

	March 31, 2020		December 31, 2019
	(in thousands)
Loans:
Commercial and industrial	$	4,998,731	$	4,825,997
Commercial real estate:
Commercial real estate	16,390,236		15,996,741
Construction	1,727,046		1,647,018
Total commercial real estate loans	18,117,282		17,643,759
Residential mortgage	4,478,982		4,377,111
Consumer:
Home equity	481,751		487,272
Automobile	1,436,734		1,451,623
Other consumer	914,587		913,446
Total consumer loans	2,833,072		2,852,341
Total loans	$	30,428,067	$	29,699,208

Valley transferred and sold approximately $30.0 million and $100.0 million of residential mortgage loans from the loan portfolio to loans held for sale during the three months ended March 31, 2020 and 2019, respectively. Excluding the loan transfers, there were no sales of loans from the held for investment portfolio during the three months ended March 31, 2020 and 2019.

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 appetite. 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. 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. See Valley’s Annual Report on Form 10-K for the year ended December 31, 2019 for further details.

Loans are deemed to be past due when the contractually required principal and interest payments have not been received as they become due. Loans are placed on non-accrual status generally, when they become 90 days past due and the full and timely collection of principal and interest becomes uncertain. When a loan is placed on non-accrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current income. Cash collections from non-accrual loans are generally applied against principal, and no interest income is recognized on these loans until the principal balance has been determined to be fully collectible.



	Past Due and Non-Accrual Loans
	30-59 Days or More Past Due Loans		60-89 Days or More Past Due Loans		90 Days or More Past Due Loans		Non-Accrual Loans		Total Past Due Loans		Current Loans		Total Loans		Non-Accrual Loans Without Allowance for Credit Losses
	(in thousands)
March 31, 2020
Commercial and industrial	$	9,780	$	7,624	$	4,049	$	132,622	$	154,075	$	4,844,656	$	4,998,731	$	17,149
Commercial real estate:
Commercial real estate	41,664		15,963		161		41,616		99,404		16,290,832		16,390,236		37,865
Construction	7,119		49		—		2,972		10,140		1,716,906		1,727,046		2,839
Total commercial real estate loans	48,783		16,012		161		44,588		109,544		18,007,738		18,117,282		40,704
Residential mortgage	38,965		9,307		1,798		24,625		74,695		4,404,287		4,478,982		9,834
Consumer loans:
Home equity	2,625		509		—		3,845		6,979		474,772		481,751		131
Automobile	13,447		1,756		626		250		16,079		1,420,655		1,436,734		—
Other consumer	3,436		44		466		—		3,946		910,641		914,587		—
Total consumer loans	19,508		2,309		1,092		4,095		27,004		2,806,068		2,833,072		131
Total	$	117,036	$	35,252	$	7,100	$	205,930	$	365,318	$	30,062,749	$	30,428,067	$	67,818

The following table presents past due, non-accrual and current loans by loan portfolio class at December 31, 2019. At December 31, 2019, purchased credit-impaired (PCI) loans were excluded from past due and non-accrual loans reported because they continued to earn interest income from the accretable yield at the pool level. The PCI loan pools are accounted for as PCD loans (on a loan level basis with a related allowance for credit losses) under the CECL standard adopted at January 1, 2020 and reported in the past due loans and non-accrual loans in the tables above at March 31, 2020.



	Past Due and Non-Accrual Loans
	30-59 Days Past Due Loans		60-89 Days or More Past Due Loans		90 Days or More Past Due Loans		Non-Accrual Loans		Total Past Due Loans		Current Non-PCI Loans		PCI Loans
	(in thousands)
December 31, 2019
Commercial and industrial	$	11,700	$	2,227	$	3,986	$	68,636	$	86,549	$	4,057,434	$	682,014
Commercial real estate:
Commercial real estate	2,560		4,026		579		9,004		16,169		10,886,724		5,093,848
Construction	1,486		1,343		—		356		3,185		1,492,532		151,301
Total commercial real estate loans	4,046		5,369		579		9,360		19,354		12,379,256		5,245,149
Residential mortgage	17,143		4,192		2,042		12,858		36,235		3,760,707		580,169
Consumer loans:
Home equity	1,051		80		—		1,646		2,777		373,243		111,252
Automobile	11,482		1,581		681		334		14,078		1,437,274		271
Other consumer	1,171		866		30		224		2,291		900,411		10,744
Total consumer loans	13,704		2,527		711		2,204		19,146		2,710,928		122,267
Total	$	46,593	$	14,315	$	7,318	$	93,058	$	161,284	$	22,908,325	$	6,629,599

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.



	Term Loans
	Amortized Cost Basis by Origination Year
March 31, 2020	2020		2019		2018		2017		2016		Prior to 2016		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Commercial and industrial
Risk Rating:
Pass	$	251,561	$	800,674	$	677,111	$	331,265	$	220,022	$	490,587	$	1,955,270	$	515	$	4,727,005
Special Mention	—		11,167		1,614		11,201		11,587		15,016		59,157		102		109,844
Substandard	3,320		10,870		3,325		1,786		4,832		6,252		18,684		87		49,156
Doubtful	—		5,219		705		17,953		2,637		86,212		—		—		112,726
Total commercial and industrial	$	254,881	$	827,930	$	682,755	$	362,205	$	239,078	$	598,067	$	2,033,111	$	704	$	4,998,731
Commercial real estate
Risk Rating:
Pass	$	1,037,404	$	3,269,940	$	2,611,108	$	2,133,369	$	2,041,513	$	4,794,614	$	217,403	$	12,237	$	16,117,588
Special Mention	872		22,694		1,748		25,324		23,603		75,769		3,250		—		153,260
Substandard	3,855		4,909		12,473		12,288		10,947		73,855		—		—		118,327
Doubtful	—		—		—		838		—		223		—		—		1,061
Total commercial real estate	$	1,042,131	$	3,297,543	$	2,625,329	$	2,171,819	$	2,076,063	$	4,944,461	$	220,653	$	12,237	$	16,390,236
Construction
Risk Rating:
Pass	$	49,866	$	157,375	$	179,300	$	52,820	$	66,550	$	57,236	$	1,144,877	$	—	$	1,708,024
Special Mention	—		—		—		—		7,740		96		—		—		7,836
Substandard	—		42		—		8,359		2,422		363		—		—		11,186
Total construction	$	49,866	$	157,417	$	179,300	$	61,179	$	76,712	$	57,695	$	1,144,877	$	—	$	1,727,046

For residential mortgages, automobile, home equity and other consumer loan portfolio classes, 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 amortized cost in those loan classes (including PCD loans) based on payment activity by origination year as of March 31, 2020.



	Term Loans
	Amortized Cost Basis by Origination Year
March 31, 2020	2020		2019		2018		2017		2016		Prior to 2016		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Residential mortgage
Performing	$	233,209	$	877,519	$	942,127	$	752,209	$	450,980	$	1,160,244	$	46,312	$	—	$	4,462,600
90 days or more past due	—		519		201		2,612		3,908		9,142		—		—		16,382
Total residential mortgage	$	233,209	$	878,038	$	942,328	$	754,821	$	454,888	$	1,169,386	$	46,312	$	—	$	4,478,982
Consumer loans
Home equity
Performing	$	1,017	$	1,851	$	3,621	$	9,999	$	2,492	$	21,668	$	384,208	$	55,710	$	480,566
90 days or more past due	—		—		—		—		—		72		297		816		1,185
Total home equity	1,017		1,851		3,621		9,999		2,492		21,740		384,505		56,526		481,751
Automobile
Performing	120,779		556,072		363,005		220,424		86,715		88,776		—		—		1,435,771
90 days or more past due	—		170		320		275		79		119		—		—		963
Total automobile	120,779		556,242		363,325		220,699		86,794		88,895		—		—		1,436,734
Other Consumer
Performing	7,549		6,845		14,415		1,332		1,382		3,663		878,495		—		913,681
90 days or more past due	—		—		—		—		—		—		906		—		906
Total other consumer	7,549		6,845		14,415		1,332		1,382		3,663		879,401		—		914,587
Total Consumer	$	129,345	$	564,938	$	381,361	$	232,030	$	90,668	$	114,298	$	1,263,906	$	56,526	$	2,833,072



Credit exposure— by internally assigned risk rating			Special						Total Non-PCI
Credit exposure— by internally assigned risk rating	Pass		Mention		Substandard		Doubtful		Loans
	(in thousands)
December 31, 2019
Commercial and industrial	$	3,982,453	$	33,718	$	66,511	$	61,301	$	4,143,983
Commercial real estate	10,781,587		77,884		42,560		862		10,902,893
Construction	1,487,877		7,486		354		—		1,495,717
Total	$	16,251,917	$	119,088	$	109,425	$	62,163	$	16,542,593

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 is presented above, and by payment activity. The following table presents the recorded investment in those loan classes based on payment activity as of December 31, 2019:



Credit exposure— by payment activity	Performing Loans		Non-Performing Loans		Total Non-PCI Loans
	(in thousands)
December 31, 2019
Residential mortgage	$	3,784,084	$	12,858	$	3,796,942
Home equity	374,374		$	1,646	376,020
Automobile	1,451,018		$	334	1,451,352
Other consumer	902,478		$	224	902,702
Total	$	6,511,954	$	15,062	$	6,527,016



Credit exposure—	Performing		Non-Performing		Total
by payment activity	Loans		Loans		PCI Loans
	(in thousands)
December 31, 2019
Commercial and industrial	$	653,997	$	28,017	$	682,014
Commercial real estate	5,065,388		28,460		5,093,848
Construction	148,692		2,609		151,301
Residential mortgage	571,006		9,163		580,169
Consumer	120,356		1,911		122,267
Total	$	6,559,439	$	70,160	$	6,629,599

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). At the adoption of ASU 2016-13, Valley was not required to reassess whether modifications to individual PCI loans prior to January 1, 2020 met the TDR loan criteria.

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.



	Three Months Ended March 31,
	2020					2019
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Amortized Carrying Amount		Post-Modification Amortized Carrying Amount		Number of Contracts	Pre-Modification Amortized Carrying Amount		Post-Modification Amortized Carrying Amount
	($ in thousands)
Commercial and industrial	16	$	13,144	$	12,630	36	$	23,553	$	23,241
Commercial real estate:
Commercial real estate	1	3,863		3,855		1	1,597		1,597
Total commercial real estate	1	3,863		3,855		1	1,597		1,597
Total	17	$	17,007	$	16,485	37	$	25,150	$	24,838

The total TDRs presented in the above table had allocated reserves for loan losses of $7.9 million and $7.9 million at March 31, 2020 and 2019, respectively. There were $791 thousand and $913 thousand of partial charge-offs related to TDRs for the three months ended March 31, 2020 and 2019, respectively. Valley did not extend any commitments to lend additional funds to borrowers whose loans have been modified as TDRs during the three months ended March 31, 2020 and 2019.



	Three Months Ended March 31,
	2020			2019
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Amortized Cost		Number of Contracts	Recorded Investment
	($ in thousands)
Commercial and industrial	—	$	—	10	$	8,626
Residential mortgage	1	154		5	702
Consumer	—	—		1	18
Total	1	$	154	16	$	9,346

In response to the COVID-19 pandemic and its economic impact to certain customers, Valley implemented short-term loan modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that are insignificant, when requested by customers. These modifications complied with the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide temporary payment relief to those borrowers directly impacted by COVID-19 who were not more than 30 days past due as of December 31, 2019. Generally, the modification terms allow for a deferral of payments for 90 days, which Valley may extend for an additional 90 days, for a maximum of 180 days on a cumulative and successive basis. As of March 31, 2020, Valley granted temporary modifications on approximately 2,100 loans, resulting in an immaterial amount of deferred interest payments for the first quarter 2020. Under the applicable guidance, none of these loans were considered TDRs as of March 31, 2020.

Loans in Process of Foreclosure. Other real estate owned (OREO) totaled $10.2 million and $9.4 million at March 31, 2020 and December 31, 2019, respectively. OREO included foreclosed residential real estate properties totaling $2.6 million and $2.1 million at March 31, 2020 and December 31, 2019, respectively. Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $1.8 million and $2.8 million at March 31, 2020 and December 31, 2019, respectively.

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



	Three Months Ended March 31,
	2020		2019
	(in thousands)
Components of provision for credit losses for loans:
Provision for loan losses	$	33,851	$	7,856
Provision for unfunded credit commitments	73		144
Total provision for credit losses for loans	$	33,924	$	8,000

The allowance for loan losses is a valuation account that is deducted from loans' amortized cost basis to present the net amount expected to be collected on loans. Valley's methodology to establish the allowance for loan losses has two basic components: (1) a collective (pooled) reserve component for estimated lifetime expected credit losses for pools of loans that share similar risk characteristics and (2) an individual reserve component for loans that do not share risk characteristics.

Reserves for loans that share common risk characteristics. In estimating the component of the allowance on a collective basis, Valley uses a transition matrix model which calculates an expected life of loan loss percentage for each loan pool by generating probability of default and loss given default metrics. The metrics are based on the migration of loans from performing to loss by credit quality rating or delinquency categories using historical life-of-loan analysis periods for each loan portfolio pool, and the severity of loss, based on the aggregate net lifetime losses incurred. The model's expected losses based on loss history are adjusted for qualitative factors. Among other things, these adjustments include and account for differences in: (i) lending policies and procedures, (ii) current business conditions and economic developments that affect the loan collectability, (iii) concentration risks by size, type, and geography, new markets, (iv) the volume and migration of loans to non-performing status, and (v) the effect of external factors such as legal and regulatory requirements on the level of estimated credit losses in the existing portfolio.

Valley utilizes a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience for the remaining life of the loan. The forecasts consist of a multi-scenario economic forecast model to estimate future credit losses that is governed by a cross-functional committee. The committee meets each quarter to determine which economic scenarios developed by Moody's will be incorporated into the model, as well as the relative probability weightings of the selected scenarios, based upon all readily available information. The model projects economic variables under each scenario based on detailed statistical analyses. Valley has identified and selected key variables that most closely correlated to our historical credit performance, which include: GDP, unemployment and the Case-Shiller Home Price Index.

Reserves for loans that that do not share risk characteristics. Valley measures specific reserves for individual loan that do not share common risk characteristics with other loans, consisting of collateral dependent, TDR, and expected TDR loans, based on the amount of lifetime expected credit losses calculated on those loans and charge-offs of those amounts determined to be uncollectible. Factors considered by Valley in measuring the extent of expected credit loss include payment status, collateral value, borrower financial condition, guarantor support and the probability of collecting scheduled principal and interest payments when due. If repayment is based upon future expected cash flows, the present value of the expected future cash flows discounted at the loan’s original effective interest rate is compared to the carrying value of the loan, and any shortfall is recorded as the allowance for credit losses. The effective interest rate used to discount expected cash flows is adjusted to incorporate expected prepayments, if applicable.

When Valley determines that foreclosure is probable, collateral dependent loan balances are written down to the estimated current fair value (less estimated selling costs) of each loan’s underlying collateral resulting in an immediate charge-off to the allowance, excluding any consideration for personal guarantees that may be pursued in the Bank’s collection process. Valley elected a practical expedient to use the estimated current fair value (less estimated selling costs) of the collateral to measure expected credit losses on collateral dependent loans when foreclosure is not probable.

Commercial and industrial loans are primarily collateralized by taxi medallions in the table above. Commercial real estate loans are collateralized by real estate and construction loans are generally secured by the real estate to be developed and may also be secured by additional real estate to mitigate the risk. Residential and home equity loans are collateralized by residential real estate.

The allowance for unfunded credit commitments generally consists of undisbursed non-cancellable lines of credit, new loan commitments and commercial letters of credit valued using a similar methodology as used for loans. Management's estimate of expected losses inherent in these off-balance sheet credit exposures also incorporates estimated usage factors over the commitment's contractual period or an expected pull-through rate for new loan commitments. The allowance for unfunded credit commitments totaling $10.0 million at March 31, 2020 is included in accrued expenses and other liabilities on the consolidated statements of financial condition.



	Commercial and Industrial			Commercial Real Estate			Residential Mortgage			Consumer			Total
	(in thousands)
Three Months Ended March 31, 2020
Allowance for loan losses:
Beginning balance	$	104,059		$	45,673		$	5,060		$	6,967		$	161,759
Impact of ASU 2016-13 adoption*	15,169			49,797			20,575			6,990			92,531
Loans charged-off	(3,360		)	(44		)	(336		)	(2,565		)	(6,305		)
Charged-off loans recovered	569			93			50			794			1,506
Net (charge-offs) recoveries	(2,791		)	49			(286		)	(1,771		)	(4,799		)
Provision for loan losses	11,000			16,066			4,107			2,678			33,851
Ending balance	$	127,437		$	111,585		$	29,456		$	14,864		$	283,342
Three Months Ended March 31, 2019
Allowance for losses:
Beginning balance	$	90,956		$	49,650		$	5,041		$	6,212		$	151,859
Loans charged-off	(4,282		)	—			(2,028		)	(15		)	(6,325		)
Charged-off loans recovered	483			21			1			486			991
Net (charge-offs) recoveries	(3,799		)	21			(2,027		)	471			(5,334		)
Provision for loan losses	7,473			(1,909		)	2,125			167			7,856
Ending balance	$	94,630		$	47,762		$	5,139		$	6,850		$	154,381



	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
March 31, 2020
Allowance for loan losses:
Individually evaluated for credit losses	$	58,209	$	1,383	$	427	$	413	$	60,432
Collectively evaluated for credit losses	69,228		110,202		29,029		14,451		222,910
Total	$	127,437	$	111,585	$	29,456	$	14,864	$	283,342
Loans:
Individually evaluated for credit losses	$	127,776	$	76,239	$	16,798	$	3,315	$	224,128
Collectively evaluated for credit losses	4,870,955		18,041,043		4,462,184		2,829,757		30,203,939
Total	$	4,998,731	$	18,117,282	$	4,478,982	$	2,833,072	$	30,428,067
December 31, 2019
Allowance for loan losses:
Individually evaluated for credit losses	$	36,662	$	1,338	$	518	$	58	$	38,576
Collectively evaluated for credit losses	67,397		44,335		4,542		6,909		123,183
Total	$	104,059	$	45,673	$	5,060	$	6,967	$	161,759
Loans:
Individually evaluated for credit losses	$	100,860	$	51,242	$	10,689	$	853	$	163,644
Collectively evaluated for credit losses	4,043,123		12,347,368		3,786,253		2,729,221		22,905,965
Loans acquired with discounts related to credit quality	682,014		5,245,149		580,169		122,267		6,629,599
Total	$	4,825,997	$	17,643,759	$	4,377,111	$	2,852,341	$	29,699,208

Impaired loans. Impaired loans disclosures presented below as of December 31, 2019 represent requirements prior to the adoption of ASU No. 2016-13 on January 1, 2020. Impaired loans, consisting of non-accrual commercial and industrial loans, commercial real estate loans over $250 thousand and all loans which were modified in troubled debt restructurings, were individually evaluated for impairment. PCI loans were not classified as impaired loans because they are accounted for on a pool basis.



	Recorded Investment With No Related Allowance		Recorded Investment With Related Allowance		Total Recorded Investment		Unpaid Contractual Principal Balance		Related Allowance
	(in thousands)
December 31, 2019
Commercial and industrial	$	14,617	$	86,243	$	100,860	$	114,875	$	36,662
Commercial real estate:
Commercial real estate	26,046		24,842		50,888		51,258		1,338
Construction	354		—		354		354		—
Total commercial real estate loans	26,400		24,842		51,242		51,612		1,338
Residential mortgage	5,836		4,853		10,689		11,800		518
Consumer loans:
Home equity	366		487		853		956		58
Total consumer loans	366		487		853		956		58
Total	$	47,219	$	116,425	$	163,644	$	179,243	$	38,576