017			2016			2017			2016
	(in thousands)
Derivative - interest rate swaps:
Interest income	$	52		$	2		$	149		$	(97	)
Interest expense	—			2,069			—			6,797
Hedged item - loans and borrowings:
Interest income	$	(52	)	$	(2	)	$	(149	)	$	97
Interest expense	—			(2,060		)	—			(6,779		)

Gains (Losses) Related to Derivative Instruments Not Designated as Hedging Instruments

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2017		2016			2017			2016
	(in thousands)
Non-designated hedge interest rate derivatives
Other non-interest expense	$	70	$	(92	)	$	(790	)	$	(389	)

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Balance Sheet Offsetting (Tables)

6 Months Ended

Jun. 30, 2017

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, 2017 and December 31, 2016.

							Gross Amounts Not Offset
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments			Cash Collateral				Net Amount
	(in thousands)
June 30, 2017
Assets:
Interest rate caps and swaps	$	26,586	$	—	$	26,586	$	(3,888	)	$	—			$	22,698
Liabilities:
Interest rate caps and swaps	$	23,737	$	—	$	23,737	$	(3,888	)	$	(9,314	)	(1)	$	10,535
Repurchase agreements	200,000		—		200,000		—			(200,000		)	(2)	—
Total	$	223,737	$	—	$	223,737	$	(3,888	)	$	(209,314	)		$	10,535
December 31, 2016
Assets:
Interest rate caps and swaps	$	26,087	$	—	$	26,087	$	(5,268	)	$	—			$	20,819
Liabilities:
Interest rate caps and swaps	$	41,911	$	—	$	41,911	$	(5,268	)	$	(36,643	)	(1)	$	—
Repurchase agreements	165,000		—		165,000		—			(165,000		)	(2)	—
Total	$	206,911	$	—	$	206,911	$	(5,268	)	$	(201,643	)		$	—

(1) Represents the amount of collateral posted with derivatives counterparties that offsets net liabilities. Actual cash collateral posted with all counterparties totaled $59.6 million and $52.4 million at June 30, 2017 and December 31, 2016, respectively.

(2) Represents the fair value of non-cash pledged investment securities.

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Tax Credit Investments (Tables)

6 Months Ended

Jun. 30, 2017

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, 2017 and December 31, 2016.

	June 30, 2017		December 31, 2016
	(in thousands)
Other Assets:
Affordable housing tax credit investments, net	$	28,559	$	29,567
Other tax credit investments, net	36,204		44,763
Total tax credit investments, net	$	64,763	$	74,330
Other Liabilities:
Unfunded affordable housing tax credit commitments	$	4,690	$	4,850
Unfunded other tax credit commitments	3,582		7,276
Total unfunded tax credit commitments	$	8,272	$	12,126

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, 2017 and 2016: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
	(in thousands)
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits	$	1,271	$	1,065	$	2,555	$	2,130
Other tax credit investment credits and tax benefits	8,680		3,268		14,966		6,536
Total reduction in income tax expense	$	9,951	$	4,333	$	17,521	$	8,666
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses	$	358	$	775	$	754	$	1,359
Affordable housing tax credit investment impairment losses	130		60		254		200
Other tax credit investment losses	1,060		594		1,827		668
Other tax credit investment impairment losses	6,184		6,217		10,221		12,683
Total amortization of tax credit investments recorded in non-interest expense	$	7,732	$	7,646	$	13,056	$	14,910

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Basis of Presentation (Detail) - shares	Jun. 30, 2017	Apr. 27, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Common stock, shares authorized (in shares)	450,000,000	450,000,000
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000

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Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Earnings Per Share Reconciliation
Net income available to common shareholders	$ 48,268	$ 37,230	$ 92,566	$ 71,620
Basic weighted average number of common shares outstanding (in shares)	263,958,292	254,381,170	263,878,103	254,228,260
Plus: Common stock equivalents (in shares)	819,950	390,043	784,760	347,613
Diluted weighted average number of common shares outstanding (in shares)	264,778,242	254,771,213	264,662,863	254,575,873
Earnings per common share:
Basic (usd per share)	$ 0.18	$ 0.15	$ 0.35	$ 0.28
Diluted (usd per share)	$ 0.18	$ 0.15	$ 0.35	$ 0.28
Anti-dilutive common stock options and warrants (in shares)	3,300,000	4,600,000	3,300,000	4,600,000

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Accumulated Other Comprehensive Loss - Components of AOCI (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Accumulated Other Comprehensive Income (Loss)
Beginning balance			$ 2,377,156
Other comprehensive income before reclassifications	$ 1,044		2,591
Amounts reclassified from other comprehensive income	1,363	$ 2,152	2,823	$ 3,480
Other comprehensive income, net	2,407		5,414
Ending balance	2,423,901		2,423,901
Unrealized Gains and Losses on Available for Sale (AFS) Securities
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(8,774)		(10,094)
Other comprehensive income before reclassifications	1,896		3,203
Amounts reclassified from other comprehensive income	(13)		0
Other comprehensive income, net	1,883		3,203
Ending balance	(6,891)		(6,891)
Non-credit Impairment Losses on AFS Securities
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(616)		(642)
Other comprehensive income before reclassifications	21		134
Amounts reclassified from other comprehensive income	(39)		(126)
Other comprehensive income, net	(18)		8
Ending balance	(634)		(634)
Unrealized Gains and (Losses) on Derivatives
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(10,862)		(12,464)
Other comprehensive income before reclassifications	(873)		(746)
Amounts reclassified from other comprehensive income	1,356		2,831
Other comprehensive income, net	483		2,085
Ending balance	(10,379)		(10,379)
Defined Benefit Pension Plan
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(18,834)		(18,893)
Other comprehensive income before reclassifications	0		0
Amounts reclassified from other comprehensive income	59	$ 43	118	$ 86
Other comprehensive income, net	59		118
Ending balance	(18,775)		(18,775)
Total Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(39,086)		(42,093)
Ending balance	$ (36,679)		$ (36,679)

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Accumulated Other Comprehensive Loss - Reclassifications (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Reclassification Out Of Accumulated Other Comprehensive Loss
Interest and dividends on investment securities (taxable)	$ 67	$ 0	$ 216	$ 489
Interest expense	(42,187)	(37,573)	(78,774)	(75,017)
Tax effect	(20,714)	(15,460)	(38,785)	(29,849)
Total net of tax	50,065	39,027	96,160	75,214
Total reclassifications, net of tax	(1,363)	(2,152)	(2,823)	(3,480)
Unrealized gains (losses) on AFS securities before tax
Reclassification Out Of Accumulated Other Comprehensive Loss
Total reclassifications, net of tax	13		0
Non-credit impairment losses on AFS securities before tax:
Reclassification Out Of Accumulated Other Comprehensive Loss
Total reclassifications, net of tax	39		126
Unrealized losses on derivatives (cash flow hedges) before tax
Reclassification Out Of Accumulated Other Comprehensive Loss
Total reclassifications, net of tax	(1,356)		(2,831)
Defined benefit pension plan:
Reclassification Out Of Accumulated Other Comprehensive Loss
Amortization of net loss	(101)	(72)	(202)	(144)
Tax effect	42	29	84	58
Total reclassifications, net of tax	(59)	(43)	(118)	(86)
Reclassification Out of Accumulated Other Comprehensive Income (Loss)
Reclassification Out Of Accumulated Other Comprehensive Loss
Interest expense	(2,314)	(3,597)	(4,832)	(6,568)
Reclassification Out of Accumulated Other Comprehensive Income (Loss) | Unrealized gains (losses) on AFS securities before tax
Reclassification Out Of Accumulated Other Comprehensive Loss
Gains (losses) on securities transactions, net	22	(3)	(1)	268
Tax effect	(9)	1	1	(100)
Total net of tax	13	(2)	0	168
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)	67	0	215	489
Tax effect	(28)	0	(89)	(203)
Total net of tax	39	0	126	286
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	(2,314)	(3,597)	(4,832)	(6,568)
Tax effect	958	1,490	2,001	2,720
Total net of tax	$ (1,356)	$ (2,107)	$ (2,831)	$ (3,848)

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Fair Value Measurement of Assets and Liabilities - Recurring and Non-Recurring Basis (Detail) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Investment securities:
Available for sale	$ 1,464,054,000	$ 1,297,373,000
Loans held for sale	17,919,000	57,708,000
Non-recurring fair value measurements:
Unpaid principal balances of loans held for sale	17,500,000	58,200,000
Covered real estate owned	0	558,000
U.S. Treasury securities
Investment securities:
Available for sale	50,097,000	49,591,000
U.S. government agency securities
Investment securities:
Available for sale	46,368,000	23,041,000
Obligations of states and political subdivisions
Investment securities:
Available for sale	119,194,000	119,767,000
Residential mortgage-backed securities
Investment securities:
Available for sale	1,163,720,000	1,015,542,000
Trust preferred securities
Investment securities:
Available for sale	6,219,000	8,009,000
Corporate and other debt securities
Investment securities:
Available for sale	67,674,000	60,565,000
Equity securities
Investment securities:
Available for sale	10,782,000	20,858,000
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements
Investment securities:
Available for sale	58,973,000	58,961,000
Loans held for sale	0	0
Other assets	0	0
Total assets	58,973,000	58,961,000
Liabilities
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
Investment securities:
Available for sale	50,097,000	49,591,000
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | U.S. government agency securities
Investment securities:
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
Investment securities:
Available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | Residential mortgage-backed securities
Investment securities:
Available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | Trust preferred securities
Investment securities:
Available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | Corporate and other debt securities
Investment securities:
Available for sale	7,956,000	8,064,000
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | Equity securities
Investment securities:
Available for sale	920,000	1,306,000
Quoted Prices in Active Markets for Identical Assets (Level 1) | Non-recurring fair value measurements
Non-recurring fair value measurements:
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
Investment securities:
Available for sale	1,394,351,000	1,226,524,000
Loans held for sale	17,919,000	57,708,000
Other assets	26,764,000	29,055,000
Total assets	1,439,034,000	1,313,287,000
Liabilities
Other liabilities	23,902,000	44,077,000
Total liabilities	23,902,000	44,077,000
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | U.S. Treasury securities
Investment securities:
Available for sale	0	0
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | U.S. government agency securities
Investment securities:
Available for sale	46,368,000	23,041,000
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | Obligations of states and political subdivisions
Investment securities:
Available for sale	119,194,000	119,767,000
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | Residential mortgage-backed securities
Investment securities:
Available for sale	1,154,868,000	1,005,589,000
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | Trust preferred securities
Investment securities:
Available for sale	4,341,000	6,074,000
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | Corporate and other debt securities
Investment securities:
Available for sale	59,718,000	52,501,000
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | Equity securities
Investment securities:
Available for sale	9,862,000	19,552,000
Significant Other Observable Inputs (Level 2) | Non-recurring fair value measurements
Non-recurring fair value measurements:
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
Investment securities:
Available for sale	10,730,000	11,888,000
Loans held for sale	0	0
Other assets	0	0
Total assets	10,730,000	11,888,000
Liabilities
Other liabilities	0	0
Total liabilities	0	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | U.S. Treasury securities
Investment securities:
Available for sale	0	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | U.S. government agency securities
Investment securities:
Available for sale	0	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | Obligations of states and political subdivisions
Investment securities:
Available for sale	0	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | Residential mortgage-backed securities
Investment securities:
Available for sale	8,852,000	9,953,000
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | Trust preferred securities
Investment securities:
Available for sale	1,878,000	1,935,000
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | Corporate and other debt securities
Investment securities:
Available for sale	0	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | Equity securities
Investment securities:
Available for sale	0	0
Significant Unobservable Inputs (Level 3) | Non-recurring fair value measurements
Non-recurring fair value measurements:
Collateral dependent impaired loans	31,489,000	5,385,000
Loan servicing rights	7,410,000	6,489,000
Foreclosed assets	1,340,000	4,532,000
Total	40,239,000	16,406,000
Fair Value | Recurring fair value measurements
Investment securities:
Available for sale	1,464,054,000	1,297,373,000
Loans held for sale	17,919,000	57,708,000
Other assets	26,764,000	29,055,000
Total assets	1,508,737,000	1,384,136,000
Liabilities
Other liabilities	23,902,000	44,077,000
Total liabilities	23,902,000	44,077,000
Fair Value | Recurring fair value measurements | U.S. Treasury securities
Investment securities:
Available for sale	50,097,000	49,591,000
Fair Value | Recurring fair value measurements | U.S. government agency securities
Investment securities:
Available for sale	46,368,000	23,041,000
Fair Value | Recurring fair value measurements | Obligations of states and political subdivisions
Investment securities:
Available for sale	119,194,000	119,767,000
Fair Value | Recurring fair value measurements | Residential mortgage-backed securities
Investment securities:
Available for sale	1,163,720,000	1,015,542,000
Fair Value | Recurring fair value measurements | Trust preferred securities
Investment securities:
Available for sale	6,219,000	8,009,000
Fair Value | Recurring fair value measurements | Corporate and other debt securities
Investment securities:
Available for sale	67,674,000	60,565,000
Fair Value | Recurring fair value measurements | Equity securities
Investment securities:
Available for sale	10,782,000	20,858,000
Fair Value | Non-recurring fair value measurements
Non-recurring fair value measurements:
Collateral dependent impaired loans	31,489,000	5,385,000
Loan servicing rights	7,410,000	6,489,000
Foreclosed assets	1,340,000	4,532,000
Total	$ 40,239,000	$ 16,406,000

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Fair Value Measurement of Assets and Liabilities - Changes in Level 3 Assets (Detail) - Available for Sale Securities - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Changes in Level 3 Assets
Balance, beginning of the period	$ 11,367	$ 12,949	$ 11,888	$ 13,793
Total net (losses) gains included in other comprehensive income	(31)	514	13	(71)
Settlements, net	(606)	(362)	(1,171)	(621)
Balance, end of the period	$ 10,730	$ 13,101	$ 10,730	$ 13,101

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Fair Value Measurement of Assets and Liabilities - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Fair Value Assets Measured On Recurring Basis
Impaired collateral dependent loans, charge-offs	$ 1,900,000	$ 473,000	$ 2,100,000	$ 952,000
Collateral dependent impaired loans, recorded investment	35,200,000		35,200,000
Specific valuation allowance allocations	3,700,000		3,700,000
Reported net carrying amount of impaired loans	31,500,000		$ 31,500,000
Valuation of loan servicing rights, discount rate			8.00%
Net impairment charges (recoveries) on its loan servicing rights	(50,000)	265,000	$ (51,000)	457,000
Foreclosed assets measured at fair value upon initial recognition	1,300,000
Allowance for loan losses, charge-offs	282,000	489,000	994,000	922,000
Loss due to re-measurement of repossessed assets		295,000	$ 290,000	912,000
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			25.00%
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 - Quantitative Information about Level 3 Inputs (Detail) - Significant Unobservable Inputs (Level 3) - Residential mortgage-backed securities - Discounted cash flow	6 Months Ended
	Jun. 30, 2017
Minimum
Fair Value Assets Measured On Recurring Basis
Prepayment rate	6.20%
Default rate	2.60%
Loss severity	47.20%
Maximum
Fair Value Assets Measured On Recurring Basis
Prepayment rate	31.60%
Default rate	36.70%
Loss severity	66.00%
Weighted Average
Fair Value Assets Measured On Recurring Basis
Prepayment rate	19.80%
Default rate	7.50%
Loss severity	60.40%

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Fair Value Measurement of Assets and Liabilities - Carrying Amounts and Estimated Fair Values (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
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	$ 129,959	$ 171,710
Investment securities held to maturity:	1,828,732	1,924,597
Accrued interest receivable	69,732	66,816
Deposits with stated maturities	3,368,993	3,138,871
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
Investment securities held to maturity:	1,822,263	1,925,572
Carrying Amount | 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	227,830	220,791
Interest bearing deposits with banks	129,959	171,710
Accrued interest receivable	69,732	66,816
Federal Reserve Bank and Federal Home Loan Bank stock	201,116	147,127
Deposits without stated maturities	13,881,025	14,591,837
Short-term borrowings	1,734,444	1,080,960
Accrued interest payable	10,931	10,675
Carrying Amount | 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
Investment securities held to maturity:	138,754	138,830
Carrying Amount | 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	3,368,993	3,138,871
Long-term borrowings	1,819,615	1,433,906
Junior subordinated debentures issued to capital trusts	41,658	41,577
Carrying Amount | 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
Investment securities held to maturity:	10,597	11,329
Carrying Amount | 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
Investment securities held to maturity:	501,402	566,590
Carrying Amount | 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
Investment securities held to maturity:	1,070,137	1,112,460
Carrying Amount | 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
Investment securities held to maturity:	59,814	59,804
Carrying Amount | 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
Investment securities held to maturity:	41,559	36,559
Carrying Amount | 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	17,594,314	17,121,684
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
Investment securities held to maturity:	1,828,732	1,924,597
Fair Value | 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	227,830	220,791
Interest bearing deposits with banks	129,959	171,710
Accrued interest receivable	69,732	66,816
Federal Reserve Bank and Federal Home Loan Bank stock	201,116	147,127
Deposits without stated maturities	13,881,025	14,591,837
Short-term borrowings	1,739,208	1,081,751
Accrued interest payable	10,931	10,675
Fair Value | 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
Investment securities held to maturity:	147,656	147,495
Fair Value | 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	3,375,127	3,160,572
Long-term borrowings	1,906,668	1,523,386
Junior subordinated debentures issued to capital trusts	46,298	45,785
Fair Value | 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
Investment securities held to maturity:	10,802	11,464
Fair Value | 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
Investment securities held to maturity:	517,830	577,826
Fair Value | 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
Investment securities held to maturity:	1,062,008	1,102,802
Fair Value | 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
Investment securities held to maturity:	48,268	47,290
Fair Value | 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
Investment securities held to maturity:	42,168	37,720
Fair Value | 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	$ 17,187,164	$ 16,756,655

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Investment Securities - Amortized Cost, Held to Maturity (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Schedule of Held-to-maturity Securities
Amortized Cost	$ 1,822,263	$ 1,925,572
Gross Unrealized Gains	35,866	31,592
Gross Unrealized Losses	(29,397)	(32,567)
Fair Value	1,828,732	1,924,597
U.S. Treasury securities
Schedule of Held-to-maturity Securities
Amortized Cost	138,754	138,830
Gross Unrealized Gains	8,902	8,665
Gross Unrealized Losses	0	0
Fair Value	147,656	147,495
U.S. government agency securities
Schedule of Held-to-maturity Securities
Amortized Cost	10,597	11,329
Gross Unrealized Gains	205	135
Gross Unrealized Losses	0	0
Fair Value	10,802	11,464
Obligations of states and state agencies
Schedule of Held-to-maturity Securities
Amortized Cost	249,607	252,185
Gross Unrealized Gains	9,623	6,692
Gross Unrealized Losses	(1,688)	(1,428)
Fair Value	257,542	257,449
Municipal bonds
Schedule of Held-to-maturity Securities
Amortized Cost	251,795	314,405
Gross Unrealized Gains	8,519	6,438
Gross Unrealized Losses	(26)	(466)
Fair Value	260,288	320,377
Obligations of states and political subdivisions
Schedule of Held-to-maturity Securities
Amortized Cost	501,402	566,590
Gross Unrealized Gains	18,142	13,130
Gross Unrealized Losses	(1,714)	(1,894)
Fair Value	517,830	577,826
Residential mortgage-backed securities
Schedule of Held-to-maturity Securities
Amortized Cost	1,070,137	1,112,460
Gross Unrealized Gains	7,658	8,432
Gross Unrealized Losses	(15,787)	(18,090)
Fair Value	1,062,008	1,102,802
Trust preferred securities
Schedule of Held-to-maturity Securities
Amortized Cost	59,814	59,804
Gross Unrealized Gains	32	40
Gross Unrealized Losses	(11,578)	(12,554)
Fair Value	48,268	47,290
Corporate and other debt securities
Schedule of Held-to-maturity Securities
Amortized Cost	41,559	36,559
Gross Unrealized Gains	927	1,190
Gross Unrealized Losses	(318)	(29)
Fair Value	$ 42,168	$ 37,720

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Investment Securities - Unrealized Losses and Fair Value of Held to Maturity (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Schedule of Held-to-maturity Securities
Less than Twelve Months, Fair Value	$ 695,410	$ 820,561
Less than Twelve Months, Unrealized Losses	(13,892)	(16,343)
More than Twelve Months, Fair Value	193,857	160,403
More than Twelve Months, Unrealized Losses	(15,505)	(16,224)
Total, Fair Value	889,267	980,964
Total, Unrealized Losses	(29,397)	(32,567)
Obligations of states and state agencies
Schedule of Held-to-maturity Securities
Less than Twelve Months, Fair Value	63,537	98,114
Less than Twelve Months, Unrealized Losses	(1,688)	(1,428)
More than Twelve Months, Fair Value	0	0
More than Twelve Months, Unrealized Losses	0	0
Total, Fair Value	63,537	98,114
Total, Unrealized Losses	(1,688)	(1,428)
Municipal bonds
Schedule of Held-to-maturity Securities
Less than Twelve Months, Fair Value	4,664	27,368
Less than Twelve Months, Unrealized Losses	(26)	(466)
More than Twelve Months, Fair Value	0	0
More than Twelve Months, Unrealized Losses	0	0
Total, Fair Value	4,664	27,368
Total, Unrealized Losses	(26)	(466)
Obligations of states and political subdivisions
Schedule of Held-to-maturity Securities
Less than Twelve Months, Fair Value	68,201	125,482
Less than Twelve Months, Unrealized Losses	(1,714)	(1,894)
More than Twelve Months, Fair Value	0	0
More than Twelve Months, Unrealized Losses	0	0
Total, Fair Value	68,201	125,482
Total, Unrealized Losses	(1,714)	(1,894)
Residential mortgage-backed securities
Schedule of Held-to-maturity Securities
Less than Twelve Months, Fair Value	622,527	692,108
Less than Twelve Months, Unrealized Losses	(11,860)	(14,420)
More than Twelve Months, Fair Value	156,974	114,505
More than Twelve Months, Unrealized Losses	(3,927)	(3,670)
Total, Fair Value	779,501	806,613
Total, Unrealized Losses	(15,787)	(18,090)
Trust preferred securities
Schedule of Held-to-maturity Securities
Less than Twelve Months, Fair Value	0	0
Less than Twelve Months, Unrealized Losses	0	0
More than Twelve Months, Fair Value	36,883	45,898
More than Twelve Months, Unrealized Losses	(11,578)	(12,554)
Total, Fair Value	36,883	45,898
Total, Unrealized Losses	(11,578)	(12,554)
Corporate and other debt securities
Schedule of Held-to-maturity Securities
Less than Twelve Months, Fair Value	4,682	2,971
Less than Twelve Months, Unrealized Losses	(318)	(29)
More than Twelve Months, Fair Value	0	0
More than Twelve Months, Unrealized Losses	0	0
Total, Fair Value	4,682	2,971
Total, Unrealized Losses	$ (318)	$ (29)

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Investment Securities - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($) Security	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) Security	Jun. 30, 2016 USD ($)	Dec. 31, 2016 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	121		121		132
Fair value of investments held to maturity pledged as collateral	$ 997,200,000		$ 997,200,000
Weighted-average remaining expected life of residential mortgage-backed securities held to maturity, years			7 years 6 months
Number of security positions in the securities available for sale portfolio in an unrealized loss position (in security) | Security	274		274		298
Amortized cost	$ 1,476,915,000		$ 1,476,915,000		$ 1,315,723,000
Available for sale	1,464,054,000		1,464,054,000		1,297,373,000
Gross unrealized losses	17,957,000		17,957,000		$ 22,416,000
Fair value of securities available for sale pledged as collateral	703,900,000		$ 703,900,000
Weighted-average remaining expected life of residential mortgage-backed securities available for sale, years			9 years 1 month
Other than temporary impairment losses recognized in earnings	0	$ 0	$ 0	$ 0
Previously Other-Than-Temporarily Impaired Securities | Trust Preferred Securities Subject to Mandatory Redemption
Investment Securities [Line Items]
Amortized cost	2,800,000		2,800,000
Available for sale	$ 1,900,000		$ 1,900,000
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	$ 7,800,000		$ 7,800,000
Available for sale	6,200,000		6,200,000
Pooled Trust Preferred Securities | Investment Grade
Investment Securities [Line Items]
Gross unrealized losses	703,000		703,000
Four Private Label Mortgage-Backed Securities
Investment Securities [Line Items]
Amortized cost	9,100,000		9,100,000
Available for sale	$ 8,900,000		$ 8,900,000
Single Issuer 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 - Contractual Maturities of Held to Maturity (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Amortized Cost
Due in one year	$ 53,859
Due after one year through five years	210,615
Due after five years through ten years	325,933
Due after ten years	161,719
Residential mortgage-backed securities	1,070,137
Amortized Cost	1,822,263	$ 1,925,572
Fair Value
Due in one year	54,621
Due after one year through five years	218,428
Due after five years through ten years	343,717
Due after ten years	149,958
Residential mortgage-backed securities	1,062,008
Total investment securities held to maturity	$ 1,828,732	$ 1,924,597

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Investment Securities - Amortized Cost, Securities Available for Sale (Detail) $ in Thousands	Jun. 30, 2017 USD ($) Security	Dec. 31, 2016 USD ($) Security
Schedule of Available-for-sale Securities
Amortized Cost	$ 1,476,915	$ 1,315,723
Gross Unrealized Gains	5,096	4,066
Gross Unrealized Losses	(17,957)	(22,416)
Fair Value	1,464,054	1,297,373
U.S. Treasury securities
Schedule of Available-for-sale Securities
Amortized Cost	51,009	51,020
Gross Unrealized Gains	7	6
Gross Unrealized Losses	(919)	(1,435)
Fair Value	50,097	49,591
U.S. government agency securities
Schedule of Available-for-sale Securities
Amortized Cost	46,147	22,815
Gross Unrealized Gains	292	232
Gross Unrealized Losses	(71)	(6)
Fair Value	46,368	23,041
Obligations of states and state agencies
Schedule of Available-for-sale Securities
Amortized Cost	39,286	40,696
Gross Unrealized Gains	336	70
Gross Unrealized Losses	(218)	(424)
Fair Value	39,404	40,342
Municipal bonds
Schedule of Available-for-sale Securities
Amortized Cost	79,824	80,045
Gross Unrealized Gains	459	147
Gross Unrealized Losses	(493)	(767)
Fair Value	79,790	79,425
Obligations of states and political subdivisions
Schedule of Available-for-sale Securities
Amortized Cost	119,110	120,741
Gross Unrealized Gains	795	217
Gross Unrealized Losses	(711)	(1,191)
Fair Value	119,194	119,767
Residential mortgage-backed securities
Schedule of Available-for-sale Securities
Amortized Cost	1,175,171	1,029,827
Gross Unrealized Gains	2,564	2,061
Gross Unrealized Losses	(14,015)	(16,346)
Fair Value	1,163,720	1,015,542
Trust preferred securities
Schedule of Available-for-sale Securities
Amortized Cost	7,796	10,164
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(1,577)	(2,155)
Fair Value	6,219	8,009
Corporate and other debt securities
Schedule of Available-for-sale Securities
Amortized Cost	67,177	60,651
Gross Unrealized Gains	701	436
Gross Unrealized Losses	(204)	(522)
Fair Value	67,674	60,565
Equity securities
Schedule of Available-for-sale Securities
Amortized Cost	10,505	20,505
Gross Unrealized Gains	737	1,114
Gross Unrealized Losses	(460)	(761)
Fair Value	10,782	$ 20,858
Pooled Trust Preferred Securities
Schedule of Available-for-sale Securities
Amortized Cost	7,800
Fair Value	$ 6,200
Number of available for sale securities (in security) | Security	2	2

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Investment Securities - Unrealized Losses and Fair Value Available for Sale (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Fair Value
Less than Twelve Months	$ 881,521	$ 942,713
More than Twelve Months	175,334	186,670
Total	1,056,855	1,129,383
Unrealized Losses
Less than Twelve Months	(11,104)	(14,532)
More than Twelve Months	(6,853)	(7,884)
Total	(17,957)	(22,416)
U.S. Treasury securities
Fair Value
Less than Twelve Months	49,168	48,660
More than Twelve Months	0	0
Total	49,168	48,660
Unrealized Losses
Less than Twelve Months	(919)	(1,435)
More than Twelve Months	0	0
Total	(919)	(1,435)
U.S. government agency securities
Fair Value
Less than Twelve Months	31,236	2,530
More than Twelve Months	3,808	4,034
Total	35,044	6,564
Unrealized Losses
Less than Twelve Months	(68)	(4)
More than Twelve Months	(3)	(2)
Total	(71)	(6)
Obligations of states and state agencies
Fair Value
Less than Twelve Months	13,118	28,628
More than Twelve Months	1,628	753
Total	14,746	29,381
Unrealized Losses
Less than Twelve Months	(169)	(404)
More than Twelve Months	(49)	(20)
Total	(218)	(424)
Municipal bonds
Fair Value
Less than Twelve Months	18,302	42,573
More than Twelve Months	11,059	11,081
Total	29,361	53,654
Unrealized Losses
Less than Twelve Months	(193)	(506)
More than Twelve Months	(300)	(261)
Total	(493)	(767)
Obligations of states and political subdivisions
Fair Value
Less than Twelve Months	31,420	71,201
More than Twelve Months	12,687	11,834
Total	44,107	83,035
Unrealized Losses
Less than Twelve Months	(362)	(910)
More than Twelve Months	(349)	(281)
Total	(711)	(1,191)
Residential mortgage-backed securities
Fair Value
Less than Twelve Months	739,362	788,030
More than Twelve Months	136,402	132,718
Total	875,764	920,748
Unrealized Losses
Less than Twelve Months	(9,680)	(11,889)
More than Twelve Months	(4,335)	(4,457)
Total	(14,015)	(16,346)
Trust preferred securities
Fair Value
Less than Twelve Months	0	0
More than Twelve Months	6,219	8,009
Total	6,219	8,009
Unrealized Losses
Less than Twelve Months	0	0
More than Twelve Months	(1,577)	(2,155)
Total	(1,577)	(2,155)
Corporate and other debt securities
Fair Value
Less than Twelve Months	30,335	32,292
More than Twelve Months	11,034	15,192
Total	41,369	47,484
Unrealized Losses
Less than Twelve Months	(75)	(294)
More than Twelve Months	(129)	(228)
Total	(204)	(522)
Equity securities
Fair Value
Less than Twelve Months	0	0
More than Twelve Months	5,184	14,883
Total	5,184	14,883
Unrealized Losses
Less than Twelve Months	0	0
More than Twelve Months	(460)	(761)
Total	$ (460)	$ (761)

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Investment Securities - Contractual Maturities of Available for Sale (Detail) $ in Thousands	Jun. 30, 2017 USD ($)
Amortized Cost
Due in one year	$ 24,831
Due after one year through five years	70,802
Due after five years through ten years	115,497
Due after ten years	80,109
Total investment securities available for sale, Amortized Cost	1,476,915
Fair Value
Due in one year	24,752
Due after one year through five years	74,052
Due after five years through ten years	114,927
Due after ten years	78,821
Total investment securities available for sale, Fair Value	1,467,054
Residential mortgage-backed securities
Amortized Cost
Securities without a single maturity date	1,175,171
Fair Value
Securities without a single maturity date	1,163,720
Equity securities
Amortized Cost
Securities without a single maturity date	10,505
Fair Value
Securities without a single maturity date	$ 10,782

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Investment Securities - Credit Loss Component of Cumulative OTTI Losses (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Balance, beginning of period	$ 4,767	$ 5,348	$ 4,916	$ 5,837
Accretion of credit loss impairment due to an increase in expected cash flows	(67)	0	(216)	(489)
Balance, end of period	$ 4,700	$ 5,348	$ 4,700	$ 5,348

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Loans - Non-Covered and Covered PCI Loans and Non-PCI Loans (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable
Loans	$ 17,710,760	$ 17,236,103
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Loans	2,631,312	2,638,195
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable
Loans	10,111,587	9,544,613
Commercial Real Estate | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Loans	9,230,514	8,719,667
Commercial Real Estate | Construction
Accounts, Notes, Loans and Financing Receivable
Loans	881,073	824,946
Residential mortgage
Accounts, Notes, Loans and Financing Receivable
Loans	2,724,777	2,867,918
Consumer
Accounts, Notes, Loans and Financing Receivable
Loans	2,243,084	2,185,377
Consumer | Home equity
Accounts, Notes, Loans and Financing Receivable
Loans	450,510	469,009
Consumer | Automobile
Accounts, Notes, Loans and Financing Receivable
Loans	1,150,343	1,139,227
Consumer | Other consumer
Accounts, Notes, Loans and Financing Receivable
Loans	642,231	577,141
Non-PCI Loans
Accounts, Notes, Loans and Financing Receivable
Loans	16,169,291	15,464,601
Non-PCI Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Loans	2,417,924	2,357,018
Non-PCI Loans | Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable
Loans	9,026,431	8,338,594
Non-PCI Loans | Commercial Real Estate | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Loans	8,201,235	7,628,328
Non-PCI Loans | Commercial Real Estate | Construction
Accounts, Notes, Loans and Financing Receivable
Loans	825,196	710,266
Non-PCI Loans | Residential mortgage
Accounts, Notes, Loans and Financing Receivable
Loans	2,569,500	2,684,195
Non-PCI Loans | Consumer
Accounts, Notes, Loans and Financing Receivable
Loans	2,155,436	2,084,794
Non-PCI Loans | Consumer | Home equity
Accounts, Notes, Loans and Financing Receivable
Loans	369,372	376,213
Non-PCI Loans | Consumer | Automobile
Accounts, Notes, Loans and Financing Receivable
Loans	1,150,217	1,139,082
Non-PCI Loans | Consumer | Other consumer
Accounts, Notes, Loans and Financing Receivable
Loans	635,847	569,499
PCI Loans
Accounts, Notes, Loans and Financing Receivable
Loans	1,541,469	1,771,502
Covered loans	44,500	70,400
PCI Loans | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Loans	213,388	281,177
PCI Loans | Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable
Loans	1,085,156	1,206,019
PCI Loans | Commercial Real Estate | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Loans	1,029,279	1,091,339
PCI Loans | Commercial Real Estate | Construction
Accounts, Notes, Loans and Financing Receivable
Loans	55,877	114,680
PCI Loans | Residential mortgage
Accounts, Notes, Loans and Financing Receivable
Loans	155,277	183,723
PCI Loans | Consumer
Accounts, Notes, Loans and Financing Receivable
Loans	87,648	100,583
PCI Loans | Consumer | Home equity
Accounts, Notes, Loans and Financing Receivable
Loans	81,138	92,796
PCI Loans | Consumer | Automobile
Accounts, Notes, Loans and Financing Receivable
Loans	126	145
PCI Loans | Consumer | Other consumer
Accounts, Notes, Loans and Financing Receivable
Loans	$ 6,384	$ 7,642

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Loans - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable
Non-covered loans net of unearned premiums, discounts and deferred loan fees	$ 16,700,000		$ 16,700,000		$ 15,300,000
Outstanding balances for PCI loans	1,700,000,000		1,700,000,000		1,900,000,000
Transfer of loans to loans held for sale			225,541,000	$ 0
Sales of loans	0	$ 0	0	0
FDIC loss-share receivable	7,100,000		$ 7,100,000		7,200,000
Number of consecutive months for performing restructured loans to be put on accrual status			6 months
TDRs not reported as non-accrual loans	109,800,000		$ 109,800,000		85,200,000
Non-performing TDRs	15,800,000		15,800,000		10,600,000
Specific reserves for loan losses			5,300,000	2,100,000
Partial loan charge-offs related to loans modified as TDRs	0		0	$ 209,000
Other real estate owned	10,200,000		10,200,000		10,200,000
Other real estate owned covered by loss sharing agreements	0		0		558,000
Residential real estate properties
Accounts, Notes, Loans and Financing Receivable
Other real estate owned	2,300,000		2,300,000		1,600,000
In formal foreclosure proceedings
Accounts, Notes, Loans and Financing Receivable
Residential mortgage and consumer loans secured by residential real estate properties	6,200,000		6,200,000		7,100,000
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	$ 44,500,000		44,500,000		$ 70,400,000
Residential mortgage
Accounts, Notes, Loans and Financing Receivable
Transfer of loans to loans held for sale			$ 225,500,000

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Loans - Changes in Accretable Yield (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance, beginning of period	$ 269,831	$ 387,120	$ 294,514	$ 415,179
Accretion	(23,553)	(31,519)	(48,236)	(59,578)
Balance, end of period	$ 246,278	$ 355,601	$ 246,278	$ 355,601

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Loans - Past Due, Non-Accrual and Current Non-Covered Loans (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	$ 42,154	$ 37,508
Total Past Due Loans	83,921	94,221
Current Non-PCI Loans	16,085,370	15,370,380
Total Non-PCI Loans	16,169,291	15,464,601
30-59 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	18,444	34,878
60-89 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	14,501	18,363
Accruing Loans 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	8,822	3,472
Commercial and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	11,072	8,465
Total Past Due Loans	16,149	20,322
Current Non-PCI Loans	2,401,775	2,336,696
Total Non-PCI Loans	2,417,924	2,357,018
Commercial and industrial | 30-59 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	2,391	6,705
Commercial and industrial | 60-89 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	2,686	5,010
Commercial and industrial | Accruing Loans 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	0	142
Commercial Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	16,848	15,794
Total Past Due Loans	38,112	37,987
Current Non-PCI Loans	8,988,319	8,300,607
Total Non-PCI Loans	9,026,431	8,338,594
Commercial Real Estate | 30-59 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	6,983	11,971
Commercial Real Estate | 60-89 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	9,087	8,642
Commercial Real Estate | Accruing Loans 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	5,194	1,580
Commercial Real Estate | Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	15,514	15,079
Total Past Due Loans	33,045	30,089
Current Non-PCI Loans	8,168,190	7,598,239
Total Non-PCI Loans	8,201,235	7,628,328
Commercial Real Estate | Commercial real estate | 30-59 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	6,983	5,894
Commercial Real Estate | Commercial real estate | 60-89 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	8,233	8,642
Commercial Real Estate | Commercial real estate | Accruing Loans 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	2,315	474
Commercial Real Estate | Construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	1,334	715
Total Past Due Loans	5,067	7,898
Current Non-PCI Loans	820,129	702,368
Total Non-PCI Loans	825,196	710,266
Commercial Real Estate | Construction | 30-59 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	0	6,077
Commercial Real Estate | Construction | 60-89 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	854	0
Commercial Real Estate | Construction | Accruing Loans 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	2,879	1,106
Residential mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	12,825	12,075
Total Past Due Loans	22,576	29,185
Current Non-PCI Loans	2,546,924	2,655,010
Total Non-PCI Loans	2,569,500	2,684,195
Residential mortgage | 30-59 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	4,677	12,005
Residential mortgage | 60-89 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	1,721	3,564
Residential mortgage | Accruing Loans 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	3,353	1,541
Consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	1,409	1,174
Total Past Due Loans	7,084	6,727
Current Non-PCI Loans	2,148,352	2,078,067
Total Non-PCI Loans	2,155,436	2,084,794
Consumer | 30-59 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	4,393	4,197
Consumer | 60-89 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	1,007	1,147
Consumer | Accruing Loans 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	275	209
Consumer | Home equity
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	1,306	1,028
Total Past Due Loans	2,523	2,372
Current Non-PCI Loans	366,849	373,841
Total Non-PCI Loans	369,372	376,213
Consumer | Home equity | 30-59 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	988	929
Consumer | Home equity | 60-89 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	229	415
Consumer | Home equity | Accruing Loans 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	0	0
Consumer | Automobile
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	103	146
Total Past Due Loans	4,374	4,249
Current Non-PCI Loans	1,145,843	1,134,833
Total Non-PCI Loans	1,150,217	1,139,082
Consumer | Automobile | 30-59 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	3,242	3,192
Consumer | Automobile | 60-89 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	774	723
Consumer | Automobile | Accruing Loans 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	255	188
Consumer | Other consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual Loans	0	0
Total Past Due Loans	187	106
Current Non-PCI Loans	635,660	569,393
Total Non-PCI Loans	635,847	569,499
Consumer | Other consumer | 30-59 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	163	76
Consumer | Other consumer | 60-89 Days Past Due Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	4	9
Consumer | Other consumer | Accruing Loans 90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	$ 20	$ 21

XML

Loans - Impaired Loans (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	$ 48,605	$ 36,125
Recorded Investment With Related Allowance	97,388	78,694
Total Recorded Investment	145,993	114,819
Unpaid Contractual Principal Balance	155,019	123,559
Related Allowance	10,348	10,531
Commercial and industrial
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	3,933	3,609
Recorded Investment With Related Allowance	56,304	27,031
Total Recorded Investment	60,237	30,640
Unpaid Contractual Principal Balance	65,809	35,957
Related Allowance	6,746	5,864
Commercial Real Estate
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	33,320	22,936
Recorded Investment With Related Allowance	32,696	39,353
Total Recorded Investment	66,016	62,289
Unpaid Contractual Principal Balance	68,079	64,264
Related Allowance	2,969	3,872
Commercial Real Estate | Commercial real estate
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	32,641	21,318
Recorded Investment With Related Allowance	30,629	36,974
Total Recorded Investment	63,270	58,292
Unpaid Contractual Principal Balance	65,333	60,267
Related Allowance	2,751	3,612
Commercial Real Estate | Construction
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	679	1,618
Recorded Investment With Related Allowance	2,067	2,379
Total Recorded Investment	2,746	3,997
Unpaid Contractual Principal Balance	2,746	3,997
Related Allowance	218	260
Residential mortgage
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	8,464	8,398
Recorded Investment With Related Allowance	7,725	9,958
Total Recorded Investment	16,189	18,356
Unpaid Contractual Principal Balance	17,488	19,712
Related Allowance	582	725
Consumer
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	2,888	1,182
Recorded Investment With Related Allowance	663	2,352
Total Recorded Investment	3,551	3,534
Unpaid Contractual Principal Balance	3,643	3,626
Related Allowance	51	70
Consumer | Home equity
Financing Receivable, Impaired [Line Items]
Recorded Investment With No Related Allowance	2,888	1,182
Recorded Investment With Related Allowance	663	2,352
Total Recorded Investment	3,551	3,534
Unpaid Contractual Principal Balance	3,643	3,626
Related Allowance	$ 51	$ 70

XML

Loans - Average Recorded Investment and Interest Income on Impaired Loans (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	$ 131,515	$ 130,371	$ 122,642	$ 133,432
Interest Income Recognized	1,009	976	1,909	2,128
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	46,283	24,157	38,371	26,244
Interest Income Recognized	288	194	596	434
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	62,878	80,221	60,450	81,211
Interest Income Recognized	503	528	847	1,215
Commercial Real Estate | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	60,119	70,194	57,722	71,296
Interest Income Recognized	483	475	808	1,114
Commercial Real Estate | Construction
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	2,759	10,027	2,728	9,915
Interest Income Recognized	20	53	39	101
Residential mortgage
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	17,555	22,922	18,974	23,262
Interest Income Recognized	184	234	392	436
Consumer
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	4,799	3,071	4,847	2,715
Interest Income Recognized	34	20	74	43
Consumer | Home equity
Accounts, Notes, Loans and Financing Receivable
Average Recorded Investment	4,799	3,071	4,847	2,715
Interest Income Recognized	$ 34	$ 20	$ 74	$ 43

XML

Loans - Pre-Modification and Post-Modification (Detail) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($) Contract	Jun. 30, 2016 USD ($) Contract	Jun. 30, 2017 USD ($) Contract	Jun. 30, 2016 USD ($) Contract
Troubled Debt Restructurings
Number of Contracts (in contract) | Contract	54	11	65	17
Pre-Modification Outstanding Recorded Investment	$ 64,230	$ 13,020	$ 71,827	$ 15,391
Post-Modification Outstanding Recorded Investment	$ 62,516	$ 11,997	$ 69,084	$ 14,084
Commercial and industrial
Troubled Debt Restructurings
Number of Contracts (in contract) | Contract	47	4	53	6
Pre-Modification Outstanding Recorded Investment	$ 40,077	$ 5,079	$ 46,315	$ 6,456
Post-Modification Outstanding Recorded Investment	$ 38,367	$ 4,094	$ 43,660	$ 5,437
Commercial Real Estate
Troubled Debt Restructurings
Number of Contracts (in contract) | Contract	5	2	7	3
Pre-Modification Outstanding Recorded Investment	$ 23,604	$ 6,111	$ 24,342	$ 6,658
Post-Modification Outstanding Recorded Investment	$ 23,604	$ 6,077	$ 24,257	$ 6,388
Commercial Real Estate | Commercial real estate
Troubled Debt Restructurings
Number of Contracts (in contract) | Contract	5	2	6	3
Pre-Modification Outstanding Recorded Investment	$ 23,604	$ 6,111	$ 23,782	$ 6,658
Post-Modification Outstanding Recorded Investment	$ 23,604	$ 6,077	$ 23,777	$ 6,388
Commercial Real Estate | Construction
Troubled Debt Restructurings
Number of Contracts (in contract) | Contract	0	0	1	0
Pre-Modification Outstanding Recorded Investment	$ 0	$ 0	$ 560	$ 0
Post-Modification Outstanding Recorded Investment	$ 0	$ 0	$ 480	$ 0
Residential mortgage
Troubled Debt Restructurings
Number of Contracts (in contract) | Contract	2	5	5	7
Pre-Modification Outstanding Recorded Investment	$ 549	$ 1,830	$ 1,170	$ 2,222
Post-Modification Outstanding Recorded Investment	$ 545	$ 1,826	$ 1,167	$ 2,206
Consumer
Troubled Debt Restructurings
Number of Contracts (in contract) | Contract			0	1
Pre-Modification Outstanding Recorded Investment			$ 0	$ 55
Post-Modification Outstanding Recorded Investment			$ 0	$ 53

XML

Loans - Troubled Debt Restructurings Subsequently Defaulted (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($) Contract	Jun. 30, 2016 USD ($) Contract	Jun. 30, 2017 USD ($) Contract	Jun. 30, 2016 USD ($) Contract
Troubled Debt Restructurings
Number of Contracts (in contract) | Contract	6	4	9	3
Recorded Investment | $	$ 5,358	$ 1,174	$ 6,322	$ 318
Commercial and industrial
Troubled Debt Restructurings
Number of Contracts (in contract) | Contract	6	0	7	0
Recorded Investment | $	$ 5,358	$ 0	$ 5,433	$ 0
Commercial Real Estate
Troubled Debt Restructurings
Number of Contracts (in contract) | Contract	0	2	1	1
Recorded Investment | $	$ 0	$ 1,070	$ 736	$ 214
Residential mortgage
Troubled Debt Restructurings
Number of Contracts (in contract) | Contract	0	1	1	1
Recorded Investment | $	$ 0	$ 74	$ 153	$ 74
Consumer
Troubled Debt Restructurings
Number of Contracts (in contract) | Contract	0	1	0	1
Recorded Investment | $	$ 0	$ 30	$ 0	$ 30

XML

Loans - Risk Category of Loans (Detail) - Non-PCI Loans - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	$ 11,444,355	$ 10,695,612
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	2,417,924	2,357,018
Commercial Real Estate | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	8,201,235	7,628,328
Commercial Real Estate | Construction
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	825,196	710,266
Pass
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	11,123,678	10,440,996
Pass | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	2,237,178	2,246,457
Pass | Commercial Real Estate | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	8,063,898	7,486,469
Pass | Commercial Real Estate | Construction
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	822,602	708,070
Special Mention
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	128,743	102,107
Special Mention | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	76,419	44,316
Special Mention | Commercial Real Estate | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	51,960	57,591
Special Mention | Commercial Real Estate | Construction
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	364	200
Substandard
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	185,641	150,913
Substandard | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	98,034	64,649
Substandard | Commercial Real Estate | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	85,377	84,268
Substandard | Commercial Real Estate | Construction
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	2,230	1,996
Doubtful
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	6,293	1,596
Doubtful | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	6,293	1,596
Doubtful | Commercial Real Estate | Commercial real estate
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	0	0
Doubtful | Commercial Real Estate | Construction
Accounts, Notes, Loans and Financing Receivable
Credit exposure - by internally assigned risk rating	$ 0	$ 0

XML

Loans - Recorded Investment Based on Payment Activity (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Non-PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	$ 4,724,936	$ 4,768,989
PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,541,469	1,771,502
Performing Loans | Non-PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	4,710,702	4,755,740
Performing Loans | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,507,754	1,744,491
Non-Performing Loans | Non-PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	14,234	13,249
Non-Performing Loans | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	33,715	27,011
Commercial and industrial | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	213,388	281,177
Commercial and industrial | Performing Loans | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	201,297	272,483
Commercial and industrial | Non-Performing Loans | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	12,091	8,694
Commercial Real Estate | PCI Loans | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,029,279	1,091,339
Commercial Real Estate | PCI Loans | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	55,877	114,680
Commercial Real Estate | Performing Loans | PCI Loans | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,014,923	1,080,376
Commercial Real Estate | Performing Loans | PCI Loans | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	54,775	113,370
Commercial Real Estate | Non-Performing Loans | PCI Loans | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	14,356	10,963
Commercial Real Estate | Non-Performing Loans | PCI Loans | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,102	1,310
Residential mortgage | Non-PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	2,569,500	2,684,195
Residential mortgage | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	155,277	183,723
Residential mortgage | Performing Loans | Non-PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	2,556,675	2,672,120
Residential mortgage | Performing Loans | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	150,031	179,793
Residential mortgage | Non-Performing Loans | Non-PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	12,825	12,075
Residential mortgage | Non-Performing Loans | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	5,246	3,930
Consumer | Non-PCI Loans | Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	369,372	376,213
Consumer | Non-PCI Loans | Automobile
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,150,217	1,139,082
Consumer | Non-PCI Loans | Other consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	635,847	569,499
Consumer | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	87,648	100,583
Consumer | Performing Loans | Non-PCI Loans | Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	368,066	375,185
Consumer | Performing Loans | Non-PCI Loans | Automobile
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,150,114	1,138,936
Consumer | Performing Loans | Non-PCI Loans | Other consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	635,847	569,499
Consumer | Performing Loans | PCI Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	86,728	98,469
Consumer | Non-Performing Loans | Non-PCI Loans | Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,306	1,028
Consumer | Non-Performing Loans | Non-PCI Loans | Automobile
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	103	146
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	$ 920	$ 2,114

XML

Allowance for Credit Losses - Allowance for Credit Losses (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015
Receivables [Abstract]
Allowance for loan losses	$ 116,446	$ 115,443	$ 114,419	$ 108,088	$ 105,415	$ 106,178
Allowance for unfunded letters of credit	2,175		2,185
Total allowance for credit losses	$ 118,621		$ 116,604

XML

Allowance for Credit Losses - Provision for Credit Losses (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Receivables [Abstract]
Provision for loan losses	$ 3,710	$ 1,363	$ 6,112	$ 2,092
Provision for unfunded letters of credit	(78)	66	(10)	137
Total provision for credit losses	$ 3,632	$ 1,429	$ 6,102	$ 2,229

XML

Allowance for Credit Losses - Activity in Allowance for Loan Losses (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	$ 115,443	$ 105,415	$ 114,419	$ 106,178
Loans charged-off	(4,289)	(1,755)	(7,668)	(4,266)
Charged-off loans recovered	1,582	3,065	3,583	4,084
Net (charge-offs) recoveries	(2,707)	1,310	(4,085)	(182)
Provision for loan losses	3,710	1,363	6,112	2,092
Ending balance	116,446	108,088	116,446	108,088
Commercial and industrial
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	51,288	48,417	50,820	48,767
Loans charged-off	(2,910)	(493)	(4,624)	(1,744)
Charged-off loans recovered	312	990	1,160	1,516
Net (charge-offs) recoveries	(2,598)	497	(3,464)	(228)
Provision for loan losses	2,927	(889)	4,261	(514)
Ending balance	51,617	48,025	51,617	48,025
Commercial Real Estate
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	56,302	48,454	55,851	48,006
Loans charged-off	(139)	(414)	(553)	(519)
Charged-off loans recovered	640	1,458	782	1,547
Net (charge-offs) recoveries	501	1,044	229	1,028
Provision for loan losses	(1,348)	2,379	(625)	2,843
Ending balance	55,455	51,877	55,455	51,877
Residential mortgage
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	3,592	4,209	3,702	4,625
Loans charged-off	(229)	(151)	(359)	(232)
Charged-off loans recovered	235	94	683	109
Net (charge-offs) recoveries	6	(57)	324	(123)
Provision for loan losses	588	(657)	160	(1,007)
Ending balance	4,186	3,495	4,186	3,495
Consumer
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	4,261	4,335	4,046	4,780
Loans charged-off	(1,011)	(697)	(2,132)	(1,771)
Charged-off loans recovered	395	523	958	912
Net (charge-offs) recoveries	(616)	(174)	(1,174)	(859)
Provision for loan losses	1,543	530	2,316	770
Ending balance	$ 5,188	$ 4,691	$ 5,188	$ 4,691

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Allowance for Credit Losses - Allocation of Allowance for Loan Losses and Related Loans by Segment (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Allowance for loan losses:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	$ 10,348	$ 10,531
Collectively evaluated for impairment	106,098	103,888
Total Loans	116,446	114,419
Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	145,993	114,819
Collectively evaluated for impairment	16,023,298	15,349,782
Total Loans	17,710,760	17,236,103
Loans acquired with discounts related to credit quality | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans	1,541,469	1,771,502
Commercial and industrial | Allowance for loan losses:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	6,746	5,864
Collectively evaluated for impairment	44,871	44,956
Total Loans	51,617	50,820
Commercial and industrial | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	60,237	30,640
Collectively evaluated for impairment	2,357,687	2,326,378
Total Loans	2,631,312	2,638,195
Commercial and industrial | Loans acquired with discounts related to credit quality | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans	213,388	281,177
Commercial Real Estate | Allowance for loan losses:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	2,969	3,872
Collectively evaluated for impairment	52,486	51,979
Total Loans	55,455	55,851
Commercial Real Estate | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	66,016	62,289
Collectively evaluated for impairment	8,960,415	8,276,305
Total Loans	10,111,587	9,544,613
Commercial Real Estate | Loans acquired with discounts related to credit quality | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans	1,085,156	1,206,019
Residential mortgage | Allowance for loan losses:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	582	725
Collectively evaluated for impairment	3,604	2,977
Total Loans	4,186	3,702
Residential mortgage | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	16,189	18,356
Collectively evaluated for impairment	2,553,311	2,665,839
Total Loans	2,724,777	2,867,918
Residential mortgage | Loans acquired with discounts related to credit quality | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans	155,277	183,723
Consumer | Allowance for loan losses:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	51	70
Collectively evaluated for impairment	5,137	3,976
Total Loans	5,188	4,046
Consumer | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	3,551	3,534
Collectively evaluated for impairment	2,151,885	2,081,260
Total Loans	2,243,084	2,185,377
Consumer | Loans acquired with discounts related to credit quality | Loans:
Financing Receivable, Allowance for Credit Losses [Line Items]
Total Loans	$ 87,648	$ 100,583

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Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 690,637,000		$ 690,637,000		$ 690,637,000
Goodwill impairment	0	$ 0	0	$ 0
Finite-Lived Intangible Assets [Line Items]
Amortization of other intangible assets	2,562,000	2,928,000	$ 5,098,000	5,777,000
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 - Other Intangible Assets (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	$ 122,896	$ 138,593
Accumulated Amortization	(78,347)	(92,209)
Valuation Allowance	(849)	(900)
Net Intangible Assets	43,700	45,484
Loan Servicing Rights
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	75,413	73,002
Accumulated Amortization	(54,253)	(52,634)
Valuation Allowance	(849)	(900)
Net Intangible Assets	20,311	19,468
Core Deposits
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	43,396	61,504
Accumulated Amortization	(21,941)	(37,562)
Valuation Allowance	0	0
Net Intangible Assets	21,455	23,942
Other
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	4,087	4,087
Accumulated Amortization	(2,153)	(2,013)
Valuation Allowance	0	0
Net Intangible Assets	$ 1,934	$ 2,074

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Goodwill and Other Intangible Assets - Future Amortization Expense (Detail) $ in Thousands	Jun. 30, 2017 USD ($)
Loan Servicing Rights
Finite-Lived Intangible Assets [Line Items]
2017	$ 2,719
2018	4,503
2019	3,557
2020	2,813
2021	2,115
Core Deposits
Finite-Lived Intangible Assets [Line Items]
2017	2,356
2018	4,215
2019	3,671
2020	3,127
2021	2,582
Other
Finite-Lived Intangible Assets [Line Items]
2017	139
2018	249
2019	235
2020	220
2021	$ 206

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Stock-Based Compensation (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant	7,300		7,300
Stock-based compensation expense	$ 2.7	$ 2.8	$ 6.9	$ 5.2
Stock-based compensation amortization expense unrecognized	$ 16.5		$ 16.5
Average remaining vesting, years			2 years 1 month 6 days
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during the period (in shares)			482	498
Award vesting rights as a percentage			33.33%
Award vesting period			3 years
Average grant date fair value (usd per share)			$ 11.71	$ 8.77
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during the period (in shares)			371	431
Award vesting period			3 years
Average grant date fair value (usd per share)			$ 11.05	$ 8.32
Restricted Stock Units | 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%
Restricted Stock Units | 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%

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Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Derivative [Line Items]
Derivative instruments not designated as hedging instruments, liability	$ 14.5
Aggregate fair value of net liability position	10.5
CME
Derivative [Line Items]
Collateral posted with counterparties, net of CME variation margin	43.3
Interest Rate Swaps
Derivative [Line Items]
Accumulated net after-tax losses related to effective cash flow hedges	10.4	$ 12.5
Estimated amount of interest rate derivatives to be reclassified to interest expense	6.9
Derivatives designated as hedging instruments: | Cash Flow Hedge | Interest Rate Caps and Swaps | CME
Derivative [Line Items]
CME variation margins	13.0
Derivatives not designated as hedging instruments: | Interest Rate Swaps | CME
Derivative [Line Items]
CME variation margins	$ 3.3

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Derivative Instruments and Hedging Activities - Balance Sheet Disclosures (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Interest Rate Caps and Swaps
Derivative [Line Items]
Other Assets	$ 0	$ 0
Other Liabilities	23,737	41,911
Derivatives designated as hedging instruments:
Derivative [Line Items]
Other Assets	528	802
Other Liabilities	867	16,627
Notional Amount	714,889	714,999
Derivatives designated as hedging instruments: | Cash Flow Hedge | Interest Rate Caps and Swaps
Derivative [Line Items]
Other Assets	528	802
Other Liabilities	31	15,641
Notional Amount	707,000	707,000
Derivatives designated as hedging instruments: | Fair Value Hedge | Interest Rate Swaps
Derivative [Line Items]
Other Assets	0	0
Other Liabilities	836	986
Notional Amount	7,889	7,999
Derivatives not designated as hedging instruments:
Derivative [Line Items]
Other Assets	26,236	28,253
Other Liabilities	23,035	27,450
Notional Amount	1,376,841	1,322,305
Derivatives not designated as hedging instruments: | Interest Rate Swaps
Derivative [Line Items]
Other Assets	26,058	25,285
Other Liabilities	22,870	25,284
Notional Amount	1,288,274	1,075,722
Derivatives not designated as hedging instruments: | Mortgage banking derivatives
Derivative [Line Items]
Other Assets	178	2,968
Other Liabilities	165	2,166
Notional Amount	$ 88,567	$ 246,583

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Derivative Instruments and Hedging Activities - Interest Rate Derivatives Designated as Cash Flow Hedges (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
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	$ (42,187)	$ (37,573)	$ (78,774)	$ (75,017)
Amount of loss recognized in other comprehensive income	(1,482)	(3,625)	(1,265)	(14,657)
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	$ (2,314)	$ (3,597)	$ (4,832)	$ (6,568)

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Derivative Instruments and Hedging Activities - Gains (Losses) on Interest Rate Derivatives Designated as Fair Value Hedges (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Gain Loss On Fair Value Hedges Recognized In Earnings [Line Items]
Gains (losses) on derivatives	$ 70	$ (92)	$ (790)	$ (389)
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	52	2	149	(97)
Designated as Fair Value Hedge | Interest income | Loans and borrowings | Derivatives designated as hedging instruments:
Gain Loss On Fair Value Hedges Recognized In Earnings [Line Items]
Gains (losses) on derivatives	(52)	(2)	(149)	97
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	0	2,069	0	6,797
Designated as Fair Value Hedge | Interest expense | Loans and borrowings | Derivatives designated as hedging instruments:
Gain Loss On Fair Value Hedges Recognized In Earnings [Line Items]
Gains (losses) on derivatives	$ 0	$ (2,060)	$ 0	$ (6,779)

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Derivative Instruments and Hedging Activities - (Losses) Gains Related to Derivatives Not Designated as Hedges (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Non-designated hedge interest rate derivatives
Other non-interest expense	$ 70	$ (92)	$ (790)	$ (389)

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Balance Sheet Offsetting (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Offsetting Liabilities
Gross Amounts Recognized	$ 223,737	$ 206,911
Gross Amounts Offset	0	0
Net Amounts Presented	223,737	206,911
Gross Amounts Not Offset, Financial Instruments	(3,888)	(5,268)
Gross Amounts Not Offset, Cash Collateral	(209,314)	(201,643)
Net Amount	10,535	0
Collateral posted with counterparties	59,600	52,400
Repurchase Agreements
Offsetting Repurchase Agreement Liabilities
Gross Amounts Recognized	200,000	165,000
Gross Amounts Offset	0	0
Net Amounts Presented	200,000	165,000
Gross Amounts Not Offset, Financial Instruments	0	0
Gross Amounts Not Offset, Cash Collateral	(200,000)	(165,000)
Net Amount	0	0
Interest Rate Caps and Swaps
Offsetting Assets
Gross Amounts Recognized	26,586	26,087
Gross Amounts Offset	0	0
Net Amounts Presented	26,586	26,087
Gross Amounts Not Offset, Financial Instruments	(3,888)	(5,268)
Gross Amounts Not Offset, Cash Collateral	0	0
Net Amount	22,698	20,819
Offsetting Derivative Liabilities
Gross Amounts Recognized	23,737	41,911
Gross Amounts Offset	0	0
Net Amounts Presented	23,737	41,911
Gross Amounts Not Offset, Financial Instruments	(3,888)	(5,268)
Gross Amounts Not Offset, Cash Collateral	(9,314)	(36,643)
Net Amount	$ 10,535	$ 0

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Tax Credit Investments - Balance Sheet Disclosures (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Other Assets
Other Assets:
Affordable housing tax credit investments, net	$ 28,559	$ 29,567
Other tax credit investments, net	36,204	44,763
Total tax credit investments, net	64,763	74,330
Other Liabilities
Other Liabilities:
Unfunded affordable housing tax credit commitments	4,690	4,850
Unfunded other tax credit commitments	3,582	7,276
Total unfunded tax credit commitments	$ 8,272	$ 12,126

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Tax Credit Investments - Income Statement Disclosures (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits	$ 1,271	$ 1,065	$ 2,555	$ 2,130
Other tax credit investment credits and tax benefits	8,680	3,268	14,966	6,536
Total reduction in income tax expense	9,951	4,333	17,521	8,666
Non-Interest Expenses
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses	358	775	754	1,359
Affordable housing tax credit investment impairment losses	130	60	254	200
Other tax credit investment losses	1,060	594	1,827	668
Other tax credit investment impairment losses	6,184	6,217	10,221	12,683
Total amortization of tax credit investments recorded in non-interest expense	$ 7,732	$ 7,646	$ 13,056	$ 14,910

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Litigation (Details) $ in Thousands	1 Months Ended			6 Months Ended
	Mar. 31, 2015 claim	Dec. 31, 2013 claim	Mar. 31, 2012 USD ($)	Jun. 30, 2017 USD ($) claim lawsuit	Dec. 31, 2016 USD ($)
Loss Contingencies [Line Items]
Deposits | $				$ 17,250,018	$ 17,730,708
Merrick Bank Corporation and American Express Travel Related Services v. Valley National Bank | Pending Litigation
Loss Contingencies [Line Items]
Number of lawsuits consolidated (in lawsuit) | lawsuit				2
Merrick Bank Corporation v. Valley National Bank | Pending Litigation
Loss Contingencies [Line Items]
Chargebacks incurred from Direct Air Bankruptcy | $			$ 26,200
Number of claims filed (in claim) | claim		10
Number of claims dismissed (in claim) | claim	4
American Express Travel Related Services v. Valley National Bank | Pending Litigation
Loss Contingencies [Line Items]
Chargebacks incurred from Direct Air Bankruptcy | $			3,000
Number of claims filed (in claim) | claim				11
Number of claims dismissed (in claim) | claim				5
Direct Air | Merrick Bank Corporation v. Valley National Bank | Pending Litigation
Loss Contingencies [Line Items]
Deposits | $			$ 1,000

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Subsequent Events (Details) - Subsequent Event $ / shares in Units, shares in Millions, $ in Millions			3 Months Ended
	Aug. 03, 2017 USD ($) $ / shares shares	Jul. 26, 2017 USD ($) branch $ / shares	Mar. 31, 2018 USD ($)
Series B Preferred Stock
Subsequent Event [Line Items]
Liquidation preference (usd per share) | $ / shares	$ 25
Preferred stock dividend rate	5.50%
Proceeds from issuance of preferred stock after deducting underwriting discounts, commissions and offering expenses	$ 98.1
Series B Preferred Stock | LIBOR
Subsequent Event [Line Items]
Preferred stock dividend rate, basis spread on variable rate	3.578%
Series B Preferred Stock | Preferred Stock
Subsequent Event [Line Items]
Shares issued (in shares) | shares	4.0
Shares issued	$ 100.0
USAmeriBancorp, Inc. (USAB)
Subsequent Event [Line Items]
Assets acquired		$ 4,400.0
Loans acquired		3,600.0
Deposits acquired		$ 3,500.0
Number of branches acquired (in branch) | branch		30
Share ratio of common stock issued to USAB shareholders		6.1
USAmeriBancorp, Inc. (USAB) | Forecast
Subsequent Event [Line Items]
Consideration transferred			$ 816.0
USAmeriBancorp, Inc. (USAB) | Minimum
Subsequent Event [Line Items]
Stock price (usd per share) | $ / shares		$ 11.50
Walkaway rights, weighted-average share price (usd per share) | $ / shares		11
USAmeriBancorp, Inc. (USAB) | Maximum
Subsequent Event [Line Items]
Stock price (usd per share) | $ / shares		13.00
Walkaway rights, weighted-average share price (usd per share) | $ / shares		$ 13.50